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1 PATRICK Q. SULLIVAN (#179922) Exempt from filing fee pursuant to
City Attorney Government Code § 6103
2 TATIA Y. STRADER (#198735)
Assistant City Attorney ELECTRONICALLY
3 3031 Torrance Blvd.
Torrance, CA 90503-5059 F I L E D
Superior Court of California,
4 Telephone: (310) 618-5810 County of San Francisco
Fax: (310) 618-5813
04/07/2021
5 Clerk of the Court
BY: BOWMAN LIU
Attorneys for Real Party in Interest and Defendant Deputy Clerk
6
CITY OF TORRANCE
7
8
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 FOR THE COUNTY OF SAN FRANCISCO
11 SAN DIEGO COUNTY WATER AUTHORITY, Case No.: CPF-14-514004
12 Petitioner and Plaintiff, Assigned for all purposes to the
Hon. Anne-Christine Massullo, Dept. 304
13 vs.
CITY OF TORRANCE’S ANSWER TO
14 SAN DIEGO COUNTY WATER
THE METROPOLITAN WATER DISTRICT AUTHORITY’S FIRST AMENDED
15 OF SOUTHERN CALIFORNIA, ALL PETITION FOR WRIT OF MANDATE
PERSONS INTERESTED IN THE AND COMPLAINT
16 VALIDITY OF THE RATES ADOPTED BY
THE METROPOLITAN WATER DISTRICT
17 OF SOUTHERN CALIFORNIA ON APRIL 8,
2014 TO BE EFFECTIVE JANUARY 1, 2015
18 AND JANUARY 1, 2016; and DOES 1-10,
19 Respondents and Defendants.
20
21 Pursuant to Code of Civil Procedure1 § 860, et seq., Real Party In Interest, City of
22 Torrance (“Torrance”), hereby answers the first, second, third, and fifth causes of action2 in
23 Petitioner and Plaintiff San Diego County Water Authority’s (“San Diego”) unverified First
24 Amended Petition for Writ of Mandate and Complaint For Determination of Invalidity, Damages
25 and Declaratory Relief (“FAC”), as follows:
26
1
27 All Code references are to the California Code unless otherwise noted.
2
Torrance does not answer the fourth cause of action for breach of contract against Metropolitan
28 Water District of Southern California and therefore is not a party to the claims made with respect
to that cause of action, including to the extent they appear in the causes of action answered here.
Torrance's 2014 Answer.DOC 1
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 GENERAL DENIAL
2 Pursuant to Code of Civil Procedure section 431.30(d), Torrance generally denies each
3 and every allegation in the FAC, and further denies that San Diego is entitled to any of the relief
4 prayed for in the FAC.
5 GENERAL ALLEGATIONS IN SUPPORT OF GENERAL DENIAL AND
6 AFFIRMATIVE DEFENSES
7 Metropolitan, a Collective of Public Member Agencies
8 1. Respondent and Defendant Metropolitan Water District of Southern California
9 (“Metropolitan”) is a public agency and a regional wholesale water provider. It exists and
10 operates as a collective of its member agencies, which themselves are public agencies, and it is
11 governed by a Board of Directors composed of representatives from each member agency. Today,
12 Metropolitan has 26 member agencies, including San Diego.
13 2. Each member agency has proportional representation on the Board of Directors,
14 and is entitled to at least one seat on the Board, plus an additional seat for every full 3% of the
15 total assessed value of the property within the member agency’s service area that is taxable for
16 district purposes. Currently, the Board is made up of 38 directors: 23 of the agencies have no
17 more than two directors, two agencies – San Diego and Municipal Water District of Orange
18 County – each have four, and City of Los Angeles Department of Water and Power has five. Each
19 director is guaranteed one vote, which may be weighted more heavily depending on the property
20 valuation in his or her agency’s service area. San Diego controls approximately 18% of the
21 Board’s vote.
22 3. Torrance, like San Diego, is a Metropolitan member agency.
23 Metropolitan’s Rates
24 4. Torrance, like San Diego, participated in the public Board of Directors’ meetings,
25 hearings, and workshops leading up to the Board’s adoption of the rate components challenged by
26 San Diego.
27 5. In order to provide its wholesale water service to its member agencies,
28 Metropolitan imports water from the Colorado River via the Colorado River Aqueduct and from
Torrance's 2014 Answer.DOC 2
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 the State Water Project (“SWP”), which is operated by the California Department of Water
2 Resources (“DWR”). The water is delivered to member agencies through an extensive
3 interconnected regional network of canals, pipelines, and appurtenant facilities, as well as supply,
4 treatment, and storage facilities. The extensive statewide integrated conveyance and distribution
5 system is the result of collective investment by the cooperative since Metropolitan’s formation in
6 1928. To pay for its activities, Metropolitan presently collects ad valorem property taxes from
7 real property within its service area and water rates and charges that Metropolitan’s Board of
8 Directors, comprised solely of member agency representatives, sets for services Metropolitan
9 provides to those member agencies.
10 6. Metropolitan has provided two services to its member agencies for which it has
11 charged established rates: (1) full service water service in which Metropolitan supplies and
12 transports water; and (2) short-term “wheeling” service, in which Metropolitan transports water
13 supplied by others. The rate for full service water includes supply and transportation rate
14 components.
15 7. San Diego in part challenges the pre-set rate for wheeling service applicable to
16 Metropolitan’s wheeling service to its member agencies on wheeling transactions for a duration
17 of one year or less (“pre-set wheeling rate”). The pre-set wheeling rate was set by Metropolitan’s
18 Board over two decades ago and was addressed in Metropolitan Water Dist. of So. Cal. v.
19 Imperial Irrigation Dist., et al. (“Imperial”), 80 Cal. App. 4th 1403, 1407 (2000) and San Diego
20 County Water Authority v. Metropolitan Water Dist. of So. Cal. (“SDCWA”), 12 Cal. App. 5th
21 1124, 1135 (2017).
22 8. In January 1997, Metropolitan’s Board of Directors first voted to adopt the pre-set
23 wheeling rate, effective January 15, 1997. “Wheeling” generally refers to use of a public agency’s
24 facilities to convey water that is not owned by the agency, if there is unused capacity, in exchange
25 for fair compensation. Water Code §§ 1810 et seq. (the “Wheeling Statutes”) (applying to use of
26 up to 70 percent of the facility’s unused capacity); SDCWA, 12 Cal. App. 5th at 1135; Imperial,
27 80 Cal. App. 4th at 1407. Metropolitan’s pre-set wheeling rate for short-term wheeling to member
28 agencies avoided the need for negotiations with its own members over the price it would charge
Torrance's 2014 Answer.DOC 3
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 for these short-term transactions, other than any applicable offsetting benefits credit that may
2 apply to a particular transaction and certain other matters. Imperial, 80 Cal. App. 4th at 1407,
3 1434.
4 9. In 1997, Metropolitan’s Board of Directors adopted Resolution 8520, following
5 consultation and collaboration with its member agencies. Resolution 8520 supported the new
6 wheeling service for member agencies and the pre-set wheeling rate and it also included findings
7 that ensured compliance with the Wheeling Statutes. See SDCWA, 12 Cal. App. 5th at 1135. The
8 definition of short-term wheeling service for member agencies was added to Metropolitan
9 Administrative Code Section 4119 and the pre-set wheeling rate for that service was added to
10 Section 4405.
11 10. Among other things, Resolution 8520 established the specific short-term service,
12 the basis for the pre-set wheeling rate for that service, and also accounted for “offsetting
13 benefits.” The Wheeling Statutes provide that wheeling service cannot be denied by the owner of
14 a conveyance system if “fair compensation” is offered, and subject to a list of specified
15 conditions. Water Code, § 1810. “Fair compensation” is defined as including the costs incurred
16 by the owner, minus a credit for “offsetting benefits” if the wheeling transaction provides benefits
17 to the owner for use of the conveyance system. Water Code, § 1811, subd. (c). Resolution 8520
18 accounted for “offsetting benefits” of the defined short-term wheeling transactions with its
19 member agencies by providing that Metropolitan shall determine whether any such offsetting
20 benefits exist on “a case-by-case basis in response to a particular wheeling transaction.”
