Environmental Law & Policy Alerts – Update from Somach, Simmons & Dunn

February 10, 2021

Court of Appeal Holds that a City’s Surcharge for Utility Services to Cover Voter Approved General Tax on Revenues from Customer Fees and Charges Did Not Violate Proposition 218

The Court of Appeal for the Third Appellate District recently ruled in Wyatt v. City of Sacramento that a City’s imposition of a surcharge in the form of a “general tax” on property-related utility services payable to the City’s general fund did not violate Proposition 218.  The appellate court decision confirms that a surcharge imposed on a utility enterprise is a cost of providing utility services and is therefore properly part of the Prop. 218 analysis of determining whether revenues exceed funds required to provide the services.  The decision further clarifies that, even when revenues from such a surcharge are transferred to a general fund, they do not necessarily violate Proposition 218’s prohibition on funding general governmental services if the surcharge is imposed for specific utility services…. Read More

Written by Kyler C. Rayden