1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Written Notice Requirement
However, if the agency desires to preserve any authority it may have to record or enforce a lien on the parcel to which a property-related service is provided, the agency must also mail notice to the record owner's address shown on the last equalized assessment roll if that address is different from the billing or service address.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Public Hearing Requirement
The agency must conduct at least one public hearing upon the proposed property-related fee or charge not less than 45 days after mailing the notice of the proposed property-related fee or charge to the record owner(s) of each identified parcel upon which the property-related fee or charge is proposed for imposition.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Majority Protest for Property-Related Fees and Charges
Proposition 218 allows record owners of each identified parcel upon which the property-related fee or charge is proposed to formally protest the proposed levy. At the required public hearing, the agency must consider all protests against the proposed property-related fee or charge. Only one written protest per parcel, filed by an owner or tenant of the parcel, may be counted in calculating a majority protest to a proposed new or increased property-related fee or charge.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Majority Protest for Property-Related Fees and Charges
If written protests against the proposed property-related fee or charge are presented by a majority of owners of the identified parcels, the agency is prohibited from imposing the property-related fee or charge. Failure to comply with any legal requirement, including any applicable statutory requirements, can result in the invalidation of the protest document for purposes of determining whether a majority protest exists.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Majority Protest for Property-Related Fees and Charges
The majority protest provision for property-related fees and charges requires an absolute majority of the owners of the identified parcels to protest against a proposed property-related fee or charge to legally preclude imposition of the levy. If a majority protest for a proposed property-related fee or charge is attained, the agency cannot legally override the majority protest.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Majority Protest for Property-Related Fees and Charges
As a result of the absolute majority requirement, majority protests for proposed property-related fees and charges occasionally occur but not that often. They are most likely to occur in situations where the proposed levy is controversial and the number of affected parcels is small. Where the number of affected parcels is large, a majority protest is very difficult to attain even for controversial levies.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Majority Protest for Property-Related Fees and Charges
Proposition 218 does not require that a protest document for a proposed property-related fee or charge be included with the required written notice. However, some agencies may include a protest document with the required notice as a courtesy. Written protests are often submitted by property owners in letter form. Protest documents are generally treated as public records subject to public disclosure under the California Public Records Act. Effective January 1, 2017, written protests must be preserved by the agency for a minimum of two years following the date of the public hearing to consider written protests.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Local Initiative Power to Reduce or Repeal Agency Approved Property-Related Levies
Sometimes a proposed property-related fee or charge may be controversial and/or have significant opposition but not enough opposition to attain a majority protest. The lack of a majority protest does not legally obligate an agency to levy the property-related fee or charge. Occasionally, the governing body of an agency may be responsive to the objections and protests by the public concerning a proposed property-related fee or charge. Responses may take the form of not levying the property-related fee or charge or modifying the property-related fee or charge to make it more acceptable to the public.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Local Initiative Power to Reduce or Repeal Agency Approved Property-Related Levies
However, in situations where the governing body of an agency is not responsive to the objections and protests by the public and approves a controversial property-related fee or charge, the local initiative power under Proposition 218 can generally be used to reduce or repeal the property-related fee or charge. This includes the significantly reduced signature requirement thereunder. An example application is an initiative to reduce or repeal water fee or charge increases resulting from customers conserving water under drought conditions.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Political Accountability For Approving Controversial Property-Related Levies
The approval of any property-related fee or charge under Proposition 218 is a political decision generally made by locally elected officials. As a result, any approval, especially if there is significant public controversy concerning the approval, is a political matter for which those locally elected officials approving the property-related fee or charge can be held politically accountable during the next election for members of the governing body of the local agency.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Political Accountability For Approving Controversial Property-Related Levies
In extraordinary circumstances, especially when there is great hostility by local politicians in any matter relating to the approval of a property-related fee or charge (or any other levy subject to the requirements of Proposition 218), exercise of the local recall power is also generally an available option to local voters. The California Secretary of State has released a publication on the procedures for recalling elected officials in California.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Procedures for New or Increased Property-Related Fees or Charges, Applicability to Tenancies of Real Property
For purposes of the property-related fee and charge provisions of Proposition 218, "property ownership" includes tenancies of real property where tenants are directly liable to pay the property-related fee or charge in question. This means that if a tenant is directly liable to pay a property-related fee or charge, that tenant is also regarded as a "property owner" for purposes of the procedures and requirements applicable to property-related fees and charges, including entitlement to notice and the right to protest.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges
Proposition 218 includes five requirements that every property-related fee or charge must satisfy. An agency may not extend, impose or increase any property-related fee or charge unless it meets all five requirements. The five requirements help ensure that any property-related fee or charge is a legitimate fee or charge and not a tax masquerading as a fee or charge. All property-related fees and charges are subject to and must comply with the five requirements. Property-related fees or charges existing when Proposition 218 became effective must be in compliance by July 1, 1997.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges
If a property-related fee or charge is prohibited under any of the five requirements, Proposition 218 does not prohibit that levy from being structured and imposed as a tax so long as all other applicable legal requirements are satisfied, including voter approval.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges
For purposes of determining whether a property-related fee or charge complies with the five requirements, a member of the public may generally make a written request and receive a copy of any local agency supporting documentation pursuant to the California Public Records Act. The payment of a fee covering the direct costs of duplicating requested pages from any supporting documentation may also be required by the agency.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Total Cost Requirement
The first requirement is that the revenues derived from the property-related fee or charge must not exceed the funds required to provide the property related service. This is an aggregate cost requirement applicable to the combined cost from all parcels while the cost of service requirement contains a similar requirement at the parcel specific level. Use of the term "required" in the constitutional language is intended to preclude local agencies from levying property-related fees or charges for costs that are excessive, unreasonable or unnecessary. If voters believe a property-related fee or charge is excessive, unreasonable or unnecessary, exercise of the local initiative power under Proposition 218 to reduce or repeal the levy is also an available option.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Total Cost Requirement
Proposition 218 has been construed by the courts to prevent local governments from transferring revenues from a water utility to a general fund, unless the transferred funds are reimbursing the general fund for legitimate expenses related to the water utility. For example, if a city's general fund is used to pay for some water utility overhead costs, a transfer of revenue to the general fund is legally permitted. If utility revenues exceed the cost of providing the service, the excess fees are considered a tax, and are not prohibited outright, but must instead be approved by the voters as a separate tax.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Use Requirement
The second requirement is that revenues derived from the property-related fee or charge must not be used for any purpose other than that for which the property-related fee or charge was imposed.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Proportional Cost of Service Requirement
The third requirement is that the amount of a property-related fee or charge must not exceed the proportional cost of the property-related service attributable to the parcel. This requirement is frequently referred to as the "cost of service" requirement.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Proportional Cost of Service Requirement
Proposition 218 does not expressly require an agency to prepare a detailed report in support of a property-related fee or charge. However, as a practical matter, in order to comply with the requirements applicable to property-related fees and charges, a local agency must generally prepare a detailed supporting report. This is especially the case since under Proposition 218 in any legal action contesting the validity of a property-related fee or charge, the burden is on the local agency to demonstrate compliance with the law.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Proportional Cost of Service Requirement
A property-related fee or charge report prepared by a local agency is generally a public record whereby a member of the public may make a written request and receive a copy of the report under the California Public Records Act. Payment of a fee covering the direct costs of duplicating any requested pages from a property-related fee or charge report may also be required.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Actual Use or Immediate Availability Requirement
The fourth requirement is that no property-related fee or charge may be imposed for a property-related service unless that service is actually used by, or immediately available to, the owner of the property in question. In addition, property-related fees or charges based on potential or future use of a property-related service are not permitted.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Actual Use or Immediate Availability Requirement
The fourth requirement is intended to add a temporal component to the property-related fee or charge restrictions. Property owners using an existing property-related service are not supposed to be paying costs associated with future use of that service, including future service to their own property. This is especially the case with respect to paying for the costs of expensive public improvements for which property owners may not receive direct benefits from until years later (if ever at all). However, so far California appellate courts have generally allowed local agencies greater latitude in charging property owners for potential or future use of a property-related service.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Actual Use or Immediate Availability Requirement
A standby charge has historically been considered an assessment levied upon real property according to the availability of water. Under Proposition 218, a standby charge, regardless of whether characterized as a property-related charge or an assessment, is classified as an assessment and may not be levied by a local agency without compliance with the more restrictive procedures and requirements applicable to assessments.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, General Governmental Services Prohibition
The fifth requirement is that no property-related fee or charge may be levied for general governmental services including, but not limited to, police, fire, ambulance or library services, where the general governmental service is available to the public at large in substantially the same manner as it is to property owners. The fifth requirement makes it difficult for local agencies to lawfully impose property-related fees or charges for general governmental services.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Tiered (Conservation) Water Rates and the 2015 Capistrano Decision
In 2015, a California appellate court in Capistrano Taxpayers Association, Inc. v. City of San Juan Capistrano, 235 Cal. App. 4th 1493 (April 2015) unanimously construed Proposition 218 as prohibiting local governments from charging higher water rates on heavier water users (tiered or conservation water rates) without complying with the cost of service requirement under the measure. The Capistrano decision received widespread international coverage in the media because the decision came down during a severe drought in California. The Capistrano decision was also criticized by California Governor Jerry Brown when the decision came down.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Tiered (Conservation) Water Rates and the 2015 Capistrano Decision
Tiered water rate structures generally do not place a cap on the amount of water a parcel may use. Rather, tiered rates make the cost of using water more expensive as a price signal to encourage water conservation. This means that a parcel may generally use as much water as desired as long as the water customer pays the higher price. Thus, tiered rates also function as a revenue raising device (a tax) to the extent the rates exceed the cost of providing the service to the parcel. Property-related charges that exceed the cost of service were precisely the type of abuse by local governments that Proposition 218 was intended to no longer permit.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Tiered (Conservation) Water Rates and the 2015 Capistrano Decision
However, the Capistrano decision did not hold that Proposition 218 invalidated all tiered water rates in California. The appellate court merely stated that "tiers must still correspond to the actual cost of providing service at a given level of usage. The water agency here did not try to calculate the cost of actually providing water at its various tier levels. It merely allocated all its costs among the price tier levels, based not on costs, but on predetermined usage budgets."


