Riversiders Against Increased Taxes v. City of Riverside

324 Cal.Rptr.3d 529

RIVERSIDERS AGAINST INCREASED TAXES, Plaintiff and Appellant,

v.CITY OF RIVERSIDE et al., Defendants and Appellants;

Rebecca Spencer, Defendant and Respondent.

E078961

Court of Appeal, Fourth District, Division 2.

Filed July 25, 2024

APPEAL from the Superior Court of Riverside County. Harold W. Hopp, Judge. Affirmed in part and reversed in part. (Super.Ct.No. CVRI2104120)

Phaedra A. Norton, City Attorney, and Susan Wilson, Assistant City Attorney; Greines, Martin, Stein & Richland, Timothy T. Coates, Alana H. Rotter, and Jeffrey Gurrola, for Defendants and Appellants City of Riverside et al.

Law Office of Chad Morgan, and Chad D. Morgan, Corona, for Plaintiff and Appellant Riversiders Against Increased Taxes.

No appearance for Defendant and Respondent Rebecca Spencer.

Jonathan M. Coupal, Sacramento, Timothy A. Bittle, Sacramento, and Laura E. Dougherty, for Howard Jarvis Taxpayers Foundation as Amicus Curiae on behalf of Plaintiff and Appellant Riversiders Against Increased Taxes.

OPINION

RAMIREZ P. J.

Riversiders Against Increased Taxes (RAIT), filed a petition for writ of mandate seeking to rescind the resolution placing Measure C on the November 2, 2021, elec- tion ballot, seeking a declaratory judgment that Measure C violated Proposition 218 was a general tax that cannot be voted on in a special election, and injunctive relief to restrain the City of Riverside (City) from wasteful spending on the election to consider the measure, The City opposed the petition arguing the election was a general election as required by Proposition 218, because it was a regularly scheduled election, despite the fact it was referred to as a "special municipal election" in the City council’s agendas and minutes. The matter was heard after the election, where the measure passed easily. The trial court granted the writ of mandate as to the declaratory relief claim only, finding that the election was a special election, but that it was not able to cancel the election that had already taken place or to enjoin certification of the election results. Both the City and RAIT appealed.

On appeal, the City argues that the trial court’s declaratory judgment erroneously held that the election was a special, rather than a general election, and that, if we agree, the lower court’s finding that RAIT was the prevailing party must be reversed. On cross-appeal, RAIT argues that the trial court erred in not ordering the removal of Measure C from the ballot in September 2021, and in declining to enjoin the certification of the election results. We reverse the order granting the petition as to the declaratory relief cause of action and affirm as to the denial of the balance of the petition.

Background

For many years, the City transferred excess fees collected from the City-operated electric utility to the City’s general fund, which provides essential funding for community services such as police, fire, children’s after-school programs, senior/disabled services. In 2018, the City was sued in a case captioned Parada v. City of Riverside (Super. Ct. Riverside County, 2018, No. RIC 1818642) (Parada), in which the plaintiffs argued that the setting of electric rates at an amount greater than the reasonable cost of providing electric utility service, which excess was transferred to the City’s general fund, constituted a tax, which had not been placed before voters for approval. The City entered into a stipulated settlement agreement by which the City agreed to place its general fund transfer practices before voters in a ballot measure for the November 2021 election.

On July 20, 2021, pursuant to the Parada, supra, RIC 1818642 settlement agreement, the City proposed an amendment to the Riverside city charter, adding section 1204.2,¹ to authorize the transfer of an amount not to exceed 11.5 percent of the gross operating revenues, exclusive of surcharges, of the electric utility, to be used to maintain local general purposes such as 911 response, fire, paramedic, police, street repairs, parks, senior services, homelessness and other general services. Measure C, proposing adoption of the amendment by voters, was to be placed on the ballot for the November 2, 2021, election. The city council considered the proposal and approved a resolution to submit the adoption of the amendment to voters by way of a ballot measure.

According to the charter of the City, general municipal elections for local offices held in common with statewide elections are general elections, whereas all other local elections are "special elections."

