June 4, 2013
Tim Dewar, email@example.com
The battle between Casitas Municipal Water District (CMWD) and Golden State Water Company (GSWC) over who will serve 2,900 households in the future, will soon be in the hands of Ventura County Superior Court judge Mark S. Borrell.
The filing of GSWC’s reply brief Monday and the May 29 filing of CMWD’s memorandum of points and authorities in opposition, provides a clear idea of the questions Borrell will decide when the lawsuit is heard beginning Monday at 8:20 a.m. in Courtroom 43.
Filed March 29, the suit asks the court to rule that the three resolutions required to form CMWD Community Facilities District No 2013-1 and hold the election be declared invalid; that the community facilities district (CFD) be dissolved; that the court issue a permanent injunction to CMWD prohibiting it from holding the proposed bond election or from incurring bond indebtedness of any kind to fund a CFD and that CMWD pay GSWC’s costs for the lawsuit.
In trying to convince Borrell why the court should allow the Aug. 27 special election, CMWD contends that the four arguments GSWC makes for halting the election are without merit.
The four arguments include that the CFD contemplates acquiring GSWC’s Ojai service area by eminent domain but the Mello-Roos Act, which authorizes agencies such as CMWD to levy taxes for funding certain types of public service projects, does not authorize CFD funds to be used for condemnation.
It also states that both the resolution of intention to form the CFD and the CFD report failed to adequately describe GSWC’s facilities to be acquired and their estimated cost and that the CFD resolutions authorize CMWD to finance incidental costs of the condemnation of GSWC’s property and to pay for “intangible” property rights with CFD proceeds and the Mello-Roos Act does not allow CFD proceeds to be used in that way either.
In its latest filing, GSWC attorneys distilled its position further. “What provision of the Mello-Roos Act confers on a Community Facilities District (“CFD”) the power to finance a taking of property by eminent domain?” GSWC attorneys wrote in the reply brief “Given that Casitas MWD’s formal ‘List of Authorized Facilities’ says the CFD will finance acquisition of ‘intangible property and property rights’ and all potential damage awards in the eminent domain case, how can the scheme be deemed to comply with §53313.5 of the Mello-Roos Act, which restricts a CFD to financing the purchase of “real or other tangible property?”
IN CMWD’s brief in opposition, attorney Steve Oderman wrote, “With respect to GSW’s claims that CFD financing cannot be used to pay for eminent domain costs, including normal incidental costs such as appraisal and attorney fees, there is not a shred of evidence the California Legislature intended the Mello-Roos Act to be so interpreted. In short,” he added, “GSW’s assertion that the Legislature balked at including eminent domain powers in the Mello-Roos Act is pure poppycock and the legal authorities cited at pp. 15-16 of GSW’s Opening Brief have no applicability here. CMWD has researched every page of the legislative history of the original Mello-Roos Act adopted in 1982 and no fewer than 12 amendments to the Mello-Roos Act adopted in 1983, 1984, 1985, 1986, 1987, 1988, 1990, 1991 (two separate bills), 1992, 1993, and 2007 that address the eligible purposes and costs that can be financed by a CFD — some 9,766 pages of legislative history — and defies GSW to point to a single statement, a single word, a single concern raised by any legislator, any member of any of the legislative staffs, any organization or individual commenting on any of the bills, anyone at all, over a period of more than 30 years that the Legislature is now or ever was concerned with CFDs being used to fund condemnation actions.”
As for GSWC’s assertion that Casitas intends to use the Mello-Roos money to pay for “intangibles” including water rights Golden State claims to hold, Oderman again disagreed.
“GSW has failed to establish that it has any water rights or that it will suffer a loss of business goodwill; it has failed to establish that any such rights are compensable over and above the value of its other property rights; under a long line of California case law, water rights are considered to be part of the real estate and not a separate “intangible;” and even if water rights and/or loss of business goodwill are “intangible” property rights CMWD has the authority to treat them as an eligible “costs” or “incidental expenses” of the acquisition,” according to the answer.
GSWC attorney George Soneff, in the reply brief, wrote, “For the financing scheme to be validated, it must be shown that the ‘facilities’ which Casitas has formally resolved to finance through the issuance bonds and imposition of special taxes are, in fact, facilities that are financeable under the Mello-Roos Act. That showing has not been made.”
Monday’s hearing, scheduled for Courtroom 43 of the Ventura County Government Center, will be open to the public.