City to ask court for new trial in La Jolla MAD suit

The City of San Diego has notified the San Diego Superior Court that it plans to request a new trial in a lawsuit that essentially set aside a new taxing authority — aka La Jolla Maintenance Assessment District (MAD) — designed to spruce up local streets and sidewalks in The Village.

The City filed two notices with the court on Jan. 22, according to a register of actions in the case. The filings notified the court that the City would be asking it to vacate a judge’s Nov. 30 ruling against the MAD and grant the City a new trial.

According to the notices, the City is making the request on grounds that it did not receive a fair trial because of issues including an abuse of discretion by the court and irregularities in the legal proceedings.

The City has until Feb. 2 to file briefs and affidavits supporting its request, according to the plaintiff’s attorneys.

The background

Some La Jolla property owners filed the lawsuit in 2016 to challenge as an unlawful tax the City’s new La Jolla MAD, through which the City had planned to collect more than $500,000 in tax revenue in 2018. The money was supposed to pay for services including trash collection, litter pickup, power-washing sidewalks and landscape maintenance in the area covered by the special district.

The property owners argued that the MAD was unconstitutional because it funded some services that the City Charter already requires the City to provide to the general public.

On Nov. 30, San Diego Superior Court Judge Randa Trapp ruled in the property owners’ favor, finding that the City failed to show the MAD would provide special benefits, as opposed to those already provided as part of general municipal services, court records show.

Maria Severson, an attorney with the San Diego-based law firm Aguirre & Severson LLP, which filed the lawsuit on behalf of the La Jolla property owners, said last week that her firm plans to fight the City’s attempt to re-argue the case. Severson said the case was fully briefed on both sides and there is no new evidence that would warrant a reversal of the judge’s “well-reasoned” decision.

The City did not respond to The San Diego Union-Tribune’s request for information about the notices.

Enhance La Jolla stand

The La Jolla MAD was approved by voters within the District and ratified by the San Diego City Council in November 2016. Voters decided the MAD would be administered by Enhance La Jolla, a local non-profit board.

Bill Tribolet, chair of Enhance La Jolla said board members were “pleased” that the City was taking a stand against the ruling. “From the day we started the campaign to create the MAD, through an extensive outreach effort, we talked with property owners, shop owners, residents and neighbors about two things,” he explained.

“First, the increase in the property taxes being collected for the MAD would be used to supplement the custodial responsibilities now being provided by the City of San Diego. MAD services would include items such as supplemental trash collection and hydro-washing of sidewalks, landscape maintenance and tree trimming. The scope of this work and a precise budget was submitted and approved by the City Engineering Department.

“Second, if passed, the MAD would have a contractual relationship with the City that would allow an opportunity for Enhance La Jolla to make capital improvements on public property within the District, raising the funds from private donations — Enhance La Jolla is a 501(c)3 nonprofit — for the construction. This special benefit was what drove our campaign, generated a majority vote of District property owners (the people paying the additional assessment), and unfortunately, was ignored in the court’s decision.”

As for what comes next, Tribolet said: “The board of Enhance La Jolla will meet in the next 30 days to decide what we will do while the City and the opponents of the MAD have their days (months actually) in court. We are encouraged by the aggressive approach of the City and strongly believe it will prevail. In the meantime, we will either continue our efforts to create a comprehensive Village Improvement Plan, or put that effort on hold while we identify smaller individual custodial projects that can be completed on private property, with private funding.

“There can be no legitimate argument that our Village is not in need of a refreshing renovation. We have all watched time have its way with our Village, and a simple walk through the streets will tell you that time is not on our side. This is our time to make a difference, and the MAD is the only way to make it happen. This is a classic public-private partnership, one which provides the special ingredient that the opponents and court have chosen to ignore.”

The opposition’s stand

La Jolla Light reached out to Lincoln Foster, who’s named as a leading opponent in the lawsuit filed by the La Jolla property owners, for his thoughts on the pending action. Foster said he agrees with the judge’s original decision and is “confident” the decision will stand.

“We feel, in reading the decision, that the judge spent a lot of time studying the issue and put a lot of thought into her decision, and we think it was the right decision. No one wants to see a favorable decision overturned, but we are confident the decision will stand because it is based on sound reasoning.”

As for why he filed the suit, Foster said: “We are all in favor of everything the MAD and Enhance La Jolla want to achieve, it’s just the funding mechanism we object to. ... We’re already being taxed for these services, but the City is not delivering them. Further, there are other ways to raise money that are more equitable, some City rules and regulations may have to change, but it may be easier.”

For example, he said the City could charge for use of public right-of-ways (for restaurant seating or advertisements) or implement parking meters.

“Many upscale communities have parking meters. There is no reason La Jolla shouldn’t. The City Code would have to be revisited because there are certain restrictions (on what parking meter money could fund), but millions of dollars could be collected.

“No one wants to pay for parking, but it’s a fair and equitable solution. It’s more than fair if that money — rather than taxing property owners again — would fund these projects.”

Foster concluded: “We think proponents of the MAD and Enhance La Jolla are honorable and well-intentioned members of the community and have the community’s best interest at heart. We agree with what they want to do — maintain the streets, improve landscaping and pick up trash — no one can disagree with that. Our disagreement is the mechanism by which they want to raise funds to carry out those objectives.”

MAD funds in limbo

The initial MAD assessments total a little over $500,000 and were collected by the City starting in Fall 2017. They remain in a City account, pending outcome of the court action.

The boundaries of the MAD are Coast Boulevard, La Jolla Boulevard, Pearl Street, Girard Avenue and Torrey Pines Road, and consists of two zones. According to enhancelajolla.org: Zone 1 is comprised primarily of commercial properties and Zone 2 includes primarily residential properties. Because Zone 1 has a higher need for frequent maintenance, a higher level of service would be provided in this zone. Assessments would be higher in Zone 1 than in Zone 2.

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