Brooktrails Twp. Cmty. Servs. Dist. v. Bd. of Supervisors of Mendocino Cnty.

• Decision Date: 24 July 2013
• Docket Number: A135900
• Citation: 159 Cal.Rptr.3d 424,218 Cal.App.4th 195
• Court: California Court of Appeals Court of Appeals
• Parties: BROOKTRAILS TOWNSHIP COMMUNITY SERVICES DISTRICT, Plaintiff and Respondent, v. BOARD OF SUPERVISORS OF MENDOCINO COUNTY et al., Defendants. David Paland, Intervener and Appellant.

218 Cal.App.4th 195

159 Cal.Rptr.3d 424

BROOKTRAILS TOWNSHIP COMMUNITY SERVICES DISTRICT, Plaintiff and Respondent,

v. BOARD OF SUPERVISORS OF MENDOCINO COUNTY et al., Defendants.David Paland, Intervener and Appellant.

A135900

Court of Appeal, First District, Division 2, California.

Filed June 26, 2013

As Modified July 24, 2013

See 9 Witkin, Summary of Cal. Law (10th ed. 2005) Taxation, § 143.

Mendocino County Superior Court, Honorable John A. Behnke (Mendocino County Super. Ct. No. SCUK CVG–1057508)

Attorney for Intervener and Appellant: David Paland, in pro. per.

Attorneys for Plaintiff and Respondent: Neary and O'Brien, Christopher J. Neary, Willits.

Attorneys for Defendants: Thomas R. Parker, Mendocino County Counsel, Douglas L. Losak, Chief Deputy, Sandra L. Applegate, Terry N. Gross, Joan H. Turner, Brina A. Latkin, Deputy County Counsels.

Richman, J.

Proposition 218, adopted by the voters in 1996, added articles XIII C and XIII D to the California Constitution. ¹ One of its most prominent features was to tighten the two-thirds voter approval requirement for “special” taxes and assessments imposed by Proposition 13. (Art. XIII A, § 4 Art. XIII C, § 2, subd. (d); art. XIII D, §§ 3, 4, subd. (g), 6, subd. (c).) ² In Paland v. Brooktrails Township Community Services Dist. Bd. of Directors (2009) 179 Cal.App.4th 1358, 102 Cal.Rptr.3d 270 ( Paland I ), Division Five of this District concluded that “a minimum charge imposed on parcels with connections to a water district's utility systems for the basic cost of providing water or sewer service, regardless of actual use, is a charge for an immediately available property-related water or sewer service as defined in article XIII D, section 6, subdivision (b)(4), and consequently does not require ballot approval by affected owners.” ( Id. at p. 1362, 102 Cal.Rptr.3d 270.)

This appeal involves the response of the losing party in Paland I: David Paland, a resident of the Brooktrails Township Community Services District (District). Having been told that he could be required to pay for sewer and water connections even if they were inactive because he had discontinued service, Paland resolved on a novel rejoinder. He drafted an initiative that would in effect have ended the practice he had unsuccessfully battled in Paland I. The initiative passed, but only by a simple majority. However, at the same election voters statewide enacted Proposition 26 with the ostensible purpose of further tightening Proposition 218's restrictions on revenue-generating measures that are not approved by voters. (See fn. 5, post.)

On petition of the District, the trial court overturned the approval of the local initiative in the belief that a two-thirds majority was required, which was in turn premised on the applicability of the just-enacted Proposition 26. We conclude that indulging that premise was error, because there is nothing in Proposition 26 indicating that it was meant to have a retroactive application. With Proposition 26 removed from consideration, the water and sewerage operations of the District remains as discussed in Paland I—not subject to Proposition 218's supermajority requirement. Consequently, a simple majority is all that was necessary for the local initiative to pass and take effect. In light of this conclusion, we reverse.

BACKGROUND

Much of the relevant history behind this dispute was set out in Paland I:

“The Brooktrails Township Community Services District (District) was formed to provide water and sewer service to about 6,500 real property parcels in or near Willits, California.³ [Citation.] About 1,536 of the parcels are currently connected to the District's water system, and about 1,490 are connected to its sewer system. The rest of the parcels are undeveloped and not yet connected to the District's utility systems. Parcels not connected to the water and sewer systems are charged annual water availability and sewer standby fees. Parcels connected to the water and sewer systems are charged connection fees at the time of hookup to the systems, and thereafter fixed monthly water and sewer ‘base rates,’ as well as inclining usage-based rates for water service. The sewer connection is not a metered service, and is therefore not subject to a usage charge beyond the monthly base rate.

