City Council Packet - 04/19/1982 i
TIGARD CITY COUNCIL
SPECIAL MEETING AGENDA PUBLIC NOTICE: Anyone wishing to speak on
APRIL 19, 1982, 7:30 P.M. an agenda item needs to sign their name on
FOWLER JUNIOR HIGH SCHOOL the appropriate sign-up sheet(s). If no
LECTURE ROOM sheet is provided, ask to be recognized by
the Chair.
1. SPECIAL MEETING:
1.1 Call to Order and Roll Call
1.2 Pledge of Allegiance
1.3 Call-To Audience, Staff and Council For Non-Agenda Items Under Open Agenda
2. CONSENT AGENDA: These items are considered to be routine and may be enacted in
one motion without separate discussion. Anyone may request that an item be
removed for discussion and separate action. Motion to:
2.1 Receive and File Departmental Monthly Reports/Update .
2.2 Approve Payment to Landmark Ford for 1982 Econoline Van/$7,844.63
2.3 Approve Earnest Money Agreement For Crow Building-Authorize Administrator Signature.
3. PEA PATCH PROGRAM PROPOSAL
o Director of Public Works
4. POLICE K-9 DOG PROGRAM
o Chief of Police
5. DURHAM ROAD REPORT
o Director of Public Works
6. VARNS ROAD LID - Segregation of Assessment
o Director of Public Works
7. HOUSING FINDINGS AND STRATEGIES
o Director of Public Works
8. DOUBLE TAXATION DISCUSSION
o City Administrator
9. ANNEXATION POLICY DISCUSSION
o Staff
10. LID POLICY DISCUSSION
o Staff
11. ANTI-TRUST/REGULATORY/TORTS - Liability Discussion
® Legal Counsel
12. WASHINGTON COUNTY TRANSPORTATION COMMITTEE - Regional Transportation Plan
o Director of Public Works
13. DRAFT - 72ND AVENUE LID ASSESSMENTS REPORT - Discussion only
o Director of Public Works
14 . OPEN AGENDA: Consideration of Non-Agenda items identified to the Chair under item
1.3 will be discussed at this time. All persons are encouraged to contact the City
Administrator prior to the meeting.
15. ADJOURNMENT
T I G A R D C I T Y C O U N C I L
SPECIAL MEETING MINUTES - APRIL 19 , 1982 - 7:30 P.M.
1. ROLL CALL: Present: Mayor Wilbur Bishop; Councilors Tom Brian, John Cook, Kenneth
Scheckla, Nancie Stimler; Chief of Police , Robert Adams ( leaving at
8:00 P.M.) ; Director of Public Works/Planning, Frank Currie ; Finance
Director/City Recorder, Doris Hartig; City Administrator , Robert Jean
(arriving at 7:45 P.M.) ; Legal Counsel, Ed Sullivan (arriving at 7:48 P.M.) ;
Office Manager , Loreen Wilson.
2. CALL TO AUDIENCE, STAFF AND COUNCIL FOR NON-AGENDA ITEMS UNDER OPEN AGENDA
(a) Councilor Scheckla requested the following item be addressed:
. 1 Flower sales on corner of Hall & 99W
(b) Mayor requested the following item be discussed:
.3 Ballot Measures #1, #4 , #5
(c) Director of Public Works requested following items discussed:
.2 Waverly Meadows Bike Trail Report
.4 104th & McDonald House
.5 Ann Street Annexation
3. RECEIVE AND FILE DEPARTMENTAL MONTHLY REPORTS/UPDATE
(a) Motion by Councilor Stimler , seconded by Councilor Scheckla to receive and file.
Approved by unanimous vote of Council.
4. APPROVE PAYMENT TO LANDMARK FORD FOR 1982 ECONOLINE VAN - $7 ,844 .63
(a) Motion by Councilor Stimler , seconded by Councilor Scheckla to approve payment.
Approved by unanimous vote of Council.
5. APPROVE EARNEST MONEY AGREEMENT FOR CROW BUILDING - Authorize Administrator Signature
(a) Motion by Councilor Stimler , seconded by Councilor Scheckla to consider under
Open Agenda.
Approved by unanimous vote of Council.
6. PEA PATCH PROGRAM PROPOSAL
(a) Director of Public Works reported that the Chamber of Commerce had originally
requested the City consider using City owned lands for community gardens .
Staff has looked at land at Jack Park and the Senior Center which would be
suitable for this type of use. He suggested a small fee be charged to offset
the cost of water and administration and recommended Council approve the
proposal.
(b) Councilor Brian expressed concern regarding the City's liability exposure with
this type of program.
(c) Councilor Stimler requested staff also consider City property on Bonita Road
for this type of use.
CITY ADMINISTRATOR ARRIVED: 7:45 P.M.
(d) Motion by Councilor Cook, seconded by Councilor Brian to submit program
proposal to the Park Board for approval and request staff assure the City of
adequate liability coverage for the program.
Approved by unanimous vote of Council.
LEGAL COUNSEL ARRIVED: 7:48 P.M.
7. POLICE K-9 PROGRAM
(a) Chief of Police presented report to Council regarding the latest developments
on the K-9 program proposal. He noted the Budget Committee 's support of the
proposal and stated that he has been successful in finding a dog and training
program. The dog will be from California and cost $300 plus shipping fees. The
training will be given by Chief Vickery of Mt. Angel Police Department and will
be at no cost to the department. The Chief also presented the following budget
proposal for the two phase program.
PHASE I (Fiscal Year
*K-9 Vehicle Rebuild $ 1,000
Replacement Vehicle Equipment 1,830
Dog Purchase/Shipping 350
Handler Equipment 100
Dog Maintenance 75
Total $ 3,355
PHASE II (Fiscal Year 83-84,
Vehicle Operation $ 2,940
Dog Food 200
Veterinarian Cost 100
Portable Kennel 400
Handler Equipment 365
Total $ 4 ,005
*NOTE: Vehicle operation will be charged to existing budget, and is not
identified as an additional cost factor in the Phase I proposal.
(b) Councilor Brian questioned the amount of time that will be needed for training
the officer and dog.
Chief of Police stated this would be accomplished in approximately three months
and training would be four hours per day, three days a week, without the use
of overtime funds. He also advised Council that the costs for fiscal year
81-82 would be within the Control Budget amount for his department.
(c) Councilor Stimler expressed concern that the officer must be guaranteed days
off without the chance of call-back for the use of the dog. Chief of Police
noted he would set up priorities on the call-outs and would strive to protect
the officer from "burn-out".
(d) Chief continued to advise Council that the longevity of the dog should be
6 years on the force. Also the officer will receive "master trainer" training
within the next few months, if the program is approved by the Council and
funded next year. The officer would then be able to train additional dogs
and h and le r s in-house.
PAGE 2 - COUNCIL MINUTES - APRIL 19, 1982
(e) Motion by Councilor Stimler, seconded by Councilor Scheckla to accept the
proposal for the K-9 Unit and the budget as proposed by the Chief.
Approved by unanimous vote of Council.
(f) Chief of Police expressed his appreciation for the Council's consideration
and support and stated he would make every effort to keep the program operating
at a high level of proficiency.
CHIEF OF POLICE LEFT: 8:00 P.M.
8. DURHAM ROAD REPORT
(a) Director of Public Works gave a brief history synopsis of the situation to
date. He advised Council the speed limit issue was before the State Speed
Control Board and the State Highway Department was working on a way to repair
the light synchronization along 99W.
(b) Art Marchetti, representing a group of residents along SW Durham Road,appeared
before Council to state the history of the problems and make the following
recommendation from the citizen's committee which has been working with the
City staff to find some remedy for the area.
The recommendations from the committee were as follows:
1. To synchronize the traffic lights on 99W to encourage truck traffic usage.
2. Limit use of Durham Road to 30,000 gross weight.
3. Post Durham Road "no through traffic allowed".
4. Enforce load limits.
5. Have Durham Road declared by County as a local road, not a collector.
Mr. Marchetti also encouraged the City to take action on the local level to
solve the Durham Road problems.
(c) Lengthy discussion followed as to what action should be taken immediately.
Motion by Councilor Stimler, seconded by Councilor Cook to have action items
brought before Council on April 26, 1982.
Approved by unanimous vote of Council.
(d) Councilor Cook requested enforcement should be made along 99W to stop the
unsafe log trucks. Councilor Stimler asked staff to request the Washington
County Weighmaster coir in the Tigard area more often.
9. VARNS ROAD LID - Segregation of Assessment
(a) Director of Public Works gave brief synopsis of history of issue and noted that
because of the impending construction of the 217/72nd Avenue off-ramp just
north of SW Varns Road, the State of Oregon is acquiring property for right-of-way
that has been assessed for street and sanitary sewer improvements. He stated
the property owner has asked for a segregation of the assessments because the
state must purchase the property free of any liens. He continued to explain
to the Council the method by which the assessments were developed. The Director
of Public Works stated the amount of liens currently owing on the property
(r being taken by the State is as follows:
PAGE 3 - COUNCIL MINUTES - APRIL 19, 1982
Street Assessment - $6,391.22
Sewer Assessment - $6,763.01
Total: $13,154.23
(b) Legal Counsel advised Council to study the various components of the original
assessment. He noted that the Director of Public Work's recommendation is
that Council approve an assessment of $13,154.23 for the parcel in the condemna-
tion process. Legal Counsel advised that Jeff Kleinman, attorney for the
landowners, was present at the meeting and wants to be heard by Council. However,
Legal Counsel's understanding of Mr. Kleinman's position is that the landowner
owes the City nothing now, but are willing to compromise to the extent of the
street assessment. Therefore, he is not willing to have his client consider
the $6,763.01 or sewer portion of the assessment. On the other hand, the staff's
position is that the entire outstanding assessment should be paid now when the
condemnation award is made and out of the proceeds from that award. Staff
has requested as an alternative that the $13,154.23 be segregated out if the
Council desires. He noted there was one factual matter that needed to be
corrected. There has never been any denial by the City for a building permit
for that portion of :he site which is under the threat of condemnation.
Legal Counsel concluded by noting the two issues which face Council in this
matter. (1) Whether to require payment of the $6,401.24 or the $13,154.23
to release the lien against the property or not; or (2) If Council chooses to
disagree with the landowner, the Council is requested to decide if certain
sums should be placed in an escrow account while the landowners and the City
fight over the liability of the owner. He advised Council that after they heard
the landowner's attorney, they may want to consider the issue in executive
session under ORS 192.660 (1) (h) which involves matters which concern possible
litigation.
(c) Mr. Jeff Kleinman, 729 SW Alder, Portland, 97205, representing the landowners,
advised Council that the rear portion of the property had not derived benefit
for the street and sewer improvements since it was being condemned by the
State. He advised Council that the landowner would be willing to pay the
street assessment in the amount of $6,391.22 and the sewer assessment should
be put onto the assessment amount currently owing on the front parcel.
(d) Lengthy discussion followed between staff and Council. Councilor Brian
questioned if the street assessment would be paid off and the sewer would be
moved onto the front parcel, if that meant the total assessable would be
$6,763.01 + $31,371. Staff stated that was correct.
(e) City Administrator advised Council that the issue was a policy matter. Does
the City lend its credit in this way?
(f) Council consensus was that this was a unique set of circumstances. Motion by
Councilor Brian, seconded by Councilor Cook to have the street assessment of
$6,391.22 be paid on the closing of condemnation proceedings and the rest of
the assessment be put onto the front parcel.
Approved by unanimous vote of Council.
(g) Legal Counsel advised that staff would be preparing the necessary paperwork
to have the front parcel reassessment completed.
PAGE 4 - COUNCIL MINUTES - APRIL 19, 1982
10. HOUSING FINDINGS AND STRATEGIES
g - (a) Jeremy Coursolle, Associate Planner, presented the Housing Report Draft to
Council. He 'walked-through' the report with them and touched on some of
the highlights, such as housing supply, demand, cost, and population projec-
tions. He also requested Council look at the proposed strategies outlined in
Chapter 5. Associate Planner reported this updates the 1977 Housing Plan and
would be presented to the Planning Commission and NPO's in the near future.
(b) Legal Counsel advised Council that this would give them the information and
statistics to allow them to make informed policy statements.
11. DOUBLE TAXATION DISCUSSION
(a) City Administrator distributed a sheet setting forth a study on property tax
comparisons and a comparison of population of major cities in the state with
tax rates. His concern was the double taxation issue especially at the County
level and reported that his preliminary study shows that 10% of the County
budget is involved in double taxation. He suggested that an indepth study needs
to be accomplished and the City should approach the County to see what problems
there are and how they might be solved. City Administrator also reported that
Gordon Mulleneaux, County Administrator world be presenting a report on double
taxation at the Public Officials Caucus which is to be held on May 6th at the
Tigard Senior Citizens Center.
RECESS: 9:39 P.M.
RECONVENE: 9:59 P.M.
12. ANNEXATION POLICY
(a) Mayor Bishop noted that he would like to have an update to Resolution No.
79-26 which set forth the City's annexation policy. He noted there had been
many changes since that time in the City's boundaries and the policies could
be outdated by now.
(b) After some discussion regarding annexation policies in general, consensus of
Council was to have staff update the map referencing the areas in the ordinance
and recommending the City continue to be aggressive in proposing little island
annexations and health hazards be annexed.
Mayor Bishop stated he felt piecemeal annexations gives people the opportunity
to annex when they want to, and felt this was a good policy.
(c) City Administrator will prepare information requested by Council and bring
back at a later meeting.
13. LID POLICY DISCUSSION
(a) City Administrator noted this was the major discussion for the evening. Staff
will use the City Council's advise to shape the LID process revision and draft
a new ordinance for the City setting out general and finance issues in the LID
process.
(b) Following was discussion by Council and staff regarding the policy issues:
PAGE 5-COUNCIL MINUTES - APRIL 19, 1982
s City Administrator questioned what type of improvements would be paid for by
LID monies; are the improvements on-site or off-site; who pays; what are the
limits; private vs public LID's; small group improving both public and private
sewers and streets - where do you split what is bancrofted and what isn't.
Director of Public Works noted a good example of these types of problems has
come up this week. Mr, John Skourtes submitted a petition for an LID on 74th
Avenue for an improvement, less than City standards, and using their own con-
tractor. Director of Public Works distributed copy of the petition for Council
use. City Administrator cited other similar examples.
Mayor Bishop noted that he does not support the request submitted on 74th
Avenue. He also stated that he felt the City should not set a standard based
on that street to be used for all others because of special land and improvement
features unique to that area. He felt that basically the street should be
developed to City standards except where unfeasible due to the railroad tracks
and flood plain.
City Administrator stated he thought Council felt LID financing should be
utilized for non-existing or substandard systems to bring them up to a City
standard, and any variation or adjustment to the standard would have to be made
on a case by case basis by Council. Not that Council would allow the LID to
a sub-standard basis, but on a case by case basis you might look at the applica-
tion of the standard and adjust the standard to fit the unique circumstances of
the systems being improved.
Consensus of Council was that policy still remains that improvements are to be
made to City standards as noted by the Administrator.
Director of Public Works stated he understood that Council wanted the 74th
Avenue area developed to City standards, as their policy states, with some
variations being possible due to the railroad and flood plain issues. Con-
sensus of Council was that Director stated their feelings correctly.
City Administrator noted this was only an example being used on 74th Avenue
and would not be considered as having Council action this evening. However,
staff will use Council direction in working with petitioners in formulating
a plan for the area.
City Administrator stated that his understanding of City policy is that whether
the improvements are on-site or off-site they must be completed to City standards.
Council questioned what was considered on- and off-site improvements. Admin-
istrator stated this would involve public systems (i.e. sewer, water, streets,
sidewalks, street lights) off-site such as in front of a subdivision being
constructed, but does not include such things as driveways.
Councilor Brian stated that during construction of a subdivision the internal
streets and sewer systems should not be financed for the developer by LID
assessments. He stated he would not favor single party LID's when the LID's
almost sole purpose is to finance the project when otherwise it would be financed
by private means. An LID should be to finance projects where two or more
property owners are involved where the workings or timings of the improvements
would facilitate the development of the area without piecemealing the improve-
ments.
PAGE 6 - COUNCIL MINUTES - APRIL 19, 1982
Discussion followed regarding various examples of on- and off-site developments.
