Publications

Court Decision Reaffirms Rate-Setting Powers of Water Districts

By Arden Wallum and John Pinkney

Mission Springs Water District (“MSWD” or “District”)— encompassing North Palm Springs, Desert Hot Springs and some unincorporated areas of Riverside County — experienced robust growth for a decade until 2007.

During the growth spurt, MSWD significantly expanded its facilities to keep up with the demand created by nearly $1 billion in new development and construction.  In less than five years, MSWD’s assets grew from $90 million to over $150 million as the District built new infrastructure to keep up with increased demand.

But the Great Recession stopped economic momentum in MSWD’s service area almost overnight. MSWD’s revenues declined by millions, but the District still had to maintain its new and expanded infrastructure. On top of that, regulations requiring a new solids removal and treatment process in one of the District’s production wells added nearly $1 million annually to operating costs.

Like other public agencies in California, MSWD quickly found itself facing a challenging position. The District aggressively cut costs — including staff layoffs, a salary freeze and other measures — to reduce operating expenses. But it was not enough and raising water and sewer rates became inevitable.

So MSWD initiated and completed a Prop 218 rate increase process and held eight public meetings to garner extensive community input. Most of the meeting participants supported the proposed rate increase, and less than 0.2% of those receiving rate increase notices objected to the proposed new rates.  Even the local daily newspaper publically endorsed the proposal.

MSWD maintained some of the lowest rates in the region, even after the rate increase went into effect at the start of 2011.

After the new rates were implemented, a small group began circulating petitions to place initiatives on an upcoming ballot that would reduce MSWD’s revenues by as much as 40%. One of the initiatives’ proponents made comments to the local press that the initiatives were intended to force MSWD into insolvency with the intent the District would then be taken over by neighboring agencies.

MSWD’s financial analysis concluded that the District would be rendered insolvent and unable to continue providing water and sewer services if voters approved the initiatives. The MSWD board and its general manager had serious concerns not only about the impact of the initiatives themselves, but also about whether a small group of voters could misuse the initiative process as a means to drive a public agency into insolvency.

Consequently, MSWD evaluated its legal options. One concern was that the initiatives violated the mandates of California Water Code section 31007, which requires that water rates be set at levels that are sufficient to cover the cost of providing services, service debt and set aside reasonable reserves. Amid an election year, the MSWD board made the politically difficult decision to file a lawsuit challenging the legality of the initiatives on several grounds.

The initiatives’ proponents, via representation from the the Howard Jarvis Taxpayers’ Association, responded to MSWD’s lawsuit by filing a demurrer and a SLAPP motion.  Jarvis argued that MSWD had acted without legal authority in failing to place the initiatives on the ballot and argued that the initiatives could not be challenged before the election.  MSWD countered that there is no constitutional right to place an unlawful measure on the ballot and the District further argued that post-election initiative challenges that result in successful measures being overturned by courts have the tendency to erode voter confidence.  Accordingly, MSWD argued that where a ballot initiative contains serious legal flaws, the better approach is to permit pre-election judicial review of the initiatives. The trial court ruled in favor of MSWD on both the demurrer and SLAPP motion, and thus, refused to dismiss MSWD’s lawsuit. 

In response, Jarvis filed an appeal with the Fourth District Court of Appeal, which ruled that a measure may be kept off the ballot if it represents an effort to exercise a power which the electorate does not possess. The Court of Appeal agreed with MSWD’s position that the initiative proponents lacked the power to exempt themselves from the requirements of Water Code Section 31007.

Thereafter, Jarvis filed a petition for review with the California Supreme Court, which was denied.  As a result, the Fourth District Court of Appeal’s published opinion remains good law.  (See Mission Springs Water District v. Verjil  (2013) 218 Cal.App.4th 892.)

The case presented some fascinating constitutional issues, primarily whether a group of local voters may rely on the constitutional right of initiative to essentially override a state statute mandating that water rates be set at a minimum level.  The Jarvis organization argued to the Fourth District that initiatives could be used to involuntarily bankrupt a public agency.  Based on the court’s published decision, the answer is clearly that the initiative power has limitations and that when voters step into the shoes of a local agency’s legislative body to pass an initiative, the voters are subject to the same laws and limitations as the legislative body.

While the initiative process remains alive and well after Mission Springs Water District vs. Verjil, the case confirms that a public agency may seek pre-election review of an invalid initiative.  The case also makes clear that where a state statute mandates that an agency set rates at a level sufficient to cover the cost of services, the initiative process cannot be used to set rates below that level.  

