Opinion ID: 1237019
Heading Depth: 2
Heading Rank: 2

Heading: Validity of the Park Maintenance Assessment.

Text: In June 1978, the voters of California adopted an initiative measure (Proposition 13) which amended the California Constitution to add article XIII A. Article XIII A contains four principal sections, [12] each designed to interlock with the others to assure effective property tax relief. ( Amador Valley Joint Union High School Dist. v. State Board of Equalization (1978) 22 Cal.3d 208, 231 [149 Cal. Rptr. 239, 583 P.2d 1281].) (2a) The next issue in this case concerns the validity of the $24 charge for park maintenance as measured against one of those four sections, namely section 4, which restricts the ability of a city to impose special taxes by mandating a two-thirds voter approval requirement. [13] As a preliminary matter, we note plaintiffs concede that California Constitution, article XIII A (hereafter article XIII A) is not intended to limit traditional benefit assessments. Indeed, the Courts of Appeal have uniformly held that the article XIII A's tax limitations are not violated by legitimate special assessments. (See, e.g., City Council of the City of San Jose v. South (1983) 146 Cal. App.3d 320 [194 Cal. Rptr. 110] [hereafter South ] [special assessment for maintenance of landscaped median islands on public streets not an ad valorem tax within meaning of art. XIII A, § 1, nor a special tax within meaning of art. XIII A, § 4]; [14] American River Flood Control Dist. v. Sayre (1982) 136 Cal. App.3d 347 [186 Cal. Rptr. 202] [hereafter Sayre ] [art. XIII A does not impinge upon agency's ability to levy special assessments for maintenance of flood control facilities]; Solvang Municipal Improvement Dist. v. Board of Supervisors (1980) 112 Cal. App.3d 545 [169 Cal. Rptr. 391] [hereafter Solvang ] [special assessment for local improvement which directly benefits specific real property does not come within one percent limitation on real property ad valorem taxes established in art. XIII A]; County of Fresno v. Malmstrom (1979) 94 Cal. App.3d 974 [156 Cal. Rptr. 777] [hereafter Malmstrom ] [art. XIII A, §§ 1 and 4 do not apply to special assessments levied under the Improvement Act of 1911 and the Municipal Improvement Act of 1913].) Plaintiffs do not contend the above cases were decided wrongly. Rather, they argue that the instant charge for park maintenance constitutes a special tax, as opposed to a legitimate special assessment. In evaluating this contention, we first examine the distinctions between the two public financing mechanisms.
(3) The characteristics of a special assessment are not in dispute. A special assessment is a `compulsory charge placed by the state upon real property within a pre-determined district, made under express legislative authority for defraying in whole or in part the expense of a permanent public improvement therein....' [Citation.] ( San Marcos Water Dist. v. San Marcos Unified School Dist. (1986) 42 Cal.3d 154, 161 [228 Cal. Rptr. 47, 720 P.2d 935].) (4) In this regard, a special assessment is levied against real property particularly and directly benefited by a local improvement in order to pay the cost of that improvement. ( Solvang, supra, 112 Cal. App.3d at p. 554.) The rationale of special assessment is that the assessed property has received a special benefit over and above that received by the general public. The general public should not be required to pay for special benefits for the few, and the few specially benefited should not be subsidized by the general public. [Citation.] ( Id., at p. 552.) Thus, [a]lthough a special assessment is imposed through the same mechanism used to finance the cost of local government, in reality it is a compulsory charge to recoup the cost of a public improvement made for the special benefit of particular property. ( Id., at p. 553.) A tax, on the other hand, is very different. Unlike a special assessment, a tax can be levied `without reference to peculiar benefits to particular individuals or property.' ( Fenton