Director of Public Works noted that in the past Council has seemed to want to
include those improvements which would complete a portion of the Comprehensive
Street or Sewer Plans and would benefit the City as a whole, as those improve-
ments which should be eligible for LID monies.
City Administrator stated that Council's acceptance of the Atlanta and the NW
Loop LID petitions seemed to be appropriate with Council policy for the following
reasons.
(1) In an area that has a mixture of developed and developing properties.
(2) An area that has many ownerships and many parcels.
(3) An area that has many unimproved or substandard systems and the petition
is to bring it up to a standard.
(4) The LID proposal also fits with the City's comprehensive plan elen.!nts,
which makes a consistent pattern for plan implementation.
After some further discussion, Council consensus was that the City should be
willing to loan our credit capabilities for oversizing and enlarging capital
improvement systems depending on the case nature. Councilor Brian noted the
portion of overlarging or oversizing systems that meet an overriding public
need would be appropriate.
e Administrator questioned Council's policy stand on health hazards and forced
LID's. Does there have to be raw sewage flowing down the street twelve months
out of the year or just six months out of the year to be eligible for a forced
LID district?
Legal Counsel noted he had b en involv d in a health hazard LID issue recently
and stated that the Health know necessarily what constitutes
a health hazard and would be the body that would have to define it. They have
not developed any criteria or standard measurements to be used in a matter
such as a 'forced' LID. Legal Counsel did note that a fair statement would
be if the Health Commission or County Commissioners initiates an LID petition
due to a health hazard problem, that the City would be obliged to annex the
property and then form an LID to alleviate the problem.
After some discussion of various health hazards in the state, City Administrator
questioned Council if they wished to not take any action on health hazard issues
unless they were forced on us by another jurisdiction, i.e. Health ion
s:
or County Commissioners.
Councilor Scheckla stated that from Legal Counsel's discussion it would seem
that the City would not have any authority to take action anyway.
Legal Counsel stated that Council should probably develop a policy to deal with
those issues that are not forced upon the City by another public body, but
are still definite health hazards. Also the policy should deal with those
areas that are having a health hazard problem and are shown on the comprehensive
plan as being an area for development.
Councilor Stimler stated the Council should also consider those areas already
in the city limits which are having septic tank problems. She noted that
usually the person upstream from that problem is not willing to form an LID
to correct it, but the person downstream still suffers the consequences of a
septic tank failure up the street.
PAGE 7 - COUNCIL MINUTES - APRIL 19, 1982
City Administrator noted this would be a process question. This failing or
substandard system would qualify for LID funding, however, the City may need
to alter their remonstrance process in order to approve the LID.
Legal Counsel stated that the City could waive the remonstrances in an LID
proposal where health hazards exist, however, this is not a policy issue now,
but a political one. He recommended Council consider this issue as a unique
circumstance and carefully set it out in the ordinance.
City Administrator stated that this would be an exception in the process and
would like to bring it up later.
Director of Public Works encouraged Council to also discuss traffic hazards
as a portion of the health hazard discussion later this year.
e City Administrator asked Council how they wish to deal with such issues as
subsidy, deferments policy, assessment and defered assessment, assess LID,
administrative charged for billings, etc. These issues deal with how the
decision is made as to who may apply for bancrofting. He asked if this could
be a uniform policy, or if that should be decided on a case by case type of
thing.
Mayor Bishop noted that other than those issues covered by state statute,
i.e. 62 year old deferment, that it would have to be discussed on a case by
case basis.
Council did note that if property is sold, the lien should be paid in full with
no deferments being allowed.
City Administrator questioned how the City should be using SDC funds. Should
it be used for the 15% match subsidy as in the past, or should we say as long
as there is money available, other developments should be brought to Council.
Councilor Brian stated that his understanding of the policy is SDC funds
should be used for the oversize of a street, i.e. that cost of an improvement
over and above the local street costs. He noted that this could only be con-
tinued only when funds are still available.
City Administrator asked Council if their intent for SDC funds was only for
those streets which are developed to extra capacity standards and that there
are no other grants, matches, or participation in LID's other than those unless
the City is a property owner in the LID area.
Councilor Brian stated that was correct, however, Council had discussed some
other types of participation with the Master Street System proposals.
City Administrator questioned how the City should deal with the defered assess-
ment policy. Council consensus was that should be considered on an individual
basis.
(c) Mayor Bishop noted that this discussion should be continued at a later meeting
due to the lateness of the hour.
Consensus of Council was to consider at a later date.
14. ANTI-TRUST/REGULATORY/TORTS - Liability Discussion
(a) Legal Counsel suggested this item be carried over to a later meeting. Council
agreed.
PAGE 8 - COUNCIL MINUTES - APRIL 19, 1982
15. WASHINGTON COUNTY TRANSPORTATION COMMITTEE - Regional Transportation Plan
(a) Director of Public Works reported that Wednesday, April 21, 1982 at 7:30 A.M.
at Coco's in Beaverton, the Regional Transportation Plan would be presented.
He wanted Council to be aware of the meeting and that two proposals were being
presented that Council should be aware of. One, the extention of 135th Avenue
to Bull Mountain Road; and two, Durham Road development to an arterial standard
street.
16. DRAFT - 72ND AVENUE LID ASSESSMENTS REPORT - Discussion only.
(a) Director of Public Works distributed copies of the four assessments calculated
per Council request.
(b) Legal Counsel suggested the letter of notification to the property owners should
include a statement that at the public hearing on 5-3-82 "any variation of these
options may be considered".
(c) Motion by Councilor Stimler, seconded by Councilor Brian to notify all property
owners of the four assessment methods and that any variation of these would be
considered at the 5-3-82 public hearing.
Approved by unanimous vote of Council.
17. OPEN AGENDA: Consideration of Non-Agenda Items identified to the Chair under 1.3
will be discussed at this time. All persons are encouraged to contact the Admin-
istrator prior to the meeting.
17.1 FLOWER SALES ON CORNER OF HALL & 99W.
(a) City Administrator stated staff would investigate.
17.2 WAVERLY MEADOWS BIKE TRAIL REPORT
(a) Director of Public Works stated the applicant has proposed that a cash deposit
be made in lieu of building the bike trail at this time since it would not
connect to anything at present. He recommended Council consider this option.
(b) Councilor Stimler stated this had been done once before in Pathfinder and
the bike trail still isn't completed.
(c) Council consensus was to have staff look at the Pathfinder issue and report
on it before Council took action on the Waverly Meadows issue.
17.3 BALLOW MEASURES #1, #4, #5
(a) Mayor Bishop stated he had received a letter regarding ballot measure #5 which
would have the Governor appoint the Chief Justice of the State.
Councilor Brian stated he felt the Council should not take a position on any
issues that do not directly effect the City.
(b) RESOLUTION NO. 82-33 A RESOLUTION OF THE TIGARD CITY COUNCIL SUPPORTING BALLOT
MEASURE #1 - WATER PROJECT FUNDING
Motion by Councilor Stimler, seconded by Councilor Cook to approve.
Approved by unanimous vote of Council.
PAGE 9 - COUNCIL MINUTES - APRIL 19, 1982
(c) RESOLUTION No. 82-34 A RESOLUTION OF THE TIGARD CITY COUNCIL SUPPORTING
BALLOT MEASURE 464 - ROAD REPAIR, IMPROVEMENT AND
CONSTRUCTION FUNDING.
(d) Motion by Councilor Brian, seconded by Councilor Cook to approve.
Approved by unanimous vote of Council.
17.4 104TH & MCDONALD HOUSE
(a) Director of Public Works reported the house issue, which is located on the
corner of McDonald and 104th, is still being worked on. The City has gone to
court over the issue and the Judge offered a compromise to the owners. Staff
will have a court date set again for May 27th to pursue further.
17.5 ANN STREET ANNEXATION
(a) City Administrator stated a petition had been filed for a one lot annexation
and requested Council approval.
(b) RESOLUTION No. 82-35 A RESOLUTION FURTHERING ANNEXATION TO THE CITY OF
TIGARD OF THE TERRITORY DESCRIBED I" EXHIBIT "A"
ATTACHED. (Ann Street Annexation) .
(c) Motion by Councilor Stimler, seconded by Councilor Cook to approve.
Approved by unanimous vote of Council.
17.6 APPROVE EARNEST MONEY AGREEMENT FOR CROW BUILDING - AUTHORIZE ADMINISTRATOR
SIGNATURE.
(a) Administrator noted that Council withdrew this issue from the Consent Agenda.
He did want to insert the selling price into the agreement before it was
signed. The amount would be $1.125 million.
(b) Motion by Councilor Brian, seconded by Councilor Stimler to approve agreement
and authorize Administrator to sign.
Approved by unanimous vote of Council.
17.7 HEARINGS OFFICER SELECTION REPORT
(a) City Administrator reported that the selection committee has come to a deadlock
with two well qualified candidates; Beth Blount and Adrian Brockman. He
continued to discuss the strong and weak points of each candidate and suggested
that Council may want to talk with each before making a decision as to who to
hire.
(b) After some discussion, Council consensus was to talk briefly to each candidate
at the meeting of April 26, 1982 before making an appointment.
17.8 NEWSLETTER REQUEST
{ (a) City Administrator stated there was enough money in the control budget to
print an extra newsletter this fiscal year. He suggested that May and June
be two separate issues to have adequate room to advise the citizens of the
Charter amendment election, TCYS, & Loaves and Fishes levy requests and Civic
Center issues.
PAGE 10 - COUNCIL MINUTES - APRIL 19, 1982
(b) Consensus of Council was to have staff print separate issues.
r" 17.9 METZGER CPO MEETING
s
(a) City Administrator noted that staff had attended the Metzger CPO Meeting and
felt their greatest concern was to keep their individual identity even if they
annexed into Tigard, Portland, or Beaverton. Councilor Stimler stated she felt
they could keep individual identity just like Summerfield had if they were in
the City limits.
18. ADJOURNMENT: 11:35 P.M.
City Itecorder - City of gard
ATTEST:
ayor - City of Tigard
PAGE 11 - COUNCIL MINUTES - APRIL 19, 1982
MEMO
TO: CITY COUNCIL
DATE: APRIL 19, 1982
FROM: BUILDING DEPARTMENT
SUBJECT: MONTHLY REPORT FOR MONTH OF MARCH, 1982
March's building activity included permits for 5 signs,
9 single family residential, 2 residential alter and repair,
6 commercial alter and repair, 2 educational alter and
repair, and 1 site grading for a total valuation of
$2,452,021 .00.
Fees for 20 permits $10, 621 . 64
Fees for 5 signs 110.00
Plumbing Activity - 31 3, 611 . 92
Mechanical Activity - 24 491 .37
Business Licenses •- 85 2, 916.00
TOTAL - - - $17, 750 .93
Sewer Permits - 11 10, 150.00
Sewer Inspections 395.00
King City activity was 1 residential alter and repair
for a total valuation of $4, 500.00 and fees of $83 .33 .
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rIGAWLIBRARY
PUBLICPhone1639-9511
12568 SW Main Tigard, Or. 97223 MEMORANDUM April 12, 1982
TO: LIBRARY BOARD
CITY COUNCIL
FROM: CITY LIBRARIAN
r SUBJECT: Monthly Report, March 1982
1. Administration:
a. March 4, City Administrator and Librarian attended a meeting of all Washington County
librariais and city managers at Washington County Cooperative Library Service (WCCLS) head-
quarters. The topic for discussion was the 1982-83 contract to be signed by the county and
the cities and community libraries. Comments and discussion focused prj-ticularl.y on the
audit process for community libraries, method of payments from levy, services to be provided
by WCCLS, services to be tendered by the libraries, termination conditions and the hold
harmless clause. WCCLS staff was asked to revise the draft contract aiid a meeting for
April 8 was set. There was also discussion regarding allocation of funds under any new
levy. Consensus is that the present formula is inequitable, particularly for larger Libraries.
b. March 5, Librarian participated in a program at Tigard Loaves and Fishes. Linda
Stiles, WCCLS Outreach Librarian, presented a program on railroad nostalgia, consisting of
recollections from the audience about early railroad trips, songs, skits and a slide show.
Librarian urged the audience to utilize the van which goes to the Library from Loaves and
Fishes once a month and explained the National Program for the Blind and Physically Handi-
capped. Thirty-three persons attended.
C. Library Board held its regular meeting on March 8. Minutes were previously
distributed.
d. Librarian attended Civic Center Committee meetings Ilarch 2 and 9. Assistant
Librarian attended March 23. The architect presented two plans to the committee; one
included the public works on site, the other did not. Both plans called for an 18,000 sq. ft.
free-standing library and for demolition of the present city hall arca. The committee recom-
mended to City Council the plan which included public works on site and also recommended that
present city hall area be left intact, though put to a different use. It was also decided
that the Library would be built to the 18,000 sq. ft. requirement, but that only 12,000 sq. ft.
be utilized initially with the other 6,000 sq. ft. being rented out. The committee also
recommended that Brun, Moreland and Christopher be retained for phase 2 of the project.
e. After some inquiries into alternate space for the Library, it was decided that the
Library remain at its present site and negotiate a new contract with oi,rner Otto Sorg. Terms
for negotiation at the new rental ($].,250 per month) would include some repairs to be made
by Mr. Sorg, a second year option at the same rate and a third year option to be negotiated
at that time. A meeting was to be arranged with Mr. Sorg's attorney and Mr. Sorg.
f. The Assistant Librarian and Library Assistant for Circulation have begun reviewing
the overdue system to simplify some of the procedures to reduce staff time currently required.
All staff members are looking at ways to simplify or eliminate tasks without losing effec-
tiveness and/or economy. Staff has also been keeping a detailed daily log of tasks. These
will be used to further analyze tasks, time and productivity.
g. Tigard Library celebrated its 10th year as a city department in tdarch. To draw
attention to this milestone, a special "birthday" sign was painted on the front windouo (by
( a community service assignee) and no fines were levied for late materials.
Tigard Public Library - Monthly Report, March 1982 - page 2
2. Personnel:
f.. a. Beginning March 1, George Anne Clingan, Assistant Librarian, and John Henshell,
ibrary Assistant - Youth Service, began full time. This was possible through the use of
State Aid funds ($2,600) and reallocation of some capital outlay funds.
b. Four new volunteers have joined the Library staff in response to information in
TYPELINE, the bi-monthly newsletter (also a volunteer project). We not-.r have fourteen
active volunteers. Volunteer hours for March totaled 170 for a daily average of 6.3.
C. Community service assignees worked 5.5 hours.
3. Statistics:
a. Circulation of all materials 10,539. (Daily average 479)
Books 9,573 Magazines 583
Adult 6,999 Audio-Visual 209
Juvenile 2,574 Other 39
Interlibrary Loan: Requests placed 103.
Requests filled 135.
Increase over last year: 13% (Jul-Mar '81 = 71,546; Jul-Mar '82 = 80,253.)
b. User cards issued 349. In-town 190; out-of-town 159.
C. Story-hour attendance -- total 59; average 6.5.
d. Reference/Reader's Advisory 921.
e. Materials added 532.
f. Materials withdrawn 141.
g. Money Received:
Lost Books 34.40
Fines 0
Misc. Replacement 19.45
Donations 42.65
Card Fees 0
TOTAL $96. 50
4. Youth Service - John Henshell:
Circulation of juvenile materials continues to increase, particularly the non-fiction.
Increased staffing for young people's reference and reader's advisory and the addition of
over 100 new "J" fiction are factors in this trend.
For the Spring Vacation Filmstrip Festival two sound-filmstrips based on Beverly Cleary
books and one based on Marguerite Henry's Misty of Chincoteague were shown. Nine. attended.
March 2, twenty,-one high school students (in two groups) came to the Library for a story-
telling workshop. The students work with pre-school children in their classes at school.
In progress is a project to "clean up" the juvenile fiction subject file. Classifications
are being corrected and/or changed for consistency. Cross references are being added. Cards
for which we no longer have books are being withdrawn.
Books in the young adult section that are not classics and have not circulated in two
years were withdrawn. Also in progress for young adults is the creation of a special science
fiction/fantasy area.
