COURT OF APPEAL FOR THE FOURTH APPELLATE DISTRICT STATE OF CALIFORNIA (Division One) ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Docket no. D063997

Transcription

1 COURT OF APPEAL FOR THE FOURTH APPELLATE DISTRICT STATE OF CALIFORNIA (Division One) ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Docket no. D San Diego County Superior Court case nos CU-TT-CTL (lead case) CU-MC-CTL (main case) CU-TT-CTL (other matter) (Judge Ronald S. Prager--Department 71) ========== CITY OF SAN DIEGO, Plaintiff and Respondent, v. MELVIN SHAPIRO AND SAN DIEGANS FOR OPEN GOVERNMENT, Defendants and Appellants. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Appellant San Diegans for Open Government s Opening Brief BRIGGS LAW CORPORATION [BLC file: ] Cory J. Briggs (State Bar no ) Mekaela M. Gladden (State Bar no ) 99 East C Street, Suite 111 Upland, CA Telephone: Attorneys for Appellant San Diegans for Open Government

2 CERTIFICATE OF WORD COUNT As required by Rule 8.204(c) of the California Rules of Court, and based on the word count function of the word processor on which this petition and brief were written, I certify that there are less than 10,000 words in this document, excluding the cover sheet, tables, running footers, and this certificate. Date: October 15, By: Cory J. Briggs Appellant s Opening Brief Page ii

3 TABLE OF CONTENTS I. Introduction... 1 II. Statement of Facts... 5 A. Background... 5 B. Trial Court Proceedings... 6 C. Statement of Appealability III. Legal Landscape: Californians Abhor Taxes Not Approved by Voters IV. Argument and Analysis A. The Special Tax Was Not Approved by San Diego s Registered, Natural-Person Voters and Therefore Violates the California Constitution and the San Diego City Charter The California Constitution Required the City To Obtain Approval of the Special Tax By Registered, Natural-Person Voters a. The City Must Abide by the California Constitution b. Non-Registered, Non-Natural Persons Do Not Have the Right to Vote under the California Constitution c. Registered, Natural-Persons Have the Right to Vote on Taxes under the California Constitution The City Violated the San Diego City Charter. 25 Appellant s Opening Brief Page iii

4 B. The City Violated the California Environmental Quality Act by Failing to Prepare an Environmental Impact Report for the Convention Center Expansion Project and Not Taking the Role of Lead Agency The California Environmental Quality Act Applies to the Expansion Project The City Firmly Committed Itself to the Expansion Project Before the Environmental Impact Report Was Certified The City Failed to Act as Lead Agency for the Expansion Project The California Environmental Quality Act Issues Are Not Moot V. Conclusion Appellant s Opening Brief Page iv

5 California Constitution TABLE OF AUTHORITIES CAL. CONST., art. XIIIA, 4...Passim CAL. CONST., art. XIIIC, 2...Passim Judicial Authorities Altadena Library Dist. v. Bloodgood, 192 Cal. App. 3d 585 (1987) Amador Valley Joint Union High School District v. County of Alameda, 22 Cal. 3d 208 (1978)... 8 Cipriano v. City of Houma, 395 U.S. 701 (1969) Citizens Ass n of Sunset Beach v. Orange County Local Agency Formation Comm n, 209 Cal. App. 4th 1182 (2012) City of Phoenix, Arizona v. Kolodziejski, 399 U.S. 204 (1970) County of Amador v. City of Plymouth, 149 Cal. App. 4th 1089 (2007) County of Riverside v. Whitlock, 22 Cal. App. 3d 863 (1972) Friends of Mammoth v. Board of Supervisors, 8 Cal. 3d 247 (1972) Friends of Sierra R.R. v. Tuolumne Park & Recreation Dist., 147 Cal. App. 4th 643 (2007) Foothill-De Anza Community College District v. Emerich, 158 Cal. App. 4th 11 (2007) , 28 Appellant s Opening Brief Page v

6 Howard Jarvis Taxpayers Ass n v. City of San Diego, 120 Cal. App. 4th 374 (2004) , 22 Kaufman & Broad-South Bay, Inc. V. Morgan Hill Unified School Dist., 9 Cal. App. 4th 464 (1992) Kramer v. Union Free School Dist., 395 U.S. 621 (1969) Neighbors for Fair Planning v. City and County of San Francisco, 217 Cal. App. 4th 540 (2013) Neilson v. City of California City, 133 Cal. App. 4th 1296 (2005) , 28 Planning & Conserv. League v. Castaic Lake Water Agency, 180 Cal. App.4th 210 (2009) Rider v. County of San Diego, 1 Cal. 4th 1 (1991) , 14, 20 Sanchez v. City of Modesto, 145 Cal. App. 4th 660 (2006) Save Tara v. City of West Hollywood, 45 Cal. 4th 116 (2008).. 33, 36 Silicon Valley Taxpayers Ass n v. Garner, 216 Cal. App. 4th 402 (2013) , 18 Silicon Valley Taxpayers Ass n v. Santa Clara Open Space Auth., 44 Cal. 4th 431 (2008).... 3, 7, 8, 10 Sustainable Transportation Advocates of Santa Barbara v. Santa Barbara County Association of Governments, 179 Cal. App. 4th 113 (2010) Weisblat v. City of San Diego, 176 Cal. App. 4th 1022 (2009) , 23 Western Lithograph Co. v. State Bd. of Equal., 11 Cal. 2d 156 (1938) Appellant s Opening Brief Page vi

