The California Supreme Court has directed the Fourth District Court of Appeal to vacate a 1999 ruling in which the City of Riverside's requirement that poolrooms be closed from 2 a.m. to 6 a.m. was declared unconstitutional. In January 1999, a Fourth District panel ruled 2-1 that the Riverside ordinance violated poolroom owners' equal protection rights. (See CP&DR Legal Digest, March 1999.) The court said the city's law, which the owner of Mr. Cue's Family Billiards challenged, was "arbitrary and discriminatory" because there was no reason to single out poolrooms from other all-night businesses. The city said it sought to restrict poolroom hours to protect public safety. The state Supreme Court granted the city's petition for review. But in January of this year, the court transferred review back to the Fourth District with directions to vacate its decision and to reconsider the case in light of the state high court's August 1999 ruling in Warden v. State Bar, (1999) 21 Cal.4th 628. In Warden, the court ruled 5-2 that the state's mandatory continuing legal education (MCLE) program — which exempts certain categories of licensed attorneys, such as elected officials, retired judges and full-time law professors — does not violate the equal protection rights of California lawyers. The court first ruled that the lesser "rational basis" test applied, not the "strict scrutiny" test that is required to protect a fundamental right under the state and federal constitutions' due process clauses. The court then said it could not be argued that that the MCLE exemptions were not determined on some rational basis. In deciding the poolroom case, the appellate court majority ruled that Riverside's ordinance failed the rational basis test, a conclusion not shared by Justice James Ward, who filed a lengthy dissent. The case is Estevanovich v. Riverside, S077146, E018016.

Large-scale urban development will soon replace the San Bernardino County Dairy Preserve. Last December, the city of Ontario completed its annexation of more than half of the 15,000-acre swath of farmland, and the City of Chino either has annexed or plans to annex the remainder. Ontario's plans for what the city has tabbed the "New Model Colony" call for development of 31,000 homes, 5 million square feet of retail space and 5 million square feet of industrial space. The annexation of 8,200 acres increased the city's size by one-third to 49 square miles. Chino finished annexing about 1,500 acres in May 1999, and city officials are now in the early stages of master planning 5,500 neighboring acres, which the city intends to annex in the near future. Because of flooding concerns, Chino's development plans are not as aggressive as Ontario's. Still, Chino earmarked hundreds of acres for industrial development and could zone up to 2,000 acres for new residences. Although Ontario and Chino officials have reviewed each other's plans, and major thoroughfares are proposed to connect the two towns, the cities have not coordinated their planning efforts. And critics say Ontario's land-use plan is simply "more of the same." The San Bernardino County Dairy Preserve — often called the Chino Ag Preserve — has been the heart of the Southern California diary industry for decades. According to 1997 state Department of Food & Agriculture figures, San Bernardino was the number three dairy producing county in the state (after Tulare and Merced counties) with $440 million in annual production. However, rapid urban development in San Bernardino, Los Angeles and Riverside counties has surrounded the dairy preserve, and about half of the 400 dairies have moved during the last 10 years. "It's been the focus of decades-long controversy, with environmental interests, development interests, agricultural interests and municipal interests all in competition," said James Roddy, San Bernardino County Local Agency Formation Commission executive officer. During the 1980s, San Bernardino County officials promoted the continuation of agriculture in the area, Roddy said. At the same time, the county, Chino and Ontario bickered over spheres of influence, with both cities attempting to assert control over the entire preserve. During the early 1990s, county officials concluded that agriculture should be phased out, so LAFCO began a series of studies to determine spheres of influence, Roddy explained. In the end, Ontario got the bulk of developable land. In January 1998, Ontario adopted a general plan amendment and environmental impact report for the 8,200-acre New Model Colony, which lies south of the Pomona (60) Freeway and west of Interstate 15. The plan spreads about a dozen neighborhood centers across the area, with larger commercial centers surrounded by high-density residential uses at the east and west ends. Village greens crisscross the area, and there will be a town center near the middle. The majority of land will go for single-family homes, which could be developed at 4.6 units per acre, but the plan does mandate a mix of housing types, said James Ragsdale, the city's project manager. The city hopes to get some higher-end homes, of which it currently has few. To accommodate the projected 500,000 daily vehicle trips at buildout in 2030, the city proposes three north-south parkways of six or eight lanes each, connecting with the 60 Freeway, and one six- or eight-lane east-west parkway connecting the large commercial centers and Interstate 15. The neighborhood centers make bus service, which could tie to the nearby Metrolink train, a strong possibility, Ragsdale said. There will be pedestrian links to neighborhood centers and schools, and the town center will favor walkers, he added. The city is preparing a public facilities implementation program, which will include financing plans and development fees. Once that is complete later this year, development may commence. Initiating development will be expensive because the area has almost no infrastructure, Ragsdale warned. The Sierra Club and the Endangered Habitats League sued Ontario, claiming the city's plan lacked an adequate traffic impact analysis, and did not mitigate the loss of biological and agricultural resources. The city won the lawsuit, but environmentalists have appealed. Endangered Habitats League Executive Director Dan Silver said Ontario deserves credit for planning activities centers. But, he said, the plan ideally would contain denser development in those centers, more open space and agriculture other than dairies. Also, all area jurisdictions, including Riverside County, should plan for more employment centers and transit-oriented development, Silver said. Chino's cut of the former dairy preserve lies south of Ontario's New Model Colony and northeast of the Corona (71) Freeway. Much of the 1,500 acres Chino annexed last year is constrained because it lies below the top of Prado Dam, a nearby Santa Ana River flood-control project. Nearly 900 acres at elevations below the existing dam height are designated for open space, said Chuck Coe, Chino community development director. (Orange County, which lies downstream, is responsible for acquiring land or flooding rights.) Another 320 acres are below the elevation of the planned 10-foot extension, and that property is zoned for agriculture, including the continuation of dairies. The northernmost 600 acres are set aside for industrial development, probably in the form of distribution centers, warehouses, light manufacturing, and business parks. Exactly how the city will designate the 5,500 acres it intends to annex in a couple years remains underdetermined, Coe said. A significant portion lies below the Prado Dam flood line, and two prisons and Chino Municipal Airport — all nearby — are other considerations. Still, Coe expects the city could make available up to 2,000 acres for residential development. "We're running out of residential property in the city proper. The City Council and the staff sees a tremendous opportunity to accommodate a master-planned community. This is a chance to have residential uses with a high standard," Coe said. The city is working with consultants and reaching out to the public in a process akin to a general plan update, with focus group meetings, field trips and website updates. A large regional park in areas subject to flooding is one possibility, Coe said. "This is going to have a significant effect on the form of this community for years to come," said Coe, noting that the two annexations will increase Chino's size by nearly three-quarters. While people prepare to move into the dairy preserve, the cows are heading north to the San Joaquin Valley. In February, the Kings County Planning Commission approved plans for four giant diaries between Hanford and Corcoran. J.G. Boswell Co. plans to put up to 47,000 cows on 6,000 acres. Kings County originally approved the diaries in January 1999, but the Center on Race, Poverty and the Environment sued to force preparation of an EIR because of concerns over water and air pollution, insects and odors. The county completed an EIR and reapproved the project. Plans for a 28,000-cow dairy in Kern County, near Bakersfield, have received stiff opposition from residents in recent months. Contacts: Chuck Coe, Chino Community Development Department, (909) 591-9812. James Ragsdale, Ontario Planning Department, (909) 391-2506. James Roddy, San Bernardino County Local Agency Formation Commission, (909) 387-5866. Dan Silver, Endangered Habitats League, (323) 654-1456.

