Filed 5/14/19
                           CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                             FIRST APPELLATE DISTRICT

                                     DIVISION FOUR


STEVEN L. GOMES,
        Plaintiff and Appellant,
                                                   A153078
v.
MENDOCINO CITY COMMUNITY                           (Mendocino County
SERVICES DISTRICT,                                 Super. Ct. No.
                                                   SCUK-CVPT-15-65985)
        Defendant and Respondent.

        Steven L. Gomes, a homeowner in Mendocino County, appeals an adverse
judgment rejecting his petition to invalidate an ordinance of the Mendocino City
Community Services District (the district) limiting the quantity of groundwater he may
extract from his property. He contends that the statute authorizing the district to establish
groundwater-management programs does not give it authority to impose extraction limits
but that, if it does, the district failed to adopt the present program in accordance with the
procedures specified in the statute. We conclude that the statute does authorize the
imposition of extraction limitations but that the district did not adopt its program as the
statute requires. The present ordinance therefore must be invalidated, without prejudice to
re-adoption of such a program in accordance with the statutorily mandated procedures.
                             Factual and Procedural History
        The town of Mendocino lies on a peninsula, bounded by cliffs. It lacks a source
for a community-wide water system, so its residents depend on groundwater drawn from
wells. In 1972, the district was created under the Community Services District Law
(Gov. Code, § 61000 et seq.) for the purpose of regulating local wastewater—not
groundwater. In 1985, the California Department of Water Resources published a study


                                              1
of Mendocino’s groundwater basin. It concluded that the town’s water demands exceed
supply during dry years and some normal years, and that new wells should not be
permitted without pump tests.
         In 1986, the Legislature passed Assembly Bill No. 792. That act would have
authorized any local agency providing water service in Mendocino, or any of 11 specified
groundwater basins around the state that were “subject to critical conditions of
overdraft,” to “establish . . . programs for the management of groundwater resources . . .
in accordance with prescribed procedures.” Governor Deukmejian vetoed Assembly Bill
No. 792 as “overbroad,” deeming it “more appropriate” for local agencies in such basins
to petition the Legislature for such authority “on a case-by-case basis.”
         Accordingly, in 1987, the Legislature added to Division 6 of the Water Code a
new part 2.7 applying “only to the area within the existing boundaries of the Mendocino
City Community District.” (Stats. 1987, ch. 472, § 1; Wat. Code, § 10700 et seq. (the
Act).)1 The Act provides that the district “may, by ordinance, . . . establish programs for
the management of groundwater resources.” (§ 10702.)2 To do so, the district must follow a
prescribed multi-step process. The district must first hold a noticed public hearing “on the
proposed groundwater management program” at which the board may alter the program
or require more study, and after which it may “adopt a resolution of intention to adopt and
implement the program.” (§ 10703.)3 If it adopts such a resolution, it must publish the




1
    All statutory references are to the Water Code.
2
 Section 10702 reads: “Any local agency which is authorized by law to provide water
services may, by ordinance, or by resolution if the local agency is not authorized to act by
ordinance, establish programs for the management of groundwater resources.”
3
  Section 10703 reads: “Prior to the adoption of a groundwater management program, the
governing board of the local agency shall hold a public hearing, after publication of
notice pursuant to Section 6066 of the Government Code, on the proposed groundwater
management program. At the hearing, the board may alter the program or require further
study on the program and continue the hearing. At the conclusion of the hearing, the
board may adopt a resolution of intention to adopt and implement the program.”


