Michael Boyd vs. Soquel Creek Water District and city of Santa Cruz by SantaCruzSentinel

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									 1   Michael E. Boyd
     5439 Soquel Drive
 2   Soquel, CA 95073
     Phone: (408) 891-9677
 3   E-mail: michaelboyd@sbcglobal.net
 4   In Pro Per
 5                      SUPERIOR COURT OF THE STATE OF CALIFORNIA
 6                                COUNTY OF SANTA CRUZ

 7      Michael E. Boyd                                      CASE NO:
 8             Plaintiff,                                    COMPLAINT SEEKING TO
               v.                                            INVALIDATE WATER RATE &
 9                                                           SERVICE CHARGE INCREASES;
10      Soquel Creek Water District; City of                 2013 BONDS; EQUITABLE
        Santa Cruz; Does 1 to 100,                           RELIEF FOR 42 U.S.C. 1983;
11             Defendants.                                   FIRST AMENDMENT AND DUE
                                                             PROCESS VIOLATIONS
12
13                                           Common Allegations
14   Plaintiff’s Complaint seeks a temporary restraining order, a preliminary injunction, and a
15   permanent injunction to invalidate the water rate and service charge increases adopted by the
16   Board of Directors of the Soquel Creek Water District ("SqWD" or "District") at its February 5,
17   2013 meeting that became effective March 1, 2013 the District expenditure of $4,248,216 for a
18   proposed seawater desalination project and any 2013 bonds approved on that basis. Plaintiff is
19   alleging the water rate and service charge increases adopted violated Proposition 218, the Right to
20   Vote on Taxes Act (1996); and Proposition 26, the “Supermajority Vote to Pass New Taxes and
21   Fees Act” (2010). Defendant SqWD has provided Plaintiff a response to his public records
22   request showing the District expenditure of $4,248,216 between May 16, 2008 to December 7,
23   2012 for a proposed seawater desalination project, which Plaintiff alleges violated, and continues
24   to violate Plaintiff's First Amendment rights; and to the degree Defendants City of Santa Cruz
25   (referred herein as the "City") are involved in such advocacy; this also allegedly violates
26   Plaintiff's First Amendment Rights also. In the alternative Plaintiff request a Declaratory Order
27   ordering the water rate and service charge increases any previously authorized or further
28   expenditures on the proposed seawater desalination project and 2013 bonds approved on that
     basis be put before the District's and City's voters.




