HomeMy WebLinkAbout01/02/1991, 4 - STAFF ANALYSIS OF WATER INITIATIVEMEETING T75'/ 91
�iiN °i �l�ili!IIIUIi�' Illll city of San WIS oaispo
COUNCIL AGENDA REPORT R°" NUMBER: I'[
FROM: John Dunn, City Administrative Offic
Prepared by: Ken Hampian, Assistant City dmi strative Officer
Appropriate Department Heads
SUBJECT: Staff Analysis of WATER Initiative
CAO
1. Receive the staff report analyzing the potential impacts of
the WATER Initiative and direct the City Clerk to place the
measure on the ballot for action by the voters of San Luis
Obispo.
2. Formally oppose the WATER Initiative and direct staff to draft
the appropriate ballot argument against the measure based on
the key points outlined in the staff report.
REPORT -IN -BRIEF
The WATER Initiative has qualified for the next regular municipal
election. Consistent with procedures outlined in State law, on
December 4, 1990 the Council referred the Initiative to staff for
an analysis of its potential impacts. This analysis is provided
in this report.
In summary, although the Initiative contains some overall goals
which are supportable (ending rationing as soon as possible; the
development of new water sources), the Initiative's prescribed
method of achieving these goals is severely flawed. The Initiative
applies simple solutions to a very complex problem. These
solutions will not work, and further, they carry the potential of
severely undermining the public safety and economic well being of
the community. The primary concerns outlined in the staff report
are as follows:
1.
2.
reservoir supply in aPRroximately one year. If this were
to happen, the City would be unable to provide adequate
fire protection and a level of water service needed to
sustain residents and businesses. Knowingly exhausting
the City's limited water supply in such a manner
withstands no test of reason. It would be reckless.
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Council Agenda Report - WATER Initiative
3.
4.
5.
City efforts to bring other supplies "on line" are
already being pursued as aggressively as possible. In
the last 18 months, over $1.75 million has been spent to
develop additional water supplies, over 50 test wells
have been drilled, approximately 1,500 acre feet of
groundwater has been brought on line, and numerous other
projects, including desalination, are being pursued.
conseQuences to the City and to its residents. For a
variety of reasons, the Initiative can result in:
• a burden of low yielding, poor quality, highly
expensive water projects which are technically and
economically unrealistic;
• the inability of the City to exercise sound
financial decision making;
• reductions in General Fund service levels, such as
Police and Fire protection;
• severe damage to the local economy.
�� Y'v.GLI1}11G 31V tl" 4. WAA. .
These functions include providing a minimum amount of
water to sustain residents, assuring adequate .fire
protection, and rationally allocating City resources
through the budget process.
Despite the shared goals of ending rationing as soon as possible
and developing additional water supplies, staff believes that the
WATER Initiative offers simplistic and incorrect solutions to a
complex problem. For this reason, it should be opposed.
DISCUSSION:
Background
On October 18, 1990 the WATER Initiative Petition was filed with
the city Clerk (Attachment 1). After reviewing the 5,492
signatures on the petition, the City Clerk determined that there
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COUNCIL AGENDA REPORT
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Council Agenda Report - WATER Initiative
were adequate valid signatures to qualify the Initiative for the
next regular municipal election. State law requires that an
initiative petition with signatures of 10% of the voters in the
city (in this case, at least 2,377 signatures) be submitted to the
next regular municipal election. Although the petition did not
qualify for automatic submission at a special election (which
requires 15$, or 3,565 valid signatures), the Council could choose
to include the Initiative on a special election ballot.
Consistent with procedures outlined in State law, on December 4,
1990 the Council received the petition's Certificate of Sufficiency
and referred the initiative measure to staff for an analysis of its
potential impacts on City operations and policy. Because State law
requires the City Council to receive this staff analysis no later
than 30 days after the City Clerk certifies the sufficiency of the
petition, the Council is being asked on January 2, 1991 to take
action on the staff report.
A decision regarding the scheduling of the Initiative on either the
next regular municipal election or with a special election would
best be made within the context of several other election issues,
as discussed in a separate report which will also be considered by
the Council on January 2.
Introduction to WATER Initiative Analysis
Since December 4, staff has thoroughly analyzed the WATER
Initiative in relation to several City policies and operations, and
have concluded that there would be costly and dangerous
consequences if the Initiative becomes law. However, prior to
outlining the specific concerns, staff would like to briefly
discuss the Initiative in a more general and basic way.
The current drought has created a significant hardship for
residents of San Luis Obispo. Most people are understandably
feeling the strain caused by this problem. The WATER Initiative
petition was circulated as a solution to the problem. The level
of support it has attracted is not surprising in view of the water
use cutbacks, inconvenience and sacrifice the shortage has caused.
The Initiative has emotional appeal, and beyond that, based on
staff's interpretation, it contains some overall goals which are
reasonable and consistent with existing City policy and actions.
Specifically, staff believes that WATER Initiative supporters and
the City are in agreement on the following two goals:
1. The current mandatory water conservation program should
be ended as soon as possible.
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COUNCIL AGENDA REPORT
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Council Agenda Report - WATER Initiative
2. A multi - source water supply should be available to the
City, and should be aggressively pursued by City
government.
The problem with the Initiative lies with the prescribed "means"
toward these "ends ". These means are based largely on the faulty
premise that the current conservation program can be terminated if
only the City would "expedite its own efforts to find, treat, and
supply water . ". Staff believes that the WATER Initiative
will actually undermine the goals of reducing problems caused by
the drought and developing a dependable and cost - effective water
supply. This is because the Initiative applies simple solutions
to a very complex problem. These simple solutions are unworkable,
and directly impact the City's ability to protect the public safety
and economic well being of the community.
While it is understandable why the WATER Initiative would have a
surface appeal, the purpose of the staff analysis is to explore
beneath the surface to identify the specific impacts on City
policies and operations.
Staff Analysis of WATER Initiative
Attached is a series of memorandums prepared by various departments
analyzing in detail the potential impacts of the WATER Initiative
(Attachments 2 - 6). In this report, staff has integrated the main
issues identified by the departments to bring into focus our
primary concerns with the Initiative. These main issues are as
follows:
1. The required early elimination of mandatory water
conservation would be very risky at best. and disastrous
at worst.
The WATER Initiative states: "All mandatory rationing
and penalties shall be phased out within one year of
passage of this ordinance." If the drought ends soon,
this direction would pose no problem. In fact, if the
City were to receive enough rain to fill our reservoirs
this season, the phasing out of mandatory water
conservation is exactly what will be done by the City
under existing policies.
The City's Water Management Plan contains a carefully
developed, "stairstep" process for both entering and
exiting mandatory water conservation based on defined
"Water Action Levels ". These levels, which trigger
city of san Luis osispo
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Council Agenda Report - WATER Initiative
certain levels of rationing (including ending mandatory
conservation altogether) are based on computations of
available water supply. The basic purpose of Water
Action Levels is to assure that the City's water demand
is managed in relation to its supply and that we move
into and out of rationing at the right pace, neither too
fast nor too slow. In a drought, the goal is to stretch
limited supplies until such time as additional water is
brought on line and /or the drought ends.
The WATER Initiative does not allow for the rational and
methodical management of water use consistent with
available supply. Even if the drought were to continue,
the WATER Initiative would mandate the complete
elimination of rationing within one year. The danger
inherent in this requirement cannot be overstated.
Knowingly using the City's limited water supply at a pace
which increases the chances of exhausting that supply
prior to the availability of other water sources
withstands no test of reason. Simply put, it would be
irresponsible and reckless.
As noted in the memorandum prepared by the Utilities
Director (Attachment 2), if the Initiative were to pass
in an April 1991 Special Election, and assuming the
drought continues, the City could exhaust its surface
water supply by April 1992, leaving perhaps 1,500 - 2,000
acre feet of groundwater available for use. That is not
enough water to meet the community's basic needs. The
public safety and economic consequences of such an
occurrence are not possible to specifically estimate,
except to say that they would be severe and produce
negative impacts on the community.
For example, even before the reservoirs are completely
drained, the City's ability to fight fires would be
severely compromised. Fireflow is based on the amount
of water available in City water tanks after meeting
domestic consumption demands. If demands were to exceed
water tank supply, which will be the outcome if the WATER
Initiative is implemented during a drought, there would
be inadequate water available for fireflow. The Fire
Department outlines in greater detail the fire related
implications of the Initiative in Attachment 3.
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i COUNCIL AGENDA REPORT
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Council Agenda Report - WATER Initiative
2.
The WATER Initiative assumes that all such negative
consequences can be avoided, if only the City would
"expedite" the development of additional water sources.
As mentioned previously, the WATER Initiative contains
a false premise which, if not recognized as such,
suggests that the mandatory conservation program is being
artificially maintained. It assumes that a large supply
of additional water can readily be available for
residents if only the City would "expedite its own
efforts . . .". This is simply untrue.
In fact, contrary to the implied lack of action on the
City's part, long before the inception of the WATER
Initiative, the City has been aggressively pursuing
additional sources of supply. For example, in the last
year the City has increased its supply of well water from
approximately 500 feet per year annually to 1,500 - 2,000
acre feet per year. Over 50 test wells have been drilled
in the search for this groundwater, and further
exploration continues. Boyle Engineering has called this
a remarkable achievement within such a short period of
time.
Aggressive efforts have been undertaken by the City on
several other water development projects, including the
Salinas Dam Expansion, desalination, the retrofit
program, Hansen and Gularte Creek, and wastewater
reclamation. The Council has also directed that the
matter of State Water be taken to the voters within the
•timeframe established by the State Department of Water
Resources for decision making on the project in SLO
County.
City efforts have already been expedited, as illustrated
by the level of resources and attention dedicated to the
development of additional water supplies. As the
Utilities Director points out in his memorandum, over
$1.75 million has been expended in the last 18 months
alone on water supply efforts. To further assure rapid
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COUNCIL AGENDA REPORT
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Council Agenda Report - WATER Initiative
action, over one year ago the City Council waived the
usual bid procedure requirements so that projects can
move forward as fast as possible during this emergency
period.
