Filed 11/15/18
                             CERTIFIED FOR PUBLICATION




              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                              THIRD APPELLATE DISTRICT
                                            (Siskiyou)
                                               ----




 LESLIE T. WILDE,

                 Plaintiff and Appellant,                             C082664

         v.                                              (Super. Ct. No. SCCVPT16549)

 CITY OF DUNSMUIR et al.,

                 Defendants and Respondents.


        APPEAL from a judgment of the Superior Court of Siskiyou County, Anne
Bouliane, Judge. (Assigned by the Chairperson of the Judicial Council pursuant to
art. VI, § 6 of the Cal. Const.) Reversed with directions.

        Leslie T. Wilde, in pro. per., for Plaintiff and Appellant.

       KENNY, SNOWDEN & NORINE, John Sullivan Kenny, Linda R. Schaap and
Rob J. Taylor for Defendants and Respondents.




                                                1
       In 1996, California voters adopted Proposition 218 (as approved by voters Gen.
Elec. Nov. 5, 1996, eff. Nov. 6, 1996 <https://elections.cdn.sos.ca.gov/sov/1996-
general/official-declaration.pdf> [as of Nov. 14, 2018], archived at
<https://perma.cc/PZ9U-ABQ6>) (Proposition 218) to add article XIII C to the California
Constitution by which they expressly reserved their right to challenge local taxes,
assessments, fees, and charges by initiative. (See generally Bighorn-Desert View Water
Agency v. Verjil (2006) 39 Cal.4th 205, 208-209 (Bighorn-Desert).) This case presents
the question of whether section 3 of article XIII C to the California Constitution silently
repealed voters’ right to challenge by referendum the same local levies for which they
expressly preserved their power of initiative.
       Here, the City of Dunsmuir (City) rejected a referendum measure submitted by
one its residents, Leslie T. Wilde. The City rejected the referendum even though there is
no dispute Wilde gathered sufficient voter signatures to qualify the referendum for the
ballot to repeal Resolution 2016-02 that established a new water rate master plan. The
City’s rejection was based on its view that its resolution establishing new water rates is
not subject to referendum, but only voter initiative. Wilde filed a petition for a writ of
mandate in superior court to place the referendum on the ballot. At the same time, Wilde
gathered sufficient voter signatures to place an initiative on the ballot to establish a
different water rate plan.1 The trial court denied Wilde’s petition, and the City’s voters
rejected Wilde’s initiative, Measure W.



1       We grant the City’s request for judicial notice of (1) Wilde’s initiative (Measure
W) (Ballot Pamp., Gen. Elec. (Nov. 5, 1996), analysis by the Legislative Analyst for
Prop. 218) to amend the City’s water and sewer rate structure, (2) the ballot on which
Measure W appeared (Ballot Pamp., Gen. Elec. (Nov. 5, 1996)), and (3) the voters’
rejection of the Measure. (Evid. Code, §§ 452, subds. (d) & (h), 459.) We reject the
request for judicial notice of a newspaper article entitled, “Town hall talk about Measure
W in Dunsmuir.” (Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1064
[rejecting judicial notice of newspaper article because “the truth of its contents is not

                                               2
       On appeal, Wilde contends the trial court erred in refusing to order the City to
place her referendum on the ballot. The City counters that the voters’ rejection of her
initiative measure moots the current appeal.
       We conclude this appeal is not moot. The voters’ rejection of Wilde’s initiative
water rate plan does not establish that the voters would necessarily have rejected Wilde’s
referendum on the City’s water rate plan. Voters might be dissatisfied with both water
rate plans and therefore reject the initiative and pass the referendum. On the merits, we
conclude the voters’ adoption of Proposition 218 did not abridge voters’ right to
challenge local resolutions and ordinances by referendum. We further conclude the trial
court erred in finding the City’s water rate plan was an administrative decision not
subject to voter referendum. The resolution adopting an extensive water upgrade project
funded by a new water rate plan was legislative in nature and therefore subject to voter
referendum.
       Accordingly, we reverse with directions to issue a peremptory writ of mandate
ordering the voter registrar to place Wilde’s referendum on the ballot.
                      FACTUAL AND PROCEDURAL HISTORY
                                   Resolution 2016-02
       In January 2015, the City formed an ad hoc water rate committee (Committee).
The Committee held public meetings and a two-hour town hall meeting during which it
assessed the City’s water infrastructure needs, considered a study on the City’s water
rates, and proposed a six-year tiered increase in water rates. The increase was intended to
fund the replacement of a 105-year-old water storage tank and a significant number of
similarly aged water main sections.




judicially noticeable”], overruled on another point in In re Tobacco Cases II (2007) 41
Cal.4th 1257, 1276.)

