HomeMy WebLinkAboutItem 8.5 AnalysisProp218
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CITY CLERK
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AGENDA STATEMENT
CITY COUNCIL MEETING DATE: (February 4,1997)
SUBJECT:
Analysis of Issues Related To Implementation of Proposition 218
(Report Prepared By: Paul S. Rankin, Assistant City Manager)
EXHIBITS ATTACHED:
1. League of California Cities Implementation Flow Charts
2. Text of Proposition
3. Staff Summary of Key Provisions Related To Assessments
4. Staff Summary of Key Provisions Related To Fees
5. Summary ofImpacts
RECOMMENDATION:
1.
Consider Whether a Special Tax should be placed on the
June Ballot to make up the supplemental Emergency Medical
Services Assessment levied in the City of Dublin. A special
local tax of$10 per household is recommended to be
included on the June ballot. This will represent an increase
of $6.72 from the local assessment collected in FY 96/97.
Direct the City Attorney to draft appropriate ballot language.
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2.
Direct Staff to proceed with all assessments at the same level
as approved prior to November 6, 1996; or
Direct Staff to provide additional information related to an
alternate approach.
3. Direct Staff to proceed with the procedural requirements for
establishing garbage collection fees.
4. Direct Staff to proceed with the procedural requirements for
a reduced amount' of the NPDES Fees. This will reflect only
those NPDES activities which are related to refuse services
and is expected to reduce the Single Family Fee by $7.36.
FINANCIAL STATEMENT: In the event that the recommended actions are implemented a typical
single family household would recognize a 2.1 % decrease in the City-wide fees and assessments
collected in Fiscal Year 1997/98 compared to 1996/97.
DESCRIPTION: At the November 1996 election, voters approved Proposition 218,
which was supported by the Howard Jarvis Taxpayers Association (RITA). The measure was a
Constitutional Amendment which makes significant changes to the imposition and collection of taxes,
," ' asse,ssments, and property related fees.
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ITEM NO. 0,,5
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As with many ballot propositions it is anticipated that there will be conflicts with the implementation of'
the measure which may take years to resolve. Further, it is anticipated that there will be legislation to
enact changes which coordinate the new provisions with existing laws. Also this would assist with
clarification of a number of ambiguities and inconsistencies. The proponents have been meeting with
government representatives to discuss areas of agreement for legislative changes. In addition there will .
undoubtedly be legal challenges to actions taken by public agencies, which will lead to revised
interpretations of the measure. As a voter qualified Constitutional Amendment, the measure did not have
the benefit of the legislative process to clarify some of the ambiguities or conflicts of the measure.
At this time Staff is presenting a recommended course of action based upon a review of the requirements
with the City Attorney. The report will assess Taxes, Assessments, and Property Related Fees as defmed
in Proposition 218. Given that there are differing interpretations among public officials on some issues,
Staffhas presented recommended actions which appear reasonable.
TAXES IMP ACTED
Proposition 218 affects the way a local government levies taxes in the following ways:
. Agencies which proceeded without voter approval, and imposed, extended or increased
general taxes between January 1, 1995 and November 6, 1996, must submit the taxes for voter
approval by November 6, 1998.
· Unless an emergency is declared the general tax election must be scheduled with the general
election for the members of the governing body proposing the tax.
. DefInitions are added to the state constitution for "general taxes" and "special taxes".
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The City of Dublin has not enacted any general or special taxes within the window period discussed
in the Proposition. The limitations of the proposition would only be applicable to future taxes.
ALAMEDA COUNTY EMERGENCY MEDICAL SERVICE (EMS) DISTRICT - Special Tax
In 1982 Alameda County submitted to the voters a proposed EMS district which would provide
coordinated emergency medical services throughout the communities in the District. This was an
advisory measure which asked voters if a countywide Paramedic Emergency Medical Services program
should be established. It was indicated that the system would provide pre-hospital advanced life support
and would be funded through an assessment not to exceed $10.00 per household. The measure was
approved by a greater than two-thirds vote. The original boundaries included all incorporated cities except
the City of Alameda.
The Dublin City Council adopted Resolution 39-83 consenting to be included in the County Service Area
The Board of Supervisors took final action to form the district in November of 1983. As provided in the
original measure adopted by the voters the assessment was not to exceed $10 per year. Approximately
78% of the voters in the City of Dublin voted in favor of the District. Prior to the establishment of the
District the City was responsible for payment to the Ambulance Service Provider for any "dry runs",
where an ambulance was summoned and services were not required. The implementation of the EMS
District absorbed this City General Fund expense and provided the community with a higher level of
serVices by having ambulances staffed by paramedics..
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Since 1983, the scope of the services provided by the EMS District have been modified to inClude support
for the operation of Regional Trauma centers and allow for local supplemental assessments to fund
qualified expenditures. A partial list of approved expenditures included costs associated with the
following: Fire Department EMS Coordinator; First Responder Defibrillation; EMS Training for Fire
Staff; Paramedic services authorized by the County; EMS Community Training; and related equipment.
The amount levied by the County in Fiscal Year 1996/97 is a base assessment of$21.14. The County
Administrator has been working with representatives of the cities and the Emergency Medical Service
District Staff to address the status of this charge under the requirements of Proposition 218. The County
has determined that in order to levy these fees in the future it is necessary to adopt a special tax. This ,"ill
be subject to 2/3 voter approval in order to levy a valid tax on July 1, 1997. The County is proceeding
with plans for a June 3, 1997 election. If the voters do not approve the measure the status of emergency
medical services for all residents in the County will be significantly affected.
RECENT CHANGES IN COUNTY PARAMEDIC SERVICES AFFECTING SERVICE LEVELS
The County has been dealing with the fmancial pressures of operating the EMS / Paramedic Services
without significant growth in revenues. The EMS District negotiates the terms of the service agreement
with American Medical Response (AMR), the ambulance/paramedic service responder. In order to
fmance these services the County has had to modify some of the key terms of this service agreement. One
change initiated is the response time allowed. This has been extended from eight minutes to ten minutes,
which represents a reduction in service levels.
This change has placed pressure on local fire departments to implement programs which allow for
personnel responding to be trained in advanced life support. The provision of fire fighter / paramedics as
part of the first response to medical emergencies provides the community with a higher level of service.
AMR continues to provide transport services, however, typically fire personnel are at the scene.
DRF A had adopted a program to train personnel as paramedics, which would increase the level of service
to the community. This change resulted in a significant increase in the General Fund expenses associated
with Fire Services. The full extent of these costs have not been experienced as the program is not fully
implemented. In Fiscal Year 1997/98, the contract with Alameda County Fire Department also includes
the provision of paramedics as part of the first response by fire personnel. This will increase the number
of paramedic units located in the City of Dublin from 1 to 3, and also provide a corresponding reduction
in response time.
SUPPLEMENTAL PARAMEDIC ASSESSMENT
The EMS District has developed a program to allow individual cities to add supplemental assessments to
the Countywide base charge of $21.14. Several agencies fire departments, which added paramedic
services used the supplemental assessment to finance some of the additional costs. Each year the entity
providing emergency medical response was allowed an opportunity to request a supplemental assessment.
The Dougherty Regional Fire Authority took the action for the service area which includes the City of
Dublin. DRF A identified the use of the funds to support a portion of the costs associated with the EMS
Coordinator position and EMS community training. With the dissolution of DRF A the decision related to
this supplemental assessment falls to the Dublin City Council for Fiscal Year 1997/98.
