CC - Item 6G - Possible Opposition to Senate Bill 231ROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: BILL R. MANIS, CITY MANAGER,,,4,<"
DATE: MARCH 28, 2017
SUBJECT: POSSIBLE OPPOSITION TO SENATE BILL 231 (AGENDIZED BY
COUNCILMEMBER CLARK)
SUMMARY
Councilmember Clark is requesting that the City Council oppose Senate Bill (SB) 231. This bill
is similar to SB 1298 that the City Council opposed on August 23, 2016. The cities of Glendora,
Claremont, Monrovia, and Duarte opposed the original SB 1298 bill as well.
STAFF RECOMMENDATION
That the City Council direct staff to send a letter opposing SB 231.
FISCAL IMPACT — None
STRATEGIC PLAN IMPACT — None
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Prepared by:
Marc Donohue, City Clerk
Attachment A: Draft Opposition Letter
Attachment B: Article — Howard Jarvis Taxpayers Association
Attachment C: SB 231 Language
Attachment D: SB 1298 Opposition Letter
ITEM NUMBER:
Attachment A
Draft Opposition Letter
MAYOR:
SANDRA ARMENIA
MAYOR PRO TEM:
POLLY LDW
COUNCIL MEMBERS:
WILLIAM ALARCON
MARGARET CLARK
STEVENLY
March 28, 2017
Members of the State Legislature
California State Capitol
10t` and L Streets
Sacramento, CA 95814
RE: SB 231 (Hertzberg) — Oppose
Dear Members of the State Legislature:
I
8838 E. VALLEY BOULEVARD P.O BOX 399
ROSEMEAD, CALIFORNIA 91770
TELEPHONE (626) 569-2100
FAX (626) 307-9218
We are asking you to join the City of Rosemead in opposing Senate Bill 231 (Hertzberg).
This bill would remove the right of voters to vote on taxes for storm water simply by changing
the definition of sewer. We feel that the voters were clearly exempting from voting charges for
sanitary sewer that takes our sewage to treatment. They did not exempt charges for cleaning up
the water from rainstorms.
While we do appreciate the Senator's endeavors to help cities and counties that are facing
enormous costs for storm water cleanup, a bill that makes such drastic changes needs to be voted
on by the voters. Groups pushing for these taxes had proposed to put on last November's ballot a
constitutional amendment to change Prop 218, but backed off when the Attorney General's
summary said it would allow taxes "without voter approval". Knowing the voters would not like
that, they withdrew it.
We were led to believe that the current mandates upon cities were cost effective, satisfactory to
the environmental groups, cleaned up the storm water, and were standard for all cities in
California. We find this not to be accurate. Los Angeles County is faced with $20 billion in
Efficient Water Management Practices (EWMPS) that no other county has to implement and
which could actually pollute the ground water. There are also environmental groups' that are
actually suing over the EWMPS.
Because the bill would re -define sewer, which is exempt under Prop 218 to include storm water,
SB 231 would allow virtually any storm water taxes to pass without going to the voters. So in
essence, the County's 2013 "Clean Beaches" proposal, which imposed astronomical costs on
businesses and non -profits but was withdrawn due to tremendous pressure by opponents, would
pass easily. Thus, the $20 billion program that LA County is facing which has serious problems
mentioned above could put a huge burden on our low-income families and struggling businesses.
The City of Rosemead urges a no vote on this bill and asks that you uphold the right of voters to
approve new taxes being placed upon them.
Sincerely,
Sandra Armenta
Mayor
CC: Rosemead City Council
Assemblymember Ed Chau — Fax: (916) 319-2149
Assemblymember Chris Holden — Fax: (916) 319-2141
Senator Ed Hernandez Fax: (916) 319-2143
Jennifer Quan, Regional Public Affairs Manager (via email)
Meg Desmond, League of California Cities, mdesmondeacities.org
California Contract Cities — Fax: (562) 622-9555
Independent Cities Association — Fax: (310) 321-7810
Joe A. Gonsavles & Son (via email)
California State Legislature
Attachment B
Article — Howard Jarvis Taxpayers Association
Sen. Hertzberg targets homeowners with
higher water and sewer rates
Feb.11,2017
Updated Feb. 12, 2017 11:30 a.m.
