Has Madera County ignored Proposition 13?

A new county ordinance requiring residents in the unincorporated areas of Madera County, including Oakhurst, Fresno, Flats, Indian Lakes Park, and Yosemite Lakes Park, to pay for trash disposal services begs the question behind the legality of the imposed fee.

A letter sent out by the public works department last week outlined the county’s reasons for a mandated trash service citing California Law AB341 which requires Madera County to divert 75% of solid waste (trash) from disposal by the year 2020.

Because of this law, passed in 2011, the county has an obligation to comply with the quickly approaching deadline. In order to expedite recycling and waste diversion in Madera County, the Board of Supervisors has approved an ordinance that will require recycling service in certain high density areas.

Starting no later than July 1, 2015 pockets of high density areas in Eastern Madera County, where as many as 35% of residents do not subscribe to disposal services, will join the city of Madera and Chowchilla in having a mandatory waste disposal service. But is this service legal?

Marc Sobel, of Oakhurst, believes this fee is in direct violation of Proposition 13 passed by voters in 1978 and Prop 218 passed by voters in 1996.

“The law limits the ability of local agencies to impose certain property-related fee and assessments without prior property owner consent,” Sobel said.

Nearly two decades ago, Proposition 13 sharply constrained local governments’ ability to raise property taxes, the mainstay of local government finance. Proposition 13 also specified that any local tax imposed to pay for specific governmental programs--a “special tax”-- must be approved by two-thirds vote of legislation.

The law allows for government entities to charge a fee for certain services but only when those fees are optional and only when the charges for those fees can only offset the cost of providing a service.

However, during a Sept. 23, 2014 Board of Supervisors meeting county consultants discussed the implementation of this mandatory service and the counties ability to use funds generated from the mandated services to pay for police, fire suppression costs and other county related issues. A direct violation of Prop 13.

In another violation of law the county has decided to charge a 6% franchise fee to cover the costs of implementation and rolling out the services, a fee they had been charging to Red Rock Disposal Services for years but were not applying to the Eastern Madera County service provider, Emadco.

This fee is to be paid by the franchise providing service, in this case Emadco and Red Rock, and can only legally be used towards the actual cost of providing waste disposal services, or anything under that scope of service. The 6% taken from the service providers gross income, and can be equated to roughly $500,000 annually for the county to be used for waste disposal services. With most waste disposal cost included in the cost of service the question begged to be answered is what is the county’s cost of implementing services?

Many counties and cities require mandatory trash services which are similar to what has been proposed by the Madera County, however those cities and county services, such as Tulare County predate Prop 218 and Prop 13 and were grandfathered in allowing this tax to be applied legally in those areas.

Though the county has an obligations and right to mandate services for area residents under Proposition 218 the government is required to first obtain approval of property owners in a local ballot measure before levying a new or increasing a tax assessment on those property owners. Something the county failed to do before approving the service beginning July 1.

Prior to Proposition 218, cities and counties were not required to obtain approval from property owners before levying special tax assessments on them and their property. But in 1996 the people of California voted to better protect property owners from unfair taxation by requiring a special district vote to apply new property related taxes. According to Prop 218, Special Districts include: sewer, lights, water, road and trash service and need to include property owners in the decision making and voting for adding mandated services to their area.

In 2006, the California Supreme Court elaborated on that provisions as it applies to local water, refuse and sewer charges. Local government agencies are not able to charge one group of water, refuse or sewer rate payers in order to subsidize the fees of another group, refuse or sewer users. Something the county has failed to observe by lowering the cost of current subscribers by adding more subscribers with mandated service.

According to Sobel, the county has chosen to ignore California law by not obtaining property owners vote and approval to apply a service fee/tax. A decision that much like the fire fee could potentially land them in a lawsuit.

While several supervisors and consultants believe they are in good standing with Proposition 13 the state/local government bears the burden of providing evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity. So what are the costs connected to waste disposal in Madera County?

Instead the county used PRC as their authority. But Public Resource Code 41901 makes clear: A city, county, or city and county may impose fees in amounts sufficient to pay the costs or preparing, adopting, and implementing a countywide integrated waste management plan prepared pursuant to this division. The fees shall be based on the types or amounts of the solid waste, and shall be used to pay the actual costs incurred by the city or county in preparing, adopting and implementing the plan, as well as in setting and collecting the local fees.

Despite suggestions from several local residents on legal implementation of this service, on Dec. 2, 2014 the Madera County Supervisors voted 5-0 amending Title 7 of the Madera County Code, requiring recycling and partial mandatory solid waste collection in designated high density areas.