Dorothy BLAKE et al., Plaintiffs and Respondents, v. CITY OF PORT HUENEME, Defendant and Appellant.
A city exacts special assessments against certain residential property owners based on view, proximity and access to the beach and the size of their property. The funds raised augment the city's general fund to maintain the beach and provide various services. The property owners sue to invalidate the special assessments and obtain refunds. Because the special assessments do not provide special benefits to the selected homeowners, and the assessments require certain landowners to pay for general maintenance and services which benefit the entire city, the trial court invalidated the special assessment. We affirm and remand.
Respondents, Dorothy Blake, et al. (respondents), sued appellant, the City of Port Hueneme (City), to challenge the validity of the Hueneme Beach Maintenance Assessment District 91-1 (District) and the assessments to be levied under it.1 The City argues it created the District in compliance with the Landscaping and Lighting Act of 1972, as amended in 1984, (Act) and that the assessments comport with its purpose. (Sts. & Hy.Code,2 §§ 22500 et seq.; Knox v. City of Orland (1992) 4 Cal.4th 132, 14 Cal.Rptr.2d 159, 841 P.2d 144.)
For many years the City paid to develop, improve and maintain Hueneme Beach Park (Park) from its general fund using grants, bonds, developer exactions and tax increment revenues. In 1981, the City initiated beach parking fees, deposited into the City's general fund, to help defray beach maintenance costs. In 1991, the City proposed the instant District to generate about $150,000 of the $450,000 cost to maintain the Park, among other things.
The City created the District and declared the Park to be the neighborhood park for residents living within seven minutes' walking distance of it. The City set forth three property zones to assess 1,252 residences in graduated and apportioned amounts depending upon view, proximity and access to the beach and the square footage of the properties. The assessments ranged from $66 to $184 per year. All commercial and industrial properties were exempted, as were numerous residential properties adjacent to those assessed.
Approximately one-third of the property owners submitted valid written protests to formation of the District. The city council overruled the protests, approved formation of the District and the levy of assessments. Respondents sued the City seeking declaratory and injunctive relief and refunds of assessments to be collected. Respondents contend, inter alia, they receive no special, unique benefits from the assessments. They argue that the levies exacted constitute illegal special taxes, in addition to general ad valorem property taxes, to pay for general services used by the whole community.
The City filed two motions for summary judgment which the trial court denied. The trial court granted respondents' motion for summary judgment filed in June 1996. The City abandoned the District effective the end of the 1995 fiscal year. Accordingly, respondents' request for injunctive relief is moot.
Although the 1991 complaint initially constituted a facial attack on the creation of the District, the Resolution and the obligation to pay the assessments, the respondents broadened their theory of the case by 1996 to include an as applied attack as stated in the instant summary judgment motion. (Cf. generally Sprecher v. Adamson Companies (1981) 30 Cal.3d 358, 373, 178 Cal.Rptr. 783, 636 P.2d 1121; Webster v. Southern Cal. First Nat. Bank (1977) 68 Cal.App.3d 407, 416-417, 137 Cal.Rptr. 293.) The trial court ruled that the City abused its discretion in levying the instant assessments because they were not used to protect, preserve and enhance the views assessed. The court stated that the assessments were intended to be used, and were used, to supplement the general fund to maintain the Park and to provide services which fall outside the scope of the Act. The trial court determined that it is the public at large who benefits from the maintenance and services “as much as, or more than, the homeowners who were assessed.” Accordingly, the “assessment” constitutes an unauthorized, illegal and unconstitutional special double tax on real property. The trial court entered summary judgment in favor of the respondents and this appeal ensued.
Special assessments are charges imposed on owners of particular parcels of real property to provide specific, direct and special benefits to the properties proportional to the benefits derived, beyond those enjoyed by the general public. (Knox v. City of Orland, supra, 4 Cal.4th at pp. 141-142, 14 Cal.Rptr.2d 159, 841 P.2d 144; San Marcos Water Dist. v. San Marcos Unified School Dist. (1986) 42 Cal.3d 154, 161-162, 228 Cal.Rptr. 47, 720 P.2d 935; see also § 22587.) We “identify the benefit which the public improvement will render; ․ determine if the property owners will receive a benefit different from that of the general public; and ․ ascertain if the formula on which the assessments are made is based on the benefit received.” (Harrison v. Board of Supervisors (1975) 44 Cal.App.3d 852, 857, 118 Cal.Rptr. 828.)
Our scope of review is narrow because the creation of a special assessment district is a legislative matter. (Knox v. City of Orland, supra, 4 Cal.4th at pp. 145-146, 148, 14 Cal.Rptr.2d 159, 841 P.2d 144; Dawson v. Town of Los Altos Hills (1976) 16 Cal.3d 676, 684-685, 129 Cal.Rptr. 97, 547 P.2d 1377.) We review the validity of such districts and the levies assessed thereunder by considering whether, on the face of the record and facts which may be judicially noticed, the assessments are proportional to the benefits supposedly bestowed on the properties. (Knox, supra, at p. 146, 14 Cal.Rptr.2d 159, 841 P.2d 144; Dawson, supra, at p. 685, 129 Cal.Rptr. 97, 547 P.2d 1377.) We liberally construe the Act to effectuate its purpose and invalidate assessments only when such levies “substantially and adversely affect the rights of any person.” (§ 22509.)
We independently review the summary judgment to determine if there are triable issues of fact and whether respondents are entitled to judgment as a matter of law. (Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 673-674, 25 Cal.Rptr.2d 137, 863 P.2d 207.)
