HomeMy WebLinkAbout12/1/2004 - STAFF REPORTS (22) FA
ALESHIRE &
JWYNDER, LLP
ATTORNEYS AT LAW
wWW.aWaCLOLneys.coni
MEMORANDUM
TO: HONORABLE CITY COUNCIL OF THE CITY OF PALM SPRINGS
FROM: DAVE ALESFIIkE
ANITA LUCK
DATE: NOVEMBER 24,2004
RE: GENERAL OBLIGATION BOND ISSUE TO ACQUIRE OPEN SPACE
A. INTRODUCTION
The following memorandum will discuss the requirements precedent to inserting a
general obligation bond measure on the ballot for the March 8, 2005 election to finance the
purchase of open space within the City of Palm Springs (the "City").
B. CONCLUSIONS
1. The City may pursuant to the Constitution, the laws of the State of
California and the City Charter insert a General Obligation Bond measure on the ballot to
purchase open space because the purchase of the "open space" is a"public use."
2. Such Bond measure would require the following procedural actions prior
to inclusion on the Ballot: (a) Adoption of a Resolution of Necessity on December 1, 2004; (b)
First Reading of an Ordinance on December 1, 2004; (c) Adoption of the Ordinance on
December 8, 2004.
3. The measure would require the approval of two thirds of the electors of
the City voting at a duly called election to pass muster.
4. The issuance of bonds would subject the property owners within the City
to increased property taxes.
5. A tax rate statement sent to voters with any election material will
demonstrate the effect of the measure on taxes.
C. BACKGROUND
An initiative measure (the "Mountain Initiative") to establish a Mountain Region
designation over 55.5 square miles of land in the City of Palm Springs (the "City") and limit
development to one residential unit per 40 acres of land within such Region was circulated and
s \\
01003/0001/35403.02 F
Honorable City Council of the City of Palm Springs
November 24, 2004
Page 2
received sufficient signatures to be placed on the ballot. On September 13, 2004 the City Clerk
declared the petition to be sufficient. The City Council on November 10, 2004 deterniined to
place the measure on the March 8, 2005 ballot along with certain other measures.
The City Council has received written claims from various property owners alleging a
substantial diminution of their property values if the Mountain Initiative is enacted. They claim
that their property will be deprived of all value, and that there is not sufficient public benefit to
the enactment of such regulations, and that the Mountain Initiative constitutes a regulatory taking
of property without just compensation. If the Mountain Initiative is enacted by the voters and
certain property owners within the region determine to sell their property or to file claims of
regulatory takings in a court of competent jurisdiction, there is a possibility that the property
owners will prevail and that the City will be required to compensate the property owners under
State law. In case of such eventuality, the City must determine how to pay for the property.
The City Council may issue general obligation bonds the purpose of raising monies to
acquire property for open space, wildlife, habitat and conservation purposes within the Mountain
Region and to compensate property owners for legally valid claims for just compensation should
the Mountain Initiative be approved.
D. LEGAL REQUIREMENTS
1. The City may pursuant to the Constitution and the Government Code
insert a General Obligation Bond measure on the Ballot to purchase open space because
the purchase of open space is a "public use."
California Constitution Section XIIIA, Government Code Sections 43600 et seq. and
Sections 906 and 908 the Charter of the City permit the issuance of general obligations bonds to
finance the acquisition of real property with a two-thirds vote of the qualified electors of the
City. Such bonds would be secured by a levy of ad-valorem taxes on property owners within the
City. General obligation bonds are backed by the full, faith and credit of the City and subject to
the requirement that the City not incur general obligation debt which exceeds 15% of the
assessed value of all real and personal property within the City. The City will be well within its
debt limits if it determines to issue general obligation bonds in an amount of$100,000,000. The
assessed value of all real and personal property within the City for the fiscal year 2004-2005 was
approximately$6.2 billion. The city currently has no general obligation debt outstanding.
Government Code Sections 43600 et. seq. (the "1901 Act" or "Act") provides the
relevant Government Code and procedural authorization with respect to general obligation
bonds. Section 43602 of the Government Code states that a"city may incur indebtedness for any
municipal improvement requiring an expenditure greater than the amount allowed for it by the
aranxal tax levy." Section 43601 defines "municipal improvement" to include "the acquisition
of real property for a civic center site or for any public use or uses, whether or not the
improvement of said real property is part of the purposes for which the bonds are to be issued
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01003/0001/35403.02
Honorable City Council of the City of Palm Springs
November 24, 2004
Page 3
and whether or not funds for the improvement of said real property are presently available from
other sources. "
The acquisition of land by the City for open space, wild life habitat and conservation
purposes would most likely be considered a "public use." [See. Government Code Section
65562 (Relating to open space plans and stating that the legislature intended that "cities and
counties recognize that open space land is a limited and valuable resource which must be
conserved whenever possible"); Government Code Section 66561 (Stating that "discouraging
premature and unnecessary conversion of open-space land to urban uses is a matter of public
interest and will be of benefit to urban dwellers because it will discourage noncontiguous
development patterns which unnecessarily increase the costs of community services to
community residents."); Government Code Section 51073 relating to open space easements
(Stating that the "[IJegislature further declares that the acquisition of open-space easements is
in the public interest and constitutes a public purpose for which public funds may be expended or
advanced")].
2. Such Bond measure would require that the City adopt a resolution
and ordinance prior to inclusion of the measure on the ballot.
The following initial actions must be taken to insert a general obligation bond measure
on the ballot:
(a) Adopt a resolution of the Council determining that the public
interest or necessity demands the acquisition, construction or completion of any
municipal improvement (again, with "improvement" including acquisition of open
space). The resolution requires an affirmative vote of 2/3 of the entire Council to pass.
