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BACKGROUND Proposition 218 was adopted by the voters in 1996. It added Articles XIIIC and XIIID to the California Constitution relating to the local adoption of taxes, assessments and fees. Those articles provide in part that the local agency that imposes a tax, assessment, or fee bears the burden of proving that such exaction comports with the requirements of Proposition 218. The County seeks indemnification from the City in the event that a tax, assessment, or fee imposed by the City is challenged, the County is also named as a defendant, and the exaction is found not to comport with Proposition 218. The agreement provides for mutual indemnification such that the City cannot be held liable for an improperly imposed tax, assessment or fee by the County and the City is named in the claim or litigation. DISCUSSION The City and the County have entered into this type agreement for many years. It is appropriate to continue to do so. In recent years, the agreement was approved administratively by staff; however, it is preferable that the Council authorize the City Attorney to enter into the agreement. Submitted by: Fiscal Review: Approved y: Jonathan Lowell Emily Wagner Nelson Fialho City Attorney Director of Finance City Manager Attachments: 1. May 29, 2012 Letter from the Auditor-Controller's Office 2. Certification and Mutual Indemnification Agreement Page 2 of 2