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Are Private E-mails & Text Messages “Public Records?”

09 Dec 2016 00:00:00 -0800

Public agencies in California should prepare for the likelihood that communications on officials’ and employees’ private devices related to the agency’s “conduct of the public’s business” will be subject to disclosure under the state’s Public Records Act. While it is impossible to predict exactly how the California Supreme Court will rule on this issue, questions and comments from the bench during oral argument on Wednesday makes it appear likely the justices will strike down a lower court’s decision. That would mean that such communications are subject to disclosure under the PRA, even if those communications are not retained by or in possession of the public agency.

This “open government” issue has simmered — if not raged — for years. A number of trial courts have found such communications are subject to the PRA. However, in 2014, the Sixth District Court of Appeal held in a published opinion that, because the City of San Jose did not have access to messages on the private accounts and devices of its officials, those records were not “public records” required to be disclosed under the PRA. The California Supreme Court soon after agreed to review that decision. City of San Jose et al. v. Superior Court (Smith) S218066. Public agencies and open government advocates have been anxiously awaiting resolution of the question.

If the discussion during oral argument reveals the thinking the justices will bring to their deliberations, and are a harbinger of their upcoming decision, it appears likely the Court will strike down the appellate court’s decision and hold that such communications are subject to disclosure under the PRA. The Court has 90 days to issue its decision, although it regularly issues opinions within 45 to 60 days of argument.

The Court’s decision will have an immediate impact, as it will be the final word on the subject, and binding on all agencies and courts throughout California. Given the recent history of this issue in the lower courts, it is anticipated that open government advocates and the media will immediately begin to make public records requests for communications on the private devices of officials and employees, if the Supreme Court holds as the tenor of the questions at oral argument seemed to indicate.

Officials and employees should be alerted now to the potential that, within the next two to three months, or less, communications on their private devices related to their agency’s “conduct of the public’s business” (a term that has been broadly construed by the courts) will be subject to disclosure under the PRA. Agency officials should give thought as to how to accommodate privacy and free speech concerns of its officials, employees and constituents; how to account for and “capture” covered communications; how to ensure compliance with the inevitable requests that will be made; how to meet the time constraints of the PRA in this new milieu; and how to address requests for communications for former officials and employees that could still exist.

Best Best & Krieger LLP lawyers are prepared to assist in meeting the legal, policy and procedural compliance challenges, regardless of the result of the Court’s decision in this case. If you have any questions about this case or how it may impact your agency, please contact the attorney authors of this Legal Alert in the firm’s Municipal Law practice group, or your BB&K attorney.

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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

Claims Resolution Procedure Changes

02 Dec 2016 00:00:00 -0800

Claims resolution procedures for public contracts in California will change under a new law that takes effect Jan. 1. Assembly Bill 626, recently signed by Gov. Jerry Brown, establishes a claims resolution process applicable to any contractor claim, as defined, filed in connection with a public works project for contracts entered into on or after Jan. 1, 2017.

Public Contract Code section 20104, which remains in place and establishes a dispute resolution procedure for local agencies, only applies to public works claims of $375,000 or less; however, AB 626 will apply to all public works claims, regardless of the amount.

Within 45 days of receipt of any claim, AB 626 requires specified public entities to provide a written statement to the claimant identifying the disputed and undisputed portions of the claim. If a written response is not timely issued, the entire claim is deemed rejected. If the claimant disputes the public entity’s response, the claimant may demand a meet-and-confer conference, and any portion of the claim that the parties continue to dispute following the conference is subject to nonbinding mediation.

Payment due on undisputed portions of a claim must be processed within 60 days, and unpaid claim amounts accrue interest at 7 percent per annum. AB 626 also establishes a formal process for subcontractors and lower tier subcontractors that lack standing to assert claims to request the prime contractor to pass through claims, and imposes requirements on the prime contractor with regard to any such requests. AB 626 does not affect other existing claims resolution procedures, such as the Government Claims Act.

