A proposal to build a high school on farmland under Williamson Act protection has set off fireworks between local farmers and the school district in San Luis Obispo County. "This is the first time that we have seen such a controversy" over a public benefit acquisition of Williamson Act land, said Will Dale, staff attorney for the state Department of Conservation. Notwithstanding, the furor may presage similar conflicts as the agendas of farmland preservation and school construction crash head on in the rapidly developing Central Coastal area, according to Robert Corley, a Ventura-based school facilities consultant. The 1965 Williamson Act allows public agencies to acquire protected farmland to build public-benefit projects. (The act allows cancellations for three reasons: non-renewal of the contract, public acquisition and cancellation.) Parties that acquire land for public acquisition must demonstrate that no other land was suitable for the intended purpose, whether that land would be used as a nature preserve or as a recycling center, to cite two recent examples of public acquisition in San Luis Obispo County. Driving the controversy is the need for a new high school in the Nipomo area. Currently, the area is served by the 20-year-old Arroyo Grande High School in the neighboring City of Arroyo Grande; current enrollment at the high school is nearly double the building's capacity of 1,500 students. In March 1997, district voters approved a $24 million school bond, most of which was earmarked for a new high school. Shortly after, a public committee spent eight months evaluating sites in the Nipomo area for a new high school. In October of the same year, the committee chose 77 acres amid farmland owned by the Dana family, which has owned the land since the 19th century. Non-farmland sites were also considered by the committee, but were rejected because they were located in a flood plain or lacked infrastructure, or were habitat for oak trees and native plants, according to Sandy Davis, assistant superintendent of Lucia Mar Unified. In contrast, the proposed school site was flat and easily built upon, above the flood plain, and served by water and sewage lines. Early on, the site seemed uncontested. "We were so excited because the community had really been in support of the site," Davis said. In November, county planners told the school district that state officials would approve the public-benefit acquisition because the land was not prime farmland, the most zealously protected classification. County planners determined the land was not prime, because the Williamson Act follows federal guidelines for classifying farmland, and one guideline is irrigation. The Dana site is not irrigated. Despite that inconsistency, the site has been classified as prime farmland since 1972, and has been receiving subventions of $5 per acre annually from the state. (Non-prime land receives only $1 per acre.) The determination of prime vs. non-prime might be a purely bureaucratic one, except for the strong emotions that the proposed school has provoked among neighboring farmers and agri-businesses, including the C&M Nursery, which leases land from the Danas. That owners of that nursery, Mark Moore and Michael Cavaletto, have drawn a line in the loam by hiring the director of a private engineering and planning firm, John L. Wallace & Associates, to argue their case. On May 11, the nursery owners appeared to win an important policy battle, when the county's Agricultural Preserve Review Committee, which voted unanimously to oppose the site. County officials then concluded that the deciding factor in school construction is whether or not the land is truly prime farmland, and asked the state Department of Conservation for an opinion. In a July letter, staff attorney Dale Will surprised some observers by saying that the land was indeed prime, despite the lack of irrigation, because the soil quality suggested that the land could potentially be high-yielding farmland. In the same letter, Will also said the final decision lay with the county. "For years, the county has been taking the position that the soil qualifies as prime," said Dale in a July interview. "Then comes in the school district to build a high school on the same land, and now it's not prime after all. Our perspective is that we rely on the county to be the lead agency on their subventions." Would that mean that the county is not enforcing the Williamson Act? Non necessarily, said Dale. The state act, he argued, "is not intended to protect existing operations so much as to protect the land source from conversion to other (non-agricultural) uses." Another possible argument, then, is that "whether the land is irrigated or not irrigated is not dispositive, if the land itself qualifies for this Class 1 or 2 rating, assuming irrigation." In other words, there seems to be a gray area between land that is prime, because it is being irrigated, or potentially prime but requiring irrigation. Lucia Mar Unified's Davis said she is surprised and disappointed by the controversy, and noted that Arroyo Grande high school was built in a similar way, and remains surrounded amicably by farming on three sides. "We had hoped we could have that same relationship with Nipomo. We were sorry about that," she said. Dale said he had received a letter from the San Luis Obispo County Board of Supervisors saying that the board does not view the site as a good one for the high school, but requested further information on the issue of prime vs. non-prime land. "I guess we will be responding to that letter," Dale said. Davis acknowledged that the school district knows it does not have the support of the county supervisors, but continues to complete the draft EIR. If built, the new school would open in 2003 with 800 students. Contacts: Robert Corley, school-facilities consultant, (805) 658-2995. Sandy Davis, business administrator, Lucia Mar United School District, (805) xxx-xxxx. Will Dale, staff attorney, Department of Conservation,

The U.S. Forest Service's supplemental environmental impact statement for a timber sale in the State of Washington was adequate, the Ninth U.S. Circuit Court of Appeals has ruled. The case involved the Forest Service's decision to add to the sale more than 1,000 trees that were damaged by a fire. Several environmental groups sued, claiming the supplemental EIS did not adequately cover the environmental issues associated with this additional sale. But the Ninth Circuit ruled in favor of the Forest Service - comparing the circumstances to the Ninth Circuit's ruling in the San Joaquin Hills toll road case, which upheld the Department of Transportation's EIS in light of similar fire issues. The case began in 1993, when the decided to move forward with two timber sales totaling 8 million board-feet from about 1,500 acres within a 30,000-acre area in Colville National Forest. After the original EIS was prepared, a major fire occurred in the area, burning some 10,000 acres, including 133 acres in the proposed timber harvest area. Subsequently, the Forest Service proposed a timber salvage harvest of about 1,000 acres, including acreage overlapping with the original timber harvest. The Forest Service prepared a supplemental EIS on this are. As a result of the supplemental EIS, the Forest Service excluded some areas from the harvest - especially "unburned green timber located within the burn area ... for watershed protection." The Forest Service also modified some previously designated harvest units to protect streams. The Kettle Range Conservation Group, an advocacy organization, requested to meet with the Forest Service to "revisit and discuss" additional harvest areas, but the Forest Service rejected this request, saying the areas of concern specified by Kettle Range were outside the scope of the project. The Forest Service claimed that the fire did not change the situation in the areas Kettle Range was concerned with. Kettle Range and other environmental advocacy groups lost at the administrative level and then lost a summary judgment decision in federal district court. Kettle Range then appealed to the Ninth Circuit, claiming that the Forest Service's analysis in the supplement was inadequate. But the Ninth Circuit, in a brief decision, ruled in favor of the Forest Service. "The entire supplemental document is an evaluation of how the fire should affect the proposed sale, even though most of the sale area was unburned. Several changes ... are made within the sale area because of the fire that burned mostly outside the sale units. At best," the court continued, "the attack is an overly aggressive interference from the language the Forest Service used in rejecting their request." But, the court said, the Forest Service's rejection of the advocacy groups' position "cannot fairly be characterized as a failure to analyze it." The advocacy groups argued that the Forest Service should have considered whether the fire's impact outside the proposed area changed the desirability of harvesting trees inside the proposed harvest area. However, the Ninth Circuit ruled that "it is plain" that the Forest Service did so. The court relied somewhat on the San Joaquin Hills toll road case, Laguna Greenbelt Inc v. U.S. Department of Transportation, 42 F.3d 517 (1994), in making its decision. In that case, the Ninth Circuit ruled that the Department of Transportation's environmental analysis after the Laguna Beach fire was adequate even though no supplement EIS was prepared because the agency "had relied on 'substantive technical expertise'" and because the initial EIS had taken potential fire impacts into account. Since, in this case, the Forest Service actually did prepare a supplemental EIS, the Ninth Circuit noted that the facts weaken the advocacy groups' case. The Case: Kettle Range Conservation Group v. U.S. Forest Service, No. 96-36100, 98 Daily Journal D.A.R. 7452 (filed July 6, 1998). The Lawyers: For Kettle Range Conservation Group: Todd True & Yuki Ishizuka, Sierra Club Legal Defense Fund, (206) xxx-xxxx. For U.S. Forest Service: Lisa Jones, Department of Justice, Washington, D.C., (202) xxx-xxxx.