7 Legislative Authorities GOV T CODE P UB. RES. CODE Administrative Authorities CAL. CODE OF REGS., tit. 14, C AL. CODE OF REGS., tit. 14, , 30 CAL. CODE OF REGS., tit. 14, Appellant s Opening Brief Page vii

8 I. INTRODUCTION This is a case, first and foremost, about the City of San Diego s disenfranchisement of its hundreds of thousands of registered voters. In 2012, the City enacted a jurisdiction-wide special tax on hotel property to pay for an expansion of the San Diego Convention Center to be financed with bonds up to $575 million. Admin. R. 4:36 ( 4). The parties do not dispute that the special tax is subject to voter approval under the California Constitution and the San Diego City Charter. The dispute concerns who the voters are. In the City s view, the appropriate voters consist exclusively of hoteliers. To this end, the City enacted a local ordinance creating the San Diego Convention Center Facilities District ( CCFD ) along the lines of a facilities district established under the Mello-Roos Community Facilities Act of 1982 ( Procedural Ordinance ). See generally id., 2:6-19. The Procedural Ordinance gave the right to vote to the owners of the land on which the hotels are located; or to leaseholders, in the case of hotels on land owned by a government agency. Id., 2:8 ( (defining Landowner )); 2:12 ( (a) (giving right to vote to Landowners ). The vote was conducted by the city clerk and was not Appellant s Opening Brief Page 1

9 overseen in any way by the county registrar of voters. Id., 2:12 ( (b)). In Appellant s view, the City should have put the special tax up for approval by the natural persons who reside in the City and are registered to vote in the jurisdiction. These are the people who are identified in the California Constitution and San Diego City Charter, in provisions dealing with special-tax approvals, as qualified electors or the electorate. Fearing that its registered, natural-person voters would reject a special tax to pay off $575 million in debt, the City opted for an end-run around state and local constitutional limitations and gave its own meaning to the term qualified electors by defining them as the Landowners. Id., 2:12 ( (a)). The City knows that its approach is legally suspect, for its inhouse attorneys labeled it dubious and its outside attorneys altogether 1 refused to opine on the legality. In light of the uncertainty, the City 1 See, e.g., Admin. R. 26:5451 (city attorney memorandum to inform the City Council that the proposed Convention Center Facilities District Procedural Ordinance represents an unusual procedure for the formation of a special tax district and no assurance can be given that the CCFD Ordinance or the Convention Center Facilities District (CCFD) formed pursuant thereto will be validated by a court of law ); 26:5452 (Orrick letter indicating that firm will not be providing an opinion to the City of San Diego on the legality of the City s proposed Convention Center Facilities District enabling ordinance ). Appellant s Opening Brief Page 2

10 initiated a validation lawsuit seeking to validate the CCFD, the specialtax and bonding schemes for the Convention Center, and everything relating thereto. Five years ago, the California Supreme Court made it very clear that it is the Judiciary s role to exercise its independent judgment when reviewing the imposition of taxes by local agencies. See Silicon Valley Taxpayers Ass n v. Santa Clara Open Space Auth., 44 Cal. 4th 431, 450 (2008) (reviewing case law regarding standard of review over local agency s generation of revenues under California Constitution; concluding that courts should exercise independent judgment) ( Silicon Valley ). Significantly, that decision came down even before California s voters approved Proposition 26 to make abundantly clear what local agencies refused to acknowledge after passage of Proposition 13 in 1978 and its progeny and their tight restrictions on the raising of new revenues: namely, that the voters will not tolerate the imposition of any new tax without their consent. While the disenfranchisement of the City s voters is the most important issue raised in this appeal, it is certainly not the only one. Even if the special tax had been properly approved, this Court would Appellant s Opening Brief Page 3

11 still have to invalidate the City s approval of the expansion project and the associated special-tax and financing schemes because the City failed to comply with the California Environmental Quality Act ( CEQA ) 2 before it took action on the project. Appellate review of a CEQA matter is de novo. See, e.g., Environmental Prot. Info. Ctr. v. Calif. Dep t of Forestry & Fire Prot., 44 Cal. 4th 459, 479 (2008). Appellant understands that there is a lot of political momentum behind the expansion project and even some good economic reasons for supporting it. Everyone--Appellant included--wants the City to succeed socially, economically, and environmentally. But no matter how great the expansion s economic benefit might be, the cost to our democratic institutions and our right of self-governance is even greater if the protections enshrined in our state and local constitutions are ignored. Whether to get the special tax s approval or eliminate the voter-approval requirement, the City s sole recourse was at the ballot box. 2 Appellant is not raising the issue of the indebtedness through lease revenue bonds incurred by the City violating the Charter in this appeal because the judgment was revised to validate only the CCFD bonds. Jt. App. ( JA ) 3:797, 4 & 798, 10. At the hearing, the City s attorney clarified that the lease revenue bonds were not the subject of the validation action. Rpt. Transcript, p. 38, ln. 4-p. 40, ln. 6. Since the lease revenue bonds (also called supplemental bonds or gap bonds) are not the subject of the validation lawsuit, Appellant is not raising the issue here; only the CCFD bonds are an issue. Appellant s Opening Brief Page 4