This Resolution must be adopted on December 1, 2004 in order to permit first and second
reading of the ordinance discussed below.
(b) Following adoption of the resolution, the legislative body may (at
any subsequent meeting) by a 2/3 vote pass an ordinance ordering the submission of the
proposition of incurring a bonded debt for the purpose set forth in said resolution to the
qualified voters of the city at an election held for that purpose. Section 43610. In order to
insert the proposition on the ballot, the Ordinance must be adopted by December 8, 2004.
Since the ordinance concerns an election, the ordinance is effective immediately
following the second reading (See Section 315 of City Charter and Government§36937).
The Ordinance may be introduced at the same meeting the resolution is adopted and then
adopted at a subsequent meeting. Crescent City v. Griffin (1939), 31 Cal. App. 2d 133.
Thus, the Ordinance may be introduced on December 1, 2004 and adopted on December
8, 2004 following the second reading. Govermient Code Section 36934 requires that
Ordinances be passed at a regular or adjourned regular meeting. The City charter permits
a regular, adjourned regular or special meeting.
H
01003/0001/35403 02
Honorable City Council of the City of Palm Springs
November 24, 2004
Page 4
3. The measure would require the approval of two thirds of the electors
of the City voting at a duly called election to pass muster.
As delineated above, any general obligation bond measure would require the affirmative
vote of two-thirds of the electors voting in the election on the measure to become effective and
allow the bonds to be issued. Government Code Section 43614.
4. The Issuance of Bonds would subject the property owners within the
City to increased property taxes.
Pursuant to the law discussed above, the City may, following the authorization by the
electors issue bonded indebtedness up to the amount authorized. Such indebtedness will increase
the ad valorem taxes on the property within the City. The following table will provide a
breakdown of the costs to property owners based on different value bond issues':
Proposed Par Tax per$100 of Assessed Proposed Tax on Proposed Tax on
Amount Value (AV) of Property House of$150,000 House of$300,000
Of Bond Issue Assessed Value Assessed Value
$25 million 2.6 cents per$100 AV $39 per year $78 per year
$50 million 5 cents per$100 AV $75 per year $150 per year
$75 million 7.5 cents per$100 AV $112.50 per year $225 per year
$100 million 10 cents per$100 AV $150 per year $300 per year
$150 million 15 units per$100 AV $225 per year $450 per year
The City's Director of Economic Development has prepared a memo estimating the value
of property within the Mountain Region. This memo is attached as Exhibit "A." The Fiscal
Impact Study prepared for the Mountain Region Initiative estimated that the 3900 units
developable within the 55.5 square mile area would be reduced to less than 100 units. Of the
3900 units currently developable, the units are distributed as follows:
I Suzanne Harrell, the City's financial advisor provided the information for the table based on last years assessed
valuation within the City, using the 2004-5 AV and not taking into account inflationary growth which would make
tax rates decline over time.
Ej\ G^i
01003/0001/35403.02
Honorable City Council of the City of Palm Springs
November 24, 2004
Page 5
TABLE OF VALUE
Area No. of Units Estimated Values2
Actual Mountain Areas
Palm Hills/ShadowRock
Non Mountain Areas
Residential
Commercial/High Value
The above Table of Value allows an estimate of what percentage of different categories
of property could be acquired based upon the proposed amount of the bond issue. It should be
pointed out that it might not be necessary to acquire all land in the Mountain Region. Some of
the area might be acquired through a developer mitigation program or through gifts. The City
has already acquired some 3000 acres this way. Moreover, not all property owners will be able
to establish a taking.
5. A tax rate statement sent to voters with any election material will
demonstrate the effect of the measure on taxes.
Section 9400 et seq. of the Elections Code of the State of California provide specific
election code requirements, in addition to the regular requirement of analysis and arguments
relating to bond issues.
Under Section 9401 of the Elections code, the City is required to mail a statement to
voters with the sample ballot for the bond election. Such statement is required to be filed with
the election official not later than 88 days prior to election and shall include certain financial
information relevant to voters.
2 See Exhibit prepared by Director of Economic Development
In
VI
01003/0001/35403.02 V
�,�pA4M,p�y�r City of Palm Springs
Community & Economic Development
Department
C,
MEMORANDUM
Date: November 24, 2004
To: David Aleshire, City Attorney
From: John Raymond, Director of Community&Economic Deve
Sul ject: Estimated range of values of private land affected by the taro
ti
Preservation Initiative
You have asked that I work on estimating a value for the private land affected by the proposed
Mountain Preservation Initiative. Over the past several weeks I have had discussions with
appraisers and developers over the range of values to be found in the hillside area, including land
that is dedicated open space mountain land, entitled but undeveloped projects, and land that
adjoins other developed property and a major thoroughfare such as Palm Canyon Drive.
I have borrowed a map of the affected area from the Department of Strategic Planning, and
broken the type of land into four categories with different price ranges. These include:
1. True mountain open space land, largely undevelopable because of
topography and lack of infrastructure;
2. Major entitled but undeveloped projects such as Palm Hills and
Shadowrock;
3. Other developable land in the alluvial fan, including that in the Rirmrocks
area, Southridge, and the Chino Cone, that could be developed; and
4. Other land with particular proximity to adjacent uses and/or a major
thoroughfare.
There is an accepted range for the value of open space land. Much of the more remote land in
the San Jacinto Mountains has been purchased by or on behalf of the City of Palm Springs for
open space at a cost of $600/acre. However, recently the Coachella Valley Mountain
Conservancy has purchased several thousand acres in the Coachella Valley for about
$4,000/acre. It sounds, from talking to Gene House, that at least some of that land was more
threatened (such as Joshua Hills) but that figure provides the upper boundary for hillside land. I
do believe that most of this could be purchased for an amount closer to the lower number.