Moving forward, this process must be included in the plans or specifications for all public works projects. Best Best & Krieger LLP will issue additional, detailed guidance to clients regarding incorporating these provisions into contract documents. If you have any questions about this legislation or how it may impact your agency, please contact the attorney authors of this Legal Alert, or your BB&K attorney.

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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

Financing Increased Demand On Pre-Existing Services Constitutes “Additional Services”

24 Oct 2016 00:00:00 -0800

Community Facilities Districts formed by a landowner vote may be used to finance increased demand on pre-existing services, a California Appellate Court has held. Further, a CFD tax is a special tax and may finance multiple municipal services, so long as the revenue raised is not available for general governmental purposes. This decision reaffirms the flexibility and versatility of CFDs under the Mello-Roos Community Facilities Act of 1982 to fund services, and may be applied more broadly when distinguishing special taxes from general taxes in other contexts.

In Building Industry Association of the Bay Area v. City of San Ramon, a developer sought approval from the City of San Ramon to develop a 48-unit townhouse project. After conducting a study that showed the cost of providing services to the new development would exceed the revenue generated by the project, the City conditioned its approval of the project on the developer providing a funding mechanism to cover the difference. The developer petitioned the City to form a CFD for this purpose. A CFD was formed by a landowner vote (in which the developer was the only landowner), and the City authorized the revenue raised by the CFD to be used for multiple services authorized under the Act. The Building Industry Association of the Bay Area challenged the validity of the tax on the following grounds: 1.) the tax does not provide for “additional services,” 2.) the tax is an unconstitutional general tax and 3.) the City’s ordinance authorizing the tax is unconstitutional because it retaliates against property owners by providing that the City will cease to provide the tax-funded services in the CFD if the CFD property owners repeal the tax in the future.

Government Code section 53313 authorizes CFDs to be formed by landowner vote to finance numerous municipal services if the services are in addition to those already provided in the CFD before formation, and do not replace pre-existing services. BIA argued that the CFD does not provide for “additional services” because it “pays for increased quantities of existing services to meet increased demand.” The court disagreed, stating that pre-existing service levels would be insufficient to meet increased demand in the CFD without an additional cost. The CFD would thus finance services supplementary to, and not in replacement of, pre-existing services. The court further clarified that landowner-approved CFD taxes may be used to satisfy an increased demand for existing services. Further, the Act does not require such a CFD to provide its property owners services that are superior to services in areas not subject to the tax.

BIA also argued that, because the CFD finances “a widely disparate menu of services and facilities” and its purpose is to raise revenue to supplement the City’s general fund, it is a general tax that the CFD is not authorized to levy. Article XIIIC, section 1 of the California Constitution defines a general tax as “any tax imposed for general governmental purposes,” and a special tax as “any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.” The court disagreed, finding that, so long as the tax is restricted to specific enumerated purposes — even if such purposes are “a widely disparate menu of services” — the CFD tax will not be characterized as a general tax.

Finally, the court rejected BIA’s claim that the ordinance authorizing the CFD tax was unconstitutional because it retaliates against property owners in the CFD if they repeal the tax. The court found that it is not a violation of due process for the ordinance to recognize that if a tax has been imposed to provide additional services and facilities to a CFD, and if that tax is repealed and not collected, there will no longer be funds to provide properties in the CFD with those additional services and facilities, and any obligations that have been incurred to provide those services and facilities will need to be met from other sources.

If you have any questions about this opinion or how it may impact your agency, please contact the attorney authors of this Legal Alert listed to the right in the firm’s Special Districts or Public Finance practice groups, or your BB&K attorney.

Please feel free to share this Legal Alert or subscribe by clicking here. Follow us on Twitter @BBKlaw.

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

LCC Annual Conference

05 Oct 2016 00:00:00 -0800

Join Best Best & Krieger LLP at the 2016 League of California Cities’ Annual Conference in Long Beach, Calif.

BB&K Speakers

Ruben Duran: “Understanding Public Service Ethics Laws and Principles (AB 1234 Training)”
Wednesday, Oct. 5
9 - 11 a.m.

Alisha Winterswyk: “Complying with CEQA, Brown Act, and Other Public Noticing Requirements”
Thursday, Oct. 6
8 - 9:30 a.m.

