Stanford Law School - Robert Crown Law Library

Filed 2/9/04

IN THE SUPREME COURT OF CALIFORNIA

JERRY RICHMOND et al.,
Plaintiffs and Appellants,
S105078
v.
Ct.App. 3 C034239
SHASTA COMMUNITY SERVICES
DISTRICT, )

) Shasta
County
Defendant and Respondent. )
Super. Ct. No. 0134636

In November 1996, California voters adopted Proposition 218, the Right to
Vote on Taxes Act, which added articles XIII C and XIII D to the California
Constitution. (See Apartment Assn. of Los Angeles County, Inc. v. City of Los
Angeles (2001) 24 Cal.4th 830, 835.) Article XIII D of the state Constitution
(hereafter article XIII D) specifies various restrictions and requirements for
assessments, fees, and charges that local governments impose on real property or
on persons as an incident of property ownership. Here, the main issue is whether a
charge that a local water district imposed as a condition of making a new
connection to the water system, and that the district used to finance capital
improvements to the water system, is subject to the restrictions of article XIII D.
Other questions presented are whether article XIII D prohibits a local water district
from continuing to include in the new connection fees a fire suppression charge,
the proceeds of which are used to purchase firefighting and emergency medical
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equipment for the district’s volunteer fire department, and whether an ordinance
imposing a water connection fee may be amended by a resolution.
On these questions, we conclude: (1) a capacity charge imposed as a
condition for making a new connection to a water system, the proceeds of which
are used to finance capital improvements, is not an assessment within the meaning
of article XIII D, and thus it is not subject to article XIII D’s restrictions on
assessments; (2) a fire suppression fee imposed as a condition for making a new
connection to a water system, the proceeds of which are used to purchase
firefighting and emergency medical equipment, is not a property-related fee or
charge under article XIII D, and thus it is not subject to article XIII D’s prohibition
against property-related fees and charges for general governmental services; and
(3) an ordinance enacted by a community services district to impose a water
connection fee may be amended by a resolution. Because these conclusions are
consistent with the trial court’s judgment, but inconsistent with part of the Court
of Appeal’s opinion, we will reverse that court’s judgment with directions to
affirm the trial court’s judgment.
I. FACTS AND PROCEDURAL HISTORY
Because neither party petitioned the Court of Appeal for a rehearing, we
take the facts largely from that court’s opinion. (See Cal. Rules of Court, rule
28(c)(2).)
Defendant Shasta Community Services District (the District) is a local
public entity organized under the community services district law (Gov. Code,
§ 61000 et seq.). It operates a water system for residential and commercial users
and a volunteer fire department that provides both fire suppression and emergency
medical services. In February 1994, the District adopted an ordinance (No. 1-94)
establishing a “standard connection fee” of $2,000, plus the cost of a water meter,
for new water service connections. According to the ordinance, this fee included a
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capacity charge1 of $600 for future improvements to the water system and a fire
suppression charge of $400. The ordinance did not expressly allocate the
remaining $1,000, but one may infer that it covered the cost of installing the water
service connection because the ordinance also provided that if the water main was
not on the same side of the street or highway as the property to be served, “the
District will charge the actual cost of the connection to the extent such cost exceed
the sum of $1,000.”
In November 1997, the District adopted a resolution (No. 10-97) to amend
this ordinance. According to the resolution, applicants for new water service
connections would be required to pay: (1) a “standard connection fee”; (2) the
actual cost of a water meter; and (3) if the property owner chose to have the
District install the service connection, the “actual cost of the materials, labor, and
overhead” for installing the “entire service connection including the meter, line
setter, meter box, appurtenant equipment, and mainline extension, if any.” The
“standard connection fee” consisted of a $3,176 capacity charge for capital
improvements to the water system and a $400 fire suppression charge. The
resolution stated that the $3,176 capacity charge was “based upon estimated
project costs of $762,300 for future improvements assigned to the new
development of 240 future connections which equals $3,176 per connection.”
In March 1998, plaintiffs Jerry Richmond, Linda Panich, Hank Edelstein,
and Victoria Edelstein, both individually and doing business as a joint venture,
brought this action to test the validity of the resolution increasing the fees for new