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Tiered (Conservation) Water Rates and the 2015 Capistrano Decision
The Capistrano decision further stated that "[t]he way Proposition 218 operates, water rates that exceed the cost of service operate as a tax, similar to the way a 'carbon tax' might be imposed on use of energy. But, we should emphasize: Just because such above-cost rates are a tax does not mean they cannot be imposed—they just have to be submitted to the relevant electorate and approved by the people in a vote . . . However, if a local government body chooses to impose tiered rates unilaterally without a vote, those tiers must be based on cost of service for the incremental level of usage, not predetermined budgets."


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Tiered (Conservation) Water Rates and the 2015 Capistrano Decision
The Capistrano decision also rejected the argument that higher water tier prices that exceed the cost of service may be justified as "penalties" not within the purview of Proposition 218 restrictions. In holding that this argument is inconsistent with Proposition 218, the court stated that "[i]t would open up a loophole in article XIII D, section 6, subdivision (b)(3) [part of Proposition 218] so large it would virtually repeal it.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Tiered (Conservation) Water Rates and the 2015 Capistrano Decision
All an agency supplying any service would need to do to circumvent article XIII D, section 6, subdivision (b)(3), would be to establish a low legal base use for that service, pass an ordinance to the effect that any usage above the base amount is illegal, and then decree that the penalty for such illegal usage equals the incrementally increased rate for that service. Such a methodology could easily yield rates that have no relation at all to the actual cost of providing the service at the penalty levels. And it would make a mockery of the Constitution."