v. City of Delano (1984) 162 Cal. App.3d 400, 405 [208 Cal. Rptr. 486], citing Black's Law Dictionary (5th ed. 1979) p. 1307, cols. 1-2.) Indeed, [n]othing is more familiar in taxation than the imposition of a tax upon a class or upon individuals who enjoy no direct benefit from its expenditure, and who are not responsible for the condition to be remedied. ( Carmichael v. Southern Coal Co. (1937) 301 U.S. 495, 521-522 [81 L.Ed. 1245, 1260-1261, 57 S.Ct. 868, 109 A.L.R. 1327], fn. omitted; see also Leslie's Pool Mart, Inc. v. Department of Food & Agriculture (1990) 223 Cal. App.3d 1524, 1543 [273 Cal. Rptr. 373] [citing same].) The same holds true even for a special tax which, for purposes of section 4, is a tax levied to fund a specific governmental project or program ( Rider v. County of San Diego (1991) 1 Cal.4th 1, 15 [2 Cal. Rptr.2d 490, 820 P.2d 1000]; Malmstrom, supra, 94 Cal. App.3d at p. 984 [a special tax need not ... specifically benefit the taxed property in the same manner as a special assessment].) Therefore, while a special assessment may, like a special tax, be viewed in a sense as having been levied for a specific purpose, a critical distinction between the two public financing mechanisms is that a special assessment must confer a special benefit upon the property assessed beyond that conferred generally. [15] (2b) Accordingly, if an assessment for park maintenance improvements provides a special benefit to the assessed properties, then the assessed property owners should pay for the benefit they receive. If it does not, the assessment effectively amounts to a special tax upon the assessed property owners for the benefit of the general public. (See Spring Street Co. v. City of Los Angeles (1915) 170 Cal. 24, 30 [148 P. 217].)
Plaintiffs' position essentially is that the Landscaping and Lighting Act's authorization of benefit assessments for park maintenance represents a legislative device for achieving an end run around article XIII A. They, in effect, contend that, as a matter of law, a special assessment is never appropriate for financing the maintenance of a park because a park is not the type of improvement which can be viewed as conferring a special benefit upon real property. They also assert that the maintenance of an existing public improvement is not an improvement for which a special assessment may be imposed. As we will demonstrate, these arguments are without merit. Plaintiffs first argue that public parks, by their nature, do not provide special benefits to property. [16] Although plaintiffs cite no authority standing for this proposition, they seek to distinguish parks from what they describe as traditional improvements such as street lights, sewers, sidewalks and flood control. In their view, while street lights, sewers, sidewalks and flood control may, by their nature, confer a peculiar and special benefit to property, the primary characteristic of a park is that it benefits only people, that is, members of the general public. To bolster this argument, plaintiffs contend that the city's basis for the assessment, i.e., statistics showing that persons living within the district boundaries use the subject parks to the same degree, supports the notion that the benefit of parks is solely to people, not property. Plaintiffs' basic argument that a special assessment is never appropriate to fund park improvements is unconvincing. Significantly, plaintiffs' attempt to differentiate between street lights, sewers, sidewalks and flood control as constituting proper subjects for special benefits, and public parks as matters of such a general nature as not to justify a special assessment, is virtually identical to an argument rejected nearly a century ago by the United States Supreme Court in Wilson v. Lambert (1898) 168 U.S. 611, 616 [42 L.Ed. 599, 601, 18 S.Ct. 217] (hereafter Wilson ), and cases cited therein. In Wilson, property owners argued that a park that was open and dedicated to the general public was not a proper subject for special assessment. The Supreme Court