With more funding headed its way and a stated emphasis on protection of natural resources, the California Coastal Commission appears to be tightening its control over development. Gov. Davis's proposed budget contains more money for enforcement and assisting with Local Coastal Plan implementation. Davis also replaced Coastal Commissioner Nancy Fleming, the pro-development mayor of Eureka, with Humboldt County Supervisor John Woolley, an appointment that pleased environmentalists. Commissioners named Sara Wan, a former Malibu mayor and a reliable vote for the environment, chairwoman for a second year. Developers continue to have a rough time with the panel. In January, the commission appealed a Mendocino County Superior Court order allowing a controversial Fort Bragg hotel to open. That same month, the commission blocked at least temporarily an 81-unit Santa Barbara condominium project. Also, the commission agreed to undertake the first-ever review of a county's Local Coastal Plan — the San Luis Obispo County LCP — because of development pressures. Except for a short period in 1996, when Republican Curt Pringle was Assembly speaker, the majority of the 12 coastal commissioners has always been Democratic. (The governor, the speaker and the Senate president pro tempore each make four appointments.) In 1996, "our job was to keep from driving the program off a cliff," recalled Peter Douglas, longtime Coastal Commission executive director. At that point, Douglas, who helped draft the Coastal Act initiative of 1972, was the target of an unsuccessful Republican ouster attempt. Now, he said, "we have a commission of smart, intelligent commissioners who are really engaged in this. … This is the finest collection of hearts and minds we've ever had on the commission." But development interests characterize the panel differently. Fred Gaines, a Woodland Hills attorney who has represented many coastal landowners, said the commission has become more difficult during the last year. "The Coastal Commission is as pro-environment and as anti-property owner as it has been in a long time. The Coastal Commission has never been kind to property owners, but there used to be more of a balance," Gaines said. The newest commission member, Woolley, is a 30-year resident of Manila, an unincorporated community of 1,000 on Humboldt Bay. As a local activist, he worked with the Coastal Conservancy to turn a former Manila lumber mill into a 100-acre park and community center. The first-term county supervisor said developers deserve a level of certainty, but commission decisions should consider public access to the coast. "We should not turn a blind eye toward development. We should help it along where it is appropriate," added Woolley, whom Davis appointed in December. Woolley is only the latest appointee with a community activist background. Among Davis's appointees last year was Christina Desser of the Migratory Species Project. These former activists often provide a friendly audience to people who question development during hearings, development proponents say. The Davis administration has proposed a modest increase in Coastal Commission funding to $16.1 million for the 2000-01 fiscal year. The governor's budget contains $900,000 for enforcement and compliance with the Coastal Act, including funds for researching prescriptive rights of public access. The budget also includes more money for Local Coastal Plan implementation. About one-third of jurisdictions along the coast still do not have an approved LCP, even though the plans were due 19 years ago. The Davis budget reverses the trend under the Wilson and Deukmejian administrations. "The governor has been very aware of the 16 years of cuts to this program and the devastating impact that has had," Douglas said. "We just got a geologist for the first time in 10 years, when so much of our work deals with geology." Recent commission decisions suggest it is as difficult as ever to receive development approval from the panel, which decides projects outside LCP boundaries and appeals of decisions within LCPs. For example, the commission appealed a trial court order favoring the developer of the North Cliff Hotel in Fort Bragg. City and state officials contend the 35-foot-tall structure blocks ocean views. The case offers proof of the commission's increasing interest in protecting visual resources. "The commission has taken a stand that views from public lands, and that includes state waters up to three miles from the coast, are an important resource," Douglas said. Oftentimes, this approach conflicts with gigantic homes proposed in remote areas, for which the commission gets more and more applications. The landowner wants the best view, which makes the structure more prominent. Commission staff and members, however, are skeptical of such plans, Douglas said. In the latest Santa Barbara coastal controversy, the commission voted 7-3 to delay a decision on Entrada de Santa Barbara, an 81-unit time-share condominium and retail project on State Street. The commission raised questions about traffic, the displacement of poor residents, loss of views and setbacks from riparian areas. The commission asked for more information and analysis — despite a staff recommendation of approval and outspoken project support from the Santa Barbara City Council. Even previously approved projects are struggling to advance. Last September, the commission dealt a setback to the Sterling Center project in Sand City. In 1994, the commission permitted a 136-room hotel, restaurant and conference center at the site. However, because the original developer never acted on the permit, an extension was sought. The commission declined to grant the extension because conditions had changed since 1994. Commissioners said that dune habitat is now seen as more valuable; the western snowy plover, which lives in the area, has been listed as endangered; the project's water supply is uncertain; and Sand City has acquired an adjacent parcel, which it wants to develop. Sterling Center marked the second defeat in less than a year for Sand City, which has unsuccessfully advocated coastal development inside its redevelopment project area for two decades. Last May, the commission postponed a decision on the 495-unit Monterey Bay Shores resort until the developer could prove that domestic water is available. The commission also demanded more studies on impacts to species, dune habitat and circulation. "The new Coastal Commission is one of the toughest Coastal Commissions that we have ever come across," said Kelly Morgan, city administrator in Sand City. Still, not all environmentalists are convinced the commission is doing enough to protect natural resources. Mark Massara, of the Sierra Club's California Coastal Program, pointed to the commission's approval in October of Pepperdine University's expansion. The Malibu school plans to build classrooms, 