SR-213-001 (4)
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G:; :,5 .' : R 0 : ct b _
Meeting Januar,..2, 1982
Santa Monic~ California
;2/3-00/
Council
To:
Mayor and City Council
11- K
JAN 1 a 198~
From:
City Staff
Subject:
Recommendation in Responsp to Request from
St. Augustine's Church
Introduction
This report answers questions which the City Council asked at a
previous Council meeting regarding the downtown parking district.
Background
St. Augustine's Episcopal Church reQuested an exemption from the
assessments levied in the downtown parking district. At the May
19. 1981 Council meeting, several Questions were asked by the
Council members including the following:
1. Basic mechanism under which the Parking Authority works.
2. How do the bonds work?
3. What do the assessments pay?
4. Describe the financial structure of the Parkin9 District.
5. Obligation of the City under the bonds and also the
maintenance obligations.
6. Other property owners that might be similarly affected.
7. Structure of Parkinq District with regard to potential
improvement of the Mall and new development.
8. How is the assessment levied?
9. Summary of projected parking structure revenues and
expenses for fiscal year July 1, 1981 to June 30, 1982.
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JAlt:l 2 1982
ITEM 1.
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No. 702~ adopted in
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1966. established the assessment
Ordinance
district and authorized the levying of the special ad valorem tax
and an additional business license on all businesses within the
district. The ad valorem tax is S2.10/S100 assessed valuation and
the special business license is five times higher than the
business license
for locations elsewhere in the City. These
currently generate $621.461. Only those properties which have
public on-site parking (such as Henshey.s) are given credit from
the ad valorem tax assessment and from the surcharge on the
ITEM 2.
The City Parking Authority issued 17,500,000 worth of bonds in
1966 to finance the cost of acquisition of sites and construction
of the six structures. The bonds will be paid off in 13 more
years. The Parking Authority leases the structures to the City
and uses the revenues to pay the bondholders. The payment to
bondholders in the current year is $472,632.50. This amount is
available from the lease revenue from the City (currently
S396~860) pl us funds from the Reserve fund of the Parking
Aut h 0 r i ty .
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ITSM 3.
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assessments (together with the special business license) are
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The
used to pay rental of the structures. The City, as part of its
remuneration to the Parking Authority under the lease, is
required to maintain the structures and other facilities' of the
district.
ITEM 4.
Answered in above paragraph.
ITEM 5.
The obligations of the City in accordance with the lease
agreement (Resolution No. S002) originally signed in 1966 and
amended several times since, are to "at its own expense, maintain
during the terms of the serveral leases.. .all structures and
improvements in good order, condition and repair and shall pay
all costs and expenses of operating the same as parking
facilities, it being understood and agreed that the Authority is
obligated to provide only the parcels and the structures thereon
as expressly provided herein and has no obligation to pay any
cost or expense of any kind or character..." As additional
rental under this agreement, the City agrees to pay and discharge
all taxes and assessments, if any, of any type...,the insurance
premiums...and all costs of default... and legal actions." The
lease agreement further stipulates "the City proposes to pay a
portion of said rental from the proceeds of an annual additional
business license tax and an annual ad valorem assessment levied
pursuant to Ord1nance No. 702..."
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ITEM 6.
Affects on othtp property owners. Of th~621,461 collected as
of June 30, 1981, the ad valorem tax generated $346,337 and the
special additional business license generated $275,124. The three
churches paid $24,683 or 7' of the ad valorem tax assessment
generated.
ITEM 7.
If new developments occur on
facilities may be expanded,
necessary additional parking.
ITEM 8.
the Mall, the existing parking
if necessary, to provide the
Assessments are levied each year and are based on the amount of
revenue needed to meet the expenses for rental (including
maintenance). The upper limit of the ad valorem tax assessment is
$2.25/$100 assessed valuation. As previously noted, the current
rate is $2.10/$1QO A.V.
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ITEM 9.
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The following is a summary of the projected revenues and expenses
for the Parking Authority structures during fiscal year 81/82.