                                               3
       In March 2016, the city council passed Resolution 2016-02 by which it raised
water rates according to a table that lists consumption charges according to type of
residential unit served and the diameter of the water supply pipe. The new water rate
structure reflects “an ascending base rate” formulated so that, “at the end of the five year
period, the City would have its rates at a level that would give it the minimum local share
needed to meet federal grant requirements” and to “meet funding requirements for overall
projects.” Resolution 2016-02 sets forth a five-year plan for a $15 million upgrade to the
City’s water storage and delivery infrastructure.
       Consistent with the requirements of Proposition 218, the City provided notice of
the public hearing on water rate adjustments and protest ballots with which residents
could file an objection. The City received only 40 protest votes at a time when 800 were
required for a successful protest. Thus, Resolution 2016-02 went into effect.
                           Wilde’s Petition for Writ of Mandate
       After the resolution’s adoption, Wilde gathered 145 voter signatures calling for a
referendum to repeal the resolution. These signatures were verified. There is no dispute
the number of voter signatures gathered by Wilde sufficed for a referendum.
Nonetheless, the City’s attorney informed Wilde the City refused to place the referendum
on the ballot, stating: “The setting of Prop. 218 rates is an administrative act not subject
to the referendum process. Also, Proposition 218 provides for initiatives ([Cal.Const.
art.] XIII C, sec. 3), but not referenda.”
       In May 2016, Wilde filed a petition for writ of mandate to place her referendum on
the ballot. The City opposed the petition. In July 2016, the trial court denied the writ
petition. The trial court agreed with the City that the setting of new water rates
constituted an administrative act that was not subject to referendum.




                                              4
                             Defeat of Initiative Measure W
       While Wilde’s writ petition was pending in superior court, she gathered a
sufficient number of signatures for an initiative to amend the City’s water and sewer rate
structure. The City placed Wilde’s initiative on the November 8, 2016 ballot as Measure
W. Measure W would have implemented a different water and sewer rate structure than
that adopted by Resolution 2016-02. Measure W was rejected by the voters.
                                      DISCUSSION
                                             I
                                         Mootness
       As this court has previously noted, “An appeal is moot when a decision of ‘the
reviewing court “can have no practical impact or provide the parties effectual relief.” ’
(MHC Operating Limited Partnership v. City of San Jose (2003) 106 Cal.App.4th 204,
214.) We have the duty to avoid deciding a moot appeal. ‘ “ ‘[T]he duty of this court, as
of every other judicial tribunal, is to decide actual controversies by a judgment which can
be carried into effect, and not to give opinions upon moot questions or abstract
propositions, or to declare principles or rules of law which cannot affect the matter in
issue in the case before it.’ (California Redevelopment Assn. v. Matosantos (2013) 212
Cal.App.4th 1457, 1484.)” (Saltonstall v. City of Sacramento (2014) 231 Cal.App.4th
837, 848-849.) Consequently, we are compelled to dismiss when it is impossible for this
court to grant any effective relief. (Vernon v. State of California (2004) 116 Cal.App.4th
114, 120.)
       Here, the City argues this appeal is moot. The City reasons the voters’ rejection of
Wilde’s initiative renders it impossible for us to grant Wilde any relief regarding her
referendum. The City reasons the defeat of Wilde’s initiative signaled the voters’
endorsement of the water rates set by Resolution 2016-02. We disagree based on the
differences between Wilde’s initiative and her referendum.



                                             5
       Article II, sections 8 and 9, of the California Constitution contain express
reservations of the voters’ initiative and referendum powers. (Pala Band of Mission
Indians v. Board of Supervisors (1997) 54 Cal.App.4th 565, 581 (Pala).) Article II,
section 8, subdivision (a), declares: “The initiative is the power of the electors to propose
statutes and amendments to the Constitution and to adopt or reject them.” And article II,
section 9, subdivision (a), states: “The referendum is the power of the electors to approve
or reject statutes or parts of statutes except urgency statutes, statutes calling elections, and
statutes providing for tax levies or appropriations for usual current expenses of the State.”
The fundamental difference between the voter powers in Article II, sections 8 and 9 is
that “ ‘[r]eferenda do not enact law. . . .’ (Referendum Committee v. City of Hermosa
Beach [(1986)] 184 Cal.App.3d 152, 157.) That is the function of the initiative.” (Santa
Clara County Local Transportation Authority v. Guardino (1995) 11 Cal.4th 220, 242.)
Another key difference is that “tax measures are exempt from referendum. (See Rossi v.
Brown (1995) 9 Cal.4th 688, 697 [(Rossi)].) But the state Constitution imposes no
similar limitation on the initiative. (See id. at pp. 699-705.)” (Bighorn-Desert, supra, 39
Cal.4th at p. 212, fn. 3.)
       We reject the City’s mootness argument because of the different aims of Wilde’s
referendum and her initiative. Wilde’s initiative sought to replace the City’s water rate
system with a different set of water rates for Dunsmuir’s residents. By contrast, Wilde’s
referendum did not seek to replace the water rates implemented by the City’s adoption of
Resolution 2016-02 but instead to repeal the resolution. This means City voters could
have rejected Wilde’s initiative based on their dislike of the proposed new rates and
could also be willing to vote for Wilde’s referendum based on a concurrent dislike of the
water rates established by Resolution 2016-02.
       Assuming for the sake of this mootness issue that the water rates adopted by
Resolution 2016-02 are subject to challenge by referendum, this court would have the



