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The California Court of Appeal, First Appellate District, recently considered whether a public entity filed a timely challenge to an increase in public utilities fees. (Regents of the University of California v. The City & County of San Francisco (2004 Daily Journal, D.A.R. 2197, Cal. App. 1 Dist., January 22, 2004).
Facts
On July 1, 1996, the City of San Francisco increased its water and sewer rates through two resolutions of the San Francisco Board of Supervisors. In March 2000, the Regents of the University of California filed a lawsuit challenging the increased fees. The trial court granted summary judgment to City because the Regents’ lawsuit was untimely. The Regents appealed.
Appellate Court Decision
Public utilities may charge public entities capital facilities fees. A lawsuit seeking a refund for excessive fees must be filed within 120 days of “an ordinance, resolution, or motion adopting a new fee or service charge, or modifying or amending an existing fee or service charge, adopted by a local agency.” (Gov. Code § 66022) Here, the increased fees were adopted and imposed by resolutions on July 1, 1996, and the public utility gave public notice that part of the fees would be spent for capital costs. Therefore, Regents had 120 days from that date to judicially challenge the fees. Thus, Regents’ lawsuit was untimely because it was filed nearly four years after the resolutions.
The Court rejected Regents’ argument that the 120-day statute of limitations began to run when City passed its 1999 annual budget resolution. According to the Court, the annual budgets did not set or impose the increased fees; they simply set forth “how much of the revenues from the capital fee would be allocated to capital for any given year due to complex budget concerns.”
Therefore, because Regents’ lawsuit was untimely, the Court affirmed the summary judgment in favor of City.
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