By Michael Raffety, 4/9/14
For the second time, El Dorado Irrigation Director Greg Prada attacked those on the Small Farm rate, but this time he was joined by Board President Alan Day.
At the March 24 meeting, Prada claimed the Small Farm rate was a violation of Proposition 218.
Proposition 218 says, “…the amount of the fee or charge imposed upon any parcel or person as an incident of property ownership does not exceed the proportional cost of the service attributable to the parcel.”
Meanwhile, Jenny Downey, utility billing supervisor, presented a proposed revision to how persons would qualify for the Small Farm rate.
Instead of the current requirement of having a minimum half acre under cultivation, the proposal would require showing an IRS Schedule F indicating farm income of $1,000 a year.
The Small Farm rate absorbed the Domestic Irrigation rate customers when the Domestic Irrigation rate was eliminated Jan. 1, 2013. Before that shift there were 210 customers on the Small Farm rate. After Domestic Irrigation became an “orphaned rate” because it was closed to new applications, it ceased to meet the proportionality” requirement of Proposition 218.
There were 1,126 Domestic Irrigation customers in 2013 when the rate was eliminated.
By the deadline of January 2013 the Small Farm rate had 381 customers who paid a $100 fee to the El Dorado County Agriculture Department to have their properties inspected and certified as meeting the qualifications for the Small Farm rate.
It was revealed at the March 24 meeting that after the number of accounts in the Small Farm rate grew to 720, as of Jan. 9 new applications “were placed on hold while staff reviewed the criteria.”
Downey said that 60 percent of those on the Small Farm rate were on parcels over 4 acres, though the minimum size to qualify is 1 acre.
“Since 2006 the Small Farm rate has failed to comply with Proposition 218,” Prada said.
“I don’t want to see us implement it as written,” said Board President Alan Day.
Besides the $1,000 income requirement, the proposal would give a person on the Small Farm rate five years for his or her trees to mature and produce a crop.
“The way this is revised the loopholes are so big you can drive a truck through it. Putting in 25 olives trees is not very costly,” Day said.
“Making it a three-year expiration to a five-year expiration … Do you want to support 200 genuine ag people? Move it into the Ag category,” said Day, adding he thought sales should be $10,000, so that EID is not “supporting gentlemen farmers.”
“We’ve got to change these tiers. These tiers are wrong,” Prada said.
“This is being abused. I support ag 100 percent. This is a complex issue. Simple is best. Move it into the Ag class,” said Director Dale Coco. “I would like to see the numbers worked out by our own staff. I support eliminating this class.”
“Eighteen years in the county the overall mantra is ‘keep it rural.’ How do you keep it rural?” asked Director George Osborne. “If we’re not going to keep these (small farmers), you’re going to see these parcels split. There’s going to be more pressure for development. Use your common sense. Why are we here?”
Osborne also suggested that an IRS Form F may not be the only proof of ag sales. Some small farmers may join a co-op and would thus get a partnership K-1 form.
One such person who spoke up was Craig Schmidt, who is forming a co-op for olive growers that will aggregate 800 olive trees for pressing into olive oil.
“Don’t shoot me. We have helped 27 of us plant olive trees. We’re forming a co-op,” Schmidt said. “There is a variety of circumstances. We probably have 100 folks on the list.”
Kirk Taylor, Ph.D, who runs the Irrigation Management System for commercial ag growers, said the Domestic Irrigation rate was developed by the U.S. Bureau of Reclamation to help EID get the Sly Park project approved, which was originally part of the Central Valley Water Project.
“We support the Small Farm rate that is legitimate,” said Valerie Zentner of the local Farm Bureau. “We’re not in favor of defining how to sell.
“You’re wrestling with something that happened a long time ago, said wine grape grower Doug Leisz. “If you don’t allow them to farm, (the property) will break up. Move them to ag. A workshop will flush things out.”
“We have to do something to keep the legitimate farms in business,” said Director Bill George.
“We always intended the customers needed to grow to market,” said Farm Advisor Lynn Wunderlich. “I caution the board to (be sure) the criteria are broadly applied.”
“Five years is for new growers just putting something in the ground,” said El Dorado County Agriculture Commissioner Charlene Carveth, who participated in the proposed change to Small Farm rate requirements.
“Certainly time ag rates and tiered rates must apply to ag. The issue is not whether the Small Farm rate is legitimate or not a legitimate customer. You will have to do a Proposition 218 hearing (to eliminate the rate),” said District Counsel Tom Cumpston. If a majority protest you would not be able to change.”
Out of 720 Small Farm accounts it would only take 361 written protests to prevent the board from eliminating the rate class.
The final paragraph of Proposition 218 states, “… except for fees or charges for sewer, water and refuse collection services, no property related fee or charge shall be imposed or increased unless and until that fee or charge is submitted and approved by a majority vote of the property owners…”
Water rates became part of Proposition 218 as a result of court action.
The 2nd Court of Appeals in a decision published in 2011 regarding the City of Palmdale v Palmdale Water District said, “The City contended that PWD’s rate increase violated Proposition 218’s proportionality requirement by charging irrigation customers a disproportionate share of PWD’s total costs without a showing that PWD’s cost of delivering service to those customers is proportionately higher than PWD’s costs of delivering service to other customers,” as summarized by the Sacramento law firm of Somach Simmons & Dunn.
“In Bighorn-Desert View Water Agency v. Virjil, the California Supreme Court (in 2006) held that: [O]nce a property owner or resident has paid the connection charges and has become a customer of a public water agency, all charges for water delivery incurred thereafter are charges for a property-related service, whether the charge is calculated on the basis of consumption or is imposed as a fixed monthly fee,” according to an analysis by the League of California Cities.