Prop. 218 Assessments for Services – In Trouble?

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

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

3. 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

4. What are the 218 challenges with assessments? • 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. • 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).

5. Recent Bad Assessment Cases • 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) • 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) • Assessment for park and street improvements and maintenance • City failed to separate general and special benefits

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

7. Another Bad Case

8. Concerned Citizens v. West Point FPD (2011) • Assessment for fire protection services • Engineer’s report weak. Spread benefits based on three parcel types. Limited effort to separate general benefit. • 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.

9. 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 • West Point FPD appealed • 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

10. Concerned Citizens for Responsible Government et al. v. West Point Fire Protection District et al.Case: S195152 2011-10-19 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.

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

12. Outcome? Recent Supreme Court Cases on Prop. 218 • 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) • Local government lost. Open space assessment fails special benefit and proportionality tests. • 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

13. West Point FPD special tax measure • $78/parcel/year on ballot Nov. 8, 2011 • Needs 2/3 vote of registered voters. 62% of landowners supported assessment in 2007. • What if voters approve it? Will district keep litigating? Is Supreme Court case moot?

14. Questions?