                                               6
ability to grant effective relief by ordering Wilde’s referendum to be placed on a future
ballot. (Yost v. Thomas (1984) 36 Cal.3d 561, 565 (Yost).) In Yost, the California
Supreme Court ordered that a referendum be placed on the ballot three years after the
challenged resolutions were adopted by the city council. (Id. at p. 565, 574.) Here, the
City does not contend Resolution 2016-02 has been repealed or is no longer effective.
Instead, the record shows the water rate adopted by the resolution continues to increase
until 2021 in order to upgrade the City’s water infrastructure. Consequently, the appeal is
not moot because this court has the power to grant effective relief in the form of a
disposition that places Wilde’s referendum on a future ballot.
                                             II
                                       Referendum
       Wilde contends the trial court erred in concluding that Resolution 2016-02 was not
subject to voter referendum. The contention has merit.
                                             A.
                                   Principles of Review
       In construing sections of the California Constitution, we follow well-settled
principles of statutory interpretation. “Our primary objective is to ascertain the
legislative intent. In so doing, we first examine the particular words used, keeping in
mind that words should be interpreted in the context of the relevant constitutional
provisions as a whole. (Quintano v. Mercury Casualty Co. (1995) 11 Cal.4th 1049, 1055;
Schmidt v. Retirement Board (1995) 37 Cal.App.4th 1204, 1210.) If there is no
ambiguity, the constitutional provision should be interpreted according to its plain
meaning. (Mutual Life Ins. Co. v. City of Los Angeles, supra, 50 Cal.3d at p. 407.)
Where an ambiguity exists, we may resort to extrinsic evidence to determine the
intent of the Legislature or of the voters. (Ibid.)” (Pala, supra, 54 Cal.App.4th at
pp. 579-580.) In considering the scope of the referendum power, we also heed the tenet



                                             7
of constitutional interpretation that “[o]ur review of this appeal is also strictly
circumscribed by the long-established rule of according extraordinarily broad
deference to the electorate’s power to enact laws by initiative.” (Id. at pp. 573-574.)
       As the California Supreme Court has emphasized, constitutional “provisions must
be construed liberally in favor of the people’s right to exercise the reserved powers of
initiative and referendum. The initiative and referendum are not rights ‘granted the
people, but . . . power[s] reserved by them. Declaring it “the duty of the courts to
jealously guard this right of the people” [citation], the courts have described the initiative
and referendum as articulating “one of the most precious rights of our democratic
process” [citation]. “[I]t has long been our judicial policy to apply a liberal construction
to this power wherever it is challenged in order that the right not be improperly annulled.
If doubts can reasonably be resolved in favor of the use of this reserve power, courts will
preserve it.” ’ (Associated Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal.3d
582, 591, fn. omitted; see also Brosnahan v. Brown (1982) 32 Cal.3d 236, 241.)” (Rossi,
supra, 9 Cal.4th at p. 695.)
       In conducting our review of the constitutional issue in this case, we apply the de
novo standard of review because the facts are not in dispute and the issue is one of law.
(Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799.)
                                              B.
                                     Referendum Power
       This case turns on the effect, if any, that Proposition 218 might have had on
voters’ referendum powers. Consequently, we begin by delving into the context of
Proposition 218. “Proposition 218 can best be understood against its historical
background, which begins in 1978 with the adoption of Proposition 13. ‘The purpose of
Proposition 13 was to cut local property taxes. [Citation.]’ (County of Los Angeles v.
Sasaki (1994) 23 Cal.App.4th 1442, 1451.) Its principal provisions limited ad valorem



                                               8
property taxes to one percent of a property’s assessed valuation and limited increases in
the assessed valuation to two percent per year unless and until the property changed
hands. (Cal. Const., art. XIII A, §§ 1, 2.) [¶] To prevent local government 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. (Cal.
Const., art. XIII A, § 4; Rider v. County of San Diego (1991) 1 Cal.4th 1, 6–7.) It has
been held, however, that a special assessment is not a special tax within the meaning of
Proposition 13. (Knox v. City of Orland (1992) 4 Cal.4th 132, 141, and cases cited.)
Accordingly, a special assessment could be imposed without a two-thirds vote. [¶] In
November 1996, in part to change this rule, the electorate adopted Proposition 218, which
added Articles XIII C and XIII D to the California Constitution.” (Howard Jarvis
Taxpayers Assn. v. City of Riverside (1999) 73 Cal.App.4th 679, 681–682.)
       At the time when voters were presented with Proposition 218, several published
decisions had limited the reach of voter initiatives to challenge local tax measures. The
first, Myers v. City Council of City of Pismo Beach (1966) 241 Cal.App.2d 237 (Myers)
held that because taxes are not subject to challenge by referendum they are also not
subject to challenge by an initiative that is the functional equivalent of a referendum. (Id.
at p. 243 [“A proposed initiative ordinance cannot be used as an indirect or backhanded
technique to invoke the referendum process against a tax ordinance of a general law city
. . .”].) Dare v. Lakeport City Council (1970) 12 Cal.App.3d 864 (Dare) further limited
the initiative power by holding that “ ‘the Initiative process does not lie with respect to
statutes and ordinances ‘providing for tax levies.” ’ ” (Id. at p. 867.) And City of
Woodlake v. Logan (1991) 230 Cal.App.3d 1058 (City of Woodlake) reiterated the
holdings of Myers and Dare by stating that “[i]t is . . . not permissible to achieve a
prohibited purpose by disguising as an initiative a referendum addressing exempted
matters.” (Woodlake at p. 1063.)