Ryan Baron: “Energy Reliability: Understanding the Natural Gas and Electricity Nexus”
Thursday, Oct. 6
Noon

Gail Karish and Christy Marie Lopez: “The Advance of Wireless Infrastructure”
Thursday, Oct. 6
4:15 - 5:30 p.m.

Isabel Safie and Katrina Veldkamp: “Reducing Pension and OPEB Costs”
Thursday, Oct. 6
4:15 - 5:30 p.m.

Jordan Ferguson: “What Municipalities Can Do About the Coming Drone-pocalypse”
Friday, Oct. 7
10:30 - 11:45 a.m.

When
Wednesday, Oct. 5 - Friday, Oct. 7

Where
Long Beach Convention Center
300 E Ocean Blvd
Long Beach, CA 90802

For more information or to register, click here.

Lease-Leaseback Legislation Signed Into Law

27 Sep 2016 00:00:00 -0800

The lease-leaseback construction delivery method for K-12 school facilities projects changed under a new law signed Friday by Gov. Jerry Brown. Previously, Education Code Section 17406 authorized school districts, without advertising for bids, to lease property to a contractor under a lease-lease back agreement. Under such agreements, typically, the contractor constructs the school facilities and then leases the facilities back to the school district, with title vesting in the district upon expiration of the lease.

Assembly Bill 2316, which goes into effect Jan. 1, amends Education Code 17406 and addresses some of the legal issues raised by the Court of Appeal decision in Davis v. Fresno Unified School District (2015) 237 Cal.App.4th 261.

AB 2316 establishes a competitive “best value” solicitation process for school districts that utilize a lease-leaseback procurement method in the future. School districts will also now be required to publish their procedures and guidelines for the evaluation of proposers and provide an estimate of the price of the project. AB 2316 also expressly authorizes school districts to contract with the lease-leaseback contractor for preconstruction services. Further, if a project procured using lease-leaseback prior to July 1, 2015 is invalidated by a court because it failed to fall within the former competitive bidding exception, the contractor would be entitled to be paid the reasonable cost of work it performed, except for profit, so long as several conditions are met.

We will issue additional, detailed guidance to clients regarding AB 2316. If you have any questions about this legislation or how it may impact your agency, please contact the attorney authors of this Legal Alert listed to the right in the firm’s Education Law practice group, or your BB&K attorney.

Please feel free to share this Legal Alert or subscribe by clicking here. Follow us on Twitter @BBKlaw.

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

New Legislation Seeks to Expedite CEQA Administrative Record Process

26 Sep 2016 00:00:00 -0800

In a move that could have significant implications for public agencies and project proponents throughout California, Gov. Jerry Brown signed legislation intended to expedite litigation under the California Environmental Quality Act by allowing a lead agency to prepare an administrative record concurrently with the preparation of a CEQA document.

Traditionally, administrative records are prepared and certified only after litigation has begun. Senate Bill 122 seeks to expedite this process by allowing lead agencies to prepare the record while environmental review is ongoing. The administrative record is the documentation that an agency considers or relies upon during its evaluation of a project.

To trigger the concurrent preparation provisions, a project applicant must submit a written request to a lead agency within 30 days of the agency determining what type of CEQA document is required for a project. SB 122 also provides:

A lead agency can deny a project applicant’s request for concurrent preparation of a record, in which case traditional record preparation procedures would apply;
A project applicant seeking concurrent record preparation must agree to “pay all of the lead agency’s costs of preparing” the record, and the lead agency may charge a “reasonable fee” to recover any costs associated with record preparation;
All documents and materials that will be included in the concurrent record must be posted on, and downloadable from, a website maintained by the agency concurrent with the “release of [a] draft environmental document for [a] project.” Consistent with existing law under Public Resources Code section 21167.6, the record would include any written comments submitted to a lead agency, draft environmental documents and “all other documents submitted to, cited by or relied on by the lead agency” in preparing the CEQA document; and
The lead agency must certify the record within 30 days after its filing of a notice of determination.

