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TO BE PUBLISHED IN THE OFFICIAL REPORTS
 

OFFICE OF THE ATTORNEY GENERAL
 

State of California
 

DANIEL E. LUNGREN
 

Attorney General
 

OPINION : 

: No. 94-1103 

of : 

: May 5, 1995 

DANIEL E. LUNGREN : 

Attorney General : 

: 

MAXINE P. CUTLER : 

Deputy Attorney General : 

: 

THE HONORABLE RUBEN AYALA, MEMBER OF THE CALIFORNIA STATE 

SENATE, has requested an opinion on the following question: 

May the Metropolitan Water District of Southern California impose a service 

availability charge upon each of its member agencies, and, at the request of a member agency, collect a 

portion of the service availability charge from each parcel owner within the member agency's service 

area, which would be received as a credit against the member agency's service availability obligation? 

CONCLUSION 

The Metropolitan Water District of Southern California may impose a service 

availability charge upon each of its member agencies, and, at the request of a member agency, collect a 

portion of the service availability charge from each parcel owner within the member agency's service 

area, which would be received as a credit against the member agency's service availability obligation. 

ANALYSIS 

The Metropolitan Water District of Southern California ("District") is organized under 

and governed by the provisions of the Metropolitan Water District Act of 1969. (Stats. 1969, ch. 209; 

formerly Stats. 1927, ch. 429; Deering's Wat. Uncod. Acts, Act 9129b; West's Wat. Code, Appendix, '

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109; "Act.")1 The District is "organized for the purpose of developing, storing and distributing water 

for domestic and municipal purposes." (' 25.) Each member of the District is a "public agency, the 

area of which, in whole or in part, is included within a metropolitan water district as a separate unit." 

(' 12.) 

The District's Board of Directors ("Board"), which is comprised of "at least one 

representative from each member public agency" (' 51), imposes rates and charges for water provided 

by the District. ('' 130-134.) It may also raise revenue by assessing a property tax (' 307), assessing 

a benefit assessment ('' 134.6-134.9), issuing short-term revenue certificates ('' 296-299.5) and 

incurring bonded indebtedness ('' 200-295.3). 

The question presented for resolution concerns the imposition of a service availability 

charge under the terms of section 134.5. The statute provides: 

"(a) The board may, from time to time, impose a water standby or availability 

service charge within a district. The amount of revenue to be raised by the service 

charge will be as determined by the board. 

"(b) Allocation of the service charge among member public agencies shall be in 

accordance with a method established by ordinance or resolution of the board. Factors 

that may be considered include, but are not limited to, historical water deliveries by a 

district; projected water service demands by member public agencies of a district; 

contracted water service demands by member public agencies of a district; service 

connection capacity; acreage; property parcels; population, and assessed valuation, or a 

combination thereof. 

"(c) The service charge may be collected from the member public agencies of a 

district. As an alternative, a district may impose a service charge as a standby charge 

against individual parcels within the district. In implementing this alternative, a 

district may exercise the powers of a county water district under Section 31031 of the 

Water Code, except that, notwithstanding Section 31031 of the Water Code, a district 

may (1) raise the standby charge rate above ten dollars ($10) per year by a majority vote 

of the board, and (2) after taking into account the factors specified in subdivision (b), 

fix different standby charge rates for parcels situated within different member public 

agencies. 

"(d) Before imposing or changing any water standby or availability service 

charge pursuant to this section, a district shall give written notice to each member 

public agency not less than 45 days prior to final adoption of the imposition or change. 

1

All unidentified section references are to the Act. 

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"(e) As an alternative to the two methods set forth in subdivision (c), a district, 

at the option of its board, may convert the charge to a benefit assessment to be levied 

pursuant to Sections 134.6 to 134.9." 

Water Code section 31031 provides in turn: 

"A district may fix, on or before the first day of July in each calendar year, a 

water standby or availability charge of not to exceed ten dollars ($10) per acre per year 

for each parcel of land, or ten dollars ($10) per year for each parcel of land less than an 

acre within the district to which water is made available for any purpose by the district, 

whether the water is actually used or not. The board of directors of a district which 

fixes such a charge may establish schedules varying such charge according to the land 

uses and degree of availability or quantity of use of such water to the affected lands, 

and may restrict such charge to lands lying within one or more improvement districts 

within such district." 

May the District assess each of its members a service availability charge but collect it in 

part from property owners within the service area of any member that requests such collection? We 

conclude that it may do so under the terms of section 134.5. 

