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18 September 2025

First District Court Of Appeal Clarifies Limits On "Grandfathered" Local Assessments Under Proposition 218

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The case arose from Fairfield's Rolling Hills Maintenance District, created in 1988. At that time, the district levied a flat annual charge of $196.23 per residential lot for landscaping, lighting, and related services.
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The First District Court of Appeal's recent published opinion in Thacker v. City of Fairfield, ___ Cal. App. 5th__, 2025 WL 2476455 (Aug. 28, 2025), clarifies how Proposition 218 applies to special assessments that predated its enactment. Proposition 218, adopted by California voters in 1996, generally requires voter approval for new or increased local government taxes and property-related assessments, and limits how local governments can impose fees, charges, and assessments on property owners.

The case arose from Fairfield's Rolling Hills Maintenance District, created in 1988. At that time, the district levied a flat annual charge of $196.23 per residential lot for landscaping, lighting, and related services. In the years since 1996, Fairfield gradually raised the assessment, reaching $300 per lot by the 2022-2023 tax year.

A property owner challenged the increase, arguing that any post-1996 hikes violated Proposition 218's procedures, which require mailed notice, a majority protest hearing or election, and compliance with substantive limitations. The trial court sided with the City, reasoning that the assessment fell under a constitutional exemption for certain preexisting assessments, see Cal. Const., art. XIII D, § 5(a), and that the increase was permissible because it followed a methodology established before Proposition 218.

The Court of Appeal reversed. It held that Proposition 218 defines an "increased assessment" broadly, covering not only variable rates (per gallon or per square foot) but also flat, per-parcel charges like the one in Fairfield. The court also rejected the notion that a pre-1996 "range" or formula can shield later increases. Unless a range or escalation mechanism was adopted using Proposition 218's procedures, it cannot justify post-1996 increases beyond the rate in effect when the initiative became law.

The Court of Appeal's opinion underscores the continuing vitality of Proposition 218 as a significant limitation on local revenue measures. For public agencies, the decision is a cautionary reminder that grandfathered assessments are effectively frozen at their 1996 levels unless voters or property owners approve an increase using the procedures set forth in Proposition 218. For property owners faced with escalating assessments, the case should prompt them to examine whether increases were tied to a lawful post-1996 range or methodology. If not, Thacker offers a strong precedent supporting a legal challenge. The opinion also suggests that courts may read the definition of "increase" expansively, leaving little room for agencies to argue that flat charges fall outside Proposition 218's protections.

Developers should take note as well. In many cases, participation in an assessment district is a condition of development approval, and charges may escalate over time. Thacker could provide additional leverage to contest unlawful increases, and potentially to negotiate more favorable arrangements with local governments.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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