21 Resolution 8520, Section 10; Imperial, 80 Cal. App. 4th at 1420.
22 11. In 2000, the California Court of Appeal held that Metropolitan may have a pre-set
23 wheeling rate, including the methodology of pre-setting a rate and leaving the determination of
24 offsetting benefits, if any, on a case-by-case basis based on a particular transaction. The Court of
25 Appeal held that the Wheeling Statutes did not as a matter of law prevent Metropolitan from
26 having a fixed, pre-set rate for a particular type of short-term wheeling transactions with its
27 member agencies, rather than setting a price based on each transaction. Imperial, 80 Cal. App. 4th
28 at 1407-08. The Court noted that under Resolution 8520, “Metropolitan will provide offsetting
Torrance's 2014 Answer.DOC 4
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 benefits on a case-by-case basis.” Id. at 1420. The Court explained that Metropolitan’s pre-set
2 wheeling rate “simplifies the factors to be considered in setting the rate for a particular
3 transaction. The Metropolitan Water District need only modify the fixed rate as applied to a
4 proposed wheeling transaction after considering any necessitated power costs, treatment costs,
5 replacement costs, or offsetting benefits.” Id. at 1434 (emphasis added).
6 12. Twenty years after that appellate decision, San Diego now alleges this
7 methodology approved by the Court of Appeal violates the same Wheeling Statutes reviewed by
8 that Court. San Diego alleges Metropolitan failed to credit offsetting benefits when it set its pre-
9 set wheeling rate on April 15, 2014. For the same reasons the pre-set wheeling rate did not violate
10 the Wheeling Statutes in 1997, there is no violation of the Wheeling Statutes in 2014: the
11 supporting Resolution provides for offsetting benefits if applicable in a given transaction.
12 Additionally, no member agency including San Diego presented any request to Metropolitan for
13 wheeling service subject to the pre-set wheeling rate challenged by San Diego in the years in
14 question in this lawsuit. Therefore, Metropolitan could not have refused to apply a credit for
15 offsetting benefits to any transaction subject to the pre-set wheeling rate.
16 13. San Diego also challenges a different aspect of Metropolitan’s pre-set wheeling
17 rate, as well as the transportation rate components of the full service rate. San Diego alleges the
18 Water Stewardship Rate, a component of the pre-set wheeling rate and also a transportation-
19 related component of the full service rate, should be allocated solely to Metropolitan’s supply
20 function and not to any function that is recovered through Metropolitan’s transportation-related
21 rate components. The Water Stewardship Rate recovers costs that Metropolitan uses to fund
22 demand management programs to develop and conserve local water supplies in member agencies’
23 service areas. The demand management programs help increase water supply reliability, reduce
24 imported water demands, decrease the burden on Metropolitan’s infrastructure, reduce system
25 costs, and free up conveyance capacity.
26 14. In addition, the demand management programs help Metropolitan meet its unique
27 legislative mandate under Senate Bill 60, codified in Metropolitan Water District Act § 130.5, to
28 “expand water conservation, water recycling, and groundwater recovery efforts,” and “place
Torrance's 2014 Answer.DOC 5
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 increased emphasis on sustainable, environmentally sound, and cost-effective water conservation,
2 recycling, and groundwater storage and replenishment measures,” with annual reports on its
3 progress to the Legislature. SB 60 further directed, as codified in Metropolitan Water District Act
4 § 130.7, that Metropolitan participate, in cooperation with its member agencies and others, in
5 considering groundwater recharge and replenishment and other programs utilizing the resource
6 potential of Southern California rivers, including storm water runoff. Metropolitan’s annual
7 progress reports to the Legislature document the amount of water developed and conserved
8 through its demand management programs.
9 15. Overall, Metropolitan’s demand management programs provide benefits to all
10 member agencies regardless of the location of the local resource development project or the
11 conservation measure. In helping to increase water supply reliability, the demand management
12 programs do not create or conserve Metropolitan’s water supply. The water developed and
13 conserved through the demand management programs instead is at the local level, within
14 Metropolitan’s member agencies’ service area. The financial impact of this for Metropolitan, and
15 thus for its member agencies, is the reduction in conveyance system costs that would have
16 otherwise been charged to member agencies under Metropolitan’s transportation-related rate
17 components. By managing demand on Metropolitan, the demand management programs reduce
18 the need to import water from the Colorado River and the Bay Delta into Metropolitan’s service
19 area. As a result, Metropolitan reduces the costs it would have to spend to expand, operate,
20 maintain, replace, and refurbish its entire system if demands on Metropolitan were higher. By
21 reducing the need to import water into the service area, Metropolitan also frees up conveyance
22 capacity within its system, making that capacity available for other transactions.
23 16. In the late 1990s, Metropolitan began a revision of its overall water rates and
24 charges, again in consultation and cooperation with San Diego and Metropolitan’s other member
25 agencies. On October 16, 2001, Metropolitan’s Board of Directors, representing each member
26 agency, voted to adopt a revised rate structure to be effective January 1, 2003. Among other
27 things, this rate structure unbundled water rates and charges to reflect the different functions
28 within the services provided by Metropolitan and more transparently allocated costs to those
Torrance's 2014 Answer.DOC 6
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 functions. Among the unbundled rates in the new structure were: (1) a “System Access Rate”
2 charged on every acre-foot of water conveyed through Metropolitan’s conveyance system,
3 whether the water is purchased from Metropolitan or is non-Metropolitan water; (2) a “Water
4 Stewardship Rate,” also charged on every acre-foot of water conveyed through Metropolitan’s
5 conveyance system and used to fund conservation and other demand management programs; and
6 (3) a “System Power Rate,” which recovers the costs of moving Metropolitan’s water along its
7 system and also reflects the benefits Metropolitan receives when it produces energy as a result of
8 moving water along its system. The Board assigned two of these new rate components – the
9 System Access Rate and the Water Stewardship Rate – to the pre-set wheeling rate. The Board
10 also included in the pre-set wheeling rate a treatment surcharge (for treated water), actual power
11 costs unless the wheeling party provided its own power, and an administrative fee.
12 17. The conservation and local supply development programs funded by the Water
13 Stewardship Rate provide conveyance services and benefits to all member agencies, and the
14 Water Stewardship Rate applicable to all member agencies is properly treated as a conveyance
15 charge. The conveyance benefits afforded by demand management programs include preserved
16 conveyance capacity and reduced capital and operational expenditures on additional new
17 conveyance capacity. As stated, the programs do not create a supply resource for Metropolitan to
18 serve to its member agencies or to use in any way, but rather develop and conserve water at the
19 local level, and the costs that are reduced are conveyance costs that would otherwise be charged
20 in transportation rates that all member agencies pay. Therefore, the costs are not treated as supply
21 charges.
22 18. By 2001, when Metropolitan adopted its unbundled rate structure and allocated the
23 Water Stewardship Rate as a conveyance charge, it followed the reasoning of experts in the area
24 of demand management and the United States Environmental Protection Agency (“EPA”).
25 During that time and in the years since, experts and the EPA all published reports concluding that
26 investments in demand management programs resulted in decreasing water agencies’ need to
27 spend greater amounts of money in additional infrastructure, operations, and maintenance that
28 would have been necessary if demands would not have been reduced.
Torrance's 2014 Answer.DOC 7
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 19. Additionally, Metropolitan analyzed the effect investments in demand
2 management would have specifically for Metropolitan. In 1996, Metropolitan performed analyses
3 in connection with its long-term regional planning, which forecast that investments in demand
4 management programs would avoid specific conveyance infrastructure projects that would be
5 needed to meet anticipated increased demands. Metropolitan’s 1996 Integrated Resource Plan
6 (“IRP”) included an analysis of future demand scenarios and their effect on infrastructure
7 requirements over the next 25 years. A comparison of capital infrastructure costs with and
8 without demand management programs showed a difference of around $2 billion through 2020.
9 In other words, the ability to meet demand through demand management programs resulted in
10 what was back in 1996 an anticipated $2 billion savings in capital costs. A sensitivity analysis in
11 1996 further showed that a 5% increase or decrease in demand had a correlative effect on when
12 Metropolitan would need to incur capital infrastructure costs.
13 20. The Metropolitan Board’s decision to recover the Water Stewardship Rate
14 component as a conveyance charge was therefore informed and supported by the extensive
15 independent expert reports, government studies, and Metropolitan’s own analysis of the specific
16 projects it would avoid by investing in demand management instead of expanding conveyance-
17 related infrastructure.
18 21. As stated, revenues from the Water Stewardship Rate element of Metropolitan’s
19 rate structure are used by Metropolitan to support water conservation and local resource
20 development programs. The programs provide incentives for development by member agencies or
21 their customers of new water resources – such as through recycling, seawater desalination, and
22 groundwater recovery projects – and water conservation, at the local level within Metropolitan’s
23 service area, thereby reducing the need for Metropolitan to import water into the area. All
24 member agencies benefit from the water developed and conserved through these programs, by
25 reducing the need to invest in the development of and maintain additional and larger, more
26 expensive water delivery infrastructure, as well as free up capacity in Metropolitan’s system.