Valuing the two entitled projects is a bit more difficult: Shadowrock has an approved 405 units
and Palm Hills has about 1,150 runts (about 700 homes). Both are located partly on Indian land
and partly on fee land. The market for the finished lots (though not building-ready pads) in the
area ranges from $500,000 to $1,000,000 each for a one acre site. However, part of that cost is
the hard cost of creating the necessary infrastructure (grading, roads, water, sewer/septic, dry
utilities) and part of that is fees. El Portal, for example (which is not in the hillside area) was
marketing "paper lots" for $280,000 each, before any of the grading had been done or streets put
in. According to several developers we talked to, the target price for a developer acquiring land
for such a project, though, would be under $1.00/s.f. for raw land, with a premium paid for the
entitlement. I have used a value of$0.50/sf($21,780/acre) as the low end of the property value,
with $1.50/sf ($65,340/acre) as the high end. That obviously is much less than $500,000/lot,
which would be over $202,000,000 for Shadowrock alone (including the Indian land portion),
but reflective of the state of the project. I also applied those values to the developable land on
the alluvial fan, such as in Chino Cone. For the purposes of calculating the acquisition of the
two entitled projects, I have also included the hidian land as well as the fee land, since the
purchase would be of the entire projects.
The final category of land is that which has more marketability and potentially more profitable
because (1) a portion of the land could potentially be used for commercial or, in one case multi-
family, purposes, (2) the land itself is close to Palm Canyon Drive, (3) it is lower in elevation
and slope and would need less remediation. This includes some of the land on the south side of
the Chino Cone and the Rimrocks area.
Total Values Size (acres) Low Value High Value
Mountain Areas 6,757 $4,054,200 $27,028,000
Palm Hills/Shadowrock 1,237 $26,941,860 $80,825,580
Projects
Other Alluvial Fan Areas 470 $10,236,600 $30,709,800
Higher Value Areas 316.7 $27,590,904 $55,181,808
Grand Total 8,780.7 $68,823,564 $193,745,188
Estimated Value of Private Land Covered by Hillside Preservation Initiative
Palm Hills/Snow Creek Mountain Area
Parcel Size (acres) Low Value(1) High Value (2)
1 160 $96,000 $640,000
2 40 $24,000 $160,000
3 10 $6,000 $40,000
4 10 $6,000 $40,000
5 80 $48,000 $320,000
6 640 $384,000 $2,560,000
7 160 $96,000 $640,000
8 40 $24,000 $160,000
9 40 $24,000 $160,000
10 640 $384,000 $2,660,000
11 40 $24,000 $160,000
12 40 $24,000 $160,000
13 640 $384,000 $2,560,000
14 320 $192,000 $1,280,000
15 640 $384,000 $2,560,000
16 640 $384,000 $2,560,000
17 160 $96,000 $640,000
18 320 $192,000 $1,280,000
35 640 $384,000 $2,560,000
36 320 $192,000 $1,280,000
37 180 $108,000 $720,000
38 80 $48,000 $320,000
39 200 $120,000 $800,000
40 40 $24,000 $160,000
41 900 $540,000 $3,600,000
Total 6,980 $4,188,000 $27,920,000
Palm Hills/Shadowrock Project Areas
Parcel Size (acres) Low Value(3) High Value (4)
Mother 1200 $26,136,000 $78,408,000
34/other 331 $7,209,180 $21,627,540
Total 1,531 $33,345,180 $100,035,540
Other Alluvial Fan Areas
Parcel Size (acres) Low Value (3) High Value (4)
26 50 $1,089,000 $3,267,000
31 100 $2,178,000 $6,534,000
32 160 $3,484,800 $10,454,400
33 160 $3,484,800 $10,454,400
20 150 $3,267,000 $9,801,000
21 40 $871,200 $2,613,600
22 50 $1,089,000 $3,267,000
23 55 $1,197,900 $3,593,700
24 70 $1,524,600 $4,573,800
25 35 $762,300 $2,286,900
Total 870 $18,948,600 $56,845,800
Higher Value Areas
Parcel Size (acres) Low Value (5) High Value (6)
27 40 $3,484,800 $6,969,600
28 45 $3,920,400 $7,840,800
29 36 $3,136,320 $6,272,640
30 14 $1,219,680 $2,439,360
Total 135 $11,761,200 $23,522,400
Total Values Size (acres) Low Value High Value
Mountain Areas 6,980 $4,188,000 $27,920,000
Palm Hills/Shadowrock Projects 1,531 $33,345,180 $100,035,540
Other Alluvial Fan Areas 870 $18,948,600 $56,845,800
Higher Value Areas 135 $11,761,200 $23,522,400
Grand Total 9,516 $68,242,980 $208,323,740
Land Value Assumptions
1 $600/acre Often paid for true mountain land
2 $4,000/acre Paid by CV Conservancy for habitat
3 $0.50/sf Prices paid for raw developable land
4 $1.50/sf high part of the range for raw land
5 $2.00/sf Paid for commercial and residential
6 $4.00/sf land near North Palm Canyon
I b
U
*?A«Sp City of Palm Springs
Community & Economic Development
k Department
��tr�atlp
° t+ a � MEMORANDUM
Date: November 24, 2004
To: David Aleshire, City Attorney
From: John Raymond, Director of Community&Economic Development
Subject. Estimated range of values of private land affected by the Mountain
Preservation Initiative
You have asked that I work on estimating a value for the private land affected by the proposed
Mountain Preservation Initiative. Over the past several weeks I have had discussions with appraisers
and developers over the range of values to be found in the hillside area, including land that is
dedicated open space mountain land, entitled but undeveloped projects, and land that adjoins other
developed property and a major thoroughfare such as Palm Canyon Drive.