“Appellant David Paland, a property owner in the District, connected his parcel to the water and sewer systems in 1986 and paid $1,800 in connection fees. In the decades that followed, he periodically discontinued his water service when he was away from his home for extended periods of time or when he asserts he could not afford the service. On such occasions, he was historically charged a prorated amount of the water and sewer base rates for the month in which his service was discontinued and was not charged again until he requested reactivation of his water service. Until 2003, it was District policy not to charge base rates to parcels with existing connections that were inactive because the parcels were either undeveloped or unoccupied, or because the owners had temporarily discontinued their service.

“The District changed its policy in 2003. At the time, the state Department of Health Services had imposed a moratorium on new connections pending an increase in the District's water storage capacity. The Department of Health Services mandates increased the District's capital investment costs and eliminated its income from new connections. On March 11, 2003, the District's Board of Directors (Board) decided to begin charging established monthly base rates to parcels with existing utility connections, regardless of whether the owner was actually using the District's services. On April 24, 2003, District General Manager Michael Chapman wrote to Paland and 20 other property owners with currently or periodically inactive water meters informing them of the change of policy.

“Paland protested the new policy. He questioned [the] Board's statutory authority to impose monthly base rates on inactive connections, arguing that the practice was ‘in the nature of a standby fee’ and that the Board had not complied with Proposition 218 or due process. Although the Board did not rescind its policy, Paland took no immediate legal action because he ‘did not become aware that the thing had actually gone through as any kind of ordinance....’ He did not discontinue his water service between 2003 and 2006.

“In late 2006, Paland fell behind on his monthly bills. In October 2006, the District notified him that his service would be shut off if he did not pay the arrears. In a letter to the district general manager dated December 25, 2006, Paland wrote that his water had been turned off, that he would pay the arrears as soon as he could, that he could not afford to pay ongoing base rates because he was unemployed, and, ‘For that reason, I have no plans to ask you to turn the water back on until I can afford the huge base rate.’ By the end of January 2007, Paland apparently had paid his arrears through November 2006. Paland's subsequent monthly bills reflect no actual water usage. The District, however, continued to charge Paland the monthly base rates for both water and sewer services.

“On May 17, 2007, Paland sued the Board for declaratory and injunctive relief. He alleged that in 2007, pursuant to the 2003 policy, the District began charging him monthly base rates ... for time periods when he had requested that his water service be turned off. He again argued the monthly base rates, when charged to customers whose water service had been turned off, were ‘standby charges' subject to the owner voting requirements of article XIII D, section 4, and that the District had failed to comply with those requirements.” (Paland I, supra, 179 Cal.App.4th 1358, 1362–1363, 102 Cal.Rptr.3d 270, fns. omitted.) Paland lost and appealed.

Division Five agreed with the trial court that Proposition 218 did not entitle Paland to relief. The court opened its analysis by defining the nature and scope of the problem:

“The core issue in this appeal is whether the imposition of minimum monthly water and sewer base rates on parcels connected to the District utility systems, regardless of actual usage, is a property assessment subject to owner ballot approval requirements adopted in Proposition 218 (art. XIII D, § 4), or is instead a fee or charge for a property-related service exempted from those requirements (art. XIII D, § 6, subd. (c)).” (Paland I, supra, 179 Cal.App.4th 1358, 1364–1365, 102 Cal.Rptr.3d 270.) “The narrow focus of this dispute is the proper interpretation and application of article XIII D, section 6, subdivision (b)(4), which distinguishes between fees and assessments: ‘A fee or charge shall not be extended, imposed, or increased by any agency unless it meets all of the following requirements: [¶] ... [¶] (4) No fee or charge may be imposed for a service unless that 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, whether characterized as charges or assessments, shall be classified as assessments and shall not be imposed without compliance with Section 4.’ (Art. XIII D, § 6, subd. (b)(4), italics added.)” (Paland I, supra. at pp. 1366–1337, 102 Cal.Rptr.3d 270.)

“Paland argues that, despite the existence of a metered connection for water service at his parcel, that service is still not immediately available to him, and to those similarly situated with inactive connections, and therefore the imposition of minimum base rates on such parcels is a standby charge that must be classified as an assessment under article XIII D, section 6, subdivision (b)(4). He asserts that water service is not immediately available to him when his connection is inactive because the District would have to unlock his water meter before he could use the service. Also, he argues the service is not...