By JON COUPAL / Contributing writer
It's no secret that tax -and -spend interests have hated Proposition 13 since its adoption
by the voters in 1978. Immediately after passage, Prop. 13 was the target of numerous
lawsuits and legislative proposals seeking to create loopholes that would allow
government to grab more tax dollars from California citizens.
These constant attacks compelled taxpayer advocates to go back to the voters with
multiple initiatives to preserve the letter and spirit of Prop. 13. These included Prop. 62
in 1986 (voter approval for local taxes); Prop. 218 (closing loopholes for local fees and
so-called "benefit assessments"); and Prop. 26 (requiring "fees" to have some nexus to
the benefits conferred on the fee payers).
However, the latest tax -grabber to treat homeowners as ATMs is state Senator Bob
Hertzberg, D -Van Nuys. If he gets his way, Californians will be spending a lot more on
water and sewer service. He seeks to do away with the critical "cost of service"
requirements for water rates as well as treat "stormwater runoff' (the rain that runs down
street gutters) the same as "sewer service," opening the door to virtually unlimited —
and unvoted — sewer rates.
As to the latter proposal, Hertzberg has introduced Senate Bill 231. This proposal would
attempt to rewrite Prop. 218 with a statute to allow for stormwater to be included under
the definition of "sewer," meaning that it would no longer be subject to a Prop. 218
election. This is not a minor issue and, in fact, when the city of Salinas attempted to
charge residents for "storm water runoff' as part of their sewer bill, the Howard Jarvis
Taxpayers Association sued and won. The published decision in HJTA v. City of Salinas
was a significant victory for homeowners as the city was attempting to load up its
"sewer" service with all kinds of costs unrelated to sewer service including street
sweeping.
Of course, the real problem with SB231 is that it attempts to rewrite part of the California
Constitution with a mere statute. This is a big no -no. The city of Salinas decision was an
interpretation of Prop. 218 which added Articles XIIIC and MID to the California
Constitution. Courts are likely to take a dim view of a legislative override of their
interpretation of the state constitution.
To add insult to injury, Hertzberg has also introduced Senate Constitutional Amendment
4. While this bill is basically intent language and needs to be refined, the point of this bill
will be to undermine Prop. 218's proportionality and cost of service requirements. Under.
the state Constitution, rates for property related fees (water/sewer/refuse) need to be
equivalent to the cost of providing the service. Taxpayers fear that SCA 4 will ultimately
overrule another taxpayer court victory in the city of San Juan Capistrano which upheld
the concept of "cost of service." This decision has been misinterpreted by Gov. Brown
and the media as prohibiting the ability of water districts to create tiered water rates. In
truth, tiered water rates — charging more for higher levels of water use — can be legal
if the municipality can demonstrate that the extra water costs more.
What Hertzberg and big government bureaucrats want to do, however, is to use water
rates as another opportunity to engage in social engineering. They wish to charge those
water users they perceive as "bad" more per gallon than those users they perceive as
"good." The beauty of "cost of service" rates, however, is that they are fair for everyone:
You pay for what you use.
More importantly, when government deviates from "cost of service" requirements, it
expands the opportunity for them to do what they do best — extract more money from
citizens.
Jon Coupal is president of the Howard Jarvis Taxpayers Association
Attachment C
SB 231 Language
SENATE BILL No. 231
Introduced by Senator Hertzberg
February 2, 2017
An act to amend Section 53750 of, and to add Section 53751 to, the
Government Code, relating to local government finance.
LEGISLATIVE COUNSEL'S DIGEST
SB 231, as introduced, Hertzberg. Local government: fees and
charges.
Articles XIII C and XIII D of the California Constitution generally
require 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. Existing law, the Proposition 218
Omnibus Implementation Act, prescribes specific procedures and
parameters for local jurisdictions to comply with Articles XIII C and
XIII D of the California Constitution and defines terms for these
purposes.