154 housing units, a conference center and 1,300 parking spaces on 50 acres above the main campus. "Look at the Pepperdine decision," Massara said. "This ‘green' commission approved destruction of the last best example of old-growth native coastal grass left in existence. For what? A 1,300-acre parking lot. Pepperdine could easily have built the project elsewhere." Clearly, the Coastal Commission is interested in improved planning efforts. Staff members recently initiated a periodic review of the San Luis Obispo County LCP, the first such review of a county LCP, said Steve Monowitz, a coastal planner in the commission's Santa Cruz office. Two years ago, when rejecting a giant Hearst Corp. hotel development, the commission urged San Luis Obispo County to amend its LCP to further restrict growth. "There are a lot of coastal development pressures and there are a lot of resources at stake. There's a concern about the adequacy of the LCP to address this, as evidenced by the number of appeals the commission is getting," Monowitz said. The agency also would like to provide more training for local planners because some cities and counties are implementing LCPs improperly, Douglas added. He believes mistakes are made because of local staff turnover and because most jurisdictions with an LCP have failed to update the LCP, leaving them with an obsolete plan. Douglas said the commission will probably sue the worst offenders. That crackdown is unlikely to win new friends. Landowner attorney Gaines said the commission should relinquish its role of "statewide planning commission" and simply set policies. Tom Mathews, Orange County planning and development services director, complained at a recent conference in Los Angeles that the commission has interpreted the Coastal Act too narrowly and has ignored local decision-makers. Alternatives to the commission's strict enforcement of regulations exist, such as Orange County's 37,000-acre Natural Communities Conservation Plan for 38 species, Mathews said. But Alex Hinds, Marin County community development director, recommended local planners tap Coastal Commission expertise as early as possible. For example, Marin County planners asked commission staff to help review a 31-unit affordable housing project in Point Reyes, even though the project is covered by Marin County's LCP. "My experience is that their intent is to enhance the experience, not just look over your shoulder," Hinds said. Contacts: Peter Douglas, Coastal Commission executive director, (415) 904-5200. Steve Monowitz, coastal planner, (831) 427-4868. Fred Gaines, Gaines & Stacey, (818) 593-6355. Mark Massara, Sierra Club California Coastal Program, (415) 977-5729. John Woolley, coastal commissioner, (707) 476-2393. Alex Hinds, Marin County community development director, (415) 499-6269.

For the second time in less than a year, the Fourth District Court of Appeal has ruled against Riverside County landowners whose property was foreclosed upon because of nonpayment of special taxes. The court ruled that taxes levied under the Mello-Roos Community Facilities Act (Government Code §53311) are special taxes, not special assessments, and that failure of the government to use Mello-Roos bond proceeds as promised does not excuse nonpayment of those special taxes. Late last year, in a case involving a different landowners in a neighboring community facilities district, the court held that delays in constructing roads and utilities funded by Mello-Roos bonds did not absolve property owners of paying special taxes. Property owners have an obligation to repay bondholders regardless of disputes over how bond proceeds are used, the court held in Community Facilities District No. 88-8 v. Harvill, 99 C.D.O.S. 7309. Although the court did not cite its decision in Harvill, the latest case is similar. Riverside County formed a community facilities district under the Mello-Roos Act to raise funds for new roads and utility lines in 1987. The district encompassed industrial land along Interstate 215 north of Perris. After a vote of property owners, the county issued bonds on November 1, 1990. Later that some month, the county recorded a notice of special tax lien against all nonexempt property in the district. In October 1995, a group of property owners sued the county and the district alleging that the county fraudulently induced landowners to vote for district formation and the special levy, and that public improvements were not completed as promised. That case, Greater Perris Valley Industrial Association v. County of Riverside, San Diego County Superior Court Case No. 704058, is pending. Meanwhile, the owners of two properties, Bainbridge 17 and Dorothy Burghart, failed to pay taxes levied against their properties for the 1995-96 and 1996-97 tax years. The district, acting on behalf of bondholders, commenced foreclosure proceedings in April 1997. The landowners argued that the district was contractually obligated to provide improvements, that the failure to do so violated a 1990 memorandum of understanding, and that nonpayment was excused by the district's failure to complete improvements. San Diego County Superior Court Judge Herbert Hoffman issued summary judgement for the district. On appeal, the property owners argued that the levies were not special taxes, but were instead special assessments that could not be the subject of foreclosure. The appellate court rejected that argument. " he statutory scheme expressly set forth in the Act and the undisputed material facts in this matter establish as a matter of law that those charges are special taxes levied under the Act," Justice Gilbert Nares wrote for the unanimous three-judge panel. " e note the Act refers expressly, repeatedly and unambiguously to the levying of a ‘special tax,' rather than the levying of a special assessment," Nares wrote. The district was entitled to foreclose, he said. Nares noted that §53325.3 expressly states that such taxes may, or may not, be based on benefits received by real property. He quoted the statute, which says, "… there is no requirement that the tax be apportioned on the basis of benefit to any property. …" Failure of the district to perform contractual obligations does not excuse nonpayment of taxes, the court ruled. Bondholders who are due payments were not party to the MOUs involving the county, the district and landowners, the court said. The appellate court also upheld the trial court's award of attorney's fees to the district, and awarded fees on appeal. The Case: Riverside County Community Facilities District No. 87-1 v. Bainbridge 17, No. D030175, 00 C.D.O.S. 433, filed December 22, 1999, certified for partial publication January 14, 2000. The Lawyers: For CFD No. 87-1: Susan Feller and Ray Sherman, Sherman & Feller, (510) 452-3222. For Bainbridge: Henry Heater and George Kaelin III, Endeman, Lincoln, Turek & Heater, (619) 544-0123.