disagreed: The residents and property holders of the District of Columbia must be regarded as coming within the class of beneficiaries; and, so far from being injured by the declaration that the park shall also have a national character, it is apparent that thereby the welfare of the inhabitants of the District will be promoted. (5)(See fn. 17.) Whatever tends to increase the attractiveness of the city of Washington, as a place of permanent or temporary residence, will operate to enhance the value of the private property situated therein or adjacent thereto. (168 U.S. at pp. 616-617 [42 L.Ed.2d at p. 601].) [17] (2c) In California, there is a lengthy history of legislative and judicial recognition that parks constitute proper subjects for special assessment. Parks, like street lights, sewers and sidewalks, have long been considered by the Legislature to be within the domain of special assessments. (See, e.g., Stats. 1909, ch. 538, p. 1066; Stats. 1923, ch. 56, § 1, p. 104, [amending Stats. 1911, ch. 397, § 2]; Stats. 1925, ch. 419, p. 849; Stats. 1941, ch. 79, § 1, p. 836.) Likewise, at least one judicial decision before the adoption of Proposition 13 upheld the use of special assessments with regard to parks. ( O.T. Johnson Corp. v. County of Los Angeles (1932) 128 Cal. App. 440 [17 P.2d 792] [upholding use of special assessments for acquisition of lands for park purposes]; cf. J.W. Jones Companies v. City of San Diego (1984) 157 Cal. App.3d 745 [203 Cal. Rptr. 580] [upholding validity of ordinance which authorized a facilities benefit assessment levying a special assessment on properties benefited by street improvements and parks within a new development]; City of San Diego v. Holodnak (1984) 157 Cal. App.3d 759 [203 Cal. Rptr. 797] [hereafter Holodnak ] [upholding validity of a facilities benefit assessment used to finance certain public facilities in new development, including neighborhood and community parks]. [18] ) Since, as even plaintiffs concede, Proposition 13 was not intended to limit benefit assessments in their historical manner of use, we see no basis for rejecting these long-standing legislative and decisional determinations that parks are legitimate subjects for special assessment. Plaintiffs next argue that only the construction of a new public improvement, as opposed to the maintenance of an existing improvement, confers a special benefit sufficient to justify a special assessment. This argument is similarly unavailing because the propriety of a special assessment for maintenance also has been recognized for decades by both the Legislature and the courts. (See, e.g., Stats. 1927, ch. 543, § 1, p. 909; Stats. 1941, ch. 79, § 1, p. 880; Stats. 1953, ch. 192, § 4, p. 1182; South, supra, 146 Cal. App.3d 320 [maintenance of landscaped median islands on public streets]; Sayre, supra, 136 Cal. App.3d 347 [operation and maintenance of flood control system]; cf. Russ Bldg. Partnership v. City & County of San Francisco (1988) 44 Cal.3d 839 [244 Cal. Rptr. 682, 750 P.2d 324] [upholding assessment-like funding mechanism to pay for maintenance of municipal mass transit systems]; Roberts v. City of Los Angeles (1936) 7 Cal.2d 477 [61 P.2d 323] [upholding assessment to pay for operation of street lighting improvements on ground that statutory authorization included repair and maintenance].) This makes perfect sense, for regular maintenance of a physical improvement may operate to renew and preserve the special benefit attributable to the improvement. Conversely, the closure, damage or impairment of a physical improvement due to a lack of maintenance may well result in the elimination or diminishment of special benefit. In light of the foregoing, we reject the argument that a benefit assessment for park maintenance is never appropriate as a matter of law, and we find untenable any suggestion that the Act itself was improperly devised by the Legislature. However, that is not the end of our inquiry. We must now examine the validity of the city's determination of special benefit in this case.
