City of Los Angeles v. Offner

GIBSON, C. J.

— I dissent.

Section 64.16.1 of the Los Angeles Municipal Code, as amended in 1957, requires the payment of a fee of $400 per acre as a charge for connection with the city’s outlet sewer facilities. This charge was collected, prior to 1960, separate and apart from any special assessments for local sewer improvements, and the landowners, after being assessed for the local improvements, were required to pay the charge in a lump sum before they could use the local improvement. It is undisputed that the $400 per acre charge for connection with the outlet facilities of the city’s system is reasonable in amount and that the municipal code section imposing the charge is valid. By enactment of subdivision (i) of section 5024 of the Streets and Highways Code in 1959 the Legislature authorized inclusion of such a charge in special assessments as an incidental expense, and when thereafter, in 1960, the assessment before us was adopted by ordinance 115574, the charge was included in the amount assessed. The landowners within the district may pay the amount of the assessment over a period of years.

The majority holds that subdivision (i) of section 5024 of the Streets and Highways Code and the 1960 ordinance, insofar as it includes the charge authorized by subdivision (i), are unconstitutional. The holding is based solely upon an asserted violation of section 1 of article XIII of the state Constitution which provides, “All property in the State . . . *115shall be taxed in proportion to its value. ...” This provision, as we shall see, is not applicable to the situation before us.

The rule is well settled that a city is entitled to require payment of a reasonable charge as a condition to connection with or use of its sewer system. (Harter v. Barkley, 158 Cal. 742, 745-746 [112 P. 556]; Longridge Estates v. City of Los Angeles, 183 Cal.App.2d 533, 539-540 [6 Cal.Rptr. 900]; Cramer v. City of San Diego, 164 Cal.App.2d 168, 171-172 [330 P.2d 235]; Health & Saf. Code, § 5471; The Sewer District Act of 1899 (Stats. 1899, ch. 66, p. 81 [formerly Health & Saf. Code, §§4659-4667, repealed Stats. 1959, ch. 1309, p. 3581]); see City of Glendale v. Trondsen, 48 Cal.2d 93, 101-103 [308 P.2d 1]; 11 McQuillin, Municipal Corporations, § 31.30, pp. 238-240.) Such a charge, which merely represents payment by landowners for services of special benefit to them, is not a property tax subject to the constitutional requirements of equality and uniformity like those of section 1 of article XIII. (See 1 Cooley, Taxation (4th ed. 1924), §§ 36, 267, 268, pp. 115-117, 569-572; 51 Am.Jur., Taxation, §§16, 157, pp. 48-49, 209.) In City of Glendale v. Trondsen, supra, 48 Cal.2d 93, 101 et seq., we held that charges for rubbish collection did not come under section 1 of article XIII, pointing out that sewer service charges have been held not to constitute taxes. (48 Cal.2d at p. 102; see also Louisville & Jefferson County Metropolitan Sewer Dist. v. Joseph E. Seagram & Sons, 307 Ky. 413 [211 S.W.2d 122, 4 A.L.R.2d 588].)

The fact that the charge is now being included in the special assessment, whereas formerly it was collected separately, does not alter its character so that it becomes a tax subject to section 1 of article XIII, and there is substantial authority supporting the conclusion that a reasonable charge for sewer service may properly be included in a special assessment. The cases discussed below establish that the amount to be assessed is not limited to the cost of local installations but may be based on all elements contributing to the benefit of the landowners and may include a reasonable charge for the use of improvements which serve a larger area and for operation and maintenance.

Etheridge v. City of Atlanta, 167 Ga. 222 [145 S.E. 84, 85], is directly in point. In sustaining a sewer assessment in excess of the cost of constructing a lateral sewer and connections with private property, the court held that the cost of building, repairing, and upkeep of the city’s trunk sewers and disposal plants should be taken into consideration and that a reasonable charge for the privilege of connecting with the trunk lines *116could be added to the actual cost of the lateral sewers and property connections. Roberts v. City of Los Angeles, 7 Cal.2d 477, 490-494 [61 P.2d 323], held that the city may include its estimated costs of furnishing electric current, repairs, and supervision in an assessment for street lighting. In concluding that there should be no distinction between the cost of the services to be rendered and the cost of the mechanical contrivances installed as part of the improvement, the Roberts decision pointed out that the benefit to the landowners arose from the whole improvement, that the services were reasonably necessary, and that the fact that the city rather than a private party was to furnish them did not affect the district’s duty to pay for them. (7 Cal.2d at pp. 490-494.)