Projected Revenues
Business Improvement District
(Assessment and Business license Fees) S 622,000
Revised Structure Permit Fees* 148,300
TOTAL PROJECTED REVENUES $ 770,300
Estimated Exp~nses
Capi tal Improvements $ 50,000
Maintenance 231,000
Insurance 33,300
Lease Payment to Parking Authority 397,000
Structure Security (4 Guards) 80,000
Parking Enforcement 40,200
TOTAL ESTIMATED EXPENSES $ 831,500
Deficit: $ 41,000
*The Revised Structure Permit Fees include the Parking Permit
Fees increases effective January 1, 1982.
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In staffls opinion~ it is legal (see atta~d City Attorney's
opinion 81-3) ~ not unfair to require St. Augustine to
continue to pay the assessments. The Staff believes that
charges for parking and other services should continue to be
charged to these institutions since they derive benefits from
the parking~ just as the commercial properties do. It should
be noted that commercial properties are paying substantially
more for the parking on a per square foot basis than are the
churches and charitable institutions. This is because the
business properties not only pay the property assessments,
but pay larger business licence fees than those businesses
outside the parking assessment district. Therefore, every
commercial property is paying much more on a square foot
basis than the churches and charitable institutions.
Recommendation
Staff recommends no changes be made in the assessments and that
the request of St. Augustine's Church be denied.
Prepared by:
Stan Scholl Nick Rives Ray Davis
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1irsf presbyterian Church
1220 Second Street
Santa Monica, Cahforma 90401
12131451-1303
t
Ministers
Alvin Duane SmIth, S T D
4.lan Wayne Deuel, M Dlv
PARKING ASSESSMENT PAYMENTS
1965 to 1982
1965-1966
66- 67
67- 68
68- 69
69 - 70
70- 71
71- 72
72- 73
73- 74
74- 75
75- 76
76- 77
77- 78
78- 79
79- 80
80- 81
$ 4,856.00
5 JOO .00
5,700.00
6,024.00
7 , 126 . 80
II
II
II
II
II
8.302. 50
14,.135.62
13.200.00
13 ,217 . 40
14,486 .63
22 . 176 . 77
ESTIMATED TOTAL AMOUNT PAID
$150,559.61
- 6,991.61
$143,568.11
Credit on 1981--2nd Installment
RE-CAP OF T!iE YEAR 1980--1981
4/6/81 Paid 1st lnstallment $ 7,609.76
12/10/81 .. 2nd II 14,567.01
(Semi-Annual Increase
x 2 = $29.134.02 Annual Assessment)
Amount Pald
Assessment Credit
Recelved 6/6/81
$22 , 176 . 77
- 6.991.61 L.A. County Assessor!!CorrectedllAssessment
$15.185.15 TOTAL PAID IN 1981
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OPINION OF THE CITY ATTORNEY
81-3
OPINION OF THE CITY ATTORNEY CON-
CERNING THE REQUEST OF THE PARISH
CHURCH OF ST. AUGUSTINE BY-THE-SEA
FOR REFUND OF PARKING DISTRICT
ASSESSMENTS
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ISSUE PRESENTED
The City Attorney has been requested by the City Treasurer
to answer the following question:
Is the Parish Church of St. Augustine By-the-Sea entitled
to a refund of Parking District assessments?
CONCLUSION
For the reasons discussed in more detail below, the City
Attorney concludes:
Because it is subject to the parking assessment levied by
Ordinance Number 702 (CCS), the Parish Church of St. Augustine
By-the-sea is not entitled to any refund.
BACKGROUND
The Parish Church of St. Augustine By-the-Sea ("st.
Augustine") has filed a statutory request with the County
Auditor-Controller contesting its inclusion in the Downtown
parking and Business Improvement Area and seeking a refund of
approxinately $ 35,000 in assessments levied against it since
December, 1976.
On November 23, 1965, by a vote of 6-0, one councilmember
abstaining, the City Council adopted Ordinance Number 702 (CCS)
establishing the Downtown Parking and Business Improvement Area.
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The ordinance provides for the levy of an additional business
license tax on businesses within the area and an annual ad
valorem assessment, not to exceed $ 2.25 per each $ 100 of
assessed valuation, on all "taxable real property" within the
area. The sole use of the revenues is the payment of rentals of
public off-street parking facilities and structures under leases
to the City from the Parking Authority.
St. Augustine is one of three churches located within the
boundaries of the assessment area. Although churches are exempt
from the payment of any business license tax (Santa Monica
Municipal Code Section GIll),
the three churches have been
assessed and have paid without protest the annual ad valorem
assessment each year since the adoption of the ordinance.