Recent actions by two water boards signal a movement in the state towards greater regulation of non-point water pollution. The new regulations could start a trend in California of tightened development standards, which have already taken hold elsewhere in the country. The biggest step was taken in Los Angeles, where the local Regional Water Quality Control Board voted in January to set measurable numerical standards for treating stormwater runoff in new development throughout Los Angeles County. While similar steps have been taken in other states, this is believed to be the first time in California that it has occurred. Briefly stated, the new regulations require developers to collect or filter storm runoff. Predictably, environmentalists are elated by the new rules and developers have complained that they are unnecessary and will add to building costs. In another move, the State Water Resources Control Board adopted new measures regulating water runoff. But the state action did not include the same stringent measurements that were part of the Los Angeles package, and in the short term the state regulations should have a more limited impact. The regulations adopted in Los Angeles are "probably the most significant step the Regional Water Quality Control Board has ever taken regarding stormwater," said Alex Helperin, an attorney with Natural Resources Defense Council in Los Angeles. He called the Los Angeles stormwater drainage problem the worst in the country, with beaches frequently closed after storms send pollution into Santa Monica Bay and other coastal waters. One reason for the runoff problems is that the region's many concrete flood control systems send water quickly to the ocean after rain falls. The problem is exacerbated by development, which strips vegetation that could hold the water. The new regulations will do little for the existing problem, but, by regulating new development, should prevent pollution from getting worse, Helperin said. Under the regulations adopted in Los Angeles County in late January, numerous types of development will have to filter stormwater runoff from roofs, parking lots and other pavement. The new standards will impact commercial projects of more than 100,000 square feet, new parking lots with 25 or more spaces, gas stations, auto repair garages, restaurants larger than 5,000 square feet, and subdivisions with at least 10 houses. The new developments must be designed to collect or filter runoff from the first 0.75 inches of rain in a 24-hour period. Developers are given a number of ways to comply, including adding grass or detention ponds and trenches. Figures released by the regional board show that complying with the new regulations adds only 0.5% to a project's costs, according to Helperin. For a $6.5 million commercial project, the cost of a detention basin is figured to be $28,000, with annual maintenance costs of $33. An infiltration basin would cost $17,550 to construct with annual maintenance of $1,350, and catch basin filters would cost $1,500 with yearly maintenance of $495, according to Regional Water Quality Control Board. The standards affect all of Los Angeles County's 85 cities, and were opposed by most of them — but not by Los Angeles, West Hollywood and Santa Monica. The Building Industry Association also fought the regulations. The BIA is considering its options, including an appeal to the State Water Resources Control Board , said Ray Pearl, deputy director of public affairs for the Building Industry Association for Greater Los Angeles. If the state board rejects an appeal, the BIA's next option would be to file a lawsuit. Los Angeles County adopted similar runoff regulations for unincorporated sections of the county last year to settle a lawsuit from the NRDC. That action has created delays and uncertainty, and design costs have increased, Pearl said. At the same time, he said, the new standards will not make a dent in water quality because they address only a small portion of a larger problem. "To throw water down the drain, so to speak, with no measurable impact is quite frankly ridiculous," he said. But environmentalists disagree. The City of Santa Monica has been regulating runoff for the past six years, and "we've had a boom in development here," said Mitzy Taggert, a staff scientist with Heal the Bay, A Santa Monica-based environmental group. Other areas have already adopted similar runoff regulations without experiencing economic problems, including Austin, Texas, Phoenix, Arizona, and the states of Maryland and Florida, Helperin said. The NRDC attorney said he sees a "pretty minimal effect on land use. There's not going to be a reduction in development." The Coastal Commission has followed the adoption of the Los Angeles County standards closely, and has begun requiring essentially the same standards on a case-by-case basis in other jurisdictions, according to Cy Oggins, coordinator of the Coastal Commission's Coastal Non-Point Pollution Control Program until mid-February. When the Coastal Commission looked at the Local Coastal Plan for the Mendocino County town of Gualala last October, it required the elimination of 85% of runoff, which is similar to the Los Angeles County standards. Runoff controls have been part of the Coastal Commission's work since it began, Oggins added, but requiring those controls at a level of 85% is new. Meanwhile, the State Water Resources Control Board plan adopted in December is part of a 61-point plan to curb pollution. Unlike the Los Angeles regulations, the state program, which covers all types of water runoff, does not establish any numerical standards. Taggert, of Heal the Bay, called it a "soft plan." "There's no benchmark to see if you're being successful or not"" she said. The state plan calls for strict monitoring of water quality and cleanup of polluted runoff. That plan was also approved by the Coastal Commission in January. Oggins described the plan as an update of a 1988 state non-point pollution plan, but the recent action added 61 management measures in six categories: forestry, urban areas, marina and recreational boating, channeling waterways, agriculture and wetland and riparian areas. Controlling water pollution statewide is estimated to cost $14 billion in the next decade, according to the Los Angeles Times. Proposition 13, the water bond on the March ballot, contains $190 million for non-point source pollution control. A staff member at the State Water Resources Control Board said there will be several phases of the plan, with many of the actual implementation standards to be developed by regional boards, such as the one in Los Angeles. Contacts: Ray Pearl, Building Industry Association of Southern California, (818) 225-2857. Alex Helperin, NRDC, (323) 934-6900. Mitzy Taggert, Heal the Bay, (310) 581-4188.

