5 ‘ - Ay Dially Vodthied gree ca 1a Lejins, et al. v. City of Long Beach, et Fentetive decision on petition Tata 18STCP02628 mandate: granted Oe Laas Petitioners Diana Lejins (“Lejins”) and Angela Kimball (“Kimball”) seek a writ of mandate directing Respondent City of Long Beach (“City”) to void Ordinance No. ORD-18-0022 and to cease the transfer of rate revenue and imposition of charges pursuant to that ordinance. The court has read and considered the moving papers, opposition, and reply, and renders the following tentative decision. A, Statement of the Case 1. Petition Petitioners filed this action on October 22, 2018, alleging a cause of action for traditional mandamus and requesting the remedies of declaratory relief and injunction. The verified Petition alleges in pertinent part as follows The City maintains the Long Beach Water Department (“LBWD"), which is governed by a five-member Board of Commissioners but is not a legal entity separate from the City. LBWD. provides drinking water and wastewater service to City residents and businesses, as well as drinking water services to residents and businesses in unincorporated areas of the City. LBWD. adopts water and sewer fees by resolution, which are subject to City Council approval. LBWD imposes charges on its water and sewer customers each month, and the revenue is maintained in a Water Revenue Fund and Sewer Revenue Fund, respectively In 1996, the electorate passed Proposition 218 (“Prop 218”), which placed constitutional limitations on how local governments may impose fees and charges as an incident of property ownership. In 2016, Lejins sued the City to challenge its practice of embedding surcharges in its water and sewer rates in order to transfer monies from the Water and Sewer Revenue Funds to the City’s General Fund, In 2017, the parties settled the lawsuit with the City agreeing to transfer $12 million from the General Fund to the Water and Sewer Funds and to reduce LBWD's water and sewer rates. In December 2017, the City adopted Ordinance No. ORD-17-0028 reducing the water and sewer rates to a level which Lejins and the City agreed was legally justified based on third-party studies. In 2018, the City placed a charter amendment, Measure M, before the electorate in an effort to restore the pre-settlement transfers. Measure M passed on June 5, 2018, and it authorizes the City to fix and approve water and sewer rates in an amount sufficient to transfer to the General Fund up to 12% of the annual gross revenues of the waterworks and sewer system. ‘The funds transferred are unrestricted general revenue. On September 4, 2018, the City adopted the Ordinance No, ORD-18-0022 (“Ordinance”), which enacted new water and sewer service charges with embedded surcharges sufficient to make transfers to the General Fund pursuant to the City Charter. The rate revenue collected pursuant to the Ordinance does not benefit the water or sewer utility, is not used to provide water and sewer services, and is not a reimbursement of costs incurred for the benefit of water and sewer utilities Petitioners contend that Measure M and City Charter section 1407 do not relieve the City from complying with Prop 218’s requirements. The ministerial duty to comply with Prop 218 and Art. XIIID in connection with its water and sewer fees and charges. The rate revenuecollected under the Ordinance is used for general governmental purposes and violates California Constitution article XID (“Art, XIIID”),' section 6(b)(1)(2) and (5). The City's Charter is subordinate to the California Constitution, and Prop 218 does not authorize the electorate to approve property-related fees and charges that run afoul of Art. XID. If the City contends that the embedded surcharges are a general tax, Prop 218 precludes local governments from imposing general taxes upon any parcel or person as an incident of property ownership. B. Governing Law a. Article XI A city charier may provide that the city may make and enforce all ordinances and regulations with respeet to its municipal affairs, subject only to limitations provided in the charter and general laws. City charters adopted pursuant to this Constitution shall supersede all laws inconsistent with the city’s governance of it municipal affairs. Art. XI, §5(a) ‘A county or city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws. Art. XI, §7. ‘A municipal corporation may establish, purchase, and operate public works to furnish its inhabitants with light, water, power, heat, transportation, or means of communication. It may fumish those services outside its boundaries, except within another municipal corporation which fumishes the same service and does not consent. Art. XI, §9. b, Prop 218 In 1978, the voters adopted Prop 13, adding Art, XIIIA to the California Constitution. Prop 13, among other things, “impose[ed] important limitations upon the assessment and taxing powers of state and local governments.” Amador Valley Joint Union High School District v. State Board of Equalization, (1978) 22 Cal.2d 208, 218. Prop 218, enacted by the voters in 1996, added Art, XIIIC and XIIID to the state Constitution, Prop 218 extended voter approval requirements for the enactment of a local tax to cities operating under a home rule charter, and also imposed voter approval requirements for property-related fees, charges, and assessments, Howard Jarvis Taxpayers’ Assn. v. City of Los Angeles, (“Los Angeles”) (2000) 85 Cal.App-4th 79, 82-83. The Ballot Argument in support of Prop 218 stated that it was intended to guarantee Californians the “right to vote on local tax incteases—even when they are called something else, like ‘assessments’ ot fees’.” These restrictions were required because local politicians sought to exploit an apparent loophole in the law “that allowed] them to raise taxes without voter approval by calling taxes ‘assessments’ and “fees’.” (i Art. XIIIC (Voter Approval for Local Tax Levies ‘All taxes imposed by any local government shall be deemed to be either general taxes or special taxes.” Art. XIIIC, §2(a). A “general tax” is “any tax imposed for general governmental purposes.” Art. XIIIC, §1(a). General tax revenues may be used for general governmental purposes and no local government may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. Id. §§ 1(a), 2(b). ' All further references to the California Constitution shall be to “Art. B}ecial tax” is “any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.” Art. XIIIC, §1(d). No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by two thirds vote. Id. §§ 1(d), 2(d).. Elections on a general tax must be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency. Art. XIIIC §2(b). Elections on a special tax may be held at any time, See Art, XIIIC, §2(d), (ii) Art, XIMID (Assessment and Property Related Fee Reform A “fee” or “charge” means 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. Art. XIIID, §2(e). “Property-related service” means a public service having a direct relationship to property ownership. Art. XID, §2(h). No tax, assessment, fee, or charge shall be assessed by any agency upon any parcel of property or upon any person as an incident of property ownership except: (1) The ad valorem property tax imposed pursuant to Art. XIII and Art. XIILA; (2) Any special tax receiving a two-thirds vote pursuant to Section 4 of Art. XIIIA; (3) Assessments as provided by this article; and (4) Fees of charges for property related services as provided by this article. Art. XIID, $3(a). A property-related fee or charge shall not be extended, imposed, or increased by any agency unless it meets all of the following requirements: (1) Revenues derived from the fee or charge shall not exceed the funds required to provide the property related service; (2) Revenues derived from the fee or charge shall not be used for any purpose other than that for which the fee or charge was imposed; (3) The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the services attributable to the parcel” (4) No fee or charge may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property; (5) 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. Reliance by an agency on any parcel map, including, but not limited to, an assessor's parcel map, may be considered a significant factor in determining whether a fee or charge is imposed as an incident of property ownership for purposes of this article. In any legal action contesting the validity of a fee or charge, the burden shall be on the agency to demonstrate compliance with this article, Art. XIIID, §6. All charges for water delivery after a water connection is made are charges for a property- related service. City of Palmdale v. Palmdale Water District, (“Palmdale”) (20001) 198 Cal. App. 4% 926, 934, To comply with Art. XIID, section 6(b)(3), a local government must justify any inequality in the cost of providing water as between classes, and within tiers of a class, of customers. Palmdale, supra, 198 Cal.App.4" at 937; Capistrano Taxpayers Assn. Inc. v. City of San Juan Capistrano, (“Capistrano”) (2015) 235 Cal.App.4" 1493, 1510. ‘The local agency must 3figure out the true cost of water, not simply draw lines based on water budgets. Capistrano, supra, 235 Cal.App.4" at 1511. Other constitutional mandates such as water conservation (Art. X, §2) must be obeyed in charging for water services, but Prop 218’s requirement that the charges may not exceed the proportional cost of service cannot be ignored. Prop 218 does not conflict with Art. X, section 2 so long as water conservation does not allow rates that exceed the cost of service. Palmdale, supra, 198 CalApp.4" at 937; Capistrano, supra, 235 Cal.App.4" at 1510-11 “The purpose of Art. XIIID, section 6(b)(5) is to stop local governments from using property-related fees to fund governmental services that are paid with taxes and subject to voter approval. Where property residents and non-residents and all properties benefit from a service such as fire protection, itis illegal to burden only water customers with the cost of the service. ‘The theme of Art. XIIID, section 6(b)(1), (2) and (5) is that fee or charge revenues may not exceed the cost to provide the service, and “the key is that the revenues derived from the fee or charge are required to provide the service, and may be used only for the service.” Howard Jarvi Taxpayers Assn. v. City of Roseville, (“Roseville”) (2002) 97 Cal.App.4" 637, 647-48 The local government has the burden of proving compliance with Prop 218. Art. XIIID, $6(b)(5); Capistrano, supra, 235 Cal.App.4" at 1504. c. Prop 26 Prop 218 did not define the term “tax”. In Sinclair Faints v. SBE, (“Sinclair”) (1997) 15 Cal.4th 