Property assessments levied to fund the downtown Pomona Property and Business Improvement District did not violate Proposition 218, the Second District Court of Appeal has ruled for a second time. The court issued the same ruling in 2006, which the state Supreme Court agreed to review. Instead of deciding the case, the state high court struck down an assessment in a different Proposition 218 case – Silicon Valley Taxpayers' Assn., Inc. v. Santa Clara County Open Space Authority , (2008) 44 Cal.4th 431 ( SVTA ) – and directed the Second District to rehear the Pomona case in light of the SVTA ruling. Proposition 218, a progeny of Proposition 13 that added articles XIII C and XIII D to the state constitution, requires voter approval of most property-based assessments and fees. In SVTA, the court held that the measure shifts the burden of proof in assessment lawsuits to the government agency that imposes the assessment, and that courts should independently review levies. Pomona's Property and Business Improvement District (PBID), as do many of the state's business improvement districts seeking to boost commerce downtown, assesses property owners to pay for security, streetscape maintenance, marketing and special events. In 2004, the city's affected property owners voted 126 to 66 to form the district. The weighted voted, based on property assessments, was $338,000 to $153,000. In 2006, property owner Robert Dahms sued the city of Pomona to block the assessments. At the heart of Dahms's argument was the contention that Pomona, in forming the district, had violated Proposition 218's requirement that the assessment on each parcel in the district shall not exceed the reasonable cost of the proportional special benefit. Dahms's suit contended the city's discounted assessments for nonprofit entities, such as fraternal organizations and churches, was unjustified; some commercial properties were improperly assessed; and the city's method of determining assessments was illegal. In rejecting Dahms's claims, the appellate court disagreed that Proposition 218 does not allow discounted assessments because they would not be proportional to the benefits received. " rticle XIII D does not require that the assessment be no less than the reasonable cost of the proportional special benefit conferred on that parcel," Justice Frances Rothschild wrote for the court. "That is, article XIII D leaves local governments free to impose assessments that are less than the proportional special benefit conferred – in effect, to allow discounts." A discount on a parcel could run afoul of the constitution, Rothschild wrote, if it caused assessments on other parcels to exceed the cost of the proportional special benefit. However, Dahms did not argue this was the case in downtown Pomona. In a separate concurring opinion, Orange County Superior Court Judge Ronald Bauer, sitting by assignment to the Second District, disagreed with the majority's handling of this question. Proportionality is "at the heart" of article XIII D, Bauer wrote, and thus cannot be ignored. Because the PBID system has no revenue other than the assessments, it "seems inevitable that an assessment against any parcel that is disproportionately low in relation to the benefits conferred thereon (that is, a ‘discount') would lead to an impermissibly high assessment against one or more other parcels. This would be a fatal flaw in such a system." Because Dahms did not make this argument in his suit, Bauer sided with the two-justice majority in the ruling. In rejecting Dahms's contention that some commercial parcels had been improperly assessed, the court held that even though Proposition 218 shifted the burden of proof in assessment litigation to the city of Pomona, Dahms failed to "support his own arguments on appeal in a manner that will make them susceptible of rational evaluation." Finally, the justices disagreed with Dahms's contention that the city's formula for determining assessments was illegal because it counted only the length of street frontage of a property's address, and did not consider side street frontage. According to the formula, 40% of a property's assessment is based on street frontage, 40% on building size and 20% on lot size. The inclusion of building and lot size as criteria "should compensate for any disproportionality that might have resulted from exclusive reliance on front footage," the court ruled. Dahms further contended that the city of Pomona failed to separate "general benefits" from "special benefits" in its assessments, noting that rising property values resulting from the assessments would be a general benefit. In SVTA , the state Supreme Court struck down a parks and open space assessment because it provided only general benefits – such as increased access to recreational areas and protected views – to all properties no matter how situated. "The PBID is nothing like the district at issue in SVTA ," Justice Rothschild wrote for the appellate court. "In SVTA , all seven of the putative special benefits were merely the alleged effects of the two services directly funded by the assessments, namely, the acquisition and maintenance of open space land. In contrast, the special benefits conferred by the PBID are not mere effects of the services funded by the assessments. Rather, the PBID's services themselves constitute special benefits to all of the assessed parcels. The assessments directly fund security services, streetscape maintenance services, and marketing and promotion services for the assessed parcels. SVTA in no way suggests that those services are not special benefits." Dahms also argued the required public hearing on the assessment was premature because the city conducted the hearing on the 45th day after it mailed notices of proposed assessments. In rejecting the contention, the court noted that article XIII D requires the hearing "not less than 45 days after mailing the notice." The Case: Dahms v. Downtown Pomona Property and Business Improvement District , No. B183545, 09 C.D.O.S. 5797, 2009 DJDAR 6855. Filed May 12, 2009. Modified June 8, 2009, at 2009 DJDAR 8321. The Lawyers: For Dahms: Ronald Friendt, Martineau & Knudson, (951) 285-9955. For PBID: Scott Nichols, Alvarez-Glasman & Colvin, (626) 858-9121.

