DAHMS v. DOWNTOWN POMONA PROPERTY AND BUSINESS IMPROVEMENT DISTRICT (2006)

Robert Dahms appeals from the trial court's rejection of his challenge to the creation of a special assessment district in downtown Pomona, California.   We affirm.

BACKGROUND

This case concerns the formation of the Downtown Pomona Property and Business Improvement District (PBID), a special assessment district created by the City of Pomona (City) in 2004.   The PBID levies assessments on properties within downtown Pomona in order to fund certain services for the properties within the PBID's boundaries.   Dahms owns a number of properties within the PBID.

The process of creating the PBID apparently began with a request the City received from four property owners in the spring of 2003.   The City subsequently hired a consultant, MuniFinancial, to assist in the creation of the PBID. On June 14, 2004, after receiving a management plan for the PBID and a petition signed by property owners representing over 50 percent of the assessments to be levied, the city council passed and approved a resolution declaring its intention to form the PBID. The resolution set August 2, 2004, as the date for a public hearing on the formation of the PBID.

On June 18, 2004, the City mailed ballots to the affected property owners.   On August 2, 2004, the city council held the public hearing, at the conclusion of which the ballots were tabulated.   One hundred and twenty-six ballots favored the PBID;  66 opposed it.   The ballots were also tabulated after being weighted by the dollar amount assessed for each affected property, as required by California law;  the weighted vote was $338,461.29 in favor, and $153,156.86 against.

At the conclusion of the hearing and the tabulation of the ballots, the city council passed and approved three resolutions relating to the PBID. The first resolution declared the results of the balloting.   The second approved the formation of the PBID, specified its boundaries and the services to be provided, stated the total amount of the assessments and the maximum annual rate of increase in the assessments, and took various other, related measures.   The third resolution approved the engineer's report that MuniFinancial had prepared concerning the PBID, as required by California law.

The engineer's report describes the services that the PBID will provide:  (1) security, (2) streetscape maintenance (e.g., street sweeping, gutter cleaning, graffiti removal), and (3) marketing, promotion, and special events.   All the services are over and above those the City provides within the boundaries of the PBID and are to be provided only to the properties within the PBID.

As the engineer's report explains, the amount of the assessment for each assessed property within the PBID is based on three factors:  street frontage (i.e., the length of street on the street-address side of the property), building size, and lot size.   Those factors account for 40 percent, 40 percent, and 20 percent, respectively, of the amount assessed for each property.   On the basis of those factors, the amount of the assessment for each assessed property is calculated as a portion of the total cost of the services that the PBID provides.   The engineer's report also explains that various nonprofit entities (“religious organizations, clubs, lodges and fraternal organizations”) within the boundaries of the PBID are to be assessed for only 5 percent of the amount that they would otherwise have to pay (i.e., the “basic assessment rate”).   After discussion of the issue, the City justified the discount on the ground that such entities will “only slightly benefit” from the services provided in the PBID. In addition, properties within the PBID zoned exclusively residential will not be subject to assessment.

On August 25, 2004, Dahms filed this action challenging the City's formation of the PBID. His complaint named the City, the PBID, and “all persons interested in the matter of the [PBID]” as defendants.  (Block capitals omitted.)   The trial court sustained the City's demurrer to two causes of action, and the case proceeded to a bench trial on Dahms' remaining claims.   After the parties filed trial briefs and participated in a hearing, the trial court entered judgment against Dahms.   This appeal followed.

STANDARD OF REVIEW

 Before California's voters enacted Proposition 218 in 1996, the Supreme Court had repeatedly held that “ ‘[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.’  [Citations.]”  (Knox v. City of Orland (1992) 4 Cal.4th 132, 146, 14 Cal.Rptr.2d 159, 841 P.2d 144, quoting Dawson v. Town of Los Altos Hills (1976) 16 Cal.3d 676, 685, 129 Cal.Rptr. 97, 547 P.2d 1377.)  “[T]he establishment of a special assessment district takes place as a result of a peculiarly legislative process” (ibid.), and, because of California's constitutional separation of powers, such legislative determinations are entitled to judicial deference.  (Connecticut Indemnity Co. v. Superior Court (2000) 23 Cal.4th 807, 814, 98 Cal.Rptr.2d 221, 3 P.3d 868;  Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 572, 38 Cal.Rptr.2d 139, 888 P.2d 1268;  California Hotel & Motel Assn. v. Industrial Welfare Com. (1979) 25 Cal.3d 200, 211-212, 157 Cal.Rptr. 840, 599 P.2d 31;  Cal. Const., art. III, § 3.) Review is limited to the record before the body creating the assessment, plus judicially noticed facts.   (Knox v. City of Orland, supra, 4 Cal.4th at p. 147, 14 Cal.Rptr.2d 159, 841 P.2d 144.)