Development continues to be a contentious issue in El Dorado County in the Sierra foothills east of Sacramento. In the June primary, development interests were able to beat back a ballot initiative that would have reduced housing densities. However, a second candidate critical of the county's growth policies was elected to its Board of Supervisors, and a new ballot initiative to control growth may be headed for the November ballot. Voters turned down Measure A, which would have required public referendums on three major subdivisions and restricted housing densities for all new subdivisions. Opponents of the measure were able to defeat it with 54.4% no votes. But supporters say that they put little money or effort into the Measure A campaign, since they have another ballot initiative they are trying to get on the November ballot. The long-running disputes over development in the county center on its general plan, which was adopted in 1996 after more than six years of debate. The plan calls for a population of 260,000 in 2015, up from the current 120,000, and 347,000 at buildout in the year 2040, according to Conrad Montgomery, the county's planning director. Montgomery said that Measure A attempted to reproduce the low-growth alternative that was considered when the county's general plan was adopted. Opponents of the general plan - which includes such environmental groups as the Sierra Club, the California Native Plant Society, and the El Dorado Taxpayers for Quality Growth - immediately filed suit to stop the plan. But no injunctive relief was granted, and the Board of Supervisors has approved a number of projects under the new plan. That case has moved slowly, and is now scheduled to go to trial in October. Most of the development in the county is proposed on its western flank, which is close to Sacramento. Newer residents tend to favor less growth, while support for development is often found in the inland mountainous regions, hard hit by cutbacks in logging and other extractive industries. "As we have been implementing the general plan, all major projects except one have been litigated by local environmental groups," Montgomery said. The board of Supervisors has approved two major residential developments, Carson Creek, a 2,434-unit development on 710 acres; and Promontory, a 1,387-unit development on 999 acres. Both developments are proposed for the west county area. A third development, Pilot Hill Ranch, has been proposed for the northern end of the county, and would have 983 units on 1,798 acres. Opposition to Pilot Hill Ranch helped Penny Humphreys defeat incumbent Walt Shultz in the June supervisor's race. Shultz, a free marketer, had been elected to the board in 1994, when he defeated an advocate of managed growth. Humphreys, who received 56.7 percent of the vote, opposed the rapid pace of development in the county. Measure A, which failed in the June election, was the second ballot measure in two years that attempted to limit growth. In November 1996, Measure K, was narrowly defeated by the county's voters. It would have required developers to have a water supply for their projects, set aside 25% of the county's water for non-residential uses, and prevent approval of tract maps if traffic fell below a specified level of service. Measure K received 51.3% no votes, while measure A failed by a larger margin, with 54.5% no votes. Measure A had originally been readied to be on the same ballot as Measure K in 1996, but the board of supervisors delayed putting it on the ballot, according to Kris Anderson-Moore of Georgetown, a supporter of Measure A. Anderson-Moore explained that the supervisors ordered a 30-day study that effectively kept Measure A off the 1996 ballot. The new ballot initiative, which was recently submitted to the county, is running into similar opposition. The Board of Supervisors defeated four options to place the ballot measure on the November ballot offered by Supervisor Bradley at their June 16 meeting. The new initiative, which supporters call the Control Traffic Congestion initiative, has traffic control features that are similar to Measure K. But the new measure dropped Measure K's water supply elements, Anderson-Moore said. Environmentalism is a loaded word in the county. Anderson-Moore said supporters of the ballot initiatives are "not an environmental movement. It's a movement of good government." Newly elected Supervisor Humphreys will join Supervisor Sam Bradley on the board. Bradley was the lone vote against adoption of the county's general plan. Another newly elected supervisor, Dave Solaro, the police and fire chief of South Lake Tahoe, said he would strike "a balance between the environment and the economy," according to the Sacramento Bee. But campaign finance disclosures showed he had received contributions from those tied to the development community. One environmentalist expressed optimism about the new board. "I think the board will take a broader look at the issues instead of just being a rubber stamp for the developers," said Steve Proe, who lives in Greenwood. Another large proposed master-planned development, Cinnabar, was recently ruled inconsistent with the county's general plan by the Third District Court of Appeal. (See CP&DR, May 1998). Cinnabar, as proposed, would be an equestrian-themed development with 566 houses on very large lots and 2,900 acres of open space. It had been adopted under the general plan that was in effect in 1994. Developers of the project are now considering whether to appeal the matter or redo their EIR, Montgomery said. For years, El Dorado County was among the state's fastest growing counties. But the population apparently slightly decreased between 1996 when it was 121,450 to 119,800 in 1997, Montgomery said. In the last six months, though, it appears that growth has begun again. Montgomery said that the county's population in 1998 is lower by between 10,000 and 20,000 people than was projected under the general plan. This may mean that the population figures projected by the general plan will not be met. Contacts: Conrad Montgomery, El Dorado County Planning Director, (530) 621-5355.