Approval of an 88-acre warehouse distribution facility at March Air Reserve Base was exempt from environmental review because the project was included in a general plan and a specific plan, both of which received environmental analysis, the Fourth District Court of Appeal has ruled. The unanimous decision of a three-judge appellate panel overturned a Riverside County judge who had ruled that the Tesco warehouse development was a discretionary project subject to the California Environmental Quality Act (CEQA). The Fourth District, Division Two, determined that the project required only ministerial approval and thus was exempt from CEQA requirements. During the early 1990s, the Pentagon began scaling back its operations at the site along the I-215 freeway in Moreno Valley by converting a 6,500-acre Air Force base into a 2,000-acre Air Reserve base. The March Joint Powers Authority – composed of elected officials from Riverside County and the cities of Moreno Valley, Riverside and Perris – adopted, in 1996, a redevelopment plan and accompanying environmental impact report for the land left unused. Three years later, the authority approved a general plan and master EIR for reuse of 4,400 acres. Among other things, the plan allowed for up to 2 million square feet of industrial development on 433 acres. The authority followed up in 2003 with a specific plan and a focused EIR that included a mitigation monitoring and reporting plan. The specific plan established guidelines for future development of a business park as well as office, commercial and other uses. Environmental activists sued to block the 2003 plan and EIR because of concerns over increased air pollution from trucks. The authority settled the suit by agreeing to limit truck traffic. In 2006, Tesco, the British company that operates Fresh and Easy Neighborhood Markets, applied for approval to build warehouse facilities totaling 1.925 million square feet on an 88-acre site. After finding the proposal was consistent with its specific plan and focused EIR, the authority approved the project and filed a notice of exemption stating that no environmental review was necessary because approval amounted to a ministerial act. The project has been built and is operational. A group called Health First sued in 2006 to block the Tesco project because, Health First argued, the authority should have completed an EIR for the development. In 2008, Riverside County Superior Court Judge Thomas Cahraman agreed with Health First, ruling that CEQA required the authority to conduct an additional environmental review of the warehouse project. The question before the Fourth District Court of Appeal was whether the March Joint Powers Authority's approval of the Tesco project was ministerial (exempt from CEQA) or discretionary (requiring CEQA review). In deciding the case, the court cited CEQA, the CEQA Guidelines and case law. A ministerial decision, it held, involves only the use of fixed standards and objective measures – and not the personal judgment of a public official. In approving the warehouse project, the authority measured Tesco's design plan application against requirements, fixed standards and proposed mitigation provisions contained in the 2003 specific plan and focused EIR, the court determined. In so doing, the authority "exercised no discretion and instead acted ministerially," Justice Barton Gaut wrote for the majority. "The Tesco facility is not a discrete CEQA project but one component of the specific plan for the larger March Business Center," Gaut wrote. "In contrast, a project may be deemed discretionary when environmental review has not been completed and further review is anticipated. But such is not the circumstance here, where the specific plan and the focused EIR offer a comprehensive environmental review of the proposed industrial development as eventually implemented by Tesco. "Instead," Gaut continued, "unless there are substantial changes or new information affecting the specific plan, there is no justification for additional environmental review of Tesco's design plan application." In its suit, Health First also contended that the Tesco facility did not comply with the 2003 specific plan's mitigation measures, but the court disagreed. "Because the mitigation plan applies to the Tesco facility without alteration or modification, Health First cannot argue that the mitigation measures are being implemented in a discretionary fashion," the court ruled. While deciding the case on the merits, the court questioned Health First's "standing" to bring the lawsuit in the first place because the group was essentially challenging plans and environmental documents approved in 2003, 1999 and 1996 long after the statute of limitations for legal action had passed. Nevertheless, the court resolved the lawsuit on the merits. The court hinted that lawyers on both sides of the dispute had gone overboard by loading on the court 70 volumes of administrative records dating to 1971, eight volumes of court proceedings and "almost 300 pages of overly elaborate briefings." "Our analysis resolves the primary issue involving ministerial, as opposed to discretionary, approval. No further discussion is required of the other issues raised by the parties," Gaut concluded bluntly. The Case: Health First v. March Joint Powers Authority , No. E045541, 2009 DJDAR 8441. Filed May 18, 2009. Ordered published June 10, 2009. The Lawyers: For Health First: Raymond W. Johnson, Johnson & Sedlack, (951) 506-9925. For the authority: Michelle Ouellette, Best, Best & Krieger, (951) 686-1450. For Tesco: Lisabeth Rothman, Brownstein, Hyatt, Farber, Shreck, (310) 440-9996.

