Filed 4/15/15 (unmodified opn. attached)
                                CERTIFIED FOR PUBLICATION

             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                 SECOND APPELLATE DISTRICT

                                           DIVISION SIX


CITY OF SAN BUENAVENTURA,                                    2d Civil No. B251810
                                                       (Super. Ct. Nos. VENCI 00401714,
     Plaintiff, Cross-defendant and Appellant,                  VENCI 1414739)
                                                            (Santa Barbara County)
v.
                                                       ORDER MODIFYING OPINION
UNITED WATER CONSERVATION                               AND DENYING REHEARING
DISTRICT et al.,
                                                        [NO CHANGE IN JUDGMENT]
     Defendants, Cross-complainants and
     Appellants.



THE COURT:
                 It is ordered the opinion filed on March 17, 2015, be modified as follows:
                 On page 6, in the last line of the first paragraph, the word "generally" is
inserted before "prohibited by Proposition 13 altogether."
                 On page 8, in the last two lines of the second full paragraph, the word
"two-thirds" is inserted before "majority of voters" and "subd. (b)" is replaced with
"subd. (d)".
                 On page 26, in the fourth sentence of the last paragraph beginning with
"Large-scale users such as the City receive a far greater benefit from individual
landowners" the word "from" is replaced with "than".
                 [There is no change in the judgment.]
                 The City's petition for rehearing is denied.
Filed 3/17/15 (unmodified version)
                                CERTIFIED FOR PUBLICATION

             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                 SECOND APPELLATE DISTRICT

                                        DIVISION SIX


CITY OF SAN BUENAVENTURA,                                 2d Civil No. B251810
                                                    (Super. Ct. Nos. VENCI 00401714,
     Plaintiff, Cross-defendant and Appellant,               VENCI 1414739)
                                                         (Santa Barbara County)
v.

UNITED WATER CONSERVATION
DISTRICT et al.,

     Defendants, Cross-complainants and
     Appellants.




                 Appellants United Water Conservation District and its board of directors
(collectively, District) manage the groundwater resources in central Ventura County.
Appellant City of San Buenaventura (City) pumps groundwater from District territory
and sells it to residential customers. The District collects a fee from groundwater
pumpers, including the City, based on the volume of water they pump. The Water Code
authorizes this fee (Wat. Code, §§ 74508, 75522)1 and requires the District to set
different rates for different uses. Groundwater extracted for non-agricultural purposes
must be charged at three to five times the rate applicable to water used for agricultural
purposes. (§ 75594.)



         1 All statutory references are to the Water Code unless otherwise stated.
              Article XIII D of the California Constitution governs fees "upon a parcel or
upon a person as an incident of property ownership, including a user fee or charge for a
property related service." (Cal. Const., art. XIII D, §§ 1, 2, subd. (e).) The City contends
that the fees it pays the District violate article XIII D because they "exceed the
proportional cost of the service attributable to the parcel[s]" of land from which the City
pumps its water. (Id. § 6, subd. (b)(3).)
              The threshold question before us is whether the District's groundwater
extraction charges are property-related and thus subject to article XIII D. The trial court,
relying on Pajaro Valley Water Management Agency v. Amrhein (2007) 150 Cal.App.4th
1364 (Pajaro), concluded that they are. It found that the District's pumping charges
violated article XIII D because, pursuant to section 75594, the District charged the City
three times the rate it charged pumpers who extracted water for agricultural purposes.
The court calculated the amount of overcharges in two separate years and issued writs of
mandate requiring the District to refund these amounts to the City. The District appeals
this decision, and the City cross-appeals, seeking declaratory relief that the trial court
denied.
              We conclude that the pumping fees paid by the City are not property-
related and that Pajaro is distinguishable. We reject the City's alternative arguments.
The pumping fees are not taxes subject to the requirements of article XIII C. In addition,
substantial evidence supports the trial court's finding that the charges are valid regulatory
fees because they are fair and reasonable, and do not exceed the District's resource
management costs. Therefore, we reverse the judgment awarding relief to the City and
direct the trial court to vacate its writs of mandate. Otherwise, we affirm.
                                      BACKGROUND
                                              I.
                             Factual and Statutory Background
              The District is organized and operated pursuant to the Water Conservation
District Law of 1931 (codified as amended in § 74000 et seq.). Its stated purpose is to
"manage, protect, conserve and enhance the water resources of the Santa Clara River, its

                                              2
tributaries and associated aquifers, in the most cost effective and environmentally
balanced manner." To this end, the Water Code authorizes the District to conduct water
resource investigations (§ 74520), acquire water and water rights (§ 74521), build
facilities to store and recharge water (§ 74522), construct wells and pipelines for water
deliveries (§ 74525), commence actions involving water rights and water use (§ 74641),
prevent interference with or diminution of stream and river flows and their associated
natural subterranean supply of water (§ 74642), and acquire and operate recreational
facilities associated with dams and reservoirs (§ 74540).
              The District covers approximately 214,000 acres in central Ventura County
along the lower Santa Clara River valley and the Oxnard Plain. It comprises portions of
several groundwater basins.2 Along the Santa Clara River, from upstream to
downstream, the District includes most or all of the Piru, Fillmore, Santa Paula, Oxnard
Forebay, Oxnard Plain, and Mound basins. To the east of the Oxnard Plain basin, the
District includes the West Las Posas basin and part of the Pleasant Valley basin.
              Groundwater recharge in these basins occurs naturally from rainfall as well
as from river and stream flow infiltration and percolation. Heavy demand for
groundwater throughout the District from both agricultural and urban users causes
overdraft, the amount by which extractions exceed natural water recharge. (See
§ 75506.) Artificial recharge is critical to minimize the overdraft. The District
replenishes the groundwater supply directly by spreading diverted river water over
grounds at the northern part of the Oxnard Plain. In addition, the District augments
groundwater indirectly by delivering water through pipelines to users near the coast who
would otherwise attempt to meet their water needs by pumping it from the ground.
Despite these mitigation efforts, pumping in the District has exceeded recharge, both
natural and artificial, by an average of 20,400 acre-feet per year over the past decade.

