County's finding of financial distress allowing reduction of welfare benefits is reviewed under independent judgment test.
Cite as
1997 DJDAR 14371Published
Jun. 11, 1999Filing Date
Nov. 25, 1997Summary
The C.A. 3rd has determined that a county's finding of financial distress, which would allow it to reduce it general assistance benefits pursuant to procedure outlined in Welfare and Institutions Code Section 17000.6, must be reviewed under the independent judgment test, not a substantial evidence standard.
When Sacramento County faced a large projected budget shortfall it sought to reduce its general assistance benefits pursuant to Section 17000.6. The Commission on State Mandates found that the county had made a showing of significant financial distress that would permit it to lower general assistance aid to a lower level. Billy Goff and other general assistance recipients, filed a petition for a writ of mandate and a complaint for declaratory and injunctive relief challenging the Commission's determinations. The trial court upheld the Commission's findings. Goff contended that the trial court erred in applying the substantial evidence standard of review to the Commission's finding of significant financial distress, and argued that the trial court should have exercised its independent judgment in reviewing the Commission's decision.
The C.A. 3rd reversed and remanded. Section 17000.6 provides that a county can adopt a level of general assistance below statutory levels if a finding is made that maintaining the statutory level would result in significant financial distress to the county. "Significant financial distress" is defined in the statute as a finding that basic county services, including public safety, could not be maintained. The county's determination was reached by applying an existing rule to existing facts. As such, it was a quasi-judicial decision. The standard of review for a quasi-judicial determination is an independent examination of the proceedings to determine if the agency action has been arbitrary or capricious. Therefore, the substantial evidence standard used by the trial court in this case was incorrect since the action was not quasi-legislative. The trial court found the action was quasi-judicial, but applied the wrong standard of review. The failure of the trial court to apply the appropriate standard precluded review of the merits of the appeal. The matter was remanded for reconsideration. To guide the trial court in its review, it was also held that the trial court and the Commission had not erred in construing Section 17000.6.
—
BILLY GOFF et al.,
Plaintiffs and Appellants,
v.
COMMISSION ON STATE MANDATES,
Defendant and Respondent;
COUNTY OF SACRAMENTO et al.,
Real Parties in Interest
and Respondents.
No. C022434
(Super. Ct. No. 95CS01215)
California Court of Appeal
California Court of Appeal
Third Appellate District
(Sacramento)
Filed November 25, 1997
APPEAL from a judgment of the Superior Court of Sacramento County. W. J. Harpham, Judge. Reversed with directions.
Legal Services of Northern California, Jennifer Horne, Brian Patrick Lawlor and Eugenie Denise Mitchell, Western Center on Law & Poverty, Robert Newman and Richard Rothschild for Plaintiffs and Appellants.
Daniel E. Lungren, Attorney General, Floyd D. Shimomura, Senior Assistant Attorney General, Linda A. Cabatic, Supervising Deputy Attorney General, Paul H. Dobson, Deputy Attorney General, for Defendant and Respondent.
Robert A. Ryan, Jr., County Counsel, Kathleen A. O'Connor, Supervising Deputy and Peter L. Dixon, Deputy, for Respondent and Real Party in Interest.
This appeal stems from the inevitable problems and conflicts that occur as counties make budgetary decisions in an era of increased demand and diminished local resources.
Facing a large projected budget shortfall, Sacramento County (the County) sought to reduce its general assistance benefits pursuant to the procedures outlined in Welfare and Institutions Code section 17000.6. (All subsequent statutory references are to the Welfare and Institutions Code unless otherwise indicated.) As we describe in detail below, this statute permits a reduced level of general assistance upon a finding by the Commission on State Mandates (the Commission) that meeting the otherwise required level of assistance "would result in a significant financial distress to the county." (§ 17000.6, subd. (a).) The statute specifies the Commission cannot make this finding "unless the county has made a compelling case that, absent the finding, basic county services, including public safety, cannot be maintained." (Ibid.)
The Commission found the County had made such a showing and that payment of general assistance at the ordinarily required level would result in significant financial distress to the County. The County's Board of Supervisors subsequently reduced its general assistance standard of aid to the lower level permitted by section 17000.6. Plaintiffs, who are general assistance recipients, filed a petition for mandate and a complaint for declaratory and injunctive relief challenging the Commission's determinations. The trial court upheld the Commission, and this appeal followed.
The appeal raises two issues. First, plaintiffs assert the trial court erred in applying a substantial evidence standard of review to the Commission's finding of significant financial distress. Because the Commission's decision was quasi-judicial in nature and directly affected a vested fundamental right, they contend the trial court should have exercised its independent judgment in reviewing the Commission's decision. We agree, and shall therefore remand the matter for reconsideration under the appropriate standard of review.
Second, plaintiffs assert the Commission and trial court erred in construing section 17000.6 and in determining the County had established that payment of general assistance at the prescribed level would cause significant financial distress. To provide guidance to the court on remand, we address plaintiffs' legal arguments concerning the scope of section 17000.6.
STATUTORY FRAMEWORK The general assistance mandate is found in section 17000. It provides: "Every county and every city and county shall relieve and support all incompetent, poor, indigent persons, and those incapacitated by age, disease, or accident, lawfully resident therein, when such persons are not supported and relieved by their relatives or friends, by their own means, or by state hospitals or other state or private institutions."
General assistance is a safety net, a program of last resort designed to meet the subsistence needs of indigents who are unable to qualify for any other public aid. (Whitfield v. Board of Supervisors (1991) 227 Cal.App.3d 451, 456; Reyes v. Board of Supervisors (1987) 196 Cal.App.3d 1263, 1267.) The responsibility for the financing and administration of this program rests with individual counties, which are statutorily compelled to support their indigent and disabled residents. (§ 17000; see also Whitfield v. Board of Supervisors, supra, 227 Cal.App.3d at p. 456; Reyes v. Board of Supervisors, supra, 196 Cal.App.3d at p. 1267, fn. 2; Washington v. Board of Supervisors (1993) 18 Cal.App.4th 981, 983-986.)
Section 17001 requires each county to adopt standards of aid and care for its indigent and dependent poor. That level may be determined in one of two ways. A county may conduct a study to determine the actual subsistence costs in the county and set aid levels accordingly. (See Boehm v. County of Merced (1985) 163 Cal.App.3d 447, 452.) Alternatively, a county may rely on section 17000.5, enacted in 1991 (Stats. 1991, ch. 91, § 34), which provides in subdivision (a): "The board of supervisors in any county may adopt a general assistance standard of aid, including the value of in-kind aid, . . . that is 62 percent of a guideline that is equal to the 1991 federal official poverty line and may annually adjust that guideline. . ." in a specified manner. Subdivision (b) of this statute explicitly provides: "The adoption of a standard of aid pursuant to this section shall constitute a sufficient standard of aid." Thus, under this statute, a county need not demonstrate it has actually met the minimum subsistence needs of its general assistance recipients; instead, a "sufficient standard of aid" is conclusively presumed to have been provided. (Welfare Rights v. Frank (1994) 25 Cal.App.4th 415, 420; see generally Gardner v. County of Los Angeles (1995) 34 Cal.App.4th 200, 205-206, 213.)
In 1993, the Legislature added a third possible method of establishing assistance levels by enacting section 17000.6. This statute, the heart of the instant appeal, provided:
Title 2, section 1186.51 of the California Code of Regulations outlines the steps a county must take to obtain a finding of significant financial distress from the Commission. The county must file a written application containing a copy of a resolution from the county's board of supervisors stating that compliance with the standards set forth in section 17000.5 will result in significant financial distress. The application must also include a "written narrative, including a summary, detailing the relevant financial or other budgetary information and documents necessary for a county to make a compelling case that basic county services, including public safety, cannot be maintained without a reduction in the standard of aid as provided in . . . section 17000.5." (Cal. Code Regs., tit. 2, § 1186.51, subd. (b)(1)(B).)
With this framework in mind, we turn to the case before us.
FACTUAL AND PROCEDURAL BACKGROUND On January 31, 1995, the County's Board of Supervisors passed resolution No. 95-0113, declaring that compliance with the standards set forth in section 17000.5 would result in significant financial distress to the County, and authorizing the filing of an application for relief with the Commission pursuant to section 17000.6. In this resolution, the County noted the need and demand for public safety and related ancillary services had substantially increased in recent years, but county revenues and other financial resources had failed to keep pace. The County found an "erosion in the delivery of these services to a level beneath that which is genuinely adequate to the needs of this county and its citizens[.]" The County also noted that key social services, designed to meet fundamental human needs, were seriously underfunded, and discretionary funding sources were inadequate to support these services.
The County stated it had "reduced the provision of county services for which general funds are available to a level that is minimal, at best, and cannot further reduce such services in order to provide additional funding for the purpose of eliminating the disparity between the reasonably adequate level of public safety and other core services to which county residents are entitled and the level at which such services are actually delivered; to do so would render other fundamental and essential services so deficient as to jeopardize this county's ability to function at any level; and further, any 'discretionary' funds which now support the provision of local government services which might arguably be characterized as non-basic, are grossly inadequate to fill the gap between the current level of identified core basic services and the adequate level of these services[.]"
The County further found that "neither the elimination of the . . . services outside the nucleus of basic county services nor the utilization of available resources not already dedicated to these core services, nor any combination of these two options, would be sufficient to overcome the shortfall between the current level and the adequate level of these core services[.]" However, the County also asserted that if it were authorized to pay the lower level of general assistance permitted by section 17000.6, the County would then have sufficient funds "to allow for delivery of some services within the . . . core of basic county services at the adequate level[.]"
The County concluded that "compliance with the standard of aid established by [s]ection 17000.5 . . . will result in significant financial distress," and authorized the board of supervisors to apply to the Commission for relief from this mandate pursuant to section 17000.6.
The County filed its application with the Commission on February 14, 1995, detailing its financial situation. The County asserted it had a total unfunded need for basic services of $157.2 million, and that only seven percent of the budget represented discretionary expenditures. The County claimed that by reducing general assistance to the minimum levels permissible under section 17000.6, an additional $7.4 million would be available to spend on basic services. 2
The Commission held a hearing at which County officials and general assistance recipients testified. The County representatives described the financial situation in each of their agencies and noted the increasing demand for services, particularly in areas of public safety. General assistance recipients described how their lives would be affected by cuts in the level of aid received, and pointed to items in the County's expenditures that they did not consider to be essential to basic county services, such as employee cost-of-living increases. They further argued that revenues could be raised through increased fees, and that elimination of waste and inefficiencies would result in further savings. They noted that the County had a history of overbudgeting, and expenditures had often been less than the budgeted amount.
The Commission concluded the County had demonstrated that meeting the aid standards set forth in section 17000.5 would cause significant financial distress. In a lengthy decision, the Commission devoted considerable effort to interpreting section 17000.6 because this was the first case arising under that statute. The Commission noted that given the extremely short time frames set forth in section 17000.6, an audit of the County's fiscal processes and budget was impossible. Instead, the Commission concluded, its role was to determine whether the County "has compellingly established critical deficiencies (whether existing or threatened) in basic service areas," a task to be accomplished by examining "objective indicators of service problems, rather than through a detailed analysis/audit of budget requests."
The Commission found that section 17000.6 equated "significant financial distress" with a county's inability to maintain basic services, including public safety, but further noted that meeting section 17000.5 standards need not be the only reason for the inability to maintain basic county services. As the Commission explained, "[i]n other words, a county might be unable to maintain basic services fully even if its . . . application were granted," but an application could not be denied for that reason.
The Commission continued: "[S]ection 17000.6 implies the duty to consider whether there are alternatives which could remedy the basic service deficiencies without the need for a reduction in general aid. Absent these inquiries, it would be sufficient for a county to state that its projected or actual expenditures exceed revenues; therefore it is in financial distress. This approach would not provide meaningful protection for general aid recipients and is clearly contrary to both the standard of evidence implied in the phrase 'compelling case' and the limits suggested by the use of the term basic county services." (Emphasis in original.)
The Commission rejected the suggestion that counties be held to a standard of fiscal impossibility or, at a minimum, be required to demonstrate that they had exhausted all possible alternatives to reducing general assistance. Instead, the Commission concluded a county must establish that it had made "a diligent effort . . . to identify and implement reasonable alternatives and that alternatives deemed reasonable, but not implemented, have been set aside for sound reasons. The Commission further found that proof that all possible alternatives had been exhausted would be exceedingly difficult to offer or for the Commission to validate. Moreover, such a requirement would have a chilling effect on the ability of counties to exercise, in a reasonable fashion, the relief offered by . . . section 17000.6." (Emphasis in original.)
Declining to adopt a standardized test for determining significant financial distress, the Commission decided to consider the following factors in determining whether there might be reasonable alternatives to the reduction of general assistance: (1) evidence of unmet need, (2) budget forecasts, (3) county efforts to constrain expenditures, (4) county efforts to enhance revenues, (5) flexibility in spending, (6) flexibility in resources, and (7) debt and cash flow. The Commission concluded that "after consideration of these factors, the task resolves itself into weighing the evidence to determine if a compelling case has been made that overall county flexibility in resources is insufficient to address the needs in basic county services. Further, the Commission found that this is a different task than setting priorities among county activities; the latter is a task which the Commission found is solely within the purview of the county board of supervisors." (Emphasis in original.)
The Commission noted that section 17000.6 required a county to demonstrate a compelling case that, absent relief, basic county services, including public safety, "cannot be maintained." "Maintained" is defined in the regulations as "the level of service which the county must provide in order to adequately or effectively furnish basic county services." (Cal. Code Regs., tit. 2, § 1186.5, subd. (c)). The Commission determined this definition would permit "a county to propose that it needed to restore or expand services as well, not simply to perpetuate a service level currently in place." (Emphasis in original.) The Commission explained this construction "makes good policy sense. Basic, fundamental, and essential are not static concepts in relation to government services or social needs. It seems artificial to restrict a definition of urgency of need to a level of services no greater than provided in any given year. For example, caseload increases in a program may require additional funding in order to maintain existing service levels on a per-client basis. Or, new social needs may arise (such as a disease or public safety situation) requiring activities not previously contemplated but nonetheless essential to maintaining the overall adequacy of a basic county service. Or more simply, funding may have lagged behind existing program requirements long enough to erode service levels." (Emphasis in original.)
The Commission therefore rejected plaintiffs' claim that basic county services must be confined to existing services, and concluded the County could properly base a claim of financial distress on both existing and needed new services. The Commission cautioned, however, that "not all levels of activity within a basic county service might be deemed equally fundamental or essential. It is not enough to define human services programs (for example) as basic and then argue that any unmet need or threatened activity within those programs is sufficient cause to justify a finding of significant financial distress. An applicant would still be responsible for providing a compelling argument that the proposed service level within the basic program was itself fundamental or essential and truly necessary for the provision of adequate service." (Emphasis in original.)