1
The Government Code defines a “capacity charge” as “a charge for
facilities in existence at the time a charge is imposed or charges for new facilities
to be constructed in the future that are of benefit to the person or property being
charged.” (Gov. Code, § 66013, subd. (b)(3).)
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connections. (Code Civ. Proc., § 860; Gov. Code, §§ 66013, 66022.) They
alleged that they owned real property within the District and also within an area
proposed for annexation into the District. They challenged the resolution on many
grounds, only three of which are relevant here: (1) The resolution imposed an
assessment within the meaning of article XIII D, but the District had not satisfied
the constitutional requirements for imposing an assessment; (2) the $400 fire
suppression charge was a “fee” or “charge” within the meaning of article XIII D,
and it violated article XIII D’s prohibition against fees or charges for general
governmental services; and (3) the 1994 ordinance could be amended only by
another ordinance, not by a mere resolution. Plaintiffs requested a declaratory
judgment that the resolution was void and a permanent injunction restraining the
District from enforcing it.
The action was tried to the court without a jury. At the trial, the District
presented evidence showing, among other things, that the capital improvements to
be funded by the $3,176 capacity charge, including a new 500,000-gallon storage
tank, would both remedy existing deficiencies in the water system and expand the
system’s ability to provide service to new customers through new connections.
The $3,176 charge was calculated by allocating 50 percent of the cost of the
improvements to new connections and 50 percent to existing connections. Water
customers throughout the district would benefit from the improvements, but
customers in certain higher-elevation areas would receive somewhat less benefit
than other customers. After considering the evidence, the superior court granted
judgment for the District. The court concluded: (1) The connection fee imposed
by resolution No. 10-97 is not a special assessment but a development fee exempt
from article XIII D; (2) the fire suppression charge is merely the continuation of a
fee imposed before article XIII D was enacted; and (3) the connection fee could
legally be adopted by a resolution (enactment of an ordinance was not required).
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On plaintiffs’ appeal, the Court of Appeal affirmed the judgment, except as
to the fire suppression charge. The court reasoned that the District’s connection
fee was not an assessment within the meaning of article XIII D because that
constitutional provision by implication defines an assessment as a charge imposed
on specific identified parcels, whereas the connection fee was not imposed on
identified parcels. Because the connection fee was imposed only when a property
owner requested a new service connection, the specific properties for which
connections would be sought could not be identified (although the number of such
requests could be estimated), and thus the connection charge could not be
characterized as an assessment. The Court of Appeal also concluded that the
connection fee, because it was incurred only when the owner voluntarily requested
a new service connection, was properly characterized as a development fee, and as
such it was exempt from the requirements of article XIII D.
With respect to the fire suppression charge, however, the Court of Appeal
accepted plaintiff’s argument that it was a fee for general governmental services
prohibited by section 6, subdivision (b)(5), of article XIII D. The Court of Appeal
rejected the District’s argument that this provision did not apply to fees authorized
by laws enacted before article XIII D became effective, but only to fees that were
newly enacted or increased thereafter.
Finally, the Court of Appeal concluded that the District could validly use a
resolution to amend an ordinance.
II. THE CAPACITY CHARGE
To determine whether the District’s $3,176 capacity charge, imposed only
on applicants for new service connections, violates article XIII D’s restrictions on
assessments, we must interpret our state Constitution. “The principles of
constitutional interpretation are similar to those governing statutory construction.”
(Thompson v. Department of Corrections (2001) 25 Cal.4th 117, 122.) The aim of
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constitutional interpretation is to determine and effectuate the intent of those who
enacted the constitutional provision at issue. (Ibid.) To determine that intent, we
begin by examining the constitutional text, giving the words their ordinary
meanings. (Ibid.; accord, Leone v. Medical Board (2000) 22 Cal.4th 660, 665.)
Section 2 of article XIII D defines an “assessment” as “any levy or charge
upon real property . . . for a special benefit conferred upon the real property . . . .”
(Art. XIII D, § 2, subd. (b).) It defines “special benefit” as “a particular and
distinct benefit over and above general benefits conferred on real property located
in the district or to the public at large . . . .” (Id., § 2, subd. (i).)
Section 4 of article XIII D establishes procedures and requirements for
assessments. A local public agency may not impose an assessment, as defined in
article XIII D, unless: (1) the agency identifies “all parcels which will have a
special benefit conferred upon them and upon which an assessment will be
imposed” (art. XIII D, § 4, subd. (a)); (2) the agency obtains an engineer’s report
that supports the assessment (id., § 4, subd. (b)); (3) the assessment does not
exceed the reasonable cost of the proportional special benefit conferred on the
affected parcel (id., § 4, subds. (a) & (f)); and (4) after giving notice to affected
property owners and holding a public hearing, the agency does not receive a
majority protest based on ballots “weighted according to the proportional financial
obligation of the affected property” (id., § 4, subds. (c)-(e)).
To determine what constitutes an assessment under article XIII D, it is
necessary to consider not only article XIII D’s definition of an assessment, but
also the requirements and procedures that article XIII D imposes on assessments.
Article XIII D requires that an agency imposing an assessment identify “all parcels
which will have a special benefit conferred upon them and upon which an
assessment will be imposed.” (Art. XIII D, § 4, subd. (a), italics added.) The
agency then must give written notice of the proposed assessment to the owners of
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these identified parcels (id., § 4, subd. (c)) and provide an opportunity for a protest
using ballots “weighted according to the proportional financial obligation of the
affected property” (id., § 4, subd. (e)).
Because the capacity charge is imposed only on property owners who apply
for a new service connection, the District cannot identify the parcels upon which
the capacity charge will be imposed. Here, the District estimated that there would
be 240 new connection applications, but the District did not and could not identify
the specific parcels for which new connection applications would be made. At
most, the District can identify the parcels within its boundaries on which the
capacity charge would be imposed if the owners applied for a service connection.
But the matter is more complex, because many existing undeveloped parcels
would likely be subdivided into an indeterminable number of smaller parcels, for
each of which a connection might be requested, thus making it impossible to now
determine “the proportional financial obligation of the affected property.” And
even this understates the problem, because owners of property outside the
District’s boundaries may seek service connections by applying for annexation of
their property into the District. Therefore, it is impossible for the District to
comply with article XIII D’s requirement that the agency identify the parcels on
which the assessment will be imposed and provide an opportunity for a majority
protest weighted according to the proportional financial obligation of the affected
property.
We agree with the Court of Appeal that the proper conclusion to be drawn
from this impossibility of compliance is that an assessment within the meaning of
article XIII D must not only confer a special benefit on real property, but also be
imposed on identifiable parcels of real property. Because the District does not
impose the capacity charge on identifiable parcels, but only on individuals who
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request a new service connection, the capacity charge is not an assessment within
the meaning of article XIII D.
This construction is consistent with settled rules of constitutional
interpretation. “Courts construe constitutional phrases liberally and practically;
where possible they avoid a literalism that effects absurd, arbitrary, or unintended
results.” (Carman v. Alvord (1982) 31 Cal.3d 318, 327; see also California
Correctional Peace Officers Assn. v. State Personnel Bd. (1995) 10 Cal.4th 1133,
1147 [“a practical construction is preferred”].) Construing article XIII D’s
definition of assessment as applying only to charges imposed on identifiable
parcels avoids the probably unintended result of prohibiting local water districts
from imposing capacity charges, no matter how modest or reasonable, for new
connections because of the inherent impossibility of identifying in advance the
parcels for which new connections would later be requested.
This construction is also consistent with article XIII D’s definition of an
assessment as a “levy or charge upon real property . . . .” (Art. XIII D, § 2, subd.
(b), italics added.)2 The District does not impose the capacity charge on real
property as such, but on individuals who apply for new service connections. It is
the applicant who must pay, and the District may not impose a lien or otherwise
have recourse to the property to compel payment. Rather, the District simply does
not initiate water service until the charge is paid. A charge that operates in this

