Cajon Valley Union Sch. Dist. v. Drager

321 Cal.Rptr.3d 154

CAJON VALLEY UNION SCHOOL DISTRICT et al., Plaintiffs and Appellants,

v.Tracy DRAGER, as Auditor-Controller, etc., et al., Defendants and Respondents;

City of El Cajon et al., Real Parties in Interest and Respondents.

C097429

Court of Appeal, Third District.

Filed April 24, 2024

APPEAL from a judgment of the Superior Court of Alpine County, Stephen P. Acquisto, Judge. Affirmed. (Super. Ct. No. 34-2018-80002921-CU-WM-GDS)

Jeffrey A. Hoskinson, Atkinson, Andelson, Loya, Ruud & Romo, Irvine, for Plaintiffs and Appellants.

Thomas Deak, Office of County Counsel, County of San Diego, San Diego, for Defendants and Respondents

Holly O. Whatley, Liliane M. Wyckoff, Colantuono, Highsmith & Whatley, PC, Pasadena, Jeffery A. Morris, David R. Plancarte, Devaney, Pate, Morris & Cameron, Temecula, Jeffrey G. Scott, Law Offices of Jeffrey G. Scott, San Diego, for Real Parties in Interest and Respondents.

HULL, J.

Summary of the Appeal

Petitioners and appellants Cajon Valley Union School District (CVUSD) and Grossmont Union High School District (GUHSD, together the Districts) are both public school districts located within the boundaries of the former El Cajon Redevelopment Agency (RDA), in the respondent County of San Diego. In 1988 the Districts entered into "pass-through" agreements with the RDA in which the RDA agreed to provide the Districts a portion of its annual property tax increment revenue up to a specified dollar cap.

After the RDA was dissolved as part of the "Great Dissolution" of California’s redevelopment agencies in 2012 (see City of Pasadena v. Cohen (2014) 228 Cal.App.4th 1461, 1463, 176 Cal.Rptr.3d 729), the respondent San Diego County Auditor-Controller continued to make payments pursuant to the agreements’ terms. The Auditor-Controller made a final pass-through payment to GUHSD in Fiscal Year 2011-2012, when the amount GUHSD had received under its agreement with the RDA reached the agreement’s cap. As of April 28, 2021, payments made to CVUSD under its agreement had not reached that agreement’s cap. GUHSD, in August 2016, and CVUSD, in January 2017, both wrote to the Auditor-Controller asking the Auditor-Controller to confirm she would make statutorily defined pass-through payments to them under Health and Safety Code sections 33607.7, subdivision (b)(2), and 34183, subdivision (a)(1), after their respective agreed upon caps were reached. (Statutory section citations that follow are to the Health and Safety Code unless otherwise stated.) The Auditor-Controller responded that she would not make further pass-through payments to the Districts once their respective caps were reached.

The Districts sought a writ of mandate to compel the Auditor-Controller to make statutorily defined pass-through payments to them under sections 33607.7, subdivision (b)(2), and 34183, subdivision (a)(1), after the caps in their respective agreements are reached. The Districts also sought related declaratory relief. The trial court denied the requested relief. We affirm the judgment.

Facts and History of the Proceedings

Factual and Statutory Background

The facts of this matter are largely undisputed. The history of redevelopment statutes and when statutes were passed or amended in relation to when the RDA took certain actions are key to understanding the factual context in which this case arose.

General Redevelopment Practices Prior to 1994

The historical underpinnings of California’s redevelopment agencies were discussed in California Redevelopment Association v. Matosantos (2011) 53 Cal.4th 231, 245-248, 135 Cal.Rptr.3d 683, 267 P.3d 580 (Matosantos I), and need not be detailed here. "Briefly summarized, since the 1940’s, the Community Redevelopment Law ([ ] § 33000 et seq.) allowed sponsoring cities and counties to establish redevelopment agencies to address urban blight." (City of Cerritos v. State of California (2015) 239 Cal.App.4th 1020, 1027-1028, 191 Cal.Rptr.3d 611 (Cerritos).)

Under the Community Redevelopment Law, "[r]edevelopment agencies generally could not levy taxes, and, instead, relied primarily on tax increment financing as a funding source as authorized by article XVI, section 16 of the California Constitution and … section 33670. (Matosantos I, supra, 53 Cal.4th at p. 246, 135 Cal. Rptr.3d 683, 267 P.3d 580.) Under that funding mechanism, redevelopment agencies received the growth in property taxes from a designated redevelopment plan area, known as the property tax increment, while the other public entities entitled to receive property tax revenue in the redevelopment area were allocated a portion based on the assessed value of the property prior to the effective date of the redevelopment plan (known as the frozen base). (Id. at pp. 246–247, 135 Cal.Rptr.3d 683, 267 P.3d 580; Cal. Const., art. XVI, § 16, subds. (a), (b); [ ] § 33670.)" (Cerritos, supra, 239 Cal.App.4th at p. 1028, 191 Cal.Rptr.3d 611.)