27 22. Metropolitan implements the local water development programs by entering into
28 long-term contracts with a Metropolitan member agency, or a Metropolitan member agency and
Torrance's 2014 Answer.DOC 8
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 that agency’s own member agency (and also sometimes other parties) that provides financial
2 incentives for the Metropolitan member agency or its own member agency to create their own
3 locally produced water supply, based on program criteria. Metropolitan also funds programs to
4 reduce water use through conservation by providing incentives directly to consumers, such as
5 conservation device rebates and turf removal incentives; funding to member agencies to
6 implement their own conservation programs; and education and community outreach.
7 23. These local resource development and water conservation programs are an
8 important component of Metropolitan’s IRP, which is Metropolitan’s long-term planning
9 mechanism to ensure that the decreased demand on Metropolitan enhances its ability to provide
10 its services to the Southern California region for the long-term future. Since 1996, the IRP has
11 been updated three times, in 2004, 2010, and 2015, each reaffirming demand management
12 remains an important part of Metropolitan’s long-term planning.
13 24. Metropolitan’s demand management funding is significant. From 1998 to 2018,
14 Metropolitan spent nearly $1.3 billion on this funding. San Diego and its service area have always
15 been one of the highest recipients of demand management funding from Metropolitan, applying
16 for substantial sums that Metropolitan has provided. From 1998 to 2018, San Diego received
17 nearly $205 million in demand management funding from Metropolitan. In comparison to the
18 other 25 member agencies, San Diego was the third highest recipient of demand management
19 funding overall; the third highest recipient of local resource development funding; and the second
20 highest recipient of conservation funding. San Diego is slated to become the highest recipient of
21 funding based on new local resource project funding commitments Metropolitan has made. For
22 example, in 2019, Metropolitan’s Board approved two local resource project agreements with San
23 Diego and two of San Diego’s member agencies for Pure Water recycling projects, with
24 committed funding by Metropolitan of up to $328 million.
25 25. Metropolitan conducted a look-back analysis in 2016 and again in 2018 to assess
26 the conveyance system cost savings through demand management that were forecast in 1996 at
27 the beginning of the 25-year IRP capital planning period. As stated, that forecast had estimated
28 that demand management programs could save Metropolitan (meaning its member agencies)
Torrance's 2014 Answer.DOC 9
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 approximately $2 billion in deferred and avoided capital infrastructure costs. The 2016 and 2018
2 look-back analyses found the demand management programs had in fact saved Metropolitan (its
3 member agencies) significant sums in deferred and avoided capital infrastructure costs, and even
4 more than had been forecast: approximately $3 billion.
5 26. The 25-year capital planning period of the IRP concluded in 2020. Accordingly, a
6 new phase began in 2021 in regard to the relationship between demand management,
7 Metropolitan’s future capital planning, and Metropolitan’s cost structure. Consequently, in April
8 2018, the Metropolitan Board directed a study of the most appropriate method for the allocation
9 and recovery of demand management costs going forward after 2020.
10 27. As part of this forward-looking demand management study, in a first phase, Peter
11 Mayer, P.E., Principal of Water Demand Management, LLC (“WaterDM”) conducted an analysis
12 to determine the most appropriate method for assigning demand management costs to
13 Metropolitan’s system functions. In August 2019, Mr. Mayer issued a Report on Functional
14 Assignment of Metropolitan’s Demand Management Costs. Mr. Mayer found that Metropolitan’s
15 demand management occurs at the local level and decreases the burden on Metropolitan’s
16 infrastructure, reduces system costs, and frees up conveyance capacity to the benefit of all system
17 users. Mr. Mayer further found that Metropolitan’s approach for recovering demand management
18 costs is widely accepted in the water industry and has been proven effective. In light of the
19 completion of the 25-year capital planning period and changed circumstances going forward, Mr.
20 Mayer recommended a methodology for updating Metropolitan’s functional assignment of
21 demand management program costs after 2020.
22 28. In a second phase, Richard Giardina, Senior Vice President of Raftelis, conducted
23 an analysis to incorporate the phase one recommendations into the cost-of-service process and
24 develop demand management cost recovery mechanisms, whether through Metropolitan’s
25 existing rate and charge structure or alternative cost recovery mechanisms. Mr. Giardina issued a
26 Demand Management Cost Recovery Alternatives Report in December 2019, in which he
27 concluded that four proposed alternatives, some of which involved the allocation of costs to the
28 conveyance function in Metropolitan’s rates, were each reasonable and consistent with industry
Torrance's 2014 Answer.DOC 10
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 guidelines and standards. Mr. Giardina advised that it was a policy decision of the Metropolitan
2 Board to determine which alternative is most appropriate for Metropolitan to adopt.
3 29. In December 2019, the Metropolitan Board considered the proposed alternatives
4 for a future demand management cost recovery mechanism, and decided to continue the study
5 through a rate refinement workgroup of staff representatives of the member agencies.
6 Consequently, the Board voted in April 2020 to suspend use of the Water Stewardship Rate in
7 2021 and 2022 during the workgroup’s efforts, and to fund demand management in these years
8 with reserve funds from the Water Stewardship Fund. The member agency rate refinement
9 workgroup study, which includes San Diego, continues to date, along with Metropolitan’s work
10 on its most recent IRP update.
11 30. By the time it adopts rates in April 2022 for 2023 and 2024, the Metropolitan
12 Board is expected to consider the most appropriate cost recovery mechanism for demand
13 management costs for the future. The Water Stewardship Reserve fund, relied upon for demand
14 management funding commitments in 2021 and 2022, is not sufficient to maintain indefinite
15 funding of demand management costs, particularly with the new commitments for local resource
16 projects Metropolitan has entered into with San Diego.
17 31. In SDCWA, 12 Cal. App. 5th 1124, the Court of Appeal in part considered the
18 sufficiency of the record for the years 2011 to 2014 to support Metropolitan’s inclusion of the
19 Water Stewardship Rate in the pre-set wheeling rate. Based on the record before it, the Court held
20 the pre-set wheeling rate was valid, except to the extent this included the Water Stewardship Rate
21 component. The Court found the record for 2011 to 2014 lacked substantial evidence to support
22 including the Water Stewardship Rate in those years. SDCWA, 12 Cal. App. 5th at 1130, 1149,
23 1150-51. The Court of Appeal’s decision did not address Metropolitan’s inclusion of the Water
24 Stewardship Rate in the pre-set wheeling rate in subsequent years, including the years at issue in
25 the present case, based on a different record with additional support for allocating demand
26 management costs to transportation rather than supply.
27 32. San Diego not only seeks invalidation of the Water Stewardship Rate’s inclusion
28 in the pre-set wheeling rate, but also seeks a writ of mandate prospectively commanding
Torrance's 2014 Answer.DOC 11
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 Metropolitan on the manner of setting the pre-set wheeling rate and demand management cost
2 recovery in the future.
3 33. However, in August 18, 2020, the Metropolitan Board of Directors repealed the
4 pre-set wheeling rate and Resolution 8520. By that time, no transactions governed by the pre-set
5 wheeling rate had occurred in over 10 years. Since the Board’s action in August 2020, the price
6 for all wheeling by member agencies, regardless of duration, will be set based on each
7 transaction, as is the case for third-party wheeling transactions and wheeling to member agencies
8 for more than one year. And, as stated, the Metropolitan Board has suspended use of the Water
9 Stewardship Rate pending its forward-looking demand management cost recovery study.
10 34. San Diego also alleges in its fifth cause of action that Metropolitan’s rates and
11 charges for the services it provides to its member agencies are subject to the requirements of the
12 constitutional provisions added by the passage of Proposition 26 in 2010. However, those
13 requirements apply to exactments that are “imposed” on ratepayers. For multiple reasons,
14 Metropolitan’s rates and charges are not imposed on San Diego or its other member agency
15 ratepayers. Metropolitan is a voluntary cooperative of its member agencies, and is governed by a
16 Board of Directors comprised only of the representatives of its members. Metropolitan has only
17 26 customers – its 26 member agencies – and those customers through the representative Board
18 set the rates and charges that are applicable to themselves and no others. Consequently, the rates
19 and charges are voluntarily set by the customers, including San Diego, which comprise a
20 voluntary cooperative. Metropolitan’s rates and charges are also not imposed because San Diego
21 is not required to utilize Metropolitan’s system. The Court of Appeal has not yet decided the issue
22 of whether Metropolitan’s rates and charges are imposed and, therefore, whether Proposition 26
23 applies to Metropolitan’s rates and charges. SDCWA, 12 Cal. App. 5th at 1152-53 (noting
24 Metropolitan’s position that Proposition 26 is inapplicable because its rates are not imposed;
25 declining to decide that issue by holding “whether or not ‘imposed’” the System Access Rate and
26 System Power Rate comply with constitutional requirements). In any event, Metropolitan’s rates
27 and charges are collected for a service and do not exceed the reasonable costs of providing the
28 service and/or are fees for the use of Metropolitan’s services. The manner in which the rates and
Torrance's 2014 Answer.DOC 12
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 charges are allocated to a member agency bears a fair or reasonable relationship to the member
2 agency’s burdens on, or benefits received from, Metropolitan.
