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Tentative Ruling
Judge Thomas Anderle
Department 3 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION

Rolland Jacks et al vs City of Santa Barbara

Case No: 1383959
Hearing Date: Tue Oct 08, 2013 9:30

Nature of Proceedings: Motion Judgment on Pleadings

Motion of Defendant for Judgment on the Pleadings Ruling: For the reasons set forth herein, the motion of defendant City of Santa Barbara for judgment on pleadings is granted without leave to amend. In this putative class action, plaintiffs assert that part of the defendant City of Santa Barbara’s electricity franchise fee is in actually a tax levied by the City without compliance with Proposition 218. Background: This is a motion for judgment on the pleadings. A motion for judgment on the pleadings is resolved by considering the allegations of the complaint, assumed as true for purposes of the motion, and matters of which the court takes judicial notice. (Code Civ. Proc., § 438, subd. (d).) The parties have filed with the court two sets of stipulated facts. (Note: The court again expresses its appreciation to the parties in creating these stipulations.) In response to the court’s request for clarification, both parties have agreed that these stipulated facts are intended for use by the court for all purposes. (City Supp. Brief, at p. 2; Plaintiffs Supp. Brief, at p. 2.) The court therefore takes judicial notice of the written stipulations of facts filed in this action and gives effect to those stipulations as conclusive of the truth of those facts for purposes of this action. (See Palmer v. City of Long Beach (1948) 33 Cal.2d 134, 141- 142.) As a result, the court considers those facts in determining this motion for judgment on the pleadings in addition to the allegations of the operative complaint. (1) Stipulated Facts Defendant City of Santa Barbara (the “City”) was incorporated on April 19, 1850. (First Stipulation of Facts [“Stipulation 1”], fact 1.) In 1887, Santa Barbara Electric Company installed and turned on electric arc lamps on State Street in Santa Barbara. (Stipulation 1, fact 2.) In 1959, the City adopted City Ordinance 2728, by which the City entered into a new franchise agreement (the “1959 Franchise”) with Southern California Edison (“SCE”) for electricity service for customers of the City. (Stipulation 1, fact 4 & exhibit B.) The 1959 Franchise was for a term of 25 years, to December 31, 1984. (Stipulation 1, fact 4.) The 1959 Franchise acknowledged the existence of SCE’s constitutional franchise and provided that it was “complimentary” to the existing constitutional franchise. (Ibid.) The 1959 Franchise was expressly granted in accordance with the Franchise Act of 1937 (Pub. Util. Code, § 6201 et seq.). (Stipulation 1, fact 4.) On May 2, 1967, the City adopted a revised City Charter, which has been in effect during the relevant times concerning the electricity franchise between the City and SCE. (Stipulation 1, fact 3.) In late 1984, the City entered into a franchise with SCE, adopted by City Ordinance 4312, to provide electricity to all homes, businesses and manufacturers located within the City (the “1984 Franchise”). (Stipulation 1, fact 5 & exhibit C.) The 1984 Franchise provided for a franchise fee to be paid to the City of one percent of SCE’s gross annual receipts for electricity sold within the City. (Stipulation 1, fact 8.) The 1984 Franchise was originally set to expire in September 1994. (Ibid.) In 1994, the City and SCE began negotiating the terms of a new franchise. (Stipulation 1, fact 7; Second Stipulation of Facts [“Stipulation 2”], fact 1.) These negotiations took more time than anticipated. (Ibid.) So, at the conclusion of the 1984 Franchise, five extensions were authorized pursuant to City Ordinances 4884, 4925, 5076, 5095 and 5111, extending the 1984 Franchise to December 1999. (Stipulation 1, fact 6.) During negotiations for this new franchise, City staff sought to increase the franchise fee from the percentage set in the previous City-SCE Franchise. (Stipulation 2, fact 2.) The 1984 Franchise had provided for a franchise fee that was paid by SCE to the City of one percent of SCE’s gross receipts for the electricity sold within the City. (Ibid.) For the new franchise agreement, City staff sought to raise additional revenues for the City for general City governmental purposes. (Ibid.) The City sought to increase the franchise fee percentage to an amount equal to two percent of SCE’s gross annual receipts from SCE’s sale of electricity within the City. (Stipulated Stipulation 1, fact 8.) After a period of negotiations, SCE drafted the proposal for the new franchise agreement. (Stipulation 2, fact 3.) That proposal stated that SCE would remit to the City a two percent franchise fee provided that the increase in the franchise fee (i.e., the additional one percent above the franchise fee under the 1984 Franchise) would be due and payable by SCE when and if the California Public Utilities Commission (the “CPUC”) consented to SCE’s request to include the additional one percent as a “customer surcharge” on the bills of all SCE electricity customers in the City. (Stipulation 1, fact 9; Stipulation 2, fact 3.) On that basis, the City staff and SCE tentatively agreed to a 30-year franchise agreement obligating SCE to remit to the City two percent of its gross annual receipts from its operations within the City, provided that the additional one percent portion of the franchise fee would become payable only if and when SCE obtained CPUC consent that the additional one percent would be collected as a customer surcharge. (Stipulation 2, fact 4.) The proposed new franchise was noticed by the City Clerk. (Stipulation 1, fact 11.) The City adopted City Ordinance 5135 on December 7, 1999, granting the 30-year franchise to SCE on the terms previously discussed (the “1999 Franchise”). (Stipulation 1, fact 12 & exhibit D; Stipulation 2, fact 5.) The initial term of the 1999 Franchise began on January 1, 2000, and was to end on December 31, 2002 (the “Initial Term”). (Stipulation 1, fact 13 & exhibit D.) During the Initial Term, SCE was to commence appropriate efforts to obtain consent from the CPUC through an SCE advice letter that would allow SCE to separately state the additional one percent fee. (Ibid.) Also during the Initial Term, the franchise fee was limited to the one percent franchise fee. (Stipulation 1, exhibit D, § 4.) SCE did not begin to collect the additional one percent at that time. (Stipulation 2, fact 5.) (As used herein, the following terms refer to the 1999 Franchise: The one percent franchise fee which is not the subject of the CPUC advice letter and is the only charge during the Initial Term is referred to as the “Initial Term Fee.” The additional one percent franchise fee which is the subject of the CPUC advice letter and is not charged during the Initial Term is referred to as the “Recovery Fee” [and is referred to in the 1999 Franchise as the “Recovery Portion”]. The Initial Term Fee and the Recovery Fee together, comprising the entire two percent franchise fee, is referred to as the “Extension Term Fee.” This terminology is for convenience in writing; the legal effects of these charges are discussed below.) Under section 