12 II. STATEMENT OF FACTS A. Background Through its city council, the City enacted the Procedural Ordinance in November 2011, thereby giving the City the legal authority and prescribing the procedures necessary to form the CCFD. See generally Admin. R. 2:6-19. Shortly thereafter the City passed a resolution of intention to form the CCFD and a related resolution declaring the need to incur bonded indebtedness to the tune of $575 million. Id., 3:20-34 & 4: Having received written protests from less than a majority of those the City determined to be eligible voters, it proceeded with the formation of the CCFD and scheduled an election to approve the special tax. Id., 5: The formation resolution explicitly stated that the CCFD s qualified electors --not the City s-- would be allowed to participate in the election. Id., 5:47 ( 13). A mail-ballot election was then conducted, with only those who met the definition of Landowners under the CCFD permitted to vote. Id., 8: After tabulating the votes through a weighted-vote scheme, the measure came back with more than two-thirds of the votes being yes. Id., 141:7523 & 8:78-81 (resolution declaring election results). Appellant s Opening Brief Page 5

13 The resolution directing the city clerk to record a Notice of Special Tax Lien directed her to include a statement indicating that no special tax shall be levied until the City has obtained a final validation judgment determining that the special tax was lawfully authorized and valid. Id., 9: B. Trial Court Proceedings The City filed a validation action on May 10, Admin. R. 9:82-87; JA I: The lawsuit was answered by Melvin Shapiro, the Coalition for Responsible Convention Center Planning (with some related individuals), and Appellant. JA I:36-41 (Shapiro answer); (Appellant s answer) & (Coalition s answer). The lawsuit was consolidated with two other lawsuits. JA I: However, the other 3 two were dismissed and Coalition withdrew its answer here. JA I: (dismissals and notice of settlement). The City, Shapiro, and Appellant briefed the case. JA I: (City s opening brief), II: (Shapiro s trial brief), II: (Appellant s trial brief) & III: (City s reply brief). Following a 3 It is believed that the Coalition was affiliated with unions and dropped its opposition to the expansion project and special tax after the City entered into a project labor agreement with the building-trades union. Appellant s Opening Brief Page 6

14 hearing, the trial court issued a ruling in the City s favor. JA III: Judgment was entered accordingly on April 18, JA III: C. Statement of Appealability Notice of entry of judgment was filed on April 19, 2013, and served by mail. JA III: The decision is now final. This appeal was timely filed on May 8, JA III: III. LEGAL LANDSCAPE: CALIFORNIANS ABHOR TAXES NOT APPROVED BY VOTERS Californians revolt against runaway taxation has its origins in Proposition 13, with later efforts to close loopholes thereto through passage of Proposition 62 and Proposition 218. Proposition 13 was adopted by the voters in Silicon Valley, supra, 44 Cal. 4th at 442. Article XIIIA of the California Constitution, which was added by Proposition 13, establishes a very high bar for the imposition of special taxes by local governments. Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district, except ad valorem taxes on real property or a transaction tax or sales tax on the sale of real property within such City, County or special district. Appellant s Opening Brief Page 7

15 4 CAL. CONST., art. XIIIA, 4 (emphasis added). As explained more recently by the Supreme Court: To prevent local governments from subverting its limitations, Proposition 13 also prohibited counties, cities, and special districts from enacting any special tax without a two-thirds vote of the electorate. Silicon Valley, supra, 44 Cal. 4th at 442 (emphasis added). Charter cities are not exempt from the constitutional provisions due to the principle known as home rule. Article XI, Section 5, of the California Constitution allows charter cities to make and enforce all ordinances and regulations with respect to municipal affairs, subject only to limitations provided in their charters. In all other respects, charter cities must abide by general laws. The relationship between Proposition 13 and the home-rule principle was discussed in Amador Valley Joint Union High School District v. County of Alameda (1978) 22 Cal. 3d 208, The principle of home rule involves, essentially, the ability of local government (technically, chartered cities, 4 Even if the CCFD is a special district, it is geographically coterminous with the City, and thus the qualified electors of the CCFD are the same as the City s qualified electors. See Rider v. County of San Diego, 1 Cal. 4th 1, 11 (1991) (holding that special district under Proposition 13 includes any local taxing agency created to raise funds.... ). Appellant s Opening Brief Page 8

16 counties, and cities and counties) to control and finance local affairs without undue interference by the Legislature. Id. at The High Court determined that Proposition 13 does not necessarily result in abrogation of home rule because local agencies retain full authority to impose special taxes if approved by a two-thirds vote of the qualified electors. Id. at 226. Local agencies retain autonomy regarding allocation and expenditures of the relevant tax revenue. Id. The constitutional requirement for voter approval of special taxes and the principle of home rule are thus not in conflict. Despite the inability of local governments to circumvent Proposition 13 by relying on home rule, Proposition 13 was not as effective as the voters had hoped in preventing local governments from enacting new and increased taxes. As a result, Proposition 62, the Voter Approval of Taxes Act, was passed in In furtherance of Proposition 62, the Legislature amended the Government Code to provide that [n]o local government or district may impose any special tax unless and until such special tax is submitted to the electorate of the local government, or district and approved by a two-thirds vote of the Appellant s Opening Brief Page 9

