The opinion
Filed 5/30/25
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
ROBERT GLUCK et al.,
Plaintiffs and Appellants,
v.
CITY AND COUNTY OF SAN A170087
FRANCISCO,
(City & County of San Francisco
Defendant and Respondent;
Super. Ct. No. CGC-23-609954)
San Francisco has a combined sewer system that collects and treats
both wastewater and stormwater in the same network. (City and County of
San Francisco v. Environmental Protection Agency (2025) 604 U.S. ___ [145
S.Ct. 704, 707] (Environmental Protection Agency) [detailing combined
system]; Edward Brown & Sons v. City and County of San Francisco (1950)
36 Cal.2d 272, 274 (Edward Brown & Sons) [describing “combined storm and
sanitary sewers”].)
In 1996, California voters approved Proposition 218, also known as the
“Right to Vote on Taxes Act.” (Ballot Pamp., Gen. Elec. (Nov. 5, 1996) text of
Prop. 218, § 1, p. 108.) Proposition 218 added certain provisions to the
California Constitution for property-related charges imposed by local
government. (Ballot Pamp., § 4, pp. 108–109.) These provisions included
(1) a voter approval requirement for the imposition or increase of property-
related charges, except for “sewer, water, and refuse collection services,” and
(2) a proportionality requirement that property-related charges “shall not
1
exceed the proportional cost of the service attributable to the parcel.” (Cal.
Const., art. XIII D,1 § 6, subds. (b)–(c) (“art. XIII D, sections 6(b)–(c)”).)
Plaintiffs Robert Gluck and Adam Hertz filed this class action against
defendant City and County of San Francisco (City) challenging the
constitutionality of City’s sewer charges related to one aspect of its combined
sewer system: stormwater. The first three causes of action relied on the
premise that stormwater services funded by the City’s sewer charges were
not “sewer” services covered by the exception to Proposition 218’s voter
approval requirement. The fourth cause of action alleged that City’s charges
failed Proposition 218’s proportionality requirement because they recovered
stormwater costs through sewer rates that were based only on wastewater
cost factors. The fifth cause of action sought declaratory relief related to
these alleged violations of Proposition 218. City demurred to the complaint,
which the trial court sustained without leave to amend.
On appeal, plaintiffs argue their allegations should have survived
City’s demurrer. We affirm the judgment as to plaintiffs’ first three causes of
action, concluding City’s combined sewer system provides “sewer” services
falling within the voter approval exception of article XIII D, section 6(c). But
we reverse as to plaintiffs’ fourth and fifth causes of action, concluding City
did not establish that plaintiffs’ allegations regarding City’s sole reliance on
wastewater factors to support charges recovering costs for stormwater
services are insufficient as a matter of law to establish a violation of the
proportionality requirement of article XIII D, section 6(b)(3).
1 Further citations to “articles” refer to those in the California
Constitution.
2
FACTUAL AND PROCEDURAL BACKGROUND
A. City’s Combined Sewer System
San Francisco has a combined sewer system, which collects and treats
wastewater and stormwater in the same network. (Environmental Protection
Agency, supra, 145 S.Ct. at p. 707.) San Francisco is the only coastal city in
California with a combined sewer system, which began over a century ago.
To support development from the California Gold Rush in the 1850s, the
system was designed to carry wastewater and stormwater flows to the
shoreline. By 1899, over 300 miles of combined sewer lines had been
completed. The city’s master plan in 1935 led to the construction of the first
treatment plants as well as additional sewer lines, creating a total collection
system of approximately 900 miles.
Today, the San Francisco Public Utilities Commission (SFPUC) is the
public agency that provides sewer services to the city. The combined
wastewater and stormwater flows are carried by sewer pipes for treatment at
one of SFPUC’s treatment facilities. The final flows are then pumped for
discharge to the San Francisco Bay and Pacific Ocean. This system can
present challenges. During periods of heavy precipitation, for example, the
combination of wastewater and stormwater flows may exceed system capacity
and result in the discharge of untreated water. (Environmental Protection
Agency, supra, 145 S.Ct. at p. 707.)
To operate, maintain, and finance this combined sewer system, SFPUC
sets sewer rates charged to its users. In 2018, SFPUC conducted a cost-of-
service study to determine “appropriate” sewer rates. Its resulting report
explained, among other things, that costs attributable to certain “functional
cost categories”—“primarily related to flow, strength, and customer service”—
must be measured at the SFPUC facilities and estimated for each user.
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These functional cost categories referenced costs incurred in treating
wastewater: handling the volume of flows “discharged to or collected by the
system”; removal and disposal of total suspended solids (“TSS”) or non-
filterable residue in wastewater; cleaning, treatment, and disposal of fats, oil,
and grease (“FOG”); the chemical oxygen demand (“COD”) of microbial
organisms as they oxidize the organic matter present in wastewater; and
customer service, such as accounting, billing, administrative, and technical
support.
The 2018 report sought to provide a “rational basis” for distributing
sewer costs to each customer class “in proportion to the demands they place
on the systems.” But because “explicit stormwater charge dollar values were
challenging to identify for most agencies,” the stormwater charges “were not
isolated from wastewater charges in the rates table.” Thus, the proposed
rates for sewer charges reflected “combined sanitary sewer and stormwater
sewer costs.”
Five years later, SFPUC conducted a new study on sewer rates in order
to “[d]evelop and introduce a stormwater charge to recover costs associated
with wet weather flows and treatment.” The ensuing 2023 report explained:
“The SFPUC has historically recovered stormwater-related costs through
wastewater rates. In this study, the stormwater-related portion of the sewer
cost of service has been calculated to enable the split of the sewer rates into
wastewater rates and stormwater charges.” By splitting these costs, the
report stated, “SFPUC will be able to enhance the equity in its rate structure
by establishing a stormwater [charge] in addition to its wastewater rates.”