       2 A groundwater basin is "[a]n alluvial aquifer or a stacked series of alluvial
aquifers with reasonably well-defined boundaries in a lateral direction and having a
definable bottom." (Department of Water Resources, Bulletin 118-03, at p. 216.) An
aquifer is "[a] body of rock or sediment that is sufficiently porous and permeable to store,
transmit, and yield significant or economic quantities of groundwater to wells and
springs." (Id. at p. 214.)
                                             3
This has led to problems of subsidence and salt water intrusion into aquifers along the
coast.
               The District's water management activities and ongoing operating expenses
require a means of funding. The District currently generates revenue from three main
sources: property taxes (§ 75370), water delivery charges (§ 74592), and, at issue here,
pump charges (§ 75522). Historically, the District relied solely on property taxes and
water delivery charges. In 1979, after it had become clear that these two sources were
insufficient to support the District's activities, particularly the reversal of overdraft and
saline intrusion on the Oxnard Plain basin, the District began levying a charge on
groundwater produced within its territory—i.e., pump charges.
               The Water Code authorizes districts to impose pump charges in one or
more zones within the district "for the benefit of all who rely directly or indirectly upon
the ground water supplies." (§ 75522.) Zones may overlap and include the entire district
(§ 75540), as does the District's Zone A, from which revenues are applied to a "general"
fund used for District-wide conservation efforts. Although the rates charged may vary
from zone to zone, the rate within each zone must be "fixed and uniform" for each of two
classes of use—water used for agricultural purposes and water used for all other
purposes. (§ 75594.) Subject to exceptions not at issue here, section 75594 prohibits a
district from equalizing the rates charged for the two types of use.3 Instead, the rate for
non-agricultural use must be between three and five times that charged for agricultural
use. The District has always set rates at the minimum 3:1 ratio.
               In the 1980s and early 1990s, the District planned and constructed the
Freeman Diversion project (Freeman), a major improvement to its surface water
diversion facilities along the Santa Clara River near Saticoy. Freeman permanently
diverted water from the Santa Clara River to recharge groundwater in the Oxnard Plain

         3 Section 75594 provides in relevant part that "any ground water charge in any
year shall be established at a fixed and uniform rate for each acre-foot for water other
than agricultural water which is not less than three times nor more than five times the
fixed and uniform rate established for agricultural water." The Water Code defines
"agricultural water" to mean "water first used on lands in the production of plant crops or
livestock for market." (§ 75508.)
                                               4
basin in order to mitigate declining water levels and seawater intrusion. To help finance
Freeman, the District imposed groundwater pumping charges in the area that it
determined received the recharge benefit from Freeman. This area, designated as Zone
B, currently comprises the basins south of the Santa Clara River's north bank, which
include the Oxnard Plain basin, the Oxnard Forebay basin, the Pleasant Valley basin, and
a portion of the West Las Posas basin.
              The City overlies nearly the entire Mound basin. At the time the District
implemented the pumping charges to fund Freeman, there was a lack of technical
agreement as to the degree pumpers in the Mound basin benefited from District's
activities. The City maintained that its wells would not benefit from Freeman and filed
several lawsuits seeking to invalidate both the new Freeman-related charges and the
District's general pump charges as they applied to City. The parties reached a settlement
in 1987. The agreement provided that the Mound basin would be excluded from the
Freeman-related charges and a separate billing zone (Zone C) would be established
covering the area of the Oxnard Plain basin north of the Santa Clara River. Within Zone
C, municipal pumping rates for Freeman were to equal agricultural rates on the Oxnard
Plain south of the Santa Clara River. This was accomplished by setting the rates for Zone
C equal to a third of the rates for Zone B.
              The settlement agreement expired at the end of the 2010-2011 water year
when the District paid off its construction loan for Freeman. Beginning in the 2011-2012
water year, Zone C was abolished and incorporated into Zone B, resulting in substantially
higher pumping rates for groundwater extractors in the former Zone C. It is this increase
in rates to which the City objects.
                                              II.
                                The Constitutional Overlay
              Proposition 13 was adopted by the electorate in 1978. It added article
XIII A to the California Constitution, "imposing important limitations upon the
assessment and taxing powers of state and local governments." (Amador Valley Joint
Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 218.) Its

                                              5
principal provisions set maximum rates for ad valorem property taxes and for increases in
a property's assessed valuation. (Howard Jarvis Taxpayers Assn. v. City of Riverside
(1999) 73 Cal.App.4th 679, 681.) Crucially, Proposition 13 restricted cities, counties,
and special districts from imposing "special taxes" except by a two-thirds vote of the
district's qualified electors. (Cal. Const., art. XIII A, § 4.) A "special tax" is a tax
"imposed for specific purposes," as opposed to a "general tax," which is "imposed for
general governmental purposes." (Gov. Code, § 53721; accord, Cal. Const., art. XIII C,
§ 1, subd. (d).) A local government's use of certain types of special taxes—"ad valorem
taxes on real property or a transaction tax or sales tax on the sale of real property"—was
prohibited by Proposition 13 altogether. (Cal. Const., art. XIII A, § 4.)
              A series of judicial decisions diminished Proposition 13's import by
allowing local governments to generate revenue without a two-thirds vote. (See Schmeer
v. County of Los Angeles (2013) 213 Cal.App.4th 1310, 1317-1319 [discussing several
such cases].) The watershed case was Knox v. City of Orland (1992) 4 Cal.4th 132, in
which the California Supreme Court upheld, as a "special assessment" rather than a
"special tax," a city's levy on real property to fund park maintenance. A special
assessment under Knox did not require voter approval at all. It was a "''''compulsory
charge placed by the state upon real property within a pre-determined district, made
under express legislative authority for defraying in whole or in part the expense of a
permanent public improvement therein . . . .'" . . .'" (Id. at pp. 141-142.) A special tax,
while also levied for a specific purpose, differed from a special assessment in that it need
not "confer a special benefit upon the property assessed beyond that conferred generally."
(Id. at p. 142, fn. omitted.) The result was that Proposition 13's directive of limiting the
taxes imposed on property owners, and in particular homeowners, was circumvented
through an ever increasing proliferation of special assessments and other property-related
fees and charges that were not deemed "taxes." (See Apartment Assn. of Los Angeles
County, Inc. v. City of Los Angeles (2001) 24 Cal.4th 830, 839 (Apartment Association).)
              In response, the voters in 1996 approved Proposition 218, which added
articles XIII C and XIII D to the state Constitution. (See Howard Jarvis Taxpayers Assn.

                                               6
v. City of Riverside, supra, 73 Cal.App.4th at p. 682.) Proposition 218's intent was "to
prohibit unratified exactions imposed on property owners as such." (Apartment
Association, supra, 24 Cal.4th at p. 838.) It restricted local governments attempting to
raise funds from property owners to four methods: (1) an ad valorem property tax, (2) a
special tax, (3) an assessment, and (4) a "fee" or "charge" (the terms are interchangeable)
for property-related services. (Cal. Const., art. XIII D, § 3; Howard Jarvis Taxpayers
Assn. v. City of Fresno (2005) 127 Cal.App.4th 914, 918.) Proposition 218 extended
Proposition 13's limitations on ad valorem property taxes and special taxes by placing
similar restrictions on assessments and property-related fees and charges, including the
two-thirds vote requirement. (Howard Jarvis v. City of Riverside, supra, at p. 682.)
              While Proposition 218 sharply limited local governments' ability to raise
revenue from property owners without their consent, it did little to limit the imposition of
regulatory fees imposed on a basis other than property ownership. Fees classified as
something other than "taxes" were not subject to Proposition 13. For example, in Sinclair
Paint Co. v. State Bd. of Equalization (1997) 15 Cal.4th 866, the Supreme Court
considered certain "fees" imposed on manufacturers that contributed to environmental
lead contamination. Sinclair Paint concluded that the fees funding services for potential
child victims of lead poisoning constituted "bona fide regulatory fees, not taxes, because
the Legislature imposed the fees to mitigate the actual or anticipated adverse effects of
the fee payers' operations, and [by law] the amount of the fees must bear a reasonable
relationship to those adverse effects." (Id. at p. 870.)
              Largely in response to the Sinclair Paint decision, California voters
approved Proposition 26 in 2010 to close the perceived loopholes in Propositions 13 and
218 that had allowed "a proliferation of regulatory fees imposed by the state without a
two-thirds vote of the Legislature or imposed by local governments without the voters'
approval." (Schmeer v. County of Los Angeles, supra, 213 Cal.App.4th at pp. 1322,
1326.) Proposition 26 broadened the constitutional definition of "'tax' to include 'any
levy, charge, or exaction of any kind imposed by' the state or a local government, with
specified exceptions." (Id. at p. 1326, citing Cal. Const., art. XIII C, § 1; see Prop. 26,