The New Jersey Division of Developmental Disabilities’ Amended Community Care Waiver

Slovak Baron Empey Murphy & Pinkney LLP

By: Valerie A. Powers Smith, Esq.

Eligibility

If a child under age 18 is ineligible for Medicaid because of parental income or resources, the Community Care Waiver (CCW) waives the deeming of parental income and resources. For individuals 18 years and older, the resource limitation is still $2,000 as is the case with the Medicaid State Plan; but the income limitation is higher at approximately $2,022 per month.

The following Medicaid eligibility groups are now served under the CCW:

  • SSI recipients
  • Optional State supplemental recipients
  • Optional categorically needy, aged and/or disabled with income at 100% F.P.L.
  • Special home & community-based waiver group under 42 C.F.R. 435.217 with 300% of SSI Federal Benefit Rate and ABD population with 100% of F.P.L.

Services

In addition to Medicaid State Plan services, a DDD client under the CCW may receive:

  • Case management services
  • Respite care
  • Day habilitation (i.e., pre-vocational or day programming & transportation)
  • Supported employment services (includes transportation)
  • Individual supports (i.e., personal care assistant & training)
  • Integrated Therapeutic Network Therapies (i.e., occupational, physical & speech therapies and psychological services)
  • Environmental & vehicle modifications (not to exceed $11,000 every 3 years)
  • Assistive technology devices (included in the above $11,000 tri-annual maximum)
  • Personal Emergency Response Systems (PERS)
  • Transportation
  • Community transition services (temporary)

Application

To apply for the CCW, contact your DDD (800-832-9137) or your DDD case manager directly to request an application.

ABOUT Slovak Baron Empey Murphy & Pinkney LLP

© 2011, Valerie A. Powers Smith, Esq.

Valerie A. Powers Smith, Esq., Of Counsel, Slovak Baron Empey Murphy & Pinkney LLP, is licensed to practice in New Jersey, New York, Pennsylvania, and California and specializes in the following special needs and disability law subject areas: health care insurance, Medicaid, Medicare, special needs trust, trust administration, estate planning & administration, guardianships, and accessing federal and state government disability-based benefits. Valerie can be contacted at powers@sbemp.com, 609.655.3393 or 760.322.2275.

Social Security Administration Benefits Available for People with Disabilities

Slovak Baron Empey Murphy & Pinkney LLP

By: Valerie A. Powers Smith, Esq.

Supplemental Security Income (SSI) is available to people whose disabilities prevent gainful employment. In order to be eligible, an individual must not have greater than $2,000 in countable resources and less than approximately $668 in monthly income (varies by state). Because the income and resources of parents are counted until the child turns 18, many people with disabilities will not qualify for SSI until they have reached the age of 18. After age 18, the income and resources of family members are not counted even if the individual continues to live at home. The SSI benefits usually ranges between $500.00 and $700.00 per month. The monthly amount depends on a number of factors, including where the person lives and what other income he or she may have.

In most states, individuals who qualify for SSI automatically receive Medicaid (a.k.a., medical assistance). Medicaid pays for a wide array of services for people with disabilities and provides government-funded health insurance for children and adults with disabilities who have limited financial resources. Medicaid also provides government funding for long-term services and supports, including institutional care in nursing facilities and, in some cases, in non-specialized placements for people with disabilities.

Social Security Disability Insurance (SSDI) pays benefits to covered workers who are unable to work because of a disability. After two years, the worker qualifies for Medicare. SSDI is typically given to workers who sustain injuries; however, sometimes, people with lifelong disabilities or mental illness qualify because of work history and experience a subsequent problem with continued employment.

Benefits for Disabled Adult Children are available to adults who are unmarried, 18 years of age or older, and whose disability started before the age of 22. One is eligible where their parent has retired (and is collecting their own Social Security Retirement Benefits), has become disabled (and is collecting their own SSDI benefits), or is deceased. The amount of this benefit paid to the disabled adult child is based on the parent’s Social Security earnings record. While the disabled adult child may still work and qualify for these benefits, his or her earnings must not be “substantial”. In 2010, substantial earnings were considered to be greater than $1,000 per month.