We are informed that the District is planning a long-range capital improvements 

program to construct facilities necessary to maintain a reliable water supply. The District anticipates 

revising its rate structure, incorporating a commodity rate charge for the delivery of water, a property 

tax, a service availability charge (known as a "readiness-to-serve charge"), as well as new demand and 

connection maintenance charges. The service availability charge would be imposed on the District's 

member agencies to recover the debt service on bonds issued to finance the capital facilities and would 

be allocated among the District's member agencies on the basis of their historical water purchases. If a 

member agency so requests, a portion of the service availability charge would be collected from each 

parcel owner within the member's service area. A charge collected by the District on behalf of a 

member agency would be credited against the member agency's assessment. The member agency 

would remain liable for any amount of its service availability obligation not collected from the property 

owners. 

Service availability fees, or standby charges, are charges imposed on parcels of land 

regardless of whether any water is actually delivered. "Standby and availability charges are fees 

exacted for the benefit which accrues to property by virtue of having water available to it, even though 

the water might not actually be used at the present time." (Kennedy v. City of Ukiah (1977) 69 

Cal.App.3d 545, 553.) For our purposes, the terms "water standby charge" and "availability charge" 

have the same meaning. (Wat. Code, ' 389, subd. (a).) 

The Board is expressly authorized in section 134.5 to collect a service availability 

charge from its member agencies. As an alternative, it may impose the charge upon individual parcel 

owners within the District. Section 134.5 does not specifically address the collection mechanism now 

proposed by the Board. In order to determine whether the proposal comes within the terms of section 

134.5, we turn to applicable principles of statutory construction for guidance. "The rules of statutory 

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construction are well established. In interpreting a statute, the court should ascertain the intent of the 

Legislature so as to effect the purpose of the law." (City of Berkeley v. Cukierman (1993) 14 Cal. 

App.4th 1331, 1338-1339.) "[I]f the meaning of the words is not clear, courts must . . . refer to the 

legislative history." (Halbert's Lumber, Inc. v. Lucky Stores, Inc. (1992) 6 Cal.App.4th 1233, 1239.) 

"`[T]he provision must be given a reasonable and common sense interpretation consistent with the 

apparent purpose and intention of the lawmakers, practical rather than technical in nature, which upon 

application will result in wise policy rather than mischief or absurdity."' (In re Steven F. (1994) 21 

Cal.App.4th 1070, 1077.) 

With these principles in mind and looking at the individual provisions of section 134.5, 

we find that the Board must first determine "[t]he amount of revenue to be raised by the service 

charge." (' 134.5, subd. (a).) The total amount to be collected is then allocated to the areas of the 

individual member public agencies. (' 134.5, subd. (b).) Subdivision (c) of 134.5 provides two 

different methods of collecting the service charge: "The service charge may be collected from the 

member public agencies of a district. As an alternative a district may impose a service charge as a 

standby charge against individual parcels within a district." Finally, subdivision (e) of section 134.5 

authorizes the Board to convert the service charge into a benefit assessment. 

It is apparent that section 134.5, added to the Act by the Legislature in 1984 (Stats. 

1984, ch. 271, ' 5), was intended to furnish an additional source of funding for the Board. Section 

134.5 was added at the same time section 134 was amended (Stats. 1984, ch. 271, ' 4). Section 134 

provides: 

"The Board, so far as practicable, shall fix such rate or rates for water as will 

result in revenue which, together with revenue from any water standby or availability 

service charge or assessment, will pay the operating expenses of the district, provide for 

repairs and maintenance, provide for payment of the purchase price or other charges for 

property or services or other rights acquired by the district, and provide for the payment 

of the interest and principal of the bonded debt subject to the applicable provisions of 

this act authorizing issuance and retirement of the bonds. Those rates, subject to the 

provisions of this chapter, shall be uniform for like classes of service throughout the 

district." 

From the legislative history, it is evident that the Board is to have flexibility in 

generating its revenues. The Board may appropriately collect a service availability charge from its 

member agencies or impose a service availability charge against individual parcels within the District. 

We believe it to be reasonable for the Board to impose a service availability charge upon its member 

agencies, but if requested by a member agency, to collect a portion of the charge from each property 

owner as long as the amount collected is credited against the member agency's obligation. 

The Board has determined that the proposed rate structure will insure stability of funds 

and that the charges will be equitably allocated. It has concluded that a service availability charge is 

necessary to produce sufficient revenues to cover the District's operations. Substantial deference must 

be given to the Board's determination of its rate design. The Board is responsible for not only fairly 

allocating a finite resource, but also financing the system by which the resource is supplied. (See 

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Bryden v. East Bay Municipal Utility District (1994) 24 Cal.App.4th 178, 201.) "Rates established by 

the lawful rate-fixing body are presumed reasonable, fair and lawful." (Hansen v. City of San 

Buenaventura (1986) 42 Cal.3d 1172, 1180.) 

We conclude that the Board may impose a service availability charge upon each of its 

member agencies, and, at the request of a member agency, collect a portion of the service availability 

charge from each parcel owner within the member agency's service area, which would be received as a 

credit against the member agency's service availability obligation. 

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