BILL ANALYSIS Ó
AB 2567
Page 1
ASSEMBLY THIRD READING
AB 2567 (Carter)
As Amended March 26, 2012
Majority vote
LOCAL GOVERNMENT 8-0
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|Ayes:|Alejo, Bradford, Campos, | | |
| |Davis, Gordon, Hueso, | | |
| |Knight, Norby | | |
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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
AB 2567
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effective date of the adjustment.
EXISTING LAW :
1)Requires, generally, pursuant to Articles XIIIC and XIIID of
the California Constitution, that assessments, fees, and
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
AB 2567
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before the effective date of the adjustment.
FISCAL EFFECT : None
COMMENTS : In a unanimous decision, the California Supreme Court
held in 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.
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.
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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."
Opposition arguments: None on file.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
FN: 0003585