The'supplemental assessments levied by jurisdictions in Alameda County ranged from zero to $30.84.
The City of Dublin supplemental assessment for 1996/97 is $3.28. The revenue from this assessment
estimated for Dublin in Fiscal Year 1996/97 is approximately $27,330. This amount was primarily related
to costs associated with the coordination of EMS services and community training. DRF A did not raise
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the assessment when the paramedic program was adopted. As previously noted the implementation of a
paramedic program will result in an increased level of service to the community, which is only possible
with significant increases in operating costs.
Of the fourteen agencies levying a supplemental assessment, $10.28 represents the median point. Staff
has discussed with Chief McCanunon the costs of paramedic related services under the Alameda County
proposal accepted by the City. ChiefMcCarnmon has indicated that the cost proposal assumed that there
would support a supplemental assessment of $1 0.00. This is the amount levied in the area served by the
Alameda County Fire District. The City of San Leandro which also contracts with Alameda County Fire
levied a $9.90 supplemental assessment for Fiscal Year 1996/97.
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Due to the fact that the County is now structuring the EMS program as a special tax, the City must make a
determination as to whether it intends to submit a local measure to the voters to account for the
supplemental amount. In addition the amount of the tax would need to be determined. Ifreplacement
revenues are not secured, the City would incur a greater general fund expense than anticipated for EMS
services provided by fire department personnel. This change in the amount levied will not fully offset the
additional general fund fire service costs in Fiscal Year 1997/98 as a result of the dissolution of DRF A.
The Fiscal Year 1997/98 gross Contract County Fire Service costs are projected to be over $436,000 more
than the amount budgeted by DRFA in Fiscal Year 1996/97. This represents an increase of approximately
15% and it does not include one-time costs associated with the transition, or any contribution to
equipment replacement reserves. Staff will be developing a budget for equipment replacement once the
City is aware of the inventory to be transferred from DRF A.
ELECTION ISSUES
The City Council will need to determine whether they desire to have a local measure submitted to Dublin
V oters to authorize a special tax. This measure would appear on the same June ballot as the County-wide .
measure. The City Council would need to direct the City Attorney to prepare the necessary ballot
language. Staffwould recommend that the amount of the tax be established at $10.00 per household.
This would generate approximately $83,000 towards the cost of the improved local paramedic services to
be provided by Fire personnel. In drafting the measure the Staff will also evaluate the desirability and
impacts of including either an escalation factor and/or a cap on the amount of the tax.
In addition, the City would incur a proportionate share of the election costs. It is estimated that the City
of Dublin proportionate share of an election would cost between $10,000 and $12,000. A Budget change
will be presented at the time that the City Council considers action on a ballot measure.
Meetings are continuing between the county and cities as this report is being prepared. Staff will provide
any additional information related to the steps required at the City Council Meeting. In order to comply
with the requirements of the Election Code, the County Board of Supervisors is expected to take action on
its ballot measure on February 27, 1997, with a need for local election items to be submitted by March 6,
1997.
ASSESSMENTS IMP ACTED
Proposition 218 also imposes changes to the requirements related to imposing a special assessment. A
special assessment is a charge generally levied upon parcels to pay for benefits received from local
improvements. The major areas of change are as follows:
· Assessments may be repealed or reduced by initiative.
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. New procedural requirementS are imposed related to the levy of assessments.'1bis
includes: mailed notices 45 days prior to the hearing to each owner of a parcel; specific
content for the notice is stated; a mail ballot to express support or opposition to the
assessment; votes are weighted based upon the proportional financial obligation; City
Council may not override a majority protest. This refers to the percentage of ballots
received and not a majority of the total ballots.
. Unless there is evidence that publicly owned parcels receive no special benefit, public
property must be included in the calculation of assessments owed. (This would include
City owned property, i.e. parks, etc.; DSRSD property; BART; Federal Government;
State Government; School District property; County Property; etc.). Current laws do
not address a mechanism for collection of these assessments and in some cases they are
barred (i.e. on federal property). This means the City must absorb from other funds,
amounts which cannot be levied on public entities.
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. The burden of proof in legal actions contesting the validity of an assessment is placed
upon the agency.
. Certain exemptions from the new requirements are provided, as long as the current
assessment is not increased.
Attached as Exhibit 3 is a summary which discusses in more detail the provisions noted above. It is
important to understand that there remain varying legal interpretations and conflicts between Proposition
218 and other laws related to the enactment of assessments.
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ASSESSMENTS CURRENTLY LEVIED BY CITY OF DUBLIN
This section will summarize the assessments currently levied by the City of Dublin. As identified in
Exhibit 3 certain exemptions exist regarding the requirement to fully comply with all provisions of
Proposition 218. The applicable exemption is noted following the discussion of each assessment. It is
important to note that in all but one case the exemptions only apply provided that the assessment amount
is not increased. Increased costs would need to be funded by reserves, to the extent they are available, or
from another funding source. The estimated net collections are based upon the Fiscal Year 1996/97 gross
levy less the County Tax Collector collection fees. In addition, estimated delinquencies have been
included and they are based on delinquency rates from Fiscal Year 1995/96.
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City-wide Street Lighting Assessment District (City Fund #710)
Estimated 1996/97 Net Collections - $129,857
1997/98 Assessment Rates
Single Family Homes:
Condominium:
Apartment:
Commercial / Industrial:
$ 13.60/ unit
$ 13.60/ unit
$ 81.60/ parcel
$ 74.80/ acre
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This District includes assessments on all parcels in the City, except publicly owned parcels. The
assessments have been used to fund expenses related to street light maintenance and operations.
This includes repairs to street light poles and fixtures as well as the energy costs. In addition the
District has been used to fund the acquisition of the Street Light system from PG&E. The
assessments are levied in accordance with the Landscaping and Lighting Act of 1972.
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: Applicable Exemption: Article xm D Section S(a) Assessments used exclusively for capital costs
and maintenance and operation of streets.
Note: The authors of the proposition issued a statement dated January 2, 1997, which states that "The
reference to streets does not include street lighting." This statement, which was not included in the
ballot materials, appears to conflict with other provisions of Proposition 218. The Proposition defines .';
maintenance and operation expenses as: "cost of repair, replacement, fuel, power, electrical current,
care, and supervision necessary to properly operate and maintain a permanent public improvement."
Staff believes that the inclusion of street lighting in the "street" category can be reasonably supported.
. Stagecoach Road Landscaping Assessment District (City Fund #711)
Estimated 1996/97 Net Collections - $54,029
1997/98 Assessment Rates
Single Family Homes: $ 228.72
Condominium!Apartment: $ 38.68
Tract 4719 was originally approved by Alameda County in 1981, prior to incorporation of the City of
Dublin. The final tract map approved by the Board of Supervisors included a requirement that a
homeowners association be established to maintain certain landscaping. In 1983, the City of Dublin
processed a Planning Application for the Amador Lakes project, which was included in Tract 4719.
As part of the conditions it was agreed that the City would attempt to establish a Landscaping and
Lighting Assessment District to maintain landscaping and related slope easements. City records
indicate that one property owner owned all of the property within the District when the assessments
were initiated. Mr. Larry Lee owned both the Amador Lakes parcel and the 150 Single Family lot
subdivision. Mr. Lee signed an application requesting and consenting to the establishment of the
district and the levying of assessments.
