Filed 4/15/15 (unmodified opn. attached)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

CITY OF SAN BUENAVENTURA,

 Plaintiff, Cross-defendant and Appellant,

v.

UNITED WATER CONSERVATION 

DISTRICT et al.,

 Defendants, Cross-complainants and

 Appellants.

2d Civil No. B251810

(Super. Ct. Nos. VENCI 00401714,

VENCI 1414739)

(Santa Barbara County)

ORDER MODIFYING OPINION

AND DENYING REHEARING

[NO CHANGE IN JUDGMENT]

THE COURT:

It is ordered the opinion filed on March 17, 2015, be modified as follows:

On page 6, in the last line of the first paragraph, the word "generally" is 

inserted before "prohibited by Proposition 13 altogether."

On page 8, in the last two lines of the second full paragraph, the word 

"two-thirds" is inserted before "majority of voters" and "subd. (b)" is replaced with 

"subd. (d)".

On page 26, in the fourth sentence of the last paragraph beginning with 

"Large-scale users such as the City receive a far greater benefit from individual 

landowners" the word "from" is replaced with "than".

[There is no change in the judgment.]

The City's petition for rehearing is denied.
Filed 3/17/15 (unmodified version)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

CITY OF SAN BUENAVENTURA,

Plaintiff, Cross-defendant and Appellant,

v.

UNITED WATER CONSERVATION 

DISTRICT et al.,

Defendants, Cross-complainants and 

Appellants.

2d Civil No. B251810

(Super. Ct. Nos. VENCI 00401714, 

VENCI 1414739)

(Santa Barbara County)

Appellants United Water Conservation District and its board of directors 

(collectively, District) manage the groundwater resources in central Ventura County. 

Appellant City of San Buenaventura (City) pumps groundwater from District territory 

and sells it to residential customers. The District collects a fee from groundwater 

pumpers, including the City, based on the volume of water they pump. The Water Code 

authorizes this fee (Wat. Code, §§ 74508, 75522)1 and requires the District to set 

different rates for different uses. Groundwater extracted for non-agricultural purposes 

must be charged at three to five times the rate applicable to water used for agricultural 

purposes. (§ 75594.)

 

1 All statutory references are to the Water Code unless otherwise stated.
2

Article XIII D of the California Constitution governs fees "upon a parcel or 

upon a person as an incident of property ownership, including a user fee or charge for a 

property related service." (Cal. Const., art. XIII D, §§ 1, 2, subd. (e).) The City contends 

that the fees it pays the District violate article XIII D because they "exceed the 

proportional cost of the service attributable to the parcel[s]" of land from which the City 

pumps its water. (Id. § 6, subd. (b)(3).)

The threshold question before us is whether the District's groundwater 

extraction charges are property-related and thus subject to article XIII D. The trial court, 

relying on Pajaro Valley Water Management Agency v. Amrhein (2007) 150 Cal.App.4th 

1364 (Pajaro), concluded that they are. It found that the District's pumping charges 

violated article XIII D because, pursuant to section 75594, the District charged the City 

three times the rate it charged pumpers who extracted water for agricultural purposes. 

The court calculated the amount of overcharges in two separate years and issued writs of 

mandate requiring the District to refund these amounts to the City. The District appeals 

this decision, and the City cross-appeals, seeking declaratory relief that the trial court 

denied.

We conclude that the pumping fees paid by the City are not propertyrelated and that Pajaro is distinguishable. We reject the City's alternative arguments. 

The pumping fees are not taxes subject to the requirements of article XIII C. In addition, 

substantial evidence supports the trial court's finding that the charges are valid regulatory 

fees because they are fair and reasonable, and do not exceed the District's resource 

management costs. Therefore, we reverse the judgment awarding relief to the City and 

direct the trial court to vacate its writs of mandate. Otherwise, we affirm.

BACKGROUND

I.

Factual and Statutory Background

The District is organized and operated pursuant to the Water Conservation 

District Law of 1931 (codified as amended in § 74000 et seq.). Its stated purpose is to 

"manage, protect, conserve and enhance the water resources of the Santa Clara River, its 
3

tributaries and associated aquifers, in the most cost effective and environmentally 

balanced manner." To this end, the Water Code authorizes the District to conduct water 

resource investigations (§ 74520), acquire water and water rights (§ 74521), build 

facilities to store and recharge water (§ 74522), construct wells and pipelines for water 

deliveries (§ 74525), commence actions involving water rights and water use (§ 74641), 

prevent interference with or diminution of stream and river flows and their associated 

natural subterranean supply of water (§ 74642), and acquire and operate recreational 

facilities associated with dams and reservoirs (§ 74540).

The District covers approximately 214,000 acres in central Ventura County

along the lower Santa Clara River valley and the Oxnard Plain. It comprises portions of 

several groundwater basins.

2 Along the Santa Clara River, from upstream to 

downstream, the District includes most or all of the Piru, Fillmore, Santa Paula, Oxnard 

Forebay, Oxnard Plain, and Mound basins. To the east of the Oxnard Plain basin, the 

District includes the West Las Posas basin and part of the Pleasant Valley basin. 

Groundwater recharge in these basins occurs naturally from rainfall as well 

as from river and stream flow infiltration and percolation. Heavy demand for 

groundwater throughout the District from both agricultural and urban users causes 

overdraft, the amount by which extractions exceed natural water recharge. (See 

§ 75506.) Artificial recharge is critical to minimize the overdraft. The District 

replenishes the groundwater supply directly by spreading diverted river water over 

grounds at the northern part of the Oxnard Plain. In addition, the District augments

groundwater indirectly by delivering water through pipelines to users near the coast who 

would otherwise attempt to meet their water needs by pumping it from the ground.

Despite these mitigation efforts, pumping in the District has exceeded recharge, both 

natural and artificial, by an average of 20,400 acre-feet per year over the past decade. 

 

2 A groundwater basin is "[a]n alluvial aquifer or a stacked series of alluvial 

aquifers with reasonably well-defined boundaries in a lateral direction and having a 

definable bottom." (Department of Water Resources, Bulletin 118-03, at p. 216.) An 

aquifer is "[a] body of rock or sediment that is sufficiently porous and permeable to store, 

transmit, and yield significant or economic quantities of groundwater to wells and 

springs." (Id. at p. 214.)
4

This has led to problems of subsidence and salt water intrusion into aquifers along the 

coast. 

The District's water management activities and ongoing operating expenses 

require a means of funding. The District currently generates revenue from three main 

sources: property taxes (§ 75370), water delivery charges (§ 74592), and, at issue here, 

pump charges (§ 75522). Historically, the District relied solely on property taxes and 

water delivery charges. In 1979, after it had become clear that these two sources were

insufficient to support the District's activities, particularly the reversal of overdraft and 

saline intrusion on the Oxnard Plain basin, the District began levying a charge on 

groundwater produced within its territory—i.e., pump charges. 