2
In this regard, it may be instructive to compare article XIII D’s definition of
an assessment as a “levy or charge upon real property” (id., § 2, subd. (b)) with its
definition of a fee or charge as a “levy . . . upon a parcel or upon a person as an
incident of property ownership . . .” (id., § 2, subd. (e)). Although a property-
related fee or charge may be imposed either on the property itself or upon the
owner as an incident of ownership, a levy must be imposed on the property itself
to qualify as an assessment under article XIII D.
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way cannot be described as a charge upon real property within the meaning of
article XIII D.
Finally, this construction is consistent with the aim of Proposition 218 to
enhance taxpayer consent. Here, the District proposed to divide the costs of new
capital improvements between users receiving service through existing
connections and users applying for new connections. This case concerns only
imposition of costs on new connections. Presumably, any costs imposed on
customers receiving service through existing connections would be subject to
article XIII D’s voter approval requirements, and thus their consent. Customers
who apply for new connections give consent by the act of applying. Moreover,
water connection fees are already subject to significant constraints under
Government Code section 66013.3

3
Government Code section 66013 provides:
“(a) Notwithstanding any other provision of law, when a local agency
imposes fees for water connections or sewer connections, or imposes capacity
charges, those fees or charges shall not exceed the estimated reasonable cost of
providing the service for which the fee or charge is imposed, unless a question
regarding the amount of the fee or charge imposed in excess of the estimated
reasonable cost of providing the services or materials is submitted to, and
approved by, a popular vote of two-thirds of those electors voting on the issue.

“(b) As used in this section:
“(1) ‘Sewer connection’ means the connection of a structure or project to a
public sewer system.

“(2) ‘Water connection’ means the connection of a structure or project to a
public water system, as defined in subdivision (f) of Section 116275 of the Health
and Safety Code.

“(3) ‘Capacity charge’ means a charge for facilities in existence at the time
a charge is imposed or charges for new facilities to be constructed in the future
that are of benefit to the person or property being charged.

“(4) ‘Local agency’ means a local agency as defined in Section 66000.
“(5) ‘Fee’ means a fee for the physical facilities necessary to make a water
connection or sewer connection, including, but not limited to, meters, meter boxes,
and pipelines from the structure or project to a water distribution line or sewer
(Footnote continued on next page.)
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(Footnote continued from previous page.)

main, and that does not exceed the estimated reasonable cost of labor and
materials for installation of those facilities.

“(c) A local agency receiving payment of a charge as specified in paragraph
(3) of subdivision (b) shall deposit it in a separate capital facilities fund with other
charges received, and account for the charges in a manner to avoid any
commingling with other moneys of the local agency, except for investments, and
shall expend those charges solely for the purposes for which the charges were
collected. Any interest income earned from the investment of moneys in the
capital facilities fund shall be deposited in that fund.

“(d) For a fund established pursuant to subdivision (c), a local agency shall
make available to the public, within 180 days after the last day of each fiscal year,
the following information for that fiscal year:

“(1) A description of the charges deposited in the fund.
“(2) The beginning and ending balance of the fund and the interest earned
from investment of moneys in the fund.

“(3) The amount of charges collected in that fiscal year.
“(4) An identification of all of the following:
“(A) Each public improvement on which charges were expended and the
amount of the expenditure for each improvement, including the percentage of the
total cost of the public improvement that was funded with those charges if more
than one source of funding was used.

“(B) Each public improvement on which charges were expended that was
completed during that fiscal year.

“(C) Each public improvement that is anticipated to be undertaken in the
following fiscal year.

“(5) A description of each interfund transfer or loan made from the capital
facilities fund. The information provided, in the case of an interfund transfer, shall
identify the public improvements on which the transferred moneys are, or will be,
expended. The information, in the case of an interfund loan, shall include the date
on which the loan will be repaid, and the rate of interest that the fund will receive
on the loan.

“(e) The information required pursuant to subdivision (d) may be included
in the local agency’s annual financial report.

“(f) The provisions of subdivisions (c) and (d) shall not apply to any of the
following:
(Footnote continued on next page.)
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Plaintiffs rely on this court’s decision in San Marcos Water Dist. v. San
Marcos Unified School Dist. (1986) 42 Cal.3d 154 (San Marcos). The issue there
was whether a provision of the state Constitution exempting public entities from
payment of property taxes (Cal. Const., art. XIII, § 3, subd. (b)) applied to a local
water district’s capacity fee, used to fund capital improvements to the water
system. The constitutional property tax exemption for public entities had been
construed to include special assessments, but not user fees, and thus the issue
presented to this court was whether the capacity charge was more properly
characterized as a special assessment or as a user fee for purposes of this
constitutional provision. We concluded that a capacity charge was a hybrid in the
sense that it had some characteristics of a user fee and some characteristics of an
assessment. (San Marcos, supra, at p. 163.) We concluded also, however, that the

(Footnote continued from previous page.)

“(1) Moneys received to construct public facilities pursuant to a contract
between a local agency and a person or entity, including, but not limited to, a
reimbursement agreement pursuant to Section 66003.

“(2) Charges that are used to pay existing debt service or which are subject
to a contract with a trustee for bondholders that requires a different accounting of
the charges, or charges that are used to reimburse the local agency or to reimburse
a person or entity who advanced funds under a reimbursement agreement or
contract for facilities in existence at the time the charges are collected.