While deciding whether to pursue this course will require project applicants and lead agencies to assess whether the risk of CEQA litigation is sufficiently high to merit expending the (often significant) costs necessary to prepare the record for a lawsuit that may never be filed, this legislation may serve as a tool for expediting litigation in the event it does arise.

If you have any questions about this legislation or how it may impact your agency, please contact the attorney authors of this Legal Alert listed to the right in the firm’s Environmental Law & Natural Resources practice group, or your BB&K attorney.

Please feel free to share this Legal Alert or subscribe by clicking here. Follow us on Twitter @BBKlaw.

Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

New Legislation Impacts Special Parcel Taxes, Community Facilities Districts, and Notices for Property-Related Fees

22 Sep 2016 00:00:00 -0800

Three new laws require local agencies to comply with new notice requirements for special parcel taxes, publication of annual reports on community facilities district special taxes, and retention of any written protests to any new or increase in any existing property-related fee or charge. The new laws are contained in Assembly Bills 2476, 1666 and 2801. Public agencies are required to comply with these new requirements beginning Jan. 1.

Assembly Bill 2476

AB 2476 adds section 54930 to the Government Code and requires a local agency to provide notice of a new parcel tax to an owner of a parcel affected by the new tax if that owner does not reside within the jurisdictional boundaries of the taxing entity. The notice must contain certain information, including: 1.) the amount or rate of the parcel tax in sufficient detail to allow the property owner to calculate the amount of the tax to be levied against the owner’s property; 2.) the method and frequency for collecting the tax; and 3.) the telephone number and address of an individual, office or organization that interested persons may contact to receive additional information. The form of the notice is included in the legislation. A copy of the bill may be obtained by clicking here.

Assembly Bill 1666

The Mello-Roos Community Facilities Act of 1982 authorizes the formation of a community facilities district to finance various facilities and services. The Act requires a community facilities district formed after Jan. 1, 1992 to prepare an “Annual Report,” if requested by a person who resides or owns property in a CFD, and within 120 days after the last day of each fiscal year. The report contains information regarding the activities and finances of the CFD. The Act also requires local agencies to report information regarding the sale of bonds to the California Debt and Investment Advisory Commission. Other existing law requires each county, city and special district that assesses a parcel tax to provide specific information to the State Controller in connection with reports compiled and published by the Controller on the financial transactions of those entities.

AB 1666 adds section 53343.2 to the Government Code and requires local agencies that have a website to prominently display on the website a copy of the annual report, if requested, a copy of the bond sale report to CDIAC and a copy of the report to the State Controller within seven months after the last day of each fiscal year of the CFD.Local agencies that impose CFD special taxes should consider amending their reporting procedures to reflect this new change in the law. A copy of the bill may be obtained by clicking here.

Assembly Bill 2801

California Constitution article XIII D, section 6 (commonly referred to as Proposition 218) generally requires that any local agency proposing to impose a new or increase an existing property-related fee must provide written notice by mail to the record owner of each parcel upon which the fee will be imposed and hold a public hearing not less than 45 days after the mailing of the notice. If a majority of property owners send written protests to the new fee or increase, the fee may not be imposed. The Proposition 218 Omnibus Implementation Act (Government Code section 53750, et seq.) prescribes certain procedures and parameters for local jurisdictions to comply with article XIII D, including that one written protest per parcel, filed by an owner or tenant of the parcel, is counted in calculating a majority protest to a proposed new or increased property-related fee. AB 2801 amends Government Code section 53755 and requires that any written protests submitted to a local agency be retained by the local agency for a minimum period of two years following the date of the public hearing. Local agencies that impose property-related fees should consider amending their records retention schedules to reflect this new requirement. A copy of the bill may be obtained by clicking here.

If you have any questions about this legislation or how it may impact your agency, please contact the attorney author of this Legal Alert listed to the right in the firm’s Public Finance practice group, or your BB&K attorney.

Please feel free to share this Legal Alert or subscribe by clicking here. Follow us on Twitter @BBKlaw.

