Court Opinion

ID: 4384699
Source: CourtListenerOpinion
Date Created: 2019-04-05 18:01:56.995463+00
Date Added: 2024-06-11T14:50:15.741724
License: Public Domain

TO BE PUBLISHED IN THE OFFICIAL REPORTS

                       OFFICE OF THE ATTORNEY GENERAL
                                 State of California

                                  XAVIER BECERRA
                                   Attorney General

                             _________________________

                                            :
                 OPINION                    :                 No. 16-301
                                            :
                     of                     :                April 4, 2019
                                            :
           XAVIER BECERRA                   :
            Attorney General                :
                                            :
        MANUEL M. MEDEIROS                  :
        Deputy Attorney General             :
                                            :

________________________________________________________________________

       THE HONORABLE JOHN M. W. MOORLACH, MEMBER OF THE SENATE,
has requested an opinion on the following question:

       May a California water district make employer-paid retirement plan or pension
contributions on behalf of its governing board members (“directors”), where such plans
or pensions are otherwise authorized by the district’s enabling statutes, without violating
Water Code sections 20201 or 20202 regarding the compensation that water districts may
pay to their directors?

                                     CONCLUSION

       A California water district may make employer-paid retirement plan or pension
contributions on behalf of its directors, where such plans or pensions are otherwise
authorized by the district’s enabling statutes, without violating Water Code sections
20201 or 20202 regarding the compensation that water districts may pay to their
directors.

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                                        ANALYSIS

       In this opinion, we consider whether California water districts may lawfully make
contributions to their directors’ retirement plans or pensions. We conclude that they may.

       “There are hundreds of water special districts in California, with a great diversity
of purposes, governance structures, and financing mechanisms. Some districts are
responsible for one type of specific duty, while others provide a wide range of public
services. Some are governed by a county board of supervisors or city council while
others have their governing boards directly elected by the public.”1

       Water districts can be created either by forming under a general water district act,
or by a special act of the Legislature.2 General acts prescribe the duties, responsibilities,
and powers of the given type of district (water supply, sanitation, flood control, etc.), and
they apply to all districts of that type throughout the state. On the other hand, a special
act’s provisions apply only to the particular district that is the subject of the act.

       Compensation for water district directors is specified by the enabling statute
applicable to the district. Most enabling statutes provide for a director stipend of $100
per day for each day’s attendance at a meeting.3 But some provide for stipends of less

   1
         Legislative Analyst’s Office, Water Special Districts: A Look at Governance and
Public Participation” (March 2002), available at http://www.lao.ca.gov/2002/water_distri
cts/special_water_districts.html.
   2
      Despite the state Constitution’s preference for general laws whenever possible (Cal.
Const., art. IV, § 16), courts have found it permissible for the Legislature to create water
districts by special act where warranted (see Fairfield-Suisun Sewer Dist. v. Hutcheon
(1956) 139 Cal. App. 2d 502, 508-509).
   3
     E.g., Gov. Code, § 61047 (Stats. 2005, ch. 249, § 3 [Community Services Districts]);
Wat. Code, §§ 21166 (Stats. 1947, ch. 928, § 1, p. 2145 [Irrigation Districts]), 30507
(Stats. 1949, ch. 274, § 1, p. 500 [County Water Districts]), 30507.1 (Stats. 1987, ch. 880,
§ 1 [Contra Costa Water District]), 34740-34741 (Stats. 1951, ch. 390, § 1, p. 1196
[California Water Districts]), 40355 (Stats. 1951, ch. 391, § 1, p. 1240 [Water Storage
Districts]), 60143 (Stats. 1955, ch. 1514, § 1, p. 2766 [Water Replenishment Districts]),
71255 (Stats. 1963, ch. 156, § 1, p. 823 [Municipal Water Districts]), 74208 (Stats. 1965,
ch. 75, § 1, p. 961 [Water Conservation Districts]), 81339 (Stats. 2002, ch. 844, § 1 [Bay
Area Water Supply and Conservation Agency]), 81632 (Stats. 2002, ch. 849, § 1 [San
Francisco Bay Area Regional Water System Financing Authority]); Wat. Code App.
(West’s), §§ 40-6.5 (Stats. 1982, ch. 992, § 7, p. 3595 [Orange County Water District]),
142-503 (Stats. 2016, ch. 391, § 1 [Kings River East Groundwater Sustainability

