An appellate court has struck down a Riverside County assessment for park maintenance because the county failed to distinguish between general benefits and parcel-specific benefits provided in return for the assessments, as required by Proposition 218.
"The County failed to meet its constitutional burden of demonstrating that the assessment was proportional to, and did not exceed, the value of the special benefits that the use and enjoyment of the parks would confer on assessed parcels," the Fourth District Court of Appeal concluded.
One of the elements of a Proposition 218 election is the engineer's report in support of the range of assessments. The engineer's report must segregate general and special benefits, and it must be based upon credible, substantial evidence. Because Proposition 218 places the burden on the agency adopting the assessment to justify the assessment, every agency must make its own judgment about much information it must include in the engineer's report. The Fourth District's decision Beutz v. County of Riverside sheds light on the subject.
In 1999, a local park and recreation district in the community of Wildomar failed and Riverside County subsequently took over the district's assets and liabilities. The county adopted a parks master plan, and, to help fund the parks, it adopted a development impact fee. In addition, the county proposed using assessments, as authorized by the Landscaping and Lighting Act of 1972 (Streets and Highways Code, § 22500 et seq.), to maintain the landscaping for the three parks inherited from the district and to help fund a proposed new park. Upon return of the engineer's report, the county authorized the assessments, conducted a protest proceeding, and called an election.
According to the engineer's report, there were more than 6,000 assessable parcels in the district, all residential in character. A senior citizen development and non-residential properties were not included because the engineer concluded those properties would not receive any special benefits. The assessment was set at $28 per residential unit, with a maximum assessment of $45. The higher amount was to be triggered by improvements for the then-unbuilt park. In addressing the allocation of general and special benefits, the engineer's report recognized that there would be general benefits to people in the greater community but found that these benefits would be offset by three factors: 1) the county's absorption of the former district's debt; 2) by anticipated county expenditures of $6 million on park rehabilitation and improvements; and 3) by contributions to annual operating costs.
Steven Beutz, a residential property owner, filed suit challenging the assessment. Beutz argued that the assessment was invalid because all of the costs were assigned to residential properties without deduction for the general benefits to non-residential properties. The county's decision to exempt 150 publicly owned parcels from the assessment also violated Proposition 218, he argued, because the county failed to present clear and convincing evidence that the parcels would not receive a special benefit from the landscaping. The trial court ruled for the county. The appellate court reversed.
With respect to the standard of review, Proposition 218 requires the agency imposing the assessment to justify the special benefits and allocation of financial burden. The appellate court said that a reviewing court applies a de novo or independent judgment review, not the more deferential approach typically applied to review of agency decisions.
The first issue addressed by the court in Beutz was whether the allocation of benefits – special versus general – was based on the landscaping maintenance component only, or on the master plan, of which landscape maintenance was a part. On this issue, the appellate court ruled for the county, saying that Proposition 218 allowed for the broader inquiry on the master plan.
However, the appellate court ruled for Beutz on the issues pertaining to the assessment calculations. Missing from the engineer's report was an analysis of the relative use/benefit of the parks to the public generally compared with use/benefit by the residents in Wildomar. The court also faulted the analysis for ignoring whether Wildomar residents who lived closer to the parks would use the facilities more than Wildomar residents who lived farther away.
"Notably, had the report separated and quantified the general and special benefits of the master plan, based upon solid, credible evidence and purported to base the assessment solely on the special benefits, the substantial evidence standard of review may have applied to the report's implicit conclusions that all Wildomar properties would specially benefit from the parks in equal measure, and that the assessment on each parcel was proportional to and no greater than those special benefits." Justice Jeffrey King wrote for the court.
Thus, for assessing agency, the bar is set high. When read with Town of Tiburon v. Bonander, (2009) 180 Cal.App.4th 1057 (see CP&DR Legal Digest, January 15, 2010), which held that an assessment has to be based upon relative benefits, not relative costs, the Beutz decision reaffirms that assessment proceedings require an additional degree of documentation and care by the enacting agency. It also makes clear that across-the-board uniformity of assessments is more difficult to defend.
Beutz v. County of Riverside, No. E046318, (2010) 184 Cal.App. 4th 1516, 2010 DJDAR 7833. Filed May 26, 2010.
For Beutz; Robert A. Pool, Gangloff, Gangloff & Pool, (562) 920-5853.
For the County; Michael G. Colantuono, Colantuono & Levin, (530) 432-7359.