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MONTHLY REPORT
PLANNING DEPARTMENT
March, 1982
The following projects were acted on by the Planning Commission over the past
month:
CONDITIONAL USES
CU 3-82 Daniel Koller/William Barnett NPO #3
Applicant: Daniel Koller,C.V.M. OWNER: Wahl Brothers
William Barnett, D.V.M. 19811 NW Rock Creek Dr.
1979 SW 8th Drive Portland, Oregon 97229
Gresham, Oregon 97030
Request:. For a Conditional Use in a CP Commercial Professional Zone to
locate a small animal veterinary clinic in an existing building.
Site Location: 13599 SW Pacific Highway (Washington County Tax Map 2S1 2CC,
lot 700) .
Action Taken: Approved March 2, 1982 with conditions.
CU 4-82 Tim Settlemire NPO #6
Applicant: Tim A. Settlemire OWNER: May S. Vincent
306 S. Chehalem St. P.O. Bcx 2971
Newberg, Oregon 97132 Portland, Oregon 97208
Request: For a Conditional Use permit to locate a florist shop in a C-3
General Commercial Zone.
Site Location: 12035 SW Pacific Highway (Washington County Tax Map 2S1 2AA,
lot 1000) .
Action Taken: Approved March 2, 1982 with conditions.
CU 5-82 Storer Metro NPO #6
Applicant: Storer Metro OWNER: Saxon I
7100 SW Hampton Street 1 SW Columbia #1200
Suite 231 Portland, Oregon
Tigard, Oregon 97223
Request: For a Conditional Use to allow for construction of a radio
receiving tower.
Site Location: Generally located on the west side of SW 85th Avenue, just
,. south of SW Durham Road at 16285 85th Avenue. (Washington
County Assessor Map 2S1 14A, tax lot 1100)
NUtV 11"11,1 11MrV111
PLANNING DEPT.
Page 2
CONDITIONAL USE CU 5-82 continued
Action Taken: Approved March 2, 1982 with conditions.
CU 6-82 Tri-Met NPO #1
Applicant: Tri-Met OWNER: Dick Kadel
4012 SE 17th Avenue 8960 SW Commercial
Portland, Oregon 97202 Tigard, Oregon 97223
Request: For a Conditional Use to locate a Tri-Met bus time-transfer
center in a C-3 General Commercial Zone.
Site Location: 8960 SW Commercial (Washington County Tax Map 2S1 2AA, lot
4800) .
Action Taken: Approved March 2, 1982 per Findings of Facts and Recommendations
by staff.
SENSITIVE LANDS PERMIT
M 3-81 Unified Sewerage Agency NPO #7
Applicant: Unified Sewerage Agency OWNER: D. J. Swan, et al
150 North First Avenue
Hillsboro, Oregon 97123
Request: For a Sensitive Lands Permit to install an underground sanitary
sewer line.
Site Location: Various properties North of SW Walnut between SW Tiedeman and
SW 121st Avenue (Washington County Tax Maps 2S1 3AA, lots 100
and 101; 2S1 2AB, lots 100 & 300; 1S1 34DC, lots 1200, 3500,
3601 and 3602; 1S1 34CD, lots 100 and 1202)
Action Taken: Approved March 2, 1982 with conditions.
SITE DESIGN REVIEW
SDR 26-81 St.Anthony's Kelly Center NPO #2
Applicant: Larry D. Nicholson OWNER: Arch Diocese of
113 SW Front St. Portland
Portland, Oregon c/o St. Anthony's Church
9905 SW McKenzie
Tigard, Oregon 97223
Request: An appeal by St. Anthony's of the Planning Director's decision
of approval with conditions for construction of St. Anthony's
Kelly Center.
'PLANNING DEPT.
Page 3
SITE DESIGN REVIEW SDR 26-81 continued
Site Location: 9905 SW McKenzie (Washington County Tax Map 2S1 2BD, lot 100,
200, 300 & 400)
Action Taken: The Planning Commission will forward the appeal to City Council
with conditions.
MISCELLANEOUS
ZOA 1-82 Conditional Use Standards
Request: A request by the City of Tigard to revise Chapter 18-72 of the
Tigard Municipal Code to include standards for Conditional Use
applications.
Action Taken: Staff requested the Commissioners take the standards home to
review and be prepared to offer comments and recommendations
at the April 6th Planning Commission meeting.
The following actions were taken by the Planni:ig Director.
SITE DESIGN REVIEW
SDR 5-82 Tuality Junior High School
Applicant: Tigard School District
Request: For Site Design Review of remodeling and additions to Tuality
Junior High School.
Site Location: 14650 SW 97th (Wash. Co. Tax Map 2S1 11AC, lot 2700)
Action Taken: Approved with conditions on March 15, 1982.
SDR 6-82 General Telephone
Applicant: General Telphone of Northwest, Inc.
Request: For Site Design Review of a proposed addition to the existing
General Telephone Central Offices.
Site Location: 8840 SW Burnham Road (Wash. Co. Tax Map 2S2 2DB, lot 100)
Action Taken: Approved with conditions on March 15, 1982.
POLICE DEPART[;ENT MONTHLY REPORT
March 1982
and
First Quarter Recap
TO: City Administrator/City Council
FROM: Chief of Police
I. Personnel
The department continues to be at full strength thi-s month, and there
has been no personnel turnover this quarter.
The average daily department strength this month was 17.8 as compared to
16.5 for March, 1981. By Division the breakdown is as follows:
Administration 2.0; Services Divison 4.2; Patrol Division 10.2; and
Investigation Division 2.1.
II. Service Delivery
The department responded to 677 non-criminal calls for service in con-
trast to 585 calls in March, 1981.
The combined total non-criminal calls for service the first quarter of
1982 was 1,758, for this same time period in 1981 the total was 1,756.
Patrol Divsion's obligated time this month was 1,539.7 hours, for the
quarter it was 4,096.9 hours. The non-obligated time this month was
1,099.3 hours, for the quarter it was 3,394.1 hours.
III. Crime
There were 124 Part I crimes reported this month as compared to 103 for
March, 1981, up by 21 crimes in this classification, or 20.38%. There
were 18 Part I crimes cleared this month, or 14.5%
The total Part I crimes reported this quarter was 293, in contrast to
303 for this same quarter last year, a decrease of 3.410/..
The clearance rate for Part I crimes this quarter is 17.4% or 51 cases.
In contrast to the same time period of 1981, 30.7% were cleared, or 93
cases.
There were 84 Part II crimes reported this month, of that number 45
were cleared, or 53.6%; for the same month last year 71 were reported,
and 26 were cleared, or 36.6%
The total Part II crimes reported this quarter was 233 in contrast to
206 reported the first quarter of 1981 , an increase of 27 or
13.10%.
There were 130 Part- IT cFt5;-s cleared this quarter, or 55.8%, _'or this
same time period in 1981 , 100 cases were cleared, or 48.5
The Investigative Divison worked 37 active cases this month, and cleared
i
3, or 8.10%. The total active cases worked this quarter by the
Investigative Division was 80, of that number 21 cases were cleared
or 26.25%.
The reported property loss this month was $46,849.96, o: that amount
$3,258.48 was recovered, or 77..
The combined total property loss this quarter was $106,453.89, of
that total $26,472.66 was recovered, or 24.86%.
IV. Traffic
Patrol Division responded to 29 accidents, of that number 7 :•rere injury.
There were 353 citations issued this month as compared to 230 in March
of 1981. There were also 81 warnings issued this month in contrast
to 65 for this same time period in 1981.
Patrol Division has issued a total of 903 citations this quarter in
contrast to 655 for this same quarter last year.
There has been a total of 79 accidents repor .ed this quarter, and 80
were reported for this same time period last year. There were 19 injury
accidents reported this quarter, the same number of injuries were reported
last year in the first quarter.
The Enforcement Index this month was 30.50 as compared to 21.40 for March
of 1981.
The Enforcement Index for this quarter is 28.68 in contrast to 17.15 for
this same quarter in 1981.
V. Police Reserves
The Reserve Unit worked 274 hours this month assisting the department in
policing the community, through this quarter the Reserves have donated
799 hours of community service.
Reserve Officers Eley and Boothby received certificates of completion
at the Reserve Academy, held at Clackamas Community College and con-
ducted by Clackamas County Sheriff's Department.
VI. Training
A. Link Analysis Training. Sgt. Branstetter attended a 7 hour workshop
on March 3, to discuss link analysis training. This class was held in
Oregon City.
B. Crime Prevention Conference. Lt. Jennings and Sgt. Martin attended
a 3 day conference on crime prevention. This was held at Salishan
Lodge on March 3, 4 and 5.
C. Physical Fitness in Law Enforcement. Lt. Jennings and Sgt. Newman
attended a 2 day national conference on physical fitness on March 18
and 19. This was held at Portland State University.
D. Inter-agency Meeting. On March 24, the Chief, Lt. Jennings and
f Officer Grisham met with Beaverton and Lake Oswego police departments
to discuss ICAP and criminal information sharing. This lasted for 2
hours, and was held at the police department.
E. Juvenile Officers Conference. Officers Grisham and Miller went to
the Holiday Inn in Wilsonville on March 25, to attend an 8-hour
conference for juvenile officers.
f F. Narcotics. On March 24, 25 and 26, Sgt. I.lheeler attended the annual
conference for the Oregon Narcotics Enforcement Association. This year
it was held in Eugene.
G. Performance Appraisals. Rec. Sup. Carrick attended a 7 hour workshop
on performance appraisals for employee development in Portland on March
30. Instructor was Robert F. McCain, Ph.D.
H. See monthly report from Tigard Police Reserves for their training and
activities.
VII. Community Relations
A. On March 1, the Chief and Lt. Jennings met with Tualatin. Fire to
discuss the dispatch study proposal. This luncheon meeting lasted 2 hours.
B. On March 2, a one hour drug education program was presented to 50
6th grade students at Metzger School, by Officer Grisham.
C. On March 15, the Chief and Officer Grisham attended a leadership
luncheon at Templeton School, 2 man hours were spent in this activity,
35 students were present.
D. On March 17 Officers Grisham and Miller presented a bank robbery
response talk to the Oregon Bank to 10 bank employees, 2 man hours were
required for this program.
E. On March 18, Lt. Jennings met at Beaverton City Hall for 2-112 hours
to give a presentation from our City Council. This was presented to the
Elected Officials Caucus.
F. On March 19, a preliminary Neighborhood Watch Conference was held
at Tigard High School, 4 citizens were in attendance, 1 man hour was
devoted to this program by Officer Grisham.
G. On March 23 a preliminary Neighborhood Watch Conference was held at
the Summerfield Club House, 7 Summerfield residents were in attendance.
This conference was conducted by Sgt. Martin and Officer Grisham.
Note: There were 8 man hours spent in Community Relations programs, and
106 persons contacted in the above programs.
Respectfully submitted,
R.B. Adams
Chief of Police
t
MA-M
POLICE DEPARTMENT
CONSOLIDATED MONTHLY REPORT
FOR
MONTH OF K-1,RCH 19 82
y.1
` DISTRIBUTION OF PERSONNEL
4! AVERAGE p
NIDI.1ERICAL STRENGTH I DAILY ABSENCE AVER-AGE EFFECTIVE STRENGTH
End of Same ThisSame This 1 Last Same
this Month Month Month t Month i Month Month
Month Last Last Last
Year Year i Year
TOTAL PERSONNEL 29 26 11.2 9.5 17.8 18.7 16.5
THIEF'S OFFICE 3 2 1.0 a 2.0 1.9 1.1 '
SERVICES DIVIS. 7 7 2.8 2.6 4.2 4.6 4.4
?ATROL DIVISION 16 14 I 5.8 5.0 10.2 10.3 9.0
£RAFFIC DIVIS. -------- ------------------ --------- -------------------- ------- ----------
INVEST. SECTION 3 3 9 1.0 2.1 1.Q 2.0
FORCE ONE 13 11 4,8 4.1 e
� g,- 8. 6.� ,
!ORCE TWO 9 8 3.0 2.e 6,0 5.4 5,1-
:6110E THREE 6 7 3.4 2.5 (� 2.6 5.0 4:5
i
CHANGES IN PERSONNEL DAILY AVERAGE PATROL STRENGTH
. Present for duty end of last month 29 This Same Month
Recruited during month 0 Month , Last Year
Reinstated during month 0 I1. Total number field
officers 16 14 -
- Total to account for 29 2. Less Agents Assig-
Separations from the service: ned to Investigat. 0 0
(a) Voluntary resignation 0 3. Average daily abs-
ences of field off-
(b) Retirement 0 iters owing to:
(c) Resigned with charges pending 0 (a) Vacation, cusp- .
(d) Dropped during probation 0 erasion, days off, -
comp. time, etc. ^.5 4.8
'(e) Dismissed for cause 0 (b) Sick & Injured - .2
(f) Killed in line of duty 0 (c) Schools, etc. .3
(g) Deceased _ 0 Total average daily
�.F
absences .5.0 - - •
_Total separations 0
`'• Available for duty 1C.2 9.0
S. P resent for duty at end of month 20
' n
k. Yap_e one
TIGARD POLICE DEPARTMENT
Monthly Report
I. Calls for Service: This Month 677 Year to Date 1,758
A. Obligated Time 1539.7 B. Non-Obligated Time 1099.3
II. PART I CRIMES
No. Cleared Arrests
A. Homicide
B. Rape 1 1 1
C. Robbery 3
D. Assault 9 5 2
E. Burglary 38 2 2
F. Larceny 69 9 10
G. Auto Theft 4 1 1
Totals 124 18 16
III. PART II TOTALS %:== 84 45 52
TOTAL - Part I and II
208 63 68
IV. TOTAL PERSONS CHARGED: 68
a. Adult Male 29 C. Juvenile Male 17
b. Adult Female 12 d. Juvenile Female 10
V. WARRANTS SERVED 9
VI. TOTAL PROPERTY LOSS $ 46,849.96 TOTAL PROPERTY RECOVERED ,53,258.48
VII. TRAFFIC
a. Accidents Investigated 29 Injury Accidents 8 Fatal 0
b. Citations: VBR (Speeding) 104 Yield Right of Way-2—
Following
ay5Following too Close 0 Red Light 28 Stop Sign 28
Improper Turn 25 Reckless Driving 0
Careless Driving 16 Driving Under the Influence 12
Driving While Suspended 10 Other Hazardous 16
Non-Hazardous 109 Total Hazardous 244
C. Enforcement Index 30-50
d. Traffic Enforcement Totals
Citations: This Month This Year 353 Year to Date 903
This Month Last Year 230 Last Year to Date 655
Warnings: This Month This Year 81 Year to Date 304
This Month Last Year 65 Last Year to Date 222
NOTE: - Part I Crimes (Major Crimes) Clearance Rate 14.5%
- Part II Crimes (Minor Crimes) Clearance Rate 53.6°x,,
TIGARD POLICE DEPARTMENT
Quarterly Report
I. Calls for Service: 1,758
A. Obligated Time 4,096.9 B. Non-Obligated Time 3,394.1
II. PART I CRIMES No. Cleared Arrests
A. Homicide 1
B. Rape 1 1 1
C. Robbery 5 1 1
D. Assault 23 14 9-
E. Burglary 71 5 6
F. Larceny 182 24 22
G. Auto Theft 11 5 2
Totals 293 51 41,
III. PART II TOTALS 233 130 142
TOTAL - Part I and II
526 181 183
IV. TOTAL PERSONS CHARGED: 183
a. Adult Male 107 C. Juvenile Male 34
F
b. Adult Female 23 d. Juvenile Female 19
V. WARRANTS SERVED 28
VI. TOTAL PROPERTY LOSS $ 106,453.89 TOTAL PROPERTY RECOVERED $26,472.66
VII. TRAFFIC
a. Accidents Investigated 79 Injury Accidents 19 Fatal 0
b. Citations: VBR (Speeding) 144 Yield Right of Way28
Following too Close 1 Red Light79 Stop Sign 76
Improper Turn 44 Reckless Driving 4
Careless Driving 32 Driving Under the Influence 45
Driving While Suspended 29 Other Hazardous C3
Non-Hazardous 358 Total Hazardous 545
C. Enforcement Index 28.68
d. Traffic Enforcement Totals
Citations: 903
Warnings: 304
�J
NOTE: •• - Part I Crimes (Major Crimes) Clearance Rate 17.4%
Part II Crimes (Minor Crimes) Clearance Rate 55-
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VOLUME IV ISSUE 4 APRIL 19, 1982
PERSONNEL CHANGES
The following City staff have been placed on lay-off and their positions eliminated as of
April 15, 1982:
Claire Sheldon, Library Assistant
Forrest Brouillard, Engineering Technician III
Craig Weekes, Utility Worker I
Peggy Lyon, Utility Worker I
Melvin Walker, Utility Worker I
Clerical staff reorganization has been necessary due to reduced revenue forecasts for the
next fiscal year. A written examination, typing test, and interviews were conducted on
an open, competitive basis for the new position of Word Processing Specialist (Clerk/
Typist III) . Based on the results of these assessments, Office Aide Patricia Martin
will be offered the new position. Penny Liebertz, Lowana Murray, and Diane Jelderks -
all currently employed as Clerk/Typist II's - will be offered positions as Office Assis-
tant I's. Pat Robertson and Randy Stevens have been placed on the lay-off list as of
April 30, 1982. These two employees will be given the opportunity to accept temporary,
full-time positions as Office Assistant I through June 30, 1982, however.
