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■ Dahms v. Downtown Pomona Property, No. B183545

 Robert Dahms appeals from the trial court’s rejection of his challenge to the creation of a special assessment district in downtown Pomona, California.  In our previous opinion in this case, we applied the substantial evidence standard of review to Dahms’ challenges and affirmed, but we recognized that the issue of the proper standard of review was then before the Supreme Court.  The Supreme Court granted review in this case but deferred briefing pending its decision in the case already under review.  Last year the Supreme Court decided that case, Silicon Valley Taxpayers’ Assn., Inc. v. Santa Clara County Open Space Authority (2008) 44 Cal.4th 431 (SVTA), and held that the proper standard of review is de novo.  (Id. at p. 450 [“[C]ourts should exercise their independent judgment in reviewing whether assessments that local agencies impose violate article XIII D” of the California Constitution].)  The court remanded this case to us with directions to vacate our decision “and to reconsider the cause in light of [SVTA].”  We do so and again affirm.[1]

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 thereafter hired an engineering 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 to be 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 report on the PBID prepared by the engineer, MuniFinancial, as required by California law.

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

            MuniFinancial’s report based the amount of the assessment for each assessed property within the PBID 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.  Using those factors, the City calculated the assessment for each assessed property as a portion of the total cost of the services that the PBID provides.  MuniFinancial’s report also stated that the City would assess various nonprofit entities (“religious organizations, clubs, lodges and fraternal organizations”) within the boundaries of the PBID only 5 percent of the amount that they would otherwise have to pay (i.e., the “basic assessment rate”).   In addition, the City exempted from assessment the properties within the PBID “zoned exclusively residential.”[2]

            On August 25, 2004, Dahms filed this action challenging the City’s formation of the PBID on the ground that it violates article XIII D of the California Constitution (article XIII D).  His complaint alleged 14 causes of action and 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

            “[We] exercise [our] independent judgment in reviewing whether assessments that local agencies impose violate article XIII D.”  (SVTA, supra, 44 Cal.4th at p. 450.)

■ Held:           

Trial court order rejecting plaintiff's challenge to the creation of a special assessment district is affirmed where: 1) the notice for the hearing on the proposed assessment to the affected property owners was not premature and did not violate the notice provision of Cal. Const. art. XIII D; 2) the amount assessed on the parcel does not exceed the reasonable cost of the proportional special benefit conferred in violation of constitutional requirements; and 3) the court properly rejected defendant's argument that the creation of the special assessment district violated Cal. Const. art. XIII D because the city failed to separate general benefits from special benefits, as the argument is based on a misunderstanding of the relevant constitutional requirements.
Dahms v. Downtown Pomona Property-B183545A-5/12/09 CA2/1
Dahms v. Downtown Pomona Property-B183545A-5/12/09 CA2/1-PDF

 

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