17 voters voting in an election on the issue. GOV T CODE (emphasis added). Again, however, loopholes were popping up and Proposition 62 was found not to apply to charter cities. So Californians returned to the polls in 1996 and enacted Proposition 218 to plug certain perceived loopholes in Proposition 13. See Silicon Valley Taxpayers Ass n v. Garner, 216 Cal. App. 4th 402, 405 (2013) (explaining purpose of Proposition 218 to plug certain perceived loopholes in Proposition 13 ). Proposition 218 added Articles XIIIC and XIIID to the California Constitution. Silicon Valley, supra, 44 Cal. 4th at 443. In particular, it provided that [n]o local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote. CAL. CONST., art. XIIIC, 2(d) (emphasis added). When local government again made progress circumventing Proposition 218 and its predecessors, the voters likewise went back to the ballot box. In 2010, the electorate adopted Proposition 26, Supermajority Vote to Pass New Taxes and Fees Act, and expanded what they consider a tax requiring voter approval. Appellant s Opening Brief Page 10

18 Locally, San Diegans care equally about the right to vote on taxes. Approved by the City s voters in 1983, City Charter Section 76.1 reads (with Appellant s emphasis): Notwithstanding any provision of this Charter to the contrary, a special tax, as authorized by Article XIIIA of the California Constitution may be levied by the Council only if the proposed levy has been approved by a twothirds vote of the qualified electors of the City voting on the proposition; or if the special tax is to be levied upon less than the entire City, then the tax may be levied by the Council only if the proposed levy has been approved by a two-thirds vote of the qualified electors voting on the proposition in the area of the City in which the tax is to be levied. Altogether, Californians and San Diegans have consistently and vigorously defended their right to vote on taxes. That right was violated here, and the City s voters are looking to this Court for redress. IV. ARGUMENT AND ANALYSIS This appeal raises two primary issues. The first is that the special tax was not approved by a two-thirds vote of the electorate or the qualified electorate and is therefore illegal. The second issue is that the expansion approvals violated CEQA. If the Court agrees with Appellant s Opening Brief Page 11

19 Appellant on the first issue, it need not reach the second issue. Appellant briefs both issues, however, in an abundance of caution. A. The Special Tax Was Not Approved by San Diego s Registered, Natural-Person Voters and Therefore Violates the California Constitution and the San Diego City Charter The special tax levied by the City is illegal because it was not approved by the City s registered, natural-person voters. The California Constitution and the San Diego City Charter both require special taxes to be approved by qualified electors or the electorate. Yes, votes were cast on the special tax. The problem is that they were cast by hoteliers, not humans, and the City s voters were disenfranchised in the process. 1. The California Constitution Required the City to Obtain Approval of the Special Tax by Registered, Natural-Person Voters The fundamental flaw in the City s special-tax scheme to repay the $575 million in bonds necessary to finance the expansion project was the failure to obtain the tax s approval by the City s registered, natural-person voters. They represent the qualified electors and the electorate whose approval is a constitutional requirement. The City did not have the luxury of defining qualified electors in the Procedural Appellant s Opening Brief Page 12

20 Ordinance and using that definition to supplant the constitution s registered-voter requirement. The City s failure to obtain the approval of registered voters renders the special tax unconstitutional. After demonstrating that the City, as a charter city, was required to abide by the California Constitution--all of it, in fact--appellant will explain why the approval of hotel businesses was not sufficient under the Constitution and show that the approval of registered, natural-person voters was essential to the tax s validity. a. The City Must Abide by the California Constitution It should go without saying that the City must abide by the California Constitution. In Howard Jarvis Taxpayers Association v. City of San Diego, 120 Cal. App. 4th 374, 384 (2004), this Court determined that a trial court did not err when it ruled that a city charter may not conflict with the California Constitution. The Court noted that it is well established that a charter represents the supreme law of a charter city, subject only to conflicting provisions in the federal and state Constitutions and to preemptive state law. Id. at 385. As a constitutional initiative, Proposition 218 is binding upon charter cities. Id. at 391 (italics in original). Consequently, this Court ultimately Appellant s Opening Brief Page 13

21 determined that a city ballot measure was invalid because it conflicted with Article XIIIC of the California Constitution. Fearing a similar ruling here, the City enacted a legal provision acknowledging that constitutional defects would render any special tax levied or bonds issued under the Procedural Ordinance invalid. See Admin. R. 2:17 (SAN DIEGO MUN. CODE ). b. Non-Registered, Non-Natural Persons Do Not Have the Right to Vote under the California Constitution Non-registered, non-natural persons were impermissibly allowed to vote on the special tax. The California Constitution requires a vote 5 of qualified electors under Article XIIIA, Section 4, and by the electorate under Article XIIIC, Section 2. In this case, the City decided to concoct its own definition of qualified electors for purposes of the 5 Appellant does not concede that Article XIIIA, Section 4, even applies here in the way the City argues because the CCFD is not a special district under that constitutional provision. The Procedural Ordinance does not give the CCFD the power to levy taxes, which puts it outside Section 4. See Rider, supra, 1 Cal. 4th at 11 (holding that special district under Proposition 13 includes any local taxing agency created to raise funds.... ). Thus, the qualified electors under Section 4 must be qualified electors of the City, not qualified electors of the CCFD, because the City, not the CCFD, is levying the special tax. Even if the City could levy the special tax within the CCFD s jurisdiction--which is coterminous with the City s geographic boundaries--the City would have a problem because the qualified electors did not vote on the special tax. Appellant s Opening Brief Page 14