It is most difficult for the City to have to lay off good employees, and it is with real
regret that this action has been necessary. Employees who face termination are being
assisted with information concerning conversion of their benefits and with counseling on
job search techniques and resume' writing.
TRAINING ACTIVITIES
Employee Position Activity Date
Robert Wheeler Sergeant Oregon Narcotics Enforcement Conf. 3/24-3/26/82
Joe Grisham/ Patrolman Oregon Juvenile Law Enforcement
Jesse Miller Patrolman Assn. Spring Training Conference 3/25/82
Joy Martin Admin. Asst. Intergovernmental Relations Class 3/29-6/11/82
Lonnie Branstetter Detective Sgt. F.B.I. National Academy(Quantico, VA) 4/12-6/25/82
Paul Johnson Corporal Traffic Law Update Class 4/14/82
John Hagman Engin. Supt. Amer. Public Works Assn. Conference 4/14-4/16/82
John Henshell/ Assoc. Librarian Oregon Library Assn./Wash. Library
George Anne Clingan/ Asst. Librarian Assn. Joint Conference 4/15-4/16/82
Irene Ertell Librarian
George Anne Clingan Asst. Librarian Data Users Conference 4/19/82
Billie Rawlings Records Mgr./ Oregon Assn. of Court Administra-
Mun. Court Clerk tors Annual Conference 4/23-4/25/82
NEWS AND NOTES
.City Administrator Bob Jean was invited to participate in "Operation Paycheck," an economic
development conference sponsored on March 29 by the Corvallis Chamber of Commerce. Leaders
from business and government discussed taxation, land use, education systems and Oregon's
image as factors influencing Oregon's economic development. Recommendations from this
meeting will be presented to Governor Atiyeh.
.The Building Department is warning businesses of sign code violations and will be issuing
citations if the problems are not corrected within a specified time.
(over
-2-
.The City's volunteer program is off and running. On April 12, retired office worker
Margaret Earl began as a clerical volunteer at City Hall. Margaret will work every
Monday; and Dolores Edwards, who has experience as a bookkeeper and officer worker,
will be a clerical volunteer on Fridays, beginning April 23rd. Frances Rihala and
Judy Swayze have been referred to the Library for placement. Several other persons
called in response to notices in the paper asking for volunteers. These people will
be interviewed and quite possibly put to work in the near future.
.Linda Sargent and Bob Jean continue to be involved in the selection process for the
Administrator of MACC. An Assessment Center will be held on April 29th. One of the
new administrator's first duties will be coordination of the cable TV construction time-
table.
*Mayor Bishop, Bob Jean, and Public Works/Planning Director Frank Currie met recently with
Bob Bothman and Ed Hardt, engineers with the State Highway Department, to discuss State
projects in the Tigard area. There is a good chance that the Haines Road Interchange
project will be funded this next fiscal year.
*One terminal for the new computer system has been delivered and installed. The streets
maintenance program is now being entered. The remaining equipment should be delivered
by the end of May.
*An organizational meeting for NPO#7 was held on April 6, with approximately 20 persons
in attendance. A goal has been set to get members of NPO's #3, #5, and #7 through the
interview and recommendation for appointment process by the end of April.
*Congratulations to Clerk/Dispatcher Teresa Eley and Corporal Tom Killion on their engage-
ment! July 24, 1982 has been set as their wedding date.
*Bob Jean attended the Northwest Regional Conference of the International City Management
Association, March 31-April 2. Topics covered included: Anti-trust Liability, Economic
Effect of the New Federalism on Northwest Cities, Creating Costs and Increasing Producti-
vity, Industrial Development Revenue Bonds, Creative Financing Alternatives, and other
subjects of mutual interest.
•City planning staff have met with the Metzger Community Planning Organization (CPO) at
their request to discuss possible annexation and other issues.
.Interviews were held on April 14th with candidates for Hearings Officer. Council will
appoint the Hearings Officer on April 26.
*Civic Center Executive Committee and Architect Dennis Brun will present plans for the
proposed Civic Center to the Mayor's Advisory Committee of interested citizens at 7:30
p.m. at Fowler Junior High on April 20th.
INTERGOVERNMENTAL MEETINGS
.Washington County City Managers met on April 9th at Tigard City Hall to discuss the
issue of double taxation and how to work more effectively to provide urban services.
•Washington County Public Officials Forum will meet at 7:30 p.m. on Thursday, May 6,
at Tigard Senior Center.
*Bob Jean and Irene Ertell attended the meeting of the Washington County Cooperative
Library Service (WCCLA) on April 8th in Aloha.
.Jeremy Coursolle, Joy Martin, Doris Hartig and Bob Jean from City staff and Tom Brian
and Nancie Stimler from Council attended the League of Oregon Cities Regional Workshop
from 1:00 to 8:00 p.m. on April 13th in Lake Oswego.
April 14, 1982
MEMORANDUM
TO: City Council
FROM: Public Works Director
SUBJECT: Payment to Landmark Ford for Public Works Inspection Van
This is payment for the van purchased on bid, awarded by the City Council on
February 8, 1981.
The paperwork for this payment did not get done in time to be included with the
regular bills.
I recommend this payment be approved as submitted.
e`-
1
April 15 , 1982
MEMORANDUM
To: Mayor and Council
From: Administrative Assistant, Joy Martin
Subject: Earnest Money Agreement for the Crow Building
Attached are copies of the letter and proposed agreement. We need authorization
from the Council for the City Administrator to enter into this agreement.
JM: lw
O'OONNELL, SULLIVAN & RAMIS
ATTORNEYS AT LAW
MARK P.O'DONNELL BALLOW & WRIGHT BUILDING CANBY OFFICE
EDWARD J.SULLIVAN _
TIMOTHY RAMIS 1727 N.W. HOYT STREET 181 N.GRANT, SUITE 202
KENNETH M.ELLIOTT PORTLAND. OREGON 97209 CANBY.OREGON 97013
CORINNE C.SHERTON (503) 222.4402 (503) 266-1149
STEPHEN F.CREW PLEASE REPLY TO
STEVEN L.PFEIFFER PORTLAND OFFICE
THOMAS L.MASON
April 12 , 1982
Mr. Bob Jean
City Administrator
City of Tigard
P. O. Box 23397
Tigard, Oregon 97223
Re : Crow Building
Dear Bob:
Enclosed is a draft copy of the proposed Earnest Money Agreement
for the purchase of the Crow Building. Please review it and call
me if you have any questions.
I have retained for the City the right to designate the title
insurance company. Mr. Crow will pay the cost of title insurance ;
however, I am sure we can save approximately $1 ,000-$2 ,000 closing
fees by placing the title insurance .
I assume Mr. Crow will contact you or Myron Fleck will contact me.
Siacereiy, q
ark O'Donnell
MOD :sw
Enclosure
RECEIVED APR 1 5 1982
11552 S Lesser Fd.
Fortlan,. Oregon 97'21Q
April 13, 1952
?lark P. O'Donnell
O'Donnell, Sullivan & Ramis
Attorneys at Law
Ballow & Wright Building
1727 N.W. Hoyt Street
Portland, Oregon 97209
Dear Mr. O'Donnell:
We received your letter dated April 6, 1982, regarding the City of
Tigard's interest in aquiring our building and property at 9040 S.W.
Burnham Street.
We have no desire to go through the long condemnation proceedings.
We would be interesting in entering into negotiations with the City
in regard to their purchase of the building and the approximately 2.53
acres which is the front portion of the site.
Sincerely.-
Gerald
incerely,Gerald W. Crow
cc: r. Myron J. Fleck
Mr. Bob Jean
r
c.
EARNEST MONEY AGREEMENT
Dated: 1982
Between -_ GERALD W. and CAROL L. CROW, "Seller" ,
and CITY OF TIGARD, a municipal corporation,
"Purchaser" .
Seller agrees to sell to Purchaser the real property situated
in the City of Tigard, Washington County ,
State of Oregon, which
real property is known as 9040 S. W. Burnham Road, and is more
particularly described in the attached Exhibit "A" , incorporated by
reference as if fully set forth.
NOW, THEREFORE, in consideration of the mutual promises set
forth in this Agreement, the parties agree as follows :
1. PURCHASE AND SALE OF PROPERTY
Seller agrees to sell the real property described above and
Purchaser agrees to purchase the real property from Seller on the
terms and conditions set forth in this Agreement.
2. EARNEST MONEY DEPOSIT
Upon execution of this Agreement, Purchaser shall deposit
with a licensed title insurance company and escrow agent, its
promissory note in the amount of $4 ,999 .00. Prior to closing ,
Purchaser shall submit additional escrow instructions.
3. PURCHASE PRICE
The total purchase price for the real property is $
h 1 r,a� the purchase price on closing. Purchaser' s
'Purchaser s=.a--1 =--1 t ��+ t the
obligation to pay the purchase price is expressly s—j�.-� o
occurrence of all of the conditions precedent set forth in paragraph
4 of this Agreement.
4 . PRECONDITIONS TO PURCHASER'S OBLIGATIONS
Purchaser' s obligations to purchase the real property are
subject to the occurrence of all of the following conditions precedent :
(A) Approval by the voters of the City of Tigard of
a general obligation bond issue to provide funds
sufficient for the purchase and improvement of the
subject real property at either the June , 1982 , September,
1982, or November, 1982 special election;
1 - EARNEST MONEY AGREEMENT
(B) Sale and issuance of the general obligation
bonds contemplated by condition (A) ;
(C) Examination and approval of Seller' s existing
leases of the subject real property, exclusive of
Seller' s lease with Purchaser. Purchaser' s attorney
shall review any such leases and advise Seller and
escrow agent in writing of approval of the leases
or failure of this condition. Seller shall deliver
to Purchaser all existing leases for the subject
property upon execution of this Agreement.
5. CONVEYANCE AND SELLER'S TITLE
Seller shall convey the property at closing to Purchaser
by statutory warranty deed, free and clear of all liens and encum-
brances except zoning ordinances , building and use restrictions ,
reservations and federal patents, utility easements of record with
no other exceptions. Seller shall furnish to Purchaser an ALTA
owner' s title insurance policy in the amount of the purchase price
from a title insurance company selected by Purchaser showing good
and marketable title subject only to the exceptions above-stated.
Prior to closing, Seller, upon request, will furnish to Purchaser
a preliminary title report showing the condition of title to the
property. Purchaser shall have ten (10) days after receipt of the
preliminary title report and exceptions within which to notify Seller
in writing of Purchaser' s disapproval of any exceptions shown in
the report, other than exceptions for current taxes not yet due and
payable, zoning ordinances, building and use restrictions, reser-
vations and federal patents and utility easements of record.
6. CLOSING
This transaction shall be closed on or before April 26, 1983
or within 175 days of the election date set forth in paragraph 4 (A)
of this Agreement, whichever first occurs. Closing shall occur at
the offices of the escrow agent selected by the parties. Closing
shall take place in the manner set forth in this Agreement and the
escrow officer shall prorate ad valorem real property taxes on a
fiscal year basis as of the closing date , rents and other normal
prorations. The parties shall share equally the cost of escrow
services.
7. EXISTING LEASES
Seller shall not extend, modify or renew any of the existing
leases of the subject real property during the term of this Agreement:
without first obtaining the written permission of Purchaser.
Purchaser shall not withhold Purchaser's consent where the withholding
of said consent would be unreasonable.
2 - EARNEST MONEY AGREEMENT
8. GOOD FAITH AND COOPERATION
Seller and Purchaser represent and warrant to each other
good faith, due diligence and complete cooperation in carrying out
their respective obligations under this Agreement.
9. FAILURE TO CLOSE
(A) Seller's RemediF.
In the event that this transaction shall fail to
close on account of Purchaser' s fault, other than
the failure of the preconditions set forth in
paragraph 4 , the amount previously deposited or
paid as earnest money shall be forfeited by
Purchaser and retained by Seller as liquidated
damages. Such amount has been agreed by the parties
to be reasonable compensation and the exclusive
remedy for Purchaser' s default, since the precise
amount of such compensation would be difficult to
determine.
(B) Purchaser' s Remedies .
In the event that the transaction shall fail to
close on account of Seller' s fault or Seller' s
inability to close, the earnest money deposit shall
be returned to Purchaser. Purchaser shall be
entitled to such remedies for breach of contract
as may be available under applicable law, including,
without limitation, the remedy of specific performance .
10. NOTICES
Notices under this Agreement shall be in writing and shall
be effective when actually delivered. If mailed, notice shall be
deemed effective 96 hours after mailing as registered or certified
mail, postage prepaid, directed to the other party at the address
set forth below or such other address as the party may indicate by
written notice to the other:
To Seller: To Purchaser :
i -
3 - EARNEST MONEY AGREEMENT
11. ASSIGNMENT
This Agreement shall be binding upon and inure to
the benefit of the parties hereto, and their respective heirs ,
personal representatives , successors, and assigns, but Purchaser
shall not assign any interest hereunder without the prior written
consent of Seller, which consent shall not be unreasonably withheld.
12. WAIVER
of anFailure of either party at any time to require performance
y provision of this Agreement shall not limit the party' s
right to- enforce the provision, nor shall any waiver of any breach
of any provision be a waiver of any succeeding breach of the provision
or a waiver of the provision itself or any other provision.
13. ATTORNEY FEES
In the event suit or action is instituted to interpret or
enforce the terms of this Agreement, the prevailing party shall be
entitled to recover from the other party such sums as the court may
adjudge reasonable as attorney fees at trial or on appeal of such
suit or action , in addition to all other sums provided by law.
14. PRIOR AGREEMENTS
This Agreement supersedes and replaces all written and oral
agreements heretofore made or existing by or on behalf of the parties
with the exception of that certain lease agreement for a portion
of the subject real property with Seller as Landlord and Purchaser
as Tenant.
IS, SURVIVAL
All of the terms and covenants contained in this Agreement
shall survive the closing and delivery of the deed.
1.6. BROKERS
Purchaser and Seller warrant to each other than neither
party has utilized a real estate broker in connection with this
transaction and will defend and indemnify each other from any claim,
lcr.<:s or liability made or imposed by any party claiming a commission
or fee in connection with this transaction and arising out of said
party' s conduct.
4 - EARNEST MONEY AGREEMENT
17 . MEMORANDUM
The parties shall execute a Memorandum of this Agreement
for recording with the recording officer of Washington County, Oregon.
18 . TIME
Time is of the essence of this Agreement.
19 . PREPARATION OF AGREEMENT
Seller acknowledges that this Agreement has been prepared
by O'Donnell, Sullivan & Ramis , acting strictly for the benefit
and protection of the Purchaser. Seller acknowledges Seller' s
right to have this Agreement and all matters related thereto,
reviewed by Seller' s own and independent counsel.
IN WITNESS WHEREOF, the parties have executed this Agreement
in duplicate as of the day and year first above written.
SELLER: PURCHASER:
Gerald W. Crow
Carol L. Crow
STATE OF OREGON )
) ss.
County of )
On the day of , 1982 , personally
appeared before me the above-named GERALD W. CROW and CAROL L. CROW,
who did execute the foregoing in my presence and acknowledged the same
to be their voluntary act and deed.
DATED this day of 1982 .
