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are intended to have the same meanings for purposes of Article XIIIC as for Article XIIID described below. If
<br />not, the scope of the initiative power under Article XIIIC potentially could include any general fund local tax,
<br />assessment, or fee not received from or imposed by the federal or State government or derived from investment
<br />income. The City does not levy any property related "fees" or "charges" that it considers subject to challenge
<br />under Article XIIIC.
<br />The voter approval requirements of Proposition 218 reduce the flexibility of the City to raise revenues for
<br />its general fund, and no assurance can be given that the City will be able to impose, extend, or increase taxes in
<br />the future to meet increased expenditure needs.
<br />Article XIIID also added several new provisions relating to how local agencies may levy and maintain
<br />"assessments" for municipal services and programs. These provisions include, among other things, (i) a
<br />prohibition against assessments which exceed the reasonable cost of the proportional special benefit conferred on
<br />a parcel, (ii) a requirement that the assessment must confer a "special benefit," as defined in Article XIIID, over
<br />and above any general benefits conferred, and (iii) a majority protest procedure which involves the mailing of a
<br />notice and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of ballots
<br />weighted according to the proportional financial obligation of the affected party. "Assessment" in Article XIIID
<br />is defined to mean any levy or charge upon real property for a special benefit conferred upon the real property and
<br />applies to landscape and maintenance assessments for open space areas, street medians, street lights, and parks.
<br />In addition, Article XIIID added several provisions affecting "fees" and "charges," defined for purposes
<br />of Article XIIID to mean "any levy other than an ad valorem tax, a special tax, or an assessment, imposed by [a
<br />local government] upon a parcel or upon a person as an incident of property ownership, including a user fee or
<br />charge for a property related service." All new and existing property related fees and charges must conform to
<br />requirements prohibiting, among other things, fees and charges which (i) generate revenues exceeding the funds
<br />required to provide the property related service, (ii) are used for any purpose other than those for which the fees
<br />and charges are imposed, (iii) are for a service not actually used by, or immediately available to, the owner of the
<br />property in question, or (iv) are used for general governmental services, including police, fire, ambulance, or
<br />library services, where the service is available to the public at large in substantially the same manner as it is to
<br />property owners. Depending on the interpretation of what constitutes a "property related fee" under Article XIIID,
<br />there could be future restrictions on the ability of the City to charge its respective enterprise funds for various
<br />services provided. Further, before any property related fee or charge may be imposed or increased, written notice
<br />must be given to the record owner of each parcel of land affected by such fee or charge. The City must then hold
<br />a hearing upon the proposed imposition or increase, and if written protests against the proposal are presented by
<br />a majority of the owners of the identified parcels, the City may not impose or increase the fee or charge. Moreover,
<br />except for fees or charges for wastewater, water, and refuse collection services, or fees for electrical and gas
<br />service, which are not treated as "property related" for purposes of Article XIIID, no property related fee or charge
<br />may be imposed or increased without majority approval by the property owners subject to the fee or charge or, at
<br />the option of the City, two-thirds voter approval by the electorate residing in the affected area.
<br />The City does not believe that the provisions of Article XIIIC or Article XIIID will directly impact the
<br />Gas Tax Revenues available to the City to make debt service payments on the Bonds required pursuant to the
<br />Indenture.
<br />Future Initiatives
<br />Article XIIIB, Article XIIIC, and Article XIIID were each adopted as measures that qualified for the ballot
<br />pursuant to the State's Constitutional initiative process. From time to time other initiative measures could be
<br />adopted, affecting the ability of the City to increase or apply revenues and to make or increase appropriations.
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