ITEM NO. 6
.png) |
CITY COUNCIL STAFF REPORT |
| TO: |
Honorable Mayor and Members of the City Council |
|
| FROM: |
Arron Brown, City Manager |
|
| BY: |
Sheryl Garcia, Administrative Services Director/City Clerk |
|
| DATE: |
11/12/2025 |
|
| SUBJECT: | Second Reading and Adoption of Ordinance No. 263 - An Ordinance of the City Council of the City of Canyon Lake, California, Repealing Sections 3.26.090 (Water Users’ Tax) and 3.26.100 (Sewer Users’ Tax) of the Canyon Lake Municipal Code
|
|
Recommendation:
Conduct second reading and adopt Ordinance No. 263 - An Ordinance of the City Council of the City of Canyon Lake, California, Repealing Sections 3.26.090 (Water Users’ Tax) and 3.26.100 (Sewer Users’ Tax) of the Canyon Lake Municipal Code.
Background/Analysis:
At the September 23, 2025, City Council meeting, the City Council approved the first reading of Ordinance No. 263, Repealing Sections 3.26.090 (Water Users’ Tax) and 3.26.100 (Sewer Users’ Tax) of the Canyon Lake Municipal Code.
In Beck v. City of Canyon Lake (2025) (D083322), the California Court of Appeal, Fourth District, held that the water and sewer UUT was unconstitutional under Article XIII D of the California Constitution (Proposition 218). The Court found the tax was imposed “as an incident of property ownership,” and because revenues were used for general governmental services beyond the cost of water and sewer, the UUT violated several provisions of Article XIII D, section 6. The Court further emphasized that voter approval under Article XIII C does not override Article XIII D’s independent restrictions.
Although voters twice approved the tax, the Court held it unconstitutional. The provisions remain codified in the Municipal Code. Adoption of the proposed ordinance is necessary to repeal Sections 3.26.090 and 3.26.100, thereby removing provisions the Court has declared unconstitutional and ensuring the Municipal Code is consistent with the law.
In Beck v. City of Canyon Lake (2025) (D083322), the California Court of Appeal, Fourth District, held that the water and sewer UUT was unconstitutional under Article XIII D of the California Constitution (Proposition 218). The Court found the tax was imposed “as an incident of property ownership,” and because revenues were used for general governmental services beyond the cost of water and sewer, the UUT violated several provisions of Article XIII D, section 6. The Court further emphasized that voter approval under Article XIII C does not override Article XIII D’s independent restrictions.
Although voters twice approved the tax, the Court held it unconstitutional. The provisions remain codified in the Municipal Code. Adoption of the proposed ordinance is necessary to repeal Sections 3.26.090 and 3.26.100, thereby removing provisions the Court has declared unconstitutional and ensuring the Municipal Code is consistent with the law.
- Fiscal Impact Yes/No:
- No
Additional Fiscal Information:
Adoption of the ordinance will ratify the repeal of the water and sewer users’ taxes, and the revenue loss has already been accounted for in the City’s budget.