“(3) Charges collected on or before December 31, 1998.
“(g) Any judicial action or proceeding to attack, review, set aside, void, or
annul the ordinance, resolution, or motion imposing a fee or capacity charge
subject to this section shall be brought pursuant to Section 66022.

“(h) Fees and charges subject to this section are not subject to the
provisions of Chapter 5 (commencing with Section 66000), but are subject to the
provisions of Sections 66016, 66022, and 66023.

“(i) The provisions of subdivisions (c) and (d) shall only apply to capacity
charges levied pursuant to this section.”

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fee should be considered an assessment for purposes of the public entity property
tax exemption. We established a bright-line rule that “a fee aimed at assisting a
utility district to defray costs of capital improvements will be deemed a special
assessment from which other public entities are exempt.” (Id. at pp. 164-165.)4
San Marcos, supra, 42 Cal.3d 154, is not on point here. We were not there
construing the term “assessment” as used in article XIII D; instead, we were
construing the constitutional provision exempting public entities from property
taxes (Cal. Const., art. XIII, § 3, subd. (b)), a provision in which the term
“assessment” does not appear. In deciding what constituted an assessment in San
Marcos, we sought to determine and effectuate the constitutional purpose for
exempting public entities from property taxes, a purpose that plays no role in
interpreting the provisions of article XIII D that are at issue here. The
characteristic that we found determinative for identifying assessments in San
Marcos—that the proceeds of the fee were used for capital improvements—forms
no part of article XIII D’s definition of assessments. For each of these reasons, we
agree with the Court of Appeal that San Marcos is not helpful, much less
controlling, in this strikingly different context. (See Ginns v. Savage (1964) 61
Cal.2d 520, 524, fn. 2 [“Language used in any opinion is of course to be
understood in the light of the facts and the issue then before the court, and an
opinion is not authority for a proposition not therein considered.”]; People v.