                                              7
§ 1, subd. (f) ["[T]his measure . . . defines a 'tax' for state and local purposes so that
neither the Legislature nor local governments can circumvent the[] restrictions [in Props.
13 and 218] on increasing taxes by simply defining new or expanded taxes as 'fees'"].)
               Taken together, Propositions 13, 218, and 26 create a classification system
for revenue-generating measures promulgated by local government entities. Any such
measure is presumptively a tax. If the revenue is collected for a payor-specific benefit or
service (see Cal. Const., art. XIII C, § 1, subds. (e)(1) & (e)(2)), certain regulatory costs
(see id. subd. (e)(3)), the use, lease, or purchase of government property (see id. subd.
(e)(4)), judicial fines or penalties (see id. subd. (e)(5)), or property development charges
(see id. subd. (e)(6)), it is not a tax. In addition, a measure is not a tax if under article
XIII D it constitutes an assessment on real property or a property-related "fee" or
"charge." (See id. subd. (e)(7).) A fee or charge is "any levy other than an ad valorem
tax, a special tax, or an assessment, imposed . . . upon a parcel or upon a person as an
incident of property ownership, including a user fee or charge for a property related
service." (Id. subd. (e).)
               A measure's classification determines the requirements to which it is
subject. Taxes cannot be levied by a special purpose district (such as the District) for
general revenue purposes. (Cal. Const., art. XIII C, § 2, subd. (a).) A special purpose
district can levy a tax for a specific purpose only with the approval of a majority of
voters. (Id. subd. (b).)
               In order to levy a property-related fee or charge, a number of procedural
and substantive requirements must be met. As relevant here, the fee must not "exceed the
proportional cost of the service attributable to the parcel." (Cal. Const., art. XIII D, § 6,
subd. (b)(3).) Although property-related fees generally require approval by either a
majority of the affected property owners or two-thirds of the voters in the affected area, a
property-related fee for water service does not. (Id. subd. (c).)
               A fee or charge for a payor-specific benefit or service that is neither
property-related nor a tax must "not exceed the reasonable costs to the local government
of conferring the benefit[,] granting the privilege," or "providing the service or product."

                                                8
(Cal. Const., art. XIII C, § 1, subds. (e)(1) & (e)(2).) "[T]he manner in which those costs
are allocated to a payor [must] bear a fair or reasonable relationship to the payor's
burdens on, or benefits received from, the governmental activity." (Id. subd. (e)(7).)
Such a fee or charge normally does not require voter approval.
                                             III.
                                  Procedural Background
              After Freeman was paid off and the terms of the 1987 settlement were no
longer in force, the District proposed to eliminate Zone C and merge it with Zone B,
effectively tripling the City's rate per acre-foot of water. In addition, in both the 2011-
2012 and 2012-2013 water years, the District proposed increasing the rate charged
District-wide (Zone A). The District notified well owners of the proposed changes and
invited them to comment. Only a minority of the well owners, including the City,
submitted protest letters. Over the City's objections, the District eliminated Zone C and
adopted the proposed rates.
              The City filed two lawsuits, which were consolidated. It sought to overturn
the District's rate decisions through a writ of mandate (Code Civ. Proc., § 1085), an
administrative mandate (id. § 1094.5), declaratory relief (id. § 1060), and a reverse
validation action (id. § 860 et seq.). The California Federation of Farm Bureaus, the
Ventura County Farm Bureau, and the Pleasant Valley County Water District answered
the validation cause of action and intervened in the others.4 The District filed a cross-
complaint seeking declaratory relief upholding its rate determinations in water year 2011-
2012.
              The City challenged the rates on two fronts. First, it asserted that the
statutorily-mandated 3:1 ratio between groundwater extraction rates for non-agricultural
and agricultural uses constituted an illegal subsidy for agricultural users at the expense of


        4 These parties were not named defendants or respondents except insofar as the
City's validation cause of action named as defendants "all persons interested in the
validity of the rates adopted by the United Water Conservation District." They are not
parties to the appeal. The California Federation of Farm Bureaus filed an amicus brief in
support of the District.
                                              9
other users. Second, the City questioned the propriety of including in the District-wide
Zone A rates certain of the District's expenses that the City contended either did not
benefit it at all or benefitted it less than other groundwater users. The City maintained
that these practices violated Propositions 13, 218, and 26, the common law of
ratemaking, and section 54999.7, subdivision (a), of the Government Code (San Marcos
legislation).5
                 The trial court concluded that the groundwater extraction charges (1) bore a
reasonable relationship to the City's burdens on and benefits from the regulatory activity
and thus were valid regulatory fees rather than special taxes subject to Proposition 13; (2)
were property related fees and charges subject to article XIII D (Prop. 218); and (3) were
not, as property related fees, taxes under Proposition 26. The court did not determine
whether the San Marcos legislation or the common law of utility rate-making applied to
the extraction charges but found that, if they did, the charges did not exceed the
reasonable cost to the District of providing the service and were reasonable, fair, and
equitable.
                 Analyzing the extraction charges under article XIII D, the trial court
similarly found that the charges in the aggregate were reasonably proportional to the
District's costs and comported with Proposition 218. However, it found that the 3:1 ratio
between rates for non-agricultural and agricultural water use mandated by section 75594
was unconstitutional under Proposition 218 for the water years in question because the
District failed to present evidence that the rate differential reflected a cost differential.
The court found that the City was entitled to a partial refund in the amount it paid in
excess of a rate based upon the District's average cost for all types of water usage. It