Assessments are used to maintain landscape improvements along Stagecoach Road and landscaped
slope areas adjacent to Coral Way and Agate Way. Included in the maintenance cost are all related
utilities and repairs necessary to maintain the irrigation system within the landscaped areas. The
assessments are levied in accordance with the Landscaping and Lighting Act of 1972.
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Applicable Exemption: Article XIII D, section S(b) Assessment was initially imposed upon petition
by all property owners.
· Dougherty Road Assessment District (City Fund #713)
Estimated 1996/97 Net Collections - $ 53,705
1997/98 Assessment Rates
Single Family Homes:
Condominium! Apartment:
Commercial Lot:
$ 84.72/unit
$ 42.36/unit
$ 338.88 / 1 parcel
Tentative Map 5511 was approved by the City of Dublin in 1986. The project was designed as a
single development with 7 "villages," containing different housing types. There are currently
apartments, condominiums and single family houses within the development. The Developer who
originally processed the development application was the fIrm ofRafanelli & Nahas. The original
Tentative Map contained a condition to require establishment of a homeowners association. In 1986
the City established an assessment district which eliminated the need for a master homeowners ,.
association to maintain areas adjacent to public streets. City records indicate that two property owners
owned all of the property within the District when the assessment district proceedings were initiated.
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":(:~)~~Wiiers signed an: application requeStmg 'and consenting to the eStablishment 'of the district and
the levying of assessments.
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The district maintains landscaped areas adjacent to public streets including: median and roadside
landscaping along Willow Creek Drive; roadside landscaping along Shady Creek Drive; pathway,
wall, landscaping, and fence improvements along Dougherty Road and Amador Valley Boulevard;
landscaping, fence and pathway improvements along Wildwood Road and Fall Creek Road; and
landscaping and emergency access surfacing at the north end of Crossridge Road. The assessments are
levied in accordance with the Landscaping and Lighting Act of 1972.
Applicable Exemption: Article XIIID, section 5(b) Assessment was initially imposed upon petition
by all property owners.
. Santa Rita Assessment District
(No Assessments Have Been Levied - Estimated 1997/98 Assessments are $39,400 depending on the
status of the installation of landscaping.)
In July of 1996, the City Council responded to a petition from the Alameda County Surplus Property
Authority to establish an assessment district pursuant to the Landscaping and Lighting Act of 1972.
The area covered by this district covers all of the property originally owned by the Alameda County
Surplus Property Authority and excluding the parcels designated for governmental use. The purpose
of the assessments were to maintain landscaping along public streets and Tassajara Creek trails. The
Surplus Property Authority petitioned for the formation of the district and the levy of assessments.
The first year that assessments would be levied is Fiscal Year 1997/98. At the time the district was
formed a formula was established to identify the basis for future increases in assessments.
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Applicable Exemption: Article XIII D, section 5(b) Assessment was initially imposed upon petition
by all property owners.
. Dublin Boulevard Extension Assessment District (City Fund #515)
1996/97 Assessments Levied $ 235,534
Outstanding Bonds As of 6/30/96 $ 2,208,000
This assessment district was formed in 1991, to fmance the construction of a portion of the Dublin
Boulevard Extension project. Bonds were sold to finance the project and the properties which
benefited from the improvements are assessed each year to collect money necessary to payoff the
bonds. The bonds will be completely paid off in 2012 as long as assessments are collected and paid as
scheduled. The City has a fiduciary responsibility to levy and collect the assessments for the benefit
of the bondholders. In addition, the City is required to proceed with foreclosure in the event that
assessments are delinquent. As of June 30, 1996, all assessments were current.
Applicable Exemption: Article XIII D, section 5(c) Assessment proceeds are used to repay bonded
indebtedness. (Changes in annual assessments are not subject to the act.)
PROPOSED PLAN FOR FISCAL YEAR 1996/97 ASSESSMENTS
It appears that if the City were to freeze all assessments, that the noticing and majority protest proceeding
discussed in Exhibit 3 would not need to be addressed. This is the approach recommended by Staff. In
::." " the ~ase of the Santa Rita ~is~ct, the property owner consented to an assessment which could fluctuate as
, the nnprovements to be mamtamed were developed.
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At this time the Engineer's Reports have not been prepared, and a determination has not been made~'U;
the impact of allocating any special benefits attributable to publicly owned properties. Staff will be +
preparing the assessments to be imposed prior to the July 1, 1997 deadline, which may eliminate the need
for the consideration of this factor for the 1997/98 assessments. However, it should be noted that
assessments levied after July 1, 1997 will clearly need to incorporate this factor. which could require
other funds to contribute towards costs previously paid for by special assessments. .
As stated earlier, the City would need to rely on reserves in the Assessment District Funds to absorb any
increased operating cost. Other alternatives would include the use of another funding source (i.e. general
fund or gas tax fund) or a reduction in the services provided. Neither of these alternatives are desirable as
there "ill already be significant pressure on the Fiscal Year 1997/98 General Fund Budget to finance the
increased Fire and Police Service costs. Further, for services such as street lights it is difficult to reduce
services without compromising public safety.
Staff proposes to proceed with the preparation of the Engineer's report and to conclude a levy of
assessments under the 1972 Landscaping and Lighting Act by May 31, 1997. This will require the
information and mailed notices to be available by approximately April 1 st. The conclusion of the
proceeding in May allows for the statute oflimitations to run before July 1, 1997. It should be noted that
there are different opinions related to the effective date among attorneys and others professionals
preparing implementation plans for dealing with Proposition 218. Section 5 of the new Article XIII D
reads in part:
...the provisions of this article shall become effective the day after the election unless otherwise
provided. Beginning July 1. 1997. all existing. new. or increased assessments shall comply with
this article. Notwithstanding the foregoing, the following assessments existing on the effective date
ofthis article shall be exempt from the procedures and approval process set forth in Section 4:...
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Some agencies are proceeding with efforts to comply with the "substantive sections" of section 4 [4( a)
and 4(b)] and utilizing an authorized exemption to forego the noticing and protest proceeding. The so
called "substantive sections" relate to the requirement to identify the special benefit conferred on the
property. In addition, Section 4(a) includes the requirement to assess government owned parcels unless
clear and convincing evidence demonstrates that the publicly owned parcels receive no special benefit.
The requirements of Section 4(b) relate to the requirement that the assessments be supported by a detailed
Engineers report. The Engineer's report is also required as part of the 1972 Landscape & Lighting Act
and has been prepared by a registered engineer in the past.
Other Approaches Available
There are other alternatives available for City Council consideration. If there is interest in evaluating any
of these measures, Staff could evaluate further the pros and cons and present a report at the next City
Council meeting.
Special Tax:
The City Council could prepare a ballot measure to enact a special tax to replace any of the current
assessments. A special tax would require a 2/3 voter approval.
Eliminate the Use of the Assessment Districts:
The City would need to utilize other funds in order [mance expenditures at the current level or identify
reductions in service levels. This would present an on-going operating expense which would impact
the ability to [mance other services and high priority projects.
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. . 'Proceed With Increased 'Assessments If Required To Meet Increased Costs: ' '.,', . ."'