The Landscaping and Lighting Act provides in pertinent part: Any proceedings taken under this part and any assessment levied pursuant thereto shall not be invalidated for failure to comply with the provisions of this part if such failure does not substantially and adversely affect the rights of any person. All determinations made by the legislative body pursuant to this part shall be final and conclusive in the absence of fraud or prejudicial abuse of discretion. (§ 22509.) (6) Prior to the passage of Proposition 13, we stated the standard for judicial review of a special assessment in Dawson v. Town of Los Altos Hills (1976) 16 Cal.3d 676 [129 Cal. Rptr. 97, 547 P.2d 1377] (hereafter Dawson ), as follows: A special assessment finally confirmed by a local legislative body in accordance with applicable law will not be set aside by the courts unless it clearly appears on the face of the record before that body, or from facts which may be judicially noticed, that the assessment as finally confirmed is not proportional to the benefits to be bestowed to the properties to be assessed or that no benefits will accrue to such properties. (16 Cal.3d at p. 685; see also White v. County of San Diego (1980) 26 Cal.3d 897, 904 [163 Cal. Rptr. 640, 608 P.2d 728].) We distilled this standard from decisions dating back to the early part of this century (e.g., Duncan v. Ramish (1904) 142 Cal. 686, 692 [76 P. 661]; Larsen v. San Francisco (1920) 182 Cal. 1, 15 [186 P. 757]; Rutledge v. City of Eureka (1925) 195 Cal. 404, 416-417 [234 P. 82]), and observed that the underlying justification for the narrow scope of judicial review is firmly rooted in the notion that the establishment of a special assessment district takes place as a result of a peculiarly legislative process. ( Dawson, supra, 16 Cal.3d at pp. 684-685.) [19] As a threshold matter, we address plaintiffs' request to reevaluate the standard of review announced in Dawson, supra, 16 Cal.3d 676, in light of Beaumont Investors v. Beaumont-Cherry Valley Water Dist. (1985) 165 Cal. App.3d 227 [211 Cal. Rptr. 567] (hereafter Beaumont Investors ). Beaumont Investors involved the interaction between development fees and Government Code section 50076, a legislative exemption to section 4 for fees which are not levied for general revenue purposes and which do not exceed the reasonable cost of providing a service or regulatory activity for which such fees are charged. [20] In that case the court concluded, inter alia, that because the purpose of section 4 is to impose a general restriction upon the power of local authorities to impose special taxes, it rightfully follows that the local agency which seeks to avoid the general rule should have the burden of establishing that it fits the exception [contained in Government Code section 50076]. ( Beaumont Investors, supra, 165 Cal. App.3d at p. 235.) Although the court in Beaumont Investors was addressing the validity of a development fee, petitioners argue for the application of a similar burden of proof analysis in the context of benefit assessments. We are not persuaded by the Beaumont Investors decision ( supra, 165 Cal. App.3d 227) to deviate from the traditional standard of review which we reaffirmed in Dawson, ( supra, 16 Cal.3d 676). Neither section 4, nor Government Code section 50076, has any application to benefit assessments. Unlike the situation in Beaumont Investors, the benefit assessment in question is not presumptively a special tax under section 4. Thus, it is not necessary that the assessment fit into the statutory exception for the city to prevail. We see no basis for applying the Beaumont Investors analysis in the context of benefit assessments. [21] (2d) Under Dawson, supra, 16 Cal.3d 676, we confine our review in this case to the record before the city and judicially noticed facts. Here the record shows that the subject improvements are described in the city engineer's report as including the maintenance of the pools, playgrounds, picnic and barbecue areas, bicycle paths, baseball and softball fields, tennis and volleyball courts, and horseshoe pits located at the various parks. The city's studies of park use confirmed that residents from all geographical areas of the district used these park facilities to roughly the same degree, and therefore received nearly equal benefit from the availability of such facilities. These facilities were not duplicated by any other nearby parks, and the only parks in closer proximity to the properties within the district had no basic recreational improvements. Based on the studies of park use, the city proposed to spread the total cost of the improvements ($103,152) among all parcels within the assessment district based on the number of dwelling units thereon. This resulted in a $24 per dwelling unit assessment, from which owners of undeveloped or commercial property would be effectively exempt. In conformance with the statutory requirements of the Landscaping and Lighting Act, the city held a duly noticed hearing to give all affected property owners the opportunity to oppose the assessment district and present their input as to whether or not the proposed assessment would be proportional to the benefits conferred upon their properties. Unfortunately, we are not provided with a transcript or any other record of the evidence or statements received at that hearing. It is clear, however, that plaintiffs did not attend the public hearing and did not specify their objections to the assessment district at that time. Even if we presume plaintiffs are not thereby barred from challenging the sufficiency of the city's benefit determination, [22] the record