4
In response to our San Marcos decision, the Legislature granted local water
districts authority to impose capacity charges on other public entities, thereby
removing the public entity exemption. (See Gov. Code, §§ 54999-54999.6; Utility
Cost Management v. Indian Wells Valley Water Dist. (2001) 26 Cal.4th 1185,
1189; City of Marina v. Board of Trustees (2003) 109 Cal.App.4th 1179, 1182-
1183; Utility Cost Management v. East Bay Mun. Utility Dist. (2000) 79
Cal.App.4th 1242, 1246-1247.)
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Woodhead (1987) 43 Cal.3d 1002, 1008 [a word may have different legal
meanings in different contexts]; In re Marriage of Buol (1985) 39 Cal.3d 751,
757, fn. 6 [same].)
Plaintiffs invoke the rule that when a term has been given a particular
meaning by a judicial decision, it should be presumed to have the same meaning in
later-enacted statutes or constitutional provisions. (See People v. Hurtado (2002)
28 Cal.4th 1179, 1188-1189; Arnett v. Dal Cielo (1996) 14 Cal.4th 4, 19.)
Plaintiffs argue that San Marcos, supra, 42 Cal.3d 154, gave the term
“assessment” a precise legal meaning as applying to capacity charges used to fund
capital improvements, and therefore the term “assessment” in article XIII D,
enacted after San Marcos, must be construed to have the same meaning. But the
rule that plaintiffs invoke does not apply when, as here, the statute or
constitutional provision contains its own definition of the term at issue: “If the
Legislature has provided an express definition of a term, that definition ordinarily
is binding on the courts.” (Curle v. Superior Court (2001) 24 Cal.4th 1057, 1063.)
Here, article XIII D provides both an express definition of assessment and an
implied qualification of that definition through the requirement that the agency
identify the specific parcels on which the assessment will be imposed.
Plaintiffs next rely on the definition of assessment in Government Code
section 53750, part of the Proposition 218 Omnibus Implementation Act (Gov.
Code, §§ 53750-53753) that the Legislature enacted in 1997. (Stats. 1997, ch. 38,
§ 5.) Government Code section 53750 states that “[f]or purposes of Article XIII C
and Article XIII D of the California Constitution” an assessment means “any levy
or charge by an agency upon real property that is based upon the special benefit
conferred upon the real property by a public improvement or service, that is
imposed to pay the capital cost of the public improvement, the maintenance and
operation expenses of the public improvement, or the cost of the service being
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provided.” (Gov. Code, § 53750, subd. (b).) As plaintiffs point out, this
definition does not distinguish between charges imposed only in response to a
request for service and charges imposed on previously identified parcels. In this
respect, the statutory definition is no different from the constitutional definition in
section 2, subdivision (b), of article XIII D. But the statutory provisions
implementing article XIII D, like article XIII D itself, assume that assessments are
imposed only on identified parcels. Under Government Code section 53753,
subdivision (b), before levying a new or increased assessment, an agency must
give notice “to the record owner of each identified parcel.” Government Code
section 53750, subdivision (g), defines an “identified parcel” as “a parcel of real
property that an agency has identified as having a special benefit conferred upon it
and upon which a proposed assessment is to be imposed . . . .” Because the
statutory provisions merely reflect the constitutional provisions, they do not alter
our conclusion that under article XIII D an assessment is a charge imposed on
previously identified parcels, and not a charge imposed only as a condition of
extending service through a new service connection.
Arguing that a charge imposed only on property owners who voluntarily
seek a governmental service or approval may properly be characterized as an
assessment, plaintiffs call our attention to the Integrated Financing District Act
(Gov. Code, § 53175 et seq.), under which local agencies may establish
“contingent assessments” payable only when a landowner applies for development
approval. (See id., § 53187.) As plaintiffs point out, the Integrated Financing
District Act includes notice and majority protest provisions for owners of property
subject to the contingent assessment (id., § 53183). (See Southern Pacific Pipe
Lines, Inc. v. Board of Supervisors (1992) 9 Cal.App.4th 451, 461-462.) We agree
that the District’s capacity charge is similar to a contingent assessment under the
Integrated Financing District Act, but this observation does not assist plaintiffs.
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Unlike article XIII D, the Integrated Financing District Act does not require a local
agency to identify in advance the particular parcels that will be subject to the
assessment. Instead, the notice of intention to impose a contingent assessment
goes to all owners of property within the proposed assessment zone, and the
assessment cannot be imposed if protested by “the owners of more than one-half
of the area of the property within the proposed . . . district which is proposed to be
subject to the contingent assessment immediately or in the future . . . .” (Gov.
Code, § 53183, subd. (d).) Thus, under the Integrated Financing District Act, in
contrast to article XIII D, all owners of property potentially subject to a charge are
entitled to notice and a weighted vote.
Article XIII D could have been written, like the Integrated Financing
District Act, to cover contingent assessments as well as assessments imposed only
on previously identified parcels. But it was not written in that manner, and we
remain persuaded that a capacity charge contingent on some voluntary action by
the property owner is not an assessment within the meaning of article XIII D.
Plaintiffs argue that the Court of Appeal erred in characterizing the
District’s capacity charge as a development fee. Observing that development fees
“are imposed only if a property owner elects to develop” (Loyola Marymount
University v. Los Angeles Unified School Dist. (1996) 45 Cal.App.4th 1256,
1267), the Court of Appeal reasoned that the District’s capacity charge, because it
was imposed only in response to a property owner’s voluntary decision to request
a service connection, should be considered a development fee and thus exempt
from the requirements of article XIII D under its section 1, subdivision (b), stating
that “[n]othing in this article . . . shall be construed to . . . [a]ffect existing laws
relating to the imposition of fees or charges as a condition of property
development.”
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Plaintiffs insist that the District’s capacity charge cannot be a development
fee because the District has no authority to approve or disapprove property
development, and because a property owner may request a new service connection
without proposing any new development, such as when the owner of a previously
developed residential parcel decides to use the District’s water instead of water
from an existing well on the property.
We agree with plaintiffs that the District’s capacity charge is not a
development fee. It is similar to a development fee in being imposed only in
response to a property owner’s voluntary application to a public entity, but it is
different in that the application may be only for a water service connection without
necessarily involving any development of the property. (See Utility Cost
Management v. Indian Wells Valley Water Dist., supra, 26 Cal.4th at p. 1191
[noting that a capacity charge “might apply regardless of whether a development
project is at issue”]; Capistrano Beach Water Dist. v. Taj Development Corp.
(1999) 72 Cal.App.4th 526, 530 [concluding that a capacity charge is not a
development fee under the Mitigation Fee Act (Gov. Code, § 66000 et seq.)].)
Our agreement that the capacity charge is not a development fee does not assist
plaintiffs, however, because it does not mean that the capacity charge is an
assessment within the meaning of article XIII D. The capacity charge is neither an
assessment nor a development fee under article XIII D.
We conclude, as did the trial court and the Court of Appeal, that the
District’s capacity charge is not an assessment under article XIII D.
III. THE FIRE SUPPRESSION CHARGE
Article XIII D provides: “No fee or charge may be imposed for general
governmental services including, but not limited to, police, fire, ambulance or
library services, where the service is available to the public at large in substantially
the same manner as it is to property owners.” (Art. XIII D, § 6, subd. (b)(5),
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italics added.) At the trial below, the evidence showed that the District uses the
proceeds of the fire suppression component of the connection fee to purchase
equipment for its volunteer fire department, including both firefighting equipment
and emergency medical equipment.5 The fire department provides firefighting
and emergency medical services to the public at large. Accordingly, the District’s
fire suppression charge is “imposed for general governmental services” within the
meaning of section 6, subdivision (b)(5), of article XIII D, and it is prohibited by
that provision if it satisfies article XIII D’s definition of a “fee or charge.”
Article XIII D defines a “fee” or “charge” as “any levy other than an ad
valorem tax, a special tax, or an assessment, imposed by an agency upon a parcel
or upon a person as an incident of property ownership, including a user fee or
charge for a property-related service.” (Id., § 2, subd. (e).) It defines “property-
related service” as “a public service having a direct relationship to property
ownership.” (Id., § 2, subd. (h).)
The District argues that the connection fee, including its fire suppression
component, does not fall within article XIII D’s definition of a fee or charge
because it is not imposed “upon a parcel or upon a person as an incident of
property ownership.” (Art. XIII D, § 2, subd. (e).) The District does not impose
the fee on parcels of real property but on persons who apply for a water service
connection. The District does not impose the fee on such persons “as an incident

5
Government Code section 50078 authorizes “[a]ny local agency which
provides fire suppression services” to “determine and levy an assessment for fire
suppression services.” Plaintiffs have argued that the District may not rely on this
provision as authority for its fire suppression fee because Government Code
section 50001 defines “local agency” to include only cities and counties. Plaintiffs
have overlooked Government Code section 50078.1, subdivision (b), which
defines “local agency,” as used in Government Code section 50078, to include any
city, county, “or special district.”
17