       5 San Marcos Water Dist. v. San Marcos Unified School Dist. (1986) 42 Cal.3d
154 held that, absent legislative authorization, a public entity's constitutional exemption
from special assessments prohibited a local water district from imposing a capacity fee
for funding capital improvements to the water system. (See Regents of University of
California v. East Bay Municipal Utility Dist. (2005) 130 Cal.App.4th 1361, 1366.) The
San Marcos legislation granted that express authorization, subject to certain substantive
and procedural requirements.
                                               10
issued writs of mandate awarding the City a partial refund of $548,296.22 for 2011-2012
and $794,815.57 for 2012-2013, plus pre-judgment interest.6
              The District appeals the trial court's conclusion that Proposition 218 applies
to its groundwater extraction charges. In the alternative, it appeals the court's ruling that
to satisfy Proposition 218, the District must present quantitative evidence justifying the
3:1 rate disparity rather than pointing to qualitative differences between agricultural and
other water users that impact the relative cost of conservation services. The District also
appeals the court's decision to award a partial refund rather than to remand to the District
so that it can conduct further proceedings to determine whether the 3:1 ratio is justified
under article XIII D. Finally, the District contends that the court's refund calculation is
incorrect.
              The City cross-appeals, seeking declaratory relief. First, it asks us to hold
that section 75594's rate ratio is facially unconstitutional. It also requests a declaration
that the District must limit its groundwater extraction charges to the cost of providing
services that have a demonstrated relationship to groundwater use. In addition, the City
seeks a declaration that the District's rate structure must take into account the scientific
evidence regarding how different groundwater basins respond to specific recharge efforts
rather than charging all groundwater users a uniform rate for District-wide conservation
efforts. The City does not challenge the trial court's findings that the groundwater
extraction charges were not "special taxes" under Proposition 13 and did not violate the
common law of utility ratemaking.
              We conclude that the pump charges paid by the City are neither property-
related fees nor taxes, that they do not exceed the District's reasonable costs of
maintaining the groundwater supply, and that the District allocates those costs in a fair or
reasonable relationship to the City's burdens on this resource. Accordingly, we reverse
the judgment in favor of the City and direct the trial court to vacate its writs of mandate.

       6 The trial court, finding that a writ of mandate and declaratory judgment were the
only appropriate forms of relief, denied the petition for writ of administrative mandate
and the reverse validation complaint. Neither party contests this aspect of the court's
judgment.
                                              11
                                        DISCUSSION
                                               I.
                                     Standard of Review
              We review de novo a trial court's determinations whether taxes, fees, and
assessments imposed by a local governmental entity are constitutional, exercising our
independent judgment. (Silicon Valley Taxpayers' Assn., Inc. v. Santa Clara County
Open Space Authority (2008) 44 Cal.4th 431, 448-450.) In the trial court, the
governmental entity has the burden of showing, by reference to the face of the record
before it, that its charges satisfy the Constitution. (See Cal. Const., arts. XIII A, § 3,
subd. (d), XIII C, § 1, subd. (e), XIII D, § 6, subd. (b)(5); see also California Farm
Bureau Federation v. State Water Resources Control Bd. (2011) 51 Cal.4th 421, 436-
437.) On appeal, as in any case, the appealing party has the responsibility of
affirmatively demonstrating error. (Morgan v. Imperial Irrigation District (2014) 223
Cal.App.4th 892, 913.)
              "[W]e exercise our independent judgment in reviewing the record," but "we
do not take new evidence or decide disputed issues of fact." (Morgan v. Imperial
Irrigation District, supra, 223 Cal.App.4th at p. 912.) Instead, we review the resolution
of factual conflicts by the trial court under the substantial evidence standard. (Id. at p.
916.) "Under this standard, 'the power of an appellate court begins and ends with the
determination as to whether there is any substantial evidence, contradicted or
uncontradicted, which will support the finding of fact.' [Citation.]"7 (Ibid.; see Schmeer
v. County of Los Angeles, supra, 213 Cal.App.4th at p. 1316.)



       7 The City asserts that our "[r]eview of factual issues is de novo" because we are
"equally well placed" as the trial court to review the "cold" administrative record. Not so.
While the City is correct that in a mandamus action the scope of review can be identical
in the trial and appellate courts (see, e.g., Stone v. Regents of University of California
(1999) 77 Cal.App.4th 736, 745), that is because courts at each level normally give great
deference to an agency's factual findings made in support of its action. (McGill v.
Regents of University of California (1996) 44 Cal.App.4th 1776, 1786.) Here, the factual
findings under review were made by the trial court, not the District, so we apply the less
but still highly deferential "substantial evidence" standard.
                                              12
                                               II.
                              Construction of a Voter Initiative
              When construing a provision of the state Constitution brought about by
voter initiative, we apply the same interpretive principles governing statutory
construction. (Professional Engineers in California Government v. Kempton (2007) 40
Cal.4th 1016, 1037.) "[O]ur paramount task is to ascertain the intent of those who
enacted it." (Greene v. Marin County Flood Control & Water Conservation Dist. (2010)
49 Cal.4th 277, 290.) We look first to the provision's language as the best indicator of
the voters' intent (California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231,
265), giving words their ordinary meaning and construing them in the context of the
measure as a whole and its overall scheme. (Professional Engineers, at p. 1037.)
"'Absent ambiguity, we presume that the voters intend the meaning apparent on the face
of an initiative measure . . . and the court may not add to the statute or rewrite it to
conform to an assumed intent that is not apparent in its language.' [Citation.] Where
there is ambiguity in the language of the measure, '[b]allot summaries and arguments
may be considered when determining the voters' intent and understanding of a ballot
measure.' [Citation.]" (Ibid.)
              Proposition 218 instructs courts to liberally construe its provisions "to
effectuate its purposes of limiting local government revenue and enhancing taxpayer
consent." (Prop. 218, § 5.) At the same time, repeal of existing legislation by implication
is strongly disfavored. (Pacific Palisades Bowl Mobile Estates, LLC v. City of Los
Angeles (2012) 55 Cal.4th 783, 807; St. Cyr v. California FAIR Plan Association (2014)
223 Cal.App.4th 786, 799.) We presume the validity of a legislative act, resolving all
doubts in its favor, and must uphold it unless a "'. . . conflict with a provision of the state
or federal Constitution is clear and unquestionable . . . .'" (Amwest Surety Ins. Co. v.
Wilson (1995) 11 Cal.4th 1243, 1252.)




                                              13
                                               III.
                  The Pump Fees Are Not Property-Related Fees or Charges
               The trial court determined that it was constrained by Pajaro and, as a result,
concluded that the pump fees at issue constituted property-related fees or charges. Before
explaining why Pajaro is distinguishable, we must discuss the trio of Supreme Court
cases underlying its holding: Apartment Association; Richmond v. Shasta Community
Services District (2004) 32 Cal.4th 409 (Richmond); and Bighorn-Desert View Water
Agency v. Verjil (2006) 39 Cal.4th 205 (Bighorn).
                                               A.
       Supreme Court Authority Regarding "Property-Related Fees and Charges"
               Apartment Association involved a municipal housing code provision that
imposed an annual $12 fee on residential rental property owners to finance the city's cost
of inspection and enforcement. (Apartment Association, supra, 24 Cal.4th at p. 833.)
The Supreme Court held that the fee was not subject to Proposition 218 because it was
"imposed on landlords not in their capacity as landowners, but in their capacity as
business owners." (Id. at p. 840.) It thus was "more in the nature of a fee for a business
license than a charge against property." (Ibid.)
               The Court explained that regulatory fees and property-related fees are not
mutually exclusive. (Apartment Association, supra, 24 Cal.4th at p. 838 ["[T]he mere
fact that a levy is regulatory . . . or touches on business activities . . . is not enough, by
itself, to remove it from article XIII D's scope"].) The hallmark of a property-related fee
is that "it applies only to exactions levied solely by virtue of property ownership." (Id. at
p. 842.) In other words, Proposition 218 applies to "exactions . . . that are directly
associated with property ownership" and that "burden landowners as landowners" rather
than on "levies linked more indirectly to property ownership." (Id. at pp. 839, 842, first
italics added.)
               Richmond again considered the scope of a property-related fee or charge.
The district that supplied water to residential and commercial users imposed a connection
fee for new water service, one component of which was a fire suppression charge used to

