Prop. 218 Assessments for Prop. 218 Assessments for Services – In Trouble?Services – In Trouble?

Richard P. ShanahanRichard P. ShanahanBartkiewicz, Kronick & ShanahanBartkiewicz, Kronick & ShanahanSacramento, CA Sacramento, CA www.bkslawfirm.comwww.bkslawfirm.com

MVCAC Fall MeetingMVCAC Fall MeetingNovember 3, 2011November 3, 2011

South Lake Tahoe, CASouth Lake Tahoe, CA

Topics to be coveredTopics to be covered

Recent assessment casesRecent assessment cases Concerned Citizens v. West Point Concerned Citizens v. West Point

FPDFPD Supreme Court reviewSupreme Court review What next?What next?

Proposition 218 (1996)Proposition 218 (1996)

Approval and increase of Approval and increase of assessments subject to assessments subject to more stringent substantive more stringent substantive and procedural and procedural requirements, including:requirements, including:– Detailed engineer’s reportDetailed engineer’s report– Majority landowner approval Majority landowner approval

through ballot proceedingthrough ballot proceeding– Courts no longer deferential Courts no longer deferential

to local agencyto local agency

What are the 218 challenges What are the 218 challenges

with assessments?with assessments? Only special benefits may be funded by Only special benefits may be funded by

assessment.assessment. Must identify special benefit and separate Must identify special benefit and separate

out general benefit. General benefit must out general benefit. General benefit must be supported by another revenue source.be supported by another revenue source.

Need to analyze proportionate special Need to analyze proportionate special benefit received by each parcel and spread benefit received by each parcel and spread cost based on proportionality. cost based on proportionality.

Must work from special benefit to cost; not Must work from special benefit to cost; not vice versa (i.e., cannot “back into” vice versa (i.e., cannot “back into” assessment based on cost).assessment based on cost).

Recent Bad Recent Bad Assessment Assessment CasesCases

Town of Tiburon v. Bonander (2009)Town of Tiburon v. Bonander (2009)– Assessment to underground utility linesAssessment to underground utility lines– Town failed to properly allocate proportionate special Town failed to properly allocate proportionate special

benefits because it spread assessment based on relative benefits because it spread assessment based on relative costs not benefitscosts not benefits

Beutz v. Co. of Riverside (2010)Beutz v. Co. of Riverside (2010)– Assessment for park landscapingAssessment for park landscaping– County failed to separate general and special benefits; failed County failed to separate general and special benefits; failed

to show proportionalto 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 Assessment for park and street improvements and maintenancemaintenance

– City failed to separate general and special benefits City failed to separate general and special benefits

But See --But See --

Dahms v. Downtown Pomona PBID (2009)Dahms v. Downtown Pomona PBID (2009)– Assessment for downtown business Assessment for downtown business

improvement districtimprovement district– PBID services upheld as all special benefits PBID services upheld as all special benefits

on downtown parcelson downtown parcels

Another Bad CaseAnother Bad Case

Concerned Citizens v. Concerned Citizens v. West Point FPD (2011)West Point FPD (2011) Assessment for fire protection servicesAssessment for fire protection services Engineer’s report weak. Spread benefits Engineer’s report weak. Spread benefits

based on three parcel types. Limited based on three parcel types. Limited effort to separate general benefit.effort to separate general benefit.

District failed special benefit and District failed special benefit and proportionality requirements.proportionality requirements.

Court of Appeal ruled the assessment Court of Appeal ruled the assessment confers only general benefits and confers only general benefits and implied that 218 prohibits assessments implied that 218 prohibits assessments for services.for services.

Reaction to CC v. Reaction to CC v. WPFPDWPFPD

MVCAC, CSDA, CSAC, Fire Districts MVCAC, CSDA, CSAC, Fire Districts Association of Cal., League of Cities, & Association of Cal., League of Cities, & California Downtown Association requested California Downtown Association requested depublication by Cal. Supreme Courtdepublication by Cal. Supreme Court

West Point FPD appealedWest Point FPD appealed Supreme Court’s optionsSupreme Court’s options

– Do nothing; Court of Appeal opinion standsDo nothing; Court of Appeal opinion stands– Depublish Court of Appeal opinionDepublish Court of Appeal opinion– Grant petition for review and hear case on Grant petition for review and hear case on

meritsmerits

Concerned Citizens for Responsible Concerned Citizens for Responsible Government et al. v. West Point Fire Government et al. v. West Point Fire Protection District et al.Protection District et al.Case: S195152Case: S195152

2011-10-192011-10-19

Petition for review granted in Petition for review granted in Supreme Court. Supreme Court.

CANTIL-SAKAUYE, C.J., BAXTER, A.J., CANTIL-SAKAUYE, C.J., BAXTER, A.J., WERDEGAR, A.J., CHIN, A.J., WERDEGAR, A.J., CHIN, A.J., CORRIGAN, A.J., LIU, A.J. CORRIGAN, A.J., LIU, A.J.

What next?What next?

Parties file briefsParties file briefs– League, CSAC andLeague, CSAC and

FDAC to file amicus briefFDAC to file amicus brief– MVCAC role? Join local government MVCAC role? Join local government

brief or file separate brief?brief or file separate brief? Court hears oral argumentCourt hears oral argument Decision (1.5 – 3 years); could be Decision (1.5 – 3 years); could be

significantsignificant

Outcome? Recent Outcome? Recent Supreme Court Cases on Supreme Court Cases on Prop. 218Prop. 218

Bighorn-Desert View WA v. Verjil (2006)Bighorn-Desert View WA v. Verjil (2006)– Local government lost. Water charges are property-Local government lost. Water charges are property-

related fees subject to 218.related fees subject to 218. Silicon Valley Taxpayers Assoc. v. SCVOSA Silicon Valley Taxpayers Assoc. v. SCVOSA

(2008)(2008)– Local government lost. Open space assessment fails Local government lost. Open space assessment fails

special benefit and proportionality tests.special benefit and proportionality tests. Greene v. Marin Co. FCWCD (2010)Greene v. Marin Co. FCWCD (2010)

– Local government won. Voter-approved storm Local government won. Voter-approved storm drainage fee and related district procedures upheld. drainage fee and related district procedures upheld.

Note: Chief Justice Cantil-Sakauye and Justice Note: Chief Justice Cantil-Sakauye and Justice Liu are new since GreeneLiu are new since Greene

West Point FPD special West Point FPD special tax measuretax measure

$78/parcel/year on $78/parcel/year on ballot Nov. 8, 2011ballot Nov. 8, 2011

Needs 2/3 vote of Needs 2/3 vote of registered voters. 62% registered voters. 62% of landowners of landowners supported assessment supported assessment in 2007.in 2007.

What if voters approve What if voters approve it? Will district keep it? Will district keep litigating? Is Supreme litigating? Is Supreme Court case moot? Court case moot?

Questions?Questions?