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of property ownership” but instead as an incident of their voluntary decisions to
request water service. If a person fails to pay the connection fee, the District does
not collect it by levying upon the person’s property. Rather, because the person
applying for service has not satisfied a condition for extending service, the District
does not make the water connection and does not provide water service.
We agree that a connection charge, because it is not imposed “as an
incident of property ownership” (art. XIII D, § 2, subd. (e)), is not a fee or charge
under article XIII D. A connection fee is not imposed simply by virtue of property
ownership, but instead it is imposed as an incident of the voluntary act of the
property owner in applying for a service connection.
Urging a different construction, plaintiffs rely on article XIII D’s definition
of a fee or charge as “including a user fee or charge for a property-related service.”
(Id., § 2, subd. (e).) They argue that supplying water is a “property-related
service,” and, therefore, all charges for water service must be deemed to be
imposed “upon a person as an incident of property ownership.”
We agree that supplying water is a “property-related service” within the
meaning of article XIII D’s definition of a fee or charge. In the ballot pamphlet
for the election at which article XIII D was adopted, the Legislative Analyst stated
that “[f]ees for water, sewer, and refuse collection service probably meet the
measure’s definition of property-related fee.” (Ballot Pamp., Gen. Elec. (Nov. 5,
1996), analysis of Prop. 218 by Legis. Analyst, p. 73.) The Legislative Analyst
apparently concluded that water service has a direct relationship to property
ownership, and thus is a property-related service within the meaning of article XIII
D because water is indispensable to most uses of real property; because water is
provided through pipes that are physically connected to the property; and because
a water provider may, by recording a certificate, obtain a lien on the property for
the amount of any delinquent service charges (see Gov. Code, §§ 61621, 61621.3).
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But the Legislative Analyst was apparently referring to fees imposed on existing
water service customers, not fees imposed as a condition of initiating water service
in the first instance.
Several provisions of article XIII D tend to confirm the Legislative
Analyst’s conclusion that charges for utility services such as electricity and water
should be understood as charges imposed “as an incident of property ownership.”
For example, subdivision (b) of section 3 provides that “fees for the provision of
electrical or gas service shall not be deemed charges or fees imposed as an
incident of property ownership” under article XIII D. Under the rule of
construction that the expression of some things in a statute implies the exclusion
of other things not expressed (In re Bryce C. (1995) 12 Cal.4th 226, 231), the
expression that electrical and gas service charges are not within the category of
property-related fees implies that similar charges for other utility services, such as
water and sewer, are property-related fees subject to the restrictions of article
XIII D.
This implication is reinforced by subdivision (c) of section 6, which
expressly excludes “fees or charges for sewer, water, and refuse collection
services” from the voter approval requirements that article XIII D imposes on
property-related fees and charges. Because article XIII D does not include similar
express exemptions from the other requirements that it imposes on property-
related fee and charges, the implication is strong that fees for water, sewer, and
refuse collection services are subject to those other requirements. (See Howard
Jarvis Taxpayers Assn. v. City of Roseville (2002) 97 Cal.App.4th 637, 645
[reaching the same conclusion].)
Thus, we agree that water service fees, being fees for property-related
services, may be fees or charges within the meaning of article XIII D. But we do
not agree that all water service charges are necessarily subject to the restrictions
19

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that article XIII D imposes on fees and charges. Rather, we conclude that a water
service fee is a fee or charge under article XIII D if, but only if, it is imposed
“upon a person as an incident of property ownership.” (Art. XIII D, § 2, subd.
(e).) A fee for ongoing water service through an existing connection is imposed
“as an incident of property ownership” because it requires nothing other than
normal ownership and use of property. But a fee for making a new connection to
the system is not imposed “as an incident of property ownership” because it results
from the owner’s voluntary decision to apply for the connection.
Any doubt on this point is removed by considering the requirements that
article XIII D imposes on property-related fees and charges. As with assessments,
article XIII D requires local government agencies to identify the parcels affected
by a property-related fee or charge. Specifically, it requires the agency to identify
“[t]he parcels upon which a fee or charge is proposed for imposition.” (Art. XIII
D, § 6, subd. (a)(1).) As we have explained, it is impossible for the District to
comply with such a requirement for connection charges, because the District
cannot determine in advance which property owners will apply for water service
connection. As with assessments, this impossibility of compliance strongly
suggests that connection fees for new users are not subject to article XIII D’s
restrictions on property-related fees.
Because the connection fee, including the fire suppression charge, is not a
property-related fee or charge within the meaning of article XIII D, it is not
subject to article XIII D’s prohibition on property-related fees or charges for
general governmental services.
IV. AMENDMENT OF AN ORDINANCE BY A RESOLUTION
Government Code section 66016, part of the Mitigation Fee Act (Gov.
Code, § 66000 et seq.), provides in subdivision (b): “Any action by a local agency
to levy a new fee or service charge or to approve an increase in an existing fee or
20

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service charge shall be taken only by ordinance or resolution.” (Italics added.)
We agree with the Court of Appeal that this provision authorizes the District to
use a resolution to increase existing connection fees, and that this authorization
applies even when the fees were initially imposed by an ordinance.
Arguing to the contrary, plaintiffs assert that the Mitigation Fee Act is
procedural rather than substantive. In other words, it does not give local water
districts substantive authority to impose fees, but instead it merely regulates the
manner in which fees may be imposed. But whether a fee imposed by ordinance
may be amended by resolution is essentially a question of procedure, not
substance. Therefore, we may and do construe Government Code section 66016
as giving the District authority to use a resolution to amend a fee ordinance.
In support of their position that the District may not use a resolution to
amend an ordinance imposing a connection fee, plaintiffs rely on Cavalier Acres,
Inc. v. San Simeon Acres Community Services District (1984) 151 Cal.App.3d 798
(Cavalier Acres), in which the Court of Appeal concluded that a community
services district could impose or increase water charges only by ordinance. In
reaching this conclusion, the Cavalier Acres Court of Appeal relied on
Government Code section 61621.5 and Health and Safety Code section 5471.
Relying on the rule of construction that when two statutory provisions conflict, the
one that is more specific controls, the Cavalier Acres Court of Appeal stated that,
as applied to water charges imposed by a community services district, Government
Code section 61621.5 and Health and Safety Code section 5471 were both more
specific than Government Code section 66016.
Government Code section 61621.5 is part of the Community Services
District Law (Gov. Code, § 61000 et seq.). As here relevant, it provides: “Except
as otherwise provided in this section, a district may by ordinance adopt regulations
binding upon all persons to govern the construction and use of its facilities and
21