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Tiered (Conservation) Water Rates and the 2015 Capistrano Decision
The California Supreme Court subsequently denied requests by then California Attorney General Kamala Harris (representing the California State Water Resources Control Board) and local government interest organizations (Association of California Water Agencies, League of California Cities, and California State Association of Counties) to depublish the Capistrano decision.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Tiered (Conservation) Water Rates and the 2015 Capistrano Decision
Despite the best efforts by the state's top lawyers and water experts to depublish the groundbreaking ruling, the California Supreme Court decision to keep it published means the Capistrano decision can continue to be cited as precedent throughout California in other lawsuits involving the legality under Proposition 218 of tiered water rates charged by other local governments. The Capistrano decision is also considered a milestone in the debate over to what extent appellate court decisions in California should be published as precedent.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Tiered (Conservation) Water Rates and the 2015 Capistrano Decision
Proposition 218 does not prohibit other tools available to local governments that accomplish water conservation. Examples of such tools include: restricting specific wasteful uses of water (e.g., hosing down a driveway to clear debris), water usage caps or rationing, or public disclosure of excessive water users.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Tiered (Conservation) Water Rates and the 2015 Capistrano Decision
After the 2015 Capistrano decision, lawsuits were filed against other cities in California, alleging that their tiered water rate structures were unconstitutional.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Lifeline Utility Rates for Low Income Customers
Local agencies often provide financial assistance to low income customers in the form of lifeline utility rates. Some local agencies use existing taxpayer funds to finance lifeline utility rate programs. Other local agencies may use proceeds from voluntary donations or from a voter approved tax increase to finance lifeline utility rate programs.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Lifeline Utility Rates for Low Income Customers
Proposition 218 issues arise when a local agency seeks to finance lifeline utility rate programs by increasing utility fees and charges on other ratepayers without voter approval. Local agencies generally prefer to legally overcharge ratepayers to pay for lifeline utility rate programs because no voter approval would be required and because it would free up existing local agency funds that could be spent on other purposes.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Lifeline Utility Rates for Low Income Customers
However, since property-related fees and charges are limited to the cost of providing the service to each parcel of property, Proposition 218 prohibits local agencies from overcharging utility customers for property-related services such as water, sewer, and refuse collection to pay for lifeline utility rate programs. The legal reasoning is similar to the reasoning applied to tiered water rates and the cost of service limitations under Proposition 218.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Lifeline Utility Rates for Low Income Customers
As with tiered water rates, Proposition 218 does not prohibit all lifeline utility rate programs by local agencies. Proposition 218 does not prohibit local agencies from using existing taxpayer funds to pay for lifeline utility rate programs much in the same manner that taxpayer funds are used to finance social and other government programs for those in need. Proposition 218 also does not prohibit local agencies from using voluntary donations or securing a voter approved tax increase to pay for lifeline utility rate programs. However, when local agencies overcharge other utility customers without voter approval to pay for lifeline utility rate programs, Proposition 218 does not allow this.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Requirements for Existing, New, or Increased Property-Related Fees and Charges, Lifeline Utility Rates for Low Income Customers
While lifeline utility rate programs are intended to protect low income individuals, many other utility customers who don't qualify for lifeline programs are adversely impacted by significant utility fee and charge increases by local water agencies. If a local water agency is not responsive to the needs of its customers and raises water utility fees and charges too much, the local initiative power under Proposition 218 provides a remedy that can generally be used to reduce or repeal those utility fee and charge increases.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges
Voter approval is also required for certain new or increased property-related fees or charges. Except for fees or charges for sewer, water, or refuse collection services, no property related fee or charge may be imposed or increased unless and until that property-related fee or charge is submitted and approved by a majority vote of the property owners of the property subject to the property-related fee or charge or, at the option of the agency, by a two-thirds vote of the electorate residing in the affected area.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges
A property-related fee or charge election must be conducted not less than 45 days after the required public hearing. An agency is allowed to adopt procedures similar to those for increases in assessments in the conduct of property-related fee or charge elections. However, a property-related fee or charge election cannot be used to validate or override a property-related fee or charge otherwise prohibited under Proposition 218.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Election Exemptions
Property-related fees or charges for sewer, water, or refuse collection services are exempt from the voter approval requirement. Since the exemptions represent exceptions to a voter approval requirement, the election exemptions are strictly construed. Nevertheless, most property-related fees or charges fall within an election exemption as typical utility fees for water, sewer, or refuse collection services. Examples of new or increased property-related fees or charges that ordinarily require an election include stormwater fees or flood control fees.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Property-Related Fee or Charge Election Procedures
If a property-related fee or charge election is required, the local agency decides whether the election will be a property owner election requiring a majority vote or a two-thirds vote registered voter election. The California Supreme Court has ruled that property owner elections for property-related fees and charges are not subject to the voting secrecy provision in the California Constitution.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Property-Related Fee or Charge Election Procedures
The California Legislature has enacted additional legal procedures relating to property-related fee or charge elections under Proposition 218. These procedures are mandatory and are in addition to any other procedures that may be adopted by the local agency. The new procedural requirements became legally operative on July 1, 2014.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Property-Related Fee or Charge Election Procedures
If the agency submits the proposed property-related fee or charge for approval by a two-thirds vote of the registered voters residing in the affected area, the election must be conducted by the agency's elections official or his or her designee.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Property-Related Fee or Charge Election Procedures
If the agency submits the proposed property-related fee or charge for approval by a majority vote of the property owners who will be subject to the fee or charge, then additional procedures apply and must be followed.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Property-Related Fee or Charge Election Procedures
On the face of each envelope in which the notice of election and ballot are mailed, there must appear in substantially the following form the phrase "OFFICIAL BALLOT ENCLOSED" in no smaller than 16-point bold type. A local agency may additionally place the phrase "OFFICIAL BALLOT ENCLOSED" on the face of the envelope in a language or languages other than English.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Property-Related Fee or Charge Election Procedures
The ballot must include the agency's address for return of the ballot, the date and location where the ballots will be tabulated, and a place where the person returning it may indicate his or her name, a reasonable identification of the parcel, and his or her support or opposition to the proposed property-related fee or charge. The ballots must be tabulated in a location accessible to the public. The ballot must be in a form that conceals its content once it is sealed by the person submitting it. The ballot must remain sealed until the ballot tabulation starts.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Property-Related Fee or Charge Election Procedures
An impartial person designated by the agency who does not have a vested interest in the outcome of the proposed property-related fee or charge must tabulate the ballots. An impartial person includes, but is not limited to, the clerk of the agency.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Property-Related Fee or Charge Election Procedures
If the agency uses agency personnel for the ballot tabulation, or if the agency contracts with a vendor for the ballot tabulation and the vendor or its affiliates participated in the research, design, engineering, public education, or promotion of the property-related fee or charge, the ballots must be unsealed and tabulated in public view to permit all interested persons to meaningfully monitor the accuracy of the ballot tabulation process.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Property-Related Fee or Charge Election Procedures
The ballot tabulation may be continued to a different time or different location accessible to the public, provided that the time and location are announced at the location at which the tabulation started and is posted by the agency in a location accessible to the public. The impartial person may use technological methods to tabulate the ballots, including, but not limited to, punchcard or optically readable (bar-coded) ballots.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Property-Related Fee or Charge Election Procedures
During and after the tabulation, the ballots are treated as public records subject to public disclosure under the California Public Records Act, and must be made available for inspection by any interested person. The ballots must be preserved for a minimum of two years, after which they may be destroyed as provided by law.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Property-Related Fee or Charge Election Procedures
Historically, the constitutional right to vote in secret did not apply to property owner elections. This was not altered by the passage of Proposition 218.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
One of the most significant issues under the Proposition 218 election requirement for property-related fees and charges is whether stormwater drainage fees and charges are exempt from the election requirement as either a fee for "water" or "sewer" service.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
Many local agencies use existing revenues from their general fund to help finance stormwater programs. Some local agencies also use existing revenues from stormwater fees and charges imposed without voter approval before Proposition 218 became law when an election was not legally required at that time. However, legal issues arise under Proposition 218 when local agencies seek to raise stormwater revenues in the form of a new or increased fee or charge without voter approval.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
In 2002, a California appellate court in the published case of Howard Jarvis Taxpayers Association v. City of Salinas, 98 Cal. App. 4th 1351 (June 2002) unanimously held that a stormwater drainage fee imposed on developed parcels of land was a "property-related" fee subject to Proposition 218, including the voter approval requirement thereunder.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
Prior to the Salinas decision, the California Attorney General previously issued a formal written opinion in 1998 and concluded not only that storm drainage fees are "property-related" fees subject to Proposition 218, but also that the election exemptions for "sewer" and "water" services do not apply. Thus, the California Attorney General reached the same conclusions concerning stormwater drainage fees under Proposition 218 as the appellate court did in the Salinas case which was decided some four years later.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
Concerning the issue of whether the sewer or water service election exemptions applied, the City of Salinas argued that the court should rely on the commonly accepted meaning of "sewer," noting the broad dictionary definition of this word. The city also pointed to several code sections that described storm drains as a type of sewer.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
Yet, even an analysis of Proposition 218 in a League of California Cities publication before the November 1996 election made a distinction between storm drainage and sewer systems (and also water systems) in stating: "But, it appears that all fees and charges for water, sanitation, storm drainage, or sewer are included within the scope of the measure." This analysis was available to the public before the Proposition 218 election, and it came from an organization, the League of California Cities, that opposed Proposition 218.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
The Howard Jarvis Taxpayers Association argued that the court should look beyond mere dictionary definitions of "sewer" to examine the legal meaning of the term in the specific context of how that term is used in Proposition 218. The Association also observed that numerous California statutes differentiated between storm drainage and sewerage systems, including a specific statute that legally authorizes many local governments to levy fees and charges for storm drainage or sewerage systems.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
In resolving the appropriate standard of construction that should be applied in interpreting the scope of the election exemption for property-related fees under Proposition 218, the appellate court in the Salinas case stated: "We must keep in mind, however, the voters' intent that the constitutional provision be construed liberally to curb the rise in "excessive" taxes, assessments, and fees exacted by local governments without taxpayer consent. Accordingly, we are compelled to resort to the principle that exceptions to a general rule of an enactment must be strictly construed."


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
Thus, since Proposition 218 constitutionally requires that its provisions be liberally construed to limit local government revenues and enhance taxpayer consent, an election exemption provision that would have the opposite effect of enhancing local government revenues and limiting taxpayer consent must be strictly construed. This conclusion is also consistent with the rule of interpretation that exceptions to the general rule of a law be strictly construed.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
In applying the strict construction standard to the sewer service exemption, the appellate court construed the exemption to include only its narrower and more common meaning applicable to sanitary sewerage. Using similar reasoning, the appellate court also concluded that the stormwater drainage fee did not qualify under the water service exemption. The court noted that the "average voter would envision 'water service' as the supply of water for personal, household, and commercial use, not a system or program that monitors storm water for pollutants, carries it away, and discharges it into the nearby creeks, river, and ocean."


