Nick explains California's Prop 218 and its impact on water fees

The Seal Beach City Council held a special meeting on April 28, 2025, focused on a financial study session regarding water and sewer rates. The meeting began with a presentation by Nick, who provided an overview of Proposition 218, a significant regulation affecting local government revenue collection.

Proposition 218, adopted by California voters in 1996, was introduced by the Howard Jarvis Taxpayer Association to safeguard taxpayers by restricting how local governments can increase fees for services like water and wastewater without voter approval. Nick explained that the proposition mandates specific procedural steps before any increase in water and wastewater fees can occur.

Key requirements include holding a public protest hearing, with the city obligated to notify property owners at least 45 days in advance. During this hearing, property owners and tenant customers can submit written protests, but only one protest per parcel is counted. If a majority of parcels submit protests against the proposed fee increase, the council is prohibited from approving the increase.

Additionally, Proposition 218 stipulates that the fees charged for water and wastewater services must not exceed the actual cost of providing those services, which encompasses operational, maintenance, financial, and capital expenditures. The city is responsible for demonstrating compliance with these requirements.

The meeting underscored the importance of transparency and community involvement in decisions regarding utility rates, as the council prepares to navigate the complexities of Proposition 218 in future discussions about water and sewer rate adjustments.