Opinion
Introduction
This is an appeal from the trial court’s denial of a petition for writ of mandate seeking to prevent the City and County of San Francisco (City) from *1214 diverting tobacco settlement revenues away from the project to replace Laguna Honda Hospital and to require the City to maintain Laguna Honda as a 1,200-bed skilled nursing facility. We affirm.
Factual Background and Procedural History
Laguna Honda Hospital, founded in 1866, has long been a fixture in the City, providing continuing care services to the City’s elderly and chronically disabled population without regard to ability to pay. As of 1999, the City operated Laguna Honda as a 1,200-bed skilled nursing facility. By the late 1990’s, its physical condition was seriously deteriorating, it suffered damage from the 1989 earthquake, and its open-ward structure was outmoded, leaving it at risk to lose federal funding that was critical to its survival. Also, in 1998, the City settled litigation it had brought against the tobacco industry. As of 1999, the City was projecting that it would receive more than $580 million in settlement payments over the next 37 years. The proceeds of this settlement gave the City a unique opportunity to address the serious problems at Laguna Honda.
In November 1999, the voters of the City approved Proposition A, a ballot measure authorizing the City to incur $299 million in debt for a health care facility to replace Laguna Honda Hospital, and dedicating certain revenues derived from the settlement with the tobacco industry to help pay for the replacement facility. After passage of Proposition A, the City began planning the project. In February 2004, the City authorized sale of bonds pursuant to Proposition A. In October 2004, the City received construction bids for the project as originally contemplated that significantly exceeded the project’s budget. Also in October 2004, in response to the escalating cost of the project, the City adopted an ordinance allowing it to negotiate with bidders to try to reduce the project costs. The project was then rebid.
During this same time period, the City was experiencing a severe economic downturn. In fiscal year 2003-2004, the City faced an unprecedented budget deficit. The tobacco settlement, however, was a fiscal bright spot. As of June 2003, projections indicated that the City would receive $238 million more over 37 years than projected at the time Proposition A was placed on the ballot. By the beginning of fiscal year 2003-2004, including interest that would be earned during the coming fiscal year, that unexpected windfall already equaled $25 million. On July 25, 2003, still before any bonds were authorized or issued pursuant to Proposition A, the City enacted an ordinance *1215 authorizing the transfer of $25 million of tobacco settlement payments from the tobacco settlement revenue sub-account 1 to its general fund.
Petitioner, a resident of the City, brought this writ of mandate action in November 2004 in the San Francisco Superior Court seeking an order that the City (a) return the $25 million and not divert any tobacco settlement funds away from the Laguna Flonda project and (b) maintain Laguna Honda as a skilled nursing facility with at least 1,200 inpatient beds unless the City could satisfy certain conditions. On April 4, 2005, the superior court, having heard oral argument, entered judgment on its order denying the writ of mandate, from which this appeal is taken.
Analysis
Because this case turns on application of settled principles of statutory interpretation as applied to the Proposition A bond measure, and not on disputed issues of fact, our review is de novo. “In reviewing a trial court’s judgment on a petition for writ of ordinary mandate, the appellate court applies the substantial evidence test to the trial court’s factual findings, but exercises its independent judgment on legal issues, such as the interpretation of statutes.”
(Abbate
v.
County of Santa Clara
(2001)
In
Associated Students of North Peralta Community College v. Board of Trustees
(1979)
I. Transfer of Tobacco Settlement Money to the General Fund
Petitioner argues that Proposition A requires the City to apply all money received from the tobacco settlement to the Laguna Honda project (with the exception of the first $1 million annually that is set aside for tobacco education) and that, therefore, the City was not permitted to allocate the $25 million to the general fund. Petitioner contends that certain language in the voter pamphlet summary of Proposition A should control over conflicting language in the ordinance by which Proposition A was placed on the ballot. This argument fails for several reasons.
The primary “contract” documents are unambiguous. The bond ordinance, which was included in the voter information pamphlet distributed to voters prior to the election, in its title, “provides] for the use of available tobacco settlement revenues’'’ and, in section 3, requires that “[t]he first $100,000,000 of available tobacco settlement revenues” must be used for the Laguna Honda project. (Italics added.) Section 2 of the ordinance, “[f]or purpose of this ordinance and the proposition to be voted upon,” defines “ ‘[available tobacco settlement revenues’ ” to mean “the total payments the City and County receives under the 1998 Master Settlement Agreement (the ‘Agreement’) over the term of any lease financing, bonded debt and/or other evidences of indebtedness authorized hereby that the City and County may use for the project under applicable law, less $1,000,000 of the amount the City and County receives each year under the Agreement during the term of any obligations authorized hereby, which amount the City and County will use for tobacco education, prevention and control purposes.” (Italics added.) It follows that the ordinance only committed funds received once the bonds *1217 were issued—i.e., once the term of the bonds had commenced. Because funds received before any bonds issued, including the $25 million at issue in this action, are not received during the term of the bonds, they are not “available” within the meaning of the ordinance and, therefore, are not pledged to the project.