866, the California Supreme Court held that a regulation that has a primary purpose of a being a fee is not a tax. ‘The Sinclair decision had the effect of making it significantly easier for state and local government to impose a fee for the regulation of a service which may result in incidental revenue to the government. In November 2010, the voters passed Prop 26 to address the problem of taxes disguised as fees by amending Articles XIIIC and XIIID to address “hidden taxes” and overturning Sinclair. For legislature-imposed fees, Prop 26 requires that any change in a state statute which results “in any taxpayer paying a higher tax” must be enacted with two-thirds approval of the legislature. Voter Information Guide, p. 59. For fees imposed by local government, Prop 26 amended Art. XIIIC, section 1(e) to broaden the definition of “tax” to mean “any levy, charge, or exaction of any kind imposed by a local government” unless the charge qualifies for one of seven exceptions: (1) A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege to the payor. (2) A charge imposed for a specific government service or produet provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product (3) A charge imposed for the reasonable regulatory costs to the local government for issuing licenses and permits, performing investigations, inspections, and audits, 4enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof (4) A charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property, except charges governed by Section 15 of Article XI. (5) A fine, penalty, or other monetary charge imposed by the judicial branch of government or a local government, as a result of a violation of law (6) A charge imposed as a condition of properly development. (7) Assessments and property-related fees imposed provisions of Article XID.” accordance with the Prop 26 also places the burden of proof on a local government to show by a preponderance of the evidence that a levy, charge, or exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bears a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity. Art. XIIIC, §1(¢) C, Standard of Review ‘There are three general categories of ageney decisions challenged by mandamus: (1) quasi- adjudicative decisions in which the agency exercised its discretion and which are challenged by administrative mandamus under CCP section 1094.5, (2) quasi-legislative decisions challenged by traditional mandamus under CCP section 1085, and (3) ministerial or informal administrative actions also challenged by traditional mandamus. See Western States Petroleum Assn. v. Superior Court, (“Wester States”) (1995) 9 Cal.4th 571-76. An agency decision is quasi-adjudicative where it concerns the agency’ s application of discretion in the determination of facts after a hearing is required. See Neighborhood Action Group v. County of Calaveras, (1984) 156 Cal.App.3d 1176, 1186. In contrast, quasi-legislative actions generally concem the adoption of a “broad, generally applicable rule of conduct on the basis of general public policy.” Saleeby v. State Bar, (1985) 39 Cal.3d 547. ‘A traditional writ of mandate is a method of challenging an agency's quasi-legislative act, The Sherwin-Williams Co. v. South Coast_Air Quality Management District, (2001) 86 Cal.Apptth 1258, 1267. The ageney action has a strong presumption of validity, and the burden is on the party challenging it. Western States Petroleum Assn. v. State Dept. of Health Services, (2002) 99 Cal.App4th 999, 1007. ‘The court’s review is limited to an examination of the proceedings before the agency to determine whether the agency action was arbitrary, capricious, or entirely lacking in evidentiary support, or whether it did not follow the procedure and give the notices required by law, Id. at 1018. The courts exercise this deferential standard “out of deference to the separation of powers between the Legislature and the judiciary, to the legislative delegation of administrative authority to the agency, and to the presumed expertise of the agency within its scope of authority.” California Hotel & Motel Assn, v. Industrial Welfare Commission, (1979) 25 5Cal.3d 200, 212. The court will not select the best approach to ratemaking and will permit the agency to exercise its discretion from a reasonable range of approaches. Griffifth v. Pajaro Valley Water Management Agency, (2013) 220 Cal.App.4"" 586, 601. A writ will lie where the agency's discretion can be exercised only in one way. Hurtado v. Superior Court, (1974) 11 Cal.3d 574, 579. While generally the court does not weigh evidence in evaluating quasi-legislative decisions (Shapell Industries, Inc. v. Governing Board, (1991)! Cal.App.4th 218, 230), in Prop 218 cases the court independently reviews the evidence to ensure compliance with its constitutional mandates. Sileon Valley Taxpayers Assn., Inc. v. Santa Clara County Open Space Authority, (“Silicon Valley”) (2008) 44 Cal.4" 441, 450. No deference is given to the local government's legislative findings concerning constitutionality. Morgan _v. Imperial_Irrigation District, (“Morgan”) (2014) 223 Cal.App.4"" 892, 912. If the petitioner makes a prima facie case, the local government bears the burden of demonstrating that its rates comply with Prop 218, Art. XID, §6(b)(5); Morgan, supra, 223 Cal.App.4® at 913. The courts’ review is limited to the qua: legislative administrative record. Western States, supra, (1995) 9 Cal.4" 559, 576.7 Petitioners” claim that the City lacks authority to tax persons outside its jurisdictional limits is a question of law subject to the court’s review de novo, Microsoft Corp. v. Franchise Tax Board, (2006) 39 Cal.4"" 750, 758; Dominguez Energy v. County of Los Angeles, (1997) 56 Cal.App.4" 839, 852. D. Statement of Facts* The parties have not submitted an administrative record, Instead, they stipulated to certain facts and the authenticity of documents produced by the City. Aug. 7, 2019 Stip. All references to “LB” refer to the bates-stamp affixed to these documents. > Petitioners request judicial notice of Prop 218 Title, Summary and Analysis; Prop 218 Arguments and Rebuttals; and Text of Prop 218 (Ex. A). A ballot pamphlet is subject to judicial notice. See Edelstein v. City & County of San Francisco, (2002) 29 Cal 4th 164, 171. The request is granted, Evid. Code §452(0). The City requests judicial notice of: (1) the ballot materials for Prop 218 (Ex. A), (2) City Charter Article XIV (Ex. B), (3) City Charter Article I, Section 109 (Ex. C), (4) City Charter Article XIX, section 1901 (Ex. D), (5) Sections 201 and 1101 from LBWD's “Rules, Regulations and Charges Governing Potable Water, Reclaimed Water, Sewer Service, and the Water Conservation and Water Supply Shortage Plan” (Ex. E), (6) excerpts from a report compiled by the California State Legislature, Senate Committees on Local Government and Revenue and Taxation, “November 1996 Ballot, Proposition 218: Right to Vote on Taxes Act” (Ex. F), and (7) the following facts: (a) at least 87 cities in California currently impose a utility tax on water service, sewer service, or both; (b) many of these utility taxes existed in 1996 when Prop 218 was adopted, and many were adopted or amended afier 1996; and (c) almost all of these utility taxes are levied for unspecified or general city purposes with only a few dedicated to specific purposes (Ex. G). The request is granted for Exhibit A because ballot materials are subject to judicial notice. See Edelstein v. City & County of San Francisco, (2002) 29 Cal.4th 164, 171. ‘The request also is granted for Exhibits B-E (Evid. Code §452(b) (c)), and Exhibit F. id. Code §452(c); Garibotti y. Hinkle, (2015) 243 Cal.App.4th 470, 478-79 n. 5; Arce v. Kaiser Foundation Health Plan, Inc., (2010) 181 Cal. App.4th 471, 484-85. The request is denied as to Exhibit G. 61, Petitioners’ Evidence On September 30, 2016, Petitioner Lejins brought an action against the City challenging LBWD’s payment of “pipeline permit fees” to the City’s General Fund pursuant to Long Beach Municipal Code (“LBMC”) section 15.44.100. Pet. §11.' On November 8, 2017, the City and Lejins reached a settlement in which the City agreed to transfer $12 million from the General Fund to LBWD over approximately four years and to reduce its water and sewer rates for fiscal year 2018 pursuant to a methodology specified in the settlement agreement. Pet. §11 ‘On December 5, 2017, the City Council adopted Ordinance No. ORD-17-0028, approving the rates adopted by the Board of Commissioners in Resolution No. WD-1382. Rates were adjusted downward to implement the terms of the settlement agreement. Pet, §11; Benink Decl. Ex. C, pp. 72-73. In January 2018, the City Couneil began considering an amendment to the City Charter to address the annual $8.3 million General Fund budget impact as a result of the settlement. LB 3243-51. On March 7, 2018, the City Council passed Resolution No. 18-0025, calling for a June 5, 2018 general election on a proposed charter amendment. LB 3595-605. The City submitted Measure M to voters at the June 5, 2018 election. LB 3534, 3554-59. Measure M proposed an amendment to City Charter article XIV, section 1407 (“section 1407 Section 1407(5), as amended, authorized the City to transfer moneys from the Water Revenue Fund and Sewer Revenue Fund to the City’s General Fund, provided that the transfer did not exceed 12% of the annual gross revenues of the waterworks and sewer system, respectively, and subject to other conditions, Benink Decl. Ex. G. Section 1407(8) authorized the Board of Commissioners to fix, and the City Council to approve, water and sewer rates in an amount sufficient to recover the transferred funds. Benink Decl. Ex. G. The proceeds from the transfers could be spent as unrestricted general revenue. Benink Decl. Ex. G. Long Beach voters approved Measure M by a 53.7% vote. LB 3365, 3510. The City contends that amounts collected from its water and sewer customers to finance the transfers pursuant to section 1407(5) are general taxes. Benink Deel. Ex. D. p.12. Pursuant to Measure M, the City raised water rates by 7.2% effective October 1, 2018, and left sewer rates unchanged, Benink Decl. Ex. E, When the City increases a water or sewer rate the increase is applied against all rate components (i.e., volumetric charges and per daily service charges) and against all customers classes. Benink Decl., Ex. C, p.61. Utility bills do not separately identify the Measure M tax, which is instead embedded in the water and sewer charges. Benink Decl., Exs. C, pp. 110-13, Although the City did not raise sewer rates in 2018, LBWD budgeted Measure M transfers in 2019 for both the Water Revenue Fund