After reviewing the County's claims of budgetary hardship, the Commission reiterated that "not all activity levels within a basic service are equally fundamental or essential," and concluded that $65 million of the County's $157.2 million of identified service deficiencies were both "compellingly basic in character and convincingly established in amount."
The County's proposed savings from general assistance computed under section 17000.6 rather than section 17000.5 was $7.49 million. Even with this savings, the County projected a budget deficit of $31.8 million for the 1995-1996 fiscal year. If the County's application were denied, the shortfall would be $39.2 million. The Commission noted that while this projection contained variables that might change over time, the forecast was nonetheless conservative in some respects because it did not take into account the effects of the "three strikes law" or the Governor's budget on the county coffers. The Commission concluded the forecast was "reasonable for the information known at this time."
The Commission found the County's efforts to constrain expenditures and enhance revenues demonstrated diligence. The Commission determined the County had expenditure flexibility in a range of three to five percent of its budget ($9 million to $15 million) and revenue flexibility in the range of six to seven percent of the budget ($18 million to $21 million). These positive amounts of additional funds were weighed against the basic service deficiencies of $65 million and the upcoming budget year forecast shortfall of $39.2 million.
The Commission rejected plaintiffs' suggestion that the County's credit rating, debt load, fund balances and cash flow demonstrated a prima facie case of financial health, and instead considered these elements as additional factors in its weighing process.
The Commission concluded the County had established a compelling case that, absent a finding by the Commission, meeting the general assistance standards as set forth in section 17000.5 would result in significant financial distress. This decision became effective on April 28, 1995.
On May 9, 1995, the County Board of Supervisors voted to reduce general assistance benefits to the minimum levels required by section 17000.6. This action resulted in a budget savings of approximately $7.45 million.
Plaintiffs filed a petition for writ of mandate with the trial court, challenging the Commission's interpretation of section 17000.6 as well as the particular findings made. As a threshold matter, plaintiffs asserted the trial court was obligated to apply an independent judgment standard of review because the case involved a quasi-judicial determination affecting a vested fundamental right, namely, the recipients' right to assistance at the level authorized by section 17000.5. Plaintiffs also argued that comments made by two legislators during deliberations on Senate Bill No. 1033 (SB 1033) reflected the Legislature's intent that section 17000.6 apply only to the worst-off counties, those in "catastrophic" situations. Plaintiffs asserted the County's relative financial health made it ineligible for relief under this provision.
In response, the County and the Commission argued that substantial evidence review was proper because the Commission's determination was quasi-legislative, not quasi-judicial. However, they asserted, even if characterized as a quasi-judicial proceeding, the matter did not involve a vested fundamental right requiring a broader standard of review. The County and the Commission further contended that the Commission had properly interpreted section 17000.6, and that the Commission's findings were supported by substantial evidence.
The trial court denied plaintiffs' petition for mandate. It concluded that the Commission's decision was adjudicative in nature, not quasi-legislative, and that plaintiffs had a fundamental right to general assistance benefits for which they qualified. However, the court found the Commission's decision "did not directly and immediately affect that right." The court reasoned that the Commission's decision did not determine whether the assistance level would be set below the section 17000.5 standard, or if so, by how much. These decisions were to be made by the County in a separate proceeding after the Commission's decision. The court added that because the Legislature had given counties the option of reducing assistance levels under the procedures outlined in section 17000.6, plaintiffs could not claim a vested right to assistance under the section 17000.5 standard. The court therefore determined that the appropriate standard of review was one of substantial evidence, not independent judgment.
The court ruled that the Commission had properly interpreted section 17000.6 and that substantial evidence supported the Commission's decision finding payment of general assistance at the section 17000.5 level would cause the County significant financial distress.
This appeal followed.
DISCUSSION I. Standard of Review in the Trial Court Plaintiffs contend the trial court erred in applying a substantial evidence standard of review, rather than an independent judgment test. We agree.
As an initial matter in determining the appropriate standard of review, we must determine whether the Commission's decision was quasi-judicial or quasi-legislative in nature.
Generally, an action is deemed "quasi-legislative" when an administrative agency creates a new rule for future application. In contrast, an action is "quasi-adjudicative" when the agency applies an existing rule to existing facts. (20th Century Ins. Co. v. Garamendi (1994) 8 Cal.4th 216, 275.) As one commentator explained: "Legislative actions create broad, generally applicable rules of conduct as public policy, whereas quasi-judicial or adjudicatory actions affect only the individual parties and are determined by the facts of the individual case." (Cal. Administrative Mandamus (Cont.Ed.Bar 2d ed. 1989) Decision to Petition for Writ, § 1.7, p. 7.)
"The classification of administrative action as quasi-legislative or quasi-adjudicative 'contemplates the function performed . . . .'" (20th Century Ins. Co. v. Garamendi, supra, 8 Cal.4th at p. 275.) Consequently, the characterization does not depend on the nature of the decisionmaking body, the procedural characteristics of the administrative process or the breadth of the agency's discretion. (Pacifica Corp. v. City of Camarillo (1983) 149 Cal.App.3d 168, 176.) 3
The appropriate classification presents a question of law (Dominey v. Department of Personnel Administration (1988) 205 Cal.App.3d 729, 737, fn. 4), and the resolution of that question bears on the standard of review to be applied. In reviewing a quasi-legislative determination, a court "must proceed in ordinary mandamus (Code Civ. Proc., § 1085) and 'is limited to an examination of the proceedings before the agency to determine whether its action has been arbitrary or capricious, or entirely lacking in evidentiary support, or whether it has failed to follow the procedure and give the notices required by law.' [Citations.] If, on the other hand, the action is adjudicative, then the more rigorous standard of review compelled by Code of Civil Procedure section 1094.5 governs. That statute requires a determination of 'whether substantial evidence supports the administrative agency's findings and whether the findings support the agency's decision. . . .'" (Joint Council of Interns & Residents v. Board of Supervisors (1989) 210 Cal.App.3d 1202, 1209; see also Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 566-567; Balch Enterprises, Inc. v. New Haven Unified School Dist. (1990) 219 Cal.App.3d 783, 791.)
The threshold matter before us is whether the Commission created a new rule for future application in a quasi-legislative function, as contended by the County and Commission, or applied an existing rule to existing facts and acted in a quasi-judicial capacity, as plaintiffs assert. We conclude that plaintiffs advance the more persuasive argument.
The issue before the Commission was whether the County had made a compelling case that providing general assistance at the level contemplated by section 17000.5 would cause significant financial distress such that the County could not maintain basic services, including public safety. It is difficult to imagine a case better epitomizing adjudicative functions. The Commission applied the standards set forth in section 17000.6 and the related regulations to the County's situation. This determination did not involve the formulation of a rule to be applied in any future case. It was a determination of one county's eligibility for relief under section 17000.6, "the determination of specific rights in regard to a specific fact situation." (Cal. Administrative Mandamus, supra, Decision to Petition for Writ, § 1.7, p. 7.)
The County and the Commission analogize the Commission's actions to rate setting, a quasi-legislative action. (See 20th Century Ins. Co. v. Garamendi, supra, 8 Cal.4th at pp. 275-279.) The comparison is faulty. The Commission did not set the general assistance level; it simply provided the needed authorization for the County to lower its benefit levels. It is the County Board of Supervisors who acts as "rate setter," not the Commission.
The trial court properly characterized the Commission's decision as quasi-adjudicative in nature, giving rise to the broader scope of review permitted in administrative mandamus proceedings under Code of Civil Procedure section 1094.5.
Subdivision (c) of this statute provides the court shall weigh the evidence when "authorized by law to exercise its independent judgment" and in all other cases shall determine whether the findings are supported by substantial evidence. This section "was designed to leave to the courts the establishment of standards for deciding which cases require independent judgment review and which substantial evidence review." (Frink v. Prod (1982) 31 Cal.3d 166, 173; accord, County of Alameda v. Board of Retirement (1988) 46 Cal.3d 902, 906.) 4
The principles involved in making this determination have their genesis in cases such as Bixby v. Pierno (1971) 4 Cal.3d 130, and Strumsky v. San Diego County Employees Retirement Assn. (1973) 11 Cal.3d 28. In Berlinghieri v. Department of Motor Vehicles (1983) 33 Cal.3d 392, 395, the Supreme Court summarized these standards as follows: "If the decision of an administrative agency will substantially affect a 'fundamental vested right,' then the trial court must not only examine the administrative record for errors of law, but must also exercise its independent judgment upon the evidence. [Citation.] When the administrative decision neither involves nor substantially affects such a right, then the trial court must review the whole administrative record to determine whether the findings are supported by substantial evidence and whether the agency committed any errors of law. [Citation.]
". . . '[W]e explained the considerations which counsel in favor of fuller judicial review in cases involving vested, fundamental rights. The essence to be distilled is this: When an administrative decision affects a right which has been legitimately acquired or is otherwise "vested," and when that right is of a fundamental nature from the standpoint of its economic aspect or its "effect . . . in human terms and the importance . . . to the individual in the life situation," then a full and independent judicial review of that decision is indicated because "[t]he abrogation of the right is too important to the individual to relegate it to exclusive administrative extinction." [Citation.]'" (Emphasis omitted.)
Courts must decide on a case-by-case basis whether an administrative decision substantially affects a fundamental vested right, "and there is no fixed formula which guarantees a predictably exact ruling in each case. The essence of the determination is to protect the fundamental rights of the individual from abrogation without judicial, as opposed to administrative, review." (San Marcos Mobilehome Park Owners' Assn. v. City of San Marcos (1987) 192 Cal.App.3d 1492, 1499.) A right may be considered "fundamental" and "vested" based on either of two factors: (1) the character and quality of its economic aspect, or (2) the character and quality of its human aspect. (Cooper v. Kizer (1991) 230 Cal.App.3d 1291, 1296-1297; Dominey v. Department of Personnel Administration, supra, 205 Cal.App.3d at p. 742.) In analyzing the fundamental nature of the right involved, courts are particularly responsive to "the human as opposed to the purely economic dimension of rights affected by administrative action" (Frink v. Prod, supra, 31 Cal.3d at p. 177), and generally give less weight to the preservation of purely economic privileges. (San Marcos Mobilehome Park Owners' Assn. v. City of San Marcos, supra, 192 Cal.App.3d at p. 1499.)
Fundamental rights necessitating independent judicial review have been found in a wide range of areas, including the right to keep a driver's license (Berlinghieri v. Department of Motor Vehicles, supra, 33 Cal.3d at p. 398), a landlord's right to control parking spaces at an apartment building (301 Ocean Ave. Corp. v. Santa Monica Rent Control Bd. (1991) 228 Cal.App.3d 1548, 1556-1558), an employee's right to continue in a profession or trade (Hadley v. City of Ontario (1974) 43 Cal.App.3d 121, 126), an employee's right to backpay (Dominey v. Department of Personnel Administration, supra, 205 Cal.App.3d at pp. 742-743), a disabled applicant's right to Medi-Cal benefits (Cooper v. Kizer, supra, 230 Cal.App.3d at pp. 1298-1299), and an eligible individual's right to welfare benefits (Frink v. Prod, supra, 31 Cal.3d at pp. 178-179).
As the California Supreme Court explained: "[T]he right of a welfare recipient to continued welfare benefits is a fundamental one. It is fundamental both in economic terms, and in terms of its 'effect . . . in human terms and . . . [its] importance . . . to the individual in the life situation.' [Citation.] Like the widow's retirement benefits which we deemed both vested and fundamental in Strumsky, supra, the right to continued welfare benefits involves, of course, the individual's means of support. [Citation.] Indeed, welfare benefits to an individual totally disabled from gaining employment are likely to be even more important and necessary than retirement benefits to an individual who may still be able physically to earn a livelihood. As we observed . . . , 'Termination of aid to an eligible recipient deprives him of the very means for his survival and his situation becomes immediately desperate.' [Citation.] We think it significant that the United States Supreme Court . . . has held that the right to welfare benefits is important enough to fall within the category of benefits to which due process rights attach. Under the principles of our prior cases, we find that this right is also important enough to trigger the independent judgment standard of review when an administrative determination has been made terminating a person's entitlement to this right." (Harlow v. Carleson (1976) 16 Cal.3d 731, 737.)
It is true that plaintiffs' general assistance benefits were not terminated, but simply reduced. Nevertheless, we find this distinction immaterial for the purpose of determining whether a fundamental right is involved. The essential question before us is whether the affected right is of such sufficient significance to preclude its extinction or abridgment by a body lacking judicial power. (301 Ocean Ave. Corp. v. Santa Monica Rent Control Bd., supra, 228 Cal.App.3d at p. 1556; San Marcos Mobilehome Park Owners' Assn. v. City of San Marcos, supra, 192 Cal.App.3d at p. 1501.)
The fundamental nature of general assistance benefits cannot be understated. In Frink v. Prod, supra, 31 Cal.3d at pages 178-180, the high court noted that previous cases, such as Harlow v. Carleson, supra, 16 Cal.3d 731, had emphasized the significance of the right to continued welfare benefits in requiring independent judgment review, and found the same considerations applied with equal force to applicants for benefits. The Frink court held: "The right of the needy applicant to welfare benefits is as fundamental as the right of a recipient to continued benefits. Because need is a condition of benefits, erroneous denial of aid in either case deprives the eligible person '"of the very means for his survival and his situation becomes immediately desperate."'" (31 Cal.3d at p. 179.)
The Frink court noted that in the licensing context, some cases had distinguished between possessed and vested rights and rights "merely sought," a distinction based primarily on the belief that courts should not second-guess an administrative agency's expertise in determining whether someone was qualified to be licensed. (31 Cal.3d at p. 179.) The court stated: "Evaluating the degree to which the right is vested, it is apparent that the right to welfare benefits is not based on expertise, competence, learning, or purchase or ownership claim. Determination of qualification for public assistance does not involve the 'delicate task' of evaluating competence to engage in a broad field of endeavor as is true in most licensing cases. [¶] Rather, the qualification for public assistance primarily is based on need, the absence of income or other source of funds. The applicant for public assistance is seeking aid because of deterioration of his life situation in economic terms. Unlike the applicant for a license, he is not seeking advancement of his earlier life situation. The statutory public assistance programs provide protection to citizens who through economic adversity are in need and as such should be viewed as residual rights possessed by all of the citizenry to be exercised when circumstances require." (Id. at p. 180.)