Social Security Retirement (SS) Benefits are available to workers would have earned the requisite 40 Social Security credits. Individuals with disabilities who are considered dependents of a parent collecting SS benefits or of a parent who dies may be entitled to receive a greater monthly benefit amount from the Social Security Administration (SSA) under that parent’s earnings record. Additionally, individuals who receive SS benefits receive Medicare two years after SS benefits begin.

It is important to note that SS or Survivor benefits count as income for SSI purposes and; in some cases, can reduce or eliminate SSI benefits altogether. If an individual loses his or her SSI benefits, Medicaid eligibility will also be lost. If this occurs, one must, first, contact the SSA in order to be determined a DAC (disabled adult child) client and, then, contact his or her local County Medicaid office to apply for continued Medicaid coverage as a DAC. In order to be determined a DAC, one must have: (1) already been receiving SSI; (2) been determined disabled by SSA before the age of 22; and (3) lost his or her SSI benefits because of receiving social security survivor benefits.

Medicare is provided to people 65 and over, to SSDI recipients, and permanently disabled Social Security recipients. Medicare is divided into three parts: Part A covers hospital and limited nursing care; Part B covers physician services, as well as a variety of therapies and other items. Part B requires an extra premium, but it is covered by Medicaid when an individual has both Medicaid and Medicare. Part D covers prescription drugs. Medicare also has co-payments and deductibles, which do not apply to people who also have Medicaid. There are no income or resources tests for Medicare.

ABOUT Slovak Baron Empey Murphy & Pinkney LLP

© 2011, Valerie A. Powers Smith, Esq.

Valerie A. Powers Smith, Esq., Of Counsel, Slovak Baron Empey Murphy & Pinkney LLP, is licensed to practice in New Jersey, New York, Pennsylvania, and California and specializes in the following special needs and disability law subject areas: health care insurance, Medicaid, Medicare, special needs trust, trust administration, estate planning & administration, guardianships, and accessing federal and state government disability-based benefits. Valerie can be contacted at powers@sbemp.com, 609.655.3393 or 760.322.2275.

Supreme Court holds the Affordable Care Act (ACA) is constitutional, but what does the law mean?

Slovak Baron Empey Murphy & Pinkney LLP

By: Valerie A. Powers Smith, Esq.

The Patient Protection & Affordable Care Act and Health Care & Education Affordability Reconciliation Act (a.k.a., the Affordable Care Act) was passed into law in March 2010.

As many are aware, there has been great debate and legal challenges since its passage. On June 28, the Supreme Court issued its decision ruling that the Affordable Care Act (ACA) is constitutional. One of the most controversial components of ACA decided by the Supreme Court was the mandate that those who can afford to purchase healthcare coverage, do so or face a financial penalty, was held constitutional under the taxation power (not the commerce power) of Congress.

In response, House Republicans are said to seek to overturn ACA; perhaps, as soon as July 2012. In the meantime and without regard to either side of the argument, this article provides a highlight of some of the key points of the law.

Since September 23, 2010, private insurance plans have been prohibited from:

  • Excluding or rejecting coverage to any child birth through age 18 based on a preexisting condition, including a disability.
  • Charging higher premiums based on pre-existing conditions.
  • Dropping an individual who becomes ill.
  • Including lifetime limits on one’s coverage.
  • Placing annual limits on coverage.

In addition, since September 23, 2010, private insurance plans have been required to provide coverage to beneficiary’s dependents up to age 26 regardless of residence or marital status so long as the dependent is not eligible for his or her own group coverage.

Since October 1, 2011, a new state Medicaid option, Community First Choice (CFC), has required participating states to provide self-directed services statewide in the most integrated setting appropriate to an individual.

In October 2012, one will be able to join and get benefits from a voluntary, enrollment-based insurance program called the Community Living Assistance Services and Supports (CLASS) Program. CLASS will provide assistance to people who need help with daily activities. Under this voluntary program, one can get cash allowances so they can get care and other support to help them keep their independence. Starting January 1, 2014:

  • Private insurance plans cannot consider disability and health status when setting premiums; specifically, insurance eligibility rules based on health status.
  • Private insurance plans are required to guarantee issue and renewal of policies (that is, they must accept every employer and individual who applies).
  • The state-based health insurance marketplace Exchange is intended to increase choice and foster competition by enabling consumers to compare coverage and premiums.