and the Sewer Revenue Fund. The Water Revenue Fund 2019 budget includes a $9,318,000 Measure M transfer and the Sewer Revenue Fund budget includes a $2,094,000 Measure M transfer. LB 1932-33. Mid-year, the City increased the total In support of their reply, Petitioners request judicial notice of the Final Judgment Granting Declaratory Relief and Petition for Peremptory Writ of Mandate in Wyatt v. City of Sacramento, Sacramento Superior Court Case No. 34-2017-80002634 (Ex. A). The existence of the requested document, but not the truth of its contents, is judicially noticed. Evid. Code §452(d); Sosinsky v. Grant, (1992) 6 Cal.App.4th 1548, 1551 Gudicial notice of findings in court documents may not be judicially noticed). * Although an unverified Petition is not admi undisputed. ible evidence, the cited prot ions areMeasure M transfer to $14.4 million, Benink Decl. Ex. C, p.102. Although the Measure M budgeted figure was intended to restore transfers to the pre-lawsuit settlement levels, Measure M's 12% cap precluded the City from allocating the $11.3 million in the same percentages. See LB 612-18, 1935 2. The City’s Evidence LBWD provides three different water services to its customers: potable water, recycled water, and sewer. Fujita Decl. §2. Roughly 60% of LPWD’s water supply is pumped from groundwater wells located in the City or purchased from the City of Lakewood’s groundwater supplies, The remainder is purchased from the City’s water wholesaler, the Metropolitan Water District of Southern California (*MWD"). Fujita Deel. §2. LBWD transports sewage from residences and businesses to a treatment facility operated by the Los Angeles County Sanitation District, which is responsible for disposal of that sewage. Fujita Decl. $2. LBWD’s water treatment plant is located within the City, as are most of LBWD’s water and sewer distribution facilities. Fujita Decl. (2. In the first three quarters of the 2019 fiscal year, LBWD provided potable water to approximately 89,322 separate accounts, of which 611 (0.68%) were located outside the City. Fujita Decl. §3. LBWD provided sewer services to approximately 86,516 separate accounts, of which 113 (0.13%) were located outside the City. Fujita Decl. 3. During this same period, LBWD provided recycled water services to 142 separate accounts, two of which were customers located outside the City. Fujita Decl. §3. Approximately 652 Long Beach residents receive potable water services from privately ‘owned water companies, California Water Service or Golden State Water Company. Fujita Decl. 44. Before 2017, the City required LBWD to secure a permit and pay a “pipeline permit fee” in order to install and operate pipelines and other facilities in the City's streets and rights-of-way. Fujita Decl. §5. LBWD's pipeline permit fees were placed in the City’s general fund and treated as unrestricted revenue. LBWD treated the fee as a cost of providing service and set water and sewer rates at a level sufficient to recoup the cost of the payments from ratepayers. Fujita Decl. §5. The pipeline permit fee was not approved by City voters. Fujita Decl. 45. On September 30, 2016, Lejins filed a lawsuit challenging the LBWD's payment of pipeline permit fees, which was settled on November 8, 2017. Fujita Decl. §6. The settlement required the City to stop charging LBWD pipeline permit fees, but it allowed LBWD to make payments to the General Fund to compensate the City for street repair and public safety costs associated with LBWD’s activities. Fujita Decl. %6. The City agreed to reduce water and sewer service rates to account for the corresponding reduction in LBWD’s costs of service, which were approved by the City Couneil on December 5, 2017. Fujita Decl. 46. On June 5, 2018, Long Beach voters approved Measure M. Fujita Deel. {7. To cover the anticipated transfers to the General Fund under Measure M and maintain adequate funding for the provision of water service, LBWD proposed 2 7.2% inerease in its rates for potable and recycled water service for fiscal year 2019, Fujita Decl. 47. No adjustment in sewer rates was proposed at that time because the transfers authorized by Measure M did not substantially exceed the transfer authorized by the settlement agreement, Fujita Decl. 47. The existing sewer rates were determined to be sufficient to cover the Measure M transfers and LBWD’s costs of providing sewer service. Fujita Decl. 47. These water and sewer rate proposals were approved by the City Council, effective October 1, 2018. Fujita Decl. §7For fiscal year 2019, LBWD budgeted $12,654,202 to transfer from the Water Revenue Fund to the General Fund and $2,118,236 to transfer from the Sewer Revenue Fund to the General Fund. Fujita Decl. 48, To date, LBWD has transferred $8,950,350 from the Water Revenue Fund and $1,566,177 from the Sewer Revenue Fund, with these amounts covering the first three quarters, of fiscal year 2019, Fujita Decl. 48. E. Analysis Petitioners contend that, ever since Prop 13 was passed, local governments have looked for a way to impose fees and charges on property. To protect against government-devised loopholes in Prop 13, in 1996 the People of the State of California passed Proposition 218. Voters specifically targeted fees and taxes imposed upon properties and persons as an incident of property ownership, In other words, they sought to severely restrict exactions tied to property ownership. Pet. Op. Br. at 7. Petitioners assert that the City’s 7.2% increase in rates for potable and recycled water service constitutes a surcharge that is unlawfully embedded and collected through its water and sewer fees and charges. Petitioners explain that the constitutional restrictions in Art. XIIID, sections 3 and 6 are triggered when a levy is imposed upon a person as an incident of property ownership. Art, XIII D, section 3 states that qualification directly, while Art. XIII D, section 6 relies on the definition of “fee or charge” set forth in Art, XIII D, section 2(e). Petitioners contend that the surcharge blended in the City’s water and sewer rates is a general tax imposed as an incident of property ownership that can never be imposed. Reply at 5. Despite the superficial appeal of the Measure M voter approval, a local electorate may not bless an action that violates the state Constitution. Petitioners also argue that the City taxes water customers outside its boundaries and the City lacks constitutional authority to do so. Pet. Op. Br. at 8. 1. Governing Law Charter provisions “have the force and effect of legislative enactments[,}” and are “presumed to be constitutional.”” Art. XI, §3(a); Lockyer v. City and County of San Francisco, (2004) 33 Cal.4th 1055, 1086, Nonetheless, charter cities are subject to the Constitution and a charter provision, like any other law, cannot be enforced if it conflicts with “a clear constitutional mandate”, Silicon Valley, supra, 44 Cal.4th at 448, “It is no small matter" for a court to “annul the formal exercise ... of power"” by another branch of government (Howard Jarvis Taxpayers Ass'n v. Padilla, (2016) 62 Cal.4th 486, 520)—particularly when the voters themselves who have spoken. Ultimately, “all doubts must be resolved in favor of {a charter’s] validity[,]” and its unconstitutionality “must be clearly, positively, and certainly shown ....” Copley Press, Inc. v. Superior Court, (2006) 39 Cal 4th 1272, 1302. Whether the City’s surcharge on water and sewer service is unlawfully imposed as an incident of property ownership is an issue which requires interpretation of Prop 218. “A constitutional provision should be construed according to the natural and ordinary meaning of its words.” See City and County of San Francisco v. County of San Mateo, (1995) 10 Cal.dth $54, 562-63. (citation omitted); People v. Lopez, (2005) 34 Cal.4th 1002, 1006. “We begin by ‘examining the statutory language, giving the words their usual and ordinary meaning. Day v. City of Fontana, (2001) 25 Cal.dth 268, 272. “If there is no ambiguity, then we presume the lawmakers meant what they said, and the plain meaning of the language governs.” Ibid. The City has the burden of proof to rebut Petitioners’ Art. XIIID arguments as Petitioners make a prima facie case. Art, XIIID, §6(b)(5); Morgan, supra, 223 Cal.App.4™ at 913. Petitioners 9have the burden of proof on the third argument concerning the constitutionality of taxation outside City limits, 2. Art, XIIID, Section 6(b)(1). (2) & (5) The City concedes that its water and sewer charges to customers are inflated to fund Measure M transfers and that the funds transferred do not fund utility-related services. Petitioners contend that the fees and charges violate Art. XIIID, sections 6(b)(1)(2), and (5). Pet. Op. Br. at 7. Ant. XIIID, section 6 prescribes mandatory requirements for the imposition or increase in fees and charges for property-related services. Art, XIIID, sections 6(b)(1), (2) and (5) are designed to prevent a local government from profiting from the provision of property-related services. A “property-related service” is “a public service having a direct relationship to property ownership.” Art, XIIID, §2(h). “Property ownership” includes tenancies of real property where tenants are directly liable to pay the fee in question. Art. XIID, §2(g). ‘A “fee” or “charge” is any levy other than an ad valorem tax, a special tax, or an sment, imposed by an agency upon a parcel or person as an incident of property ownership, including a user fee or charge for a property-related service. Art. XIIID, §2(e). Revenues derived from such a fee or charge shall not exceed the funds required to provide the property-related service. Art. XIIID, §6(b)(1). Revenues derived from the fee or charge shall not be used for any purpose other than that for which the fee or charge was imposed. Art. XIIID, §6(b)(2). 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. XIIID, $6(b)(5). “The theme of these sections is that fee or charge revenues may not exceed what it costs, to provide fee or charge services” and “[t]he key is that the revenues derived from the fee or charge are required to provide the service, and may be used only for the service.” Roseville, supra, 97 Cal.App.4th at 647. Art. XIIID’s provisions apply to new fees or charges as well as those in place prior to the adoption of Prop 218, Howard Jarvis Taxpayers Assn. v. City of Fresno, (“Eresno”) (2005) 127 Cal.App.4!" 