Notary Public for Oregon
t
(NOTARIAL SEAL) My Commission expires:
5 - EARNEST MONEY AGREEMENT
STATE OF OREGON )
) ss .
County of )
On the day of 1982 , personally
appeared before me the above-named
wno did execute the foregoing in
my presence and acknowledged the same to be their voluntary act and
deed by authority of its City Council.
DATED this day of 1982.
Notary Public for Oregon
(NOTARIAL SEAL) My Commission expires :_
6 - EARNEST MONEY AGREEMENT
April 14, 1982
MF:ISORANT DUI•i
TO: City Council
FROM: Public Uorks Director'
SUBJECT: Pea Patch :'rogr•arn
(Cominunit.y Garden Plots)
You will note from the attached letter from the. Chambc i- of Cornmercc tt.,at. the?- :
appears to be sonic interest and need for community ,-ar•den plots.
There seems to be space at the Senior Cent.cr and at Jack Part: f'or this l:i.nd of
activity.
V.- 'iave not had the opportunity to contact the Park Board concer•ninS their par-
ticipation and possible recommendation but I will include it. on their ageiid-3 fo.
April 29, 1982.
A prescribed arca could be tilled and subdivid-,d. 1dr,t.er t•;ould be a concer•i-; as
would rules of conduct: and cleanup, particularly in t}re flood paain.
' I Mould s,; gest a small charge or deposit to insure compliarrce and pay for water
and administration.
I have seen these programs work in other connnunit.i_es and 1:rould r•ecornmend t•:^ try
to snake this proposal a reality.
MEMORANDUM
April 15, 1982
TO: City Administrator/City Council and Budget Committee
FROM: Chief of Police
SUBJECT: K-9 Proposal
RE: Phase I K-9 Program
• Sir:
At the onset, I wish to express my appreciation to the City Council and
Budget Committee for the support of the K-9 Unit Proposal.
In my efforts to establish a training capability with Washington County,
I have been in contact with several agencies in regards to obtaining a
dog and a local training capability. As you were advised at the Council
meeting of 4-12-82, there was nothing available, dog or training capability,
at that point in time. I did learn that Chief Vickery of Mt. Angel P.D.
had a very good K-9 training program at no cost to law enforcement; however,
he could not take on another dog and handler until this July.
I have now located a dog of suitable age and breeding that is prime for
law enforcement. Incidently, this dog is related to some of the dogs that
have received notoriety in the metro area.
This dog (German shepard) is out of the World of Animals Kennel located at
E1 Monte, California. The dog is a 15 month old male and the cost is $300
plus shipping, estimated to be $50. This dog is medically sound, A.K.C.
registered, etc. , and all records will be forwarded to the department. If
this dog should wash out for any reason, it will be replaced at no cost to
the city.
On Wednesday, April 14, I received a call from Chief Vickery, who advised
me that a dog was lost due to medical problems, and a handler washed out;
subsequently, a spot is open for Tigard to start training with them at
this time. In addition, Chief Vickery has developed a Master Dog Trainer
Program, and is in the process of having this program certified by the
Board on Police Standards and Training (B.P.S.T. ) The Master Dog Trainer
Program will have a tendency to reduce and aid in the defense liability
issues.
This all translates into a very good K-9 program at considerable cost
savings. Other than the cost of the dog, equipment, dog maintenance,
vehicle conversion and operation, there should be very little cost to
the city at this time and next fiscal year.
To start the K-9 program at this time will require the conversion of one
of the older patrol units to a K-9 program. The dog handler will be
assigned to the car and have it available at home on off-duty hours,
t
K-9 Program
Page 2
April 15, 1982
F
and is subject to call out at any time. This car will not be altered
externally other than "K-9 Unit" on the front doors to alert citizens
that there is a police dog in the vehicle.
The conversion of this vehicle for the K-9 program means one addition
to the Patrol Division fleet, the insurance cost will be $350 for the
vehicle. There will be no additional liability insurance cost to the
city as a result of the K-9 program.
The first phase of the program can commence at this time without a
supplemental budget request, and still remain within the control bud-et
guidelines.
PROPOSAL
Phase I (Fiscal Year 82/83)
*K-9 Vehicle Rebuild $1,000
Replacement Vehicle Equipment 1,830
Dog Purchase/Shipping 350
Handler Equipment 100
Dog Maintenance 75
Total $3,355
Phase II (Fiscal Year 83/84)
Vehicle Operation 2,940
Veterinarian Cost 100
Dog Food 200
Portable Kennel 400
Handler Equipment 365
Total $4,005
*Note: Vehicle operation will be charged to
existing budget, and is not identified as
an additional cost factor in the Phase I
proposal.
I am satisfied that this K-9 program will be of high quality and minimal
risk. The training program provided by Chief Vickery of Mt. Angel is
a high quality program, and he has 16 years experience in working and
training police dogs.
The training of our officer and dog will take from four (4) to four and
one-half (4-1/2) months, which is Phase One of the training; i.e. , dog
and handler.
Phase Two is the master trainer program, which will require a similar
amount of time.
K-9 Program
Page 3
April 15, 1982
I will estimate that by the end of December, 1982 we will have completed
all of the above training, and should have a working dog on line by
late September, 1982.
The basic outline above will allow the City to expand the program in the
future with minimal cost, as we will then be equipped to do all of our
own training of dogs and handlers.
The department will also be in a position to help Chief Vickery train
other dogs and handlers for other agencies.
(See attached report) .
Respectfully,
R.B. Adams
Chief of Police
RBA:ac
Board on Police Standards and Training
SUITE 404, THE EXECUTIVE HOUSE, 325 13th ST. N.E., SALEM, OREGON 97310 PH. 378-3674, 378-3675
%nGTOR ATIYEH OREGON POLICE ACADEMY. 550 N. MONMOUTH AVE., MONMOUTH, OREGON 97361 PH. 378-2100, 378-2101
ow[non
December 24, 1981
Chief Kimball P. Vickery
Mt. Angel Police Iepartme"t
P.O. Box 960
Mt. Angel, Oregon 97362
Dear Chief Vickery:
Conforming to the Provisions of OILS 131.650, the Board is
pleased to certify the "Police Patrol Dog Ilandl.er Training"
sponsored by your department and to be held January 4 - May
14, 1982, at various training sites in Woodburn and Mt. Angel.
The curriculum and instructor are certified as rec{uested.
We are enclosing one BPSr course roster. Refer to the re-
verse side of the roster for detailed instructions on how
to complete this form.
This course has been certified for 350 hours. Please return
the original roster within seven days after completion of
the course indicating the total number of hours attended by
each person, if less than 350.
we wisli you success in this training endeavor. Please let
us know if we can be of any assistance. _
sincerely,
Dave Burks
Chairman
�Z�0 avi-Z-1
Paul Bettiol
Executive Director
PB:pss
Enc.
SUPPLEMENTAL SHEET TO FORM F-20 (Page 1)
COURSE : Police Patrol Dog Handler Training (Basic)
r� DATES : January 4 , 1982 to May 14 , 1982
PROPOSED SCHEDULE:
• Jan. 4 - Jan. 11 - Familiarization with Dogs ; Basic Care
and Grooming 20 hrs .
Jan. 12 Feb. 1 - Basic Obedience; Obstacle Course;
Retrieving 60 hrs .
Feb. 2 - March 8 - Basic Tracking; Building Search; Adv.
Obedience 80 hrs .
March 9 - April 5 Adv. Tracking; Object Search;
Narcotics 80 hrs .
April 6 - April 19 - Basic Aggression; Explosives 40 hrs .
April 20 - May' 3 - Adv. Aggression; Firearms Familiariza-
tion 35 hrs.
May 4 - May 14 - Practical Street Excercises 35 hrs .
TOTAL 350 hrs .
NOTE:
1) Actual length of course depends on several factors including
handlers ' free time to devote Lo training; health and
acceptability of dogs ; etc.
2) No written course announcement, as I have personnally con-
tacted all local department heads with pertinent information.
Enrollment is necessarily limited because of the nature of the
training and the requirement that trainees furnish a dog which
meets instructor 's approval.
3) Advanced training is of an on-going nature, as trainees are
expected to conduct periodic refresher training sessions and
on-the-job excercises to be scheduled through their own
departments .
COURSE DESCRIPTION:
1) Obedience - handlers will be instructed through practical
demonstration in the proper techniques of dog obedience as
recommended by American Kennel Club .
2) Obstacle Course - handlers will be instructed in the proper
methods of commanding their dogs over fences, up ladders and
around all obstructions normally encountered when pursuing
or searching for suspects .
a
SUPPLEMENTAL SI(1?(:T TO FORM F-20 (Page 2)
� 3) Retrieving .,
- dogs will be taught Lo pursue and retrieve objects
thrown in bushes, grass areas , etc .
4) Tracking - dogs will be taught through practice how to search
for suspects for long distances over varying types of terrain
including bush, grass, asphalt, gravel, etc . Tracking will
be done with dogs in harness and training will closely follow
London Police Method.
5) Building and Area Search - dogs will be taught to search for
hidden suspects in various types of buildings and compounds
and to alert their handlers to the location of hidden suspect .
6) Object Search - dogs will be taught to locate and alert their
handlers to hidden objects , such as guns , knives, keys ,
contraband, in bushes, grass areas, etc .
7) Narcotics - dogs will be taught to locate marijuana and other
related drugs by controlled scent in furniture and vehicles .
8) Aggression - dogs will be taught handler protection and pursuit
of fleeing suspects utilizing the harrass and delay technique.
Accepted agression training equipment will be used including
a multi-purpose bite sleeve.
9) Explosives -- dogs will be taught to locate explosives by
controlled scent under vehicles and in buildings . Simulated
bombs will be utilized.
10) Firearms Familiarization - dogs will be accustomed to sharp
reports from firearms utilizing blank starter pistols and
blank cartridges in actual firearms for this purpose.
NOTE:
1) Dogs to be trained will be of the German Shepherd (Alsatian)
Breed and will be obtained through an accepted breeder at
handlers ` expense.
2) Prior to being accepted for training, dogs will be *tested
by instructor for temperament , stability, gun shyness and
signs of health problems using standard tests .
April 15, 1982
MEMORANDUM
TO: City Council
FROM: Public Works Director
SUBJECT: Varns Road LID Segregation
Because of the impending construction of the 217/72nd Avenue off-ramp just
north of SW Varns Road, the State of Oregon is aquiring property for right-of-way
that has been assessed for street and sanitary sewer .improvements as part
Varns Road LID #-&--
of the
The property owner has asked for a segregation of the assessments because the
state must purchase the property free of any liens.
Staff has no problem with segregating these assessments as a matter of admini-
strative function as long as the segregation is done on the same basis as the
assessments were made against the property.
Any other division must be done by City Council.
Street improvement costs were distributed on the basis of one-half the cost
applied to front footage and one-half the cost applied to area within the
assessment district boundary.
Sewer assessments were done on the basis of one-half the costs applied to number
of connections and one-half applied to area within the assessment district
boundary.
The amount owing under this method on the parcel being taken by the state is as
follows:
STREET - Frontage $32.824209/ft. x 40 ft. _
- Area $0.1253554/sq. ft. x 40,510.8 sq. ft. _ $ .97
$55,,078078.25
SEWER - Area 0.1669433/sq. ft. x 40510.8 sq. ft. _ $6,763.01
- Connection -0-
-0-
Total assessed to state parcel $13,154.23
/
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to the area in Question
In addition , there has always been water avail-able
on the affected property, and a sewer connection has 1)ee,)
available within 150-200 ft-OnS .W. Fir. Loop, regardless of the
existence of the LID. For these reasons , the owners propose
to pay a proportionate amount of the LID assessment, based upon
the street square footage and street frontage of the affected
property, but no sum allocated to "sewer cost.. "
We believe the street square footage of. thc, condemned
property is 42 , 688 . 8 square feet, assessable at 12 . 5 cents
per square foot, and that the street frontage is 40 feet,
as;-essable at 32 - 82 cents per foot. This would result in
respective assessments of $5 , 336 . 10 and $1, 312 . 30 , for a total
proposed payment of $6 , 648. 90 - This figure could fluctuate
as a result of actual measurement of the property, but we do
not ask that it be reduced to reflect that portion of the
assessment previously paid by the property owners .
We believe that the above proposal is a fair and
reasonable one for both the City and the owners. This is
especially true in this case, where the remaining portion of
the acreage has more value in land alone than the remainder
of the assessment to be collecte,ii , as well as being the site
of substantial construction with quite a high assessed val-
uation. Thus, the City will remain secured many times over
for the amount still owed to it.
I appreciate your consideration of these thoughts,
and regret that the shortness of time before your next meeting
requires me to contact you at home.
Thank you for your consideration .
Very truly yours,
Je-F
rmia n
JLK: jh
CC: Mr. Edward J. Sllll.iX7an , Esq. ,,/
IN
r
fAR'r 1 `
INTRODUCT I ONI
The following report on double or duplicate taxation was requested by the flesol-
utions/Legislative Committee of the League of Oregon Cities in 1980 because
of continuing membership interest in the issue. 'ihe committee requester thai:
the LOC Executive Committee initiate a double taxation pro_"ri in 198 having
several components, including preparing a handbook to assist cities in rneasu+ ,:,g
the extent of double taxation, researching the applicability of the Ja.rvill ci3se
to double taxation, developing a clearinghouse on experiences of other cities
in dealing with the issue, and preparing various programs on double tax,�tion for
Leaque meetings. Subsequently, the Executive Committee requested the C :gon
Section of the International City Management Association to undertake t, is
assignment.
The report which follows contains three parts:
1. Part 2 describes the problem, its origin, and its incidence in
Oregon.
2. Part 3 provides a methodology for estimating the impact of double
taxation in a community and presents a case study using this method-
ology.
3. Part 4 describes a series of remedies, solutions, and/or negotiated
settlements to the double taxation problem, emphasizing voluntary
arrangements that have been worked out between cities and counties in
' Oregon and elsewhere. Additional information on various constitution-
al, legislative, and legal solutions adopted or attempted elsewhere is
" attached to this report in Appendix I .
- -1- '
PARE 2
THE PROBLEM OF DOUBLE 1AY.A-FION'
Local governments in Oregon are concerned with a problem th,-y perceive as
inequitable taxation and service distribution between the residents of incor-
porated (municipal ) and unincorporated areas. The problem has been variously
labeled 'double taxation," "tax equity," or "base-level support," but 111 all
cases the issue is the same mix of tax and service inequities that result in
the following:
1 . Unequal eligibility for services between incorporated and unin-
corporated county residents.
2. Citizens of municipalities paying county taxes and city taxes while
receiving benefits or services from only the city and not the cclunty.
As an example, both city and county might operate police departments,
but the county's police protection i!� limited to the unincorporated
area even though it is funded in pari, by property taxes of incorporated
residents or other unrestricted county revenues.
3. City/county intergovernmental agreements providing for the joint
financing of certain services or facilities, with city residents
paying all of the city portion as well as financing part of the
county's share through their county taxes or county general fund
revenues. For example, county detention facilities are often
financed by county-wide bonds and subsequently used by city police
departments for a daily fee. Incorporated residents support the jail
.operation through the county property tax and again through daily
prisoner fees charged to the city's general fund.
HISTORICAL PERSPECTIVE
Originally, county governments were established to provide basic levels of
service to rural populations. The county provided an equal level of service
throughout the entire area for such basic needs as law enforcement, roads,
courts, and others. As the area became more densely populated, there developed
needs for higher-level service (for example, fire suppression, solid waste
collection, recreation) than were being provided by the county. The people who
were living in those .areas decided to work together to provide what they
needed--over and above what was then provided by the county. Cities were
created not to replace county services, but to build upon the base level of
service that was already being provided by the counties so that the desires of
the local residents for a higher level of service could be achieved. Yet at
some point in time, county support of this base level of service has been
systelrlatically denied the county residents who reside within the incorporated
areas . Nowhere in history have city residents chosen to forgo the services of
funding provided by their country.
-2-
fks: lona as the demand for the traditional municipal servic0s; ;•ras general-ed
V f mainly by people concentrated in the small toi•;rts and cities of eachstate,
tiro problem was contained. Toms and cities v;ere established and functione• :
as separate taxing districts within each county to provide those addition-:1
services required by the city taxpayer. the Arable rr become aggrava', ed
about three decades ago. At that time population began to build up in the
unincorporated areas of the county on the fringe of the municipal boundar,ie-; as
;,ell as in other clustered areas that remained in an unincorporated status.
