Well owner takes on water district in small claims court

Steve Coney sued the Santa Clara Valley Water District stating

A San Martin well owner’s pursuit to prove the Santa Clara
Valley Water District illegally collected almost $500 million in
groundwater charges will likely be stalled until a ruling in a
higher court is handed down.
A San Martin well owner’s pursuit to prove the Santa Clara Valley Water District illegally collected almost $500 million in groundwater charges will likely be stalled until a ruling in a higher court is handed down.

The amount in question is $2,700, Steve Coney’s groundwater bill from 2008-2009 plus 1 percent interest – just a drop in the bucket in the Santa Clara Valley Water District’s $350 million annual budget.

His bill is part of the $500 million the water district has collected since the first year Proposition 218, a state constitutional amendment that requires voter approval to increase utility taxes, went into effect in 1996.

The $2,700 bill isn’t exactly going to make or break Coney, either. His 5.5 acres on Renaissance Court is a good-sized piece of land highlighted by spans of grass, surrounded by several gardens, about 450 trees, a basketball court and two homes.

“There’s no question I use a lot of water. The question is can they charge us? Not without a vote or a protest procedure, which they haven’t done until now,” Coney said from his back porch last week.

Coney and the water district will find out Thursday if the pending claim against Coney will be continued until after a ruling on the appeal in the Great Oaks Water Co. case. The private San Jose water retail agency sued the water district for $4.8 million for its pump tax bill from 2005-2006, claiming they violated Proposition 218, which requires either majority approval among affected property owners, or two-thirds approval from the electorate for any proposed tax or property related fee.

Great Oaks won the suit in trial court, and the water district immediately appealed. The judge in small claims court must listen to a higher court’s ruling, which according to Coney could set a wide-reaching precedent for the 4,000 well owners in South County.

Coney has since counter-sued SCVWD for $6,700, the total of his payments for the past eight years plus 1 percent interest, an identical formula used by the water district.

“This is a $10,000 suit now. The water district will never admit they’re wrong. They’re using that $500 million (they collected) to fight us … it’s the money we paid them to fight against us,” Coney said, who retired from Intel after several bypass surgeries left him on disability. “We can’t be intimidated by them.”

On July 29, the water district sent a letter to the court and Coney claiming the small claims court lacks jurisdiction over Coney’s case, since he is challenging the legality of the charge, and because the Great Oaks case is “unresolved” the small claims court should wait until the appeal process has ended. Superior Court Commissioner Gregory Saldivar decided to keep the hearing set for Thursday, but said the case will be continued “pending the outcome of Great Oaks.”

“I can’t guarantee it will control the outcome in (Coney’s case) at all,” Great Oaks attorney Tim Guster said about the Great Oaks lawsuit, “but what it will probably do is confirm that the charges are unlawful,” he said. Great Oaks has subsequent lawsuits for every year after 2006 filed against the SCVWD that are frozen until an outcome in the appellate court.

“We’re confident we will prevail on appeal and that the decision will result in a refund of groundwater charges that we paid,” Guster said. He said a decision isn’t likely until 2011.

Groundwater rates are measured in acre feet. One acre foot is enough water for a family of five for a year. Around 2004, the water district placed a meter on Coney’s property because they believed he wasn’t properly estimating how much water he was using, about nine acre feet a year.

“The things that he’s alleging, many of the issues are different. He hasn’t complied with the necessary statues to put him in the same category as Great Oaks,” Emily Cote said, who is a water district attorney and is also representing the district in the Great Oaks case. “It should have no bearing on the decision. The (Great Oaks) case is on the appeal and should have no precedential appeal from a legal standpoint,” she said.

In 1998, groundwater rates were $108 per acre foot, since then they have increased $167 to $275 per acre foot for municipal and industrial use. The agricultural rate in South County is $16.50 per acre foot. For the third year in a row, the water district has maintained those rates, though projections show next year they will increase slightly.

Coney said he will pay his groundwater bill this year, since the water district actually complied with Prop 218 when it issued a protest procedure in April and won.

While the way in which the protest procedure was done by the water district was criticized heavily by well owners, 433 legitimate protest letters were submitted. A simple majority vote of 3,644 well owners in South County was needed to eliminate the bi-annual fee. Well owners said in April they were not given enough time to respond and the announcement of the protest was buried on the fourth page of a letter that some well owners said they threw away because it appeared to be SCVWD junk mail.

According to the water district, it would have lost almost $14 million if the protest was successful. That funding is regulated to replenish the groundwater basin, water recycling, water conservation and environmental projects.

For now, Coney is the only active well owner with a claim against the water district for violating Proposition 218. He has become the face to what some disgruntled well owners have said anecdotally, but have not taken legitimate action. As the David to South County’s well owners, he says he won’t back down from Goliath.

“The little guy’s got a big mouth,” Coney said, who has no law background. “We don’t have to take this anymore. They think we’re just little people living in the country. I believe it in my heart that this is the right thing. I believe they’re doing wrong.”

An update from Coney’s hearing can be read online Thursday afternoon.

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