22 weighted vote on the special tax. Under the Procedural Ordinance, qualified electors refers to the Landowners, who are defined as the owners and lessees of real property on which the City s hotels are 6 located. Admin. R. 2:8, 12 (SAN DIEGO MUN. CODE , (a)). The proposition that landowners--natural persons or not, registered voters or not--are qualified electors under Article XIIIA, Section 4, was rejected in Neilson v. City of California City, 133 Cal. App. 4th 1296 (2005). In Neilson, a non-resident landowner challenged a parcel tax (i.e. a property tax) because, he contended, property owners rather than registered voters were the qualified electors. Id. at The appellate court disagreed. In recognizing that the word electorate was not defined in the California Constitution, the Court of Appeal looked to the Elections Code in order to determine the meaning of electorate in the context of voting on special taxes: 6 Weighting of the vote was itself illegal. The special tax is imposed on the real property or the leasehold interest therein. See Admin. R. 2:15 (SAN DIEGO MUN. CODE ). Even though Article XIIID allows weighted votes by property owners in some cases, it nevertheless requires the qualified electors to approve special taxes pursuant to Article XIIIA, Section 4. See CAL. CONST., art. 13D, 3(a)(2). Article XIIID thus offers no refuge to the City. Appellant s Opening Brief Page 15

23 The Elections Code defines elector to mean any person who is a United States citizen 18 years of age or older and a resident of an election precinct at least 15 days prior to an election. (Elec. Code, 321.) The Elections Code does not contain a formal definition of the word qualified, but it does contain variations of that word that are useful in determining its meaning. For example, division 2 of the Elections Code is titled Voters and it contains chapters titled Voter Qualifications (ch. 1, beginning with 2000) and Registration (ch. 2, beginning with 2100). Pursuant to section 2000 of the Elections Code, [e]very person who qualifies under Section 2 of Article II of the California Constitution and who complies with this code governing the registration of electors may vote at any election held within the territory within which he or she resides and the election is held. (Italics added.) Article II, section 2 provides that a United States citizen 18 years of age and resident in this state may vote. Also, Elections Code section 359 provides that voter means any elector who is registered under this code. Id. at Based on this reasoning, the appellate court concluded that the phrase qualified electors of such district (art. XIII A, 4) means 7 the registered voters of City who voted in the election. Id. 7 The Court of Appeal bolstered this conclusion by pointing out that the challenger s construction of qualified electors was predicated on the voting procedures specified in Article XIIID, not Article XIIIA, both of which covered a related subject but did not both include the qualified electors language. Id. at For similar reasons, the Court should reject any Appellant s Opening Brief Page 16

24 Another instructive case is Foothill-De Anza Community College District v. Emerich, 158 Cal. App. 4th 11 (2007) ( Foothill-De Anza ), in which the general partner in a partnership that owned real property in a school district challenged a bond measure approved by the registered voters in the district; the general partner did not live in the district, and the measure would result in a special tax being indirectly imposed on him. In rejecting his claim that not allowing him to vote on the measure violated his constitutional right to equal protection, the Court of Appeal concluded that the general partner was not qualified to vote on the measure. Id. at 26. A person qualifies generally as a voter if he or she is a United States citizen at least 18 years of age residing in the state. * * * If such a person complies with the registration requirements of the Elections Code he or she may vote at any election held within the territory within which he or she resides and the election is held. * * * attempt by the City to morph the qualified electors definition under Article XIIIA into property owners --regardless of the legal authorities to which the City might resort. After all, Article XIIID itself expressly distinguishes between assessments and property-related fees, which are approved by owners, and special taxes, which are to be approved in accordance with Article XIIIA. Cf. CAL. CONST., art. 13D, 3(a)(3) & (4), 4, 6 (requiring owner votes for assessments and fees); CAL. CONST., art. 13D, 3(b) (requiring vote on special tax under Article XIIIA). The distinction cannot be ignored. That the voters saw fit to make it speaks volumes. Appellant s Opening Brief Page 17

25 Since [the general partner] does not reside in and is not a registered voter of the District, he is not otherwise qualified to vote there. Id. (bold italics added; regular italics in original; citations omitted). The voter intent behind Proposition 218 further compels the conclusion that only registered, non-natural persons should have been allowed to vote. The intent of the voters is the paramount consideration in construing a constitutional provision. Silicon Valley Taxpayers Ass n, supra, 216 Cal. App. 4th at 407. The rebuttal to the argument against Proposition 218 state: Proposition 218 expands your voting rights. It CONSTITUTIONALLY GUARANTEES your right to vote on taxes. Appellant s Req. Jud. Notice, Item 1. It further reads (with Appellant s emphasis): Under Proposition 218, only California registered voters, including renters, can vote in tax elections. Corporations and foreigners get no new rights. Id. The argument in support distinguishes who can act on property assessments versus taxes. Thus, while the rule may be different when it comes to who can vote on property assessments, the voter intent was that registered voters are the electorate for purposes of approving new taxes. Appellant s Opening Brief Page 18