I have borrowed a map of the affected area from the Department of Strategic Planning, and broken
the type of land into four categories with different price ranges. These include:
1. True mountain open space land,largely undevelopable because of topography
and lack of infrastructure;
2. Major entitled but mndeveloped projects such as Palm Hills and Shadowrock;
3. Other developable land in the alluvial fan, including that in the Rimrocks
area, Southridge, and the Chino Cone, that could be developed; and
4. Other land with particular proximity to adjacent uses and/or a major
thoroughfare.
There is an accepted range for the value of open space land. Much of the more remote land in the
San Jacinto Mountains has been purchased by or on behalf of the City of Palm Springs for open
space at a cost of$600/acre. However, recently the Coachella Valley Mountain Conservancy has
purchased several thousand acres in the Coachella Valley for about $4,000/acre. It sounds, from
talking to Gene House,that at least some of that land was more threatened(such as Joshua Hills)but
that figure provides the upper boundary for hillside land. I do believe that most of this could be
purchased for an amount closer to the lower number.
Valuing the two entitled projects is a bit more difficult: Shadowrock has an approved 405 units and
Patin Hills has about 1,150 units (about 700 homes). Both are located partly on Indian land and
partly on fee land. The market for the finished lots (though not building-ready pads) in the area (,
r
ranges from$500,000 to $1,000,000 each for a one acre site. However,part of that cost is the hard
cost of creating the necessary infrastructure (grading, roads, water, sewer/septic, dry utilities) and
part of that is fees. El Portal, for example (which is not in the hillside area)was marketing"paper
lots" for $280,000 each, before any of the grading had been done or streets put in. According to
several developers we talked to, the target price for a developer acquiring land for such a project,
though,would be under$1.00/s.f. for raw land,with a premium paid for the entitlement. I have used
a value of$0.50/sf($21,780/acre)as the low end of the property value,with$1.50/sf($65,340/acre)
as the high end. That obviously is much less than$500,000/lot,which would be over$202,000,000
for Shadowrock alone(including the Indian land portion),but reflective of the state of the project. I
also applied those values to the developable land on the alluvial fan,such as in Chino Cone. For the
purposes of calculating the acquisition of the two entitled projects, I have also included the Indian
land as well as the fee land, since the purchase would be of the entire projects.
The final category of land is that which has more marketability and potentially more profitable
because (1) a portion of the land could potentially be used for connnercial or, in one case multi-
family, purposes, (2) the land itself is close to Palen Canyon Drive, (3) it is lower in elevation and
slope and would need less remediation. This includes some of the land on the south side of the
Chino Cone and the Rimrocks area.
Total Values Size (acres) Low Value High Value
Mountain Areas 6,980 $4,188,000 $27,920,000
Palm Hills/Shadowrock 1,531 $33,345,180 $100,035,540
Projects
Other Alluvial Fan Areas 870 $18,948,600 $56,845,800
Higher Value Areas 135 $11,761,200 $23,522,400
Grand Total 9,516 $68,242,980 $208,323,740
1
12/01/2604 13:13 3103148050 CHATTEN—BROWN&ASSOCI PAGE 02/06
CHATTEN-BRowN & ASSOC,LATES
TELEPPIONEt(310)3 L4.8040 3250 OCEAN PARK BOULEVARD E-mail:
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SANTA MONICA,CALA.FOANI'A 90405
oww.cbamrthlaw.com
December 1, 2004
By Facsimile
Original to follow in U.S. Mail
Honorable Mayor and City Council
City of Palm Springs
3200 E. Tahquitz Carryon Way
Palm Springs, CA 92262
Re: Opposition to Counoil-Initiated Ballot Measures fox March 2005 Election
Honorable Mayor and Councilmembers:
We have reviewed the City Attorney's November 24, 2004 Memorandum.
regarding the Council-Initiated ballot measures and strongly oppose both measures. This
City Council has had many opportunities to protect the Palm Springs mountain's, and has
not chosen to do so. Now that the ,Mountain Preservation Initiative has qualified, the City
proposes a bond measure that is fundamentally misleading and is based upon the false
premise that the hnitiative may require the payment of monetary damages for a regulatory
taking. 1~urthennore, the ,Bond.Measure is not exempt from CEQA review nor is the so-
called Mountain Protection Act.
Although the Protection Act is described in only the most vague terms, it is
apparent that it too is subject to CEQA review. Moreover, it appears that it does very
little to protect our local mountains. We will provide our additional comments on that
measure after we have had the opportunity to review it.
The Bond Measure Is Based Upon The False Prey rise
That The City Could Be Liable For Monetary Damages
The primary and express purpose of the bond measure is "to compensate property
owners for legally valid claims for just compensation should [the] Initiative be approved."
(Resolution, page 1). The proposed resolution recites that"the City Council has received
written claims from various property owners alleging a substantial diminution of their
property values if the Initiative is enacted." (Proposed Resolution, page I-) Although the
resolution claims the purpose is also to "acquire property for open space" and other
12/01/2004 13:13 3103148050 CHATTEN-BROWNOASSOCI PAGE 03106
Honorable Mayor and City Council
December 1, 2004
Page 2 of 5
purposes, there are not recitals that explain this purpose. (Ibid.) Similarly, the proposed
ordinance states portions of bond proceeds would be used "to compensate property
owners where legally necessary for a partial or total taking of their properly in the event a
court . . . determines that the Initiative, though constitutional on its face, constitutes an
unconstitutional taking of parcels of property as applied." (Ordinance, p. 2.) Payments
for partial or total takings do not necessarily allow the City to acquire the properties
involved.