3(D) of the 1999 Franchise, if the CPUC approved the SCE advice letter to bill the Recovery Fee, the Initial Term would be automatically extended to December 31, 2029. (Stipulation 1, fact 16.) This extension of the Initial Term is referred to as the “Extension Term.” If, by the end of the Initial Term, SCE has not yet received CPUC approval, the 1999 Franchise would be extended on a year-to-year basis paying only the Initial Term Fee. (Ibid.) In April 2001, the City consented to SCE’s request to delay for up to two years SCE’s advice filing with the CPUC seeking approval of the Recovery Fee billing because of uncertainty in the California energy deregulation transition period. (Stipulation 1, fact 17.) SCE continued to pay only the Initial Term Fee during this period. (Ibid.) On November 23, 2004, the City authorized City staff to send a letter to SCE directing SCE to pursue implementation of the Extension Term Fee by having SCE seek consent from the CPUC for the Extension Term Fee billing. (Stipulation 1, fact 18.) On December 8, 2004, City staff sent the letter to SCE. (Stipulation 1, fact 19.) On or about March 30, 2005, SCE submitted its Advice Filing 1881-E (U 338-E) (the “Advice Filing”) requesting CPUC consent for the Extension Term Fee billing. (Stipulation 1, fact 20 & exhibit I.) On April 20, 2005, the CPUC consented to the Advice Filing effective May 9, 2005. (Stipulation 1, fact 22 & exhibit J; Stipulation 2, fact 7.) After being advised that the Advice Filing was effective, SCE began collecting the Recovery Fee in November 2005 from all electricity users within the City. (Stipulation 1, fact 23; Stipulation 2, fact 8.) The SCE assessments, collections and remittance of the Recovery Fee were required by Santa Barbara City Ordinance 5135. (Stipulation 2, fact 8.) SCE includes the Recovery Fee on all electricity users’ bills with the City and remits 100 percent of those funds to the City. (Stipulation 2, fact 9.) For the first few years after SCE began including the Recovery Fee on customers’ bills, the receipts from the Recovery Fee were distributed to the City according to the original terms of the 1999 Franchise with one half going into the City’s general fund and one half going into the City’s underground projects fund. (Stipulation 1, facts 14, 25.) On November 10, 2009, the City reallocated the Recovery Fee receipts so that all of those receipts went into the City’s general fund without a limitation on the use of those funds. (Stipulation 1, fact 26.) (2) Complaint On December 2, 2011, plaintiffs Rolland Jacks and Rove Enterprises, Inc., dba Hotel Santa Barbara, filed their complaint against defendant City. The operative complaint is the first amended complaint (“FAC”) filed on September 12, 2012. The FAC is a putative class action complaint, asserted by plaintiffs individually and on behalf of all others similarly situated. The court has not yet heard any motion for class certification. The FAC asserts two causes of action against the City: (1) violation of Proposition 218 (Cal. Const., arts. XIII C, XIII D); and, (2) declaratory relief. (3) Prior Rulings The parties made cross-motions for summary judgment/summary adjudication based largely upon the facts set forth in Stipulation 1. On February 26, 2013, the court denied both of these motions. One issue asserted by plaintiffs in the summary judgment motion was that the franchise was governed by a combination of a constitutional franchise, the Broughton Act, and the Franchise Act of 1937. A constitutional franchise is a vestige of constitutional rights that existed between 1884 and 1911 to supply light or water to a city. (See generally City of Santa Cruz v. Pacific Gas & Electric Co. (2000) 82 Cal.App.4th 1167, 1171-1172.) The Broughton Act (now codified at Pub. Util. Code, § 6001 et seq.) was enacted in 1905 to provide procedures and limitations for, among other things, franchises complementary to constitutional franchises. (See generally Stats. 1905, ch. 578, pp. 777-780.) The Franchise Act of 1937 (now codified at Pub. Util. Code, § 6201 et seq.) provides an alternative scheme for calculating franchise fees to address practical accounting problems arising in the application the Broughton Act. (See generally City of Santa Cruz v. Pacific Gas & Electric Co., supra, 82 Cal.App.4th at pp. 1172-1173.) The court, in analysis incorporated here by reference, determined that the Broughton Act and Franchise Act of 1937 do not apply to charter cities, such as the City. As a result, the court found unpersuasive plaintiffs’ arguments that because the Extension Term Fee exceeds the franchise fees allowable by the Broughton Act and by the Franchise Act of 1937, the Recover Fee cannot be a “franchise fee” as that term is traditionally understood. (The court also found that the stipulated facts were insufficient to establish the existence of a constitutional franchise in SCE. This determination is inapplicable to this motion for judgment on the pleadings to the extent that the FAC can be construed to allege the existence of such a constitutional franchise. (See FAC, ¶¶ 40-45.)) The court then engaged in a review of changes in the constitutional aspects of local taxation from the passage of Proposition 13 in 1978 through the date of the hearing on the motions for summary judgment. Much of that discussion is repeated below to provide context for this motion. The court ultimately denied both cross-motions for summary judgment because the parties’ arguments did not provide a sufficient basis for the court to analyze the impact of the enactment of Proposition 26 on November 2, 2010, of plaintiffs’ claims of violation of article XIII C of the California Constitution. As a result, the court did not find it necessary to analyze the application of article XIII D to resolve the summary judgment motions. (4) Motion for Judgment on the Pleadings City now brings this motion for judgment on the pleadings to address the issue unresolved by the court’s analysis in the summary judgment motions, namely, the application of Proposition 26. In its moving papers, City argued that Proposition 26 does not apply retroactively, that is, to prevent collection of the Recovery Fee which was part of the franchise agreement enacted prior to the effectiveness of Proposition 26. Plaintiffs oppose the motion. Plaintiffs argue that the allegations in the FAC that the Recovery Fee is a tax prevents the granting of this motion and that Proposition 26 is retroactive in the sense of preventing the imposition of taxes inconsistent with Proposition 26 after its effective date. In reply, the City cited for the first time the recent case of Brooktrails Township Community Services Dist. v. Board of Supervisors of Mendocino County (2013) 218 Cal.App.4th 195 (published Jul. 24, 2013) (“Brooktrails”). Brooktrails, discussed below, addresses the issue of the retroactivity of Proposition 26. Because Brooktrails was cited for the first time in reply and because of other issues not adequately addressed by the parties, the court requested additional briefing. First, the court requested that plaintiffs provide their response to the City’s arguments with respect to Brooktrails. Second, the court requested clarification of whether the stipulated facts were facts which