NOME v. TOWN OF SAN ANSELMO (1989)

We must decide in this case whether Elections Code section 4055 ¹ bars a second resolution of the Town Council of the Town of San Anselmo (hereafter Town), as an invalid attempt to revive a portion of a first resolution which was repealed by the referendum process.²  The first resolution, inter alia, granted the town administrator an 11 percent raise.   The first resolution was repealed by the town council after a legally sufficient referendum petition was filed requiring submission of the resolution to the electorate.   A second town council resolution passed three weeks after repeal of the first resolution granted the administrator an 8 percent raise.   We conclude that, for purposes of analysis under section 4055 and the governing precedents, a resolution granting a raise of 11 percent is essentially the same as a resolution granting a raise of 8 percent;  and the second resolution is, therefore, barred by section 4055.   We, therefore, reverse the judgment below.

I. FACTS AND PROCEDURAL HISTORY

On August 12, 1986, the town council passed resolution 2087 (hereafter first resolution) which, in pertinent part, set the town administrator's salary for the 1986–1987 fiscal year at $4,557 per month.   This was a raise of about 11 percent over his previous monthly salary of $4,098.

Appellant and others believed the raise was unwarranted;  and pursuant to sections 4050–4061 dealing with referendum, a petition was signed and circulated by them calling for a referendum and repeal of that portion of the first resolution raising the town administrator's salary.   The petition concluded with this sentence:  “Any decision to grant a raise in the current fiscal year is hereby nullified.”   On September 22, 1986, the Marin County Registrar of Voters verified that the petition contained 803 signatures, sufficient to require that the town council either repeal the portion of the first resolution raising the salary of the town administrator, or submit the question of such repeal to a referendum by the voters for approval.  (§§ 4051, 4055.)   This certification suspended the council's attempt to raise the administrator's salary until it reconsidered the salary resolution pursuant to section 4051.

Rather than submit the matter to a vote of the citizens, the town council on reconsideration repealed the raise for the town administrator.   Three weeks later the town council passed resolution 2096 (hereafter second resolution) which reinstated the town administrator's raise, this time as an 8 percent rather than an 11 percent raise.

Appellant then filed this action seeking injunctive and declaratory relief against the second resolution, relying on section 4055, which provides in pertinent part:  “If the legislative body repeals the ordinance [rather than call a referendum election] ․, the ordinance shall not again be enacted by the legislative body for a period of one year after the date of its repeal by the legislative body․”  The trial court denied appellant's motion for a preliminary injunction and, subsequently, granted respondents' motion for summary judgment.   Appellant timely appealed.   Appellant concedes on appeal that her request for injunctive relief is now moot, since the Town's 1986–1987 fiscal year has ended;  but she continues to seek declaratory relief.

II. DISCUSSION

This case involves no relevant factual disputes;  instead, it involves the proper legal interpretation of section 4055, which codifies and protects the people's “reserved” power of referendum under our Constitution.   As then-Justice Lucas recently observed for a unanimous Supreme Court, “The 1911 amendment to the California Constitution, which provides for the initiative and referendum, ‘[d]rafted in light of the theory that all power of government ultimately resides in the people, ․ speaks of the initiative and referendum, not as a right granted the people, but as a power reserved by them.   Declaring it “the duty of the courts to jealously guard this right of the people,” the courts have described the initiative and referendum as articulating “one of the most precious rights of our democratic process.”  “[I]t has long been our judicial policy to apply a liberal construction to this power wherever it is challenged in order that the right be not improperly annulled.   If doubts can reasonably be resolved in favor of the use of this reserve[d] power, courts will preserve it.” ’ ”  (Building Industry Assn. v. City of Camarillo (1986) 41 Cal.3d 810, 821, 226 Cal.Rptr. 81, 718 P.2d 68, citations omitted.)

“Since its inception, the right of the people to express their collective will through the power of the referendum has been vigilantly protected by the courts.   Thus, it has been held that legislative bodies cannot nullify this power by voting to enact a law identical to a recently rejected referendum measure.  [Citations.]  Unless the new measure is ‘essentially different’ from the rejected provision and is enacted ‘not in bad faith, and not with intent to evade the effect of the referendum petition,’ it is invalid.”   (Assembly v. Deukmejian (1982) 30 Cal.3d 638, 678, 180 Cal.Rptr. 297, 639 P.2d 939, emphasis added.)