While the desire to "find additional water" is shared and
easily understood, the complexities and costs of doing
so afford no easy answers or "quick fixes" to the current
situation. In terms of short range water development
prospects, as evidenced by the Boyle Engineering
Groundwater Basin Study, the City may have maximized its
yield from the groundwater development program. Our own
experience, and that of other cities, has shown that
there is not an endless supply of water underground.
With respect to desalination, under the most aggressive
and "fast track" program - which we are pursuing -
desalted water will not be available to the community
sooner than 18 to 24 months from now. The Hansen and
Gularte Creek Project, while important, will yield only
an additional 560 acre feet per year.
With respect to long term water sources, if the State
Water Project is approved, water from this source will
not be available for at least five years. The Salinas
Reservoir Expansion Project, while desirable, will do
nothing to alleviate the current drought, since the
reservoir is currently at its minimum pool and needs a
large amount of rain run -off to partially replenish its
supply. The Wastewater Reclamation Program is dependent
upon the upgrade of the Wastewater Treatment Plant to
provide tertiary treatment. The treatment plant upgrade
will not be completed for approximately three years.
In summary, the combination of a continued drought with
a phasing out of the mandatory water conservation program
could result in the exhaustion of most of the City's
water supply by April 1992. The earliest the City can
substantially augment its existing water supply is in 18
to 24 months through the desalination facility. Even
with desalination, if reservoirs are drained, groundwater
and "desal" alone can only provide about one -half the
non - drought consumption level. It would be irresponsible
to assume the risk of phasing out conservation prior to
recovery from the drought.
�;I; MY Of Sa►'i �UI S OBI SPO
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Council Agenda Report - WATER Initiative
3. The WATER Initiative will result in severe financial
consequences to the City and to its residents.
At first glance it may not appear that there are serious
financial consequences resulting from the WATER
Initiative. However, a deeper examination reveals quite
serious financial consequences.
Specifically, Section l.0 of the Initiative states that
within one year of ordinance passage "the City shall
rollback all rate increases directly caused by water
rationing ". As pointed out in the Finance Director's
memorandum (Attachment 4), if the intent of this language
is to "rollback" rates relative to only the discreet and
separate costs of the water conservation program, then
there would be no financial impact resulting from the
"rollback ". This is because, as staff has indicated on
several prior occasions, there have been no rate
increases directly caused by the water conservation
program. While the program has increased costs and
decreased revenues, these factors have been accommodated
solely through project reprioritization and the use of
reserves.
In July the City Council took action to offset water
conservation related costs by deferring several water
main replacement projects and by drawing down on the
water fund reserve from a 20% to a 10% level. This was
done to mitigate the rate increase which has been
required in order to pursue the numerous water
development projects discussed earlier. And, here is
where the potentially drastic financial impacts of the
WATER Initiative come into play.
First, if the intent is to rollback water rates in total
to 1988 levels, then the water fund will be stripped of
its ability to develop new water sources. It would not
even have the financial capacity to cover the costs of
producing our existing supply. This would leave the City
with essentially one choice of action, since
circumstances and the WATER Initiative would not allow
for a reduction in service levels. That choice would be
to fully fund the additional needs of the water program
from General Fund resources. To do so would not only
destroy the City's longstanding enterprise fund concept
(which would be inconsistent with several existing
MY of san LUIS OBISPO
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COUNCIL AGENDA REPORT
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Council Agenda Report - WATER Initiative
policies) , but would have severe consequences on General
Fund services, such as police and fire protection and
other necessary services.
Secondly, even if the "rollback" is not intended to
freeze rates at 1988 levels, the mandates of the
Initiative itself are likely to drive up water rates to
levels demanding General Fund support. The Initiative
requires that the City "meet user needs at all times
without rationing" and, while giving priority to
"economic sources of water ", essentially mandates that
the City "... pursue any or all sources of water ... ".
If City government is unable to meet user needs "at all
times ", then the City is "required to seek all private
sources of water ". This would mean that any purveyor of
water would have a readily available client (the City of
San Luis Obispo) required by law to Rurchase its water
at any price. Taken to an extreme (which is what the
Initiative allows), as pointed out in the Utilities
Department analysis, "jugs of water could be delivered
to the City's doorstep and we would be required to
purchase them ".
The pursuit of tankered water, which would be required
under the Initiative, offers another graphic example of
fiscal impact. As pointed out in the City Council "Water
Supply Status and Development" report of November 17,
tankered water would cost an estimated $6,900 per acre
foot, two to three times that of desalination and over
15 times that of groundwater development. If the City
were to purchase 2,500 acre feet of such water annually,
a 176% rate increase would be needed or the equivalent
of an additional average of $50 more per customer
onth .
Related, but no less severe financial consequences,
include:
a damage to the City's Class II ISO Fire Suppression
rating, which will drive up the cost of fire
insurance for residents and business owners;
• reduction in the City's recently upgraded credit
rating as a result of the Water Fund subsidy by the
General Fund; and
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City of Sail LUIS OBISPO
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Council Agenda Report - WATER Initiative
4.
• if City reservoirs are drained in advance of the end
of the drought and /or other water sources coming on
line, the impact on the overall economy of the
community would be impacted in incalculable ways,
and greater unemployment and economic hardship to
businesses and families would increase.
As noted in the Community Development analysis
(Attachment 5), the WATER Initiative essentially prevents
the City from regulating water demand in any manner
whatsoever. This includes during times of drought and
when there is no drought. The City must simply meet
"user needs at all times" (the term "user" is not
defined, and could be extended to mean meeting the
demands of those persons outside the City or outside the
urban reserve line, and /or in places with inadequate
water pressure). By not allowing for any regulation of
demand, the initiative would clearly be growth inducing.
Other resource, environmental, and community development
related concerns include:
• encouraging waste and ignoring potential
environmental impacts by requiring the City to "meet
user needs at all times without rationing" through
"the total production of all sources, public and
private ".
• dismantling the concept of Safe Annual Yield, which
is intended to balance water demand in relation to
supply.
• allowing an unlimited number of purveyors in the
City, all of whom can compete with the City for the
same finite supply of groundwater.
• Requiring the purchase of water without
consideration of water quality, reliability, cost,
development time, and quantity.
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Council Agenda Report - WATER Initiative
For these reasons and others noted in the Community
Development memorandum, the Initiative is inconsistent
with the Water, Wastewater, and Conservation Elements of
the General Plan.
5. The form and substance of the WATER Initiative raises
several significant legal issues.
The City Attorney referred the WATER Initiative to the
law firm of McCutchen, Doyle, Brown and Enersen for legal
review. This review, which is provided as Attachment 6,
has identified the following legal issues:
• The form of the petition is inconsistent with State
law with respect to the address identification of
the signatories.
• The WATER Initiative would strip the City Council
of charter granted powers, especially related to
budget development, resource allocation, and
assuring the safety of City residents.
• The full impact of the Initiative on other City laws
is not explicitly revealed in the Initiative
language as required by City Charter.
• The Initiative would impair "essential government
functions ", such as providing the minimum necessary
water to sustain residents, providing adequate fire
protection, and rationally allocating city resources
through the budget process.
• The Initiative would bind future Councils in a
number of ways including preventing mandatory
conservation at all times, not allowing any
limitations on private water purveyors, and not
being allowed to exercise judgement relative to
reasonable and "cost- effective" water development
programs.
• The WATER Initiative can be considered an amendment
to portions of the General Plan, which in turn would
render the overall General Plan internally
inconsistent (which is not allowed by State law).
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COUNCIL AGENDA REPORT
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Council Agenda Report - WATER Initiative
Each of these legal issues raises a legitimate question as to the
validity of the Initiative.
CONCLUSION:
While the staff shares the desire to see an early end to the
mandatory water conservation program and to bring additional
sources of water on line as soon as possible, the WATER Initiative
will not have a positive effect on the community. To the contrary,
it can create conditions which will allow for very dire
consequences, should the drought continue. It offers a simple, but
wrong, solution to a complex problem.
In contrast, staff strongly believes that the City has embarked
upon a thoughtful, prudent, and fiscally responsible approach to
managing the current drought situation while concurrently
developing additional water supplies. While improvement is always
possible, and is constantly being pursued, the City is on the right
track.
It is staff's recommendation that the WATER Initiative be placed
before the voters, and that staff be directed to develop a ballot
argument which clearly sets forth the City's position. In this
way, the WATER Initiative and the eventual vote on the matter may
serve to better inform all residents as to the complexities and
realities surrounding this important community issue.
ATTACHMENTS:
1. Initiative Petition Language
2. Utilities Department Analysis
3. Fire Department Analysis
4. Finance Department Analysis
5. Community Development Department Analysis
6. Legal-Analysis
KH \water.rpt
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III C �o san l�ui s OBISPO
990 Palm Street /Post Office Box 8100 • San Luis Obispo, CA 93403 -8100
CERTMCATE OF SUFFICIENCY
I, Pam Voges, City Clerk of the City of San Luis Obispo, California, hereby certify
that I have carefully checked the names on the initiative petition filed in my office on
October 18, 1990, reading in full as follows:
"Be it ordained by the people of the City of San Luis Obispo: In order to end water
supply shortfalls and water rationing, the City Council of San Luis Obispo shall be required
to do the following:
Section 1. A) The City of San Luis Obispo (hereinafter known as "the City") shall expedite
its own efforts to find, treat and supply water for all water users and shall maintain its own
level of water production by using groundwater, desalination, recycling, rain water retention,
and /or other methods to complement the production from private sources (See Section II).