3
4 SPECIFIC AFFIRMATIVE DEFENSES
5 Torrance asserts the following affirmative defenses to the claims for relief made against it
6 in the FAC without admitting it has the burden of proof on any of the issues raised below:
7 First Affirmative Defense
8 (Failure to Name Real Parties in Interest)
9 Torrance incorporates by reference the General Allegations stated above.
10 San Diego fails to name the 25 other Metropolitan member agencies, whose interests are
11 directly at issue in this litigation and in whose absence complete relief cannot be accorded
12 among San Diego and Metropolitan, pursuant to Code of Civil Procedure § 389(a).
13 Second Affirmative Defense
14 (Failure to State Facts Sufficient to Constitute a Cause of Action)
15 Torrance incorporates by reference the General Allegations stated above.
16 San Diego fails to state facts in its FAC sufficient to constitute a cause of action on which
17 relief can be granted. Among other grounds, San Diego fails to state a violation of Proposition 26,
18 i.e., Article XIII C, § 1, subdivision (e) of the California Constitution (adopted by Proposition
19 26), Government Code § 50076, Government Code § 54999.7(a), Government Code § 66013,
20 Water Code §§ 1810 et seq., the Metropolitan Water District Act, or the common law, and/or
21 these laws are not applicable to the facts alleged in the FAC. Moreover, San Diego fails to allege
22 it engaged in any transaction with Metropolitan that is subject to the pre-set wheeling rate it
23 challenges in the first through third causes of action, which was previously set by the
24 Metropolitan Board of Directors pursuant to former Metropolitan Administrative Code Sections
25 4119 and 4405.
26 Third Affirmative Defense
27 (Statute of Limitations)
28 Torrance incorporates by reference the General Allegations stated above.
Torrance's 2014 Answer.DOC 13
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 San Diego’s claims are barred in whole or in part by the applicable statutes of limitations,
2 including but not limited to, Code of Civil Procedure §§ 337, 338(a) and 343, Government Code
3 §§ 945.4, 945.6, and 945.8.
4 Fourth Affirmative Defense
5 (California Government Claims Act)
6 Torrance incorporates by reference the General Allegations stated above.
7 Those portions of San Diego’s claims for relief that may implicate the California
8 Government Claims Act, are barred in whole or in part because San Diego failed to comply with
9 all provisions of the Government Claims Act, including but not limited to Government Code §§
10 901, 905, 905.2, 910 et seq., 911.2, 911.3, 911.4, 935, 945.4, and 946.6, and the Metropolitan
11 Water District of Southern California Administrative Code §§ 9300-9310, including by failing to
12 timely file a claim, and failed to timely file a court action relieving it from its failure to timely
13 present a claim, as required by Government Code §§ 945.4 and 945.6, and the Metropolitan
14 Administrative Code. Among other reasons, San Diego did not reference “offsetting benefits”
15 anywhere in its written communications to Metropolitan (attached to the FAC). San Diego
16 does not allege it made any such request to Metropolitan, as a claim or otherwise. The
17 monetary relief sought in the FAC is barred by the claim presentation requirements in
18 Government Code §§ 900 et seq.
19 Fifth Affirmative Defense
20 (Laches)
21 Torrance incorporates by reference the General Allegations stated above.
22 San Diego’s claims are barred by the doctrine of laches.
23 Sixth Affirmative Defense
24 (Exercise of Administrative Discretion)
25 Torrance incorporates by reference the General Allegations stated above.
26 Metropolitan has no ministerial duty to structure its rates in the manner alleged by San
27 Diego. Rather, the legal directives under which Metropolitan operates broadly leave the design of
28
Torrance's 2014 Answer.DOC 14
CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED
PETITION FOR WRIT OF MANDATE AND COMPLAINT
1 water rates to Metropolitan’s sound discretion and the majority vote of Metropolitan’s Board of
2 Directors.
3 The applicable legal standards for Metropolitan’s rates are reasonableness, resulting in
4 revenue which will pay the costs of the district, and uniform for like classes of service.
5 Metropolitan’s principal act, the Metropolitan Water District Act, states that Metropolitan “shall
6 fix the rate or rates at which water shall be sold” (Cal. Water Code § 109-133), and that those
7 rates shall recover sufficient revenue, together with o
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PEOPLE CENTER, INC. D/B/A RIPPLING, A DELAWARE VS. ASURE PAYROLL TAX MANAGEMENT LLC, A DELAWARE LLC ET AL
Jul 11, 2024 |
CGC24615613
Matter on the Law & Motion calendar for Thursday, July 11, 2024, Line 15. PLAINTIFF PEOPLE CENTER, INC. D/B/A RIPPLING's Motion For Preliminary Injunction. Plaintiff People Center, Inc. d/b/a Rippling's motion for a preliminary injunction is denied. (The Court's complete tentative ruling has been emailed to the parties.) For the 1:30 p.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. Counsel for the prevailing party is required to prepare a proposed order which repeats verbatim the substantive portion of the tentative ruling and must email it to contestdept302tr@sftc.org prior to the hearing even if the tentative ruling is not contested. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RBU)
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A & A GENERAL BUILDING CONSTRUCTION INC., A VS. ARLENE S. TASIM ET AL
Jul 12, 2024 |
CGC23609755
Matter on the Law & Motion calendar for Friday, July 12, 2024, Line 12. DEFENDANT ARLENE TASIM AND ALI TASIM'S Motion For Sanctions Against A A General Building Construction Inc. Pursuant To Code Of Civil Procedure Section 1281.99. Defendants and Cross-Complainants' unopposed Motion for Sanctions in the amount of $8350.00 is granted (CCP section 1281.99), payment to be made within 30 days of the filing of this order. Friday's Law & Motion Calendar will be called out of Dept. 301. Anyone intending to appear in person should report to Dept. 301. However, anyone intending to appear remotely should use the regular Zoom information for Dept. 302's Law & Motion Calendar for 9:30 a.m. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. Counsel for the prevailing party is required to prepare a proposed order which repeats verbatim the substantive portion of the tentative ruling and must email it to contestdept302tr@sftc.org prior to the hearing even if the tentative ruling is not contested. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RCE)
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YOLANDA JONES ET AL VS. GENERAL MOTORS, LLC ET AL
Jul 10, 2024 |
CGC23609805
Matter on the Law & Motion calendar for Wednesday, July 10, 2024, Line 10. 2 - DEFENDANT GENERAL MOTORS, LLC's MOTION TO STRIKE 1ST Amended COMPLAINT. Off calendar. The Quezada declaration fails to show that the parties met and conferred "in person, by telephone, or by video conference" in compliance with CCP 435.5. The parties are ordered to comply with the code. The response to the complaint is now due August 7, 2024. For the 9:30 a.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RBU)
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EDWARD WESTERMAN VS. FTI CONSULTING, INC. ET AL
Jul 09, 2024 |
CGC24615152
Matter on the Law & Motion Calendar for Tuesday, July 9, 2024, Line 12. PLAINTIFF EDWARD WESTERMAN's Motion To Seal. Plaintiff's unopposed motion to seal is granted. For the 9:30 a.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. Counsel for the prevailing party is required to prepare a proposed order which repeats verbatim the substantive portion of the tentative ruling and must email it to contestdept302tr@sftc.org prior to the hearing even if the tentative ruling is not contested. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RBU)
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CLEAR HOMES LLC, A NEW MEXICO LIMITED LIABILITY VS. BRENDAN MICHAEL WEE ET AL
Jul 11, 2024 |
CGC23607972
Real Property/Housing Court Law and Motion Calendar for July 11, 2024 line 2. DEFENDANT BRENDAN WEE, ERIKA HILTON MOTION FOR JUDGMENT ON THE PLEADINGS is Off Calendar - Per request of moving party. =(501/HEK) Parties may appear in-person, telephonically or via Zoom (Video - Webinar ID: 160 560 5023; Password: 172849; or Phone Dial in: (669) 254-5252; Webinar ID: 160 560 5023; Password: 172849). Parties who intend to appear at the hearing must give notice to opposing parties and the court promptly, but no later than 4:00 p.m. the court day before the hearing unless the tentative ruling has specified that a hearing is required. Notice of contesting a tentative ruling shall be provided by sending an email to the court to Department501ContestTR@sftc.org with a copy to all other parties stating, without argument, the portion(s) of the tentative ruling that the party contests. A party may not argue at the hearing if the opposing party is not so notified and the opposing party does not appear.