The notion of the "background building" is one of those profound concepts that was startling when first introduced in the 1960s (by Robert Venturi, I think) and now seems so commonsensical that we might assume the idea had always existed. The basic idea is simple: Some buildings are "stars" and should stand out, while other buildings are merely supporting players. The distinction between foreground and background buildings is not value-laden; foreground buildings are not necessarily better or more desirable than background buildings. Both are crucial for an attractive and functional urban district. Foreground buildings are the landmarks, while the background buildings provide the scale, the style, the rhythm, and the continuity of an urban district. Without background buildings, one runs the danger of creating streets like Fifth Avenue in New York, or the Las Vegas strip, where nearly every building is a scene-stealer, and the street lacks coherence and walkability as a result. The distinction between foreground and background buildings is not such a clear-cut matter, however, in the case of the Hollywood and Highland project in Hollywood. The project is a retail-and-entertainment center that will be the future home of the annual Academy Awards ceremony. In addition, the northwest corner of Hollywood and Highland will be a future stop for the Metro Rail subway, a promising source of pedestrian movement. The most remarkable aspect of the site, however, is the context: the eight-acre site directly east of the famous Mann's Chinese Theater, which means Hollywood and Highland must stand shoulder-to-shoulder with the icon of historic Hollywood. And that's the delicacy of the design problem: Like Jane Russell playing opposite Marilyn Monroe in "Gentlemen Prefer Blondes," Hollywood-Highland must have star quality to be a good foil for the Chinese Theater. The complex must be strong enough not to disappear next to the fantasy pagodas of the Chinese, nor so strong that the new building appears predatory and insensitive. Far from being a merely aesthetic issue, the design for Hollywood-Highland has huge implications for the future of Hollywood, at least in restoring the tourist trade to historic Hollywood. After all, the only part of Hollywood that has worked well for tourists has been the Chinese Theater, with its generous courtyard, the well-judged scale of its fantasy architecture, and the concrete handprints of Humphrey Bogart et al. Much of the rest of old Hollywood has been destroyed, rendered inaccessible, or altered beyond recognition. Hollywood Boulevard, far from being the river of flashing neon that it was in the 1930s, has become the Bad Boy of Los Angeles streets, the downtown of prostitutes, bikers, pushers and teen runaways. The sidewalks and buildings of the new building will, hopefully, serve as extensions of the courtyard in front of the Chinese Theater. Visitors will have someplace to go, to look at, to eat, to watch movies and to spend money. And when the crowds turn out on Oscar night to watch stars step gingerly out of their limousines, the urban design had better work: it needs to be big enough to hold thousands of people on that once-a-year event, as well as maintain the "street wall" of Hollywood Boulevard for the rest of the year. The site plan by Ehrenkrantz shows how much activity has gone on in the immediate area of the Egyptian and Hollywood-Highland. The front of the project is tourist-oriented retail, including a "Media Mega Store," a broadcast center, and new movie screens for the Chinese. One difficult part about the design is that the most important building - the Premiere Theater, where the Academy Awards will take place - is tucked in back and largely hidden from view. The solution, which so far looks convincing, is a gate on Hollywood Boulevard that leads directly down the Orchid Walk into the Theater courtyard. A more dramatic route to the theater, if a little more roundabout, is a grand staircase that provides a framed view of the Hollywood sign at the upper landing. The staircase leads to an overlook of the happiest inspiration of the scheme, a monumental Babylon Court that borrows imagery from the Babylon scenes, elephant idols and all, from D.W. Griffiths' Intolerance. I hope this courtyard, which is obviously intended as the great "collector space" of Oscar Night, receives the flamboyance that it deserves. Hollywood and Highland is rich in context. The ongoing efforts of the Los Angeles Community Redevelopment Agency have spearheaded a number of worthwhile projects in the past 16 years, including the rehab of the Hollywood Roosevelt Hotel, El Capitan Theater, and the Egyptian Theater currently under restoration, Hollywood is acquiring a critical mass of interesting and historic projects. Architects nowadays get a little bit precious with context. Contextualism that follows the appearance, the imagery, the style and the height of surrounding buildings too slavishly ends up creating second-rate buildings, and also - which not enough people have observed - slavishly contextual buildings also blunt the impact of the historic buildings. I am deeply concerned that overly conventional architects will prepare a design that is fatally cautious and marred with good taste. But Hollywood is not a particularly subtle industry, nor is Hollywood, the place, a particularly refined urban district. With the architectural facades still under design, maybe it is not too late to lobby. My advice is to err on the side of boldness, and do not be too tasteful, too namby-pamby or too reverent. Designing for Hollywood should put conventional "good taste" aside, just as one puts aside conventional taste when designing for Las Vegas. (If that idea sets your teeth on edge, you are not right for the job.) Whatever you do, for God's sake, don't be boring. The design program here is to create a supporting actor who neither fades into the background, nor outshines the leading lady. If your imagination flags, just think of Lauren Bacall in TO HAVE AND HAVE NOT: "You know how to design, don't you? Just put your fingers around a pencil - and draw."

In a case involving municipal zoning, the U.S. Ninth Circuit Court of Appeals has ruled that a city cannot enforce zoning regulations for signs if they require the alteration of a registered service mark. The court did rule, however, that a city can prevent a company from erecting an awning containing a service mark. The case arose in Tempe, Arizona, where Blockbuster Video and Video Update, two national chains, rented space in two separate shopping centers. All exterior signs in Tempe's shopping centers must conform to the center's sign package, which specifies such things as the color, size and location of the signs. The package is created by the owner of the center, and is reviewed and approved by the Tempe Design Review Board, which can grant variances. Video Update was not allowed to use its signature color pattern on its sign, while Blockbuster was not allowed to construct its blue awning service mark. Both corporations sued the city, and the district court granted a preliminary injunction requiring Tempe to allow Blockbuster and Video Update to displace their registered service marks. The three-judge panel of the appellate court ruled in Video Update's favor and against Blockbuster. The case hinged on the interpretation of the federal Lanham Act 15 U.S.C. Section 1121 (b), which states "No state...or any political subdivision or agency thereof may require alteration of a registered mark ..." In an opinion by Circuit Judge David R. Thompson, the judge wrote, "The color red is a characteristic of Video Update's mark. By requiring Video Update to change the red color of the lettering on one of its signs to white letters on a turquoise background, Tempe required Video Update to 'alter' its service mark. This alteration violates Section 1121(b) of the Lanham Act." But the judge distinguished the Lanham Act in Blockbuster's case, noting that Section 1121(b) speaks only to the alteration of a mark, and does not require cities to allow businesses to display their registered mark. "A municipality retains the power to prohibit the use of a registered mark altogether," he wrote. "Thus, Tempe could prevent Blockbuster from installing its awning service mark on the outside of the building it leased in the shopping center." The court noted that Congress limited section 1121(b) to prohibiting any alteration of the mark itself. " state, political subdivision or agency remains free to regulate where and whether signs may be placed and how large they may be," Thompson said. Looking at the legislative history of the Lanham Act's adoption, the court said it was unlikely that "Congress intended the broad zoning exception that Tempe seeks." The court noted that a trademark is recognized by having a uniform appearance in design and color, so that customers will recognize it. Two federal cases, the judge said, show that color is so important that "the color itself can be registered as a trademark because customers identify a particular brand by its color." Qualitex Co. v. Jacobson Prods. Co., 115 S. Ct. 1300, 1303 (1995), and In re Owens-Corning Fiberglas Corp., 774 F. 2d 1116, 1127 (Fed. Cir. 1985). Circuit Judge James R. Browning dissented in part and concurred in part of the opinion. "There is no reasoned basis for drawing a distinction for purposes of Section 1121 (b) preemption between local regulation of color and or architectural features. Color and architectural features are analogous aesthetic components of registered trademarks. If Congress intended to leave localities free to prohibit the use of architectural features, surely localities can also control the use of color." Browning contended that the majority adopted "an extreme interpretation of the Lanham Act that will give trademark holders the absolute right to display their marks, free or regulation, no matter how garish and inappropriate they may be..." The Case: Blockbuster Videos, Inc. v. City of Tempe, No. 97-15535, 98 Daily Journal D.A.R. 3811 (April 16, 1998). The Lawyers: For Tempe: Clifford Mattice, City Attorney, (602) 350-8227 For Blockbuster/Video Update: Marcia B. Paul, Kaye, Collyer & Boose, (212) 940-8200. For Video Update: David K. Jones, (602) 340-0900.