General assistance meets the subsistence needs of those who are ineligible for any other public aid. (Whitfield v. Board of Supervisors, supra, 227 Cal.App.3d at p. 456.) It is difficult to imagine a program that affects fundamental rights in a more profound way. Without this assistance, indigents would lack housing and other basic necessities of life. Far more than a driver's license or a landlord's right to control parking spaces, general assistance implicates the most fundamental of rights. Its "effect . . . in human terms and the importance of [this right] to the individual in the life situation" (Bixby v. Pierno, supra, 4 Cal.3d at p. 144) is readily apparent, as the trial court concluded here.
The County and the Commission implicitly acknowledge the fundamental nature of general assistance benefits and instead center their argument on a claim that plaintiffs' right to these benefits was not vested. Therefore, they argue, there was no need for the trial court to apply an independent judgment standard of review. We disagree.
A "vested" right is one that is "already possessed" or "legitimately acquired." (Harlow v. Carleson, supra, 16 Cal.3d at p. 735.) The trial court suggested plaintiffs could not claim a vested right to general assistance benefits computed under section 17000.5 because the Legislature had given the counties an alternative method of calculating general assistance payments with the enactment of section 17000.6. The court reasoned that because a county might opt to utilize this alternative, plaintiffs did not have a vested right to benefits at any particular level.
On appeal, the County and the Commission raise an identical claim, a contention we find unpersuasive. Initially, we note there is not a true choice of payment methods, in that a county cannot unilaterally decide to pay benefits at the lower level authorized by section 17000.6. It may do so only upon approval of the Commission after demonstrating a compelling case that payment at the 17000.5 level would cause significant financial distress. Absent that finding by the Commission, the County must pay benefits pursuant to section 17000.5 and plaintiffs are entitled to general assistance at this higher level.
Furthermore, the fact that the benefit amount may change has no bearing on the question of whether the right to those benefits is vested. As the California Supreme Court explained: "[I]t would appear irrelevant that the Legislature had retained the general power to amend or revoke benefits granted under its welfare programs [citation] or had granted the counties authority to modify or cancel welfare awards [citation]. In every context in which the question of the standard of judicial review of administrative decisions arises, the administrative agency has the power to withdraw the benefit from the individual if certain conditions exist. But we have uniformly held that the relevant factor is whether a certain benefit or right is 'already possessed' or was 'legitimately acquired,' not whether, once received, it was to remain permanently. Similarly, the fact that the right to future benefits is not irretrievably lost, when terminated, has no bearing on the question of whether a right is 'vested.'" (Harlow v. Carleson, supra, 16 Cal.3d at p. 736.)
Plaintiffs have the right to benefits under section 17000.5. It is a right "already possessed" and "legitimately acquired," and must be deemed vested.
This conclusion is bolstered by the fact that courts have long recognized the interrelationship between fundamental rights and vested rights. In Frink v. Prod, supra, 31 Cal.3d at pages 177-178, the court summarized: "Bixby [v. Pierno, supra, 4 Cal.3d 130] and Interstate Brands [v. Unemployment Ins. Appeals Bd. (1980) 26 Cal.3d 770] establish that for purposes of determining applicability of independent judgment review the terms fundamental and vested are not used to establish absolutes but are used in a relative sense, and they show that it is the weighing of both the fundamental nature and the vested nature of the right which determines whether independent judgment review is required. Thus, both cases explaining the term fundamental refer to the effect of the right in economic and human terms and to the importance of it to the individual. [Citations.] Effect and importance of rights may vary greatly, and by defining fundamental in terms of effect and importance, the cases reflect that the fundamental character of rights may vary significantly. Similarly, Bixby speaks of rights being 'possessed' by the individual in discussing the vested requirement [citation]; Interstate Brands specifically recognizes independent judgment review may be applicable although the administrative decision does not involve 'vested property rights in the traditional sense' [citation]. And both cases refer to the 'degree to which that right is "vested."' [Citations.] Interstate Brands points out that under the Bixby formulation the effect and importance of rights and the degree to which they are possessed are to be weighed together, stating that 'the search for "vestedness" and the search for "fundamentalness" are one and the same. The ultimate question in each case is whether the affected right is deemed to be of sufficient significance to preclude its extinction or abridgment by a body lacking judicial power.'" (Emphasis in original.) (31 Cal.3d at pp. 177-178; accord, 301 Ocean Ave. Corp. v. Santa Monica Rent Control Bd., supra, 228 Cal.App.3d at p. 1556.)
Thus, in Frink, the court grappled with the question of what standard of review should be utilized in reviewing the denial of an application for welfare benefits. After noting that the right to continued welfare benefits required an independent judgment standard of review, the court concluded the same standard should apply in the case of the denial of an initial application for welfare benefits. The court observed: "While the degree to which the right is vested may not be overwhelming, the degree of fundamentalness is. Weighing them together as required by Bixby and Interstate Brands, we conclude the independent judgment standard should be applied to decisions denying applications for welfare benefits." (31 Cal.3d at p. 180.)
We reach the same conclusion here. The instant case involves an "overwhelming degree of fundamentalness," as well as a right to which plaintiffs are already entitled. An administrative decision affecting such a right should not be immune from judicial review. Consequently, we conclude an independent judgment standard of review is warranted.
The trial court came to a contrary conclusion, in part on the theory that the Commission's decision did not directly and substantially affect plaintiffs' rights. The court reasoned that it was the County's subsequent decision actually lowering general assistance benefits, not the Commission's decision authorizing such a reduction, that directly impacted plaintiffs. On a purely theoretical level, this distinction may have some technical merit. But the stark realities of the situation compel a different conclusion.
The regulations require that a county seeking relief under section 17000.6 must first pass a resolution stating that compliance with the standards of section 17000.5 will cause significant financial distress. (Cal. Code Regs., tit. 2, § 1186.51, subd. (b)(1)(A).) The County passed such a resolution, outlining at length its fiscal situation and asserting that the savings achieved by paying general assistance benefits at the minimum level permitted by section 17000.6 would permit funding of some basic county services. The County concluded that compliance with section 17000.5 would result in significant financial distress, and authorized an application for such a finding by the Commission.
In essence, the County had already determined that with the Commission's approval, benefits would be reduced in accordance with section 17000.6. The Commission's decision was the vehicle whereby this plan could be implemented. It is virtually inconceivable that a county having made a determination that payment of general assistance benefits under section 17000.5 would cause significant financial distress, and having pleaded that case to the Commission, would then turn around and, upon approval for lower payments by the Commission, decline that opportunity and maintain benefits at the higher level required by section 17000.5. On a practical level, it is the Commission's decision that will determine whether general assistance recipients will be paid under section 17000.5 or under section 17000.6. While plaintiffs' benefits are not actually reduced until the County subsequently makes its allocation under section 17000.6, that result is a foregone conclusion. Given the realities of this situation, the Commission's decision must be deemed to directly and substantially affect plaintiffs' rights.
Under these circumstances, the trial court should have applied an independent judgment standard of review, not the less stringent substantial evidence test. A fundamental, vested right was involved, and the Commission's actions directly affected that right. As a matter of public policy in such cases, responsibility for factual determinations lies with the trial court, not the administrative agency. (Barber v. Long Beach Civil Service Com. (1996) 45 Cal.App.4th 652, 659.)
The trial court's failure to apply the appropriate standard of review precludes our ability to reach the merits of this appeal. "This is so because on appeal from a judgment in a case where the trial court is required to exercise its independent judgment, our review of the record is limited to a determination whether substantial evidence supports the trial court's conclusions and, in making that determination, we must resolve all conflicts and indulge all reasonable inferences in favor of the party who prevailed in the trial court. [Citations.] It follows that where the trial court has failed to perform its duty, we are unable to perform ours . . . ." (Barber v. Long Beach Civil Service Com., supra, 45 Cal.App.4th at pp. 659-660; see also 301 Ocean Ave. Corp. v. Santa Monica Rent Control Bd., supra, 228 Cal.App.3d at p. 1555; Cooper v. Kizer, supra, 230 Cal.App.3d at p. 1299.)
The voluminous record in this case reveals conflicting evidence on the County's financial state and its ability to maintain basic county services if compelled to pay general assistance benefits at the level established by section 17000.5. It is the trial court's responsibility to weigh this evidence and make factual determinations under an independent judgment standard of review. We shall therefore reverse and remand the matter to the trial court for reconsideration under the appropriate standard.
For the guidance of the trial court, we clarify questions of law raised by the parties concerning the proper interpretation of section 17000.6. (See Hilb, Rogal & Hamilton Ins. Services v. Robb (1995) 33 Cal.App.4th 1812, 1823.) We turn to those issues now.
II. Section 17000.6 Plaintiffs contend the trial court and the Commission erred in construing section 17000.6. We conclude otherwise.
"The rules governing statutory construction are well settled. We begin with the fundamental premise that the objective of statutory interpretation is to ascertain and effectuate legislative intent. [Citations.] 'In determining intent, we look first to the language of the statute, giving effect to its "plain meaning."' [Citations.] Although we may properly rely on extrinsic aids, we should first turn to the words of the statute to determine the intent of the Legislature. [Citation.] Where the words of the statute are clear, we may not add to or alter them to accomplish a purpose that does not appear on the face of the statute or from its legislative history." (Burden v. Snowden (1992) 2 Cal.4th 556, 562.)
The language of a statute is to be construed according to its usual, ordinary meaning, with significance given to every word, phrase, and sentence, when possible. (DuBois v. Workers' Comp. Appeals Bd. (1993) 5 Cal.4th 382, 387-388.)
Plaintiffs contend the term "significant financial distress" may be interpreted in a variety of ways, and therefore turn to legislative history to divine legislative intent. Specifically, plaintiffs assert comments of two legislators indicate that section 17000.6 must be construed as affording relief only to those counties in the most severe financial distress. Because the County was relatively healthy compared to other counties throughout the state, they assert the Commission and trial court erred in making a finding of significant financial distress. These assertions are not convincing.
Section 17000.6 was enacted through the passage of SB 1033. This bill was part of the final 1993 budget negotiations and was not heard before any legislative committees.
On June 24, 1993, SB 1033 was presented on the floor of the Assembly with a minimum of discussion. The measure's proponent, Assembly Member Bernie Richter, introduced the bill by saying: "Mr. Speaker and Members, it's certainly not easy for me to ask that we take money from some of the most indigent people in our society and in our counties. [¶] In the counties that I represent -- because of the inequities of AB 8 -- we have catastrophic situations in which monies from the reduction in the grant levels mean the difference between having no deputies all night long in a county of 30,000 people or having two deputies or three deputies within that county. [¶] It is not pleasant to go for resources to this kind of base. But because of this budget crisis, counties that I represent, in fact, need this revenue. [¶] We have reached an accord and a compromise in which the floor is effectively moving down from approximately 50 percent of the federal poverty level, which is now the base -- 51 or 50 -- to 40. [¶] And in addition to that, we have agreed that hearings by the Mandate Commission be held in the counties that are asking for the relief. [¶] I urge an aye vote."
One speaker spoke briefly in opposition to the measure. The bill passed out of the Assembly on a 42-24 vote.
Debate in the Senate was equally abbreviated. In presenting the bill on the floor on June 29, 1993, Senator Tim Leslie said: "SB 1033 is a critical adjunct to the budget package because it provides budget relief to the hardest pressed counties. Particularly to small and rural counties."
After one senator spoke against the bill, Senator Leslie replied: "Now, the thing that should be made very clear, this is not across-the-board reduction in general assistance in any way, shape, or form. Only counties who are in fiscal distress are allowed to apply for this. And only the counties in the worst situation will be able to apply. And they have to go to the Commission on State Mandates. There's a public hearing. There's a full debate, and only if they can document that they have reached a certain level of destitioness [sic], then they would be able to make these reductions. [¶] And besides that the bill does still maintain a floor so that this cannot be reduced down to zero. The floor is lower than the current floor, but there is a floor there. So I want to make that very, very clear. I think the issues -- that the issues are clear. We've created a situation that we must provide relief to those who have to implement these programs. It asks for your aye vote."
There was no further debate, and the measure passed on a 26-9 vote.
Plaintiffs contend Assembly Member Richter's reference to the "catastrophic situation" in his county, and Senator Leslie's references to "the hardest pressed counties," particularly "small and rural counties," and counties "in the worst situation" evidence the Legislature's intent to limit relief under section 17000.6 to those counties in the worst financial shape when compared to other counties in the state. We disagree.
In appropriate circumstances, legislative intent may be ascertained through a consideration of legislative history, including committee reports and legislative debates. (Perez v. Smith (1993) 19 Cal.App.4th 1595, 1598; Estate of Sanders (1992) 2 Cal.App.4th 462, 470.) However, ". . . statements of an individual legislator, including the author of a bill, are generally not considered in construing a statute, as the court's task is to ascertain the intent of the Legislature as a whole in adopting a piece of legislation." (Quintano v. Mercury Casualty Co. (1995) 11 Cal.4th 1049, 1062; see also Oberlander v. County of Contra Costa (1992) 11 Cal.App.4th 535, 547-548.)
"'In construing a statute we do not consider the motives or understandings of individual legislators who cast their votes in favor of it. [Citations.] Nor do we carve an exception to this principle simply because the legislator whose motives are proffered actually authored the bill in controversy [citation]; no guarantee can issue that those who supported his proposal shared his view of its compass.' [Citations.] A legislator's statement is entitled to consideration, however, when it is a reiteration of legislative discussion and events leading to adoption of proposed amendments rather than merely an expression of personal opinion. [Citations.] The statement of an individual legislator has also been accepted when it gave some indication of arguments made to the Legislature and was printed upon motion of the Legislature as a 'letter of legislative intent.'" (California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 692, 699-700; see also In re Marriage of Bouquet (1976) 16 Cal.3d 583, 589-590.)
Here, the statements of Legislators Richter and Leslie do not chronicle events leading to proposed amendments in SB 1033, nor were these comments adopted by the Legislature as a representation of legislative intent. Instead, the comments are nothing more than the personal opinion of two lawmakers. The fact that they viewed SB 1033 as permitting relief for the "worst-off" counties, those in "catastrophic conditions," does not mean that other legislators shared this interpretation, and their comments cannot be used to determine legislative intent. (See California Teachers Assn. v. San Diego Community College Dist., supra, 28 Cal.3d at p. 701; Estate of Sanders, supra, 2 Cal.App.4th at p. 474, fn. 15; cf. Walters v. Weed (1988) 45 Cal.3d 1, 10 [discussion and events at hearing indicated other legislators shared the author's view of a legislative bill].)