There are also decisions holding that the use of sewage disposal plants and trunk mains is a special benefit to the land served and that the cost of such improvements may be met by special assessments. (Federal Construction Co. v. Ensign, 59 Cal.App. 200, 209 et seq. [210 P. 536] (pet. for hg. den.); Davidson v. Sewer Improvement Dist. No. 4,182 Ark. 741 [32 S.W.2d 1062, 1064]; City of Elmhurst v. Rohmeyer, 297 Ill. 430 [130 N.E. 761, 764]; Alley v. City of Lebanon, 146 Ind. 125 [44 N.E. 1003,1004]; Gray v. Dingman, 279 Mich. 62 [271 N.W. 552, 110 A.L.R. 274]; Armstrong v. Sewer Improvement Dist. No. 1, 201 Okla. 531 [199 P.2d 1012, 1015]; Wm. H. Heinemann Creameries v. Tillage of Kewaskum, 275 Wis. 636 [82 N.W.2d 902, 905]; see anno., Sewers as Local or General Improvement, 134 A.L.R. 895, 900 et seq.; cf. Mills v. City of Elsinore, 93 Cal.App. 753, 769 [270 P. 224], and Kane v. Wedell, 54 Cal.App. 516, 520-521 [202 P. 340] [assessments for pumping plants and wells of municipal water systems].)

The majority opinion relies on assessment cases which did not involve a charge for use of a city’s sewer system or any other reasonable charge which the city was entitled to make for a service furnished by it. For example, County of San Diego v. Childs, 217 Cal. 109 [17 P.2d 734], involved expenditures which did not result in any benefit to the land of the district. The opinion contains the following general language: “The improvement must confer a special benefit upon the property assessed. [Citation.] The assessment can be levied only for the actual cost of the improvement ‘and the local authorities cannot include in the assessment the expense of any other work than such as is necessary to complete the particular improvement in a reasonable and fair mode.’ ” The statement in the Childs case must be considered *117in the light of the facts there before the court. It should not be used as a basis for invalidating a statute which authorizes inclusion in an assessment, as an incidental expense, of a reasonable charge for sewer service rendered by the city. This is particularly true where, as here, the landowners will in any event be required to pay the charge before they realize any benefit from the local facilities. As was held in Roberts v. City of Los Angeles, 7 Cal.2d 477, 490-491, 493-494 [61 P.2d 323], in determining the amount of an assessment, the costs of the whole improvement may be taken into consideration including the cost of reasonably necessary services. Insofar as the amount of the charge must bear a relationship to the cost of the service provided, there is nothing to show that the $400 per acre charge does not represent a fair apportionment of the city’s cost in constructing and maintaining its sewer system, and the presumption in favor of constitutionality requires us to conclude that there has been such an apportionment.

The validity of the assessment is not affected by the fact that under section 64.19.1, the money collected from the district may be used to construct outlet sewers which do not serve the district. So long as the charge is reasonable and the district receives the benefits it has paid for, it is immaterial whether the money collected is kept in a separate fund earmarked for the costs of conferring the benefits or placed in the city’s general fund and the costs paid therefrom.

The legislative bodies of both the state and the city have authorized a reasonable and practical method of collecting this charge. Their action is supported by the decisional law of this state and elsewhere.

I would hold that subdivision (i) of section 5024 of the Streets and Highways Code is constitutional and that it has been properly applied here.

Traynor, J., and Dooling, J., concurred.

Petitioner’s application for a rehearing was denied January 31, 1961. Lillie, J. pro tern.,* participated therein in place of McComb, J., who deemed himself disqualified. Gibson, C. J., Traynor, J., and Dooling, J., were of the opinion that the application should be granted.

Assigned by Chairman of Judicial Council.