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property, including regulations imposing reasonable charges for the use thereof.”
(Gov. Code, § 61621.5, subd. (a), italics added.) By its terms, this provision
applies only to charges for the use of a community services district’s facilities, not
charges for its services. The Community Services District Law gives districts
authority to impose charges for services, including charges for water, in a different
section, Government Code section 61621. (See Waterman Convalescent Hospital,
Inc. v. Jurupa Community Services Dist. (1996) 53 Cal.App.4th 1550, 1552-1553.)
As relevant here, it provides: “A district may prescribe, revise and collect rates or
other charges for the services and facilities furnished by it . . . .” (Gov. Code,
§ 61621.) Nothing in this provision requires a community services district to act
by ordinance rather than by resolution when, as here, it revises and prescribes the
charges for water service.
Health and Safety Code section 5471 is part of article 4 (“Sanitation and
Sewerage Systems”) of chapter 6 (“General Provisions with Respect to Sewers”)
of part 3 (“Community Facilities”) of division 5 (“Sanitation”) of the Health and
Safety Code. As relevant here, it reads: “In addition to the powers granted in the
principal act, any entity shall have power, by an ordinance approved by a two-
thirds vote of the members of the legislative body thereof, to prescribe, revise and
collect, fees, tolls, rates, rentals, or other charges, including water, sewer standby
or immediate availability charges, for services and facilities furnished by it, either
within or without its territorial limits, in connection with its water, sanitation,
storm drainage, or sewerage system. . . .” (Italics added.)
Health and Safety Code section 5471 does not apply to the District because
it is not an “entity” within the meaning of this provision. Health and Safety Code
section 5470 states that “ ‘[e]ntity’ means and includes counties, cities and
counties, cities, sanitary districts, county sanitation districts, sewer maintenance
districts, and other public corporations and districts authorized to acquire,
22

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construct, maintain and operate sanitary sewers and sewerage systems.” The
District is a public agency organized as a community services district under the
Community Services District Law (Gov. Code, § 61000 et seq.) to provide water
service. Nothing in the record indicates it is authorized to construct, maintain, or
operate sewers or sewerage systems. In this respect, Cavalier Acres, supra, 151
Cal.App.3d 798, is distinguishable because the community services district at
issue there provided both water and sewer services. (See id. at p. 800.)
Moreover, even if we assume that Health and Safety Code section 5471
applies to the District, that provision, by its terms, confers authority “[i]n addition
to” the authority otherwise granted to a public entity. In other words, its main
purpose is to supplement rather than to limit a public agency’s authority to impose
charges for water or sewer services in connection with a water or sewerage
system. For a public agency organized as a community services district, the
“principal act” (ibid.) providing its authority is the Community Services District
Law (Gov. Code, § 61000 et seq.). As we have seen, Government Code section
61621 authorizes community services districts to establish charges for water
services without requiring that they act by ordinance rather than by resolution, and
Government Code section 66016, part of the Mitigation Fee Act (Gov. Code,
§ 66000 et seq.), expressly authorizes districts to use either a resolution or an
ordinance to impose or increase a service charge. We do not read Health and
Safety Code section 5471 as limiting or abrogating that authority.
Again, we find Cavalier Acres, supra, 151 Cal.App.3d 798, to be
distinguishable. In 1984, when the Court of Appeal decided Cavalier Acres, the
wording of Health and Safety Code section 5471 was materially different. The
introductory phrase (“In addition to the powers granted in the principal act”) was
not present, having been added later by amendment. (Stats. 1988, ch. 706, § 1,
p. 2348.) The 1988 amendment demonstrates the Legislature’s intent that Health
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and Safety Code section 5471 not be read as limiting the powers conferred on
public entities by the laws under which they were organized.
V. CONCLUSION
Before beginning to provide water service to real property through a new
connection, the District requires its new customers to pay a capacity fee and a fire
suppression fee. Both of these fees are used to fund capital improvements, the
former to the water system and the latter to the volunteer fire department. Because
these fees are imposed only on the self-selected group of water service applicants,
and not on real property that the District has identified or is able to identify, and
because neither fee can ever become a charge on the property itself, we conclude
that neither fee is subject to the restrictions that article XIII D imposes on property
assessments and property-related fees. We also conclude that the District could
properly use a resolution to amend an ordinance establishing these fees.
The judgment of the Court of Appeal is reversed and the matter is
remanded to that court with directions to affirm the trial court’s judgment.
KENNARD,
J.
WE CONCUR

GEORGE, C.J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
BROWN, J.
MORENO, J.

24

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See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Richmond v. Shasta Community Services
__________________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted

XXX 95 Cal.App.4th 1227
Rehearing Granted

__________________________________________________________________________________

Opinion No.

S105078
Date Filed: February 9, 2004
__________________________________________________________________________________

Court:

Superior
County: Shasta
Judge: Richard A. McEachen

__________________________________________________________________________________

Attorneys for Appellant:

Law Offices of Walter P. McNeill and Walter P. McNeill for Plaintiffs and Appellants.

Trevor A. Grimm, Jonathan M. Coupal and Timothy A. Bittle for Howard Jarvis Taxpayers Association as
Amicus Curiae on behalf of Plaintiffs and Appellants.

Sheppard, Mullin, Richter & Hampton and David P. Lanferman for California Building Industry
Association as Amicus Curiae on behalf of Plaintiffs and Appellants.

__________________________________________________________________________________

Attorneys for Respondent:

Law Office of David L. Edwards, David L. Edwards; Colantuono, Levin & Rozell, Michael G. Colantuono
and Sandra J. Levin for Defendant and Respondent.

Betsy Strauss, City Attorney (Rohnert Park) for 84 California Cities, the Association of California Water
Agencies and the California State Association of Counties as Amici Curiae on behalf of Defendant and
Respondent.