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
The City of Salinas subsequently petitioned the appellate court to rehear the Salinas case, but that petition was denied. Thereafter, the City of Salinas petitioned the California Supreme Court to review the Salinas case, but that petition was also denied as the California Supreme Court refused to review the case.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
Many local agencies, politicians, and environmental interest groups want stormwater drainage services to also be classified as a utility service in the same class as water, sanitary sewer, and refuse collection services that are exempt from a property-related fee election under Proposition 218. If, contrary to the Salinas decision, stormwater drainage services were classified as an election exempt service, local agencies would no longer need voter approval under Proposition 218 to impose new or increased stormwater drainage fees and charges. This not only would result in local agencies imposing many new or increased stormwater fees and charges, but also in significantly higher amounts than would have otherwise been imposed had voter approval been required.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
On February 2, 2017, Senator Robert Hertzberg (Democrat-District 18-Van Nuys) introduced Senate Bill No. 231 (SB 231) which would redefine and expand, by statute, the constitutional "sewer service" election exemption under Proposition 218 as also applying to stormwater fees and charges.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
Hertzberg sought to "clarify" the California Constitution so that it will be easier for local governments to impose fees and charges to pay for stormwater programs and services by also exempting stormwater fees and charges from the constitutional election requirement under Proposition 218.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
However, a 2002 published California appellate court decision (the Salinas case) made it clear that stormwater fees and charges are not exempt from the constitutional election requirement for property-related fees under Proposition 218 in stating: "We conclude that article XIII D [part of Prop. 218] required the City to subject the proposed storm drainage fee to a vote by the property owners or the voting residents of the affected area."


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
Jon Coupal, President of the Howard Jarvis Taxpayers Association, wrote that SB 231 is an end run around Proposition 218 in that it attempts to illegally rewrite a Prop. 218 constitutional election exemption applicable to sewer and water service with a mere statute to allow for stormwater to be included under the definition of "sewer," meaning that stormwater fees and charges would no longer be subject to a Proposition 218 election.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
On October 6, 2017, SB 231 was signed by Governor Brown and became a statute. The SB 231 statute became effective on January 1, 2018. Notwithstanding the SB 231 statute, local governments remain bound by the Salinas case decision interpreting the constitutional language of Proposition 218.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
The property-related fee or charge election requirement for stormwater fees and charges only applies to new or increased stormwater levies. Stormwater fees and charges existing before Proposition 218 became law are not subject to the property-related fee or charge election requirement so long as those property-related fees or charges are not increased by the local government. However, existing (before Proposition 218 became law) stormwater fees and charges imposed without voter approval can generally be reduced or repealed by the voters using the local initiative power under Proposition 218, including the significantly reduced signature requirement thereunder.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
In addition, if any new or increased stormwater fee or charge is imposed by a local government without complying with the election requirement under Proposition 218, such as by a local government relying on SB 231 (2017) to evade the constitutional election requirement applicable to stormwater fees and charges, as a political remedy that fee or charge may also be reduced or repealed by the voters using the local initiative power under Proposition 218, including the significantly reduced signature requirement thereunder. This can be done as an alternative to, or concurrent with, any legal remedy for noncompliance with any applicable election requirement under Proposition 218.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
After property owner or voter approval of a property-related fee or charge, the local initiative power under Proposition 218 can also generally be used by the electorate to reduce or repeal a stormwater levy. An example of where such a local initiative may be appropriate involves election issues or controversies associated with a property owner election, particularly where the local government adopted controversial election procedures.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Voter Approval for New or Increased Property-Related Fees and Charges, Stormwater Drainage Fees and Charges
Should a property-related fee or charge reduction or repeal initiative qualify for the ballot, the initiative election would be by the registered voters since the initiative power is a power applicable to the electors.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Local Agency Burden to Demonstrate Compliance
Prior to Proposition 218, the courts allowed local agencies significant flexibility in determining fee or charge amounts. In lawsuits challenging fees or charges, the challenger generally had the burden to show that they were not legal. However, Proposition 218 shifted the burden of demonstrating compliance to the local agency in any lawsuit challenging a property-related fee or charge. In any legal action contesting the validity of a property-related fee or charge, the burden is on the local agency to demonstrate compliance with the procedures and requirements applicable to property-related fees and charges. This change in the law makes it significantly easier for taxpayers to win a legal challenge involving a property-related fee or charge under Proposition 218.


1996 California Proposition 218, Property-Related Fees and Charges – Procedures and Requirements, Local Agency Burden to Demonstrate Compliance
The independent standard of review for property assessments adopted by the California Supreme Court in the landmark Silicon Valley Taxpayers case also applies to legal challenges involving property-related fees and charges. As a result, California courts now exercise their independent judgment in determining whether a property-related fee or charge violates Proposition 218. The independent standard of review makes it significantly easier for taxpayers to win legal challenges involving property-related fees and charges.


1996 California Proposition 218, Application to Regional Levies
Proposition 218 expressly applies to regional governments in California under its broad "local government" constitutional definition. This means that regional governments must comply with the voter approval requirements for taxes as well as the procedures and requirements applicable to special assessments and property-related fees and charges.


1996 California Proposition 218, Application to Regional Levies
Regional government can also take the form of delivering government services and programs from the state level down to the regional level. An example would be a state administered water program limited to the Central Valley region of California. If a separate regional governmental agency is involved, the agency will generally be subject to Proposition 218. However, when a separate regional governmental agency is not involved, it is unclear whether Proposition 218 compliance is required as California courts have yet to resolve this issue.


1996 California Proposition 218, Application to Regional Levies, Regional Levies and Accountability Issues
There is a growing trend in California to address public policy issues on a regional basis. From the perspective of taxpayers and voters voting on a regional governmental levy (such as a regional tax or a regional property-related fee or charge), significant accountability concerns can arise. Depending upon the laws creating a regional governmental agency, the governing body may not be directly elected by the voters of the region. In many instances, the governing body members of a regional governmental agency are appointed.


1996 California Proposition 218, Application to Regional Levies, Regional Levies and Accountability Issues
If the governing body of a regional governmental agency is not directly elected by voters of the region, political accountability issues often arise regarding the expenditure of public funds derived from a regional governmental levy. This is because there is no provision for directly electing members of the governing body. In addition, if the governing body members of a regional governmental agency are not directly elected, the recall power is also not available to remove those members from the regional governing body. In the foregoing situation, if any expenditure problems were to occur after approval of a regional governmental levy, voters will not be able to vote any problem governing body members out of office as a political accountability mechanism.


1996 California Proposition 218, Application to Regional Levies, Regional Levies and Accountability Issues
As an accountability mechanism, a regional governmental levy can generally be reduced or repealed using the local initiative power under Proposition 218, including the significantly reduced signature requirement thereunder. However, even with the significantly reduced signature requirement, qualifying an initiative for a regional levy will generally be more difficult because of the large number of voters involved.


1996 California Proposition 218, Application to State Levies
Levies imposed by the State of California are generally not subject to Proposition 218 because the state is not a "local government" under Article XIII C or an "agency" under Article XIII D.


1996 California Proposition 218, Application to State Levies
While state taxes are not subject to Proposition 218, such taxes are generally subject to approval by two-thirds of all members of the California Legislature. The preceding requirement for state taxes was adopted when Proposition 13 was approved by California voters in 1978. Proposition 26, approved by California voters in 2010, added a broad constitutional definition of "tax" applicable to the state with the resulting effect of expanding the scope of state levies subject to two-thirds approval by the California Legislature.