The Water Code authorizes districts to impose pump charges in one or 

more zones within the district "for the benefit of all who rely directly or indirectly upon 

the ground water supplies." (§ 75522.) Zones may overlap and include the entire district 

(§ 75540), as does the District's Zone A, from which revenues are applied to a "general"

fund used for District-wide conservation efforts. Although the rates charged may vary 

from zone to zone, the rate within each zone must be "fixed and uniform" for each of two 

classes of use—water used for agricultural purposes and water used for all other 

purposes. (§ 75594.) Subject to exceptions not at issue here, section 75594 prohibits a 

district from equalizing the rates charged for the two types of use.

3 Instead, the rate for 

non-agricultural use must be between three and five times that charged for agricultural 

use. The District has always set rates at the minimum 3:1 ratio. 

In the 1980s and early 1990s, the District planned and constructed the 

Freeman Diversion project (Freeman), a major improvement to its surface water 

diversion facilities along the Santa Clara River near Saticoy. Freeman permanently 

diverted water from the Santa Clara River to recharge groundwater in the Oxnard Plain 

 

3 Section 75594 provides in relevant part that "any ground water charge in any 

year shall be established at a fixed and uniform rate for each acre-foot for water other 

than agricultural water which is not less than three times nor more than five times the 

fixed and uniform rate established for agricultural water." The Water Code defines 

"agricultural water" to mean "water first used on lands in the production of plant crops or 

livestock for market." (§ 75508.)
5

basin in order to mitigate declining water levels and seawater intrusion. To help finance 

Freeman, the District imposed groundwater pumping charges in the area that it 

determined received the recharge benefit from Freeman. This area, designated as Zone 

B, currently comprises the basins south of the Santa Clara River's north bank, which 

include the Oxnard Plain basin, the Oxnard Forebay basin, the Pleasant Valley basin, and 

a portion of the West Las Posas basin. 

The City overlies nearly the entire Mound basin. At the time the District 

implemented the pumping charges to fund Freeman, there was a lack of technical 

agreement as to the degree pumpers in the Mound basin benefited from District's 

activities. The City maintained that its wells would not benefit from Freeman and filed 

several lawsuits seeking to invalidate both the new Freeman-related charges and the 

District's general pump charges as they applied to City. The parties reached a settlement 

in 1987. The agreement provided that the Mound basin would be excluded from the 

Freeman-related charges and a separate billing zone (Zone C) would be established 

covering the area of the Oxnard Plain basin north of the Santa Clara River. Within Zone 

C, municipal pumping rates for Freeman were to equal agricultural rates on the Oxnard 

Plain south of the Santa Clara River. This was accomplished by setting the rates for Zone 

C equal to a third of the rates for Zone B.

The settlement agreement expired at the end of the 2010-2011 water year 

when the District paid off its construction loan for Freeman. Beginning in the 2011-2012 

water year, Zone C was abolished and incorporated into Zone B, resulting in substantially 

higher pumping rates for groundwater extractors in the former Zone C. It is this increase 

in rates to which the City objects.

II.

The Constitutional Overlay

Proposition 13 was adopted by the electorate in 1978. It added article 

XIII A to the California Constitution, "imposing important limitations upon the 

assessment and taxing powers of state and local governments." (Amador Valley Joint 

Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 218.) Its 
6

principal provisions set maximum rates for ad valorem property taxes and for increases in 

a property's assessed valuation. (Howard Jarvis Taxpayers Assn. v. City of Riverside

(1999) 73 Cal.App.4th 679, 681.) Crucially, Proposition 13 restricted cities, counties, 

and special districts from imposing "special taxes" except by a two-thirds vote of the 

district's qualified electors. (Cal. Const., art. XIII A, § 4.) A "special tax" is a tax 

"imposed for specific purposes," as opposed to a "general tax," which is "imposed for 

general governmental purposes." (Gov. Code, § 53721; accord, Cal. Const., art. XIII C, 

§ 1, subd. (d).) A local government's use of certain types of special taxes—"ad valorem

taxes on real property or a transaction tax or sales tax on the sale of real property"—was 

prohibited by Proposition 13 altogether. (Cal. Const., art. XIII A, § 4.)

A series of judicial decisions diminished Proposition 13's import by 

allowing local governments to generate revenue without a two-thirds vote. (See Schmeer 

v. County of Los Angeles (2013) 213 Cal.App.4th 1310, 1317-1319 [discussing several 

such cases].) The watershed case was Knox v. City of Orland (1992) 4 Cal.4th 132, in 

which the California Supreme Court upheld, as a "special assessment" rather than a 

"special tax," a city's levy on real property to fund park maintenance. A special 

assessment under Knox did not require voter approval at all. It was a "''''compulsory 

charge placed by the state upon real property within a pre-determined district, made 

under express legislative authority for defraying in whole or in part the expense of a 

permanent public improvement therein . . . .'" . . .'" (Id. at pp. 141-142.) A special tax, 

while also levied for a specific purpose, differed from a special assessment in that it need 

not "confer a special benefit upon the property assessed beyond that conferred generally." 

(Id. at p. 142, fn. omitted.) The result was that Proposition 13's directive of limiting the 

taxes imposed on property owners, and in particular homeowners, was circumvented 

through an ever increasing proliferation of special assessments and other property-related 

fees and charges that were not deemed "taxes." (See Apartment Assn. of Los Angeles 

County, Inc. v. City of Los Angeles (2001) 24 Cal.4th 830, 839 (Apartment Association).)

In response, the voters in 1996 approved Proposition 218, which added 

articles XIII C and XIII D to the state Constitution. (See Howard Jarvis Taxpayers Assn. 
7

v. City of Riverside, supra, 73 Cal.App.4th at p. 682.) Proposition 218's intent was "to 

prohibit unratified exactions imposed on property owners as such." (Apartment 

Association, supra, 24 Cal.4th at p. 838.) It restricted local governments attempting to 

raise funds from property owners to four methods: (1) an ad valorem property tax, (2) a 

special tax, (3) an assessment, and (4) a "fee" or "charge" (the terms are interchangeable) 

for property-related services. (Cal. Const., art. XIII D, § 3; Howard Jarvis Taxpayers 

Assn. v. City of Fresno (2005) 127 Cal.App.4th 914, 918.) Proposition 218 extended 

Proposition 13's limitations on ad valorem property taxes and special taxes by placing 

similar restrictions on assessments and property-related fees and charges, including the 

two-thirds vote requirement. (Howard Jarvis v. City of Riverside, supra, at p. 682.)

While Proposition 218 sharply limited local governments' ability to raise 

revenue from property owners without their consent, it did little to limit the imposition of 

regulatory fees imposed on a basis other than property ownership. Fees classified as 

something other than "taxes" were not subject to Proposition 13. For example, in Sinclair 

Paint Co. v. State Bd. of Equalization (1997) 15 Cal.4th 866, the Supreme Court 

considered certain "fees" imposed on manufacturers that contributed to environmental 

lead contamination. Sinclair Paint concluded that the fees funding services for potential 

child victims of lead poisoning constituted "bona fide regulatory fees, not taxes, because 

the Legislature imposed the fees to mitigate the actual or anticipated adverse effects of 

the fee payers' operations, and [by law] the amount of the fees must bear a reasonable 

relationship to those adverse effects." (Id. at p. 870.)