                                               2
proposed program in a newspaper (§ 10704)4 and hold a second hearing to “consider
protests to the implementation of the program,” at which “any eligible registered voter of
the [district] may file [or withdraw] a written protest” (§ 10705).5 If more than 50 percent
of voters file protests, “the groundwater management program shall be abandoned,” and
the board may not consider a new program for one year. If a majority does not protest,
the board “may adopt an ordinance or resolution to implement the program.” (§ 10706.)6
       The Act also authorizes the district to “fix and collect rates for the extraction of
groundwater” (§ 10708) and to “levy a water replenishment assessment” (§ 10709). In
order to do either, the district must “hold an election on the proposition of whether or not
[it] shall be authorized to levy a water replenishment assessment or to fix and collect
[extraction] rates.” (§ 10710.)
       In a letter urging the governor to sign Assembly Bill No. 786, its author explained
its origins and purpose: “The village of Mendocino has no central water system and
operates entirely off of private wells. In recent years, some developments have dug wells
deeper into the water table than existing wells, causing many residents to be without

4
 Section 10704 reads: “After the conclusion of the hearing, and if the governing board
adopts a resolution of intention, copies of the groundwater management program shall be
published in a newspaper of general circulation. Upon written request, any interested
person shall be provided with a copy of the program.”
5
  Section 10705 reads: “After the adoption of a resolution of intention, the governing
board shall hold a second hearing and consider protests to the implementation of the
program. Any interested person may appear to be heard concerning any matter set forth
in the resolution or matters material thereto. Any time prior to the conclusion of the
hearing, any eligible registered voter of the local agency may file a written protest or
withdraw a protest previously filed.”
6
  Section 10706 reads: “A majority protest shall be determined to exist if the governing
board finds that the protests filed and not withdrawn prior to the conclusion of the second
hearing represent more than 50 percent of the eligible registered voters residing within
the boundaries of the local agency. If the governing board finds that a majority protest
exists, the groundwater management program shall be abandoned and no new program
shall be considered by the board for a period of one year following the date of the second
hearing. If a majority protest has not been filed, the board, within 35 days after the
conclusion of the second hearing, may adopt an ordinance or resolution to implement the
program.”


                                               3
water for as much as two to three months a year, even in wet years . . . . [¶] AB 786
would permit [the district] to adopt a water management program through public hearings
to regulate new development relative to water availability and the impact on neighbors.”7
(Italics added.)
       In 1990, in compliance with the procedures specified in sections 10703 through
10706, the district adopted Ordinance No. 90-1, the “groundwater extraction permit
ordinance,” which states that it is “the first component of a comprehensive groundwater
management program.” The ordinance requires a property owner to obtain a groundwater
extraction permit for the extraction of groundwater “for ‘new development’ or ‘change in
use’ ”or “from a well constructed or modified following the adoption of this ordinance
within the boundaries of [the district].” In most instances, and subject to detailed
specifications, the applicant must arrange a hydrological study to determine if the well
will adversely affect other wells, and must install a water meter and accept an “allotment”
defining the quantity of water that may be extracted. Extraction exceeding that amount is
a misdemeanor subject to daily fines.
       Since adopting Ordinance No. 90-1, the district has enacted further groundwater-
management measures without following the procedure specified in sections 10703
through 10706. In January 2007, for example, the district adopted Ordinance No. 07-01,
requiring a property owner to obtain a permit and allotment after a property is sold, even
if no new construction or change in use results.
       Later in 2007, the district adopted the two measures primarily at issue on appeal:
resolution No. 200, which adopted a water shortage contingency plan, and Ordinance
No. 07-04 which implements the plan.8 The plan was created “to establish criteria for



7
  The letter concluded by stating incorrectly that “such a management plan would be
subject to a majority vote of the residents of the district,” whereas, as noted, the Act
subjects a proposed groundwater management program to a majority-protest procedure
(§ 10706).
8
 Gomes also seeks to challenge Ordinance No. 2018-002, which the district adopted after
entry of the judgment. Consideration of this ordinance is beyond the scope of this appeal.