                                                    COMPLAINT TO INVALIDATE WATER RATE & SERVICE
                                                                        CHARGE INCREASES; ET. AL. ;
 1                                                               Table of Contents
 2   Common Allegations.......................................................................................................................1
 3   Table of Contents and Authorities...................................................................................................2
 4   Introduction and Background ..........................................................................................................5
 5   Arguments why adopted Water Rates and Charges Modifications are in violation of the California
 6   Constitution; Prop 218; Prop 26; along with violations of state and federal constitutional due
 7   process rights and the First Amendment .........................................................................................7
 8   Prop 218...........................................................................................................................................7
 9   Prop 26.............................................................................................................................................9
10   Alleged substantive procedural due process violations.................................................................11
11   $4,248,216 allegedly exceeds proportional cost of the service attributable..................................13
12   $4,248,216 charges based on potential or future use of a service are not permitted.....................15
13   Allegedly $4,248,216 not an exception within the definition of Art. XIII C, sect. 1....................16
14   Allegedly Defendants preferred desalination project option over all others for new regional water
15   supplies ..........................................................................................................................................17
16   Defendants allegedly failed to identify "potentially feasible alternative that might avoid a
17   significant impact".........................................................................................................................17
18   Allegations that proposed desal water supply is not the least cost environmentally.....................19
19   preferred option .............................................................................................................................19
20   Plaintiff alleges LAFCO must approve provision of extraterritorial services...............................21
21   FIRST CAUSE OF ACTION(Against Soquel Creek Water District) (California Constitution
22   Article XIII D, sect.6 (b)(3)) .........................................................................................................23
23   SECOND CAUSE OF ACTION(Against Soquel Creek Water District) (California Constitution
24   Article XIII D, sect.6 (b)(4)) .........................................................................................................25
25   THIRD CAUSE OF ACTION(Against Soquel Creek Water District) (California Constitution
26   Article XIII C, sect.1)....................................................................................................................26
27   FOURTH CAUSE OF ACTION(Against City of Santa Cruz and Soquel Creek Water District)
28   (First Amendment, Due Process Violations, and 42 USC 1983) ..................................................27
29
30                                                             Table of Authorities
31   Cases
32   Laurel Heights, supra, 47 Cal.3d ................................................................................................... 17
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                                                                                              COMPLAINT TO INVALIDATE
                                                                          WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   Bighorn-Desert View Water Agency v. Verjil (2006) ............................................................... 13, 15
 2   City of Palmdale v. Palmdale Water District................................................................................. 12
 3   HABITAT AND WATERSHED CARETAKERS, v. CITY OF SANTA CRUZ et al., 211 Cal.App.4th
 4      429 (2012) ............................................................................................................................ 17, 21
 5   Halberstam v. Welch, 705 F.2d 472, 477 (D.C.Cir.1983).................................................................28
 6   Hampton v. Hanrahan, 600 F.2d 600, 620-21 (7th Cir.1979) .......................................................... 28
 7   Hoffman-LaRoche, Inc. v. Greenberg, 447 F.2d 872, 875 (7th Cir.1971)...................................28, 29
 8   Howard Jarvis Taxpayers Assn. v. City of Roseville (2002) ............................................................ 7
 9   Save the Habitat v. Soquel Creek Water District ........................................................................... 12
10   Silicon Valley Taxpayers' Assn., Inc. v. Santa Clara County Open Space Authority, supra, 44
11      Cal.4th 431 ................................................................................................................................... 9
12   Smith v. U.C. Regents (1993) 4 Cal.4th 843, 852..................................................................... 28, 34
13   Stanson v. Mott (1976) 17 Cal.3d 206, 218.............................................................................. 28, 34
14   Statutes
15   42 USC 1983 ............................................................................................................ 2, 27, 28, 29, 30
16   California Environmental Quality Act, Public Resources Code section 21000, et seq...... 17, 18, 28
17   Gov. Code, § 56133........................................................................................................................ 21
18   Ordinance 72-2 ............................................................................................................................... 22
19   Proposition P ............................................................................................................................ 27, 30
20   section 1985(3)................................................................................................................................ 29
21   Stats.1969, ch. 1175, § 25, p. 2286................................................................................................. 15
22   Other Authorities
23   2007 Memorandum of Agreement (MOA) .................................................................................... 13
24   City of Santa Cruz 2010 Urban Water Management Plan ............................................................. 13
25   minutes of the February 5, 2013 Public Hearing............................................................................ 22
26   Ordinance No. 72-2 ........................................................................................................................ 22
27   Pacifica Institute Key Issues for Seawater Desalination in California (2012)...............................20
28   Santa Cruz County Resource Conservation District "APPENDIX C Fisheries Assessment
29   D.W.ALLEY and Associates. March 2003"it lists the prior "Investigations of Alternative Water
30   Development Projects on Soquel Creek Progress Report 1982-83, June 1984 by D.H. Dettman
31   and D.W. Kelley" conducted for the Soquel Creek Water District."                                                                                18
32   Water Supply Evaluation and Recommendations 4-22" (1999) .................................................... 19
                                                                            -3-
                                                                                             COMPLAINT TO INVALIDATE
                                                                         WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   Constitutional Provisions
 2   42 U.S.C. 1983 ......................................................................................................................... 1, 5, 7
 3   Art. XIII C, sect. 1 ...................................................................................................................... 2, 16
 4   Art. XIII D, sect. 6(b)(3) and (4) .................................................................................................... 15
 5   Art. XIII D, sect.6 (b) ............................................................................................................... 13, 15
 6   Art. XIII D, sect.6 (c) ..................................................................................................................... 15
 7   Article XIII C ................................................................................................................... 2, 7, 10, 26
 8   Article XIII D ..........................................................................................................................passim
 9   Article XIII D, sect.6 (b)(3)............................................................................................................ 23
10   Article XIII D, sect.6 (b)(4)) .......................................................................................................... 25
11   due process ..............................................................................................................................passim
12   First Amendment .....................................................................................................................passim
13   Proposition 218........................................................................................................................passim
14   Proposition 26..........................................................................................................................passim
15
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                                                                                            COMPLAINT TO INVALIDATE
                                                                        WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1                                     Introduction and Background
 2   As stated in Plaintiff's Protest [Exhibit 1] dated January 30, 2013 as agent for the customer of
 3   record [my wife Pat [Paramoure] Boyd]; on the property's water account for 5439 Soquel Drive,
 4   Assessor's Parcel Number 037-094-29, SqWD Account#028460-000, in Santa Cruz County
 5   California; states "I am protesting the proposed water rate and the service charge increases, as
 6   violating the provisions of Proposition 26, also known as the “Supermajority Vote to Pass New
 7   Taxes and Fees Act” (2010). The true but hidden purpose of the increases are so as to
 8   predetermine the approval of ratepayer subsidized debt financing incurred for a pro-desal project
 9   campaign activity which has understated [miss-informed the public of] the fact that two thirds of
10   the proposed three year water rate and the service charge increases are for the Board's pet
11   project." I allege all such expenditures on the project including the cost of environmental review
12   and district staff time is unlawful and in violation of Propositions 218 and 26 and my rights as a
13   voter within the District's jurisdictional boundaries. This also allegedly violates my federal and
14   state constitutional rights, including but not limited to, due process, equal protections, and First
15   Amendment rights. It also allegedly violates these federal civil rights under color of state law in
16   violation of my rights under 42 U.S.C. 1983.
17
18   According to the November 20, 2012 Agenda Packet Soquel Creek Water District 10-Year
19   Financial Plan Update November 15, 2012; Table 1 - Soquel Creek Water District - Cash Flow
20   Projections With Desal, 2900 AF Target [at P. 26 line 27] of the independent auditors report [See
21   http://soquelcreekwater.org/sites/default/files/11-20-12%20Board%20packet.pdf]; submitted to
22   the District along with their Financial Plan & Water Rate Study Summary of Recommendations it
23   lists under [line 27] "Future Debt Proceeds for Desal Project"....for the fiscal year "2014/15" a
24   rate increase of "9%" and "$6,000,000" of debt payments for desal and for the fiscal year
25   "2015/16" a rate increase of "12%" and $46,000,000" debt payment for desal.
26
27   Under California law, local governments are strictly prohibited from engaging in political
28   advocacy using public resources. Local governments may make public statements of an
29   informational nature, provided they are factual and impartial. Statements that are not factual, or
30   that are not impartial are prohibited both by our state and federal Constitutions.
31
32
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                                                                        COMPLAINT TO INVALIDATE
                                                    WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   On Jan 9, 2013 by e-mail to Taj Dufour, P.E., Interim General Manager Soquel Creek Water
 2   District; Plaintiff asked "What percentage of the rate increase would go to desal assuming desal
 3   is approved by the board?" His response by e-mail on Jan 22, 2013 was "this round of rate
 4   increases is NOT needed to fund the regional desal project…it is needed to fund District
 5   operations and near-term District capital improvements. The short answer to your question is
 6   0%...." [See Exhibit 2 Plaintiff's January 30, 2013 Taj Dufour e-mail response]
 7
 8   On Jan 24, 2013 Taj Dufour, repeated this statement to the press at the Santa Cruz Sentinel the
 9   article report him stating "Taj Dufour, the interim general manager, emphasized none of those
10   funds would be used to build a proposed desalination plant, a joint effort between the Soquel
11   Creek Water District and City of Santa Cruz. However, some would be used to complete an
12   environmental report on the controversial project, he said..." [Id.]
13
14   In response to Plaintiff's request for information under the California Public Records Act the
15   District identified the expenditure of $4,248,216 [see Exhibit 3 SqWD response to CPRA request]
16   on their alleged advocacy for the proposed desal project, which violated, and continues to violate
17   Plaintiff's First Amendment rights; and to the degree Defendants City of Santa Cruz (referred
18   herein as the "City") are involved in such alleged advocacy ; this also allegedly violates Plaintiff's
19   First Amendment Rights. These activity/materials at issue violate these core democratic
20   principles in the following manner. The activities described above expressly; to fund a pilot desal
21   plant; various studies on intake, energy, source water, etc; partial design of the plant; funds for
22   solicited grant opportunities; and a highly biased environmental review; all for the purposes of
23   supporting and pre-committing the District [and the City] to the desalination project's approval.
24   These actions are so one-sided; that they would fairly be characterized as alleged advocacy as
25   opposed to informational.
26
27   Especially in light of the fact that City of Santa Cruz Voter Approval Required for Desalination
28   Facility ballot question was on the November 6, 2012 ballot for voters in the City of Santa Cruz
29   in Santa Cruz County, where it was approved. 19,124 voted for the measure, or 72.13%, and
30   7,389 voted against the measure, or 27.87%. With the approval of Measure P, voters will have to
31   vote on a specific plan before a proposed +$115 million desalination facility can be built. The
32   proposed facility would be shared with the Soquel Creek Water District but no such voting
                                                      -6-
                                                                        COMPLAINT TO INVALIDATE
                                                    WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   requirement was included in the measure for Soquel Water District Customers. Purportedly the
 2   facility would produce about 2.5 million gallons of desalinated sea water each day, which under
 3   the District's 2007 agreement with the City for constructing the facility which is to be located
 4   within the City's jurisdictional water service boundaries; the District will pay 50% of the
 5   cost...even though the District has +14,100 service connection compared to the City's service
 6   connections of more than 24, 300; as is discussed in more detail below. This allegedly violates
 7   Plaintiff's, and all like situated customers, and voters within the Soquel District's [and City's]
 8   boundaries; including but not limited to, the right substantive procedural rights to due process;
 9   including voting rights; and First Amendment Rights also. Finally Plaintiff alleges these same
10   actors violated Plaintiff's federal civil rights under color of state law in violation of 42 U.S.C.
11   1983. Therefore Plaintiff’s seeks a temporary restraining order, a preliminary injunction, and a
12   permanent injunction to enjoin further water rate and service charge increases and further
13   expenditure s by Defendants until the matters in dispute are put to a vote of the voters of the
14   Soquel Creek Water District and the City of Santa Cruz.
15
16
       Arguments why adopted Water Rates and Charges Modifications are in violation of the
17
        California Constitution; Prop 218; Prop 26; along with violations of state and federal
18
                      constitutional due process rights and the First Amendment
19
20                                               Prop 218
21   In November 1996, California voters adopted Proposition 218, the Right to Vote on Taxes Act. In
22   adopting this measure, the people found and declared `"that Proposition 13 was intended to
23   provide effective tax relief and to require voter approval of tax increases. However, local
24   governments have subjected taxpayers to excessive tax, assessment, fee and charge increases that
25   not only frustrate the purposes of voter approval for tax increases, but also threaten the economic
26   security of all Californians and the California economy itself. This measure protects taxpayers by
27   limiting the methods by which local governments exact revenue from taxpayers without their
28   consent."'" (Howard Jarvis Taxpayers Assn. v. City of Roseville (2002) 97 Cal.App.4th 637, 640
29   [119 Cal.Rptr.2d 91], fns. omitted.) "Proposition 218 added articles XIII C and XIII D to the
30   California Constitution. Article XIII C concerns voter approval for local government general
31   taxes and special taxes. Article XIII D sets forth procedures, requirements and voter approval
32
                                                    -7-
                                                                       COMPLAINT TO INVALIDATE
                                                   WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   mechanisms for local government assessments, fees and charges. We are concerned here with
 2   article XIII D, specifically certain provisions concerning fees and charges." (Ibid.)
 3   The relevant article XIII D provisions on fees and charges are as follows:
 4   "[Section] 6. Property Related Fees and Charges.
 5   "(a) Procedures for New or Increased Fees and Charges. An agency shall follow the procedures
 6   pursuant to this section in imposing or increasing any fee or charge as defined pursuant to this
 7   article [(these procedures include notice to property owners, and a public hearing for proposed
 8   new or increased fees)]: [¶] . . . [¶]
 9   "(b) Requirements for Existing, New or Increased Fees and Charges. A fee or charge shall not be
10   extended, imposed, or increased by any agency unless it meets all of the following requirements:
11   "(1) Revenues derived from the fee or charge shall not exceed the funds required to provide the
12   property-related service.
13   "(2) Revenues derived from the fee or charge shall not be used for any purpose other than that for
14   which the fee or charge was imposed.
15   "(3) The amount of a fee or charge imposed upon any parcel or person as an incident of property
16   ownership shall not exceed the proportional cost of the service attributable to the parcel.
17   "(4) No fee or charge may be imposed for a service unless that service is actually used by, or
18   immediately available to, the owner of the property in question. Fees or charges based on
19   potential or future use of a service are not permitted. Standby charges, whether characterized as
20   charges or assessments, shall be classified as assessments and shall not be imposed without
21   compliance with Section 4.
22   "(5) No fee or charge may be imposed for general governmental services including, but not
23   limited to, police, fire, ambulance or library services, where the service is available to the public
24   at large in substantially the same manner as it is to property owners. [¶] Reliance by an agency on
25   any parcel map, including, but not limited to, an assessor's parcel map, may be considered a
26   significant factor in determining whether a fee or charge is imposed as an incident of property
27   ownership for purposes of this article. In any legal action contesting the validity of a fee or
28   charge, the burden shall be on the agency to demonstrate compliance with this article.
29   "(c) Voter Approval for New or Increased Fees and Charges. Except for fees or charges for sewer,
30   water, and refuse collection services, no property-related fee or charge shall be imposed or
31   increased unless and until that fee or charge is submitted and approved by a majority vote of the
32   property owners of the property subject to the fee or charge or, at the option of the agency, by a
                                                     -8-
                                                                        COMPLAINT TO INVALIDATE
                                                    WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   two-thirds vote of the electorate residing in the affected area. The election shall be conducted not
 2   less than 45 days after the public hearing. . . .
 3   "(d) Beginning July 1, 1997, all fees or charges shall comply with this section." (Italics added.)
 4   (2) As our Supreme Court emphasized in Silicon Valley Taxpayers' Assn., Inc. v. Santa Clara
 5   County Open Space Authority, supra, 44 Cal.4th 431, "We `"`must enforce the provisions of our
 6   Constitution and "may not lightly disregard or blink at . . . a clear constitutional mandate."'"'
 7   [Citation.] In so doing, we are obligated to construe constitutional amendments in a manner that
 8   effectuates the voters' purpose in adopting the law. [Citation.]" (Id. at p. 448.) "
 9
10   Plaintiff alleges the Soquel Creek Water District has failed to demonstrate that its water rates and
11   service charges are proportional to the cost of providing water service to each parcel [See Pp. 16-
12   33    at   http://soquelcreekwater.org/sites/default/files/02-05-13%20Board%20Packet.pdf];           as
13   required under section 6, subdivision (b), paragraph (3) of article XIII D: "The Proposition 218
14   Ballot Pamphlet makes clear that the voters intended that `No property owner's fee may be more
15   than the cost to provide service to that property owner's land.'" SqWD's rates and service charges
16   violate this proportionality requirement in a number of respects: (1) SqWD's monthly service
17   charge is arbitrary and not tied to the actual costs of providing identified services to each meter;
18   (2) SqWD's commodity charge tiers are not proportional to the costs of providing water service;
19   and (3) SqWD's water budget structure is not proportional to the costs of providing water service
20   and fails to achieve its stated purpose. SqWD failed to prove its revenues under the new rate
21   structure will not exceed the costs of providing water service in contravention of article XIII D,
22   section 6, subdivision (b), paragraph (1), and instead "all but assures that revenues SqWD
23   receives from customers in the higher tiers will be more than is required to cover SqWD's costs of
24   service." Further, SqWD's new rates require users to pay for services; desalination water supplies;
25   they cannot receive in violation of section 6, subdivision (b), paragraph (4) of article XIII D.
26
27                                                   Prop 26
28   Proposition 26 amends the California Constitution to provide that any change to a State statute
29   which results in anyone paying a higher tax must be approved by a two-thirds majority of the
30   state’s legislature. Proposition 26 also amends the definition of tax to include, with few listed
31   exemptions, “any levy, charge, or exaction of any kind imposed by the state.” Similarly, under
32   Proposition 26, certain fees imposed by local governmental entities are redefined as taxes.
                                                          -9-
                                                                             COMPLAINT TO INVALIDATE
                                                         WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1
 2   Plaintiff alleges Proposition 26 limits the ability of local governments to approve and collect
 3   certain fees because any local fees that are redefined as taxes now require voter approval. As with
 4   the state, a local government bears the burden of proving that a fee or charge is not a tax. Notably,
 5   Proposition 26 does not apply to any local fees that were in effect on Nov. 2, 2010. Therefore, if a
 6   local fee was in effect on or before that date it will remain valid as long as it is not increased.
 7   Therefore the District's proposed water rate and the service charge increases violate Proposition
 8   26 provisions which as a tax must be subject to a two-thirds vote of the District's voters prior to
 9   approval of any proposed water rate and the service charge increases.
10
11   Plaintiff alleges the Board of Directors of the Soquel Creek Water District; following the close of
12   the February 5, 2013 Public Hearing; adopted Water Rates and Charges Modifications, effective
13   March 1, 2013, that are in violation of California Constitution Article XIII D, sect.6 (b)
14   "Requirements for Existing, New or Increased Fees and Charges. A fee or charge shall not be
15   extended, imposed, or increased by any agency unless it meets all of the following requirements"
16   which states at (3) "The amount of a fee or charge imposed upon any parcel or person as an
17   incident of property ownership shall not exceed the proportional cost of the service attributable
18   to the parcel."
19
20   Plaintiff alleges the Board's actions also violated California Constitution Article XIII D, sect.6 (b)
21   (4) "No fee or charge may be imposed for a service unless that service is actually used by, or
22   immediately available to, the owner of the property in question. Fees or charges based on
23   potential or future use of a service are not permitted. Standby charges, whether characterized as
24   charges or assessments, shall be classified as assessments and shall not be imposed without
25   compliance with Section 4."
26
27   Additionally Plaintiff alleges the District's expenditure of $4,248,216 on the Desal project was
28   not an exception within the definition of Article XIII C, sect. 1.; because these services "exceed
29   the reasonable costs to the local government of conferring the benefit "; nor do the expenditures
30   qualify as "assessments and property-related fees imposed in accordance with the provisions of