These unincorporated residents generated theiro:rn ':CL of service needs wiiich
in many cases were equivalent to the same level of service provided by the
residents of the city.
The response of state governments to these service pressures from unincorporated
residents was to authorize the creation of numerous special purpose districts
for providing limited services (this created no tax inequities) . However,
counties also gained authorization to provide municipal-type services financed
through county-wide tares, which meant that counties were now delivering unincor-
porated residents similar services that city residents were providing and paying
for themselves.
The problem will continue as the cost of delivering services increases to a
growing population in Oregon's unincorporat.d areas, whose residents continu^ to
demand municipal-type services. These services, in many cases, increase the tax
burden carried by city taxpayers or require a growing share of county general
fund revenues.
THE. ISSUE OF BENEFITS
It has been argued that the provision of services by county government to
residents of unincorporated areas is a two-way street, since the city resident
receives an indirect benefit from these services. This is true to a degree,
but it is more than outweighed by the indirect benefit provided by cities to
residents of unincorporated areas; it also fails to address the direct benefits
unincorporated residents receive while they are in a city without paying taxes.
In balance, the use of county-wide property tax levies and the restricted use of
state- aid and general revenue-sharing moneys to unincorporated areas represents
a direct subsidy by incorporated taxpayers to those living in the unincorporated
areas.
It has been suggested that one way to test the balance described above is for a
city to temporarily discontinue those services that are essentially duplicated
by the county government and then demand the county to provide all services
equally to both city and county residents. The question would then become
whether the county government could supply those incorporated residents with tiro
same level of service now being provided to those in unincorporated areas ;•;ithout
increasing its work force and property tax levy. If the ans.;er is "no, " and in
most of the urbanizing counties of the state it will be "no," then clearly
county taxpayers living in the city are not receiving an equal benefit for
tax payments or from their state aid and other Federal moneys they leverage -or-
the county.
-3-
ADDRESSING THE PROBLEM
Traditionally, the issue of inequitable taxation of municipal residents h.-Is been
addressed in four different ways across the country--voluntarily/polit.ically,
legally (through the courts), legislatively, or constitutionally. The remainder
of this report will focus on helping Oregon communities seek resolution or the
double taxation issue at the local level by providing thein t:,ith the tools to
work out their own solutions.
EXTENT OF THE PROBLEM IN OREGON
Many local jurisdictions consider double taxation a problem in Oregon. Ques-
tionnaires were sent out in June 1.931 by the Oregon Section of the International
City Management Association (ICMA) to all Oregon cities requesting information
on how public services were provided and financed by cities and counties and how
serious the cities considered the problem of double taxation. Of the 23 returned
questionnaires, only four (14%) did not consider the problem: to be at least
moderately serious. The concerns expressed by the respondernLs centered around:
I ) equity to the city taxpayer, 2) the inefficiency of duplicated services,
and 3) the complexities and burdens of joint financing.
Tax Payer Equity
In all cities surveyed, the city residents paid the full county tar, rate.
Because Oregt:'r has had an early start on land use planning and setting urban
growth boundaries, most taxable property in a county is usually in the incor-
porated areas, whose residents, therefore, pay a majority of the county tax.
City residents, however, may not receive many county-funded services, such as _
law enforcement, planning and zoning, vector control, or parks. One city having
two/thirds of the county's population and 40% of the county's assessed valuation
is supporting county law enforcement for only 370 people. Many counties get
0 C. C and other Federal funds, and some cities feel that either these should be
shared with them, the counties should provide the same service to city residents
as they do to county residents, or the county should reimburse the city for-
those services the city has to provide because the county does not.
All but four of the returned questionnaires reported one or more public services
jointly financed by city and country • vernments. Often a city is asked to con-
tribute additional dollars to a coo; service from which it benefits. For
example, there are repeated cases it, 1.e survey of the county and city each con-
tributing a share of library operatirit; expenses. The city resident then pays
not only a share of the county support, but also a share of the city contribution.
The survey only identified two cases where county residents had to pay an extra
fee for their library card. In all other cases the residents in an unincorporated
area only paid the county's tax and received the same library service.
Of toll cities feel th�•re is a revenue inc.11.1ity when County gcrverrunents fund
unincorporated area services and joint f inai- +ng agreements from Federal
(' revenues, for whicl, cities do riot receive credit.
One inequity of double taxation occurs %•:hen city residents support a large
share of county services as well as their own, but another inequity is the cost
of maintaining tVfo such syste,r+s side by side. Counties and cities offer miry
di,plicated services in their attempts to service their separate populations.
In a time of scarce resources and CutbaCIKS in public services, the extent. of
duplicated services provided by city and county goyernments has to be con- 1cr�:red
contrary to the best interest of the taxpayer.
Duplicated Services
Again from the 28 returned questionnaires, all of thern reported at least one
city service that was duplicated by a county service, and 13 respondents ( +65 )
reported more than 5 duplicated services, to a maximum of 14 in 3 cities. hlie
extent of this duplication has nothing to do with city size (Reedsport, with a
Population of 4,970, has 14 duplicated services, while Baker, frith a population
of 9,450, only has 2 duplicated services) , but is more a. result of either county
and city cooperation, or the lack of services provided by a particular county.
Duplicated services most reported in the surveys were law enforcement, street.
and road maintenance, planning and zoning, and judicial systems (courts) .
Joint Financing
Joint financing agreements between cities and counties have attempted to reduce
the duplication of services and to increase intergovernmental cooperation.
However, in addition to compounding the equity problem+ for residents in an
incorporated area, these agreements have reportedly become an administrative
burden for several cities. The only consistency between agreements in the
various cities surveyed is that they are all different. The rr+ost common services
jointly financed are libraries, animal control, communications and dispatt_lr,
jail, and street and road maintenance. Financing agreements that transfer funds
to the service provider include arbitrary donations, a percentage of the service
cost based on some set criteria or formula, a users fee, and a separate serial
levy. Cities perceive agreements to be inequitable, as in the following examples,
when they require a city contribution without giving credit for a city's share
of the county's contribution.
*Several cities (Philomath, Corvallis, The Dalles, Hermiston, Pendleton,
Cascade Locks) pay approximately 40-60% of the operating expenses for
libraries which are used by residents of both incorporated and unincor-
porated areas.
*Jail facilities are supported by county tares, but most cities are
charged an extra daily lodging fee for el-jch prisoner incarcerated for a '
municipal offense.
_t-L*ugene and Springfield city residents pay approximately 15,300,000 and
,,,?5,000 for social service procIr-arns through city taxes arld do not rec.e'Ve.
credit for Line County's contribution of approxiaately S160,000 I-Mich
comes from Fi:deral revenue-sharing.
*Local jurisdictions in the Eugene-Sprincgfield SMSA (mo-It. of Lane County)
and the Portland metro area are assessed by State lad to support a Boun-
dary Commission. The 1981-82 rate for cities and counties is $.1761< per
capita, which ;•Iould be an equitable taxing wechanism if revenues to p •y
for the assessment were also generated equitably.
*Although several cities pay a fee for animal control services in addition
to their county tax contribution, the equity of these agreements cannot
easily be generalized.
Eugene and Springfield (Lane) budgeted a total of $451,000 in 1981-82 to
upport the county-administered service (68% of the total animal control
s
budget) with provision for a share of all collected fees and licenses.
Astoria and Hammond (Clatsop) contract for- a certain number of hours of
county enorcement of their leash law, depending on the severity of their
problem, and the county administers a licensing program and collects all
fees. Last year Hammond paid $540 and Astoria paid $6,400 for the service.
Pendleton (Umatilla) pays for its own dog control officer and the county
maiiitains the pound operation. The city collects license fees and gives
them to the county. At the end of the year, all revenues and expenditures
are totaled and any deficit is shared equally. Last year Pendleton paid
$1,000.
Unless the city or county government pursues theissue, most taxpayers are not
aware that a double taxation problem exists. Therefore, the following sections
will provide a methodology for measuring the problem and will describe a range of
possible solutions in the event that a city government r+--cides to make this
issue a priority.
{
APPENIDIX I
OTHER ATTEMPTS TO RMEDY JHFDOUBLE` TAXATION Pt'-1()i)[ -r
The Eugene, Oregon (Jarvill ) Case
A series of lawsuits, initiated ill )q'74, resulted from the levying of a
tax on a Downtov,,n Development District and; evontually erirjc,,a
Lip being 1111cc] upon
by the Oregon Supreme Court in Jarvill V. City of Fllq(�ne. The basic argument of
those individuals and busincsse�s that a municipjl
property tax had to be uniform thrOUghOUL the Ci-Ly. The SUpreme Court
' _j,
however, that a sub-territory with genuine qualitative differences frornthe rest
of the City could be singled out for special tax treatment. The types of
qualitative differences that could justify a tax differential fell' into the
categories Of either "natural qualities" (i .e. , differences that exist by reason,
of nature, such as a swamp area) or "politically imposed qualities" (i .e
differences resulting from decisions and actions Of City government, sucl'j'as the
City providing services/programs that distinguish an area from the remaining
portion of the City) .
In December 1980 the Oregon Attorney General issued an opinion based on the
Jarvill case indicating that a County government could lawfully tax Prop--_rLy
ic; different parts of the county at different property tax rates if the Jarvill
test was Successfully [net (see Appendix 11 for ruling) . This test was whether
persons/property being taxed at different rates were, qualitatively distinci!jish-
able and the differences in taxation rates were related to the qualital'I V(I
differences. The Attorney General also concluded that "specific difference; in
services provided in various parts *of the county can he adequate distinguishing
iShilig
characteristics to support the imposition of different rate's of taxation.. "
Based on these findings, it appears that the Jarvill case relates directly
to the subject of double taxation. The question to be answered by each
individual community is whether the cost of services provided 'exclusively
tr) Unincorpori:ted residents--such as law enforcement, planning, Public works—
can he applied to the same people in the form of a higher tax rate. Since
these particular services distinguish the unincorporated section of the
County from those liviQ9 within City boundaries, it would validate a dif-
ferential taxation rate. The Attorney General opinions in 1968 and 1971
state that a county cannot adjust the tax levy frof;i area to area depending
on services, but do suggest that special service districts' or tax districts
might: be the answer.
More recently, Multnomah County in November 1980 requested its Office 0, County
u �, 1 .0 , ty
Counsel to determine the feasibility of creating a "sub-district" Of i1:1-.0f for
the purpose of paying for "urban services" by imposing an ad volorem thjee_year
serial levy property tax at a rate
hi- her thaLn the property tax
imposed county.-
wide. The Counsel 's opinion was "Yes, but
' tit fh4s linlitatioll", based, in
in tile case. J-iie Court inter-
• Oil the Court of Appeal 's
'goll 's UnifOI-Mity Clause t.o iixan that. c(-,uijtie,-' cool classify TfIz
-e taxation hase
J)7_01L('d ("I �. .d C:1 econoilic
of tl constitutionally valid class for the purpos(", Of
and physical factors, not Just qC.,oqrL41,)YJiC boundaries.
•
f a differential - il
In stm-,i-miry, the use 0 til taxing district i , an option ion f o I- Oregon
CO'11151L)nities, but will require a careful analysis of individual county services
that are partially or Wholly funded from the county property tax levy. Use
t zIx q roach wi 11 also reqUil,_C2 ViOr'- ifl(j C'C)-'("Y
of a differential district approach
faith
h the City Attorney's Of from
Office because of the narrow find ;nys eirtargi rig fi
the Supreme Court and Attorney General .
The California Case
A joint County/City study in the Los Angeles area in 1970 revealed a tax inequity
produced by Los Angeles County's practice of providing municipal services to the
unincorporated area at a cost greater than the revenues collected from this
area. As is the case with Multnomah County, the deficit was compensated for by
revenues collected from residents in the incorporated areas or other general
revenues.
The City of Los Anqeles filed suit in 1978 against the County, and in early 1980
a State court ruled that the County must take immediate steps to end any subsidy.
Since proposition 13, County budget officials do not believe a subsidy still
exists. They contend most County services are novi delivered county-wide or are
supported by fees. The exceptions are fire protection, which is being supported
by special districts in the unincorporated area, and law enforcement, which is
not yet at that stage. County officials feel that special law enforcement
districts Will. not Succeed because all new taxes must nowbe approved by two
thirds of the registered voters or by charter amendment,
The -Florida Case
In 1974, the Florida State Legislature enacted provisions of a comprehen-
sive statute (Florida Statute Chapter 125, Section 125.01(6a)), which granted
authority to the governing body of a municipality, or to citizens Of a munici-
pality through petition, to identify services rendered especially I for the
benefit of unincorporated areas and to require the county hoard of commissioners
to develop a mechanism to finance Such activity "by taxes, special assessments,
l
or service charges levied or imposed solely upon residents or property in the
unincorporated area, by the establishment of a municipal service taxing or
benefit unit, or by remitting the identified cost Of" service paid from revenues
reciuired to be expended on a county-wide basis through the municipality Or
rnunicipal i ties."
The same statute authorized counties to establish flunicipal Services Taxing
Units (MSTUs) in all or part of the unincorporated area for VIC Purpose Of
-
providing the municipal-type services_ Counties theiehy permitted to
-33-
assess the full cost of munici!)al-t:ytie services to the area h- -le"it.ed by sr;clr
services. A separate property tax levy was authorized for the f-lcensu] ing
that city di.,ellers were not taxed for- services provided rural residents. 1n
y._
order to compensate core cities that had high population and lois assessed
property values, a weighted percentage %-/as used in one county to allocate
expenses in each of the taxing units and the unincorporated areas: 5o percent
was based on population and 50 percent on assessed valuation. Subsequent.
legislation provided that both charter and non--charter counties could estahlish
these units and levy the additional tax without a referendum.
Approximately 15 Florida counties have established MSTUs. A number of otf!cr
counties have demonstrated some -interest in establishing 14SlUs, soRre volun,'arily
andsome through recent court decisions. MSTUs have been formed to provide
services such as fire, police, and recreation.
The impact of an MSTU on the double taxation problem is that this taring vehicle
has reduced the amount of double taxation that may have otherwise occurred
statewide_ On the other hand, there are drawbacks associated with use of an
MSTU:
1. The belief that there is little economic incentive for counties to
voluntarily establish MSTUs.
2. MSTUs, in effect, become quasi-municipalities, but, lack municipal
power and the right of direct electoral representation.
3.. The provision of urban services in unincorporated areas by counties
might foster urbanization outside designated growth boundaries. If
urban level services are available, there would appear -to be a risk
of creating a supergovernment that could provide what have been
historically city-level services. Such a government might be seen in
the short-run as a competitor with cities but in the long run, might
be an answer to the overlapping and duplication of services by provid-
ing for the ultimate consolidation of all local governments into a
single level county service unit.
The Utah Case
Salt Lake City was motivated by tax equity concerns brought about by the
rapid urbanization of unincorporated areas within Salt Lake County, and sought:
to prevent counties from providing "municipal-type services" within unincorpor-
ated areas at any expense to residents of incorporated areas %%,it:hin the county.
They vrere successful in gaining legislative approval in 1971. of an act vhich
provided the following:
1. When a county furnishes services to an unincorporated area, the entire
cost of the services shall come from taxes, charges, or fees derived
only from benefiting persons. Taxes, charges, and fees levied and
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collected shall he placed by the cou,,t.y in a spe( ial revenue fund,
frr i which disbursements Trill be m:sdcr ol. Y for ti _Tse services in t h o e
arc as.
2. The County Coiimisslon is empo,.,er•ed to divide t.ile coiv;ty into Laxing
districts.
3. The counties are prevented by legislat.inn fro:o using any general fund
revenues ( i .e. , general county-wide property taxes, stares taxes,
general county-wide fees) to fund ser-v i:.e', only in i?re ur;;ncorl�or��tcd
area.
The City of Salt Lake's repeated requests that the county implement these
provisions were ignored and the City brought suit against the county. The case
was eventually brought before the Utah Supreme Co+_rrt in May 191%6, t�rho uphelc; the
statute. After the county mandated two service areas within the unincor-pora'ced
area that would have cost the Kennecott Copper- Company S4 million, the company
led a taxpayer revolt that resulted in another Supreme Court decision, this
time against the city.