For the second time in less than a year, the California Supreme Court has ruled for individual property owners contesting local government assessments, opening the door for future challenges based on Proposition 218. In the latest case, the court held that Tiburon property owners contesting an assessment levied under the Municipal Improvement Act of 1913 need not abide by cumbersome "reverse validation" procedures. The unanimous decision clears the way for the property owners to challenge the assessments as violations of Proposition 218. The precise reach of the court's ruling is unclear. Attorney Frank Mulberg, who represented himself and the owners of one other home, said the decision "opens the door, at a minimum, for class action lawsuits. The validation procedure as it relates to homeowners who want to contest an assessment is now gone. It is no longer in the law." That change is important, said Mulberg, because in a reverse validation lawsuit, a property owner has to prove an assessment is improper. But under the court's ruling, there is no assumption the assessment is legal, and the government entity bears the burden of proof. "Any one homeowner can now challenge the assessment for any reason, Proposition 218 or otherwise," Mulberg said. However, attorney Michael Colantuono, who represented the League of California Cities and the California State Association of Counties in the case, called the Supreme Court's decision "a big so-what." The ruling applies only to the 1913 improvement act, and local governments may utilize other statutes to levy property assessments, he said. Tiburon Town Attorney Ann Danforth agreed the decision will not have major implications, because all the court did was clarify the rules for challenging assessments. "The ambiguity is gone," she said. More important than the ruling itself is the state high court's ongoing treatment of local revenue measures, Colantuono suggested. "The decision is evidence that this is a court that is conservative on matters on local government finance," said Colantuono, who helped argue the Tiburon case at the high court. He rejected the idea that the latest ruling bolstered Proposition 218, the 1996 follow-up to Proposition 13 that requires an election on tax increases special assessments and fees. Conversely, Mulberg said the ruling, combined with a 2008 state Supreme Court decision, has breathed new life into Proposition 218. Last year, the state Supreme Court struck down a Santa Clara County open space assessment on 314,000 parcels. The court ruled the assessment – which an open space district had levied under the Landscaping and Lighting Act of 1972 – provided only general benefits and therefore was a special tax that was subject to Proposition 218's voter-approval requirement (see CP&DR Legal Digest , August 2008 ). The ruling in that case, Silicon Valley Taxpayers' Assn., Inc. v. Santa Clara County Open Space Authority , (2008) 44 Cal.4th 431, was a loss for local government and helped provide the basis for the more recent decision involving the Marin County town of Tiburon. In 2003, the Tiburon Town Council began work on the Del Mar Valley Utility Undergrounding Assessment District based on the Municipal Improvement Act of 1913. The town commissioned an engineer's report, which determined that placing utility lines underground would provide aesthetic, service reliability and safety benefits to the owners of 221 parcels. The report estimated the project would cost $4.2 million, and individual assessments would range from about $7,200 to $31,200. In early 2005, the town mailed ballots to property owners. The ballots were weighted based on the amount of the assessments, and owners of parcels representing 71% of the total proposed assessment voted for the project. In May of 2005, the Town Council officially formed the district and assessed the property owners. The owners of two properties – Mulberg and his wife, Shelley, and Jimmie and Jean Bonander (she's the city manager of neighboring Larkspur) – sued Tiburon. They argued the assessment violated Proposition 218 because the $31,146 assessment against each of their properties exceeded the special benefits conferred, as overhead wires would remain in place nearby. They further contended the town's procedures were illegal and the town had cherry picked parcels for inclusion in the assessment district. A trial court judge decided that the lawsuit was a reverse validation action. (A local government will frequently file a validation lawsuit seeking court confirmation that an assessment is legal.) Because Mulberg did not meet the summons and publication requirements in the validation statutes (Code of Civil Procedure §§ 860 – 870.5), the court threw out the lawsuit. The First District Court of Appeal upheld the lower court, ruling the validation procedure applied "regardless of whether the challenge is premised on asserted violations of Proposition 218 or any other constitutional provision" (see CP&DR Legal Digest , April 2007 ). The case then moved to the state Supreme Court. The issue, Justice Joyce Kennard summarized in the unanimous opinion, was whether the general validation procedure applied to assessments levied under the 1913 act. The court undertook a lengthy discussion of the validation procedure, and the 1913 act (Streets and Highways Code § 10000 et seq.), both of which the Legislature