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than $100 per day;4 some allow no compensation;5 some permit the board to set a “just
and reasonable” compensation;6 and some provide for salaries or a combination of
stipends and salaries.7

        We are informed that the Internal Revenue Service deems directors of water
district governing boards to be “employees,” and that director compensation is therefore
subject to Social Security taxation unless the directors are members of a public retirement
system.8 Although water districts may (and do) contract with the California Public
Employees Retirement System (CalPERS),9 members of part-time governing boards such

Agency]), 143-503 (Stats. 2016, ch. 392, § 1 [North Fork Kings Groundwater
Sustainability Agency]).
   4
     E.g., Wat. Code, §§ 12513 (Stats. 1977, ch. 393, § 2, p. 1388 [Colorado River Board
of California]) ($50 per day), 55305 (Stats. 1969, ch. 315, § 1, p. 687 [County Water
Works Districts]) ($10 per day); Wat. Code App. (West’s), §§ 116-3.11 (Stats. 1973, ch.
1089, § 3.11, p. 2210 [South Delta Water Agency]) ($25 per day), 117-3.11 (Stats. 1973,
ch. 1133, § 3.11 [Central Delta Water Agency]) ($25 per day).
   5
     E.g., Wat. Code App. (West’s) §§ 9-14 (Stats. 1905, ch. 310, § 14, p. 332 [Levee
Districts]), 48-16 (Stats. 1945, ch. 1122, § 16, p. 2147 [Riverside County Flood Control
and Water Conservation District]), 55-38 (Stats. 1961, ch. 1009, § 1, p. 2690 [Alameda
County Flood Control and Water Conservation District]), 65-5 (Stats. 1951, ch. 1657, §
5, p. 3777 [Yolo County Flood Control and Water Conservation District]), 74-6 (Stats.
1955, ch. 1057, § 6, p. 2010 [Santa Barbara County Flood Control and Water
Conservation District]), 91-9 (Stats. 1959, ch. 2123, § 9, p. 4987 [Sierra County Flood
Control and Water Conservation District]), 92-9 (Stats. 1959, ch. 2127, § 9, p. 5017
[Lassen-Modoc County Flood Control and Water Conservation District]), 109-51 (Stats.
1969, ch. 209, § 51, p. 497 [Metropolitan Water District]).
   6
      See, e.g., Wat. Code, §§ 50605 (Stats. 1951, ch. 336, § 1, p. 697, Stats. 1897, ch.
186, p. 239 (Pol. Code, § 3454) [Reclamation Districts]), 70078 (Stats. 1959, ch. 370, §
1, p. 2292 [Levee Districts]); Wat. Code App. (West’s), § 120-253 (Stats. 1981, ch. 421,
§ 1, p. 1619 [Stanislaus County Flood Control District]).
   7
     Wat. Code App. (West’s) § 1-11 (Levee District No. 1) ($500 per year in quarterly
installments); see Wat. Code, §§ 21166 (Irrigation Districts) ($100 per day, $600 per
month, or up to $15,00 per year), 22840 (500K acre Irrigation Districts) (annual salary up
to that of an Imperial County supervisor).
   8
     See Internal Revenue Service, Classification of Elected and Appointed Officials,
https://www.irs.gov/government-entities/federal-state-local-governments/classification-
of-elected-and-appointed-officials; see also 26 U.S.C. § 3212(b)(7)(F).
   9
       See Gov. Code, § 20460 (“Public Agency Participation” in CalPERS); see also id.,

