Starr’s Measure M Rate Rollback Upheld! City Overcollected $5.2MM

By George Miller

Ventura County Superior Court Judge Rocky Baio has finally come back with a ruling  on the 1+ year old challenge by the City of Oxnard to Aaron’ Starr’s Measure M wastewater rate increase rescission, which passed with 72% of the vote. It would reinstate the Measure, which was stayed by an injunction not long after it passed. The Council had raised wastewater rates 88% in a process deemed flawed by critics.

READ court ruling: 2018_05_25 Court Ruling on Measure M

The implications are huge:

  • The injunction is vacated.
  • The City has overcollected $5.2 million
  • It affirms the supremacy of the voters via the ballot initiative process

“The principles that guide us in evaluating the validity of initiative measures such as Proposition 140 are likewise well settled. Although the legislative power under our state Constitution is vested in the Legislature, ‘the people reserve to themselves the powers of initiative and referendum.’ (Cal. Const., art. IV, § 1.) Accordingly, the initiative power must be  liberally construed to promote the democratic process. (Raven v. Deukmejian, supra, 52 Ca1.3d 21 at p. 341.). Indeed, it i~ our solemn duty to jealously guard the precious initiative power, and to resolve any reasonable doubts in favor of its exercise. (Ibid., and cases cited.) As with statutes adopted by the Legislature, all presumptions favor the validity of initiative measures and mere doubts as to validity are insufficient; such measures must be upheld unless their unconstitutionality clearly, positively, and unmistakably appears. (Calfarm Ins. Co. v. Deukmejian (1989) 48 Ca1.3d 805, 814 [258 Cal.Rptr. 161, 771 P.2d 1247} [evaluating the constitutionality of Prop. 103, an insurance rate initiative measure adopted at the Nov. 1988 Gen.Elec.].)” (Legislature v. Eu (1991) 54 Ca1.3d 492,500.) 

It also means that a City can’t override a measure just because it thinks it knows better or because it believes a voter decision would harm the public interest, credit rating, or creditors.

We note that Starr proved in court that the Wastewater Fund was not actually operating at a deficit as previously claimed, although maintenance and capital expenditures had been cut back drastically to make that so.

This is a major milestone in a long struggle which began when Oxnard initiated a Proposition 218 process for arate review to calculate rate increase. The process, assumptions, capex plan, even the accounting numbers, were all challenged by critics, led by local business executive Aaron Starr. He initiated a rate rollback voter measure which was fought every step of the way by the City. But Starr won most rounds in court repeatedly.

Measure M passed with a 72% supermajority and was quickly challenged in court by the city, which also did a full-court press on publicity to support its case. VC Superior Court Judge Rocky Baio granted the City an injunction, staying the rate increases  while things were sorted out in court, which took well over a year.

Meanwhile, the City did another rate review which actually lowered some of the future scheduled rate increases. Also, it was learned that the City had overstated wastewater expenses and understated revenues and that it was not actually running a deficit as City staff claimed. However, that was only accomplished by draconian cuts in capital and maintenance expenditures by resourceful public works management.

All parties have just been waiting for the other shoe to drop- the ruling, which was dropped on the deadline 90 days date from last hearing of 5-23-18. We just learned about it today, 5-25-18

Interim City Mgr. Scott Whitney informed us that there will be a special City Council meeting next Tuesday, May 29, to discuss all options (agenda at end of this article).

On the other hand, a subsequent rate increase was passed, so there may be some legal wrangling ….

… by exercising the initiative power voters may decrease a public water agency’s fees and charges for water service, but the agency’s governing board may then raise other fees or impose new fees without prior voter approval. Although this power-sharing arrangement has the potential for conflict, we must presume that both sides will act reasonably and in good faith, and that the political process will eventually lead to compromises that are mutually acceptable and both financially and legally sound. (See De Vita v. County a/Napa, supra, 9 Ca1.4th at pp. 792-793 [‘We should not presume … that the electorate will fail to do the legally proper thing.’].)

 

In respect to the issue that Measure M impairs Oxnard’s ability to meet its contractual and bond obligations, the Court finds those arguments to be speculative and premature….

Based upon these findings, the Court finds Measure M to be a valid exercise of the right of the citizens of Oxnard to decide what type of wastewater system would best serve the overall needs of their community. Oxnard’s request to deny Measure M invalidate is denied.

