Statement on Lawsuit Settlement - May 4, 2023
The following statement was jointly issued by Marin Water and CO$T upon reaching settlement in the 2019 case of the Coalition of Sensible Taxpayers, et al. v. Marin Municipal Water District:
Marin Municipal Water District and the Coalition of Sensible Taxpayers (CO$T) and other individually named plaintiffs have reached a settlement in the 2019 case of the Coalition of Sensible Taxpayers, et al. v. Marin Municipal Water District. The agreement settles a lawsuit over water rates that Marin Water adopted in 2019. Both sides agree it is prudent to move forward for the benefit of all Marin Water customers.
The dispute centered on certain fixed fees in customers’ water bills that vary according to the size of their water meters. CO$T alleged that the Watershed Management Fee and the Capital Maintenance Fee in the 2019-2023 fixed fee schedule were not compliant with the law’s requirement that water charges be proportional to the cost of service. Marin Water disputed that claim and maintains that these charges were legally adopted and comply with Proposition 218.
The settlement will only become effective if the Marin Water Board of Directors adopts certain modifications to its Watershed Management Fee and its Capital Maintenance Fee, which are being considered as part of its current rate setting process. Marin Water staff and its rate consultant are proposing changes to the fixed fees to better reflect customer demand and to help reduce the burden of fixed fees on low water users, which presents an opportunity to improve the District’s rate structure and address issues of concern to CO$T.
Marin Water is in the process of completing its proposal for the next four-year rate cycle effective July 1, 2023, for which it will be mailing notices and holding a public hearing in May 2023, as required under Proposition 218. As part of this rate proposal, Marin Water would cease to charge fixed fees to single family and duplex residential customers using the disputed meter-size factors. If the new rates are adopted as proposed, Marin Water would assess its Capital Maintenance Fee and Base Service Charge Fee (both fixed fees) using new factors for single family residential and duplexes that are more clearly tied to water usage. The fixed fees would comprise a declining percentage of aggregate customer bills over the 4-year rate period. Marin Water is also proposing to eliminate the meter-size-based fixed charge Watershed Management Fee and instead more closely tie this charge to each customer’s water usage.
Both sides agree this approach is fair, promotes conservation, and better ties individual customer bills to water usage, thereby addressing the central complaint of CO$T’s lawsuit. Settling the lawsuit in advance of the December 2023 trial date reduces the risk to both sides of an adverse legal decision and ongoing higher litigation costs.
CO$T and Marin Water recognize the need for the district to focus on increasing its investment in infrastructure, a more secure water supply, and wildfire mitigation work on the Mt. Tam Watershed – as well as rebuilding financial reserves. Resolving this lawsuit better positions Marin Water to pursue these important priorities and makes ratepayers more confident that their water bills will be fair and equitable.