contains no indication of any evidence presented to the city challenging the improvements, the boundaries of the assessment district or the proposed assessment. Indeed, contrary to plaintiffs' opinions on the matter, the overwhelming majority of affected property owners did not express opposition to the formation of the assessment district and did not protest the city's proposal to include their lands within the designated area of benefit. [23] After holding the public hearing, the city passed a resolution making the basic and ultimate determination that the city engineer's report has fairly and properly apportioned the cost of the improvement to each parcel of land in the assessment district in proportion to the estimated benefits to be received by each parcel, respectively, from the improvements. (7)(See fn. 24.) Based on this record, [24] we see no basis for invalidating the city's determination of benefit under Dawson, supra, 16 Cal.3d 676. (2e) The record contains no evidence contradicting the city's benefit determination, and no facts that otherwise tend to show nonproportionality or absence of benefit to the assessed properties. Moreover, we cannot say from the record that the assessed properties will in fact receive no special benefit from the improvements here in question. While renters, commercial and undeveloped property owners and persons residing outside the district are able to use the park facilities, and the community at large benefits by the presence of five parks in the area, the residential property owners are uniquely benefited by the proximity of these facilities to their properties. [25] The record establishes no reason for doubting that the desirability of the assessed residential properties is enhanced by the presence of well-maintained public pools, playgrounds, picnic and barbecue areas, bicycle paths, baseball and softball fields, tennis and volleyball courts, and horseshoe pits in the area for the use and enjoyment of residents. Moreover, having a wide assortment of facilities such as a pool, a playground and a tennis court readily accessible in nearby public parks means that the assessed owners may enjoy the benefits of having such improvements available for use by their families and/or tenants while avoiding the expense of privately installing and maintaining such improvements on their own properties. Finally, in the absence of evidence to the contrary, we may presume that the presence of well-maintained open park land contributes to the attractiveness of the district and thereby also enhances the desirability of the properties therein. In summary, the record fails to establish that the assessment in question, as finally confirmed, is not proportional to the benefits bestowed on the properties assessed or that no benefits accrue to such properties. Under Dawson, supra, 16 Cal.3d 676, the city's determination of benefit, as set forth in its resolution approving the engineer's report, must be deemed conclusive in the absence of any contradictory evidence in the record. [26]
Finally, we address plaintiffs' contention that it is inconsistent with the theory underlying benefit assessments for the city to now finance park maintenance by assessments after having previously used tax revenues to pay for such maintenance. In plaintiffs' view, the city's admission that operation of the parks was in jeopardy due to lack of funds in its treasury, coupled with its decision to shift funding for park maintenance to a special assessment, violates the spirit of section 4, which is aimed at limiting local governments' ability to replace funds reduced by other sections of [article XIII A] by shifting to other types of taxes. ( Malmstrom, supra, 94 Cal. App.3d at p. 983.) Contrary to plaintiffs' suggestion, the city's decision to change funding sources for an improvement is not fatally inconsistent with the theory underlying benefit assessments. (8) In the first place, we recognized long ago that a public entity's choice initially to fund an improvement out of tax revenues should not prevent it from deciding later that funding by special benefit assessment would be more appropriate. ( Irish v. Hahn (1929) 208 Cal. 339, 348 [281 P. 385, 66 A.L.R. 1382] [city's original decision to acquire a utility system with bond funds did not foreclose financing its reconstruction by special assessment].) [27] Plainly, if an improvement provides a special benefit, that benefit exists whether or not the public entity was correct in first financing it out of its general fund. (2f) Moreover, the record is uncontroverted that the city decided to shift from general fund financing to benefit assessment after studies confirmed that residents in the outlying county were accounting for roughly 55 percent of the regular usage of the park facilities without having to pay for maintenance of those facilities. We cannot say that the spirit of section 4 is violated where, as here, a city shifts to benefit assessments in order to equalize the benefits and burdens of park improvements and to end the windfall enjoyed by residential property owners outside the city who use, and whose property benefits from, such improvements. [28] (9) Although the drafters of section 4 clearly did not intend to adopt a definition that could readily permit its circumvention (see Rider v. County of San Diego, supra, 1 Cal.4th at p. 11), it is equally clear that they did not intend to interfere with benefit-related assessments. Accordingly, section 4 does not preclude a public entity from shifting funding for an improvement from its general fund to special assessment, so long as the requisite special benefit exists.