A water district increased its water rates by implementing a five-tier system that charged the customer more per unit after an allocated amount was surpassed. The rate of increase varied after the allotment was surpassed based on the type of property being serviced, with irrigation properties billed at a higher rate than residential or commercial properties. A city received a steep rate increase under the five-tier system as much of the city’s land was considered irrigation property. The city sought to invalidate the rate increases, claiming the five-tier system was improperly based on the classification of property being serviced and was not based on the water services provided. A California court of appeals held the water rate increase was invalid since the water district failed to demonstrate the fees associated with its five-tier system were proportional to the cost of services provided. [City of Palmdale v. Palmdale Water District (August 9, 2011)_CA4th_]