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when to declare a water shortage through four (4) stages of alert and action, and to identify
appropriate conservation measures and response actions for each water shortage stage to
protect the water resources of the district.” The plan describes four levels of water
shortage criteria and the resulting measures that are to be taken at each level of water
shortage. If the district declares a stage 4 “water shortage emergency,” “all property
owners within the district with developed parcels shall be required to obtain a
groundwater extraction permit with an allotment.” 9 As Gomes notes, a stage 4 declaration
acts as a “one-way ratchet”: It triggers the requirement that all property owners obtain
permits and allotments, and that requirement remains in effect in perpetuity, even after the
drought ends.
       The district’s brief advises that the water shortage contingency plan “was the
subject of a number of public hearings where testimony was received by the board of
directors of the [district] that promoted the idea that in a truly historic drought (Stage 4)
every developed property in the district should share the burden associated with reduced
availability of groundwater.” Nonetheless, the district acknowledges that “[i]t is
undisputed the district did not follow the procedure set forth in Water Code §§ 10703-
10706 when adopting Ordinances 07-1 and 07-04, and Resolution No. 200.”
       From February 2012 through December 2013, the district successively declared
stage 1 through stage 3 water shortages. On February 24, 2014, the district’s board of
directors adopted resolution No. 2014-231 declaring that “under the current water
shortage conditions,” a stage 4 water shortage emergency condition “exists within the
area served by the [district]” and directing implementation of “demand management as


We therefore deny his request that we take judicial notice of the subsequent ordinance,
and of other documents, on the ground of irrelevance.
9
 Further, during the stage 4 water shortage emergency, “all allotments shall be reduced
by 40 percent. The notification [to the property owner] shall also include a listing of
potential water conservation and water use reduction measures, and an advisory that [the
district] staff is available upon the written request of the property owner to conduct an
audit of water usage and to make specific recommendations and additional conservation
measures.”

                                               5
defined in the [district] water shortage contingency plan under stage 4.” In April 2014,
the district sent a letter to Gomes requiring him, for the first time, to obtain a permit. He
objected and demanded a hearing, and the board held one in November 2014, at which it
concluded that he was obliged to obtain a permit. It promptly sent him a notice of
violation demanding that he get a permit or face enforcement action and a $100 per day
charge.
       The district lowered the drought level to stage 1 in December 2014 and to “No
Water Shortage Condition” in February 2015. But since the stage 4 declaration had
triggered the permit and allotment requirements, the district sent Gomes a second notice of
violation in January 2015. He again requested a hearing, and the district again affirmed
its position. The district sent a third notice of violation subjecting Gomes to daily fines of
$350. The district then began to impose such fines, which eventually mounted to a total
of $35,300.
       Gomes filed this action in June 2015, seeking a writ of mandate, declaratory relief,
and damages. He alleged that the district “seeks to force Gomes to put a meter on a
groundwater well, which is nearly 100 years old and has been in Gomes’s family that
entire time, and submit to the district’s regulatory authority to limit the amount of water
Gomes can withdraw from his well regardless of either of the supply of water available or
Gomes’s need for the water.” In addition to alleging that the district had not complied
with its own contingency plan and had violated state and federal constitutional
requirements, Gomes’s first amended complaint alleges that the district “did not follow
the notice, hearing and publication requirements set forth in . . . §§ 10703 and 10704 in
adopting the contingency plan or resolution 2014-231.”
       After requesting briefing on “whether the Legislature intended the enhanced
enactment procedures to apply to the enactment of all ordinances relating to a
groundwater management plan or only to the enactment of the initial ordinance,” the court
held that the Act required the district to use the “enhanced enactment procedures” only
once, in adopting its first groundwater management program. Following a bench trial in
which the court rejected Gomes’s causes of action for declaratory relief and damages, the


                                              6
court issued a statement of decision holding that the adoptions of the water shortage
contingency plan and of Ordinance No. 07-04 were “authorized by [section] 10700
et seq. The district provided appropriate notice and opportunities for citizen participation
prior to adopting the plan and Ordinance No. 07-4, and its decision was based upon
substantial, reliable scientific evidence. The district’s decision to require all landowners
within the district to obtain a groundwater extraction permit and abide by water
allotments was rationally related to a legitimate governmental purpose.”10 The court
entered a judgment holding that the adoption of Ordinance Nos. 07-01 and 07-04 was
valid, and Gomes timely appealed.
                                         Discussion
1.     The district may limit groundwater extraction within its groundwater management
       program
       Gomes first argues that the Act cannot be read to give the district authority to
impose limits on property owners’ right to extract groundwater from their own land.
Although the district correctly argues that Gomes failed to make this argument in the trial
court, both parties have briefed the issue, it raises a pure question of law, and we deem it
advisable to address the issue on the merits.11


