HollisterFreelance.com | Award Homes alleges 'excessive' fees from district

Award Homes alleges 'excessive' fees from district

Dec 30, 2008
By Jeff Gatlin

HOLLISTER

The Homebuilders Association of Northern California and Award Homes have filed a lawsuit alleging "excessive water charges" against the Sunnyslope County Water District.

According to Cathy Buck, finance and human resource manager for Sunnyslope, the water district passed Ordinance 65 in March of 2007, which raised water capacity connection costs from $1,575 to $10,892.

The ordinance also authorized them to annually raise connection fees in order to pay for improvements in water treatment that their consultant, Bartle Wells Associates, reported were necessary in order to stay in compliance with the regional water quality control board.

The water district then passed Resolution 502 in June 2008, said Buck, which further raised connection costs from $10,892 to $11,784 for the same type of connection.

According to the complaint filed by Award Homes, which is slated to build 677 homes off Fairview Road within the water district, the fee increase constitutes a violation of another ordinance, in which the water district stated that "new water capacity charges adopted by Sunnyslope will not exceed the estimated reasonable costs of providing the services for which the fees or charges are imposed."

The complaint also states that the water district is improperly seeking to pass along costs of new treatment facilities, which are not "attributable to new development or new users seeking connections."

As a result, according to the complaint, the resolution is "invalid and unlawful" for these and "a multitude of other reasons" and the sharp rise in the fees should be disallowed.

According to Buck, however, the district's attorneys contend Award Homes waited too long.

"We have filed a motion for dismissal because what they are really doing is attacking 65 through 502 and the statute of limitations on questioning 65 has run out."

Ordinance 65 is the one OK'd in March 2007, authorizing the passage of Resolution 502, after sufficient public notice and no objection from Award Homes, said Buck.

That motion for dismissal will be held Feb. 5 and overseen by Judge Harry Tobias.

The reason for the fee increases, contended Buck, is that a new plant for the area is necessary to treat the local groundwater either through reverse osmosis, lime softening or a combination of both approaches.

"We are just starting a pilot study, which is taking a look at different filters to see what will work best on our wells. So when the engineers design a new plant, we know what the best way (is) to filter the water."

Based on projected costs, the water district will pay for projects to meet mandated improvements, explained Buck.

"We needed to increase connection charges to new customers so they would be helping to pay for the necessary improvements," she said. "This is what any new customer in our district would have to pay to connect, not just Award Homes."

Buck also stressed that not all costs of needed projects are borne by new customers.

"Some of the cost of the improvements will be paid for by existing rate payers" said Buck, "We just haven't implemented the rate increases yet."

Attorneys for Award Homes declined to comment on the lawsuit, pending permission from their client. Representatives from Award Homes and the Homebuilders Association of Northern California did not immediately return calls seeking comment.

Jeff Gatlin
Jeff Gatlin is a staff writer at The Hollister Free Lance. You can call him at (831) 637-5566 or send him an email.