In fact, the language of the statute does not reflect any such limitation. While there are rare instances when legislative intent can be inferred from statements of a bill's sponsor, that inference can be made only if the statement is consistent with the statute's language. (Dubins v. Regents of University of California (1994) 25 Cal.App.4th 77, 87.) That is not the case here. Nothing in the statute suggests the number of counties eligible for relief under section 17000.6 might be limited. Nor is there any hint that only those counties in the most financial distress vis-à-vis other counties should be approved for reduced benefits. Instead, the statute clearly and unequivocally permits the Commission to make a finding of significant financial distress when a "county has made a compelling case that, absent the finding, basic county services, including public safety, cannot be maintained." (§ 17000.6, subd (a).) Theoretically, all 58 counties could qualify for relief under this provision. Had the Legislature intended to limit reductions to a specified number of counties or those in comparatively worse financial position, it could easily have included such language in the statute. It did not.
Additionally, the short time frames set forth in section 17000.6 belie any suggestion that a comparative study of the financial health of all counties must be undertaken. The Commission must notify a county within 10 days of receipt of the application if the application is incomplete, must provide a 30-day notice of hearing in the county of application, must notify the county of its preliminary decision within 60 days after receiving the application, and must render a final decision within 90 days of receipt of the application. (§ 17000.6, subd. (c); Cal. Code Regs., tit. 2, §§ 1186.51, subd. (b)(2), 1186.6, subd. (a), 1186.7, subds. (a), (b)). 5 An in-depth comparison of the relative fiscal situation in each county simply cannot be made within these time frames.
In sum, there is no evidence that the Legislature intended to limit the relief afforded by section 17000.6 to those counties in the worst financial situations. Instead, the statute authorizes the Commission to make a finding of "significant financial distress" whenever a county has established by clear and convincing evidence that, absent such a finding, basic county services could not be maintained. No comparative analysis of a particular county's financial health vis-à-vis others is required.
Relying on statutes from Ohio and Pennsylvania, plaintiffs contend a finding of significant financial distress should be predicated on several specific factors, such as whether the county has maintained a deficit over a period of time, missed a payroll, or failed to make payments to a judgment creditor. 6 While these factors may indeed indicate "significant financial distress," there is nothing in the statute that requires these elements to be present before such a finding is made. A county's fiscal health is one factor to be considered in judging "significant financial distress," but it alone is not determinative.
Unlike Ohio and Pennsylvania, California did not enumerate the factors indicating significant financial distress. Instead, section 17000.6 permits the Commission to make a finding of significant financial distress only if "the county has made a compelling case that, absent the finding, basic county services, including public safety, cannot be maintained." Thus, the statute itself implicitly defines "significant financial distress" as the inability to maintain basic county services if full general assistance payments are required. There is no need to resort to the statutes of other states for a definition of this term.
Next, plaintiffs assert the regulation defining "basic county services" improperly enlarges the scope of the statute. Once again, we disagree.
Section 17000.6 does not define "basic county services" other than to indicate that these services include public safety. Section 1186.5, subdivision (b) of title 2 of the California Code of Regulations defines "basic county services" as "those services which are fundamental or essential. Such services shall include, but are not limited to, those services required by state or federal law, and may vary from county to county."
The rulemaking authority of an administrative body is limited by statute. (California Beer & Wine Wholesalers Assn. v. Department of Alcoholic Beverage Control (1988) 201 Cal.App.3d 100, 106 (California Beer).) Government Code section 11342.2 provides: "Whenever by the express or implied terms of any statute a state agency has authority to adopt regulations to implement, interpret, make specific or otherwise carry out the provisions of the statute, no regulation adopted is valid or effective unless consistent and not in conflict with the statute and reasonably necessary to effectuate the purpose of the statute."
"A regulation is invalid (as 'in conflict with' a statute) if it would 'alter or amend the [governing] statutes or enlarge or restrict the agency's statutory power.'" (California Beer, supra, 201 Cal.App.3d. at pp. 106-107.)
That is not the case here. Nothing in the statute limits "basic county services" to those mandated by law, or reflects a requirement that the same services be deemed "basic" in every county in California. The regulation's clarification of this fact does not alter the meaning of section 17000.6, nor does it enlarge the Commission's power. Instead, it reflects reality. Some basic services, that is, services that are "fundamental or essential," may be mandated by state or federal law; others that are equally essential may not be subject of a governmental mandate. Similarly, what constitutes a basic service in one county may not be considered as such in another. It defies logic to suggest that rural and urban counties, for example, require the identical basic services. Modoc County and Los Angeles County have different populations and different needs. The regulation simply reflects that fact.
Plaintiffs properly note that not all expenditures by a public agency necessarily relate to basic county services. For instance, a sheriff's office does not have carte blanche to classify every agency expenditure as fundamental and essential simply because it is an expenditure of an agency concerned with public safety. As the Commission found, each item must be examined to determine whether it in fact relates to a "basic county service." Whether sufficient funds from "nonbasic" services are available to cover shortfalls in basic services is a question of fact for the Commission in the first instance, and the trial court on review, to determine. Similarly, the amount of money spent on nonessential items is part of the calculus in determining whether a county would in fact suffer significant financial distress if required to fund general assistance at the level set by section 17000.5.
Plaintiffs challenge the trial court's and the Commission's interpretations of the word "maintained" as used in section 17000.6, arguing that the maintenance of basic county services limits a county to services at the level then provided. 7 In other words, a county can keep basic services at the current level, but cannot increase them. Again, we are unpersuaded.
"Maintain" has a number of definitions. It can mean "to keep in an existing state, . . ." such as a state of repair, as plaintiffs point out. However, it can also mean to "preserve from failure or decline . . . ," or "to support or provide for . . . ." (Webster's Ninth New Collegiate Dict. (1984) p. 718.) These latter definitions are applicable to the instant case, because they would permit a county to restore or expand basic services if these basic services were fundamental or essential.
As the Commission properly noted, this construction "makes good policy sense. Basic, fundamental, and essential are not static concepts in relation to government services or social needs. It seems artificial to restrict a definition of urgency of need to a level of services no greater than provided in any given year. For example, caseload increase in a program may require additional funding in order to maintain existing service levels on a per-client basis. Or, new social needs may arise (such as a disease or public safety situation) requiring activities not previously contemplated but nonetheless essential to maintaining the overall adequacy of a basic county service. Or more simply, funding may have lagged behind existing program requirements long enough to erode service levels." (Emphasis in original.) We agree. The fundamental question underlying this entire process is whether the county can afford to maintain basic county services. Whether those services have previously been funded is immaterial if the services are now essential. 8
Finally, plaintiffs suggest the Commission (and the trial court) must look at alternative revenue enhancements and expenditure reductions to determine whether a county cannot maintain basic county services, or simply chooses not to spend resources in this manner. We agree that alternatives must be considered. However, those alternatives must be viable and practical, not speculative. It is not sufficient, for example, to say that a county could raise the requisite amount of funds through a tax levy approved by the electorate. An event that has not yet produced that income and which is uncertain ever to occur cannot form the basis for a finding of financial ability to support these services
Furthermore, alternatives are relevant only to the extent that they can in fact cover the projected shortfall giving rise to the claim of significant financial distress. For example, the fact that some funds might be found to cover certain county programs is immaterial if that simply reduces a deficit to a smaller, but still unmanageable, size.
As we noted earlier, our discussion of the proper interpretation of section 17000.6 is designed to assist the trial court on remand. We do not reach the question of whether the County made a compelling case that, absent a finding of significant financial distress, it would be unable to maintain basic county services. Resolution of that issue must first be provided by the trial court, exercising its independent judgment on the evidence.
DISPOSITION The judgment is reversed and the cause remanded to the trial court with directions to reconsider the evidence under the independent standard of review and thereafter proceed according to law. Plaintiffs are awarded their costs on appeal.
I concur:
SIMS, J.
I concur in the judgment and in Part I of the Discussion. I dissent from the cursory analysis in Part II of the Discussion concerning the standards which the trial court must follow on remand.
This case involves the poorest of the poor, those who receive general assistance. The Commission on State Mandates (Commission), authorized the County of Sacramento to reduce its general assistance (GA) standard of aid of 62 percent of the federal official poverty level, as required by Welfare and Institutions Code section 17000.5, to 40 percent under section 17000.6. The reduction would amount to seven million dollars out of a total budget of over one billion dollars and discretionary spending of over three hundred million dollars.
Section 17000.5 requires a county to set the level of GA at 62 percent of the federal poverty level. Section 17000.6 permits a county to reduce that level to 40 percent if the Commission
The majority opinion is, in my view, seriously flawed. It sets out the facts of the Commission decision without explaining how they evidence the Commission's application of the standard set out in section 17000.6. It fails to show the mode of its reasoning, e.g., if fails to show how to treat the fact that the County has shown increasing end-of-the-year general fund balances during or how to treat the fact that the County was "able" to increase the salaries of County employees while "unable" to maintain basic services. Most importantly, it largely ignores the plaintiffs' central arguments about the meaning of section 17000.6.
The plaintiffs argue that the Commission departed from the mandate of section 17000.6 in failing to apply a stringent view of whether continuation of the higher level of GA benefits would cause the failure to maintain basic county services. They make the following statutory argument:
The draft opinion fails to recognize this as a statutory argument. It responds opaquely and summarily that:
"[A]lternatives must be considered. However, those alternatives must be viable and practical, not speculative. It is not sufficient, for example, to say that a county could raise the requisite amount of funds through a tax levy approved by the electorate. An event that has not yet produced income and which is uncertain ever to occur cannot form the basis for a finding of financial ability to support these services." (Maj. opn. at p. 45.)
I take from this an implicit concession that if the county could raise the money, for example, through a tax levy imposed by the county when the approval of the electorate was not required, i.e., when it can be done by a vote of the supervisors, but they choose not to do so, it would require a finding that basic county services can be maintained without lowering GA. I find this implied also in the direction to the trial court to determine whether, "absent a finding of significant financial distress, [the County] would be unable to maintain basic county services." (Maj. opn. at p. 46, emphasis added.)
I think the implication is correct. It is compelled by the gravity of the deprivation occasioned by lowering GA to 40 percent of the poverty level (threatening the lives and health of the poorest segment of our community), the tendency to drive paupers to (initially) more beneficent jurisdictions, and the unqualified statutory phrases "would result" and "cannot be maintained." It is impelled by the rhetorical assurances of the legislation's sponsors that only the most hard pressed counties can qualify.
Such a tax levy is imposed by the vote of the county supervisors. In such actions or omissions the supervisors are the county, the county qua the board of supervisors. If the county qua the board of supervisors can maintain basic county services without lowering the GA level by their vote, and choose not to do so, the criterion of the statute is not met.
But why draw the line at a vote by the electorate's representatives, its board of supervisor's? In those instances where a tax levy requires the endorsement of the electorate it, rather than its elected representatives, is the county. It is in the nature of a compulsory referendum, in which the county's power has been divided between the board of supervisors, which initiates the tax levy, and the electorate which must ratify it. "The voice is Jacob's voice but the hands are the hands of Esau." (County of San Diego v. Williams (1954) 126 Cal.App.2d 804, 810, internal quotation marks omitted.)
It is no different than if the electorate passes an initiative ordinance requiring some taking of property or some act occasioning damages, say via employment discrimination. In that case it is the county that is liable. If the electorate refuses to pay for "basic county services" when it has been given the ability so to do by the board of supervisors, but chooses not to do so, then the county can provide those services without a GA cut.
I agree with the plaintiffs that this would present a case that does not meet the criterion of the statute.
1 Effective January 1, 1997, a finding of financial distress may be made for a period of 36 months. (Stats. 1996, ch. 6, § 8.)
2 An individual who had been receiving $286 per month in general assistance would receive $221 under the minimum levels established by section 17000.6. Twenty dollars of this aid, under either formula, is in the form of a transit pass rather than cash.
3 Thus, the fact that the Commission is described in Government Code section 17500 as a "quasi-judicial body" and has been recognized as such by other courts (e.g., Redevelopment Agency v. Commission on State Mandates (1996) 43 Cal.App.4th 1188, 1194-1196) is not in itself determinative. The focus is on the Commission's function in proceedings under section 17000.6, not the label that might be attached to this entity. We note, however, that Government Code section 17559, relating to reimbursement for state-mandated claims, specifically provides that a claimant or the state may challenge a Commission decision as lacking substantial evidence through proceedings under Code of Civil Procedure section 1094.5, the administrative mandamus provision.
4 The standard of review for quasi-legislative determinations under ordinary mandamus pursuant to Code of Civil Procedure section 1085 is not affected by the fact that fundamental vested rights may be involved. (Dominey v. Department of Personnel Administration, supra, 205 Cal.App.3d at p. 738, fn. 5.)
5 Continuances of Commission hearings can be granted "only under compelling and urgent circumstances." (Cal. Code Regs., tit. 2, § 1186.65, subd. (b).)
6 Title 53 of Pennsylvania Consolidated Statutes Annotated, section 11701.201 is part of the Financially Distressed Municipalities Act, and sets forth various criteria demonstrating "a valid indication of municipal financial distress." Similar considerations are enumerated in Ohio Revised Code Annotated, section 118.03 (Anderson 1992), outlining fiscal emergency conditions for a municipal corporation.
7 We note, however, that at the Commission hearing, plaintiffs themselves suggested examining program expenditures over the last three to five years.
8 In a related argument, plaintiffs assert Proposition 172 serves to define "maintenance of public safety." This proposition, reflected in article 13, section 35(a) of the state Constitution, relates to the local public safety fund established in Government Code sections 30051 et sequitur, and provides in part: "In order to assist local government in maintaining a sufficient level of public safety services, the proceeds of the tax enacted pursuant to this section shall be designated exclusively for public safety." (Cal. Const., art. 13, § 35, subd. (a)(3).)
Proposition 172 was designed to "assist local governments in maintaining a sufficient level of public safety services." (Cal. Const., art. 13, § 35, subd. (a)(3), emphasis added.) Nothing in the proposition suggests that the revenue available through this tax sets the standard for maintenance of these services. These funds may not be sufficient in and of themselves to maintain public safety services, but serve to assist counties in meeting these needs.
* Retired Associate Justice of the Court of Appeal, Third District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
APPEAL from a judgment of the Superior Court of Sacramento County. W. J. Harpham, Judge. Reversed with directions.
Legal Services of Northern California, Jennifer Horne, Brian Patrick Lawlor and Eugenie Denise Mitchell, Western Center on Law & Poverty, Robert Newman and Richard Rothschild for Plaintiffs and Appellants.