This would require the adherence to both the "substantive" and the "procedural" requirements
discussed in Section 4, for the amounts in excess of the amount levied in 1996/97. In this scenario,
the City would consider increases over the 1996/97 assessment in the event that increased costs
needed to be recovered. There are a number of unresolved issues related to interpretations of
Proposition 218. Therefore, this option is not recommended at this time. It may be beneficial to allow
time for consideration of legislative clarifications prior to proceeding with actions which require
implementation of all sections of the proposition.
Proceed With A Measure to Receive Majority Voter Approval of Current Assessments:
Assessments which previously received majority voter approval fall under an exemption category. As
previously discussed Staff has established that exemptions exist without the expense of an election.
Further, it is not clear that the elections held after November 6, 1996 will satisfy the exemption.
In the event that the City Council desires to pursue any of these alternatives it would be appropriate to
provide Staff with further direction.
FEES IMP ACTED
Proposition 218 establishes a separate subset of revenues labeled "Property - Related Fees and Charges".
As with the provisions for assessments this results in new procedures for certain fees and charges. In
addition to establishing this new category of fees, Proposition 218 requires the following:
. E>..iensive requirements are imposed for notifying property owners of new or increased property-
related fees. This adds an additional administrative cost to the provision of services funded by such
fees.
',.. Property related fees may be rejected by a "majority protest" at a public hearing. This majority protest
provision differs from the process defined for assessments. A majority of Rll property owners must
protest the proposed fee.
. A voter approval requirement is added for certain fees in addition to the "majority protest" procedure.
An exception is granted for sewer, water, and refuse collection fees. For those fees subject to the
voter approval, the City may select one of two options: 1) A majority vote of property owners; or 2) a
two-thirds vote of the general electorate.
. Local agencies are prohibited from using such fees to fund general governmental services. These
services are defined to include but not be limited to fees for: police, fire, ambulance, or library
services, which are available to the public at large in substantially the same manner as they are to the
property owners.
City of Dublin Property Related Fees
Staffhas identified two fees which appear to fit the definition of "property related fees" and would be
subject to certain provisions of Proposition 218.
. Garbage Rates Pursuant To A Franchise Agreement With Livermore Dublin Disposal:
Annual Cost of All Services Which City Sets Fees For ( Includes Residential/Commercial /
':. Drop Box): $2,865,000
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The City has an exclusive franchise agreement with Liverinore Dublin Disposal, which provides'for.
removal of all solid waste services in the City. In addition, the Municipal Code provides for
mandatory garbage subscription for all parcels within the City. State law allows the City to enact
these provisions in order to protect the public health, safety, and welfare. In the case of residential
service the City collects fees on the property tax bill and makes payments to the Company for these
serVIces. ..
Section 6.6 of current agreement with Livermore Dublin Disposal provides in part the following
responsibilities:
"City shall calculate those rates that it deems appropriate so long as the revenues forecasted to be
received by Company from charging such rates can reasonably be expected to generate sufficient
revenues to provide Company Compensation as calculated by Company."
The revenue requirement is based upon a negotiated cost and the total revenue is allowed to increase
based upon a formula which incorporates changes in the consumer price index. The rates are
established by the City as they apply to residential customers as well as commercial rates and drop
box services. Staff believes that the requirement in the municipal code for all properties to obtain
garbage service, strengthens the obligation to utilize the Proposition 218 approval requirements when
establishing garbage collection rates.
In order to attempt to structure an exemption entirely from Proposition 218, Staff believes that it
would be necessary to address both the issue of whether it is a property related fee and whether the fee
is one set by the City. Publications by the League of California Cities acknowledge the benefit of
laws which address the improper accumulation and disposal of solid waste which presents issues of
public health. It is suggested by the League of Cities that any proposal to weaken mandatory service
requirements should also take into account these competing public policy issues. The issue of rate
setting would need to be explored further with representatives of Livermore Dublin Disposal and
Staff. Obviously uncontrolled rates could also impact subscribership and the ability of the City to
meet State mandated goals related to waste reduction.
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Non-Source Point Discharge Elimination System (NPDES)- Storm Water Fees (Including Street
Sweeping and Storm Drain Clearing)
Estimated 1996/97 Net Fees To Be Collected:
1997/98 Assessment Rates
Single Family Homes:
Condominium! Apartment:
CommercialJIndustriall Apartments:
Example of Fee on 100,000 sq. ft parcel
$ 171,093
$ 14.72/unit
$ 8.83/unit
Lot Size in sq. ft / 4,840 x $14.72
$ 304.12
In accordance with the Federal Clean Water Act agencies are required to obtain permits for flows into
waterways, which cannot be traced to a specific source. A significant portion of the "non-point source
discharge" is related to storm drain flows from public streets. The cities and Alameda County have
jointly obtained a permit based upon a plan to implement certain programs. The City of Dublin has
imposed fees on each parcel to cover the cost of this program.
The fees collected by the City are used for four general categories of activities. The costs shown are.,
as included in the adopted 1996/97 budget.
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;~ei-aI arlmiriistratlonofthe program..
'1996/97 Budget: $ 5,986
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2) Removal of debris from streets, gutters, and storm drain catch basin. This includes the regularly
scheduled contract street sweeping service and storm drain maintenance services.
1996/97 Budget: $ 81 ,21 0
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3) Staff time associated with inspections of commercial businesses which may contribute
contaminants to storm run-off.
1996/97 Budget: $ 34,817
4) Alameda County coordinates the permit requirements and reporting and prepares certain public
information items. These costs are shared by the participating agencies.
1996/97 Budget: $ 51,620
TOTAL BUDGET ITEMS 1- 4: $173,633
The requirement for the NPDES program is based upon Federal mandates incorporated in the Clean
Water Act. Enforcement is handled by the Regional Water Quality Control Board. The Board has the
ability to issue sanctions for non-compliance, which can include penalties of $10,000 per day and a
requirement to comply with the program.
PROPOSED PLAN FOR FISCAL YEAR 1996/97 PROPERTY RELATED FEES
As outlined in Exhibit 4, refuse fees are required to comply with the notice requirements and are subject
to a majority protest at a public hearing. However, they are not subject to voter approval. Staff
recommends that this exemption be utilized in addressing the garbage rates and a portion of the NPDES
'-:':: 0:, program costs.
>. The noticing requirements will result in mailed notices to approximately 7,868 parcel owners, which will
result in an additional cost to the City. In order to preclude the imposition of the fee or charge a majority
of the parcel owners would need to submit a written protest. The process will result in additional
administrative cost associated with mailed notices. A rough estimate of the postage, printing, and mailing
costs to provide a single notice to the owners of all parcels is approximately $3,600. If the same mailing
was used for a second fee the incremental costs may be less, provided that the mailing lists were identical.
Proposed Process To Enact Garbage Fees
Staff recommends that notices explaining changes in the garbage collection fees be mailed by April 1,
1997. A public hearing will be held in May to adopt the final fee schedule. The fees may be imposed
unless a written protest is received from a majority of the parcel owners. Based upon the current number
of parcels this would require over 3,500 protests. By following this process the City's solid waste fees
established under the franchise agreement with Livermore Dublin Disposal, will be in full compliance
with Proposition 218. In order to provide consistency among various classes of garbage customers (i.e.
residential vs. commercial), the garbage notice costs will need to be absorbed by the City General Fund.