The 2023 report described proposed sewer rates based on flow and
strength factors. It then identified a new stormwater charge structure, with
“Simplified” tiers for residential customers based on parcel size and the
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average amount of permeable and impermeable area for parcels within each
tier, and “Standard” rates for non-residential customers based on actual
square footage of permeable and impermeable area. These rates were
designed to recover $301,471,528 in wastewater service costs and $87,719,197
in stormwater service costs for fiscal year 2024. Because the proposed rate
structure changes “would result in significant bill impacts on customers with
parcels that have large impermeable surface areas,” the 2023 report
indicated such changes “should take place over a few years instead of all at
once” given SFPUC’s Ratepayer Assurance Policy principles of Affordability
and Predictability.
B. Plaintiffs’ Complaint
In October 2023, plaintiffs filed a class action complaint alleging that,
starting four months prior and continuing over a seven-year period, City is
“phasing in” the new rate structure that separates stormwater charges from
wastewater charges. That is, new stormwater rates would fund one-seventh
of all stormwater costs beginning in July 2023, with the proportion increasing
each year until the new rates completely fund stormwater costs in the
seventh year. The complaint defines two prospective classes: (1) those who
paid City sewer or stormwater charges from October 2022 to June 2023, and
(2) those who paid City sewer or stormwater charges in or after July 2023.
The complaint includes five causes of action against City for purported
violations of the constitutional requirements for property-related charges
added by Proposition 218. The first cause of action alleges that City
improperly implemented this new rate structure for stormwater service
charges without submitting it for voter approval. (Art. XIII D, § 6(c).) The
second, third, and fourth causes of action appear to target the stormwater
charges City had imposed under the prior rate structure and is continuing to
5
impose while “phasing in” the new rate structure. The complaint describes
City’s “effort to eventually establish a proportionate stormwater rate” as “a
step in the right direction,” but alleges the California Constitution “does not
permit an additional 7 years of delay.”
The second and third causes of action allege that, by using sewer
charges to fund stormwater services, City had derived revenue from charges
that were excessive and used for an improper purpose. (Art. XIII D, § 6,
subds. (b)(1)–(2).) The fourth cause of action alleges that City’s charges were
disproportionate because they were based on wastewater factors (e.g., flow
and strength) but not stormwater factors (e.g., impermeable surface area).
(Art. XIII D, § 6, subd. (b)(3).)
The complaint seeks to recover refunds for “illegal charges” resulting
from City’s alleged Proposition 218 violations. It also requests various forms
of injunctive relief, as well as declaratory relief in a fifth cause of action,
regarding City’s imposition and collection of sewer and stormwater charges.
C. City’s Demurrer
City filed a demurrer to the complaint, arguing the first, second, and
third causes of action failed because City’s combined sewer system provides
“sewer” services under the exception to Proposition 218’s voter approval
requirement. To support its interpretation of the term “sewer” in article
XIII D, section 6(c), City cited Government Code section 53751.2 Section
53751 was added by Senate Bill No. 231 in 2017 and states the term “ ‘sewer’
should be interpreted to include services necessary to collect, treat, or dispose
of sewage, industrial waste, or surface or storm waters, and any entity that
2 Further undesignated statutory references are to the Government
Code.
6
collects, treats, or disposes of any of these necessarily provides sewer service.”
(§ 53751, subd. (m); Stats. 2017, ch. 536, § 2.)
City then argued the fourth cause of action was “impermissibly
uncertain” and did not allege facts showing the City’s sewer rates either
exceeded “the proportional cost of sewer services” or were unreasonable
under article XIII D, section 6(b). Finally, City asserted the fifth cause of
action for declaratory relief failed because it “depends entirely on allegations
in the other causes of action.”
Plaintiffs opposed the demurrer. As to their first three causes of action,
they argued that City had misclassified stormwater charges as “sewer”
charges and that City could not rely on Senate Bill No. 231 because it is
unconstitutional. Plaintiffs also argued they had alleged sufficient facts in
their fourth cause of action, stating: “No doubt discovery will be required in
order to complete analysis of the City’s disproportionate rate structure, but
the fact that stormwater costs continue to be recovered through sewer rates,
based on factors that are not relevant to the cost of managing storm drainage,
is sufficient to state a claim under Proposition 218.”
D. Trial Court’s Ruling
The trial court sustained the demurrer without leave to amend. In so
ruling, the court concluded the first, second, and third causes of action failed
because City’s combined sewer system provides “sewer” services not subject
to voter approval under Proposition 218. The court then found the fourth
cause of action also failed because the linchpin of the claim was the same:
that “wastewater and stormwater are distinct and stormwater management
is not a ‘sewer service.’ ” Then, having concluded all these “predicate claims”
failed, the court sustained the demurrer to the fifth cause of action for
7
declaratory relief, also without leave to amend. Judgment was entered for
City and against plaintiffs.
This appeal followed.
DISCUSSION
Plaintiffs raise two principal issues in this appeal. First, they argue
the trial court erred in sustaining the demurrer on their first three causes of
action because the stormwater services provided as part of City’s combined
sewer system are not “sewer” services excepted from the voter approval
requirement of article XIII D, section 6(c). Second, plaintiffs contend they
should have been permitted to proceed beyond the pleading stage and/or
given leave to amend their fourth cause of action on the proportionality
requirement in article XIII D, section 6(b). We begin with an overview of the
legal framework guiding our analysis: Proposition 218.
A. Legal Framework
“ ‘Proposition 218 can best be understood against its historical
background, which begins in 1978 with the adoption of Proposition 13.’ ”
(Apartment Ass’n of Los Angeles County, Inc. v. City of Los Angeles (2001) 24
Cal.4th 830, 836 (Apartment Ass’n).) Proposition 13 amended the California
Constitution by placing certain limitations on ad valorem property taxes
(taxes based on assessed value) and increases in assessed valuations.
(Apartment Ass’n, at p. 836.) “ ‘To prevent local governments from subverting
its limitations, Proposition 13 also prohibited counties, cities, and special
districts from enacting any special tax without a two-thirds vote of the
electorate.’ ” (Ibid.) But subsequent case law held that a “ ‘special
assessment’ ” was “ ‘not a special tax within the meaning of Proposition 13’ ”
and thus “ ‘could be imposed without a two-thirds vote.’ ” (Id. at pp. 836–
837.)