Ask any local government veteran in California what has most hurt their cause and the answer will very likely be Prop 13. Since 1978, the infamous taxpayer revolt and its aftermath has been blamed for every public service woe in the book: closed libraries, lack of police protection, dying street trees, indeed faith in government itself. Yet a growing body of research suggests that per-capita spending by cities in California has not changed from that of pre-Prop 13 years. And nearly all observers of municipal finance agree that spending for police and fire services far surpasses that of the early 1970s. How can this be possible, since cities' primary source of general fund expenditures - property taxes - was severely limited in the complete restructuring that the initiative implemented? For answers, we checked in with Michael Coleman, A policy analyst for the League of California Cities. His data confirms that property tax dropped precipitously. Indeed, inflation-adjusted per capita revenues from property taxes have dropped from $150 in 1978 to about $75 in 1995. But the drop was mostly an instant free-fall: the worst year was actually 1979, right after the revenue pie was re-sliced. In that year, property taxes dropped to only $50 of per capita revenue. Since then, the numbers have ebbed and flowed along with assessed valuations, actually growing to about $105 in 1992. In planning lore, Prop 13 has forced cities to grovel for sales tax revenues, accounting for much hand-ringing about the zero-sum gain of fiscally-based land use decisions. But truth be told, revenues from sales tax are actually lower than in pre-Prop 13 years. In 1978, about $125 of cities' revenue per capita came from sales tax, on average. But in 1995, this figure had declined to only $100. Taxes aside, the total revenue picture hasn't really changed in all of this time. While 1978 was a peak year for per capita revenue for the state's cities ($750 dollars), overall revenues have essentially remained stable. For example, 1975 totals were approximately $630 per capita, as were they in 1994. Special taxes, utility user taxes, and transportation sales taxes pumped the revenue pie back up. So how come libraries are closed and tree wells are paved over? In part, because new police cars and rapidly growing administrative salaries consume a much greater portion of the municipal expenditures, to the detriment of not so fortunate services. According to the Coleman's research, police and fire spending are up an inflation-adjusted 50% since 1976. Meanwhile, parks, libraries, and long-range planning are down. Parks is the most dramatic victim - down 24% since 1976. It's a fair bet that a larger proportion of overall expenditures go to white collar salaries at city hall. In an annual review of public employee salaries conducted by the Vacaville Reporter, Karen Nolan noted that Vacaville's public works director collects a base salary that is 47% higher than 20 years ago - after adjustments for inflation. The city's police chief is an adjusted 24% higher than in 1997. And this is a pattern that is mirrored throughout California. When faced with such data, why is it that Prop 13 stirs such acrimony amongst dedicated public servants? Fred Silva, research director for the San Francisco-based non-profit Public Policy Institute has theory. "There is no city-wideness to fiscal policy anymore," he surmises. The post-Prop. 13 fiscal system offends the public servant's sense of propriety, and complicates the mission to provide for the broader public interest. It's a loss of city wide-ness. But whose public and whose interest? Silva points out that "Prop 13, along with the Coastal Act, were exactly the types of policies that reformist governor Hiram Johnson had in mind when he invented the initiative process in 1910." Prop 13 would have happened with or without Howard Jarvis, because it was a fundamental reaction to a legislative/statehouse impasse in resolving a widely understood problems in the annual property assessment system. So when it comes to local government financing, maybe the question should not so much be "how much?" but "how?" In this 20th anniversary of the passage of Prop 13, let us take comfort in the fact that the blood is still in the turnip. But at the same time, let us pay greater attention to how we slice it.