The provision of proposed rates in the April Notice will substantially advance the timing for adoption of
these fees.
Proposed Process To Enact A Portion Of The Current NPDES Fees
,,00:.':'" The NPDES ~ees ~ll ne~d to be segregated into co~ponents which can b~ collec~ed.similar to the past
, and those which Will reqUlre another revenue mechanism. The costs assocIated With Items 1 and 2 above,
(I-Administrative Costs; and 2-Street Cleaning/Storm Drain Cleaning) totaling $ 87,196 are actually
refuse services. Therefore, Staff would recommend that the fee be calculated to assess only these costs.
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The co~ associated with these refuse services account for approximately 50% of the total NPDES--J'~".
Program co~. Therefore it is anticipated that the per unit fee would be reduced by approximately 50%.
The exact calculation will need to account for any changes in the cost of these services. This would
represent a savings to the property owner of approximately $7.36 for a single family household.
If replacement funding cannot be identified and/or a reduction in services does not occur, the City would.
need to incur an additional $86,437 in costs for the Commercial Inspection Program and the County
charges to participating agencies. In all likelihood these costs would need to be absorbed by the General
Fund, which may impact the provision of other discretionary City services.
Unless the items supported by the County charges can be characterized as refuse fees, the County costs
would need to be approved by the electorate, or, funded from another source. This would also be the case
for the Engineering Staff costs associated with commercial inspections. In order to minimize the impact,
Staff would recommend that efforts be made to encourage Alameda County to evaluate the services
provided and their necessity in meeting the obligations under the Clean Water Permit Program.
The cost of the NPDES notices will be incorporated into the recommended fee, since the fee is paid by all
privately owned parcels. In order to comply with Proposition 218, the fees must be fully adopted by July
1, 1997. This will substantially advance the timing for adoption of these fees. Staff recommends that the
City Council concur with this approach and direct Staff to proceed with implementation.
CONCLUSION
Exhibit 5 is a summary of the impacts as they have been addressed in this report. The following tables
summarize the financial impacts as addressed in this report. The first Table shows the impact on the
General Fund if Fees and assessments were eliminated. The second displays the additional General Fund
expense estimated to occur if the Staff recommendation is fully implemented. The final table shows the
reduction in costs to a typical single family household, if the Staff recommendations were implemented.
ESTIMATED IMPACTS ON GENERAL FUND IN 1997/98
IF IMPLEMENTATION OF PROPOSITION 218
ELIMINATED ASSESSMENTS AND PROPERTY RELATED FEES
,'.
Property Tax Assessments And Fees
No EMS Replacement Revenue
INCREASED
GENERAL
FUND EXPENSE
-.
FY 1997/1998
$ 27,330 ..
Assume No Street Light Assessment
129,857
Assume No Stagecoach Road Assessments
54,029
Assume No Dougherty Road Assessments
53,705
Assume No NPDES Storm Water Fee
TOTAL
s
171,093
436,014 *
* This is equivalent to approximately 3% of the 1996/97 General Fund Operating Budget.
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ESTIMATED GENERAL FUND
ADDITIONAL EXPENSES
TO IMPLEMENT PROPOSITION 218
.
Cost of Local Election
NET CHANGE IN
GENERAL
FUND EXPENSE
$ (55,670)
12,000
3,600
3,600
86,437
$ 49,967
CHANGES IN EXPENSES AND REVENUES
Increase in Local EMS Revenue From $10 Tax
Cost of Mailed Notice For Garbage Fees
Cost of Mailed Notice For NPDES Fees
NPDES Expenses No Longer Covered By Property Fees
TOTAL
:.
ESTIMATED IMPACTS TO
HOMEOWNERS IF
STAFF RECOMMENDATIONS ARE
IMPLEMENTED
(City-wide AssessmentslFees Typical Single Family Household)
TOTAL
Staff
Proposed
Current FY 97/98
FY 96/97 Prop 218
3.28 10.00
13.60 13.60
14.72 7.36
$ 31.60 $ 30.96
Difference
City of Dublin Approved
Property Tax Assessments And Fees
DRFA Approved Supplemental EMS Assessment
+ $ 6.72
City-wide Street Light Assessment
NPDES Storm Water Fee
( 7.36)
($ 0.64) *
* This is equivalent to approximately a 2.1 % decrease in the total amount paid.
Staff provides the following recommendations to fully implement Proposition 218.:
. 1) , A local EMS Special Tax of$10.00 should be placed before the voters at the June election. The
City Attorney will need to develop the necessary documents for presentation at the next City Council
meeting. A budget change will be required to provide for the local election costs.
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2) Staff requests City Council concurrence with the freezing of all Landscaping and Lighting
assessments at levels approved prior to November 6, 1996. The City Engineer will proceed with the
preparation of the Engineer's Reports and the levy of assessments will be considered prior to May 31,
1997.
3) Garbage rates will be treated as property related fees. Notices will be mailed to all property
owners with a hearing on the fees to be completed prior to May 31, 1997.
4) The City Engineer will prepare NPDES fees based upon a total levy which only covers refuse
related services and the cost of collecting the fees. This is estimated to reduce the 1996/97 fees paid by
property owners by approximately 50%. Efforts will be made to reduce program costs which can no
longer be paid for with these fees.
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VI. Att.chments
A-3
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PRoPosmON 218
TAXATION- VOTER APPROVAL OF LOCAL T.AJCES, ETC.-INITIATIVE
CONSTITIJ110NAL AMENDMENT
This initiative measure is submitted to the people in accordance with the provisions of Article II,
Section 8 of the Constitution.
PROPOSED ADDmON OF ARTICLE XIII C AND ARTICLE XIII D
RIGHT TO VOTE ON TAXES ACT
SECTION 1. TITI..E. This act sball be known and may be cited as the "Right to Vote on Taxes
Act."
SECTION 2. FINDINGS AND DECLARA.TIONS. The people of the State of California
hereby find and declare that Proposition 13 was intended to provide effective tax relief and to
~
require voter approval of tax increases.' However, local governments have subjected taxpayers to
excessive tax, assessment, fee and charge increases that not only frustrate the pwposes of voter
approval for tax increases, but also threaten the economic security of all Californians and the
California economy itself. This measure protects taxpayers by limiting the methods by which
local govenunents exact revenue from taxpayers without their consent.
SECTION 3. VOTER APPROVAL FOR LOCAL TAX LEVIES. Article XIII C is added to the
California Constitution to read: ..
CaNST Prec. Art. xm C, S' 1
ARTICLE xm C
SECTION 1. Definitions. As used in this article:
...'
(a) "General tax" means any tax imposed for general governmental purposes.
~ .. -- ..
(b) "Local government" means any county, city, city and county, including a charter city or
county, any special district, or any other local or regional governmental entity.
(c) "Special district" means an agency of the state, formed pursuant to general law or a special
act, for the local performance of governmental or proprietary functioDS with limited geographic
boundaries including, but not limited to, school districts and redevelopment agencies.
(d) "Special tax" means any tax imposed for specific purposes, including a tax imposed for
specific pwposes, which is placed into a general fund.
,.