updated in 1961. The validation statutes contain a procedure to validate and to invalidate public agency matters, the court concluded. However, the 1913 act permitted only validation actions brought by the legislative body or the contractor involved. The 1961 legislative updates maintained this provision. " hen the Legislature in 1961 amended § 10601 to incorporate the general validation procedure, it expressly limited which parties might avail themselves of the new procedure," Kennard wrote. " he Legislature intended to activate the general validation procedure set forth in the Code of Civil Procedure only for action to validate assessments, not for actions to contest assessments." The court conceded this reading resulted in internal inconsistency, because § 10400 explicitly permits validation actions to contest an assessment. "In our view, the better interpretation of § 10601 is to give effect to the limiting language in that section even at the cost of rendering meaningless the section's cross-reference to § 10400," Kennard wrote. Thus, the Tiburon property owners did not have to comply with the validation procedure in their suit contending the city should have complied with Proposition 218. The decision sends the case back to Marin County Superior Court, where Mulberg said he intends to argue the merits of the case. Mulberg has filed two other lawsuits, as well. One suit involves a challenge to a second assessment district formed to cover the same undergrounding project. Tiburon formed the supplemental assessment district after learning the project would cost about twice as much as originally estimated. Tiburon won in the trial court, but the case, Bonander v. Town of Tiburon , No A119918 ( Bonander II ), is now at the First District Court Appeal. A third lawsuit, this one seeking damages for alleged breach of contract and breach of fiduciary duties, is pending in San Francisco Superior Court's Complex Civil Litigation department. The actual undergrounding project remains on hold. The Case: Bonander v. Town of Tiburon , No. S151370, 2009 DJDAR 8246. Filed June 8, 2009. The Lawyers: For Bonander: Frank Mulberg, (415) 388-0605. For Tiburon: Ann Danforth, town attorney, (415) 435-7370.

One person's infill is another person's environmental disaster. The Saltworks 50-50 project in Redwood City is a prime example. In Sunday op-ed pieces for the San Francisco Chronicle , architect Peter Calthorpe called Saltworks "one of the most compelling smart growth proposals." On the other hand, Save the Bay Executive Director David Lewis called the very same project "enormous sprawl into the bay." The differing perspectives from two thoughtful experts demonstrate just how difficult implementation of Greenbelt Alliance's all-infill plan for the Bay Area will be. As I wrote last week , Greenbelt recently rolled out "Grow Smart Bay Area," which says the region can accommodate all projected growth through 2035 in existing cities by developing, redeveloping and better using 40,000 "opportunity sites." Advocacy groups frequently publish glossy brochures and launch new websites. Grow Smart Bay Area is extraordinary in that it has three years of solid research as a foundation, and because it has an air officialdom. San Mateo County Supervisor and Association of Bay Area Governments President Rose Jacobs Gibson endorsed Grow Smart Bay Area as complementary to ABAG's own planning. California Air Resources Board Chair Mary Nichols called the Greenbelt plan a model for the rest of the state. Still, developing another 800,000 housing units in the Bay Area is an enormous challenge, which brings me back to the Saltworks project . Developer DMB and property owner Cargill propose reusing 1,400 acres between the Bayshore Freeway and the bay itself for 12,000 housing units. Cargill and prior owners have used the site for salt production for many decades. With half the site set aside as open space and restored marsh, the development would be quite dense and, according to proponents, walkable and rich with transit. Calthorpe � who helped DMB and Cargill design Saltworks � endorses the project because it would provide housing in an area with a great deal of employment while opening up the waterfront to the public. Lewis says it's crazy to build new houses at sea level in an area at risk of liquefaction during an earthquake, and the salt ponds should be restored with the others lining the bay. Even though the project would qualify as industrial land conversion within existing city boundaries, I don't think this is the sort of "redevelopment" Greenbelt envisioned. Rather, the Grow Smart Bay Area website talks about traditional redevelopment of downtown Redwood City with additional housing. There is little doubt downtown certainly could accommodate more residences, as could sections of El Camino Real corridor and some outdated commercial strips in town. But it's difficult to see how all of those projects would add up to 12,000 new units � and there is no doubt the mid-Peninsula can use the housing. So, does the Saltworks project qualify as infill? If it does, is it a wise project environmentally? Keeping in mind that some locals are still fighting downtown redevelopment that planners consider first-rate, is the Saltworks project even close to politically feasible in Redwood City? The answers that been provided to questions like these � as well the inability to provide any answers � has forced most of the Bay Area's new housing into the Central Valley since the 1990s. Greenbelt's all-infill plan will succeed only if it accompanies a sea change in attitudes about Bay Area land use. - Paul Shigley