Proposition 218 altered the standard for judicial review of assessments by amending the California Constitution to provide that “[i]n any legal action contesting the validity of any assessment, the burden shall be on the agency to demonstrate that the property or properties in question receive a special benefit over and above the benefits conferred on the public at large and that the amount of any contested assessment is proportional to, and no greater than, the benefits conferred on the property or properties in question.”  (Cal. Const., art. XIII D, § 4, subd. (f).)  We must consequently determine the effect of this provision on the standard of review articulated in Knox v. City of Orland, supra, 4 Cal.4th at page 146, 14 Cal.Rptr.2d 159, 841 P.2d 144.

Not About Water Com. v. Board of Supervisors (2002) 95 Cal.App.4th 982, 116 Cal.Rptr.2d 526, addresses this issue, but we believe that opinion's analysis is not sufficiently clear to provide concrete guidance.   The opinion states that the creation of a special assessment district is reviewed “under the substantial evidence rule” (id. at p. 986, 116 Cal.Rptr.2d 526), but at another point the opinion appears to apply an “abuse of discretion standard” (id. at p. 994, 116 Cal.Rptr.2d 526).   In addition, although the standard of review articulated in the opinion provides, pursuant to Proposition 218, that the agency bears the burden of proving the existence of special benefits to the assessed properties, it does not acknowledge that, also pursuant to Proposition 218, the agency bears the burden of proving that the assessment is proportional to the benefits.  (Ibid.) There is no other published California decision on point.¹

We conclude that the City's determinations that the affected properties will receive special benefits and that the assessment is proportional to the benefits conferred on those properties must be affirmed if they are supported by substantial evidence.   The substantial evidence standard is highly deferential and thus comports with the constitutional separation of powers and the legislative character of the determinations at issue.   But the substantial evidence standard also conforms to Proposition 218's placement of the burden of proof on the City, because (1) the determinations at issue are factual, and (2) factual determinations are ordinarily reviewed under the substantial evidence standard on appeal regardless of which party bore the burden of proof in the trial court.  (See, e.g., SFPP v. Burlington Northern & Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 461, 17 Cal.Rptr.3d 96.)

We review pure questions of law de novo.  (Topanga and Victory Partners v. Toghia (2002) 103 Cal.App.4th 775, 779-780, 127 Cal.Rptr.2d 104.)

DISCUSSION

I. The Hearing on the Assessment Was Not Premature

 Dahms argues that the city council held the hearing on the proposed assessment too early, in violation of the California Constitution, because the hearing took place on the forty-fifth day after the City mailed notices of the proposed assessment to the affected property owners.   We disagree.

The City was required to “conduct a public hearing upon the proposed assessment not less than 45 days after mailing the notice of the proposed assessment to record owners of each identified parcel.”  (Cal. Const., art. XIII D, § 4, subd. (e).)  By its terms, that constitutional provision permits the City to hold the hearing 45 days after mailing the notices.   The only remaining question is how the 45-day period is to be computed.

The Code of Civil Procedure provides that “[t]he time in which any act provided by law is to be done is computed by excluding the first day and including the last, unless the last day is a holiday, and then it is also excluded.”  (Code Civ. Proc., § 12.)   By this method of computation, the City held the hearing 45 days after mailing the notices-the first day (i.e., the day of the mailing) is excluded from computation of the 45-day period, but the last day (i.e., the day of the hearing) is included.²  Accordingly, the notice did not violate the constitutional notice provision.

Dahms' arguments to the contrary are not persuasive.   He cites a section of the Government Code for the proposition that “ ‘[a] day is the period of time between any midnight and the midnight following[,]’ ” but that section tells us nothing about whether the first day, the last day, neither, or both are to be included in computing the 45-day period.   Dahms also relies upon two cases, Burke v. Turney (1880) 54 Cal. 486, and City of Pleasanton v. Bryant (1965) 63 Cal.2d 643, 47 Cal.Rptr. 807, 408 P.2d 135, but neither of those cases involved a provision, like the one at issue here, calling for notice of “not less than” a specified number of days.   Consequently, neither case casts any doubt upon our analysis.

For all of these reasons, we reject Dahms' argument that the hearing on the assessment was unconstitutionally premature.

II.-IV.**

DISPOSITION

The judgment is affirmed.   Respondents shall recover their costs on appeal.

FOOTNOTES

1.   A case presenting the issue is currently pending before the Supreme Court.  (Silicon Valley Taxpayers' Association, Inc. v. Santa Clara County Open Space Authority (2005) 30 Cal.Rptr.3d 853, review granted Oct. 12, 2005, S136468, 35 Cal.Rptr.3d 317, 121 P.3d 1238.)

2.   Similarly, a noticed motion in the superior court must be served “at least 16 court days before the hearing.”  (Code Civ. Proc., § 1005, subd. (b).)  That is, if the motion is served on the 16th court day counting back from the hearing date, and excluding the first day (i.e., the day of the hearing itself), then the statutory notice requirement is satisfied.

FOOTNOTE.   See footnote *, ante.

ROTHSCHILD, J.

SPENCER, P.J., and VOGEL, J., concur.