The City of Wasco in Kern County is trying to stave off municipal bankruptcy as a result of a series of problems with Marks-Roos and other bonds. The possibility of bankruptcy compounds the legal and financial problems facing the city, including a "cease-and-desist" order in May from the U.S. Securities & Exchange Commission which bans the agencies from issuing further bonds. Wasco was one of three California municipalities, including the City of Ione and Nevada County, to consent to the cease-and-desist orders. Both Wasco's financial straits and the SEC order are evidence of the mounting problems stemming from the poor performance of certain Mello-Roos and Marks-Roos bonds, particularly when used to finance speculative real estate projects. The city owes nearly $12 million in both bond payments and legal judgments, although the city's annual budget is only about $8 million, according to the California Debt and Investment Advisory Commission. Many of Wasco's current difficulties center on defaults on bond payments on a golf course in the city. In 1989, Wasco Public Finance Authority spent $8.86 million of bond proceeds to finance the construction of the Valley Rose Golf Course. Under the repayment structure, the bonds were to be repaid by golf course revenues, and the city would make up any shortfall in payments out of the city's general fund. In addition, the city itself leased the golf course from the developer, and attempted to run it as a business. The golf course, however, has never been profitable, and the city is at least $2.75 million in arrears on lease payments. Last November, a Kern County Superior Court judge issued a statement of intended decision that required the city to make the late lease payments, plus interest of 12% annually after November 1997. In the same statement of intended decision, the judge authorized the bond trustee, State Street Bank and Trust Co., to pursue deficiency judgments against the city directly. The judge also approved foreclosure proceedings against the golf course. To date, however, the city has been unable to make any further lease payments on the golf course, according to the Debt and Investment Advisory Commission. A court-appointed receiver is in charge of all golf course revenues. The city, which has gained notoriety in financial circles for both its high debt level and its troubled land-based bonds, is hoping to find a negotiated solution with bond trustees, to avoid filing Chapter 9 bankruptcy. "We have decided not to take that drastic step without evaluating every possible means to avoid it," said contract city attorney Tom McCartney. The city may face a challenge, however, in convincing the bond trustee to renegotiate the level of the bond payments, according to McCartney. He reported that the bond trustee of a golf course in Wasco financed by a Marks-Roos bond, State Street Bank & Trust Company of Boston has indicated ominously that "legally, it cannot compromise the rights of the bond holders. Therefore, as a corollary to that, it cannot compromise the lease obligation," that is, the lease payments that the city is making on the golf course. As a result, he said, "the trustee has taken the position that he will force us into bankruptcy, unless we can compensate the bondholders." The city is currently consulting with financial experts to review its options, according to McCartney. One state official, who asked not to be named, said one possibility for Wasco is an "asset transfer" sale, in which the city sells off a major asset, such as a utility or water company, leases back the services, and uses the sales proceeds to pay off the bond debt. Wasco has both water and sewer districts that could possibly be sold. Wasco has other obligations and judgments, as well. The city has also defaulted on $4 million of industrial development bonds, and may be facing a lawsuit from an attorney the city had hired to sue Richardson and First Capital, who has now sued the city for non-payment. Troubles with Wasco's golf course are part of a larger set of difficulties stemming from land-based bonds underwritten by First California. In February, the U.S. Securities & Exchange Commission charged three California bond issuers with securities fraud. Significantly, all of the securities at issue were Mello-Roos and Marks-Roos bonds underwritten by the San Diego-based firm of First California Capital Markets Group. The federal agency charged the Wasco Public Finance Authority, the City of Ione, and Nevada County with a variety of offenses, centering on failure to make disclosures in official statements about the true nature of the risks entailed in development projects that were to provide the revenue to pay off the bonds. Among the charges: o For a $35 million Marks-Roos bond issued in 1989 by the Wasco Public Finance Authority, the official statement for the offering to investors failed to warn investors that the projects were "highly contingent, if not speculative." o For a $9.07 million bond issued in 1991 by Nevada County to finance the Wildwood Estates residential project, the official statement misrepresented the value of the property, the developer's experience and financial qualifications, and the plan by which the developer intended to finance the project. The developer of the 286-acre project reportedly abandoned the development shortly after receiving the bond proceeds. o For a $14 million Mello-Roos bond issued in 1991 by City of Ione for the Castle Oaks Residential project, which includes a golf course, the official statement misrepresented the developer's ability to complete the project with the bond proceeds alone, the value of the underlying land, and the adequacy of other funding sources to enable the developer to complete the project. Specifically, the statement failed to mention that the project needed $3 million more than the $7.5 million being provided out of the bond proceeds. The securities-fraud charges and the subsequent cease-and-desist order in May were the outgrowths of a two-year investigation by the federal agency into municipal bond fraud. In May, all three municipalities consented to a "cease-and-desist" order from the SEC, which essentially banned those agencies from issuing further securities for the time being. Two other defendants, including Virginia Horler, a Dain Rauscher securities broker who was a financial consultant to Nevada County and William McKay, A real estate appraiser who worked for both Ione and Nevada County, have not settled with the SEC and are scheduled to appear before an administrative law judge in July. Contacts: Tom McCartney, contract city attorney, City of Wasco, (805) 327-4147. Riley Walter, bankruptcy attorney for the City of Wasco, (209) 438-2390.

In the latest in a long line of cases challenging the constitutionality of San Francisco's hotel conversion laws, the Ninth U.S. Circuit Court of Appeals has sent one hotel owner back to state court. The case involves the longstanding attempt by the owners of the San Remo Hotel to have the city officially recognize their hotel as a tourist hotel. San Francisco has had strict restrictions against the conversion of residential hotels to tourist use in place for almost twenty years. When the first "hotel conversion ordinance" was passed in 1979, the San Remo Hotel in North Beach was operating as a tourist hotel. However, when Thomas and Robert Field began operating it in 1984, it was classified as a residential hotel. Under a 1987 zoning law for North Beach, new tourist hotels require conditional use permits, while existing tourist hotels were classified as non-conforming uses. In 1990, the Fields requested under the hotel conversion ordinance that their hotel be officially re-classified as a tourist hotel. Because of the 1984 classification, however, the San Remo was never listed by the city as a non-conforming use and therefore the Fields were required to obtain a conditional use permit under the North Beach zoning ordinance. Field first contended before city administrative agencies that he did not need a conditional use permit because his property was a non-conforming use that pre-dated the 1987 zoning ordinance. However, the Board of Permit Appeals rejected this argument, claiming that Field was bound by the residential classification under the hotel conversion ordinance and therefore required a conditional use permit. In 1993, the Planning Commission approved Field's request for a conditional-use permit, provided that Field paid 40% of the cost of replacement units to make up for the loss of the 62 residential units and that Field offered lifetime leases to existing long-term tenants. Field then sued the city in federal court under 42 U.S.C. 1983, the federal civil rights law, claiming that the hotel conversion ordinance (as amended in 1990), was unconstitutional both on its face and as applied in this case and seeking damages. Field also argued that the 40% fee was a violation of both procedural and substantive due process. In 1996, U.S. District Court Judge Lowell Jensen ruled against Field and also refused him permission to amend the complaint to state an equal protection claim, reasoning that it would be futile. Field later dropped the due process claims but appealed Jensen's ruling on the constitutionality issues. In addition, the Fields argued on appeal that under the so-called "Pullman abstention", the federal courts should refrain from deciding the takings question - a strategy usually undertaken by government agency defendants seeking to avoid federal court, rather than plaintiffs. On appeal, the Ninth Circuit panel ruled against the Fields on both the facial and as-applied takings cases - ruling that the case was not ripe for federal review under Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1994). Regarding the facial challenge, the court wrote: "Field has not filed an inverse condemnation action in state court, and therefore has not been denied compensation by California. It follows that Field's facial takings claim - insofar as it alleges the denial of the economically viable use of his property - is unripe." This is especially true, the court said, in light of the famous First English Evangelical Lutheran Church v. County of Los Angeles case, 482 U.S. 304 (1987), which re-established inverse condemnation claims in California state courts. Similarly, on the as-applied taking claim, the Ninth Circuit concluded that the claim was not ripe because the Fields had not pursued an inverse condemnation claim in state court. Regarding Judge Jensen's denial of Fields' attempt to add an equal protection claim - which arose after the Fields conceded defeat on the due process claims - the court concluded that such an amendment would have been futile under Younger v. Harris, 401 U.S. 37 (1971). Finally, the court granted the Fields unusual request - unusual for a plaintiff, at least - that the federal courts abstain from deciding the takings issue under Railroad Comm'n v. Pullman, 312 U.S. 496 (1941). The Pullman abstention requires the plaintiff to require a definitive ruling in state courts regarding state law before returning to federal court. It is typically used by government agencies that are defendants as a mechanism for removing cases from unsympathetic federal courts. "Unsurprisingly," the Ninth Circuit panel wrote, "the City views Field's request for abstention as an outrageous act of chutzpah, and argues that Field should be stuck with the federal forum he chose. Although we have some sympathy for the city's position, we agree with Field that a plaintiff may raise Pullman abstention just as a defendant may, and he may do so for the first time on appeal." However, the court concluded that the Pullman abstention "does not exist for the benefit of either of the parties but rather than for the rightful independence of the state governments and for the smooth working of the federal judiciary....There is no reason why federal defendants should have a monopoly on preserving the harmonious functioning of the federal and state court systems." On the merits of the Pullman issue, the court concluded that the case hinges on an interpretation of the city's ordinance - specifically, "the meaning of a prior non-conforming use under state law," which the Ninth Circuit concluded is properly a question for California state courts. The Case: San Remo Hotel v. City and County of San Francisco, No. 96-16843, 98 Daily Journal D.A.R. 5827 (issued June 3, 1998). The Lawyers: For San Remo Hotel and the Fields: Andrew M. Zacks and Paul F. Utrecht, (415) (821-0347 For City and County of San Francisco: Andrew Schwartz, Deputy City Attorney, (415) 554-3800.

