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Canyon Lake council introduces ordinance to repeal water and sewer utility taxes after court rulings
Summary
City Attorney Stephen Graham told the council that appellate rulings required repeal of the city’s water- and sewer-utility-user-tax code sections; the council voted to introduce Ordinance 263 by title to comply with the court order.
Canyon Lake — The Canyon Lake City Council voted unanimously Tuesday to introduce by title Ordinance 263 to repeal the municipal code sections that established the city’s water and sewer utility user taxes, a step city staff said is required after state court rulings.
Why it matters: City Attorney Stephen Graham told the council the sections in question had been challenged under Proposition 218 and that the trial court and an appellate court found the code language did not comply because the tax was not sufficiently designated for a specific purpose. He said the council must repeal the code sections to comply with the court order.
Graham explained the legal difference: “A special tax is designated for a specific purpose, whereas a general tax can be spent for any purpose. A general tax must be approved by at least two‑thirds of the voters, whereas a general tax can be approved by a simple majority, 50% plus 1.” He said the city’s utility user tax had been approved by more than two‑thirds of voters but nonetheless was invalidated because it was not limited to a specific purpose.
After the city attorney’s remarks, Mayor Pro Tem Castillo stressed the impact of revenue uncertainty on municipal budgeting and operations. “Our income streams are being assaulted every year,” Castillo said, urging creative budgeting and the use of reserves. The council approved introduction by title with a roll-call vote of 5‑0.
The vote to introduce Ordinance 263 starts the formal process of repealing the code sections (identified in the staff report as sections 3.260.09 — water users tax — and 3.260.100 — sewer users tax). City staff said they will inform the superior court that the city is taking steps to comply with the court order and will return with necessary implementing language.
Council members discussed general budget pressures and cited previous decisions to localize fire and public‑safety services as ways to gain cost control. The city attorney and council did not present specific replacement revenue proposals at the meeting.
