RES 02047 - Laserfiche WebLink

the O\\mers to judicial discretion and interpretation of their rights in bankruptcy or other- wise and consequently may entail risks of delay. limitation. or modification of their rights. No Obligation to Tax The City's obligation to pay the debt service payments does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The obligation of the City to pay debt service payments does not constitute a debt or indebtedness of any city, the State of Cali- fornia or any of its political subdivisions, within the meaning of any constitutional or statu- tory debt limitation or restriction. Change in Law In addition to the other limitations described herein. the California electorate or legislature could adopt a constitutional or legislative property tax decrease or an initiative \\ ith the effect of reducing revenues payable to or collected by the City. There is no assurance that the Cali- fornia electorate or legislature \\ill not at some future time approve additional limitations that could reduce the revenues and adversely affect the security of the Bonds, Constitutional Limit on Appropriations, Fees and Charges Under Article XIIIB of the California Constitution, state and local government entities have an annual "'appropriations limit" which Iirnits their ability to spend certain moneys called "'appropriations subject to limitation:' which consists of tax revenues. certain state subventions and certain other moneys, including user charges to the extent they exceed the costs reasonably borne by the entity in providing the service for which it is levying the charge. In general terms. the "appropriations limit" is to be based on certain 1978/79 expenditures, and is to be adjusted annually to reflect changes in population factors and either changes in the cost of living or per capital income. Among other provisions of Article XlIIB. if an entity's revenues in any year exceed the amount permitted to be spent the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years. The City is of the opinion that the rates and user charges imposed by the City in connection \\ith the enterprise do not exceed the costs it reasonably bears in providing such services, If a portion of the enterprise rates or connection charges were determined by a court to exceed the reasonable costs of providing service, any fee which the City charges may be considered to be a "'special tax," which under Article XIIlA or XIIlD of the California Constitution rnust be authorized by a two-thirds vote of the affected electorate, This requirement is applicable to the City's rates for service provided by the enterprise. The reasonable cost of service provided by the enterprise has been determined by the State Controller to include depre- ciation and allowance for the cost of capital improvements, In addition, the California courts have determined that fees such as connection fees (capacity charges) will not be special taxes if they approximate the reasonable cost of constructing enterprise improve- ments conternplated by the local agency imposing the fee. Such court determinations have been codified in the Government Code of the State of California (Section 66000 et seq.). 18