8
In 1996, California voters approved Proposition 218, known as the
“Right to Vote on Taxes Act,” which amended the state Constitution to
override such case law. (Ballot Pamp., Gen. Elec., supra, text of Prop. 218,
§ 1, p. 108; see Apartment Ass’n, supra, 24 Cal.4th at p. 837.) As the ballot
materials accompanying Proposition 218 explained: “Proposition 13 was
intended to provide effective tax relief and to require voter approval of tax
increases. However, local governments have subjected taxpayers to excessive
tax, assessment, fee and charge increases that not only frustrate the
purposes of voter approval for tax increases, but also threaten the economic
security of all Californians and the California economy itself. This measure
protects taxpayers by limiting the methods by which local governments exact
revenue from taxpayers without their consent.” (Ballot Pamp., § 2, p. 108.)
Thus, as the “progeny” of Proposition 13, Proposition 218 “ ‘buttresses’ ” the
constitutional limitations on ad valorem and special taxes “ ‘by placing
analogous restrictions on assessments, fees, and charges, ” and closing
“government-devised loopholes.” (Apartment Ass’n, at p. 837.)
Specifically, Proposition 218 added articles XIII C and XIII D to the
California Constitution. Sections 4 and 5 of article XIII D relate to
assessments levied by an agency on a parcel of property for a special benefit
conferred upon that property. Section 4 sets forth requirements and
procedures for such assessments. (Art. XIII D, § 4, subd. (a).) It provides,
among other things, that “[n]o assessment shall be imposed on any parcel
which exceeds the reasonable cost of the proportional special benefit
conferred on that parcel.” (Ibid.) It also requires that the agency send notice
of the proposed assessment, with a ballot whereby owners may indicate their
support or opposition to the proposed assessment. (Id., subd. (d).) The
9
assessment cannot be imposed if, considering these ballots and all protests at
a public hearing, a majority protest exists. (Id., subd. (e).)
Section 5 of article XIII D defines the effective date of Proposition 218
as “the day after the election unless otherwise provided” and specifies that
beginning July 1, 1997, “all existing, new, or increased assessments” shall
comply with the procedures and approval process set forth in section 4 of
article XIII D, subject to certain enumerated exemptions. One such
exemption names assessments “existing on the effective date of this article”
that were “imposed exclusively to finance the capital costs or maintenance
and operation expenses for sidewalks, streets, sewers, water, flood control,
drainage systems or vector control.” (Art. XIII D, § 5, subd. (a) (“art. XIII D,
section 5(a)”).)
Unlike these preceding sections regarding assessments that confer a
special benefit on a parcel, section 6 of article XIII D sets forth requirements
and procedures for property-related fees and charges imposed by an agency
“upon any parcel or person as an incident of property ownership,” including
“user fees or charges for a property related service.” (Art. XIII D, § 6,
subd. (b)(3); see also id. § 2, subd. (e) [defining “ ‘Fee’ ” or “ ‘charge’ ”].)
Section 6(b) of article XIII D imposes a proportionality requirement: “A fee or
charge shall not be extended, imposed, or increased by any agency unless it
meets all of the following requirements: [¶] (1) Revenues derived from the fee
or charge shall not exceed the funds required to provide the property related
service. [¶] (2) Revenues derived from the fee or charge shall not be used for
any purpose other than that for which the fee or charge was imposed.
[¶] (3) The amount of a fee or charge imposed upon any parcel or person as an
incident of property ownership shall not exceed the proportional cost of the
service attributable to the parcel.”
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And critically, section 6(c) of article XIII D imposes a voter approval
process for all new or increased property-related fees and charges, subject to
three exceptions: “Except for fees or charges for sewer, water, and refuse
collection services, no property related fee or charge shall be imposed or
increased unless and until that fee or charge is submitted and approved by a
majority vote of the property owners of the property subject to the fee or
charge or, at the option of the agency, by a two-thirds vote of the electorate
residing in the affected area.”
Proposition 218 also included an uncodified section expressly stating:
“The provisions of this act shall be liberally construed to effectuate its
purposes of limiting local government revenue and enhancing taxpayer
consent.” (Ballot Pamp., Gen. Elec., supra, text of Prop. 218, § 5, p. 109.)
With this legal framework in mind, we turn to the parties’ arguments
regarding these constitutionally-imposed voter approval and proportionality
requirements.
B. Voter Approval Requirement
Plaintiffs argue the trial court erred in sustaining the demurrer on
their first three causes of action because the stormwater services provided by
City’s combined sewer system are not “sewer” services under the exception to
Proposition 218’s voter approval requirement. The focus of this argument, in
opposition to the demurrer and on appeal, is that City cannot contend
otherwise by relying on Senate Bill No. 231’s definition of “sewer” because
that legislation is unconstitutional.
Typically, a litigant may challenge the constitutionality of a statute in
two ways: on its face or as applied. “A facial challenge to the constitutional
validity of a statute or ordinance considers only the text of the measure itself,
not its application to the particular circumstances of an individual.” (Tobe v.
11
City of Santa Ana (1995) 9 Cal.4th 1069, 1084 (Tobe).) The law requires us to
examine the “facial requirements” of the statute in order to determine
whether its provisions “ ‘ “inevitably pose a present total and fatal conflict
with applicable constitutional prohibitions.” ’ ” (Ibid., citing Arcadia Unified
School Dist. v. State Dept. of Education (1992) 2 Cal.4th 251, 267.)
Unlike a facial challenge, an “as applied” challenge may seek “relief
from a specific application of a facially valid statute or ordinance to an
individual or class of individuals who are under allegedly impermissible
present restraint or disability as a result of the manner or circumstances in
which the statute or ordinance has been applied[.]” (Tobe, supra, 9 Cal.4th at
p. 1084.) An as applied challenge “contemplates analysis of the facts of a
particular case or cases to determine the circumstances in which the statute
or ordinance has been applied and to consider whether in those particular
circumstances the application deprived the individual to whom it was applied
of a protected right.” (Ibid.)
