Wilde v. City of Dunsmuir, 470 P.3d 590

The City of Dunsmuir adopted a five-year, $15 million water-infrastructure plan and a resolution establishing new municipal water rates to fund pipe replacements and tank upgrades.
Resident Leslie T. Wilde led pre-adoption Proposition 218 protests (insufficient to block rates), ran an unsuccessful initiative, and then submitted a petition for a post-enactment referendum.
The City refused to place the referendum on the ballot, arguing rate-setting is not subject to referendum; Wilde sought a writ of mandate.
The trial court denied relief; the Court of Appeal reversed and ordered the City to place the referendum on the ballot, focusing on Prop. 218’s classification of the rates as "fees," not "taxes."
The California Supreme Court granted review and held municipal water rates set by a local government fall within the article II, §9 exemption for "tax levies," so they are not subject to referendum; it also held the phrase "for usual current expenses" modifies "appropriations," not "tax levies."

Issue	Plaintiff's Argument (Wilde)	Defendant's Argument (City)	Held
Are municipal water rates subject to referendum under Cal. Const. art. II, §9?	Water rates are "property-related fees" under Prop. 218 and thus not "tax levies" exempt from referendum.	Water rates fund an essential municipal service and are within the referendum exemption for "tax levies."	Held: Water rates adopted by a municipality are "tax levies" within art. II, §9 and not subject to referendum.
Do Prop. 218 definitions of "tax" and "fee" control the meaning of "tax" in art. II, §9?	Yes — Prop. 218 treats these exactions as fees, so art. II, §9 should not exempt them.	No — Prop. 218’s definitions apply only to those articles and do not amend other constitutional provisions.	Held: Prop. 218’s article-specific definitions do not alter the meaning of "tax" in the separately enacted referendum provision.
Does the qualifying phrase "for usual current expenses" limit the exemption to taxes used for ordinary operating expenses?	The exemption applies only to taxes for usual current expenses; infrastructure/rate measures fall outside.	The phrase grammatically and historically modifies only "appropriations," not "tax levies."	Held: "For usual current expenses" modifies "appropriations" only; tax levies need not be for usual current expenses to be exempt.

City of Madera v. Black, 181 Cal. 306 (Cal. 1919) (charges for municipal sewer system treated as a "tax" for constitutional purposes)
Geiger v. Board of Supervisors, 48 Cal.2d 832 (Cal. 1957) (referral to purpose of referendum exemption to avoid disruption of fiscal administration)
Rossi v. Brown, 9 Cal.4th 688 (Cal. 1995) (discussion of referendum/initiative differences and limits on referendum when essential functions are implicated)
Simpson v. Hite, 36 Cal.2d 125 (Cal. 1950) (limits on direct democracy where it conflicts with governmental functions/delegations)
Dare v. Lakeport City Council, 12 Cal.App.3d 864 (Cal. Ct. App. 1970) (earlier Court of Appeal treating sewer rates as exempt from referendum)
City of Morgan Hill v. Bushey, 5 Cal.5th 1068 (Cal. 2018) (background on referendum process and timing)