November 5, 2004
Voters can’t stop Mesa from hiking utility rates, a judge ruled Thursday. But the group that challenged the rate hikes says it isn’t giving up.
"They may have won this little legal skirmish, but they’re going to lose the battle, the war," said David Molina, a member of Stop Exploiting Taxpayers.
The call by Maricopa County Superior Court Judge Michael Yarnell means last summer’s City Council decision to raise water, sewer, trash and natural gas costs stays in place.
The rate increase adds an average of $57 to annual utility bills for customers who receive all four services.
Mesa, which has no property tax, has long put profits from its utility departments into its General Fund to help finance basic government services. City officials have said making fee increases subject to a referendum like the one pursued by Stop Exploiting Taxpayers could put the city’s bond rating and fiscal future in doubt.
"I’m pleased. We have a future," City Councilman Mike Whalen said about the ruling.
Councilwoman Janie Thom, who opposed the rate hike and helped gather the 4,538 petition signatures, said she’s disappointed by the ruling.
It doesn’t answer the central question of whether the rate hikes are an improper way to circumvent Mesa’s lack of a property tax, she said.
"I don’t feel it’s right for the city to use utility rates to replace a funding source the citizens have outlawed by amending the city charter," she said.
The city refused to send the petitions on to Maricopa County for certification after they were turned in in July.
The state constitution limits referendums to legislative acts. Utility rate-setting is an administrative act.
Yarnell’s opinion cited Wennerstrom v. City of Mesa, the same state Supreme Court case City Attorney Debbie Spinner used to back her claim that setting utility fees is not a legislative act but an administrative one, because of the rates’ temporary nature.
Yarnell also said there is no legal issue with the city using profits generated by its utility departments to pay for other city functions.
Stop Exploiting Taxpayers will consult attorneys before deciding whether to appeal, chairwoman Jan Hibbard said.
The group also has collected 4,000 signatures for a voter initiative headed for the March 2006 ballot. It would amend the city charter to require public approval for any future utility rate hikes. Initiatives make new law, rather than attempting to change laws or actions already taken, like a referendum.
Spinner said Thursday she has not yet seen the text of the initiative, but it’s possible that it could raise some of the same legal issues as the referendum.
The city’s decision to challenge the referendum was "arrogant," Molina said.
"Challenging the referendum on a legal basis is the only way they could thwart the will of the people, because they know if they go to the ballot, they lose," he said.
Mayor Keno Hawker said voters have recourse regarding utility fee hikes: "They can run council candidates who don’t want to use utility rates as a revenue source."