914, 924, Pet. Op. Br. at 14, In light of At. XIIID, section 6(b), the City is constitutionally permitted to levy user fees or charges only to recover the cost of providing its property-related services. The City raised water rates by 7.2% effective October 1, 2018 solely to fund Measure M transfers. The Measure M tax is embedded in the water and sewer rates and is denominated a “service” or “usage” charge on utility bills. Benink Decl, Ex. F (Lejins utility bill). ‘The California Supreme Court has held that ‘axes, assessments, fees, and charges are subject to the constitutional strictures when they burden landowners as Jandowners.” Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles, (“Apartment Assn”) (2001) 24 Cal.4th 830, 842 (italics in original). The Measure M tax is imposed upon persons based on normal use of their property as water and sewer customers and is, therefore imposed “as an incident of property ownership” within the meaning of Art. XIIID, section 2(e). See Bighorn-Desert View Water Agency v. Verjil, (“Bighorn”) (2006) 39 Cal.4th 205, 226 (fee for ongoing water service is imposed “as an incident of property ownership” because it requires nothing other than normal ownership and use of property). See also Fresno, supra, 127 Cal. App.4th at 161 (ejecting contention that in lieu fee was based on use of utility services rather than property ownership). ‘The “normal use” of a City customer’s property is the consumption of water and sewer services. Accordingly, the City’s tax is imposed upon the City’s water and sewer customers as an incident of property ownership. Pet. Op. Br, at 17-18. 10Specifically, the City’s water and sewer surcharge violates Art. XIIID, section 6(b(1) because the fee or charge imposed as an incident of property ownership exceeds the revenue needed to operate the City’s utilities. The City crosses the constitutional boundary by imposing fees intentionally inflated to generate surplus revenue to fund Measure M transfers. The City violated Art. XIIID, section 6(b)(1) when it imposed a levy in an amount that exceeds the revenue needed to operate its utilities. Pet. Op. Br. at 15. The surcharge also violates Art. XIIID, section 6(b)(2) because the City transfers the fee charged for water and sewer services to its General Fund for unrestricted general revenue purposes unrelated to the provision of sewer or water service. Art XIIID, section 6(b)(2) prohibits the City from using “revenues derived from” user utility fees and charges for property related services “for any purpose other than that for which the fee or charge was imposed.” See Roseville, supra, 97 Cal.App.4th at 647. The City imposes fees and charges for water and sewer services and then transfers a portion of its sewer and water fee revenue to the general fund pursuant to Measure M. Section 1407(7) provides that these funds may be used as unrestricted general revenue unrelated to the provision of sewer or water service. The City admits that the transferred funds have not been earmarked for or restricted to any specific purpose or use. Stip. 1. Thus, the City’s surcharge violates Art, XIII, section 6(b)(2). Pet. Op. Br. at 16. Finally, the surcharge Art, XIIID, section 6(b)(5) because the General Fund to which the surcharge is transferred is used for general governmental purposes. The by the City’s police chief, fire chief, and mayor promoted Measure M to support “Long Beach firefighter, paramedic and police office staffing, as well as funding for pothole and street repairs...” LB 3556, ‘The City ‘Attomey's Impartial Analysis of Measure M explained that the “General Fund pays for general City services such as police, fire and paramedic response, street repairs, parks, libraries and youth/senior programs” and that “the Long Beach City Council placed Measure ‘M’ on the ballot to maintain General Fund revenue.” LB 3554. The City admits that the Measure M transfers are not earmarked for or restricted to any specific purpose. Stip. 1. A “general tax” is any tax imposed for general governmental purposes. Art, XIIC, §1(@). Measure M authorizes a general tax because the City uses these funds for general governmental purpo: ‘Art. XIIID, section 6(b)(5) prohibits charging a utility customer for a service that merely benefits the community. “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. XIND §6(b)(5). See Roseville, supra, 97 Cal.App.4th at 650 (in-lieu fee violated Art. XID, section 6(b)(5) because it was placed in general fund and not for specific purpose). By imposi fees on utility customers that fund general governmental services, the City violated Art. XID, section 6(b)(5). Pet. Op. Br. at 16 In Roseville, a taxpayers’ association and related parties challenged a 4% “in-licu franchise fee” imposed on the annual budgets of the city’s water, sewer, and garbage collection utilities, which was paid by the utility ratepayers and transferred to the city's general fund. 97 Cal. App.4" at 638. The court held that the in-lieu fee was a fee or charge imposed as an incident of property ownership within the meaning of Art, XID, section 2. Id. at 642. In so holding, the court distinguished the inspection fee imposed on landlords for code compliance in Apartment Assn, supra, 24 Cal.4th at 842, which the California Supreme Court held was a fee imposed on landlords because their property was being rented, and therefore was more of a business license than a charge against property. Id. at 646, The Roseville court also distinguished Los Angeles, supra, 85 Cal.App.4th at 79, in which the appellate court addressed whether water usage rates were imposed. uas an incident of property ownership and required voter approval. In holding that water rates are not taxes or fees, the Los Angeles court noted that the ordinances setting the water rates did not require that a person own or rent the property to which the water was delivered, and the charges ‘were essentially usage rates based primarily on the amount of water consumed and not incident to property ownership. Id, at 647. In contrast, the Roseville court found that the city's 4% in-liew fee was tied to property ownership and was blended with the rates charged regardless of the amount consumed, Therefore, Prop 218 applied to the 4% in-lieu fee. Id. Roseville held that the in-licu fee violated Art. XIIID, section 6(b)(1) and (2) because the charge was not required to provide the service and was not used only for the service. Id. at 648. While the city could charge its utilities for the street, alley, and right-of-way costs attributed to the utilities, and could transfer these revenues to its general fund to pay for these costs, there was no showing that the 4% in-lieu flat fee reasonably represented these costs. Id. at 648. Roseville expressly rejected as made “10 years before Prop 218” the California Supreme Court's observation -n-v, City of San Buenaventura, (“Hansen”) (1986) 42 Cal.3d 1172, 11182, that nothing in the California Constitution foreclose a local governmental entity from using the “net proceeds” of its utilities for the benefit of its general fund. 1d. at 649. The in-lieu fee also violated Art. XID section 6(b)(5) because it was imposed for general governmental services. Id. at 650 As in Roseville, the City’s surcharge is a general tax imposed as an incident of property ownership and not a charge based on actual water usage. The surcharge is not required to provide the water and sewer service (Art. XIIID §6(b)(1)), is not used only for that service (Art. XIIID {§6(b)(2)), and only benefits the general community. Art. XIIID, $6(b)(5). See also Howard Jarvis Taxpayers Assn. v. City of Fresno, (“Fresno”) (2002) 97 Cal.App.4" 914, 925-26. The City contends that Roseville and Fresno are distinguishable. ‘The City admits that Fresno invalidated a surcharge on water and sewer service that was somewhat similar to the City’s charge, 127 Cal.App.4th at 925-26. The City contends that Fresno is distinguishable because Fresno’s city charter expressly prohibited taxes on utility services and the surcharge could not be justified as the equivalent of a general utility user’s tax. See 127 Cal.App.4" at 926, Roseville is distinguishable because the water and sewer service surcharge had not been approved by the voters. 97 Cal.App.4" at 649. Opp. at 17. These distinctions are unavailing, Fresno and Roseville both held that a city’s surcharge ‘was imposed as an incident of property ownership. The City’s distinction of Roseville as lacking voter approval has nothing to do with its holding that the surcharge was imposed as an incident of property ownershi Similarly, in Fresno the fact that the city charter precluded a tax on utility services bore only on whether the in-lieu fee was a tax on the consumption of utility services and not on whether the surcharge was an incident of property ownership. 97 Cal.App.4" at 926-27. The in-lieu fee wwas blended into the user fees so that a water bill contained only a single amount due for service. Id, at 918. Like the City in this case, Fresno asserted that the-in lieu fee was not imposed as an incident of property ownership, but rather imposed on the use of utility service.” Id. at 925. Fresno held that Fresno’s analysis of Richmond “could hardly be more misguided” because Richmond expressly stated that a fee for ongoing water service is imposed as an incident of property ownership because it requires nothing other than normal ownership and use of property. Ibid. Reply at 11-12. Roseville and Fresno are controlling, and the City’s surcharge is imposed as an incident of property ownership. 