Largely in response to the Sinclair Paint decision, California voters 

approved Proposition 26 in 2010 to close the perceived loopholes in Propositions 13 and 

218 that had allowed "a proliferation of regulatory fees imposed by the state without a 

two-thirds vote of the Legislature or imposed by local governments without the voters'

approval." (Schmeer v. County of Los Angeles, supra, 213 Cal.App.4th at pp. 1322, 

1326.) Proposition 26 broadened the constitutional definition of "'tax' to include 'any 

levy, charge, or exaction of any kind imposed by' the state or a local government, with 

specified exceptions." (Id. at p. 1326, citing Cal. Const., art. XIII C, § 1; see Prop. 26, 
8

§ 1, subd. (f) ["[T]his measure . . . defines a 'tax' for state and local purposes so that 

neither the Legislature nor local governments can circumvent the[] restrictions [in Props.

13 and 218] on increasing taxes by simply defining new or expanded taxes as 'fees'"].)

Taken together, Propositions 13, 218, and 26 create a classification system

for revenue-generating measures promulgated by local government entities. Any such 

measure is presumptively a tax. If the revenue is collected for a payor-specific benefit or 

service (see Cal. Const., art. XIII C, § 1, subds. (e)(1) & (e)(2)), certain regulatory costs 

(see id. subd. (e)(3)), the use, lease, or purchase of government property (see id. subd. 

(e)(4)), judicial fines or penalties (see id. subd. (e)(5)), or property development charges 

(see id. subd. (e)(6)), it is not a tax. In addition, a measure is not a tax if under article

XIII D it constitutes an assessment on real property or a property-related "fee" or 

"charge." (See id. subd. (e)(7).) A fee or charge is "any levy other than an ad valorem 

tax, a special tax, or an assessment, imposed . . . upon a parcel or upon a person as an 

incident of property ownership, including a user fee or charge for a property related 

service." (Id. subd. (e).)

A measure's classification determines the requirements to which it is 

subject. Taxes cannot be levied by a special purpose district (such as the District) for 

general revenue purposes. (Cal. Const., art. XIII C, § 2, subd. (a).) A special purpose 

district can levy a tax for a specific purpose only with the approval of a majority of 

voters. (Id. subd. (b).)

In order to levy a property-related fee or charge, a number of procedural 

and substantive requirements must be met. As relevant here, the fee must not "exceed the 

proportional cost of the service attributable to the parcel." (Cal. Const., art. XIII D, § 6, 

subd. (b)(3).) Although property-related fees generally require approval by either a 

majority of the affected property owners or two-thirds of the voters in the affected area, a 

property-related fee for water service does not. (Id. subd. (c).)

A fee or charge for a payor-specific benefit or service that is neither 

property-related nor a tax must "not exceed the reasonable costs to the local government 

of conferring the benefit[,] granting the privilege," or "providing the service or product." 
9

(Cal. Const., art. XIII C, § 1, subds. (e)(1) & (e)(2).) "[T]he manner in which those costs 

are allocated to a payor [must] bear a fair or reasonable relationship to the payor's 

burdens on, or benefits received from, the governmental activity." (Id. subd. (e)(7).) 

Such a fee or charge normally does not require voter approval.

III.

Procedural Background

After Freeman was paid off and the terms of the 1987 settlement were no 

longer in force, the District proposed to eliminate Zone C and merge it with Zone B, 

effectively tripling the City's rate per acre-foot of water. In addition, in both the 2011-

2012 and 2012-2013 water years, the District proposed increasing the rate charged 

District-wide (Zone A). The District notified well owners of the proposed changes and 

invited them to comment. Only a minority of the well owners, including the City, 

submitted protest letters. Over the City's objections, the District eliminated Zone C and 

adopted the proposed rates.

The City filed two lawsuits, which were consolidated. It sought to overturn 

the District's rate decisions through a writ of mandate (Code Civ. Proc., § 1085), an 

administrative mandate (id. § 1094.5), declaratory relief (id. § 1060), and a reverse 

validation action (id. § 860 et seq.). The California Federation of Farm Bureaus, the 

Ventura County Farm Bureau, and the Pleasant Valley County Water District answered 

the validation cause of action and intervened in the others.

4 The District filed a crosscomplaint seeking declaratory relief upholding its rate determinations in water year 2011-

2012.

The City challenged the rates on two fronts. First, it asserted that the 

statutorily-mandated 3:1 ratio between groundwater extraction rates for non-agricultural 

and agricultural uses constituted an illegal subsidy for agricultural users at the expense of 

 

4 These parties were not named defendants or respondents except insofar as the 

City's validation cause of action named as defendants "all persons interested in the 

validity of the rates adopted by the United Water Conservation District." They are not 

parties to the appeal. The California Federation of Farm Bureaus filed an amicus brief in 

support of the District.
10

other users. Second, the City questioned the propriety of including in the District-wide 

Zone A rates certain of the District's expenses that the City contended either did not 

benefit it at all or benefitted it less than other groundwater users. The City maintained 

that these practices violated Propositions 13, 218, and 26, the common law of 

ratemaking, and section 54999.7, subdivision (a), of the Government Code (San Marcos

legislation).

5

The trial court concluded that the groundwater extraction charges (1) bore a 

reasonable relationship to the City's burdens on and benefits from the regulatory activity 

and thus were valid regulatory fees rather than special taxes subject to Proposition 13; (2) 

were property related fees and charges subject to article XIII D (Prop. 218); and (3) were 

not, as property related fees, taxes under Proposition 26. The court did not determine 

whether the San Marcos legislation or the common law of utility rate-making applied to 

the extraction charges but found that, if they did, the charges did not exceed the 

reasonable cost to the District of providing the service and were reasonable, fair, and 

equitable.

Analyzing the extraction charges under article XIII D, the trial court 

similarly found that the charges in the aggregate were reasonably proportional to the 

District's costs and comported with Proposition 218. However, it found that the 3:1 ratio 

between rates for non-agricultural and agricultural water use mandated by section 75594 

was unconstitutional under Proposition 218 for the water years in question because the 

District failed to present evidence that the rate differential reflected a cost differential. 

The court found that the City was entitled to a partial refund in the amount it paid in 

excess of a rate based upon the District's average cost for all types of water usage. It 

 

5 San Marcos Water Dist. v. San Marcos Unified School Dist. (1986) 42 Cal.3d 

154 held that, absent legislative authorization, a public entity's constitutional exemption 

from special assessments prohibited a local water district from imposing a capacity fee 

for funding capital improvements to the water system. (See Regents of University of 

California v. East Bay Municipal Utility Dist. (2005) 130 Cal.App.4th 1361, 1366.) The 

San Marcos legislation granted that express authorization, subject to certain substantive 

and procedural requirements.
11

issued writs of mandate awarding the City a partial refund of $548,296.22 for 2011-2012 

and $794,815.57 for 2012-2013, plus pre-judgment interest.

