As the saying goes, “Water is the stuff of Life.” Without water the land in Riverside is dry, brown and barren. Much like many of the properties I see in town today. Many of our neighborhoods have 20-60% brown and barren front yards. Why does our city look so dead??
The answer is not so simple nor, what you would think living in Riverside. It all started when California became a state and twenty-some years before John North came to California with the dream of creating a city he called, Riverside. Our earliest State Constitution covered the issue of water by establishing that “the waters of California are to be used for beneficial purposes and must not be wasted” (beneficial uses were later defined as residential, agricultural, recreational, commercial/manufacturing and export in order of priority). Today this remains the Law of the Land. However, in those early days of the State of California conflict over water and the pricing was very high.
The conflict was created and driven by (greedy) land developers who had subdivided large tracts of land into small parcels suitable for family farms and built canals, ditches, flumes, pipes and laterals to transport water to the land thus, increasing its value. The developers owned and built the canals and operated the water delivery systems. They made their money from the sale of improved land and from the sale of water to the land each following year. Typically, the price of water rose dramatically after the land was sold and placed into production by the family farmer. After all, if you can’t afford the price of your water service, someone else will pay to use your water allotment. The trap was, “Water Tight”. This financial squeeze was used to excess and distressed land owners complained bitterly to the state legislators. Riversides’ legislator John Satterwaite was actively proposing new legislation to make more water available at the lowest cost.
In 1862 the state legislature passed a new law that allowed investors/land developers to incorporate private water companies for the purpose of building privately owned canals and other infrastructure for the delivery of water to the land. This would allow more land to be productive and available to the many immigrants from the eastern U.S. Immigration was the basis of California’s early economy. Most immigrants came west to purchase land and operate small farms.
California was booming in population growth and land development (large tracts turned into small farms). Everyone needed that which we have least of – fresh water. Water, if you had it, made you wealthy, but abusing the economic power of water was intolerable to the populace. So the new law of 1862 granted the newly incorporated private water companies the (reserved for government) power of Eminent Domain. So for the first time a private corporation could exercise the power of government to eminent domain private property for the layout and construction of the canal and related water transport infrastructure. It was a necessary evil in the time of much argument over the uses of water and the economics of monopolistic holders of land and water rights. It also placed certain public responsibilities upon the water company(s) to serve the public the water they needed without price discrimination (everyone pays the same flat fee).
John North and the other founding fathers of Riverside incorporated the Southern California Colony Assn. in 1870 under the law of 1862. The incorporation documents state the reason for incorporation was to construct canals and other water transportation systems to their land holdings (now Riverside) in order to make profits from the sale of the land, the water to be provided to the land at cost forever. So this is why the Riverside Canal was built from the abundant water source in San Bernardino flowing to Riverside. The original canal remains substantially intact today and can be seen flowing through many neighborhoods that lie along the route of the 91 Freeway through Riverside into Home Gardens and Corona.
The original Riverside canal completed in 1871, conveyed water to Highgrove and the land holdings of the Southern California Colony Association (SCCA). Later in 1875, the SCCA became known as the Riverside Land & Irr. Co., with the southern boundary being Jurupa Ave. By 1875 extensions of the canal below the southern boundary of the SCCA were approved by the directors of the Riverside Land and Irr. Co. and construction eventually extended water delivery service to the Arlington tract and the La Sierra tract. The board of directors realized that the abundant water supply allowed them to profit from the sale of their abundant water supply by extending the canal into land holdings south of their SCCA (Riverside) land holdings. NOTE: In the 1870’s the highest technology for delivering water in the West was by canal. The land owner depended entirely upon this supply for residential and agricultural use with most families owning small farms and subsisting on the fruits of their labor and the availability of water to the land.
1875, One of several lawsuits over water service in Riverside was filed by A.O. Price against the Riverside Land & Irrigation Co (parent to the SCCA). This case was elevated to the California Supreme Court who issued the decision in November of 1880. (Cal. Sup., Price v. Riverside Land & Irr. Co., 1880.) It remains a published case and “Good Law” today and can be found on the California State Supreme Court website. This case allowed the court to write “new law” known as the Legal Doctrine of water rights appurtenant to the land.
Summarizing the major issues in the decision:
- The Riverside Land & Irrig. Co.(now in 1880 the Riverside Canal Co.) and its successor owners (including a municipality) is bound by the decision. The city of Riverside is the current owner/operator of the Riverside Canal Co and is also bound to follow the 1880 decision in perpetuity.
- The water is supplied to the land (by the original land sales contract) and is fixed to it in perpetuity and, the water transfers with the land through succession of ownership. This also defines one class of water customer with the highest priority of right to water now served by the Riverside Water Utility.
- The same amount of water as supplied each year by the canal co./city is to be made available each year as an allotment to the parcel. “The water (allotment) goes with the land in perpetuity”. “No act of man can separate the water from the land.” “The water stays with the land”. Non-use of the water does not void the lands’ right to the annual water allotment from the city water utility.
- The canal co. shares issued with the original sale of land represents, “only the capital investment of the land purchaser in the water rights and infrastructure of the water delivery system to your parcel”. If the shares are sold the water allotment remains fixed to the land forever. The entitlement to water service need not be recorded upon the title and is not held in the water co. shares.