                                               14
purchase equipment for the volunteer fire department. (Id. at pp. 415-416, 425.) A group
of real property owners challenged the ordinance as levying an illegal property-related
fee. (Id. at p. 416.)
               While agreeing with the plaintiffs' contention "that supplying water is a
'property-related service' within the meaning of article XIII D's definition of a fee or
charge," Richmond rejected their broader argument "that all water service charges are
necessarily subject to the restrictions that article XIII D imposes on fees and charges."
(Richmond, supra, 32 Cal.4th at pp. 426-427.) The Supreme Court distinguished "[a] fee
for ongoing water service through an existing connection" from "a fee for making a new
connection to the system." (Id. at p. 427.) The former "requires nothing other than
normal ownership and use of property" whereas the latter "results from the owner's
voluntary decision to apply for the connection." (Ibid.) Because the charge on the
owner's voluntary decision to apply for a service connection was not a charge on the
property-related service itself, it was not subject to Proposition 218. (Id. at p. 428.)
               Finally, in Bighorn, a case that Pajaro ultimately found dispositive, the
Supreme Court reiterated that rates and other charges for water delivery were "property-
related" within the meaning of Proposition 218. Bighorn involved a local agency that
provided domestic water service to residents within its special district. A resident in the
district sought to place an initiative on the ballot that would have limited the agency's
rates and other water delivery charges. (Bighorn, supra, 39 Cal.4th at pp. 209-210.) The
Court of Appeal held that article XIII C, section 3 of the California Constitution, which
vests local voters with the power to "reduc[e] or repeal[] any local tax, assessment, fee or
charge" by initiative, did not apply to the fees and charges at issue. (See Bighorn, at pp.
211-212, fn. omitted.)
               The Supreme Court disagreed, finding it obvious that section 3 applied to
"fees and charges." The only issue was whether the meaning of "fees and charges" in
article XIII C, which does not define the phrase, is coextensive with its meaning in article
XIII D, where it is limited to property-related fees and charges. (See Cal. Const., art.
XIII D, § 2, subd. (e).) Bighorn did not resolve this question other than to conclude that

                                              15
the "fees and charges" in article XIII C included the property-related fees and charges in
article XIII D. Citing Richmond for the proposition that "a public water agency's charges
for ongoing water delivery . . . are fees and charges within the meaning of article XIII D,"
the court held that such charges "are also fees within the meaning of section 3 of article
XIII C." (Bighorn, supra, 39 Cal.4th at p. 216.)
              Relying on dictum in Apartment Association that "it is unclear . . . whether
a fee to provide gas or electricity service is the same as a fee imposed on the consumption
of electricity or gas" (Apartment Association, supra, 24 Cal.4th at p. 844), the agency in
Bighorn argued that its volumetric charges were based on consumption rather than
property and were not subject to Proposition 218. In its view, only the fixed monthly
charge that it imposed on all customers regardless of usage was property-related.
              The court rejected this argument. Pointing out that article XIII D
"'includ[es] a user fee or charge for a property related service'" (Cal. Const., art. XIII D,
§ 2, subd. (e)), Bighorn concluded that "[c]onsumption-based water delivery charges also
fall within the definition of user fees, which are 'amounts charged to a person using a
service where the amount of the charge is generally related to the value of the services
provided.' [Citation.]" (Bighorn, supra, 39 Cal.4th at p. 217.)
                                              B.
                                            Pajaro
              Like the District here, the Pajaro Valley Groundwater Basin faced problems
of overdraft and seawater intrusion from decades of groundwater overuse. The Pajaro
Valley Water Management Agency was created by special statute to combat these
problems, in part by supplementing the area's water supply with sources other than
groundwater. To that end, the agency was authorized to impose groundwater
augmentation charges on the extraction of groundwater. (Pajaro, supra, 150 Cal.App.4th
at pp. 1370-1372.)
              The agency adopted a groundwater management plan that included the
construction of a 23-mile pipeline to import water from a neighboring county. It planned
to fund the project in part through higher groundwater augmentation charges against all

                                              16
extractors of groundwater. The charges were levied at a set rate per acre-foot. Metered
pumpers, many of which were large, agricultural users, paid based on their actual usage.
Non-metered residential users paid a flat fee based on an estimated average rate of
consumption per dwelling. (Pajaro, supra, 150 Cal.App.4th at pp. 1372-1374.)
              The agency brought an action to validate the increased groundwater
augmentation charges. The trial court declared the charges valid but the Court of Appeal
reversed, holding that they constituted a charge incidental to property ownership.
Because the agency had not complied with Proposition 218's procedural requirements for
imposing such a charge, the augmentation charge was held invalid. (Pajaro, supra, 150
Cal.App.4th at pp. 1374-1375, 1393.)
              The appellate court characterized the augmentation fee as being "charged in
return for the benefit of ongoing groundwater extraction and the service of securing the
water supply for everyone in the basin." (Pajaro, supra, 150 Cal.App.4th at p. 1381, fn.
omitted.) Ultimately, though, Pajaro concluded that whether the agency's fee was for a
"service" was immaterial because it was "imposed as an incident of property ownership."
(Id. at p. 1389.) Water extraction, the court posited, is "an activity in some ways more
intimately connected with property ownership than is the mere receipt of delivered
water." (Id. at p. 1391.)
              Pajaro recognized that the conceptually similar Apartment Association
undermined its conclusion, insofar as that case held that "as an incident of" property
ownership means "solely by virtue of" property ownership rather than "on an incident of"
property ownership. (Pajaro, supra, 150 Cal.App.4th at p. 1389.) However, Pajaro
dismissed Apartment Association as being of questionable vitality given that Bighorn
"did not mention the case at all." (Ibid.) Pajaro found no material distinction, for article
XIII D purposes, between a charge on groundwater extraction and a charge on delivered
water. (Id. at pp. 1388-1389.) Although the court speculated that the extraction charge
might survive scrutiny under Bighorn if it were imposed only on non-residential users,
the fact that a large majority of pumpers were using the water for residential or domestic
uses was dispositive. (Id. at p. 1390.)

