The City and County of San Francisco is working to address a $4.9 billion unfunded liability for the 30-year costs projected for retiree health care benefits.  This is second to the State of California's unfunded liability of $48 billion.  Click here for the S.F. Chronicle article on this story.

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Today, the California Supreme Court issued its long-awaited decision in Bighorn-Desert View Water Agency v. Verjil (July 24, 2006, S127535) __ Cal.4th __.  The case concerned whether the water agency’s rates were subject to repeal by initiative pursuant to section 3 of article XIII C of the California Constitution. In the course of answering this question, the Court determined that water service charges (and by implication sewer and refuse collection fees) are “property related fees” under Article XIIII D.  This decision ends a long period of uncertainty. 

For agencies that impose water, sewer, and refuse collection fees, Bighorn has three basic implications.  First, the adoption and increase of “property related fees” are subject to Proposition 218’s procedural requirements. (Art. XIII D, sect. 6(a).)  These procedural provisions require detailed noticing of each property owner 45 days prior to the hearing on the fee and prohibit the adoption of the fee or increase if a majority of the property owners protest the imposition or increase in writing.  Second, property related fees are subject to Proposition 218’s substantive requirements. (Art. XIII D, sect. 6(b).)  Among other things, the substantive requirements provide that the amount of the fee “shall not exceed the proportional cost of the service attributable to the parcel,” and that revenues from the fee “shall not exceed the funds required to provide the service” and “shall not be used for any purpose other than that for which the fee was imposed.” Third, “property related fees” are subject to the power of the electorate to reduce them by initiative. (Art. XIII C, sect. 3).

The decision can be found here.  A link to a more detailed discussion of the case is forthcoming shortly.

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