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California HOAs Deal with Water Shortages and State Environmental Regulations

Palm DesertFrom the point of view of a resident, a homeowners’ association (HOA) in California operates much like a government entity. It has the authority to enact legally binding rules and to assess and collect fees for a variety of purposes, such as maintenance of common areas and community-wide utility services. Ongoing drought conditions throughout California have strained the ability of many HOAs to maintain various requirements and services. As just one example, an ongoing dispute in the Coachella Valley area involves a water district’s efforts to maintain water service in the face of water shortages and new state standards for water quality.

More than 1,000 water districts provide services to cities, counties, and other communities throughout California. These districts may bill consumers directly for services, or they may contract with HOAs to provide services to a community. The HOA would then bill individual residents. Increases in fees require a vote by the members of a water district’s board after a public meeting. A 1996 voter initiative, Proposition 218, limits the amount of fee increases to actual increases in a water district’s cost of providing water service. Any increase in fees ultimately falls on consumers, or on HOA members through the HOAs.

New water quality standards established by the California Department of Public Health (DPH) have reportedly led to substantial expenses for many water districts. DPH proposed new standards in 2013 regarding the amount of hexavalent chromium, also known as chromium 6, in drinking water. The consensus among public health officials is that chromium 6 is carcinogenic when consumed above certain amounts. This is the substance made famous by the events depicted in the film Erin Brockovich, in which the residents of a small town in the Mojave Desert experienced high rates of cancer due to chromium 6 in the groundwater. The DPH recommended a cap on chromium 6 of 10 parts per billion (ppb), considerably lower than the federal cap of 100 ppb. Ten ppb became the state standard in May 2014.

This new standard, the strictest in the nation, reportedly resulted in part from a lawsuit by an environmental organization, Natural Resources Defense Council v. Cal. DPH, No. RG12643520, (Cal. Super. Ct., Alameda Co., Aug. 14, 2012), seeking information about chromium 6 groundwater contamination around the state. Groups representing industry and taxpayer interests filed suit against the state shortly after the standards took effect, seeking to prevent their enforcement. Cal. Manufacturers and Tech. Ass’n vs. Cal. DPH, No. 34-2014-80001850-CU-WM-GDS, am. pet. (Cal. Super. Ct., Sacramento Co., May 29, 2015). That case is still pending in superior court.

A law passed by the California Legislature in 2015 allows water districts to phase in compliance with the new standards between now and 2020, but many water districts and HOAs are already complaining about the cost of compliance. The Coachella Valley Water District (CVWD) faced major backlash from the public in early June 2016 over plans to increase fees in order to raise $250 million for necessary upgrades to water treatment facilities. Many objections came from HOAs and their members, who potentially faced significant cost increases. The CVWD board president stated at a public meeting that the district might join a lawsuit against the DPH.

Homeowner association attorney James G. Schwartz has advocated for the rights and interests of Bay Area businesses and business owners for more than three decades. We represent clients in both transactional and litigation matters, negotiating for them in conference rooms and fighting for them in courtrooms. Contact us online or at (925) 463-1073 today to schedule a free and confidential consultation with a knowledgeable and experienced business advocate.

More Blog Posts:

California Water Restrictions Conflict with Homeowners’ Association Rules Regarding Lawns, Pleasanton Business & Commercial Lawyer Blog, July 31, 2015

New California Law Prohibits Homeowner Associations from Penalizing Homeowners Who Do Not Water Their Lawns During Droughts, Pleasanton Business & Commercial Lawyer Blog, September 30, 2014

Homeowner Association Law Update – Recent Court Decision and Changes to Davis-Stirling Common Interest Development Act, Pleasanton Business & Commercial Lawyer Blog, November 27, 2013

Photo credit: Ken Lund [CC BY-SA 2.0], via Flickr.