Resident questions Exeter's utility tax

By Reggie Ellis

Is the City of Exeter in violation of California State Law?

That was the question raised by Bill Clinton of Exeter during the public comment period of the Exeter City Council's June 8 meeting. Clinton contends that the city's utility user tax - which charges a fee for sewer, water, electricity, gas and telephone - violates Propositions 218 and 62.

"I see it as the city having two choices," Clinton told the council. "Repeal the utility tax or put it on the ballot to be voted on by the citizens this November."

Approved by voters in 1986, Prop. 62 was a ballot initiative that closed loopholes in the property tax protection laws instituted in Prop. 13 eight years earlier. Prop. 62 required local governments to put any general taxes on the ballot for voter approval by a simple majority. However, the law was not a constitutional amendment so, after several legal challenges, was ruled to have no bearing on charter law cities. City Attorney Steve Kabot explained that charter law cities are not governed by statutory law and therefore derive their power directly from the state Constitution.

In 1996, voters approved Prop. 218, titled the "Right To Vote On Taxes Act." The proposition stated that any local government taxes or tax increases instituted after Jan. 1, 1996 must be approved by voters - two thirds for special use taxes and simple majority for general use taxes. Prop. 218 was a Constitutional Amendment that affected charter law cities.

The utility user tax was approved by the city council in 1994 - after Prop. 62 and before Prop. 218. But the city did not pass its charter until November 1998. Clinton said this would put the city under the provisions of 1996's Prop. 218.

Article IV, Section 4.1 of the charter states, "No City tax shall be imposed or increased in rate by the City Council without an affirming vote of the voters as required by applicable State law and California Constitution provisions."

However, the charter clearly states that all laws prior to the charter are grandfathered out of charter restrictions. Article V, Section 5.5 states, "All City Ordinances, resolutions, rules, regulations and agreements which are in force when this Charter becomes effective shall remain in effect until repealed." The City Charter also supercedes any "court order or decision which does not apply specifically to home rule charter cities under the Constitution of California."

Exeter's charter was recommended by a Citizens Charter Advisory Committee. Members were James Andrews, Ruby Clinton, Ernie Hernandez, Retta Niday, Seldon Kempton, Floyd Brown, Clifford Good, Margaret Mercer and Tom Powell.

Kabot said there is still no legal argument for either because both laws were passed after the tax was created.

"Prop. 218 has no application to Exeter's [utility user] tax unless the city tried to increase the tax," Kabot said. "Our position is that Exeter's utility user tax is valid now."

Kabot did say that some cities have put existing local taxes onto the ballot but that it was not required under the current interpretation of the law.

While the City of Exeter contends it is not in violation of any laws, the people of Exeter do have recourse if they are unhappy with the city's charter. Article V, Section 5.4 states that the city's charter "may be amended by majority vote of the City's voters." Amendments can be proposed by council ordinance, voter initiative or by a Charter Commission. A copy of the City Charter of the City of Exeter can be picked up at city hall, located at 137 N. F St.

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