The total production from all sources, public and private, shall meet user needs at all times
without rationing, (approximately 8000 acre feet per year as of January 1990). The City
should give priority to the most economic sources of water but may pursue any or all
sources of water to meet the requirements of this ordinance. B) All mandatory rationing
and penalties shall be phased out within one year of passage of this ordinance. C) Within
one year of the passage of this ordinance the City shall rollback all rate increases directly
caused by water rationing. D) Water conservation programs shall be continued on an
educational basis only. The City shall not continue or re- establish rationing under a
different name. Rationing is hereby defined as any fines, penalties, limits, allocations,
restrictions. or any other method primarily designed to limit the amount of water a user
can purchase. However, the City may establish a lifeline rate and /or lifeline amount for
water users and may establish a graduated rate structure to reflect the actual costs of
supplying additional water.
Section A) If the City is unable to meet the requirements of Section I through
government sources, it is hereby required to seek all private sources of water whether
underground, desalinated, recycled, surface water or any other water that can be treated to
meet state standards, so that the requirements of Section I can be met. The supply of water
may come from any geographical area. B) The City shall not limit the number of private
water suppliers and should encourage as much competition as possible among private
suppliers.
Section M. If any Section, Subsection or part of this initiative /ordinance is declared or
ruled by the courts to be illegal, invalid or unconstitutional, the remaining Sections,
Subsections, or parts shall remain valid as a legal ordinance. If any Section, Subsection, or
part of this initiative /ordinance is ruled invalid, efforts shall be made to determine the
original intent and, if possible the invalid portion(s) be revised to remain a legal part of the
ordinance.
f ;15
Certificate of Sufficiency
ge
Pa 2 T
Section N. The effective date of this ordinance shall be sixty (60) days after its adoption
by the San Luis Obispo City Council, or if it is passed by the voters, ten (10) days after the
vote is declared."
The signatures found on the petition were compared to the signatures of the
Affidavit of Registration in the Registrar of Voters Office. Pursuant to Section 4011 of the
California Elections Code, the petitions were found to contain the signatures of more than
10% of the voters of the City of San Luis Obispo according to the County Clerk's official
report of registration to the Secretary of State effective on May 3, 1990, recording a total
of 23,769.
pcv�� a/4wo;
Date Pam Voges, City ClQyk
f /�i
December 18, 1990
TO: Ken Hampian, Assistant City Administrative Officer
FROM: William T. Hetland, Director of Utilities
SUBJECT: W.A.T.E.R. Initiative Comments
The Utilities Department staff has reviewed the WAT.E.R Initiative and have
submitted the following comments:
Section I.
A. The initiative does not clearly define what expedite means nor does it
specify who makes that determination. Consensus is that the City has "expedited"
efforts to develop all available water resources. The City's efforts to expedite the
water development program has included extensive groundwater development, new
source identification and a comprehensive water conservation program. These
efforts over the last 18 months have totaled over $1.75 million in expenditures.
The program has been underway for over two years with groundwater currently
providing approximately 40% of all water consumed. A detailed study of the
groundwater basin has also indicated the basin is in a temporary overdraft due to
the demand being placed on it and a significant increase in groundwater
development is not possible. The City Council has authorized staff to begin
development of a $20 million desalination facility. Rain water retention facilities
are only viable if it rains and would not be a significant benefit during a continued
drought.
The City's goal is to be able to meet all the City water demands, both current and
future, without rationing. This is done by developing water resource projects which
v ill meet all of the City's safe annual yield. The City has identified water
requirements throughout the full development of the City's General Plan up to the
year 2015. Included is a planning reserve of 2000 AFY to account for future
changes that cannot be clearly identified at this time. Water resource projects
have also been identified and are in various stages of development. Some of those
include:
ATTACHMENT 2
W.A.T.E.R. Initiative Comments
Page 2
1. Desalination
2. Expansion of the Salinas Reservoir
3. Hansen and Gularte Creek Project
4. State Water Project
5. Groundwater
The statement that the City "should give priority to most economic sources of
water but = pursue any and all sources..." is very misleading and unclear. It
does not provide specific direction to staff on what is desired. Who will make
the decision that a water source should or should not be pursued based on
economic reasons? Without clear direction regarding "economic viability" the
City does not have the necessary discretion in selecting water supply projects.
This could result in the City being overburdened with low yielding, poor quality,
highly expensive water projects which are technically and economically
unrealistic.
B. Phasing out all mandatory water rationing within one year is not
reasonable. Effective management of water resources require that many options
be pursued depending on the specific situation. Demand management is just as
important as development of additional water resources. Eliminating water
rationing when the City may not have adequate water supplies to meet the
increased demand could very likely result in the City totally running out of water
with no available options. Staff analyzed the impact on reservoir storage if
rationing were removed immediately (0% conservation) or if it were removed in
three increments over the next year. These analysis used 1987 consumption
amounts, well yields of 1500 AFY, historically projected reservoir inflows and
evaporations, and no new additional supplies. It basically says that the City
reservoirs would reach their mn* u'mum pools in about a year if rationing were
eliminated.
Eliminating rationing also places severe restrictions on the City in case of an
emergency where it may be necessary to temporarily request a cutback in water
use due to a possible plant, storage reservoir or pipeline failure. It basically
restrains the City's ability to maintain the integrity and safety of the City water
system.
C. This section also is inconsistent with the City's long - standing policy that
water operations will be operated as an enterprise function and will be self -
supporting. It is not clear what effect this may have on future rate increases or
the ability of the Water Fund to generate revenue. Implementing unlimited and
unrealistic water supply projects could result in the City depleting its water fund,
and being in a position to have to draw from the General Fund. This will
result in significant impacts to the overall operations of the City and can restrict
the City in its ability to recover from the drought or other emergency.
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WATER. Initiative Comments
Page 3
D. Restricting water conservation programs to education only is unrealistic.
Many of the services and programs the City and others in the water conservation
field provides increases the long -term efficient use of water. The initiative could
result in the City being unable to restrict the waste of water through "gutter
flooding" or other wasteful measures. The State of California strongly encourages
extensive water conservation programs through its Urban Water Management
Planning Act. The comment regarding not allowing the rationing in the future is
addressed above.
A graduated rate structure does not necessarily represent actual costs and is often
used in water conservation programs to discourage water use. The rate structures
could be challenged as another means of rationing.
Section II
A The requirement that all private sources of water be obtained can place a
difficult burden on the City. Many sources within the City may not meet the
current state health standards and could cause extensive expenditures to meet
those standards. It is also very possible that without restrictions on the quantity of
water sources the City would have to accept, jugs of contaminated water could be
delivered to the City's door step and we would be required to purchase them. The
potential for increase in staff to simply monitor an infinite number of water
sources is great.
The issue of obtaining water from any geographical area is currently under
investigation. There is concern that water right issues and potential political and
legal issues could be insurmountable.
B. Not limiting the number of water supplies could result in the City being
required to accept an unlimited number of systems to operate. They may be highly
inefficient and could result in increases in staff and budget expenditures.
Section III
No Comments
Section IV
No Comments
General Comments
The WAT.E.R. Initiative is a highly emotional issue which deals with a subject that
directly effects everyone of us every day. The basic premise of the initiative to eliminate
rationing and develop adequate water resources is consistent with the goals and policies
WATER Initiative Comments
Page 4
of the City. But, the implementation of the initiative would be disastrous to the overall
effective operations of the water system and could seriously effect the balance of City
furnished services.
The City Council and staff has long been concerned about our ability to meet the water
requirements of the community. Extensive efforts in policy development, study,
community hearings and project implementation have been undertaken. The City is
proceeding on all the reasonable water resource options which the initiative cited.
Much of this effort was implemented prior to the beginning of the initiative. The
initiative severely restricts the City in its ability to properly manage its water resources.
The impact of the initiative on the financial operations of the water system could be
significant and may result in serious consequences to the general fund.
p/bill /initiati
'f � -B
M E M O R A N D U M
TO: Ken Hampian, Acting City Administrative Officer
FROM: Michael Dolder, Fire Chief /
John Dompke, Fire Protection Engineer
DATE: December 19, 1990
SUBJECT: Impacts of the Water Initiative on Fire Protection
HOW WILL A DEM14BBING WATER SUPPLY AFFECT FIRE PROTECTION?
One of the primary functions of the City's water distribution system is to provide adequate fire flow
for the suppression of fires. Since the fire flow requirements can be significant in a large fire, the
water system must be designed to take those demands into account. The system does this in a
number of ways.
The water sources for the City include the surface water reservoirs and the groundwater wells.
This water is first treated then introduced into the water distribution system and storage tanks. The
piping in the distribution system is sized according to the required fire flow. Storage tanks are
sized and strategically located in order to meet the large volume of water needed in a fire situation.
If the surface reservoirs were to become empty without a replacement source of water, some of the
areas in the City would not have any water. Emergency connections would be necessary to other
areas of the City for additional water. The well system would supply some area but as of now it
does not look like adequate water would be available for that source alone to meet the City's needs.
Sooner or later the storage tmh would go dry and there would be no fire flow capability within
the water distribution system. If a major fire broke out there would not be any water available to
extinguish it.
WHAT OTHER AFFECTS WILL AN INADEQUATE WATER SUPPLY HAVE ON THE
CITY?
The Water Initiative will have a major impact on new construction. New projects must meet
Uniform Fire Code and Insurance Services Office (ISO) fire flow requirements to receive fire
department approval (as explained in detail below). If the Water Initiative is adopted, water
supplies for fire flow will be inadequate and the Fire Department could not approve new
construction.
Additionally, City Ordinance No. 839 (1980 series) provides for managing and preventing
deficiencies in the City's resources such as the water supply. Water supplies for fire fighting fall
under Level -1: Life and Safety Support Systems. If the water initiative is adopted, water supplies
will be inadequate and a Level -1 Resource Deficiency would be triggered.