Here, plaintiffs present an as applied challenge to Senate Bill No. 231:
they argue its definition of “sewer” cannot be relied upon to interpret article
XIII D, section 6(c)’s voter approval exception as inclusive of stormwater
services provided by City’s combined sewer system. But City contends that,
even without application of Senate Bill No. 231, the constitutional exception
for “sewer” services is properly interpreted to include the stormwater services
at issue here.
Given the as applied nature of plaintiffs’ challenge and City’s response
to that challenge, we need not and do not address the general
constitutionality of Senate Bill No. 231.3 Instead, the question before us is
3 We therefore deny plaintiffs’ request for judicial notice of legislative
history materials on Senate Bill No. 231 as not necessary or helpful to our
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whether City’s combined sewer system provides “sewer” services excepted
from Proposition 218’s voter approval requirement.
“When construing a constitutional provision enacted by initiative, the
intent of the voters is the paramount consideration.” (Davis v. City of
Berkeley (1990) 51 Cal.3d 227, 234.) We begin with the plain language of the
provision, “which is typically the best and most reliable indicator of purpose.”
(California Cannabis Coalition v. City of Upland (2017) 3 Cal.5th 924, 933.)
“We start by ascribing to words their ordinary meaning, while taking account
of related provisions and the structure of the relevant statutory and
constitutional scheme.” (Ibid.) Where possible, we avoid “ ‘literalism that
effects absurd, arbitrary, or unintended results.’ ” (Richmond v. Shasta
Community Services Dist. (2004) 32 Cal.4th 409, 419 (Richmond).) “Terms
used in a constitutional amendment ‘must be construed in the light of their
meaning at the time of the adoption of the amendment.’ ” (Forster
Shipbuilding Co. v. County of Los Angeles (1960) 54 Cal.2d 450, 456.) “If the
provisions’ intended purpose nonetheless remains opaque, we may consider
extrinsic sources, such as an initiative’s ballot materials.” (California
Cannabis Coalition, at pp. 933–934.)
1. Meaning of “Sewer”
The term “sewer” is not defined in article XIII D, section 6(c), or in any
other constitutional provision added by Proposition 218. Indeed, none of the
three voter approval exceptions (“sewer, water, and refuse collection
analysis. (Cal. Rules of Court, rule 8.252; Jordache Enterprises, Inc. v.
Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6.) For the same
reasons, we also deny the request by various amici curiae for judicial notice of
California Regional Water Quality Control Board San Francisco Bay Region
order excerpts, Executive Order No. N-10-19, and California Water Resilience
Portfolio excerpts, which were offered to illustrate public policy
considerations relevant to Senate Bill No. 231.
13
services”) was defined by the measure. (Ballot Pamp., Gen. Elec., supra, text
of Prop. 218, § 5, p. 109.)
Given the absence of such constitutional definitions, California courts
have looked to statutory definitions existing at the time Proposition 218 was
passed to interpret the terms in article XIII D, section 6(c). In Crawley v.
Alameda County Waste Management Authority (2015) 243 Cal.App.4th 396
(Crawley), for example, the plaintiff had challenged a property charge for the
disposal of household hazardous waste. (Id. at p. 400.) The plaintiff argued
that such waste was not “refuse” covered by the “refuse collection” services
exception to voter approval under Proposition 218. (Id. at p. 409.) The
appellate court disagreed, citing the definition of “refuse” in Health and
Safety Code section 4740 that included “ ‘anything thrown away as
worthless.’ ” (Crawley, at p. 410.) Crawley explained: “It is inherent in the
act of disposing of or depositing household hazardous waste for collection that
the household hazardous waste is no longer of value to the property owner.”
(Ibid.) The court also noted its interpretation was consistent with the plain
meaning of the terms “refuse” and “garbage” in other statutes and
dictionaries. (Ibid.)
Adopting this approach, we find Public Utilities Code section 230.5
instructive here. Enacted in 1970, this section defines the term “sewer
system” expansively to include “all real estate, fixtures, and personal
property owned, controlled, operated, or managed in connection with or to
facilitate sewage collection, treatment, or disposition for sanitary or drainage
purposes, including any and all lateral and connecting sewers, interceptors,
trunk and outfall lines and sanitary sewage treatment or disposal plants or
works, and any and all drains, conduits, and outlets for surface or storm
waters, and any and all other works, property or structures necessary or
14
convenient for the collection or disposal of sewage, industrial waste, or
surface or storm waters.” (Pub. Util. Code, § 230.5, added by Stats. 1970,
ch. 1109, § 2.) Under this longstanding definition, City’s combined
wastewater and stormwater system is clearly a “sewer.”4
We acknowledge there are other statutes that appear to address
wastewater (sewerage) and stormwater systems as separate systems. But
viewed in context, such statutes do not suggest that a combined system is not
a sewer system. Health and Safety Code section 5471, for example, initially
provided authority for an entity to prescribe, revise, and collect fees for
services and facilities furnished in connection with its sewerage system. (Id.,
subd. (a).) Five years before Proposition 218 was adopted, the final phrase of
that provision was amended to authorize such fees “in connection with its
water, sanitation, storm drainage, or sewerage system.” (Stats. 1991,
ch. 1110, § 35.) Legislative history materials explain the purpose of this
amendment was to ensure that newer cities could impose such fees for their
“storm drainage systems.” (Sen. L. Gov. Com., Off. of Sen. Floor Analyses, 3d
4 The Association of California Water Agencies, California State
Association of Counties, and League of California Cities jointly filed an
amicus curiae brief pointing to the way sewer systems are defined under
regulations implementing the Clean Water Act (33 U.S.C. § 1251 et seq.).