The statements in the Resolution and Memorandum that there may be takings for
which the City may be liable for monetary damages as a result of the Mountain
Preservation Initiative are contrary to well-established law.
First, the Initiative will not result in the taking of property. It is well-established
that a City has the right to down-zone property for purposes of preserving open space.
(See, e.g.,Agins v. 00) of Tiburon (1980) 447 U.S. 255; see also Shea Flames Limited
Partnership v. County of Ala eda (2003) 110 Cal. App, 4th 1246.) Accordingly, cities
and counties throughout this state have adopted open space districts imposing density
limits that far exceed the one house per 40 acres which the initiative proposes.
Regulation of the use of property does not cause a taking if it: 1) substantially
advances legitimate state interests, and 2) does not deny the owner all economically
viable use of his land. With regard to the first element, as Agins observes, California has
determined that regulations that provide for open space will reduce ill effects of urban
sprawl, such as air, noise and water pollution, traffic congestion, destruction of scenic
beauty. (Agins,supra, 447 U.S. at p. 261.) Such a governmental purpose has long been
recognized as legitimate. There can be no doubt that the Initiative satisfies this element
given that it specifically articulates and advances fnese purposes.
With respect to the second element, the claimant must show a loss of all
economically beneficial or productive use of the property so as to leave the property
economically idle. (See Lucas v. South Carolina Coastal Council (1992) 505 U.S. 1003,
1019_) Generally, if permissible uses exist, a development restriction does not deny a
property holder the economically viable use of his property. (See Agins, supra, 447 U.S.
at p. 262; Model v. Virginia Surface Mining&Real. Assn. (1981) 452 U.S. 264, 296.)
Even a significant diminution in value is insufficient to establish a regulatory taping.
(Euclid v.Ambler fealty Co. (1926) 272 U.S. 365 [75 percent reduction in value because
of zoning law insufficient to establish a taking]; Iladacheck v. Sebastian, (1915) 239 U.S.
394 [nearly 90 percent reduction in value because of use restriction insufficient to
establish a taking].) Given that the Initiative allows for property to be used for residential
purposes regardless of the size of the parcel, there are certainly productive and viable uses
of the land.
12/01/2004 13:13 3103148050 CHATTEN-BROWN&ASSOCI PAGE 0410G
Honorable Mayor and City Council
December 1, 2004
Page 3 of 5
It is quite surprising that the City Attorney's legal analysis of the bond does not
even discuss the City's right to establish an open space district and down-zone areas
without resulting in a taking. Instead, we find only the unsupported assertion that"some
valid claims may exist". (November 24, 2004 Memorandum, page 6.)
Second, and more importantly, even if a court did determine that a takings
occurred, there is no possibility that the City would be required to pay a penny in
damages even if a claimant were successful in claiming that a takings. If a court found
the application of the Initiative would create a taking, the City could simply not apply the
Initiative to that property.
The California Supreme Court has ruled in Agins v. City of Tiburon, (1979) 24
Cal.3d 266, 272-273, that a claimant Wray not recover monetary damages based upon such
regulatory takings, but rather must bring an action for declaratory relief or nnandamus. As
the Court explained:
"We also accept the reasonable latitude which must be afforded public
officials in the planning for and implementation of legitimate land use
goals. These twin purposes will be served by preserving for the landowner,
in appropriate cases, declaratory relief or mandamus remedies. However,
the use of inverse condemnation with its imposition of money damages
upon the public entity would, in our view, unwisely inhibit the proper and
necessaly exercise of a valid police power." (Id. at 278.)
In fact, the Agins Court specifically stated that monetary compensation is not
available, in part, because of the concern that it would impair the public's ability to
implement land use controls by means of direct initiatives. (Id. at 276.) Subsequent cases
have consistently followed the Supreme Court's holding in Agins.' (See, e.g., Hensler v.
City of Glendale (1994) 8 Cal. 4" 1, 14.)
The City has an obligation to the voters not to make any false or misleading
statements in connection with ballot measures. 'Therefore, no measure should be
approved for the ballot that is founded upon.the false premise that valid claims might
exist that require payment. It is hard to understand how such a bond measure could be
Nowhere in the proposed bond measure does the City Attorney even attempt to
argue that there could be a legitimate claim for a complete denial of the use of the
property. Indeed, any such contention would be absurd given that the Initiative permits a
single residence regardless of the size of the parcel. Thus, there is no basis for arguing
that a claimant could seek damages as a temporary regulatory taking under First English
Evangelical Lutheran Church of Glendale v. Los Angeles County(1987) 482 U.S. 304.
12/01/2004 13: 13 3103148350 CHATTEN-BROWN&ASSOCI PAGE 05/06
Honorable Mayor and City Council
December 1, 2004
Page 4 of 5
placed upon the ballot, given that the City must inform the public that it is not only
unnecessary; but fundamentally misleading, given that under Agins there is no
possibility that the City will be liable for monetary damages.
However, if you do put the measures on the ballot, our clients will insist that
you make no argument that the bond measure is needed because of the Mountain
Preservation Initiative. We believe that Nye could succeed in eliminating any such
statement as false and misleading, and prohibited by Elections Code Section 9204.