31   Article XIII D".
32
                                                     - 10 -
                                                                        COMPLAINT TO INVALIDATE
                                                    WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1                       Alleged substantive procedural due process violations
 2   Plaintiff alleges examples of other substantive procedural due process and Prop 218 from the
 3   Draft minutes from the February 5, 2013 Public Hearing are also incorporated in this complaint
 4   herein by reference. Plaintiff alleges that these violations occurred and will continue to occur
 5   under the Water Rates and Charges Modifications adopted as follows:
 6
 7          Patrick McMenamy, an Aptos resident, stated he moved into his home 19 months
 8          ago. The washing machine, faucets etc. were replaced. The District’s Conservation
 9          Specialist, Roy Sikes, provided guidance regarding native grasses, drought
10          resistant plants and his sprinkler system. Timers for the sprinkler system were set
11          to be most stringent. His water bill decreased by 15.5%. He questioned why Aptos
12          businesses, e.g. the Safeway Shopping Center and new residential construction are
13          allowed with the current water shortage. It’s the Board’s job to reduce, not
14          increase water demand. He asked if the District’s Water Demand Offset (WDO)
15          program does enough and how many protest letters were received. With so much
16          mail typically during the holiday season, the Proposition 218 notice he received
17          was almost thrown out. [Like Mr. McMenamy pointed out Plaintiff alleges the
18          Board's actions violated Plaintiff's due process and First Amendment rights.]
19
20          Director Daniels explained that mandatory restrictions and possibly a moratorium
21          will be put in place if the proposed desalination option is not approved. The
22          District’s Water Demand Offset policy requires all new development to offset the
23          increase in demand, essentially creating a zero impact that would not exacerbate
24          groundwater overdraft. [See further discussions on the moratorium alternative
25          below]
26
27          Joan Vanek, a Soquel resident, stated she does not support a rate increase. She
28          called customer service today and was given her APN number. Instead of
29          disqualifying letters without an APN, she suggested the District should look it up.
30          She has been working hard to conserve water but at the same time feels she is
31          being punished because revenue is down due to people using less water.
32          Desalination is not the answer... [Like Mr. Vanek pointed out Plaintiff alleges the
                                                   - 11 -
                                                                      COMPLAINT TO INVALIDATE
                                                  WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   Board's protest process violated Plaintiff's due process and First Amendment
 2   rights.]
 3
 4   Bill Parkin, stated he represented Mr. Tom Mader in the Save the Habitat v. Soquel
 5   Creek Water District litigation. He understands the conservation conundrum and
 6   agrees with Mr. Bosso about Proposition 26. Mr. Parkin stated under Proposition
 7   218 the District’s tiered rate structure is illegal. The City of Palmdale v. Palmdale
 8   Water District litigation was cited. The District hasn’t explained why they think
 9   it’s OK with the information provided. No analysis was given. A Service Charge
10   cannot be imposed arbitrarily. Instead of using the money for a supplemental
11   supply, start a moratorium now. [Plaintiff agrees with Mr. Parkin and alleges that
12   the City of Palmdale v. Palmdale Water District litigation is applicable in this case
13   because of the Tiered rate structure the District has adopted; but disagrees that
14   Proposition 26 (2010) does not apply for the reasons described.]
15
16   Mr. Maxwell stated he is particularly disappointed in the desal EIR studies that
17   were done and the proceedings to increase the rates. Proposition 218 notices
18   should be provided with the bill. Mailing the notice during the Christmas holiday
19   was intended to fool people; the very people you are obligated to serve. The next
20   notice should be in large print and mailed months in advance. The noticing was not
21   adequate and protest letters submitted without APN’s should not be disqualified.
22   He urged the Board to withdraw their intention to vote on a rate increase and
23   resend an adequate notice. He opined that deciding not to withdraw would be
24   unethical and illegal. He alleged the District failed to follow due process. [Like
25   Mr. Maxwell pointed out Plaintiff alleges the Board's actions violated Proposition
26   218 as well as Plaintiff's due process and First Amendment rights.]
27
28   George Mead, a Santa Cruz resident, stated he noticed inconsistencies regarding
29   the rates in the information on the District’s website. He reviewed the materials,
30   specifically noting the Proposition 218 flyer and the information provided by
31   Bartle Wells regarding the rates on page 7 of Schedule B for Tier 2, 5/8” meters
32   that doesn’t add up when tracking the numbers from left to right in the flyer. He
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                                                               COMPLAINT TO INVALIDATE
                                           WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1          felt it was convoluted and confusing." [Like Mr. Mead pointed out Plaintiff
 2          alleges the Board's actions violated Proposition 218 as well as Plaintiff's due
 3          process and First Amendment rights.]
 4
 5          [See 02/05/2013 Draft Minutes of Public Hearing]
 6
 7             $4,248,216 allegedly exceeds proportional cost of the service attributable
 8   According to Draft minutes from the February 5, 2013 Public Hearing "District Counsel Bob
 9   Bosso respond[ing] to Mr. Boyd’s statements regarding Proposition 26 citing the California
10   Supreme Court Bighorn-Desert View Water Agency v. Verjil (July 26, 2006) decision whereby the
11   court determined that water service charges are “property related fees” under Article XIII D and
12   adoption and increase of “property related fees” are subject to Proposition 218’s procedural
13   requirements (Art. XIII D, sect.6 (a)). Since the passage of the Bighorn case, “property related
14   fees” are exempt from Proposition 26."
15
16   But Plaintiff alleges the District expenditure of $4,248,216 was for advocacy for the proposed
17   desal project allegedly violates Art. XIII D, sect.6 (b) "Requirements for Existing, New or
18   Increased Fees and Charges. A fee or charge shall not be extended, imposed, or increased by any
19   agency unless it meets all of the following requirements" which states at (3) "The amount of a fee
20   or charge imposed upon any parcel or person as an incident of property ownership shall not
21   exceed the proportional cost of the service attributable to the parcel." Plaintiff alleges there is
22   no proportionate costs for the District Board's proposed desal project when the City of Santa Cruz
23   has more than 24,351 Water Service Accounts listed in 2010
24   [see City of Santa Cruz 2010 Urban Water Management Plan Table 4-1 at p. 2.
25   http://www.cityofsantacruz.com/Modules/ShowDocument.aspx?documentid=24684]
26   and the Soquel Creek Water District has 14,100 Water Service Accounts
27   [see http://soquelcreekwater.org/content/about-us].
28
29   According to the 2007 Memorandum of Agreement (MOA) at Pp. 8-9 the District must pay an
30   equal share or 50% of all costs which is clearly not proportionate to its share of water service
31   connections that would purportedly benefit from the project. Plaintiff alleges the District's share
32
                                                    - 13 -
                                                                       COMPLAINT TO INVALIDATE
                                                   WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   of the costs is clearly on its face disproportionate to the City's share of the cost of the desal
 2   project and therefore it exceeds "the proportional cost of the service attributable to the parcel".
 3   [See http://www.scwd2desal.org/documents/task-
 4   force/MOA%20fully%20executed%20version%20%28Aug%202007%29.pdf]
 5          14.    Member Contributions
 6          The parties agree that the costs for the investigative phase of the Project will be
 7          shared as follows:
 8
 9          a. Pilot Plant Costs. The parties shall contribute equal shares for all of the costs
10          incurred for designing (including all studies required), developing, constructing
11          and operating the pilot plant for the duration of the test period after deduction of
12          any grant funds received from third parties.
13
14          b. Investigative Studies and Full Scale Facility Costs. The parties shall
15          contribute equal shares of the costs for investigative studies, design,
16          environmental review, and permitting associated with the full scale Facility after
17          deduction of any grant funds received from third parties.
18
19          c. Acquisition of Property and Construction. The parties shall contribute equal
20          shares for commitments necessary to secure a site and associated rights-of-way
21          for the full scale project excluding any rights-of-way or easements that solely
22          benefit only one agency. Actual purchase of property and construction will be by
23          separate agreement as it is beyond the scope of the Task Force.
24
25          d. Staffing. Both parties will provide support from existing staff and dedicated
26          staff or independent contractors may be retained as needed to support the Project.
27          Actual costs incurred by each party for staff and/or independent contractors will
28          be tracked and submitted to the Treasurer on an annual basis to issue
29          reimbursements as appropriate to result in the equal sharing of costs by both
30          parties.
31
32
                                                     - 14 -
                                                                       COMPLAINT TO INVALIDATE
                                                   WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1          e. Reimbursement of Existing Costs. Each party shall reimburse the other for
 2          50% of any costs described above which have been incurred prior to this
 3          agreement...
 4         $4,248,216 charges based on potential or future use of a service are not permitted
 5   Additionally Plaintiff alleges the District expenditure of $4,248,216 for the proposed desal project
 6   allegedly violates Art. XIII D, sect.6 (b) "Requirements for Existing, New or Increased Fees and
 7   Charges. A fee or charge shall not be extended, imposed, or increased by any agency unless it
 8   meets all of the following requirements" which states at (4) "No fee or charge may be imposed
 9   for a service unless that service is actually used by, or immediately available to, the owner of
10   the property in question. Fees or charges based on potential or future use of a service are not
11   permitted. Standby charges, whether characterized as charges or assessments, shall be classified
12   as assessments and shall not be imposed without compliance with Section 4."
13
14   In opposite of SqWD's counsel's stated at the February 5, 2013 Public Hearing; in Bighorn-Desert
15   View Water Agency v. Verjil, 138 P. 3d 220 - Cal: Supreme Court 2006
16          "In holding that section 3 of article XIII C of the state Constitution authorizes
17          initiative measures that reduce public agency water service charges, we are not
18          holding that the authorized initiative power is free of all limitations. In particular,
19          we are not determining whether the electorate's initiative power is subject to
20          the statutory provision requiring that water service charges be set at a level
21          that "will pay the operating expenses of the agency, . . . provide for repairs and
22          depreciation of works, provide a reasonable surplus for improvements, extensions,
23          and enlargements, pay the interest on any bonded debt, and provide a sinking
24          or other fund for the payment of the principal of such debt as it may become due."
25          (Stats.1969, ch. 1175, § 25, p. 2286, 72B West's Ann. Wat.-Appen., supra, ch. 112,
26          p. 203.) That issue is not currently before us."
27
28   Plaintiff alleges since the District expenditure of $4,248,216 was not within the definition of a
29   water fee or charge and was already expended for the proposed desal project; therefore, this
30   violated Art. XIII D, sect. 6(b)(3) and (4); therefore the Water Rates and Charges Modifications
31   adopted by the Board following the close of the February 5, 2013 Public Hearing under Art. XIII
32   D, sect.6 (c) applied; which required "Voter Approval for New or Increased Fees and Charges. ...
                                                     - 15 -
                                                                       COMPLAINT TO INVALIDATE
                                                   WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   no property related fee or charge shall be imposed or increased unless and until that fee or charge
 2   is submitted and approved by a majority vote of the property owners of the property subject to the
 3   fee or charge or, at the option of the agency, by a two-thirds vote of the electorate residing in the
 4   affected area. The election shall be conducted not less than 45 days after the public hearing. An
 5   agency may adopt procedures similar to those for increases in assessments in the conduct of
 6   elections under this subdivision."
 7
 8         Allegedly $4,248,216 not an exception within the definition of Art. XIII C, sect. 1.
 9   Additionally the District's expenditure of $4,248,216 on the Desal project was not an exception
10   within the definition of Art. XIII C, sect. 1.
11            Definitions; As used in this article:
12            (e) As used in this article, "tax" means any levy, charge, or exaction of any kind
13          imposed by a local government, except the following:
14            (1) A charge imposed for a specific benefit conferred or privilege granted
15          directly to the payor that is not provided to those not charged, and which does not
16          exceed the reasonable costs to the local government of conferring the benefit or
17          granting the privilege.
18            (2) A charge imposed for a specific government service or product provided
19          directly to the payor that is not provided to those not charged, and which does not
20          exceed the reasonable costs to the local government of providing the service or
21          product. ...
22            (7) Assessments and property-related fees imposed in accordance with the
23          provisions of Article XIII D..."
24   The District's expenditure of $4,248,216 failed to qualify for any of these three exceptions; and is
25   therefore is a "tax" subject to the requirements of Art. XIII C, sect. 1 "The local government bears
26   the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is
27   not a tax, that the amount is no more than necessary to cover the reasonable costs of the
28   governmental activity, and that the manner in which those costs are allocated to a payor bear a
29   fair or reasonable relationship to the payor's burdens on, or benefits received from, the
30   governmental activity...."
31
32
                                                       - 16 -
                                                                          COMPLAINT TO INVALIDATE
                                                      WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   Allegedly Defendants preferred desalination project option over all others for new regional
 2                                             water supplies
 3   Alleged violations of state and federal constitutional due process rights and the First Amendment;
 4   in addition to those noted above including, but not limited to, those made over the protest process,
 5   notice of public hearing during the Christmas Holiday, and the other procedural and substantive
 6   due process violations alleged by Plaintiff, and the public, at the District's so-call February 5,
 7   2013 Public Hearing on the water rate and service charge increases; Plaintiff incorporates these
 8   alleged violations by reference. I allege that the Defendants [including individual District Board
 9   members and City Council members individually] have engaged in alleged advocacy                for their
10   preferred desalination project option over all others for new regional water supplies to the
11   exclusion of other feasible options; like watershed restoration options for the San Lorenzo River
12   and the Soquel Creek watersheds; a new supply that uses underground storage and stream
13   diversions during wet periods.
14
15    Defendants allegedly failed to identify "potentially feasible alternative that might avoid a
16                                          significant impact"
17   In the recent state appeals court decision in HABITAT AND WATERSHED CARETAKERS, v.
18   CITY OF SANTA CRUZ et al., 211 Cal.App.4th 429 (2012), 149 Cal. Rptr. 3d 574 the court found
19   in a case where the City [same actor as City Defendants herein] while the City identified its
20   proposed desal project as the sole new water supply; in that case it allegedly had failed to identify
21   "potentially feasible alternative that might avoid a significant impact must be discussed ".
22          We find no merit in the conclusory argument by the City and the Regents that
23          there was no need to mention, discuss, or analyze a limited-water or reduced-
24          development alternative because such alternatives would not avoid the significant
25          impact on water supply. They reason that these alternatives would simply result in
26          the Regents developing areas other than North Campus that are already within the
27          City's water service area. In their view, "[a]nalyzing either alternative in detail
28          would be a futile exercise because it would not provide meaningful information to
29          the City decision-makers regarding whether to approve the Project or an
30          alternative."
31
32
                                                     - 17 -
                                                                       COMPLAINT TO INVALIDATE
                                                   WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1          (8) "`To facilitate CEQA's informational role, the EIR must contain facts and
 2          analysis, not just the agency's bare conclusions or opinions.'" (Laurel Heights,
 3          supra, 47 Cal.3d at p. 404.) A potentially feasible alternative that might avoid a
 4          significant impact must be discussed and analyzed in an EIR so as to provide
 5          information to the decision maker about the alternative's potential for reducing
 6          environmental impacts. Without analysis, the theory posited by the City and the
 7          Regents is purely speculative and is not supported by any facts discussed in the
 8          draft EIR or the final EIR. Since, as Habitat points out, the draft EIR and the final
 9          EIR neither discussed nor analyzed either of these alternatives, the decision
10          maker, here primarily LAFCO rather than the City was not provided with any
11          information about the effect that either of these alternatives might have on water
12          supply impacts or other impacts.
13
14          CEQA does not permit a lead agency to omit any discussion, analysis, or even
15          mention of any alternatives that feasibly might reduce the environmental 456*456
16          impact of a project on the unanalyzed theory that such alternatives might not
17          prove to be environmentally superior to the project. The purpose of an EIR is to
18          provide the facts and analysis that would support such a conclusion so that the
19          decision maker can evaluate whether it is correct. By failing to mention, discuss,
20          or analyze any feasible alternatives, the draft EIR and the final EIR failed to
21          satisfy the informational purpose of CEQA, which included providing LAFCO
22          with relevant information.
23
24   An example of SqWD's failure to allow for any potentially feasible alternative that might avoid a
25   significant impact that must be discussed is a watershed restoration option which reference comes
26   from the Santa Cruz County Resource Conservation District "APPENDIX C Fisheries
27   Assessment D.W.ALLEY and Associates. March 2003"it lists the prior "Investigations of
28   Alternative Water Development Projects on Soquel Creek Progress Report 1982-83, June 1984 by
29   D.H. Dettman and D.W. Kelley" conducted for the Soquel Creek Water District."
30
31   Figure 1 is from page 5 of the referenced report that allegedly delineates the proposed "Location
32   of alternative damsites, present upstream barriers to steelhead migration, riffles .., and bedrock
                                                    - 18 -
                                                                       COMPLAINT TO INVALIDATE
                                                   WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   chute ... that block migration block migration at low flows" at the bottom of Figure 1, and an
 2   arrow pointing to the proposed "USGS gage and site of proposed diversion" that was the subject
 3   of the June 1984 report to SqWD by D.H. Dettman and D.W. Kelley.
 4
 5
 6
 7
 8
 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
     [See http://www.rcdsantacruz.org/media/watershed_plans/SCWEP_C1.pdf at P. 76]
26
27         Allegations that proposed desal water supply is not the least cost environmentally
28                                            preferred option
29   According to the SqWD's "Water Supply Evaluation and Recommendations 4-22" (1999) [See P.
30   57 at http://soquelcreekwater.org/sites/default/files/irp_0.pdf] "With regard to the cost
31   comparison, alternative economics might be applied. For example, the preliminary estimates for
32   the water diversion project, is approximately $1,900,000 annually for debt service and operating
                                                     - 19 -
                                                                        COMPLAINT TO INVALIDATE
                                                    WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   costs for a yield of approximately 1,400 acre feet. This represents an approximate cost of $1,357
 2   per acre foot..." This compares very favorable to the costs of the proposed desal project based on
 3   currently existing facilities based on the recent study completed by the Pacifica Institute titled
 4   Key Issues for Seawater Desalination in California: [See
 5   http://www.pacinst.org/reports/desalination_2013/financing_final_report.pdf] Cost and Financing
 6   November 2012. As the Executive Summary of this recent report notes [P. 7] under "How Much
 7   Does Seawater Desalination Cost?... Economics – including both the cost of the water produced
 8   and the complex financial arrangements needed to develop a project – are key factors that will
 9   determine the ultimate success and extent of desalination in California. Our analysis finds that the
10   cost to produce water from a desalination plant is highly variable. Recent estimates for plants
11   proposed in California range from $1,900 to more than $3,000 per acre-foot, or $1.54 - $2.43 per
12   cubic meter (m3). While the cost of seawater desalination has declined considerably over the past
13   20 years, desalination costs remain high and there are unlikely to be any major cost breakthroughs
14   in the near- to mid-term. Indeed, desalination costs may increase in response to rising energy
15   prices...The public and decision-makers must exercise caution when comparing cost estimates for
16   different seawater desalination projects. In many cases, costs are reported in ways that are not
17   directly comparable. For example, some report the cost of the desalination plant alone, while
18   others include the additional infrastructure, e.g., conveyance pipelines, needed to integrate the
19   desalination plant into the rest of the water system. Some estimates include the cost to finance the
20   project, while others do not. Even when there is an apples-to-apples comparison, there are a
21   number of site- and project-specific factors that make cost comparisons difficult, such as energy,
22   land, and labor costs."
23
24
25
26
27
28
29
30
31
32
                           Figure 5 Marginal Unit Cost- of Water, Dollars per Acre-Foot
                                                        20 -
                                                                                COMPLAINT TO INVALIDATE
                                                    WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   Plaintiff alleges the analysis also provides Figure 5 [at P. 38] comparing the Marginal Cost per
 2   Acre-Foot of the sole existing desalination facilities list one pure seawater desal project
 3   operational which cost is listed at $2,340 per acre-foot. [Note: All costs are in year 2011 dollars
 4   and exclude any grants or incentives. The cost listed for the City of San Diego Recycled Water
 5   Study includes wastewater-related costs that could reduce the unit cost by up to $600 per acre-
 6   foot. This figure also excludes the costs of conservation and efficiency, water transfers from
 7   agriculture, or additional water from regional providers. Source: SDCWA 2012b]
 8
 9             Plaintiff alleges LAFCO must approve provision of extraterritorial services
10   Further HABITAT identifies that since SqWD is not within the Sphere of Influence ("SOI") of the
11   City [and visa versa] in order for SqWD to purchase desalination water supplies from the City,
12   the District must file an application for extraterritorial services to the Local Agency Formation
13   Commission ["LAFCO"] , stating "The housing commitment was contingent on the City seeking
14   LAFCO approval of an SOI amendment and agreeing not to oppose the Regents' request for
15   extraterritorial water and sewer services for North Campus." According to footnote 1 of the
16   Court's Decision ["Section 2.7, subdivision (a) of the CSA provided: "The City currently provides
17   water service to UCSC through five (5) connections, the most northern of which is north of the
18   City's limits and was installed by the City in 1973. The City will continue to provide water
19   service to the Campus through the five existing connections, and UCSC may use the water to
20   support development implementing the 2005 LRDP, including the development of housing in the
21   North Campus, consistent with the other provisions of this Agreement." ...Although the City and
22   the Regents suggest that this provision means that the Regents may develop North Campus even
23   without LAFCO granting the City's application for an SOI amendment or the Regents' application
24   for extraterritorial services, they provide no legal authority for this interpretation. LAFCO
25   approval is a prerequisite for extraterritorial service, which may occur only within the service
26   provider's SOI. (Gov. Code, § 56133.) No agreement between the City and the Regents could
