When All Else Fails, Blame the Engineers

By William W. Abbott

One of the elements of a Proposition 218 election is the engineer’s report in support of the spread of assessments. As 218 places the burden on the agency adopting the assessment to justify the assessment, every agency facing the question of, how much information is required? The recent case of Beutz v. County of Riverside (2010) 184 Cal.App.4th 1516, sheds light on the subject.

The facts in Beutz involve an assessment imposed by the County of Riverside on properties within the community of Wildomar in 2006. In 1999, the local park and recreation district failed, and the County subsequently took over the assets and liabilities. The County adopted a parks master plan, and to help fund the parks, the County adopted an impact fee and also proposed using assessments, as authorized by the Landscaping and Lighting act of 1972, Streets and Highways Code 22500 et seq. to maintain the landscaping for the three parks inherited from the District, plus a new park to be developed. The County designated an engineer for the assessment proceeding, and upon return of the engineer’s report, authorized the assessments, conducted a protest proceeding, and authorized an election.

According to the engineer’s report, there were over 6000 assessable parcels in the district, all residential in character. A senior citizen development and non residential properties were not included as the engineer concluded those properties would not receive any special benefits. The assessment was set at $28 per residential unit or EDU, with a maximum assessment of $45, the higher amount triggered by the improvements for the yet to be constructed park. In addressing the allocation of general and special benefits, the engineer’s report recognized that there would be general benefits, but that these would be offset by the County’s investment in absorbing the former district’s debt, and anticipated County expenditures on park rehabilitation and improvements ($6,000,000), and contribution to annual operating costs.

Beutz, a residential property owner filed suit, challenging the assessment. In his 2nd and 3rd causes of action, Beutz argued that the assessment was invalid as all of the costs were assigned to residential properties without deduction for the general benefits to non residential properties, and exemption for publicly owned properties from the assessment without clear and convincing evidence that these parcels would receive no special benefit from the landscaping. First Beutz, then the County filed motions for summary judgment on these causes of action. The trial court ruled for the County. The appellate court reversed.

With respect to the standard of review, Proposition 218 places the burden on the agency imposing the assessment to justify the special benefits and allocation of burden. In reviewing these disputes, the appellate court said that a reviewing court applies a de novo or independent judgment review, not the more deferential reviews typically applied to review of agency decisions. The first issue addressed by the court was whether the allocation of benefits (special v. general) was based upon the landscaping maintenance component only, or on the master plan, of which landscape maintenance was a part. On this issue, the appellate court ruled for the County, saying that 218 allowed for the broader inquiry (on the master plan). The appellate court then ruled for Beutz on the issues pertaining to the assessment calculations. Missing from the engineer’s report was an analysis of the relative use/benefit of the parks to the public generally compared to use/benefit by the residents in Wildomar. The court also faulted the analysis by not analyzing the extent to which residents within Wildomar who lived closer to the parks would use the facilities different than or the same as those within Wildomar but who lived further away. “Notably, had the Report separated and quantified the general and special benefits of the Master Plan, based upon solid, credible evidence and purported to base the assessment solely on the special benefits, the substantial evidence standard of review may have applied to the Report’s implicit conclusions that all Wildomar properties would specially benefit from the parks in equal measure, and that the assessment on each parcel was proportional to and no greater than those special benefits.” (Page 1531.)

For the assessing agency, the bar is set high. This case, when read with Town of Tiburon v. Bonander (2009) 180 Cal.App.4th 1057, (holding that an assessment has to be based upon relative benefits, not relative costs) reaffirms that assessment proceedings require an additional degree of documentation and care by the enacting agency, and that across the board uniformity of assessments are more difficult to defend.

William W. Abbott is a partner at Abbott & Kindermann, LLP.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

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