(E.g., 40 C.F.R. § 35.2005(11) [defining “combined sewer” as “[a] sewer that is
designed as a sanitary sewer and a storm sewer”]; id., § 35.2005(37) [defining
“Sanitary sewer” as “[a] conduit intended to carry liquid and water-carried
wastes from residences, commercial buildings, industrial plants and
institutions together with minor quantities of ground, storm and surface
waters that are not admitted intentionally”]; id., § 35.2005(48) [defining
“Storm sewer” as “[a] sewer designed to carry only storm waters, surface run-
off, street wash waters, and drainage”].) These federal regulations, which
were issued in 1984 (49 Fed.Reg. 6234 (Feb. 17, 1984)), recognize that a
single sewer system—i.e., a “combined sewer”—can handle both wastewater
and stormwater.
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reading analysis of Sen. Bill No. 682 (1991–1992 Reg. Sess.) as amended
Sept. 9, 1991, p. 2.) Accordingly, we do not view Health and Safety Code
section 5471 as reflecting a general understanding that a sewer system can
never combine sewerage and storm drainage functions; rather, it seems to
reflect the apparent reality in 1991 that public entities often constructed and
maintained separate sewerage and storm drainage systems.
Similarly, Government Code section 63010 provides a definition of
“Public development facilities” under the Bergeson-Peace Infrastructure and
Economic Development Bank Act (§§ 63000 et seq.). This definition specifies
various services provided by such facilities, including “Drainage, water
supply, and flood control” and “Sewage collection and treatment.” (§ 63010,
subds. (q)(3), (10).) Though section 63010 does not purport to provide a
statutory definition for either phrase, it states “Drainage, water supply, and
flood control” includes “storm sewers.” (Id., subds. (q)(3).) Like Health and
Safety Code section 5471, the reference to “storm sewers” appears directed at
separate stormwater systems. And again, neither statute negates the
definition in Public Utilities Code section 230.5 that a combined wastewater
and stormwater system, like the one at issue here, is a “sewer” system.
2. Dictionary Definitions
Dictionary definitions of the term “sewer” around the time of
Proposition 218 also recognize and include combined sewer systems.
Webster’s dictionary defined “sewer” as “a ditch or surface drain” or “an
artificial usually subterranean conduit to carry off water and waste matter
(as surface water from rainfall, household waste from sinks or baths, or waste
water from industrial works).” (Webster’s Third New International
Dictionary (1993) p. 2081.) And the Oxford English dictionary defined
“sewer” as an “artificial watercourse for draining marshy land and carrying
16
off surface water into a river or the sea” and an “artificial channel or conduit,
now usually covered and underground, for carrying off and discharging waste
water and the refuse from houses and towns.” (Oxford English Dict. (2d ed.
1989, vol. XV) p. 105.) Under these definitions, the term “sewer” includes a
combined wastewater and stormwater sewer.
Though general dictionaries may be helpful to consult, we are mindful
that “ ‘great caution’ ” must be exercised when consulting a dictionary
definition of a common term to determine the meaning of a constitutional or
statutory provision. (A.S. v. Miller (2019) 34 Cal.App.5th 284, 293, fn. 4.)
Indeed, a dictionary “ ‘ “is a museum of words, an historical catalog rather
than a means to decode the work of legislatures” ’ ” and voters. (Ibid.; see De
Vries v. Regents of University of California (2016) 6 Cal.App.5th 574, 591.)
Here, we simply note that construing the term “sewer” in article XIII D,
section 6(c) as inclusive of combined sewer systems is both reasonable and
justifiable.
3. Decisional Law
Our interpretation is also consistent with other California appellate
court decisions addressing Proposition 218. In Griffith v. Pajaro Valley Water
Management Agency (2013) 220 Cal.App.4th 586 (Griffith), for example, the
agency was tasked with resolving issues related to water in its jurisdiction
being extracted faster than it was replenished naturally, leading to saltwater
intrusion from the coast into the groundwater. (Id. at p. 590, disapproved on
other grounds in City of San Buenaventura v. United Water Conservation
Dist. (2017) 3 Cal. 5th 1191, 1211, fn. 6.) The agency sought to reduce the
amount of water taken from the groundwater basin (e.g., from wells), by
supplying supplemental water to some users. (Griffith, at p. 590.) To do so,
it enacted an ordinance increasing groundwater augmentation charges for
17
the operation of wells and the “ ‘purchase/acquisition, capture, storage and
distribution of supplemental water.’ ” (Id. at pp. 589–591.)
The plaintiffs challenged the ordinance as violating Proposition 218.
(Griffith, supra, 220 Cal.App.4th at p. 591.) As relevant here, the plaintiffs
argued the agency’s ordinance did not implicate “water” services covered by
the voter approval exception in article XIII D, section 6(c). (Griffith, at
p. 595.) In rejecting that argument, the Griffith court reached a conclusion
somewhat analogous to ours, i.e., that charges for water delivery and water
extraction are “akin” to each other, and that both services fall within the
broader concept of a “water” system. (Ibid.)
Similarly, in Capistrano Taxpayers Assn., Inc. v. City of San Juan
Capistrano (2015) 235 Cal.App.4th 1493 (Capistrano), the city had set a rate
structure imposing charges for recycling water. (Id. at p. 1501.) But while
some users could receive the non-potable recycled water, others including
private residences could not because they were not plumbed for such use.
(Ibid.) The trial court determined the city had violated the requirement in
article XIII D, section 6(b)(4) that charges be imposed for services “ ‘actually
used by, or immediately available to, the owner of the property in question.’ ”
(Capistrano, at p. 1501.) The appellate court disagreed, rejecting the
assumption that “providing recycled water is a fundamentally different kind
of service from providing traditional potable water.” (Id. at p. 1502.) It
explained: “When each kind of water is provided by a single local agency that
provides water to different kinds of users, some of whom can make use of
recycled water (for example, cities irrigating park land) while others, such as
private residences, can only make use of traditional potable water, providing
each kind of water is providing the same service.” (Ibid.) The appellate court
18
further reasoned that water is “part of a holistic distribution system that
does not distinguish between potable and nonpotable water.” (Ibid.)
The lesson we draw from Griffith and Capistrano is that the terms used
in article XIII D do not represent rigidly defined services and functions that
cannot overlap or be combined with others. Here, City provides wastewater
and stormwater services within the same sewer system. Once the flows enter
that system, there appears no indication they are treated differently.