On or about November 25, 1980, St. Augustine filed a claim
for refund WhICh is the subject of this opinion. Pursuant to
Revenue and Taxation Code Section 5097, the claim is limited to
assessments paid within the last four years.
At the tlme of
filing, the amount of the claim was for $ 30,880.65; the Church
paid under protest an additional assessment of $ 4,000 pending
determination of its claim.
As originally stated, the basis of St. Augustine's claim
was that, as a tax exempt religious institution, it was not a
business
within
the meaning of the Parking and Business
ImproveTient Area Law of 1965 and, accordingly, not subject to
assess~ent under the ordinance.
The County Auditor-Controller requested direction from the
City on how to respond to the refund request. In reviewing this
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claim, the City Attorney's offIce initially concluded that the
terms of the ordinance did not cover St. Augustine's property.
Subsequently,
the
City Attorney's office embarked upon a
reconsideration of its initial opinion because of certain facts
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brought to its attention by Perry Scott, the city manager at the
time the ordinance was adopted.
As discussed in more detail below, the City Attorney now
concludes that the initial opinion of his office was in error and
that St. Augustine's property is subject to the terms of the
ordinance.
ANALYSIS
In filing its claim for a refund, St. Augustine asserted
that it was not subject to the tax pursuant to the Parking and
BUSiness Improvement Law of 1965, Streets and Highways Code
Section 36000 et ~eq. Under this state law, only the levy of an
additional
business license tax is authorized.
Thus, St.
Augustine apparently concludes that, since it is exempt from the
City's bUSIness license tax, the ad valorem assessment 1s not
permitted by state law.
The power of the City to form local assessment areas and
levy ad valorem assessments is not limited by the Parking and
BUSiness Improveme~t Law of 1965.
The formation of assessment
areas and the levy of assessments therein is a municipal affair
which, in the case of a charter city, may be accomplished
pursuant to a local procedural ordinance. Red~ood City v. Moore,
231 Cal. App. 2d 563, 42 Cal. Rptr. 72 (1965); Logan v. City of
Glendale, 102 Cal. App. 2d 861, 229 P.2d 128 (1951).
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Ordinance Number 702 (eeS) was adopted pursuant to a
procedural ordinance adopted by the City Council on September 20,
1965.
(Ordinance
Number
699
( CeS) .)
Accordingly, St.
Augustine's contention that the assessments are not permitted by
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the Parking and Business Improvement Law of 1965 is without
merit.
St. Augustine's status as a religious institution likewise
does not exclude it from the payment .of the assessments.
Although property used exclusively for religious purposes is
exempt from property taxation (Cal. canst. art. XIII, SS 3-4),
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the "exemptions of private property from taxat10n do not extend
to special assessments, levied upon the basis of equivalent
benefit, unless specifically so provided.~
Cedars of Lebanon
Hospital v. County of Los Angeles, 35 Cal. 2d 729, 221 P.2d 31,
42 (1950)i see Young Men's Christian Association v. County of Los
Angeles, 35 Cal. 2d 760, 221 p.2d 47 (1950); Ci~y of Fresno v.
Malmstrom, 94 Cal. App. 3d 979,156 Cal. Rptr. 777 (1979).
As indicated above, no provision of state law prohibits the
City from levying a special assessment on the property owned by
St. Augustine.
Thus, it is necessary to examine the terms of
Ordinance Number 702 (ees) to determine whether or not St.
Augustine is subject to the ad valorem assessment.
Under Section 4 of the ordinance, the ad valorem assessment
is levied upon ntaxable real property" within the area. The term
"taxable real property" is defined in the same section as bland
and improvements on land (but not personal property) located
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within the boundaries of said area and which are subject to the
general ad valorem property taxes levied by said City."
In its earlier opinion, the City Attarneyfs office
concluded that St. Augustine was exempt from the tax because it
d~es not pay the City's general ad valorem property tax. This
interpretation of the ordinance is inconsistent with both the
wording of the ordinance and with the contemporaneous
construction af the ordinance by the City and St. Augustine.
