3 Cal. App. 5th 1229
Cal. Ct. App.2016Background
- The City of Winters had a redevelopment agency that was required by statute to set aside a portion of annual tax increment for a subsidized housing fund; the agency’s final indebtedness statement (2011) listed roughly $12 million as the remaining amount associated with those set-asides.
- The Legislature abolished redevelopment agencies and tax increment financing in 2011–2012 (the “Great Dissolution”), reallocating property tax by reference to successor agencies and permitting payments only for enforceable obligations listed on Recognized Obligation Payment Schedules (ROPS).
- The City became the successor agency and successor housing agency and submitted ROPS listing the $12 million housing set-aside as a debt; the Department of Finance rejected inclusion, treating future set-asides as not enforceable because tax increment (the funding source) had been abolished.
- Plaintiffs (local residents) petitioned for writ of mandate to compel the Department to approve the City’s inclusion of the full future set-asides as an enforceable obligation, arguing the set-asides were owed ab initio and therefore “deferred” or otherwise obligations under state law that survived dissolution.
- The trial court denied the petition, holding the future annual set-asides were not “deferred” enforceable obligations under section 34171 and that section 34189 rendered provisions depending on tax increment (including the housing set-asides) inoperative.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether future housing set-asides constitute "deferred" enforceable obligations under §34171(d)(1)(G) | Set-asides are statutory "indebtedness" and the full life‑of‑project deposits were due ab initio, so they are deferred obligations that survive dissolution | Statutory set-asides are annual allocations dependent on tax increment; they are not presently due debts deferred as of the effective date and thus are not within §34171(d)(1)(G) | Held for defendant: future set-asides are not "deferred" enforceable obligations under §34171(d)(1)(G) |
| Whether characterization of future set-asides in the indebtedness statement/ROPS creates an enforceable obligation | Inclusion of future set-asides in annual indebtedness statements and ROPS shows the agency treated them as obligations owed over the project life | The indebtedness statement and budgeting anticipations do not convert future, tax‑increment‑dependent allocations into present deferred obligations; planning entries are not enforceable debts | Held for defendant: budgeting/statements do not transform future set-asides into enforceable obligations |
| Whether any statutory obligation to make housing set-asides survives the Great Dissolution because it is an obligation under state law (§34171(d)(1)(C)) | The housing statutes impose ongoing obligations on successor housing agencies independent of tax increment; thus they survive dissolution | Section 34189 makes inoperative all Community Redevelopment Law provisions that depend on allocation of tax increment; since set-asides depend on tax increment, they are inoperative and do not survive | Held for defendant: §34189 abrogates any statutory obligation to continue post‑dissolution tax‑increment set‑asides; housing set-asides are inoperative |
Key Cases Cited
- California Redevelopment Assn. v. Matosantos, 53 Cal.4th 231 (Sup. Ct. 2011) (analyzing the Great Dissolution and its effects on redevelopment finances)
- California Redevelopment Assn. v. Matosantos, 212 Cal.App.4th 1457 (2013) (post‑dissolution interpretation of redevelopment statutes)
- City of Brentwood v. Campbell, 237 Cal.App.4th 488 (2015) (discussing tax increment and enforceable obligations after dissolution)
- City of Pasadena v. Cohen, 228 Cal.App.4th 1461 (2014) (procedure for Recognized Obligation Payment Schedules)
- Glendale Redevelopment Agency v. County of Los Angeles, 184 Cal.App.4th 1388 (2010) (construction of indebtedness and allocation of tax increment)
- People v. Johnston, 247 Cal.App.4th 252 (2016) (statutory‑construction principle cited by plaintiffs)