It was a long time coming for attorneys and volunteers in Golden Hill and South Park to get reimbursed, at least partially, for their time and money spent to fight the city over their illegally formed maintenance assessment district.
On Tuesday, May 20, city councilmembers will put an and to the case by awarding $300,000 from the Public Liability Fund to those involved in the lawsuit.
Residents first filed their complaint in 2007, shortly after the district was formed. They argued that the city rigged the vote by exaggerating city-owned property included in the district. Residents also argued that there was no real distinction between "specific" benefits for property owners and "general" benefits for non-paying members of the public, as called for in state and municipal laws governing assessment districts. In February of 2012, a judge agreed, ordering the city to invalidate the Greater Golden Hill Maintenance Assessment District.
Since the ruling, only a small percentage of residents have received refunds. The reason for that is the city attached a four-year-statute of limitations clause, this despite the fact that residents filed their lawsuit the same year the district was formed.
Refunds weren't the only thing city officials and its attorneys hoped to delay. City officials challenged having to pay the legal fees spent by a number of residents and now-deceased attorney Hal Tyvoll, who led the legal charge before succumbing to poor health.
Their hard work and hard-earned money paid off in November of last year when California's Court of Appeals rejected the city's argument that it was not responsible for fees. Now, six months later, those residents and a volunteer attorney will get reimbursed, albeit partially.
"This action is for the approval of a settlement reached between the City and the Golden Hill Neighborhood Association in the amount of $300,000. The settlement will conclude two lawsuits filed by the Association against the City in which the Association contested the legality of the City's Greater Golden Hill Maintenance Assessment District (GGHMAD)," reads the May 20 council docket.
The victory may have some ripple effect for improvement districts throughout the city. In July 2012, not long after the decision, the city attorney's office issued a memo rethinking the legality of special assessments and promoted the idea that residents and business owners form their own private association.
"The current legal landscape with respect to both business-based and property-based assessment districts is treacherous. The passage of Prop 26 has left the legality of business-based assessments in limbo until it is clarified by legislation or litigation. The Golden Hill holding has imposed upon the City and its hired assessment engineers the seemingly impossible task of dividing nearly every improvement and activity into special and general benefit and quantifying each based on solid, credible evidence...
"...A potential solution to this dilemma is for the businesses or property owners to form their own private association and ‘assess’ each of the members for the benefit conferred. The association could also consider recording instruments that would act as a lien on their businesses or property to ensure payment and participation. There is nothing preventing interested businesses or property owners from doing so. This private association approach would eliminate all risk to the City and its General Fund."
Despite the warning, the city has marched forward, forming new districts (read: Barrio Logan and Civitas). Currently, the city is fighting a lawsuit from attorney Cory Briggs, who challenges the legality of the city's 55 maintenance assessment districts.