City of Petaluma v. CohenAnnotate this Case
In 2011, a few months before the California legislature enacted legislation leading to the “Great Dissolution” of state redevelopment agencies, the Petaluma Community Development Commission issued bonds to fund certain projects. The Commission was the redevelopment agency for the City of Petaluma, and the newly funded projects included an interchange and roadway under-crossing of U.S. Highway 101 (the Rainier Project). The City, as successor to the Agency, submitted various recognized obligation payment schedules (ROPS) that included expenditures of bond proceeds for the Rainier Project. The Department of Finance disapproved certain of these expenditures because they were pursuant to contracts to which the Agency was not a party. The City brought a petition for a writ of mandate, seeking an order to require the Department to approve these expenditures. The trial court denied the petition. On appeal, the City argued the Department abused its discretion in disapproving ROPS items relating to the use of bond proceeds for the Rainier Project. Focusing on what it believed would be the result of the Department’s action (defeasance of the bonds), the City contended the Department had no authority to order defeasance and abused its discretion in failing to defer to the City and its oversight board on the decisions relating to the bonds. The Court of Appeal concluded that though the bonds at issue were enforceable obligations, no enforceable obligation to use those bond proceeds specifically to fund the Rainier Project appeared in the record. Accordingly the Court affirmed, holding in the published part of its opinion that the Department did not abuse its discretion in disapproving ROPS items relating to the Rainier Project. In the unpublished portion of its opinion, the Court concluded that the City’s remaining contentions also failed.