26 Furthermore, to the extent Article XIIIA, Section 4, and Article XIIIC, Section 2, are inconsistent, the latter trumps. See CAL. CONST., art. XIIIC, 2 ( Notwithstanding any other provision in the Constitution.... ). Even if local governments could manipulate the term qualified electors in Article XIIIA, Section 4, the electorate closed that loophole by requiring a vote of the electorate, not the qualified electors, under Article XIIIC, Section 2, before taxes may be imposed, extended, or increased. Id. Altogether, the special tax is invalid under the California Constitution--either because of Article XIIIA or Article XIIIC--because only property owners and leaseholders were allowed to vote on the tax. c. Registered, Natural-Persons Have the Right to Vote on Taxes under the California Constitution The corollary to the special tax being invalid because only hoteliers were allowed to vote is that the tax is invalid because the City s registered, natural-persons were not given the opportunity to vote on it. Article XIIIC, Section 2, provides (with Appellant s emphasis): Local Government Tax Limitation. Notwithstanding any other provision of this Constitution: *** Appellant s Opening Brief Page 19

27 (d) No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a twothirds vote.*** Here, the electorate--the registered, natural-person voters--was denied the right to vote. In this regard, the tax s payee is irrelevant. Sales taxes are levied against and are the responsibility of retailers, not their customers. See Western Lithograph Co. v. State Bd. of Equal., 11 Cal. 2d 156, 162 (1938) (holding that sales tax is levied against retailer, not consumer). Yet the Supreme Court has repeatedly struck down sales taxes that were not approved by the requisite number of natural persons who are registered to vote in the jurisdiction proposing the taxes. See, e.g., Rider, supra, 1 Cal. 4th at 6 (1991) (holding that sales tax was invalid because, as a special tax, it did not receive requisite two-thirds voter approval of the County s voters); Santa Clara County Local Transp. Auth. v. Guardino, 11 Cal. 4th 220 (1995) (holding that sales tax was invalid because it did not receive requisite two-thirds voter approval). 8 8 This Court did the same thing recently against the City, albeit based on a parallel voter-approval requirement in Proposition 218. See Weisblat v. City of San Diego, 176 Cal. App. 4th 1022, 1027 (2009) (holding that rental-unit business tax was void because not approved by a majority vote of the municipal electors under Article XIIIC.) Appellant s Opening Brief Page 20

28 Even special taxes levied against real property must be approved not by the property owners but by the registered, natural-person voters. See, e.g., Altadena Library Dist. v. Bloodgood, 192 Cal. App. 3d 585 (1987) (concluding that special tax against real property to fund library services was invalid because of failure to receive requisite two-thirds voter approval). Nothing in the California Constitution allows the City to manipulate the definition of the electorate or qualified electors to deny the right to vote to San Diego s registered, natural-person voters. According to Article II, Section 2, of the California Constitution: A United States citizen 18 years of age and resident in this State may vote. Nothing in the case law allows a local government imposing a special tax to make up its own definition of qualified electors or electorate for purposes of satisfying the California Constitution. No case stands for that proposition because such a glaring loophole in the constitutional protections for taxpayers would be quickly abused by taxcrazed local governments who raise taxes by defining qualified electors in a way that ensures victory at the ballot box while circumventing the will of The People. Nothing in the history of Appellant s Opening Brief Page 21

29 Proposition 13, 62, 218, or 26 suggests that the voters intended such an absurd outcome. To the contrary, this Court has determined that the City is not allowed to modify terms in the California Constitution to suit its purposes. In Howard Jarvis Taxpayers Association, supra, 120 Cal. App. 4th 374, the Court was called upon to determine the constitutionality of a proposition requiring that certain amendments to the Charter be approved by a super-majority vote of the City s electorate. Article XI, Section 3(a), of the California Constitution provided that a charter may be adopted or amended by majority vote. Id. at 385. This Court determined that the super-majority vote requirement in the proposition could not be harmonized with the Constitution. Just as this Court did not allow the City to change the majority requirement to a two-thirds vote in Howard Jarvis Taxpayers Association, supra, because such a modification was unconstitutional, this Court should not allow the City to modify the term qualified electorate to apply to a group of hotel landowners and leaseholders that may not even otherwise be qualified to vote in San Diego or even in California generally Appellant s Opening Brief Page 22

30 because, for example, they are not natural persons or reside outside the jurisdiction. It is important to keep in mind that Proposition 218 is the Right to Vote on Taxes Act. See Weisblat, supra, 176 Cal. App. 4th Proposition 218 s statement of purpose reads in part: The people of the State of California hereby find and declare that Proposition 13 was intended to provide effective tax relief and to require voter approval of tax increases. However, local governments have subjected taxpayers to excessive tax, assessment, fee and charge increases that not only frustrate the purposes of voter approval for tax increases, but also threaten the economic security of all Californians and the California economy itself. Id. at (emphasis added). The voter pamphlets were littered with references to the right to vote on taxes. For example, the backers of Proposition 218 said: Proposition 218 simply extends the long standing constitutional protection against politicians imposing tax increases without voter approval. Citizens Ass n of Sunset Beach v. Orange County Local Agency Formation Comm n, 209 Cal. App. 4th 1182, 1196 (2012). Allowing a city to contort the definition of who is qualified to vote and manipulate the outcome through the weighting of Appellant s Opening Brief Page 23