Law Office of William D. Ross and William D. Ross for California Fire Chiefs Association as Amicus
Curiae on behalf of Defendant and Respondent.


25

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Counsel who argued in Supreme Court (not intended for publication with opinion):

Walter P. McNeill
Law Offices of Walter P. McNeill
280 Hemsted Drive, Suite E
Redding, CA 96002
(530) 222-8992

Michael G. Colantuono
Colantuono, Levin & Rozell
555 West 5th Street, 30th Floor
Los Angeles, CA 90013-1048
(213) 533-4155

26

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Opinion Information

Date:	Docket Number:
Mon, 02/09/2004	S105078

Disposition
Feb 9 2004	Opinion: Reversed

Dockets
Mar 5 2002	Request for depublication filed (initial case event)   Executive Committee of Legal Advocacy Committee of League of California Cities
Mar 14 2002	Petition for review filed   by counsel for aplts
Mar 18 2002	Received Court of Appeal record   one volume
Apr 5 2002	Answer to petition for review filed   by resp (timely per Rule 40k)
Apr 12 2002	Reply to answer to petition filed   by counsel for aplts
Apr 30 2002	Time extended to grant or deny review   to 6-12-02
May 15 2002	Petition for Review Granted (civil case)   Votes: George, CJ., Kennard, Baxter, Werdegar, Chin, Brown and Moreno, JJ.
May 16 2002	Record requested   remaining volumes of c/a record
May 29 2002	Certification of interested entities or persons filed   by aplts
Jun 14 2002	Opening brief on the merits filed   by counsel for aplts
Jun 25 2002	Association of attorneys filed for:   resp Shasta
Jul 12 2002	Request for extension of time filed   resp Shasta Comm Svcs Dist, to file its anwser brief/merits
Jul 12 2002	Received:   Faxed request for extension of time from David Edwards, counsel for resp.
Jul 16 2002	Extension of time granted   to 7-29-02 for resp to file the answer brief on the merits.
Jul 29 2002	Answer brief on the merits filed   respondent Shasta Community Services District
Jul 29 2002	Request for judicial notice filed (in non-AA proceeding)   respondent Shasta Community Services District
Aug 8 2002	Request for extension of time filed   counsel for appellant (J. Richmond, et al.) requests extension to September 10, 2002 to file reply brief on the merits.
Aug 13 2002	Extension of time granted   Appellant's time to serve and file the reply brief is extended to and including September 10, 2002.
Sep 10 2002	Reply brief filed (case fully briefed)
Sep 10 2002	Request for judicial notice filed (in non-AA proceeding)   by appellants
Oct 10 2002	Received application to file amicus curiae brief; with brief   from Howard Jarvis Taxpayers Assn. in support of aplts. (received in Sac.)
Oct 10 2002	Received application to file amicus curiae brief; with brief   by the Calif. Building Industry Association in support of aplts
Oct 11 2002	Received application to file amicus curiae brief; with brief   from 84 Calif. Cities, the Association of Calif. Water Agencies and the Calif. State Assn. of Counties in support of respondent. (timely-CRC 40k)
Oct 11 2002	Received application to file amicus curiae brief; with brief   from the Calif. Fire Chiefs Association in support of resp (timely-CRC 40k)
Oct 23 2002	Permission to file amicus curiae brief granted   by California Fire Chiefs Association and by 84 California Cities in support of resp. Answers may be filed w/in 20 days.
Oct 23 2002	Amicus Curiae Brief filed by:   Calif. Fire Chiefs Assn. in support of resp.
Oct 23 2002	Permission to file amicus curiae brief granted   by the Calif. Building Industry Association in support of aplt. Answers may be filed w/in 20 days.
Oct 23 2002	Amicus Curiae Brief filed by:   Calif. Bldg. Industry Assn. in support of aplt.
Oct 23 2002	Permission to file amicus curiae brief granted   by Howard Jarvis Taxpayers Association in support of appellant. Answers may be filed w/in 20 days.
Oct 23 2002	Amicus Curiae Brief filed by:   Howard Jarvis Taxpayers Assn. in support of aplt.
Oct 23 2002	Amicus Curiae Brief filed by:   84 California Cities, et al, in support of resp.
Nov 12 2002	Response to amicus curiae brief filed   Petnrs' answer to A/C brief of 84 Calif. Cities, etc, et al.
Nov 13 2002	Response to amicus curiae brief filed   Resp's answer to A/C briefs of Calif. Building Industry Association and Howard Jarvis Taxpayers Assn. (timely-CRC 40k)
Oct 30 2003	Case ordered on calendar   12-3-03, 1:30pm, San Jose
Nov 26 2003	Request for judicial notice granted   Defendant and respondent Shasta Community Services District's request for judicial notice, filed in this court on July 29, 2002, is GRANTED. Plaintiff's and appellants Jerry Richmond et al., request for judicial notice filed in this court on September 10, 2002, is DENIED.
Dec 3 2003	Cause argued and submitted
Feb 9 2004	Opinion filed: Judgment reversed   and the matter is remanded to the court of appeal with directions to affirm the trial court's judgment. Majority opinion by Kennard, J. ------------------joined by George, C.J., Baxter, Werdegar, Chin, Brown, Moreno JJ.
Mar 16 2004	Remittitur issued (civil case)

Briefs
Jun 14 2002	Opening brief on the merits filed
Jul 29 2002	Answer brief on the merits filed
Sep 10 2002	Reply brief filed (case fully briefed)
Oct 23 2002	Amicus Curiae Brief filed by:
Oct 23 2002	Amicus Curiae Brief filed by:
Oct 23 2002	Amicus Curiae Brief filed by:
Oct 23 2002	Amicus Curiae Brief filed by:
Nov 12 2002	Response to amicus curiae brief filed
Nov 13 2002	Response to amicus curiae brief filed

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