Plaintiffs offer no legal or logical basis for interpreting the term “sewer” in
article XIII D, section 6(c) as applicable to only one part of this “holistic”
sewer system.5 (Capistrano, supra, 235 Cal.App.4th at p. 1502.)
Plaintiffs rely on Howard Jarvis Taxpayers Association v. City of
Salinas (2002) 98 Cal.App.4th 1351 (City of Salinas) and Department of
Finance v. Commission on State Mandates (2022) 85 Cal.App.5th 535
(Department of Finance) to argue otherwise. But both cases are
distinguishable because, unlike City’s combined sewer system here, separate
stormwater systems were at issue.
In City of Salinas, the plaintiffs challenged a property-related fee
imposed by the city council to reduce or eliminate pollutants in stormwater.
5 At oral argument, plaintiffs seemed to suggest that, under Griffith and
Capistrano, City’s stormwater services must provide a common benefit to its
sewer users and/or its wastewater services in order to qualify for the voter
approval exception under article XIII D, section 6(c). True, both courts cited
the common benefit to users in determining that supplemental and recycled
water services are “immediately available” to owners paying the respective
charges under article XIII D, section 6(b)(4). (Griffith, supra, 220
Cal.App.4th at p. 602; Capistrano, supra, 235 Cal.App.4th at p. 1502.) But
plaintiffs offer nothing to support the questionable proposition that
stormwater services do not benefit sewer users, and neither Griffith nor
Capistrano imposed a benefit requirement between services within a
combined system for purposes of article XIII D, section 6(c).
19
(City of Salinas, supra, 98 Cal.App.4th at p. 1353.) There, as here, the
plaintiffs argued the fee violated article XIII D, section 6(c) because it had not
been approved by a majority vote of affected property owners. (City of
Salinas, at p. 1354.) But Salinas had a stormwater drainage system that was
separate and distinct from its sanitary and industrial waste systems (id. at
p. 1353), so the question in City of Salinas was whether the voter approval
exception for “sewer” services extended to Salinas’s separate stormwater
drainage system. (Id. at p. 1356.)
City of Salinas concluded “the term ‘sewer services’ is ambiguous in the
context of both section 6(c) and Proposition 218 as a whole.” (City of Salinas,
supra, 98 Cal.App.4th at p. 1357.) After reviewing statutory and dictionary
references to sewer services, the court ultimately determined that “[t]he
popular, nontechnical sense of sewer service, particularly when placed next to
‘water’ and ‘refuse collection’ services, suggests the service familiar to most
households and businesses, the sanitary sewerage system.” (Ibid.) Mindful
of “the voters’ intent that the constitutional provision be construed liberally
to curb the rise in ‘excessive’ taxes, assessments, and fees exacted by local
governments without taxpayer consent [citation],” the court felt “compelled to
resort to the principle that exceptions to a general rule of an enactment must
be strictly construed” and to thus interpret “sewer” services as not inclusive
of Salinas’s separate storm drainage system. (Id. at pp. 1357–1358.)
Accordingly, the court held that article XIII D, section 6(c) required Salinas to
subject its stormwater drainage system fee to a vote by the property owners
or the voting residents of the affected area. (City of Salinas, at pp. 1358–
1359.)
Importantly, however, the City of Salinas court emphasized the
separate nature and purpose of the storm drainage system at issue there. In
20
concluding that voter approval was required for that system, the court
reasoned: “The City itself treats storm drainage differently from its other
sewer systems. The stated purpose of ordinance No. 2350 was to comply with
federal law by reducing the amount of pollutants discharged into the storm
water, and by preventing the discharge of ‘non-storm water’ into the storm
drainage system, which channels storm water into state waterways.
According to John Fair, the public works director, the City’s storm drainage
fee was to be used not just to provide drainage service to property owners, but
to monitor and control pollutants that might enter the storm water before it
is discharged into natural bodies of water. The Salinas City Code contains
requirements addressed specifically to the management of storm water
runoff.” (City of Salinas, supra, 98 Cal.App.4th at p. 1358.)
City of Salinas’s conclusion that voter approval was necessary for the
separate stormwater system charges in that case does not compel the same
conclusion for City’s combined sewer system. Plaintiffs offer no authority
suggesting the principle regarding the strict construction of exceptions or
Proposition 218’s liberal construction clause are properly invoked to exclude
part of the combined sewer system that City employs to collect and treat both
wastewater and stormwater. Put another way, the voter approval exception
in article XIII D, section 6(c) is properly applied to “those circumstances
which are within the words and reason of the exception.” (City of Lafayette v.
East Bay Mun. Utility Dist. (1993) 16 Cal.App.4th 1005, 1017.) That City’s
sewer service is combined does not mean it is not a sewer service.
Department of Finance, supra, 85 Cal.App.5th 535, also involved a
separate storm sewer system. In that case, the San Diego regional board of
the California Regional Water Quality Control Board had issued permits to
local governments for the operation of this separate system. (Id. at p. 551.)
21
The permittees filed a test claim with the Commission on State Mandates
(Commission) seeking subvention of funds to compensate for the costs of
complying with new permit requirements. (Id. at p. 552; see art. XIII B, § 6,
subd. (a) [allowing reimbursement of local governments for costs of a “new
program or higher level of service” mandated by a state agency, except where
such costs are recoverable from sources other than taxes].)
Relying on the holding in City of Salinas regarding its stormwater
drainage system fee, the Commission concluded the majority of the new
permit requirements were reimbursable mandates because permittees had no
authority to levy fees for stormwater drainage systems without voter
approval under Proposition 218. (Department of Finance, supra, 85
Cal.App.5th at pp. 560–561.) In determining that reimbursement was
appropriate, the Commission reasoned that a contrary holding would defeat
the purpose of subvention because the voters might never approve the
proposed stormwater fees. (Id. at pp. 562–563.) The Commission issued its
ruling in 2010. (Id. at p. 552.)