With the legal questions still unresolved, the city and county have begun to
cooperate in prep:!rinq new legislation for submission to the Utah legislature.
T}1e city is drafting legislation that , if adopted, would require that when
special service districts in unincorporated areas attain certain population and
assessed valuation, they will automatically be declared a city. In this case_,
the county would be limited to providing rudimentary services and traditional
county-wide services.
' The Georqia Case
PeSUlutions on double taxation were passed at the annual business session of the
Georgia Municipal Association in 1976 and 1977 urging the Georgia General
Assembly to "place before the people of Georgia State a proposed amendmcrlt to
the Georgia constitution which will require county governments to reduce millage
ra:'-.es of City residents in reasonable proportion to the full services not
delivered to municipal residents." Such a Constitutional amendment is currently
being considered by Special Session of the Georgia General Assembly.
In 1:)77, the Municipal Association developed a handbook to be used by city
officials to develop data to support their claims that city residents r•rere not
receiving services from their county government proportionate to county taxes
raid.
In De Kalb County, voters approved a charter a;rendwent in 1976 that listed eight
services including police, parks and recreation, street and road maintenance,
and storm Mater systems that would be considered as "district (municipal)
services" and for trhich county taxes would be levied only in the unincorporated
areas. After the county passed a resolution that. still levied a single tax rate
-35-
on all property in the county, the cities brouctl-rt suit on the grounds that it.
conflicted with the local amend tent. In June 1981 , the Supr•crrne Court. of Gent-Ctid
decided in favor of the county on the basis that. a pr avis ion for tax roil bc,ck ,
or exemption, was not expressed distinctly in the local a:nendtn�,nt..
A study was conducted in 1979 to determine the rel at i onsh i,, bet.t•:eett revnu��,
paid by citizens of Athens, Georgia, and the reur :ining arca_: of Clarke County,
as compared to th^ services these two groups of citizens received from th:-ir
respective governments . The findings r:ere thatvarious service tradeoffs
t:cre taking place: insider residents erre c:onsurninn• a hca�. icr sf.;?-0 of •1nsl.ice
and health and welfare services provided by the county than their revenue
share, while they were providing revenues for police and road services for %-:h ich
they received almost no direct benefits. On the other hanc'•, the outside, ve,-idc-nts
were subsidizing inside residents for justice and health and welfare. services,
but: were being subsidized for roads and police functions. There were, however,
recommendations to (1) adjust water rates and surplus distributions; (2) to
increase Clarke County Fire District millage rate; and (3) to fund county
payments to Athens for city services such as recreation, planning-zoning, etc.
%.:.-th a special tax district levy.
In 1.978, a special committee on double taxation was created by the Clayton
County Municipal Association, which represented six cities. Their report
concluded that city residents could receive as much as a 38% reduction on
their county tax bills if certain services were established under tax districts.
The Indiana Case
In 1.973, the Indiana Association of Cities and Towns unsuccessfully sponsored
FIB 1163, known as the Duplication of Service: Bill . The bill gave the city the
authority to decide whether or not the municipality wanted a particular county
service. If the city opted not to receive the service, the tax needed to
support the service would be levied against unincorporated residents only.
Since that time, a tax limitation law was passed which has diverted all energies
and attention away from the double taxation issue. Consequently, no further
progress has been made in addressing the issue.
The Maryland Case
Introduced in 1975, FIB 1.473 would have required counties to levy a property tar,
on incorporated residents to fund only those services actually provided_
Any services provided solely to unincorporated residents would be excluded from
the municipal county tax. The Maryland tiunicipal League conducted a major-
public campaign in support of this issue. They held news conferences, ditribut--
ed brochures and bumper stickers, and conducted informational meetings to make
the public and local officials aware of the inequities of double taxation. The
hill was narrowly defeated and the legislation eventually adopted permitted
county governments to levy a tax differential on incorporated resicfent. ,
-36-
III 1`� t'l., double taXatiO.-I Will be the Maryland Nunic.ioal League's only issue with
thc� Assern'oly. HOWever', a more difficult struggle is expo-EFecl due to
ant is ipat ion that: the county assoc i at ion wi 11 be much Inure prepj,rr,d.
Currently, about one half of the Maryland count: ie s have heen w 1 l incl to negotiz;te
tax differential agreements.
The M;:ryland Municipal League published a tax differential handbook in ) 979. J
contains a summary of the history of double taxatian in the st.atc and out=lines
hoto develop an effective ta>- differential campaign, and copies of various
statutes and c.areements currently enforced around the state.
DW:c j/CM59a1
-37-
.�SES til. fSRC�\1'N !� TM 3 APi'f fi,i)IX II
DEPARTNAP\1T Of: JUS"1-10E
7(1U Slate once Buildmi"
Salem, U,e--on 07310
Telephorne. t503) 3%8-•t4oJ
December 15, 1950
No . 798)_
This opinion is issued in response .to a question presenrec3 b1.
the Honorable Drew Davis , Oregon State Representative .
QUESTION PRESF"' 'E'D
May a county levy a tax on one portion of the
county at a higher rate than that imposed on another_
portion of thc. county based on differences in the
services provided in the respective areas?
ANSf,!ER GIVEN
Yes, if the proper classification can be mac5e
as set forLh in Jarvill v_ City of z:ugene
DISCUSSION
The question is presented whether b count.y inay levy a ;_ax oil
one portion of the county at a hic;I:er rate than that impo_ed on
another portion of the county, based on difference.; in the sr�r-
vices provided in the respective areas Before Jar- vi.11 v. CiC_v
of Euqene, 289 Or 157, 613 P2d 1 , cert. denied , 49 USLW 3409 (ii . S .
3.980) (No. 80-520) , the answer to this question would have been
a i�;
ill dou})t . Though acl:nowledy:inc our d;>�:}�t, �:c, c:ono luded i.n 35 op
1s,_1ty Geri E60 (1971 ) that a pr.opaed Ill i_pz�.t eorporiiti_ore cot�lc:
ccs: ,: ti ti_ition�tlly
establish subdi.s t riots and 1 c vy taxes wittlin t1�c
cOver.al subdistr_ictts at different rates , based upon the levc.).s of
services provided within the various Jarv.i_].1 has
SUIDStal"tti_ated that opinion .
Jarvill v . City of F-.uc}ene, su:-)ra , concerned special taxes
levied by the City of Eugene upon only property and businesses
within the citv ' s "downtown development district . " The plain-
tiffs in the case challenged ordinances impoi_ng these taxes on
the ground that the imposition of taxes on other than a
geographically equal basis throughout the city %•gas contrary to
Art I, sec 32 of the Oregon Constitution, which requires t :t all
taxation shall be uniform on the szime class of subjects within
the territorial limits of the authority levyinc) the tax . The
ordinances were also challenged as being contrary to Art I, sec
20 of the Oregon Constitution, which states that no law shall be
passed granting to any citizen or class of citizens privileges or
ini,,iunitties which upon the same terns shall not equally belong to ^
all citizens . 11he ordinances were fusthr,x• chzjl3_engcr �.s viol�i
ting the equal protection and duo process clauses of the
Fourteenth Amendment of the United States Constitution,
In Jarvill , the court said :
" Elq]e conclude that a classific::it:ion ? oi; cr
defined by geographical- location Is . . . constitu-
tionr:.l.ly permissible if it is r,lso based upon
qualitative difference; that di stingttish the geo-
graphical area from other areas within the territorial
limits of the authority levying t_lic- tElx . Ill other
caords , a taxing authority m�iy not single out a
3 1)
subterritory for exclusi•✓e tax treztt_m,�nt_ (e_itiicar
taxation or exemption) if that subterrito,:y is
indistinguishable from the rest of the territ-ory.
But if the subterritory is different in quality
compared to the rest of the territory, t-her: art_.i_cl.c
I section 32 , does: not prohibit a taxing authority
from defining the subterritory as a separate
class . [A] tax classification is corrStltu'
tionally valid if .it rests upon ctertuine differences
. o In addition, if the taxing authority selects
a subterritory for taxation and that subterritory is
the only area so taxed, then the subterritory must
not only be qualitatively different but must also be
unique.
"There may be two types of qualitative differ-
ences that might justify singling out a geogr&phical_
area for tax treatment . One type might be described
as natural qualities . These would be qualities:;
that exist in the lana by reason of nature, for
example, swamp land . . . . The second type might
be described as politically imposed qualities . These
would be qualities that exist in the subterritory by
political decision, commitment and action, and they
may well result because of econonii c f_;:I.c-tors or Human
conditions . Thus the wider sig:rl.f_ican • � of the
present analysis is that article I , section 32, does
not prevent tax classifications from reflecting
qualitative differences that result from land use
planning decisions . Such planning decisions are
almost inevitably stated in territorial terms ; but
this does not mean that a tax classification which
reflects a land use classifi.cation is based only on
location and therefore invalid., rather than being
validly based on the qualitative difference in land
use characteristics .
"In addition to the fact that-- the businesses and
property within the District presently share, and in
the past have shared, the conditions unique to being
in a downt:own urt-)an area , the City is taxing the
District for the purpose of cre�iting a unique area in
the future . The City has corranitted itself to provide
a package of special services not provided clso�..Yhcre
in the city, including free motor vehicle marking, an
economic promotion and development program, and a
public transportation program. In this reyrsrd, the
qualities that distinguish the District from the rest
of the City are politically imposes? . The District is
unique not only because it contains the only downtown
area in the city, but also because the City has
IlU
to providinq �-.orvic� d 1). (-):-11-a
that pa ; -ntly and phy-SiCci Lly di-';t i.!1(JL1if;11 t.l,e J-)iS1-riCf-
. f-.r(:)i.i any other area of the city .
"We therefore. hold ths11 the cil-y
f ied the District , and the property ari(--1
therein, for the purpose of separztte tax trea'r'on t
This classification does not violale article I , s e c I-
32 , of the Oreclon Cori f-,titut-ion . 1.*or the sai.-ic
this classification does not grant any citizen or cl-a!-,s
of citizens a privilege or ijimiunity that is no--
equally available to all on the same tern; (Or Const
art 1, [sect 20) , nor does it deny anyone the equal
protection of the laws guaranteed by the fourteenth
amendment to the United States Constitution. " Jarvill
v. City of
_Eugene, supra, at 180-182, 613 P2d at 13-14 .
In answer to the question presented, in order for a county
lawfully to levy a tax or a series of taxes N-,,bich would tax 'pro--
perty. in different parts of the county at different- rates, the
levy or levies must satisfy the classification tests expressed in
the above quoted paragraphs . That is; the persons or property
that are subject to the taxation at a raLe different from that
imposed on other persons or property in the county would have to
be qualitativ- ely distinguishable from the persons or property not
so taxed. Further, the differences in rates of taxation must be
f
reasonable in light of these qualitative differences .
Weconclude that specific differences in the services pro-
viacd in various discrete areas of tlic- county can be adr---quaLC-
distinguishing characteristics to support. the imposition Of dif-
ferent rates of taxation in the various areas..
X
(3J)r\C
rinc.s M- Bz ower
- torney General
JI SP 11qJ:t Ig
41
At'FIE 14,1)1X I I i
League of Oregon Cities
PO Box 92.8
Salem Ott 97308
Title:
City:
1. Do you have an example of a negotiated double taxation settlement in your
community? Please d-escribe the type of settlement and its terms.
2. Do you have any suggestions for league action or Othea` recommendations for
pursuing the issue of double taxation?
D1-t:c i ICh1G0a1
42
MULTNOMAH COUNTY MUNTCIPAL SIEMUCES Rf.-:];XAI. Tr,
FINAT,
I*PORT
NAYUZAT1-V)`I
The Center for Urban Stu(3i.cs
Schoc>1 of Urban AFfaj-rs
Portland State University
March, 1979
w! A. Toulan, Project Director ConnieGraduate Assistant
r"armack,
Principal Inv(--sti-gator BrL!(-C 11a.1 Graduate Assistant
-;oi-ny Condor, Research Associate Mindy Graduate A5sistan't-
I-i t;zIa Robinson, Research Assistant (-,rc!g (,raduatc Assistant.
I N'l T jC
Of t-111C'
At a li,,i-!cting of the Cresha-,n ("hambnr of
tats expyesf;ecl that: of C:j.tjC.f., jy) 1."U1
tae re r,ot
ohtaining a fair return from tai:. dollars, It v-'z's
that "clOul.)1- t-IXatiOrl" Was occurring: city taxpayers were SUppC,.j:`4ng
municipal services dc--livered to them by city govc:rclInr.rit, but I-101,Lalso
funding municipal servi(f; delivered by county government to _reE,:iderjt_s
and business,c!s; in thE:- unincorporated area. A--, a -CO-110—up to that
mec�tinq, Don Clay}-, cSjFAj2-.-mZl1-j Of the Board of County Comini-- sioners, directed
the Office of County Manacjertient to ez,.ibark on a preliminary study of t1j-
issue. The study culminated in the Publication, in February 1.977, o,F-
-
Financiaj Jllzuini
Co L-ty S(.-rvi co A 1,1 ocat.j on
(PPR 8)
FPR 8, which represents an initial attc!"'IDU to dntcnrine who pays for z,nd
who recei-ves county service_: , concl.uclecl that- a Subsidy froiii the in,_:orpc)rat0d
to the un in corporate(!I area dor!r; exist.
Subsequently, IduIt' COUrItY contracted 'with the center for Urban
Studies at Pr),--LIan(j State University to vey-ifythe fim-linas of FPR S and
to consider options for change. ST-)ncifically, the county requested that
the
Center: .1) refine the rjetjjc)rjr)j
PPR 8; 2)
asses..; whether or
not a mur-_'C_ Sc, vices 0>- -n,
11g t}tcr
refined mothodology; 3) es-Limat.c- the mctrjjjj_t_(jCjC_ of thc! -c-;ubsidy, if i.ts
l-'re confirmed; and 4)
C) 1 7
Ct f
It iV
ur-wilal:Y of the st_ucly Pi ndi n(jf-;
col,,-Ity r-iunicil),11 crvices Intcrii-,i Rep)rt
F
I J
';I11):;-idy F I-()I zi Llw to th(-! Cl T-(1 a
r nwd, but: i L-5-- t-'Vle vm5-. reclucu-(I t ]w 'PlIR F; c�;t-i"('Clluc. I-11-
I ea receive(i a
:,j 11(-2 oor L- No- _:11,I(Lecl tjIjjt tjjfj� IiIii-lic-.orpor itc, I-
i.
-1 U21 Y $J. 3 " i 1 1.iol I fol- cQu!11-y- pn)vidc"'! jl-n
jy of approx-im,
it
-7-1 While some of the sjIj)f-,jcjy stcmrned From programs
to redist-ribuLu income, most of the SUbSidY was attributed to
servi.cc provision in the Uni1ICC)rr'C)rat-( Cl llrCjlIntern(' Report
1. contained zui analysis of s<c-rvice beneficiav-j.os and revenue, sources;
area, for each county service_
Interim Report-. NO. I also out-] inod t cc.-hnjquc-,s that are potentially
to local clovernmOnt to rC!CILICC--' C10111-A,(! tjlXatiml. Most proposed
ions are tarqoLed at Zi more careful. matching of municipal service
iciaries and I-OVUrnic SC)LIrCe!!. 1,111-ee bLIF-,jc.- ip..woachc-::; to the problem
:;ucjqcsted. The approaches, which njay I-)e
-implernentod individually or
.n-)i.nation, are:
as
o reorqzmizinc4 local government -- changing the nIIII11-)eI- Of units,
their boundaries, and/or their form
A 0 restrUcU-m-ing ununi-ci ,al. service finance
restruct-LIIJ III:; InUI-Ii-Cil-NAl service provision
LOCOS are nvajlable to oper<lt:ionr:l i.2.i these ajillo-O'Ch( :hey
4 ,1] Il is:t.ricts
o COU11ty i;ervice (IisUricts
municipzIl -;eyvice8 -<illcl
t E;
iF;er Cee:-
L
---- ------
or .1 978) Cori U13 -1-clit PIttcrn of
(Octob ric-i7l a Or tau C:u I
for municipal in t-11(- Six existinf4
!ultriox.ah Cc, int" service
cities and in the un!n(:orj.-)oraL(-2d arc?'Et Of.