                                              9
       In Rossi, supra, 9 Cal.4th 688 the California Supreme Court addressed the scope
of initiative power shortly before the voters decided on Proposition 218. Rossi abrogated
Myers, Dare, and City of Woodlake by holding that “the referendum provisions expressly
preclude a referendum on statutes and ordinances which impose a tax, no such limitation
is imposed on the people’s exercise of their reserved initiative power.” (Id. at p. 693.)
The Rossi court explained that the “obligation to jealously guard the people’s reserved
right of initiative precludes the restriction on its exercise suggested by the Myers court”
and therefore rejected the approach of Myers and its progeny. (Id. at p. 711.) Even so,
Rossi based its decision on provisions of both the City and County of San Francisco’s
charter and article II, section 9, of the California Constitution. (Id. at p. 694.)
       For purposes of this appeal, the common denominator of the cases Myers to Rossi
was the focus on the extent to which initiatives could be used to challenge local tax
resolutions and ordinances. From Myers through Rossi, there was no dispute that tax
measures were not subject to referendum. (See Myers, supra, 241 Cal.App.2d at p. 243;
Dare, supra, 12 Cal.App.3d at p. 867; City of Woodlake, supra, 230 Cal.App.3d at p.
1063; Rossi, supra, 9 Cal.4th at p. 693.) The context within which the voters adopted
Proposition 218 is important because voters are “presumed to be aware of existing laws
and judicial construction thereof.” (In re Lance W. (1985) 37 Cal.3d 873, 890, fn. 11
(Lance W.); accord People v. Valencia (2017) 3 Cal.5th 347, 369.) And it is with the
background of Myers, Dare, City of Woodlake, and Rossi that California voters
considered Proposition 218 in November 2006.
       Proposition 218 is titled the “Right to Vote on Taxes Act.” (Ballot Pamp., Gen.
Elec. (Nov. 5, 1996) text of Prop. 218, § 1, p. 108.) In its findings and declarations
section, Proposition 218 states: “The people of the State of California hereby find
and declare that Proposition 13 was intended to provide effective tax relief and to
require voter approval of tax increases. However, local governments have subjected



                                              10
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.” (Ibid.) Section 5 of the text of Proposition 218 declares, “The
provisions of this act shall be liberally construed to effectuate its purposes of limiting
local government revenue and enhancing taxpayer consent.” (Id. § 5, at p. 109, italics
added.)
       The language added by Proposition 218 to the California Constitution as article
XIII C, section 3, states: “Initiative Power for Local Taxes, Assessments, Fees and
Charges. Notwithstanding any other provision of this Constitution, including, but not
limited to, Sections 8 and 9 of Article II, the initiative power shall not be prohibited or
otherwise limited in matters of reducing or repealing any local tax, assessment, fee or
charge. The power of initiative to affect local taxes, assessments, fees and charges shall
be applicable to all local governments and neither the Legislature nor any local
government charter shall impose a signature requirement higher than that applicable to
statewide statutory initiatives.”
       The language of section 3 is declarative of voters’ prerogative to decide on local
taxes, assessments, and fees by initiative. In the context of the decision in Myers, supra,
241 Cal.App.2d 237 and its progeny, section 3’s purpose and function concern the
preservation of voters’ initiative powers. The language of section 3 is positive in that it
confirms voter initiative rights and contains no negative language that limits any power
of the voters. Section 3 cannot be read to repeal California voters’ referendum power to
challenge local resolutions and ordinances. “ ‘We cannot presume that . . . the voters
intended the initiative to effect a change in law that was not expressed or strongly implied
in either the text of the initiative or the analyses and arguments in the official ballot