A City of Las Vegas ordinance regarding adult bookstore permits has been declared unconstitutional by the Ninth Circuit U.S. Court of Appeals. The ruling in the case, known as Baby Tam II , came despite amendments to city ordinance, state law and court rules of practice that were intended to cure defects of an earlier law that the Ninth Circuit declared invalid in 1998. In a 2-1 decision, a panel of the Ninth Circuit said the regulatory scheme remained flawed because it still did not ensure a timely decision by the city on an application for an adult bookstore — a variation on the basis on which the Ninth Circuit threw out the earlier law. In Baby Tam I , ( Baby Tam & Co. v. City of Las Vegas , 154 F.3d 1097 (9th Cir. 1998)) the court held that the city's ordinance failed to provide for prompt judicial review of a denial of a license to operate a bookstore and therefore was "on its face a prior restraint of speech which violates the First and Fourteenth amendments." The Ninth Circuit extensively cited the U.S. Supreme Court's decision in FW/PBS, Inc. v. City of Dallas , 493 U.S. 215 (1990). After Baby Tam I , California lawmakers approved a measure in 1999 (SB1165) that requires judges to decide within 60 days on challenges to issuance, denial or revocation of an adult business permit. Las Vegas also altered its regulatory scheme. It amended the municipal code to state that if an adult bookstore applicant challenges denial of a permit in district court, and the court does not decide the matter within 30 days, then the city must issue a temporary bookstore license until the court rules. The city also secured amendments to state law and to practices of the Eighth Judicial District Court, which agreed to decide such cases within 30 days after filing of a writ. With those changes in place, the U.S. District Court held that "the deficiencies noted by the Ninth Circuit Court of Appeals have been corrected" and dissolved the injunction against the city. Baby Tam & Co., which operates adult bookstores, appealed. On appeal, the Ninth Circuit said the city got it partially right. But the court noted it decided Baby Tam I on narrow grounds, leaving other issues undecided. " n its face the judicial review appears to pass constitutional muster," Judge John Noonan wrote for the majority. "A Las Vegas council member or a Nevada legislator might think, we did what the courts said and the Constitution required. Wasn't that enough? As it turns out, it wasn't, because this court did not take upon itself to expound all the constitutional problems in the statute or write a primer on the First Amendment." In fact, the court said, Las Vegas' ordinance remained no different than the Dallas law that the Supreme Court rejected in FW/PBS . Because Dallas required that applicants get clearance from the health department, fire department and building official before the 30-day limit for deciding an application began to run, "the city's regulatory scheme allow indefinite postponement of the issuance of a license," the high court ruled. The Law Vegas law was similar. " he thirty days begin to run ‘from receipt of a complete application and fees upon compliance with the requirements of this Section and any applicable provisions of Title 6 of this Code,'" Noonan wrote, citing the Las Vegas ordinance. "Other applicable provisions of the Code include ‘the standards of the health, zoning, fire and safety laws of the State of Nevada and ordinances of the City of Las Vegas applicable thereto.' LVMC §6.06A.020. "No time limit is set within which satisfaction of these requirements must be found," Noonan continued. "The time is as indefinite as in the invalid Dallas ordinance. The thirty days within which the Director must act may be indefinitely postponed. The ordinance fails to meet the requirements of the First and Fourteenth Amendments." The court further noted that it was not prejudging any other issues that might arise in future litigation. In a dissent Judge David Thompson said that while he agreed with the majority's ruling on the legal principles, the Las Vegas ordinance was factually different from the invalid Dallas law. Thompson interpreted the Las Vegas ordinance as giving the planning director — who would issue the adult bookstore license — 30 days to determine whether an applicant has met the health, zoning, fire and safety requirements. If the director did not decide within 30 days, the license is issued, Thompson wrote. The Case: Baby Tam & Co., Inc., v. City of Las Vegas , No. 99-16809, 00 C.D.O.S. 383, filed January 14, 2000. The Lawyers: For Baby Tam: Michael Stein, Kenehan, Lambertsen & Stein, Las Vegas, (775) 329-1129. For Las Vegas, William Henry, deputy city attorney, (702) 229-6201.

The California Supreme Court will decide a case involving the City of Los Angeles's inspection fee on apartments. In December, five of seven justices voted to grant the petition from Los Angeles, which lost a Second District Court of Appeal ruling on a lawsuit filed by apartment owners. (See CP&DR Legal Digest, October 1999.) The Los Angeles City Council approved the $12 annual inspection fee on each of the city's approximately 750,000 apartments in July of 1998. The fee was intended to generate revenues for the city's renewed effort to fight slum housing. However, apartment owners quickly sued the city, alleging that Proposition 218 required voters to decide on what amounted to a $12 annual tax. The city argued that the fee was placed on a business — operation of rental units — and not on real property, so it was not subject to Proposition 218. The city won at the trial court level, but a three-judge panel of the Second District reversed the decision. The appellate court said the fee was clearly a "fee or charge for property related service" and was therefore subject to Proposition 218. The fact that the city assessed only owners of rental units, and not all property owners, was irrelevant under Proposition 218, the court ruled. The state Supreme Court has not yet set a date for oral arguments. The case is Apartment Association of Los Angeles v. City of Los Angeles, No. B130243, 99 C.D.O.S. 7038, 1999 Daily Journal D.A.R. 8951, filed August 26, 1999.

The wealthy City of Indian Wells will give $1.5 million in housing funds to the City of Coachella, a neighboring town where residents' median income is less than one-third that of Indian Wells' citizens. The money is a portion of the mandatory 20% housing set-aside from an Indian Wells redevelopment project, which transformed desert land into an upscale golf resort. Indian Wells has spent $13.6 million in housing funds on 90 senior apartments and earmarked $14.6 million for 100 more senior units. The city offered the $1.5 million to Coachella, where Indian Wells officials said the money would go further. In early December, the Coachella City Council voted 3-2 against accepting the money. "Indian Wells has a responsibility to provide housing for their workers in their city," Coachella Mayor Sylvia Montenegro told the Los Angeles Times. However, a councilwoman elected in November switched her vote on December 28 — three days before special legislation allowed the transfer expired. State officials are now reviewing the transfer.