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ELIANE DOS SANTOS VITAL, AN INDIVIDUAL ET AL VS. AMERICAN HONDA MOTOR CO., INC., A CALIFORNIA ET AL
Jul 12, 2024 |
CGC22601133
Matter on the Discovery Calendar for Friday, Jul-12-2024, Line 2, PLAINTIFFS ELIANE DOS SANTOS VITAL, AN INDIVIDUAL, and WIDES VITAL DA SILVA'S, AN INDIVIDUAL, Motion To Compel Further Responses To Plaintiffs Request For Production Of Documents, Set Two. Pro Tem Judge William Lynn, a member of the California State Bar who meets all the requirements set forth in CRC 2.812 to serve as a temporary judge, has been assigned to hear this motion. Prior to the hearing all parties to the motion will be asked to sign a stipulation agreeing that the motion may be heard by the Pro Tem Judge. If all parties to the motion sign the stipulation, the hearing will proceed before the Judge Pro Tem who will decide the motion with the same authority as a Superior Court Judge. If a party appears by telephone, the stipulation may be signed via fax or consent to sign given by email. If not all parties to the motion sign the stipulation, the Pro Tem Judge will hold a hearing on the motion and, based on the papers submitted by the parties and the hearing, issue a report in the nature of a recommendation to the Dept. 302 Judge, who will then decide the motion. If a party does not appear at the hearing, the party will be deemed to have stipulated that the motion will be decided by the Pro Tem Judge with the same authority as a Superior Court Judge. The Pro Tem Judge has issued the following tentative ruling: Parties to appear if the motion remains unresolved. For the 9:00 a.m. Discovery calendar, all attorneys and parties are required to appear remotely. Hearings will be conducted by videoconference using Zoom. To appear at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link (DISCOVERY, DEPARTMENT 302 DAILY AT 9:00 A.M.), or dial the corresponding number and use the meeting ID, and password for Discovery Department 302. Any party who contests a tentative ruling must send an email to williamclynn@gmail.com with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. If the tentative ruling is not contested, the parties are deemed to have stipulated to the Pro Tem hearing the motion and the Pro Tem will sign an order confirming the tentative ruling. The prevailing party is required to prepare a proposed order repeating verbatim the substantive portion of the tentative ruling and must e-mail it to the Judge Pro Tem. The court no longer provides a court reporter in the Discovery Department. Parties may retain their own reporter, who may appear remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/JPT)
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Y.P. VS. WELLS FARGO & COMPANY, ET AL
Jul 10, 2024 |
CGC24613065
Matter on the Law & Motion calendar for Wednesday, July 10, 2024, Line 12. DEFENDANT EARL IGNACIO AND WELLS FARGO BANK, N.A.'s Motion To Compel Arbitration. Defendants Wells Fargo Bank, N.A. and Earl Ignacio's motion to compel arbitration and stay is denied. (The Court's complete tentative ruling has been emailed to the parties.) For the 9:30 a.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. Counsel for the prevailing party is required to prepare a proposed order which repeats verbatim the substantive portion of the tentative ruling and must email it to contestdept302tr@sftc.org prior to the hearing even if the tentative ruling is not contested. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RBU)
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MARY ELIZABETH LEMASTERS VS. SCHOENBERG FAMILY LAW GROUP P.C. ET AL
Jul 09, 2024 |
CGC22600572
Matter on the Law & Motion Calendar for Tuesday, July 9, 2024, Line 4. PLAINTIFF MARY LEMASTERS' MOTION FOR WITHDRAWAL OF ATTORNEY OF RECORD. Hearing required. For the 9:30 a.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RBU)
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JOHN P BERNARD VS. BMW OF NORTH AMERICA, LLC ET AL
Jul 10, 2024 |
CGC23608339
Matter on the Law & Motion calendar for Wednesday, July 10, 2024, Line 8. PLAINTIFF JOHN BERNARD's Motion For Award Of Attorneys Fees, Costs, And Expenses. Off calendar for noncompliance with Local Rule 2.7(B) (courtesy copies). The motion may be re-set for a Mon.-Thurs. after July 24, with papers to bear new hearing date. In meantime, counsel shall meet and confer to resolve their differences. For the 9:30 a.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RBU)
Preview
1 PATRICK Q. SULLIVAN (#179922) Exempt from filing fee pursuant to City Attorney Government Code § 6103 2 TATIA Y. STRADER (#198735) Assistant City Attorney ELECTRONICALLY 3 3031 Torrance Blvd. Torrance, CA 90503-5059 F I L E D Superior Court of California, 4 Telephone: (310) 618-5810 County of San Francisco Fax: (310) 618-5813 04/07/2021 5 Clerk of the Court BY: BOWMAN LIU Attorneys for Real Party in Interest and Defendant Deputy Clerk 6 CITY OF TORRANCE 7 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 FOR THE COUNTY OF SAN FRANCISCO 11 SAN DIEGO COUNTY WATER AUTHORITY, Case No.: CPF-14-514004 12 Petitioner and Plaintiff, Assigned for all purposes to the Hon. Anne-Christine Massullo, Dept. 304 13 vs. CITY OF TORRANCE’S ANSWER TO 14 SAN DIEGO COUNTY WATER THE METROPOLITAN WATER DISTRICT AUTHORITY’S FIRST AMENDED 15 OF SOUTHERN CALIFORNIA, ALL PETITION FOR WRIT OF MANDATE PERSONS INTERESTED IN THE AND COMPLAINT 16 VALIDITY OF THE RATES ADOPTED BY THE METROPOLITAN WATER DISTRICT 17 OF SOUTHERN CALIFORNIA ON APRIL 8, 2014 TO BE EFFECTIVE JANUARY 1, 2015 18 AND JANUARY 1, 2016; and DOES 1-10, 19 Respondents and Defendants. 20 21 Pursuant to Code of Civil Procedure1 § 860, et seq., Real Party In Interest, City of 22 Torrance (“Torrance”), hereby answers the first, second, third, and fifth causes of action2 in 23 Petitioner and Plaintiff San Diego County Water Authority’s (“San Diego”) unverified First 24 Amended Petition for Writ of Mandate and Complaint For Determination of Invalidity, Damages 25 and Declaratory Relief (“FAC”), as follows: 26 1 27 All Code references are to the California Code unless otherwise noted. 2 Torrance does not answer the fourth cause of action for breach of contract against Metropolitan 28 Water District of Southern California and therefore is not a party to the claims made with respect to that cause of action, including to the extent they appear in the causes of action answered here. Torrance's 2014 Answer.DOC 1 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 GENERAL DENIAL 2 Pursuant to Code of Civil Procedure section 431.30(d), Torrance generally denies each 3 and every allegation in the FAC, and further denies that San Diego is entitled to any of the relief 4 prayed for in the FAC. 5 GENERAL ALLEGATIONS IN SUPPORT OF GENERAL DENIAL AND 6 AFFIRMATIVE DEFENSES 7 Metropolitan, a Collective of Public Member Agencies 8 1. Respondent and Defendant Metropolitan Water District of Southern California 9 (“Metropolitan”) is a public agency and a regional wholesale water provider. It exists and 10 operates as a collective of its member agencies, which themselves are public agencies, and it is 11 governed by a Board of Directors composed of representatives from each member agency. Today, 12 Metropolitan has 26 member agencies, including San Diego. 13 2. Each member agency has proportional representation on the Board of Directors, 14 and is entitled to at least one seat on the Board, plus an additional seat for every full 3% of the 15 total assessed value of the property within the member agency’s service area that is taxable for 16 district purposes. Currently, the Board is made up of 38 directors: 23 of the agencies have no 17 more than two directors, two agencies – San Diego and Municipal Water District of Orange 18 County – each have four, and City of Los Angeles Department of Water and Power has five. Each 19 director is guaranteed one vote, which may be weighted more heavily depending on the property 20 valuation in his or her agency’s service area. San Diego controls approximately 18% of the 21 Board’s vote. 22 3. Torrance, like San Diego, is a Metropolitan member agency. 23 Metropolitan’s Rates 24 4. Torrance, like San Diego, participated in the public Board of Directors’ meetings, 25 hearings, and workshops leading up to the Board’s adoption of the rate components challenged by 26 San Diego. 27 5. In order to provide its wholesale water service to its member agencies, 28 Metropolitan imports water from the Colorado River via the Colorado River Aqueduct and from Torrance's 2014 Answer.DOC 2 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 the State Water Project (“SWP”), which is operated by the California Department of Water 2 Resources (“DWR”). The water is delivered to member agencies through an extensive 3 interconnected regional network of canals, pipelines, and appurtenant facilities, as well as supply, 4 treatment, and storage facilities. The extensive statewide integrated conveyance and distribution 5 system is the result of collective investment by the cooperative since Metropolitan’s formation in 6 1928. To pay for its activities, Metropolitan presently collects ad valorem property taxes from 7 real property within its service area and water rates and charges that Metropolitan’s Board of 8 Directors, comprised solely of member agency representatives, sets for services Metropolitan 9 provides to those member agencies. 10 6. Metropolitan has provided two services to its member agencies for which it has 11 charged established rates: (1) full service water service in which Metropolitan supplies and 12 transports water; and (2) short-term “wheeling” service, in which Metropolitan transports water 13 supplied by others. The rate for full service water includes supply and transportation rate 14 components. 