The referendum power reaches only legislative, not administrative, acts.   (Martin v. Smith (1960) 184 Cal.App.2d 571, 575, 7 Cal.Rptr. 725.)   It has also been held that certain matters, such as the imposition of local taxes necessary for the provision of essential government services, are not within the scope of the referendum power.  “Although it is the general rule that referendum provisions are to be liberally construed in favor of the reserved power, it is settled that consideration must also be given to the consequences of applying the rule.  [Citations.]  If essential governmental functions would be seriously impaired by the referendum process, the courts, in construing the applicable constitutional and statutory provisions, will assume that no such result was intended.”  (Geiger v. Board of Supervisors (1957) 48 Cal.2d 832, 839, 313 P.2d 545 [holding that a county ordinance imposing a sales tax in Butte County pursuant to statewide enabling legislation was not subject to local referendum because the Legislature had given the power of decision to the county board of supervisors, thus immunizing the resulting ordinance from repeal by local referendum];  cf. Campen v. Greiner (1971) 15 Cal.App.3d 836, 841, 93 Cal.Rptr. 525, the case principally relied on by the lower court [an initiative could not repeal a utilities tax ordinance because under the city charter the city council had plenary power to set taxes].)

However, the present case does not concern an issue of tax imposition confided by city charter or statewide legislation to the city council, and immunized from the referendum power.   Nor do we think that the provision of a raise to the town administrator, though perhaps advisable, is one of the “essential governmental functions” immune from referendum.

 The Town argues that Government Code section 36506, which allows city councils to employ city officers, immunizes the officers' salaries from referendum.  Section 36506 provides in its entirety that:  “By resolution or ordinance, the city council shall fix the compensation of all appointive officers and employees.   Such officers and employees hold office during the pleasure of the city council.”   The Town's argument was accepted in the case of an initiative in Mitchell v. Walker (1956) 140 Cal.App.2d 239, 295 P.2d 90;  but Mitchell was explicitly disapproved in Kugler v. Yocum (1968) 69 Cal.2d 371, 379–380, footnote 6, 71 Cal.Rptr. 687, 445 P.2d 303, which held that the matter of city salaries must be presented to the voters pursuant to a valid referendum petition, because the issue was a legislative decision, not within the sole competence of the city council and not immune from referendum.  “In sum, the [salary] ordinance in question, if enacted, would not unlawfully delegate legislative power.”  (Id. at p. 383, 71 Cal. Rptr. 687, 445 P.2d 303.)   The rule of decision here is in accord with Merriman v. Board of Supervisors (1983) 138 Cal.App.3d 889, 188 Cal.Rptr. 343, in which Division One of this District held that a proposed county ordinance, making violations of the county building code punishable as infractions, was not immune from referendum on the asserted grounds that state laws confided the issue of enforcement to the county.

Here, the issue is the fixing of an employee's compensation, which is a legislative act subject to referendum.  “[T]he ultimate act of applying the standards [for compensation] and of fixing compensation is legislative in character, invoking the discretion of the [city] council.  [Citations.]”  (Bagley v. City of Manhattan Beach (1976) 18 Cal.3d 22, 25, 132 Cal.Rptr. 668, 553 P.2d 1140.)   The referendum power may also be exercised to overturn only a portion of an ordinance.  (Dye v. Council of the City of Compton (1947) 80 Cal.App.2d 486, 490–491, 182 P.2d 623;  see also Cal. Const., art. II, § 9, subd. (a).)  Therefore, the referendum could validly repeal that portion only of the first resolution granting a raise to the town administrator.

Here it is conceded the second resolution was enacted within three weeks of repeal of the first, and is invalid under the one year rule of section 4055 if section 4055 applies to it.

 The Town argues that the second resolution differs from the first, and is not barred under principles of referendum law.   The standard articulated for deciding whether later legislation is an invalid attempt to revive repealed legislation under section 4055, its predecessor statutes (former §§ 1772, 4052), and case law is the relatively opaque standard of whether the new legislation is “essentially the same” or “essentially different.”   Examination of the facts of relevant cases decided under this standard helps to clarify its scope.