Also in 2014, most adults under age 65 with incomes up to about $15,000 per year for single individual (higher income for couples/families with children) will qualify for Medicaid in every state. State Medicaid programs will also be able to offer additional services to help those who need long-term care at home and in the community. Moreover, the Federal government will pay 100% until 2016 (phasing down to 90% in 2020) to states participating in the Medicaid program. Additional expansions to the Medicaid and Medicare program are set to occur in 2013 and 2014, such as:

  • State’s option to provide health homes for Medicaid enrollees with chronic conditions
  • Free annual Medicare wellness visits with assessments and individualized prevention plan
  • Elimination of Medicare Part D (drug coverage) co-pays for dual eligibles receiving waiver services
  • Improving Medicare Part D access to key anti-seizure, anti-anxiety, and anti-spasm medications

Valerie A. Powers Smith, Esq. is an attorney with Slovak Baron Empey Murphy & Pinkney LLP in Palm Springs. In addition to her estates and trust practice, she has concentrated part of her practice in the area of health care law and has vigorously advocated for families and people with disabilities to gain medically necessary care from private insurance companies, Medicaid, Medicare, and other health insurance providers. She can be reached at (760) 322-2275 or powers@sbemp.com.

ABOUT Slovak Baron Empey Murphy & Pinkney LLP

©2012, Valerie A. Powers Smith, Esq.

Valerie A. Powers Smith, Esq., Of Counsel, Slovak Baron Empey Murphy & Pinkney LLP, is licensed to practice in New Jersey, New York, Pennsylvania, and California and specializes in the following special needs and disability law subject areas: health care insurance, Medicaid, Medicare, special needs trust, trust administration, estate planning & administration, guardianships, and accessing federal and state government disability-based benefits. Valerie can be contacted at powers@sbemp.com, 609.655.3393 or 760.322.2275.

Slovak Baron Empey Murphy & Pinkney LLP Expands Practice

FIRM ADDS FULL-SERVICE ESTATE, TRUSTS, PROBATE & LITIGATION DEPARTMENT

Slovak Baron Empey Murphy & Pinkney LLP

By: Valerie A. Powers Smith, Esq.

Slovak Baron Empey Murphy & Pinkney LLP, founded in 1994, and with offices in Palm Springs and Costa Mesa, California, and Princeton, New Jersey, concentrates on providing clients with superior legal representation and first-class service at competitive pricing. The firm has continued that success and built a strong reputation in both complex litigation and transactional matters. To enhance the services the firm provides to the community, Slovak Baron Empey Murphy & Pinkney LLP announces the addition of a full-service Estate, Trusts, Probate & Litigation Department.

ESTATE PLANNING & ADMINISTRATION

Estate planning is an area of law designed to bring security and comfort to you and your loved ones. Planning your estate can also help to preserve hard-earned family wealth. Our estate planning and administration services are dedicated to relieving stress, eliminating uncertainty and protecting your family’s assets. The Attorneys at Slovak Baron Empey Murphy & Pinkney LLP have extensive experience preparing comprehensive estate plans, giving families a sense of security and preserving their assets for future generations, minimizing estate taxes, preparing for family emergencies, and avoiding the expense and nightmare of probate.

Our estate planning expertise is comprehensive and includes the following services:

  • Revocable Living Trusts
  • Wills
  • Irrevocable Trusts
  • Financial Powers of Attorney
  • Advance Healthcare Directives
  • Special Needs Trusts
  • Qualified Domestic Trusts (QDOTs)
  • Family Limited Partnerships
  • Charitable Trusts
  • Gifting Strategies

In addition to the estate planning activities involved in drafting a trust instrument, SBE’s Attorneys also represent trustees and beneficiaries in administration of trusts so that the intentions of the trust are carried out seamlessly and efficiently. SBE’s practice includes petitioning for transfer of assets into the trust after the death of the trustor in the event title was incorrectly cleared, funding sub-trusts, petitioning for instructions regarding the interpretation or modification of trusts, monitoring the creditors’ claim process, petitioning for instructions regarding actions to be taken by the trustee, petitioning for termination of trusts, and petitioning for resignation of trustees and for the appointment of successor trustees.

SBE’s Attorneys also advise trustees regarding their fiduciary duties and powers, the sale or distribution of trust assets, and the preparation of accountings and reports.