                                              11
pamphlet.’ ” (People v. Valencia (2017) 3 Cal.5th 347, 364, quoting Farmers Ins.
Exchange v. Superior Court (2006) 137 Cal.App.4th 842, 857-858.)
       Our conclusion that Proposition 218 did not negatively impact voters’ referendum
power is bolstered by the text, analysis, and arguments for Proposition 218 that were
presented to the voters in the ballot pamphlet. (Ballot Pamp., Gen. Elec. (Nov. 5, 1996),
analysis by the Legislative Analyst for Prop. 218, p. 74.) The summary of Proposition
218 provided by the Legislative analyst in the ballot pamphlet noted that among other
things, “The measure states that Californians have the power to repeal or reduce any local
tax, assessment, or fee through the initiative process. This provision broadens the
existing initiative powers available under the State Constitution and local charters.” This
summary was echoed in the ballot argument made by proponents of Proposition 218
where they stated: “Proposition 218 expands your voting rights. It
CONSTITUTIONALLY GUARANTEES your right to vote on taxes.” (Id. at p. 77
[rebuttal to argument against Proposition 218], original emphasis.)2
       Proposition 218’s focus on preserving initiative rights on tax levies did not require
any focus on the referendum power because taxes have never been subject to referendum.
(Bighorn-Desert, supra, 39 Cal.4th at p. 212.) Insofar as Proposition 218 affected voters’
rights, the initiative several times reiterated the goal of increasing voters’ rights to vote
on local legislation. (Ballot Pamp., Gen. Elec. (Nov. 5, 1996) text of Prop. 218, § 1,
p. 108-109.) Section 5 declared the purpose of Proposition 218 was to enhance local
taxpayers’ consent. (Id. at p. 109.) Conspicuously absent from the text of Proposition
218 is any language that limits voter rights. (See id. at pp. 108-109.) For this reason, the
Legislative Analyst informed voters Proposition 218 “broadens the existing initiative



2     We consider these statements because “[b]allot summaries and arguments are
accepted sources from which to ascertain the voters’ intent and understanding of initiative
measures.” (Lance W., supra, 37 Cal.3d at p. 888, fn. 8.)

                                              12
powers” of voters. (Id. at p. 74.) No mention is made of the referendum power or any
proposed limitations on voter power in general.
       Proposition 218 was not required to reinvigorate the referendum power for two
reasons. First, section 9 is self-executing and does not require implementing legislation
at the state or local level. (Midway Orchards v. County of Butte (1990) 220 Cal.App.3d
765, 777 (Midway Orchards).) Second, the holdings in Myers, Dare, and City of
Woodlake addressed only the limits of the voters’ initiative powers to challenge local
ordinances. (Myers, supra, 241 Cal.App.2d at p. 243; Dare, supra, 12 Cal.App.3d at
p. 867; City of Woodlake, supra, 230 Cal.App.3d at p. 1063.) For this reason, the
proponents of Proposition 218 had no reason to mention the referendum power when
seeking to preserve voter powers. In short, the context, language, and analysis of
Proposition 218 all point to expanded initiative powers without any effect on the voters’
ability to challenge local legislation by referendum.
       Having concluded Proposition 218 did not curtail the voters’ referendum powers,
we turn to the question of whether the resolution at issue in this case is legislative or
administrative in nature.3
                                              B.
      Whether Resolution 2016-02 Set Water Rates in an Administrative Manner
       Wilde contends the trial court erred in finding Resolution 2016-02 is not subject to
voter referendum because it represents an administrative action. We agree.




3       Wilde and the City agree Resolution 2016-02’s water rate charges are fees rather
than taxes. Based on the parties’ agreement, we assume without deciding that water
service charge is a fee under article XIII D when it is imposed, as here, as an incident of
property ownership. (See Bighorn-Desert, supra, 39 Cal.4th at p. 215.) Consequently,
the prohibition on the use of referenda to challenge tax measures does not apply here.
(Id. at p. 215.)

                                              13
   1. Administrative Acts by Local Government
       As the California Supreme Court has explained, “The powers of referendum and
initiative apply only to legislative acts by a local governing body (Arnel Development Co.
v. City of Costa Mesa (1980) 28 Cal.3d 511, 516, fn. 6). Acts of a local governing body
which, in a purely local context, would otherwise be legislative and subject to referendum
may, however, become administrative ‘in a situation in which the state’s system of
regulation over a matter of statewide concern is so pervasive as to convert the local
legislative body into an administrative agent of the state.’ (Associated Home Builders
etc., Inc. v. City of Livermore (1976) 18 Cal.3d 582, 596, fn. 14; see Housing Authority v.
Superior Court (1950) 35 Cal.2d 550).” (Yost, supra, 36 Cal.3d at pp. 569-570.)
However, “[c]ourts are not ‘to automatically infer that a statutory scheme restricts the
power of initiative or referendum merely because some elements of statewide concern are
present.’ (DeVita [v. County of Napa (1995)] 9 Cal.4th [763,] 780-781.) ‘[I]t is
erroneous to assume that a statute or statutory scheme that both asserts certain state
interests and defers in other respects to local decision making implies a legislative intent
to bar the right of initiative. Rather, courts must inquire concretely into the nature of the
state’s regulatory interests to determine if they are fundamentally incompatible with the
exercise of the right of initiative or referendum, or otherwise reveal a legislative intent to
exclusively delegate authority to the local governing body.’ (Id., at p. 781.)” (Totten v.
Board of Supervisors (2006) 139 Cal.App.4th 826, 838 (Totten).)
       Acts of a local governmental entity may also be administrative in nature when
they merely carry out previously determined policies rather than constituting new
legislative policy. “To determine whether an initiative enacts legislation, ‘it is the
substance, not the form that controls.’ (Marblehead v. City of San Clemente (1991) 226
Cal.App.3d 1504, 1509.) The test to distinguish a legislative act from an executive or
administrative one is well-established: ‘ “ ‘ “The power to be exercised is legislative in