the court could consider in the resolution of this motion. As noted above, the parties agreed that the facts were stipulated as true for all purposes and could be used by the court in consideration of this motion. Third, the court requested that the parties address the issue of whether article XIII D of the California Constitution applied to the Recovery Fee, in particular, whether the any part of the Extension Term Fee constitutes a “fee” or “charge” “assessed by any agency upon any parcel of property or upon any person as an incident of property ownership” within the meaning of article XIII D, section 3. The parties provided their supplemental briefs as requested. Analysis: A party may move for judgment on the pleadings pursuant to Code of Civil Procedure section 438. This motion may be made on the grounds that “[t]he complaint does not state facts sufficient to constitute a cause of action against that defendant.” (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii).) “The standard for granting a motion for judgment on the pleadings is essentially the same as that applicable to a general demurrer, that is, under the state of the pleadings, together with matters that may be judicially noticed, it appears that a party is entitled to judgment as a matter of law. [Citations.] Judgment on the pleadings does not depend upon a resolution of questions of witness credibility or evidentiary conflicts. In fact, judgment on the pleadings must be denied where there are material factual issues that require evidentiary resolution.” (Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216, fn. omitted.) As discussed above, the parties have stipulated to facts which the court may, and does, consider in resolving this motion. The consideration of these facts largely disposes of plaintiffs’ argument that the pleadings do not provide sufficient detail regarding the enactment of the 1999 Franchise to resolve this motion. Unlike the court’s discussion of the summary judgment motions, however, the court does not consider facts presented outside of the FAC or the stipulated facts. (1) Legal Background of Proposition 218 Proposition 218, enacted by the voters in November 1996, provides substantial limitations upon the power of local government to impose taxes. Proposition 218 defines all taxes imposed by a local government to be either general or special taxes. (Cal. Const., art. XIII C, § 2, subd. (a).) “‘General tax’ means any tax imposed for general governmental purposes.” (Cal. Const., art. XIII C, § 1, subd. (a).) “No local government may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote.” (Cal. Const., art. XIII C, § 2, subd. (b).) “‘Special tax’ means any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.” (Cal. Const., art. XIII C, § 1, subd. (d).) “No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote.” (Cal. Const., art. XIII C, § 2, subd. (d).) Proposition 218, as originally enacted, did not include a definition of “tax” in article XIII C. The core issue presented is whether the Recovery Fee is a tax for purposes of article XIII C. City argues that the Recovery Fee, being part of the Extension Term Fee, is a “franchise fee” and not a tax. To resolve this issue, it is necessary to consider two core concepts: “franchise fee” and “tax.” As City points out, the concept of a “franchise fee” has been essentially unchanged since its definition in 1922 as a “charge which the holder of the franchise undertakes to pay as part of the consideration for the privilege of using the avenues and highways occupied by the public utility.” (County of Tulare v. Dinuba (1922) 188 Cal. 664, 670.) The stability in the concept of “franchise fee” is to be contrasted with the volatility in the definition of “tax.” “In June 1978, California voters added article XIII A, commonly known as the Jarvis-Gann Property Tax Initiative or Proposition 13 (article XIII A), to the state Constitution. The initiative’s purpose was to assure effective real property tax relief by means of an ‘interlocking “package”’ consisting of a real property tax rate limitation (art. XIII A, § 1), a real property assessment limitation (art. XIII A, § 2), a restriction on state taxes (art. XIII A, § 3), and a restriction on local taxes (art. XIII A, § 4).” (Sinclair Paint Co. v. State Bd. of Equalization (1997) 15 Cal.4th 866, 872.) Article XIII A, section 4, provides: “Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district, except ad valorem taxes on real property or a transaction tax or sales tax on the sale of real property within such City, County or special district.” The term “special taxes” was not defined by Proposition 13. In City and County of San Francisco v. Farrell (1982) 32 Cal.3d 47, the California Supreme Court considered whether a payroll and gross receipts tax, the proceeds of which were placed into a city’s general fund to be used for general governmental expenditures, constituted a “special tax.” (Id. at p. 50.) The two competing definitions of a “special tax” were: “a tax whose proceeds are used for a special purpose” and “additional or supplemental taxes other than those specifically excepted.” (Id. at p. 53.) After noting that “the language of section 4 must be strictly construed and ambiguities therein resolved so as to limit the measures to which the two-thirds requirement applies” (id. at p. 52), the court adopted the city’s definition: “[W]e construe the term ‘special taxes’ in section 4 to mean taxes which are levied for a specific purpose rather than, as in the present case, a levy placed in the general fund to be utilized for general governmental purposes.” (Id. at p. 57.) “In November 1979 article XIII B was added to the California Constitution through the adoption of Proposition 4, commonly referred to as the ‘Gann Initiative.’ Ballot arguments in support of Proposition 4 referred to it as providing ‘permanent protection for taxpayers from excessive taxation’ and ‘a reasonable way to provide discipline in tax spending at state and local levels.’ [¶] Article XIII B was adopted less than 18 months after the addition of article XIII A to the state Constitution, and was billed as ‘the next logical step to Proposition 13’ [article XIII A]. While article XIII A was generally aimed at controlling ad valorem property taxes and the imposition of new ‘special taxes’ [citations], the thrust of article XIII B is toward placing certain limitations on the growth of appropriations at both the state and local government level; in particular, article XIII B places limits on the authorization to expend the ‘proceeds of taxes.’ (§ 8, subd. (c).)” (County of Placer v. Corin (1980) 113 Cal.App.3d 443, 446.) “Article XIII B provides that beginning with the 1980-1981 fiscal year,‘an appropriations limit’ will be established for each ‘local government.’ (§ 8, subd. (h).) No ‘appropriations subject to limitation’ may be made in excess of this appropriations limit, and revenues received in excess of authorized appropriations must be returned to the taxpayers within the following two fiscal years. (§ 2.)” (County of Placer v. Corin, supra, 113 Cal.App.3d at p. 446.) “Billed as a flexible way to provide discipline in government spending, article XIII B does not limit the ability to expend government funds collected from all sources. Rather, the appropriations limit is based on ‘appropriations subject to limitation,’ which consists primarily of the authorization to expend during a fiscal year the ‘proceeds of taxes.’ (§ 8, subd. (a).) As to local governments, limits are placed only on the authorization to expend the proceeds of taxes levied by that entity, in addition to proceeds of state subventions (§ 8, subd. (c)); no limitation is placed on the expenditure of those revenues that do not constitute ‘proceeds of taxes.’” (Id. at p. 447.) In County of Placer v. Corin, the court addressed the issue of whether “proceeds of taxes” as used in article XIII B of the California Constitution included, among other thing, special assessments of an assessment district. (County of Placer v. Corin, supra, 113 Cal.App.3d at p. 445.) The court determined that, “for local entities, ‘proceeds of taxes’ includes, but is not restricted to: (1) all tax revenues; (2) excessive regulatory license fees and excessive user charges and fees; (3) the investment of tax revenues; and (4) subventions from the state.” (County of Placer v. Corin, supra, 113 Cal.App.3d at p. 448.) The court observed that “‘there is a broad and well-recognized distinction between a tax levied for the general public good and without special regard to the benefit conferred upon the individual or property subject to the tax, and a special assessment levied to force the payment of a benefit, …’ [Citations.]” (Id. at p. 449.) The court concluded that “the framers of the initiative did not intend to include the proceeds derived from special assessments to be included within the ‘not restricted to’ language of ‘proceeds of taxes.’” (Ibid.) In Santa Barbara County Taxpayers Assn. v. Board of Supervisors (1989) 209 Cal.App.3d 940 (“SB Taxpayers”), the court addressed the issue of whether franchise fees constitute “proceeds of taxes” under article XIII B. (Id. at pp. 943-944.) The court held: “A franchise is a negotiated contract between a private enterprise and a governmental entity for the long-term possession of land. Franchise fees are paid as compensation for the grant of a right of way, not for a license or tax nor for a regulatory program of supervision or inspection.” (Id. at p. 949.) “In sum, franchise fees are paid for the governmental grant of a relatively long possessory right to use land, similar to an easement or a leasehold, to provide essential services to the general public.” (Ibid.) “Although franchises may be taxed like other forms of property, fees paid for franchises are not taxes, user fees or regulatory licenses. ([Citations]; see also County of Placer v. Corin[, supra,] 113 Cal.App.3d [at pp.] 451-452, which concludes that ‘“proceeds of taxes”’ generally contemplate only those exactions which raise general tax revenues for the governmental entities and do not include special assessments which do not obtain revenue beyond the cost of the improvement; [citation].)” (SB Taxpayers, supra, 209 Cal.App.3d at p. 950.) “By contrast, user fees or charges are typically cost recovery charges imposed upon individual citizens for the specific, temporary use of public property and/or services.” (Ibid.) “Consequently, franchise fees collected for grants of rights of way are not ‘“proceeds of taxes”’ under article XIII B, section 8, subdivision (c). These fees are not user fees or charges, nor are they for regulatory licenses. Franchise fees need not be included in calculating the appropriations limit.” (SB Taxpayers, supra, 209 Cal.App.3d at p. 950.) While the effects of Proposition 13 and the Gann Initiative were percolating through the courts, the voters continued their refinements of local government taxing authority. “In November 1986, the voters approved Proposition 62, a statutory initiative that added sections 53720 through 53730 to the Government Code. [Citation.] ‘The manifest purpose of Proposition 62 as a whole was to increase the control of the citizenry over local taxation by requiring voter approval of all new local taxes imposed by all local governmental entities: the measure defines broadly and inclusively both the taxes ([Gov. Code,] § 53721) and the entities ([Gov. Code,] § 53720) to which it applies.’ [Citation.]” (Howard Jarvis Taxpayers Assn. v. City of San Diego (2004) 120 Cal.App.4th 374, 390, fn. omitted.) Proposition 62 included the same definition of taxes as later set forth in Proposition 218 (quoted above): All taxes are either special taxes or general taxes. General taxes are taxes imposed for general governmental purposes. Special taxes are taxes imposed for specific purposes. (Gov. Code, § 53721.) Because Proposition 62 was a statutory initiative rather than a constitutional amendment, however, Proposition 62 does not apply to charter cities. (Trader Sports v. City of San Leandro (2001) 93 Cal.App.4th 37, 49.) In Knox v. City of Orland (1992) 4 Cal.4th 132, the Supreme Court addressed the issue of whether a special assessment was a “special tax” within the meaning of article XIII A, section 4. In May 1989, the City of Orland formed a special assessment district under the Landscaping and Lighting Act of 1972 (Sts. & Hy. Code, § 22500 et seq.). (Knox, supra, 4 Cal.4th at p. 137.) Orland then imposed on each parcel within the district a special assessment of $24 per dwelling unit. (Ibid.) The special assessment was for the maintenance and servicing of lights, playground equipment, landscaping, irrigation systems, public restrooms, bleachers, and other improvements at five named city parks. (Ibid.) The special assessment was challenged as “special tax” for which voter approval was required. (Id. at p. 138.) The Knox court distinguished special assessments from special taxes. “‘The rationale of special assessment is that the assessed property has received a special benefit over and above that received by the general public. The general public should not be required to pay for special benefits for the few, and the few specially benefited should not be subsidized by the general public. [Citation.]’ [Citation.] Thus, ‘[a]lthough a special assessment is imposed through the same mechanism used to finance the cost of local government, in reality it is a compulsory charge to recoup the cost of a public improvement made for the special benefit of particular property.’ [Citation.]”) (Knox, supra, 4 Cal.4th at p. 142.) “A tax, on the other hand, is very different. Unlike a special assessment, a tax can be levied ‘“without reference to peculiar benefits to particular individuals or property.”’ [Citation.] Indeed, ‘[n]othing is more familiar in taxation than the imposition of a tax upon a class or upon individuals who enjoy no direct benefit from its expenditure, and who are not responsible for the condition to be remedied.’ [Citations.] The same holds true even for a special tax which, for purposes of section 4, is a tax levied to fund a specific governmental project or program.” (Ibid.) “Accordingly, if an assessment for park maintenance improvements provides a special benefit to the assessed properties, then the assessed property owners should pay for the benefit they receive. If it does not, the assessment effectively amounts to a special tax upon the assessed property owners for the benefit of the general public.” (Knox, supra, 4 Cal.4th at pp. 142-143.) The Knox court held that the Orland park maintenance assessment was a valid special assessment and not a special tax requiring voter approval. (Id. at p. 150.) “‘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. Proposition 218 allows only four types of local property taxes: (1) an ad valorem property tax; (2) a special tax; (3) an assessment; and (4) a fee or charge. [Citations.] It buttresses Proposition 13’s limitations on ad valorem property taxes and special taxes by placing analogous restrictions on assessments, fees, and charges.’ [Citation.] (Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles (2001) 24 Cal.4th 830, 837.) “In contrast to Proposition 62, this initiative measure created a constitutional amendment intended to limit the authority of local governments to impose taxes, assessments, fees and charges. As explained in McBrearty v. City of Brawley (1997) 59 Cal.App.4th 1441, the drafters of Proposition 218 ‘felt that a constitutional amendment was necessary to ensure that voter approval requirements would apply to charter cities as well as other local taxing authorities. [Citations.]’ [Citation.]” (Trader Sports v. City of San Leandro (2001) 93 Cal.App.4th 37, 49, fn. 3.) In Howard Jarvis Taxpayers Assn. v. City of Roseville (2002) 97 Cal.App.4th 637 (“City of Roseville”), the issue was the validity of a fee charged by the City of Roseville’s municipal water, sewer and refuse collection utilities. The fee was denominated an “in-lieu franchise fee” and was paid by the utility ratepayers. (Id. at p. 638.) Whereas “[p]rivate utilities pay public authorities ‘franchise fees’ to use government land such as streets, or for rights-of- way to provide utility service,” Roseville imposed the in-lieu fee on its municipal-owned utilities.” (Id. at p. 639.) Plaintiff in City of Roseville challenged the in-lieu fee as a property- related fee or charge imposed in violation of article XIII D, section 6. (Id. at p. 642.) The City of Roseville court held that “Roseville may charge its water, sewer, and refuse utilities for the street, alley and right-of-way costs attributed to the utilities; and Roseville may transfer these revenues to its general fund to pay for such costs (the general fund supports or pays for Roseville’s streets, alleys, and rights-of-way)[,] however, there has been no showing that the in-lieu fee reasonably represents these costs.” (Id. at p. 648.) The in-lieu fee was therefore held to be in violation of Proposition 218. (Id. at p. 650.) Proposition 26, which became effective on November 3, 2010, amended Proposition 218 by adding article XIII C, section 1, subdivision (e)—a new and expansive definition of “tax.” (2) Application of Proposition 218 to Franchise Fees Before Proposition 26 Plaintiffs’ FAC was filed in 2011 and seeks remedies for the violation of articles XIII C and XIII D (i.e., Proposition 218) at times both before and after the enactment of Proposition 26. Plaintiffs argue that Proposition 218 applies to the Recovery Fee regardless of Proposition 26. It is therefore appropriate for the court to consider the effect of article XIII C before its amendment in 2010. The determination of whether impositions are “taxes” or “fees” is a question of law. (Sinclair Paint Co. v. State Bd. of Equalization, supra, 15 Cal.4th 866, 873-874.) “The cases recognize that ‘tax’ has no fixed meaning, and that the distinction between taxes and fees is frequently ‘blurred,’ taking on different meanings in different contexts.” (Id. at p. 874.) The above discussion of the legal background to Proposition 218 shows that voters have repeatedly refined the scope of the concept of “tax” in reaction to local government efforts to circumvent the constitutional restrictions imposed by the voters. “Section 5 of Proposition 218 require[s] that the provisions of the act be ‘liberally construed to effectuate its purposes of limiting local government revenue and enhancing taxpayer consent.’ [Citation.]” (Bay Area Cellular Telephone Co. v. City of Union City (2008) 162 Cal.App.4th 686, 693.) “In general, taxes are imposed for revenue purposes, rather than in return for a specific benefit conferred or privilege granted. [Citations.] Most taxes are compulsory rather than imposed in response to a voluntary decision to develop or to seek other government benefits or privileges. [Citations.] But compulsory fees may be deemed legitimate fees rather than taxes.” (Sinclair Paint Co. v. State Bd. of Equalization, supra, 15 Cal.4th at p. 874.) Courts have applied the Sinclair Paint analysis, which analyzed the scope of the term “tax” under Proposition 13 in determining whether a fee is a tax for purposes of Proposition 218. (Bay Area Cellular Telephone Co. v. City of Union City, supra, 162 Cal.App.4th at p. 694, fn. 6.) “The ‘special tax’ cases have involved three general categories of fees or assessments: (1) special assessments, based on the value of benefits conferred on property; (2) development fees, exacted in return for permits or other government privileges; and (3) regulatory fees, imposed under the police power.” (Sinclair Paint Co. v. State Bd. of Equalization, supra, 15 Cal.4th at p. 874.) “[R]egardless of the type of fee, it must bear some reasonable relation to the benefits and costs associated with the service: A special assessment is based on the benefit to the specific property; a development fee is not considered a special tax if it bears a reasonable relation to the development’s probable cost to the community and benefits derived from the community; a regulatory fee is limited to ‘the reasonable cost of the services necessary for the activity for which the fee is charged and for carrying out the purpose of the regulation’; and a user fee is charged to the person using the service and its amount is related to the goods and services actually provided.” (Bay Area Cellular Telephone Co. v. City of Union City, supra, 162 Cal.App.4th at pp. 694-695.) “With each of these cases, a discrete group receives a benefit (for example, a permit to build or inspection of produce) or a service (for example, providing and administering a rental dispute mediation and arbitration hearing process) or a permanent public improvement (such as a local park or landscaped median islands on a local road) which inures to the benefit of that discrete group. The public as a whole may be incidentally benefitted, but the discrete group is specially benefitted by the expenditure of these funds. [Citations.] The public should not be required to finance an expenditure through taxation which benefits only a small segment of the population.” (Evans v. City of San Jose (1992) 3 Cal.App.4th 728, 738.) Plaintiffs argue that the Recovery Fee is a tax because (1) the Recovery Fee is billed to and paid by SCE customers rather than by SCE and (2) the primary purpose of the Recovery Fee is to generate revenue. City argues that the Recovery Fee is a franchise fee paid in consideration of SCE’s use of City streets and rights of way, which fee is not a tax as determined in SB Taxpayers, supra, 209 Cal.App.3d 940. SB Taxpayers assumed without discussion that the franchise fees there at issue fell within the traditional understanding of fees paid for the governmental