TRUST & ESTATES LITIGATION

When a trustee is accused of not fulfilling his or her fiduciary duties, the matter can become contested. The Attorneys at SBEMP represent trustees and beneficiaries in estate and trust disputes and litigation. SBEMP’s Attorneys have in-depth knowledge of the legal responsibilities of trustees. More specifically, the firm’s estate and trust litigation group has extensive expertise in:

  • Will and trust contests;
  • Estate and trust accountings;
  • Removal of trustees;
  • Defense of trustees;
  • Trustee/Beneficiary disputes;
  • Trustee/Trustee disputes;
  • Family disputes;
  • Modification of trusts;
  • Termination of trusts;
  • Property disputes;
  • Tax disputes;
  • Creditor claims;
  • Contested conservatorships, and
  • Other disputes involving wills and trusts.

If you think you may need legal help or advice for a trust, estate, probate, will contest, wills and trust fraud, or any other trust or estate litigation matter, SBEMP’s Attorneys can help.

THE ATTORNEYS

The Estate Trust Probate & Litigation Department includes Attorneys Tom Slovak, H. Neal Wells, III, Valerie A. Powers Smith, and David Smith. Their expertise blends estate and trust law, tax law, probate and administration, special needs law, litigation procedures and strategies, and the knowledge of the unique personal emotional experiences encountered by clients in these types of matters.

Tom Slovak, Esq., Partner, began his career emphasizing labor relations for management representing a wide variety of public and private entities in labor contract negotiations, disputes, and administrative hearings including a substantial practice before the Agricultural Labor Relations Board; but, then moved to commercial, real estate transaction, fraud and fiduciary disputes, with substantial emphasis in probate and trust litigation. Tom has tried to verdict numerous commercial and labor arbitration matters, as well as participating in well over 100 sophisticated mediations as counsel and occasionally acting as a private mediator upon request. Tom is a highly respected and effective litigator in the probate and trust area.

H. Neal Wells III, Esq., Of Counsel has offices in both Palm Springs and Costa Mesa (Orange County), California. He is an estates and trusts lawyer whose practice focuses on all aspects of that area of law: estate planning, estate and trust administration, income, gift and death taxation, and litigation respecting estates and trusts. Neal is a fellow of the American College of Trust and Estate Counsel where he currently serves on the Fiduciary Litigation and Employee Benefits Committees. He served as chair of the Executive Committee of the Estates, Trusts and Probate Law Section of the State Bar of California and was on the Probate Estate Planning and Trust Law Advisory Commission of the California Board of Legal Specialization. Neal’s is certified as a specialist for estate planning, trust and probate law by the State Bar of California Board of Legal Specialization. He was an active member of the Probate Litigation Committee of the American Bar Association. Neal has written numerous articles for professional journals. He has been listed as one of the top lawyers in the region and country in local and national publications.

Valerie A. Powers Smith, Esq., Of Counsel, has offices in both Palm Springs, California, and Princeton, New Jersey. Valerie’s experience in the field of estate and trust planning & administration includes the creation of wills, durable powers of attorney, medical/advance directives, special needs trusts, revocable living trusts, and credit shelter trusts. Valerie’s practice includes an additional focus in the area of special needs and disability law. Valerie has routinely advised families, executors, and corporate trustees on the areas of estate and trusts planning and administration; as well as, individuals and families with special needs or unique issues. She is an active member of the Real Property, Trusts & Estate Law Section of the American Bar Association; as well as the state bar associations in California, New Jersey, New York, and Pennsylvania. Valerie has written numerous articles for professional journals and has spoken extensively. She is highly regarded for her estate planning and administration and trust work with particular regard to those with complex, specialized, and unique considerations.

Dave Smith, Esq., Associate is part of the litigation department and has twenty-three years’ experience in civil litigation and complex corporate, commercial and business litigation issues. Dave is an active member of the Real Property, Trusts & Estate Law Section of the American Bar Association.

For more information about Slovak Baron Empey Murphy & Pinkney LLP’s new Department and its Attorneys or to schedule a consultation, visit sbemp.com or call (760) 322-2275.

ABOUT Slovak Baron Empey Murphy & Pinkney LLP

©2012, Valerie A. Powers Smith, Esq.

Valerie A. Powers Smith, Esq., Of Counsel, Slovak Baron Empey Murphy & Pinkney LLP, is licensed to practice in New Jersey, New York, Pennsylvania, and California and specializes in the following special needs and disability law subject areas: health care insurance, Medicaid, Medicare, special needs trust, trust administration, estate planning & administration, guardianships, and accessing federal and state government disability-based benefits. Valerie can be contacted at powers@sbemp.com, 609.655.3393 or 760.322.2275.