Board of Supervisors v. Local Agency Formation Com.

• Decision Date: 09 November 1992
• Docket Number: No. S023805,S023805
• Citation: 13 Cal.Rptr.2d 245,838 P.2d 1198,3 Cal.4th 903
• Court: California Supreme Court
• Parties: , 838 P.2d 1198, 61 USLW 2302 BOARD OF SUPERVISORS OF SACRAMENTO COUNTY et al., Plaintiffs and Appellants, v. LOCAL AGENCY FORMATION COMMISSION OF SACRAMENTO COUNTY, Defendant and Appellant. CITRUS HEIGHTS INCORPORATION PROJECT, Real Party in Interest and Appellant.

Page 245

13 Cal.Rptr.2d 245

3 Cal.4th 903, 838 P.2d 1198, 61 USLW 2302

BOARD OF SUPERVISORS OF SACRAMENTO COUNTY et al., Plaintiffs and Appellants, v. LOCAL AGENCY FORMATION COMMISSION OF SACRAMENTO COUNTY, Defendant and Appellant.

CITRUS HEIGHTS INCORPORATION PROJECT, Real Party in Interest and Appellant.

No. S023805.

Supreme Court of California,

In Bank.

Nov. 9, 1992.

Brenton A. Bleier, Peter Mixon, Remy & Thomas, Tina A. Thomas, James G. Moose, Sacramento, and Whitman Manley, San Francisco, for plaintiffs and appellants.

Dwight L. Herr, County Counsel, Santa Cruz, Deborah Steen and Jane M. Scott, Asst. County Counsel and Victor J. Westman, County Counsel, Contra Costa, as amici curiae, on behalf of plaintiffs and appellants.

Hyde & Miller, Hyde, Miller & Owen, Hyde, Miller & Savage, Nancy C. Miller, Kirk E. Trost, Matina R. Kolokotronis, Christiane E. Layton and Paul Chrisman, Sacramento, for defendant and appellant.

Downey, Brand, Seymour & Rohwer and Patrick J. Borchers, for real party in interest and appellant.

Rourke & Woodruff, Rourke, Woodruff & Spradlin, Daniel K. Spradlin, Lois E. Jeffrey, Robert W. Lucas, Orange, Kronick, Moskovitz, Tiedemann & Girard and Anthony B. Manzanetti, Sacramento, as amici curiae on behalf of defendant and appellant and real party in interest and appellant.

MOSK, Justice.

Residents of an unincorporated area of Sacramento County seek to incorporate into a city. Government Code section 57103 provides that only the voters residing in the territory to be incorporated may vote to confirm the incorporation. The Court of Appeal found this law unconstitutional as applied, holding that it violates the guaranty of equal protection of the laws. We conclude that the law is constitutional, both on its face and as applied to the incorporation at issue.

The case before us illustrates the tension between California's financially beleaguered counties and the desire of residents of unincorporated areas to form cities and draw local government closer to home. ¹ With the fall in tax rates following the adoption of Proposition 13 (Cal. Const., art. XIIIA) in 1978, and a concomitant population-driven rise in demand for services, this tension has grown in recent years: at least one California county has considered bankruptcy and, like the state itself, all counties have had to make painful spending decisions. The counties fear that if tax-rich districts form cities, the counties will be deprived of revenue and their financial position further weakened. (See Arrival of New Cities Puts Counties on a Starvation Diet, L.A. Times (Orange Co. ed., Feb. 17, 1991) Metro sec., pt. B, p. 8, col. 1.) On the other hand, community residents and landowners often prefer to govern their local affairs insofar as possible, and cityhood provides them with greater opportunities for self-determination than does residence or ownership in a more amorphous unincorporated area. The evolution of cities is a natural process when population grows and communities begin to form their own identities.

Acknowledging the tension between fiscal concerns and the desire for self-government, the Legislature enacted the Cortese-Knox Local Government Reorganization Act of 1985. ² The Cortese-Knox Act consolidated three major laws governing local-government boundary changes. As explained in Fallbrook Sanitary Dist. v. San Diego Local Agency Formation Com. (1989) 208 Cal.App.3d 753, 758, 256 Cal.Rptr. 590, "In 1985, the Legislature repealed the Knox-Nisbet Act (former § 54773 et seq.), the District Reorganization Act of 1965 (former § 56000 et seq.) and the Municipal Organization Act of 1977 (former § 35000 et seq.), and replaced these laws with the Cortese-Knox Act...." The new scheme's provisions became operative January 1, 1986. (Ibid.)