6

The District appeals the trial court's conclusion that Proposition 218 applies 

to its groundwater extraction charges. In the alternative, it appeals the court's ruling that 

to satisfy Proposition 218, the District must present quantitative evidence justifying the 

3:1 rate disparity rather than pointing to qualitative differences between agricultural and 

other water users that impact the relative cost of conservation services. The District also 

appeals the court's decision to award a partial refund rather than to remand to the District 

so that it can conduct further proceedings to determine whether the 3:1 ratio is justified

under article XIII D. Finally, the District contends that the court's refund calculation is 

incorrect.

The City cross-appeals, seeking declaratory relief. First, it asks us to hold 

that section 75594's rate ratio is facially unconstitutional. It also requests a declaration 

that the District must limit its groundwater extraction charges to the cost of providing 

services that have a demonstrated relationship to groundwater use. In addition, the City

seeks a declaration that the District's rate structure must take into account the scientific 

evidence regarding how different groundwater basins respond to specific recharge efforts 

rather than charging all groundwater users a uniform rate for District-wide conservation 

efforts. The City does not challenge the trial court's findings that the groundwater 

extraction charges were not "special taxes" under Proposition 13 and did not violate the 

common law of utility ratemaking.

We conclude that the pump charges paid by the City are neither propertyrelated fees nor taxes, that they do not exceed the District's reasonable costs of 

maintaining the groundwater supply, and that the District allocates those costs in a fair or 

reasonable relationship to the City's burdens on this resource. Accordingly, we reverse 

the judgment in favor of the City and direct the trial court to vacate its writs of mandate.

 

6 The trial court, finding that a writ of mandate and declaratory judgment were the 

only appropriate forms of relief, denied the petition for writ of administrative mandate 

and the reverse validation complaint. Neither party contests this aspect of the court's 

judgment.
12

DISCUSSION

I.

Standard of Review

We review de novo a trial court's determinations whether taxes, fees, and 

assessments imposed by a local governmental entity are constitutional, exercising our 

independent judgment. (Silicon Valley Taxpayers' Assn., Inc. v. Santa Clara County

Open Space Authority (2008) 44 Cal.4th 431, 448-450.) In the trial court, the 

governmental entity has the burden of showing, by reference to the face of the record 

before it, that its charges satisfy the Constitution. (See Cal. Const., arts. XIII A, § 3, 

subd. (d), XIII C, § 1, subd. (e), XIII D, § 6, subd. (b)(5); see also California Farm 

Bureau Federation v. State Water Resources Control Bd. (2011) 51 Cal.4th 421, 436-

437.) On appeal, as in any case, the appealing party has the responsibility of 

affirmatively demonstrating error. (Morgan v. Imperial Irrigation District (2014) 223 

Cal.App.4th 892, 913.)

"[W]e exercise our independent judgment in reviewing the record," but "we 

do not take new evidence or decide disputed issues of fact." (Morgan v. Imperial 

Irrigation District, supra, 223 Cal.App.4th at p. 912.) Instead, we review the resolution 

of factual conflicts by the trial court under the substantial evidence standard. (Id. at p. 

916.) "Under this standard, 'the power of an appellate court begins and ends with the 

determination as to whether there is any substantial evidence, contradicted or 

uncontradicted, which will support the finding of fact.' [Citation.]"

7 (Ibid.; see Schmeer

v. County of Los Angeles, supra, 213 Cal.App.4th at p. 1316.)

 

7 The City asserts that our "[r]eview of factual issues is de novo" because we are 

"equally well placed" as the trial court to review the "cold" administrative record. Not so. 

While the City is correct that in a mandamus action the scope of review can be identical 

in the trial and appellate courts (see, e.g., Stone v. Regents of University of California

(1999) 77 Cal.App.4th 736, 745), that is because courts at each level normally give great 

deference to an agency's factual findings made in support of its action. (McGill v. 

Regents of University of California (1996) 44 Cal.App.4th 1776, 1786.) Here, the factual 

findings under review were made by the trial court, not the District, so we apply the less 

but still highly deferential "substantial evidence" standard.
13

II.

Construction of a Voter Initiative

When construing a provision of the state Constitution brought about by 

voter initiative, we apply the same interpretive principles governing statutory 

construction. (Professional Engineers in California Government v. Kempton (2007) 40 

Cal.4th 1016, 1037.) "[O]ur paramount task is to ascertain the intent of those who 

enacted it." (Greene v. Marin County Flood Control & Water Conservation Dist. (2010) 

49 Cal.4th 277, 290.) We look first to the provision's language as the best indicator of 

the voters' intent (California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231, 

265), giving words their ordinary meaning and construing them in the context of the 

measure as a whole and its overall scheme. (Professional Engineers, at p. 1037.) 

"'Absent ambiguity, we presume that the voters intend the meaning apparent on the face 

of an initiative measure . . . and the court may not add to the statute or rewrite it to 

conform to an assumed intent that is not apparent in its language.' [Citation.] Where 

there is ambiguity in the language of the measure, '[b]allot summaries and arguments 

may be considered when determining the voters' intent and understanding of a ballot 

measure.' [Citation.]" (Ibid.)

Proposition 218 instructs courts to liberally construe its provisions "to 

effectuate its purposes of limiting local government revenue and enhancing taxpayer 

consent." (Prop. 218, § 5.) At the same time, repeal of existing legislation by implication 

is strongly disfavored. (Pacific Palisades Bowl Mobile Estates, LLC v. City of Los 

Angeles (2012) 55 Cal.4th 783, 807; St. Cyr v. California FAIR Plan Association (2014) 

223 Cal.App.4th 786, 799.) We presume the validity of a legislative act, resolving all 

doubts in its favor, and must uphold it unless a "'. . . conflict with a provision of the state 

or federal Constitution is clear and unquestionable . . . .'" (Amwest Surety Ins. Co. v. 

Wilson (1995) 11 Cal.4th 1243, 1252.)
14

III.

The Pump Fees Are Not Property-Related Fees or Charges

The trial court determined that it was constrained by Pajaro and, as a result,

concluded that the pump fees at issue constituted property-related fees or charges. Before 

explaining why Pajaro is distinguishable, we must discuss the trio of Supreme Court 

cases underlying its holding: Apartment Association; Richmond v. Shasta Community 

Services District (2004) 32 Cal.4th 409 (Richmond); and Bighorn-Desert View Water 

Agency v. Verjil (2006) 39 Cal.4th 205 (Bighorn).

A.

Supreme Court Authority Regarding "Property-Related Fees and Charges"

Apartment Association involved a municipal housing code provision that 

imposed an annual $12 fee on residential rental property owners to finance the city's cost 

of inspection and enforcement. (Apartment Association, supra, 24 Cal.4th at p. 833.) 

The Supreme Court held that the fee was not subject to Proposition 218 because it was 

"imposed on landlords not in their capacity as landowners, but in their capacity as 

business owners." (Id. at p. 840.) It thus was "more in the nature of a fee for a business 

license than a charge against property." (Ibid.)