PROPOSITION 218 . 1
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League of California Cities
EXHIBIT 2
Proposition 218 Implementation Guide
January 1997
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SEe. 2. Local Government Tax Limitation. Notwithstanding any other provision of this
Constitution:
~
(a) All taxes imposed by any local government shall be deemed to be either general taxes or
special taxes. Special purpose disnicts or agencies, including school districts, shall have no
power to levy general taxes.
(b) No local government may impose, extend, or increase any general tax unless and until that
tax is submitted to the electorate and approved by a majority vote. A general tax shall not be
deemed to have been increased if it is imposed at a rate not higher than the maximum rate so
approved. The election required by this subdivision shall be consolidated with a regularly
scheduled general election for members of the governing body of the local government, except in
cases of emergency declared by a unanimous vote of the governing body.
(c) Any general tax imposed, extended, or increased, without voter approval, by any local
government on or after January 1, 1995, and prior to the effective date of this article, shall
continue to be imposed only if approved by a majority vote of the voters voting in an election on
the issue of the imposition. which election shall be held within two years of the effective date of
this article and in compliance with subdivision (b).
(d) No local government may impose, extend, or increase any special tax unless and until that
tax is submitted to the electorate and approved by a two-thirds vote. A special tax shall not be
deemed to have been increased if it is imposed at a rate not higher than the maximum rate so
approved.
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
IT. the initiative power shall not be prohibited or otherwise limited in matters of reducing or-4.
repealing any local tax, assessment, fee or charge. The power of initiative to aff~t 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.
SECTION 4. ASSESSMENT AND PROPERTY RELATED FEE REFORM.
Article xm D is added to the California Constitution to read:
PROPOSITION 218 - 2
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Proposition 218 Implementation Guide
January 1997
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VI. Attachmcals
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ARTICLE xrn D
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SECTION 1. Application. Notwithstanding any other provision oflaw, the provisions of this
article shall apply to all assessments, fees and charges, whether imposed punuant to state statute
or local government charter authority. Nothing in this article or Article xm C shall be construed
to:
(a) Provide any new authority to any agency to impose a tax, assessment, fee. or charge.
(\?) Affect existing laws relating to the imposition of fees or charges as a condition of property
development.
(c) Affect existing laws relating to the imposition of timber yield taxes.
~
... SEC. 2. Definitions. As used in this article:
(a) "Agency" means any local government as defined in subdivision (b) of Section I of Anicle
xmc.
(b) "Assessment" means any levy or charge upon real property by an agency for a special benefit
conferred upon the real property. "Assessment" includes. but is not limited to, "special
assessment," "benefit assessment," "maintenance assessment" and "special assessment tax."
.
(c) "Capital cost" means the cost of acquisition, installation. construction, reconstruction. or
replacement of a permanent public improvement by an agency.
(d) "District" means an area determined by an agency to contain all parcels which will receive a
special benefit from a proposed public improvement or property~related service.
(e) "Fee" or "charge" means any levy other than an ad valorem tax, a special tax, or an
assessment, imposed by an agency upon a parcel or upon a person as an incident of property
ownership, including a user fee or charge for a property related service.
(f) "Maintenance and operntion expenses" means the cost ofrent. repair, replacement,
rehabilitation, fuel, power, electrical current. care, and supervision necessary to properly operate
and maintain a permanent public improvement.
(g) "Property ownership" shall be deemed to include tenancies ofreal property where tenants are
directly liable to pay the assessment, fee, 0: charge in question.
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PROPosmON 218 - 3
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(h) "Property-related service" means a public service having a direct relationship to property
ownership.
(i) "Special benefit" means a particular and distinct benefit over and above general benefits
conferred on real property located in the district or to the public at large. General enhancement
ofpropeny value does not constitute "special benefit."
SEC. 3. Property Taxes, Assessments, Fees and Charges Limited. (a) No tax. assessment,
fee, or charge shall be assessed by any agency upon any parcel ofpropeny or upon any person as
an incident of property ownership except:
(1) The ad valorem property tax imposed pursuant to Article XIII and Article XIII A..
(2) Any special tax receiving a two-thirds vote pursuant to Section 4 of Article XIII A..
'....
(3) Assessments as provided by this article.
(4) Fees or charges for property related services as provided by this article.
(b) For purposes of this article, fees for the provision of electrical or gas service shall not be
deemed charges or fees imposed as an incident of property ownership.
SEe. 4. Procedures and Requirements for All Assessments. (a) An agency which proposes
to levy an assessment shall identify all parcels which will have a special benefit conferred upon
them and upon which an assessment will be imposed. The proportionate special benefit derived
by each identified parcel shall be determined in relationship to the entirety of the capital cost ofa
public improvement, the maintenance and operation expenses of a public improvement, or the
cost of the property related service being provided. No assessment shall be imposed on any
parcel which exceeds the reasonable cost of the proportional special benefit conferred on that
parcel. Only special benefits are assessable, and an agency shall separate the general benefits
from the special benefits conferred on a parcel. Parcels within a district that are owned or used
by any agency. the State of California or the United States shall not be exempt from assessment
unless the agency can demonstrate by clear and convincing evidence that those publicly owned
parcels in fact receive no special benefit.
(b) All assessments shall be supported by a detailed engineer's report prepared by a registered
professional engineer certified by the State of California.
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PROPOSITION 218 - 4
League of California Cities
Proposition 218 Implementation Guide
January 1997
VI. Attachments
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(c) The amount of the proposed assessment for each identified parcel shall be calculated and the
record owner of each parcel shall be given written notice by mail of the proposed assessment, the
total amount thereof chargeable to the entire district, the amount chargeable to the owner's
particular parcel, the duration of the payments, the reason for the assessment and the basis upon
which the amount of the proposed assessment was calculated. together with the date, time, and
location of a public hearing on the proposed assessment. Each notice shall also include, in a
conspicuous place thereon., a summary of the procedures applicable to the completion., return.
and tabulation of the ballots required pursuant to subdivision (d), including a disclosure
statement that the existence of a majority protest, as defined in subdivision (e), will result in the
assessment not being imposed.
.
(d) Each notice mailed to owners of identified parcels within the district pursuant to subdivision
(c) shall contain a ballot which includes the agency's address for receipt of the ballot once
completed by any owner receiving the notice whereby the owner may indicate his or her name,
reasonable identification of the parcel, and his or her support or opposition to the proposed
assessment.
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(e) The agency shall conduct a public hearing upon the proposed assessment not less than 45
days after mailing the notice of the proposed assessment to record owners of each identified
parcel. At the public hearing, the agency shall consider all protests against the proposed
assessment and tabulate the ballots. The agency shall not impose an assessment if there is a
majority protest. A majority protest exists it: upon the conclusion of the hearing, ballots
submitted in opposition to the assessment exceed the ballots submitted in favor of the
assessment. In tabulating the ballots, the ballots shall be weighted according to the proportional
financial obligation of the affected property.
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(f) In any legal action contesting the validity of any assessment, the burden shall be on the
agency to demonstrate that the property or properties in question receive a special benefit over
and above the benefits conferred on the public at large and that the amount of any contested
assessment is proportional to, and no greater than, the benefits conferred on the property or
properties in question.
(g) Because only special benefits are assessable, electors residing within the district who do not
own property within the district shall not be deemed under this Constitution to have been
deprived of the right to vote for any assessment If a court determines that the Constitution of the
United States or other federal law requires otherwise, the assessment shall not be imposed unless
approved by a two.thirds vote of the electorate in the district in addition to being approved by the
property owners as required by subdivision (e).