It seems to me that, like so many other policy initiatives, this whole SB 375 thing can either be a bureaucratic nightmare or a useful way to move forward. We can devote an enormous amount of time and attention to figuring out how to comply with the law ... or we can figure out how to drive less. How do you focus on the second instead of the first? I put some thought into that while preparing a recent speech to a gathering in Ontario sponsored by the Leonard Transportation Center at Cal State San Bernardino. Amazingly, there were more than 100 people dweebie enough to attend this event on the Friday of Memorial Day Weekend. The panel that followed me included regional officials I quoted in my blog after the event, which not everybody liked. To be fair, Ty Schuiling of SANBAG didn't just rail at SB 375 as being an inefficient way to reduce greenhouse gas emissions; he also showed the transit-oriented developments that SANBAG is pursuing no matter what, especially along proposed bus rapid transit lines. The video doesn't show the presentation slides, but you can easily find those here . – Bill Fulton

The Bay Area can accommodate the next 25 years' worth of growth – 2 million additional people and 1.7 million new jobs – entirely through infill development, according to Greenbelt Alliance. The San Francisco-based advocacy group unveiled the all-infill strategy in a plan called "Grow Smart Bay Area" on Wednesday, June 10. "Our cities and towns have plenty of room to provide for the next generation of new homes and new jobs," said Jeremy Madsen, Greenbelt's executive director. Specifically, seven areas could accommodate 80% of predicted growth – the eastern half of San Francisco, El Camino Real corridor through San Mateo and Santa Clara counties, the suburban office parks of Northeast Santa Clara County, transit-heavy Southern Alameda County, the "inner East Bay" centered around Oakland and Berkeley, Central Contra Costa County, and a planned North Bay rail corridor. Greenbelt researchers and consultants identified 40,000 "opportunity" sites across the Bay Area. These include failing strip centers, unused parking lots, vacant parcels, underused business sites and struggling downtowns. The analysts then considered what type of development or redevelopment would be appropriate for a particular neighborhood. They increased potential housing units by 5% in neighborhoods where secondary dwelling units would be a good fit, and they accepted the Association of Bay Area Governments' estimates for 100 priority growth areas near transit stations and in downtowns. Crunch the numbers, and you find plenty of space to handle the region's predicted growth through 2035, according to Greenbelt. No need to exile Bay Area workers to Tracy, pave Solano County's prime farmland or build new towns in San Benito County. The folks at Greenbelt present a compelling vision of walkable, mixed-use, compact neighborhoods, abundant and easily accessible parks and open space, and many alternatives to the car. Elected officials from a number of jurisdictions – including San Mateo and Napa counties, Santa Jose, Santa Rosa, San Leandro and Mountain View – nodded their heads in agreement during the presentation. San Jose Mayor Chuck Reed noted that San Jose's population has increased by 500,000 people during the last 30 years, yet the city has not substantially expanded its boundaries. Still, the question is how to make the vision a reality in a region where anti-growth sentiment often runs strong. Obviously, good planning, zoning and development entitlement processes are necessary, but Madsen and people on a panel organized by Greenbelt repeatedly emphasized the importance of political willpower. Reed said it is crucial for infill proponents to engage in the process early so that elected officials have a platform for making decisions that may be unpopular with NIMBYs and slow-growthers. Will Fleissig, president of Communitas Development, agreed that vocal support for elected officials in making the right decisions is essential. Greenbelt does not frame Grow Smart Bay Area as a strategy for the region and its cities and counties to comply with SB 375, Rather, Greenbelt argues that an all-infill approach is the right thing to do environmentally, economically and socially. It took Mary Nichols, chair of the California Air Resources Board, to make the SB 375 tie directly. "Grow Smart Bay Area is a vision that we would embrace," Nichols said during closing comments Wednesday. "It really does provide a model for the state's regions. … It's up to us at the state level to do what we can do to support this vision." - Paul Shigley

California Planning & Development Report has joined the electronic communications revolution. On July 1st, we delivered the first PDF of our newsletter directly to subscribers' email inboxes! If you're not already a subscriber, now's the time to sign up. Because we have eliminated our printing and mailing costs, we've rolled our subscription price clear back to the 2000 level. That's right – you'll get an even better, more topical CP&DR at a nine-year-old price.