In a move that promises to bring a planning commission back to Kern County, the county board of supervisors voted 3-2 on June 17 on a measure directing planning staff to recommend ways to reinstitute the long-disbanded body. The decision was applauded by activists who had complained that the public had not received adequate notice of public hearings, nor provided enough input into projects in their early stages. The county's planning director also welcomed the decision, which he said would assist in exploring new policy directions, including the update of the county's general plan and a new system to rate the importance of agricultural land. County staff is expected to deliver a response to the supervisors on August 3. "It was a good policy decision to bring it back," chief of staff for Kern County Supervisor Jon McQuiston, who spearheaded the June 21 vote. "We are only one of two counties that did not have a planning commission, and the other county is 99% trees." The county disbanded its former planning commission in 1981 in the name of streamlining. In 1992, however, the county took the half-measure of instituting a seven-member "planning advisory board," to evaluate the San Emidio new town just north of Grapevine and subsequent major projects. The advisory board meets only occasionally to consider major projects. "With the growth that is continuing to occur, people want to know what is going, and they want to understand. They want more access to the process," said Ronald Brummett, executive director of the Kern County Council of Governments. In recent years, he added, there have been "several incidents, at the county and Bakersfield and COG (i.e. council of government) levels, where there have been projects about which people in the greater community wanted to have their voices heard, to be able to state their opinion." One "incident" that galvanized support for a planning commission was an amendment to the metropolitan Bakersfield general plan that won approval after a very limited public hearing. The property at issue was a 1,300-acre unincorporated area in the city's sphere of influence, known as the Coberly-Etcheverry property. County supervisors voted 5-0 in October to approve the change in land-use designation, which changed the zoning from agriculture to residential, and also certified a negative declaration on the requirement for an EIR. Despite his support for the general plan amendment, McQuiston proposed a motion in October, approved 5-0, that authorized the planning department to report back to the board on the advisability of reinstituting the planning commission. Craig Peterson, McQuiston's chief of staff, said McQuiston's decision was motivated both by a respect for a more inclusive public process, as well as a feeling that the supervisors were getting bogged down in examining the minutiae of projects. McQuiston, he said, had "wound up spending more time on Coberly-Etcheverry than he had spent on major problems, like our financially troubled medical center." The supervisor, Peterson added, "said his time should be spent on policy-making decisions, as opposed to handling planning-commission issues." Also supporting a new planning commission was a community group known as Smart Growth Coalition, which has a mailing list of 150 households. The group favors development in existing urbanized areas and opposes urban sprawl and leap-frog development but stops short of urban-growth boundaries, according to president John Fallgatter, a Bakersfield insurance agent. He said a planning commission was needed to facilitate public comments on projects. "We felt that the lack of a planning commission prevented adequate information getting to the public in a timely fashion. And so the real push was to allow more public input in to what was going on," he said. The existence of a commission, in fact, "helps the developer," he said. Rather than invest years of work in a project, only to see it killed by public outcry at the last minute, the planning commission process would include public hearings earlier in the development process, and allow the developer to make the changes that will render the project politically acceptable, according to Fallgatter. "The way it was structured here, a project got basically one shot in front of a public entity way down the road," Fallgatter said. Fallgatter was critical of the planning advisory board, however, saying it met too seldom to provide policy leadership in planning issues. "It typically met twice a year, if that often," he said. Maintaining consistent and complimentary policy is a badly needed role that could be filled by a planning commission, according to Fallgatter. County supervisors have approved major projects in unincorporated county areas, without regard to the metropolitan Bakersfield general plan, he claimed. "There was a 2010 Plan, and it has been chewed up. There is no consistency here," Fallgatter said. "The developer goes in and says. 'This is a crap shoot.' More often than not, they get their way. I am not knocking the development community. It's using the system as it is set up." The concept of a new planning commission is not universally supported. Earlier this year, the planning advisory board held four public hearings on the question of whether a planning commission should be convened, The county Planning Advisory Commission in May recommended against reinstating the commission, and forwarded a series of recommendations to the supervisors intended to improve the public-hearing process, such as earlier notification and expanding the radius of property owners to be notified beyond the 300 feet currently required by county law. The local Board of Realtors, an organization which often sides with the building industry in opposing development guidelines, holds that "county's existing planning staff and process are highly responsive to citizens' concerns, and do an excellent job of public outreach in general," according to Sheila Henderson, president of the group, in a letter to the Planning Advisory Committee. And, surprisingly, the Kern County Grand Jury, concluded in January that the county's method of evaluating projects was adequate and did not need a planning commission. Ted James, the county's Planning Director, seemed ebullient about the possibility of a more coordinated planning policy made possible by a planning commission. He said he was pleased particularly because the planning commission could participate in the upcoming update of the county's general plan. Part of that plan is to devise a policy about the preservation of farmland, which is one of the most debated issues in Kern County. James said one possibility was to emulate the "point" system developed by Tulare County to rate the importance of farmland. Properties that receive high rankings as prime "ag" land in a county "survey" remains zoned for agriculture. James said his recommendations to the board on the new planning commission would also propose some new guidelines on public-hearing notification, including an expansion of the current 300-foot limit on property owners to be notified. In addition, he plans to recommend different methods of appointing the planning commissioners, possibly allowing each supervisor to appoint one commissioner, plus an alternate commissioner to ensure a quorum. That approach worried Fallgatter of the Smart Growth Coalition about the commission's independence, however. "We don't want the planning commission to be a carbon copy of the Board of Supervisors," he said. Contacts: Ted James, director, Kern County Planning Department, (805) 861-2099. Ronald Brummett, executive director, Kern County Council of Governments, (805) 861-2191. Craig Peterson, chief of staff to Jon McQuiston, Kern County Supervisor, (805) 363-8463. John Fallgatter, President, Smart Growth Coalition, (805) 868-3650.

