21 ATTACHMENT 3 - Laserfiche WebLink

76 imposing or increasing such fees. The California Supreme Court denied the City of Fresno’s petition for review of the Court of Appeal’s decision on June 15, 2005. In July 2006 the California Supreme Court, in Bighorn-Desert View Water Agency v. Verjil (46 Cal.Rptr.3d 73), addressed the validity of a local voter initiative measure that would have (a) reduced a water agency’s rates for water consumption (and other water charges), and (b) required the water agency to obtain voter approval before increasing any existing water rate, fee, or charge, or imposing any new water rate, fee, or charge. The court adopted the position indicated by its statement in Richmond that a public water agency’s charges for ongoing water delivery are “fees and charges” within the meaning of Article XIIID, and went on to hold that charges for ongoing water delivery are also “fees” within the meaning of Article XIIIC’s mandate that the initiative power of the electorate cannot be prohibited or limited in matters of reducing or repealing any local tax, assessment, fee or charge. Therefore, the court held, Article XIIIC authorizes local voters to adopt an initiative measure that would reduce or repeal a public agency’s water rates and other water delivery charges. (However, the court ultimately ruled in favor of the water agency and held that the entire initiative measure was invalid on the grounds that the second part of the initiative measure, which would have subjected future water rate increases to prior voter approval, was not supported by Article XIIIC and was therefore invalid.) The court in Bighorn specifically noted that it was not holding that the initiative power is free of all limitations; the court stated that it was not determining whether the electorate’s initiative power is subject to the statutory provision requiring that water service charges be set at a level that will pay for operating expenses, provide for repairs and depreciation of works, provide a reasonable surplus for improvements, extensions, and enlargements, pay the interest on any bonded debt, and provide a sinking or other fund for the payment of the principal of such debt as it may become due. Application of Article XIIIC and Article XIIID. For information concerning the specific procedures employed by each Member with respect to its charges and fees, see “DUBLIN SAN RAMON SERVICES DISTRICT,” “CITY OF PLEASANTON” and “CITY OF LIVERMORE.” The Members believe their wastewater service charges do not constitute “taxes” under Article XIIIC as revised by Proposition 26 because, as described in subsection 1(e)(7) of Article XIIIC, they are “property-related fees imposed in accordance with the provisions of Article XIIID” (and are also charges for a “property-related service” as defined in subsection 2(g) of Article XIIID) and because, as described in subsection 1(e)(2) of Article XIIIC, they are charged for wastewater service, “a specific government service or product provided directly to the payor that is not provided to those not charged.” The Members believe their connection fees are not “taxes” as defined by Article XIIIC as revised by Proposition 26 because they are charges to a landowner that are imposed (typically in connection with property development) and, as described in subsection 1(e) of Article XIIIC, they are imposed (1) “for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged” and/or (2) “for a specific government service or product [a time-limited share of capacity in the wastewater system] provided directly to the payor that is not provided to those not charged,” and which do not exceed either the reasonable costs of conferring the benefit or granting the privilege and/or the reasonable costs of providing the service or product.