Daniel E. Lungren, Attorney General, Floyd D. Shimomura, Senior Assistant Attorney General, Linda A. Cabatic, Supervising Deputy Attorney General, Paul H. Dobson, Deputy Attorney General, for Defendant and Respondent.
Robert A. Ryan, Jr., County Counsel, Kathleen A. O'Connor, Supervising Deputy and Peter L. Dixon, Deputy, for Respondent and Real Party in Interest.
This appeal stems from the inevitable problems and conflicts that occur as counties make budgetary decisions in an era of increased demand and diminished local resources.
Facing a large projected budget shortfall, Sacramento County (the County) sought to reduce its general assistance benefits pursuant to the procedures outlined in Welfare and Institutions Code section 17000.6. (All subsequent statutory references are to the Welfare and Institutions Code unless otherwise indicated.) As we describe in detail below, this statute permits a reduced level of general assistance upon a finding by the Commission on State Mandates (the Commission) that meeting the otherwise required level of assistance "would result in a significant financial distress to the county." (§ 17000.6, subd. (a).) The statute specifies the Commission cannot make this finding "unless the county has made a compelling case that, absent the finding, basic county services, including public safety, cannot be maintained." (Ibid.)
The Commission found the County had made such a showing and that payment of general assistance at the ordinarily required level would result in significant financial distress to the County. The County's Board of Supervisors subsequently reduced its general assistance standard of aid to the lower level permitted by section 17000.6. Plaintiffs, who are general assistance recipients, filed a petition for mandate and a complaint for declaratory and injunctive relief challenging the Commission's determinations. The trial court upheld the Commission, and this appeal followed.
The appeal raises two issues. First, plaintiffs assert the trial court erred in applying a substantial evidence standard of review to the Commission's finding of significant financial distress. Because the Commission's decision was quasi-judicial in nature and directly affected a vested fundamental right, they contend the trial court should have exercised its independent judgment in reviewing the Commission's decision. We agree, and shall therefore remand the matter for reconsideration under the appropriate standard of review.
Second, plaintiffs assert the Commission and trial court erred in construing section 17000.6 and in determining the County had established that payment of general assistance at the prescribed level would cause significant financial distress. To provide guidance to the court on remand, we address plaintiffs' legal arguments concerning the scope of section 17000.6.
STATUTORY FRAMEWORK The general assistance mandate is found in section 17000. It provides: "Every county and every city and county shall relieve and support all incompetent, poor, indigent persons, and those incapacitated by age, disease, or accident, lawfully resident therein, when such persons are not supported and relieved by their relatives or friends, by their own means, or by state hospitals or other state or private institutions."
General assistance is a safety net, a program of last resort designed to meet the subsistence needs of indigents who are unable to qualify for any other public aid. (Whitfield v. Board of Supervisors (1991) 227 Cal.App.3d 451, 456; Reyes v. Board of Supervisors (1987) 196 Cal.App.3d 1263, 1267.) The responsibility for the financing and administration of this program rests with individual counties, which are statutorily compelled to support their indigent and disabled residents. (§ 17000; see also Whitfield v. Board of Supervisors, supra, 227 Cal.App.3d at p. 456; Reyes v. Board of Supervisors, supra, 196 Cal.App.3d at p. 1267, fn. 2; Washington v. Board of Supervisors (1993) 18 Cal.App.4th 981, 983-986.)
Section 17001 requires each county to adopt standards of aid and care for its indigent and dependent poor. That level may be determined in one of two ways. A county may conduct a study to determine the actual subsistence costs in the county and set aid levels accordingly. (See Boehm v. County of Merced (1985) 163 Cal.App.3d 447, 452.) Alternatively, a county may rely on section 17000.5, enacted in 1991 (Stats. 1991, ch. 91, § 34), which provides in subdivision (a): "The board of supervisors in any county may adopt a general assistance standard of aid, including the value of in-kind aid, . . . that is 62 percent of a guideline that is equal to the 1991 federal official poverty line and may annually adjust that guideline. . ." in a specified manner. Subdivision (b) of this statute explicitly provides: "The adoption of a standard of aid pursuant to this section shall constitute a sufficient standard of aid." Thus, under this statute, a county need not demonstrate it has actually met the minimum subsistence needs of its general assistance recipients; instead, a "sufficient standard of aid" is conclusively presumed to have been provided. (Welfare Rights v. Frank (1994) 25 Cal.App.4th 415, 420; see generally Gardner v. County of Los Angeles (1995) 34 Cal.App.4th 200, 205-206, 213.)
In 1993, the Legislature added a third possible method of establishing assistance levels by enacting section 17000.6. This statute, the heart of the instant appeal, provided:
"(a) The board of supervisors of any county may adopt a standard of aid below the level established in Section 17000.5 if the Commission on State Mandates makes a finding that meeting the standards in Section 17000.5 would result in a significant financial distress to the county. When the commission makes a finding of significant financial distress concerning a county, the board of supervisors may establish a level of aid which is not less than 40 percent of the 1991 federal official poverty level, which may be further reduced . . . for shared housing. The commission shall not make a finding of significant financial distress unless the county has made a compelling case that, absent the finding, basic county services, including public safety, cannot be maintained.
"(b) Upon receipt of a written application from a county board of supervisors, the commission may make a finding of financial distress for a period of up to 12 months[ 1] pursuant to regulations that the commission shall adopt, that are necessary to implement this section. The period of reduction may be renewed annually by the commission upon reapplication by the county.
"(c) As part of the decisionmaking process, the commission shall notice and hold a public hearing on the county's application or reapplication in the county of application. The commission shall provide a 30-day notice of hearing in the county of application or reapplication. The commission shall notify the applicant county of its preliminary decision within 60 days after receiving the application and final decision within 90 days after receiving the application.
"(d) This section shall not be construed to eliminate the requirement that a county provide aid pursuant to Section 17000.
"(e) Any standard of aid adopted pursuant to this section shall constitute a sufficient standard of aid.
"(f) The commission may adopt emergency regulations for the implementation of this section."
Title 2, section 1186.51 of the California Code of Regulations outlines the steps a county must take to obtain a finding of significant financial distress from the Commission. The county must file a written application containing a copy of a resolution from the county's board of supervisors stating that compliance with the standards set forth in section 17000.5 will result in significant financial distress. The application must also include a "written narrative, including a summary, detailing the relevant financial or other budgetary information and documents necessary for a county to make a compelling case that basic county services, including public safety, cannot be maintained without a reduction in the standard of aid as provided in . . . section 17000.5." (Cal. Code Regs., tit. 2, § 1186.51, subd. (b)(1)(B).)
With this framework in mind, we turn to the case before us.
FACTUAL AND PROCEDURAL BACKGROUND On January 31, 1995, the County's Board of Supervisors passed resolution No. 95-0113, declaring that compliance with the standards set forth in section 17000.5 would result in significant financial distress to the County, and authorizing the filing of an application for relief with the Commission pursuant to section 17000.6. In this resolution, the County noted the need and demand for public safety and related ancillary services had substantially increased in recent years, but county revenues and other financial resources had failed to keep pace. The County found an "erosion in the delivery of these services to a level beneath that which is genuinely adequate to the needs of this county and its citizens[.]" The County also noted that key social services, designed to meet fundamental human needs, were seriously underfunded, and discretionary funding sources were inadequate to support these services.
The County stated it had "reduced the provision of county services for which general funds are available to a level that is minimal, at best, and cannot further reduce such services in order to provide additional funding for the purpose of eliminating the disparity between the reasonably adequate level of public safety and other core services to which county residents are entitled and the level at which such services are actually delivered; to do so would render other fundamental and essential services so deficient as to jeopardize this county's ability to function at any level; and further, any 'discretionary' funds which now support the provision of local government services which might arguably be characterized as non-basic, are grossly inadequate to fill the gap between the current level of identified core basic services and the adequate level of these services[.]"
The County further found that "neither the elimination of the . . . services outside the nucleus of basic county services nor the utilization of available resources not already dedicated to these core services, nor any combination of these two options, would be sufficient to overcome the shortfall between the current level and the adequate level of these core services[.]" However, the County also asserted that if it were authorized to pay the lower level of general assistance permitted by section 17000.6, the County would then have sufficient funds "to allow for delivery of some services within the . . . core of basic county services at the adequate level[.]"
The County concluded that "compliance with the standard of aid established by [s]ection 17000.5 . . . will result in significant financial distress," and authorized the board of supervisors to apply to the Commission for relief from this mandate pursuant to section 17000.6.
The County filed its application with the Commission on February 14, 1995, detailing its financial situation. The County asserted it had a total unfunded need for basic services of $157.2 million, and that only seven percent of the budget represented discretionary expenditures. The County claimed that by reducing general assistance to the minimum levels permissible under section 17000.6, an additional $7.4 million would be available to spend on basic services. 2
The Commission held a hearing at which County officials and general assistance recipients testified. The County representatives described the financial situation in each of their agencies and noted the increasing demand for services, particularly in areas of public safety. General assistance recipients described how their lives would be affected by cuts in the level of aid received, and pointed to items in the County's expenditures that they did not consider to be essential to basic county services, such as employee cost-of-living increases. They further argued that revenues could be raised through increased fees, and that elimination of waste and inefficiencies would result in further savings. They noted that the County had a history of overbudgeting, and expenditures had often been less than the budgeted amount.
The Commission concluded the County had demonstrated that meeting the aid standards set forth in section 17000.5 would cause significant financial distress. In a lengthy decision, the Commission devoted considerable effort to interpreting section 17000.6 because this was the first case arising under that statute. The Commission noted that given the extremely short time frames set forth in section 17000.6, an audit of the County's fiscal processes and budget was impossible. Instead, the Commission concluded, its role was to determine whether the County "has compellingly established critical deficiencies (whether existing or threatened) in basic service areas," a task to be accomplished by examining "objective indicators of service problems, rather than through a detailed analysis/audit of budget requests."
The Commission found that section 17000.6 equated "significant financial distress" with a county's inability to maintain basic services, including public safety, but further noted that meeting section 17000.5 standards need not be the only reason for the inability to maintain basic county services. As the Commission explained, "[i]n other words, a county might be unable to maintain basic services fully even if its . . . application were granted," but an application could not be denied for that reason.
The Commission continued: "[S]ection 17000.6 implies the duty to consider whether there are alternatives which could remedy the basic service deficiencies without the need for a reduction in general aid. Absent these inquiries, it would be sufficient for a county to state that its projected or actual expenditures exceed revenues; therefore it is in financial distress. This approach would not provide meaningful protection for general aid recipients and is clearly contrary to both the standard of evidence implied in the phrase 'compelling case' and the limits suggested by the use of the term basic county services." (Emphasis in original.)
The Commission rejected the suggestion that counties be held to a standard of fiscal impossibility or, at a minimum, be required to demonstrate that they had exhausted all possible alternatives to reducing general assistance. Instead, the Commission concluded a county must establish that it had made "a diligent effort . . . to identify and implement reasonable alternatives and that alternatives deemed reasonable, but not implemented, have been set aside for sound reasons. The Commission further found that proof that all possible alternatives had been exhausted would be exceedingly difficult to offer or for the Commission to validate. Moreover, such a requirement would have a chilling effect on the ability of counties to exercise, in a reasonable fashion, the relief offered by . . . section 17000.6." (Emphasis in original.)
Declining to adopt a standardized test for determining significant financial distress, the Commission decided to consider the following factors in determining whether there might be reasonable alternatives to the reduction of general assistance: (1) evidence of unmet need, (2) budget forecasts, (3) county efforts to constrain expenditures, (4) county efforts to enhance revenues, (5) flexibility in spending, (6) flexibility in resources, and (7) debt and cash flow. The Commission concluded that "after consideration of these factors, the task resolves itself into weighing the evidence to determine if a compelling case has been made that overall county flexibility in resources is insufficient to address the needs in basic county services. Further, the Commission found that this is a different task than setting priorities among county activities; the latter is a task which the Commission found is solely within the purview of the county board of supervisors." (Emphasis in original.)
The Commission noted that section 17000.6 required a county to demonstrate a compelling case that, absent relief, basic county services, including public safety, "cannot be maintained." "Maintained" is defined in the regulations as "the level of service which the county must provide in order to adequately or effectively furnish basic county services." (Cal. Code Regs., tit. 2, § 1186.5, subd. (c)). The Commission determined this definition would permit "a county to propose that it needed to restore or expand services as well, not simply to perpetuate a service level currently in place." (Emphasis in original.) The Commission explained this construction "makes good policy sense. Basic, fundamental, and essential are not static concepts in relation to government services or social needs. It seems artificial to restrict a definition of urgency of need to a level of services no greater than provided in any given year. For example, caseload increases in a program may require additional funding in order to maintain existing service levels on a per-client basis. Or, new social needs may arise (such as a disease or public safety situation) requiring activities not previously contemplated but nonetheless essential to maintaining the overall adequacy of a basic county service. Or more simply, funding may have lagged behind existing program requirements long enough to erode service levels." (Emphasis in original.)
The Commission therefore rejected plaintiffs' claim that basic county services must be confined to existing services, and concluded the County could properly base a claim of financial distress on both existing and needed new services. The Commission cautioned, however, that "not all levels of activity within a basic county service might be deemed equally fundamental or essential. It is not enough to define human services programs (for example) as basic and then argue that any unmet need or threatened activity within those programs is sufficient cause to justify a finding of significant financial distress. An applicant would still be responsible for providing a compelling argument that the proposed service level within the basic program was itself fundamental or essential and truly necessary for the provision of adequate service." (Emphasis in original.)
After reviewing the County's claims of budgetary hardship, the Commission reiterated that "not all activity levels within a basic service are equally fundamental or essential," and concluded that $65 million of the County's $157.2 million of identified service deficiencies were both "compellingly basic in character and convincingly established in amount."
The County's proposed savings from general assistance computed under section 17000.6 rather than section 17000.5 was $7.49 million. Even with this savings, the County projected a budget deficit of $31.8 million for the 1995-1996 fiscal year. If the County's application were denied, the shortfall would be $39.2 million. The Commission noted that while this projection contained variables that might change over time, the forecast was nonetheless conservative in some respects because it did not take into account the effects of the "three strikes law" or the Governor's budget on the county coffers. The Commission concluded the forecast was "reasonable for the information known at this time."
The Commission found the County's efforts to constrain expenditures and enhance revenues demonstrated diligence. The Commission determined the County had expenditure flexibility in a range of three to five percent of its budget ($9 million to $15 million) and revenue flexibility in the range of six to seven percent of the budget ($18 million to $21 million). These positive amounts of additional funds were weighed against the basic service deficiencies of $65 million and the upcoming budget year forecast shortfall of $39.2 million.