This bill would define the term "sewer" for these purposes. The bill
would also make findings and declarations relating to the definition of
the term "sewer" for these purposes.
Vote: majority. Appropriation: no. Fiscal committee: no.
State -mandated local program: no.
The people of the State of California do enact as follows.•
1 SECTION 1. Section 53750 of the Government Code is
2 amended to read:
3 53750. For purposes of Article XII C and Article XIII D of
4 the California Constitution and this article: article, the following
5 words have the following meanings, and shall be read and
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SB 231
—2-
1 interpreted in light of the findings and declarations contained in
2 Section 53751:
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(a) "Agency" means any local government as defined in
subdivision (b) of Section 1 of Article XIII C of the California
Constitution.
(b) "Assessment" means any levy or charge by an agency upon
real property that is based upon the special benefit conferred upon
the real property by a public improvement or service, that is
imposed to pay the capital cost of the public improvement, the
maintenance and operation expenses of the public improvement,
or the cost of the service being provided. "Assessment" includes,
but is not limited to, "special assessment," "benefit assessment,"
"maintenance assessment," and "special assessment tax."
(c) "District" means an area that is determined by an agency to
contain all of the parcels that will receive a special benefit from a
proposed public improvement or service.
(d) "Drainage system" means any system of public
improvements that is intended to provide for erosion control, for
landslide abatement, or for other types of water drainage.
(e) "Extended," when applied to an existing tax or fee or charge,
means a decision by an agency to extend the stated effective period
for the tax or fee or charge, including, but not limited to,
amendment or removal of a sunset provision or expiration date.
(f) "Flood control" means any system of public improvements
that is intended to protect property from overflow by water.
(g) "Identified parcel" means a parcel of real property that an
agency has identified as having a special benefit conferred upon
it and upon which a proposed assessment is to be imposed, or a
parcel of real property upon which a proposed property -related
fee or charge is proposed to be imposed.
(h) (1) "Increased," when applied to a tax, assessment, or
property -related fee or charge, means a decision by an agency that
does either of the following:
(A) Increases any applicable rate used to calculate the tax,
assessment, fee, or charge.
(B) Revises the methodology by which the tax, assessment, fee,
or charge is calculated, if that revision results in an increased
amount being levied on any person or parcel.
(2) A tax, fee, or charge is not deemed to be "increased" by an
agency action that does either or both of the following:
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-3— SB 231
(A) Adjusts the amount of a tax, fee, or charge in accordance
with a schedule of adjustments, including a clearly defined formula
for inflation adjustment that was adopted by the agency prior to
November 6, 1996.
(B) Implements or collects a previously approved tax, fee, or
charge, so long as the rate is not increased beyond the level
previously approved by the agency, and the methodology
previously approved by the agency is not revised so as to result in
an increase in the amount being levied on any person or parcel.
(3) A tax, assessment, fee, or charge is not deemed to be
"increased" in the case in which the actual payments from a person
or property are higher than would have resulted when the agency
approved the tax, assessment, fee, or charge, if those higher
payments are attributable to events other than an increased rate or
revised methodology, such as a change in the density, intensity,
or nature of the use of land.
(i) "Notice by mail" means any notice required by Article XIIIC
or XIII D of the California Constitution that is accomplished
through a mailing, postage prepaid, deposited in the United States
Postal Service and is deemed given when so deposited. Notice by
mail may be included in any other mailing to the record owner
that otherwise complies with Article X111 or XIIID of the
California Constitution and this article, including, but not limited
to, the mailing of a bill for the collection of an assessment or a
property -related fee or charge.
0) "Record owner" means the owner of a parcel whose name
and address appears on the last equalized secured property tax
assessment roll, or in the case of any public entity, the State of
California, or the United States, means the representative of that
public entity at the address of that entity known to the agency.