(§§ 500 [elections], 501 [special municipal elections].) General municipal elections for city council and "such other purposes as the City Council may prescribe" shall be held on the same day as the statewide election, consistent with the state primary election date. (§ 500.) All other elections are to be held in accordance with the state’s Election Code. (§ 502.)

The city council approved Resolution No. 23740, "Ordering, calling, providing for, and giving notice of a special municipal election to be held in said city on the 2nd day of November 2021, for the purpose of submitting to the qualified electors an amendment to the Charter of the City of Riverside." (Some capitalization omitted.) In addition, five council members were selected and authorized to prepare ballot arguments relating to Measure C, the proposed City charter amendment.

The November election was the regularly scheduled date for the city council runoff election, had one been necessary, as provided by the City charter.² Until 2021, City council runoffs would normally occur in November of odd-numbered years, pursuant to section 400(c), (d), and section 401. No November runoff election was necessary in 2021, however, because a candidate in each of Wards 2, 4, and 6 obtained more than 50 percent of the vote in the June 2021 election.

On August 3, 2021, at the city council meeting, council members adopted a resolution to "1. Adopt Resolution Ordering, Calling, Providing For, and Giving Notice of a Special Municipal Election to be Held in Said City on the 2nd Day of November, For the Purpose of Submitting to the Qualified Electors an Amendment to the Charter of the City of Riverside, Repealing Resolution No. 23740 and [¶] 2. Consider whether to defer submitting a ballot argument in favor of the proposed ballot measure if ballot arguments are submitted by other individual voters, or a bona fide association of citizens, or combination of voters and associations, or individual voters who are eligible to vote on the measure."

On August 3, 2021, the city council considered and adopted an amended resolution which referred to the June 8, 2021, general election, held earlier that year, and discussed how section 400(d) of the city charter required the city to call a special election to be held on November 2, 2021, if no candidate won a majority, but that no runoff election was scheduled because all successful candidates in the June election won by more than 50 percent. The amendment to the resolution further stated that based on the published decision in Silicon Valley Taxpayers' Assn. v. Gamer (2013) 216 Cal.App.4th 402, 407-408, 156 Cal. Rptr.3d 708 (Silicon Valley), a special election for a tax measure can be .called even though no candidate is on the ballot. The city council therefore desired to set a Uniform District Election Law to be held concurrently with the special municipal election on November 2, 2021. This resolution was adopted at the city council meeting on August 3, 2021. Ballot materials mailed to voters referred to the election as a "Consolidated General Election."

On September 9, 2021, RAIT filed a petition for writ of mandate seeking a declaration that Measure C, if adopted would violate Proposition 218, and an order enjoining the City from wasteful spending on an election to consider the measure. RAIT’s argument was that because the resolution adopted by the city council referred to the November 2, 2021, election as a "special election," submission of the tax measure violated California Constitution, article XIII C, enacted pursuant to Proposition 218. RAIT also sought an ex parte order setting a hearing on the petition itself and seeking a temporary restraining order preventing further action on Measure C. RAIT argued that the status conference hearing for petition had been scheduled for November 8, 2021, but that ballots would be mailed on or shortly after September 23, 2021, and the election would be conducted on November 2, 2021, and the matter needed to be resolved before the election.

The City opposed the ex parte application for order shortening time. At the ex parte hearing, the court ordered the hearing on the application for a temporary restraining order to take place on September 24, 2021.

However, on September 24, 2021, the court continued the hearing on the temporary restraining order as well as for ruling on the balance of the petition to take place on October 6, 2021. In setting the date, the court recognized the need to have the matter resolved before the election. On October 6, 2021, the matter was continued until October 22, 2021, on which date the parties discussed further briefing and scheduling.

After extensive briefing, on November 9, 2021, after the election, the trial court initially indicated it would deny the preliminary injunction to the extent it sought to delay certification and ordered the parties to appear and argue whether the court should enjoin transfers to the general fund pending the decision, but, after the parties orally argued, the court granted the preliminary injunction, pending resolution of the case, or until further order. On that same date, the court took under submission the remaining issues of the petition for writ of mandate.

On November 15, 2021, the court issued an order granting the motion for a preliminary injunction enjoining the City from certifying the results of the election on Measure C until...