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as water district boards are specifically excluded from membership in CalPERS if they
were elected to office on or after July 1, 1994.10 However, for purposes of the Social
Security tax laws, a qualifying “public retirement system” could be an agency-provided
plan such as a 457(b) plan or a 401(a) plan11 (hereafter referred to collectively as an
alternative retirement plan or “ARP”), if that plan provides for a contribution to the
employee’s account of at least 7.5 percent of the employee’s compensation—part of
which contribution may be provided by the employer.12

       Many enabling statutes also authorize water districts to establish and contribute to
retirement plans or pensions for officers and employees,13 and we are told that some

§ 20056 (“public agency” includes districts).
   10
     Gov. Code, § 20322, subd. (c). Unelected employees of a district may be members
of CalPERS.
   11
        See 26 C.F.R. § 31.3121(b)(7)-2(e).
   12
     See 26 C.F.R. § 31.3121(b)(7)-2(e)(iii); cf. Gov. Code, § 19999.2 (establishing state
deferred compensation plan to satisfy 26 U.S.C. § 3212(b)(7)(F) for state employees who
are not members of CalPERS).
   13
      See, e.g., Wat. Code, §§ 22140, 22141 (Stats. 1965, ch. 726, § 1, p. 2128 [Irrigation
Districts]), 31008 (Stats. 1953, ch. 1375, § 1, p. 2954 [County Water Districts]), 71593,
71594 (Stats. 1963, ch. 156, § 1 [Municipal Water Districts]); Wat. Code App. (West’s),
§§ 97-13, & 6 (Stats. 1959, ch. 2146, § 13, p. 5132 [Mojave Water Agency]), 98-61, & 12
(Stats. 1959, ch. 2146, § 61, p. 5153 [Antelope Valley-East Kern Water Agency]); 100-
15, & 16 (Stats. 1961, ch. 1069, § 15, p. 2762 [Desert Water Agency]), 101-15, & (p)
(Stats. 1961, ch. 1435, § 15, p. 3246 [San Gorgonio Pass Water Agency]), 104-11, & 16
(Stats. 1962, 1st Ex. Sess, ch. 40, § 11 p. 291 [Crestline-Lake Arrowhead Water
Agency]), 109-76 (Stats. 1969, ch. 441, § 22, p. 975 [Metropolitan Water District]), 112-
15, & 11 (Stats. 1969, ch. 1175, § 15, p. 2276 [Bighorn-Desert View Water Agency]);
114-124 (Stats. 1971, ch. 1560, § 124, p. 3095 [Tahoe-Truckee Sanitation Agency]), 118-
264 (Stats. 1977, ch. 527, § 264, p. 1685 [Monterey Peninsula Water Management
District]).
    Not all water-district enabling statutes expressly authorize the provision of retirement
contributions for “directors”; some authorize retirement contributions for “officers and
employees,” without clearly identifying directors as officers. Members of governing
boards of public districts or entities are commonly regarded as elected or appointed
public officers (see, e.g., 90 Ops.Cal.Atty.Gen. 24, 26 (2007); 69 Ops.Cal.Atty.Gen. 126,
128 (1986); Bus & Prof. Code, § 16204). For purposes of this analysis, we assume that
when an enabling statute uses the phrase “officers and employees” in connection with
retirement contributions, it includes “directors.”

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water districts have established ARPs and are making contributions to those plans for the
benefit of their governing board members in order to satisfy the 7.5 percent requirement
mentioned above.

        In this opinion, we analyze the proposition that two statutes in the Water Code
(sections 20201 and 20202) generally forbid water district employer contributions, by
limiting director compensation to a stipend of $100 per meeting (except as it may be
periodically increased by an ordinance subject to voter referendum). We conclude that
sections 20201 and 20202 do not restrict the scope of compensation available to district
directors. Instead, we believe that the statutes’ purpose is to empower water districts that
pay directors a minimal daily stipend to increase the stipend level without need of further
legislation.