– Court ruling

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Here’s the City’s news release: 

Judge Issues Tentative Decision Against City of Oxnard on Measure M
Oxnard, California – Ventura County Superior Court Judge Rocky Baio has issued a tentative decision and proposed statement of decision against the City of Oxnard on the Measure M initiative litigation.
“The City is obviously disappointed by the tentative decision,” said Oxnard City Attorney Stephen Fischer. “We believe the rates set by Measure M were unlawfully low. The City is going to evaluate its options.”
In his tentative decision, Baio wrote, “Following what this Court believes to be evidence based and prudent practices, Oxnard formulated a new rate structure for its wastewater services.” However, despite that, the Court found “Measure M to be a valid exercise of the right of the citizens of Oxnard to decide what type of wastewater system would best serve the overall needs of their community.”
The City asked the Court to find Measure M unenforceable for two reasons: Measure M fails to generate sufficient revenue for Oxnard to maintain and operate its wastewater facilities to protect the health and safety of its residents, and that it impairs Oxnard’s ability to meet its bond and contractual obligations. 
Measure M was a voter initiative to set wastewater rates at levels in place before Ordinance 2901. 

Español:

Juez emite una decisión tentativa contra la ciudad de Oxnard en la medida M

Oxnard, California – El juez de la corte superior del Condado de Ventura, Rocky Baio, ha emitido una decisión tentativa y propuso una declaración de decisión contra la ciudad de Oxnard en el litigio de la iniciativa medida M.

“la ciudad está obviamente decepcionada por la decisión tentativa”, dijo el abogado de la ciudad de Oxnard, Stephen Fischer. “Creemos que las tasas establecidas por la medida M fueron ilícitamente bajas. La ciudad va a evaluar sus opciones. “

En su decisión tentativa, Baio escribió, “siguiendo lo que esta corte cree para ser prácticas basadas y prudentes de la evidencia, Oxnard formuló una nueva estructura de la tarifa para sus servicios de las aguas residuales.” Sin embargo, a pesar de ello, el Tribunal determinó que “la medida M era un ejercicio válido del derecho de los ciudadanos de Oxnard a decidir qué tipo de sistema de aguas residuales serviría mejor a las necesidades generales de su comunidad”.

La ciudad solicitó a la corte que buscara la medida no ejecutable por dos razones: la medida M no genera ingresos suficientes para que Oxnard mantenga y opere sus instalaciones de aguas residuales para proteger la salud y la seguridad de sus residentes, y que perjudica a Oxnard capacidad para cumplir con sus obligaciones contractuales y de bonos.

La medida M fue una iniciativa de los votantes para establecer las tasas de aguas residuales en el lugar antes de la Ordenanza 2901.

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PRESS RELEASE

Moving Oxnard Forward

Breaking News! We just received word today that we won in the city’s lawsuit against us.

As you know, the City of Oxnard has been suing me personally for the past two years to overturn your vote on Measure M – which rescinded the City Council’s 87% sewer rate increase.

Judge Rocky Baio states in his ruling: “Oxnard has not met its burden of proof, and the Court finds Measure M to be a valid exercise of the will of the citizens of Oxnard as expressed through the initiative process.”

We will write more about this later, but we just wanted to get the word out to you ASAP.

Thank you to everyone who has supported us thus far.

Aaron Starr
starr@movingoxnardforward.org
805-804-9101

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AGENDA
OXNARD CITY COUNCIL
Council Chambers, 305 West Third Street
May 29, 2018
Special Meeting – 6:00 PM
A. ROLL CALL / POSTING OF AGENDA
B. PUBLIC COMMENTS ON CLOSED SESSION ITEMS
C. CLOSED SESSION
1.
CC
CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
(Government Code section 54956.9(d)(1))
Name of case: City of Oxnard; et al. v. Aaron Starr
Ventura County Superior Court, Case No. 56-2016-00479696-CU-MC-VTA
The City Attorney requested that this item be discussed in closed session under the
Brown Act authorization for the City Council to confer with its legal counsel regarding
pending litigation.
D. ADJOURNMENT

 

George Miller is Publisher and Co-Founder of CitizensJournal.us and a “retired” operations management consultant residing in Oxnard


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One Response to Starr’s Measure M Rate Rollback Upheld! City Overcollected $5.2MM

  1. William Hicks May 29, 2018 at 1:23 pm

    Transparency was truly lacking behind closed doors with the city council.

    Reply

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