The Insurance Services Office's Public Protection Classification for the City (explained in detail
below) would also be adversely affected. The City is re- evaluated periodically and if water
supplies are found to be deficient, the City's rating would go up as would fire insurance costs for
most, buildings.
piaa
ATTACHMENT #3
f -/f
Impacts of the Water Initiative on Fire Protection
Page 2
WHAT SPECIFIC STANDARDS ARE USED TO DETERMINE WATER SUPPLY
REQUIREMENTS FOR FIRE PROTECTION?
The recognized standards for determining the required water supply for fire protection are the
Uniform Fire Code's Appendix III -A, and the Insurance Services Office's (ISO) Fire - Suppression
Rating Schedule. The purpose of the Uniform Fire Code is to determine the water supply needs
(fire flow) for individual buildings. The purpose of ISO's Fire Suppression Rating Schedule is to
develop Public Protection Classifications for cities or geographic area based on a scale of 1 -10,
with class 1 being the best. In 1982, the City attained a class rating of 2. The ISO class rating for
the City determines the fire insurance costs for each building.
HOW DO THE WATER SUPPLY REQUIRE1�MM WORK IN TECHNICAL TERMS?
The Uniform Fire Code specifies the water supply requirements (fire flow) for each building based
on the size of a building, its construction type and exposures. Fire flow requirements range from
1,000 gallons per minute for a single -family residence to 8,000 gallons per minute for large
commercial buildings. Although fire flow requirements are reduced for sprinklered buildings,
water supply requirements for buildings remain on the order of 500 gpm to 6,000 gpm. The
required water supply for a building is determined when the building is being proposed to ensure
adequacy and also during a fire to determine manpower and equipment needs. A building's water
supply requirement is either met by the existing water supply infrastructure, water main
improvements or fire resistive construction.
The Insurance Services Office's Public Protection Classification for San Luis Obispo is determined
by a formula which is based on: 1) Credit for fire-alarm processing; 2) Credit for fire department
staffing and equipment and; 3) Credit for water supplies. The formula is such that higher credits
for these rating components results in a lower Public Protection Classification which in turn lowers
fire insurance costs for City residents.
Credits for water supply are based on needed fire flow and supply -works capacity. Needed fire
flow is the volume of water (in gallons per minute) required to extinguish a fire in a given
building. The supply -works capacity is the volume of water left over for fire flow and fire
protection purposes. Supply -works capacity is calculated by subtracting the amount of water being
used for domestic consumption from the amount of water available in the City's water system.
The largest needed fire flow (NFF) in the City occurs in the downtown area. Some examples are
the Masonic Temple (NFF = 4,000 gpm), Mission San Luis Obispo (NFF = 4,000 gpm), and
Mission College Prep (NFF = 4,250 gpm). These fire flows are required to be supplied at a
minimum of 20 psi for a duration of 4 hours. The total volume of water which would be required
to fight a fire in any of these buildings would be in excess of 960,000 gallons of water.
HOW MIGHT THE WATER INITIATIVE IMPACT FIRE PROTECTION?
Since the water initiative eliminates water rationing, a fair assumption would be that the domestic
demand for water could return to 8,000 acre-feet per year and the maximum daily consumption
would be about 10,000 gpm. Under this assumption, the City's reservoirs and storage tanks would
be emptied and the sole water supply for domestic and fire protection needs would be the
groundwater wells which currently produce about 2,000 acre-feet or 1,260 gallons per minute.
pjsl4.mem
Impacts of the Water Initiative on Fire Protection
Page 3
The supply -works capacity (water available for fire protection) is equal to the water supply in the
system minus the maximum daily consumption [1,260 gpm - 10,000 gpm = (8,740 gpm)]. Under
these circumstances, the water supply would not be capable of supplying the City's domestic needs
let alone the 4,000 or so gpm required for fire protection.
In summary, adoption of the water initiative will deplete the water supply available for fire
protection, prohibit new construction, trigger a Level 1 Resource Deficiency and raise insurance
rates for building owners.
pjx14.mcm
//-,t /
MEMORANDUM
December 17, 1990
TO: Ken Hampian, Assistant City Administrative Officer
FROM: William C. Statler, Director of Finance VYre�
SUBJECT: FISCAL IMPACT OF WATER INITIATIVE
OVERVIEW
The purpose of this memorandum is to analyze the fiscal impact of the Water Initiative
as directed by the Council at their December 4, 1990 meeting. This fiscal analysis
primarily focuses on the following three statements contained in Sections I(A), I(C) and
II(A) of the Initiative:
I(A) Direction that the City "pursue any or all sources of water to meet the
requirements of the ordinance ".
I(C) "Within one year of the passage of this ordinance the City shall rollback
all rate increases directly caused by water rationing ".
H(A) "If the City is unable to meet the requirements of Section I through
government sources, it is hereby required to seek all private sources of
water whether underground, desalinated, recycled, surface water or any other
water that can be treated to meet state standards, so that the requirements
of Section I can be met. The supply of water may come from any
geographical area ".
As discussed below, the fiscal impact of this Initiative is primarily dependent upon how
the intent of the Initiative is interpreted within the context of the City's existing financial
management policies as well as other key policy documents such as the City Charter and
the General Plan.
However, based on my understanding of the provisions of the Initiative at this time, I
have reached the following conclusions regarding its fiscal impact:
■ There is a significant potential for tremendous cost increases to our
consumers in purchasing and delivering water under the direction provided
in the Initiative to essentially meet pre - drought demand at all costs..
■ This direction places the City's budget process in jeopardy and severely
impairs our financial management capabilities. .
■ Our local economy could be severely damaged if the drought continues and
new supplies cannot be brought on -line in time to offset increased demands
resulting from an end to any form of rationing.
ATTACHMENT 4
BACKGROUND
Under the City's existing financial management policies, water revenues are required to
fully support the costs of building, maintaining, and operating the City's water system
With this approach, the sole goal in setting water rates is to ensure that these revenues
recover the cost of providing water to our customers: no more and no less.
As such, the cost of acquiring, treating, and delivering water to our customers is the mk
factor in determining water revenue requirements; and setting water rates is simply a
function of implementing these water revenue requirements after they are identified and
justified.
As summarized in the attached Water Rate Fact Sheet, the purpose of recent rate
increases has been to support the costs necessary to produce and deliver water to our
customers; no increases have been implemented that have been "directly caused by water
rationing"
As further summarized in the attached Water Rate Fact Sheet, the City maintains an
"Enterprise Fund" approach in financing its water system. Under this policy, all water
revenues are used only for water purposes. The City does not use its "General Fund"
revenues such as sales and property tax revenues for water because these revenues are
needed for other essential municipal services such as Police and Fire protection that
have no other source of funding.
DISCUSSION
If the Initiative simply reinforces our existing policies and strategies in delivering water
to our customers, including aggressively pursuing all viable sources of new water supplies,
then there would be no significant fiscal impact on the City if the proposed Initiative is
adopted. However, it appears to go far beyond our current policy of ending rationing
as soon as possible and developing all viable sources of supply. Depending upon what
is intended by the Initiative, there could be serious adverse fiscal impacts to the City as
well as the overall local economy. The following is a summary of these impacts
assuming the "worst case" interpretation of what the Initiative intends to do and how it
will be implemented.
Cost of Pursuing "Any or All Sources of Water"
Although economics are a consideration in the Initiative, there is a requirement to
"pursue any or all sources of water to meet the requirements of the ordinance". Under
the City's water revenue policies, procedures, and rate setting methodologies, the cost of
this required pursuit will be reflected in water rates. This 'pursuit" will have an impact
on the City if it results in costs greater than would otherwise be incurred by the City if
the Initiative was not in effect Although the cost of this factor cannot be determined
at this time, the potential for serious financial consequences is enormous as summarized
below:
Cost of Purchase
The negative cost implications of purchasing water from "any or all sources" when the
prospective suppliers are aware of this mandate are staggering. Under generally accepted
principles of supply and demand, prices for water - if it is available at all - will skyrocket
under a scenario where reasonableness and cost - effectiveness are removed as
considerations in the City's purchasing decisions.
Cost of Water Quality
Although the need to meet State standards is addressed in the Initiative, there is no
consideration for the initial quality of water purchased and the related cost of its
treatment; the only qualification provided in Section II(A) is that the water "O be
treated to meet state standards" (emphasis added). Under this provision, there is no
limit on the cost of treatment that the City might incur in our attempts to treat low -
quality, high cost water to acceptable standards.
Cost of Operations
Significant costs can be anticipated in our attempts to coordinate, operate, and deliver
water supplies which come from a variety of sources with a variety of quality levels.
In summary, under the direction provided by the ordinance, we may lose All of our
ability to effectively manage the cost and quality of our water supplies. This could lead
to very little water of acceptable quality being delivered to our customers at
astronomically high prices.
Financial Management
Under the interpretation that the City must acquire "any and all sources" from all
prospective suppliers - public and private - the City's ability to budget and manage its
fiscal affairs will be seriously impaired. Given the tremendous potential for unrestrained
water costs under a "water at any cost" policy, it will be extremely difficult to maintain
our "enterprise fund" policy for the water system.
This will potentially place an enormous, new burden on the General Fund, which is
already experiencing significant financial challenges in meeting its historical commitments.
This added burden will result in a significant deterioration in our financial condition and
our ability to address other critical municipal services such as Police and Fire which have
no other source of funding other than the General Fund.
In summary, the Initiative could seriously jeopardize the City's budgetary process and
significantly impair our ability to financially manage our operations.
Rollback of Rate Increases Directly Caused by Rationing
Because there have been no rate increases directly caused by the rationing program, the
meaning of Section I(C) is not clear.
■ Does it mean rolling back rates to 1988 levels with no ability to
subsequently modify rates? or
■ Does it refer to the cost of administering the rationing program? or
■ Does it simply reflect a lack of understanding of the purpose of the recent
rate increase: to generate the revenues necessary to build and operate the
water facilities required to bring additional water to our community?