      Our analysis starts with an examination of the statutes at issue. In pertinent part,
Water Code section 20201 provides:

             Notwithstanding any other provision of law, the governing board of
        any water district[14] may, by ordinance adopted pursuant to this chapter,

   14
       The term “water district,” for purposes of section 20201, is defined broadly by
Water Code section 20200 to mean “any district or other political subdivision, other than
a city or county, a primary function of which is the irrigation, reclamation, or drainage of
land or the diversion, storage, management, or distribution of water primarily for
domestic, municipal, agricultural, industrial, recreation, fish and wildlife enhancement,
flood control, or power production purposes. ‘Water districts’ include, but are not limited
to, irrigation districts, county water districts, California water districts, water storage
districts, reclamation districts, county waterworks districts, drainage districts, water
replenishment districts, levee districts, municipal water districts, water conservation
districts, community services districts, water management districts, flood control districts,
flood control and floodwater conservation districts, flood control and water conservation
districts, water management agencies, water agencies, and public utility districts formed
pursuant to Division 7 (commencing with Section 15501) of the Public Utilities Code.”
(Wat. Code, § 20200.) This sweeping definition applies only to chapter 2 of division 10
of the Water Code, as evidenced by the introductory limitation, “As used in this chapter.”
(See Alcala v. City of Corcoran (2007) 147 Cal. App. 4th 666, 670 (term’s definition “is
expressly limited to the article in which it appears”; “it does not pretend to define the
term for use in all statutes”); Howard Jarvis Taxpayers Assn. v. City of San Diego (1999)
72 Cal. App. 4th 230, 236 (phrase “as used in this article” restricts the field of application);
66 Ops.Cal.Atty.Gen. 40, 47 (1983); 64 Ops.Cal.Atty.Gen. 317, 323 (1981) Accordingly,
the term “water district” may elsewhere have a more restrictive meaning. (See, e.g.,
Health & Saf. Code, § 116286; Sts. & Hy. Code, § 830; Wat. Code App. (West’s), § 134-

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         provide compensation to members of the governing board, unless any
         compensation is prohibited by its principal act, in an amount not to exceed
         one hundred dollars ($100) per day for each day’s attendance at meetings of
         the board, or for each day’s service rendered as a member of the board by
         request of the board, and may, by ordinance adopted pursuant to this
         chapter, in accordance with Section 20202, increase the compensation
         received by members of the governing board above the amount of one
         hundred dollars ($100) per day.

                 It is the intent of the Legislature that any future increase in
         compensation received by members of the governing board of a water
         district be authorized by an ordinance adopted pursuant to this chapter and
         not by act of the Legislature. 15

         Water Code section 20202, in turn, provides:

                In any ordinance adopted pursuant to this chapter to increase the
         amount of compensation which may be received by members of the
         governing board of a water district above the amount of one hundred
         dollars ($100) per day, the increase may not exceed an amount equal to 5
         percent, for each calendar year following the operative date of the last
         adjustment, of the compensation which is received when the ordinance is
         adopted.

              No ordinance adopted pursuant to this chapter shall authorize
         compensation for more than a total of 10 days in any calendar month.16

      Section 20201 begins with sweeping words of supersession: “Notwithstanding
any other provision of law.”17 At first blush, then, section 20201 could be read to

315.)
   15
        Wat. Code, § 20201.
   16
        Wat. Code, § 20202.
   17
      See People v. Palacios (2007) 41 Cal. 4th 720, 729 (the “broad and unambiguous
scope of ‘notwithstanding any other provision of law’ overrides application” of
inconsistent statute); Apartment Ass’n of Los Angeles County, Inc. v. City of Los Angeles
(2009) 173 Cal. App. 4th 13, 26 (phrase is a “term of art” that overrides other code
sections unless specifically modified by use of a term applying it only to a particular code
section or phrase); 73 Ops.Cal.Atty.Gen. 296, 299 (1990) (phrase amounts to “words of
supersession with respect to any inconsistent provision”).

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sweepingly supplant the myriad enabling statutes that provide for water district director
compensation. Under such a reading, for example, section 20201 would seem to divest
many water districts of their otherwise authorized discretion to set a “just and reasonable”
compensation, or to provide for monthly salaries, despite specific statutory authority for
some districts to do so.