- The price of the water service shall not exceed the average annual cost to the water company of maintaining and operating the water delivery infrastructure whether by canal, ditch, flume or pipe. This is a flat rate per acre foot of water and every land owner pays the same price for the water service (no exceptions or exemptions for government agencies or “Special Customers”). The service provided is the transportation of water to the land. This means that all contract sales at lower than residential rates for water service to parcels within the City of Riverside are null and void. They violate the Supreme Court order that pre-dates these contracts. Wholesale purchasers of water must be entirely outside the city water distribution system and distribute water to their land customers. The current city definition of wholesale water customer is invalidated by the 1880 court order.
- The canal co./city cannot profit from the sale of the water to the land served by the canal co./city (concept of retail sale). The owner operator cannot make a profit on the investment in the water infrastructure (the capital investment having been paid at the time of land purchase). This means you can’t transfer water funds to the city General Fund. The court specifically ordered that purchases of the land from the canal co. also paid the capital investment in the infrastructure. Land purchased from others required a charge for ownership/shares in the canal co. Future capital replacement or improvement to the infrastructure to be paid by bonding the land served with water from the canal. The city cannot include capital cost of infrastructure in the water rate and must sell municipal bonds or seek approval of parcel assessments.
- Excess water production may be sold to wholesaler/transporters of water outside of the flow of the water system without establishing a right to future water supply (concept of wholesale sales). Wholesale customers by definition of the Supreme Court cannot be located within the City Water Utility service area.
- Each parcel of land is entitled to its’ water supply by priority of customer class. The class being determined by the Supreme Court in Price v. Riverside Land & Irr. Co. The higher classes being defined mostly by the date of sale by the SCCA or the date water was first supplied to the parcel by the water company/city (if the land was purchased from other than the SCCA.) The higher the class of customer the higher level of protection of the water entitlement during period of drought or other shortage of water supply. The owner/operator/city water utility may declare a water emergency and ignore the priority of water right to the land and redistribute available water equally to the land in order to protect the public health & safety without adding new customers during the emergency period. This holds true today statewide via the state water code.
- The canal co./city can take no action forcing the land owner to use less than the annual allotment to the parcel or to accept a lesser quality of water without declaring an emergency. This means no arbitrary price increases, punitive tiered pricing, conservation measures or fees, or any other means of causing a lesser demand/usage of water upon the customers.
- The cost of water service will be determined annually at the end of the budget year from the accounting of only annual operation and maintenance records of the canal co./city utility.
- The canal co./city does not have a right to earn a profit from the capital investment in the water infrastructure. The capital cost of which was paid by the land owners when the Riverside Land & Irr. Co. first profited from the sale of land with the promise of water delivery in perpetuity (a lawful contract to serve the land in perpetuity). Subsequent capital expenditures for infrastructure replacement and improvement are to be funded by the land owners bonding their land. (This prohibits the city from using Revenue Bonds or other instruments of borrowing.)
It is interesting to note that this 1880 decision does not conflict with more recent changes to the California Constitution and Supreme Court rulings interpreting the constitution. It remains good law which our city manager and Water Utility Department are not following and the following issues require action:
- The city has stated in recent court filings that, it has a right to make a return on its investment in capital infrastructure of the water utility it owns. (Moreno v. City of Riverside, current superior court case) The city is incorrect. The city may propose a special tax ballot measure for voter approval. A Special Tax would provide tax revenue to the General Fund for general city expenditures where as, a General Fund Transfer is prohibited by the Calif Constitution Article 13 D. A City may only ask property owners to bond the land or sell municipal bonds to borrow capital for replacement or improvement to the water supply infrastructure.
- The city refused to stop making transfers to the general fund of profits from the Water Utility Department when the California Constitution was changed by the voters in 1996 forbidding the practice. The city refuses to return the money to the Water Utility Department. Courts have ordered other cities to return (all) the money to the water fund it was taken from or endure a criminal investigation of misappropriation of funds.
- The city has established and maintained unlawful “higher than cost” water rates since 1996. The city must reduce its current water rate(s) to a single flat rate established in 1996. New rate increases may only be approved after a rate study is done on the most recent budget year ended.
- The city has and continues to inflate the rates for water service in order to pay the cost of replacing and improving the capital infrastructure. The city must ask land owners to bond their land to fund these improvements or sell municipal bonds.
- The city refuses to issue municipal bonds for capital expense by the Water Utility Department. Placing the cost of capital debt into the water rate. See 4. Above.
- The city established and maintains punitive water rates that are designed to economically force (the lower income) residential customers to use less water. The city established and maintains a water conservation program that requires payment of a fee. The 1880 Supreme Court decision prohibits these programs and the associated rates, fees and charges.
- The city has not recognized or maintained information that would establish the water allotment your land is entitled to receive each year. The court ordered this action. If the data is not retrievable, the amount of water required to produce a crop of citrus (the dominant crop in Riverside circa 1880) is your allotted amount of water in acre feet of water per acre of land not including rainfall.
- The city established and maintains different (lower) water rates, charges and fees for select customers. The Supreme Court has ordered that all water customers pay the same rate for water service measured by volume consumed via meter.
- The city is forcing property owners to pay for recycled water and use it instead of clean water the land is entitled to receive. The city may only ask land owners to voluntarily use water of a lesser quality such as recycled water.
All of the above actions of the city lowers your property value and drives up your monthly cost of living via hidden taxes. The city must change its practices and conform to constitutional law!
No one is above the law!
For more information on this June 4th, 2013 Measure A, contact us email@example.com