City of Bakersfield v. West Park Home Owners Assn. and Friends

—California Constitution, article XVI, section 18, prohibits certain public entities, including cities, from incurring indebtedness without a two-thirds vote of the qualified electors. Nevertheless, alternative constitutionally permissible financing methods exist.

Respondent, City of Bakersfield (City), proposed to finance road improvement projects through a public benefit corporation and pay the debt from revenues held in special funds. The City filed an action seeking validation of this finance plan under Government Code section 53511 and Code of Civil Procedure section 860 et seq. Appellant, West Park Home Owners Association and Friends (West Park), opposed the finance plan.

West Park challenges the trial court’s judgment validating the City’s proposed plan. According to West Park, the circumstances do not qualify as exceptions to the voter approval requirement of the California Constitution. West Park further argues the City could not use gas tax revenues to pay the debt.

Contrary to West Park’s position, the overall financing scheme is valid. However, the City cannot use gas tax revenues as part of the financing. Accordingly, the judgment will be affirmed in part…