By Brian Park

The Groundwater Recovery Plant. File photo

The Capistrano Taxpayers Association’s lawsuit alleging that the city’s tiered water-rate structure is in violation of state law has been amended and resubmitted, after the city filed a demurrer challenging the initial complaint.

The local taxpayers’ rights group’s lawsuit claims the city’s rate structure violates Proposition 218, which requires rates to be relative to cost of service. The lawsuit goes on to claim that water rates have financed a “phantom bond” to fund water operations despite no bond ever being issued, and that high rates, as a result of the controversial Groundwater Recovery Plant, could be resolved by purchasing water elsewhere.

“The city said that there was nothing illegal with what they were doing, so we more narrowly clarified that the illegality is the illegal rate scheme,” Ben Benumof, the group’s attorney, said.

The city has until November 18 to respond to the amended complaint.

The four-tiered rate structure is meant to encourage water conservation, but the lawsuit claims that charges for higher tiers “are a financial penalty intended to force conservation and are not a fee for service.”

“There’s nothing wrong with tiered conservation, but it can’t exceed proportional cost of services,” Benumof said.

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