Item 23 - Protests - Sewer & Water Rates

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Legal Objection—Proposed Water and Sewer Rate Changes imposes disproportionate treatment costs. The proposed single-class sewer rate structure cannot reflect these differences. c. Infrastructure utilization patterns. Commercial customers concentrated in particular corridors place different demands on distribution mains, service connections, and fire-flow capacity than residential customers distributed across neighborhoods. Multi-family customers share service connections and generate higher per-connection throughput. These differences in infrastructure utilization translate directly to differences in cost of service. d. Customer service and meter-reading costs.Per-account administrative costs vary by customer type, as do meter sizes, service connection characteristics, and the complexity of billing arrangements.Aggregating these into a single class obscures real cast differences that Section 5(b)(3) requires be reflected in rates. C. The Rate Study Fails to Demonstrate That Consolidation Preserves Proportionality The Rate Study does not include a comparative analysis demonstrating that a single customer class produces rates proportional to the cost of service attributable to each parcel. Specifically, the Rate Study does not: a. Present the cost-of-service breakdown by prior customer class (Single Family, Non- Residential, Multi-Family)that existed under the current rate structure; b. Quantify the magnitude of cross-subsidization inherent in the proposed single-class structure. That is, the degree to which one former customer class subsidizes or is subsidized by another under the uniform rates; c. Provide verified, Santa Ana-specific data on peaking factors,return-flow ratios, or infrastructure demand by customer type to justify treating all customers identically; d. Explain why the prior differentiated class structure was inadequate or inconsistent with Proposition 218, or why collapsing it into a single class better achieves proportional cost recovery. Under Coziahr, the burden is on the City to demonstrate compliance by substantial evidence. The absence of this analysis is not a technicality; it is the very gap in evidentiary support that the Court of Appeal found fatal in both Coziahr and Patz. III. THE PROPOSITION 218 NOTICE UNDERSTATES THE RATE IMPACT The Proposition 218 Notice states that the monthly impact to a"typical customer"is "$4.18" for water and "$2.94" for sewer, These figures represent only the Year 1. adjustment. The Notice fails to communicate the cumulative five-year impact in terms that would enable a property owner to understand the full scope of the proposed rate changes. The proposed adjustments compound as follows: Page 3