“No taxation without representation”  is a powerful rallying cry, but it’s not enough to justify an application for annexation of territory to a special district, according to recent court of appeal decisionCity of Patterson v Turlock Irrigation District  (5th Dist. F067629 June 25, 2014).  The court held that there is no statutory authorization for expansion of an irrigation district’s territorial boundaries for the sole purpose of giving voting rights to consumers of the district’s electrical services.

Turlock Irrigation District  imposed a surcharge on electrical rates charged customers in a service area outside of the District’s boundaries.  Because they reside outside the District, electrical service customers in the City of Patterson were not eligible to vote in Irrigation District elections or sit on the District’s board, and thus they were not represented in the Irrigation District’s rate-setting process. Despite this lack of representation, they had to pay the surcharge on electrical rates.

The California Public Utilities Commission had authorized the Irrigation District to provide extraterritorial service in 2003 when it approved the District’s acquisition of PG & E’s electric distribution and transmission facilities in western Stanislaus County.   Over eight years later, the city sought to obtain voting rights for its disenfranchised customers by asking the Stanislaus Local Agency Formation Commission to approve annexation of the area to the District.

The Irrigation District opposed the city’s application for annexation and submitted a resolution to the LAFCO requesting termination of the proceedings, under Government Code § 56857(b), which allows proceedings for annexation of territory to a district to be terminated when justified by a financial or service-related concern.

The city responded by filing suit to challenge the validity of the Irrigation District’s resolution. The city claimed that the financial and service concerns relating to provision of water for irrigation described in the resolution were not legitimate because the city’s annexation application was limited to retail electrical service and would not expand the District’s obligations relating to irrigation water. The trial court ruled for the District, concluding that its resolution requesting termination of the proceedings complied with the statute.

The city appealed and the Court of Appeal affirmed the trial court judgment.  However, rather than basing its decision on the Irrigation District’s resolution requesting termination of the annexation proceedings, it found the city’s annexation application was  legally deficient.

The court concluded the city’s application failed to comply with the mandatory requirement in Government Code § 56653 that an application for annexation include a plan for providing services to the annexed territory that describes the services to be extended to the affected territory. The city’s application did not, however, seek to extend services to the affected territory; it sought annexation solely for the purpose of obtaining voting rights for city residents.

The court noted at the outset of its opinion: “This appeal echoes a familiar cry from the American Revolution— ‘No taxation without representation!’”  But it explained that this  “purported evil” that the city’s application sought to redress had not been identified by the Legislature as a problem that annexation of territory is intended to solve. The city’s application was therefore fatally flawed because it was not based on a statutorily authorized reason for annexation, based on the statute’s plain language.