CEQA Review Must Be Conducted Prior To Approving the
Placement of the Bond Measure or the Protection Act on the Ballot
California Environmental Quality Act ("CEQA") review is required before the
City Council may approve placement of a measure on the ballot. (Friends of Sierra
Madre v. City of Sierra Madre (2001) 25 Cal.4"' 165.) The City Attorney's memorandum
expresses a belief that"an acquisition fiend for sensitive mountain areas is categorically
exempt from CEQA under Section 15313 of the CEQA Guidelines" (Memorandum, p. 6)
and.implies that the Mountain Protection Act is exempt pursuant to section 15307 or
15308 of the CEQA Guidelines, (Memorandum,p. 7.) These assertions of exemptions
from CEQA are incorrect. Rather, the correct conclusion is the City Attorney's earlier
recognition that"a ballot measurc put before the voters by the City Council is not exempt
from CEQA. (Friends of Sierra Madre v. City of Sierra Madre (2-001) 25 CaIA h 165.)"
(Memorandum,p. 4.)
Section 15313 of the CEQA Guidelines was intended for acquisitions of land for
fish and wildlife conservation, not for simply compensating landowners when the value
of their property is diminished. There is no basis for concluding that all of the bond
money will be used for wildlife conservation or open space preservation. One of the
stated purposes of the bond measure is to pay money damages to litigants who have
claimed that "there is not sufficient public benefit to justify the enactment" of the
Initiative's regulations, (Bond Resolution, page 1.) WWle the use of funds for the other
stated purpose (wildlife conservation and open space acquisition) may properly be
exempt, the use of funds for compensation to property owners clearly is not. The bond,
measure clearly allows for property owners to be compensated on a regulatory takings
claim, and there is no requirement that the City acquire the land under such
circumstances. In fact, the property owner may still retain ownership and under the
Mountain Preservation hnitiative use the property for residential purposes. In no way
would such expenditures be considered the acquisition of property for the purposes of
conservation. Therefore the placement of the bond measure on the ballot is not exempt
from CEQA pursuant to CEQA Guidelines Section 15313,
It is impossible to evaluate the potential exemption of the San Jacinto-Santa Rosa
12/01/2064 13: 13 KeK48HO CHATTEN-BROWN&ASSOCI PAGE 0G/06
Honorable Mayor and City Council
Dcoenrber 1, 2004
Page 5 of 5
Mountain Protection Act since it is not written yet. However, the Memorandum's
references to CEQA exemptions for these treasures are similar to the questionable claims
of exemptions that courts have struck down. (Mountain Lion Foundation 'v. Fish & Game
Coin. (1997) 16 CalAth 105,125 ["Because a delisting removes rather than secures these
protections [for protected species], the categorical exemption for actions assuring the
maintenance, preservation or enhancement of a natural resource set forth in sections
15307 and 15309 of the Guidelines does not apply"]; Wildlife Alive v. Chickening(1976)
18 Cal.3d. 190, 204-206 [categorical exemption for activities assuring maintenance,
preservation, or enhancement of natural resource inapplicable to setting of hunting and
fishing seasons]; International Longshoremen°s & Warehousemen's Union v. Board of
Supervisors (1,981), 116 Cal.App-3d 265, 275-276 [exemption inapplicable to agency
action leading to relaxation of air quality standards relating to allowable levels of nitrogen
oxide emissions].)
We urge you not to place either of these proposed measures on the ballot.
Sincerely,
Douglas P. Carstens
cc_ David Aleshire, City Attorney
Friends of Palm Springs Mountains
F:\halm Sprints btouotaius\Co*r\FinalsU.tr Council-Clcnt Rc IIund Mcasutt.Protection Act FIINAL.doc
RESOLUTION NO. 21156
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, DETERMINING THAT
SHOULD MEASURE B BE ADOPTED, THEN THE PUBLIC
INTEREST AND NECESSITY DEMAND THE ACQUISITION
OF REAL PROPERTY FOR OPEN SPACE, WILDLIFE
HABITAT AND CONSERVATION PURPOSES WITHIN THE
MOUNTAIN REGION ESTABLISHED BY MEASURE B AND
TO COMPENSATE PROPERTY OWNERS FOR TAKINGS
WHICH MAY ARISE IN CONNECTION WITH SAID
MEASURE B AND MAKING FINDINGS RELATING
THERETO
WHEREAS, an initiative measure (the "Initiative") to establish a Mountain Region
("Region") designation over 55.5 square miles of land in the City of Palm Springs (the "City")
and limit development to one residential unit per 40 acres of land within such Region was
circulated and received sufficient signatures to be placed on the ballot, and on September 13,
2004 was declared sufficient by the City Clerk; and
WHEREAS, the City Council on November 10, 2004 determined to place the measure on
the March 8, 2005 ballot along with certain other measures; and
WHEREAS, the City Council has received written claims from various property owners
alleging a substantial diminution of their property values if Initiative is enacted, that they will be
deprived of all value of their property, and that there is not sufficient public benefit to justify the
enactment of such regulations, and that a regulatory taking of property without just compensation
will result from the Initiative; and
WHEREAS, the City Council has determined that general obligation bonds should be
issued for the purpose of raising monies to acquire property for open space, wildlife habitat and
conservation purposes within the Region and to compensate property owners for legally valid
claims for just compensation should Initiative be approved; and
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA, AS FOLLOWS:
SECTION 1. That should the Initiative be approved by the voters at the Special
Election held on March 8, 2005, then the public interest and necessity demand the acquisition
construction or completion of municipal improvements, to wit. Acquisition of real property
within the Mountain Region as established in the Initiative for open space, wildlife habitat and
for conservation purposes and where legally necessary, to compensate property owners for a
taking of their property(the"Improvements"), and the issuance of general obligation bonds of
360850
Resolution 21156
Page 2
The City to finance the costs thereof.
SECTION 2. That the estimated cost of said acquisition is not to exceed
$150M. Said estimated costs include provisions for legal and other fees, costs of printing
the bonds and other costs and expenses incidental to or connected with the issuance and
sale of general obligation bonds to finance the costs of the Improvements.