                                              14
its nature if it prescribes a new policy or plan; whereas, it is administrative in its nature if
it merely pursues a plan already adopted by the legislative body itself, or some power
superior to it.” ’ ” ’ [Citation]; . . . ‘Acts constituting a declaration of public purpose,
and making provisions for ways and means of its accomplishment may be generally
classified as calling for the exercise of legislative power. Acts which are to be deemed as
acts of administration, and classed among those governmental powers properly assigned
to the executive department, are those which are necessary to be done to carry out
legislative policies and purposes already declared by the legislative body, or such as are
devolved upon it by the organic law of its existence.’ [Citations.]” ’ (City of San Diego
v. Dunkl [(2001)] 86 Cal.App.4th [384,] 399-400, italics omitted.)” (Park At Cross
Creek, LLC v. City of Malibu (2017) 12 Cal.App.5th 1196, 1203-1204.)
    2. Resolution 2016-02
       We proceed to consider whether Resolution 2016-02 prescribes a new policy or
plan, or whether it administratively carries out previously determined legislative policies
and plans.4 We begin with the factual recitals articulated in Resolution 2016-02. These
recitals are uncontested and establish the following about the 2015 Dunsmuir Water
Master Plan:
       The process of examining water rates and City infrastructure began when “the City
commissioned an update to the 1994 Water Rate Master Plan which is designated the
2015 Dunsmuir Water Master Plan.” To formulate the new water rate master plan, “the
City Council appointed an Ad Hoc Committee of two council [] members and three
community members to review, comment and provide recommendations regarding the
Water Master Plan update and the Water Utility Rate study.” “[T]he 2015 Water Utility



4     The City does not argue state law dictates the new water rate structure in
Resolution 2016-02 so the City must administratively conform to statewide regulation.
(See Totten, supra, 139 Cal.App.4th at p. 838.)

                                               15
Rate Study . . . reported need to increase rates for water utility services to enable
replacement of water mains and water storage tank.” The ad hoc committee also
identified “a significant number of water main sections that should have been replaced
years ago, and [the] need to replace over 105 years old water storage tank . . . .” In the
notice of public hearing on proposed water rates, the City reported that “the proposed
rates are based on the Water Utility Rate study prepared by PACE Engineering . . . .”
Ultimately, “the Ad Hoc Committee and the City Council have found that the proposed
rates are equitable and fairly distribute the burden of system costs among the various
classes of customers.”
       The new water rates adopted in Resolution 2016-02 are not an administrative
adjustment of rates according to the previously established 1994 Water Rate Master plan.
The new water rates are the product of a newly formulated set of policies that
implemented a new set of choices: to replace a 105-year-old water storage tank as well
as selected old water mains. In addition to these decisions to replace infrastructure, the
2015 Dunsmuir Water Master Plan also represents policy choices about how to allocate
the new infrastructure costs.
       The City’s own briefing states that “the legislative decision here took the form of
public hearings and the eventual adoption of a water master plan.” At oral argument, the
City’s counsel confirmed the City’s position that the water rate master plan is legislative
in nature. We agree that the City’s action is legislative in nature. “ ‘Legislative acts of a
city which establish general policies and objectives, and the ways and means of
accomplishing them, are subject to the referendum process.’ ” (Worthington v. City
Council of Rohnert Park (2005) 130 Cal.App.4th 1132, 1140, quoting W.W. Dean &
Associates v. City of South San Francisco (1987) 190 Cal.App.3d 1368, 1374.) That the
new water rate master plan was adopted by resolution, rather than ordinance, does not
matter for our purposes because “the referendum may be invoked whether the [local]



                                              16
measure is denominated an ordinance or resolution.” (Midway Orchards, supra,220
Cal.App.3d at p. 777.)
        Indeed, Resolution 2016-02 represents legislative policymaking in two separate
respects. First, the resolution adopted a new water rate master plan that departed from
continued maintenance of old water storage and transmission facilities in favor of a $15
million infrastructure upgrade plan. This plan may be sound policy, but it is new policy
rather than administration of prior policy. Second, the resolution adjusted the allocation
of rates to be charged to the various users of the City’s water. This adjustment
represented discretionary choices made in a new policy, rather than continuation of the
policy of the 1994 water rate plan. Consequently, Resolution 2016-02 is subject to
referendum because it is legislative, and not administrative, in nature.
                                             C.

