Monday, January 18, 2010

Supplemental Assessment Violates Prop. 218

In Town of Tiburon v. Bonander (here), the Court of Appeal held that a supplemental special assessment violated the proportionality requirement of Article XIII D, Section 4(a). The court first found that the assessment was properly imposed to pay for the special benefits conferred by undergrounding utilities, and that the benefit conferred was not "general" merely because properties throughout the district shared the same benefit. With respect to proportionality, however, the court found two flaws. First, the assessment engineer created three "zones," based on cost, so that properties in the high cost area paid more for the same benefit. However, the court held that dividing up the assessment area by cost zones violated the provision in Article XIII D. Section 4(a), which requires that the assessment be based on "the entirety of the capital cost of a public improvement." Properties that receive the same special benefit should pay the same assessment, even if the cost to serve those properties is greater. Second, the Town excluded some properties from the assessment district even though they received a benefit from undergrounding. Although the utilities in the areas in which these properties were located were already underground, they received reliability and safety benefits from the undergrounding of the larger area.

This case raises a number of interesting issues in the area of assessment proportionality. Although it may be a little fact-specific, I wouldn't be surprised if the Supreme Court granted review.