The Ninth Circuit U.S. Court of Appeals has sided with a miner in a feud between the miner and the U.S. Forest Service. In interpreting the Mining Law of 1872 and the 1955 Multiple Use Act, the court ruled that the Forest Service could not kick a miner off his claim in the Tonto National Forest, and that the Forest Service may not have had justification for increasing a reclamation bond requirement. In an opinion that recounted the history of mining laws in the United States, Circuit Judge Andrew Kleinfeld made clear that the owner of a valid mining claim on public land has great rights. Writing for the unanimous three-judge panel, Kleinfeld cited the U.S. Supreme Court's decision in Wilbur v. United States ex rel. Krushnic, 280 U.S. 306 (1930), which stated, " hen the location of a mining claim is perfected under the law, it has the effect of a grant by the United States of the right of present and exclusive possession. The claim is property in the fullest sense of that term … ." The case involved the Forest Service's attempt to remove Ray and Molly Shumway from the location of two mill site claims — the same as mining claims — in Arizona's Tonto National Forest. The Forest Service had first approved a mining and milling operation plan for the sites in 1979. In 1981, the Forest Service approved a revised plan that allowed a cyanide leaching operation. However, in 1987 the Forest Service ordered the Shumways to move off the site and to remove a horse, trash and equipment, which the Forest Service termed "junk." The Forest Service also raised its requirements for a bond intended to ensure site reclamation from $5,200 to $18,000. In 1991, the Forest Service ordered the Shumways to halt all mining and move out because they had not posted an acceptable bond. The Forest Service also advised the Shumways that a new operating plan would likely come with a requirement for a $150,000 to $200,000 bond. The Shumways did not leave the property, so the federal government sued the Shumways in 1995 to evict them and to require them to remove their belongings and clean up the sites. Arizona District Court Judge Stephen McNamee issued a summary judgement for the government. On appeal, the Shumways argued that their equitable title in the mill site claims entitled them not to be treated as trespassers, that the increase in bond amounts was impermissible and that Judge McNamee failed to consider evidence they presented. The Ninth Circuit panel reversed McNamee. So long as the claims were not shams and the Shumways abided by Forest Service regulations, they were entitled to possess the mill site claims, the court ruled. "The owner of a mining claim owns property, and is not a mere social guest of the Department of the Interior to be shooed out the door when the Department chooses," Kleinfeld wrote. No one disputed that the claim was bone fide and that the Shumways owned it. The court took particular exception to the Forest Service's description of the Shumways' tools and equipment as "junk.." Furthermore, the court said, failure to file an approved mining plan — the Shumways' was rejected for failure to provide the $18,000 surety bond — does not cost the owner his claim. "Like someone who proposes to operate a nursing home in an area zoned for single family residential and light retail, regulations may prohibit their proposed use, but it does not follow that they forfeit their interests in the real estate," Kleinfeld wrote. As for the bond amount, the court ruled that triable issues of fact existed and the lower court should not have issued a summary judgement. The Ninth Circuit said that Judge McNamee erred when he disregarded affidavits from Ray Shumway and his expert witness, both of whom discussed operations at the mill site claims. The Case: U.S. v. Shumway, No. 96-16480, 99 C.D.O.S. 3, filed December 28, 1999. The Lawyers: For U.S.: Robert Bartels, assistant U.S. attorney, Phoenix, (602) 514-7500. For Shumway, Arthur Lloyd, Payson, Arizona, (520) 474-6727.

A commission appointed by Assembly Speaker Antonio Villaraigosa has recommended local governments swap sales tax revenue for a bigger cut of property taxes. The proposal is one of several intended to reduce city and county dependence on sales tax. However, it remains unclear whether lawmakers and Gov. Davis will take meaningful steps toward altering the complex fiscal system this year. It is a two-handed situation. On the one hand, recommendations of the Speaker's Commission on State and Local Government Finance appear to be getting serious consideration, as a new joint standing committee of the Senate and Assembly was created to follow up. On the other hand, Davis's January budget proposal contained scant mention of local government finance. In fact, the governor chided local agencies for failing to spend transportation and housing funds already in their possession, a charge local officials hotly disputed. David Abel, who chairs the Speaker's Commission, said momentum exists for changing a broken system. The 34 members of the commission — established to address "the impacts of topsy-turvy fiscal policy on governance and quality of life" — came from all over the state and represented every political persuasion. Yet the members agreed at the outset on nearly everything and cast unanimous votes during the year-long process, he said. Plus, the Commission on Local Governance for the 21st Century — created by the Legislature to review the Cortese-Knox Act, which guides local agency formation commissions — reached similar conclusions about altering local government funding mechanisms, Abel noted. "The issues are not unclear to those who follow them," he said. One of the primary issues noted by these two groups and by others is that local governments are heavily dependent upon sales tax revenue. This situation causes cities and counties to make land-use decisions based on short-term financial gain — jurisdictions often choose retail uses rather than manufacturing or houses — and pits communities against one another because the town that lures big boxes and car dealers gets more money. Plus, because cities and counties typically get only 10% to 20% of local property tax revenue — while schools get half or more — local decision-makers show little interest in lands that boost property values long-term, such as housing. Recommendations from the Speaker's Commission included the following: o Reduce the local cut of sales tax by half to 0.5%, in exchange for a similar portion of property tax revenue. o Place the existing 0.5% countywide "transactions and use" tax authority in the state constitution to ensure that revenue does not supplant state spending. o Over several years, return $1 billion in property tax revenue shifted from cities and counties to schools in 1992 and 1993. o Clearly define responsibilities of the state and counties when a county is acting as an agent of the state. Sales tax allocation examined Under the Speaker's Commission's proposed swap of sales and property taxes, cities and counties in the first year would receive the same amount of property tax they received the prior year, augmented with the amount of sales tax it lost. In future years, each jurisdiction would get the amount of property tax received the prior year (including the sales tax adjustment), plus a share of property tax growth attributable to increased assessed value within their individual jurisdictions. Thus, if 15% of the increase in a county's assessed valuation occurred in one city, that city would get 15% of the growth in property taxes from the base year. "I think the swap, which is a modest but practical step, is going to get a very fair and open hearing," Abel predicted. "There ought to be balanced decision-making … and not a dependence on sales tax revenue that skews the whole land-use decision-making process." In recent months, the idea of reducing local government dependence on sales received support from the 21st Century panel, State Controller Kathleen Connell, and the California State Association of Counties. The 21st Century panel recommended "that the point-of-sale allocation of the sales tax be revised to mitigate its effect as an incentive for ‘fiscalization of land use' and that the allocation of property taxes should be increased to more completely fund property-related services." A panel convened last year by Connell