Judge Finds Upland And San Antonio Heights Assessments Were Illegally Imposed

Reversing the direction in which he told a packed courtroom full of litigants he was headed in December, Judge David Cohn this week rendered a tentative decision that the inclusion of Upland and San Antonio Heights into a service zone at the same time they were annexed into one of San Bernardino County’s fire protection districts was an overreach of the county’s, the city’s and the San Bernardino County Local Agency Formation Commission’s authority.
Cohn’s decision leaves standing the 2017 dissolution of the Upland Municipal Fire Department and the accompanying assumption of fire suppression, fire prevention and emergency medical service duties in Upland by the county fire department, but declares the $148.68 per parcel annual assessment that was imposed on all property owners to pay for the service improper and impermissible under the law. That assessment was layered into the fire department abolishment as a ploy by the city to drum up a city-wide tax without first getting voter approval, as is normally required under California law.
Over a two-year period beginning in 2015, public officials in the cities of San Bernardino, Needles and Twentynine Palms closed out their municipal or community-based fire departments and “annexed their territory” into the county’s Fire Protection Five Service Zone, known as FP-5, imposing a flat tax in those communities ranging from $130 to $150 per year on every parcel within them. FP-5 was originally formed in the early 2000s by a vote of residents in the unincorporated Helendale/Silverlakes region of the Mojave Desert between Victorville and Barstow to arrange for the provision of fire suppression/safety service there. The City of Upland, seeing the ease with which San Bernardino, Needles and Twentyine Palms had been able to get out from underneath the expense of providing fire service by transferring the cost to their residents through the imposition of a fire service assessment on landowners in conjunction with a service transfer, took a leaf from those cities’ playbooks and initiated a similar move in the late fall of 2016, following through on and finalizing the application in the winter of 2017.
In March 2017, the San Bernardino County Local Agency Formation Commission followed the recommendation of its then-executive director, Kathleen Rollings-McDonald, to permit the annexing of Upland to the neighboring and contiguous West Valley Service Area that includes San Antonio Heights. Pundits say that the purpose of that move was a strategy employed by Rollings-McDonald to comply with the law that requires a territory to be contiguous or adjacent to the district that it is being annexed into at the time of the annexation. Once that was accomplished, the Local Agency Formation Commission, known by its acronym LAFCO, maneuvered to “annex” both San Antonio Heights and Upland into FP-5, what was at that point a discontiguous fire service district. Helendale is 48 miles as the crow flies from Upland and 65 miles driving distance from Upland.
The controversial “annexation” of Upland and San Antonio Heights into FP-5 entailed the imposition of a $148.68 annual assessment with inflation adjustments into perpetuity. The county and city agreed to the option of tacking on the FP-5 service zone tax as part of the agreement to defray the cost of the county fire department providing that service. Upland City officials were all for it, as having the county take on the task of operating a fire department on the city’s behalf relieved City Hall of having to pay for fire safety operations. The city’s taxpayers, who throughout the city’s 111-year history had been provided with fire service as a consequence of basic municipal function, took up the slack by being consigned to paying the $148.86 assessment. Thereafter, the city committed to turning over a percentage of its property tax as part of the deal, and pocketed the difference between the savings the city realized from the closure of the fire department and its loss of a percentage of property tax to the county, as the city’s residents, business operators and property owners were at that point paying the lion’s share of the freight with regard to the provision of fire service. The city was free to use the money it netted as it deemed necessary, which in practical terms meant paying down its substantial costs in paying pensions to retired municipal employees.
One small catch attended. Under California law, residents have a right to approve whatever newly created tax is to be imposed on them collectively, in some cases by a simple majority vote and in others by a two-thirds majority. Recognizing that there was virtually no possibility that the residents of Upland and San Antonio heights would approve a nearly $150 assessment on themselves to pay for a service they were already receiving, the city, the county and LAFCO rigged the process so that the voting requirement was met not by a traditional balloting in which those participating cast simple “yes” or “no” or “for” or “against” votes but rather through what is known as a protest procedure.
The protest vote that LAFCO conducted consisted of the San Bernardino County Local Agency Formation Commission’s invitation of property owners and voters within each of the jurisdictions to lodge letters of protest against the mixed bag of annexations – relating to the fire protection district and the service assessment zone – all bundled into one package. Each protest letter received was to be counted as a single vote against all varieties of annexations proposed. Any resident or voter not lodging a letter of protest was presumed to have voted to accept the annexation. If 25 percent of the combination of the city’s and San Antonio Heights’ voters or landowners lodged protests, then a straightforward election with regard to the formation of the assessment district was to be held. If a majority protested, than the assessment would have been denied outright. As typical of such “protest votes,” nothing approaching sufficient opposition appeared to be manifesting in the population of Upland and San Antonio Heights together to achieve the 25 percent protest threshold to trigger a real election, let alone stop the annexations outright. Of note, however, was that in upscale San Antonio Heights – the most affluent unincorporated district in San Bernardino County – the opposition among the highly sophisticated and well educated population there was overwhelming. Were San Antonio Heights alone being dragged into the annexation, the effort would have failed. But with the overwhelming majority of Upland residents oblivious to what was happening and making no effort to oppose the annexations, the dismantling of the Upland Municipal Fire Department and the movement of Upland and San Antonio Heights out of the West Valley Service Zone and into FP-5 were handily ratified in accordance with the terms of the protest procedure.