Under Section 4 of the ordinance, the special assessment is
levied against taxable real property. In defining taxable real
property, no attempt was made to focus on the status of any
particular taxpayer. Instead, taxable real property is land and
improvements "subject to" the Cityfg general ad valorem property
tax.
There can be no disagreement that St. Augustine's property
is "subject to" the City's general ad valorem property tax. In
the absence of a constitutional exemption, st. Augustine would be
required to pay the tax. If st. Augustine transfers the property
to a non-exempt entity, the tax would be required to be paid by
any new owner not entitled to the exemption.
Because st. Augustine is exempt from real property taxation
does not necessarily mean that its property is not subject to the
general ad valorem property tax. In the absence of its
exemption, St. Augustine would be required to pay the CIty'S
general ad valorem property tax. Thusr although its property is
subject to the tax, St. Augustine need not pay the otherwise
applicable tax because of its exempt status. ObviouslYr implicit
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in the very nature of the exemption is the fact that the property
would be otherwise subject to the tax.
Although the wording of the ordinance might lend itself to
other interpretations, thi~ interpretation is consistent with the
contemporaneous construction of the ordinance by the affected
parties. In interpreting an ordinance, it is well-established
that a court will give great weight to the "contemporaneous and
practical construction of a statute by those whose duty it is to
carry it into effect, plus acquiescence by persons having an
interest in the matter . .. .n prichard v. Southern Pacific
Co., 9 Cal. App. 2d 704, 706,51 P.2d 428,429 (1935).
Prior to the adoptlon of the ordinance, St. Augustine was
informed that the ordinance would require that it pay the
assessment. At the public hearing on the ordlnance, the Senior
Warden of St. Augustine was present but did not protest the
formation of the assessment area. Follo~ing adoption of the
ordinance, the County Assessor has always levied the assessment
on the property, and for 14 years, St. Augustine regularly paid
the assessments. Moreover, in 1966, after St. Augustine's
building was destroyed by fire, a new building permit was issued
without the require~ent of on-site parking because of inclusion
within the assess~ent area.
It is certainly not unfair to require St. Augustine to
continue to pay the assessments. Like other property owners in
the assessment area, it has benefited from the var~ous parking
structures publICly owned and operated in the area. Like the
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other property owners benefited. it should continue to pay the
assessments.
For
the
reasons discussed above, the City Attorney
concludes that St. Augustine's claim for a refund should be
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denied because it is subject to Ordinance Number 702 (CCS).
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ROBERT M. MYERS
Acting City Attorney
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RHODES, BARNARD, MALON EY, HART &.. MULLEN
HO\'-iA~D ...,.\' ~HC:H:'S
B TL-.OMA5 eARNA~D
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J\ ;:::J.:;>OFe:S.SrONAL CORpORATrON
ATTORNEYS A'T' LAW
1244 SiXTH ST~EE-
~C5T OFF'CE. sex '069
cr....y C-F ~o MV ERC~
LOS AN(;f:'L.E:S~ CA
/2'3" 723-631' 722-3662
:::HR.S,CPI--'E"l M HARLl'NCO
SANTA MON leA, CAlIFO~N IA 9JtlC6
(2'~-. 393---0174 870-1500
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September 16, 1981
8~~ :::-, L~ No
5880.1
Mayor Ruth Yanatta Goldway
Members of the City Council
SANTA MONICA CITY HALL
1685 Main Street
Santa Monlca, CA 90401
RE: St. Augustine Claim for Refund
Dear Mayor Goldway and
Members of the City Councll:
This letter is submitted In support of the claim
for refund of the downtown parking district speclal assess-
ment flIed by the Parish Church of St. Augustine By-The-Sea.
It LS submitted on behalf of all three churches affected by
the speclal assessment: St. Augustlne, First Presbyterian
and Un1ty By-The-Sea.
1. The Ord~nance Deflnlng th~ Property SubJect to the
Special Assessment for the Downtown Parking and BUS1ness
Improvement Area Clearly Excludes St. Augustlnels Property.