123. Art. XID, Section 2(¢ ‘Art. XIIID governs local fees and charges, which may be levies imposed on property or on persons because they own property, and which includes property-related services having a “direct relationship” to property ownership. Art. XIIID, §2(e), (h) The City concedes that, if a levy fits this description, it is subject to the substantive restrictions of Art. XIIID, section 6(b). The City does not dispute that domestic water and sewer service are property-related services, and that governmental levies imposed on users of these services without voter approval are fees and charges subject to Art. XIIID. The City also concedes that its Measure M surcharge does not comply with Art. XIIID, section 6(b)'s substantive requirements because proceeds from the surcharges are not used to fund the City's water and sewer services and instead are intended for general revenue purposes. City RIN Ex. B (§1407(7)). Opp. at 14-15. Despite these concessions, the City argues that the Measure M tax is not a fee or charge within the meaning of Art, XIIID, section 2(e). The City contends that Art, XIIID, section 2(¢)'s definition of “fee” or “charge” has two distinct tests: (1)“any levy other than an ad valorem tax, a special tax, or an assessment, imposed ...upon a person as an incident of property ownership ....”; and (2) “a user fee or charge for a property-related service.” ‘The City contends that these two levies are not the same, a distinction that is evident in the fact that Art, XIIID, section 2(e) uses the word “including”, which operates to enlarge the statute's application beyond the meaning of the clause that precedes it. Bighorn, supra, 39 Cal.4th at 216-17. The City concludes that Art XIIID, section 2(¢) establishes two different tests for a fee or charge. Opp. at 18-19. In support of its conclusion that there are two Art, XIIID, section 2(e) tests, the City relies on the fact that the Howard Jarvis Taxpayers Association, the organization that drafted Prop 218, noted in a “Statement of Drafters’ Intent” that “Fees. ..are limited to levies imposed as an incident of property ownership or fees for property related services.” McWhirter Decl. Ex. G, p. 12 (emphasis added), The City contends that case law also supports the distinction. A levy is imposed “upon a person as an incident of property ownership” when the obligation to pay the levy is triggered “solely by virtue of property ownership.” Apartment Assn, supra, 24 Cal.dth at 843. In contrast, a “user fee or charge for a property-related service” is not imposed solely by virtue of property ‘ownership. Property-related services are public services that have “a direct relationship to property ownership” such as domestic water and sewer service. Art. XIIID, §2(h); Bighorn, supra, 39 Cal.4th at 216-17. A user fee is charged “only to the person actually using the service”, and a person can own property without using water and sewer service. Isaac v. City of Los Angeles, (1998) 66 Cal. App.4th 586, 596-97, A “user fee or charge for a property-related service” is treated as a charge not because it is imposed solely by virtue of property ownership—it isn’t—but because the use of property-related services requires “nothing other than normal ownership and_use of property.” Richmond v. SI Community Services District, (“Richmond”) (2004) 32 Cal.4th 409, 427 (emphasis added). ‘The City concludes that XIIID, section 2(e) effectively treats a user fee for a property-related service as if it were a levy imposed upon a person as an incident of property ownership even though the two are distinct. Opp. at 19-20. From its conclusion that there are two Art. XIIID, section 2(e) tests, the City argues that its surcharge does not qualify as a fee or charge under either test. The surcharge is not a levy “other than an ad valorem tax, a special tax, or an assessment, imposed...upon a person as an incident of property ownership” because it is not imposed “solely by virtue of property ownership”.Apartment Assn, supra, 24 Cal.4th at 842.5 ‘The surcharge also is not “a user fee or charge for a property-related service” because it is a general tax imposed on the use of water and sewer service, and a general tax is not the same thing as a user fee. A “general tax” is a levy intended to support general governmental functions and a “user fee” is a payment for a service purchased by the user. See Union City, supra, 162 Cal.App.4th at 694; Art. XIIIC, §1(d).° The City argues that the two levies—user fee and tax—are distinct. Opp. at 20. The City coneludes that, while Art XIIID, section 2(e) treats general taxes imposed on the ‘ownership of property as a charge or fee per se, it does not extend that same treatment to general taxes imposed on the use of property-related services. Since its surcharge is not a fee or charge within the meaning of Art, XIIID, section 2(e), the City is not required to comply with the substantive requirements of Art. XIIID, section 6(b)(1) and (2). Opp. at 20-21 he City’s argument ~ that its general tax on water and sewer services is not imposed as an incident of property ownership and also is not a user fee for a property-related service, ignores the plain language of Art, XIIID, section 2(c)’s definition of “fee” or “charge”. That provision, without the listed exceptions, states that a fee or charge is “any levy....imposed by an agency upon 4 parcel or upon a person as an incident of property ownership, including a user fee or charge for a property related service.” (emphasis added). This language plainly means that a levy imposed as an incident of property ownership includes, and subsumes it, a user fee for a property- related service. There are not two tests for an Art. XIIID, section 2(c) charge or fee The California Supreme Court’s statement in Bighorn -- that Art. XIIID, section 2(e)'s definition use of the word “including” operates to enlarge the meaning of the “incident of property ownership” clause preceding it-- is not to the contrary. 39 Cal.4th at 216-17. The enlargement of the meaning of “incident to property ownership” did not place the additional user fee or charge for a property related service outside of its scope. Nor did Bighorn hold that ongoing water and sewer service is not an incident of property ownership. The Bighorn decision relied on the California Supreme Court's earlier decision in ichmond, supra, 32 Cal.4th at 427, which considered whether a water service connection fee imposed by a water district to fund equipment for a fire department is a fee or charge within the meaning of Art. XIID, section 2(¢). 39 Cal.4" at 217, The Richmond court explained that a fee for property-related services may or may not be a fee imposed as an incident of property ownership: “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 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).)” (italics in original), 32 Cal.4™ at 427. 5 The City’s citation of Apartment Assn’s language to support its position that its general tax is not “imposed solely by virtue of property ownership” is inapt because the language is not found in Prop 218. (This same contention was made by the city in Fresno, supra, 127 Cal.App.4® at 925.). The operative phrase is “as an incident of property ownership.” © The City acknowledges that a user fee for a property-related service can be a tax that must be approved by the voters if it exceeds the cost of service. Art. XILIC, §1(e)(2), (7). Opp. at 20. 4The Richmond court concluded that the provision of water 1g of Art. XIIID, section 2(¢). Id. at 426 (“The Legi a property-related service ative 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..."). ‘The Richmond court then held that a water connection fee is not a property related service: “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 Id. at 427. ‘The City wrongly attempts to separate a property-related user fee from a levy imposed as an incident of property ownership. As Petitioners contend, Richmond demonstrates that some property-related fees are levies upon a person as an incident of property ownership and some are not. But the categories overlap and — unlike a connection fee --a user fee or charge for a property- related service both enlarges and is subsumed within the Art, XIIID, section 2(e) definition of a levy upon a person as an incident of property ownership.’ The proper Art. XIIID section 2(e) inquiry is whether the charge (property-related or not) is imposed as an incident of property ownership. This is necessarily true for a user fee for ongoing water or sewer service that is not based on actual water usage. Thus, the Richmond court noted: “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”. 32 Cal.4" at 427. The Bighom court also expressly stated that “charges for utility services such as electricity and water should be understood as charges imposed ‘as an incident of property ownership."". 39 Cal.4" at 213. Reply at 10-11 The City’s surcharge meets Art. XID, section 2(e)’s definition of a levy imposed as an incident of property ownership. As stated ante, the Measure M tax is embedded in the rates and is denominated a “service” or “usage” charge on utility bills. Benink Decl., Ex. F (Lejins utility bill). ‘The Measure M tax is imposed upon property owners based on their normal use of the property as water and sewer customers, is not a commodity charge based on actual water and sewer usage (Los Angeles, supra, 85 Cal.App.4" at 83), and therefore is imposed “as an incident of property ownership” within the meaning of Art, XIIID, section 2(e) as a fee that burdens landowners as landowners.” Apartment Assn, supra, 24 Cal.4th at 842 (italics in original), Accordingly, the surcharge is a general tax imposed upon the City’s water and sewer customers as. an incident of property ownership and is subject to the constitutional restraints of Art. XIIID, sections 6(b) (1), (2), and (5). Pet. Op. Br. at 17-18. 7 For this reason, the City errs in contending that Art, XIIID, section 2(¢) effectively treats a user fee for a property-related service as if it were imposed upon a person as an incident of property ownership even though the two are distinet. Opp. at 20, n.4. Art, XIIID, section 2(e)'s use of the word “including” means that a user fee for a property-related service is a levy imposed as an incident of property ownership. * ‘The City argues that the court’s interpretation of Art. XIIID, section 2(e)’s definition would mean that a general tax on water and sewer service could never comply with Art. XID, section 6(b), since a fee or charge must only be used to support a specific service or governmental activity that benefits property owners (Art, XIIID §6(b)(1), (2)) and a general tax necessarily is4. Art. XIIID, Section 3 Art, XIIID, section 3 does not rely solely on Art. XID, section 2(e)’s definition of fee or charge. It directly prohibits local governments from assessing any tax, as well as an assessment, fee, or charge, upon any parcel of property or upon any person as an incident of property ownership, unless the levy meets one of four exceptions: (1) the ad valorem property tax imposed pursuant to Article XIII and Article XIII A; (2) any special tax receiving a two-thirds vote pursuant to Section 4 of Article XIII A; (3) assessments as provided under Article XINID; and (4) fees or charges for property related services as provided by Article XIIID. The City’s surcharge violates Art, XIID, section 3 because it is a charge as an incident of property ownership that does not fall under any of the enumerated exceptions. Pet. Op. Br. at 17. The City defends its tax on water and sewer service under Art. XIIID, section 3 on the same ground as for Art, XIIID, sections 6(b)(1), (2), and (5), contending that its general tax on the use of property-related services is not a tax imposed as an incident of property ownership. The City again argues that Petitioners conflate Art. XIID’s treatment of levies imposed “upon [a] person as an incident of property ownership” with its treatment of levies imposed on the use of a property- related service. Art. XIIID, section 3(a) ensures that the only levies that can be imposed on property ownership per se are an ad valorem tax, a special tax, an assessment, or some other levy that complies with the substantive requirements of Art. XIIID, section 6(b). Indeed, the Howard Jarvis Taxpayers Association has noted that section 3(a) “provides an exclusive list of those levies which can be imposed on real property.” MeWhirter Decl. Ex. G, p. 13 (emphasis added). Because Art, XIID, section 3(a) only applies to taxes imposed “upon [a] person as an incident of property ownership,” it does not impliedly prohibit general taxes imposed on some other basis, including on the use of property-related services. Opp. at 21 This argument was addressed ante in connection with Art, XIIID, section 2(¢) and need not be discussed further. 