27   sidestep LAFCO's statutory authority and permit water provided "through the ... existing
28   connections" to service extraterritorial lands in North Campus that remained outside the City's
29   SOI. Indeed, the final EIR seemed to admit as much: "The City agrees that the Settlement
30   Agreement does not contemplate the provision of extraterritorial service to any other areas of
31   University property not currently already served by the City." "LAFCO must approve provision
32   of extraterritorial services."...In fact, the phrase upon which the City and the Regents rely was
                                                    - 21 -
                                                                       COMPLAINT TO INVALIDATE
                                                   WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   apparently intended to refer to the fact that the City will not be extending its water or sewer lines
 2   into the North Campus area. As the draft EIR explained, those lines "would be extended by the
 3   University to serve new development" in North Campus from the "existing campus connections."]
 4   The CSA provided that a LAFCO denial would excuse the Regents from the housing
 5   commitment.[]"
 6
 7   But neither of the Defendants have allegedly provided such an application to LAFCO even
 8   though on entering an agreement; back in 2007 to support and build the desal project the SqWD
 9   and/or the City should have filed such an application but failed to do so.
10   [See http://www.scwd2desal.org/documents/task-
11   force/MOA%20fully%20executed%20version%20%28Aug%202007%29.pdf]
12
13   As noted in the Draft minutes of the February 5, 2013 Public Hearing "Director Daniels explained
14   that mandatory restrictions and possibly a moratorium will be put in place if the proposed
15   desalination option is not approved." Plaintiff alleges this viable alternative to the proposed
16   desalination option has not been given due consideration. As former residents of Goleta
17   California we [me and my family] lived in the Goleta Water District during such a moratorium
18   which Plaintiff alleges had a long term beneficial effect on the value of real estate in Goleta
19   during the 35 years it was in effect.
20
21   Following the declaring of a water shortage emergency; in December 1972, the Goleta Water
22   District's board of directors declared the existence of a water shortage emergency, and enacted
23   Ordinance No. 72-2, [Exhibit 4] which imposed a moratorium on new water connections. The
24   moratorium applied to property even though there was a "connection" (water meter) on the
25   property, inasmuch as Section 9 of the Ordinance provided that "[w]ater service shall not be
26   provided through any existing, installed water service facilities which were not used for
27   furnishing any significant quantity of water for any bonafide (sic) purpose at any time within five
28   years prior to December 7, 1972, unless an applicant for water service through said facilities has
29   satisfied the conditions of Sections 2, 3, 4 or 5 of this ordinance..." footnote "Ordinance 72-2,
30   Section 13 allows the Water District, in its discretion, to grant permits allowing for water service
31   otherwise prohibited if it finds that (1) the restrictions herein would cause an undue hardship or
32   emergency condition or (2) that the granting of the permit will not adversely affect the water
                                                     - 22 -
                                                                       COMPLAINT TO INVALIDATE
                                                   WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   supply or service to other existing water consumers or (3) that due to peculiar facts and
 2   circumstances, none of the provisions of this Ordinance authorizing new water service are
 3   applicable to the situation under consideration, if the Board of Directors in its discretion finds that
 4   the applicant is entitled to substantially similar treatment as set forth in some provision of this
 5   Ordinance * * *." In May 1973, the Goleta Water District's voters adopted by referendum a
 6   "Responsible Water Policy Ordinance" also prohibiting new water connections during times of
 7   water shortage.
 8
 9   Based on the District Board member Daniels' characterization of this alternative to the propose
10   desalination option; Plaintiff alleges Defendants are using this as a sort of "buggy man" water
11   supply option; therefore they [the SqWD and City] appear to have allegedly already pre-
12   committed to the desal option; without the voters' approval first in a fair unbiased comparison to
13   the other options that should be available to choose from by District and City voters; include a
14   moratorium on new water connections while additional water supplies are developed along with
15   the development of a watershed habitat restoration alternative developed under the auspices of the
16   [http://rcdsantacruz.org/] Santa Cruz County Resource Conservation District; which proposed
17   option Plaintiff alleges should be subject to voter approval in the City of Santa Cruz and Soquel
18   Creek Water District; along with the desal option; and a moratorium/conservation option. Plaintiff
19   alleges funding from the City and SqWD for the Resource Conservation District costs should be
20   born on the basis of the number of service connections each entity currently maintains.
21
22   Plaintiff complains and for causes of action alleges as follows:
23
24                                      FIRST CAUSE OF ACTION
25                                 (Against Soquel Creek Water District)
26                         (California Constitution Article XIII D, sect.6 (b)(3))
27   Defendants Soquel Creek Water District (herein referred to as "SqWD" or “District” for the Board of
28   Directors acting in both their capacity as individuals and as members of the Board of Directors) at all
29   times herein mentioned, was a governmental agency and existing under the laws of the State of
30   California with principle offices located at 5180 Soquel Drive, in the County of Santa Cruz.
31
32
                                                      - 23 -
                                                                        COMPLAINT TO INVALIDATE
                                                    WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   Plaintiff is ignorant of the true names and capacities of defendants sued herein as DOES 1
 2   through 50 inclusive and therefore sue these defendants by such fictitious names. Plaintiff will
 3   amend this complaint to allege their true names and capacities when ascertained.
 4   Plaintiff is informed and believes and thereon alleges that, at all times herein mentioned, each of
 5   the defendants sued herein was the agent and employee of each of the remaining defendants and
 6   was at all times acting within the purpose and scope of such agency and employment.
 7
 8   Plaintiff alleges that the Board of Directors of the Soquel Creek Water District; following the
 9   close of the February 5, 2013 Public Hearing; adopted Water Rates and Charges Modifications,
10   effective March 1, 2013, that are in violation of California Constitution Article XIII D, sect.6 (b)
11   "Requirements for Existing, New or Increased Fees and Charges. A fee or charge shall not be
12   extended, imposed, or increased by any agency unless it meets all of the following requirements"
13   which states at (3) "The amount of a fee or charge imposed upon any parcel or person as an
14   incident of property ownership shall not exceed the proportional cost of the service attributable
15   to the parcel."
16
17   WHEREFORE, plaintiff prays for judgment against defendant Soquel Creek Water District and
18   each of them, as follows:
19
20   1. For an order requiring defendants to show cause, if any they have, why they should not be
21   enjoined as hereinafter set forth, during the pendency of this action;
22
23   2. For a temporary restraining order, a preliminary injunction, and a permanent injunction, all
24   enjoining defendants' adopted Water Rates and Charges Modifications, effective March 1, 2013,
25   and each of them, and their agents, servants, and employees, and all persons acting under, in
26   concert with, or for them:
27          A. From March 1, 2013;
28          B. Until such time as the voters have had an opportunity to vote on Water Rates and
29          Charges Modifications adopted by the District on February 5, 2013.
30
31   3. For attorney fees herein incurred;
32   4. For costs of suit herein incurred; and
                                                     - 24 -
                                                                        COMPLAINT TO INVALIDATE
                                                    WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   5. For such other and further relief as the court deems proper.
 2
 3                                    SECOND CAUSE OF ACTION
 4                                 (Against Soquel Creek Water District)
 5                        (California Constitution Article XIII D, sect.6 (b)(4))
 6   The Board's actions also violated California Constitution Article XIII D, sect.6 (b) (4) "No fee or
 7   charge may be imposed for a service unless that service is actually used by, or immediately
 8   available to, the owner of the property in question. Fees or charges based on potential or
 9   future use of a service are not permitted. Standby charges, whether characterized as charges or
10   assessments, shall be classified as assessments and shall not be imposed without compliance with
11   Section 4."
12
13   WHEREFORE, plaintiff prays for judgment against defendant Soquel Creek Water District and
14   each of them, as follows:
15
16   1. For an order requiring defendants to show cause, if any they have, why they should not be
17   enjoined as hereinafter set forth, during the pendency of this action;
18
19   2. For a temporary restraining order, a preliminary injunction, and a permanent injunction, all
20   enjoining defendants' adopted Water Rates and Charges Modifications, effective March 1, 2013,
21   and each of them, and their agents, servants, and employees, and all persons acting under, in
22   concert with, or for them:
23          A. From March 1, 2013;
24          B. Until such time as the voters have had an opportunity to vote on Water Rates and
25          Charges Modifications adopted by the District on February 5, 2013.
26
27   3. For attorney fees herein incurred;
28   4. For costs of suit herein incurred; and
29   5. For such other and further relief as the court deems proper.
30
31
32
                                                     - 25 -
                                                                        COMPLAINT TO INVALIDATE
                                                    WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1                                      THIRD CAUSE OF ACTION
 2                                   (Against Soquel Creek Water District)
 3                            (California Constitution Article XIII C, sect.1)
 4   The District's expenditure of $4,248,216 between May 16, 2008 to December 7, 2012 on the
 5   Desal project was not an exception within the definition of Article XIII C, section 1.; because
 6   these services "exceed the reasonable costs to the local government of conferring the benefit ";
 7   nor do the expenditures qualify as "assessments and property-related fees imposed in
 8   accordance with the provisions of Article XIII D".
 9
10   WHEREFORE, plaintiff prays for judgment against defendant Soquel Creek Water District and
11   each of them, as follows:
12
13   1. For an order requiring defendants to show cause, if any they have, why they should not be
14   enjoined as hereinafter set forth, during the pendency of this action;
15
16   2. For a temporary restraining order, a preliminary injunction, and a permanent injunction, all
17   enjoining defendants from any future expenditure towards the desal option, and each of them, and
18   their agents, servants, and employees, and all persons acting under, in concert with, or for them:
19          A. From March 1, 2013;
20          B. Until such time as the voters has had an opportunity to vote on the District's
21          expenditures of $4,248,216 and any future expenditure towards the desal option and if the
22          desal option fails at the ballot the District's expenditures of $4,248,216 be returned to the
23          District's ratepayers.
24          C. The development of a watershed habitat restoration alternative developed under the
25          auspices of the [http://rcdsantacruz.org/] Santa Cruz County Resource Conservation
26          District which proposed options must be subject to voter approval in the City of Santa
27          Cruz and Soquel Creek Water District.
28
29   3. For equitable damages of $4,248,216 divided by 14,100 per District service connections in the
30   sum of $301, plus damages in such further sums as may be sustained and as are ascertained
31   before final judgment herein;
32   4. For attorney fees herein incurred;
                                                     - 26 -
                                                                        COMPLAINT TO INVALIDATE
                                                    WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   5. For costs of suit herein incurred; and
 2   6. For such other and further relief as the court deems proper.
 3
 4                                    FOURTH CAUSE OF ACTION
 5                     (Against City of Santa Cruz and Soquel Creek Water District)
 6                   (First Amendment, Due Process Violations, and 42 USC 1983)
 7   Defendants City of Santa Cruz (herein referred to as "City” for the City Council and Mayor acting in
 8   both their capacity as individuals and as members of the City Council) at all times herein mentioned,
 9   was a governmental agency and existing under the laws of the State of California with principle
10   offices located at 809 Center Street, in the City of Santa Cruz, County of Santa Cruz.
11
12   Plaintiff is ignorant of the true names and capacities of defendants sued herein as DOES 51
13   through 100 inclusive and therefore sue these defendants by such fictitious names. Plaintiff will
14   amend this complaint to allege their true names and capacities when ascertained.
15
16   Plaintiff is informed and believes and thereon alleges that, at all times herein mentioned, each of
17   the defendants sued herein was the agent and employee of each of the remaining defendants and
18   was at all times acting within the purpose and scope of such agency and employment.
19
20   At or about July 3, 2012 Proposition P was qualified for the November 6, 2012 ballot in the City
21   of Santa Cruz. In the election 19,124 voted for the measure or 72.13%. The measure was very
22   strict on limiting further expenditure on the desal option by the City if enacted by the voters
23   stating "Section 1. Purpose. The purpose of this Charter Amendment is to enact a comprehensive
24   policy ensuring that the City of Santa Cruz does not approve, permit, or fund a desalination
25   project without voter approval." While the initiative is silent on City funding for the cost
26   environmental review it states "Notwithstanding any other provision of this Charter, no legislative
27   action by the City that would authorize or permit the construction, operation, and/or acquisition
28   of a desalination project, or that would incur any bonded or other indebtedness for that purpose,
29   shall be valid or effective unless such action is authorized by an affirmative vote of a majority of
30   qualified electors in the City of Santa Cruz voting on the question at a statewide general,
31   statewide primary, or regularly scheduled municipal election. Provided that it has first fully
32   complied with the California Environmental Quality Act, Public Resources Code section 21000,
                                                     - 27 -
                                                                       COMPLAINT TO INVALIDATE
                                                   WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   et seq.," Finally the initiative is retroactive to any expenditures made by the City and presumably
 2   the SqWD stating "Section 6. Retroactive Application. In the event this Charter Amendment is
 3   adopted by the voters, its provisions shall apply retroactively as of the date the measure was
 4   found to have qualified for placement on the ballot" which in this case was July 2, 2012.
 5
 6   Plaintiff alleges these election results and the measure bound both the SqWD and the City to its
 7   terms as co-signers on the 2007 desal agreement; allegedly therefore after July 2, 2012 any
 8   expenditure by the SqWD and the City were in violation of Plaintiff's rights to free speech and
 9   procedural due process rights which Plaintiff alleges violated Plaintiff's federal civil rights under
10   color of state law in violation of 42 USC 1983.
11
12   Plaintiff alleges the Free Speech clauses of the federal and state Constitutions prohibit the use of
13   governmentally compelled monetary contributions (including taxes) to support or oppose political
14   campaigns since "[s]uch contributions are a form of speech, and compelled speech offends the
15   First Amendment." Smith v. U.C. Regents (1993) 4 Cal.4th 843, 852.
16
17   Plaintiff alleges moreover, "use of the public treasury to mount an election campaign which
18   attempts to influence the resolution of issues which our Constitution leaves to the 'free election' of
19   the people (see Const., art. II, § 2) ... presents a serious threat to the integrity of the electoral
20   process." Stanson v. Mott (1976) 17 Cal.3d 206, 218; as is clearly the case here.
21
22   Plaintiff is in the belief and understanding that a civil conspiracy is defined as an agreement
23   between two or more people to participate in an unlawful act or a lawful act in an unlawful
24   manner. See Halberstam v. Welch, 705 F.2d 472, 477 (D.C.Cir.1983); Hampton v.
25   Hanrahan, 600 F.2d 600, 620-21 (7th Cir.1979), modified on other grounds, 446 U.S. 754,
26   100 S.Ct. 1987, 64 L.Ed.2d 670 (1980). An express agreement among all conspirators is not
27   necessary. "A plaintiff ... need not prove that each participant in a conspiracy knew the `exact
28   limits of the illegal plan or the identity of all participants therein.'" Hampton, 600 F.2d at 621
29   (quoting Hoffman-LaRoche, Inc. v. Greenberg, 447 F.2d 872, 875 (7th Cir.1971)). The
30   conspirators "must share the general conspiratorial objective, but they need not know all the
31   details of the plan ... or possess the same motives." Id. Thus, to "demonstrate the existence of
32   a conspiratorial agreement, it simply must be shown that there was a single plan, the essential
                                                       - 28 -
                                                                          COMPLAINT TO INVALIDATE
                                                      WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   nature and general scope of which [were] known to each person who is to be held responsible
 2   for its consequences." Id. (quoting Hoffman-LaRoche, Inc. v. Greenberg, 447 F.2d 872, 875
 3   (7th Cir.1971)). To make the conspiracy actionable, there must also be an overt act in
 4   furtherance of the object of the conspiracy that injures plaintiff in his person or property or, in
 5   a section 1985(3) action, which deprives him of having or exercising any right or privilege of
 6   a citizen of the United States.
 7
 8   Plaintiff alleges the Defendants deprived him of having or exercising any right or privilege under
 9   the Constitution. Plaintiff asserted that he was the victim of a civil conspiracy by Defendants to
10   violate his civil rights, all actionable under 42 U.S.C. §1983, to redress violations of federal laws
11   committed by Defendants, i.e. to inter alia compel the enforcement of federal laws, for Plaintiff’ and
12   the public’s interests, and to secure remedial relief for Plaintiff for damages caused by those
13   violations.
14
15   Defendants' alleged advocacy for sole sourcing new water supply for seawater desalination
16   allegedly has placed in jeopardy the health and welfare of unascertained customers whose water
17   is contaminated by the toxic Chromium 6. Allegedly it will cost $2.52 million for remediation
18   measures. [See http://soquelcreekwater.org/content/chromium-6-aka-hexavalent-chromium]
19   "At Soquel Creek Water District, chromium 6 has been detected in 6 of our 15 active water
20   supply wells. Impacted wells draw water from the Aromas Red Sands Aquifer, which has
21   widespread naturally occurring deposits of chromium 6 due to the local geology. Affected areas
22   of our District include Rio Del Mar, Seascape and La Selva Beach (see more about the source of
23   local chromium 6 deposits below.)...In 2011, SqCWD initiated a formal review of potential
24   chromium 6 treatment alternatives. The screening process utilized District-specific water quality
25   data and site constraints to evaluate potential alternatives based upon effectiveness, ability to
26   implement and cost.      Pilot testing of two of the most appropriate alternatives will commence in
27   Summer 2012....The available chromium 6 treatment processes are very expensive.                       In
28   anticipation of installing treatment facilities at some or all of the wells with chromium 6 above
29   the drinking water standard, the District started a Water Quality Projects Reserve, which has a
30   current balance of $2.52 million...In August 2011, SqCWD began construction on a new well
31   which will pump water from an aquifer that has not had detected chromium 6."
32
                                                       - 29 -
                                                                          COMPLAINT TO INVALIDATE
                                                      WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   Therefore Plaintiff alleges that because of the SqWD failure to carry out its duty to prevent the
 2   over drafting of the Aromas Red Sands Aquifer the Board's alleged advocacy for desal coupled
 3   with their alleged failure to declare an emergency and a water hook-up moratorium on new
 4   connections; this allegedly exacerbated the chromium 6 problem...allegedly adding to the
 5   $4,248,216 for desal advocacy the amount of damages of at least "$2.52 million" to the District's
 6   ratepayers that would have allegedly been avoided by Plaintiff and other like situated water
 7   ratepayers but for Defendant's alleged unlawful actions in unlawful alleged advocacy for their
 8   preferred water supply option, on matters that allegedly should be decided in an impartial
 9   unbiased manner based on the facts at hand by the voters. Without the District's Board knowingly
10   authorizing the over drafting of the aquifer so as to create their alleged buggy man to the
11   desalination project they have allegedly already admitted to spending $4,248,216 for desal
12   advocacy on; in light of Proposition P's provision "ensuring that the City of Santa Cruz does not
13   approve, permit, or fund a desalination project without voter approval"; nor does Prop P
14   allegedly authorize SqWD to do so;.... instead as an alleged agent of the City under the terms of
15   their 2007 agreement [and co-conspirator] with the City. Plaintiff alleges the provision of Prop P
16   the Defendants' are trying to get around, and the Defendants will continue to allegedly do so;
17   unless the court enjoins them to stop doing so. An alleged case in point is the recently approved
18   contract for a alleged $500,000-grant application consulting services, approved February 20, 2013
19   for the desal project by the so-called Desal Task Force [allegedly unelected governmental body];
20   even when the Defendants allegedly purport to be conducting an independent; impartial; unbiased
21   environmental review on their predetermined and pre-committed [allegedly at ratepayers' expense
22   without a vote first] to their preferred desal project.
23   [See http://www.cityofsantacruz.com/Modules/ShowDocument.aspx?documentid=30848]
24
25   WHEREFORE, Plaintiffs seeks judgment against Defendants:
26           1. Equitable damages for First Amendment, Due Process Violations, and 42 USC 1983
27   violations.
28           2. Reasonable attorneys' fees and costs of suit pursuant to law;
29           3. For injunctive, declaratory and other such relief, according to proof;
30           4. For such further relief as the Court may deem necessary and proper.
31
32
                                                       - 30 -
                                                                         COMPLAINT TO INVALIDATE
                                                     WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1
 2
 3
 4
 5
 6
 7
 8
 9
10
11
12
13
14
15   Exhibit 1
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
        - 31 -
                           COMPLAINT TO INVALIDATE
       WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   Protest Officer
     Soquel Creek Water District
 2   P.O. Box 1550, Capitola, CA 95010
               PROTEST OF PROPOSED WATER RATE AND SERVICE CHARGE
 3                                          INCREASE
 4   Service Address: 5439 Soquel Drive
     Soquel CA 95073-2659
 5   Assessor's Parcel Number 037-094-29 Account#028460-000
 6   I am protesting the proposed water rate and the service charge increases, as violating the
 7   provisions of Proposition 26, also known as the “Supermajority Vote to Pass New Taxes and Fees
     Act” (2010). The true but hidden purpose of the increases are so as to predetermine the approval
 8   of ratepayer subsidized debt financing incurred for a pro-desal project campaign activity which
     has understated [miss-informed the public of] the fact that two thirds of the proposed three year
 9   water rate and the service charge increases are for the Board's pet project. I allege all such
     expenditures on the project including the cost of environmental review and district staff time is
10   unlawful and in violation of Proposition 26.
11
     Proposition 26 amends the California Constitution to provide that any change to a State statute
12   which results in anyone paying a higher tax must be approved by a two-thirds majority of the
     state’s legislature1. Proposition 26 also amends the definition of tax to include, with few listed
13   exemptions, “any levy, charge, or exaction of any kind imposed by the state.”2 Similarly, under
     Proposition 26, certain fees imposed by local governmental entities are redefined as taxes.3
14
15   Proposition 26 limits the ability of local governments to approve and collect certain fees because
     any local fees that are redefined as taxes now require voter approval. As with the state, a local
16   government bears the burden of proving that a fee or charge is not a tax. Notably, Proposition 26
     does not apply to any local fees that were in effect on Nov. 2, 2010. Therefore, if a local fee was
17   in effect on or before that date it will remain valid as long as it is not increased. Therefore the
18   District's proposed water rate and the service charge increases violate Proposition 26 provisions
     which as a tax must be subject to a two-thirds vote of the District's customers prior to approval of
19   any proposed water rate and the service charge increases.
20   I designate my husband Michael E. Boyd as my agent for service in these matters.
21
                                                          _____________________________
22                                                        Pat [Paramoure] Boyd
23   January 30, 2013