The Court explained that regulatory fees and property-related fees are not 

mutually exclusive. (Apartment Association, supra, 24 Cal.4th at p. 838 ["[T]he mere

fact that a levy is regulatory . . . or touches on business activities . . . is not enough, by 

itself, to remove it from article XIII D's scope"].) The hallmark of a property-related fee 

is that "it applies only to exactions levied solely by virtue of property ownership." (Id. at 

p. 842.) In other words, Proposition 218 applies to "exactions . . . that are directly

associated with property ownership" and that "burden landowners as landowners" rather 

than on "levies linked more indirectly to property ownership." (Id. at pp. 839, 842, first 

italics added.)

Richmond again considered the scope of a property-related fee or charge. 

The district that supplied water to residential and commercial users imposed a connection 

fee for new water service, one component of which was a fire suppression charge used to 
15

purchase equipment for the volunteer fire department. (Id. at pp. 415-416, 425.) A group 

of real property owners challenged the ordinance as levying an illegal property-related 

fee. (Id. at p. 416.)

While agreeing with the plaintiffs' contention "that supplying water is a 

'property-related service' within the meaning of article XIII D's definition of a fee or 

charge," Richmond rejected their broader argument "that all water service charges are 

necessarily subject to the restrictions that article XIII D imposes on fees and charges." 

(Richmond, supra, 32 Cal.4th at pp. 426-427.) The Supreme Court distinguished "[a] fee 

for ongoing water service through an existing connection" from "a fee for making a new 

connection to the system." (Id. at p. 427.) The former "requires nothing other than 

normal ownership and use of property" whereas the latter "results from the owner's 

voluntary decision to apply for the connection." (Ibid.) Because the charge on the

owner's voluntary decision to apply for a service connection was not a charge on the 

property-related service itself, it was not subject to Proposition 218. (Id. at p. 428.)

Finally, in Bighorn, a case that Pajaro ultimately found dispositive, the 

Supreme Court reiterated that rates and other charges for water delivery were "propertyrelated" within the meaning of Proposition 218. Bighorn involved a local agency that 

provided domestic water service to residents within its special district. A resident in the 

district sought to place an initiative on the ballot that would have limited the agency's 

rates and other water delivery charges. (Bighorn, supra, 39 Cal.4th at pp. 209-210.) The 

Court of Appeal held that article XIII C, section 3 of the California Constitution, which 

vests local voters with the power to "reduc[e] or repeal[] any local tax, assessment, fee or 

charge" by initiative, did not apply to the fees and charges at issue. (See Bighorn, at pp. 

211-212, fn. omitted.)

The Supreme Court disagreed, finding it obvious that section 3 applied to 

"fees and charges." The only issue was whether the meaning of "fees and charges" in 

article XIII C, which does not define the phrase, is coextensive with its meaning in article 

XIII D, where it is limited to property-related fees and charges. (See Cal. Const., art. 

XIII D, § 2, subd. (e).) Bighorn did not resolve this question other than to conclude that 
16

the "fees and charges" in article XIII C included the property-related fees and charges in 

article XIII D. Citing Richmond for the proposition that "a public water agency's charges 

for ongoing water delivery . . . are fees and charges within the meaning of article XIII D,"

the court held that such charges "are also fees within the meaning of section 3 of article 

XIII C." (Bighorn, supra, 39 Cal.4th at p. 216.)

Relying on dictum in Apartment Association that "it is unclear . . . whether 

a fee to provide gas or electricity service is the same as a fee imposed on the consumption 

of electricity or gas" (Apartment Association, supra, 24 Cal.4th at p. 844), the agency in 

Bighorn argued that its volumetric charges were based on consumption rather than 

property and were not subject to Proposition 218. In its view, only the fixed monthly 

charge that it imposed on all customers regardless of usage was property-related.

The court rejected this argument. Pointing out that article XIII D 

"'includ[es] a user fee or charge for a property related service'" (Cal. Const., art. XIII D, 

§ 2, subd. (e)), Bighorn concluded that "[c]onsumption-based water delivery charges also 

fall within the definition of user fees, which are 'amounts charged to a person using a 

service where the amount of the charge is generally related to the value of the services 

provided.' [Citation.]" (Bighorn, supra, 39 Cal.4th at p. 217.)

B.

Pajaro

Like the District here, the Pajaro Valley Groundwater Basin faced problems 

of overdraft and seawater intrusion from decades of groundwater overuse. The Pajaro 

Valley Water Management Agency was created by special statute to combat these 

problems, in part by supplementing the area's water supply with sources other than 

groundwater. To that end, the agency was authorized to impose groundwater 

augmentation charges on the extraction of groundwater. (Pajaro, supra, 150 Cal.App.4th

at pp. 1370-1372.)

The agency adopted a groundwater management plan that included the 

construction of a 23-mile pipeline to import water from a neighboring county. It planned 

to fund the project in part through higher groundwater augmentation charges against all 
17

extractors of groundwater. The charges were levied at a set rate per acre-foot. Metered 

pumpers, many of which were large, agricultural users, paid based on their actual usage. 

Non-metered residential users paid a flat fee based on an estimated average rate of 

consumption per dwelling. (Pajaro, supra, 150 Cal.App.4th at pp. 1372-1374.)

The agency brought an action to validate the increased groundwater 

augmentation charges. The trial court declared the charges valid but the Court of Appeal 

reversed, holding that they constituted a charge incidental to property ownership. 

Because the agency had not complied with Proposition 218's procedural requirements for 

imposing such a charge, the augmentation charge was held invalid. (Pajaro, supra, 150 

Cal.App.4th at pp. 1374-1375, 1393.)

The appellate court characterized the augmentation fee as being "charged in 

return for the benefit of ongoing groundwater extraction and the service of securing the 

water supply for everyone in the basin." (Pajaro, supra, 150 Cal.App.4th at p. 1381, fn. 

omitted.) Ultimately, though, Pajaro concluded that whether the agency's fee was for a 

"service" was immaterial because it was "imposed as an incident of property ownership." 

(Id. at p. 1389.) Water extraction, the court posited, is "an activity in some ways more 

intimately connected with property ownership than is the mere receipt of delivered 

water." (Id. at p. 1391.)

Pajaro recognized that the conceptually similar Apartment Association

undermined its conclusion, insofar as that case held that "as an incident of" property 

ownership means "solely by virtue of" property ownership rather than "on an incident of"

property ownership. (Pajaro, supra, 150 Cal.App.4th at p. 1389.) However, Pajaro

dismissed Apartment Association as being of questionable vitality given that Bighorn

"did not mention the case at all." (Ibid.) Pajaro found no material distinction, for article 

XIII D purposes, between a charge on groundwater extraction and a charge on delivered 

water. (Id. at pp. 1388-1389.) Although the court speculated that the extraction charge 

might survive scrutiny under Bighorn if it were imposed only on non-residential users, 

the fact that a large majority of pumpers were using the water for residential or domestic 

uses was dispositive. (Id. at p. 1390.)
18

C.

Analysis

The level of abstraction at which we should analyze the constitutional text

is unclear. Do we determine whether groundwater extraction fees in general are imposed 

as an incident of property ownership? Or do we focus on the specific fee imposed by the 

District? And if the latter, do we consider the District's fee without regard to the payor at 

issue or do we consider the City's purpose in pumping groundwater?