5. Voter Approval The City contends that its general tax is not prohibited by any provision of Art. XIIID because it was approved by local voters in compliance with Art, XIIIC, Opp. at 21. ‘The City notes that Art. XIIIC (Voter Approval for Local Tax Levies) states that all local taxes are “deemed to be either general taxes or special taxes.” Art. XIIIC, §2(a). “No local government may impose, extend, or increase any genéral tax unless and until that tax is submitted to the electorate and approved by a majority vote.” Art. XIIIC. §§ 1(a), 2(b). “No local government may impose, extend, or increase any special tax unless and until that tax is submitted used for general governmental purposes. Art. XIIIC, §1(a). Opp. at 18. ‘This argument is addressed post. ° Art, XIIID, section 2(e), which applies to Art. XIILD” section 6’s restrictions, includes “a user fee or charge for a property related service” as an incident of property ownership in the definition of “tax” whereas Art, XIIID, section 3 excludes from a barred tax, assessment, fee, or charge as an incident of property ownership “a fee or charge for property related services as provided by this article”. Art. XIIID §3(a)(4). This difference is of no moment in analyzing the City’s surcharge because (a) Art. XIIID, section 3 bars a tax for property-related services and the City concedes it has imposed a general tax, and (b) Art. XIIID, section 6's restrictions apply to user fees or charges for a property-related service. Reply at 11 16to the electorate and approved by a two-thirds vote.” Art. XIHIC §§ 1(d), 2(@). Blections on a general tax must be “consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency ....” Art. XIIIC §2(b). Elections on a special tax may be held at any time, Art, XIIC §2(d). Opp. at 12-13. In 2010, California voters adopted Prop 26, which amended Art. XIIIC to define the word “tax.” Art, XIIIC, section 1(¢) states that “any levy, charge, or exaction of any kind imposed by a local government” is considered a tax unless it fits into one of seven enumerated and inapplicable exceptions. Opp. at 13. The City acknowledges that its surcharge is a general tax pursuant to Art. XIIIC (City RIN Ex. B (§ 1407(7)) and argues that this concession does not end the inquiry because general taxes imposed on the use of water and sewer service and approved by a majority vote are not prohibited by Art. XIIID. Before Art, XIIID was adopted, the rules applicable to levies imposed on property ownership or on services having a relationship to property ownership were well-established, Non- ad valorem general taxes imposed on property or upon a person because of property ownership “without regard to the use to which the property is put” were prohibited by the Constitution. City of Oakland v. Digre, (1988) 205 Cal.App.3d 99, 104-10. But general excise taxes approved by a majority vote were permissible where “triggered not by ownership but instead by some particular use of the property or privilege associated with ownership”. Thomas v. City of East Palo Alt, (1997) 53 Cal.App.4th 1084, 1088. The City argues that its surcharge is functionally similar to a utility users’ tax, with the difference that a utility users’ tax is imposed on all users of a utility service in a city, while the general fund surcharge is only imposed on users of LBWD’s utility services (652 City residents receive water from private vendors, not LBWD). See Eastern Municipal Water District v. City of Moreno Valley, (1994) 31 Cal.App.4th 24, 25-27; Rev. & Tax. Code §7284.2. Opp. at 13-14, Special taxes approved by a two-thirds vote and imposed solely on the basis of property ownership were also permissible. Heckendom v. City of San Marino, (1986) 42 Cal.3d 481, 483-89, Additionally, special assessments, regulatory fees, and user fees were, unless clearly excessive, not considered taxes and could be imposed by a local government without avote. See Bay Area Cellular Telephone Co, v, City of Union City, (“Union City”) (2008) 162 Cal. Appth 686, 694-95, Opp. at 16, Prop 218 passed in 1996. The City notes that Art, XIIIC and Art, XIIID are functionally related and both further Prop 218’s goal of “limiting the methods by which local governments exact revenue from taxpayers without their consent.” City RIN Ex. A, p. 108 (§ 2). In the words of its proponents, Prop 218 “CONSTITUTIONALLY GUARANTEES your right to vote on taxes.” City RIN Ex. A, p. 77. This requirement was satisfied when 53.76% of votes were cast in favor of Measure M in the June 5, 2018 election “consolidated with a regularly scheduled general lection for members” of the City’s governing body as required by Art, XIIIC, section 2(b). MeWhirter Decl. Ex. F; City RJN Ex. D (Charter Art. XIX, §1901). As a result, the City argues that the surchar; a general tax on water and sewer service that fully complies with Art. XIIIC’s election requirements. Opp. at 13-14. ‘The City contends that general taxes on water and sewer service are common!” and were widespread before Prop 218 was passed, and no court has found one unconstitutional in the 23 '° The City offers no admissible evidence that other citi water or sewer services. impose general utility taxes onyears since Prop 218 was adopted.'' “The way Proposition 218 operates, water rates that exceed the cost of service operate as a tax, similar to the way a ‘carbon tax’ might be imposed on [the] use of energy. But... [jJust because such above-cost rates are a tax does not mean they cannot be imposed—they just have to be submitted to the relevant electorate and approved by the people in a vote.” Capistrano, supra, 235 Cal.Appth at 1515 (increased rates to pay for cost of water recycling plant are permissible under Prop 218, but pricing tiers for water service did not adequately reflect high water users’ portion of cost).'? Opp. at 15. Given this compliance with Art. XIIIC’s voter requirements, the City contends that the Measure M surcharge does not violate Art. XIIID's substantive requirements. No provision of article XIIID explicitly states that general taxes on water and sewer service are prohibited. ‘The drafters of Prop 218 knew how to craft a ban on general taxes when they wanted to do so because Art. XIIIC, section 2(a) expressly states that “[s]pecial purpose distriets or agencies, including school districts, shall have no power to levy general taxes.” Opp. at 16. If Prop 218s intent was to require that all taxes imposed on such services be limited to specific purposes and approved by a two-thirds vote, such arule should be expressly stated, not by implication. Super-majority voting requirements are strictly construed, given their “fundamentally undemocratic” nature (Los Angeles County Transportation Commission v. Richmond, (1982) 31 Cal.3d 197, 205), and the drafters of legislation on any topic ““do not ... hide elephants in mouseholes™ California Redevelopment ‘Assn v. Matosantos, (2011) $3 Cal.4th 231, 260-61. The City concludes that it asked voters to approve the general fund surcharge and a majority said “yes.” In the absence of evidence that Art. XIIID was intended to ban general taxes on water and sewer service, the voters’ decision should not be overturned. Opp. at 15, 23 The answer is that Art. XIIC does not relieve the City from complying with Art. XIIID, which carries independent constitutional requirements. See Citizens for Fair REU Rates v. City of Redding, (“Redding”) (2018) 6 Cal.s 1, 14 (“in Roseville and Fresno, the fact that the utilities were transferring rate proceeds to the cities’ general funds, where those proceeds could be used for general government services, created an independent violation of article XIII D. Article XIII C contains no such restriction.”), Reply at 6. Art. XIIID, sections 3 and 6 reflect the Prop 218 voters’ determination that local governments can never impose general taxes upon parcels or \\ The City argues that Bighorn, the principal case relied on by Petitioners, did not hold that a general tax on water and sewer service is unconstitutional. Opp. at 17. The City is correct. As pertinent, Bighorn held that (a) Art. XIIID applies to a fee for ongoing water service is imposed “as an incident of property ownership” because it requires nothing other than normal ownership and use of property, and (b) under Art, XIIIC local voters by initiative may reduce a public agency's water rates, 39 Cal.4th at 215-16, 220. Petitioners note that, while “no published decision has invalidated a general tax on water and sewer service, one trial court recently invalidated the surcharge embedded in the City of Sacramento's water, sewer and solid waste charges, which the city had contended were voter- -d utility taxes. Reply RIN, Ex. A. "2 As Petitioners argue, Capistrano’s suggestion that a local government could seek approval from voters to impose “above-cost rates” was dictum, Reply at 12. Capistrano did not distinguish between special taxes and general taxes, did not analyze whether general taxes could be imposed on persons as an incident of property ownership, and never discussed Art. XID, section 3. “It is axiomatic that cases are not authority for propositions not considered.” People v. ‘Ault, (2004) 33 Cal.4th 1250, 1268, n. 10. 