1996 California Proposition 218, Application to State Levies
Special assessments on real property as well as property-related fees and charges, the types of levies ordinarily subject to Proposition 218, are generally not levied by the state. To the extent such levies may be imposed by the State of California, whether two-thirds legislative approval is required is determined by the provisions of Proposition 26 approved in 2010.


1996 California Proposition 218, Application to State Levies, State Levies Imposed Within Limited Geographic Boundaries
There may exist limited instances in which levies imposed by the State of California might be subject to Proposition 218. Under Proposition 218, the definition of a "special district" refers to "an agency of the State, formed pursuant to general law or a special act, for the local performance of governmental or proprietary functions with limited geographic boundaries." Accordingly, some state agencies are subject to Proposition 218 when they are a "special district."


1996 California Proposition 218, Application to State Levies, State Levies Imposed Within Limited Geographic Boundaries
While a state agency imposing a levy at the state level is not a "special district," such an agency may be a "local or regional governmental entity" under the broad definition of a "local government," and thereby be subject to Proposition 218 if the levy is imposed within limited geographic boundaries as opposed to being imposed on a statewide basis.


1996 California Proposition 218, Application to State Levies, State Levies Imposed Within Limited Geographic Boundaries
An example is a state levy imposed solely within the Central Valley region of California. Another example is a state levy imposed solely within the boundaries of a local government in situations where the state has taken partial or complete control over the local government and is exercising powers ordinarily exercised by the local government.


1996 California Proposition 218, Application to State Levies, Article XIII D Application to the State
Under Proposition 218, any real property within an assessment district that is owned or used by the State of California is generally not exempt from assessment. As a result, the State of California must pay its fair share of any special assessment on real property lawfully levied pursuant to Proposition 218. The State of California is also entitled to vote in assessment ballot proceedings required by Proposition 218.


1996 California Proposition 218, Application to State Levies, Article XIII D Application to the State
The State of California is also entitled to Proposition 218 protections applicable to property-related fees and charges. This includes rights to receive written notice and protest a property-related fee or charge, the five requirement safeguards applicable to property-related fees and charges (including "cost of service" protections), and the right to vote if a property owner election is held for a property-related fee or charge.


1996 California Proposition 218, Application to State Levies, Article XIII D Application to the State
The California Department of General Services is required to develop compliance standards in the State Administrative Manual to inform owners of state property in California of their duties and responsibilities under Proposition 218. Under the State Administrative Manual, all state agencies are required to determine that, with respect to state properties for which an assessment is levied by a local government, the applicable assessment district was properly constituted pursuant to law and that the requisite special benefit is present. If the assessment is valid, then the state agency which owns or controls the property must promptly pay its proportionate share of the assessment.


1996 California Proposition 218, Liberal Interpretation Constitutional Provision
Section 5 of Proposition 218 contains a liberal interpretation provision constitutionally commanding that its provisions be "liberally construed to effectuate its purposes of limiting local government revenue and enhancing taxpayer consent." The liberal interpretation constitutional command is legally binding on all California courts (including the California Supreme Court), the California Legislature, government agencies, and government officials and employees in their interpretation and application of Proposition 218. The liberal interpretation provision has positively affected the outcome of numerous Proposition 218 lawsuits when it has been properly applied by the courts as intended.


1996 California Proposition 218, Liberal Interpretation Constitutional Provision, Judicial Interpretation Before Proposition 218
The importance and significance of the liberal interpretation provision under Proposition 218 can be traced to prior adverse judicial interpretations of Proposition 13 strictly construing important provisions of that initiative measure. In two leading cases in 1982, the California Supreme Court, headed by controversial Chief Justice Rose Bird, formulated and applied a special rule of interpretation applicable only to Proposition 13 that strictly construed the circumstances in which local governments must get two-thirds voter approval to approve local tax increases. This had the practical effect of the courts significantly limiting the scope of Proposition 13.


1996 California Proposition 218, Liberal Interpretation Constitutional Provision, Judicial Interpretation Before Proposition 218
The California Supreme Court majority reasoned that due to the "fundamentally undemocratic nature" of a two-thirds vote supermajority requirement, the applicable voter approval requirement for local taxes under Proposition 13 must be strictly construed. This special rule of interpretation was not consistent with the usual interpretation of initiative measures, and has not been applied by the California Supreme Court in circumstances other than Proposition 13 where a supermajority vote is required in an initiative measure.


1996 California Proposition 218, Liberal Interpretation Constitutional Provision, Judicial Interpretation Before Proposition 218
As a result of the two-thirds voter approval requirement for local taxes under Proposition 13 being strictly construed, local governments in California were able to impose many local tax increases with either simple majority voter approval or no voter approval at all. The resulting adverse impact frustrated the effective tax relief provisions of Proposition 13 to the significant detriment of California taxpayers, especially homeowners. The special strict construction rule of interpretation also provided a legal basis for California courts to narrowly and strictly interpret the circumstances in which nontax levies such as property assessments, fees, and charges were in reality special taxes subject to two-thirds voter approval under Proposition 13.


1996 California Proposition 218, Reaction to Proposition 218 by Local Governments
Proposition 218 significantly limits the ability of local governments to raise revenues without voter approval. As a result, most local governments in California opposed Proposition 218 when it appeared on the ballot, and remain hostile to Proposition 218. In nearly every Proposition 218 appellate court case of significance, local government interests, including the League of California Cities, the California State Association of Counties, and the Association of California Water Agencies have sought to limit the scope and application of Proposition 218 restrictions by arguing in favor of narrow or strict interpretations of the taxpayer protections.


1996 California Proposition 218, Reaction to Proposition 218 by Local Governments
The actions by local governments to limit the scope and application of Proposition 218 are not limited to the courts. Through the legislative process, particularly in the California Legislature but also via the ballot initiative process, local governments have also supported legislative proposals that limit or otherwise erode Proposition 218 taxpayer protections. California law allows local governments to spend taxpayer funds to lobby in support of such legislative proposals in the California Legislature either directly or indirectly through local government interest associations such as the League of California Cities, the California State Association of Counties, and the Association of California Water Agencies.


1996 California Proposition 218 (Local Initiative Power)
Proposition 218 is an adopted initiative constitutional amendment in the state of California that appeared on the November 5, 1996, statewide election ballot. Proposition 218 revolutionized local and regional government finance in California. Called the “Right to Vote on Taxes Act,” Proposition 218 was sponsored by the Howard Jarvis Taxpayers Association as a constitutional follow-up to the landmark Proposition 13 property tax revolt initiative constitutional amendment approved by California voters on June 6, 1978. Proposition 218 was drafted by constitutional attorneys Jonathan Coupal and Jack Cohen.


1996 California Proposition 218 (Local Initiative Power)
One of the most significant provisions of Proposition 218 constitutionally reserves to local voters the exercise of the initiative power to reduce or repeal any local tax, assessment, fee, or charge. This includes a significantly reduced signature requirement making ballot qualification easier for local voters. Proposition 218 was the first successful initiative measure in California history to alter the scope of the constitutional initiative power.


1996 California Proposition 218 (Local Initiative Power), Overview of local initiative power under Proposition 218
The initiative is the constitutionally reserved power of the voters to propose laws and thereafter to adopt or reject them. The local initiative power under Proposition 218 is a powerful tool available to voters, particularly when local elected officials are not responsive to their constituents in matters relating to local taxes, assessments, fees, and charges.