SEe. 5. Effective Date. Pursuant to subdivision (a) of Section 10 of Micle II. the provisions
of this wiele shall become effective the day after the election unless otherwise provided.
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PROPOSITION 218 - 5
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League of California Cities
Proposition 218 Implementation Guide
January 1997
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VI. Attachments
Beginning July I, 1997, all existing, new, or increased assessments shall comply with this article.
Notwithstanding the foregoing, the following assessments existing on the effective date of this
article shall be exempt from the procedures and approval process set forth in Section 4:
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(a) Any assessment imposed exclusively to finance the capital costs or maintenance and
operation expenses for sidewalks, streets, sewers, w~er, flood control, drainage systems or
vector control. Subsequent increases in such assessments shall be subject to the procedures and
approval process set forth in Section 4.
(b) Any assessment imposed pursuant to a petition signed by the persons owning all of the
parcels subject to the assessment at the time the assessment is initially imposed. Subsequent
increases in such assessments shall be subject to the procedures and approval process set forth in
Section 4.
(c) Any assessment the proceeds of which are exclusively used to repay bonded indebtedness of
which the failure to pay would violate the ContraCt Impairment Clause of the Constitution of the
United States.
(d) Any assessment which previously received majority voter approval from the voters voting in
an election on the issue of the assessment. Subsequent increases in those assessments shall be
subject to the procedures and approval process set forth in Section 4.
SEC. 6. Property Related Fees and Charges. (a) Procedures for New or Increased Fees and
Charges. An agency shall follow the procedures pursuant to this section in imposing o~
increasing any fee or charge as defined pumIant to this article; including, but not limited to, the
following:
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(I) The parcels upon which a fee or charge is proposed for imposition shall be i~entified. The
-amount of the fee or charge proposed to be imposed upon each parcel shall be calculated. The
agency shall provide written notice by mail of the proposed fee or charge to the record owner of
each identified parcel upon which the fee or charge is proposed for imposition. the amount of the
fee or charge proposed to be imposed upon each, the basis upon which the amount of the
proposed fee or charge was calculated, the reason for the fee or charge, together With the date,
time, and location of a public hearing on the proposed fee or charge.
(2) The agency shall conduct a public hearing upon the proposed fee or charge not less than 45
days after mailing the notice of the proposed fee or charge to the record owners of each identified
parcel up~n which the fee or charge is proposed for imposition. At the public hearing, the
agency shall consider all protests against the proposed fee or charge. If written protests against
PROPOSITION 218 - 6
League of California Cities
Proposition 218 Implementation Guide
January 1997
Vl. Attachments
A-9
the proposed fee or charge are presented by a majority of owners of the identified parcels, the
agency shall not impose the fee or charge.
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(b) Requirements for Existing, New or Increased Fees and Charges. A fee or charge shall not be
extended, imposed, or increased by any agency unless it meets all of the following requirements:
(1) Revenues derived from the fee or charge shall not exceed the funds required to provide the
property related service.
(2) Revenues derived from the fee or charge shall not be used for any pwpose other than that for
which the fee or charge was imposed.
(3) The amount of a fee or charge imposed upon any parcel or person as an incident of property
ownership shall not exceed the proportional cost of the service attributable to the parcel.
(..,4) No fee or charge may be imposed for a service unless that service is actually used by, or
immediately available to, the owner of the property in question. Fees or charges based on
potential or future use of a service are not permitted. Standby charges. ~hether characterized as
charges or assessments, shall be classified as assessments and shall not be imposed without
compliance with Section 4.
(5) No fee or charge may be imposed for general governmental services including, but not
limited to, police, fire, ambulance or library services, where the service is available to the public
at large in substantially the same manner as it is to property owners. Reliance by an agency on
any parcel map, including, but not limited to, an assessor's parcel map, may be considered a
significant factor in determining whether a fee or charge is imposed as an incident of property
ownership for pwposes of this article. In any legal action contesting the validity of a fee or
charge, the burden shall be on the agency to demonstrate compliance with this article.
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(c) Voter Approval for New or Increased Fees and Charges. Except for fees or charges for
sewer, water, and refuse, collection services, no property related fee or charge shall be imposed or
increased unless and 'until that fee or charge is submitted and approved by a majority vote of the
property owners of the property subject to the fee or charge or, at the option of the agency, by a
two-thirds vote of the electorate residing in the affected area. The election shall be conducted not
less than 4S days after the public hearing. An agency may adopt procedures similar to those for
increases in assessments in the conduct of elections under this subdivision.
(d) Beginning July I, 1997, all fees or charges shall comply with this section.
SECTION S. LIBERAL CONSTRUCTION. The provisions of this act shall be liberally
construed to effectuate its pwposes of limiting local government revenue and enhancing taxpayer
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consent.
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, SECTION 6. SEVERABILITY. If any provision of this act, or part therrof, is for any reason
held to be invalid or unconstitutional, the remaining sections shall not be affected. but shall
remain in full force and effect, and to this end the provisions of this act are severable.
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STAFF SUMMARY OF
KEY PROVISIONS
OF
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PROPOSITION 218
RELA TED TO ASSESSMENTS
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EXHIBIT 3
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Ibis summary references key areas of change in the process and procedures enacted as part of Proposition
218. This does not address all requirements of the act and is intended to be background on the major
issues faced with the levy of assessments.
ASSESSMENT AUTHORITY EXTENDS TO ONLY SPECIAL BENEFITS .
The initial test to be made on assessments is to ascertain whether the expenditures to be funded are of a
general or special benefit to the properties being assessed. This finding was required prior to Proposition
218 under the assessment statutes. The first step is to identify all parcels which will have a special benefit
conferred upon them. This must include property owned by governmental agencies. (Current laws do not
have a clearly identified mechanism to collect from public agencies. In the case of the federal
government, due to current laws, the federal government may ignore an assessment levied without
authorization by an act of Congress.)
In accordance with the League of California Cities' implementation guide, a "special benefit" means that
the property receives a particular and distinct benefit over and above general benefits conferred on real
property in the district or the public at large. Further, they state that general enhancement of property
value is.....llQ[ a "special benefit." This standard must be kept in mind when a determination is made
regarding the spreading of assessments by land use. The apportionment needs to be reasonable and
justified in the required Engineer's report. Costs associated with "general" benefit must be paid from
other resources of the local agency.
The cost of preparing the Engineer's report will increase due to the complexity involved and the shift in
the burden of proof. The Public Works Director has not determined whether he will seek the services of a
consulting engineer or prepare the report with City Staff.
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ASSESSMENT NOTICING AND MAJORITY PROTEST PROCEEDING '.
Under Proposition 218 a notice must be mailed to the owner of each parcel. At the present time, this is in
addition to the notices and public hearings required under the statute governing an assessment and the
Brown Act. For example, the Landscaping and Lighting Act of 1972 requires a published notice to appear
at least 10 days prior to the date of the hearing. Therefore, there may be some duplication in order to
comply with all applicable laws.
The notice must be mailed 45 days prior to the public hearing and must provide the following
information:
(a) The total amount of the assessments to be collected from the entire district.
(b) The amount of the assessment applicable to the specific owner's parcel.
( c) The duration of the proposed assessment.
(d) The basis on which the amount of the proposed assessment was calculated.
