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materials is submitted to, and approved by, a popular vote of two - thirds of those electors voting on the issue " "66013 (b) (3) 'Capacity charge' means a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities. A "capacity charge" does not include a commodity charge." The City's proposed recycled water connection fees are "capacity charges" as defined in the preceding provision. In addition to the determination of "the estimated reasonable cost of providing the service for which the fee is imposed," California law also requires the following: ❑ That notice (of the time and place of the meeting, including a general explanation of the matter to be considered) and a statement that certain data is available to be mailed to those who filed a written request for such notice, ❑ That certain data (the estimated cost to provide the service and anticipated revenue sources) be made available to the public, ❑ An opportunity for public input at an open and public meeting to adopt or modify the fee, and ❑ That revenue in excess of actual cost be used to reduce the fee creating the excess. The basic principle that needs to be followed under California law is that the charge be based on a proportionate share of the costs of the system required to provide service and that the requirements for adoptions and accounting be followed in compliance with California law. 3.3 Proposition 218 and Connection Fees In 1996, the voters of California approved Proposition 218, which required that the imposition of certain fees and assessments by municipal governments require a vote of the people to change or increase the fee or assessment. Of interest in this particular study is the applicability of Proposition 218 to the establishment of connection fees for the City. In Richmond v. Shasta Community Services Dist., 32 Ca1.4th 409 (2004), the California Supreme Court held that sewer connection fees and capacity charges are not "assessments" under Proposition 218 because they are imposed only on those who are voluntarily seeking sewer service, rather than being charged to particular identified parcels, and therefore such fees are not subject to the procedural or substantive requirements of Proposition 218. The court also held that such fees can properly be enacted by either ordinance or resolution. In November 2010 the voters of California passed Proposition 26, an initiative based state constitutional amendment, the Supermajority Vote for Passage of New Taxes and Fees Act. Proposition 26 requires a two - thirds supermajority vote of the California State Legislature or local legislative Board, to pass many fees, levies, charges and tax revenue allocations that FOR Legal Considerations in Establishing CFs for the City City of Pleasanton - Recycled Water Connection Fees 9