18persons as an incident of property ownership — even if local voters approve it. As Petitioners’ argue, this is not surprising in light of Proposition 218’s historical background, which began in 1978 with the adoption of Proposition 13, the purpose of which was to cut local property taxes. Howard Jarvis Taxpayers Assn v. City of Riverside, (1999) 73 Cal. App-4th 679, 681 (citations omitted), Pet. Op. Br. at 20. Prop 218 continues that purpose of limiting local property taxes, which cannot be overcome by partial compliance. Nothing in Art, XIIID expressly or implicitly relieves a qualifying fee or charge from Art, XIIID, section 6's substantive requirements. As for Art. XIIID, section 3, Petitioners correctly argue that the interpretive principle of expressio unius est exclusion alterius (the enumeration of things to which a statute applies is presumed to exclude things not mentioned) forecloses any possibility that the drafters intended Art, XIHD, section 3 to permit a local government to impose general taxes as an incident of property ownership once voter approval was obtained, Art. XIIID, section 3°s enumerated exceptions include (1) ad valorem property taxes, (2) special taxes receiving a two-thirds vote, (3) assessments on property for a special benefit, and (4) charges for property-related services as provided by Article XIIID. General taxes are not listed as an exception."® Thus, Prop 218 voters understood that the only taxes permitted as an incident of property ownership were special, not general taxes. See Bighorn, supra, 39 Cal.4th at 218-19 (rejecting initiative that required voter approval of water fees because “the electorate chose not to impose a voter-approval requirement for increases in water service charges”). Pet. Op. Br. at 18- 19, The Roseville court expressly rejected a voter approval argument where Art, XID was violated, After the Roseville lawsuit commenced, Roseville submitted ballot measures to its local electorate, including one that sought to “validate the in-lieu franchise fee concept as representing an element as the actual cost of providing utility services to the public.” 97 Cal.App.4" at 649-50 Although voters approved the measure, the court held the measure was deficient because it did “nothing to show actual costs” of the service as required by Art. XIIID, section 6. Id. at 650. In so holding, the court was concerned only with the city’s compliance with Art, XIIID, section 6's substantive requirements and the voter approval was immaterial. Pet. Op. Br. at 19-20. The City distinguishes Roseville as a case which invalidated a water and sewer service surcharge not approved by the voters in compliance with Art, XIIIC, 97 Cal.App.4th at 647-49, While city voters approved two measures after the trial court proceedings concluded, the approvals had no bearing on the outcome. The first (Measure U) stated that each city utility “shall be financially self-sufficient, and shall fully compensate the City general fund for all goods, services, real property and rights to use or operate on or in city-owned real property”. Id. at 649-50. The Roseville court had no quarrel with Measure U in principle, but its defect lay in the fact that it did nothing to show the actual costs of the utilities’ use of city rights-of-way and real property. Ibid. The second measure (Measure K) authorized a special tax for the city’s utilities to “pay to Roseville’s general fund an in-lieu franchise fee not to exceed 4 percent of total utility operating and capital expenditures, which shall be budgeted and appropriated solely for police, fire, parks and recreation, or library services”. This measure suffered from a similar deficiency of failing to set forth actual cost of the services. Ibid. Because of this fact, the court expressed no views of 13 The term “property ownership” includes tenancies of real property where tenants are directly liable to pay the assessment, fee or charge, which includes utility service. See Art. XIIID, §2(g). If an agency could levy general taxes on utility services, Art. XIIID, section 3 would offer no protection to tenants who pay for utilities. Reply at 9 19Measure K’s validity. Ibid. Opp. at 17-18. While Roseville is not controlling for the voter approval issue, it certainly found that a surcharge as an incident of property ownership was invalid without regard to the post-trial voter approvals. The City voters” approval of section 1407 does not trump the constitutional restrictions of Art, XID, sections 3 and 6. The Supreme Court has rejected the notion that local voters approving a city charter provision can override Prop 218’s constitutional restrictions, In Silicon Valley Taxpayers Association, Inc. v. Santa Clara County Open Space Authority, (2008) 44 Cal.4th 431. 448, the Santa Clara Open Space Authority (“OSA”) created an assessment district subject to Art. XIIID, section 4, Id. at 437-38. When the petitioners asserted that the assessment failed to comply with Prop 218's procedural and substantive requirements, OSA argued thatthe district was valid because it was approved by a majority vote of property owners subject to the assessment. Id. at 441, 449. ‘The Supreme Court was not persuaded: “Defendants argue that because a weighted majority of property owners approved the assessment, it furthers Proposition 218's emphasis on voter consent, and we should accord deference to those voting owners’ wishes. However, voter consent cannot convert an unconstitutional legislative assessment into a constitutional one Under Proposition 218, all valid assessments must both clear the substantive hurdles in article XIIID, section 4, subdivision (a) ad be approved by a weighted majority of owners under section 4, subdivisions (c), (d), and (e).” Id. at 449 (emphasis added and citation omitted), See also Howard Jarvis Taxpayers Ass'n. v. City of San Diego, (2004) 120 Cal.App.4th 374, 389- 95 (charter city ballot initiatives approved by voters were invalid because they conflicted with the California Constitution); Bighorn, supra, 39 Cal.4" at 221 (“When a significant part of a proposed initiative is invalid, the measure may not be submitted to the voters.”). Pet. Op. Br. at 19. Despite voter approval, the City’s surcharge does not “clear the substantive hurdles” of Art. XID, sections 3 and 6. The City argues that, if Art. XIID, sections 3 and 6 ban general taxes on the use of water and sewer service, then special taxes on such service dedicated to “specific purposes” and approved by a two-thirds vote will be lawful, but general taxes on such services, approved by a majority vote, will not, Opp. at 21 ‘This is true, and the short answer is “So what?” Prop 218 -- and its predecessor Prop 13 and successor Prop 26 -- changed the rules for local government imposition of property-related taxes, Prop 218 is best understood as a reinforcement of Prop 13’s prohibition on general non ad valorem taxes on property. One of Prop 218°s stated purposes is to limit local government revenue and its provisions are to be construed liberally to accomplish this purpose. City’s RIN, Ex. A, p. G96 (§5). Setting the voter approval bar at two-thirds, rather than majority, furthers this goal. Prop 218“buttresse{d] Proposition 13's limitations on ad valorem property taxes and special taxes by placing analogous restrictions on assessments, fees, and charges.” City of San Buenaventura v. United Water Conservation Dist, (2017) 3 Cal.Sth 1191, 1200, modified on denial of reh'g (Feb. 21, 2018) (citation omitted). In other words, Art. XIIID sections 3 and 6 tightened the prohibition against general taxes upon parcels by expanding it to fees “upon persons as an incident of property ownership.” Reply at 7-8. 6. Extrinsic Aids to Constitutional Interpretation 20‘The City argues that its interpretation of Art, XIIID, sections 2(¢) and 3(a) is supported by extrinsic sources concerning Prop 218"s purpose and effect. In interpreting the California Constitution, the court’s primary concem is to give effect “to the intended purpose” of the provisions at issue. Californi is Coalition v. City of Upland, (2017) 3 Cal.sth 924, 933. The constitutional text, analyzed in its “relevant context,” is “typically the best and most reliable indicator of purpose.” Ibid. If the text is ambiguous, the Court should also “consider extrinsic evidence of the enacting body's intent’”—including any “[bJallot summaries and arguments”” submitted to the voters. Professional Engineers in California Government v. Kempton, (2007) 40 Cal-4th 1016, 1037. Opp. at 15-16. The City notes that Prop 218°s proponents stated that “politicians created a loophole in the law that allows them to raise taxes without voter approval by calling taxes “assessments” and “fees"”, and that “Proposition 218 guarantees your right to vote on local tax increases—even when they are called something else, like ‘assessments’ or ‘fees’ ....” City RINEx. A, p. 76. See also City RIN Ex. F, pp. 61-62 (informational pamphlet prepared by the Howard Jarvis Taxpayers Association). These advocacy statements make it clear that levies labeled as “fees” are in reality “taxes” if they fund “general governmental services”, but that local governments can impose such taxes with voter approval. Opp. at 22. City RIN Ex. A, p. 76 (“Proposition 218 guarantees your right to vote on taxes imposed on your water, gas, electric, and telephone bills.”). Opp. at 22. ‘The City argues that an Art. XIIID ban on general taxes on water and sewer service would undermine this promise of voter control. Nowhere do these materials explain that “taxes imposed ‘on your water ... bills” must be approved by a two-thirds vote and limited to specific purposes, as ‘opposed to general governmental purposes. If anything, Art. XIIID, section 3(b)’s exclusion of fees for electric and gas service from fees imposed as an incident of property ownership ~ and hence can be subject to general taxes —- suggests the opposite. Opp. at 22-23. ‘The City adds that the court’s interpretation of Art. XIIID would create an anomaly. Privately-owned utilities provide water service to about 16% of California residents, and cities could impose a general tax on the use of such private water services even though a similar tax on public water services would be barred because the term “property-related service” only applies to “a public service having a direct relationship to property ownership”. Art. XIIID, §2(h) (emphasis added). No justification for this differential treatment is found in Prop 218’s ballot materials. Opp. at 3. There is no ambiguity in the language of Art: XIIID, sections 3 and 6 and there is no need to resort to extrinsic aids. See Day v. City of Fontana, supra, 25 Cal.4th at 272. Even if'arguendo there were ambiguity, the Prop 218 advocacy materials reflecting a purpose of stopping local governments from avoiding voter-approval requirements adopted in Prop 13 (Art. XIIIA, §4) and Prop 62 (Gov't Code §§ 53720-53730) do not aid the City. These materials support a conclusion that local agencies may impose taxes on persons as an incident of property ownership following voter approval, but they must be special taxes following approval by two-thirds of the electorate. Art, XIIID, §3(a); Art. XIIIC, §2(4). Prop 218 voters excluded special taxes, but not general taxes, from the definition of a “fee or charge.” Art. XIIID, §2(¢). Unlike general taxes, special taxes are not subject to Art, XIIID, section 6's restrictions and may be voter approved. ‘The advocacy materials are entirely consistent with this approach. Reply at 8.'