The Commission rejected plaintiffs' suggestion that the County's credit rating, debt load, fund balances and cash flow demonstrated a prima facie case of financial health, and instead considered these elements as additional factors in its weighing process.
The Commission concluded the County had established a compelling case that, absent a finding by the Commission, meeting the general assistance standards as set forth in section 17000.5 would result in significant financial distress. This decision became effective on April 28, 1995.
On May 9, 1995, the County Board of Supervisors voted to reduce general assistance benefits to the minimum levels required by section 17000.6. This action resulted in a budget savings of approximately $7.45 million.
Plaintiffs filed a petition for writ of mandate with the trial court, challenging the Commission's interpretation of section 17000.6 as well as the particular findings made. As a threshold matter, plaintiffs asserted the trial court was obligated to apply an independent judgment standard of review because the case involved a quasi-judicial determination affecting a vested fundamental right, namely, the recipients' right to assistance at the level authorized by section 17000.5. Plaintiffs also argued that comments made by two legislators during deliberations on Senate Bill No. 1033 (SB 1033) reflected the Legislature's intent that section 17000.6 apply only to the worst-off counties, those in "catastrophic" situations. Plaintiffs asserted the County's relative financial health made it ineligible for relief under this provision.
In response, the County and the Commission argued that substantial evidence review was proper because the Commission's determination was quasi-legislative, not quasi-judicial. However, they asserted, even if characterized as a quasi-judicial proceeding, the matter did not involve a vested fundamental right requiring a broader standard of review. The County and the Commission further contended that the Commission had properly interpreted section 17000.6, and that the Commission's findings were supported by substantial evidence.
The trial court denied plaintiffs' petition for mandate. It concluded that the Commission's decision was adjudicative in nature, not quasi-legislative, and that plaintiffs had a fundamental right to general assistance benefits for which they qualified. However, the court found the Commission's decision "did not directly and immediately affect that right." The court reasoned that the Commission's decision did not determine whether the assistance level would be set below the section 17000.5 standard, or if so, by how much. These decisions were to be made by the County in a separate proceeding after the Commission's decision. The court added that because the Legislature had given counties the option of reducing assistance levels under the procedures outlined in section 17000.6, plaintiffs could not claim a vested right to assistance under the section 17000.5 standard. The court therefore determined that the appropriate standard of review was one of substantial evidence, not independent judgment.
The court ruled that the Commission had properly interpreted section 17000.6 and that substantial evidence supported the Commission's decision finding payment of general assistance at the section 17000.5 level would cause the County significant financial distress.
This appeal followed.
DISCUSSION I. Standard of Review in the Trial Court Plaintiffs contend the trial court erred in applying a substantial evidence standard of review, rather than an independent judgment test. We agree.
As an initial matter in determining the appropriate standard of review, we must determine whether the Commission's decision was quasi-judicial or quasi-legislative in nature.
Generally, an action is deemed "quasi-legislative" when an administrative agency creates a new rule for future application. In contrast, an action is "quasi-adjudicative" when the agency applies an existing rule to existing facts. (20th Century Ins. Co. v. Garamendi (1994) 8 Cal.4th 216, 275.) As one commentator explained: "Legislative actions create broad, generally applicable rules of conduct as public policy, whereas quasi-judicial or adjudicatory actions affect only the individual parties and are determined by the facts of the individual case." (Cal. Administrative Mandamus (Cont.Ed.Bar 2d ed. 1989) Decision to Petition for Writ, § 1.7, p. 7.)
"The classification of administrative action as quasi-legislative or quasi-adjudicative 'contemplates the function performed . . . .'" (20th Century Ins. Co. v. Garamendi, supra, 8 Cal.4th at p. 275.) Consequently, the characterization does not depend on the nature of the decisionmaking body, the procedural characteristics of the administrative process or the breadth of the agency's discretion. (Pacifica Corp. v. City of Camarillo (1983) 149 Cal.App.3d 168, 176.) 3
The appropriate classification presents a question of law (Dominey v. Department of Personnel Administration (1988) 205 Cal.App.3d 729, 737, fn. 4), and the resolution of that question bears on the standard of review to be applied. In reviewing a quasi-legislative determination, a court "must proceed in ordinary mandamus (Code Civ. Proc., § 1085) and 'is limited to an examination of the proceedings before the agency to determine whether its action has been arbitrary or capricious, or entirely lacking in evidentiary support, or whether it has failed to follow the procedure and give the notices required by law.' [Citations.] If, on the other hand, the action is adjudicative, then the more rigorous standard of review compelled by Code of Civil Procedure section 1094.5 governs. That statute requires a determination of 'whether substantial evidence supports the administrative agency's findings and whether the findings support the agency's decision. . . .'" (Joint Council of Interns & Residents v. Board of Supervisors (1989) 210 Cal.App.3d 1202, 1209; see also Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 566-567; Balch Enterprises, Inc. v. New Haven Unified School Dist. (1990) 219 Cal.App.3d 783, 791.)
The threshold matter before us is whether the Commission created a new rule for future application in a quasi-legislative function, as contended by the County and Commission, or applied an existing rule to existing facts and acted in a quasi-judicial capacity, as plaintiffs assert. We conclude that plaintiffs advance the more persuasive argument.
The issue before the Commission was whether the County had made a compelling case that providing general assistance at the level contemplated by section 17000.5 would cause significant financial distress such that the County could not maintain basic services, including public safety. It is difficult to imagine a case better epitomizing adjudicative functions. The Commission applied the standards set forth in section 17000.6 and the related regulations to the County's situation. This determination did not involve the formulation of a rule to be applied in any future case. It was a determination of one county's eligibility for relief under section 17000.6, "the determination of specific rights in regard to a specific fact situation." (Cal. Administrative Mandamus, supra, Decision to Petition for Writ, § 1.7, p. 7.)
The County and the Commission analogize the Commission's actions to rate setting, a quasi-legislative action. (See 20th Century Ins. Co. v. Garamendi, supra, 8 Cal.4th at pp. 275-279.) The comparison is faulty. The Commission did not set the general assistance level; it simply provided the needed authorization for the County to lower its benefit levels. It is the County Board of Supervisors who acts as "rate setter," not the Commission.
The trial court properly characterized the Commission's decision as quasi-adjudicative in nature, giving rise to the broader scope of review permitted in administrative mandamus proceedings under Code of Civil Procedure section 1094.5.
Subdivision (c) of this statute provides the court shall weigh the evidence when "authorized by law to exercise its independent judgment" and in all other cases shall determine whether the findings are supported by substantial evidence. This section "was designed to leave to the courts the establishment of standards for deciding which cases require independent judgment review and which substantial evidence review." (Frink v. Prod (1982) 31 Cal.3d 166, 173; accord, County of Alameda v. Board of Retirement (1988) 46 Cal.3d 902, 906.) 4
The principles involved in making this determination have their genesis in cases such as Bixby v. Pierno (1971) 4 Cal.3d 130, and Strumsky v. San Diego County Employees Retirement Assn. (1973) 11 Cal.3d 28. In Berlinghieri v. Department of Motor Vehicles (1983) 33 Cal.3d 392, 395, the Supreme Court summarized these standards as follows: "If the decision of an administrative agency will substantially affect a 'fundamental vested right,' then the trial court must not only examine the administrative record for errors of law, but must also exercise its independent judgment upon the evidence. [Citation.] When the administrative decision neither involves nor substantially affects such a right, then the trial court must review the whole administrative record to determine whether the findings are supported by substantial evidence and whether the agency committed any errors of law. [Citation.]
". . . '[W]e explained the considerations which counsel in favor of fuller judicial review in cases involving vested, fundamental rights. The essence to be distilled is this: When an administrative decision affects a right which has been legitimately acquired or is otherwise "vested," and when that right is of a fundamental nature from the standpoint of its economic aspect or its "effect . . . in human terms and the importance . . . to the individual in the life situation," then a full and independent judicial review of that decision is indicated because "[t]he abrogation of the right is too important to the individual to relegate it to exclusive administrative extinction." [Citation.]'" (Emphasis omitted.)
Courts must decide on a case-by-case basis whether an administrative decision substantially affects a fundamental vested right, "and there is no fixed formula which guarantees a predictably exact ruling in each case. The essence of the determination is to protect the fundamental rights of the individual from abrogation without judicial, as opposed to administrative, review." (San Marcos Mobilehome Park Owners' Assn. v. City of San Marcos (1987) 192 Cal.App.3d 1492, 1499.) A right may be considered "fundamental" and "vested" based on either of two factors: (1) the character and quality of its economic aspect, or (2) the character and quality of its human aspect. (Cooper v. Kizer (1991) 230 Cal.App.3d 1291, 1296-1297; Dominey v. Department of Personnel Administration, supra, 205 Cal.App.3d at p. 742.) In analyzing the fundamental nature of the right involved, courts are particularly responsive to "the human as opposed to the purely economic dimension of rights affected by administrative action" (Frink v. Prod, supra, 31 Cal.3d at p. 177), and generally give less weight to the preservation of purely economic privileges. (San Marcos Mobilehome Park Owners' Assn. v. City of San Marcos, supra, 192 Cal.App.3d at p. 1499.)
Fundamental rights necessitating independent judicial review have been found in a wide range of areas, including the right to keep a driver's license (Berlinghieri v. Department of Motor Vehicles, supra, 33 Cal.3d at p. 398), a landlord's right to control parking spaces at an apartment building (301 Ocean Ave. Corp. v. Santa Monica Rent Control Bd. (1991) 228 Cal.App.3d 1548, 1556-1558), an employee's right to continue in a profession or trade (Hadley v. City of Ontario (1974) 43 Cal.App.3d 121, 126), an employee's right to backpay (Dominey v. Department of Personnel Administration, supra, 205 Cal.App.3d at pp. 742-743), a disabled applicant's right to Medi-Cal benefits (Cooper v. Kizer, supra, 230 Cal.App.3d at pp. 1298-1299), and an eligible individual's right to welfare benefits (Frink v. Prod, supra, 31 Cal.3d at pp. 178-179).
As the California Supreme Court explained: "[T]he right of a welfare recipient to continued welfare benefits is a fundamental one. It is fundamental both in economic terms, and in terms of its 'effect . . . in human terms and . . . [its] importance . . . to the individual in the life situation.' [Citation.] Like the widow's retirement benefits which we deemed both vested and fundamental in Strumsky, supra, the right to continued welfare benefits involves, of course, the individual's means of support. [Citation.] Indeed, welfare benefits to an individual totally disabled from gaining employment are likely to be even more important and necessary than retirement benefits to an individual who may still be able physically to earn a livelihood. As we observed . . . , 'Termination of aid to an eligible recipient deprives him of the very means for his survival and his situation becomes immediately desperate.' [Citation.] We think it significant that the United States Supreme Court . . . has held that the right to welfare benefits is important enough to fall within the category of benefits to which due process rights attach. Under the principles of our prior cases, we find that this right is also important enough to trigger the independent judgment standard of review when an administrative determination has been made terminating a person's entitlement to this right." (Harlow v. Carleson (1976) 16 Cal.3d 731, 737.)
It is true that plaintiffs' general assistance benefits were not terminated, but simply reduced. Nevertheless, we find this distinction immaterial for the purpose of determining whether a fundamental right is involved. The essential question before us is whether the affected right is of such sufficient significance to preclude its extinction or abridgment by a body lacking judicial power. (301 Ocean Ave. Corp. v. Santa Monica Rent Control Bd., supra, 228 Cal.App.3d at p. 1556; San Marcos Mobilehome Park Owners' Assn. v. City of San Marcos, supra, 192 Cal.App.3d at p. 1501.)
The fundamental nature of general assistance benefits cannot be understated. In Frink v. Prod, supra, 31 Cal.3d at pages 178-180, the high court noted that previous cases, such as Harlow v. Carleson, supra, 16 Cal.3d 731, had emphasized the significance of the right to continued welfare benefits in requiring independent judgment review, and found the same considerations applied with equal force to applicants for benefits. The Frink court held: "The right of the needy applicant to welfare benefits is as fundamental as the right of a recipient to continued benefits. Because need is a condition of benefits, erroneous denial of aid in either case deprives the eligible person '"of the very means for his survival and his situation becomes immediately desperate."'" (31 Cal.3d at p. 179.)
The Frink court noted that in the licensing context, some cases had distinguished between possessed and vested rights and rights "merely sought," a distinction based primarily on the belief that courts should not second-guess an administrative agency's expertise in determining whether someone was qualified to be licensed. (31 Cal.3d at p. 179.) The court stated: "Evaluating the degree to which the right is vested, it is apparent that the right to welfare benefits is not based on expertise, competence, learning, or purchase or ownership claim. Determination of qualification for public assistance does not involve the 'delicate task' of evaluating competence to engage in a broad field of endeavor as is true in most licensing cases. [¶] Rather, the qualification for public assistance primarily is based on need, the absence of income or other source of funds. The applicant for public assistance is seeking aid because of deterioration of his life situation in economic terms. Unlike the applicant for a license, he is not seeking advancement of his earlier life situation. The statutory public assistance programs provide protection to citizens who through economic adversity are in need and as such should be viewed as residual rights possessed by all of the citizenry to be exercised when circumstances require." (Id. at p. 180.)
General assistance meets the subsistence needs of those who are ineligible for any other public aid. (Whitfield v. Board of Supervisors, supra, 227 Cal.App.3d at p. 456.) It is difficult to imagine a program that affects fundamental rights in a more profound way. Without this assistance, indigents would lack housing and other basic necessities of life. Far more than a driver's license or a landlord's right to control parking spaces, general assistance implicates the most fundamental of rights. Its "effect . . . in human terms and the importance of [this right] to the individual in the life situation" (Bixby v. Pierno, supra, 4 Cal.3d at p. 144) is readily apparent, as the trial court concluded here.
The County and the Commission implicitly acknowledge the fundamental nature of general assistance benefits and instead center their argument on a claim that plaintiffs' right to these benefits was not vested. Therefore, they argue, there was no need for the trial court to apply an independent judgment standard of review. We disagree.
A "vested" right is one that is "already possessed" or "legitimately acquired." (Harlow v. Carleson, supra, 16 Cal.3d at p. 735.) The trial court suggested plaintiffs could not claim a vested right to general assistance benefits computed under section 17000.5 because the Legislature had given the counties an alternative method of calculating general assistance payments with the enactment of section 17000.6. The court reasoned that because a county might opt to utilize this alternative, plaintiffs did not have a vested right to benefits at any particular level.