The Pajaro court implied that the result could differ at least from district to 

district if not from user to user when it suggested that a charge on groundwater extracted

for nonresidential purposes might fall within the rationale of Apartment Association. 

(Pajaro, supra, 150 Cal.App.4th at pp. 1389-1390.) But this is far from certain. Our 

Constitution applies statewide. It would be anomalous to assign its provisions different 

meanings in different locations. (See Cal. Const., art. IV, § 16, subd. (a) ["All laws of a 

general nature have uniform operation"]; Ex parte Smith (1869) 38 Cal. 702, 710 

["[G]eneral laws . . . shall operate uniformly, or in the same manner upon all persons who 

stand in the same category, that is to say, upon all persons who stand in the same relation 

to the law, in respect to the privileges and immunities conferred by it, or the acts which it 

prohibits"].) Similarly, the City questions how the District "can . . . apply a 'uniform' rate 

as required by . . . section 74527 that is lawful as to the City but unconstitutional as to 

rural residential groundwater users." 

We need not resolve this issue. Whether we consider this specific pump fee 

or pump fees in general, we conclude that the fee is not property-related and that article 

XIII D does not apply.

Pajaro was based upon a unique set of facts—"that the vast majority of 

property owners in the Pajaro Valley obtained their water from wells, and that alternative 

sources were not practically feasible." (Pajaro, supra, 150 Cal.App.4th at p. 1397 (conc. 

opn. of Bamattre-Manoukian, J.).) That is far from the case here. While the record does 

not disclose the exact number of residential customers who pump water in lieu of 

connecting to an existing water delivery network, it is evident that this number is 
19

insubstantial relative to the number of residential customers receiving delivered water. 

There are at most 840 parcels with wells in the District. The City, whose 11 parcels 

account for only about 6 percent of the water extracted from these wells, delivers water to 

approximately 30,000 residential dwelling units in the District. And of course the City 

itself uses the water it pumps for commercial rather than residential purposes.8

Pajaro also found it significant that the agency's pump charge did not serve 

a regulatory purpose. (See Pajaro, supra, 150 Cal.App.4th at p. 1381 [concluding that 

fee charged to smaller, unmetered wells based on estimated usage was not "justified on 

regulatory grounds" but that a regulatory purpose "might still be readily invoked with 

respect to metered extractions"].)

9 According to Pajaro, Bighorn "le[ft] open the 

possibility that delivery of water for . . . nonresidential purposes is not a property-based 

service, and that charges for it are not incidental to the ownership of property. A finding 

that such a fee is not imposed as an incident of property ownership might be further 

supported by a clearly established regulatory purpose, e.g., to internalize the costs of the 

burdened activity or to conserve a supplied resource by structuring the fee in a manner

intended to deter waste and encourage efficiency." (Id. at pp. 1389-1390, fn. omitted.) 

Here, as the trial court found, the groundwater extraction fees serve the valid regulatory 

purpose of conserving water resources. (Cal. Const., art. X, § 2; §§ 75521, 75522.)

 

8 The City asserts that its "customers use the groundwater it delivers for residential 

purposes and it is entitled to speak for its customers." It is true that "a political 

subdivision of the state may challenge the constitutionality of a statute or regulation on 

behalf of its constituents where the constituents' rights under the challenged provision are 

'inextricably bound up with' the subdivision's duties under its enabling statutes." (Central 

Delta Water Agency v. State Water Resources Control Bd. (1993) 17 Cal.App.4th 621, 

629.) But the City's residential water customers lack independent standing to sue the 

District because they have no rights at stake. Nothing requires the City to obtain its water 

by pumping, and the City's customers, who do not pay the fees, have only an indirect 

financial interest in the constitutionality of the District's rates. (Cf. Loeffler v. Target 

Corp. (2014) 58 Cal.4th 1081, 1101, 1104, fn. omitted ["[W]e have permitted consumer 

intervention into the sales tax scheme in limited circumstances and only by means of a 

judicial proceeding to compel the retailer/taxpayer to seek a refund" since "[t]he retailer

is the taxpayer, not the consumer"].)

9 The City's wells are all metered. We do not necessarily agree with Pajaro that 

charging unmetered residential wells based on estimated usage is incompatible with a 

regulatory purpose, particularly in a district with large commercial pumpers and only a 

few residential ones. That issue is not before us.
20

Even if there were no factual record regarding the relative number of 

residential versus commercial well owners and a clear regulatory purpose, we would still 

conclude that a charge on groundwater extraction is not imposed as an incident of 

property ownership. In Orange County Water Dist. v. Farnsworth (1956) 138 

Cal.App.2d 518, the Court of Appeal considered a similar pump fee. The charge was 

challenged, among other reasons, on the ground that "the water which underlies real 

property is a part of the property itself and that the charge in question is, in effect, a tax 

levied by reason of ownership of the property . . . ." (Id. at pp. 529-530.) The Court of 

Appeal summarily rejected this argument. It found that "[t]he charge in question is more 

in the nature of an excise tax levied upon the activity of producing ground water by 

pumping operations" than "a tax levied by reason of the ownership of property." (Id. at p. 

530.)

We agree with Farnsworth that a pump fee is better characterized as a 

charge on the activity of pumping than a charge imposed by reason of property 

ownership. Given this characterization, the facts here are not materially different from 

those in Apartment Association. "The [pump] fee is not imposed solely because a person 

owns property. Rather, it is imposed because the property is being [used to extract 

groundwater]. It ceases along with the business operation, whether or not ownership 

remains in the same hands. For that reason, the [District] must prevail." (Apartment 

Association, supra, 24 Cal.4th at p. 838.)

That Bighorn did not cite Apartment Association is unsurprising. 

Richmond squarely stood for the proposition that charges for domestic water delivery 

service are property related, even though other charges less directly associated with the 

provision of water, namely connecting a property to the delivery system, are not. 

Bighorn, like Richmond, dealt with "a public water agency's charges for ongoing water 

delivery." (Bighorn, supra, 39 Cal.4th at p. 216.) It merely clarified that the charges for 

this service were subject to Proposition 218 whether they were volume-based 

"consumption" charges or flat-rate charges "imposed regardless of water usage." (Id. at 

pp. 216-217.) Apartment Association was far less relevant than Richmond to this issue. 
21

The Supreme Court's failure to cite a marginally relevant case does not signal that case's

implicit overruling. (See Griffith v. City of Santa Cruz (2012) 207 Cal.App.4th 982, 995 

[characterizing Apartment Association as "dispositive" of a Prop. 218 challenge].)

Nor do we think it overly important that pumping may not always be a 

"business operation." (See Pajaro, supra, 150 Cal.App.4th at p. 1391, fn. 18 [discussing 

the distinction set forth in Apartment Association between "[a] charge . . . imposed on a 

person because he owns land" and one "imposed because he engages in certain activity

on his land" and doubting "that it is satisfactorily captured by a distinction between 

business and domestic uses or purposes"].) In the City's case, of course, it is. The City 

pumps water for the municipal supply, which it then sells to residential customers. (See 

City of South Pasadena v. Pasadena Land & Water Co. (1908) 152 Cal. 579, 593 ["In 

administering a public utility, such as a water system, even within its own limits, a city 

does not act in its governmental capacity, but in a proprietary and only quasi-public 

capacity"].) But even with respect to the individual household that elects to pump water 

for its own consumption, the Supreme Court made clear in Richmond that residential 

business operations are not the only household activities exempt from article XIII D. 

