A streetlighting assessment district created prior to Proposition 218 is exempt from the tax-limiting initiative, the Fourth District Court of Appeals has decided. The court held that the City of Riverside's Street Light Assessment District is exempt because it provides revenue to operate streets, which was a specific exemption in the 1996 initiative. The July ruling was a blow to the Howard Jarvis Taxpayers Association and Paul Gann's Citizens Committee, two statewide organizations that backed Proposition 218. The landmark Proposition 13 was the forebearer to Proposition 218, the court noted. Backers intended for the initiative to close a loophole in Proposition 13 that allowed local government to raise taxes via special assessments. Proposition 218 requires two-thirds voter approval for special assessments. But Proposition 218 (Cal. Const. art. XIII D) contained four exemptions, and the Riverside case turned on one of them. The proposition exempted pre-existing special assessments "imposed exclusively to finance the capital costs or maintenance and operation expenses for sidewalks, streets, sewers, water flood control, drainage systems or vector control." Under the Riverside assessment district, created under the Landscaping and Lighting Act of 1972 (Sts. & Hy. Code § 22500), the city taxes almost all private property owners to pay for electricity for street lights. The district raises about $3 million annually. "Electrical current is necessary to operate streetlights; and streetlights, we believe, are necessary to operate streets and sidewalks," Justice Betty Ann Richli wrote for the unanimous three-judge panel. "Streetlights make streets and sidewalks safer. Thus, they are analogous to traffic lights." Proposition 218 contained exemption for "traditionally appropriate, nonabusive special assessments" such as those for streetlights, the court ruled. The taxpayer groups argued that the necessity of streetlighting was a factual question that was not resolved at the trial level. But the appellate court said the question was whether streetlighting is necessary within the meaning of Proposition 218. The court affirmed that streetlighting is necessary. "Although the drafters of Proposition 218 did not exempt streetlighting assessments in so many words, it does not violate their evident intent to hold that a streetlighting assessment is exempt as an expense of the operation of streets and sidewalks," Richli wrote. Riverside city officials' unease regarding the assessment district's legal status vis a vis Proposition 218 was not an issue, the court said. In June of 1997, Riverside placed a measure on the ballot that was intended to continue the district. Measure EE received 50.5% of the vote, well short of the two-thirds requirement needed to survive as a special tax. "This does not necessarily mean the City actually believed the assessment was invalid under Proposition 218," the court said. "The City was entitled to take a ‘suspenders and belt' approach — to try to reauthorize the assessment as a special tax and thereby to forestall litigation, while preserving its position that the assessment was exempt, just in case its efforts failed and litigation did ensue." Proposition 218 also exempted assessments imposed pursuant to a petition signed by all property owners, assessments needed to repay certain bond indebtedness, and assessments that had previously received a majority voter approval. The Case: Howard Jarvis Taxpayers Association v. City of Riverside, No. E022717, 99 C.D.O.S. 5739, Filed July 16, 1999. The Lawyers: For Jarvis: Jonathan Coupal, (916) 444-9950. For Riverside: Stan Yamamoto, city attorney, (909) 782-5567.