The first case to articulate the standard, though obliquely, was In re Stratham (1920) 45 Cal.App. 436, 439–440, 187 P. 986.  Stratham was a proceeding for a writ of habeas corpus brought by a person who had been convicted of violating a Los Angeles ordinance, which apparently barred taxicab drivers from picking up passengers at the Southern Pacific railroad depot in Los Angeles unless the driver had paid Southern Pacific for that privilege.   The petitioner mounted a broad attack on the validity of the ordinance under which he was convicted, on a variety of grounds not relevant here;  but he also argued that the ordinance was invalid because it was an impermissible duplication of prior ordinances which had been repealed by the city council after being suspended by a voter referendum.  (Id. at p. 438, 187 P. 986.)   The Stratham court opined that, “[W]hen an ordinance which has been suspended by a referendum has been repealed by the council, the council cannot enact another ordinance in all essential features like the repealed ordinance․  The council may, however, deal further with the subject matter of the suspended ordinance, by enacting an ordinance essentially different from the ordinance protested aginst, avoiding, perhaps, the objections made to the first ordinance․  We have compared the two ordinances․  Without making the comparative quotations, which would unduly extend this opinion, we are content to say that the two ordinances differ from each other, not merely in phraseology, but in substance relating to items of importance.   Therefore, the assertion of petitioner ․ is not sustained by the record.”  (Id. at pp. 439–440, 187 P. 986, emphasis added.)   While Stratham unfortunately did not set forth the specifics of the ordinances under comparison, it appears from the court's discussion that they provided regulatory schemes which were sufficiently different to allow the Stratham court to confidently assert that, apart from dealing with the same general subject matter of taxicabs at the Southern Pacific depot, the two ordinances contained material differences in matters of substance.  (Id. at p. 440, 187 P. 986.)

The Stratham standard was next applied in Gilbert v. Ashley (1949) 93 Cal.App.2d 414, 209 P.2d 50, a relevant case in which the court found that a tax ordinance was “ ‘essentially different’ ” (quoting Stratham ) from a prior repealed tax ordinance and, therefore, not an invalid revival of repealed legislation.  “The tax rate imposed in ordinance 409 is not the same as in ordinance 385 and each enactment deals with a different tax year.   The ordinances also differ from each other in exemption and enforcement provisions and in numerous other particulars which impel the conclusion that ordinance 409 is not similar to ordinance 385 in all its essential features and provisions.”  (Id. at p. 415, 209 P.2d 50.)   In Gilbert, as in Stratham, it appears that a new and different legislative scheme was adopted, which differed in essential features from the legislation repealed through the referendum process.

The next two directly relevant cases were both decided by Division One of this District, and were both authored by Presiding Justice Bray.   In Martin v. Smith (1959) 176 Cal.App.2d 115, 1 Cal.Rptr. 307, the court concluded on one set of facts that the later legislation was invalid because it was “essentially the same” as prior legislation repealed by the referendum process.   In Reagan v. City of Sausalito (1962) 210 Cal.App.2d 618, 26 Cal.Rptr. 775, a subsequent case with different facts, the court concluded that later legislation was “ ‘essentially different.’ ”   Comparison of these cases is especially instructive in illuminating the governing standard.

In Martin, the prior ordinance extended by 20 years the term of a lease of Sausalito city property to private parties for commercial purposes, so that the lease would not end in the year 1987, but instead would last until the year 2007.   A valid petition for a referendum was filed.   The city council did not submit the matter to the voters, but instead passed a new ordinance which changed the term of the lease extension to 15 years, so that it would end in 2002, and made minor changes to the acreage and lease arrangements in order to improve its legal sufficiency.  (Martin v. Smith, supra, 176 Cal.App.2d at pp. 118–120, 1 Cal.Rptr. 307.)   Relying on Stratham, supra, and Gilbert, supra, the court held that the second resolution, as measured by referendum principles, was essentially the same as the prior legislation which was the subject of the referendum petition.

Three years later Presiding Justice Bray returned to the same legal issue in Reagan, which likewise dealt with a Sausalito land-use measure adopted after the repeal of other prior measures through referendum.   The prior measures in Reagan had provided for the acquisition of a beach with city funds;  which would then be leased to a private entity, the Sausalito Foundation, for 50 years rent free.   After those measures were suspended by a valid referendum petition, the council adopted another measure which would acquire the land but would not lease it rent free to the private entity at all.  (Reagan v. City of Sausalito, supra, 210 Cal.App.2d at pp. 629–630, 26 Cal.Rptr. 775.)   The court found that the later measure was not “essentially the same” as the prior measures because the later measure “eliminates all mention of Sausalito Foundation and of any lease to it․” and “is limited to establishing the policy of acquiring [the land] for park, etc. purposes.   Thus, a comparison of [the measures] shows them to be substantially dissimilar.”  (Id. at p. 630, 26 Cal.Rptr. 775.)