31 votes by hotel businesses cannot be harmonized with the voters intent to reserve for themselves the right to vote on taxes and thereby limit local government s ability to raise taxes without a vote. The foregoing analysis demonstrates that the City violated the California Constitution when it levied the special tax based on the hoteliers vote, without ever asking the City s registered, natural-person voters to weigh in on the matter. Ignoring the meaning of qualified electors under Article XIIIA and electorate under Article XIIIC is not the only constitutional violation, but it is certainly the most obvious one. Having never been approved by the City s qualified electors or electorate, the special tax is constitutionally invalid. 9 9 Denying the City s registered, natural-person voters of their right to vote on the special tax also runs afoul of the Equal Protection Clause. [T]he right to vote is a fundamental right under the Equal Protection Clause. Sanchez v. City of Modesto, 145 Cal. App. 4th 660, 678 (2006). As such, a proscription on the voting right is subject to the most exacting scrutiny. Id. Strict scrutiny of legislative restrictions on the right to vote extends to elections on... general obligation bonds[,]... municipal revenue bonds[,]... [and] school district bonds. County of Riverside v. Whitlock, 22 Cal.App.3d 863, 872 (1972) (citations omitted). The City has violated the equal-protection rights of every registered, natural-person voter in the City. In City of Phoenix, Arizona v. Kolodziejski, 399 U.S. 204 (1970), a city resident who was otherwise qualified to vote in an election but owned no property challenged the constitutionality of an election approving the issuance of general obligation bonds in which only property owners were given the franchise. The city argued that since general obligation bonds are in effect a lien on the real property subject to taxation by the issuing municipality... the State is justified in recognizing the unique interests of real property owners Appellant s Opening Brief Page 24

32 2. The City Violated the San Diego City Charter For the same reasons, the special tax also fails to pass muster under the San Diego City Charter. That is because the City Charter defines qualified electors in accordance with the laws governing general state elections and requires the approval of the qualified electors for any special tax. The hoteliers who voted on the special tax 10 are not qualified electors under the City Charter. Electors : Consider first the City Charter section bearing the title Qualified by allowing only property taxpayers to participate in elections to approve the issuance of general obligation bonds. Id. at 208. In holding that nonpropertied taxpayers should not have been excluded from the franchise, the High Court stated: it is unquestioned that all residents of [the City], property owners and nonproperty owners alike, have a substantial interest in the public facilities and the services available in the city and will substantially be affected by the outcome of the bond election at issue in this case. Id. at 209 (emphasis added). See also Kramer v. Union Free School Dist., 395 U.S. 621 (1969) (holding that state may not restrict vote in school district elections to owners and lessees of real property and parents of school children because exclusion of otherwise qualified voters was not shown to be necessary to promote compelling state interest); Cipriano v. City of Houma, 395 U.S. 701 (1969) (holding that state may not restrict vote on approval of revenue bonds to finance local improvements only to property owners). 10 Because the CCFD is being created pursuant to the City s charter powers (see Admin. R. 39:5517; see also Other R. OR7:94), Appellant expects no dispute that the special tax at the heart of the CCFD s financing is also subject to the requirements and limitations contained in the San Diego City Charter. Appellant s Opening Brief Page 25

33 The qualifications of an elector at any election held in the City under the provisions of this Charter shall be the same as those prescribed by the general law of the State for the qualification of electors at General State Elections. No person shall be eligible to vote at such City election until he has conformed to the general State law governing the registration of voters. JA III:604 (Req. for Jud. Notice, Item 2 (SAN DIEGO CITY CHARTER 6)) (emphasis added). Next consider the prohibition on special taxes in the City Charter section entitled Limit on Tax Levy : The tax levy authorized by the Council to meet the Municipal expenses for each fiscal year shall not exceed the rate of $1.34 on each $ of assessed valuation of the real and personal property within the city. * * * No special tax shall be permitted except as expressly authorized by this Charter. The foregoing limitations shall not apply in the event of any great necessity or emergency, in which case they may be temporarily suspended, provided that.... * * * JA III: (Item 3 (SAN DIEGO CITY CHARTER 76)) (emphasis added). Lastly, consider the qualified electors voting requirement codified in the City Charter section entitled Special Taxes : Notwithstanding any provision of this Charter to the contrary, a special tax, as authorized by Appellant s Opening Brief Page 26

34 Article XIIIA of the California Constitution may be levied by the Council only if the proposed levy has been approved by a twothirds vote of the qualified electors of the City voting on the proposition; or if the special tax is to be levied upon less than the entire City, then the tax may be levied by the Council only if the proposed levy has been approved by a two-thirds vote of the qualified electors voting on the proposition in the area of the City in which the tax is to be levied. JA III:616 (Item 3 (SAN DIEGO CITY CHARTER 76.1)) (emphasis added). The special tax is not levied upon less than the entire City. Even if it were, the levy must be approved by a two-thirds vote of the qualified electors in the area of the City in which the tax is to be levied. The levy is City-wide; the CCFD s geographic limits and the City s are the same. Because the area of the City in which the tax is to be levied is the entire City, the special tax should have been subject to a vote of the qualified electors of the City, not the property owners and leaseholders of the CCFD. Furthermore, there is no definition in the Charter that is inconsistent with Charter Section The Charter does not read Notwithstanding any provision of this Charter or some later-adopted Appellant s Opening Brief Page 27