After the trial court upheld the Commission’s decision, the appellate
court was tasked with interpreting the term “sewer” in article XIII D, section
6(c), at the time of the Commission’s decision before Senate Bill 231 was
passed, and whether it encompassed a separate stormwater drainage system.
(Department of Finance, supra, 85 Cal.App.5th at p. 565.) Acknowledging
that dictionary definitions of the term sewer “indicate the word can refer to
both sanitary sewers and storm drainage systems,” the court nonetheless
found they were not dispositive of the issue. (Id. at p. 567.) But unlike the
court in City of Salinas, the Department of Finance court looked to article
XIII D, section 5(a), “in which the voters distinguished the word ‘sewer’ from
a drainage system” for purposes of exempting assessments from certain
22
procedures and approval requirements if they were in existence on July 1,
1997 and had been imposed exclusively to finance the capital or operational
costs for “ ‘sidewalks, streets, sewers, water, flood control, drainage systems or
vector control.’ ” (Department of Finance, at pp. 567–568.)
The Department of Finance court viewed article XIII D, section 5(a)’s
separate references to “sewers” and “drainage systems” as evidence that
California voters “intended the words to have different meanings.”
(Department of Finance, supra, 85 Cal.App.5th at p. 568.) “Were it not so,”
reasoned the court, “the use of the terms to convey the same meaning would
render them superfluous, an interpretation courts are to avoid.” (Ibid.) In
light of the separate references used in article XIII D, section 5(a), the court
concluded the voters did not intend the “sewer” exception in article XIII D,
section 6(c), to include fees for separate stormwater drainage systems.
(Department of Finance, at p. 568.)
Like City of Salinas, Department of Finance is distinguishable because
it involved a separate stormwater drainage system.6 And like Health and
Safety Code section 5471 and Government Code section 63010, the inclusion
of the term “drainage systems” in article XIII D, section 5(a)’s exemption for
existing assessments does nothing to define section 6(c)’s exception for sewer
services as excluding a combined sewer system like the one City operates
here.
4. Avoiding an Unintended Result
Finally, we are not persuaded that voters intended the term “sewer” in
article XIII D, section 6(c) to apply to only part of a combined sewer system.
6 We need not and do not express an opinion on the holdings of City of
Salinas and Department of Finance as they relate to separate stormwater
systems.
23
The existence of combined sewer systems—in San Francisco and elsewhere—
appeared in case law long before Proposition 218. (See, e.g., Edward Brown
& Sons, supra, 36 Cal.2d at p. 274; County of Riverside v. Whitlock (1972) 22
Cal.App.3d 863, 874, fn. 9 [referencing public improvements to “storm and
sanitary sewers”], Ramseier v. Oakley Sanitary Dist. (1961) 197 Cal.App.2d
722, 723 [discussing district’s “storm and sanitary sewer system”].)
As indicated, plaintiffs are in full agreement that charges for
wastewater sewer services are not subject to voter approval under article
XIII D, section 6(c). But they offer no legal or logical basis for supposing that
the voters who approved Proposition 218 intended to force every public entity
operating a combined sewer system in California to segregate charges for
services attributable to wastewater from those attributable to stormwater.
Nor do plaintiffs point to anything suggesting segregation was reasonable or
even possible at that time. Indeed, even assuming currently-developing
technology is making it possible to calculate the charges separately
attributable to wastewater and stormwater, subjecting stormwater charges to
voter approval may result in the degradation of a combined sewer system as
a whole when approval is withheld. We are reluctant to construe the voter
approval exception in article XIII, section 6(c), as excluding a system
providing combined sewer services when indulging in such an interpretation
finds no support in the constitutional language and may potentially effect
such an unintended result. (Richmond, supra, 32 Cal.4th at p. 419
[construing article XIII D’s definition of assessment as applying to only
certain charges because of the inherent impossibility of identifying in
advance all charges which might apply].)
Because the City’s combined sewer system provides “sewer” services
excepted from the voter approval requirement in article XIII D, section 6(c),
24
the trial court did not err in sustaining City’s demurrer on plaintiffs’ first,
second, and third causes of action.
Nor did the court err in denying leave to amend these three claims.
When a demurrer is sustained without leave, “we decide whether there is a
reasonable possibility that the defect can be cured by amendment: if it can be,
the trial court has abused its discretion and we reverse; if not, there has been
no abuse of discretion and we affirm.” (Blank v. Kirwan (1985) 39 Cal.3d 311,
318.) “The burden of proving such reasonable possibility is squarely on the
plaintiff.” (Ibid.) Here, the only amendment plaintiffs propose to add are
allegations that Senate Bill No. 231 is unconstitutional. Because the defect
in the first, second, and third causes of action is apparent without addressing
the perceived unconstitutionality of that legislation, leave to amend these
claims was properly denied.
C. Proportionality Requirement
Plaintiffs’ fourth cause of action alleges City’s charges—under the prior
rate structure and while the new structure is being “phased in”—violate the
proportionality requirement of Proposition 218. To reiterate, article XIII D,
section 6(b)(3) requires that property-based charges “imposed upon any
parcel or person as an incident of property ownership shall not exceed the
proportional cost of the service attributable to the parcel.” Plaintiffs allege
City violated this requirement because its charges were based only on
wastewater cost factors (e.g., flow and strength), and not also on stormwater
cost factors (e.g., impermeable surface area).
Plaintiffs argue the trial court erred in sustaining City’s demurrer on
this claim because it is sufficiently stated to proceed beyond the pleading
stage. In making such a determination, we accept as true all material facts
properly pleaded, but “not contentions, deductions or conclusions of fact or
25
law.” (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.) Further,
we give the complaint a reasonable interpretation, reading it as a whole and
its parts in their context. (Ibid.)
The premise of City’s demurrer on this fourth cause of action is the
same as the preceding three claims: that because stormwater services are
“sewer” services within City’s combined system under article XIII D,
section 6(c), it had no obligation to apportion stormwater costs and
wastewater costs. City argues that this “dooms” the fourth cause of action
because plaintiffs have not challenged City’s overall sewer rates, but instead
only its stormwater charges.