The Act permits maintenance and servicing of parks and recreational improvements. (§ 22525, subds.(e) & (f).) Maintenance is defined by the Act to mean “the furnishing of services and materials for the ordinary and usual maintenance, operation, and servicing of any improvement.” (§ 22531.) “Service” or “servicing” means providing utilities for the improvements. (§ 22538.) The Act requires that the assessments levied be fairly distributed on all territory benefited by the improvement in proportion to benefit, and that all the money raised be used solely for physical maintenance of the benefit. (§§ 22503; 22525, subd. (f); 22531; 22573.)
The only material facts disputed by the City were whether the assessments were used to pay for lifeguard, police and administrative services and for an off-site athletic center. The City's exhibit 8, the deposition of Dorill Wright, and other evidence provided in opposition to the motion establish that the City used the assessments to pay for these services. Most of these services do not fall within the ambit of the Act.
Moreover, the assessed properties received only the most attenuated special benefit from beach maintenance, lifeguards and administrative services. Little, if any, nexus exists between views of the beach and maintaining the beach park for safe use. (See Harrison v. Board of Supervisors, supra, 44 Cal.App.3d at pp. 858-859, 118 Cal.Rptr. 828.) These benefits accrue to the whole community using the beach.
The City relies on Knox v. City of Orland, supra, 4 Cal.4th 132, 14 Cal.Rptr.2d 159, 841 P.2d 144. Such reliance is misplaced. As a general proposition, benefited property may be subject to special assessments for public parks. (Id., at pp. 143-145, 14 Cal.Rptr.2d 159, 841 P.2d 144, citing cases.) But courts must “examine the validity of the city's determination of special benefit” on a case-by-case basis. (Id., at p. 145, 14 Cal.Rptr.2d 159, 841 P.2d 144.) “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.” (Id., at p. 142, 14 Cal.Rptr.2d 159, 841 P.2d 144.)
In Knox, the city conducted studies to determine who used the existing park facilities. (Knox v. City of Orland, supra, 4 Cal.4th at p. 147, 14 Cal.Rptr.2d 159, 841 P.2d 144.) Orland assessed only the regions whose residents regularly used the park. (Id., at pp. 147, 150, 14 Cal.Rptr.2d 159, 841 P.2d 144.) “[N]o evidence contradicting the city's benefit determination, and no facts ․ otherwise tend[ed]to show nonproportionality or absence of benefit to the assessed properties.” (Id., at p. 148, 14 Cal.Rptr.2d 159, 841 P.2d 144.) Not so here.
Here, the City conducted no studies of use. The only study considered by the City “made a point that the beach was used primarily by people who live outside the proposed assessment district. That is no doubt true.” Nonetheless, the City levied special assessments only against certain properties on one side of the park-primarily those with views. Many properties of similar proximity, access and size without beach views were not assessed.
The Knox court questioned whether a special assessment would be valid in cases where, as here, evidence exists in the record contradicting the benefit determination and indicating that such determination was arbitrary, capricious or without evidentiary support. (Knox v. City of Orland, supra, 4 Cal.4th at p. 149, fn. 26, 14 Cal.Rptr.2d 159, 841 P.2d 144.) The instant record shows that the City created and used the District to augment the general fund by adopting an arbitrary, discriminatory formula. The formula selected properties which did not specially benefit from the charges to pay for purposes beyond the scope of the Act. (Id., at p. 144, fn. 17, 14 Cal.Rptr.2d 159, 841 P.2d 144; see also Harrison v. Board of Supervisors, supra, 44 Cal.App.3d at pp. 857-859, 118 Cal.Rptr. 828; Costello v. City of Los Angeles (1975) 54 Cal.App.3d 28, 31, 126 Cal.Rptr. 462.)
Local governments may choose to fund an improvement either from tax revenues or special assessments if specific, special direct benefits accrue to the properties in proportion to the amounts assessed. (Knox v. City of Orland, supra, 4 Cal.4th at pp. 142-144, 149-150, 14 Cal.Rptr.2d 159, 841 P.2d 144; and see generally Spring Street Co. v. City of Los Angeles (1915) 170 Cal. 24, 30-31, 148 P. 217, regarding inequitable assessments in excess of statutory power.) Where local government shifts tax burdens to benefit assessments based on studies showing where the special, requisite benefit lies, such levies are permissible. (Knox, supra, at p. 150, 14 Cal.Rptr.2d 159, 841 P.2d 144.) Here, however, the levies constitute special taxes unconstitutionally imposed without a vote of two-thirds of the electorate. (Cal. Const., art. XIIIA, § 4; Gov.Code, § 53722; Knox, supra, at p. 142, 14 Cal.Rptr.2d 159, 841 P.2d 144; Rider v. County of San Diego (1991) 1 Cal.4th 1, 6, 2 Cal.Rptr.2d 490, 820 P.2d 1000.)
The resolution creating the District and the levies assessed thereunder violate the Act and our state Constitution. Accordingly, we affirm the summary judgment and we remand the matter to the superior court with directions to order that the amounts levied pursuant to the instant District be refunded with interest at the legal rate. (Rev. & Tax.Code, §§ 5096, 5151.) We caution that the instant decision is limited to the specific facts of the case. (Knox v. City of Orland, supra, 4 Cal.4th at p. 145, 14 Cal.Rptr.2d 159, 841 P.2d 144.)
Costs are awarded to respondents.
1. The other respondents are Sam Toovy, Ernie Brown, Charles Richlin, John Henderson, Bob Moesch, Leah Bahr, Mike Roberts and Erv Johnson.
FN2. All statutory references are to this code unless otherwise stated.. FN2. All statutory references are to this code unless otherwise stated.
STEVEN J. STONE, Presiding Justice.
GILBERT and YEGAN, JJ., concur.