SECTION 3. That said municipal acquisitions require expenditures greater
than the amount allowed for them by the annual tax levy and are necessary and
convenient to carry out the objectives, purposes and powers of the City.
ADOPTED this 1st day of December, 2004.
AYES: Members Foat, McCulloch, Mills, Pougnet and Mayor Oden
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
City Clerk City Manager
Reviewed and Approved as to Form:
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF PALM SPRINGS, CALIFORNIA, ORDERING THE
SUBMISSION OF A PROPOSITION FOR INCURRING
BONDED DEBT TO THE QUALIFIED VOTERS OF THE
CITY OF PALM SPRINGS AT THE SPECIAL ELECTION
TO BE HELD ON MARCH 8, 2005 FOR THE PURPOSE OF
FINANCING THE ACQUISITION OF REAL PROPERTY
FOR OPEN SPACE, WILDLIFE HABITAT AND
CONSERVATION PURPOSES WITHIN THE MOUNTAIN
REGION ESTABLISHED BY MEASURE " " AND TO
COMPENSATE PROPERTY OWNERS FOR TAKINGS
WHICH MAY ARISE IN CONNECTION WITH SAID
MEASURE SHOULD SUCH MEASURE BE ENACTED
WHEREAS, an initiative measure ("Initiative") to establish a Mountain Region
("Region") designation over 55.5 square miles of land in the City of Palm Springs (the "City")
and limit development to one residential unit per 40 acres of land within such Region was
circulated and received sufficient signatures to be placed on the ballot, and on September 13,
2004 was declared sufficient by the City Clerk; and
WHEREAS, the City Council on November 10, 2004 determined to place the measure on
the March 8, 2005 ballot along with certain other measures; and
WHEREAS, the City Council has received written claims from various property owners
alleging a substantial diminution of their property values if Initiative is enacted, that they will be
deprived of all value of their property, and that there is not sufficient public benefit to justify the
enactment of such regulations, and that a regulatory taking of property without just compensation
will result from the Initiative; and
WHEREAS, the City Council has detenmined that general obligation bonds should be
issued for the purpose of raising monies to acquire property for open space, wildlife habitat and
conservation purposes within the Region and to compensate property owners for legally valid
claims for just compensation should the Initiative be approved; and
WHEREAS, the City Council has heretofore adopted, by a two-thirds vote of all the
members of said Council, Resolution No. entitled "A Resolution of the City Council of the
City of Palm Springs, California, Determining That Should Measure _ be Adopted, the Public
Interest and Necessity Demand the Acquisition of Real Property for Open Space, Wildlife
Habitat and Conservation Purposes within the Mountain Region Established by Measure _ and
to Compensate Property Owners for Takings which may arise in connection with said Measure
and Making Findings Related Thereto' (the "Resolution"); and
WHEREAS, this City Council has determined to finance the acquisition of real property
for open space, wildlife habitat and conservation purposes within the Region and to compensate
rr tr_
1 /
v
01003/0007/35451 02
property owners for takings which may arise in connection with the Initiative through the
issuance of general obligation bonds consistent with the provisions of Article XIIIA of the
California Constitution, Article 1, commencing with Section 43600, of Chapter 4 of Division 4
of Title 4 of the California Government Code and the Charter of the City of Palm Springs; and
WHEREAS, the City Council intends to use a portion of the proceeds of the bonds to
acquire land within the Mountain Region as defined in the Initiative for open space, wildlife
habitat and conservation purposes and to compensate property owners where legally necessary
for a partial or total talking of their property in the event a court of competent jurisdiction
determines that the Initiative, though constitutional on its face, constitutes an unconstitutional
taking of parcels of property as applied; and
WHEREAS, in order to provide for the issuance by the City of its general obligation
bonds to finance the improvements described in the Resolution it is necessary for this City
Council to pass an ordinance ordering the submission of the proposition of incurring bonded
indebtedness for such purpose to the qualified voters of the City at a special municipal election
("Special Election"); and
WHEREAS, the City Council desires to submit said ballot measure to the qualified voters
of the City at Special Election to be held in the City on March 8, 2005 in conjunction with
Initiative itself; and
WHEREAS, the City Council desires to consolidate the Special Election with the election
to be held within the City on March 8, 2005, and within the territory affected by the
consolidation.
NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF PALM SPRINGS
ORDAINS AS FOLLOWS:
SECTION 1. That there shall be and there is hereby ordered a consolidated Special
Election, to be held on March 8, 2005, for the purpose of submitting to the qualified electors of
said City, the proposition set forth below.
SECTION 2. That said proposition shall appear on the ballot for said Special Election in
the following form:
OPEN SPACE PRESERVATION WITHIN THE
MOUNTAIN REGION
Shall General Obligation Bonds in the amount of_
million be issued to acquire real property for open
space, wildlife habitat and for conservation purposes, Yes
and where legally necessary to compensate property No
owners for a taking of their property, within the 55.5
square mile Mountain Region in the event Measure
_is adopted by the voters, all as described in
Ordinance No. ?
,1, a
01003/0007/35451 02
The City Council does hereby submit to the qualified voters of the City, at said Special
Election, this Ordinance and the proposition set forth above.
SECTION 3. The object and purpose of incurring the indebtedness is, within the 55.5
square mile Mountain Region as defined in the Initiative, to permit the acquisition of real
property for open space, wildlife habitat and for conservation purposes, and where legally
necessary to compensate property owners for a taking of their property in the event the Initiative
is adopted (the "Improvements"). The Improvements constitute a single purpose Linder Section
43609 of the California Government Code.
SECTION 4. The estimated cost of the Improvements is _million dollars ($�.