We reject this characterization of plaintiffs’ proportionality claim. The
complaint alleges that City’s sewer rates violate article XIII D, section 6(c)
because the rates under the prior structure and phasing in of the new
structure are based only on wastewater cost factors with no consideration of
costs attributable to stormwater factors. Because plaintiffs allege that the
costs attributable to wastewater factors and to stormwater factors differ in
criteria and calculation, which is consistent with SFPUC’s 2018 and 2023
reports submitted on demurrer, we conclude the complaint adequately alleges
disproportionality of City’s sewer rates.
Nor are we persuaded that City’s argument defeats this proportionality
claim as a matter of law. City assumes that its stormwater charges are
proportional because they were calculated using wastewater factors and, as
explained above, City’s combined system provides “sewer” services under
Proposition 218’s voter approval exception. But City offers no authority
supporting its position that if services fall within the same exception of
article XIII D, section 6(c), they can be used interchangeably to satisfy the
26
proportionality requirement in article XIII D, section 6(b)(3). And the cases
they do cite are inapposite.
In Morgan v. Imperial Irrigation District (2014) 223 Cal.App.4th 892
(Morgan), the plaintiffs alleged the district’s cost of service study for new
water rates did not prove proportionality because the underlying data was
poor and not reviewed or audited. (Id. at p. 915.) Morgan determined article
XIII D, section 6 “does not require perfection” in data, and it found sufficient
evidence of data reliability to support judgment for the district. (Morgan, at
p. 918.) And in Capistrano, the plaintiffs challenged a new water rate
structure that used four distinct “tiers” of pricing. (Capistrano, supra, 235
Cal.App.4th at p. 1499.) Though concluding that tiered rates are generally
consistent with the proportionality requirement of article XIII D, section
6(b)(3), Capistrano determined the city had failed to satisfy this requirement.
Specifically, the city “did not try to calculate the incremental cost of providing
water at the level of use represented by each tier,” and “tiers must still
correspond to the actual cost of providing service at a given level of usage.”
(Capistrano, at pp. 1498–1499; cf. Griffith, supra, 220 Cal.App.4th at p. 601
[rejecting contention that Proposition 218 “compels a parcel-by-parcel
proportionality analysis” instead of “grouping similar users together”].)
Unlike the situations in Morgan, Capistrano, and Griffith, plaintiffs
here do not challenge the reliability of City’s data or its use of customer tiers
or grouping. Instead, plaintiffs allege that City’s reliance on wastewater
factors alone to support sewer rates that recover costs for stormwater services
violates the proportionality requirement.
Coziahr v. Otay Water Dist. (2024) 103 Cal.App.5th 785 (Coziahr) is
instructive. In that case, the plaintiff alleged the district’s water rates were
not proportional because they did not correspond to the actual cost of water
27
service to customer parcels. (Id. at p. 792.) The trial court ruled in the
plaintiff’s favor after determining the district’s rate structure relied on “ ‘non-
cost’ ” factors to promote water conservation that resulted in differential
treatment of customers. (Id. at p. 807.) The appellate court affirmed,
concluding the rate structure rested on “nonspecific data,” assumptions, and
industry standards, rather than “the actual cost of providing water service to
the parcel.” (Id. at pp. 808, 812.) In a passage that speaks to the matter
here, Coziahr explained: “[T]he California Supreme Court has made clear
the proportionality requirement under section 6(b)(3) demands something
more than the reasonable basis standard under article XIII A. To satisfy
Section 6(b)(3), then, it is not enough for a water agency to show it uses a
reasonable allocation method. Rather, an agency must show that the method
produces rates that are proportional to costs.” (Coziahr, at p. 801.)
The question presented by plaintiffs’ fourth cause of action is whether
City’s sole reliance on wastewater factors to support sewer rates that recover
costs for both wastewater and stormwater services satisfies this threshold.
This presents a factual question that is inappropriate for resolution on
demurrer. (See KCSFV I, LLC v. Florin County Water Dist. (2021) 64
Cal.App.5th 1015, 1030 [“agency must generally provide evidence identifying
the data used, analyzing the cost of service, and demonstrating the
proportionality” of a challenged rate increase].) At the very least, SFPUC’s
2018 and 2023 reports suggest it had historically recovered sewer charges
based on wastewater cost factors because of difficult challenges in identifying
and/or isolating stormwater costs, not because of any conclusive authority
that such practices satisfied Proposition 218’s proportionality requirement.
Now having the ability to do so, SFPUC has proposed that separate
stormwater charges will “enhance the equity in its rate structure.” Indeed,
28
SFPUC anticipated that separate stormwater charges would have
“significant bill impacts” for certain customers, and thus decided that
implementation of the new rate structure “should take place over a few years
instead of all at once.”
In sum, we conclude the trial court erred in sustaining City’s demurrer
to plaintiffs’ fourth cause of action. Having so concluded, we need not and do
not address the parties’ arguments regarding leave to amend the fourth cause
of action. And because the demurrer and the trial court’s ruling on plaintiffs’
fifth cause of action for declaratory relief were based entirely on the perceived
failures of the preceding four causes of action, we conclude the court also
erred in sustaining the demurrer on this cause of action to the extent it seeks
declaratory relief related to plaintiffs’ proportionality claim.
DISPOSITION
The judgment is reversed as to plaintiff’s fourth and fifth causes of
action. In all other respects, it is affirmed. The parties shall bear their own
costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3).)
_________________________
Fujisaki, J.
WE CONCUR:
_________________________
Tucher, P.J.
_________________________
Rodríguez, J.
29
Trial Court: City & County San Francisco Superior Court
Trial Judge: Hon. Rochelle C. East
Counsel: Law Office of Amy Sparrow, Amy C. Sparrow; COHELAN
KHOURY & SINGER, and Michael D. Singer for
Plaintiffs and Appellants
David Chiu, City Attorney, Alexander J. Holtzman and
Sara J. Eisenberg, Deputy City Attorneys for Defendant
and Respondent.
Gluck v. City and County of San Francisco (A170087)
30