The California Attorney General recently issued two opinions concerning municipal authority to charge other agencies for certain services and to contract with a county regarding the city’s sphere of influence. [Opinions No. 01-106 (April 16, 2001) and No. 00-108 (May 18, 2001)]
Opinion No. 01-106: Pollution Abatement Charges
Opinion No. 01-106 addressed whether a city may impose pollution abatement charges against property within a city’s boundaries, owned by school districts or the state Department of Transportation (DOT), in order to fund the city’s activities in meeting federal stormwater discharge requirements. The Attorney General answered a qualified “yes” as to school district property, finding a city may impose such charges as long as the revenues generated are not used for constructing capital improvements. A city may not, however, impose abatement charges against DOT-owned property, because DOT is subject to the same federal requirements as the city.
The need for abatement charges arose from federal clean water regulations requiring a city to limit the amount of pollution it discharges from storm sewers. Federal regulations also require cities to implement certain practices, such as monitoring chemicals in stormwater runoff and collecting household hazardous waste. One source of funding for such activities is a “pollution abatement charge” assessed against property owners as part of a city’s utility services.
Even though the California Constitution exempts public entities from property taxes and, by implication, special assessments for capital improvements, the Attorney General found that, as long as the funds generated from pollution abatement charges are not used to defray capital construction costs, the charges are neither taxes nor special assessments. Rather, they are “user fees” (i.e., fees for goods and services, from which public entities generally are not exempt). Thus, as long as a city does not use the funds for capital improvement projects, it may assess the abatement charge against property owned by school districts.
Different from a school district, DOT is fully exempt from such charges; however, because DOT has specific obligations to comply with federal stormwater regulations similar to those of a city, a city has no responsibility for DOT’s activities under the federal requirement – and, therefore, no basis to levy “user” fees against DOT property to fund the city’s own compliance activities. Accordingly, said the Attorney General, a city may not assess such charges against DOT-owned parcels of land.
Opinion No. 00-108: Agreements as to City’s “Sphere of Influence”
Opinion No. 00-108 addressed a city’s ability to enter into an agreement with a county respecting specific changes in the city’s “sphere of influence” boundaries and expressing the intent to jointly agree to such boundaries in the future. The Attorney General affirmed that a city and a county may enter such an agreement, but clarified that LAFCO retains ultimate authority to determine the boundaries in question.
The Attorney General’s analysis focused on LAFCO’s purpose as well as the procedures it must follow. Among LAFCO’s duties is the delineation of “spheres of influence” for local agencies within a county, including cities. A “sphere of influence” is a “plan for the probable physical boundaries and service area” of a city or other agency, and one of LAFCO’s duties is to promote logical and orderly development within each agency’s sphere.
The statute setting forth the procedures LAFCO must follow (Government Code section 56425) encourages cities and counties to meet and reach an agreement as to their respective spheres of influence before the issue is presented to LAFCO. LAFCO must, then, give “great weight” to the agreement in making its determination. Because section 56425 expressly contemplates such city-county agreements, said the Attorney General, an agreement between a city and county concerning a city’s sphere of influence – including a provision expressing intent to “jointly agree” in the future – clearly would be valid. Any such agreement, however, would remain subject to LAFCO’s ultimate authority to determine a city’s sphere of influence boundaries.
If you have any questions about this Legal Alert, please contact Ann Siprelle or any attorney in the Public Agency Department at (916) 321-4500.