Fire Protection Assessments Fail Prop. 218 Challenge

By William W. Abbott

A new decision from the Third Appellate District illustrates that the drafters and voters in favor of Proposition 218 achieved what they were after: further restrictions on the ability of public agencies to raise new revenue irrespective of the salutary purposes or modesty of the imposition. The case involves a fire protection assessment approved by 61.8% of the vote cast in a 218 election proceeding.Concerned Citizens for Responsible Government v. West Point Fire Protection District (2011) 196 Cal.App. 4th 1427.

The West Point Fire Protection District is located in Calaveras County. Formed in 1948, the primary funding source to the District is property tax. Like most areas in California, time did not stand still within the District boundaries. With a rapidly increasing service population, the demands for service outpaced tax revenues. A study prepared for the District estimated that it would require an additional $146,000 per year (double its existing budget) to keep one full time EMT/firefighter available at all times; something that most urban areas currently enjoy but is a luxury in the rural parts of California.

However, neither the necessity for, nor the reasonableness of the expenses is relevant to the legal question of whether or not an assessment is valid. Under Proposition 218, assessments must be based upon benefits. After reviewing the history behind Proposition 218 and the court decisions which followed, the appellate court held the assessment procedure for the District was flawed on several grounds. The court’s initial ruling was that the assessment was only for general benefits, and therefore did not qualify for an assessment. The court viewed the assessment as a general expansion of services which benefitted all properties. Since the delivery of general emergency services is a non predictable event, this effectively precluded the existence of special benefits.

 

While the court’s first holding disposed of the case, the court went on to say that even if one could argue that special benefits were found, the assessment was invalid as it failed the proportionality requirement. Relying on the holding of Town of Tiburon v. Bonander (2009) 180 Cal.App.4th 1057, the appellate court acknowledged that a proportionality determination was based upon the costs, as measured by the relative benefits. In finding that the assessment failed the proportionality requirement, the appellate court noted that the District’s engineer first determined the cost, then worked backwards to establish the amount of the assessments, an error perhaps of oversimplification. The engineers report also relied upon three categories for assessments: improved, unimproved and exempt. Improved properties would be assessed $87.58 per year, whereas unimproved properties paid $45.00. Exempt properties paid nothing. The appellate court concluded that this assessment structure was flawed because all increased services would be “special benefits,” there being no discount for general benefits. The formula resulted in disproportionate assessments between improved and unimproved properties. In reaching this conclusion, the court relied upon the relative value of the properties (land and improvements) as the metric for analyzing the proportionality of the assessment. The court also highlighted that the assessment report noted that exempt properties would receive a “major benefit,” implying that assessment report authors ought to be more careful in how they write their reports.

 

William W. Abbott is a partner at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

 

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

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