One city's municipal services agreement with an Indian tribe has survived a legal challenge while another city's agreement has been struck down by an appellate court.
The Fourth District Court of Appeal upheld Hesperia's municipal services agreement (MSA) with the Timbisha Shoshone Tribe. The agreement called for the city to provide police, fire, water and sewer services to the tribe's proposed casino, which would be within the city limits. The court rejected arguments that the MSA violated the Community Redevelopment Law's prohibition on providing assistance to a casino.
Meanwhile, the Third District Court of Appeal rejected the City of Plymouth's MSA with the Ione Band of Miwok Indians. That deal called for the city to provide water, sewer and fire service, and to turn over a road to the tribe, which also intends to build a casino. The Third District ruled that the MSA should have undergone environmental review because it committed the city to certain actions.
The MSAs have been controversial in both cities, perhaps more so in Plymouth, where voters recalled three elected officials because of the deal. In both cases, the tribes have asked the secretary of the interior to accept lands acquired by the tribes into trust so that the tribes may develop casinos.
The City Council in the high desert city of Hesperia approved the MSA with the Timbisha Shoshone Tribe four years ago. Hesperia's redevelopment agency is a party to the MSA, as the proposed casino would be built inside the redevelopment project area. Casino opponents gathered enough signatures to force a referendum election on the agreement, but voters upheld the MSA. Hesperia Citizens for Responsible Development then sued the city, arguing that it had violated the Community Redevelopment Law (Health and Safety Code § 33000 et seq.) and had unlawfully surrendered the city's sovereign authority. San Bernardino County Superior Court Judge Stanford Reichert ruled for the city, a decision upheld by a unanimous three-judge panel of the Fourth District, Division One.
Health and Safety Code § 33426.5 prohibits redevelopment agencies from assisting "directly or indirectly" any business that involves gambling. Citizens argued that the redevelopment agency was providing assistance by endorsing the tribe's application to the secretary of interior and by ceding land use control and revenue to the tribe.
The court rejected the arguments. While the city itself might provide assistance to the tribe, the redevelopment agency would not, as the agency does not provide water, sewer, police or fire services. "There is nothing in § 33426.5 that suggests that redevelopment agencies cannot be parties to contracts in which other governmental entities provide assistance to gaming entities," Justice Cynthia Aaron wrote for the court.
Any loss of control or revenue, Aaron continued, would be a function of the property becoming trust land for the tribe, not of the MSA.
The court also rejected arguments that the city should have insisted that the tribe abide by redevelopment law mandates, such as setting aside 20% of tax increment for affordable housing and adopting non-discrimination policies. "Citizens has not identified any obligation in the Community Redevelopment Law that requires the agency to insist on such terms for all developments occurring within a redevelopment area," Aaron wrote.
As for the city relinquishing authority, the court again determined that any loss of authority would be the result of the land going into trust, not of the MSA.
The lawsuit over the Plymouth MSA was different. In 2004, the council in the small Sierra foothills town agreed to provide water, sewer and fire service, and to abandon a road where the Ione Band's proposed casino and hotel would be located. In exchange, the tribe agreed to pay the city $5.85 million in one-time fees and infrastructure costs, and $3 million annually for maintenance and service. Several months later, voters recalled the mayor and two councilmembers who supported the MSA. In addition, Amador County and a group called No Casino in Plymouth sued, contending that the MSA was subject to the California Environmental Quality Act (CEQA).
Judge Glenn Ritchey Jr., a retired Stanislaus County Superior Court judge, ordered the city to set aside the MSA because it had not undergone environmental review. The reconstituted City Council declined to pursue an appeal, so the Ione Band took up the appeal.
The tribe offered numerous arguments that the MSA was not a "project" within the meaning of CEQA, and that the city's adoption of the MSA was not approval of a project. The tribe argued that the MSA was simply an intergovernmental agreement between a tribe and a city government, which is expressly not subject to CEQA. The court disagreed.
The MSA committed the city to building sewer and water connections, remodeling a fire station so that it may be staffed 24 hours, and vacating a road. Those are activities that "could produce a physical change in the environment subject to CEQA," the unanimous three-judge panel ruled.
The court rejected the tribe's contention that the casino (or "gaming development") was the project, not the MSA. "The public works and road vacation constitute a project subject to CEQA and the MSA constitutes the approval or contingent approval of the project," Justice Coleman Blease wrote. "That the tribe could itself provide the municipal services required by the gaming development is irrelevant so long as the MSA is in effect."
According to Third District, the MSA is not like the memorandum of understanding that the City of Rohnert Park signed with the Federated Indians of Graton Rancheria and which was upheld as exempt from CEQA in Worthington v. City Council of Rohnert Park, (2005) 130 Cal.App.4th 1132 (see CP&DR Legal Digest, October 2005). The Rohnert Park MOU called for the tribe to make "voluntary contributions" to the community in exchange for the city not opposing a proposed casino. In addition, the MOU did not obligate the city to undertake specific construction projects, and the agreement acknowledged that CEQA review might be required if the city were to provide infrastructure.
In addition, the statute (Government Code § 12012.40) excluding city-tribe agreements from CEQA only applies when a tribe has signed a compact with the state and the federal government has taken lands into trust for the tribe. Neither has occurred for the Ione Band, the court noted.
Another lawsuit over the proposed casino is just getting started. Earlier this year, Amador County sued the U.S. Bureau of Indian Affairs for approving the Ione Band's status as a "restored tribe." The county requested that the bureau halt consideration of the tribe's land request.
Hesperia Citizens for Responsible Development v. City of Hesperia, No D049614, 07 C.D.O.S. 6245, 2007 DJDAR 8069. Filed May 30, 2007.
For Hesperia Citizens: C. Robert Ferguson, (909) 482-0782.
For the city: William Hauck, Covington & Crowe, (909) 983-9393.
County of Amador v. City of Plymouth, No. C050066, 07 C.D.O.S. 4140, 2007 DJDAR 5253. Filed April 17, 2007. Modified May 10, 2007 at 2007 DJDAR 6643.
For the county: Martha Jeanne Shaver, county counsel, (209) 223-6366.
For the Ione Band of Miwok Indians: Paul Workman, Holland & Knight, (213) 896-2400.