did not recommend a tax swap. Instead, her State Municipal Advisory Reform Team (SMART) recommended that the growth in sales tax revenue be apportioned according to population. "This will incentivize cash-starved municipalities to invest in community, housing and quality of life programs — instead of erecting huge car malls on cheap land to attract sales tax revenue," Connell said in a prepared statement. The SMART panel also said that the state should return a portion of the 1993 property tax shift, end "unfunded state mandates" and implement performance audits. The counties association recommended that 90% of sales tax revenue growth, after a five-year phase-in, be allocated based on population and to ensure equity among jurisdictions within a county. Like Connell's panel, CSAC recommended keeping the situs-basis for existing sales tax revenue because many local governments have based their budgets on sales tax revenue. The counties association also urged a return of the 1993 property tax shift and constitutional protection of the local 0.5% "transactions and use" tax. Naturally, all the talk about reallocating sales tax makes cities with large retail bases nervous. David Jones, a League of California Cities lobbyist, said it is easy for counties to support reallocating sales tax because counties receive only about one-seventh the amount of sales taxes that cities do. "We are a situs-centric organization, so we have to tread lightly when it comes to swapping sales tax," Jones said. Legislation not yet written A key player in local government finance reform could be Assemblyman Robert Hertzberg (D-Van Nuys), whom Villaraigosa has tabbed as his successor. Hertzberg created the Commission on Local Governance for the 21st Century as part of a 1998 bill intended to ease the San Fernando Valley's pursuit of secession from the City of Los Angeles. When the Commission released its final report on January 20, Hertzberg vowed to put all the recommendations into one bill this year. Paul Hefner, a Hertzberg aide, said the bill language would become clearer as analysts complete an examination of the recommendations. February 25 is the deadline to submit bills. Hefner noted that Hertzberg talks a great deal about the proper roles of different levels of government, regionalism, and the existing structure of government, which the assemblyman believes is failing. Assemblyman Tom Torlakson (D-Martinez) is another likely player. Torlakson has proposed giving cities the option of swapping all their sales tax revenue for a bigger cut of property taxes. He also has discussed letting cities designate "good development" zones that have a jobs-housing balance and good transportation. Cities could get most or all of the property tax resulting from development in these zones. Again, these concepts have not yet appeared in bill form. Last year, the Legislature directed the Legislative Analyst's Office to present alternatives for restructuring the property tax allocation system, partly to "give cities and counties greater fiscal incentives to approve land developments other than retail developments." The legislation, AB 676, set a December 31, 1999 deadline, but the LAO was still working on the report as of late January. The report should be complete shortly, said Marianne O'Malley, an LAO analyst. Besides its immediate recommendations on fiscal reform, the Speaker's Commission also urged the Legislature and governor to begin developing a state policy on regional growth. The commission considered a plan to have local agencies and the state pool resources for regional efforts, but there is no legal structure in place for such pools, said Commission Chairman Abel. Still, the commission planned to discuss incentives for local governments to work together and share sales tax revenues during its final meeting in early February. The pool concept, however, may go nowhere because there is no legal structure in place, said Commission Chairman Abel. Still, the commission planned to discuss incentives for local governments to work together and share sales tax revenues during its final meeting in early February. The Speaker's Commission also urged development of "a set of state, regional and local ‘smart growth' policies to guide the development and conservation of the state." Such policies would require that local general plans be linked to regional plans, encourage efficient use of land through efforts such as mixed-used projects and reuse of brownfields, and infrastructure investment, especially in existing urban areas. Contacts: David Abel, Speaker's Commission on State and Local Government Finance Reform, (213) 629-9019. Paul Hefner, Office of Assemblyman Robert Hertzberg, (916) 319-2040. State Controller's Office: (916) 445-2636. David Jones, League of California Cities, (916) 658-8200. Website: http://speaker.metroforum.org Website: www.clg21.ca.gov

The Salton Sea is sometimes referred to as Southern California's Lake Tahoe, and while efforts to save the northern lake took shape 20 years ago, officials only now are making big decisions about the future environmental health of the southern water body. The Salton Sea (which is also sometimes called a lake) has been in a downward environmental spiral in recent years. Rising salinity, warnings about eating its fish, oxygen depleting algal blooms, and the deaths of thousands of birds and fish have plagued the Salton. But in January, the U.S. Department of Interior issued a Draft Environmental Impact Statement that looked at five alternatives designed to improve the sea's health. The alternatives all involve evaporating salt from the sea to increase the health of its fish population. The five alternatives are really a combination of three different plans for removing salt. They range from such standard ideas as using two evaporating ponds, to building evaporation towers up to 130 feet tall, to using snowblowers that would disburse water. The blowers, similar to those used in snow making, would shoot Salton Sea water into the air and into an evaporation pond. The towers would drop the water in a spray. Either way, salt could be collected from evaporation ponds. A final decision on the alternatives is due by mid-year, but an $8.5 million pilot program to try out all three ideas has already been funded by the federal Environmental Protection Agency and is under way. The sea, located in both Riverside and Imperial counties, is on a salty ancient lake bed, and has grown saltier over the years. The sea does not drain to another water body. The Salton Sea was created by accident in 1905 when construction of an irrigation canal accidentally diverted Colorado River water into a dry lake. The water flow continued for one and a half years. By that time, the water had created the largest lake entirely within the state boundaries. The Salton Sea is 34 miles long and between nine and 10 miles wide. Over time, the sea's salinity has risen as water evaporated in hot desert temperatures, and saline is now at 43 parts per thousand. By comparison, the Pacific Ocean's salt level is 35 parts per thousand. If the level reaches 60 parts per thousand � as could happen during the next 15 to 20 years unless something is done � most of the Salton's 100 million fish will die. Thousands of birds use the lake as a major stopping point on migratory journeys. With most wetlands in Southern California destroyed through urbanization, the Salton Sea serves as an important food source. But disease problems have killed more than 200,000 birds at the Salton Sea since 1992, including endangered California brown pelicans. Thousands of fish have also died during that period. "It's a thorny issue to improve the environmental quality of the Salton Sea," said Perry Plumart, a spokesman for the National Audubon Society. "Nobody knows the answer. It's not clear what's killing the birds." Besides the salt level, high levels of phosphates in the sea from agriculture and from the remains of dead fish also hurt the water quality. Dead fish will be removed from the sea as part of new efforts to improve the water quality. Last year, a U.S. Environmental Protection Agency-commissioned report from the Pacific Institute for Studies in Development, Environment and Security blamed many of the current ecological problems on the intensive use of fertilizers in the Imperial Valley. However, the EIS