Local government: Proposition 218 Omnibus Implementation Act: proportional cost of service.

Plain English Breakdown

The official source material does not provide specific details on how local governments must determine characteristics indicative of likely water or sewer use, nor does it specify what constitutes a 'reasonable' basis for allocating costs within tiers.

Local Government: Proposition 218 Omnibus Implementation Act: Proportional Cost of Service

This law allows local governments more flexibility in setting water and sewer fees based on the cost of providing service, while still ensuring that charges are fair.

What This Bill Does

• Allows local governments to use different methods to show how much it costs to provide water or sewer services to each property.
• Permits local governments to set uniform or tiered rates for water and sewer fees based on common characteristics of likely usage, rather than exact cost per parcel.

Who It Names or Affects

• Local government agencies providing water and sewer services
• Property owners who pay water and sewer fees

Terms To Know

Proposition 218 Omnibus Implementation Act

A law that sets rules for local governments to follow when they charge property-related fees.

Proportional cost of service

The fair share of a fee or charge based on the actual cost of providing a service to each property.

Limits and Unknowns

• Does not specify how local governments must decide which characteristics define customer classes for tiered rates.
• Does not provide details about what constitutes 'reasonable' allocation of costs within tiers.

Official Summary Text

AB 2180, as amended, Ward.
Local government: Proposition 218 Omnibus Implementation Act: proportional cost of service.
The California Constitution specifies various requirements with respect to the levying of assessments and property-related fees and charges by a local agency. As part of those requirements, the California Constitution mandates that such fees or charges that are extended, imposed, or increased satisfy certain requirements, including, but not limited to, that the amount of the fee or charge imposed upon any parcel or person as an incident of property ownership not exceed the proportional cost of the service attributable to the parcel.
Existing law, known as the Proposition 218 Omnibus Implementation Act (act), prescribes specific procedures and parameters for local jurisdictions to comply with these requirements and, among other things, authorizes an agency providing water, wastewater, sewer, or refuse collection services to adopt a schedule of
fees or charges authorizing automatic adjustments that pass through increases in wholesale charges for water, sewage treatment, or wastewater treatment or adjustments for inflation under certain circumstances.
This bill would authorize a local government to demonstrate the proportional cost of the service attributable to the parcel by any method that reasonably allocates the ascertainable cost of providing service to all parcels, if substantiated as provided. The bill would, however, provide that for water or sewer service fee or charge impositions, a local government is not required to provide an exact measure of the cost of the service at each parcel and may instead impose uniform or tiered
fees or charges
rates
to parcel or customer classes that are defined based on common
characteristics indicative of likely water or sewer use. The bill would provide that the proportional cost of service within each tier of water service may be substantiated by using any reasonable basis for allocating costs attributed to the tier, as
described.
described, and would provide a local government discretion to determine the costs allocated to each tier as long as the rate for each tier does not exceed the proportional cost of service reasonably allocated to parcels subject to that tier.

Current Bill Text

Download Bill PDF