BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 171 HEARING: 5/8/13
AUTHOR: Hueso FISCAL: No
VERSION: 4/8/13 TAX LEVY: No
CONSULTANT: Austin
COACHELLA VALLEY WATER DISTRICT'S PROPERTY RELATED FEES
Allow the Coachella Valley Water District to levy property
related fees.
Background and Existing Law
Proposition 218 (1996) defined a property-related fee or
charge as any levy other than an ad valorem tax, a special
tax, or an assessment imposed by an agency on a parcel or a
person as an incident of property ownership, including a
user fee or charge for a property-related service.
Before a local government can charge a new property-related
fee, or increase an existing fee, Proposition 218 requires
local officials to:
Identify the parcels to be charged.
Calculate the fee for each parcel.
Notify the parcels' owners in writing about the
fees and the hearing.
Hold a public hearing to consider and count
protests.
Abandon the fees if a majority of the parcels'
owners protest.
New or increased property-related fees also require:
A majority-vote of the affected property owners;
Two-thirds registered voter approval; or,
Weighted ballot approval by the affected property
owners.
The election requirements don't apply to property-related
fees for sewer, water, or refuse collection services. A
2002 appellate court decision in Howard Jarvis Taxpayers
Association v. City of Salinas found that a city's charges
on developed parcels to fund storm water management were
property-related fees, and were not covered by Proposition
SB 171 -- 4/8/13 -- Page 2
218's exemption for "sewer" or "water" services. As a
result, storm water fees require a vote of property owners
or registered voters.
Drainage from impervious surfaces produces urban runoff,
stormwater discharges, and water pollution. To protect
rivers and oceans, the federal Clean Water Act requires the
states to reduce pollution from urban runoff. Most
stormwater discharges require National Pollutant Discharge
Elimination (NPDES) permits. In California, the State
Water Resources Control Board (SWRCB) and the Regional
Water Quality Control Boards (RWQCBs) are pushing counties,
cities, and special districts to reduce urban runoff and
stormwater discharges.
Formed in 1918, the Coachella Valley Water District (CVWD)
provides irrigation and drinking water, collects and
recycles wastewater, provides storm water protection,
replenishes the groundwater basin and promotes water
conservation to over 107,000 homes and businesses across
1,000 square miles mostly within the Coachella Valley in
Riverside County. CVWD is governed by a five-member Board
of Directors elected to four-year terms by district voters.
Each director represents a division of the district, but
is elected at-large by all voters. The Board of Directors
sets policy and represents the ratepayers. The District
can levy special assessments to raise funds for
constructing, operating, and maintaining public works (SB
650, Kelley, 1993).
The Legislature has authorized counties, cities, sanitary
districts, county sanitation districts, sewer maintenance
districts, and other districts responsible for sanitary
sewers and sewerage systems to impose fees in connection
with storm drainage services and facilities (SB 682, Mello,
1991). In 2005, the Legislature authorized the Ventura
County Watershed Protection District to impose property
related fees to fund storm drainage services and facilities
(AB 554, Nava, 2005). In 2010, the Los Angeles County Flood
Control District was granted the same power (AB 2554,
Brownley, 2010). Coachella Valley Water District officials
want the Legislature to grant them the same authority.
Proposed Law
SB 171 -- 4/8/13 -- Page 3
Senate Bill 171 authorizes the Coachella Valley Water
District to impose a fee or charge to pay for constructing,
operating, improving and maintaining the District's public
works in compliance with Article XIII D of the California
Constitution.
SB 171 clarifies that the Coachella Valley Water District's
benefit assessments must comply with the state laws that
implement Proposition 218, including majority vote
threshold requirements.
State Revenue Impact
No estimate.
Comments
1.Purpose of the bill . The Coachella Valley Water District
covers more than
1,000 square miles, and there is only one drainage system
in the Lower Coachella Valley that handles stormwater,
agricultural drainage, and now urban drainage. The system
was originally constructed by the Bureau of Reclamation to
manage storm flows and agricultural drainage, but urban
development that is moving into the Lower Valley also uses
the system. Operation and maintenance costs of the system
are currently paid by the farmers in the Lower Valley. As
farm areas are urbanized, the number of farmers has
decreased while urban drainage has driven costs up. The
current fee structure has caused shortages in funding for
operations and maintenance and is unsustainable as
agricultural contributions continue to decline. SB 171's
aim is to provide a tool to the Coachella Valley Water
District to assist in the continued operation and
maintenance of their drainage facilities.
2. Is a fee necessary ? The District already has the
authority to impose benefit assessments. Under Proposition
218, benefit assessments need weighted majority property
owner approval. Rather than expose the taxpayers to a new
type of fee, the Committee may wish to consider whether the
District should use its existing revenue tools.
3. Proposition 218 still intact . Proposition 218
protects property owners' interests by requiring a local
SB 171 -- 4/8/13 -- Page 4
government that wants to charge a property-related fee to
meet certain requirements. SB 171 does not change that.
If the District uses
SB 171 to impose a property-related fee, it must meet the
constitutional requirements added by Proposition 218. If
it can't, it can't impose the fee.
Support and Opposition (5/2/13)
Support : Coachella Valley Water District, Desert Valleys
Builders Association
Opposition : Unknown.