    Whether Resolution 2016-02 is Not Subject to Referendum Because of the Essential
                            Government Service Exemption
        The City contends Resolution 2016-02 impinges on an essential government
service that is not subject to referendum. Specifically, the City argues Wilde’s
“referendum proposal, relating to essential government services, is improper and
would lead to uncertainty in the planning and fiscal administration of government
budgets.”5 Wilde counters that “the water rate increases were intended to finance an



5       The City does not develop its argument by connecting the essential government
service exception to the facts of this case. Indeed, the City’s argument on this issue does
not contain a single citation to the appellate record. This sort of undeveloped and
unsupported argument generally warrants the argument being deemed forfeited. (Allen v.
City of Sacramento (2015) 234 Cal.App.4th 41, 52.) Due to the importance of this issue,
however, we exercise our discretion to consider the City’s contention. “[T]he application
of the forfeiture rule is not automatic and we may excuse forfeiture in cases presenting
‘an important legal issue.’ ” (Cleveland National Forest Foundation v. San Diego
Association of Governments (2017) 17 Cal.App.5th 413, 434, quoting In re S.B. (2004)
32 Cal.4th 1287, 1293.) We note, however, the City does not argue Resolution 2016-02

                                             17
improvement project, not support ‘essential government services’ . . . .” Wilde has
the better argument.
   1. Wilde’s Referendum
       Wilde’s petition for a referendum on Resolution 2016-02 stated, “We request the
text of Resolution Number 2016-02 be entirely repealed by the Dunsmuir City Council or
be submitted to a vote of the people.” The petition contained no restraint on the City
Council that would have disallowed adoption of a different water rate master plan or
revised rate allocation structure. The petition also provided the additional option of voter
approval for the 2015 Dunsmuir Water Master Plan.
   2. The Essential Government Service Exception
       In assessing the City’s attempt to invoke the essential government service
exception to voters’ referendum power, we begin with the California Supreme
Court’s guidance on this topic in four cases: Hunt v. Mayor and Council of City of
Riverside (1948) 31 Cal.2d 619 (Hunt), Geiger v. Board of Sup’rs of Butte County (1957)
48 Cal.2d 832 (Geiger), Rossi, supra, 9 Cal.4th 688, and Bighorn-Desert, supra, 39
Cal.4th 205.
       We have already noted that “referendum provisions of the constitution and of
charters and statutes should, as a general rule, be liberally construed in favor of the
reserved power.” (Hunt, supra, 31 Cal.2d at p. 628.) Even so, “it is proper and important
to consider what the consequences of applying it to a particular act of legislation would
be, and if upon such consideration it be found that by so applying it the inevitable effect
would be greatly to impair or wholly destroy the efficacy of some other governmental



implicates an essential government service due to the importance of water supply to
residents, but only that Wilde’s referendum is “disturbing to proper fiscal
administration.” Accordingly, we are called to consider only whether Wilde’s
referendum undermines the City’s fiscal administration of its budget so that the trial court
properly denied the writ petition.

                                             18
power, the practical application of which is essential, and perhaps, as in the case of the
power to compel the improvement of streets, indispensable, to the convenience, comfort,
and well-being of the inhabitants of certain legally established districts or subdivisions of
the state or of the whole state, then in such case the courts may and should assume that
the people intended no such result to flow from the application of those powers, and that
they do not so apply.’ ” (Id. at pp. 628–629, quoting Chase v. Kalber (1915) 28 Cal.App.
561, 569-570.) In short, legislation is not subject to referendum if it precludes the
functioning of essential government services. (Ibid.)
       Geiger involved a county ordinance imposing a sales and use tax as authorized by
the Legislature in the Bradley-Burns Act. (Geiger, supra, 48 Cal.2d at p. 832.) The
Geiger court recognized the referendum power as reserved under the California
Constitution does not allow for tax measures to be challenged by referendum. (Id. at p.
836.) Thus, the question in Geiger was whether the Legislature could statutorily confer
the referendum power despite limitations on the constitutional power of referendum. (Id.
at p. 837.) The Geiger court held the Legislature did not have “the power to extend or
expend the scope of referendum.” (Ibid.) The Geiger court further held the Legislature
did not intend in the Bradley-Burns Act to make county sales and use tax ordinances
subject to referendum. (Ibid.) In so holding, the Geiger court also noted the referendum
power did not include local voters’ ability to retroactively cripple budgeted spending
consistent with statewide policy. As the Supreme Court explained this prohibition on
referenda being available to challenge “tax levies or appropriations for the usual current
expenses of the state is to prevent disruption of its operations by interference with the
administration of its fiscal powers and policies.” (Id. at p. 840.)
       In Rossi, supra, 9 Cal.4th 688, the California Supreme Court again revisited the
essential government services exception to the referendum power. The Rossi court
reiterated that “if a tax measure were subject to referendum, the county’s ability to adopt