011.�
If it means rolling back rates to 1988 levels with no ability to modify them in the future,
then water rate revenues will not be able to support the existing cost of the water system
let alone make the improvements necessary to secure a quality, dependable water supply
in the future. As noted in the attached Water Rate Fact Sheet, the revenues generated
under our current rate structure are necessary in order to build and operate facilities
which will to bring additional water to our community. Further, additional financial
commitments will be required to support future water supply development efforts.
This rollback would result in at least five severe financial consequences:
■ Violate our adopted water revenue policies.
■ Conflict with the Water Element of the General Plan.
■ Place an enormous, new burden on the General Fund which is already
experiencing significant financial challenges in meeting its historical
commitments. '
■ This added burden will result in 'a significant deterioration in our financial
condition and our ability to address other critical municipal services such
as Police and Fire which have no other source of funding other than the
General Fund.
■ The City's credit rating, which was recently upgraded, will be negatively
affected.
Although the exact cost cannot be determined at this time, the fiscal impact of this
interpretation is enormous in both the short and long -term
If this section of the . Initiative relates only to the cost of administering the rationing
program, then there is no significant fiscal impact. With adoption of this Initiative, the
City's rationing program and related costs would end, and the City's current rate - setting
policies and methods would account for this relatively minor decrease in the cost of the
City's water system. However, the City has never expressly raised rates for the sole
purpose of supporting the cost of administering the rationing program, and as such, it is
unclear that a rollback for this purpose would be required.
Insuranc
The City's current fire- suppression rating by the Insurance Service Office (ISO) is "2" on
a scale of 1 to 10. If ending rationing prematurely results in a reduction in our fire
fighting capabilities, and if this reduced capacity is reflected in our ISO rating, the
community can expect higher insurance costs as a result of this downgrade in our rating.
Community Economic Health
In addition to the fiscal impacts on the City, there could be serious impacts on the
overall economic health of the community if the Initiative is adopted. If the drought
continues, rationing is ended, and all our efforts in securing new supplies - even without
cost constraints - are not successful in making up for the increased demand for water,
the economic impact on the community will be devastating. As the City's fiscal health
is directly tied to the health of our local economy, any damage to the local economy will
significantly affect the City's financial condition.
lulu :: 1
Since the intent of the ordinance is unclear, it is difficult to fully assess its fiscal impacts.
However, the potential for serious financial hardship - both for the City and the
community at -large - are enormous. In carrying out the directives of the ordinance, we
may end up:
■ Delivering very little new water at very high costs.
■ Seriously impacting our ability to financially manage the City.
■ Severely damaging our local economy.
In addition to my analysis of this Initiative which assumes that there could be a wide
variety of interpretations of its intent, I am sure that other departments have identified
areas that will require administrative and legislative interpretation if the Initiative is
adopted. In this event, I am sure that there will also be significant legal costs to the
City in supporting its interpretations.
WATER /12- 121ap.WPF a
u_
CITY OF SAN LUIS OBISPO FACT SHEET
Why is a rate increase necessary?
Bringing dependable, quality water to our customers
costs more now than in the past. For example,
developing groundwater resources to bring water to our
community now will cost $3.6 million, and pumping this
water and delivering it will cost $500,000 annually. Our
eeassting.rates simply don't generate this level of funding.
But aren't revenues down because. of
conservation?
Yes, by about $700,000 annually. However, if this was
our only financial need, we could address it through
existing resources, and a rate increase would not be
necessary. But the cost of constructing and operating
new facilities to bring additional water to the
community is far greater than existing resources, and'
additional money is needed to fund these projects.
Why can't we use other revenues?
The City has a long - standing policy — and a wise one,
of running the water operation on a businesslike basis,
with revenues fully recovering costs. Under this policy,
all water revenues are used only for water putgs ..
The City does not use its "General Fund" revenues such
as sales and property tax revenues for water because
these revenues are needed for essential municipal
services that have no other source of funding.
Doesn't this mean we're paying more for less?
It's easy to understand why our customers would believe
this. But unfortunately, it simply costs more to produce
and deliver the water were providing today.
Until very recently, the City relied solely on local
reservoirs as its source of water. The Salinas Reservoir,
the City's primary source of water, was donated to the
community at no cost by the Federal Government in
the 1940's. The Whale Rock Reservoir was constructed
in the late 1950's, at 501s construction costs and 50%
interest rates. Unfortunately, new water supplies
secured in the 90's will be paid for and operated at
199Vs prices, and this will require new revenues to
finance them.
How much more will this cost me?
Obviously, the cost will depend on how much water you
use. But our •average" residential customer will pay
about $4.00 more per month — or about 13 cents more
per day. Your total monthly cost for water will be
about $19.00 — or 63 cents per day for 200 gallons of
water delivered directly to your tap, a cost of 1!3 cent
per gallon.
How does this compare to other utilities?
Average monthly utility service costs range as follows:
Telephone
$20-$75
Cable TV
$20-$40
Gas
$25-S70
Electricity
$2.5-S70
city water
$15.$25
What are we doing to get more water?
The City has already brought on an additional 2,000
acre feet per year of new groundwater sources. Plans
are underway to increase this to a minimum of 3,000
acre feet by the end of 1990. Studies are currently
underway to determine how long. we can pump
groundwater at this rate, but we are confident that.
adequate reserves are available through the drought
Longer term, the City is evaluating a number of water
supply options, including expanding the capacity of the
Salinas Reservoir, increasing the run-off into the Whale
Rock Reservoir, developing the use of sea water
through the process of "Desalinization', utilization of
water from Naciemento Reservoir, and the state water
project
WiII water rates come down after the drought
is over?
Building and operating the facilities necessary to bring
dependable, quality water to our community will require
new, ongoing financial commitments. Although the
new rate increase will give us a good basis for the
future, modest increases can be anticipated over time
to continue this commitment.
zy
�►I I IE ii��!lii!I I llli' ii i I �IIII CItY Of sAn luiS OBISPO
990 Palm Street /Post Office Box 8100 • San Luis Obispo, CA 93403.8100
13 1313 [I] 61"\►I 111) 35 i
TO: Ken Hampian, Assistant City Administrator
FROM: Arnold Jonas, Community Development Director d
DATE: December 16, 1990
SUBJECT: Community Development Department evaluation of WAT.E.R. Initiative
conformity with the city's general plan.
The city's general plan consists of 12 elements adopted pursuant to California law. The
general plan embodies a long -range vision of conservation and development, as well as
specific objectives, to fulfill community needs and desires. City actions which are to be
consistent with its general plan include decisions to regulate the subdivision, use, and
development of land, to acquire and dispose of property, and to budget for public
facilities. California law provides that measures initiated by citizens must generally pass
the same tests for consistency with the general plan as actions taken by the City Council
and its boards and commissions.
The city's general plan Water and Wastewater Management Element was adopted by
Resolution 6351 in October 1987, and most recently amended in September 1989.
Hereafter, it is referred to as the "water element." The water element bears most
directly on the issues raised by the Initiative Measure Water Action To Eliminate
Rationing, hereafter called "the initiative
Like the initiative, the water element calls for the city to explore "all potential supply
alternatives" (Policy 3.2) to meet its goal, "to provide appropriate quality water for the
needs of the community" (page 21). However, the water element gives more emphasis
than the initiative to proceeding first with those supply alternatives which involve the
least undesirable side effects. According to water element Policy 3.1, "In deciding
appropriate sources of supplemental water, the city will evaluate impacts on other users
of the water and other environmental impacts, total and unit costs, reliability, water
quality, development time, and quantity available." Policy 33 associates Policy 3.1
directly with protection of local agricultural uses and wildlife habitat. The water element
implies that some potential water sources would be rejected by the city, since obtaining
them would be too harmful to current users of those sources or to the environment, or
simply too expensive. The initiative would require the city to "meet user needs at all
times without rationing" through "the total production of all sources, public and private"
(Section 1[A]).
These concerns with the full costs of developing water supplies are also stated in the
Conservation Element (1973), which says "scenic and ecological values should receive
due consideration along with economic factors in water resources development" (item 5,
page 2.7).
ATTACHI�IENT 5
The water element outlines steps for the city to pursue multiple supplemental water
sources, with the objective of increasing permanent annual yield by about 4,800 acre -
feet between the mid 1980's and the mid 1990's (Figure 6).
Initiative Section 1(B) requires that "all mandatory rationing and penalties shall be
phased out within one year." This would contradict water element Policy 22, which says
that the city will manage water demand so it can provide a high level of water service.
This policy goes on to acknowledge two aspects of managing demand:
First, there should be limits on land development so normal water demands can
be brought within the safe yield of supplies as additional supplies are developed;
program 2.4 outlines the content of the Water Allocations Regulations, to
implement these limits.
Second, while normal demand does exceed safe yield, the Annual Water
Operational Plan should be used to focus on how much and in what way
occupants of existing development should reduce water use from normal levels to
avoid running out of water during droughts; program 23 outlines bow these
efforts would be translated into a mandatory conservation program.
The initiative essentially rejects the idea of managing demand, and says that at least the
pre - drought levels of water demand must be met at any cost It clearly would conflict
with the second (customer) aspect of demand management, and may conflict with the
lust (developer) aspect of demand management.
Initiative Section 1(A) requires the city to "meet user needs at all times without
rationing." Since the initiative does not specify that "users" are city water customers at a
certain date, it could be argued that with passage of the initiative, the city would have to
provide water service to any potential user, including those:
Outside the city, contradicting water element Policy 13;
Outside the urban reserve line, contradicting water element Policy 1.4;
Beyond reliable gravity -flow or pressure systems maintained by the city,
contradicting water element Policy 1S.
The Urban Land Use & Growth Management Element (adopted 1977, hereafter "land
use element ") contains policies similar to these three (on page 11, the fifth and sixth
parts of CIA).
Initiative Section H(B) says, 'The City shall not limit the number of private water
suppliers and should encourage as much competition as possible among private
suppliers." This requirement would conflict with water element Policy 5.1, which says,
'The city will be the only purveyor of water within the city." This water element policy
does not prevent any number of property owners or tenants from developing and using
private sources of water, such as groundwater wells, for their individual benefit
�� -z 9
However, it does prevent establishment of a water district or water company which could
sell water to others within the city.