24
     DATED: March 12, 2012
25
26
27
28
29
30   1See CA Const. art. XIII A, § 3(b), as amended by Proposition 26.
     2See CA Const. art. XIII C, § 1(e), as amended by Proposition 26.
31   3See, California Proposition 218, “Right to Vote on Taxes Act” (approved by California voters in
     November of 1996 thereby adding Article XIIIC and Article XIIID to the California
32   Constitution); See also: Rider v. County of San-Diego (1991)
                                                     32 -
                                                                       COMPLAINT TO INVALIDATE
                                                   WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1
 2
 3
 4
 5
 6
 7
 8
 9
10
11
12
13
14
15
     Exhibit 2
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
        - 33 -
                           COMPLAINT TO INVALIDATE
       WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   1/30/2013

 2   Taj Dufour, P.E.
     Interim General Manager
 3   Soquel Creek Water District
 4   5180 Soquel Dr.
     Mail to: P.O. Box 1550
 5   Capitola, CA 95010
     Tel: (831) 475-8501, Ext. 123
 6   Cell: (831) 332-9699
     e-fax: (831) 824-9943
 7
     tajd@soquelcreekwater.org
 8   www.soquelcreekwater.org

 9   Dear Taj,
10   On Tue, Jan 22, 2013 at 11:55 AM, in an e-mail to me below, and a second time in article in the Santa
11   Cruz Sentinel quoting you, on agency time, I allege you engaged in pro-desal project campaign activity.