10
  The court also held that the permit and allotment requirements do not violate a
constitutional provision requiring that water be put to beneficial use (Cal. Const., art. X,
§ 2) and did not effect a regulatory taking. On appeal, Gomes does not challenge these
rulings.
11
  The district argues that the judgment should be affirmed on the ground that Gomes did
not exhaust his administrative remedies by applying for an expanded allotment for his
land. While the trial court held that Gomes failed to exhaust administrative remedies with
respect to his claim that the district “violated his due process right to a hearing regarding
[his] request for a water allotment that would support agricultural use,” it did not hold the
same with respect to his attack on the validity of the district’s regulations. In all events,
the district waived the defense of exhaustion in its answer, in which it “admits that
Gomes has exhausted all available administrative remedies.” “The defense of failure to
exhaust administrative remedies may be waived.” (Mission Housing Development Co. v.
City and County of San Francisco (1997) 59 Cal.App.4th 55, 63; accord, Cummings v.
Stanley (2009) 177 Cal.App.4th 493, 505–506; O.W.L. Foundation v. City of Rohnert Park
(2008) 168 Cal.App.4th 568, 584; but see Hood v. Hacienda La Puente Unified School

                                              7
       Several statutes conferring groundwater management authority on different local
agencies expressly confer the power to impose extraction limits (e.g., Wat. Code Appen.,
§§ 121-701, 128-708, 129-708), and some confer that power subject to explicit
preconditions for its exercise (e.g., § 10753.9, subd. (c)). The Act before us does not
specifically authorize the district to impose extraction limits, leading Gomes to argue that
we should infer from the absence of such a provision that the district was not granted
such authority. The district, on the other hand, argues that the express authorization of
such limits in these other statutes confirms the Legislature’s view that such limits are
inherently among the permissible components of a groundwater management program.
       We agree that the authority to manage groundwater necessarily includes the ability
to limit the quantity of water that individual users may extract. The authority to issue
extraction permits and to include conditions in those permits—which unquestionably are
encompassed within the authority to manage the groundwater—would be ineffectual, if
not entirely meaningless, without the authority to impose limits. The Act in question is
relatively brief and concise; it does not specify many of the powers that other
groundwater management statutes do spell out. (E.g., Wat. Code Appen., § 121-701
[conferring powers to require conservation practices; regulate, limit, or suspend
extractions and construction or enlargement of extraction facilities; prosecute legal
actions; impose spacing requirements on new extraction facility construction; and impose
reasonable operating regulations].) All such powers are presumably included within the
authority to manage groundwater. The fact that the Act does not specify the power to
limit extraction is no more an indication that the district lacks such power than that it
lacks authority to use any of the other management tools that are articulated in other
statutes. Gomes cites no judicial decision or other authority suggesting that when the
Legislature grants authority to manage groundwater, it must specify precisely what




Dist. (1998) 65 Cal. App. 4th 435, 440–441 [noting traditional view that exhaustion may be
raised at any time].)


                                              8
powers are included or the power does not exist.12 Nor does he cite any legislative history
or other material suggesting that the Legislature intended to withhold the power to limit
extractions from the general grant of authority to manage the groundwater resources
within the boundaries of the district.
       We thus conclude that the authority to manage the district’s groundwater resources
includes the authority to impose extraction limitations on users of the groundwater.

2.     The district’s groundwater management program was not adopted in compliance
       with the requirements of the Act.