By encouraging competition among private suppliers, the city could be encouraging
competition for the limited and shared groundwater, in contradiction to water element
Policy 3.4. This policy says, "The city does not encourage but may consider wells to
provide domestic water for a private development within the city." Part B of this policy
calls for a qualified, independent hydrological investigation to demonstrate that the well
or wells can provide sufficient quality and quantity of water for any proposed land -
development project which would be dependent on private well water, and thereby
become exempt from the city's Water Allocation Regulations.
The initiative does not give consideration to the significant impact on energy resources
which could result from an unrestricted quest for new water sources. It would result in a
reversal of a substantial body of city policy that currently seeks conservation and the
discouragement of waste.
The initiative's direction to the city to meet the demands of all users could conflict with
land use element Policy C.3.e.3, 'The city shall prevent the development of water -
intensive industries..." (page 19).
Lastly, there may be a conflict between the initiative's call to roll back rate increases
(Section I[C]), and water element Policy 6.1, which says 'The city's water system will be
operated as an enterprise activity, with costs to be borne by water fees and charges."
The following sections of the general plan contain no policies which pose issues of
consistency with the initiative: Housing Element (1986); Circulation Element (1982);
Qpen Space Element (1973); Parks and Recreation Element (1982); Noise Element
(1975); Seismic Safety Element (1975); Safety Element (1978); Scenic Highway Element
(1983).
In summary, the city's general plan combines three courses of action to deal with current
and anticipated water supply and demand conditions: obtaining additional supplies
quickly but prudently; limiting the amount of water which can be used by any individual
customer in the short term, to avoid depriving a majority of customers in the long term;
and, limiting the amount of new development which can draw on city water supplies.
According to the adopted general plan, these paths lead to the same goal, and are not
alternatives to be pursued independently. The initiative appears to be inconsistent with
policies concerning each of these paths. Its fundamental conflict comes from requiring
the city to follow one path to the exclusion of the others.
-30
city of San klis OBIS
990 Palm Street /Post Office Box 8100 • San Luis Obispo, CA 93403.8100
December 19, 1990
MEMORANDUM
TO: Ken Hampian, Assistant City Administrative Officer
FROM: Jeff Jorgensen, City Attorne1w,
SUBJECT: Legal Analysis of W.A.T.E.R. Initiative
Attached is a legal analysis of the W.A.T.E.R. Initiative prepared
by Daniel J. Curtin, Jr. and Thomas C. Wood of the law firm of
McCutchen, Doyle, Brown and Emersen. Mr. Curtin is perhaps the
foremost authority in California on municipal law and land use, and
the author of the leading treatise on initiative law entitled "Land
Use Initiatives and Referenda in California ", Solano Press Books,
1990.
Mr. Curtin was requested to prepare a formal opinion letter
suitable for presentation at the January 2, 1991 City Council
meeting in order to provide the Council with an independent and
impartial legal analysis of the W.A.T.E.R. Initiative.
The City Attorney's office has reviewed the analysis and concurs
with its conclusions. Should the City Council wish to discuss the
various legal options available to it in light of Mr. Curtin's
letter, it would be appropriate to hold a closed session at the
January 2, 1991 Council meeting pursuant to Government Code Section
54956.9(c).
JJ:water:bw
ATTACHMENT 6 �. ��
MCCUTCHEN, DOYLE, BROWN & ENERSEN
December 12, 1990
Jeffrey Jorgensen
City Attorney
City of San Luis Obispo
990 Palm Street
Post Office Box 8100
San Luis Obispo, California 93403 -8100
Re: Legal Analysis of W.A.T.E.R. Initiative
Dear Mr. Jorgensen:
kzlt�
OMAN= CoY y Orrl
FACSIMILE GI. 11 AND 111
(714) 666 -1069
As you requested, we have reviewed the
W.A.T.E.R. (Water Action To Eliminate Rationing) Initiative
(the Initiative) for legal sufficiency. This letter contains
the results of that analysis. Discussed below are a number of
legal problems with the Initiative that may possibly affect its
validity.
I.
AUTHORITY FOR PRE - ELECTION CHALLENGE
It should initially be stated that the courts have a
responsibility to protect the people's exercise of the
initiative and referendum powers and will attempt to uphold the
validity of an initiative whenever possible. Associated Home
Builders etc., Inc. v. City of Livermore, 18 Cal. 3d 582
(1976). As part of the courts' deference to the initiative
process, they are reluctant to rule on the validity of an
initiative until after it is enacted at an election. However,
there are two general exceptions followed by the courts which
allow pre - election judicial review. These exceptions are when
the electorate lacks the power to enact the initiative measure
f .%A
COUNSELORS AT LAW
SAN FRANCISCO
THE CENTER TOWER
SAN JOSE
650 TOWN CENTER DRIVE
WALNUT CREEK
WASHINGTON. D.C.
SUITE 1110
SHANGHAI
COSTA MESA. CALIFORNIA 92626
TAIPEI
TELEPHONE (714) 665 -1060
December 12, 1990
Jeffrey Jorgensen
City Attorney
City of San Luis Obispo
990 Palm Street
Post Office Box 8100
San Luis Obispo, California 93403 -8100
Re: Legal Analysis of W.A.T.E.R. Initiative
Dear Mr. Jorgensen:
kzlt�
OMAN= CoY y Orrl
FACSIMILE GI. 11 AND 111
(714) 666 -1069
As you requested, we have reviewed the
W.A.T.E.R. (Water Action To Eliminate Rationing) Initiative
(the Initiative) for legal sufficiency. This letter contains
the results of that analysis. Discussed below are a number of
legal problems with the Initiative that may possibly affect its
validity.
I.
AUTHORITY FOR PRE - ELECTION CHALLENGE
It should initially be stated that the courts have a
responsibility to protect the people's exercise of the
initiative and referendum powers and will attempt to uphold the
validity of an initiative whenever possible. Associated Home
Builders etc., Inc. v. City of Livermore, 18 Cal. 3d 582
(1976). As part of the courts' deference to the initiative
process, they are reluctant to rule on the validity of an
initiative until after it is enacted at an election. However,
there are two general exceptions followed by the courts which
allow pre - election judicial review. These exceptions are when
the electorate lacks the power to enact the initiative measure
f .%A
Jeffrey Jorgensen
December 12, 1990
Page 2
in the first instance, and when there is a compelling showing
that the substantive provisions of the measure are invalid.
de Bottari v. City Council, 171 Cal. App. 3d 1204 (1985). We
believe that the legal issues discussed below are sufficient to
justify a pre - election challenge.
It should be noted that the first legal issue discussed
below dealing with the petition's form, is an issue that is
waived unless challenged in court before the election. Chase
v. Brooks, 187 Cal. App. 3d 657 (1986).
It should also be noted at the outset that the general
law provisions apply in this analysis even though San Luis
Obispo is a chartered city. Section 304 of the City's Charter
adopts the provisions of the California Elections Code unless
there is a conflict with an express provision in the Charter.
II.
PETITION'S FORM AND REQUIREMENT
OF ELECTIONS CODE SECTION 41
The Elections Code was amended in 1987 to require
rather specific wording requirements on an initiative petition
for the area where persons are asked to sign. This section
contains a sample for the part of the petition for the voters'
signatures and requires petitions "shall be substantially in
the following form." Section 41 then includes a sample form
showing printed in the space provided for the voters' residence
addresses the following: "(Residence Address ONLY) ".
The form of the petition for the Initiative does not
follow the requirement of section 41. Instead, on the part of
the petition where the voter is to place his residence address,
the petition merely shows: "Address." As noted by one court:
"In determining whether a petition is valid despite a technical
defect, a paramount concern is whether the defective form of
the petition frustrates the purpose of the technical
requirement." Billi4 v. Voges, Cal. App. 3d _, 273
Cal.Rptr. 91 (1990).
The purpose of the Legislature in requiring the wording
shown in the sample petition included in section 41 must be to
emphasize to the persons signing a petition that it is their
residence address, and residence address alone, that should be
placed on the petition. This requirement for residence address
in section 41 merely repeats the same requirement found in
Section 3516 which is applicable'to initiative petitions in
cities. Elections Code sections 4001 and 3516(c).
yi3
Jeffrey Jorgensen
December 12, 1990
Page 3
A recent California Supreme Court case provides
guidance as to what the Legislature's purpose was in requiring
the petition to specify: "Residence Address ONLY ". That court
stated: "Far from being a mere technical shortcoming, real
parties' failure to comply with the requirement of section
3516, subdivision (c) goes to the very heart of that section's
purpose - to enable the clerk to ensure that petitions have
been signed by those entitled to do so - and prevents that
purpose from being effectuated." Assembly v. Deukmeiian, 30
Cal. 3d 638, 649. In that case, the court ruled that the form
of the petitions being challenged was defective. The facts
were more aggravated than the petition for the W.A.T.E.R.
Initiative because the instructions accompanying the petitions
actually directed the signer to affix his or her address "as
registered to vote ". The court ruled that there had been no
substantial compliance with this requirement because
substantial compliance "means actual compliance in respect to
the substance essential to every reasonable objective to the
statute." Id.
The substance essential to the reasonable objective of
section 41 must be to ensure that signers' affix only their
residence address. This allows the city clerk to compare the
voter's current residence address on the petition with the
individual's address as registered to vote in the records of
registration maintained by the county clerk. These addresses
must be the same to satisfy the requirement of section 3516
that the signer be a qualified registered voter when signing
the petition. By the W.A.T.E.R. Initiative's failing to
specifically state "Residence Address ONLY ", the city clerk
cannot be as confident that the signer placed his or her
current residence address, rather than some other address
presently or formerly used. For example, the person signing
the petition might insert the address where he or she resided
at the time of registering to vote, but which address is no
longer the place of residence. This would make such signatures
invalid, yet the city clerk would not detect that fact when
verifying whether the signers were qualified.
