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Storm Drainage Fee Fails To Qualify For Sewer And Water Exemption

A City of Salinas fee to finance stormwater drainage facilities and system maintenance has been ruled unconstitutional by the Sixth District Court of Appeal. The court found that the fee was subject to the voter-approval requirements of Proposition 218, which amended the state constitution in 1996. The court rejected the city's argument that the charge was a user fee that qualified for the exemption afforded to utility fees. Instead, the court ruled that it was an assessment related to property ownership. In 1999, the Salinas City Council approved two ordinances to fund and maintain a program intended to clean up the water in the city's storm drainage system. The city imposed an annual "storm water management utility fee" on owners of developed property to pay for facilities and maintenance. The city based the level of the fee on the amount of impervious surface on a parcel, with the single-family home rate set at $18.66 per year. Property owners with their own stormwater management systems could reduce or eliminate their fee. Owners of undeveloped parcels were exempt. The Howard Jarvis Taxpayers Association, which wrote Proposition 218, and some Salinas property owners filed suit. They argued that the fee was a property-related assessment, so it required approval of the majority of affected property owners or of two-thirds of the residents. Monterey County Superior Court Judge Richard Silver ruled that the charge was not a property-related fee, and that it met the exemption requirements for sewer and water service fees. A unanimous three-judge panel of the Sixth Appellate District, however, reversed the lower court. Article XIIID, § 6, subdivision (c), of the state constitution provides an exception to Proposition 218's voter-approval requirements "for fees or charges for sewer, water, and refuse collection services." The city argued that the stormwater fee was a utility fee like these. The city also argued that the charge was a user fee — and not a "property-related fee" — because a property owner could avoid the fee by maintaining a private stormwater management system. The appellate panel rejected both arguments. Storm drains are often referred to as "sewers," the court conceded. But storm drains are not sanitary sewers, the court ruled, and Proposition 218 should be read liberally to encourage voter-approval of fees. "We conclude that the term ‘sewer services' is ambiguous in the context of both § 6(c) and Proposition 218 as a whole," Justice Franklin Elia wrote for the court. "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 principles that exceptions to a general rule of an enactment must be strictly construed, thereby giving ‘sewer services' its narrower, more common meaning applicable to sanitary sewerage." And, the court ruled, the storm drainage system clearly is not what a voter would envision as "water service." The court also concluded that the fee was in fact a property-related assessment, and not a charge based on measured use or metered service. The fact that the city would reduce or waive the fee if the property owner had private facilities was not enough for the appellate panel. "A property owner's operation of a private storm drain system reduces the amount owed to the City to the extent that runoff into the City's system is reduced. The fee nonetheless is a fee for a public service having a direct relationship to the ownership of developed property," Justice Elia wrote. Thus, the storm drainage fee "burdens landowners as landowners," Elia wrote, citing Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles, (2001) 24 Cal. 4th 830 (see CP&DR Legal Digest, February 2001). Because of this, the fee required voter approval. The Case: Howard Jarvis Taxpayers Association v. City of Salinas, No. H022665, 02 C.D.O.S. 4853, 2002 DJDAR 6161. Filed June 3, 2002. The Lawyers: For Jarvis: Timothy J. Morgan, (831) 429-9841. For Salinas, James Sanchez, city attorney, (831) 758-7256.
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