Proposition 218: Understanding the Basics

PWD’s 2019 Rate Study

Palmdale Water District (PWD), like many other local governments, follows the legal requirements established by CA Proposition 218 when considering rate increases.

On November 5, 1996, California voters approved Proposition 218, known as the “Right to Vote on Taxes Act.”  Proposition 218 amended the California Constitution to add elements that affect how special districts, such as PWD, can levy and collect taxes, assessments, and property-related fees and charges.

Any special district proposing to adopt a new, or increase an existing, property-related fee or charge must comply with both the substantive and procedural requirements of Proposition 218.

Substantive Requirements of Prop 218:

According to Prop. 218, a property-related fee must meet the following substantive requirements:

  • Revenues derived from the fee must not exceed the funds to provide the service;
  • Revenues derived from the fee must not be used for any purpose other than that for which the fee is imposed;
  • The amount of a fee imposed must not exceed the proportional cost of the service attributable to the parcel;
  • The fee may not be imposed for a service unless the service is actually used by, or immediately available to, the owner of the property subject to the fee; and
  • No fee or charge may be imposed for general governmental services, such as police, fire, ambulance, or libraries, where the service is available to everyone in the community.

Procedural Requirements of Prop 218:

It is required by Prop 218 that a public agency proposing a new or increased property-related fee or charge provide written notice by mail to the owner of each parcel upon which the fee or charge will be imposed.

  • The notice must include the following:
    • The proposed amount of the fees or charges;
    • The basis upon which the fees or charges were calculated;
    • An explanation of the need for the new or increased fees or charges; and
    • The date, time and location of the public hearing at which the agency will consider the new or increased fees.
  • Proposition 218 requires that a public hearing be held at least 45 calendar days after the mailing of the notice; and
  • Provides that a property owner-related fee or charge may not be imposed or increased if a majority submit a written protest.

Public Hearing Requirements:

The final step in the Proposition 218 process is the public hearing, which is held at least 45 days after the notice is mailed.  At the public hearing, it will be determined whether there is a majority protest against the property-related fee and all public comments will be heard.

At the end of the public hearing, if the protests against the proposed increase are not presented by a majority of affected property owners, the agency may proceed with imposing the fees or charges.

California law simplifies the process for determining whether a majority protest exists by allowing one protest, filed by an owner or a tenant of an affected parcel, to be counted.

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