                                             17
                                              C.
                                           Analysis
              The level of abstraction at which we should analyze the constitutional text
is unclear. Do we determine whether groundwater extraction fees in general are imposed
as an incident of property ownership? Or do we focus on the specific fee imposed by the
District? And if the latter, do we consider the District's fee without regard to the payor at
issue or do we consider the City's purpose in pumping groundwater?
              The Pajaro court implied that the result could differ at least from district to
district if not from user to user when it suggested that a charge on groundwater extracted
for nonresidential purposes might fall within the rationale of Apartment Association.
(Pajaro, supra, 150 Cal.App.4th at pp. 1389-1390.) But this is far from certain. Our
Constitution applies statewide. It would be anomalous to assign its provisions different
meanings in different locations. (See Cal. Const., art. IV, § 16, subd. (a) ["All laws of a
general nature have uniform operation"]; Ex parte Smith (1869) 38 Cal. 702, 710
["[G]eneral laws . . . shall operate uniformly, or in the same manner upon all persons who
stand in the same category, that is to say, upon all persons who stand in the same relation
to the law, in respect to the privileges and immunities conferred by it, or the acts which it
prohibits"].) Similarly, the City questions how the District "can . . . apply a 'uniform' rate
as required by . . . section 74527 that is lawful as to the City but unconstitutional as to
rural residential groundwater users."
              We need not resolve this issue. Whether we consider this specific pump fee
or pump fees in general, we conclude that the fee is not property-related and that article
XIII D does not apply.
              Pajaro was based upon a unique set of facts—"that the vast majority of
property owners in the Pajaro Valley obtained their water from wells, and that alternative
sources were not practically feasible." (Pajaro, supra, 150 Cal.App.4th at p. 1397 (conc.
opn. of Bamattre-Manoukian, J.).) That is far from the case here. While the record does
not disclose the exact number of residential customers who pump water in lieu of
connecting to an existing water delivery network, it is evident that this number is

                                              18
insubstantial relative to the number of residential customers receiving delivered water.
There are at most 840 parcels with wells in the District. The City, whose 11 parcels
account for only about 6 percent of the water extracted from these wells, delivers water to
approximately 30,000 residential dwelling units in the District. And of course the City
itself uses the water it pumps for commercial rather than residential purposes.8
              Pajaro also found it significant that the agency's pump charge did not serve
a regulatory purpose. (See Pajaro, supra, 150 Cal.App.4th at p. 1381 [concluding that
fee charged to smaller, unmetered wells based on estimated usage was not "justified on
regulatory grounds" but that a regulatory purpose "might still be readily invoked with
respect to metered extractions"].)9 According to Pajaro, Bighorn "le[ft] open the
possibility that delivery of water for . . . nonresidential purposes is not a property-based
service, and that charges for it are not incidental to the ownership of property. A finding
that such a fee is not imposed as an incident of property ownership might be further
supported by a clearly established regulatory purpose, e.g., to internalize the costs of the
burdened activity or to conserve a supplied resource by structuring the fee in a manner
intended to deter waste and encourage efficiency." (Id. at pp. 1389-1390, fn. omitted.)
Here, as the trial court found, the groundwater extraction fees serve the valid regulatory
purpose of conserving water resources. (Cal. Const., art. X, § 2; §§ 75521, 75522.)


       8 The City asserts that its "customers use the groundwater it delivers for residential
purposes and it is entitled to speak for its customers." It is true that "a political
subdivision of the state may challenge the constitutionality of a statute or regulation on
behalf of its constituents where the constituents' rights under the challenged provision are
'inextricably bound up with' the subdivision's duties under its enabling statutes." (Central
Delta Water Agency v. State Water Resources Control Bd. (1993) 17 Cal.App.4th 621,
629.) But the City's residential water customers lack independent standing to sue the
District because they have no rights at stake. Nothing requires the City to obtain its water
by pumping, and the City's customers, who do not pay the fees, have only an indirect
financial interest in the constitutionality of the District's rates. (Cf. Loeffler v. Target
Corp. (2014) 58 Cal.4th 1081, 1101, 1104, fn. omitted ["[W]e have permitted consumer
intervention into the sales tax scheme in limited circumstances and only by means of a
judicial proceeding to compel the retailer/taxpayer to seek a refund" since "[t]he retailer
is the taxpayer, not the consumer"].)
        9 The City's wells are all metered. We do not necessarily agree with Pajaro that
charging unmetered residential wells based on estimated usage is incompatible with a
regulatory purpose, particularly in a district with large commercial pumpers and only a
few residential ones. That issue is not before us.
                                             19
              Even if there were no factual record regarding the relative number of
residential versus commercial well owners and a clear regulatory purpose, we would still
conclude that a charge on groundwater extraction is not imposed as an incident of
property ownership. In Orange County Water Dist. v. Farnsworth (1956) 138
Cal.App.2d 518, the Court of Appeal considered a similar pump fee. The charge was
challenged, among other reasons, on the ground that "the water which underlies real
property is a part of the property itself and that the charge in question is, in effect, a tax
levied by reason of ownership of the property . . . ." (Id. at pp. 529-530.) The Court of
Appeal summarily rejected this argument. It found that "[t]he charge in question is more
in the nature of an excise tax levied upon the activity of producing ground water by
pumping operations" than "a tax levied by reason of the ownership of property." (Id. at p.
530.)
              We agree with Farnsworth that a pump fee is better characterized as a
charge on the activity of pumping than a charge imposed by reason of property
ownership. Given this characterization, the facts here are not materially different from
those in Apartment Association. "The [pump] fee is not imposed solely because a person
owns property. Rather, it is imposed because the property is being [used to extract
groundwater]. It ceases along with the business operation, whether or not ownership
remains in the same hands. For that reason, the [District] must prevail." (Apartment
Association, supra, 24 Cal.4th at p. 838.)
              That Bighorn did not cite Apartment Association is unsurprising.
Richmond squarely stood for the proposition that charges for domestic water delivery
service are property related, even though other charges less directly associated with the
provision of water, namely connecting a property to the delivery system, are not.
Bighorn, like Richmond, dealt with "a public water agency's charges for ongoing water
delivery." (Bighorn, supra, 39 Cal.4th at p. 216.) It merely clarified that the charges for
this service were subject to Proposition 218 whether they were volume-based
"consumption" charges or flat-rate charges "imposed regardless of water usage." (Id. at
pp. 216-217.) Apartment Association was far less relevant than Richmond to this issue.