The future of the Governor's Office of Planning and Research appears very much in doubt. On Wednesday, the Legislature's Conference Committee on the Budget recommended eliminating OPR only hours after Gov. Schwarzenegger called OPR "a total waste." The Los Angeles Times quotes the governor saying, "The Office of Planning and Research ought to be about planning and research to come up with great policy answers, which this office doesn't do." I'll grant that OPR is not all it could be. But whose fault is that, Mr. Governor? Starting with Gray Davis and continuing with Schwarzenegger, the OPR director's position has become a political patronage appointment. Both governors passed over highly qualified policy experts in favor of political cronies. A political crony's primary task is covering the boss's ass, not pressing forward with policies that could be politically sensitive.   The Office of Planning and Research has some smart and very dedicated people on its chronically short staff. Give them the leadership, freedom and resources to develop "great policy answers," and they just might do so. - Paul Shigley

The committee charged with recommending how the Air Resources Board should establish greenhouse gas emissions reduction targets under AB 32 and SB 375 spent much of its first half dozen meetings talking in about the technical details of measuring emissions and modeling for future emissions. That changed on Wednesday, June 3, when Regional Targets Advisory Committee (RTAC) member Richard Katz said he'd had enough. Can't we get on with the policy discussion, asked Katz, a former assemblyman who represents the Los Angeles County Metropolitan Transportation Commission on the RTAC. Other RTAC members – including Los Angeles Planning Commissioner Mike Woo and San Diego Association of Governments Executive Director Gary Gallegos – agreed during something of an impromptu roundtable discussion. Woo said it was time to "reclaim the direction of the committee." The Air Resources Board is in the midst of implementing AB 32, the three-year-old law that requires California to reduce greenhouse gas (GHG) emissions to 1990 levels by 2020, and to 80% below 1990 levels by 2050. The Air Resources Board has decided that a small portion of the GHG reduction will be attributable to land use changes, but the board has deferred the specifics to the SB 375 process . Passed last year, SB 375 requires the state to establish GHG emissions reduction targets for each of the state's 17 regions, and requires the metropolitan planning organization within each region to adopt land use planning and transportation strategies that will meet the target. To help figure out what the targets should be, the board appointed the 21-member advisory committee earlier this year to recommend factors and methodologies the board should consider. Despite the call for diving into policy issues during the most recent RTAC meeting, questions of how to measure emissions and ways to predict how policies will affect future emissions remain. Barry Wallerstein, executive officer of the South Coast Air Quality Management District, said a summary of regional scenario data (essentially a collection of models) that was provided for the June 3 meeting proved that the various models employed by different MPOs are too inconsistent to be of use. "The existing models don't provide a common yardstick by which we can measure progress toward the targets," Wallerstein said. "I think that's a major problem." Shari Libiki, a consultant and Stanford environmental engineering professor, insisted the panel could not recommend policy without better data. "We don't understand our baseline very well," Libiki said. "I understand that people are frustrated with talking about models." But, she added, the models will affect the committee's recommendations. The committee made no recommendations at the June 3 meeting, but several of the committee members' priorities started to shine through. Great Valley Center founder Carol Whiteside encouraged the committee to be  "bolder" and not settle for "tinkering at the margins" of land use and transportation policy. A $1 per gallon gas tax would generate a great deal of new revenue and help move the state toward its GHG reduction goals, she said. Affordable housing attorney Michael Rawson and University of Southern California professor Manuel Pastor Jr. pressed for the inclusion of social equity as part of a policy package. Any policy that results in displacement of low-income people or disruption of communities should not be considered "feasible," argued Rawson. Amanda Eaken, of the Natural Resources Defense Council, said the committee should ensure that local governments have the tools to respond to changing demographics and new housing products – namely, housing other than single-family subdivisions. Bay Area Metropolitan Transportation Commission Executive Director Steve Heminger expressed what appeared to be a somewhat common observation, and a frustration. "2020 is really soon," Heminger said in reference to the AB 32 deadline for reducing GHG emissions to 1990 levels. "But land use strategies are slow acting, and they are even slower in regions that are growing slowly. And they are slower yet in regions in recession." "We are working on this subject at a time when our Legislature is on the verge of blowing the state up," Heminger continued, noting that all funding for transit is likely to be lost. "They are doing everything they can to encourage more driving." So, how much should the current recession and state budget crisis factor into the committee's recommendations? A lot, said Katz, who argued for GHG targets "grounded in real world achievability." Not so much, said Stuart Cohen, of advocacy group TransForm. "We should not use the existing funding situation as the reason for low targets," he said. The committee has only four meeting scheduled before it makes a recommendation to the Air Resources Board. Those should be lively – and very long – sessions. – Paul Shigley