        But we must read sections 20201 and 20202 “with reference to the entire scheme
of law of which they are part, so that the whole may be harmonized and retain
effectiveness.”18 We may not lightly infer sweeping implied repeals. An implied repeal
of a statute is generally disfavored, and we will not construe section 20201 impliedly to
repeal other statutes unless it is clear that this was the Legislature’s intent.19 And even
the introductory phrase, “Notwithstanding any other provision of law,” without any other
indicia of legislative intent, is not necessarily determinative of supersession.20

       We may look to legislative history to discern the Legislature’s intent here.21 In it,
we find that sections 20201 and 20202 were not intended to impose a strict limit on
director compensation. Rather, the statutes were intended to supplement, not supplant,
the enabling statutes, and to allow water districts to increase daily stipends without
additional legislative authorization.

        Before these sections were enacted, those water districts whose enabling statutes
tied director compensation to a limited daily stipend had no administrative mechanism for
increasing the stipend. Yet the Legislature was hesitant to be making stipend-adjustment
decisions for special districts, seeing this as a matter more appropriately left to local
control. Accordingly, in the early 1980s, “[t]ired of successive bills, the Legislature

   18
      Smith v. Superior Court (2006) 39 Cal. 4th 77, 83; People v. Ledesma (1997) 16
Cal. 4th 90, 95, citation omitted; 96 Ops.Cal.Atty.Gen. 54, 56 (2013); 95
Ops.Cal.Atty.Gen. 89, 95 (2012).
   19
     See Williams v. Superior Court (2014) 230 Cal. App. 4th 636, 658; 99
Ops.Cal.Atty.Gen. 56, 59-60 & fn. 19 (2016).
   20
      See, e.g., Citizens for Ceres v. Superior Court (2013) 217 Cal. App. 4th 889, 913;
Gonzalez v. Department of Corrections and Rehabilitation (2011) 195 Cal. App. 4th 89,
94-96; People v. Wilson (2002) 95 Cal. App. 4th 198, 202; see also Lungren v. Deukmejian
(1988) 45 Cal. 3d 727, 735 (court will determine whether statute’s literal meaning
comports with its purpose).
   21
     See, e.g., Voices of the Wetlands v. State Water Resources Control Bd. (2011) 52
Cal. 4th 499, 526-527; 73 Ops.Cal.Atty.Gen. 330, 333 (1990); see also Gonzalez v.
Department of Corrections and Rehabilitation, supra, 195 Cal.App.4th at pp. 94-96.

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allowed water districts to increase their board members’ stipends above $100 a meeting,
provided that a governing board boosted its pay by referendable ordinance.”22

       In 1984 the Legislature enacted Senate Bill 1370, the first of two bills to address
the problem. Legislative Counsel’s Digest explained:

               Under existing law, various water district acts contain limitations on
         the amount of compensation which may be received by each member of the
         governing board of a water district organized under the act.

                ...

                 This bill would authorize the governing board of any water
         district . . . which is authorized under its principal act to [receive]
         compensation in the amount of $100 or more per day to increase, by
         ordinance, the amount of that compensation, subject to prescribed
         limitations, and subject to a prescribed right of the voters of the district to
         petition for a referendum of the ordinance.23

      As enacted, SB 1370 empowered water districts paying a stipend of $100 or more
per day to increase the stipend, subject to referendum.24 In 1988, sections 20201 and