The Supreme Court in Assembly also rejected an argument
that the defective petitions should be excused as a form of
harmless error because the total signatures collected was
substantially in excess of the number of signatures required to
qualify the measure for the ballot. The court said that such
an argument "begs the question" which was how many of the
signatures collected are actually valid. Supra, at 650.
It is not likely that the failure of the Initiative
petition to comply with section 41 would be excused by a court
3�
Jeffrey Jorgensen
December 12, 1990
Page 4
solely because this requirement only became effective on
January 1, 1988. The proponents are assumed to have notice of
the provisions in the Elections Code regarding such petitions.
One court has invalidated a referendum petition because it
failed to comply with a new Elections Code requirement that the
circulator declare that he personally observed each signer
affixing the date and his residence, even though this
requirement became effective three days after adoption'of the
ordinance being challenged. If it appears to a court that the
objective of the Elections Code requirement is not met, it will
have no hesitancy in voiding initiative and referendum
petitions. See, for example, Hayward Area Planning Association
v. Superior Court, Cal. App. 3d, 266 Cal.Rptr.
745 (1990); and Ibarra v. City of Carsen, 214 Cal. App. 3d 90
(1989). As one court has cautioned: "Substantial compliance
can be carried too far, and its application should not be
relied on to save carelessly prepared petitions." Daniels v.
Tergeson, 211 Cal. App. 3d 1204 (1989).
Although the deficiency in the instant petition for the
W.A.T.E.R. Initiative is not as serious as in the Assembly
case, based upon the above authorities, it does present a close
question of whether there is a failure of substantial
compliance with section 41, thus invalidating the Initiative
petition.
III.
RESTRICTION ON COUNCIL POWER GRANTED BY CHARTER
The Initiative requires the council to expedite its
efforts to obtain adequate water to supply all user needs at
all time without rationing. Although the Initiative requires
priority to be given to "the most economic sources of water ",
it indicates "any and all sources of water" should be pursued.
Mandatory rationing and penalties are to be phased out within
one year and all rate increases directly caused by the
rationing must also be rolled back within one year. The
reinstitution of rationing is expressly prohibited. There is
no provision for temporary rationing if water supply ends due
to drought or some temporary interruption of supply.
As you have informed us, the City Staff has
investigated new sources of water supply including
participation in the state Water Project, diversion and
treatment of water from creeks, waste water reclamation and
desalination. A possible desalination plant is being
considered which has a cost of near $20 million. The
acquisition of new water supplies will take at least 18 months
to acquire and none of the options would provide water before
,-,ss
Jeffrey Jorgensen
December 12, 1990
Page 5
the existing reserves would be exhausted. The alternatives
being considered could increase the cost of producing water by
a factor of 10.
The city's Charter grants to the City Council the
responsibility for approving a city budget each fiscal year
required for the business and proper conduct of the city
government. See City Charter.sections 802 -806. The Charter
thus places upon the Council the extremely important
responsibility for planning the allocation of the city's
resources to ensure the ability to meet the needs of the
community during the ensuing 12 months.
The Initiative impairs the exercise of this power by
arbitrarily requiring that the city continue to "meet user
needs at all times without rationing" without there being any
limitations as to the expense necessary to provide such a water
supply. By mandating this unlimited expenditure, the
Initiative impairs the council's discretion of allocating the
city's resources as it deems prudent. Such an initiative has
been held to be an invalid attempt to amend the Charter by
changing the discretionary power of the legislative body. City
and County of San Francisco v. Patterson, 202 Cal. App. 3d 95
(1988). The court in Patterson voided an initiative that would
have imposed a restriction on the Board of Supervisors power to
sell property at less than 90% of fair market value. The court
agreed with the city's contention that any restriction on the
Board's charter -based authority to sell property must be
accomplished by a charter amendment and not by initiative. In
another similar case the court ordered an initiative removed
from the ballot because it would improperly have prohibited all
future city councils from enacting any utility users tax
without a vote of the people. It was argued such a prohibition
could only be established by charter amendment. Campen v.
Greiner, 15 Cal. App. 3d 386 (1971). The city's Charter is its
constitution and ordinances are invalid which conflict with it
or attempt to change or limit the power granted by the Charter
to the City Council. In Brown v. City of Berkley, 57 Cal. App.
3d 223 (1976), the court invalidated portions of an initiative
that created a police review commission granting it certain
powers because the stricken provisions involved powers
expressly granted by the Charter to the City Council or City
Manager.
The Patterson, Campen and Brown cases indicate that the
W.A.T.E.R. Initiative's provisions requiring the supply of all
water users' needs without rationing and regardless of costs
make the Initiative subject to legal challenge because it
impairs the council's authority under the Charter to manage the
f,q 4-
Jeffrey Jorgensen
December 12, 1990
Page 6
city's resources through the budget planning process. (Charter
amendments initiated by voter petition require signatures of
15% of the registered voters. Elections Code, sections 4080,
et seq.)
IV.
CONFLICT WITH CHARTER REQUIREMENT
FOR AMENDING ORDINANCES
The City's Charter provides that: "No ordinance shall
be amended by reference to its title, but the subsections
thereof to be amended shall be re- enacted at length as amended;
and any amendments passed contrary to the provisions of this
section shall be void." Section 606. This section raises the
issue whether the Initiative violates this charter provision
because the Initiative contradicts certain existing city
ordinance provisions.
There are several express provisions in the Initiative
that dismantle the rationing program of the city. For example,
the Initiative requires all mandatory rationing and penalties
to be phased out within one year; all rate increases caused by
rationing to be rolled back within one year; and
re- establishment of rationing (defined as any fines, penalties,
limits, allocations, restrictions, etc.) is expressly
prohibited.
Several ordinance provisions implement a water
rationing program. One section provides: "When deemed
necessary in the judgment of the city council to conserve water
during critical water periods, the city council may by
resolution declare an emergency condition and do any or all of
the following . " for example, limit or prohibit
irrigation, limit all customers to specific maximum usages of
water, and implement other water conservation measures as
deemed appropriate. San Luis Obispo Municipal Code section
13.07.030. Similarly, another section calls for the
establishment of mandatory water conservation percentage
reductions, and prohibits certain specific usages of water,
such as restaurants serving water without specific requests,
and using potable water for washing sidewalks, driveways or
parking areas. San Luis Obispo Municipal Code section
13.07.070.
A possible interpretation of Charter section 606 would
require the W.A.T.E.R. Initiative to be invalidated due to its
failure to re -enact as amended the various ordinance provisions
that are affected. The purpose of the Charter provision is to
inform the public what is the extent and nature of the new
f�s7
Jeffrey Jorgensen
December 12, 1990
Page 7
provisions being enacted and their impact on existing city
laws. The failure to re -enact the existing ordinance
provisions regulating water usage that are impacted by the
Initiative's provisions can cause confusion and
misunderstanding as to the impact of the Initiative. In the
case of Myers v. Stringham, 195 Cal. 672 (1925), an initiative
ordinance was voided because it attempted to amend an existing
ordinance by simply referring to its number and adding a new
subsection and by repealing a different subsection. The
subdivision added simply described a certain parcel of property
which by adding it to the existing ordinance, changed its
zoning. That initiative was void because a charter provision
prohibited the revision, re- enactment, or amendment by
reference to title only of an existing ordinance. The
rationale was that the strict enforcement of the charter
provision was necessary because without it, such amendments do
not disclose what the effect of adoption would be and by
themselves are unintelligible and meaningless.
Although the W.A.T.E.R. Initiative is more intelligible
than the initiative in the Stringham case, the full impact of
its enactment on existing city laws is not revealed to the
voters. If enacted, there will be provisions in the existing
water rationing /conservation program established by ordinance
that will be nullified without their being expressly stated to
the voters.
V.
IMPAIRING ESSENTIAL GOVERNMENTAL FUNCTIONS
Another limitation on initiatives is that voters do not
have the power to enact an initiative if its effect would be to
impair an essential governmental function. The Initiative's
mandatory commitment of an unlimited and unknown amount of
financial resources to providing water supply to the community
and its prohibition of any rationing could impair essential
city functions of providing fire protection to its citizens,
providing the minimum necessary water to sustain its citizens,
and rationally allocating the city's resources through the
budgetary process. As stated by the California Supreme Court:
"The initiative or referendum is not applicable where 'the
inevitable effect would be to greatly impair or wholly destroy
the efficacy of some other governmental power, the practical
application of which is essential'. . . ." Simpson v. Hite, 36
Cal. 2d 124, 134 (1950). The court will assume the right of
initiative was not intended to be available for the enactment
of an initiative that would seriously impair an essential
governmental function. Geiger v. Board of Supervisors, 48 Cal.
2d 832 (1957). This limitation is especially appropriate due
Jeffrey Jorgensen
December 12, 1990
Page 8
to the.factual setting in the instant case. As the Supreme
Court noted in 1976: "Past decisions invalidating initiative
or referendum measures to repeal local tax levies have
indicated a policy of resolving any doubts in the scope of the
initiative or referendum in a manner that avoids interference
w4 +-h > In^ =l Tan4 elat 4 vn 1%^AVI� 1% 4 1 4*4mc Fnr fimn =I
, 17 Cal. 3d 129
If the W.A.T.E.R. Initiative were enacted, the city
could be prevented from allocating the water resources
available in a way the Council determines will ensure an
adequate supply of water for firefighting purposes. It could
not impose rationing to maintain a sufficient level for that
purpose. It cannot be assumed that an unlimited supply of
water could be obtained or that periodically, at least,
supplies would not be exhausted during drought periods if no
rationing or conservation were permissible. Such constraints
on the city's ability to impose rationing and to allocate its
resources for necessary city services in addition to supplying
water, show the Initiative's impairment of essential and
fundamental government functions.