15 7. San Diego in part challenges the pre-set rate for wheeling service applicable to 16 Metropolitan’s wheeling service to its member agencies on wheeling transactions for a duration 17 of one year or less (“pre-set wheeling rate”). The pre-set wheeling rate was set by Metropolitan’s 18 Board over two decades ago and was addressed in Metropolitan Water Dist. of So. Cal. v. 19 Imperial Irrigation Dist., et al. (“Imperial”), 80 Cal. App. 4th 1403, 1407 (2000) and San Diego 20 County Water Authority v. Metropolitan Water Dist. of So. Cal. (“SDCWA”), 12 Cal. App. 5th 21 1124, 1135 (2017). 22 8. In January 1997, Metropolitan’s Board of Directors first voted to adopt the pre-set 23 wheeling rate, effective January 15, 1997. “Wheeling” generally refers to use of a public agency’s 24 facilities to convey water that is not owned by the agency, if there is unused capacity, in exchange 25 for fair compensation. Water Code §§ 1810 et seq. (the “Wheeling Statutes”) (applying to use of 26 up to 70 percent of the facility’s unused capacity); SDCWA, 12 Cal. App. 5th at 1135; Imperial, 27 80 Cal. App. 4th at 1407. Metropolitan’s pre-set wheeling rate for short-term wheeling to member 28 agencies avoided the need for negotiations with its own members over the price it would charge Torrance's 2014 Answer.DOC 3 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 for these short-term transactions, other than any applicable offsetting benefits credit that may 2 apply to a particular transaction and certain other matters. Imperial, 80 Cal. App. 4th at 1407, 3 1434. 4 9. In 1997, Metropolitan’s Board of Directors adopted Resolution 8520, following 5 consultation and collaboration with its member agencies. Resolution 8520 supported the new 6 wheeling service for member agencies and the pre-set wheeling rate and it also included findings 7 that ensured compliance with the Wheeling Statutes. See SDCWA, 12 Cal. App. 5th at 1135. The 8 definition of short-term wheeling service for member agencies was added to Metropolitan 9 Administrative Code Section 4119 and the pre-set wheeling rate for that service was added to 10 Section 4405. 11 10. Among other things, Resolution 8520 established the specific short-term service, 12 the basis for the pre-set wheeling rate for that service, and also accounted for “offsetting 13 benefits.” The Wheeling Statutes provide that wheeling service cannot be denied by the owner of 14 a conveyance system if “fair compensation” is offered, and subject to a list of specified 15 conditions. Water Code, § 1810. “Fair compensation” is defined as including the costs incurred 16 by the owner, minus a credit for “offsetting benefits” if the wheeling transaction provides benefits 17 to the owner for use of the conveyance system. Water Code, § 1811, subd. (c). Resolution 8520 18 accounted for “offsetting benefits” of the defined short-term wheeling transactions with its 19 member agencies by providing that Metropolitan shall determine whether any such offsetting 20 benefits exist on “a case-by-case basis in response to a particular wheeling transaction.” 21 Resolution 8520, Section 10; Imperial, 80 Cal. App. 4th at 1420. 22 11. In 2000, the California Court of Appeal held that Metropolitan may have a pre-set 23 wheeling rate, including the methodology of pre-setting a rate and leaving the determination of 24 offsetting benefits, if any, on a case-by-case basis based on a particular transaction. The Court of 25 Appeal held that the Wheeling Statutes did not as a matter of law prevent Metropolitan from 26 having a fixed, pre-set rate for a particular type of short-term wheeling transactions with its 27 member agencies, rather than setting a price based on each transaction. Imperial, 80 Cal. App. 4th 28 at 1407-08. The Court noted that under Resolution 8520, “Metropolitan will provide offsetting Torrance's 2014 Answer.DOC 4 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 benefits on a case-by-case basis.” Id. at 1420. The Court explained that Metropolitan’s pre-set 2 wheeling rate “simplifies the factors to be considered in setting the rate for a particular 3 transaction. The Metropolitan Water District need only modify the fixed rate as applied to a 4 proposed wheeling transaction after considering any necessitated power costs, treatment costs, 5 replacement costs, or offsetting benefits.” Id. at 1434 (emphasis added). 6 12. Twenty years after that appellate decision, San Diego now alleges this 7 methodology approved by the Court of Appeal violates the same Wheeling Statutes reviewed by 8 that Court. San Diego alleges Metropolitan failed to credit offsetting benefits when it set its pre- 9 set wheeling rate on April 15, 2014. For the same reasons the pre-set wheeling rate did not violate 10 the Wheeling Statutes in 1997, there is no violation of the Wheeling Statutes in 2014: the 11 supporting Resolution provides for offsetting benefits if applicable in a given transaction. 12 Additionally, no member agency including San Diego presented any request to Metropolitan for 13 wheeling service subject to the pre-set wheeling rate challenged by San Diego in the years in 14 question in this lawsuit. Therefore, Metropolitan could not have refused to apply a credit for 15 offsetting benefits to any transaction subject to the pre-set wheeling rate. 16 13. San Diego also challenges a different aspect of Metropolitan’s pre-set wheeling 17 rate, as well as the transportation rate components of the full service rate. San Diego alleges the 18 Water Stewardship Rate, a component of the pre-set wheeling rate and also a transportation- 19 related component of the full service rate, should be allocated solely to Metropolitan’s supply 20 function and not to any function that is recovered through Metropolitan’s transportation-related 21 rate components. The Water Stewardship Rate recovers costs that Metropolitan uses to fund 22 demand management programs to develop and conserve local water supplies in member agencies’ 23 service areas. The demand management programs help increase water supply reliability, reduce 24 imported water demands, decrease the burden on Metropolitan’s infrastructure, reduce system 25 costs, and free up conveyance capacity. 26 14. In addition, the demand management programs help Metropolitan meet its unique 27 legislative mandate under Senate Bill 60, codified in Metropolitan Water District Act § 130.5, to 28 “expand water conservation, water recycling, and groundwater recovery efforts,” and “place Torrance's 2014 Answer.DOC 5 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 increased emphasis on sustainable, environmentally sound, and cost-effective water conservation, 2 recycling, and groundwater storage and replenishment measures,” with annual reports on its 3 progress to the Legislature. SB 60 further directed, as codified in Metropolitan Water District Act 4 § 130.7, that Metropolitan participate, in cooperation with its member agencies and others, in 5 considering groundwater recharge and replenishment and other programs utilizing the resource 6 potential of Southern California rivers, including storm water runoff. Metropolitan’s annual 7 progress reports to the Legislature document the amount of water developed and conserved 8 through its demand management programs. 9 15. Overall, Metropolitan’s demand management programs provide benefits to all 10 member agencies regardless of the location of the local resource development project or the 11 conservation measure. In helping to increase water supply reliability, the demand management 12 programs do not create or conserve Metropolitan’s water supply. The water developed and 13 conserved through the demand management programs instead is at the local level, within 14 Metropolitan’s member agencies’ service area. The financial impact of this for Metropolitan, and 15 thus for its member agencies, is the reduction in conveyance system costs that would have 16 otherwise been charged to member agencies under Metropolitan’s transportation-related rate 17 components. By managing demand on Metropolitan, the demand management programs reduce 18 the need to import water from the Colorado River and the Bay Delta into Metropolitan’s service 19 area. As a result, Metropolitan reduces the costs it would have to spend to expand, operate, 20 maintain, replace, and refurbish its entire system if demands on Metropolitan were higher. By 21 reducing the need to import water into the service area, Metropolitan also frees up conveyance 22 capacity within its system, making that capacity available for other transactions. 23 16. In the late 1990s, Metropolitan began a revision of its overall water rates and 24 charges, again in consultation and cooperation with San Diego and Metropolitan’s other member 25 agencies. On October 16, 2001, Metropolitan’s Board of Directors, representing each member 26 agency, voted to adopt a revised rate structure to be effective January 1, 2003. Among other 27 things, this rate structure unbundled water rates and charges to reflect the different functions 28 within the services provided by Metropolitan and more transparently allocated costs to those Torrance's 2014 Answer.DOC 6 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 functions. Among the unbundled rates in the new structure were: (1) a “System Access Rate” 2 charged on every acre-foot of water conveyed through Metropolitan’s conveyance system, 3 whether the water is purchased from Metropolitan or is non-Metropolitan water; (2) a “Water 4 Stewardship Rate,” also charged on every acre-foot of water conveyed through Metropolitan’s 5 conveyance system and used to fund conservation and other demand management programs; and 6 (3) a “System Power Rate,” which recovers the costs of moving Metropolitan’s water along its 7 system and also reflects the benefits Metropolitan receives when it produces energy as a result of 8 moving water along its system. The Board assigned two of these new rate components – the 9 System Access Rate and the Water Stewardship Rate – to the pre-set wheeling rate. The Board 10 also included in the pre-set wheeling rate a treatment surcharge (for treated water), actual power 11 costs unless the wheeling party provided its own power, and an administrative fee. 12 17. The conservation and local supply development programs funded by the Water 13 Stewardship Rate provide conveyance services and benefits to all member agencies, and the 14 Water Stewardship Rate applicable to all member agencies is properly treated as a conveyance 15 charge. The conveyance benefits afforded by demand management programs include preserved 16 conveyance capacity and reduced capital and operational expenditures on additional new 17 conveyance capacity. As stated, the programs do not create a supply resource for Metropolitan to 18 serve to its member agencies or to use in any way, but rather develop and conserve water at the 19 local level, and the costs that are reduced are conveyance costs that would otherwise be charged 20 in transportation rates that all member agencies pay. Therefore, the costs are not treated as supply 21 charges. 