                                             19
a balanced budget and raise funds for current operating expenses through taxation would
be delayed and might be impossible. As a result, the county would be unable to comply
with the law or to provide essential services to residents of the county.” (Rossi, supra, 9
Cal.4th at p. 703.)
       In Bighorn-Desert, the California Supreme Court held “that section 3 of article
XIII C grants local voters a right to use the initiative power to reduce the rate that a
public water district charges for domestic water.” (Bighorn-Desert, supra, 39 Cal.4th at
p. 209.) Nonetheless, the high court cautioned that “this new constitutional provision
does not grant local voters a right to impose a voter-approval requirement on all future
adjustments of water delivery charges, and that the proposed initiative at issue here was
properly withheld from the ballot because it included a provision to impose such a
requirement.” (Ibid.) Thus, Bighorn-Desert and Rossi teach that voters cannot throw
government finances into chaos by vitiating the regularly budgeted expenditures for
essential government services.
   3. Whether the Exception Applies to Resolution 2016-02
       On the facts of this case, we conclude the essential government services exception
does not bar Wilde’s referendum from the ballot. Wilde’s referendum was not aimed at
previously existing City water rates or water delivery services. Had Wilde’s referendum
been placed on the ballot and passed, it would have had the effect of reverting to the
City’s 1994 Water Rate Master Plan. Rather than invalidating the regular expenditure of
previously budgeted funds for essential government services, Wilde’s referendum would
have prospectively cancelled the City’s newly adopted master plan to spend $15 million
on infrastructure and reallocation of water costs. In essence, Resolution 2016-02
constitutes policymaking legislation that is subject to referendum.
       The fact that Resolution 2016-02 includes a financial component does not insulate
it from challenge by voter referendum. The resolution does not represent the ordinary



                                              20
working or budgeting of the City. As the City itself emphasizes in its briefing, the new
water rate master plan was the product of an ad hoc group that studied the City’s water
infrastructure and billing rate structure. The Resolution represents policy choices and
marks out a different approach to the City’s water infrastructure and rates. For this
reason, Wilde’s referendum was not subject to the exception on voter referendum powers
made for measures that will undermine ongoing and essential governmental services and
budgeting.
       We reject the City’s reliance on Citizens for Jobs and the Economy v. County of
Orange (2002) 94 Cal.App.4th 1311. Citizens for Jobs arose out of the voters’ approval
of an initiative that required future electorate ratification of certain land use projects prior
to their effect – even if approved by the board of supervisors. (Id. at p. 1328.) Citizens
for Jobs held the initiative was “clearly beyond the power of the electorate” for several
reasons, one of which was that “[i]t interferes with the essential government functions of
fiscal planning and land use planning.” (Id. at p. 1324.) Wilde’s referendum, however,
contains no prohibition on the City’s future ability to study, plan, or implement a new
water rate plan in the event voters approve the referendum. Wilde’s referendum seeks
repeal of Resolution 2016-02 without constraining the City in its ability to formulate and
implement a different water rate master plan.
       For the same reason, we are not persuaded by the City’s reliance on City of
Atascadero v. Daly (1982) 135 Cal.App.3d 466. City of Atascadero involved a proposed
initiative ordinance that “would have required the City to submit any revenue-raising
measure to the voters for their approval before the measure could be implemented.” (Id.
at p. 468.) The proposed initiative was invalidated as a voter usurpation of the power to
tax and as “an unlawful attempt to impair essential governmental functions through
interference with the administration of the City’s fiscal powers.” (Id. at p. 470.) The
continuing validity of this decision is questionable after the California Supreme Court in



                                              21
Rossi mentioned City of Atascadero as one of the decisions in harmony with the
overruled decisions in Myers, supra, 231 Cal.App.2d 237 and Dare, supra, 12
Cal.App.3d 864. (Rossi, supra, 9 Cal.4th at p. 705.) In any event, as we explained in our
examination of Citizens for Jobs, supra, 94 Cal.App.4th 1311, Wilde’s referendum
proposes to repeal Resolution 2016-02 without limiting the City’s future ability to study,
plan, and implement a new water rate master plan.
       Because Wilde’s referendum does not undermine the City’s ability to
provide essential government services, she is entitled to have her referendum
placed on the ballot.
                                     DISPOSITION
       The judgment of dismissal of Leslie T. Wilde’s petition for a writ of mandate is
reversed and the case is remanded to the trial court with directions to issue a peremptory
writ of mandate ordering the voter registrar to place Wilde’s referendum on the ballot for
the next municipal election. Leslie T. Wilde shall recover her costs on appeal. (Cal.
Rules of Court, rule 8.278(a)(1) & (2).)



                                                              /s/
                                                 HOCH, J.



We concur:



          /s/
BUTZ, Acting P. J.


        /s/
MURRAY, J.


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