"To mitigate the burden on other public agencies from the diversion of tax increments to a redevelopment plan, redevelopment agencies, prior to 1994, often agreed to pass through part of their tax increment revenues to the other public agencies. (§ 33401, added by Stats. 1984, ch. 147, § 13, p. 508 and repealed by Stats. 1993, ch. 942, § 23, p. 5358.)" (County of Solano v. Vallejo Redevelopment Agency (1999) 75 Cal.App.4th 1262, 1268, 90 Cal.Rptr.2d 41.)

RDA and Districts’ Actions Prior to 1994

In July 1987, the City Council for the City of El Cajon adopted an ordinance that allowed the RDA to implement an amended redevelopment plan.

In April 1988, CVUSD and the RDA entered into an agreement (CVUSD Agreement). According to the CVUSD Agreement, the RDA would provide CVUSD with a portion of the tax increment revenue generated within the RDA project area until a total of $30 million was paid to the CVUSD.

In May 1988, GUHSD and the RDA entered into an agreement with an addendum (GUHSD Agreement). According to the GUHSD Agreement, the RDA would provide GUHSD with a portion of the tax increment revenue generated within the RDA project area until a total of $9.2 million was paid to the GUHSD.

Applicable RDA Laws from 1994 through 2011

In 1993, the Legislature passed, and the Governor approved, Assembly Bill No. 1290 (1993-1994 Reg. Sess.) (Assembly Bill 1290). (See Stats. 1993, ch. 942.)

As relevant here, Assembly Bill 1290 added section 33333.6, which imposed time limits on "every redevelopment plan adopted on or before December 31, 1993." (Stats. 1993, ch. 942, § 9.) Among other things, the enacted version of section 33333.6 limited the time for then-existing redevelopment agencies to establish loans, advances, and indebtedness to 20 years from the adoption of the redevelopment plan or to January 1, 2004, whichever is later, with certain exceptions not at issue here. (Ibid. [including then section 33333.6, subd. (a)(1)-(2)]; see also Assem. Floor analysis of Assem. Bill 1290 (1993-1994 Reg. Sess.), item 2 available at https://perma.cc/X5SK-U7RF (as of Apr. 15, 2024) [identifying limiting the term for incurrence of debt to 20 years as a significant change contained in the bill]; see also marked version of Stats. 1993, ch. 942, § 8.)

Assembly Bill 1290 also added versions of sections 33607.5 and 33607.7. (Stats. 1993, ch. 924, §§ 31-31.5.)

Section 33607.5, as adopted by Assembly Bill 1290, contained various provisions applicable to redevelopment areas with plans adopted after January 1, 1994, or with plans adopted before January 1, 1994, that were amended after that date to include new territory (Stats. 1993, ch. 942, § 31 [subd. (a) sets out the section’s scope].) Subdivisions (b) through (d) provided formulas for those redevelopment agencies to make pass-through payments to affected taxing entities.

Section 33607.7, as adopted by Assembly Bill 1290, stated it applied when redevelopment plans that had been adopted prior to January 1, 1994, were amended with one of a specified list of amendments, including amendments that would increase a limit on dollars allocated to the redevelopment agency or a time limit in the plan to establish loans, advances, and indebtedness. (Stats. 1993, ch. 942, § 31.5 [subd. (a) sets out the section’s scope].) Under the section 33607.7, subdivision (b), as adopted in 1993, "[i]f a redevelopment agency adopts an amendment that is governed by the provisions of this section, it shall pay to each affected taxing entity either of the following: [¶] (1) If an agreement exists that requires payments to the taxing entity, the amount required to be paid by an agreement between the agency and an affected taxing entity entered into prior to January 1, 1994. [¶] (2) If an agreement does not exist, the amounts required pursuant to subdivisions (b), (c), (d), and (e) of Section 33607.5, until termination of the redevelopment plan, calculated against the amount of assessed value by which the current year assessed value exceeds an adjusted base year assessed value." (Ibid.) Later amendments to section 33607.7 did not change the language from subdivision (b) we quote here. (Stats. 2001, ch. 741, § 14; Stats. 2011, ch. 5, § 5; Stats 2015, ch. 13, § 45.)

In 2001, the Legislature amended section 33333.6 with Senate Bill No. 211 (2001-2002 Reg. Sess.) (Senate Bill 211). Under the amended version of subdivision (e)(2), effective January 1, 2002, redevelopment agencies with plans adopted prior to January 1, 1994, could amend their plans to eliminate the time limit on establishing loans, advances, and indebtedness which had been imposed with the Assembly Bill 1290 version of the statute. (Stats. 2001, ch. 741, § 5.) If a redevelopment agency elected to amend its plan under the amended statute, it would be required to "make the payment to affected taxing entities required by Section 33607.7." (Ibid.) This requirement remained in section 33333.6 in 2007—and remains today— though by 2007 the statute had been amended such that the operative language now appears in section 33333.6, subdivision (...