Every time a well pumps water from the groundwater basin, the /*Santa Clara Valley Water District*/ charges a groundwater extraction fee or so-called 'pump fee.'
/*Great Oaks Water Company*/ sued the water district saying the fee violates the state constitution because under Proposition 218 such fees must be approved by voters.
A judge has just agreed.
"What we hope to achieve is to cause the water district company to obey the law and to lower the water rates for our customers," said Great Oaks Water Company CEO John Roeder.
The ruling against the water district specifically involves money Great Oaks paid in 2005 which amounts to $5 million, but there are much broader implications.
The district serves 1.8 million water users, who either directly or through a middleman have paid more than $250 million in pump fees since 2005.
Last year, those fees accounted for $72 million of the water district's $358 million budget.
"The groundwater production charges are a very significant part of the budget and to really manage and to really maintain the groundwater properly, so without that funding it's really hard to say where we would be," said Santa Clara Valley Water District spokesperson Susan Siravo.
The groundwater extraction fee has more than doubled in the last 10 years and is scheduled to go up again on July 1st, but the court ruling says the fee itself is illegal and demands a vote by the people.
Phase two of the court process starts next month. That's when the judge will decide if the water district has to return some of the money it has collected, and if so, how much.
Just the mere hint of a refund has customers thinking.
"Yeah it would be great, a refund in these times probably helps everybody out too," said Great Oaks water customer Kurt Mitchell.
The court battle is far from over, and the water district says it will likely appeal.