Rider v. City of San Diego

RICHARD RIDER et al., Appellants v. CITY OF SAN DIEGO et al., Respondents C.A. 4th, Div. 1, No. D026652 S058956 California Supreme Court Filed April 2, 1997
        Appellants` petition for review GRANTED.


(Editor Note - For your convenience we reprint below the Daily Journal`s Ruling column brief which summarized the earlier decision of the lower court.)

GOVERNMENT

Voter Approval Isn't Required For Issuance of Bonds For Expansion of San Diego Convention Center.
        The C.A. 4th has determined that San Diego's city charter did not require voter approval for a joint powers agency to issue bonds to expand the San Diego Convention Center.
        The Port District, a governmental entity, owned the Convention Center and its surrounding property. In June 1994, the city of San Diego and the Port District entered into an agreement to expand the Convention Center. San Diego and the Port District first entered into a joint exercise of powers agreement (JPA), forming a joint powers agency (the Convention Authority). The parties then negotiated several additional agreements creating a lease-back transaction. Under the agreement, the Authority would issue bonds not to exceed $205 million to finance the improvements to the Convention Center. The city council and the Port District both approved the agreements and related documents. Richard Rider and others filed an action challenging the validity of the lease-back revenue financing plan. Rider contended that the financing plan was improper since it did not require voter approval for the issuance of the bonds. The trial court granted summary judgment for the city and the Authority.
        The C.A. 4th affirmed. Article VII, Section 90(a) of the San Diego city charter expressly prohibits the city from issuing bonds without a two-thirds vote of the electorate. The Authority was properly created under the Joint Powers Act. Article 2 of the Act permits a joint agency to issue revenue bonds." These procedures do not require voter approval. Instead, the provisions provide that in issuing bonds a joint agency must be viewed as separate from the creating public entities and specifically state the debts of the joint agency do not constitute 'a debt, liability or obligation' of the creating public entities." The Legislature also enacted Article 4 of the Joint Powers Act which made it easier for a joint agency to issue revenue bonds. "Given the statutory language, we conclude the Act permits a joint agency to issue revenue bonds without voter approval and does not limit the joint agency's bond issuing powers to the powers of the creating agencies. Articles 2 and 4 expressly provide a joint agency with the power to issue bonds and do not contain a voter approval requirement."
        Rider v. City of San Diego, C.A. 4th, No. D026652, filed December 27, 1996, by Haller, J.; Benke, J., concurring and dissenting.
        The full text of this case appears in 96 Daily Journal D.A.R. 15617, December 31, 1996.


98 Daily Appellate Report