Technical Assistance Memorandum Funding Stormwater Programs under Proposition 218 (May 2014)

This memorandum is intended to briefly answer this question: May some or all of a city’s obligations to develop and implement stormwater management plans to reduce discharge of pollutants into federal and state waters be funded by property-related water or sewer service fees subject to Proposition 218? The authors of this memorandum conclude that, under existing law, the answer is “yes,” to the extent implementation of the plan produces or sufficiently relates to either “water” service as defined in Cal. Gov. Code § 53750, subdivision (m); or to sewer service.

However, if a stormwater program provides only environmental benefits — for example, by treating runoff to avoid polluting federal or state waters — water and sewer fees cannot be used for stormwater program costs, and a fee for this purpose will require voter or property owner approval under Proposition 218 (Cal. Const. art. XIII D, § 6, subd. (c).)

Whether a particular use of the proceeds of property-related water or sewer service fees is permissible under Proposition 218 is ultimately a question of fact to be decided on the basis of the a city’s rate making administrative record. Accordingly, cities are well advised to develop records to support their fees that include ample evidence to support the intended use of the proceeds of those fees.