In response, the San Antonio Heights Homeowners Association retained attorney Cory Briggs to file suit against the city, the county and the Local Formation Commission in an effort to block the annexation. Briggs filed the suit before the July 12, 2017 deadline for the reception of protests of the annexation, pairing with it a petition for a temporary restraining order to prevent the implementation of the shuttering of the Upland Fire Department and the imposition of the special tax while the lawsuit was being litigated. At the July 10, 2017 hearing, Judge Cohn denied the request for the restraining order, and thereafter the city, county and the county fire department proceeded full bore with the takeover, and by August 1, 2017, the city began implementing the changeover from the City of Upland’s fire department to the county fire district, including changing the logos on city fire trucks, which passed into the custody of the county, along with the city’s four fire stations. Later that year, the assessments were made and collected pursuant to the county’s annual property tax postings and billings.
The lawsuit proceeded apace, with Briggs characterizing the maneuver as a “Frankenstein Monster Tax” cobbled together to get around the tax code and California Constitution requiring a two-thirds majority on a ballot vote before a special tax can be applied. For their part, the Local Agency Formation Commission, represented by Jeffrey Dunn and Daniel Lee Richards; San Bernardino County and its fire division, represented by Donald Wagner and Laura Crane; and the City of Upland, represented by James Markman and Ginetta Gionvinco, asserted that the case of Sunset Beach vs. Orange County LAFCO provided them with the authority to proceed with the extension of the FP-5 Service Zone tax to include Upland and San Antonio Heights. In the Sunset Beach case, that small community was compelled to pay the assessments previously approved by residents of Huntington Beach, after Sunset beach was absorbed by, that is annexed into, the City of Huntington Beach.
In his decision, Cohn held that the Local Agency Formation Commission does not have the authority to annex properties into service zones. Accordingly, Conn averred, the $148.86 assessment on property owners as a feature of fire zone expansion was imposed improperly.
“While the larger annexation of the city and San Antonio Heights into the district is valid, the narrower annexation into the service zones within the district is not,” wrote Cohn in his tentative decision. “Imposition of the tax on the taxpayers within the geographic area that was invalidly annexed to the district’s zones was therefore improper and must be enjoined.”
In his analysis as to “whether there was a prejudicial abuse of discretion,” Cohn opined, “Even with the great deference courts must give to decisions by Local Agency Formation Commissions, approving an annexation that is specifically prohibited by law is surely a prejudicial abuse of the agency’s discretion. At its core, the San Antonio Heights Homeowners Association’s argument for invalidating the tax and annexation is simple, dependent on a parsing of two terms used in the statutory scheme governing reorganizations of public agencies, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, California Government Code section 56000 et seq. The two statutory terms are ‘annexation’ and ‘district.’ First, Government Code section 56017 states: ‘”Annexation” means the inclusion, attachment, or addition of territory to a city or district.’ Second, Government Code section 56036(a) states: ‘”District” or “Special District” are synonymous and mean an agency of the state, formed … for the local performance of governmental … functions within limited boundaries .…’ Finally, Government Code section 53036(b) states: ‘”District” or “special district” includes a county service area, but excludes a zone of any special district.’ These three statutory provisions, construed together, demonstrate that the portion of the annexation which placed the city and San Antonio Heights into the District’s Valley Service Zone and Service Zone FP-5 was improper: First, annexation means addition of territory to a district. Second, while a district includes a county service area, it excludes a zone of any special district, and the term ‘special district’ is synonymous with the term district. Therefore, this aspect of the annexation was invalid because it annexed the city and San Antonio Heights into zones of the district. Thus, the geographic expansion of the service zones within the district by San Bernardino LAFCO was simply beyond its statutory authority. By doing so, San Bernardino LAFCO committed a prejudicial abuse of its discretion.”
Cohn ruled that “the annexation is therefore void, and the tax was improperly imposed on taxpayers within the newly annexed territory.”
Issued on February 8 as tentative, the decision will become official on February 25, unless the governmental agencies can offer Cohn persuasive arguments to rescind it by that date. Once entered as official, the defendants will have the option of appealing the matter to the Fourth District court of Appeal.
-Mark Gutglueck





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