HIDDEN VALLEY LAKE, Calif. – The Hidden Valley Lake Community Services District is moving forward with implementing new sewer rates beginning this summer, but plans for similar water rate increases are on hold pending review of a court decision relating to the city of San Juan Capistrano water district handed down earlier this month.

At its meeting April 21, the Hidden Valley Lake Community Services District Board of Directors adopted the new sewer rates, effective July 1.

The proposed sewer rates consist of two components: a “fixed charge” and a “volumetric charge,” the district reported.

All sewer customers pay the same fixed charge, the district said, while the volumetric charge is determined by the average monthly water usage for the months of January through April.

As a general rule, a residential or commercial customer’s average monthly water use for the months of January through April provides a reasonable estimate of the wastewater produced each month of the year. Customers generating less wastewater will pay less for sewer service than those producing larger volumes of wastewater, the district reported.

Sewer charges will be adjusted on July 1 of each year, with the volumetric charge being based on actual average monthly water usage in the preceding months of January through April, according to the district.

Also on April 21, the board discussed but did not adopt the proposed water rate increases, which included a tiered water rate structure.

The day before, on April 20, California’s Fourth District Court of Appeal found that the city of San Juan Capistrano’s tiered water rate structure was unconstitutional because it charged more for water than it cost to provide the service.

Pursuant to Proposition 218, water rate charges cannot exceed the cost of providing water service. 

Historically, tiered water rate structures have been used to incentivize water conservation by charging higher rates for “excessive” water use, the Hidden Valley Lake Community Services District reported. Typically, the charge rates associated with excessive water use are greater than the corresponding cost of providing water service.

Although the Fourth District Court of Appeal did not conclude that tiered water rate structures were unconstitutional per se, the court also did not define what constitutes a credible cost of service analysis in support of a tiered water rate structure, thereby leaving all tiered water rate structures open to legal challenges.

At least for now, the future of tiered water rate structures and more specifically the legality of tiered water rate structures remain unclear, district officials said.

The Hidden Valley Lake Community Services District’s proposed tiered water rate structure included excessive water use tiers that were designed to incentivize water conservation and were not strictly based on the actual cost of providing water service.

Given the uncertainty regarding tiered water rates, the district said it will be proposing an alternative rate structure and will issue a new Proposition 218 water rate increase notice in the near future.