On July 30, 2025, a divided California Court of Appeal issued its long-awaited opinion in Patz v. City of San Diego, affirming the trial court’s judgment that the City’s tiered residential water rates violated Proposition 218 of the California Constitution. The ruling reinforces the strict interpretation of cost-of-service requirements previously articulated in Coziahr v. Otay Water District. However, given the nearly 70-page dissenting opinion, the California Supreme Court may take up the case if the City seeks review. … The City argued that higher-volume users should pay more due to the increased infrastructure costs required to support peak demands, which is unnecessary for lower-use customers. The Court of Appeal rejected this rationale, holding that the City failed to demonstrate that its rates bore a reasonable relationship to the “proportional cost of service attributable to the parcel.”