The estimated cost includes legal and other fees incidental to or connected with the
authorization, issuance and sale of the bonds, and the cost of printing the bonds and other costs
and expenses incidental to or connected with the issuance and sale of the bonds (collectively, the
Bond Issuance Fees and Expenses).
SECTION 5. The amount of the principal of the indebtedness to be incurred is not to
exceed million dollars ($ ).
SECTION 6. The maximum rate of interest to be paid on the indebtedness shall be eight
percent (8%) per annum, or such higher rate as may be pennissible by the laws established for
general obligation bonds of the City by the Legislature of the State of California.
SECTION 7. The City Council does hereby submit to the qualified voters of the City, at
said Special Election to be held on March 8, 2005, this Ordinance and proposition set forth in
Section 2 hereof The City proposes to acquire the Improvements and to issue and sell general
obligation bonds of the City pursuant to Article 1, commencing with Section 43600, of Chapter 4
of Division 4 of Title 4 of the California Government Code, in one or more series, in the
maximum amount and for the objects and purposes set forth above if two-thirds of all qualified
voters voting on the proposition set forth above vote in favor thereof. The bonds are to be general
obligations of the City payable from and secured by taxes levied and collected in the manner
prescribed by laws of the State of California. All of said bonds are to be equally and ratably
secured, without priority, by the taxing power of the City.
SECTION 8. The polls for said election shall be open on the day of said election in
accordance with the California Elections Code.
SECTION 9. The Special Election hereby called for March 8, 2005, shall be and is
hereby ordered consolidated with any other election to be held within the City on said date, and
within the territory affected by the consolidation. The election shall be held and conducted in
accordance with the provisions of law of the State of California. The Board of Supervisors of the
County of Riverside ("Board") and the Riverside County Registrar of Voters (the "Registrar"),
are hereby requested to order the consolidation of the municipal election hereby called with any
other election to be held within the City on said date, and within the territory affected by the
consolidation, and the Board and the Registrar are hereby authorized to canvass the returns of
said municipal election, and said municipal election shall be held in all respects as if there were
only one election and the form of ballot shall be as provided for the Special Election. Said Board
d
01003/0007/35451.02
shall certify the results of the canvass of the returns of said municipal election to the City
Council which shall thereafter declare the results thereof.
SECTION 10. All persons qualified to vote at the Special Election in the City upon the
date of the election herein provided for shall be qualified to vote upon the proposition submitted
at said Special Election.
SECTION 11. Ballots for the election shall be provided in the form and in the number
provided by law. On said ballots, in addition to any other printed matter which may be required
by law, two voting squares shall be set off to the right of the proposition submitted at the
election, in the mariner provided by law, one having the word "YES" printed before it, and the
other having the word "NO"printed before it.
SECTION 12. Each voter to vote for the proposition and for the incurring of said
indebtedness shall stamp or write a cross, or indicate by hole punch, computer, of other means, in
the blank space opposite the word "YES" on the ballot to the right of the proposition; and each
voter to vote against the proposition and against the incurring of the indebtedness shall stamp or
write a cross, or indicate by hole punch or other means, in the blank space opposite the word
"NO" on the ballot to the right of the proposition.
SECTION 13. This Ordinance shall be published once a day for at least seven days in a
newspaper published at least six days a week in the City, or once a week for two weeks in a
newspaper published less than six days a week in the City.
SECTION 14. That the City Clerk is hereby directed to file this Ordinance with the
Board of Supervisors of the County of Riverside and the Registrar of Voters, the election official
of the County of Riverside.
SECTION 15. That the City Council authorizes election expenses to be paid to the
County upon presentation of a properly approved bill.
SECTION 16. That the City Clerk is hereby directed to publish notice of the election and
a synopsis of the measure pursuant to Section 6061 of the Government Code and Section 12111
of the Elections Code.
SECTION 17. That the City Council, pursuant to Elections Code 9280, hereby directs
the City Clerk to transmit a copy of this Ordinance to the city attorney. The City Council hereby
directs the city attorney, upon receipt of these items, to prepare an impartial analysis of the
measure showing the effect of the measure on existing law and the operation of the measure
pursuant to the Elections Code.
SECTION 18. That the City Clerk is hereby authorized to receive arguments for and
against the measure, and rebuttal arguments, make such arguments available for public
examination and transmit such arguments to the Registrar of Voters and take such other action as
may be necessary pursuant to the Elections Code to accomplish the purposes set forth in this
Ordinance.
n
7 �l i ins
01003/0007/35451.02
SECTION 19. That the City Council hereby directs the City Finance Director to prepare
or cause to be prepared the tax rate statement required pursuant to Section 9401 of the Elections
Code and to submit such statement to the City Clerk to be included in the election material
within the times required by the Elections Code.
SECTION 20. This Ordinance shall become effective immediately upon its adoption by
two-thirds vote of all the members of the City Council.
SECTION 21. The proposition shall be adopted upon a two-thirds vote of the electorate
voting in favor of the proposition at the Special Election.
SECTION 22. That should this Ordinance be enacted by the voters, the City Council
shall be authorized to determine the timing and series in which such bonds shall be issued and
the manner in which all funds shall be expended, and shall have the authority to enact all
measures necessary to carry out the purposes of this Ordinance.
SECTION 23. If any section, subsection, sentence, clause, phrase, or portion of this
Ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court
of competent jurisdiction, such decision shall not affect the validity of the remaining portions of
this Ordinance. The City Council hereby declares that it would have adopted this Ordinance and
each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that
any one or more sections, subsections, sentences, clauses, phrases, or portions thereof may be
declared invalid or unconstitutional.
ADOPTED AND APPROVED this day of 2004.
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By: By:
City Clerk Mayor
REVIEWED AND APPROVED AS TO FORM:
01003/0007/35451.02