On its face, Santa Monica Clty Ordinance No. 702
(CCS), which establ~shed the Downtown Parklng and Business
Improvement Area, clearly excludes the property owned by
St. Augustine and the other churches. That ordLnance
author~zed the levying of a spec~al ad valorem tax on all
f'taxable real property", WhlCh the ordinance defines as pro-
pertlE~,g "WhlCh are subJect to the general ad valorem property
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RHODES, BARNARD, MALON EY, HART &. MULLEN
e
A bROF=:SS'O~A.L. (:OR~ORAi'ON
ATTORNEYS AT" LAW
Mayor Goldway and the City Council
September 16, 1981
Page Two
taxes levl.ed by said City t. .
Propertles held by religious institut10ns are
exempt from general ad valorem property taxes.
(Callfornia
Constitutlon, Artlcle XIII, Section 3; Revenue and Taxat~on
Code, Sectlon 214). And, as ~ndlcated by the property tax
bl11s previously flIed with the City, St. Augustlue has
obtalned a "welfare exemption" from general ad valorem pro-
perty taxes pursuant to Revenue and Taxation Code, Section 214.
For thlS reason alone, St. Augustine1s property is not "taxable
real property" wlthin the meaning of Ordlnance No. 702.
The Staff Report's argument that St. Augustlne's
property lS "taxable real property" because, if St. Augustine
transfers the property to a non-exempt entlty the property
would then become taxable, is totally without merit. The
Staff Report's ana1ysls reads the Ilml.tlng adjective "taxable"
completely out of the ordlnance. Further, it renders meaning-
less the ordlnance's definition of "taxable real property",
WhlCh is ll.ffilted to properties "subJect to the general ad
valorem property taxes" levied by the City. Th1.S argument
runs contrary to the fundamental rule of statutory
constructlon that every word, phrase, or provision employed
ln a statute lS intended to have meaning and to perform a
useful functlon; statutes are not to be interpreted in a
manner WhlCh renders certain words, phrases or provlsions
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RHODES, BARNARD, MALON EY, HART &.. MULLEN
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A PRO=-ESSJDl\iAL COR~ORATJCN
ATTORNEYS AT I-AW
Mayor Goldway and the City Council
September 16, 19B1
Page Th ree
superfluous. Clements vs. T.R. Bechtel Co. (1954), 43 Cal.2d
277, 233.
The Staff Report ~s also llloglcal. It simply
l.gnores that whether real property is "taxablell has nothl.ng
to do with any qualitles lnherent ~n the property itself.
Instead, the IItaxable" or "non-taxable" nature of real
property is a function of who owns that property and/or its
use. For example, Artl.cle XIII, Section 3 of the Californ1a
Constitution exempts from property taxation different cate-
gorles of property, including the followlng:
c.
property owned by the state;
property otvned by a local government;
property used for Ilbraries and museums
that are free and open to the public;
prope rty used exclusively for publlC
a.
b.
d.
schools, comrnufilty colleges, state
colleges, and state universltles;
e. buildl.ngs, land, equipment and securlties
used excluslvely for educational purposes
by a non-profit instltutlon of higher
education; and,
f. buildlngs, land on WhlCh they are situated,
and equl.pment used eXClusively for religious
worship.
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RHODES, BARNARD, MALONEY, HART &. MULLEN
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A PRCo"ESS'O"-lAL COR?ORAT'ON
ATTORNEYS AT LAW
Mayor Go1dway and the C1ty Council
September 16, 1981
Page Four
All of these exemptlons depend upon the character
of the owner and/or the use of the property. Because an
exempt10n from property taxat10n has noth1ng whatsoever to
do with any qualities lnherent in the property ~tself, the
Staff Report's claim that the property lS "taxable" because
it would be subject to general ad valorem property taxes lf
owned by someone else and/or used for a dlfferent purpose
15 senseless. The Staff Report renders all real property
wlthln the boundarles of the Downtown Parklng and Business
Improvement Area subJect to the special assessment for
parking purposes, whether or not it 1S currently taxable.
That 1S dlrectly contrary to the pla1n meaning of Ordinance
No. 702, WhlCh expressly Ilmlts the speclal assessment to
"taxable real property".