12   I asked you on Jan 9, 2013 by e-mail "What percentage of the rate increase would go to desal assuming
     desal is approved by the board?" Your response to me by e-mail on Jan 22, 2013 was "this round of rate
13   increases is NOT needed to fund the regional desal project…it is needed to fund District operations and
     near-term District capital improvements. The short answer to your question is 0%...."
14
15   On Jan 24, 2013 you repeated this statement to the press at the Santa Cruz Sentinel stating "Taj Dufour,
     the interim general manager, emphasized none of those funds would be used to build a proposed
16   desalination plant, a joint effort between the Soquel Creek Water District and City of Santa Cruz. However,
     some would be used to complete an environmental report on the controversial project, he said..."
17
     According to the 11-20-2012 Agenda Packet Soquel Creek Water District 10-Year Financial Plan Update
18
     November 15, 2012; Table 1 - Soquel Creek Water District - Cash Flow Projections With Desal, 2900 AF
19   Target [at P. 26 line 27] of the independent auditors report submitted to the District along with their
     Financial Plan & Water Rate Study Summary of Recommendations
20   http://soquelcreekwater.org/sites/default/files/11-20-12%20Board%20packet.pdf it lists under [line 27]
     "Future Debt Proceeds for Desal Project"....for the fiscal year "2014/15" a rate increase of "9%" and
21   "$6,000,000" of debt payments for desal and for the fiscal year "2015/16" a rate increase of "12%" and
22   $46,000,000" debt payment for desal.

