City of Bakersfield v. West Park Home Owners Ass’n & Friends

The City proposed to finance road improvement projects through a public benefit corporation and pay the debt from revenues held in special funds, and filed an action seeking validation of this finance plan under Government Code section 53511 and Code of Civil Procedure section 860 et seq. West Park opposed the plan and challenged the trial court's judgment validating the City's proposed plan. The court concluded that the City’s finance plan does not violate the California Constitution’s debt limitation where a reasonable nexus exists between the revenues and the projects that will be financed by those revenues. The court concluded, however, that the City cannot pledge gas tax revenues to make the installment payments. In this case, the City's gas tax revenues will be used to pay non-voter approved bonds. This is an impermissible use of these funds. Accordingly, the court reversed as to the portion of the judgment validating the use of the state gas tax revenues and affirmed as to the remainder of the judgment. View "City of Bakersfield v. West Park Home Owners Ass'n & Friends" on Justia Law