Finally, the City of Santa Barbara has interpreted
an ord1nance uSlng the identlcal phrase "taxable real property"
to exclude real property owned by exempt entities. In County
of Santa Barbara vs. Clty of Santa Barbara (1976),59 Cal.App.3d
364, the City of Santa Barbara adopted an ordlnance which
establlshed a procedure for the formatlon of off-street
parking dlstricts. That ord1nance provided that the bonds
lssued under the ordinance and the lnterest thereon were to
be payable "from annual ad valorem assessments leVled on the
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RHODES. BARNAR D, MALON EY, HART oS.. MULLE N
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A ::lo.,OFESSIONA..L CO~POR""'~ION
ATTORNEYS AT LAW
Mayor Goldway and the City Counc~l
September 16, 1981
Page Five
taxable real property wi thin the d~str~ct." The court pointed
out that the County of Santa Barbara owned var20US property
wlthln the parklng dlstrict, "but was not then assessed since
the property was not 'taxable real property'''. 49 Cal.App. 3d
at pp.367-36B. Slml1arly, st. Augustine's property is not
"taxable real property" and, consequently, 15 not subject to
Santa Monlca1s speclal parklng assessment.
2. St. August~nels Past Acquiescence in .P~ying the
Speclal Assessment to the City Does not Render its Property
IlTaxable Real Prope.rty" W~.thln the _Meanlng of Ordinance No. 702.
In ignor1ng the plaln meaning of Ordlnance No. 702,
WhlCh Ilmits the special assessment to "taxable real property",
the Staff Report lnapproprlately places tremendous weight on
the fact that St. August1ne has acqulesced in paying the
special parklng assessment to the Clty Slnce 1966.
In do~ng so, the Staff Report 19nored the baslc rule
of statutory construction that statutes are to be interpreted
"according to the usual, ord1nary 1mport of the language
employed ln fraIll1.ng them." Palos Verdes Faculty Association
vs. Palos Verdes penlnsula Un1f~ed School District (1978),
21 Cal.3d 650, 658. Stated otherwJ..se, "when statutory language
lS thus clear and unamb~guous there lS no need for construction,
and courts should not lndulge in it." Solberg vs. Superior
Court (1977), 19 Ca1.3d 182, 198. Accord, People vs. Belleci
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RHODES. BARNARD, MALONEY, HART &.. MULLEN
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A PROF=:SS'Ol'<AL CO~PORAT'ON
ATTORNEYS AT LAW
Mayor Goldway and the Clty Council
September 16, 1981
Page SlX
(1979), 24 Cal.3d 879, 884; Great Lakes Properties, Inc. vs.
~~ty of El Segundo (1977), 19 Cal.3d 152, 155. Moreover,
the courts have consistently reasoned that, "an lntent that
flnds no expression in the words of the statute cannot be
found to eXlst. The courts may not speculate that the
legislature meant something other than what lt said. Nor
may they rewr~te a statute to make it express an intention
not expressed therein. II Hennl.gan vs. United Paclfl.c Insurance
Co. (1975), 53 Cal.App.3d 1, 7.
The plaln ffieanlng of the phrase "taxable real pro-
perty", Wh1Ch lS defined by the ord1nance to J.nclude only
real property subject to the general ad valorem property
tax, Clearly excludes St. Augustine's property. Given thlS
plaln and unamblguous language In Ordinance No. 702, it 18
inappropriate to consider other factors -- such as ex-City
Manager Perry Scott's recollection concernlng events of
about 15 years ago -- to determine the meaning of that
ord1nance. Whether the C1ty Councll which adopted Ord1nance
No. 702 meant to lnclude non-taxable real property is not
legally relevant.
Of course, St. Augustlne and the other
churches are pre]UdlCed by thelr fallure to raise this issue
earlier. The applicable statute of liml.tatlons prevents
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RHODES. BARNARD, MALON EY, HART S. MULLEN
A ~RC-FE:S510~-.lAL CC K FCPA710N
ATTORNEYS AT LAW
Mayor Goldway and the Clty Councl1
September 16, 1981
Page Seven
St. Augustlne from obtainlng a refund for more than four
years prlor to the date they flIed their clalffi. The public
interest in preventing the fl1lng of "stale" c1alms against
governmental agencles, and the consequent hardsh2p that may
be caused on the agency's budgetary process are adequately
protected by the statute of limitations.
3. Sound PubllC Policy Supports St. Augustine's
C1alrn for Refund.
In recommending a denial of St. Augustine's claim
for refund, the Staff Report emphasizes that st. Augustlne and
the other churches beneflt from the special assessment distrlct.