That article applies only to charges on an activity that "requires nothing other than 

normal ownership and use of property." (Richmond, supra, 32 Cal.4th at p. 427, italics

added.) Voluntarily generating one's own utilities arguably is not a normal use of 

property, and in any event, it is a "business operation" in the sense that it affects the 

demand for municipal services. (Cf. Wickard v. Filburn (1942) 317 U.S. 111.)

We also disagree with Pajaro that the groundwater extraction charge need 

not constitute a fee for "service" provided by the District in order to fall within article

XIII D's scope. (See Pajaro, supra, 150 Cal.App.4th at p. 1389 ["The Agency contends 

that the charge is not a 'service fee,' but that proposition seems beside the point if the 

charge is imposed as an incident of property ownership"].) That is simply an untenable 

construction of the constitutional text, particularly taken in context.

Article XIII D provides that "[t]he amount of a fee or charge imposed upon 

any parcel or person as an incident of property ownership shall not exceed the 
22

proportional cost of the service attributable to the parcel." (Cal. Const., art. XIII D, § 6, 

subd. (b)(3), italics added.) Plainly, this refers to a service fee, albeit one imposed "as an 

incident of property ownership." (Id. at subd. (b)(3).) Most of the other substantive 

requirements imposed in section 6, subdivision (b) also explicitly apply to fees and 

charges for local government services. For example, subdivision (b)(1) prohibits 

revenues from the fee or charge from "exceed[ing] the funds required to provide the 

property related service." Subdivision (b)(4) states that "[n]o fee or charge may be 

imposed for a service unless that service is actually used by, or immediately available to, 

the owner of the property in question." It also forecloses "[f]ees or charges based on 

potential or future use of a service." (Ibid.) Subdivision (b)(5) proscribes charges for 

"general governmental services including, but not limited to, police, fire, ambulance or 

library services, where the service is available to the public at large in substantially the 

same manner as it is to property owners." These provisions refer to property-related 

services.

California Constitution, article XIII D, section 3 confirms this 

interpretation. It provides in relevant part that "[n]o tax, assessment, fee, or charge shall 

be assessed . . . upon any parcel of property or upon any person as an incident of property 

ownership except . . . [f]ees or charges for property related services as provided by this 

article."

10

We think it self-evident that in charging property owners for pumping 

groundwater, the District is not providing a "service" to property owners in the same way 

that the Bighorn agency provided a service by delivering water through pipes to 

residences. The conceptual difficulty with a contrary conclusion is apparent from 

Pajaro's attempt to define what the "service" at issue is. In its view, the District's service 

is "securing the water supply for everyone in the basin." (Pajaro, supra, 150 Cal.App.4th 

 

10 California Constitution, article XIII D, section 2 defines "property-related 

service" as "a public service having a direct relationship to property ownership." Section 

6, subdivision (b)(5), notes that "a significant factor in determining whether a fee or 

charge is imposed as an incident of property ownership for purposes of this article" is the 

agency's "[r]eliance . . . on any parcel map, including, but not limited to, an assessor's 

parcel map."
23

at p. 1381, fn. omitted.) But, if so, such a service cannot meet the requirement that it be 

"actually used by, or immediately available to, the owner of the property in question." 

(Cal. Const., art. XIII D, § 6, subd. (b)(4).) Moreover, it would fall within the realm of 

prohibited "[f]ees or charges based on potential or future use of a service." (Ibid.) Worse 

still, such a service is "available to the public at large in substantially the same manner as 

it is to property owners." (Id. at subd. (b)(5).) There is a fundamental conflict between a 

pump fee's classification as a property-related service and its validity under article 

XIII D.

The recently enacted Sustainable Groundwater Management Act (Stats. 

2014, chs. 346, 347, 348) (SGMA) bolsters our conclusion that the groundwater 

extraction fees here are not subject to article XIII D. Although the SGMA's amendments 

to the Water Code do not apply to the District because it is not currently part of a 

groundwater sustainability agency, the SGMA's treatment of groundwater extraction fees 

is instructive. The Legislature authorized such fees in two separate sections. In section 

10730.2, the Legislature expressly required that fees "to fund costs of groundwater 

management," including the "[s]upply, production, treatment, or distribution of water," be 

adopted in accordance with article XIII D. (§ 10730.2, subds. (a), (c).) Fees authorized 

pursuant to section 10730 "to fund the costs of a groundwater sustainability program"

have no such requirement. (§ 10730, subd. (a).) That the Legislature required 

groundwater sustainability agencies to impose some but not all groundwater extraction 

fees in compliance with article XIII D suggests that, in its view, compliance is not 

constitutionally required. (See In re Ethan C. (2012) 54 Cal.4th 610, 638 ["When 

language is included in one portion of a statute, its omission from a different portion 

addressing a similar subject suggests that the omission was purposeful"].)

We thus conclude that groundwater extraction charges are not propertyrelated charges or fees. Even if they were, however, we see no conflict between 

Proposition 218's substantive requirements and section 75594's required rate ratio. 

Proposition 218 mandates that the amount of the fee imposed on a parcel or a person as 

an incident of property ownership "not exceed the proportional cost of the service 
24

attributable to the parcel." (Cal. Const., art. XIII, § 6, subd. (b)(3).) Section 75594 does 

not discriminate between persons or parcels. It discriminates between types of use. (Cf. 

City of Palmdale v. Palmdale Water Dist. (2011) 198 Cal.App.4th 926 [local agency rates 

for delivered water violated Proposition 218 where agency discriminated among types of 

users even though "residential" users could use water for agricultural purposes].) If the 

City chooses to use its groundwater for agricultural purposes, it too can benefit from the 

lower rates.

That the City's desired use for the water it pumps is subject to a higher 

regulatory fee than agricultural use is a policy decision made by the Legislature, not the 

District. Section 6 of article XIII D governs only property-related fees and charges 

imposed by local government agencies. It does not govern the Legislature's statewide 

regulatory policy, particularly a policy decision made decades before the passage of 

Proposition 218. We "are required to try to harmonize constitutional language with that 

of existing statutes if possible." (Citizens Assn. of Sunset Beach v. Orange County Local 

Agency Formation Com. (2012) 209 Cal.App.4th 1182, 1192.) Because "it is possible to 

reconcile the language of Proposition 218 with [section 75594's mandatory rate ratio]

existing at the time of its passage, we must do so." (Ibid.)

IV.

The Pump Fees Are Not Taxes

The trial court found that the pump charges did not constitute "taxes" under 

Proposition 26's broader definition because they fell into the exception for propertyrelated fees and charges under article XIII D. Since we hold otherwise, we must address 

the City's alternative contention that the pump charges are taxes that were imposed in 

violation of Proposition 26.

A.

