BILL ANALYSIS Ó
AB 2567
Page 1
Date of Hearing: May 9, 2012
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 2567 (Carter) - As Amended: March 26, 2012
SUBJECT : Sewer collection agency: schedule of fees.
SUMMARY : Allows an agency providing wastewater service to adopt
a schedule of fees or charges authorizing automatic adjustments
that pass through increases in wholesale charges for wastewater
treatment or adjustments for inflation, as specified.
Specifically, this bill :
1)Allows an agency providing wastewater service to adopt a
schedule of fees or charges authorizing automatic adjustments
that pass through increases in wholesale charges for
wastewater treatment or adjustments for inflation, if it
complies with all of the following:
a) It adopts the schedule of fees or charges for a
property-related service for a period not to exceed five
years pursuant to the Proposition 218 Omnibus
Implementation Act;
b) The schedule of fees or charges may include a schedule
of adjustments, including a clearly defined formula for
adjustment for inflation;
c) The schedule of fees or charges for an agency that
purchases wholesale wastewater treatment from a public
agency may provide for automatic adjustments that pass
through the adopted increases or decreases in the wholesale
charges for wastewater treatment established by the other
agency; and,
d) Notice of any adjustment pursuant to the schedule shall
be given pursuant to the Proposition 218 Omnibus
Implementation Act not less than 30 days before the
effective date of the adjustment.
EXISTING LAW :
1)Requires, generally, pursuant to Articles XIIIC and XIIID of
the California Constitution, that assessments, fees, and
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charges be submitted to property owners for approval or
rejection after the provision of written notice and the
holding of a public hearing.
2)Prescribes specific procedures and parameters for local
jurisdictions to comply with Articles XIIIC and XIIID of the
California Constitution.
3)Establishes notice, protest, and hearing procedures for the
levying of new or increased fees and charges by local
government agencies pursuant to Articles XIII C and XIIID
of the California Constitution.
4)Allows an agency providing water, sewer, or refuse collection
service to adopt a schedule
of fees or charges authorizing automatic adjustments that pass
through increases in wholesale charges for water or
adjustments for inflation, if it complies with all of the
following:
a) It adopts the schedule of fees or charges for a
property-related service for a period not to exceed five
years pursuant to existing law;
b) The schedule of fees or charges may include a schedule
of adjustments, including a clearly defined formula for
adjusting for inflation. Any inflation adjustment to a fee
or charge for a property-related service shall not exceed
the cost of providing that service;
c) The schedule of fees or charges for an agency that
purchases wholesale water from a public agency may provide
for automatic adjustments that pass through the adopted
increases or decreases in the wholesale charges for water
established by the other agency; and,
d) Notice of any adjustment pursuant to the schedule shall
be given pursuant to existing law, not less than 30 days
before the effective date of the adjustment.
FISCAL EFFECT : None
COMMENTS :
1)In a unanimous decision, the California Supreme Court held in
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Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal. 4th
205 that charges for on-going water delivery are subject to
Proposition 218 restrictions. Given this decision public
agencies are now required to provide notice to customers and
property owners regarding a proposed increase of an existing
fee or charge for a property-related service being provided to
a parcel. Customers and property owners are then given an
opportunity to protest the proposed increase. AB 1260
(Caballero), Chapter 280, Statutes of 2007, clarified the
noticing and protest requirements for property-related
services. However, some local agencies questioned whether or
not it was legal for them to create a schedule of fees or
charges for a property-related service since customers or
property owners would only be able to protest at the initial
adoption of the schedule and not at any of the scheduled
increases.
AB 3030 (Brownley), Chapter 611, Statutes of 2008, authorized
an agency providing water, sewer, or refuse collection service
to adopt a schedule of fees or charges for a property-related
service for a period of up to five years. That bill provided
public agencies the opportunity to plan long term and to save
money by not requiring the costly noticing requirement every
time the cost of service rises. This was especially true for
those public agencies that receive water from a water
wholesaler. Wholesale water providers are able to increase the
cost of water at any point without noticing requirements
because all of their customers are public agencies. However,
if a public agency had to raise its rates due to the increased
cost of water from the wholesaler, the public agency had to
provide notice to each of its customers and hold a protest
hearing before it could increase rates.
2)According to the author, this bill amends the AB 3030
provisions to include "wastewater collection" and "wastewater
treatment" which would then simplify the process of adjusting
rates in response to increases in the cost of wastewater
treatment while maintaining the fundamental ratepayer
protections provided for in Proposition 218. This bill is
sponsored by the Ross Valley Sanitary District.
3)Support arguments : The Association of California Water
Agencies, in support, writes that this bill "would save local
agency and ratepayer monies while preserving the protections
afforded by Proposition 218."
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Opposition arguments : None on file.
REGISTERED SUPPORT / OPPOSITION :
Support
Ross Valley Sanitary District ÝSPONSOR]
Association of California Water Agencies (ACWA)
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958