                                               20
The Supreme Court's failure to cite a marginally relevant case does not signal that case's
implicit overruling. (See Griffith v. City of Santa Cruz (2012) 207 Cal.App.4th 982, 995
[characterizing Apartment Association as "dispositive" of a Prop. 218 challenge].)
              Nor do we think it overly important that pumping may not always be a
"business operation." (See Pajaro, supra, 150 Cal.App.4th at p. 1391, fn. 18 [discussing
the distinction set forth in Apartment Association between "[a] charge . . . imposed on a
person because he owns land" and one "imposed because he engages in certain activity
on his land" and doubting "that it is satisfactorily captured by a distinction between
business and domestic uses or purposes"].) In the City's case, of course, it is. The City
pumps water for the municipal supply, which it then sells to residential customers. (See
City of South Pasadena v. Pasadena Land & Water Co. (1908) 152 Cal. 579, 593 ["In
administering a public utility, such as a water system, even within its own limits, a city
does not act in its governmental capacity, but in a proprietary and only quasi-public
capacity"].) But even with respect to the individual household that elects to pump water
for its own consumption, the Supreme Court made clear in Richmond that residential
business operations are not the only household activities exempt from article XIII D.
That article applies only to charges on an activity that "requires nothing other than
normal ownership and use of property." (Richmond, supra, 32 Cal.4th at p. 427, italics
added.) Voluntarily generating one's own utilities arguably is not a normal use of
property, and in any event, it is a "business operation" in the sense that it affects the
demand for municipal services. (Cf. Wickard v. Filburn (1942) 317 U.S. 111.)
              We also disagree with Pajaro that the groundwater extraction charge need
not constitute a fee for "service" provided by the District in order to fall within article
XIII D's scope. (See Pajaro, supra, 150 Cal.App.4th at p. 1389 ["The Agency contends
that the charge is not a 'service fee,' but that proposition seems beside the point if the
charge is imposed as an incident of property ownership"].) That is simply an untenable
construction of the constitutional text, particularly taken in context.
              Article XIII D provides that "[t]he amount of a fee or charge imposed upon
any parcel or person as an incident of property ownership shall not exceed the

                                              21
proportional cost of the service attributable to the parcel." (Cal. Const., art. XIII D, § 6,
subd. (b)(3), italics added.) Plainly, this refers to a service fee, albeit one imposed "as an
incident of property ownership." (Id. at subd. (b)(3).) Most of the other substantive
requirements imposed in section 6, subdivision (b) also explicitly apply to fees and
charges for local government services. For example, subdivision (b)(1) prohibits
revenues from the fee or charge from "exceed[ing] the funds required to provide the
property related service." Subdivision (b)(4) states that "[n]o fee or charge may be
imposed for a service unless that service is actually used by, or immediately available to,
the owner of the property in question." It also forecloses "[f]ees or charges based on
potential or future use of a service." (Ibid.) Subdivision (b)(5) proscribes charges for
"general governmental services including, but not limited to, police, fire, ambulance or
library services, where the service is available to the public at large in substantially the
same manner as it is to property owners." These provisions refer to property-related
services.
              California Constitution, article XIII D, section 3 confirms this
interpretation. It provides in relevant part that "[n]o tax, assessment, fee, or charge shall
be assessed . . . upon any parcel of property or upon any person as an incident of property
ownership except . . . [f]ees or charges for property related services as provided by this
article."10
              We think it self-evident that in charging property owners for pumping
groundwater, the District is not providing a "service" to property owners in the same way
that the Bighorn agency provided a service by delivering water through pipes to
residences. The conceptual difficulty with a contrary conclusion is apparent from
Pajaro's attempt to define what the "service" at issue is. In its view, the District's service
is "securing the water supply for everyone in the basin." (Pajaro, supra, 150 Cal.App.4th

       10 California Constitution, article XIII D, section 2 defines "property-related
service" as "a public service having a direct relationship to property ownership." Section
6, subdivision (b)(5), notes that "a significant factor in determining whether a fee or
charge is imposed as an incident of property ownership for purposes of this article" is the
agency's "[r]eliance . . . on any parcel map, including, but not limited to, an assessor's
parcel map."
                                              22
at p. 1381, fn. omitted.) But, if so, such a service cannot meet the requirement that it be
"actually used by, or immediately available to, the owner of the property in question."
(Cal. Const., art. XIII D, § 6, subd. (b)(4).) Moreover, it would fall within the realm of
prohibited "[f]ees or charges based on potential or future use of a service." (Ibid.) Worse
still, such a service is "available to the public at large in substantially the same manner as
it is to property owners." (Id. at subd. (b)(5).) There is a fundamental conflict between a
pump fee's classification as a property-related service and its validity under article
XIII D.
              The recently enacted Sustainable Groundwater Management Act (Stats.
2014, chs. 346, 347, 348) (SGMA) bolsters our conclusion that the groundwater
extraction fees here are not subject to article XIII D. Although the SGMA's amendments
to the Water Code do not apply to the District because it is not currently part of a
groundwater sustainability agency, the SGMA's treatment of groundwater extraction fees
is instructive. The Legislature authorized such fees in two separate sections. In section
10730.2, the Legislature expressly required that fees "to fund costs of groundwater
management," including the "[s]upply, production, treatment, or distribution of water," be
adopted in accordance with article XIII D. (§ 10730.2, subds. (a), (c).) Fees authorized
pursuant to section 10730 "to fund the costs of a groundwater sustainability program"
have no such requirement. (§ 10730, subd. (a).) That the Legislature required
groundwater sustainability agencies to impose some but not all groundwater extraction
fees in compliance with article XIII D suggests that, in its view, compliance is not
constitutionally required. (See In re Ethan C. (2012) 54 Cal.4th 610, 638 ["When
language is included in one portion of a statute, its omission from a different portion
addressing a similar subject suggests that the omission was purposeful"].)
              We thus conclude that groundwater extraction charges are not property-
related charges or fees. Even if they were, however, we see no conflict between
Proposition 218's substantive requirements and section 75594's required rate ratio.
Proposition 218 mandates that the amount of the fee imposed on a parcel or a person as
an incident of property ownership "not exceed the proportional cost of the service

                                              23
attributable to the parcel." (Cal. Const., art. XIII, § 6, subd. (b)(3).) Section 75594 does
not discriminate between persons or parcels. It discriminates between types of use. (Cf.
City of Palmdale v. Palmdale Water Dist. (2011) 198 Cal.App.4th 926 [local agency rates
for delivered water violated Proposition 218 where agency discriminated among types of
users even though "residential" users could use water for agricultural purposes].) If the
City chooses to use its groundwater for agricultural purposes, it too can benefit from the
lower rates.
               That the City's desired use for the water it pumps is subject to a higher
regulatory fee than agricultural use is a policy decision made by the Legislature, not the
District. Section 6 of article XIII D governs only property-related fees and charges
imposed by local government agencies. It does not govern the Legislature's statewide
regulatory policy, particularly a policy decision made decades before the passage of
Proposition 218. We "are required to try to harmonize constitutional language with that
of existing statutes if possible." (Citizens Assn. of Sunset Beach v. Orange County Local
Agency Formation Com. (2012) 209 Cal.App.4th 1182, 1192.) Because "it is possible to
reconcile the language of Proposition 218 with [section 75594's mandatory rate ratio]
existing at the time of its passage, we must do so." (Ibid.)
                                             IV.
                               The Pump Fees Are Not Taxes
               The trial court found that the pump charges did not constitute "taxes" under
Proposition 26's broader definition because they fell into the exception for property-
related fees and charges under article XIII D. Since we hold otherwise, we must address
the City's alternative contention that the pump charges are taxes that were imposed in
violation of Proposition 26.
                                              A.
                      The Pump Fees Are for Payor-Specific Benefits
               Pursuant to Proposition 26's presumption that "any levy, charge, or exaction
of any kind imposed by a local government" is a tax, the pump fees must be taxes unless