 Distilling the guidance of these cases, we must determine whether the measures under comparison are the same in their essence or essential features, and differ only in relatively unimportant ways given their similarity in “fundamental principle”;  or whether they differ in essential or substantial matters which affect their very nature.  (In re Stratham, supra, 45 Cal.App. 436, 187 P. 986;  Gilbert v. Ashley, supra, 93 Cal.App.2d 414, 209 P.2d 50;  Martin v. Smith, supra, 176 Cal.App.2d 115, 1 Cal.Rptr. 307;  Reagan v. City of Sausalito, supra, 210 Cal.App.2d 618, 26 Cal.Rptr. 775.)

In this case, the essence of both town council resolutions is the same:  to give the town administrator a raise.   While the amount of the raise differs in the two resolutions and the method chosen to justify the raise may have differed,³ these are not “essential” differences, because under the governing precedents a resolution authorizing an 11 percent raise is not “ ‘essentially different’ ” (Gilbert v. Ashley, supra, 93 Cal.App.2d at p. 415, 209 P.2d 50, quoting In re Stratham, supra, 45 Cal.App. at p. 440, 187 P. 986) from one authorizing an 8 percent raise for the same person for the same fiscal year.   To paraphrase and quote from Martin, supra, “[T]he additional features [a 25 percent reduction in the term of the proposed lease in Martin, or a roughly 29 percent reduction in the amount of the proposed raise here] cannot prevent the [second] resolution from being essentially the same, so far as referendum principles are concerned, as the [prior legislation] under referendum․  Undoubtedly the voters were concerned with the fundamental principle of the resolutions, namely, the leasing of city property for the commercial purposes specified [or here, the granting of a raise]․  That principle was identical in the [compared] resolutions․  The referendum process would be completely nullified if, when a referendum petition is filed against a legislative act, the legislative body could by merely amending it in a minor way [accomplish the same essential purpose].  If such were the law, the council merely by continuous amendment of that act could deprive the voters of ever having an act either repealed or brought to a vote.  [¶] No contention is made here that the council was acting in bad faith․  However, it is not a question of bad faith but one of the adoption by the council of a resolution, which so far as it relates to the suspended resolutions and the principles of the referendum brought against them, is practically identical.”  (Martin v. Smith, supra, 176 Cal.App.2d at pp. 120–121, 1 Cal.Rptr. 307.)

We, therefore, find that the two resolutions in question here are essentially similar, as that term is used in the referendum context.

Under section 4055, the second resolution was barred by the repeal of the first resolution pursuant to the referendum process.   We recognize that the Town presented evidence below in support of contentions that the town administrator is a dedicated and efficient public servant who well deserved a raise of 8 percent, 11 percent, or even more;  and that appellant and the other signatories of the referendum petition were misguided.   Appellant of course argues to the contrary, but these considerations are not relevant to our decision.   Our decision is based solely upon the right of referendum reserved by the people;  we must fulfill “the duty of the courts to jealously guard this right of the people and to prevent any action which would improperly annul that right.”  (Martin v. Smith, supra, 176 Cal.App.2d at p. 117, 1 Cal.Rptr. 307;  Building Industry Assn. v. City of Camarillo, supra, 41 Cal.3d at p. 821, 226 Cal.Rptr. 81, 718 P.2d 68.)

III. DISPOSITION

The judgment is reversed.   The cause is remanded for further proceedings consistent with the views expressed herein.

FOOTNOTES

1.   Unless otherwise indicated, all subsequent statutory references are to the Elections Code.

2.   Although sections 4050 and 4055 actually deal with submission to the voters by referendum petition of an “ordinance” and not a “resolution” of the legislative body, “ ‘[t]he form or name of an act of municipal authorities, such as whether it is called an ordinance or a resolution, is not determinative of its legislative or administrative nature, with respect to whether or not it is subject to initiative or referendum․’ ”  (O'Loane v. O'Rourke (1965) 231 Cal.App.2d 774, 783–784, 42 Cal.Rptr. 283, emphasis added.)

3.   The respondents argue, inter alia, that the amount of the administrative raise was determined, as to the first resolution, by a “marketplace survey method” and, as to the second resolution, by a “merit method”;  and that these different approaches to the rationale of a salary increase for the administrator, together with his “performance evaluation” preceding the second resolution, show the resolutions are “different for referendum purposes under Section 4055․”  A raise for a town employee is nonetheless still a raise, regardless of the considerations of the legislative body in approving it.   Both the resolutions in essence and the referendum petition were directed to the raise in salary, not to the basis on which it was granted.

PETERSON, Associate Justice.

KLINE, P.J., and BENSON, J., concur.