County of Sonoma v. Cohen
235 Cal. App. 4th 42
| Cal. Ct. App. | 2015Background
- In 2011 California enacted the "Great Dissolution," invalidating most redevelopment-agency obligations and defining which obligations remained "enforceable obligations" payable from tax increments.
- Sonoma County, as successor agency to its redevelopment agency, sought oversight-board approval (March 2012) to "reenter" two preexisting contracts with the county (sponsoring entity) for redevelopment projects and included them in its ROPS (recognized obligation payment schedule).
- The Department of Finance disallowed those ROPS items, treating contracts between a former redevelopment agency and its sponsoring entity as excluded from the definition of enforceable obligations and citing later statutory amendments limiting successor agencies.
- Sonoma petitioned for writ of mandate; the trial court held the reentry agreements were enforceable obligations and ordered the Department to treat them as such and to recompute Sonoma's true-up payment accounting for them.
- The Court of Appeal affirmed, holding (1) the 2011 statutes unambiguously authorized oversight-board-approved reentry as a basis to include such agreements as enforceable obligations, and (2) the 2012 amendments did not retroactively invalidate the March 2012 oversight-board approvals.
Issues
| Issue | Sonoma's Argument | Department's Argument | Held |
|---|---|---|---|
| Whether oversight-board-approved "reentry" agreements with a sponsoring entity can be "enforceable obligations" payable from tax increments | Sonoma: Former statutes expressly authorized successor agencies, with oversight-board approval, to enter/reenter agreements; such approvals may make the agreements enforceable obligations included in ROPS | Department: Definition of enforceable obligations excludes sponsor–agency contracts; oversight-board approval cannot override that exclusion and later statutes show contrary intent | Held: Yes. 2011 statutes unambiguously authorized oversight-board-approved reentry to create enforceable obligations; Department must treat the two reentry agreements as enforceable obligations |
| Whether the Department’s later (2012) statutory amendments apply retroactively to invalidate prior oversight-board-approved reentries | Sonoma: The 2012 changes are not expressly retroactive and should not be read to negate the earlier grant of authority; oversight-board approvals made before amendment remain valid | Department: The 2012 legislation and related provisions are declaratory/retroactive and should bar successor agencies from creating new enforceable obligations after June 2011, thus invalidating reentries | Held: No retroactive application. 2012 amendments do not clearly show retroactive intent to void oversight-board approvals made under the earlier, unambiguous grant of authority |
| Whether the plain purpose of the Great Dissolution (preventing non-arm’s-length sponsor deals) invalidates oversight-board authority to approve reentries | Sonoma: Oversight boards consist of taxing-entity representatives with fiduciary duties; they may approve reentry when countywide benefits justify it | Department: Allowing reentry undermines the statute’s purpose to stop sponsor–redevelopment agency self-dealing | Held: Purpose does not override clear statutory language. The oversight-board exception is a permissible, limited mechanism aligned with legislative design |
| Whether Department forfeited some objections by timing | Sonoma: Alternatively argued Department failed to timely challenge ROPS III items | Department: Maintained review power | Held: Court did not need to reach forfeiture because statutory-interpretation ruling resolved the case; Sonoma’s alternative preserved reimbursement relief which Department conceded if court sided with Sonoma |
Key Cases Cited
- Matosantos v. State, 53 Cal.4th 231 (California Supreme Court) (addressing redevelopment dissolution and enforceable-obligation principles)
- City of Pasadena v. Cohen, 228 Cal.App.4th 1461 (Cal. Ct. App.) (context on Great Dissolution statutory scheme)
- Rodriguez v. United States, 480 U.S. 522 (U.S. Supreme Court) (statutory purpose cannot override clear statutory text)
- McClung v. Employment Dev. Dept., 34 Cal.4th 467 (Cal. Supreme Court) (retroactivity requires clear legislative intent)
- City of Emeryville v. Cohen, 233 Cal.App.4th 293 (Cal. Ct. App.) (discussing new vs. reentered obligations under the dissolution laws)