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HomeMy WebLinkAboutPublic Comment by James JensenLYING BY OMISSION Lying by omission is when a person leaves out important information or fails to correct a pre-existing misconception in order to hide the truth from others Lying by omission can deeply erode trust, affecting both personal and professional relationships. * Background on Proposition 218 Prop 218 (adopted in 1996, now in the California Constitution, Article XIII D) requires that property -related fees (like utilities, sewer, water, trash) be: • Based on the cost of providing the service, • Not exceed the proportional cost to each parcel, and • Approved through a public hearing process, with mailed notices and the opportunity for written protests. * The City's Duty Before the Vote Before the council votes to approve rates, the city must make available the data and rationale used to calculate those rates. Courts have held that this includes reasonable disclosure of the cost basis, assumptions, and methodologies so that the public can meaningfully evaluate and protest the proposal. If city staff or consultants know that their cost analysis is inaccurate, incomplete, or misleading and fail to disclose that to the council and public, it can be viewed as a violation of due process and transparency requirements under Prop 218 and possibly Government Code § 54950 et seq. (the Brown Act). * Possible Legal Implications Failing to disclose known flaws in the cost data could constitute: 1. Procedural violation of Prop 218 — if the rates adopted are not supported by accurate cost -of -service data. 2. Material omission or misrepresentation — potentially invalidating the rate adoption if the public and council were misled. 3. Violation of the Brown Act — if information relevant to a public decision was withheld from public discussion. 4. Breach of fiduciary duty — since staff act in trust of the public interest when presenting fiscal data. Courts have struck down rates where the methodology or data was not adequately disclosed (e.g., Bighorn -Desert View Water Agency v. Verjil (2006) 39 CalAth 205; Capistrano Taxpayers Assn. v. City of San Juan Capistrano (2015) 235 Cal.AppAth 1493). * In Plain Terms If city officials knew their cost numbers were wrong and didn't tell the council or the public before the Prop 218 hearing and vote, it's not just unethical it can render the rate action legally vulnerable to challenge and possibly invalid. If the issue wasn't the rates themselves, but rather that the Capital Improvement Projects (CIPs) used to justify or support the rates were known to be inaccurate or misrepresented before the council vote, the same transparency and legal principles still apply just through a slightly different legal pathway. Here's how that breaks down: * 1. Why the CIPs Matter Under Prop 218 James Jensen 10/13/2025 Even though Prop 218 governs the rates, the CIPs often form the foundation of the cost -of -service justification. If a city includes millions in future projects in its financial model to justify rate increases, those projects directly influence: • The cost basis of the rates, • The timing and necessity of the increases, and • The representation made to the public about what their money funds. So, if the city knew before the vote that certain projects were overstated, unnecessary, or improperly costed and didn't disclose that it could amount to material omission of facts relevant to the rate -setting process. * 2. Legal Implications of Withholding or Misrepresenting CIP Data If staff or consultants intentionally withheld or ignored known errors in CIP data before the council adopted the rates, that could amount to: a. Procedural violation under Prop 218 Because the rate study's "cost of service" foundation becomes invalid if built on inaccurate project costs. A- The public hearing and notice process would then rest on a false or misleading premise, undermining the validity of the council's action. b. Violation of the Brown Act The Brown Act (Gov. Code § 54950 et seq.) requires that deliberations by public bodies occur openly and based on the information available to the public. If critical information about project costs was intentionally withheld, it undermines public participation rights. c. Potential misrepresentation or material omission. If staff affirmatively represented the CIPS as accurate knowing they were not, this could constitute misrepresentation in a public record, which may be legally actionable (though typically as part of a taxpayer lawsuit or writ of mandate). * 3. Relevant Case Law & Precedent While most Prop 218 cases focus on rates, several address underlying assumptions: • Griffith v. Pajaro Valley Water Management Agency (2013) — court found that if underlying assumptions (like capital costs) were not properly supported, the resulting rate was invalid. • Howard Jarvis Taxpayers Assn. v. City of Fresno (2005) emphasized that cost justification must be transparent and accurate. Those cases reinforce that the validity of the rates depends on the truthfulness of the data — including capital project assumptions. 4. In Plain Terms If city staff knew before the council vote that their CIP list or cost estimates were wrong — and did not disclose that — then: • The council's decision was based on misleading information, and • The public was denied fair disclosure during the Prop 218 process. That could constitute a legal omission and make the council's approval vulnerable to legal challenge under Prop 218 or the Brown Act.