The same distinction is carried through the other relevant primary element of the bond “contract”—the ballot proposition submitted to the voters. It stated; “Shall the City and County incur bonded debt . . . and reduce the property tax impact by requiring the application of
available tobacco settlement
revenues” to finance the project. (Italics added.) Again, the proposition specifically uses the same defined term as the ordinance.
3
The use of the adjective “available” to modify “tobacco settlement revenues” clearly indicates that some subset of all such revenues is intended, and the page reference to the full text of the ordinance appears at the bottom of the page.
4
Of course, “ ‘we must assume that the voters considered the text and thereby familiarized themselves with any omitted subsidiary matter.’ ”
(Horneff
v.
City & County of San Francisco
(2003)
Against all this, petitioner points to the digest by the City’s Ballot Simplification Committee (BSC), which was also included on the first page of the section of the voter information pamphlet devoted to Proposition A and which stated, “Proposition A also provides that all tobacco settlement monies received by the City, after $1 million is set aside each year for smoking education and prevention programs, would be used to pay for [the Project].” (Italics added.) Petitioner argues that the use of the word “all” in this sentence creates an ambiguity that requires the court to interpret the voters’ intent to require the City to disregard the plain language of the ordinance. Petitioner’s argument on this point also fails for several reasons.
*1218 First, following the Associated Students case, the digest is not the sort of extrinsic document that a court would look to in determining the terms of the “contract” between the City and the voters. None of the primary documents referred to the digest or suggested to the voters that they should rely on the digest to add detail to the ordinance or the proposition language. Nor is that the function of the BSC. In fact, the reverse is true.
Two opinions of Division One of this court have thoughtfully explained the purpose and function of the BSC.
(Horneff v. City & County of San Francisco, supra,
Nor is the BSC charged with implementing or administering this or any other ordinance, so its summary cannot be entitled to the deference usually given to an interpretation of an ordinance by a body that does have such responsibility. That deference is typically reserved for an “agency charged with its enforcement and interpretation.” (See
International Business Machines
v.
State Bd. of Equalization
(1980)
Second, under ordinary rules of statutory interpretation, a court would not look to an extrinsic document for help interpreting an ordinance that is clear on its face. This is the rule of
Legislature v. Eu
(1991)
Third, we reject petitioner’s argument that the digest language should override the ordinance language in order to avoid subjecting the voters to a “bait and switch.” This argument sells the voters short by ignoring the presumption that they are familiar with the language of the ordinance, have duly considered it, and have voted intelligently.
(Amador Valley Joint Union
*1220
High Sch. Dist.
v.
State Bd. of Equalization, supra,
Petitioner’s argument echoes the “ ‘public policy’ ” argument addressed in
Associated Students.
There, having concluded that the evidence did not support an intent to mislead, the court went on to observe “that if whenever a group of voters considered that their electoral will had been frustrated, they could argue for implementation of
their
understanding of the sense of official assurances, preelection statements, publicity and unofficial discussions, an intolerable number of disputes would result.”
(Associated Students, supra,
II. Characteristics of Replacement Project
Petitioner, fearing that the City intends to build a significantly smaller and different new facility, 10 also argues that Proposition A requires the City to *1221 replace Laguna Honda with another 1,200-bed skilled nursing facility 11 and that the City has no discretion to alter these characteristics of the replacement project, at least without satisfying certain evidentiary prerequisites. 12 This argument fails for many of the same reasons explained above.
We start again with the language of the primary elements of the “contract.” The ordinance title states that the bonds will be issued “for the acquisition, improvement, construction and/or reconstruction of a health care, assisted living and/or other type of continuing care facility or facilities to replace Laguna Honda Hospital.” Section 1 of the ordinance authorizes the City to incur debt for the “Project,” and section 2 defines the “Project” to “include, without limitation, all works . . . necessary or convenient for the acquisition, improvement, construction and/or reconstruction of a new health care, assisted living and/or other type of continuing care facility or facilities to replace Laguna Honda Hospital.” The ballot proposition itself uses the same broad language, stating that the debt will be incurred “for the acquisition, improvement, construction and/or reconstmction of a new health care, assisted living and/or other type of continuing care facility or facilities to replace Laguna Honda Hospital.” 13
This language is intentionally broad and nonspecific. It is self-evidently drafted to leave the City significant flexibility in designing the replacement facility. There is nothing improper in providing for such flexibility. “[T]he rale is that public bodies may submit bond propositions in broad and general terms. Such a body may make its order of submission ‘just as broad, and just as narrow[,]’ or just as specific as it is willing to be bound by.”