1996 California Proposition 218 (Local Initiative Power), Overview of local initiative power under Proposition 218
The specific constitutional language applicable to the local initiative power under Proposition 218 (contained in Section 3 of Article XIII C of the California Constitution) states:


1996 California Proposition 218 (Local Initiative Power), Overview of local initiative power under Proposition 218
“SEC. 3. Initiative Power for Local Taxes, Assessments, Fees and Charges. Notwithstanding any other provision of this Constitution, including, but not limited to, Sections 8 and 9 of Article II, the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. The power of initiative to affect local taxes, assessments, fees and charges shall be applicable to all local governments and neither the Legislature nor any local government charter shall impose a signature requirement higher than that applicable to statewide statutory initiatives.”


1996 California Proposition 218 (Local Initiative Power), Overview of local initiative power under Proposition 218
The Impartial Analysis of Proposition 218 prepared by the California Legislative Analyst, as contained in the Official Ballot Pamphlet provided to California voters, stated:


1996 California Proposition 218 (Local Initiative Power), Overview of local initiative power under Proposition 218
“Initiative Powers. The measure states that Californians have the power to repeal or reduce any local tax, assessment, or fee through the initiative process. This provision broadens the existing initiative powers available under the State Constitution and local charters.”


1996 California Proposition 218 (Local Initiative Power), Overview of local initiative power under Proposition 218
Shortly after the passage of Proposition 218, the California Legislative Analyst wrote the following about the local initiative power under Proposition 218:


1996 California Proposition 218 (Local Initiative Power), Overview of local initiative power under Proposition 218
“Proposition 218 eliminates any ambiguity regarding the power of local residents to use the initiative by stating that residents of California shall have the power to repeal or reduce any local tax, assessment, or fee. In addition, the measure forbids the Legislature and local governments from imposing a signature requirement for local initiatives that is higher than that applicable to statewide statutory initiatives. As a consequence of these provisions, the only limits on local residents’ ability to overturn local revenue raising measures appear to be those in the federal constitution, such as the federal debt impairment clause.”


1996 California Proposition 218 (Local Initiative Power), Reduced signature requirement
The local initiative power under Proposition 218 is also subject to a significantly reduced signature requirement which cannot exceed the requirement applicable to statewide statutory initiatives. Thus, the specific maximum signature requirement under Proposition 218 is five percent (5%) of the votes cast for all candidates for Governor at the last gubernatorial election within the territory of the local government.


1996 California Proposition 218 (Local Initiative Power), Reduced signature requirement
Data needed to compute the applicable signature requirement for a local government with respect to the exercise of the local initiative power under Proposition 218 (total number of gubernatorial election votes) is generally available from local county registrars of voters. The Supplement to the Statement of Vote published by the California Secretary of State also contains data needed to calculate the applicable signature requirement in counties as well as cities, and a copy of the supplement must legally be made available upon request to any California voter.


1996 California Proposition 218 (Local Initiative Power), Example uses
The local initiative power under Proposition 218 can be used to reduce or repeal local taxes like utility user taxes, sales taxes, business taxes, parcel taxes, and also to reduce or repeal local fees and charges such as stormwater fees, groundwater fees, public ambulance/paramedic fees, public park/sports fees, public parking fees, or utility fees and charges for water (including drought fees and surcharges), sewer, or refuse collection services.


1996 California Proposition 218 (Local Initiative Power), Example uses
The local initiative power under Proposition 218 has been used to propose the repeal of local taxes in sanctuary cities. Significant controversy has also occurred from use of the local initiative power under Proposition 218 to reduce or repeal public agency domestic water rates and charges.


1996 California Proposition 218 (Local Initiative Power), Example uses, Accountability Tool
Exercise of the local initiative power under Proposition 218 gives voters a powerful tool to use such as when local government officials are not responsive to the needs of their constituents, when local voters have not previously voted on a particular levy (including special taxes for services in many Mello-Roos Districts), when there has been significant waste or mismanagement by a local government, when there has been a controversial expenditure of revenue proceeds by a local government, when the amount of a local levy is excessive or unreasonable, or when promises previously made by local politicians about the imposition of a levy are broken.


1996 California Proposition 218 (Local Initiative Power), Example uses, Accountability Tool
Sometimes even the mere mention or threat by voters to pursue a local reduction or repeal initiative under Proposition 218 will result in local government officials being more responsive to the concerns of the public regarding a particular local tax, assessment, fee or charge.


1996 California Proposition 218 (Local Initiative Power), Example uses, Alternative to Litigation
The local initiative power under Proposition 218 can also be used as an alternative to litigation (such as when cost, time delay, or legal risk issues might not make litigation an attractive option), and has also been successfully used as a legislative remedy to reduce or repeal a local levy following the defeat of a lawsuit challenging the validity of the levy under Proposition 218. There have also been instances where the local initiative power under Proposition 218 has been successfully used concurrently with pending litigation.


1996 California Proposition 218 (Local Initiative Power), Example uses, When Legal Remedy Not Available
The local initiative power under Proposition 218 is also an available legislative remedy in situations where a legal remedy may not be available such as when the applicable statute of limitations has run or when other legal procedural impediments are present (e.g., exhaustion of remedies, standing, or claims requirements).