On appeal, the County and the Commission raise an identical claim, a contention we find unpersuasive. Initially, we note there is not a true choice of payment methods, in that a county cannot unilaterally decide to pay benefits at the lower level authorized by section 17000.6. It may do so only upon approval of the Commission after demonstrating a compelling case that payment at the 17000.5 level would cause significant financial distress. Absent that finding by the Commission, the County must pay benefits pursuant to section 17000.5 and plaintiffs are entitled to general assistance at this higher level.
Furthermore, the fact that the benefit amount may change has no bearing on the question of whether the right to those benefits is vested. As the California Supreme Court explained: "[I]t would appear irrelevant that the Legislature had retained the general power to amend or revoke benefits granted under its welfare programs [citation] or had granted the counties authority to modify or cancel welfare awards [citation]. In every context in which the question of the standard of judicial review of administrative decisions arises, the administrative agency has the power to withdraw the benefit from the individual if certain conditions exist. But we have uniformly held that the relevant factor is whether a certain benefit or right is 'already possessed' or was 'legitimately acquired,' not whether, once received, it was to remain permanently. Similarly, the fact that the right to future benefits is not irretrievably lost, when terminated, has no bearing on the question of whether a right is 'vested.'" (Harlow v. Carleson, supra, 16 Cal.3d at p. 736.)
Plaintiffs have the right to benefits under section 17000.5. It is a right "already possessed" and "legitimately acquired," and must be deemed vested.
This conclusion is bolstered by the fact that courts have long recognized the interrelationship between fundamental rights and vested rights. In Frink v. Prod, supra, 31 Cal.3d at pages 177-178, the court summarized: "Bixby [v. Pierno, supra, 4 Cal.3d 130] and Interstate Brands [v. Unemployment Ins. Appeals Bd. (1980) 26 Cal.3d 770] establish that for purposes of determining applicability of independent judgment review the terms fundamental and vested are not used to establish absolutes but are used in a relative sense, and they show that it is the weighing of both the fundamental nature and the vested nature of the right which determines whether independent judgment review is required. Thus, both cases explaining the term fundamental refer to the effect of the right in economic and human terms and to the importance of it to the individual. [Citations.] Effect and importance of rights may vary greatly, and by defining fundamental in terms of effect and importance, the cases reflect that the fundamental character of rights may vary significantly. Similarly, Bixby speaks of rights being 'possessed' by the individual in discussing the vested requirement [citation]; Interstate Brands specifically recognizes independent judgment review may be applicable although the administrative decision does not involve 'vested property rights in the traditional sense' [citation]. And both cases refer to the 'degree to which that right is "vested."' [Citations.] Interstate Brands points out that under the Bixby formulation the effect and importance of rights and the degree to which they are possessed are to be weighed together, stating that 'the search for "vestedness" and the search for "fundamentalness" are one and the same. The ultimate question in each case is whether the affected right is deemed to be of sufficient significance to preclude its extinction or abridgment by a body lacking judicial power.'" (Emphasis in original.) (31 Cal.3d at pp. 177-178; accord, 301 Ocean Ave. Corp. v. Santa Monica Rent Control Bd., supra, 228 Cal.App.3d at p. 1556.)
Thus, in Frink, the court grappled with the question of what standard of review should be utilized in reviewing the denial of an application for welfare benefits. After noting that the right to continued welfare benefits required an independent judgment standard of review, the court concluded the same standard should apply in the case of the denial of an initial application for welfare benefits. The court observed: "While the degree to which the right is vested may not be overwhelming, the degree of fundamentalness is. Weighing them together as required by Bixby and Interstate Brands, we conclude the independent judgment standard should be applied to decisions denying applications for welfare benefits." (31 Cal.3d at p. 180.)
We reach the same conclusion here. The instant case involves an "overwhelming degree of fundamentalness," as well as a right to which plaintiffs are already entitled. An administrative decision affecting such a right should not be immune from judicial review. Consequently, we conclude an independent judgment standard of review is warranted.
The trial court came to a contrary conclusion, in part on the theory that the Commission's decision did not directly and substantially affect plaintiffs' rights. The court reasoned that it was the County's subsequent decision actually lowering general assistance benefits, not the Commission's decision authorizing such a reduction, that directly impacted plaintiffs. On a purely theoretical level, this distinction may have some technical merit. But the stark realities of the situation compel a different conclusion.
The regulations require that a county seeking relief under section 17000.6 must first pass a resolution stating that compliance with the standards of section 17000.5 will cause significant financial distress. (Cal. Code Regs., tit. 2, § 1186.51, subd. (b)(1)(A).) The County passed such a resolution, outlining at length its fiscal situation and asserting that the savings achieved by paying general assistance benefits at the minimum level permitted by section 17000.6 would permit funding of some basic county services. The County concluded that compliance with section 17000.5 would result in significant financial distress, and authorized an application for such a finding by the Commission.
In essence, the County had already determined that with the Commission's approval, benefits would be reduced in accordance with section 17000.6. The Commission's decision was the vehicle whereby this plan could be implemented. It is virtually inconceivable that a county having made a determination that payment of general assistance benefits under section 17000.5 would cause significant financial distress, and having pleaded that case to the Commission, would then turn around and, upon approval for lower payments by the Commission, decline that opportunity and maintain benefits at the higher level required by section 17000.5. On a practical level, it is the Commission's decision that will determine whether general assistance recipients will be paid under section 17000.5 or under section 17000.6. While plaintiffs' benefits are not actually reduced until the County subsequently makes its allocation under section 17000.6, that result is a foregone conclusion. Given the realities of this situation, the Commission's decision must be deemed to directly and substantially affect plaintiffs' rights.
Under these circumstances, the trial court should have applied an independent judgment standard of review, not the less stringent substantial evidence test. A fundamental, vested right was involved, and the Commission's actions directly affected that right. As a matter of public policy in such cases, responsibility for factual determinations lies with the trial court, not the administrative agency. (Barber v. Long Beach Civil Service Com. (1996) 45 Cal.App.4th 652, 659.)
The trial court's failure to apply the appropriate standard of review precludes our ability to reach the merits of this appeal. "This is so because on appeal from a judgment in a case where the trial court is required to exercise its independent judgment, our review of the record is limited to a determination whether substantial evidence supports the trial court's conclusions and, in making that determination, we must resolve all conflicts and indulge all reasonable inferences in favor of the party who prevailed in the trial court. [Citations.] It follows that where the trial court has failed to perform its duty, we are unable to perform ours . . . ." (Barber v. Long Beach Civil Service Com., supra, 45 Cal.App.4th at pp. 659-660; see also 301 Ocean Ave. Corp. v. Santa Monica Rent Control Bd., supra, 228 Cal.App.3d at p. 1555; Cooper v. Kizer, supra, 230 Cal.App.3d at p. 1299.)
The voluminous record in this case reveals conflicting evidence on the County's financial state and its ability to maintain basic county services if compelled to pay general assistance benefits at the level established by section 17000.5. It is the trial court's responsibility to weigh this evidence and make factual determinations under an independent judgment standard of review. We shall therefore reverse and remand the matter to the trial court for reconsideration under the appropriate standard.
For the guidance of the trial court, we clarify questions of law raised by the parties concerning the proper interpretation of section 17000.6. (See Hilb, Rogal & Hamilton Ins. Services v. Robb (1995) 33 Cal.App.4th 1812, 1823.) We turn to those issues now.
II. Section 17000.6 Plaintiffs contend the trial court and the Commission erred in construing section 17000.6. We conclude otherwise.
"The rules governing statutory construction are well settled. We begin with the fundamental premise that the objective of statutory interpretation is to ascertain and effectuate legislative intent. [Citations.] 'In determining intent, we look first to the language of the statute, giving effect to its "plain meaning."' [Citations.] Although we may properly rely on extrinsic aids, we should first turn to the words of the statute to determine the intent of the Legislature. [Citation.] Where the words of the statute are clear, we may not add to or alter them to accomplish a purpose that does not appear on the face of the statute or from its legislative history." (Burden v. Snowden (1992) 2 Cal.4th 556, 562.)
The language of a statute is to be construed according to its usual, ordinary meaning, with significance given to every word, phrase, and sentence, when possible. (DuBois v. Workers' Comp. Appeals Bd. (1993) 5 Cal.4th 382, 387-388.)
Plaintiffs contend the term "significant financial distress" may be interpreted in a variety of ways, and therefore turn to legislative history to divine legislative intent. Specifically, plaintiffs assert comments of two legislators indicate that section 17000.6 must be construed as affording relief only to those counties in the most severe financial distress. Because the County was relatively healthy compared to other counties throughout the state, they assert the Commission and trial court erred in making a finding of significant financial distress. These assertions are not convincing.
Section 17000.6 was enacted through the passage of SB 1033. This bill was part of the final 1993 budget negotiations and was not heard before any legislative committees.
On June 24, 1993, SB 1033 was presented on the floor of the Assembly with a minimum of discussion. The measure's proponent, Assembly Member Bernie Richter, introduced the bill by saying: "Mr. Speaker and Members, it's certainly not easy for me to ask that we take money from some of the most indigent people in our society and in our counties. [¶] In the counties that I represent -- because of the inequities of AB 8 -- we have catastrophic situations in which monies from the reduction in the grant levels mean the difference between having no deputies all night long in a county of 30,000 people or having two deputies or three deputies within that county. [¶] It is not pleasant to go for resources to this kind of base. But because of this budget crisis, counties that I represent, in fact, need this revenue. [¶] We have reached an accord and a compromise in which the floor is effectively moving down from approximately 50 percent of the federal poverty level, which is now the base -- 51 or 50 -- to 40. [¶] And in addition to that, we have agreed that hearings by the Mandate Commission be held in the counties that are asking for the relief. [¶] I urge an aye vote."
One speaker spoke briefly in opposition to the measure. The bill passed out of the Assembly on a 42-24 vote.
Debate in the Senate was equally abbreviated. In presenting the bill on the floor on June 29, 1993, Senator Tim Leslie said: "SB 1033 is a critical adjunct to the budget package because it provides budget relief to the hardest pressed counties. Particularly to small and rural counties."
After one senator spoke against the bill, Senator Leslie replied: "Now, the thing that should be made very clear, this is not across-the-board reduction in general assistance in any way, shape, or form. Only counties who are in fiscal distress are allowed to apply for this. And only the counties in the worst situation will be able to apply. And they have to go to the Commission on State Mandates. There's a public hearing. There's a full debate, and only if they can document that they have reached a certain level of destitioness [sic], then they would be able to make these reductions. [¶] And besides that the bill does still maintain a floor so that this cannot be reduced down to zero. The floor is lower than the current floor, but there is a floor there. So I want to make that very, very clear. I think the issues -- that the issues are clear. We've created a situation that we must provide relief to those who have to implement these programs. It asks for your aye vote."
There was no further debate, and the measure passed on a 26-9 vote.
Plaintiffs contend Assembly Member Richter's reference to the "catastrophic situation" in his county, and Senator Leslie's references to "the hardest pressed counties," particularly "small and rural counties," and counties "in the worst situation" evidence the Legislature's intent to limit relief under section 17000.6 to those counties in the worst financial shape when compared to other counties in the state. We disagree.
In appropriate circumstances, legislative intent may be ascertained through a consideration of legislative history, including committee reports and legislative debates. (Perez v. Smith (1993) 19 Cal.App.4th 1595, 1598; Estate of Sanders (1992) 2 Cal.App.4th 462, 470.) However, ". . . statements of an individual legislator, including the author of a bill, are generally not considered in construing a statute, as the court's task is to ascertain the intent of the Legislature as a whole in adopting a piece of legislation." (Quintano v. Mercury Casualty Co. (1995) 11 Cal.4th 1049, 1062; see also Oberlander v. County of Contra Costa (1992) 11 Cal.App.4th 535, 547-548.)
"'In construing a statute we do not consider the motives or understandings of individual legislators who cast their votes in favor of it. [Citations.] Nor do we carve an exception to this principle simply because the legislator whose motives are proffered actually authored the bill in controversy [citation]; no guarantee can issue that those who supported his proposal shared his view of its compass.' [Citations.] A legislator's statement is entitled to consideration, however, when it is a reiteration of legislative discussion and events leading to adoption of proposed amendments rather than merely an expression of personal opinion. [Citations.] The statement of an individual legislator has also been accepted when it gave some indication of arguments made to the Legislature and was printed upon motion of the Legislature as a 'letter of legislative intent.'" (California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 692, 699-700; see also In re Marriage of Bouquet (1976) 16 Cal.3d 583, 589-590.)
Here, the statements of Legislators Richter and Leslie do not chronicle events leading to proposed amendments in SB 1033, nor were these comments adopted by the Legislature as a representation of legislative intent. Instead, the comments are nothing more than the personal opinion of two lawmakers. The fact that they viewed SB 1033 as permitting relief for the "worst-off" counties, those in "catastrophic conditions," does not mean that other legislators shared this interpretation, and their comments cannot be used to determine legislative intent. (See California Teachers Assn. v. San Diego Community College Dist., supra, 28 Cal.3d at p. 701; Estate of Sanders, supra, 2 Cal.App.4th at p. 474, fn. 15; cf. Walters v. Weed (1988) 45 Cal.3d 1, 10 [discussion and events at hearing indicated other legislators shared the author's view of a legislative bill].)
In fact, the language of the statute does not reflect any such limitation. While there are rare instances when legislative intent can be inferred from statements of a bill's sponsor, that inference can be made only if the statement is consistent with the statute's language. (Dubins v. Regents of University of California (1994) 25 Cal.App.4th 77, 87.) That is not the case here. Nothing in the statute suggests the number of counties eligible for relief under section 17000.6 might be limited. Nor is there any hint that only those counties in the most financial distress vis-à-vis other counties should be approved for reduced benefits. Instead, the statute clearly and unequivocally permits the Commission to make a finding of significant financial distress when a "county has made a compelling case that, absent the finding, basic county services, including public safety, cannot be maintained." (§ 17000.6, subd (a).) Theoretically, all 58 counties could qualify for relief under this provision. Had the Legislature intended to limit reductions to a specified number of counties or those in comparatively worse financial position, it could easily have included such language in the statute. It did not.
Additionally, the short time frames set forth in section 17000.6 belie any suggestion that a comparative study of the financial health of all counties must be undertaken. The Commission must notify a county within 10 days of receipt of the application if the application is incomplete, must provide a 30-day notice of hearing in the county of application, must notify the county of its preliminary decision within 60 days after receiving the application, and must render a final decision within 90 days of receipt of the application. (§ 17000.6, subd. (c); Cal. Code Regs., tit. 2, §§ 1186.51, subd. (b)(2), 1186.6, subd. (a), 1186.7, subds. (a), (b)). 5 An in-depth comparison of the relative fiscal situation in each county simply cannot be made within these time frames.