There is no better example of the conundrum in which Gov. Schwarzenegger and all Californians find ourselves than the controversial oil drilling deal off Santa Barbara County. On the one hand, Schwarzenegger and the state are world leaders in public policy to reduce energy consumption and promote renewable energy development. On the other hand, we're broke – and a deal allowing Plains Exploration Petroleum (PXP) to extract oil from state waters near Vandenberg Air Force Base would provide the state government roughly $200 million a year for a decade. Right now, Schwarzenegger says do the deal. Lt. Gov. John Garamendi and State Controller John Chiang say no way. A little background. Last year, a collection of environmental organizations lead by the Santa Barbara-based Environmental Defense Center announced they had cut a deal with PXP. Under the Tranquillon Ridge plan, the Texas-based company would use an existing platform located in federal waters to extract petroleum underlying adjacent state waters (the state controls waters within 3 miles of the coast). In exchange, PXP would shut down the platform and three others in the Santa Barbara Channel by 2022, donate 4,000 acres of land for public use, and pay the state about $2 billion in royalties. In January of this year, the State Lands Commission, composed of the lieutenant governor, the controller and the director of finance, voted 2-1 to prohibit the drilling. The Commission – well, Garamendi and Chiang – said the threat of an oil spill was too great, complained about the private nature of the deal, claimed that it was not really enforceable, and pointed out that the federal government could override the agreement and prevent the planned oil drilling platform decommissioning. Considering that the State Lands Commission has jurisdiction over state waters, the 2-1 vote appeared to be the end of the Tranquillon Ridge deal. But did I mention that the state is broke? The governor's May budget revise included authority for Finance Director Mike Genest to supercede the State Lands Commission and approve the Tranquillon Ridge oil drilling lease. As you might imagine, this move did not set well with Garamendi and Chiang. At a State Lands Commission hearing in Santa Monica on Monday, they voted 2-0 for a resolution urging the Legislature to reject the "end-run around the Commission's decision regarding the Tranquillon Ridge lease." (The panel's third member, Deputy Finance Director Tom Sheehy, who had defended the governor's plan, left the meeting early because of a family emergency.) At the hearing, environmental groups that had supported the quid pro quo with PXP began backing away , saying they don't want to circumvent the State Lands Commission. This hot potato is now in the hands of the Legislature, which already has more scalding spuds than it can juggle. An additional $200 million in annual revenue, even if it doesn't start flowing for a year or two, is awfully hard pass up in the face of eliminating health care for a million children and closing 200 state parks. Back to that other hand: If California approves the first oil drilling leases in state waters since 1969, how seriously are we to take the state's commitment to the not-always-convenient fight against climate change?     Cities and counties – wondering what SB 375 is going to do to their land use authority – are watching closely. - Paul Shigley

Opponents of the proposed construction of two houses on a coastal bluff in San Clemente may pursue their lawsuit to overturn the California Coastal Commission's approval of the projects, even though the suit was filed after a statute of limitations had ostensibly expired, the Fourth District Court of Appeal has ruled. Under the California Coastal Act, opponents of a commission ruling have 60 days from the date of a decision to file legal action. The San Clemente neighbors seemingly missed that deadline. They successfully argued, however, that their suit was timely not under the Coastal Act, but under a section of the California Environmental Quality Act (CEQA) that authorizes the commission's regulatory program. The properties in question are two adjacent lots in an undeveloped, nine-parcel stretch on the city's coastal bluff. The vacant land has afforded the public an unobstructed view of the ocean and access to the beach for years. In November 2007, the Coastal Commission approved development permits that allowed the properties' owners to build multistory, single-family houses on the lots. The commission conditioned its approval on the property owners' signing a memorandum of understanding (MOU) with the owners of five other undeveloped lots to provide for view corridors and pedestrian beach access. While the commission approved the permits on November 14, 2007, it did not file the requisite notice of approval with the Natural Resources Agency until December 27. On January 28, the neighbors sued the commission, contending that the coastal