By Dawn Hodson
Note: This is part one of a two-part article regarding a pending lawsuit against the El Dorado Irrigation District over water rates. Part one is an update on the lawsuit filed against the district as detailed previously in an article published March 2, “EID sued over water rates.” Part two describes the history of EID’s water delivery system and the role that farmers and ranchers have played in the development of water resources in the county.
A pending lawsuit against the El Dorado Irrigation District could portend big trouble for agriculture in this county if it is successful.
The class-action lawsuit (Throne v. El Dorado Irrigation District) was brought by El Dorado Hills resident Darwin Throne and filed in late 2017.
The case is now pending in Department 4 (South Lake Tahoe) of the El Dorado County Superior Court.
The lawsuit alleges the water district is in violation of Prop. 218 because it charges more than what it costs to provide water service and because the charges are more than the proportional cost of the service per parcel.
In particular, the lawsuit notes that single family residences and small farms are charged the same on a bimonthly basis for up to 4,500 cubic feet (cf) of water. Small farms pay .0194 cents less per cf than single family residences for water use above 4,500 cf. For agricultural irrigation when there is no residence on the property, the cost is a flat .00122 cents per cf.
The lawsuit alleges that the difference in charges is not cost-based but instead designed to help the agriculture industry; that it costs the district the same amount to deliver water to residential, small farm and agricultural customers; and that residential customers are illegally subsidizing small farm and agricultural users.
The lawsuit also accuses EID of using a cost-of-service study that is six years old as the foundation for its fees and charges.
Based on those claims, the lawsuit sought to force EID to equalize its agricultural and residential rates, declare its current rates to be unlawful and to award damages amounting to three years of allegedly excessive charges to its customers.
Those claims were rejected by EID.
Request for dismissal
In June, a temporary judge in Department 4 heard a request by EID to dismiss the case based on two main arguments.
The first was that for more than 100 years it has been agriculture that has driven the funding, acquisition and development of EID’s water supplies and facilities including Project 184, Sly Park Reservoir and Weber Reservoir.
Further, those ag (agricultural) users didn’t require treated water nor the same level of service that is required by residential customers since they used water straight out of the ditch.
Later, EID piped its ditch system and began treating its water to serve the growing number of residential customers. The treated water also went to its ag customers but only so EID wouldn’t have to maintain and operate a duel water system — one for ag customers and a different one for residential customers.
EID argued that those facts were taken into account in its last cost of service study when it gave ag customers a break on water usage above 4,500 cubic feet.
EID also maintained that it receives nearly $20 million per year of non-rate revenue from property taxes, hydropower sales, recreation and other sources. The district argued that when those non-rate revenues are taken into account, none of the rates that EID charges exceed the actual cost of providing water and in fact all its users are being subsidized by these other sources of revenue. For example, in 2012 the district’s budget was $37.4 million. Of this amount, water sales were $19.7 million and non-rate revenues were $17.7 million. So water sales only made up two-thirds of the cost of delivering the water.
The judge subsequently dismissed two of the three claims made in the lawsuit, ruling that the remaining claim could still provide relief if the lawsuit is successful. The judge also ruled that EID’s arguments were premature but would be considered at the trial.
Both Throne and EID were contacted previously about the lawsuit but declined to comment. Throne’s legal firm also did not respond to multiple phone inquiries.
However, EID did say it does cost-of-service studies every 10 years and will be doing another in 2019 with its implementation probably taking place in 2020.
The case is now set for trial in January.