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

CEQA Allows Developers to Recover Administrative Record Costs when Reimbursing Agency

21 Sep 2016 00:00:00 -0800

A developer can recover the cost of preparing a California Environmental Quality Act administrative record, even when the lead agency, not the developer, actually prepared it, an appellate court has held. This Fifth District Court of Appeal decision, issued last week, is a victory for public agencies and real parties in interest who prevail in CEQA litigation. So long as Public Resources Code section 21167.6’s procedures are followed, public agencies can be reimbursed by real party in interest developers for administrative record preparation costs, and developers can then seek recovery of those costs from unsuccessful challengers.

In the partially published opinion in Citizens for Ceres v. City of Ceres, the court found that a real party in interest, Wal-Mart, was not barred from recovering the costs it expended to reimburse the City for preparing the administrative record in litigation brought by Citizens for Ceres, so long as the record was prepared in one of three specific ways described in Public Resources Code section 21167.6. The administrative record is the documentation that an agency considers or relies upon during its evaluation of a project.

The case arose from Citizens’ challenge to the City’s certification of an environmental impact report and approval of a shopping center anchored by a Wal-Mart Supercenter. The trial court rejected the challenge and the Court of Appeal upheld it in the unpublished portion of the opinion. Pursuant to section 21167.6, Citizens elected to have the City prepare the administrative record, and the City directed its outside counsel to do so. An agreement between Wal-Mart and the City required Wal-Mart to reimburse the City for all the City’s litigation expenses, which necessarily included expenses arising from the City’s preparation of the record.

Citing past case law, the trial court noted that a party can be awarded the cost of preparing the administrative record only if it was prepared in one of the ways described in Section 21167.6: 1.) by the agency, 2.) by the plaintiff, or 3.) by another method agreed on by the agency and plaintiff. Based on this, the trial court found that Wal-Mart was barred from recovering the cost of preparing the administrative record because Citizens had requested that the City, not Wal-Mart, prepare the record.

On review, however, the Court of Appeal disagreed and found that Wal-Mart could recover the costs it paid to the City for the record’s preparation. Specifically, the Appellate Court found that the record was, in fact, prepared by one of the statutorily approved methods: the agency prepared it. Furthermore, nothing in section 21167.6 limits the identity of prevailing parties that can recover the costs expended for the record’s preparation. As such, the Court held that an award of costs to Wal-Mart would be consistent with section 21167.6.

If you have any questions about this opinion or how it may impact your agency, please contact the attorney authors of this Legal Alert listed to the right in the firm’s Environmental Law & Natural Resources practice group, or your BB&K attorney.

Please feel free to share this Legal Alert or subscribe by clicking here. Follow us on Twitter @BBKlaw.

California Supreme Court Clarifies CEQA’s Subsequent Review Rules and Standard of Review

20 Sep 2016 00:00:00 -0800

The substantial evidence standard of review governs a lead agency’s determination as to whether a previously approved project, as modified, requires additional environmental review under the California Environmental Quality Act, the California Supreme Court has held. The decision, issued Monday in Friends of the College of San Mateo Gardens v. San Mateo County Community College, resolves a long-standing division among the appellate courts concerning the degree of deference to be shown an agency’s determination as to whether additional environmental review is required when changes are proposed to a previously approved project.

At issue here is the San Mateo County Community College District’s 2011 revised addendum to a 2007 Mitigated Negative Declaration for a campus-wide facilities improvement plan on its College of San Mateo campus. The revisions included the demolition of a building initially intended to be renovated and the removal of a portion of that building’s gardens. The District concluded that the proposed revisions did not require preparation of a subsequent environmental impact report under Public Resources Code section 21166 and CEQA Guidelines section 15162, and approved the revisions pursuant to an addendum to the MND. Friends of the College of San Mateo Gardens filed a petition in court demanding that an EIR be prepared for the demolition because, it argued, the demolition was a “new project,” rather than a revision to the previously approved campus plan.

The Supreme Court first addressed the Court of Appeal’s “error in treating the new project inquiry as a question for the court’s independent determination under a de novo standard.” The Court held that it is improper to consider whether an agency’s proposed changes render a project “new” in an abstract sense and that such a “new project” test would invite arbitrary results. The Court further held that whether an initial environmental document remains relevant despite changed plans or circumstances is a predominantly factual question for agencies to answer by drawing on their particular expertise. A court’s responsibility on review, the Court added, is only to decide whether the agency’s determination is supported by substantial evidence.