VI.
PROHIBITION AGAINST BINDING FUTURE COUNCIL ACTIONS
The Initiative in several specific ways unequivocally
binds future councils of San Luis Obispo regarding its water
policy. It requires sufficient water production to "meet user
needs at all times without rationing," phases out rationing and
rolls back rate increases within one year, and declares the
city "shall not continue or reestablish rationing under a
different name." The Initiative also mandates that the city
"shall not limit the number of private water suppliers and
should encourage competition among private suppliers." Similar
attempts in other initiative measures to bind future actions of
city councils have resulted in court invalidation of such
measures.
The court in Mueller V. Brown, 221 Cal. App. 2d 319
(1963) ordered Fresno County not to place on the ballot an
initiative attempting to preserve an historic courthouse. The
initiative purported to require that a certain parcel of
property known as the courthouse park "shall hereafter be
preserved for use as a park area only . . . [and] that.further
construction of buildings, additional parking areas or
encroachment of any kind be . . . permanently prohibited "; and
that the Fresno County Courthouse be "permanently maintained
and preserved for continued usage by various public agencies ".
-3g
Jeffrey Jorgensen
December 12, 1990
Page 9
The court invalidated the initiative stating: "The attempt to
create a park in perpetuity and to require permanent
maintenance and public use of the current courthouse exceeds
the scope of the initiative under California law . . . .The
electorate of Fresno County cannot bind the successors of the
present Board of Supervisors by use of the initiative."
The initiative in the Mueller case is similar to the
W.A.T.E.R Initiative in that it did not purport to undue any
steps that the board had already taken to construct a new
courthouse, e.g., approving a new courthouse plan for an
$8 million construction project and authorizing application for
federal grant funds to assist in the financing. The court
noted that if the courthouse initiative were enacted by the
voters, it would nullify the prior board action with which it
was in conflict.
The court in the Patterson case, supra., also voided an
initiative that sought to bind future legislative action. The
court agreed with a similar contention made by the city that:
"The people cannot employ the initiative process to bind future
boards which the board itself could not do." The court
stated: "The point seems well taken. 'It is a familiar
principle of law that no legislative board, by normal
legislative enactment, may divest itself or future boards of
the power to enact legislation within its competence.'" City
and County of San Francisco v. Patterson, 202 Cal. App. 3d 95,
105 -06.
This limitation on the use of the initiative could be
used to challenge the W.A.T.E.R. Initiative's attempt to bind
future council discretionary actions regarding its water
policies. However, there is conflicting legal authority that
recognizes the effect of initiatives of limiting future council
actions. See, Builders Assn. of Santa Clara - Santa Cruz
Counties v. Superior Court, 13 Cal.3d 225, 230 -31. Most
ordinances enacted by initiative require voter approval to be
amended or appealed. Elections Code Section 4013. The
conflict between these different rulings has not yet been
reconciled by the courts.
VII.
A GENERAL PLAN AMENDMENT BY INITIATIVE MUST BE
CONSISTENT WITH GENERAL PLAN
The W.A.T.E.R. Initiative could be construed as an
amendment to the City's General Plan, specifically the Water
and Was Management Element. The provisions in the
Initiative are typical of policies and programs found in city
JI'"i 0
Jeffrey Jorgensen
December 12, 1990
Page 10
General Plans. The general policy promoted by the Initiative
is to "end water supply short-falls and water rationing" by-
directing that sufficient water supplies be developed so total
production will "meet user needs at all times without
rationing." The Initiative designates certain programs to
implement this policy, such as, the phasing out of existing
rationing and penalties and rolling back rate increases
directly caused by the rationing.
If interpreted as a General Plan amendment, the
Initiative provisions must comply with general state law
governing such amendments. State law requires a city's General
Plan to a "comprehensive, long -term general plan for the
physical development" of the city. It is to "comprise an
integrated, internally consistent and compatible statement of
policies." Government Code sections 65300 and 65300.5.
Because the voters have no greater power by initiative
to enact legislation than does the City Council, an initiative
that amends a city's General Plan must be consistent with other
provisions of the General Plan. A case is now pending before
the California Supreme Court concerning this very issue.
Lesher v. City of Walnut Creek, Civil No. 5012604. One of the
main issues in that case is whether a growth control initiative
adopted by the voters should be invalidated because it is
inconsistent with existing provisions in the city's General
Plan. The city is arguing that rather than invalidating the
initiative, the city council should be required to amend the
General Plan to make it consistent with the initiative's
provisions. The Lesher case may also decide in what
circumstances an initiative should be construed as a General
Plan amendment when the initiative does not describe itself as
such.
It appears that certain provisions in the W.A.T.E.R.
Initiative are inconsistent with various provisions in the
city's General Plan. For example, the Water and Wastewater
Management Element, Policy 2.2 (page 24) includes the
statement: "Responding to shorter -term weather conditions, the
Annual Water Operation Plan should focus on how much and in
what manner people in existing development should reduce water
use from normal levels to assure adequate supply during
droughts." In Program 2.3 (page 25) it provides: "When
projected annual water use increases as a percentage of water
available in reservoirs, progressively more effective water
conserving measures will be implemented." Such measures
include mandatory conservation plans and imposing penalties for
water waste. If the Supreme court in the Lesher case rejects
the city's argument, then the W.A.T.E.R. Initiative could be
Jeffrey Jorgensen
December 12, 1990
Page 11
subject to invalidation as a General Plan amendment because of
its inconsistency with these provisions in the Water Element of
the city's existing General Plan. There may well be programs
and policies in other parts of the city's General Plan that
also are inconsistent with the provisions in the W.A.T.E.R.
Initiative. The other state provisions requiring consistency
between certain ordinances, approvals, etc., and the General
Plan do not seem to cover the kind of subject matter of the
Initiative. See, Government Code section 65860 (for zoning
ordinances), section 65867.5 (development agreements), section
66473.5 (subdivision maps), and section 65454 (specific plans).
VIII.
AVAILABLE OPTIONS FOR CITY ACTION
REGARDING W.A.T.E.R. INITIATIVE
The city's available courses of action in dealing with
the W.A.T.E.R. Initiative are somewhat limited. The starting
point is Elections Code section 4011 which states that if an
initiative petition is signed by not less than 10% of the
voters it shall be submitted to the voters at the next regular
municipal election, unless the City Council adopts the
ordinance without alteration. That section, however, does not
explain the options when the proposed initiative is allegedly
invalid.
As stated at the beginning of this letter, if there are
defects in the form of the petition, the city clerk has the
duty to reject the petition. The law is not fully settled on
whether such a rejection by itself is permissible, or whether
judicial review of such rejection should be sought by the
city. The State Supreme Court in.Yost v. Thomas, 36 Cal. 3d
561, 566, n.2 indicated it is not the city clerk's function to
determine whether a proposed initiative would be valid if
enacted and should instead seek judicial determination of such
an important and complex issue. However, other courts have
continued to indicate that the city clerk has a duty to reject
invalid petitions, at least where the form is defective. See,
Myers v. Patterson, 196 Cal. App. 3d 130 (1987).
There are two kinds of lawsuits the city could initiate
to bring the question of the Initiative's validity before the
court prior to the election. The first procedure would be to
file an action for declaratory relief in which the city would
state the grounds upon which it believes the Initiative is
invalid, and the proponents of the Initiative would be required
to defend the Initiative's validity. The other method is for
the city to file a writ of-mandate against the city clerk
seeking an order directing the clerk to not take any further
Jeffrey Jorgensen
December 12, 1990
Page 12
steps towards processing the Initiative, nor placing it on the
ballot. The proponents of the Initiative would be included in
the lawsuit as real parties in interest so that they would have
the ability to defend it. See, City and County of San
Francisco v. Patterson, 202 Cal. App. 3d 183 (1988).
If the city council decides to set the Initiative for
the next general election, it may be sued by someone seeking a
court order removing the Initiative from the ballot. In that
case, the extent of the city's duty to defend the validity of
the Initiative would be an issue. See Billi4 v. Voaes,
Cal. App. 3d _, 273 Cal.Rptr. 91 (1990). Unfortunately, the
courts have not clearly determined what the city's
responsibility is to defend an initiative whether before or
after the election. One point for the city to bear in mind is
that when a city does defend an initiative and is ultimately
unsuccessful, it may end up having to pay the attorney fees for
the party challenging the initiative. In one.case where the
initiative was litigated all the way to the U. S. Supreme
Court, the city ultimately had to pay around $214,000 to the
plaintiffs' for their attorneys fees and costs. Citizens
Against Rent Control v. City of Berkeley, 181 Cal. App. 3d 213
(1986).
As you can see from this discussion, there are no
reliable guidelines on what action the city council must take.
Its range of options run from refusing to place the Initiative
on the ballot, initiating court action to rule on its validity,
or placing the matter on the ballot.
IX.
CONCLUSION
We have set out above numerous legal issues that are
raised by the W.A.T.E.R. Initiative. It is our opinion that
each of them is sufficiently meritorious to raise a legitimate
question as to the Initiative's validity. However, none of the
grounds discussed above comes precisely within existing legal
precedent so that the outcome of such litigation is certain.
As the discussion shows, prior court decisions analyzing
initiatives with some similarities to the W.A.T.E.R. Initiative
have resulted in invalidation. We cannot advise you that any
one of the issues, or all of them collectively, would make it
more likely than not that a court would invalidate the
Initiative. The issues raise close questions. Ultimately,
whether any or all of the issues raised in this report would
result in invalidation would depend upon whether a court
determines the facts in this case are close enough to existing
precedent to be governed by the cases cited above.
y3
Jeffrey Jorgensen
December 12, 1990
Page 13
We hope the information provided in this letter is
useful to you. We appreciate the opportunity to provide this
analysis, and if you have any questions or request further
information about it, please call upon us.
Very truly yours,
Daniel J. Curtin, Jr.
Thomas C. Wood
TCW /ljs