The Pump Fees Are for Payor-Specific Benefits

Pursuant to Proposition 26's presumption that "any levy, charge, or exaction 

of any kind imposed by a local government" is a tax, the pump fees must be taxes unless 
25

they fall into one of seven enumerated exceptions. (Cal. Const., art. XIII C, § 1, subd. 

(e).) We only need consider two of these exceptions, which apply to varying extents.

The third exception contains an exhaustive list of regulatory activities for 

which a local government can recover its reasonable costs through fees: "issuing licenses 

and permits, performing investigations, inspections, and audits, enforcing agricultural 

marketing orders, and the administrative enforcement and adjudication thereof." (Cal. 

Const., art. XIII C, § 1, subd. (e)(3).) Many of the costs associated with managing, 

protecting, conserving, and enhancing the District's water resources lie beyond the scope 

of this exception, but not all. In particular, the District is authorized to "make surveys 

and investigations" of its water supply and resources. (§ 74520.) These costs, to the 

extent they are included in the pump fees, are not taxes.

The District's strongest argument that the groundwater extraction fees are 

not taxes is that they fall within the first exception for payor-specific benefits and 

privileges. Pumpers receive an obvious benefit—they may extract groundwater from a 

managed basin.

The City complains that pumpers are merely exercising their existing 

property rights and that the District "does not grant the City a right or privilege to use 

groundwater any more than the County grants a homeowner the right to live in his or her 

home when collecting the property tax." This analogy is inapt. A pump fee is more like 

the entrance fee to a state or local park, which is not a tax (see Cal. Const., art. XIII C, 

§ 1, subd. (e)(4); id. art. XIII A, § 3, subd. (b)(4)). Although citizens generally have the 

right to enter such public land, the government is entitled to charge them a fee for its 

efforts to maintain the land so that it can be enjoyed by all who use it. (See Pub.

Resources Code, § 5010.) Without the District's resource management operations, 

groundwater would be depleted far faster and overdraft in the District would be far more 

severe. The District's conservation efforts thus constitute a specific benefit that accrues 

directly to those who use groundwater. Consequently, the pump fees are not taxes if, as 

the trial court found, they do not exceed the District's reasonable costs of groundwater 

management.
26

B.

The Pump Fees Do Not Exceed the District's Reasonable Costs

"A regulatory fee does not become a tax simply because the fee may be 

disproportionate to the service rendered to individual payors. [Citation.] The question of 

proportionality is not measured on an individual basis. Rather, it is measured 

collectively, considering all rate payors. [Citation.] [¶] Thus, permissible fees must be 

related to the overall cost of the governmental regulation. They need not be finely 

calibrated to the precise benefit each individual fee payor might derive. What a fee 

cannot do is exceed the reasonable cost of regulation with the generated surplus used for 

general revenue collection. An excessive fee that is used to generate general revenue 

becomes a tax." (California Farm Bureau Federation v. State Water Resources Control 

Bd., supra, 51 Cal.4th at p. 438; accord § 75596 [providing that groundwater charges 

"shall not produce funds for district purposes that would exceed such amount as is 

deemed necessary by the district board to be used in furtherance of district purposes in 

the replenishment, augmentation, and the protection of water supplies for users within the 

district"].)

The trial court found that "the basins within the [District's] boundaries are

[hydrogeologically] interconnected in complex and incompletely explained ways." We 

agree. The record contains substantial evidentiary support for this finding.

The City does not dispute that the actions of one pumper in the District 

affects every other pumper to some degree; rather, it criticizes the District for "impos[ing] 

District-wide rates that assume an equal degree of service to pumpers throughout its 

basins and three times the service to [municipal and industrial users] as to agriculture." 

Yet, by imposing fees based upon the volume of water extracted, the District largely does

charge individual pumpers in proportion to the benefit they receive from the District's 

conservation activities. The District ensures water availability District-wide. Large-scale 

users such as the City receive a far greater benefit from individual landowners who pump 

water for personal consumption. That is more than is required. The District need only 

ensure that its charges in the aggregate do not exceed its regulatory costs.
27

The City specifically challenges three expenditures allocated to the Districtwide Zone A charges: the cost to treat and deliver surface water to overdrafted coastal 

areas; the cost of purchasing water from the State for delivery to water customers; and the 

"recreation activities subfund," which the City asserts includes the cost of potable water 

delivery to the concessionaire at Lake Piru. The City contends these costs are unrelated 

to groundwater augmentation and management. 

Contrary to the City's assertion, the recreation activities subfund is actually 

supported by revenue from the concessionaire at Lake Piru and the ad valorem property 

taxes collected by the District. Likewise, the District pays for its State water allocation 

primarily from an annual voter-approved property assessment. 

More generally, the City is incorrect that the District's costs associated with 

the acquisition, treatment, transport, and delivery of State and surface water are unrelated 

to its groundwater management goals. The District sells water to customers who use the 

delivered water in lieu of water pumped from the ground, particularly in coastal areas 

where the problem of seawater intrusion is most acute. Although the City's wells are not 

located in these critical areas, it pumps the majority of its water from wells in the Oxnard 

Plain basin, which contributes to the problem by removing water that would otherwise 

flow to the critical areas near the coast. In any event, providing pumpers with a substitute 

to groundwater use eases the overall burden on the resource in the District.

On independent review we conclude that the District's pump fees do not 

exceed the reasonable cost of regulating the District's groundwater supply. Accordingly, 

these regulatory fees are not taxes and are not subject to approval by the voters.

V.

San Marcos Litigation

We agree with the trial court that, insofar as the San Marcos legislation 

applies, the District complied with it. The San Marcos legislation requires that when a 

public agency provides a "public utility service" to another public agency, the service fee 

cannot "exceed the reasonable cost of providing the public utility service." (Gov. Code, 

§ 54999.7, subd. (a).) As we have explained, the District does not provide a "service" to 
28

groundwater pumpers, many if not most of whom are not "public agencies," and its fees 

are not excessive in light of its reasonable costs.

DISPOSITION

The judgment is reversed insofar as it granted mandamus and declaratory 

relief to the City. The matter is remanded to the superior court with directions to vacate 

its writs of mandate in case numbers VENCI 00401714 and VENCI 1414739. The 

judgment is affirmed in all other respects. The District shall recover its costs on appeal.

CERTIFIED FOR PUBLICATION.

PERREN, J.

We concur:

GILBERT, P. J.

YEGAN, J.
29

Thomas P. Anderle, Judge

Superior Court County of Santa Barbara

______________________________

Ariel Pierre Calonne, former City Attorney, Keith Bauerle, Assistant City 

Attorney; Colantuono & Levin; Colantuono, Highsmith & Whatley, Michael G. 

Colantuono, David J. Ruderman, Michael R. Cobden, for Appellant City of San 

Buenaventura.

Musick, Peeler & Garrett, Anthony H. Trembley, Gregory J. Patterson, Cheryl A. 

Orr, for Appellants United Water Conservation District and Board of Directors of United 

Water Conservation District.

Nancy N. McDonough and Christian C. Scheuring for California Farm Bureau 

Federation as Amicus Curiae on behalf of Appellant United Water Conservation District.