(k) "Sewer" means services and systems provided by all real
estate, fixtures, andpersonalproperty owned, controlled, operated,
or managed in connection with or to facilitate sewage collection,
treatment, or disposition for sanitary or drainage purposes,
including lateral and connecting sewers, interceptors, trunk and
outfall lines, sanitary sewage treatment or disposal plants or works,
drains, conduits, outlets for surface or storm waters, and any and
all other works, property, or structures necessary or convenient
for the collection or disposal ofsewage, industrial waste, or surface
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MWIM
or storm waters. "Sewer system "shall not include a sewer system
that merely collects sewage on the property of a single owner.
(k�
(l) "Registered professional engineer" means an engineer
registered pursuant to the Professional Engineers Act (Chapter 7
(commencing with Section 6700) of Division 3 of the Business
and Professions Code).
(lj—
(m) "Vector control" means any system of public improvements
or services that is intended to provide for the surveillance,
prevention, abatement, and control of vectors as defined in
subdivision (k) of Section 2002 of the Health and Safety Code and
a pest as defined in Section 5006 of the Food and Agricultural
Code.
(rd)
(n) "Water" means any system of public improvements intended
to provide for the production, storage, supply, treatment, or
distribution of water from any source.
SEC. 2. Section 53751 is added to the Government Code, to
read:
53751. The Legislature finds and declares all of the following:
(a) The ongoing, historic drought has made clear that California
must invest in a 21st century water management system capable
of effectively meeting the economic, social, and environmental
needs of the state.
(b) Sufficient and reliable funding to pay for local water projects
is necessary to improve the state's water infrastructure.
(c) Proposition 218 was approved by the voters at the November
5, 1996, statewide General Election. Some court interpretations
of the law have constrained important tools that local governments
need to manage storm water and drainage runoff.
(d) Storm waters are carried off in storm sewers, and careful
management is necessary to reduce pollution. But a court decision
has excluded storm water from those provisions of Proposition
218 that apply to property -related fees for sewer and water,
preventing many important projects from being built.
(e) The court of appeal in Howard Jarvis Taxpayers Ass'n v.
City of Salinas (2002) 98 Cal.AppAth 1351 concluded that the
term "sewer," as used in Proposition 218, is "ambiguous" and
declined to use the statutory definition of the term "sewer system"
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which was part of the then -existing law as Section 230.5 of the
Public Utilities Code.
(f) The court in Howard Jarvis Taxpayers Ass'n v. City of
Salinas (2002) 98 Cal.App.4th 1351 failed to follow long-standing
principles of statutory construction by disregarding the plain
meaning of the term "sewer." Courts have long held that statutory
construction rules apply to initiative measures, including in cases
that apply specifically to Proposition 218 (see People v. Bustamante
(1996) 57 Cal.App.4th 693, Keller v. Chowchilla Water Dist.
(2000) 80 Cal.App.4th 1006). When construing statutes, courts
look first to the words of the statute, which should be given their
usual, ordinary, and commonsense meaning (People v. Mejia
(2012) 211 Cal.App.4th 586, 611). The purpose of utilizing the
plain meaning of statutory language is to spare the courts the
necessity of trying to divine the voters' intent by resorting to
secondary or subjective indicators. The court in Howard Jarvis
Taxpayers Ass'n v. City of Salinas (2002) 98 Cal.App.4th 1351
asserted its belief as to what most voters thought when voting for
Proposition 218, but did not cite the voter pamphlet or other
accepted sources for determining legislative intent. Instead, the
court substituted its own judgment for the judgment of voters.
(g) Numerous sources predating Proposition 218 reject the
notion that the term "sewer" applies only to sanitary sewers,
including, but not limited to:
(1) Section 230.5 of the Public Utilities Code.
(2) Section 23010.3, which was first added by Chapter 1193 of
the Statutes of 1963.
(3) The Street Improvement Act of 1913 (repealed by Chapter
346 of the Statutes of 1963).
(4) The California Supreme Court stated in Los Angeles County
Flood Control District v. Southern California Edison Co. (1958)
51 Cal.2d 331, that "no distinction has been made between sanitary
sewers and storm drains or sewers."
(5) The term, "sewer" has been used interchangeably to refer
to both sanitary and storm sewers in many other cases, including,
but not limited to, County of Riverside v. Whitlock (1972) 22
Cal.App.3d 863, Ramseier v. Oakley Sanitary Dist. (1961) 197
Cal.App.2d 722, and Torson v. Fleming (1928) 91 Cal.App. 168.