grant of a relatively long possessory right to use land, similar to an easement or a leasehold, to provide essential services to the general public. (SB Taxpayers, supra, 209 Cal.App.3d at p. 949.) SB Taxpayers reflected the longstanding distinction between a franchise fee and a tax: “The fee which a city may exact for a franchise to use streets and other public property for the construction and maintenance of [utility] lines and equipment is not a tax upon the property of the utility or a license charge for the privilege of operating its business; it is compensation for the privilege of using the streets and other public property within the territory covered by the franchise.” (Pacific Tel. & Tel. Co. v. Los Angeles (1955) 44 Cal.2d 272, 283 [referring to telephone lines under a municipal telephone services franchise].) The defining concept of a franchise fee is compensation for use of City property. Unlike a tax, a franchise fee is imposed contractually upon the utility in exchange for the utility’s use of City property. This defining concept of payment as compensation does not depend upon the source of the funds used to pay the franchise fee. Funds derived from the utility’s customer base would be expected to pay for the franchise fee because otherwise the franchise would not be in the utility’s business interest. So, the concept of a franchise fee as compensation is unaffected by how the utility passes on that franchise fee to the customer base. From the local government perspective, the concept of a franchise fee as compensation for the use of City property does not depend upon how the City used the proceeds from the franchise fee. In particular, the amount of the contractually determined franchise fee does not depend upon the costs of the franchise to the City. (See Howard Jarvis Taxpayers Assn. v. City of Roseville, supra, 97 Cal.App.4th at p. 648 [a municipality “may be free to impose franchise fees on private utilities on the basis of contractual negotiation rather than costs”].) Instead, the amount of the compensation depends upon the relative value of the property to the two contracting parties. (See ibid.) So, whether the City uses the franchise fees for general government purposes or for specifically identified projects, the character of the franchise fee payment as the price paid for use of property does not change. In SB Taxpayers, the court was concerned with whether franchise fees were included within the definition of “proceeds of taxes” in article XIII B. (SB Taxpayers, supra, 209 Cal.App.3d at pp. 948-949.) “‘Proceeds of taxes’ shall include, but not be restricted to, all tax revenues and the proceeds to an entity of government, from (1) regulatory licenses, user charges, and user fees to the extent that those proceeds exceed the costs reasonably borne by that entity in providing the regulation, product, or service, and (2) the investment of tax revenues.” (Cal. Const., art. XIII B, § 8, subd. (c).) The court in SB Taxpayers concluded that franchise fees were not “user fees or charges” because the franchise fees were not cost recovery charges for specific, temporary use of public property or services. (SB Taxpayers, supra, 209 Cal.App.3d at p. 950.) Payments of franchise fees are not proceeds of taxes because of the defining character of franchise fees as compensation for the use of property. (Id. at p. 949.) The decision in SB Taxpayers, decided in 1989, necessarily did not incorporate the analysis applied by the California Supreme Court in Sinclair Paint Co. v. State Bd. of Equalization, supra, 15 Cal.4th 866, decided in 1997. Nonetheless, the principal distinction between a “tax” and a “fee” under the Sinclair Paint analysis is that taxes are imposed for revenue purposes and not in return for a specific benefit conferred or privilege granted. (Id. at p. 874; accord Hagman v. Meher Mount Corp. (2013) 215 Cal.App.4th 82, 91-92.) Here, the stipulated facts demonstrate that the Recovery Fee is imposed for revenue purposes and at the same time is imposed in return for a specific benefit conferred. The Recovery Fee generates revenue that is paid to the City for general revenue purposes. (Stipulation 1, fact 26.) Yet, the Recovery Fee, together with the Initial Term Fee, constitute the total compensation paid for the franchise, i.e., for the right to use public property, during the Extension Term. (See Stipulation 1, exhibit D, § 2, 4, 5.) The Sinclair Paint definition of a “tax” is not inconsistent with the definition of a “tax” applied in SB Taxpayers. SB Taxpayers emphasizes that a franchise fee is merely the measure of compensation for the long term use of public property. Because the measure of compensation is a matter of contractual negotiation, the amount of the franchise fee need not be based on costs. (See Howard Jarvis Taxpayers Assn. v. City of Roseville, supra, 97 Cal.App.4th at p. 648.) Because the franchise fee is not a cost recovery charge, franchise fees would be expected to generate revenue for the local government granting the franchise. The absolute amount of the compensation the City receives, and hence the amount of revenue, is determined by the negotiation with SCE. Thus, as SB Taxpayers holds, the character of the franchise fee as compensation in exchange for the long term use of property controls the legal effect of franchise fees as something that are not “taxes, user fees or regulatory licenses.” (SB Taxpayers, supra, 209 Cal.App.3d at p. 950.) This is not to say that the Recovery Fee is not a handy substitute for a tax. The incidence of the Recovery Fee falls squarely on the utility consumer, to whom the Recovery Fee is billed as a separate line item. The amount collected is then remitted in its entirety to the City. (Stipulation 1, fact 24; Stipulation 2, fact 9.) From the perspective of the utility consumer, there is no functional difference between the Recovery Fee and a utility users tax. However, SB Taxpayers provides a clear statement that franchise fees do not constitute taxes because of their character as compensation for the long term use of public property notwithstanding the feature of a franchise fee as a source of government revenue above and beyond any cost incurred by the local government. SB Taxpayers has not been disapproved and is binding on this court. (See Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455 [“Courts exercising inferior jurisdiction must accept the law declared by courts of superior jurisdiction. It is not their function to attempt to overrule decisions of a higher court.”].) As noted above, Proposition 218 did not provide a constitutional definition of “tax,” effectively adopting the definitions provided in case law, including both SB Taxpayers and Sinclair Paint. Until the adoption of Proposition 26, the constitutional definition of “tax” was unchanged. Thus, at least until the change in the constitutional text by Proposition 26, the SB Taxpayers determination that a franchise fee is not a tax is applicable here and binding on this court. (3) Effect of Proposition 26 Proposition 26 changed the constitutional text of article XIII C by the addition of a broad definition of a “tax.” (Cal. Const., art. XIII C, § 1, subd. (e).) When the summary judgment motion was decided, the parties had