       Although the Act authorizes the district to “establish programs for the management
of groundwater resources” (§ 10702) that may include extraction limitations, it may do so
only if the programs are adopted pursuant to the notice, hearing and protest procedures
specified in the Act. As noted above, the district acknowledges that the water shortage
contingency plan, resolution No. 200 and Ordinance No. 07-04, were not adopted
pursuant to the procedures specified in section 10703 through 10706. The district
contends, and the trial court agreed, that adoption of Ordinance No. 90-1 in 1990 in
compliance with those procedures was sufficient, and that the subsequent enactments
were merely amendments of the original program that need not have been adopted in
conformity with those procedures.
       The trial court concluded that “the Legislature intended the enhanced ordinance
adoption procedures of [sections] 10703-10706 to apply only to the enactment of the
ordinance adopting the initial water management program, representing the assumption


12
  At oral argument, Gomes’s counsel highlighted his citation to G. L. Mezzetta, Inc. v.
City of American Canyon (2000) 78 Cal.App.4th 1087, 1092, which stated that “[t]he
powers of a general law city include ‘ “only those powers expressly conferred upon it by
the Legislature,” ’ ” with certain exceptions, and that such powers “ ‘ “are strictly
construed, so that ‘any fair, reasonable doubt concerning the exercise of a power is
resolved against the corporation.’ ” ’ ” Assuming that this principle applies to the district,
the statute in question does not confer specific powers that allegedly have been exceeded.
The Act confers authority on the district to “establish programs for the management of
groundwater resources” (§ 10702) and the question is whether a limit on extraction is a
component of such a program.

                                              9
by the Community Service District of power not otherwise within its authority. The court
finds that the Legislature did not intend the same enhanced ordinance adoption
procedures to apply to the subsequent adoption of ordinances amending that initial
ordinance. The court cannot find any stated intent, rationale or public policy to support
the argument that the Legislature intended the enhanced ordinance adoption procedures
to apply to all ordinances implementing changes in the initially adopted water
management plan.” According to the court, “To construe the language to require the
enhanced procedures for any ordinance subsequently amending and modifying the initial
adopted program would render the operation of a management plan unnecessarily and
unreasonably unwieldy. A district would have to comply with the enhanced adoption
procedure for even the most minor amendment, regardless of how insubstantial. It is
extremely unlikely that the Legislature intended any amending ordinance, however
inconsequential, to be subject to the majority protest process and the mandatory one year
delay.”13
       The trial court’s interpretation disregards the text of the Act. Nothing in the statute
limits its mandatory procedures to the enactment of an “initial” water management
program. To the contrary, section 10702 states that the district “may . . . establish
programs for the management of groundwater resources,” (emphasis added) and
sections 10707 and 10709 repeat that the district may be authorized to establish multiple
“programs.” Section 10703, on the other hand, states that, “[p]rior to the adoption of a
groundwater management program,” (emphasis added) the agency shall follow the
process specified. Similarly, sections 10704, 10705, and 10706 all refer to procedures for

13
  The court also stated that the district “is not authorized to assume the additional
authority offered by the Legislature in Stats. 1987, ch. 472, sec. 1, until the voters have
agreed to become subject to that new authority as expressed in the initial management
plan.” However, the court appears to have conflated two provisions. Voter approval is not
required for adoption of a groundwater management program; rather, compliance with
the “enhanced adoption procedure” specified in sections 10703 through 10706 is
required. Voter approval is necessary only to assume the power to levy a water
replenishment assessment or to assume the power to fix and collect payment rates under
sections 10708 or 10709. (See § 10710.)