(6) Dictionary definitions of sewer, which courts have found to
be an objective source for determining common or ordinary
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SB 231
meaning, including Websters (1976), American Heritage (1969),
and Oxford English Dictionary (1971).
(h) Prior legislation has affirmed particular interpretations of
words in Proposition 218, specifically Assembly Bill 2403 of the
2013-14 Regular Session (Chapter 78 of the Statutes of 2014).
(i) The Legislature reaffirms and reiterates that the definition
found in Section 230.5 of the Public Utilities Code is the definition
of "sewer" or "sewer service" that should be used in the Proposition
218 Omnibus Implementation Act.
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Attachment D
SB 1298 Opposition Letter
MAYOR:
SAmRAARM1fENTA
MAYOR PRO TEM:
POLLY LOW
COUNCILMEMBERS:
W=AMALARCON
MARGARET CLARK
S=NLY
August 24, 2016
Members of the State Legislature
California State Capitol
IO"` and L Streets
Sacramento, CA 95814
is11 I ' I /'SM
8838 E. VALLEY BOULEVARD PA BOX 399
ROSEMEAD, CALIFORNIA 91770
TELEPHONE (626) 569.2100
FAX (626) 307-9218
RE: SB 1298 (Hertzberg) — Oppose
Dear Members of the State Legislature:
I am asking you to join the City of Rosemead in opposing Senate Bill 1298 (Hertzberg).
This bill is already opposed by the cities of Glendora, Claremont, Monrovia, Duarte, Howard
Jarvis Taxpayers' Association, San Gabriel Valley Economic Partnerships, etc.
While we do appreciate the Senator's endeavors to help cities and counties that are facing
enormous costs for storm water cleanup, a bill that makes such drastic changes needs to be
properly vetted. It is a gut and amend which as you know means it was dropped into another bill
without going through the standard procedures which are intended to give the public the time
needed to vet the consequences. To rush it through at the end of session during August when so
many constituents are on vacation violates the public trust, Groups pushing for these taxes had
proposed to put on this November ballot a constitutional amendment to change Prop 218 but
backed off when the Attorney General's summary said it would allow taxes "without voter
approval". Knowing the voters wouldn't like that they withdrew it and proposed this "end run"
around the voters.
We were led to believe that the current mandates upon cities were cost effective, satisfactory to
the environmental groups, cleaned up the storm water, and were standard for all cities in
California. We find this not to be accurate. (LA County is faced with $20 billion EWMPS that no
other county has to do and which could actually pollute the ground water. The environmental
groups' are actually suing over them.)
Because the bill would re -define sewer which is exempt under Prop 218 to include storm water,
SB 1298 would allow virtually any storm water taxes to pass without going to the voters. So in
essence the County's 2013 "Clean Beaches" proposal, which imposed astronomical costs on
businesses and non -profits but was withdrawn due to tremendous pressure by opponents, would
pass easily. Thus the $20 billion program that LA County is facing which has serious problems
mentioned above would easily pass. This could put a huge burden on our low income families
and struggling businesses.
The City of Rosemead urges a no vote on this bill and ask that you uphold the right of voters to
approve new taxes being placed upon them.
Sincerely,
Sandra Armenia
Mayor
CC: Rosemead City Council
Assemblymember Ed Chau — Fax: (916) 319-2149
Assemblymember Roger Hernandez —Fax: (916) 319-2148
Assemblymember Chris Holden — Fax: (916) 319-2141
Senator Ed Hernandez — Fax: (916) 319-2143
Senator Bob Huff—Fax: (916) 651-4929
Senator Carol Liu—Fax: (916) 651-4925
Jennifer Quan, Regional Public Affairs Manager (via email)
Meg Desmond, League of California Cities, mdesmondcacities.org
California Contract Cities —Fax: (562) 622-9555
Independent Cities Association—Fax: (310) 321-7810
Joe A. Gonsavles & Son (via email)