Salt Lake City Corp. v. Jordan River Restoration Network

• Decision Date: 14 December 2012
• Docket Number: Nos. 20110316,20110582.,s. 20110316
• Parties: SALT LAKE CITY CORPORATION, Petitioner and Appellee, v. JORDAN RIVER RESTORATION NETWORK, Danny Potts, Nancy L. Saxton, Jan R. Bartlett, Karen Potts, M. Ray Kingston, Raymond W. Wheeler, Hans Ehrbar, Lucy Knorr, and all taxpayers, property owners, and citizens of Salt Lake City, Utah, including nonresidents owning property or subject to taxation therein, all other persons having or claiming any right, title, or interest in any property or funds affected by or to be affected by the general obligation bonds of Salt Lake City, to be issued for a multipurpose regional sports, recreation and education complex; and Mark Shurtleff, Attorney General, Defendants and Appellants.
• Court: Utah Supreme Court

299 P.3d 990

SALT LAKE CITY CORPORATION, Petitioner and Appellee,
v.
JORDAN RIVER RESTORATION NETWORK, Danny Potts, Nancy L. Saxton, Jan R. Bartlett, Karen Potts, M. Ray Kingston, Raymond W. Wheeler, Hans Ehrbar, Lucy Knorr, and all taxpayers, property owners, and citizens of Salt Lake City, Utah, including nonresidents owning property or subject to taxation therein, all other persons having or claiming any right, title, or interest in any property or funds affected by or to be affected by the general obligation bonds of Salt Lake City, to be issued for a multipurpose regional sports, recreation and education complex; and Mark Shurtleff, Attorney General, Defendants and Appellants.

Nos. 20110316, 20110582.

Supreme Court of Utah.

Dec. 14, 2012.

[299 P.3d 996]

J. Wesley Robinson, Evelyn J. Furse, Edwin P. Rutan II, Salt Lake City, for appellee.

David Bernstein, Karthik Nadesan, Ivan W. Lependu, Salt Lake City, for appellants Jordan River Restoration Network, Danny Potts, Nancy L. Saxton, Jan R. Bartlett, and Karen Potts.

M. Ray Kingston, Raymond W. Wheeler, Hans Ehrbar, Lucy Knorr, Salt Lake City, pro se.

Justice PARRISH, opinion of the Court:
INTRODUCTION

¶ 1 This case involves Salt Lake City's (City) petition to validate municipal bonds pursuant to the Bond Validation Act (Validation Act). In 2003, the City asked voters to approve Proposition No. 5, which proposed the issuance of bonds to finance construction of a “Regional Sports, Recreation and Education Complex.” Voters approved the bonds. Years later, in 2011, the City authorized issuance of the bonds with Resolution No. 12 and then filed a petition to validate the Proposition No. 5 bonds in district court. Validation is an optional, expedited procedure that permits a governing body to obtain both a judicial declaration that proposed bonds are legal and an injunction preventing any future challenge to the validity of the bonds. Danny Potts, Nancy Saxton, and the Jordan River Restoration Network (collectively, Restoration Network) retained counsel and appeared in opposition to the City's petition. Additionally, Ray Kingston, Raymond Wheeler, Hans Ehrbar, and Lucy Knorr (collectively, Citizens) appeared pro se and opposed the City's petition. Together, the Restoration Network and Citizens (collectively, Appellants) challenged the bonds' validity on a variety of statutory and constitutional grounds. The district court considered their claims, denied them, and granted the City's validation petition.

¶ 2 Both the Restoration Network and Citizens appealed. We consolidated their appeals into this case. Together, the Appellants raise seven claims that they believe render the bonds invalid and illegal. Generally, the Appellants claim that the validation proceedings conducted by the district court deprived them of due process and violated the Validation Act. They also argue that validation was not proper because the City's

[299 P.3d 997]

authorization of the bonds did not comply with the Local Government Bonding Act (Bonding Act).

¶ 3 We hold that the district court conducted the validation proceedings in compliance with due process and the Validation Act, and that it correctly granted the City's petition to validate the Proposition No. 5 bonds. The validation proceedings conducted by the district court protected Appellants' due process rights to notice and an opportunity to be heard. Upon receipt of the City's validation petition, the district court properly ordered publication of notice. This notice appeared in the Intermountain Commercial Record ( Commercial Record) and on the Utah Legal Notices website and it satisfied the requirements of due process. As a result, Appellants were properly served with process and subject to the personal jurisdiction of the district court. The notice also provided Appellants with adequate time to prepare for the validation hearing. Additionally, the procedures employed by the district court at the validation hearing protected Appellants' due process rights by providing them with a meaningful opportunity to be heard. In particular, the district court permitted Appellants to testify, examine witnesses, and present closing arguments.