22 18. By 2001, when Metropolitan adopted its unbundled rate structure and allocated the 23 Water Stewardship Rate as a conveyance charge, it followed the reasoning of experts in the area 24 of demand management and the United States Environmental Protection Agency (“EPA”). 25 During that time and in the years since, experts and the EPA all published reports concluding that 26 investments in demand management programs resulted in decreasing water agencies’ need to 27 spend greater amounts of money in additional infrastructure, operations, and maintenance that 28 would have been necessary if demands would not have been reduced. Torrance's 2014 Answer.DOC 7 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 19. Additionally, Metropolitan analyzed the effect investments in demand 2 management would have specifically for Metropolitan. In 1996, Metropolitan performed analyses 3 in connection with its long-term regional planning, which forecast that investments in demand 4 management programs would avoid specific conveyance infrastructure projects that would be 5 needed to meet anticipated increased demands. Metropolitan’s 1996 Integrated Resource Plan 6 (“IRP”) included an analysis of future demand scenarios and their effect on infrastructure 7 requirements over the next 25 years. A comparison of capital infrastructure costs with and 8 without demand management programs showed a difference of around $2 billion through 2020. 9 In other words, the ability to meet demand through demand management programs resulted in 10 what was back in 1996 an anticipated $2 billion savings in capital costs. A sensitivity analysis in 11 1996 further showed that a 5% increase or decrease in demand had a correlative effect on when 12 Metropolitan would need to incur capital infrastructure costs. 13 20. The Metropolitan Board’s decision to recover the Water Stewardship Rate 14 component as a conveyance charge was therefore informed and supported by the extensive 15 independent expert reports, government studies, and Metropolitan’s own analysis of the specific 16 projects it would avoid by investing in demand management instead of expanding conveyance- 17 related infrastructure. 18 21. As stated, revenues from the Water Stewardship Rate element of Metropolitan’s 19 rate structure are used by Metropolitan to support water conservation and local resource 20 development programs. The programs provide incentives for development by member agencies or 21 their customers of new water resources – such as through recycling, seawater desalination, and 22 groundwater recovery projects – and water conservation, at the local level within Metropolitan’s 23 service area, thereby reducing the need for Metropolitan to import water into the area. All 24 member agencies benefit from the water developed and conserved through these programs, by 25 reducing the need to invest in the development of and maintain additional and larger, more 26 expensive water delivery infrastructure, as well as free up capacity in Metropolitan’s system. 27 22. Metropolitan implements the local water development programs by entering into 28 long-term contracts with a Metropolitan member agency, or a Metropolitan member agency and Torrance's 2014 Answer.DOC 8 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 that agency’s own member agency (and also sometimes other parties) that provides financial 2 incentives for the Metropolitan member agency or its own member agency to create their own 3 locally produced water supply, based on program criteria. Metropolitan also funds programs to 4 reduce water use through conservation by providing incentives directly to consumers, such as 5 conservation device rebates and turf removal incentives; funding to member agencies to 6 implement their own conservation programs; and education and community outreach. 7 23. These local resource development and water conservation programs are an 8 important component of Metropolitan’s IRP, which is Metropolitan’s long-term planning 9 mechanism to ensure that the decreased demand on Metropolitan enhances its ability to provide 10 its services to the Southern California region for the long-term future. Since 1996, the IRP has 11 been updated three times, in 2004, 2010, and 2015, each reaffirming demand management 12 remains an important part of Metropolitan’s long-term planning. 13 24. Metropolitan’s demand management funding is significant. From 1998 to 2018, 14 Metropolitan spent nearly $1.3 billion on this funding. San Diego and its service area have always 15 been one of the highest recipients of demand management funding from Metropolitan, applying 16 for substantial sums that Metropolitan has provided. From 1998 to 2018, San Diego received 17 nearly $205 million in demand management funding from Metropolitan. In comparison to the 18 other 25 member agencies, San Diego was the third highest recipient of demand management 19 funding overall; the third highest recipient of local resource development funding; and the second 20 highest recipient of conservation funding. San Diego is slated to become the highest recipient of 21 funding based on new local resource project funding commitments Metropolitan has made. For 22 example, in 2019, Metropolitan’s Board approved two local resource project agreements with San 23 Diego and two of San Diego’s member agencies for Pure Water recycling projects, with 24 committed funding by Metropolitan of up to $328 million. 25 25. Metropolitan conducted a look-back analysis in 2016 and again in 2018 to assess 26 the conveyance system cost savings through demand management that were forecast in 1996 at 27 the beginning of the 25-year IRP capital planning period. As stated, that forecast had estimated 28 that demand management programs could save Metropolitan (meaning its member agencies) Torrance's 2014 Answer.DOC 9 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 approximately $2 billion in deferred and avoided capital infrastructure costs. The 2016 and 2018 2 look-back analyses found the demand management programs had in fact saved Metropolitan (its 3 member agencies) significant sums in deferred and avoided capital infrastructure costs, and even 4 more than had been forecast: approximately $3 billion. 5 26. The 25-year capital planning period of the IRP concluded in 2020. Accordingly, a 6 new phase began in 2021 in regard to the relationship between demand management, 7 Metropolitan’s future capital planning, and Metropolitan’s cost structure. Consequently, in April 8 2018, the Metropolitan Board directed a study of the most appropriate method for the allocation 9 and recovery of demand management costs going forward after 2020. 10 27. As part of this forward-looking demand management study, in a first phase, Peter 11 Mayer, P.E., Principal of Water Demand Management, LLC (“WaterDM”) conducted an analysis 12 to determine the most appropriate method for assigning demand management costs to 13 Metropolitan’s system functions. In August 2019, Mr. Mayer issued a Report on Functional 14 Assignment of Metropolitan’s Demand Management Costs. Mr. Mayer found that Metropolitan’s 15 demand management occurs at the local level and decreases the burden on Metropolitan’s 16 infrastructure, reduces system costs, and frees up conveyance capacity to the benefit of all system 17 users. Mr. Mayer further found that Metropolitan’s approach for recovering demand management 18 costs is widely accepted in the water industry and has been proven effective. In light of the 19 completion of the 25-year capital planning period and changed circumstances going forward, Mr. 20 Mayer recommended a methodology for updating Metropolitan’s functional assignment of 21 demand management program costs after 2020. 22 28. In a second phase, Richard Giardina, Senior Vice President of Raftelis, conducted 23 an analysis to incorporate the phase one recommendations into the cost-of-service process and 24 develop demand management cost recovery mechanisms, whether through Metropolitan’s 25 existing rate and charge structure or alternative cost recovery mechanisms. Mr. Giardina issued a 26 Demand Management Cost Recovery Alternatives Report in December 2019, in which he 27 concluded that four proposed alternatives, some of which involved the allocation of costs to the 28 conveyance function in Metropolitan’s rates, were each reasonable and consistent with industry Torrance's 2014 Answer.DOC 10 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 guidelines and standards. Mr. Giardina advised that it was a policy decision of the Metropolitan 2 Board to determine which alternative is most appropriate for Metropolitan to adopt. 