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal
The local initiative power under Proposition 218 can be used to target specific components of a local government levy to better achieve public policy goals as well as to increase the chances of a local initiative being approved by voters. This approach is especially useful in situations where a local levy repeal is politically or legally problematic. Often, a more specifically targeted levy reduction will have a significantly better chance of being approved by local voters and withstanding a legal challenge.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Utility User Taxes
An example application involves local utility user taxes. Utility user taxes are imposed on one or more utility services, including water, electricity, sewer, gas, telephone, cable television, and refuse collection.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Utility User Taxes
Utility user taxes are sometimes a significant revenue source for a local government. This can make the complete repeal of a local utility users tax politically problematic. Rather than providing for a complete repeal of a local utility user tax, a local initiative could target tax relief for just the residential utility customers while leaving utility tax rates for commercial customers unchanged. Another application could target a particular utility service for tax relief while leaving the tax rate for other utility services unchanged. Similar to the foregoing would involve reducing just a utility users tax for electric service to offset historical and/or current electricity utility fee transfers to the general fund of the local government, which transfers the courts have generally allowed.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Utility User Taxes
Yet another application could target local utility user tax “modernization” measures that have been approved by voters over the past few years. In some instances, voters may have unknowingly authorized the imposition of a tax on online video streaming services in approving a local utility user tax “modernization” measure. The local initiative power can be used to reduce or repeal a local tax on online video streaming services previously approved under a utility user tax “modernization” measure.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Utility Fees and Charges
Another example involves the reduction or repeal of local government utility fees and charges, particularly local utility fees and charges for domestic water or sanitary sewer services which are not subject to a mandatory election under Proposition 218 prior to their imposition.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Utility Fees and Charges
Drafting an initiative to reduce or repeal local utility fees or charges generally requires the assistance of expert legal counsel because of numerous legal issues that must be properly addressed, especially if federal contract impairment issues may be present. Furthermore, if state statutes or other laws require local utility rates to be set at specified service levels, those issues must also be taken into consideration and satisfactorily addressed in drafting an initiative.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Utility Fees and Charges
Local government utility rate repeals are more drastic in their impact, are often more difficult to legally defend, and historically are more difficult to get approved by local voters. Utility rate reductions, especially more modest reduction amounts or reductions spread over time, generally have a better chance of being approved by local voters and withstanding legal scrutiny.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Stormwater Fees and Charges
New or increased stormwater fees and charges imposed by local governments in California (also sometimes referred to as “clean water” fees) are subject to a mandatory property-related fee or charge election under Proposition 218. However, local government imposed stormwater fees and charges existing before Proposition 218 was enacted are not subject to a mandatory election by local voters so long as those fees and charges are not increased. A local initiative could target for reduction or repeal local government stormwater fees and charges existing before Proposition 218 became law, including existing local street cleaning or sweeping fees and charges.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Stormwater Fees and Charges
Any new or increased stormwater fee or charge imposed by a local government without complying with the election requirement under Proposition 218 may also be reduced or repealed by the electorate using the local initiative power under Proposition 218. This includes any attempt by a local government relying on SB 231 (2017) to evade the constitutional election requirement for stormwater fees and charges under Proposition 218.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Sales Taxes
A local initiative can target for reduction or repeal local government sales taxes, especially where there has been significant waste and/or mismanagement of sales tax proceeds, when there has been controversial or questionable spending of sales tax proceeds by a local government such as using tax proceeds to pay for excessive public employee salaries and/or benefits like pensions and retiree healthcare, when the programs and services financed from sales tax proceeds are not delivered at an acceptably high level, when voters desire to lower the local sales tax rate in situations where the current tax rate is excessive and/or unreasonably high, when another tax election is desired especially where a local sales tax increase was narrowly approved by voters or otherwise approved under controversial circumstances, or when campaign promises made by local politicians about the expenditure of local sales tax proceeds are broken after voter approval, including in situations where legally nonbinding promises concerning the spending of general sales tax proceeds were made by local politicians before the election.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Sales Taxes
In some situations, all or a portion of local sales tax proceeds may be pledged to repay bonds issued by the local government (such as for transportation purposes). Consultation with legal counsel is usually needed where bonds are issued and sales tax proceeds are pledged by the local government to repay the bonds.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Parcel Taxes
A local initiative under Proposition 218 can target for reduction or repeal local government parcel taxes, especially in situations where major tax fairness issues are present in a particular community.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Mello-Roos Taxes
Special property taxes for services under the Mello-Roos Community Facilities Act of 1982 are sometimes controversial in a community. A Mello-Roos tax or other charge levied to finance a service is generally subject to reduction or repeal using the local initiative power under Proposition 218.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Mello-Roos Taxes
Examples where the reduction or repeal of a Mello-Roos tax on services may be appropriate include where voters desire to eliminate or reduce a local public service currently provided by government, where voters believe certain local services currently provided by government can be more cost-effectively delivered by the private sector such as by a local property owners association, where voters did not previously vote in a registered voter election on a Mello-Roos tax, and where voters believe they are bearing a disproportionate and/or unfair financial burden compared to others in the community with regard to the financing of one or more general governmental services.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Mello-Roos Taxes
A Mello-Roos tax or other charge levied to repay bonds is a legally more complex situation because federal contract impairment issues may preclude the exercise of the local initiative power. Advice from legal counsel is typically needed in such situations.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local Groundwater Fees
The California Supreme Court in 2017 held that a local fee (imposed upon persons) on the extraction of groundwater was generally no longer a property-related fee under Proposition 218. A local initiative under Proposition 218 can be used to reduce or repeal a groundwater fee approved by a local government even though such a fee is no longer subject to constitutional protections applicable to property-related fees.


1996 California Proposition 218 (Local Initiative Power), Example Levies Subject to Reduction or Repeal, Local General Obligation Bond Taxes
When voters approve a local general obligation bond measure in California, the bonds are paid off by property owners via ad valorem (based on assessed value) property tax increases. In some instances, the local initiative power under Proposition 218 may be used to reduce or repeal bond tax authorizations. Because significant federal contract impairment issues are typically present which may preclude the exercise of the local initiative power with respect to such bond taxes, advice from legal counsel is almost always needed. In circumstances where bonds have been authorized but not yet issued by the local government, voters will generally have their best opportunity to reduce or repeal the bond tax authorization.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives
An initiative to reduce or repeal a local levy may be as simple as a straight reduction or repeal of the levy, or more complex such as tying the reduction or repeal of the levy to satisfaction of specific performance standards set forth in the initiative. Local initiatives generally fall into three types.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives, Traditional Initiatives
A traditional initiative involves a straight reduction or repeal of a local tax, assessment, fee or charge. Traditional initiatives usually include specific findings and/or declarations describing the policy reasons for pursuing the initiative.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives, Compensatory Initiatives
A compensatory initiative targets one or more alternative revenue sources for reduction or repeal to compensate for the inability, such as for legal or political reasons, to reduce or repeal a particular revenue source. Compensatory initiatives typically contain specific findings and declarations setting forth the compensatory policy reasons for pursuing the local initiative, including reasons why the particular revenue source cannot be pursued and the compensatory nature of the alternative revenue source(s) being reduced or repealed. Several examples follow.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives, Compensatory Initiatives, Countering Contract Impairment Issues
In some instances, it may not be legally possible to target a particular revenue source for reduction or repeal because revenue proceeds have been pledged to repay bonds, and a violation of the contract impairment clause of the United States Constitution would occur if the pledged revenue source were reduced or repealed. A compensatory initiative would target an alternative revenue source for reduction or repeal to compensate for the desired relief not otherwise available due to federal legal constraints.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives, Compensatory Initiatives, Countering State Restriction Issues
In some instances, it may not be legally possible to target a particular utility service fee or charge for reduction or repeal because of California statutory or case law restrictions affecting the exercise of the local initiative power. A compensatory initiative could target an alternative revenue source for reduction or repeal, such as a related utility users tax, to the extent any such legal restrictions exist.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives, Compensatory Initiatives, Countering Utility Fee and Charge General Fund Transfers
In some situations, a local government may be legally allowed to transfer utility fee or charge proceeds to the general fund of the local agency to thereafter be spent at the discretion of local politicians. Such situations may include controversial reimbursements to the general fund for services and/or other benefits provided by the local government to the utility, and legally allowable return on investment (“profit”) utility fee overcharges for electrical or gas service which are not subject to the cost of service constitutional protections under Proposition 218.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives, Compensatory Initiatives, Countering Utility Fee and Charge General Fund Transfers
An example illustrating the foregoing involves the transfer of “profit” fees and charges by a local government in connection with the provision of electric service. This occurs when the local government overcharges ratepayers for electric service and then transfers a percentage of the utility fee and charge proceeds to the general fund of the local agency to be spent at the discretion of local politicians. If the local agency also levies a utility users tax on electric service, then it may be a better option to pursue a compensatory initiative providing for the repeal or reduction of the utility users tax as it pertains to electric service.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives, Tie-In Initiatives
A tie-in initiative ties the magnitude of a levy reduction, or the timing of a levy repeal or reduction, to satisfaction of specified objective performance standards or conditions contained in the local initiative. A properly drafted tie-in initiative generally requires the assistance of legal counsel to ensure compliance with all applicable legal requirements, including the levy reduction or repeal requirement. In addition, technical expertise in the subject area of a tie-in initiative is also usually required. For example, a tie-in initiative involving transportation may also require technical assistance from a transportation professional.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives, Tie-In Initiatives
Tie-in initiatives can be applied to existing local revenue sources where voter approval may not have been previously obtained. Tie-in initiatives may also be applied to revenue sources approved by voters in an election required under Proposition 218 but where voters want to hold local government officials accountable for obtaining continued positive results after the election.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives, Tie-In Initiatives, Satisfaction of Objective Performance Standards
An example of a tie-in initiative is the reduction or repeal of a local transportation sales tax if traffic and/or road conditions over time do not significantly improve relative to conditions existing before the imposition of the sales tax. Other examples of tie-in initiatives include tying an education parcel tax to improved student achievement, tying a public safety tax to reduced crime, and tying a utility service fee to completion of specified public improvement projects on schedule and without cost overruns.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives, Tie-In Initiatives, Matching Contributions
A tie-in initiative can also include specific conditions associated with the continued imposition of a levy. For example, a local initiative could attach an annual matching contribution condition whereby a levy such as a tax would be reduced or repealed if the specified annual matching contribution condition is not satisfied. A matching contribution condition is intended to leverage additional financial support as well as to demonstrate a strong financial commitment to the purposes for which the levy is imposed, especially from those interests who promoted the levy.