                                             10
consideration and adoption of a “program,” in the singular. The reference to “programs”
indicates that the district may establish more than one such program, and that each is not
to be considered an amendment of the initial program. The reference to the procedures
for adopting “a groundwater-management program ” (rather than “the groundwater-
management program”) indicates that each such program must comply with the specified
procedures.
       Moreover, the obvious policy underlying the Act is to permit the property owners
who will be affected by a groundwater management program to participate meaningfully
in the development of the program and to reject the program unless more than half
approve. Whether or not the hearings before adoption of the water shortage contingency
plan provided property owners the same opportunity to comment as the procedures
required by the Act, which is questionable, the plan was adopted without giving the
majority of the eligible residents the opportunity to reject the plan, as the statute requires.
       Even if the trial court is correct that inconsequential amendments may be made to
a program without complying with the procedural requirements of the Act, the water
shortage contingency plan adopted by the district is hardly such an inconsequential
amendment. However minor amendments may be defined, and we need not articulate a
universal definition here, the water shortage contingency plan cannot possibly be
regarded as a minor amendment of Ordinance No. 90-1. The 1990 ordinance simply
required an extraction permit for a new development or change in use of land, or the
construction of a new well or modification of an existing well. The 2007 water shortage
contingency plan created an entirely new program, involving, among other things, criteria
for stages of water shortage, implementation of various water demand reduction methods,
prohibitions and penalties depending on the stage of water shortage, the requirement that
at stage 4 owners of wells previously operated without permits or water allotments obtain
permits and be subject to allotments, and that those owners remain subject to those
requirements even after termination of the water shortage. None of these significant and
far-reaching measures was considered or approved, explicitly or implicitly, with the
adoption of the modest 1990 program. Before enactment of the entirely new water


                                              11
shortage contingency program, the Act requires what the trial court appropriately termed
an “enhanced adoption procedure.” Affected property owners are entitled to prior notice
of the proposed program, a public hearing offering the possibility for alteration or further
study of the program, a second hearing and consideration of protests to the program, and
abandonment of the program if more than 50 percent of the eligible residents oppose the
program. Had the district observed these procedures before adopting resolution No. 200
and Ordinance No. 07-04, we cannot say whether changes would have been made in the
program or that the program would not have been entirely abandoned. Therefore, the
adoption of those measures was invalid, and the measures are void.
       Gomes also challenges the validity of Ordinance No. 07-01. Whether this
ordinance should be regarded as simply a minor modification of the program adopted by
Ordinance No. 90-1, or a new program requiring compliance with the procedures
specified in the Act, presents a closer question. Ordinance No. 07-01 added to the
requirement that an extraction permit be obtained for new development or a change in use
of property, or for construction or modification of a well, the requirement that a permit be
obtained “following the sale of real property within the boundaries of the [district].”
Because this ordinance for the first time extended the permit process to existing wells that
were not being modified, we conclude that the enhanced procedures of the Act should
have been observed. Moreover, since our invalidation of resolution No. 200 and
Ordinance No. 07-04 presumably will instigate the process specified in the Act for the re-
adoption of a water shortage contingency plan, inclusion of the Ordinance No. 07-01
provisions should be easily accomplished.
       In view of these determinations, we need not consider additional issues raised by
the parties. On remand, however, we do not preclude reconsideration of other rulings
made by the trial court on the erroneous premise that resolution No. 200 and Ordinance
No. 07-04 had been validly adopted, including Gomes’ motion for attorney fees.
                                        Disposition
       The judgment is reversed with directions to issue a declaratory judgment declaring
that Ordinance No. 07-01, resolution No. 200, and Ordinance No. 07-04 are void because


                                             12
they were not adopted in the manner prescribed by Water Code sections 10703 through
10706, and for further proceedings consistent with this opinion. Gomes shall recover his
costs incurred on appeal.

                                                POLLAK, P. J.


WE CONCUR:

STREETER, J.
TUCHER, J.




                                           13
Trial court:                            Mendocino County Superior Court


Trial judge:                            Honorable Cindee F. Mayfield


Counsel for plaintiff and appellant:    DOWNEY BRAND LLP
                                        Kevin M. O’Brien
                                        David E. Cameron

                                        CARTER MOMSEN PC
                                        Colin W. Morrow


Counsel for defendant and respondent:   James A. Jackson

                                        Matthew Emrick




A153078

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