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City Entitled to Vote on New Drainage Fee as Owner of Parcels Affected by Charge—C.A.
Opinion Says Nothing in California Constitution Expressly Excludes Municipality From Casting Ballots Even if Purpose Behind Approval Mandate Is to Limit Powers
By a MetNews Staff Writer
The Third District Court of Appeal has held that a city is entitled to a vote on its own proposal seeking to implement a new storm drainage fee—under a provision of the California Constitution mandating approval by the majority of landowners before any new “property related” charge is imposed—where the municipality owns affected parcels.
In Wednesday’s opinion, written by Justice Jonathan K. Renner and joined in by Presiding Justice Laurie M. Earl and Justice Aimee Feinberg, the court rejected a challenge by another affected landowner who pointed out that the fee would not have been approved but for the inclusion of the city’s votes and argued that allowing the locality to cast a ballot undermines the policy behind the provision.
In 2022, the City of Sacramento proposed the fee to fund repairs, maintenance, and improvements to its storm drainage system. The generated funds, which were expected to amount to approximately $20 million in annual revenue, were to be calculated by a formula that considers parcel size and land use.
Sacramento’s Department of Utilities conducted an election regarding the proposal to comply with Article XIII D §6 of the California Constitution, which was added following the passage of a voter initiative titled the “Right to Vote on Taxes Act” in 1996, which calls for a public hearing on new fees and additionally provides:
“[N]o property related fee or charge shall be imposed or increased unless and until that fee or charge is submitted and approved by a majority vote of the property owners of the property subject to the fee or charge or, at the option of the agency, by a two-thirds vote of the electorate residing in the affected area….”
Ballots Mailed
As part of the election process, the city mailed 130,071 ballots, accounting for 154,879 parcels, to property owners who receive storm drainage services. Each landowner received one vote per property. At the time of the election, the city owned one percent of the properties that would be subjected to the new charge, and the municipal council authorized the city manager to sign ballots in favor of the proposal for each of the 2,007 parcels at issue. Ultimately, the scheme passed by a margin of 1,949 votes.
Property owner Dessins LLC filed a petition for a writ of mandate and a complaint, seeking declaratory relief and the invalidation of the fee. In the pleading, Dessins asserted:
“[H]ad the City not cast votes on behalf of these 2,007 City-owned parcels, the measure would have failed. By casting votes on behalf of City-owned property in favor of a Fee that will effectively be paid to the City, the City subverted Proposition 218’s goal of protecting taxpayers by limiting the methods by which local governments exact revenue from taxpayers without their consent.”
Following briefing, Sacramento Superior Court Judge Jennifer K. Rockwell concluded that the city was entitled to vote in the election and denied the petition. Judgment was entered in favor of the city in February 2024, and Dessin timely appealed.
Property Owner
Renner assumed without deciding that the storm drainage fee was subject to the procedural requirements of Article XIII D §6 and wrote:
“Dessins argues the City was not authorized to vote on the storm drainage fee, and doing so subverted the purposes of [the Right to Vote on Taxes initiative]. We disagree. Because the City is a ‘property owner[]…subject to the fee,’ it was authorized to vote on the fee under article XIII D, section 6, subdivision (c).”
Rejecting Dessins’ contention that being the “record owner” of a parcel does not make the city a “property owner” under Article III D, the jurist opined:
“Dessins offers no argument that the City does not actually own the property under the plain meaning of that term. Further, nothing in [the initiative] narrows the definition of a property owner as that term is commonly understood.”
Addressing the petitioner’s assertion that “nothing in Article XIII D states that an agency that proposes a fee—and to which the fee will be paid—is entitled to vote on the fee,” he remarked:
“The plain meaning of the phrase ‘property owner[] of the property subject to the fee’ entitles the City to vote in this case….The City proposed a fee that is imposed on its own properties, thereby making it a property owner of property subject to the fee and entitled to vote under article XIII D, section 6, subdivision (c).”
Dessins cited §5 of the initiative, which specifies:
“The provisions of this act shall be liberally construed to effectuate its purposes of limiting local government revenue and enhancing taxpayer consent.”
Renner acknowledged this duty to broadly construe the provisions of Article XIII D in order to give effect to the purposes behind the measure, but declared that such an obligation cannot overcome the plain language of the law.
Saying that Dessins wrongly claimed that the fee would impose “no burden or net cost on the City, which could simply transfer money from one accounting fund to another,” he pointed to substantive requirements in the article that limit how the revenue derived from the charge is spent.
Renner wrote:
“By imposing the fee, the City is requiring itself to pay ‘the proportional cost of the service’ and to not use what it pays for any other purpose than for which the fee was imposed….The City’s entitlement to a proportional amount of votes did not, as Dessins suggests, render the vote ‘meaningless’ or take the decision about whether to approve the fee out of the hands of taxpayers. The provisions of article XIII D, section 6, subdivision (c), construed liberally, authorized the City’s vote.”
The case is Dessins LLC v. City of Sacramento, C100644.
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