The federal Bureau of Reclamation violated the Endangered Species Act by renewing Friant Dam water contracts prior to completing required consultations with the U.S. Fish & Wildlife Service and the National Marine Fisheries Service, the Ninth U.S. Circuit Court of Appeals has ruled. The court has also overturned District Court Judge Lawrence Karlton's decision that environmentalists' challenges to the renewal of the water contracts under the California Fish & Game Code were moot. The case involves the Bureau's decision to continue renewing water contracts with local irrigation districts in the San Joaquin Valley after the passage of the Central Valley Project Improvement Act in 1992 - a law that imposed new environmental requirements on CVP water contractors. The Bureau had begun renewing CVP water contracts in 1988, but when the CVPIA was passed four years later half of the 28 water contracts were still pending. The CVPIA imposed several new requirements on the Bureau. Among other things, it restricted water contracts to 25 years in length rather than 40, and it required the Bureau to prepare an environmental impact statement on the contract renewals. Among the complicating factors in the water contract renewals was the listing of the winter-run chinook salmon as endangered. The Natural Resources Defense Council and other environmental groups who sued the Bureau claimed that the Bureau violated the federal Endangered Species Act by not concluding satisfactory consultation with the two agencies that deal with endangered species, the National Marine Fisheries Service and the U.S. Fish & Wildlife Service. In response to the lawsuit, Judge Karlton rescinded the contracts issued after the winter-run chinook was listed. NMFS has jurisdiction over the winter-run chinook. Rather than consult initially with the agency, the Bureau of Reclamation independently concluded that the renewal of the water contracts would not harm the winter-run chinook and then sought NMFS's concurrence. NMFS responded by disagreeing with the Bureau of Reclamation's conclusion, but also by adding that it did not believe a consultation was necessary under the species law. In the appellate ruling, the Ninth Circuit concluded that both agencies were wrong. "The Bureau had an affirmative duty to ensure that its actions did not jeopardize endangered species, and the NMFS letter clearly disagreed with the agency's determination of no adverse impact," the Ninth Circuit wrote. "Under those circumstances, regardless of the NMFS position that a formal consultation was 'unnecessary', the Bureau had a clear legal obligation to at least request a formal consultation." By not doing so, the court wrote, the Bureau "acted arbitrarily and capriciously and not in accordance with the law". For that reason, Judge Karlton was correct in rescinding the contracts. The Ninth Circuit found a similar flaw in the Bureau's consultation with the Fish & Wildlife Service, which has jurisdiction over several other protected species in the Friant Dam area. In this case, although information consultation had take place over a two-year period, the formal consultation was not requested until after a number of the contracts had been renewed. "Even where there is a 'no jeopardy' biological opinion, the service may make non-binding conservation recommendations," the court wrote. "The failure to respect this process mandated by law cannot be corrected with post-hoc assessments of a done deal". In other aspects of the ruling, the court also concluded that: o Individual circumstances involving a number of local irrigation districts did not require the court to set aside Judge Karlton's contract rescissions in those situations. o While the Bureau of Reclamation may have violated the National Environmental Policy Act by not preparing an environmental assessment or EIS as required by the CVPIA, this question was rendered moot by Judge Karlton's action of rescinding the contracts. o Judge Karlton erred in ruling that the environmentalists' challenge to the water contract renewals under California Fish & Game Code §5937 was not ripe. This section requires that dams allow sufficient water to pass in order to keep fisheries in good condition. Judge Karlton ruled that this challenge was not ripe because the question of whether the federal government must abide by §5937 is in dispute. However, the Ninth Circuit concluded that the section is not pre-empted by federal law in its face, and therefore the court remanded this challenge to Judge Karlton for further action. The Case: NRDC v. Houston, No. 97-16030, 98 Daily Journal D.A.R. 5872 (issued June 24, 1998). The Lawyers: For NRDC and other environmental groups: Philip F. Atkins-Pattenson, Sheppard, Mullin, Richter & Hampton, 415) 434-9100. For Friant Water User Authority: Gregory K. Wilkinson, Best, Best & Krieger, (909) 686-3958. For Bureau of Reclamation: Louis J. Schiffer, U.S. Department of Justice.