¶ 4 The district court also correctly applied both the Validation Act and the Bonding Act. It accurately concluded that the Validation Act provides a narrow, expedited procedure limited to consideration of the validity of the bonds as financial instruments and does not permit consideration of collateral matters, such as land use and zoning laws, that relate to implementation of the underlying project. Similarly, the district court correctly held that collateral documents did not create binding terms for Proposition No. 5. The project now proposed by the City is consistent with what the City advertised to voters in its statutorily required notice and falls within the bounds of the City's discretion. Finally, the district court properly determined that Resolution No. 12 complied with the Bonding Act and authorized issuance of the bonds. While Resolution No. 12 is subject to a final bond resolution, the constraints it establishes for material bond terms, like the bonds' principal and interest rate, permit it to authorize bond issuance and serve as the foundation for the validation petition. Because we conclude that the district court complied with due process and properly applied the Validation and Bonding Acts, we affirm its grant of the City's validation petition.

BACKGROUND I. THE PROPOSITION NO. 5 BOND ELECTION

¶ 5 On September 9, 2003, the City adopted Resolution No. 39, which proposed six bond issues. Only Proposition No. 5 is relevant to this case. Proposition No. 5 asked voters the following question:

Shall Salt Lake City, Utah, be authorized to issue and sell general obligations bonds of the City in an amount not to exceed Fifteen Million Three Hundred Thousand Dollars ($15,300,000) and to be due and payable in not to exceed twenty (20) years from the date or dates of the bonds for the purpose of paying the costs of acquiring, constructing, furnishing and equipping a multi-purpose regional sports, recreation and education complex and related roads, parking and improvements?

The City scheduled the bond election for Proposition No. 5 contemporaneously with the November 2003 general election.

¶ 6 Prior to the November election, the City sent out a Voter Information Pamphlet (Pamphlet) describing the six bond propositions. The description for Proposition No. 5 was titled “Regional Sports, Recreation and Education Complex.” The Pamphlet identified the site for the proposed complex as “212 acres at 2000 North and 2000 West.” It then described the purposes of the project as:

• To acquire, construct, furnish and equip a multi-purpose regional sports, recreation and education complex.

• To accommodate the growing needs of youth and adults, participating in organized sports such as soccer, rugby, lacrosse, football and baseball.

• To relieve community and neighborhood parks of continuous high-intensity, multi-

[299 P.3d 998]

use activities that negatively impact park lands.

• To create economic development opportunities by drawing regional and national events.

¶ 7 The Pamphlet also articulated the following “details” for the complex:

• The Jordan River, which runs along the eastern border of the complex, will be preserved as a natural habitat for both plants and wildlife. Access to the river corridor will be preserved for recreation.

• Complex may also include an indoor structure to support field sports and a nature component to support education.

• Fee-based, scheduled events (e.g., league and tournament play) will help generate revenue, offsetting operation and maintenance costs.

• User groups are committed to raise $7.5 million from other government, community, and constituent user groups to augment bond funding.

¶ 8 After articulating the complex's purpose and details, the Pamphlet described the cost associated with approval of Proposition No. 5. The Pamphlet estimated that an average homeowner would pay $7.75 per year for the cost of the bonds and $2 per year for ongoing maintenance of the complex. It then estimated that the cost to a small business would be $14 per year while the cost to a large business would be $81 per year.

¶ 9 In advance of the November election, newspapers reported on Proposition No. 5. In particular, the Salt Lake Tribune published an October 23, 2003 article on the subject. The article appeared in the newspaper's opinion section and its authorship was attributed to the “ Salt Lake Tribune.” The article outlined the complex's anticipated features, costs, and location and recommended voter approval. It specifically stated that the complex would include thirty soccer fields, two rugby fields, and eight baseball fields on a 212-acre site.

¶ 10 On November 4, 2003, the voters of Salt Lake City approved Proposition No. 5 by a vote of 20,475 to 19,454. Parties had until December 23, 2003 to contest the validity of the bond election. No party raised such a challenge.

¶ 11 After the validation hearing, the district court issued Findings of Fact and Conclusions of Law explaining the City's “current” proposal for the complex. The district court stated that the complex, as proposed, will be located on a 160-acre site near the Jordan River and will include fifteen multi-use fields and one championship field. The court further stated that the current proposal does not include any baseball fields but that it does include a natural buffer between the athletic fields and the Jordan River. Finally, the court stated that the proposal also includes a variety of infrastructure, including parking, roads, restrooms, concession areas, maintenance buildings, and administration buildings.

II. AUTHORIZATION OF THE PROPOSITION NO. 5 BONDS

¶ 12 In 2010, the City began proceedings to authorize issuance of the Proposition No. 5 bonds. On February 5, 2010, the City posted and published notice of a February 9,...