                                              24
they fall into one of seven enumerated exceptions. (Cal. Const., art. XIII C, § 1, subd.
(e).) We only need consider two of these exceptions, which apply to varying extents.
              The third exception contains an exhaustive list of regulatory activities for
which a local government can recover its reasonable costs through fees: "issuing licenses
and permits, performing investigations, inspections, and audits, enforcing agricultural
marketing orders, and the administrative enforcement and adjudication thereof." (Cal.
Const., art. XIII C, § 1, subd. (e)(3).) Many of the costs associated with managing,
protecting, conserving, and enhancing the District's water resources lie beyond the scope
of this exception, but not all. In particular, the District is authorized to "make surveys
and investigations" of its water supply and resources. (§ 74520.) These costs, to the
extent they are included in the pump fees, are not taxes.
              The District's strongest argument that the groundwater extraction fees are
not taxes is that they fall within the first exception for payor-specific benefits and
privileges. Pumpers receive an obvious benefit—they may extract groundwater from a
managed basin.
              The City complains that pumpers are merely exercising their existing
property rights and that the District "does not grant the City a right or privilege to use
groundwater any more than the County grants a homeowner the right to live in his or her
home when collecting the property tax." This analogy is inapt. A pump fee is more like
the entrance fee to a state or local park, which is not a tax (see Cal. Const., art. XIII C,
§ 1, subd. (e)(4); id. art. XIII A, § 3, subd. (b)(4)). Although citizens generally have the
right to enter such public land, the government is entitled to charge them a fee for its
efforts to maintain the land so that it can be enjoyed by all who use it. (See Pub.
Resources Code, § 5010.) Without the District's resource management operations,
groundwater would be depleted far faster and overdraft in the District would be far more
severe. The District's conservation efforts thus constitute a specific benefit that accrues
directly to those who use groundwater. Consequently, the pump fees are not taxes if, as
the trial court found, they do not exceed the District's reasonable costs of groundwater
management.

                                              25
                                              B.
               The Pump Fees Do Not Exceed the District's Reasonable Costs
                "A regulatory fee does not become a tax simply because the fee may be
disproportionate to the service rendered to individual payors. [Citation.] The question of
proportionality is not measured on an individual basis. Rather, it is measured
collectively, considering all rate payors. [Citation.] [¶] Thus, permissible fees must be
related to the overall cost of the governmental regulation. They need not be finely
calibrated to the precise benefit each individual fee payor might derive. What a fee
cannot do is exceed the reasonable cost of regulation with the generated surplus used for
general revenue collection. An excessive fee that is used to generate general revenue
becomes a tax." (California Farm Bureau Federation v. State Water Resources Control
Bd., supra, 51 Cal.4th at p. 438; accord § 75596 [providing that groundwater charges
"shall not produce funds for district purposes that would exceed such amount as is
deemed necessary by the district board to be used in furtherance of district purposes in
the replenishment, augmentation, and the protection of water supplies for users within the
district"].)
               The trial court found that "the basins within the [District's] boundaries are
[hydrogeologically] interconnected in complex and incompletely explained ways." We
agree. The record contains substantial evidentiary support for this finding.
               The City does not dispute that the actions of one pumper in the District
affects every other pumper to some degree; rather, it criticizes the District for "impos[ing]
District-wide rates that assume an equal degree of service to pumpers throughout its
basins and three times the service to [municipal and industrial users] as to agriculture."
Yet, by imposing fees based upon the volume of water extracted, the District largely does
charge individual pumpers in proportion to the benefit they receive from the District's
conservation activities. The District ensures water availability District-wide. Large-scale
users such as the City receive a far greater benefit from individual landowners who pump
water for personal consumption. That is more than is required. The District need only
ensure that its charges in the aggregate do not exceed its regulatory costs.

                                              26
              The City specifically challenges three expenditures allocated to the District-
wide Zone A charges: the cost to treat and deliver surface water to overdrafted coastal
areas; the cost of purchasing water from the State for delivery to water customers; and the
"recreation activities subfund," which the City asserts includes the cost of potable water
delivery to the concessionaire at Lake Piru. The City contends these costs are unrelated
to groundwater augmentation and management.
              Contrary to the City's assertion, the recreation activities subfund is actually
supported by revenue from the concessionaire at Lake Piru and the ad valorem property
taxes collected by the District. Likewise, the District pays for its State water allocation
primarily from an annual voter-approved property assessment.
              More generally, the City is incorrect that the District's costs associated with
the acquisition, treatment, transport, and delivery of State and surface water are unrelated
to its groundwater management goals. The District sells water to customers who use the
delivered water in lieu of water pumped from the ground, particularly in coastal areas
where the problem of seawater intrusion is most acute. Although the City's wells are not
located in these critical areas, it pumps the majority of its water from wells in the Oxnard
Plain basin, which contributes to the problem by removing water that would otherwise
flow to the critical areas near the coast. In any event, providing pumpers with a substitute
to groundwater use eases the overall burden on the resource in the District.
              On independent review we conclude that the District's pump fees do not
exceed the reasonable cost of regulating the District's groundwater supply. Accordingly,
these regulatory fees are not taxes and are not subject to approval by the voters.
                                             V.
                                   San Marcos Litigation
              We agree with the trial court that, insofar as the San Marcos legislation
applies, the District complied with it. The San Marcos legislation requires that when a
public agency provides a "public utility service" to another public agency, the service fee
cannot "exceed the reasonable cost of providing the public utility service." (Gov. Code,
§ 54999.7, subd. (a).) As we have explained, the District does not provide a "service" to

                                             27
groundwater pumpers, many if not most of whom are not "public agencies," and its fees
are not excessive in light of its reasonable costs.
                                       DISPOSITION
              The judgment is reversed insofar as it granted mandamus and declaratory
relief to the City. The matter is remanded to the superior court with directions to vacate
its writs of mandate in case numbers VENCI 00401714 and VENCI 1414739. The
judgment is affirmed in all other respects. The District shall recover its costs on appeal.
              CERTIFIED FOR PUBLICATION.




                                            PERREN, J.


We concur:



              GILBERT, P. J.



              YEGAN, J.




                                              28
                               Thomas P. Anderle, Judge

                        Superior Court County of Santa Barbara

                         ______________________________



      Ariel Pierre Calonne, former City Attorney, Keith Bauerle, Assistant City
Attorney; Colantuono & Levin; Colantuono, Highsmith & Whatley, Michael G.
Colantuono, David J. Ruderman, Michael R. Cobden, for Appellant City of San
Buenaventura.

      Musick, Peeler & Garrett, Anthony H. Trembley, Gregory J. Patterson, Cheryl A.
Orr, for Appellants United Water Conservation District and Board of Directors of United
Water Conservation District.

      Nancy N. McDonough and Christian C. Scheuring for California Farm Bureau
Federation as Amicus Curiae on behalf of Appellant United Water Conservation District.




                                          29