   22
        Sen. Local Gov. Comm., Analysis of Assem. Bill No. 490 (2007-2008 Reg. Sess.),
p. 1.
   23
      See Sen. Bill No. 1370 (1983-1984 Reg. Sess.) as amended Feb. 28, 1984,
Legislative Counsel’s Digest. We may properly rely on Legislative Counsel’s Digest as
authoritative evidence of legislative intent. (Mt. Hawley Ins. Co. v. Lopez (2013) 215
Cal. App. 4th 1385, 1401; Kaufman & Broad Communities, Inc. v. Performance
Plastering, Inc. (2005) 133 Cal. App. 4th 26, 35; see also Pollack v. Department of Motor
Vehicles (1985) 38 Cal. 3d 367, 376-377 [legislative amendments presumed to have
“intent and meaning expressed in the Legislative Counsel's Digest”]; 80
Ops.Cal.Atty.Gen. 297, 303 (1997); 77 Ops.Cal.Atty.Gen. 227, 230 (1994).)
   24
        Sections 20201 and 20202, as enacted by SB 1370, provided:
       20201. Notwithstanding any other provision of law, the governing board of
   any water district which is authorized under its principal act to provide
   compensation to members of the governing board in the amount of one
   hundred dollars ($100) or more per day for each day’s attendance at meetings
   of the board, or for each day’s service rendered as a member of the board by
   request of the board, may, by ordinance adopted pursuant to this chapter,
   increase the compensation received by members of the governing board above

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20202 were amended by Assembly Bill 3088 to read as they do today.25 Again, the intent
of the measure was to expand the law’s coverage, this time to include all water districts
authorized to pay directors any amount of compensation. 26

       The historical materials show that sections 20201 and 20202 are designed to
relieve the Legislature from endlessly revisiting the issue of daily stipends, and to
empower water districts to increase stipends in an incremental and accountable manner.
We find nothing to suggest an intent to generally preempt water district enabling statutes
in the area of director compensation.27 More particularly, nothing in the legislative

   the amount of one hundred dollars ($100) or more per day.
      It is the intent of the Legislature that any future increase in compensation
   received by members of the governing board of a water district above that
   amount be authorized by an ordinance adopted pursuant to this chapter and not
   by an act of the Legislature.
      20202. In any ordinance adopted pursuant to this chapter to increase the
   amount of compensation which may be received by members of the governing
   board of a water district, the increase may not exceed an amount equal to 5
   percent, for each calendar year following the operative date of the last
   adjustment, of the compensation which is received when the ordinance is
   adopted.
       No ordinance adopted pursuant to this chapter shall authorize compensation
   for more than a total of six days in any calendar month.
   Stats. 1984, ch. 186, § 1.
   25
        See Stats. 1988, ch. 397, § 1.
   26
        The Assembly Committee on Local Government reported:
       Current law allows water districts which are authorized to compensate their
   board members at the rate of $100 or more per day to increase the
   compensation by referendable ordinance at a noticed public protest hearing
   without further authorization by the Legislature. Such increases are limited to
   five percent per calendar year.
      This bill would extend this authorization to those water districts whose
   board members are compensated at less than $100 per day.
    Assem. Com on Local Gov., Analysis of Assem. Bill No. 3088 (1987-1988 Reg.
Sess.) as amended March 10, 1988, p. 1; see also Sen. Rules Com., Analysis of Assem.
Bill No. 3088 (1987-1988 Reg. Sess.) as amended May 27, 1988, p. 1.
   27
        We note, for example, that several years after enactment and amendment of Water

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history suggests that the Legislature intended by sections 20201 and 20202 to nullify
authorizations in water district enabling statutes that permit retirement contributions for
the benefit of directors.

        We conclude that sections 20201 and 20202 do not preclude a California water
district from contributing to retirement plans or pensions on behalf of its directors, where
such plans or pensions are otherwise authorized by the district’s enabling statutes. 28

                                          *****

Code section 20201, sections 50605 and 70078 were each amended without change to the
existing language permitting payment of a “just and reasonable” compensation. (See
Stats. 2005, ch. 700, §§ 34, 38.) This is some evidence of the Legislature’s belief that
this grant of discretion to pay a “just and reasonable” compensation remained “good law”
notwithstanding enactment of section 20201. (Cf. Department of Corrections and
Rehabilitation v. Workers’ Comp. Appeals Bd. (2008) 166 Cal. App. 4th 911, 914-915.)
   28
     The requester also asked us, if employer contributions to directors’ retirement plans
were unlawful, whether directors would be obligated to reimburse improper contributions
and what statute of limitations would apply to reimbursement. Our answer to the present
question makes it unnecessary for us to address those additional questions.

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