generically assumed that the definition supplied by Proposition 26 was applicable to this action. (See City’s Cross Motion for Summary Judgment, p. 20 [“Of particular relevance [is] subdivision (e)(4) of Prop 26 …. This definition applies to Santa Barbara’s Franchise Fee because it is a charge imposed on Southern California Edison for the use of the City’s property ….”].) After a review of the text and ballot statement of Proposition 26, the court concluded that, contrary to City’s argument in those summary judgment motions, Proposition 26 was intended to include within the definition of “tax” fees such as Recovery Fee. Without deciding the extent, if any, these provisions had upon the action, the court found it sufficient to deny the motions because neither party had met their respective burdens of persuasion of entitlement to judgment on the entirety of either cause of action. This motion now addresses this issue and presents new authority that is directly on point: Brooktrails Township Community Services Dist. v. Board of Supervisors (2013) 218 Cal.App.4th 195 (“Brooktrails”). The litigation in Brooktrails arose out of earlier litigation in Paland v. Brooktrails Township Community Services Dist. Bd. of Directors (2009) 179 Cal.App.4th 1358 (“Paland”). At issue in Paland were “base rate” water and sewer charges imposed on parcels that had previously been connected to the water and sewer services provided by the district (and for which connection charges had been paid) where the service had been later discontinued. (Id. at pp. 198-199.) The plaintiff (Paland) challenged the charges as standby charges made improper by article XIII D, section 6, subdivision (b) (4) of the California Constitution—provisions within Proposition 218. (Id. at p. 200.) The court in Paland concluded that the charges were not prohibited by Proposition 218. (Ibid.) In response to the Court of Appeal’s affirmance in Paland, Paland drafted and obtained sufficient signatures to put a local initiative on the ballot (Measure D) which would prohibit the charges Paland unsuccessfully challenged in Paland. (Brooktrails, supra, 218 Cal.App.4th at p. 202.) The county counsel advised voters that Measure D required only a simple majority to pass. (Id. at p. 203.) Measure D was on the November 2, 2010, ballot, together with the statewide Proposition 26. (Ibid.) Measure D passed by a simple majority; Proposition 26 passed statewide. (Ibid.) Pursuant to the California Constitution, Proposition 26 took effect on November 3, 2010; pursuant to statute, Measure D was to take effect some time later. (Id. at pp. 205, 207 & fn. 8.) The district brought suit for declaratory relief that Measure D is not in effect for not having achieved a two-thirds vote as required by Proposition 26. (Brooktrails, supra, 218 Cal.App.4th at p. 204.) Following a bench trial, the trial court concluded that allowing property owners with existing connections to discontinue service without paying the base rates would raise the base rates for property owners who remained connected, “which would in practical effect amount to a raise in what property owners who remained connected paid for the connection. The trial court reasoned that this increase amounted to a ‘tax’ according to the new definition of that term adopted in Proposition 26.” (Ibid.) (Note: The reasoning behind this determination that elimination of a service charge for those not receiving service is functionally equivalent to a tax increase under Proposition 26 to those receiving service is not explained.) The Court of Appeal in Brooktrails reversed. (Brooktrails, supra, 218 Cal.App.4th at p. 208.) The Court considered both the text and ballot materials for Proposition 26 and concluded that Proposition 26 has no “retroactive application to existing local assessments, fees, or charges.” (Id. at p. 206.) The Court then determined that with the changes to article XIII C by Proposition 26 removed from consideration, the affected charges were fees, not taxes, and therefore did not require a two-thirds vote. (Id. at p. 207.) Consequently, Proposition 218, as it existed without the Proposition 26 amendments, was no impediment to the effectiveness of Measure D. (Ibid.) City argues that Brooktrails conclusively determines that Proposition 26 is not retroactive. Brooktrails clearly holds that Proposition 26 does not have “retroactive application to existing local assessments, fees, or charges.” (Brooktrails, supra, 218 Cal.App.4th at p. 208.) The 1999 Franchise, including the Recovery Fee, was agreed, enacted and fully implemented prior to the adoption of Proposition 26. Because Brooktrails determines that Proposition does not have retroactive application to an existing fee, the amendments to article XIII C made by Proposition 26 do not apply to invalidate the future collection of those fees and charges. In response to the court’s request for supplemental briefing, plaintiffs argue that Brooktrails should not be followed because (1) Brooktrails is not binding on this court as an opinion from the First Appellate District rather than from the Second Appellate District, (2) Proposition 26 is not contrary to prior legal definitions of a “tax,” and (3) Brooktrails is wrong about the retroactive application of Proposition 26. Plaintiffs’ first argument misunderstands the precedential effect of California appellate decisions. “Decisions of every division of the District Courts of Appeal are binding upon all the justice and municipal courts and upon all the superior courts of this state ….” (Auto Equity Sales, Inc. v. Superior Court, supra, 57 Cal.2d 450, 455.) Thus, the decision in Brooktrails is precedent binding on this court. The binding authority of Brooktrails also disposes of plaintiffs’ third argument because this court, having no power to disagree with the holding of Brooktrails, cannot entertain the argument that Brooktrails was wrongly decided. As discussed above, the equally binding decision in SB Taxpayers holds that a franchise fee is not a tax under pre-Proposition 26 law. This holding disposes of plaintiffs’ second argument. Proposition 26 expressly changed the definition of “tax” to encompass fees and charges previously deemed not a “tax.” As the court discussed in its decision on the summary judgment motions, the ballot arguments in favor of Proposition 26 provide support for the argument that excessive electricity franchise fees are among the “hidden taxes” Proposition 26 intended to prohibit. (See Voter Information Guide, Gen. Elec. (Nov. 2, 2010) arguments and rebuttals for Prop. 26 [as of Oct. 3, 2013].) The apparent necessity of Proposition 26 itself is evidence that Proposition 26 changed rather than merely restated the legal definition of a “tax” under Proposition 218. The necessary conclusion from the application of SB Taxpayers and Brooktrails is that a franchise fee is not a tax and the Recovery Fee, as alleged in the FAC and detailed in the stipulated facts, is not a prohibited tax under article XIII C with Proposition 26 amendments applied prospectively only. (Note: City also argues that plaintiffs’ FAC does not mention Proposition 26 and therefore Proposition 26 should not be an issue. The FAC does, however, extensively mention articles XIII C and XIII D, which include the