Associated Homebuilders of the Greater East Bay, Inc. v. City of Livermore

366 P.2d 448, 56 Cal. 2d 847, 17 Cal. Rptr. 5, 1961 Cal. LEXIS 346
CourtCalifornia Supreme Court
DecidedNovember 16, 1961
DocketS. F. 20414
StatusPublished
Cited by24 cases

This text of 366 P.2d 448 (Associated Homebuilders of the Greater East Bay, Inc. v. City of Livermore) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Associated Homebuilders of the Greater East Bay, Inc. v. City of Livermore, 366 P.2d 448, 56 Cal. 2d 847, 17 Cal. Rptr. 5, 1961 Cal. LEXIS 346 (Cal. 1961).

Opinion

*850 SCHAUER, J.

Defendant City of Livermore appeals from a judgment which declares unconstitutional and void two of its ordinances providing for sewer connection charges for new connections to defendant’s sewer system, and awards plaintiff Associated Homebuilders the sum of $102,700, which the trial court found to be the total amount paid to defendant by plaintiff’s assignors under both ordinances.

Defendant contends that the subject legislation (Ordinance 332, adopted in 1956, superseded by Ordinance 382, adopted in 1958) is valid both as a proper exercise of the taxing power vested in defendant by section 5471 of the Health and Safety Code (post, fn. 1) and as a proper exercise of the police power (Cal. Const., art. XI, § 11); that the classification established by Ordinance 332 was not discriminatory; and that in any event plaintiff may not recover those charges which its assignors paid without formal protest. We have concluded that section 5471 of the Health and Safety Code authorizes the legislation here challenged; and that plaintiff failed to sustain the burden of showing that Ordinance 332, as applied, discriminated against its assignors. In the premises we do not reach the questions of whether these enactments might also be sustained as police power measures or whether formal protest would have been a condition precedent to recovery.

On April 9, 1956, the Livermore City Council adopted Ordinance 332, which imposed a charge of $150 a “dwelling unit” for all connections thereafter made to the Livermore sewer system. The term “dwelling unit” was defined to include “each single family dwelling, and each unit of an apartment, flat or multiple dwelling structure used for human habitation. ’ ’ Section 3 of the ordinance created a “Sanitation Fund” into which all sewer connection charges collected were to be deposited. This special fund was to be used “for the purpose of expanding the sanitary sewer system of the City of Livermore and/or the servicing of any bonded indebtedness of the City of Livermore hereinafter incurred for sanitary sewer purposes.” Section 4 made payment of the connection charge a prerequisite to the issuance of a building permit.

On July 7, 1958, Ordinance 382 was adopted by the Liver-more City Council, expressly repealing Ordinance 332. Like the measure it supersedes, Ordinance 382 imposes a sewer connection charge of $150 a dwelling unit, but in addition sets up a schedule of such charges for commercial and industrial users as well. Section 3 of this ordinance provides for a “Sewer *851 Expansion Fund” into which all sewer connection charges collected are to be deposited; and the use of the fund is again restricted to “expanding the sanitary sewer system of the City of Livermore and/or the servicing of any bonded indebtedness of the City of Livermore hereinafter incurred for sanitary sewer purposes. ’ ’ As with the prior measure, section 4 of the ordinance provides that building permits shall issue only upon payment of the sewer connection charge. Other sections provide for reimbursement to sub dividers or other property owners who are required to construct a sewer main of a larger capacity than the minimum needed to serve such subdivision or other property, by levying a prorated charge against other parcels of land benefited by the increased capacity thus furnished.

At the time of the adoption of the subject legislation other ordinances of defendant city provided for sewer construction inspection fees, “annexation fees” (imposed on property annexed to defendant for such property’s share of existing capital improvements), and charges for the extension of street or house laterals. General obligation bonds were issued in 1957 to defray the cost of sewer plant construction and trunk and interceptor line installation.

Plaintiff’s assignors, all residential builders, paid the sewer connection charges required by Ordinances 332 and 382 as a prerequisite to the issuance of building permits. Some of these payments were expressly made under protest, while others were not. Plaintiff obtained a judgment declaring the subject ordinances to be unconstitutional and allowing recovery of all payments made thereunder to defendant.

The trial court “found” (i.e., concluded) that each ordinance was a revenue measure rather than a police power enactment and that defendant, as a general law city, was “without statutory or constitutional authority” to enact such ordinances under its taxing power. Article XI, section 12, of the California Constitution provides in relevant part that “Except as otherwise provided in this Constitution, the Legislature shall have no power to impose taxes upon counties, cities, towns or other public or municipal corporations, or upon the inhabitants or property thereof, for county, city, town, or other municipal purposes, but may, by general laws, vest in the corporate authorities thereof the power to assess and collect taxes for such purposes.” Defendant contends that, pursuant to this constitutional provision, power to levy sewer connection *852 charges for revenue purposes was vested in the City of Liver-more by section 5471 of the Health and Safety Code. 1

The contention must be sustained. The manifest purpose of section 5471 is to provide revenues for the construction and maintenance of local water or sewer systems (other than “local street sewers or laterals”). The subject ordinances declare 2 that their purpose is “To establish appropriate provisions for the construction and expansion of the sanitary sewer system of the City of Livermore, . . .” The charges which they impose to achieve this end are denominated “Connection Charges For The Privilege Of Connecting To” defendant’s sewer system. As noted above, the funds thus raised are dedicated to “expanding the sanitary sewer system” of defendant city and “the servicing of any bonded indebtedness” of defendant incurred for sewer purposes. Such charges fall within the stated scope of section 5471 and are authorized by it as “fees ... or other charges for services and facilities furnished by [defendant city] ... in connection with its sanitation or sewerage systems; . . .” In any given case the charge prescribed by the subject ordinances is measured by the use to which the property (and consequentially the city’s sewer system) will be put, including the number and type of plumbing fixtures to be installed. Accordingly, it does not constitute an assessment on the value of the property, such as we considered in City of Los Angeles v. Offner (1961) 55 Cal.2d 103 [10 Cal.Rptr. 470, 358 P.2d 926], but rather is in the nature of an excise tax imposed on all persons thereafter applying for building permits for the privilege of con *853 neetion to (and is reasonably commensurate with the burden to be imposed on) the facilities of defendant’s sewer system.

Plaintiff and amici curiae contend that the legislative history of Health and Safety Code, sections 5471 and 5474, 3 demonstrates that sewer connection charges were not intended to be included within those authorized by the former section.

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Bluebook (online)
366 P.2d 448, 56 Cal. 2d 847, 17 Cal. Rptr. 5, 1961 Cal. LEXIS 346, Counsel Stack Legal Research, https://law.counselstack.com/opinion/associated-homebuilders-of-the-greater-east-bay-inc-v-city-of-livermore-cal-1961.