(Sacramento M. U. Dist. v. All Parties, etc.
(1936)
On this issue, petitioner rests his argument on the use of the word “replace” in the bond documents and on ballot arguments suggesting that a new 1,200-bed facility would be built. Neither point is persuasive.
Petitioner contends “that it is impossible, given the commonly understood meaning of the words, ‘to replace,’ as used in both the ballot proposal and in the bond ordinance, and in the context of why the measure was placed on the ballot, to suggest that there was any other intent in the voters’ passage of Proposition A, other than to replace the old 1,200-bed Laguna Honda Hospital skilled nursing facility, with a new 1,200-bed Laguna Honda Hospital skilled nursing facility.” We disagree. The word “replace,” particularly in the context it is used, cannot be limited to mean “build an exact replica,” since the bond proposition and ordinance used open-ended language to define the project. They did not specify any particular kind or quantity of continuing care services. Again, there is no ambiguity in the primary documents. So long as the City uses the bond proceeds for “a new health care, assisted living and/or other type of continuing care facility or facilities,” it is within its grant of authority. 14
The various ballot arguments referring to a 1,200-bed replacement facility do not affect our analysis. First, they should not be considered because they are not primary elements of the “contract,” and they are not referred to in the primary documents.
(Associated Students, supra,
92 Cal.App.3d at pp. 677-678.) The primary bond documents do not refer to any specific plans for the replacement project. The record before us does not include any preexisting plans for the design or construction of the replacement facility, let alone any that were disseminated to the electorate or referred to as part of the ballot materials for Proposition A. Ballot arguments are just the advocacy
*1223
statements of interested parties. They do not reflect the understanding or intent of any voter other than their authors, and they “cannot be binding upon [the City] when such intent does not appear either in the resolution, the ballot proposition, or the governing statutes.”
(Associated Students,
at p. 680;
City of Los Angeles v. Dannenbrink
(1965)
This case again echoes Associated Students. In that case, all interested parties anticipated that the bond proceeds would be used to build four college campuses. (Associated Students, supra, 92 Cal.App.3d at pp. 674—675.) The bond resolution and proposition, however, generally authorized “school lots” and “school buildings” without specifying number or location. (Id. at p. 675.) For several years after the bonds were approved, the plans and expectations continued to be that four campuses would be built, but nearly a decade later the fourth campus was abandoned. (Id. at p. 676.) Nonetheless, because the primary elements of the “contract” did not require a fourth campus, the board of trustees was free to change its plans. So here, Proposition A does not bind the City to any particular size, floor plan, or configuration of services based on the expectations of petitioner or any other individual who had an expectation different from the language of the approved proposition and ordinance.
This result is not altered by the fact that some proponents and opponents of the measure told voters that Proposition A contemplated a 1,200-bed replacement facility. “No public official or private citizen is authorized to change the substance or effect of [a bond] proposal by the characterization he employs in advocating its adoption or defeat.”
(City of Los Angeles v. Dannenbrink, supra,
*1224 the drafters’ intent had been to replicate the size and type of service provided by the existing Laguna Honda Hospital, the voters did not restrict the City to that intent. 16
DISPOSITION
The judgment is affirmed. Appellant is to pay costs.
Kline, P. J., and Haerle, J., concurred.
Appellant’s petition for review by the Supreme Court was denied August 30, 2006, S144838.
Notes
This account was set up to hold tobacco settlement payments in excess of $1 million per year. It was codified in San Francisco Administrative Code section 10.100-218. As originally enacted in December 2000, funds in this account could be used for construction of the Laguna Honda replacement or payment of debt incurred pursuant to Proposition A.
As
Associated Students
points out, even where this test is satisfied, and an extrinsic document comes into play, it is not clear how restrictive such a document can be. “Thus several cases have concluded that, even where quite specific engineering and economic feasibility reports have been incorporated, the District is not restricted by statements made in such reports. [Citation.] And this has been true even where the report was required before the bond proposal could be submitted to the electorate, at least where the report is merely mentioned by reference or recital in the ordinance calling for the election. [Citations.]”
(Associated Students, supra,
And, as we have noted, the ordinance defined the term both for its own purposes and for purposes of the proposition. We, therefore, reject petitioner’s argument that there is any inconsistency between the ordinance and the proposition or that some contrary lay understanding of the word “available” could create such a conflict.
