Howard Jarvis Taxpayers Ass'n v. City of Fresno

This is an appeal from judgment for plaintiffs and respondents Howard Jarvis Taxpayers Association and others (collectively plaintiffs), entered on the parties’ cross-motions for summary judgment. Appellant City of Fresno (Fresno) contends on appeal that its assessment of a fee in lieu of property taxes upon its own utility departments is unaffected by Proposition 218, the Right to Vote on Taxes Act, approved by the voters in 1996. Plaintiffs contend the fee is prohibited by Proposition 218, as the trial court ruled. We conclude the fee, in its present form, violates the constitutional provisions adopted through Proposition 218. We affirm the judgment.

FACTS AND PROCEDURAL HISTORY

A. The Fee in Lieu of Property Taxes

Fresno is a charter city. In 1957, the voters approved a charter provision governing municipally owned utilities. Section 1218 of the city charter, as adopted in 1957 and currently, requires that the city “endeavor to make each municipally owned utility financially self-sustaining.” It also provides that, after payment of enumerated expenses and funding of enumerated reserves, “each utility shall apply all annual profits thereafter remaining to rate…