3 29. In December 2019, the Metropolitan Board considered the proposed alternatives 4 for a future demand management cost recovery mechanism, and decided to continue the study 5 through a rate refinement workgroup of staff representatives of the member agencies. 6 Consequently, the Board voted in April 2020 to suspend use of the Water Stewardship Rate in 7 2021 and 2022 during the workgroup’s efforts, and to fund demand management in these years 8 with reserve funds from the Water Stewardship Fund. The member agency rate refinement 9 workgroup study, which includes San Diego, continues to date, along with Metropolitan’s work 10 on its most recent IRP update. 11 30. By the time it adopts rates in April 2022 for 2023 and 2024, the Metropolitan 12 Board is expected to consider the most appropriate cost recovery mechanism for demand 13 management costs for the future. The Water Stewardship Reserve fund, relied upon for demand 14 management funding commitments in 2021 and 2022, is not sufficient to maintain indefinite 15 funding of demand management costs, particularly with the new commitments for local resource 16 projects Metropolitan has entered into with San Diego. 17 31. In SDCWA, 12 Cal. App. 5th 1124, the Court of Appeal in part considered the 18 sufficiency of the record for the years 2011 to 2014 to support Metropolitan’s inclusion of the 19 Water Stewardship Rate in the pre-set wheeling rate. Based on the record before it, the Court held 20 the pre-set wheeling rate was valid, except to the extent this included the Water Stewardship Rate 21 component. The Court found the record for 2011 to 2014 lacked substantial evidence to support 22 including the Water Stewardship Rate in those years. SDCWA, 12 Cal. App. 5th at 1130, 1149, 23 1150-51. The Court of Appeal’s decision did not address Metropolitan’s inclusion of the Water 24 Stewardship Rate in the pre-set wheeling rate in subsequent years, including the years at issue in 25 the present case, based on a different record with additional support for allocating demand 26 management costs to transportation rather than supply. 27 32. San Diego not only seeks invalidation of the Water Stewardship Rate’s inclusion 28 in the pre-set wheeling rate, but also seeks a writ of mandate prospectively commanding Torrance's 2014 Answer.DOC 11 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 Metropolitan on the manner of setting the pre-set wheeling rate and demand management cost 2 recovery in the future. 3 33. However, in August 18, 2020, the Metropolitan Board of Directors repealed the 4 pre-set wheeling rate and Resolution 8520. By that time, no transactions governed by the pre-set 5 wheeling rate had occurred in over 10 years. Since the Board’s action in August 2020, the price 6 for all wheeling by member agencies, regardless of duration, will be set based on each 7 transaction, as is the case for third-party wheeling transactions and wheeling to member agencies 8 for more than one year. And, as stated, the Metropolitan Board has suspended use of the Water 9 Stewardship Rate pending its forward-looking demand management cost recovery study. 10 34. San Diego also alleges in its fifth cause of action that Metropolitan’s rates and 11 charges for the services it provides to its member agencies are subject to the requirements of the 12 constitutional provisions added by the passage of Proposition 26 in 2010. However, those 13 requirements apply to exactments that are “imposed” on ratepayers. For multiple reasons, 14 Metropolitan’s rates and charges are not imposed on San Diego or its other member agency 15 ratepayers. Metropolitan is a voluntary cooperative of its member agencies, and is governed by a 16 Board of Directors comprised only of the representatives of its members. Metropolitan has only 17 26 customers – its 26 member agencies – and those customers through the representative Board 18 set the rates and charges that are applicable to themselves and no others. Consequently, the rates 19 and charges are voluntarily set by the customers, including San Diego, which comprise a 20 voluntary cooperative. Metropolitan’s rates and charges are also not imposed because San Diego 21 is not required to utilize Metropolitan’s system. The Court of Appeal has not yet decided the issue 22 of whether Metropolitan’s rates and charges are imposed and, therefore, whether Proposition 26 23 applies to Metropolitan’s rates and charges. SDCWA, 12 Cal. App. 5th at 1152-53 (noting 24 Metropolitan’s position that Proposition 26 is inapplicable because its rates are not imposed; 25 declining to decide that issue by holding “whether or not ‘imposed’” the System Access Rate and 26 System Power Rate comply with constitutional requirements). In any event, Metropolitan’s rates 27 and charges are collected for a service and do not exceed the reasonable costs of providing the 28 service and/or are fees for the use of Metropolitan’s services. The manner in which the rates and Torrance's 2014 Answer.DOC 12 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 charges are allocated to a member agency bears a fair or reasonable relationship to the member 2 agency’s burdens on, or benefits received from, Metropolitan. 3 4 SPECIFIC AFFIRMATIVE DEFENSES 5 Torrance asserts the following affirmative defenses to the claims for relief made against it 6 in the FAC without admitting it has the burden of proof on any of the issues raised below: 7 First Affirmative Defense 8 (Failure to Name Real Parties in Interest) 9 Torrance incorporates by reference the General Allegations stated above. 10 San Diego fails to name the 25 other Metropolitan member agencies, whose interests are 11 directly at issue in this litigation and in whose absence complete relief cannot be accorded 12 among San Diego and Metropolitan, pursuant to Code of Civil Procedure § 389(a). 13 Second Affirmative Defense 14 (Failure to State Facts Sufficient to Constitute a Cause of Action) 15 Torrance incorporates by reference the General Allegations stated above. 16 San Diego fails to state facts in its FAC sufficient to constitute a cause of action on which 17 relief can be granted. Among other grounds, San Diego fails to state a violation of Proposition 26, 18 i.e., Article XIII C, § 1, subdivision (e) of the California Constitution (adopted by Proposition 19 26), Government Code § 50076, Government Code § 54999.7(a), Government Code § 66013, 20 Water Code §§ 1810 et seq., the Metropolitan Water District Act, or the common law, and/or 21 these laws are not applicable to the facts alleged in the FAC. Moreover, San Diego fails to allege 22 it engaged in any transaction with Metropolitan that is subject to the pre-set wheeling rate it 23 challenges in the first through third causes of action, which was previously set by the 24 Metropolitan Board of Directors pursuant to former Metropolitan Administrative Code Sections 25 4119 and 4405. 26 Third Affirmative Defense 27 (Statute of Limitations) 28 Torrance incorporates by reference the General Allegations stated above. Torrance's 2014 Answer.DOC 13 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 San Diego’s claims are barred in whole or in part by the applicable statutes of limitations, 2 including but not limited to, Code of Civil Procedure §§ 337, 338(a) and 343, Government Code 3 §§ 945.4, 945.6, and 945.8. 4 Fourth Affirmative Defense 5 (California Government Claims Act) 6 Torrance incorporates by reference the General Allegations stated above. 7 Those portions of San Diego’s claims for relief that may implicate the California 8 Government Claims Act, are barred in whole or in part because San Diego failed to comply with 9 all provisions of the Government Claims Act, including but not limited to Government Code §§ 10 901, 905, 905.2, 910 et seq., 911.2, 911.3, 911.4, 935, 945.4, and 946.6, and the Metropolitan 11 Water District of Southern California Administrative Code §§ 9300-9310, including by failing to 12 timely file a claim, and failed to timely file a court action relieving it from its failure to timely 13 present a claim, as required by Government Code §§ 945.4 and 945.6, and the Metropolitan 14 Administrative Code. Among other reasons, San Diego did not reference “offsetting benefits” 15 anywhere in its written communications to Metropolitan (attached to the FAC). San Diego 16 does not allege it made any such request to Metropolitan, as a claim or otherwise. The 17 monetary relief sought in the FAC is barred by the claim presentation requirements in 18 Government Code §§ 900 et seq. 19 Fifth Affirmative Defense 20 (Laches) 21 Torrance incorporates by reference the General Allegations stated above. 22 San Diego’s claims are barred by the doctrine of laches. 23 Sixth Affirmative Defense 24 (Exercise of Administrative Discretion) 25 Torrance incorporates by reference the General Allegations stated above. 26 Metropolitan has no ministerial duty to structure its rates in the manner alleged by San 27 Diego. Rather, the legal directives under which Metropolitan operates broadly leave the design of 28 Torrance's 2014 Answer.DOC 14 CITY OF TORRANCE’S ANSWER TO SAN DIEGO COUNTY WATER AUTHORITY’S FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT 1 water rates to Metropolitan’s sound discretion and the majority vote of Metropolitan’s Board of 2 Directors. 3 The applicable legal standards for Metropolitan’s rates are reasonableness, resulting in 4 revenue which will pay the costs of the district, and uniform for like classes of service. 5 Metropolitan’s principal act, the Metropolitan Water District Act, states that Metropolitan “shall 6 fix the rate or rates at which water shall be sold” (Cal. Water Code § 109-133), and that those 7 rates shall recover sufficient revenue, together with o