Petitioner does not contest the meaning of the ordinance’s language. Instead, petitioner would disparage the definitional language and its placement as “Philadelphia Lawyer language hidden away in an obscure section of a single-spaced 6-point ordinance set forth on the 22d page of a very long Voters Pamphlet section on Proposition A.” The need for carefully crafted language in documents that form the foundation for issuing nearly $300 million worth of municipal bonds is obvious whether in Philadelphia or San Francisco, and the placement of the text of the ordinance at the end of all the arguments pro and con is consistent with standard practice and of no substantive import. The length of the section only reflects the significant public interest in the measure that generated so many paid arguments, which, in turn, reinforces the usual presumption referred to in the text that voters are familiar with the terms of the ordinance. (See
Amador Valley Joint Union High Sch. Dist.
v.
State Bd. of Equalization
(1978)
In each of these cases, the superior court agreed with the petitioner and ordered changes in language. In each case the issue did not reach the Court of Appeal until after the election. In each case, the Court of Appeal chose to exercise its discretion to consider the issue presented as capable of repetition, yet evading review. In each case the Court of Appeal concluded that the superior court erred in ordering changes because, even though the court’s changes made the digest more accurate, the digest as originally drafted, though incomplete, was not false or misleading. Finally, in each case, the Court of Appeal affirmed the judgment because, despite the error, there was no prejudice since the revised version was, in fact, more accurate.
Therefore petitioner is incorrect to refer to the BSC as “ruling” on or “construing]” the meaning of the ordinance.
Petitioner also asserts in passing that the City’s Board of Supervisors contemporaneously construed Proposition A to impose a trust on all tobacco settlement payments for the benefit of *1219 the Laguna Honda project. The board of supervisors does have power to implement Proposition A. In fact, however, the board of supervisors merely created an account to hold such funds and authorized their use for certain purposes. They did not state that Proposition A compelled all deposited funds to be used solely for the authorized purposes, whereas they did state that the $1 million per year portion deposited in a separate sub-account could be used “solely” for tobacco education purposes. Ultimately, of course, the board of supervisors’ understanding is reflected in its 2003 decision to divert some of the prebond settlement payments to a different purpose.
The City argues that the rule of
Legislature
v.
Eu, supra,
We express no opinion as to the likely outcome of such a challenge, had it been brought. The issue would have been whether, given the context of the digest, the word “all” was inaccurate or misleading as opposed to whether the digest would be deemed merely incomplete for not having included the modifier “available” with its definition. In deciding that question, the trial court would have been bound by the rule that “ ‘if reasonable minds may differ as to the sufficiency of the summary, it should be held sufficient.’ ”
(Horneff v. City & County of San Francisco, supra,
Petitioner argues that the City has already decided to build a smaller facility. The City counters that, although nothing prevents it from changing the size or character of the project, it has so far only authorized value engineering discussions with bidders in order to reduce the cost of the facility in the face of massive budget overruns in the initial bid responses. The record on appeal does not answer the question, but, in light of our decision that Proposition A does not dictate the size or specific character of the replacement facility, this dispute is not material.
“Skilled nursing facility” is a legal classification meaning “a health facility that provides skilled nursing care and supportive care to patients whose primary need is for availability of skilled nursing care on an extended basis.” (Health & Saf. Code, § 1250, subd. (c).) It is only one of a nonexclusive list of categories of “health facilities]” recognized by law. (Health & Saf. Code, § 1250.)
At oral argument, petitioner conceded that the City could build an 1,100-bed replacement facility, but not one with 800 or 900 beds. This concession reveals the fundamental error in petitioner’s position. Once it is conceded that the replacement need not be a bed-for-bed replica, the City would be left with no principled limit on its discretion except the language of the ordinance itself.
Indeed, in this instance, the BSC digest also uses essentially the same broad language, describing the bonds as being issued “to acquire, construct or reconstmct a health care, assisted living, and/or other type of continuing care facility or facilities to replace Laguna Honda Hospital.”
Because the broad scope of the project is clear from the text of the proposition and ordinance, it is not necessary or appropriate to resort to dictionary definitions of “replace.” Were we to do so as invited by petitioner, however, the result would be the same. “Replace” is defined in the American Heritage Dictionary (4th ed. 2000) page 1479, column 2, to mean “1. To put back into a former position or place. 2. To take or fill the place of. 3. To be or provide a substitute for. 4. To pay back or return; refund.” This definition certainly includes building a new, but different, health care facility in the place of the old Laguna Honda. That new facility will take the place of and provide a substitute for the old facility even if it is not a bed-for-bed replica.
Petitioner finds significance in the fact that both proponents and opponents of Proposition A referred to a 1,200-bed replacement facility. In
Eu
the court looked to agreement between the ballot pamphlet arguments and rebuttals to those arguments.
(Legislature
v.
Eu, supra,
It follows that Proposition A does not require the City to meet any particular evidentiary requirements before deciding what to build to replace Laguna Honda even if imposing any such conditions were otherwise appropriate.