(e) The date, time, and location of the public hearing.
(f) A summary of the voting procedures and the effect of a majority protest.
The majority protest proceeding differs significantly from prior laws. The ballots submitted are counted
to determine whether there is a majority protest. This increases the importance of obtaining affirmative
ballots from property owners who support the particular assessment. If the only ballots returned were
protest votes, the assessment could not be levied, as the criteria under Proposition 218 now examines only
those submitted. The ballots are weighted based upon the proportional fmancial obligation of the affected
property. In other words, a multi-family project which may pay $1,000 would have greater weight than a
single family household paying $20.
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EXEMPTIONS FOR ASSESSMENTS TO COMPLY WITH ALL PROVISIONS.
Section 5 of the new Article XIII D states that the provisions of the article shall become effective on the
day after the election. This section then goes on to state that all existing, new, or increased assessments
'.". ::. must comply with the act beginning July 1, 1997. However, an exemption from the procedures and
approval process as stated in Section 4 of the act is provided in the event of the following circumstances:
(a) Any assessment imposed exclusively to finance the capital costs or maintenance and operation
expenses for sidewalks, streets, sewers, water, flood control, drainage systems, or vector control.
Subsequent increases in such assessments shall be subject to the procedures and approval process set
forth in Section 4. (Bolding added.)
(b) Any assessment imposed pursuant to a petition signed by the persons owning all of the parcels
subject to the assessment at the time the assessment is initially imposed. Subsequent increases in such
assessments shall be subject to the procedures and approval process set forth in Section 4. (Bolding
added. )
(c) Any assessment the proceeds of which are used to repay bonded indebtedness of which the failure
to pay would violate the Contract Impairment Clause of the Constitution of the United States. (Bolding
added. )
(d) Any assessment which previously received majority voter approval from the voters in an election
on the issue of the assessment. Subsequent increases in such assessments shall be subject to the
procedures and approval process set forth in Section 4. (Bolding added.)
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STAFF SUMMARY OF
KEY PROVISIONS
OF
PROPOSITION 218
"PROPERTY RELATED FEES"
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EXHIBIT 4
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This summary focuses on key areas of change related to the imposition of property related fees and
charges.
',. FEES COMPLETELY EXEMPT FROM PROPOSITION 218
Proposition 218 specifically excludes fees or charges as a condition of development. Therefore, fees such
as the East Dublin Traffic Impact Fee are exempt. In addition fees for the provision of electrical and gas
service are exempt. Proposition 218 would also not apply to "regulatory fees" such as plan check and
building inspection fees. Also, "facility user" fees would be exempt from the article. Both of these
categories have no relationship to property ownership. The focus of the fee section requires that the fee be
"...imposed upon a parcel or upon a person as an incident to property ownership...."
SUBSTANTIVE RESTRICTIONS
A property related fee must meet the following requirements:
. Revenues from the fee must not exceed the funds required to provide the property related service.
. The fees collected must not be used for any other purpose than that for which it is collected.
. The amount of the fee shall not exceed the proportional cost attributable to the parcel.
. The service must be used by or immediately available to the property owner. Fees based upon
future use of a service are not permitted.
",. Fees may not be levied for general governmental purposes.
:'. PROCEDURAL REOUIREMENTS
The procedures to be followed begin with Noticing requirements including:
. Identification of parcels upon which a fee or charge is proposed.
. The amount of the fee or charge is to be calculated by the agency.
. The agency must provide written notice of the proposed fee or charge to each owner of an
identified parcel subject to the fee.
. The notice must: a) state the amount of the fee or charge; b) state the basis upon which the fee or
charge is calculated; c) state the reason for the fee or charge; and d) state the date time and location
of the public hearing on the proposed fee or charge.
The second area addressed by the Procedural Requirements relates to the provision of a public hearing,
which must be held at least 45 days after the mailing of the notice. If a majority of the parcels submit a
written protest the City cannot impose the fee.
V oter Approval Requirements
Except for sewer, water, and refuse collection fees; new or increased fees must be submitted to the
, ' voters. Proposition 218 does not address the procedures to be used for elections related to property
:'. related fees and charges. The City has two options in defining who will vote on the fee. 1) A Property
Owner vote, which receives a majority vote approval; or 2) A two-thirds vote of the electorate. The two-
thirds vote requirement is equivalent to the requirements for a "Special Tax".
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PROPERTY
CITY BUDGET OWNER
ITEM EFFECT OF 218 IMPACT IMPACT
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County-wide EMS The COlUlty will If the EMS District If the measure .-
Assessment pursue the current dissolves, residents may passes there is no
$21.14 as a special seek changes in services change in the cost
tax. a! the local level. to the property
owner.
This will require The City may be
2/3 voter approval required to absorb If the measure fails
undetermined a significant
'The election will be additional general decrease in the
in June. fund costs to assure level of emergency
ambulance services are services will occur.
available (i.e. operator
subsidies)
Local EMS Costs The City would If the current If the measure
(Currently Partially need pursue the supplemental passes at a $10.00
Funded By A amount as a special assessment is not rate there is an
Supplemental tax. replaced General Fund increase of $6.72
Assessment) Fire Service costs will per year.
This will require increase by $27,330.
2/3 voter approval OR
OR
An election could If the measure fails ..'.,
be held in June. If a $10 tax is approved or there is no tax :. ,
the 97/98 General placed on the ballot
Fund Fire Service costs the resident will :
would be reduced have a $3.28 per
$56,000. year savings.
Election Costs for a
local measure estimated
at $10,000-$12,000 ..
Street Light Provided the In FY 97/98 any There will be no "
Assessment assessment rate is increased costs of the financial impact to
the same as District will need to be the property owner. .-
Stagecoach Road 1996/97 and absorbed either within -,
Landscape enacted prior to the 96/97 assessment
Assessment July 1st there will rates or absorbed by
be no impact for FY another fund.
1997/98.
Dougherty Road Beginning with
Landscape Beginning with Assessments levied in
Assessment Assessments levied 1998/99, the City may
in 1998/99, they be required to
will need to account contribute general :. .-
for contributions fund monies related to
associated with the share owed by ,-
public property. public agencies.
EXHIBIT 5 "
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ITEM
Garbage Rates
SUMMARY OF IMP ACTS
EFFECT OF 218
As a property
related refuse fee,
established by the
City, a written
notice must be
provided to all
parcel owners.
If there is a
majority protest the
fees cannot be
levied.
CITY BUDGET
IMPACT
The additional cost of
providing a mailed
notice to each property
owner. (Estimated at
53,600. This could be
reduced if shared with a
NPDES Notice)
PROPERTY
OWNER
IMPACT
There will be no
financial impact to
the property owner.
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NPDES I Street and
Stonn Drain
Cleaning
Only the portion of
the fee related to
street sweeping and
storm drain
cleaning would be
collected as a refuse
fee.
A written notice
must be provided to
all parcel owners.
If there is a
majority protest the
fees cannot be
levied.
The additional cost of
providing' a mailed
notice to each property
owner. (Estimated at
53,600. This could be
reduced if shared with a
Garbage Rate Notice)
Additional cost to
General Fund of
$86,437 for program
elements not related to
refuse.
The annual cost is
anticipated to
decrease by
($7.36) per year.
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EXHIBIT 5
(page 2 of2)