23   Under California law, local governments are strictly prohibited from engaging in political advocacy using
     public resources. Local governments may make public statements of an informational nature, provided
24   they are factual and impartial. Statements that are not factual, or that are not impartial are prohibited both
     by our state and federal Constitutions.
25
26   The Free Speech clauses of the federal and state Constitutions prohibit the use of governmentally
     compelled monetary contributions (including taxes) to support or oppose political campaigns since "[s]uch
27   contributions are a form of speech, and compelled speech offends the First Amendment." Smith v. U.C.
     Regents (1993) 4 Cal.4th 843, 852.
28
     Moreover, "use of the public treasury to mount an election campaign which attempts to influence the
29
     resolution of issues which our Constitution leaves to the 'free election' of the people (see Const., art. II, §
30   2) ... presents a serious threat to the integrity of the electoral process." Stanson v. Mott (1976) 17 Cal.3d
     206, 218.
31
     These activity/materials at issue violate these core democratic principles in the following manner. The
32   above described in activities described above expressly; supporting and pre-committing the District to the
                                                          - 34 -
                                                                                    COMPLAINT TO INVALIDATE
                                                        WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   desal project's approval; are so one-sided that they would fairly be characterized as advocacy as opposed
     to informational.
 2
     It is a serious breach of the public trust when government officials spend public funds to create an
 3   advantage for one side of a political campaign. We have informed the Howard Jarvis Taxpayers
 4   Association about this activity. As you may know, HJTA has successfully sued individual officials in similar
     circumstances for an accounting and personal reimbursement of mishandled public funds.
 5
     In order to avoid litigation over this matter, we demand that the Soquel Creek Water District immediately
 6   cease using its funds, property, personnel, supplies or equipment to influence the election. Printing of
     unlawful material must cease and any remaining offending material not yet distributed must be destroyed.
 7
 8   If we receive written confirmation from you within the next ten days that these demands have been met,
     we will take no further action.
 9
     Sincerely,
10   Respectfully submitted,
11
     ____________________________________
12   Michael E. Boyd,
     5439 Soquel Drive, Soquel, CA 95073
13   Phone: (408) 891-9677
     E-mail: michaelboyd@sbcglobal.net
14
15   Cc.
     toml@soquelcreekwater.org,
16   bruce.daniels@alum.mit.edu,
     bjaffe@cruzio.com,
17   dh1618meyer@cruzio.com,
     rickm@soquelcreekwater.org,
18
     kwhite@santacruzsentinel.com,
19   dmiller@santacruzsentinel.com,
     GaPatton@wittwerparkin.com,
20
     On Tue, Jan 22, 2013 at 11:55 AM, Taj Dufour <TajD@soquelcreekwater.org> wrote:
21
22      Michael- For starters, it’s not typical for us to take almost 2 weeks to reply to a customer inquiry, so I
     apologize for this delayed response. On January 7th you asked what percentage of the proposed rate
23   increases are for desal. This e-mail provides additional information to the initial response I sent you on
     January 9th.
24
       In 2009, the Board of Directors approved a 3 yr rate increase with the last year beginning in January
25   2012. These past rate increases enabled the District to install two new inland production wells, 12 new and
26   replacement monitoring wells, complete the design for a $4M main replacement on Soquel Drive, and
     make significant progress on the environmental impact report (EIR) for the regional desalination project.
27   We expect the draft EIR will be released this spring and provide our customers (as well as City customers)
     detailed information about the project, including alternatives. In case you did not know, the City and
28   District are cost sharing all study/environmental review costs for the regional desalination project 50/50.
29
        Having said all that, this round of rate increases is NOT needed to fund the regional desal project…it is
30   needed to fund District operations and near-term District capital improvements. The short answer to your
     question is 0%. Our Board has considered many supplemental supply projects (see 2012 Integrated
31   Resources Plan Update at:
     http://soquelcreekwater.org/sites/default/files/2012%20IRP%20Update_adopted_by_board_w_appendixA-
32   FINAL.pdf) but has not yet made any final decisions 35the District should ultimately pursue desal or other
                                                           - if -
     options. Existing rates will fund the remaining work needed to finalize the environmental review of the
                                                                                   COMPLAINT TO INVALIDATE
                                                          WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1   regional desalination project. The next round of rate increases (3 years from now) will be needed to
     provide financing capacity for either desal or other alternatives.
 2
        We also collect a fee (water capacity fee) when new development connects to the District’s system.
 3   This fee is currently $11,200 per residential connection, and as of December 2012, just under $1.4M has
 4   been set aside from new development. At least ½ of this amount is reserved for a supplemental supply
     project, and the other half may be used to offset borrowing for capital improvement projects (CIP). Helpful,
 5   but not nearly enough considering the magnitude of our overdraft problem and aging infrastructure needs.
     Over the next 10 years, $66M in CIP projects is identified (EXCLUDING SUPPLEMENTAL SUPPLY) and
 6   thus, we will need to borrow funds to proceed with those projects. For the next three years the proposed
     rate increase will help fund:
 7
 8     $4.45M -2 additional inland production wells (identified in the Well Master Plan, Feb. 2011)