In 1986 persons in the unincorporated Sacramento County community of Citrus Heights, containing a population of approximately 69,000, collected enough valid signatures to qualify an incorporation petition to the Sacramento County Local Agency Formation Commission (commission), which by law supervises municipal incorporations in the county. Following an environmental review and other proceedings, the commission declared that the law did not require an environmental impact report and approved a resolution setting forth the incorporation proposal. The resolution contained a provision designed to mitigate the financial impact on the county: the proposed city limits were relocated to exclude a sales-tax-rich shopping center. Requests for reconsideration of that resolution followed, in part on the ground that the boundaries still unfairly impacted the county's tax base. The commission adopted a new resolution that moved another shopping center outside the proposed city limits, and then, to further mitigate the county's financial loss, amended that resolution to require that the new city's receipt of property taxes be phased in more slowly. In accordance with section 57103, the commission ordered a confirming election to be held only within the territory of the proposed city. ³

This lawsuit followed. Plaintiffs include the Sacramento County Board of Supervisors, the Sacramento County Deputy Sheriffs' Association, and Sacramentans to Save our Services. The latter party alleged that it is an unincorporated umbrella organization of some 40 social and community service, labor, law enforcement, and business organizations, many of which receive county funds. Displeased, among other things, with the law's limitation of the confirming election to the voters in the territory to be incorporated, plaintiffs challenged the limitation's constitutionality on the ground that section 57103 denies them equal protection of the laws. (U.S. Const., Amend. XIV, § 1; Cal. Const., art. 1, § 7.)

At a hearing on plaintiffs' petition for writ of mandate and complaint for injunctive and declaratory relief, the court entered judgment in plaintiffs' favor on certain environmental impact issues but refused to find the voting limitation in the act unconstitutional.

The Court of Appeal affirmed the judgment on the environmental impact issues, but reversed on the constitutional question. Relying on language in the companion cases of Fullerton Joint Union High School Dist. v. State Bd. of Education (1982) 32 Cal.3d 779, 805, 187 Cal.Rptr. 398, 654 P.2d 168 (Fullerton ), and Citizens Against Forced Annexation v. Local Agency Formation Com. (1982) 32 Cal.3d 816, 826, 187 Cal.Rptr. 423, 654 P.2d 193 Citizens ), the Court of Appeal adopted a standard it conceded to be "a somewhat rubbery ruler": i.e., that "it is a potential voter's substantial interest in the change in government by being subjected to significant effects of the change which determines whether the residency line has been drawn in such a way as to result in impermissible disenfranchisement and the consequent strict scrutiny of that line." The court decided that the county's electorate had a substantial interest in the incorporation because, given the high level of local government services the county provides in its heavily populated unincorporated area, the incorporation of Citrus Heights would generate significant effects. The court quoted another source that described the unincorporated area as " 'a pseudo-city of 550,000' " that contains almost two-thirds of all county residents and offers " 'municipal services ... of a very high standard ... comparable to the level of service received by cities of the same size.... The Sheriff's and Public Works Departments may be the largest in the state and offer very sophistica[t]ed services.' " For that reason, the court implied, the incorporation of Citrus Heights would be tantamount to a secession from Sacramento County. The court concluded that section 57103 is unconstitutional as applied to the proposed incorporation because it deprives other voters in the county's unincorporated areas of the right to vote on the question and thereby violates the equal protection clause.

The Court of Appeal fairly interpreted Fullerton and Citizens. As we shall explain, however, those cases do not mandate a conclusion that section 57103 is unconstitutional.

I.

The Cortese-Knox Act requires that every unconsolidated county have a local agency formation commission (see § 56325), appointed by local lawmaking bodies (ibid.), to "review and approve or disapprove with or without amendment, wholly, partially, or conditionally, proposals for changes of organization or reorganization...." ( § 56375, subd. (a).) A change of organization includes the incorporation of a city with at least 500 registered voters from unincorporated county land. ( §§ 56021, subd. (a), 56043.) Territory to be incorporated as a city must be located in one county. ( § 56110.)

A local agency formation commission ordinarily is a five-member body that includes two county representatives from the board of supervisors (board), two city representatives "each of whom shall be a city officer" (defined in § 56025 as a mayor or city council member), and one member of the general public chosen by the other four. ( § 56325.) The panel must be enlarged to include two representatives of special districts if the commission of any county (1) orders special districts to be represented thereon, and (2) adopts regulations affecting the "functions and services" of such districts. ( § 56332, subd. (a).)

The act, however, prescribes special treatment for almost one-third of California's 58 counties. The Legislature has created exceptions for four larger counties ( §§ 56326-56328): Los Angeles, Santa Clara, San Diego, and, of significance in this case, Sacramento. "In Sacramento County, the commission shall consist of seven members, selected as follows": two board members representing the county; a representative for the City of Sacramento "who is a member of the city council, appointed by the mayor and confirmed by the city council"; a representative for the cities in...