35 municipal code provision to the contrary..., as the City would like. Simply put, there is nothing in the Charter that gives the City the authority to alter a Charter-defined term through the adoption of a municipal code provision (viz., the Procedural Ordinance). There can be no dispute that the City s residents who are qualified to vote in California general elections were not given the opportunity to vote on the special tax. See JA II:540 (Briggs Decl., 2). So even if the City could put forward a credible argument that Article XIIIA allows for the hoteliers to be treated as qualified electors for purposes of voting on the tax--which, of course, is impossible under Neilson and Foothill- De Anza--and even if the City could somehow get around the vote of the electorate requirement in Article XIIIC--which is even less likely--the City cannot get around the Charter s explicit requirement that special taxes be approved by the registered, natural-person voters who vote during general elections and who the Charter identifies as the qualified 11 electors of the City. The City s hoteliers may not vote in general elections, and thus they were not entitled to vote on the special tax. The 11 Neilson s and Foothill-De Anza s analyses of qualified electors under the Elections Code equally prove that the City s voters--the flesh-and-blood U.S. citizens who have registered to vote--qualify to vote under state law. Appellant s Opening Brief Page 28

36 tax is therefore illegal under the City Charter because it relies on general state law to define qualified electors. B. The City Violated the California Environmental Quality Act by Failing to Prepare an Environmental Impact Report for the Convention Center Expansion Project and Not Taking the Role of Lead Agency If the Court is inclined to invalidate the special tax on state constitutional and/or local charter grounds, there is no need to reach the CEQA issues. If there is doubt, however, CEQA was also violated. The City was required to certify an environmental document before taking the actions it seeks to have validated here--that is to say, the City s various approvals related to the expansion project. The City also failed to act as the lead agency. Each of these defects is discussed in turn. 1. The California Environmental Quality Act Applies to the Expansion Project CEQA applies to the expansion project. Under CEQA, a project is [a]n activity undertaken by any public agency that may cause either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment. PUB. RES. CODE 21065(a). The term refers to the whole of the action. CAL. CODE OF REGS., tit. 14, 15378(a). The definition applies even when Appellant s Opening Brief Page 29

37 there are several discretionary approvals and does not mean each separate approval. Id., 15378(c). In deciding whether an activity is a project, the Supreme Court has emphasized that the statute is to be interpreted in such a manner as to afford the fullest possible protection to the environment within the reasonable scope of the statutory language. Friends of Mammoth v. Board of Supervisors, 8 Cal. 3d 247, 259 (1972). In the trial court, the City argued that it did not commit to a project but only approved a funding mechanism. JA III:701, ln. 16. CEQA Guidelines Section 15378(b)(4) exempts from the definition of project the creation of a government funding mechanism or other government fiscal activities, which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The problem here is that the financing is committed to a specific project which may result in a potentially significant impact. CEQA does not apply when there is no specific plan for the use of funds; review would not be meaningful because there would not be an identifiable impact to study. See Friends of Sierra R.R. v. Tuolumne Appellant s Opening Brief Page 30

38 Park & Recreation Dist., 147 Cal. App. 4th 643, 657 (2007) (finding CEQA review premature in absence of plan involving identifiable impact; no specific plans were on the table ). In contrast, CEQA applies when there is a specific plan for the funds. See County of Amador v. City of Plymouth, 149 Cal. App. 4th 1089, & 1112 (2007) (holding that city s agreement to provide municipal services to tribe constituted commitment to specific project under CEQA and was not mere funding mechanism exempt from review); accord Kaufman & Broad-South Bay, Inc. v. Morgan Hill Unified School Dist., 9 Cal. App. 4th 464, 474 (1992) (concluding that CEQA review not required for community facilities district created for purpose of generating funds for unspecified use at unknown future date, but noting that [w]hen it makes those decisions, which depend in large part on the pattern of development within the District, it will have to examine the environmental impacts ). Here, there was a specific plan. There is also the notice to hoteliers back in November 2011, which explained that the funds from the special tax will go toward the expansion of Appellant s Opening Brief Page 31

39 the San Diego Convention Center located at 111 West Harbor Drive, San Diego CA The proposed expansion project, anticipated to begin construction in mid-2013, will expand the gross floor area of the Convention Center by approximately 961,000 square feet from 1,764,000 square feet to approximately 2,725,000 square feet and according to an analyst [] is estimated to increase hotel-room nights by 657,000 each year and produce approximately $121 million in new hotel-room sales revenue annually. Id., 107:7196 (emphasis added). The funding was limited to a project and location. See, e.g., Admin. R. 31:5473 (memorandum explaining that city attorney s office added word contiguous before word expansion in definition of convention center facility to make it explicit that funds may only be used to finance the contiguous expansion of the existing San Diego Convention Center ). Because this is not a mere funding mechanism, but a funding mechanism that involves a commitment to a specific project, CEQA clearly applies. 2. The City Firmly Committed Itself to the Expansion Project Before the Environmental Impact Report Was Certified Appellant s Opening Brief Page 32