panel had failed to adequately evaluate project alternatives; used the MOU to improperly defer mitigation; and violated procedural requirements by providing late notice of staff reports and failing to respond to written comments from the project opponents. In response, the Commission and the two property owners contended the lawsuit was filed after the 60-day deadline in the Coastal Act. Orange County Superior Court Judge Thierry Patrick Colaw agreed and dismissed the neighbors' suit. The Coastal Commission does not have to strictly abide by CEQA rules. Instead, it uses a certified regulatory equivalent of the CEQA process authorized by the act in Public Resources Code § 21080.5. Subdivision (g) of that section establishes a 30-day statute of limitations for legal action, and the appellate court ruled that the clock for legal action started ticking on December 27 when the commission filed the notice of permit approval with the Natural Resources Agency. "If § 21080.5, subdivision (g), applies, plaintiff's filing of the petition on Monday, January 28, 2008, was timely," Justice William Rylaarsdam wrote for the court. The commission and property owners argued that this CEQA provision and the Coastal Act were in conflict because of their differing statutes of limitations, and in such a case, the Coastal Act should prevail. They had a state Supreme Court ruling on their side. In Sierra Club v. California Coastal Com. , (2005) 35 Cal.4th 839, the court ruled that when CEQA and the Coastal Act conflict, the Coastal Act controls (see CP&DR Legal Digest , June 2005 ). The appellate court, however, decided that the different statutes may be reconciled. The relevant Coastal Act provision is Public Resources Code § 30801, which applies to "any decision" by the Commission, while § 21080.5, subdivision (g), covers any state agency decision prepared pursuant to the same section. "Thus," Rylaarsdam wrote, "§ 21080.5 governs a limited type of attack on Commission's rulings issued under the certified regulatory program exemption." The lawsuit filed by the group of San Clemente neighbors was precisely this sort of attack because it challenged the Commission's range of alternatives, mitigation measures and public review process, the court ruled. The Fourth District Court of Appeal also pointed out that the question of legal deadlines would not have arisen if the Commission had filed its decision with the Natural Resources Agency promptly. The case now returns to Superior Court for further proceedings. The Case: Strother v. California Coastal Commission , No. G040745, 09 C.D.O.S. 5407. Filed April 30, 2009. The Lawyers: For the project opponents: James Geocaris, Lewis, Brisbois, Bisgaard & Smith, (714) 545-9200. For the Commission: Christina Bull Arndt, attorney general's office (213) 897-8964. For the property owners: John Flynn III, Nossaman, (949) 833-7800.

The state will appeal a Superior Court decision blocking the state from shifting $350 million of tax increment revenue from redevelopment agencies to schools In the midst of the state's larger budget crisis, the amount at issue in the litigation suddenly appears piddling. Still, the case, if pursued, could be important, especially to redevelopment agencies. Attorneys for the Department of Finance filed the notice of appeal earlier this week. The notice does not contain any arguments, and state officials have declined to discuss their legal strategy. The state did not request a "stay" of the April 30 decision; hence, redevelopment agencies are off the hook for now. It's entirely possible the state is simply keeping legal options alive while other things develop in the background, including a likely legislative remedy. As we reported earlier , Judge Lloyd Connolly based his ruling entirely on the Legislature's findings and declarations in support of the money shift. A move is afoot to draft new findings and declarations that could withstand Connolly's scrutiny, renewing the shift. Don't forget, though, the California Redevelopment Association has other legal arguments against the shift, including the contention that it would unconstitutionally interfere with contracts between redevelopment agencies and bondholders. Of course, the $350 million of redevelopment money amounts to only 1.44% of the state's projected $24.3 billion budget gap for the 2009-10 fiscal year. The two-house Conference Committee on the Budget began tackling the mess this week, and I have to say I do not remember the mood in Sacramento ever being more somber. Proposals that in past years might have served as political threats – emptying some prisons, cutting off health care for a million children, eliminating job training and college grants, shortening the school year, closing the majority of state parks – are being taken seriously as budget-balancing ideas. They're no longer talking about quality of life issues at the Capitol, they're talking about life, death and the most basic public services. The League of California Cities is organizing its "budget action day" on Wednesday, June 3, during which local government officials will lobby lawmakers not to increase local government responsibilities while the state simultaneously borrows $2 billion in local property taxes and outright takes gas tax revenues locals have been receiving. However, local officials – including Los Angeles Mayor and former Assembly Speaker Antonio Villaraigosa – made their pitch all this week and appear to have gotten nowhere.   - Paul Shigley