* “The City’s claims that the Prop 218 ballot pamphlet did not inform voters of the disparate treatment between general and special taxes or of a city’s purported ability to impose a general tax 217. Unconstitutional Taxation Outside City Limits Petitioners argue that the City’s imposition ofa general tax outside its city limits is illegal, and the California Constitution prohibits local entities from enforcing regulations or taxing extra- territorially. City of Modesto v. National Med, Inc., (“Modesto”) (2005) 128 Cal.App.4th 518, 525; City of Los Angeles v. Shell Oil Company, (“Shell”) (1971) 4 Cal.3d 108, 124, The power to tax for local purposes is one of the privileges accorded charter cities by the home rule provision of the California Constitution. Art. XI, §5(a); Weekes v. City of Oakland, (1978) 21 Cal.3d 386, 392.) But Art. XI, section 7 prohibits local entities from enforcing regulations extra-territorially: ‘A county or city may make and enforce within its limits...” (emphasis added).'* See Burns Int'l Security Services Corp. v. County of Los Angeles (2004) 123 Cal.App.4th 162, 168 (collecting cases).'° Accordingly, the courts have held that a municipal corporation may not tax outside its territory. See, e.g., Modesto, supra, 128 Cal.App.th at 525 (“If a city collects a business license tax on activity carried on outside of its boundaries, i.e., the tax is not apportioned, that extraterritorial tax is beyond the city’s power to impose.”); see also Shell, supra, 4 Cal.3d at 124 (same). Pet. Op. Br. at 20-21 The City answers that its power to tax does not stem from Art. XI, section 7, but rather from the City Charter and Art. XI, section 5, which together authorize the City to legislate on all matters that qualify as “municipal affairs.” City of Cupertino v. City of San Jose, (1995) 33 Cal.App.4th 1671, 1677. Art. XI, section 9 expressly allows cities to provide water and sewer service outside their borders, and the furnishing of such services is a municipal function, Cardellini v. Casey, (1986) 181 Cal.App.3d 389, 399. To claim that it is unlawful for the City to require all users to pay a tax for the privilege of using its services, even if those users live outside the City, stretches the concept of extraterritoriality beyond any reasonable limit. Non-residents must pay local sales tax reimbursement to a seller if they enter the City and make a purchase. Why should they be exempt from paying a city tax if they purchase water from the city or if they pay the city to transport their sewage for disposal? Opp. at 24 While the City’s general power to tax arises under Art, XI, section 5, this power is limited by Art. XI, section 7. Art. XI, section 9 permits a city to provide public works beyond its boundaries, and it may properly charge for the cost of these services. But Art. XI, section 9 is not authority permitting a city to impose a general tax upon non-residents for services outside city limits. The City provides water and sewer services to customers at service locations outside the City’s boundaries and its imposition of a general tax upon those customers plainly violates article XI, seetion 7. The City argues that the tax cases cited by Petitioners, Modesto, supra, 128 Cal.App.4th at 518 and Shell, supra, 4 Cal.3d at 108, are distinguishable, Both involve the extraterritorial application of business license taxes calculated as a percentage of a company’s gross receipts, and on privately-owned water service are not significant. There is no legal requirement that a ballot pamphlet highlight every consequence of a proposed law. 'S Art. XI, section 7 states: “A county or city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws.” '© Art. XI, section 9 provides that a municipal corporation may establish, purchase, and operate public works to furnish its inhabitants with light, water, power, heat, transportation, or means of communication and may furnish those services out boundaries, except where another municipal corporation furnishes the same service and does not consent. 22their holdings, which are based on the federal Constitution, simply limited the business license taxes to gross receipts reasonably related to business activities taking place within the city. Here, the water and sewer service activities take place almost entirely within the City, Fujita Decl. § 2; see Camation Co. v. City of Los Angeles, (1966) 65 Cal.2d 36, 37-41 (city could tax gross receipts from out-of-city sales when products were manufactured and processed in city). According to the City, its general tax on water and sewer service outside its city limits is more akin to a sales tax than a gross receipts tax imposed on a business and falls outside the ambit of these cases. See Oklahoma Tax Commission v. Jefferson Lines, Inc., (1995) 514 U.S. 175, 184-200 (Oklahoma may tax bus tickets sold in-state for trips that cross state lines). Opp. at 24-25. As Petitioners reply (Reply at 13), the City’s analogy to a sales tax is misguided. A sales tax on a sale within city limits is not extraterritorial, particularly since the sales taxpayer is the local retailer within city limits, not the buyer who may or may not reside in the city. See Loeffler vy. Target Comp., (2014) 58 Cal-4th 1081, 1103-04. The City’s distinction of Modesto and Shell also is unavailing. Both stand for the constitutional principle that a city may not impose taxes extraterritorially, “[T]he requirements of equal protection and due process proscribe local taxes that operated to unfairly discriminate against intercity businesses by subject them to a tax that is not fairly apportioned to reflect the percentage of the business actually taking place within the taxing jurisdiction.” Modesto, supra, 128 Cal.App.4" at 525 (citing Shell ). “Ifa city collects a business license tax on activity carried on outside of its boundaries, i., the tax is not apportioned, that extraterritorial tax is beyond the city’s power to impose.” Id. at 525. Although the City’s water and sewer activities take place mostly within its boundaries, it actually delivers water and sewer services to customers outside city limits. The City could impose a tax on the proportionate amount of such services if it could do so lawfully for customers within city limits under Art, XID. As stated ante, it cannot do so, ‘The City certainly cannot impose a general tax on customers outside city limits where it cannot lawfully do so inside city limits In somewhat of a throwaway, the City argues that Art, XI, section 7’s bar on extraterritorial regulation does not apply when a city exercises its contracting power. Burns International Security Services Corp. v. County of Los Angeles, (2004) 123 Cal.App-4th 162, 167-78 (county could require contractors to pay employees for jury service, even those residing outside of the county); Amaral_v. Cintas Corp. No. 2, (2008) 163 Cal.App.4th 1157, 1174-78 (city could require contractors to provide living wage to all employees, including those who live or work outside of its borders). ‘The relationship between LBWD and its customers is contractual in nature. LBWD’s Rules and Regulations state that all customers “shall accept service subject to such Rules, applicable City ordinances, [and] State laws ....” City RIN Ex. E, pp. 5 (§ 201), 40 (§ 1101). By choosing to receive water and sewer service from the City, customers outside its boundaries agree that if the City’s charter, which is “the law of the State” (Art. XI, § 3(a)), may be applied to in-city customers, they will be bound by it as well. Opp. at 25. ‘The short answer is that (a) Measure M cannot be lawfully applied to in-city customers and (b) the City is not permitted to tax extratertitorially. Reply at 14."7 "" The City notes that, before Prop 218 was adopted, Art. XI, section 9 allowed municipal utilities to set utility rates at a level designed to make a reasonable profit from both in-city and out- of-city customers. Hansen, supra, 42 Cal.3d at 1180-90. In fact, cities could charge higher rates to out-of-city customers. Id, at 1183-87. Although Prop 218 restricts cities’ power to set utility rates, cities retain their full power under Art. XI, section 9 to recover any voter-approved profit from out-of-city users. Opp. at 25-26. However, as the City concedes, Hansen has been 23vote. Nonetheless, the general tax fails as a violation of Prop 218. The City has not met its burden to prove that its general tax -- This Prop 218 case is somewhat different in that the C and sewer service only after approval by its voters in a majori posed a general tax on water which is blended in utility charges and is not a commodity charge based on actual usage ~ is not imposed upon ratepayers as an incident of property ownership. Accordingly, it is prohibited by both Art. XIIID sections 3 and 6(b) (1), (2), and (5). Petitioners also have met their burden of showing that the City lacks constitutional authority to tax water customers outside its jurisdiction. The Petition is granted, Petitioners are entitled to (1) a mandate that directs the City set aside the Ordinance based on Measure M, (2) a judicial declaration that the City cannot impose general taxes, even with voter approval, upon parcels of property or upon persons as an incident of property ownership and that the City may not impose the general tax on any customers residing outside City limits, and (3) an injunetion that that commands the City to cease the transfer of Measure M rate revenue to its General Fund and to return all Measure M transfers from its General Fund to LBWDs Water and Sewer Revenue Funds. (Petitioners do not seek the additional remedy of restitution in favor of water and sewer ratepayers.) Petitioners’ counsel is ordered to prepare a proposed writ and judgment, serve it on the City's counsel for approval as to form, wait ten days after service for any objections, meet and confer if there are objections, and then submit the proposed judgment along with a declaration stating the existence/non-existence of any unresolved objections. An OSC re: judgment is set for February 20, 2020 at 9:30 a.m, superseded by Prop 218 and is no longer the law. Roseville, supra, 97 Cal.App.4" at 649; Redding, supra, 6 Cal.Sth at 18 (“Before the adoption of Propositions 218 and 26, the rule in California was that a municipal utility's “rates need not be based purely on costs. .. [article XIII C changed that rule. . .”). 24