Robert Dahms v. Downtown Pomona Property and Business Improvement District et al. (— Cal.Rptr. 3d —, 2006 WL 802490, Cal.App. 2 Dist., Mar. 30, 2006), concerns a challenge to the creation of the Downtown Pomona Property and Business Improvement District (the “PBID”), a special assessment district. A California Court of Appeal determined that plaintiff Robert Dahms’ (“Dahms”) arguments lacked factual and legal merit and accordingly concluded that the City of Pomona (“City”) properly created the PBID.
Facts
In the spring of 2003, four owners of property requested that the City create the PBID. The City then hired a consultant, MuniFinancial, to assist in the creation of the PBID. After receiving a management plan and a petition signed by property owners representing over 50 percent of the assessed properties, the city council passed a resolution stating its intention to create the PBID.
In the summer of 2004, the city council mailed out ballots to the affected property owners and subsequently held a public hearing to count the ballots. 126 ballots favored the creation of the PBID and 66 opposed it. As required by California law, the ballots were also tabulated after being multiplied by the dollar amount assessed for each respective property, and the weighted vote equaled $338,461.29 in favor and $153,156.86 against. Following the ballot counting, the city council passed three resolutions regarding the formation of the PBID. The first declared the results of the balloting; the second approved the formation of the PBID and specified the boundaries, services, assessment costs, and other related measures; and the third approved the engineer’s report prepared by MuniFinancial.
As the engineer’s report set forth, the PBID would provide the following services: security, streetscape maintenance, and marketing, promotion, and special events. It also specified that the assessment amount for each property in the PBID would be calculated based on three factors: street frontage (the length of the stress address side of the property), building size, and lot size. The factors accounted for 40 percent, 40 percent, and 20 percent, respectively, of the assessment cost for each property. The report additionally explained that various non-profit entities would only be assessed for 5 percent of the basic assessment rate, and properties zoned residential within the PBID would be exempt from the assessment cost.
Dahms owns several properties within the PBID, and he challenged the creation of the PBID by filing a lawsuit.
Decision
In 1996, Proposition 218 amended the California Constitution to read: “In 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).) The appellate court considered whether substantial evidence showed that the affected properties in the PBID would receive special benefits and that the assessment costs were proportional to the benefits received.
Dahms challenged the creation of the PBID by arguing four separate points. First, Dahms argued that the city council held the hearing on the proposed assessment too early, in violation of the California Constitution. The hearing took place on the forty-fifth day after the city mailed the notices of the proposed assessment. Under the California Constitution, the city was required to “conduct a public hearing upon to 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).) In the constitution’s own terms, the hearing can be held 45 days after the notices are mailed. The Code of Civil Procedure provides the method of computing the days, and it excludes the first day and includes the last day. The hearing took place 45 days after the day of mailing (excluding the day of mailing and including the day of hearing), thus the city did not violate the constitutional notice provision.
Secondly, Dahms challenged the creation of the PBID on the grounds that there was insufficient evidence that the assessment amounts were proportional to the special benefits conferred. The Court determined that his arguments in this regard had no merit.
Third, Dahms argued that in creating the PBID, the city violated the California Constitution in that it failed to distinguish between “general benefits” and “special benefits.” The California Constitution provides that “[o]nly special benefits are assessable, and an agency shall separate the general benefits from the special benefits.” (Cal. Const., art. XIII D, § 4, subd. (a).) “‘Special benefit’ means a particular and distinct benefit over and above general benefits conferred on real property located in the district or to the public at large.” (Cal. Const., art. XII D, § 2, subd. (i).) The Court determined that this argument failed because the services provided by the PBID, including security, street maintenance, and marketing, constituted special benefits, not general benefits. The City thus appropriately calculated the benefits.
Lastly, Dahms claimed that certain findings made by the City were not supported by the evidence. The court disagreed with Dahms and found the City’s findings to be supported by the evidence. The court affirmed the ruling of the trial court in favor of the Defendants, holding that the PBID was properly created.