Prop. 218 Assessments for Services – In Trouble? Richard P. Shanahan Bartkiewicz, Kronick & Shanahan Sacramento, CA MVCAC Fall Meeting November 3, 2011 South Lake Tahoe, CA

Topics to be covered Recent assessment cases Recent assessment cases Concerned Citizens v. West Point FPD Concerned Citizens v. West Point FPD Supreme Court review Supreme Court review What next? What next?

Proposition 218 (1996) Approval and increase of assessments subject to more stringent substantive and procedural requirements, including: –Detailed engineer’s report –Majority landowner approval through ballot proceeding –Courts no longer deferential to local agency

What are the 218 challenges with assessments? Only special benefits may be funded by assessment. Only special benefits may be funded by assessment. Must identify special benefit and separate out general benefit. General benefit must be supported by another revenue source. Must identify special benefit and separate out general benefit. General benefit must be supported by another revenue source. Need to analyze proportionate special benefit received by each parcel and spread cost based on proportionality. Need to analyze proportionate special benefit received by each parcel and spread cost based on proportionality. Must work from special benefit to cost; not vice versa (i.e., cannot “back into” assessment based on cost). Must work from special benefit to cost; not vice versa (i.e., cannot “back into” assessment based on cost).

Recent Bad Assessment Cases Town of Tiburon v. Bonander (2009) Town of Tiburon v. Bonander (2009) –Assessment to underground utility lines –Town failed to properly allocate proportionate special benefits because it spread assessment based on relative costs not benefits Beutz v. Co. of Riverside (2010) Beutz v. Co. of Riverside (2010) –Assessment for park landscaping –County failed to separate general and special benefits; failed to show proportional Golden Gate Hill N.A. v. San Diego (2011) Golden Gate Hill N.A. v. San Diego (2011) –Assessment for park and street improvements and maintenance –City failed to separate general and special benefits

But See -- Dahms v. Downtown Pomona PBID (2009) –Assessment for downtown business improvement district –PBID services upheld as all special benefits on downtown parcels

Another Bad Case

Concerned Citizens v. West Point FPD (2011) Assessment for fire protection services Assessment for fire protection services Engineer’s report weak. Spread benefits based on three parcel types. Limited effort to separate general benefit. Engineer’s report weak. Spread benefits based on three parcel types. Limited effort to separate general benefit. District failed special benefit and proportionality requirements. District failed special benefit and proportionality requirements. Court of Appeal ruled the assessment confers only general benefits and implied that 218 prohibits assessments for services. Court of Appeal ruled the assessment confers only general benefits and implied that 218 prohibits assessments for services.

Reaction to CC v. WPFPD MVCAC, CSDA, CSAC, Fire Districts Association of Cal., League of Cities, & California Downtown Association requested depublication by Cal. Supreme Court MVCAC, CSDA, CSAC, Fire Districts Association of Cal., League of Cities, & California Downtown Association requested depublication by Cal. Supreme Court West Point FPD appealed West Point FPD appealed Supreme Court’s options Supreme Court’s options –Do nothing; Court of Appeal opinion stands –Depublish Court of Appeal opinion –Grant petition for review and hear case on merits

Concerned Citizens for Responsible Government et al. v. West Point Fire Protection District et al. Case: S Petition for review granted in Supreme Court. CANTIL-SAKAUYE, C.J., BAXTER, A.J., WERDEGAR, A.J., CHIN, A.J., CORRIGAN, A.J., LIU, A.J.

What next? Parties file briefs Parties file briefs –League, CSAC and FDAC to file amicus brief FDAC to file amicus brief –MVCAC role? Join local government brief or file separate brief? Court hears oral argument Court hears oral argument Decision (1.5 – 3 years); could be significant Decision (1.5 – 3 years); could be significant

Outcome? Recent Supreme Court Cases on Prop. 218 Bighorn-Desert View WA v. Verjil (2006) Bighorn-Desert View WA v. Verjil (2006) –Local government lost. Water charges are property- related fees subject to 218. Silicon Valley Taxpayers Assoc. v. SCVOSA (2008) Silicon Valley Taxpayers Assoc. v. SCVOSA (2008) –Local government lost. Open space assessment fails special benefit and proportionality tests. Greene v. Marin Co. FCWCD (2010) Greene v. Marin Co. FCWCD (2010) –Local government won. Voter-approved storm drainage fee and related district procedures upheld. Note: Chief Justice Cantil-Sakauye and Justice Liu are new since Greene Note: Chief Justice Cantil-Sakauye and Justice Liu are new since Greene

West Point FPD special tax measure $78/parcel/year on ballot Nov. 8, 2011 $78/parcel/year on ballot Nov. 8, 2011 Needs 2/3 vote of registered voters. 62% of landowners supported assessment in Needs 2/3 vote of registered voters. 62% of landowners supported assessment in What if voters approve it? Will district keep litigating? Is Supreme Court case moot? What if voters approve it? Will district keep litigating? Is Supreme Court case moot?

Questions?