 9     $2.07M -Two new booster pump stations (58% of funding)
10     $3.77M -New water treatment plant at O’Neill Well Ranch Well (new inland well)
11
        $1.50M -Hexavalent Chromium Treatment Plant Pilot Study, partial design and construction of treatment
12   plant (20% of funding)

13     $9.20M -Main Replacement Projects
14     $0.71M -Reservoir Recoating and Maintenance
15
       $1.40M -New Reservoir in Aptos (44% of funding)
16
       $2.66M -Water Service Replacements
17
        For the next 3 years, the CIP (excluding desal) will amount to over $25M. As stated above, the rate
18
     increase will not fully fund this amount of projects and the District’s finance plan includes debt service.
19   The 3yr CIP listed above amounts to approximately 38% of the District’s total expenses (including
     operating) over that time period.
20
       Please don’t hesitate to call me if you want to discuss the specific projects identified over the next 3
21   years.
22
       Best,
23
       Taj
24
       Taj Dufour, P.E.
25     Interim General Manager
26     Soquel Creek Water District
       5180 Soquel Dr.
27     Mail to: P.O. Box 1550
       Capitola, CA 95010
28     Tel: (831) 475-8501, Ext. 123
       Cell: (831) 332-9699
29
       e-fax: (831) 824-9943
30     tajd@soquelcreekwater.org
       www.soquelcreekwater.org
31
32     From: Michael E Boyd [mailto:boyd.michaele@gmail.com]
                                                   - 36 -
       Sent: Friday, January 11, 2013 3:11 PM                         COMPLAINT TO INVALIDATE
                                                  WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1     To: Taj Dufour
       Subject: Re: Answers to your question
 2
       Taj,
 3
 4     My hat's off to you...i couldn't figure it out either. That's why I asked. I've only got a degree in Physics
     and i couldn't figure it out.
 5
       MB
 6
       On Fri, Jan 11, 2013 at 2:46 PM, Taj Dufour <TajD@soquelcreekwater.org> wrote:
 7
 8      Michael- We’ve looked into your question and unfortunately it’s not as simple as it appears. We are
     working to get this information for you and most likely it won’t be until next week that we have the numbers
 9   for you.
10     Sorry for the delay.
11
       Best,
12
       Taj
13
       Taj Dufour, P.E.
14     Interim General Manager
15     Soquel Creek Water District
       5180 Soquel Dr.
16     Mail to: P.O. Box 1550
       Capitola, CA 95010
17     Tel: (831) 475-8501, Ext. 123
       Cell: (831) 332-9699
18
       e-fax: (831) 824-9943
19     tajd@soquelcreekwater.org
       www.soquelcreekwater.org
20
       From: Michael E Boyd [mailto:boyd.michaele@gmail.com]
21     Sent: Wednesday, January 09, 2013 11:48 PM
22     To: Taj Dufour
       Cc: michaelboyd@sbcglobal.net
23     Subject: Re: Answers to your question

24     Taj,
25     Your not answering my question?? What percentage of the rate increase would go to desal assuming
26   desal is approved by the board? I don't see desal not be selected, the option most feasible to protect the
     basin
27
       What portion of the rate increase is for desal; simple question that's all.
28
       MB
29
30     On Wed, Jan 9, 2013 at 4:06 PM, Taj Dufour <TajD@soquelcreekwater.org> wrote:

31     Hi Michael,
32
                                                           - 37 -
                                                                             COMPLAINT TO INVALIDATE
                                                         WATER RATE & SERVICE CHARGE INCREASES; ET. AL
 1      I apologize for not being able to take your call the other day. I just tried leaving you a phone message,
     and was cut off by your machine, so here is the answer in writing. But, please don’t hesitate calling me to
 2   discuss if you want further explanation.
 3      You asked how much of the proposed rate changes will be allocated to desalination. The District is
 4   currently seeking a solution to reduce pumping of the groundwater basin by an overall 35%. We have
     studied several options for a supplemental supply and selected further investigating the technical and
 5   environmental issues of desalination. As you may know, the draft EIR is scheduled to be released either
     March or April of this year.
 6
        The attached page (from our 10 yr finance plan) identifies the District’s share for continuing to explore
 7
     this supplemental supply. However, should desal not be selected, the option most feasible to protect the
 8   basin is mandatory water restrictions, which in itself is estimated cost over $100M to implement. So, the
     funds you see forecasted in the attached 10 yr financial plan would be the minimum needed to reduce
 9   District pumping to the recovery pumping goal of 2,900 Acre-Ft per year. At this stage, the mandatory
     restrictions option would need as much or more funding for implementation, and also has uncertainty
10   because it relies on customers to reduce pumping about 35% (about 54 gallons per person per day). The
11   proposed rates are for FY 12/13, 13/14, and 14/15. Future years will also require additional rate increases
     regardless of desal or a different supplemental source of supply. In FY 12/13 and 13/14, $1M and $1.2M
12   respectively are forecasted for desal. In FY 14/15, $6.3M is forecasted should the project be approved.
     Even if the proposed rates are approved, the Board always reserves the right to impose any rate less than
13   or equal to what was approved depending on the outcome of desal.
14      Over the next three years, a significant capital improvement program is proposed ($8.4M in 12/13,
15   $6.9M in 13/14, and $10.5M in 14/15). These projects are independent of desal and invest in the reliability
     of the water system. The majority of the rate change is attributed to funding this capital improvement
16   program.

17     Best Regards,
       Taj
18
19     Taj Dufour, P.E.
       Interim General Manager
20     Soquel Creek Water District
       5180 Soquel Dr.
21     Mail to: P.O. Box 1550
22     Capitola, CA 95010
       Tel: (831) 475-8501, Ext. 123
23     Cell: (831) 332-9699
       e-fax: (831) 824-9943
24     tajd@soquelcreekwater.org
       www.soquelcreekwater.org
25
26
     http://www.santacruzsentinel.com/soquel/ci_22445116/soquel-water-district-plans-rate-increase-public-
27   hearing

28   Soquel water district plans rate increase: Public hearing slated for Feb. 5
29
     By Kimberly White
30
     Santa Cruz Sentinel
31   Posted: 01/24/2013 05:45:23 PM PST
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 1   SOQUEL -- The Soquel Creek Water District will hold a public hearing next month on a proposed rate
     increase, with hopes of raising millions in the next several years to address critical water supply issues in
 2   the coming years.
 3   If approved, the three-year increase would generate $4.7 million, according to district figures. Taj Dufour,
 4   the interim general manager, emphasized none of those funds would be used to build a proposed
     desalination plant, a joint effort between the Soquel Creek Water District and City of Santa Cruz. However,
 5   some would be used to complete an environmental report on the controversial project, he said.

 6   The district's boundaries extend from 41st Avenue in Capitola to La Selva Beach, and the most of its
     14,200 connections serve single-family households, Dufour said. Rates are based on us and a monthly
 7
     service charge. The average household uses about 10,500 gallons each billing cycle and has an average
 8   bimonthly bill of $108.42, according to the district's figures.

 9   Under the new rates, that would go up by nearly 20 percent, or $21.24, by 2015. Meanwhile, ratepayers
     who fall into the "moderately high" usage bracket would see a nearly 32 percent jump, while those in the
10   "high" usage category will pay nearly 42 percent more. The proposed schedule also includes a new tier,
11   but it will only affect higher-than-average consumers.

12   The extra funding is needed because "over the next three years, we have over $25 million
     identified for capital improvement projects," Dufour said. The rate increase would provide a way for the
13   district to cover the costs of such projects as replacing aging wells and improving infrastructure, including
     a $4 million main improvement project on Soquel Drive slated to begin early next month.
14
15   Unless a majority of the district's 38,000 customers submit written letters of protest before the public
     hearing takes place, the new rates would be in effect for three years starting March 1. Letters were sent
16   out to ratepayers last month alerting them to the proposal, but as of last week, only a few dozen letters
     had been received, Dufour said.
17
     The last increase went into effect in January 2010, though it was less than what district officials initially
18
     proposed.
19
     At the time, they said they needed to increase rates by 9 percent each year for the next three years to
20   "ensure a reliable and safe water supply," but after widespread public dissent, the district agreed to cut the
     increase to 5 percent.
21
22   Follow Sentinel reporter Kimberly White at Twitter.com/kwhite95066

23   IF YOU GO

24   WHAT: Public hearing on a proposed rate increase for ratepayers in the Soquel Creek Water District.
     WHEN: 7 p.m. Feb. 5
25   WHERE: Capitola City Hall, 420 Capitola Ave., Capitola
26   INFORMATION: 831-475-8500 or custserv@soquelcreekwater.org or http://soquelcreekwater.org.

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      - 63 -
                         COMPLAINT TO INVALIDATE
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 1                                    Declaration of Michael E. Boyd
 2   I am a Plaintiff in the above-entitled action. I have read the foregoing Complaint and supporting
 3   exhibits 1 to 4 and know the contents thereof. The same is true of my own knowledge, except as
 4   to those matters which are therein alleged on information and belief, and as to those matters, I
 5   believe it to be true.
 6
 7   I declare under penalty of perjury that the foregoing is true and correct and that this declaration
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10   Michael E. Boyd
     5439 Soquel Drive
11   Soquel, CA 95073
     Phone: (408) 891-9677
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     E-mail: michaelboyd@sbcglobal.net
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     DATED: March 1, 2013
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