1996 California Proposition 218 (Local Initiative Power), Types of local initiatives, Tie-In Initiatives, Matching Contributions
Matching contributions typically come from either other government sources or from the private sector in the form of voluntary payments such as from the local business community. An annual matching condition does not create a legal obligation to pay, but if at any time during the life of the tax the condition is not satisfied, the tax would either be reduced or repealed in accordance with the terms of the local initiative.


1996 California Proposition 218 (Local Initiative Power), Pure vs. mixed initiatives
A pure initiative under Proposition 218 contains subject matter exclusively within the scope of the initiative power thereunder. Such initiatives provide for the reduction or repeal of a local tax, assessment, fee or charge, and generally contain no other substantive provisions. With a pure initiative, the legal authority to exercise that power is derived from the constitutional provisions of Proposition 218 itself, and the initiative proponents may also take advantage of the significantly lower signature requirement.


1996 California Proposition 218 (Local Initiative Power), Pure vs. mixed initiatives
A mixed initiative under Proposition 218 contains provisions that fall within the scope of the initiative power thereunder (i.e., the reduction or repeal of a local levy) and one or more other substantive provisions that fall outside the scope of the Proposition 218 local initiative power. Mixed initiatives present issues relating to the application of the lower signature requirement under Proposition 218 as well as the need for additional legal authority to pursue a local initiative containing provisions outside the scope of the Proposition 218 local initiative power.


1996 California Proposition 218 (Local Initiative Power), Pure vs. mixed initiatives
The significantly reduced signature requirement for local initiatives under Proposition 218 only applies to the reduction or repeal of local government levies. Thus, if a local initiative contains one or more provisions outside the scope of the Proposition 218 initiative power, the lower signature requirement would not apply.


1996 California Proposition 218 (Local Initiative Power), Pure vs. mixed initiatives
The second issue presented with a mixed initiative is the need for legal authority independent of Proposition 218 to pursue a local initiative containing one or more provisions outside the scope of the Proposition 218 local initiative power. If such independent legal authority does not exist, the entire initiative measure can be invalidated.


1996 California Proposition 218 (Local Initiative Power), Pure vs. mixed initiatives
Because a mixed initiative presents additional and more complex legal issues compared to a pure initiative, it is usually preferable for local voters to pursue a pure initiative measure under Proposition 218.


1996 California Proposition 218 (Local Initiative Power), Initiative drafting and qualification issues
Significant legal and policy issues exist regarding the drafting and qualification of local initiatives under Proposition 218.


1996 California Proposition 218 (Local Initiative Power), Initiative drafting and qualification issues
Due to the complexity of the procedural requirements applicable to the exercise of the local initiative power in California (which procedures vary depending upon the type of local government involved) as well as the substantive legal requirements applicable to the drafting of a local revenue reduction or repeal initiative measure under Proposition 218, the assistance of legal counsel is typically needed to draft an initiative measure as well as to properly guide the initiative proponents through the legal process.


1996 California Proposition 218 (Local Initiative Power), Initiative drafting and qualification issues
A local initiative under Proposition 218 can be denied placement on the ballot or subsequently invalidated by the courts if all legal requirements, including procedural requirements applicable to the exercise of the local initiative power, are not completely followed by the initiative proponents. Local governments have generally been hostile to voters exercising the local initiative power under Proposition 218 which is another reason why it is important for the proponents of any such initiative to comply with all applicable legal requirements.


1996 California Proposition 218 (Local Initiative Power), Initiative drafting and qualification issues
The Howard Jarvis Taxpayers Association has released a general publication to assist voters in repealing or reducing existing city taxes using the local initiative power under Proposition 218.


1996 California Proposition 218 (Local Initiative Power), Initiative drafting and qualification issues, Findings and Declarations
Extensive findings and declarations language, with supporting foundations in the official record, are also generally necessary for certain reduction or repeal initiatives involving local government utility fees and charges, especially in situations where California laws may require the local governing body to levy utility fees and charges in sufficient amounts to maintain specified service levels to the community.


1996 California Proposition 218 (Local Initiative Power), Initiative drafting and qualification issues, Findings and Declarations
If a local initiative measure under Proposition 218 includes extensive findings and declarations relating to the reduction or repeal of a utility fee or charge subject to specified service levels mandated by California law, and if the local initiative measure is subsequently approved by the voters, then the findings and declarations of the people as set forth in the initiative measure should generally control for purposes of determining compliance with legal mandates related to specified utility service levels.


1996 California Proposition 218 (Local Initiative Power), Initiative drafting and qualification issues, Findings and Declarations
To avoid possible invalidation of a local initiative measure under Proposition 218 providing for the reduction or repeal of a utility fee or charge subject to specified service levels mandated by California law, any findings and declarations in an initiative generally must have a supporting basis. That supporting basis usually comes from documentation in the official record of the utility fee adoption proceedings by the governing body of the local government. Thus, voters contemplating a local initiative measure under Proposition 218 in such instances generally need to include their documentation in the official record of the utility fee adoption proceedings to counter any documentation included in the official record by the governing body of the local government.


1996 California Proposition 218 (Local Initiative Power), Initiative drafting and qualification issues, Initiative Timetable Flexibility
Initiative proponents generally need to be flexible in developing their timetable for exercising the local initiative power under Proposition 218. Not all elements applicable to the exercise of the initiative power will necessarily go according to schedule and there will often be delays. In addition, if a local government is hostile to an initiative proposal, delay tactics on the part of the local government can be expected and need to be factored in by initiative proponents.


1996 California Proposition 218 (Local Initiative Power), Initiative drafting and qualification issues, Initiative Timetable Flexibility
The actual language of a local initiative measure itself should also be flexible, particularly as it relates to the effective and operative dates of the initiative. Delay tactics by a hostile local government, including legal challenges, can sometimes result in a significant delay in an initiative appearing on the ballot. The language of an initiative needs to be flexible enough to address such scenarios so that if the initiative were to be approved by the voters any resulting delays in ballot qualification will not adversely impact the substantive provisions of the measure.


1996 California Proposition 218 (Local Initiative Power), Lawsuits involving local Proposition 218 initiatives
Local government opposition must generally be assumed by initiative proponents in planning their initiative timetable. It is a common tactic for a hostile local government to file a lawsuit to prevent a local initiative under Proposition 218 from appearing on the ballot. The local government typically alleges that any such initiative would have a major adverse financial impact, and in some cases, state statutory law supposedly precludes local voters from exercising the initiative power under Proposition 218. The timetable for initiative proponents must also be flexible enough to incorporate any likely delays which will result from any legal action by a hostile local government to thwart the exercise of the local initiative power under Proposition 218.


1996 California Proposition 218 (Local Initiative Power), Lawsuits involving local Proposition 218 initiatives
It is now a common tactic for a hostile local government to file a lawsuit against the initiative proponents even before the issuance of the ballot title and summary (which must legally be included on initiative petitions) during the early stages of the initiative process.