A Reminder To Plan Ahead When It Comes to Time-Sensitive Ordinances

In Citizens for Amending Prop L v. City of Pomona, the court struck down a purported amendment to a development agreement because it was adopted by second reading after the original agreement had expired.  The consequences for the parties were profound: the City lost a million dollars of revenue and the billboard company lost the right to have any billboards in the city, without asking for permission from the voters.

Back in 1993, the City of Pomona entered into a development agreement with Regency Outdoor Advertising to install a number of new billboards.  Soon thereafter, the voters passed a ballot initiative, Proposition L, prohibiting the construction of any new billboards in the City. The extended term of the development agreement expired in June 2014.  A few weeks later, the City had the second reading of an amendment to the development agreement.

This lawsuit challenged the validity of that amendment, arguing that it was a new contract that violated Prop L.  More specifically, the original development agreement, which required the removal of all billboards by its termination date, had terminated.  Therefore, all of the existing billboards should have been removed prior to June 2014 and any authorization of billboards after that termination date would be authorizing new billboards, which are prohibited by Prop L.

The court held that the July 2014 second reading created a new contract, rather than an extension of the original, expired contract.  Therefore, the amendment violated Prop L. Such an agreement to permit billboards could only be approved by the voters.

The lesson from this case is straightforward: plan ahead for time-sensitive contract amendments when one of the contracting parties is a city.  Government Code section 36934 is clear as to the requirements for general law cities to adopt ordinances. There must be two readings, and the second reading shall not be “within five days of the[] introduction, nor at other than a regular meeting or at an adjourned regular meeting.”   When a contract must be finalized before a date certain, the parties must plan out the approval schedule and ensure that there is either a regular meeting available for the second reading.

This can be tricky for attorneys representing private clients who are contracting with a city.  Council agendas, typically set by the politicians, fill up quickly. City staff can be busy, and ultimately answer to the council members, so may not be receptive to agenda suggestions.  Indeed, it is common agenda items to be pushed from one agenda to the next, based on competing priorities. But when an agreement faces an immutable deadline like the one at issue here, it is important to get the amendment done before the deadline.  This case provides a reminder of the consequences when that doesn’t happen.

The court also confirmed the breadth of public interest standing, held that the billboard company was not an indispensable party, and determined that plaintiffs were entitled to attorney’s fees.

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Corinne CalfeeComment