The Court also addressed Friends’ argument that CEQA’s subsequent review provision, section 21166, applies only to projects for which an initial EIR was prepared. Friends contended that section 15162 is invalid in that it extends the section 21166 subsequent review framework to projects that were initially approved via negative declaration, like the campus improvement project at issue in this case. The Court disagreed on multiple grounds, ultimately holding that limiting agencies’ post-approval review obligations for projects that were initially approved via negative declaration is wholly consistent with a statutory scheme in which negative declarations, no less than EIRs, are entitled to a presumption of finality once adopted.

Next, the Court rejected Friends’ argument that the application of the substantial evidence standard to projects initially approved via negative declaration creates a loophole. Friends argued that so long as the potential environmental effects of a project are caused by changes in the project after a negative declaration had been approved, agencies could “evade” the preparation of an EIR based on the more demanding “fair argument” standard. According to the Court, however, a loophole would not be created. This is because section 15162 requires an agency to prepare an EIR whenever there is substantial evidence that the changes to a project for which a negative declaration was previously approved might have a significant environmental impact not previously considered in connection with the project as originally approved.

Under this holding, the Court clarifies that public agencies’ determinations as to whether proposed modifications to a previously approved project will result in new, previously unconsidered significant environmental effects are entitled to great deference. This decision thus assists both public agencies and private applicants, insofar as any need for subsequent CEQA review is one to be made based on the specific facts involved, and not an abstract legal standard.

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Legislation Establishes New Reporting Requirements for State and Local Debt Obligations

14 Sep 2016 00:00:00 -0800

State and local agencies that issue debt must now file new specified information in the annual reports they are required to submit to the California Debt and Investment Advisory Commission. Under Senate Bill 1029, which Gov. Jerry Brown signed into law on Monday, the new required information includes certification that the issuer has adopted local debt policies and information regarding the use of proceeds from the debt. Both public agencies proposing to issue debt for the first time, and those that have previously issued debt, should adopt new policies and procedures for complying with these annual reporting requirements.

Existing law requires CDIAC to collect, maintain and provide comprehensive information on all state and local agency debt authorizations and issuances and to serve as a statistical clearinghouse for such debt issuances. Existing law also requires the state and local agencies to submit reports to the Commission, within specified timeframes, of the proposed issuance and final sale of debt.

Pursuant to SB 1029, state and local public agencies are required to submit an annual report for any issuance of debt for which it has submitted a report of final sale on or after Jan. 21, 2017. The annual report must cover a reporting period of July 1 to June 30, inclusive, and include the following specified information regarding authorized and outstanding debt, and the expenditure of proceeds from issued debt:

For debt authorized during the reporting period, the report must include information regarding any debt authorized at the beginning of the reporting period, any debt authorized and issued during the reporting period, any debt authorized but not issued at the end of the reporting period, and any debt authority that has lapsed during the reporting period.
For debt outstanding during the reporting period, the report must include information regarding the principal balance at the beginning of the reporting period, the principal paid during the reporting period, and the principal outstanding at the end of the reporting period.
For any debt issued during the reporting period, the report must include information regarding the expenditure of proceeds of the debt, including the debt proceeds available at the beginning of the reporting period, the proceeds spent during the reporting period and the purposes for which it was spent, and the debt proceeds remaining at the end of the reporting period.

The bill requires that the report be submitted within seven months after the end of the reporting period by any method approved by CDIAC. It also requires that the report of any proposed debt include a certification by the issuer that it has adopted local debt policies, which policies must include specified provisions concerning the use of debt and that the contemplated debt issuance is consistent with those local debt policies.

CDIAC also has additional oversight requirements, including a requirement to track and report on all state and local agency outstanding debt until fully repaid or redeemed, and a requirement to consult with appropriate state and local debt issuers and organizations representing debt issuers prior to approving any annual method of reporting pursuant to the new law.

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