In sum, there is no evidence that the Legislature intended to limit the relief afforded by section 17000.6 to those counties in the worst financial situations. Instead, the statute authorizes the Commission to make a finding of "significant financial distress" whenever a county has established by clear and convincing evidence that, absent such a finding, basic county services could not be maintained. No comparative analysis of a particular county's financial health vis-à-vis others is required.
Relying on statutes from Ohio and Pennsylvania, plaintiffs contend a finding of significant financial distress should be predicated on several specific factors, such as whether the county has maintained a deficit over a period of time, missed a payroll, or failed to make payments to a judgment creditor. 6 While these factors may indeed indicate "significant financial distress," there is nothing in the statute that requires these elements to be present before such a finding is made. A county's fiscal health is one factor to be considered in judging "significant financial distress," but it alone is not determinative.
Unlike Ohio and Pennsylvania, California did not enumerate the factors indicating significant financial distress. Instead, section 17000.6 permits the Commission to make a finding of significant financial distress only if "the county has made a compelling case that, absent the finding, basic county services, including public safety, cannot be maintained." Thus, the statute itself implicitly defines "significant financial distress" as the inability to maintain basic county services if full general assistance payments are required. There is no need to resort to the statutes of other states for a definition of this term.
Next, plaintiffs assert the regulation defining "basic county services" improperly enlarges the scope of the statute. Once again, we disagree.
Section 17000.6 does not define "basic county services" other than to indicate that these services include public safety. Section 1186.5, subdivision (b) of title 2 of the California Code of Regulations defines "basic county services" as "those services which are fundamental or essential. Such services shall include, but are not limited to, those services required by state or federal law, and may vary from county to county."
The rulemaking authority of an administrative body is limited by statute. (California Beer & Wine Wholesalers Assn. v. Department of Alcoholic Beverage Control (1988) 201 Cal.App.3d 100, 106 (California Beer).) Government Code section 11342.2 provides: "Whenever by the express or implied terms of any statute a state agency has authority to adopt regulations to implement, interpret, make specific or otherwise carry out the provisions of the statute, no regulation adopted is valid or effective unless consistent and not in conflict with the statute and reasonably necessary to effectuate the purpose of the statute."
"A regulation is invalid (as 'in conflict with' a statute) if it would 'alter or amend the [governing] statutes or enlarge or restrict the agency's statutory power.'" (California Beer, supra, 201 Cal.App.3d. at pp. 106-107.)
That is not the case here. Nothing in the statute limits "basic county services" to those mandated by law, or reflects a requirement that the same services be deemed "basic" in every county in California. The regulation's clarification of this fact does not alter the meaning of section 17000.6, nor does it enlarge the Commission's power. Instead, it reflects reality. Some basic services, that is, services that are "fundamental or essential," may be mandated by state or federal law; others that are equally essential may not be subject of a governmental mandate. Similarly, what constitutes a basic service in one county may not be considered as such in another. It defies logic to suggest that rural and urban counties, for example, require the identical basic services. Modoc County and Los Angeles County have different populations and different needs. The regulation simply reflects that fact.
Plaintiffs properly note that not all expenditures by a public agency necessarily relate to basic county services. For instance, a sheriff's office does not have carte blanche to classify every agency expenditure as fundamental and essential simply because it is an expenditure of an agency concerned with public safety. As the Commission found, each item must be examined to determine whether it in fact relates to a "basic county service." Whether sufficient funds from "nonbasic" services are available to cover shortfalls in basic services is a question of fact for the Commission in the first instance, and the trial court on review, to determine. Similarly, the amount of money spent on nonessential items is part of the calculus in determining whether a county would in fact suffer significant financial distress if required to fund general assistance at the level set by section 17000.5.
Plaintiffs challenge the trial court's and the Commission's interpretations of the word "maintained" as used in section 17000.6, arguing that the maintenance of basic county services limits a county to services at the level then provided. 7 In other words, a county can keep basic services at the current level, but cannot increase them. Again, we are unpersuaded.
"Maintain" has a number of definitions. It can mean "to keep in an existing state, . . ." such as a state of repair, as plaintiffs point out. However, it can also mean to "preserve from failure or decline . . . ," or "to support or provide for . . . ." (Webster's Ninth New Collegiate Dict. (1984) p. 718.) These latter definitions are applicable to the instant case, because they would permit a county to restore or expand basic services if these basic services were fundamental or essential.
As the Commission properly noted, this construction "makes good policy sense. Basic, fundamental, and essential are not static concepts in relation to government services or social needs. It seems artificial to restrict a definition of urgency of need to a level of services no greater than provided in any given year. For example, caseload increase in a program may require additional funding in order to maintain existing service levels on a per-client basis. Or, new social needs may arise (such as a disease or public safety situation) requiring activities not previously contemplated but nonetheless essential to maintaining the overall adequacy of a basic county service. Or more simply, funding may have lagged behind existing program requirements long enough to erode service levels." (Emphasis in original.) We agree. The fundamental question underlying this entire process is whether the county can afford to maintain basic county services. Whether those services have previously been funded is immaterial if the services are now essential. 8
Finally, plaintiffs suggest the Commission (and the trial court) must look at alternative revenue enhancements and expenditure reductions to determine whether a county cannot maintain basic county services, or simply chooses not to spend resources in this manner. We agree that alternatives must be considered. However, those alternatives must be viable and practical, not speculative. It is not sufficient, for example, to say that a county could raise the requisite amount of funds through a tax levy approved by the electorate. An event that has not yet produced that income and which is uncertain ever to occur cannot form the basis for a finding of financial ability to support these services
Furthermore, alternatives are relevant only to the extent that they can in fact cover the projected shortfall giving rise to the claim of significant financial distress. For example, the fact that some funds might be found to cover certain county programs is immaterial if that simply reduces a deficit to a smaller, but still unmanageable, size.
As we noted earlier, our discussion of the proper interpretation of section 17000.6 is designed to assist the trial court on remand. We do not reach the question of whether the County made a compelling case that, absent a finding of significant financial distress, it would be unable to maintain basic county services. Resolution of that issue must first be provided by the trial court, exercising its independent judgment on the evidence.
DISPOSITION The judgment is reversed and the cause remanded to the trial court with directions to reconsider the evidence under the independent standard of review and thereafter proceed according to law. Plaintiffs are awarded their costs on appeal.
SPARKS, J.*
I concur:
SIMS, J.
I concur in the judgment and in Part I of the Discussion. I dissent from the cursory analysis in Part II of the Discussion concerning the standards which the trial court must follow on remand.
This case involves the poorest of the poor, those who receive general assistance. The Commission on State Mandates (Commission), authorized the County of Sacramento to reduce its general assistance (GA) standard of aid of 62 percent of the federal official poverty level, as required by Welfare and Institutions Code section 17000.5, to 40 percent under section 17000.6. The reduction would amount to seven million dollars out of a total budget of over one billion dollars and discretionary spending of over three hundred million dollars.
Section 17000.5 requires a county to set the level of GA at 62 percent of the federal poverty level. Section 17000.6 permits a county to reduce that level to 40 percent if the Commission
"makes a finding that meeting the standards in Section 17000.5 would result in a significant financial distress to the county. . . . The commission shall not make [such] a finding of significant financial distress unless the county has made a compelling case that, absent the finding, basic county services, including public safety, cannot be maintained."The critical issue tendered by the plaintiffs is the meaning of this provision. The Commission must find that adhering to the 62 percent standard "would result in a significant financial distress to the county." This requires a finding that a compelling case has been made that "basic county services, including public safety, cannot be maintained." The terms "would result" and "cannot be maintained" are causal terms. They imply that the County is unable, as distinguished from unwilling, to fund and thereby "maintain" basic county services.
The majority opinion is, in my view, seriously flawed. It sets out the facts of the Commission decision without explaining how they evidence the Commission's application of the standard set out in section 17000.6. It fails to show the mode of its reasoning, e.g., if fails to show how to treat the fact that the County has shown increasing end-of-the-year general fund balances during or how to treat the fact that the County was "able" to increase the salaries of County employees while "unable" to maintain basic services. Most importantly, it largely ignores the plaintiffs' central arguments about the meaning of section 17000.6.
The plaintiffs argue that the Commission departed from the mandate of section 17000.6 in failing to apply a stringent view of whether continuation of the higher level of GA benefits would cause the failure to maintain basic county services. They make the following statutory argument:
"Section 17000.6 requires a county to present a compelling case that, absent the requested reductions in the GA grant levels, 'basic county services, including public safety, cannot be maintained' (emphasis added). As with 'basic county services' and 'maintained,' the Legislature did not supply a special definition for the word 'cannot.'
"The plain and ordinary meaning of 'cannot' is to be 'left with no alternative than to,' or 'to be unable to do otherwise.' Webster's Third New International Dictionary at 327; see also AR 4886 (the test is whether the County 'is unable to maintain basic county services, including public safety.') (emphasis added).
"As discussed previously, § 17000.6 contemplates that a County must consider other alternatives besides the requested GA grant reductions to remedy any alleged deficiency in basic county services. Section 17000.6 imposes a narrow objective standard: can a county implement one of these alternatives. [Emphasis in original.] In contrast, the trial court once again enlarged the scope of the statute and created a broader, subjective standard: did the County have 'convincing reasons for not implementing identified options.' JA 905. In so doing the trial court transformed its task from determining whether a county 'can' or 'cannot' maintain basic county services, to whether a county 'chooses' or 'is willing' to do so. There is a profound difference between being unable and unwilling to do something."
The draft opinion fails to recognize this as a statutory argument. It responds opaquely and summarily that:
"[A]lternatives must be considered. However, those alternatives must be viable and practical, not speculative. It is not sufficient, for example, to say that a county could raise the requisite amount of funds through a tax levy approved by the electorate. An event that has not yet produced income and which is uncertain ever to occur cannot form the basis for a finding of financial ability to support these services." (Maj. opn. at p. 45.)
I take from this an implicit concession that if the county could raise the money, for example, through a tax levy imposed by the county when the approval of the electorate was not required, i.e., when it can be done by a vote of the supervisors, but they choose not to do so, it would require a finding that basic county services can be maintained without lowering GA. I find this implied also in the direction to the trial court to determine whether, "absent a finding of significant financial distress, [the County] would be unable to maintain basic county services." (Maj. opn. at p. 46, emphasis added.)
I think the implication is correct. It is compelled by the gravity of the deprivation occasioned by lowering GA to 40 percent of the poverty level (threatening the lives and health of the poorest segment of our community), the tendency to drive paupers to (initially) more beneficent jurisdictions, and the unqualified statutory phrases "would result" and "cannot be maintained." It is impelled by the rhetorical assurances of the legislation's sponsors that only the most hard pressed counties can qualify.
Such a tax levy is imposed by the vote of the county supervisors. In such actions or omissions the supervisors are the county, the county qua the board of supervisors. If the county qua the board of supervisors can maintain basic county services without lowering the GA level by their vote, and choose not to do so, the criterion of the statute is not met.
But why draw the line at a vote by the electorate's representatives, its board of supervisor's? In those instances where a tax levy requires the endorsement of the electorate it, rather than its elected representatives, is the county. It is in the nature of a compulsory referendum, in which the county's power has been divided between the board of supervisors, which initiates the tax levy, and the electorate which must ratify it. "The voice is Jacob's voice but the hands are the hands of Esau." (County of San Diego v. Williams (1954) 126 Cal.App.2d 804, 810, internal quotation marks omitted.)
It is no different than if the electorate passes an initiative ordinance requiring some taking of property or some act occasioning damages, say via employment discrimination. In that case it is the county that is liable. If the electorate refuses to pay for "basic county services" when it has been given the ability so to do by the board of supervisors, but chooses not to do so, then the county can provide those services without a GA cut.
I agree with the plaintiffs that this would present a case that does not meet the criterion of the statute.
BLEASE, Acting P. J.
1 Effective January 1, 1997, a finding of financial distress may be made for a period of 36 months. (Stats. 1996, ch. 6, § 8.)
2 An individual who had been receiving $286 per month in general assistance would receive $221 under the minimum levels established by section 17000.6. Twenty dollars of this aid, under either formula, is in the form of a transit pass rather than cash.
3 Thus, the fact that the Commission is described in Government Code section 17500 as a "quasi-judicial body" and has been recognized as such by other courts (e.g., Redevelopment Agency v. Commission on State Mandates (1996) 43 Cal.App.4th 1188, 1194-1196) is not in itself determinative. The focus is on the Commission's function in proceedings under section 17000.6, not the label that might be attached to this entity. We note, however, that Government Code section 17559, relating to reimbursement for state-mandated claims, specifically provides that a claimant or the state may challenge a Commission decision as lacking substantial evidence through proceedings under Code of Civil Procedure section 1094.5, the administrative mandamus provision.
4 The standard of review for quasi-legislative determinations under ordinary mandamus pursuant to Code of Civil Procedure section 1085 is not affected by the fact that fundamental vested rights may be involved. (Dominey v. Department of Personnel Administration, supra, 205 Cal.App.3d at p. 738, fn. 5.)
5 Continuances of Commission hearings can be granted "only under compelling and urgent circumstances." (Cal. Code Regs., tit. 2, § 1186.65, subd. (b).)
6 Title 53 of Pennsylvania Consolidated Statutes Annotated, section 11701.201 is part of the Financially Distressed Municipalities Act, and sets forth various criteria demonstrating "a valid indication of municipal financial distress." Similar considerations are enumerated in Ohio Revised Code Annotated, section 118.03 (Anderson 1992), outlining fiscal emergency conditions for a municipal corporation.
7 We note, however, that at the Commission hearing, plaintiffs themselves suggested examining program expenditures over the last three to five years.
8 In a related argument, plaintiffs assert Proposition 172 serves to define "maintenance of public safety." This proposition, reflected in article 13, section 35(a) of the state Constitution, relates to the local public safety fund established in Government Code sections 30051 et sequitur, and provides in part: "In order to assist local government in maintaining a sufficient level of public safety services, the proceeds of the tax enacted pursuant to this section shall be designated exclusively for public safety." (Cal. Const., art. 13, § 35, subd. (a)(3).)
Proposition 172 was designed to "assist local governments in maintaining a sufficient level of public safety services." (Cal. Const., art. 13, § 35, subd. (a)(3), emphasis added.) Nothing in the proposition suggests that the revenue available through this tax sets the standard for maintenance of these services. These funds may not be sufficient in and of themselves to maintain public safety services, but serve to assist counties in meeting these needs.
* Retired Associate Justice of the Court of Appeal, Third District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
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