portions of Proposition 26 at issue here. Express allegations of Proposition 26 are not necessary to raise Proposition 26 as an issue.) (4) Application of Article XIII D Plaintiffs’ FAC alleges that the Recovery Fee violates both article XIII C and article XIII D. (FAC, ¶¶ 54-56.) City’s motion directly addressed only article XIII C and not article XIII D. In light of the new issues raised with respect to article XIII C in this motion, the court requested further briefing on the application of article XIII D to the Recovery Fee. Section 3, subdivision (a), of Article XIII D provides: “No tax, assessment, fee, or charge shall be assessed by any agency upon any parcel of property or upon any person as an incident of property ownership except: “(1) The ad valorem property tax imposed pursuant to Article XIII and Article XIII A. “(2) Any special tax receiving a two-thirds vote pursuant to Section 4 of Article XIII A. “(3) Assessments as provided by this article. “(4) Fees or charges for property related services as provided by this article.” The court specifically requested briefing as to whether the Recovery Fee constituted a fee or charged assessed “as an incident of property” under article XIII D, section 3. In their supplemental brief, plaintiffs argue that City has not shown that the Recovery Fee is not a fee or charge assessed as an incident of property because there is no provision of City’s Municipal Code which addresses or authorizes the consumption based electricity fee charged to plaintiffs and SCE electricity customers. Plaintiffs assert, without citation to authority, that “SCE and the City cannot ‘contract’ to foist charges upon citizens without the inclusion of such within the City’s Code.” In the City’s supplemental brief, City argues that the Recovery Fee is not a fee imposed as an incident of property ownership because electricity fees are expressly excluded from this definition: “For purposes of this article, fees for the provision of electrical or gas service shall not be deemed charges or fees imposed as an incident of property ownership.” (Cal. Const., art. XIII D, § 3, subd. (b).) There is strong support for the proposition that unless exempted by subdivision (b), the franchise fee is a fee that is assessed as an incident of property ownership. “‘Fee’ or ‘charge’ means any levy other than an ad valorem tax, a special tax, or an assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership, including a user fee or charge for a property related service.” (Cal. Const., art. XIII D, § 2, subd. (e).) As the stipulated facts indicate, the franchise fee is passed through to electricity customers at their property. (E.g., Stipulation 2, fact 10.) A charge relating to the provision of utility services to a property is a charge levied as an incident of property ownership. (See Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal.4th 205, 217 [domestic water delivery through a pipeline].) In addition, the franchise fee itself is a charge levied for the use of public property. (SB Taxpayers, supra, 209 Cal.App.3d at p. 949.) Plaintiffs provide no logic or authority for their argument that the constitutional nature of the charge cannot be determined without a provision in the Santa Barbara Municipal Code. The 1999 Franchise was adopted as an ordinance of the City. (Stipulation 1, fact 12; Stipulation 2, fact 5.) “An ordinance is the equivalent of a municipal statute, passed by the city council, or equivalent body, and governing matters not already covered by federal or state law.” (California Aviation Council v. City of Ceres (1992) 9 Cal.App.4th 1384, 1391, internal quotation marks and citation omitted.) “The codification of statutory enactments serves to compile and publish the enactments, but ‘the fact that published versions of the … Code do not include [all of the enactment] is of no moment. “A compilation of laws … is merely a systematic arrangement of all the statutes of a particular state published to facilitate the discovery of the law … . The omission of statutes from the compilation, disastrous as it may be to the hurried lawyer in search of the statutory material, is without effect and if the statute is still in force its omission from the compilation is without legal significance.” [Citation.]’ [Citation.]” (In re A.G. (2010) 186 Cal.App.4th 1454, 1461.) Thus, the adoption of an ordinance was a sufficient enactment to give effect to the terms of 1999 Franchise without including a corresponding provision in the Santa Barbara Municipal Code. The exemption of article XIII D, section 3, subdivision (b), is for “fees for the provision of electrical … service ….” The 1999 Franchise is expressly for the purpose of permitting a transmission system for the purpose of delivering electricity to users within the City. (Stipulation 1, exhibit D, § 2(A).) Because the franchise fees are compensation for the use of land required for such transmission, it is a reasonable construction of article XIII D, section 3, subdivision (b), that the franchise fees are fees for the provision of electrical service and thus deemed not to be included within the prohibition of section 3, subdivision (a). On the alleged and stipulated facts, the Recovery Fee is not a fee imposed in violation of article XIII D of the California Constitution. (5) Conclusion Based upon the foregoing analysis, the court concludes that on the alleged and stipulated facts, the Recovery Fee does not violate either article XIII C or article XIII D. Because plaintiffs’ two causes of action in the FAC depend upon a contrary conclusion, the City’s motion for judgment on the pleadings will be granted. Plaintiffs request that if the motion is to be granted based upon the City’s argument that the FAC lacks allegations concerning Proposition 26 or its application, plaintiffs seek leave to amend to assert those claims. As noted above, the FAC is construed together with the stipulated facts. The court does not grant this motion on the basis of the absence of necessary allegations but upon the legal effect of the allegations and stipulated facts. The facts as already alleged and stipulated are sufficient to raise Proposition 26 as an issue. Plaintiffs further request that, if the court concludes that the charges imposed on electricity users are “franchise fees,” plaintiffs seek leave to amend to include a cause of action against the City based upon violations of the citizens’ Due Process rights caused by the enactment of a franchise fee upon the non-franchisee utility users without legal authority and by the collection of charges from electricity users without an existing City Municipal Code ordinance granting legal authority for that conduct. (Plaintiffs Supp. Brief, at p. 7.) Plaintiffs do not specify how their FAC can be amended to make such a claim. Plaintiffs have stipulated to the adoption of the 1999 Franchise as an ordinance of the City. This stipulation obviates any claim based upon the lack of a municipal enactment. Plaintiffs do not explain how the allegation of additional facts would or could change this result. Because amendment of the complaint as requested by plaintiffs would not alter the legal result reached in the disposition of this motion, the court will deny plaintiffs’ request for leave to amend.