In a major victory for environmentalists, Unocal has agreed to a settlement that will clean up 400,000 gallons of petroleum contamination in Avila Beach, an unincorporated area south of San Luis Obispo. The June settlement is being called the largest Proposition 65 settlement in state history and is believed to be the first time a company has been forced to remove contamination and rebuild a community. "This is the biggest cleanup since Love Canal," said Richard Drury, legal director of the environmental group Communities for a Better Environment in San Francisco. The action came after years of wrangling on the issue, with pressure applied from a lawsuit filed by CBE, the local Avila Alliance and the Environmental Law Foundation. The California Attorney General's office, the county, and the Regional Water Quality Control Board later joined in the suit, which charged violations of state and federal Clean Water laws, as well as of Proposition 65 for illegal discharges to a source of drinking water. Unocal has had a marine loading facility in Avila Beach for about 100 years, according to Ken Alex, a deputy attorney general for the state. Pipes connect the facility to 14 storage tanks on a hill above the town, and those pipes leaked into the groundwater. A small amount of the pollutants has leached from the soil and is flowing into the Pacific Ocean, he said. Unocal covered the beach with thousands of pounds of sand to keep the oil from surfacing during recent winter storms. Among the petroleum products found to have been spilled were gasoline, diesel, crude oil and MTBE, according to an analysis done by CBE. The analysis found significant levels of benzene and toluene, which are considered toxic. Many people familiar with Proposition 65 think of it as solely a toxic warning statute. But the law, passed by California voters in 1986, has a second provision which prohibits the discharge of toxic chemicals to potential sources of drinking water. Drury, CBE's legal director, said that the provision is also being used to challenge other groundwater contamination problems in the state, including lawsuits against Rocketdyne in Simi Valley in Ventura County and Aerojet in Sacramento County. Under the Avila Beach agreement, Unocal will pay an $18 million penalty to local and state groups, with much of the money being used for environmental restoration in Avila Beach. A half million dollars will go to the State Oil Prevention Spill Fund, and $1.5 million to attorneys for the environmental groups. Additionally, the agreement calls for the oil company to excavate contamination from huge chunks of the small town - about 40 parcels of land that include a small business district and residences. Many of the buildings will be torn down and rebuilt. That project is expected to take over a year and cost between $70 million and $200 million. Drury described Avila Beach as a low income community, with a large portion of residents living in mobile homes. About 350 people live in the community. Dennis Lamb, Unocal's manager on the project, said he is uncertain as to how the rebuilding will look, since the county has not yet prepared a specific plan for the area. Current plans are to complete the work by the year 2000. Alex Hinds, the county's planning director, described Avila Beach as a "very eclectic group of buildings" or "1950s California coastal funk," that hadn't changed much in 40 years. Some historic buildings, such as the yacht club, will be saved, he said. Hinds said the consensus at this point is that residents don't want the town to look like just another modern coastal community. As part of the settlement, Unocal will also donate land in Avila Beach valued at $1.5 million to the county. Originally, Unocal officials had opposed excavation, and instead promoted biosparging, which is a technique involving the injection of oil-eating bacteria into the contaminated area. Lamb called it a "high-tech, less intrusive method." But it was opposed because it would take an estimated 75 years to clean the spill, according to CBE officials. Other lawsuits by Avila Beach residents are still pending against Unocal. Cotchett & Pitre, a Burlingame law firm, recently filed about 20 lawsuits based on negligence and nuisance claims. The settlement agreement provides funds for a number of restoration projects for the town, including: o The $ 6 million Avila Beach Restoration Trust, with $2.5 million to be used for studies and restoration of injuries to animal and plant life due to the contamination, and another $3.5 million for restoration of public facilities affected by the oil release. The trust will be administered by the National Fish and Wildlife Foundation. o A $1 million endowment fund for water quality improvements The recent settlement does not cover the contamination at Unocal's tank farm, a hilly area in Avila Beach where storage tanks stood until recently. The tank farm served at times as a refinery and as one of the West Coast's major oil distribution facilities. A study by Unocal showed that nearly a foot of pure petroleum products had accumulated on top of the groundwater in some spots, according to the San Luis Obispo Telegram-Tribune. Unocal is working with the regional water quality control board on an assessment plan on the contamination, Lamb said. Unlike the other contamination in the town, the tank farm which is on 90 acres, is all on private property, he said. There's no information that contamination from the tank farm is migrating anywhere, he said. Drury of CBE and Saro Rizzo, attorney for the Avila Alliance, are expected to file another lawsuit on the tank farm contamination soon. The contamination problem in Avila Beach was discovered in 1989, when a local resident was digging a basement and hit oil, Drury said. About the same time, fumes from the pollution in another basement caused an explosion. Contacts: Ken Alex, Deputy Attorney General, (510) 286-1219. Dennis Lamb, Manager of Avila Beach affairs for Unocal, (805) 595-7657. Steve Williams, Cotchett and Pitre, (650) 697-6000. Richard Drury, legal director, Communities for a Better Environment, (415) 243-8373. Saro Rizzo, Avila Alliance, (805) 783-2050. Case Name: Avila Alliance, et al. v Unocal Corporation, et al., case no. CV 079728

Reiterating earlier court decisions stating that "neither the public nor a public service corporation could tolerate as many standards and policies as there were towns, cities, or boroughs through which they operated," the Fourth District Court of Appeal has ruled that the City of Carlsbad may not require San Diego Gas & Electric Co. to remove dredged sand from its beach. San Diego Gas & Electric has dredged the Agua Hedionda Lagoon in Carlsbad ever since the early '50s, when it first constructed the Encina Electrical Generating Plant. The dredging is required to permit sea water to be used for cooling the plant's electrical generating units. The dredging spoils are typically piped westward to an adjacent beach owned by the State Lands Commission and operated by the California Department of Parks & Recreation. The beaches in the Carlsbad area have undergone severe erosion in recent years. Ten years ago, Carlsbad adopted its floodplain management ordinance, which requires a special use permit for any structure in floodplain areas. SDG&E resisted compliance with this ordinance but agreed, under protest, to a five-year special use permit for dredging in 1993. Two years later, the city ordered SDG&E to place the spoils on a different beach about a mile north of the typical location to which SDG&E spoils are pumped. SDG&E did not appeal the conditions of the permit, but began dredging in violation of the permit. City ordered work stopped. In response, SDG&E appealed unsuccessfully to the Carlsbad City Council and then sued. Carlsbad cross-complained and also obtained an advisory opinion from the state Public Utilities Commission staff stating that the city would not be pre-empted from its jurisdiction over where to place the sand. However, SDG&E won a motion for summary judgment in the trial court, which concluded that the ordinance represented a thinly disguised attempt to regulate a public utility in violation of state law. On appeal, the case boiled down to a contest between state public utilities law and state planning law. The state has clearly pre-empted public utilities regulation by local government. But the city argued that the floodplain ordinance represented an area of that is not specifically regulated by the PUC and therefore is not pre-empted. But the Fourth District disagreed. "Here, City's regulation of a special use permit for dredging, placing conditions on the exercise of SDG&E's right to dredge, on its face places a significant physical and economic burden on SDG&E's operation and maintenance of its facilities," the court wrote. "...This form of regulation goes beyond City's police power into a field that is significantly and fully occupied by the state in such a manner as to indicate clearly that a paramount state concern will not tolerate further or additional local action." In addition, the court rejected the city's argument that the trial judge should have specified whether the floodplain ordinance violated the state constitutional provisions covering public utilities facially or as applied. Clearly, the court said, this was an as-applied challenge and the trial judge was not required to deal with a facial challenge. Carlsbad also contended that the city was permitted to impose the floodplain regulations pursuant to the Coastal Act and that regulatory mechanisms that appear to conflict can co-exist so long as they serve different purposes. But the court rejected this argument as well. "Essentially," the court wrote, "the floodplain ordinance adds another layer of regulation to the operation and maintenance of the utility plat," creating an illegal "checkerboard of regulation by local governments". The court also rejected a proposal by many cities that filed as amici curiae to establish standards permitting local regulation if no state or PUC regulation exists. These standards "disregards the rule of implied pre-emption and would promote endless litigation," the court wrote. The Case: San Diego Gas & Electric co. v. City of Carlsbad, No. d027407, 98 Daily Journal D.A.R. 6042 (issued June 9, 1998). The Lawyers: For San Diego Gas & Electric: Jeffrey A. Chine, Luce, Forward, Hamilton & Scripps, (619) 699-2545. For City of Carlsbad: Ronald R. Ball, City Attorney, (619)434-2891.