issued in January downplayed any threat to the sea from other agricultural byproducts, such as pesticides. The Department of Interior proposals are expected to cost between $300 and $600 million, according to Tom Kirk, executive director of the Salton Sea Authority, a joint powers authority that is working with the federal government to restore the water body. Kirk expects the money to come from both federal and state sources. U.S. Senators Barbara Boxer and Dianne Feinstein both have promised to get money for the sea's restoration, and the efforts to improve the sea are also strongly supported by local legislators, including Rep. Mary Bono (R-Palm Springs). According to officials with the Coachella Valley Water District, an earlier plan to help preserve the Salton Sea died in 1974 due to a lack of federal and state funding. A number of other ideas have been proposed to solve the sea's problems. One of the most interesting recent proposals is to build two canals from the Sea of Cortez in Mexico to the Salton Sea. One canal would be used to pump the saltiest water; the other canal would be used to carry ships. But the $3.3 billion proposal by Metcalf & Eddy, a Massachusetts engineering firm, is not expected to go anywhere. Letting the sea evaporate and then die would create other problems, such as exposing remaining pollutants to desert winds, which would carry contaminates into the air. Steps taken to improve the sea's health are expected to increase tourism and development near the lake. Salton Sea State Park already hosts 200,000 visitors a year, but tourism started declining in the mid-1980s when warnings were issued about eating fish in its waters, due to selenium. The sea is still popular with duck hunters, boaters and water skiers. Another challenge facing the sea is that less water from Imperial County is expected to enter into it as the Imperial Irrigation District (IID) begins a controversial water transfer to San Diego County Water Authority. The sea, which on average is about 30 feet deep, could drop 10 to 15 feet when the IID diverts water, according to Kirk of the Salton Sea Authority. This is a similar in some ways to what happened to Owens Lake when Los Angeles removed water there during the early 1900s. But Salton Sea concerns are expected to be addressed in an EIS on the water transfer. Imperial Irrigation District representatives sit on the Salton Sea Authority. IID also faces state mandates to reduce waste flows to the sea. At the state level, last July Governor Davis signed SB 223 by State Senator David Kelley, which gave the Salton Sea Authority the right to form an infrastructure financing district for the reclamation and environmental restoration of the sea. Proposition 12, the state parks bond on the March ballot, is expected to provide up to $87 million for sea restoration. Contacts: Tom Kirk, Salton Sea Authority, (760) 564-4888 Perry Plumart, National Audubon Society, (202) 861-2242

Property owners who never filed a development application have no basis for a takings claim, the Fourth District Court of Appeal has ruled. The court also said a landowner whose one application for a specific plan amendment that was rejected also has no takings argument. The case arose from the City of San Diego's lengthy planning process for the East Elliott community, a former Navy base that the federal government sold during the 1960s. As early as 1981, the city conceded that a 1971 East Elliott community plan was outdated, but the city did not adopt a new one — as part of a Multi-Species Conservation Plan — until 1997. Still, landowners must get a final determination from the government regarding permissible uses before a taking occurs, no matter what a long-range plan says, the court ruled. In 1971, San Diego adopted a community plan and zoning for East Elliott that allowed five residential units per acre on 1,380 developable acres. Ten years later, the city said the plan should be updated, but the city did not have the money to do so. City officials invited property owners to retain their own planning consultant. In 1987, a consultant to the East Elliott Property Owners Association (EEPOA) proposed a plan that would have increased the permitted density of development. City planners and property owners negotiated for five years before the City Council directed staff members to stop processing EEPOA's proposal in January of 1993. Instead, the city began considering siting a landfill in East Elliott, adjacent to an existing county landfill. A few EEPOA landowners then broke away and formed Calprop Corporation. In 1995, Calprop filed an application to amend the East Elliott Plan and an application for a use permit to allow a private landfill. The city dropped its landfill plans and, in 1996, denied Calprop's applications. In October of 1996, Calprop sued the city to force approval of its project and sought damages for inverse condemnation. A few days later, EEPOA and one individual property owner sued the city for failing to adopt an updated plan and for inverse condemnation. While the lawsuits were pending, the city adopted the MSCP and amended the East Elliott plan, which reduced the level of development permitted under the 1971 specific plan. San Diego County Superior Court Judge Judith McConnell consolidated the three lawsuits and issued summary judgement for the city. The property owners appealed only the rulings on inverse condemnation. A unanimous three-judge panel of the Fourth District upheld McConnell's ruling. The court said that the landowners did not have ripe takings claims, they did not qualify for the "futility exception," and they were not entitled to compensation based on the city's slow planning process. In considering ripeness, the court extensively cited the U.S. Supreme Court's decision in MacDonald, Sommer & Frates v. Yolo County, (1986) 427 U.S. 340, in which the court ruled, "Whether the inquiry asks if a regulation has ‘gone to far,' or whether it seeks to determine if proffered compensation is ‘just,' no answer is possible until a court knows what use, if any, may be made of the affected property. Our cases uniformly reflect an insistence on knowing the nature and extent of permitted development before adjudicating the constitutionality of the regulations that purport to limit it." The EEPOA and its members worked only toward a specific plan amendment, the appellate court noted. "Because EEPOA and its members have never sought approval for any specific project, let alone one which met the existing plan and zoning requirements for the area, their claim that their property has been taken is not ripe," Justice Patricia Benke wrote. And, she continued, the city's rejection of one application for a landfill "does not by any stretch of the imagination establish that the city will prevent Calprop from developing its land in any economically viable manner." As for the futility exception to the ripeness doctrine, the court repeated what other courts have said, namely "that the exception is narrow and that it requires some development proposal by the landowner …." None of the landowners has submitted a proposal since the city adopted the MSCP and amended the East Elliott plan. Moreover, the court said, the MSCP specifically contemplates whether the city should allow development or compensate a landowner to prevent construction — a proposition that these landowners never tested. The slow planning process was not a basis for a takings claim because the city never weighed a specific development proposal, and because the city made a good faith effort at planning for the area and the slow pace was part of the normal government process, the court ruled. " t is now up to the landowners to present the city with specific plans for their respective parcels and in that manner provide the city with clear choice of permitting development or providing them some form of meaningful compensation," Benke wrote. The Cases: Calprop Corporation v. City of San Diego, No. D031965, Ann N. Petersen v. City of San Diego, No. D032263, East Elliott Property Owners Association v. City of San Diego, No. D032642, 00 C.D.O.S. 369, filed January 12, 2000. The Lawyers: For Calprop: G. Steven Andersen, Andersen & Keleher, (310) 546-6662. For Petersen and EEPOA: Richard C. Wildman Jr., (619) 338-6500. For San Diego: Anthony Shanley, deputy city attorney, (619) 533-5814.