Admlttedly the churches beneflt from havlng the
parklng structures nearby, although they questlon whether
~~ey beneflt to the extent assumed by the City's staff.
Generally, the churches use the parking structures during
"off-hours n, when they are not being used for commercial
purposes. Does anyone really belleve that the parking
structures would have been constructed differently, especially
ln terms of thelr Slze or cost, had the churches not been
within the parking distrlct's boundar1es?
But that is, or at least should be, beside the
pOlnt. Churches and other tax exempt organlzatlons
also beneflt dlrectly from governmental
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RHODES. BARNARD, MALON EY, HART s.. MULLEN
A ==~O~ESSIO"'JAL CGRPORP-.IOI"..:
ATTORNEYS AT LAW
Mayor Goldway and the Clty Councl1
September 16, 1981
Page Elght
servlces funded w1th general ad valorem property tax revenues
such as pollce and flre protection. It makes no more sense
to subJect St. Augustine and the other churches ln our com-
munity to special ad valorem tax assessments for park1ng
purposes than lt does to subject them to general property
taxes for these v~tal services.
In adopt1ng the "welfare" exemptlon from general
property taxes (Revenue and Taxatlon Code, Section 214) I
the California Leg1slature assumed that the exemption pro-
vlded benef~ts to the general public. As the court reasoned
in English vs. County of Alameda (1977), 70 Cal.App.3d 226:
"The cases in point make It abundantly clear
that the tax exemption granted to charitable organi-
zations is provided not only for the well-being of
the immediate beneflclaries of the instltut~ons .
but also for the beneflt of the public at large. .
IThe fundamental basis for all exemptions in favor
of charltable lnstitut~ons lS the beneflt conferred
by them on the public and the consequent rellef of
the burden on the state to care for and advance the
Lnterests of Lts citlzens.' In amend~ng Revenue Code,
Section 214 in 1968, the Leglslature also expressed
the ldea that the grant of property tax exemptions
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RHODES, BARNARD. MALON EY, HART &. MULLEN
A FRO~ES510NAL CORPORAT'O'l
ATTORN EYS AT LAW
Mayor Goldway and the C1ty Council
September 16, 1981
Page Nlne
to charitable lnstltut10ns 1S of beneflt to the
state ltself." 70 Ca1.App.3d at p.239.
Unquestionably the C1ty of Santa Monica, through
its parklng author1ty, is making parklng available to persons
who provide and recelve serV1ces at St. Augustine, First
Presbyterian and Unlty By-The-Sea. But not all publlC
serVlces should be funded according to the prlnclples of the
private marketplace. The Staff's recommendatlon erroneously
assumes that because the churches recelve a beneflt from the
Parking Authority, they should pay monetarily for that benefit
through the parking special assessment. ASlde from the
ObV10US fact that the churches contrlbute immeasurably to the
quality of l1fe 1n Santa Mon~ca in ways Whlch cannot be
quantlfled, prlnciples of the private marketplace are inappro-
priate ln thlS context.
Flnally, from the City's standpoint the amount of
money lnvolved is not terribly slgn1flcant. Durlng fiscal
year 1980-81 the C1ty collected a total of $621,461.00 from
the special ad valorem assessment and the addltional buslness
license fee for the Downtown Parklng and BUSlness Improvement
Area. Of that amount, only $24,683 was paid by St. Augustine
and the other churches, or sllghtly less than 4% of the total
amount.
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RHODES, BARNARD. MALONEY, HART &. MULLEN
~ PRC=ESS'O"'JA_ -:::OF:~O;:;:ATIOI\;
ATTORNEYS AT LAW
Mayor Goldway and the City Council
September 16, 1981
Page Ten
Nevertheless that $24,683 represents a signiflcant
f~nanclal burden to the three churches. The special assess-
ment necessarily imp~nges on the churches' ab11~ty to function
in th~s communlty. The City council should refra~n from
interpretlng ~ts ordinance in a manner wh~ch produces such a
harsh res ul t .
4. Conclusion
For the foregolng reasons, it lS respectfully
submitted that the City Councll should approve St. Augustine's
claim for refund of the downtown parklng distrlct special
assessment.
Sincerely,
c~~.\\~
CHRISTOPHER M. HARDING ~
CMH:ee
cc: Robert M. Myers, Esq.
Clty Attorney