AgdaPkt 2005-01-24 - Laserfiche WebLink

Browse Search

the excess would have to be returned by revIsing tax rates or fee schedules over the subsequent two years. Proposition 218 Restrictions on Property-Related Fees or Charges. On November 5, 1996, the voters of the State approved Proposition 218, the so-called "Right to Vote on Taxes Act" Proposition 218 adds Articles XIIIC and XIIID to the State Constitution, which affect the ability of local governments to levy and collect both existing and future taxes, assessments, fees and charges. Proposition 218, which generally became effective on November 6, 1996, changed, among other things, the procedure for the imposition of any new or increased property related "fee" or "charge," which is defined as "any levy other than an ad valorem tax, a special tax or an assessment, imposed by a local government upon a parcel or upon a person as an incident of property ownership, including user fees or charges for a property related service" (and referred to herein as a "property-related fee or charge"). Specifically, Article XIIID requires that, before any property-related fee or charge may be imposed or increased, written notice must be given to the record owner of each parcel of land affected by such fee or charge. The City must then hold a hearing upon the proposed imposition or increase, and, if written protests against the proposal are presented by a majority of the owners of the identified parcels, the City may not impose or increase the property-related fee or charge. Further, revenues derived from a property-related fee or charge may not exceed the funds required to provide the "property-related service" and may not be used for any purpose other than that for which the fee or charge was imposed. Further, the amount of a property- related fee or charge may not exceed the proportional cost of the service attributable to the parcel and no property-related fee or charge may be imposed for a service unless that service is actually used by, or is immediately available to, the owner of the property in question. Water Service Charges are not Incidents of Property Ownership. The City has concluded that Proposition 218 does not apply to its existing system of water service charges because the service charges are not imposed upon a parcel of land as an "incident of ownership," but instead are a commodity-based charge based upon the user's consumption of a measurable commodity. Accordingly, the City has not followed the procedures described in the previous paragraphs when increasing its water rates and charges. The California Attorney General has similarly concluded that a water rate based upon the level of consumption is not governed by Proposition 218 (see 97 Cal. Op. Atty. Gen. No. 302 (July 14, 1997)). Recent Court Decisions. In January 2004, the California Court of Appeal, Fourth Appellate District, considered whether a voter initiative can be used to reduce the rates and charges fixed by a public water agency in a case captioned Bighorn-Desert View Water Agency v. Beringson (114 Cal.App.4th 1213, (2004)). The Court of Appeal concluded that Proposition 218 does not apply to the rates, fees, and charges fixed by Bighorn for water services because Proposition 218 was intended to place limits only on property-related levies. The Court noted that Bighorn's water rates and charges were usage-based and were not "an incident of property ownership" or fees for "a property-related service," as defined in Article XIIID. However, the California Supreme Court subsequently rendered a decision in Richmond v. Shasta Community Services District (32 Cal.4th 409 (2004)) that addressed the applicability of the notice, hearing and protest provisions of Article XIII D to certain water service related charges. In this case, the Court indicated in dicta (that is, language not necessary for the 39