-j folni(l, that llortlan--1 eXaJ'ibits
t;lcquacy was alsx) It
municipal service exlDcriditUre/revenue P7attorn typical of an older city
a Ltajje 1OPuj ,tior , w1jile the five East tCounty Citio!; have patterns
characteristic of growing sub-urban areas. jqjjil(, generally suburban i.n
iiature, the unincorporated area displays c::}rendi-t.urc/revenue patterns
910re ClOF.L-'ly rC!f--0Mbli1'CJ those of hthose Portland titan ;e Of the Last County
cities. Service aCj0qL1aCy aSSCSSllents sug(jest that, in most cases, cur-
rent service levels in the unincorporaLec-1 area are comnarablo to those
4 j.11 cities for existing citizens. jjc_),.jeve cjj-)c-)i.nt of ac(--c)l'.I-
j-, fy-01,1 the E�t:-j-jjj
odating future growth, existing cap outlays tlays were. foun(I to be in,
quite in the unincorporated areas.
To evaluate alternatives to tile status quo, four hypothetical
chanc,
in local government werc- selectedselectedfor a s
c detailed fiscal impact. analysi s.
Each of the four al.L.ernativ,.25 involved form of t.4 o r, an r
f t_11c, u j.v.(- -ich
incorporation for all or part 0 (1 ujjj.jjc:(-)-rj)oraL.ed area. -
alt-ernal-ive also assumed the use of Z' "shareback" mechanis;M, whereby the
County return.,; to ctf. :11 ci tV aPC)17t---i()I-1 Of the taxes 01-i C!'n'-1tll(� city.
ing in t
'j'he four alternatives were examiyv'd from Pont' j-)0rsj-.)(-C1AVes-- 1) the r(lsi-
dent.s2) the c,xist-Anq 3) Multnomah
oil the iininc:orporat--ccl area;
County cjovernment ar 4) the count 11-0z' W; 1 1,11010-
It Was concluded that it. is fi �;(:a] ly to eliminate the MU.1ji-
Cipal Services subsidy and to improve the posit-JOT-1 Of MOSt COU'ItY
-4-
110110 c,f the four alteriiaUive-1; was r;alpnr-ior to the
1 line{ structtlr:c Cor 31] resid(.111 S.
na likely to haw-, the greatest appeal to the is likely
lcc�y-
zjt--t-ricti.ve L., tjlc! ullil zilirl vi-c:e versa.
tixrc!f.-. would bel,,fit. t1lo prop�lrt-y ovniors in
four r a I t C,I native:::
so -Orl-�- -lt-ed circa would prohably
current cities; those in the Lll'lillC- -Or�
1• ace
tax increases and/Or Service reductions; and county government might,
jelCe serious organization. . tratima These results would with
degrees; under C-lell altel-nativO. jjc)%1,-:vc-r, a] ]. four alternatives
i1,1 benefit the COullLY area as a Whole, largely of art increase
ct.atc, and federal trans.;fers whicil x,:ojljca 1 e generated by restructurinr
�.11 clovernment.
:.—nt and Orcjlniy-ation 01- the Final Rc,,,-Jr)rt
This Pinzi). i<eporL contains tllc ccjitcl)t (-,f Interim Rcports No. incl
2, with minor modifications, corrections, and some, expancled explaila-
In addit=ion,tion, t1io ct mm, 11 the
Final includes a sc,- - i-On su I :Irizi t
of local public officials to the lilt im
17 Rer,->rts.
-)ort -1�1 C :tions the
Pinal Rel is divided into two separately Y)DUl c
:'.it ivc, and the Appendices. The -i'larrative v.,Al be v:i(lely circulated;
which contain riuiiloroiis tables and t-C-Clinical detail, are
blo, upon r(-(juvsL, from the Center for Url)ail Studio';- Part One o,
'Lorly
-1-aLivL, containr; a crit-
jisses.sinenL of ):'PFZ £3' s. niet-lic-)do-
and -I
(—tiweU, of current- tax/service flov"s v.-ithill .1,1111 triom,111 County.
double` tax-atJoi-1 and ouLliilr!e;
Oit- Lir W';ed LO I-CCILIC-0 it. part lillr.ecdocument -ind coml .-2 S
the
.""I r-It'hicipal sQrvic(,s 1,)ackz'icje in each of several subareas within
I-ILI I)ici!,)Zj 1. services pro-, id(mcl by ],()(:Zll Jtiri fxiictions o4-1i(-r than,
33 t.jj(- COLII-Ity 11.-C' includerl. Part Pow: tht, fiscal impact of fc,'—:
I -
alternative methodr� of rc!chicing 1.11C, rIu1)ir:j1 s(! v.-i.C:C!5-. r;llhsidy. Part Five
contains theI-
-cact ions of local publicof Ficials to llltel:im Reports jzC). 1
and ion of the 1-c'etho-
, No. 2. The Appendices include, extensive documentation
dolocJy and data underlying the findings renorLed in I-lie narrative.
Studv Limitations
This study examined only Multnomah County xpenditures and revcnucs.
The larger tax equity question was not addressed. An analysis of overall
tax equity would require that the sane detailed, procjr,-LTn by program, re-
view be conducted for every unit of government- operating �,-,Jth-in the County.
This monumental tas' -Wa- clearly L)cvoncl tho scope of this study.
ChElYaCterist-ics of the"S-t-,udy-Area*
-
MLI.TtnOMah COLII)tY -is the sm,-11t7-st-, but most po!:)ulous and most Urban
county in the State of 01:0901, UIPProximately 400 square miles with an es-
-I of hough most Of Portland (the-
timated population 556,400 in 3977) . A] t
central city and the largest city in the st<It(`) is, situated within riultno-
mah County, the. Portland SIMSA s!)an- four counties, including one county in
the State of Washington. In aciclition 'cc) Portland, i-here are five smaller
cities located t-.hc! County, to the of Port-land - Togethor, these
(Ii.t i.C to
I1ILI1-1-LCipZ11i,Lic--,s comprise ab-,111t .120 square miles. In Et, -)n the
existing cities, Lhei-0 are SC)InC jjiqh1V U1717)LITI-i: (6 s0C:t-i()T-1s Of the County
which rer,min tiniticor.porat-(!d- Th--!f:r, uninc-orpcwated areae;
'Data in this SCCUA.01-1 arC taken direr:t-ly From or derived from information
in the Comprcl-w-, i.vc- Plan O'hiltnomah County, r)Jvi!�;j-on Of
an d �ate 1977-7,11 ,-
Dc!ve'l c)pmr!n t, oc tohnr .1977) f ra:11 1:1-1c, 2!�Cjq()" 1 3 Ir k: (S
of orcrion, rectory o," SLa-te, 1977) ; and Froi-a the Anmial-
V
C) r- :a -5; wit i C:I 1 .1 i I).-.t %:. -n
d of t h k '
" r) 11 y
t f t
an
f III 1(lev(.1()p('(1 cl(.jr i(';.1 I L Lll-,l file n icvc.a 0 F,c_:J,
20 scluLlrQ 111'. It:'!; of c j f c I
t
on SilLIVie..; 1!;1jtIId' Ile, Ilix
tlic. northwest coater Of the Count y. It- also it!clucle .
.120 Sclilare miles Which circ i dc Lll(-- Mt. 1100cl Nl ("I Iz'1 For(
ban
t1jc,. far eaL;Ler" end Of the c:c)unt*,,r. Tal"Ie the i,�-
C(mt-it-v-
11c):1--lirball kale] Ilse patterns wi tAlin om.-31)
-Ity.
t-110 genera] shape and the Coul
TaM C I
Land us'. Patt"l-11f; ill
Lan.1 tl!;(.
i ricor <ora t cd !,u,,ic:i I it i c's 120
Unincorporated Urban IK'twec"' 1`01`1-1371r] -11111
1:;t:;t County CiLicf; so
Ot.hur Unincorporatc-d Urb.lrl 10
TOI'AL URIAN 180
:ft. Hood 0
130
F.'rml"Ticl incl %:ill]I i fc. t at on
Sauvirs Islam]
T;'I' c0UNTY 4(-0
f
....... CLARK
--J COUNTY
J.J,
;.-ruLT-'Z;.(
COUNTY
N'.
S—
CLACKAMAS
i AFIC)
COUNTY
Multnn,-,iah CowqtY, Ovc tall EconcIld -vf
L-pj J,,,, 1978.
growth in the ullillcorporatcad portion of Multnomah Count-.y
IMS exceeded growth in the c.-j.L-jcs since Worl(l War 3.1 Table II contains
I)C)TILIlation Lrenclf; ill MMILI-10M4111 COLII)t-)' since 1.940.
Table IS
Multncazih Cc,knit%l 1101,11lation Trends
Yciar of
Jur i ic T on
Incorporation 1940 1950 191.0 1970 1977
1903 305 438 578 1,045 1,720
Gre-sh,c.i 1905 1,915 3,0,19 3,944 10,030 26,000
Mayw-lo'l Par), 19G7
0 0 0 1,305 1,060
Por t I an-I 1851 3f)!,,39,1 373,628, 372,676 319,9u7 384,503
Troutdale 1907 211 •514 522 1,GC,1 2,990
Wood villaqc, 1951 0 0
822 1,533 2,2£30
lticorror.tt c-d tl I HA 307,n25 377,629 3 7 a,5 e.2 395,541 416,550
(Percont) C) (30.11) 2.4,Q (71.11) (75.2,il
tin i ti�ori"r.ILv-1 Total 14A 47, 27'. 344,271 161,326 137,F350
(27. (2,1.9..)
U
County 7btal 1854 3-'s,0'1g 471 "1:37 5:?:,,v 1 3 556,667 556"""lo
Sod 1-c-c
ltor,k; P,-77- 7R; for Portl:lllj
A c i t y in I'm-L I an'-3 G. P:. in I I ei- (:i t.j i,j I 1y 25'�
2_i.0 -i 1-1 1,
I ;Vcd
rlulLnomah County is one of f j.V(! 110111c� I11.11e C:C)LllitJ,('!; in the: StZtte of
)fk!c]C)11. As a Home 1,'u1c, count-y, it is J-jei mitt ed to prov-ide a wide rancjc!'
!;0l:Vices. In acldi.Lion to county qaverwlent_ there a!-e 57 other. unit--,
I ocal government L_ viliosc- r)r i-iwi i-y j Lll:i F;'l i C t. i(JI) I ie_s %.j.i-Lhin flu I tnornah
1:lt Y. The - -ic-ts, 1.7 xwater. dis-
f; i ric.1 ucle: 6 cities,t.i 15 cduc�it�ion Oi.�;tr
8 fire dis'Lricts' 8 Comity cel-vjcc' disLrict.s' and 3 ot-her sncciji]
In aciclit-.i.on, there are saver:1.
y Ovmeo' water
ti
several -_2;pcc:ij.1 dist:r.ict.,; pr.hwi)-y juriF-.Ci.c_t ions. lie in
I i jac:C'.nt country but wl to f-.0 J_)01 I llIZO-i C-.1; CXt(+;1(1 i.I I L-.(--) 1-1111 L I 10T,-1t111 Col I I I ty;
-gional government bodies c s r lu
i a fe% rc I ic wh j_c:1) i-i ic L Lld e a I l or 1), t: c)f 1 1 t
COLITILY in th0j.r. juri�;dict:iollf;_
A
April_ 8, 1982
MEMORANDUM
TO: City Council
FROM: Bob Jean, City Administrator
SUBJECT: LID Policy Discussion Topics
Following is a tentative timetable for the study of LIDS. As you can see, a discussion
of policy issues is scheduled for tonight. This is to serve two purposes: (1) to make
everyone aware of the many related issues concerning LIDS; and (2) to provide some guide-
lines for the remainder of the study leading to a proposed ordinance in June.
April 19, 1982: LID Policy Discussion
May 17, 1982: Draft of Policy Statement, Recommendation and Discussion
LID Process Discussion
June 21, 1982: Draft of LID Ordinance
June 28, 1982: Adopt LID Ordinance
July-August, 1982: Develop Standard Operating Procedures, Flowchart and Forms
General
®Nature - Type of improvements - on-site or off-site. Who pays? What are the limits?
*Bancroft bond intent?
*Oversizing of systems and completion of CIP portions?
*Use Bancroft for serving community at large?
*Health hazards policy and forced LID criteria? Different process or extra steps?
Define health hazards?
&Subsidy, deferments policy, assessment and deferred assessment, assess LID, administra-
tive charges for billing?
*Schools, churches, non-profits, etc. -- Policy? Timing?
Finance
&Interest rates and length of term; e.g. , Project $1.00,000 Bancroft at 10% for 10,20
years, at 12% for 10,20 years
*Is interest on assessment tax deductible? No? Sullivan?
*Start late payment charge? Yes?
If delinquent, due in full and payable? Option of City?
*Billing: administrative handling charge?
*Use of assessment feels (not tax deductible) vs. use of G.O. bonds and taxes (are
deductible)?
-2-
*Interest rate limits and assessment caps. . .
*City match - % or functional cost?
*Fixed vs. variable rates for warrants?
*Preassessment policy? Deficit assessments?
®Due-on-sale (Corvallis) . . .fee? Minor land partition?
*Assessment transfers (Forest Grove)
*Assumption fee - segregation
®Impact on housing costs
*Use of mini-bonds
*Finance policy and LID policy to discourage "leap frog growth" and encourage "desired"
growth?
*Minor land partitions to Finance Director
*Due-on-sale, change of use, lot split, transfer? Relates to private development
policy?
REALTOR
Lionel A. W. Domreis - Broiler
Jo D i 1 S 2
f
cit- _'�'Utorn(ty an JAN 17 '982
T o
j
2 OT
01: L
lin
.A
I-so rcqliest t!tnf-
L, t*.Iis lett
n-r I !v -LI.-I re— a.z---, t0 iiili3CT Uii _(.l r j.)JP.9
o+� 1 on c' c on a 1-'1SIbrect is Clirl-c-II 'Lly :L.-Ivo Vie in a
sc`trcr .11-nero-ft prolicet, and! is o.-IC:7 h3-- T.imlc!_ L':-. MLary )JO-mrois .
The StC-Itio'n Lo 1)e place':* Gin mur -Ir p(-`ruy' i!jl;
I -It, cm indicatiotl
CIT"Or .,aCle any c I ai for any 1-,in" of rein'l"'11-rsciei
Of our desire 1:0 be coopei-C-ItiVC .
2. clilr 20c: feet off" I)rojcct '!,,ave been assessec-.- for j sei-.'er co-11--c-lUiUMis
a 1 I(] 4-1,eset:""'ve been ;)lace:: on -:i- propert-y
ne to the unmsna'_ dro�) in t1he S'U'rec, eve'. we navc
asketl :L-or a -l'illor na--r Lit0i on, -t:111:1-1i:? tl7a:tthe. -o1-000-'1
"Y
- s actuaIly b u j-I L o an the r-11 i z i r J'_a, •]i1 �� 7�cipl- an-i-3 ou; sc1v Z
0 o---I c 1'u c!-_ it S'lcul ! not be ju.--c. clividein td-d-rdts, 11-Ut sc.,Ie 1pl winc:-
CVC" op-m-clat if'hL be U-est.
As you, IN! oi-., i is 7_s e t r c I-i e13- (J.-C_C j c u.- L t c s c 31.1 1 o 4.s at -L is t7 ilic
for 2 nont",s lz-infl :,�E:ve not receive'
ave ;
icl'i El. qian Oil th-c propn�rt-vy
e-%reyj :I Ce..11. .
5 . Tlie- -cfare we reques'L t:l-e
a .'elcl S S S,S T;!f_lnt lie On t'ic basis 1,74"n ", it i)uyer ca-ri tal c over
1 'D au I c r 0 f L -t-i tilOtl L -p -
yij-j Off tile ]);-I;, ai-i'_. qavinp.-s
hu, f, -p ro i s s 01 1-dt'!
,o-1 10a11s :lave ..1.011-- rp_cocj1_1-_-Cf.
0 Yt I -a*0 33 0 s-L"c-nin"
-s t"'o e�-*
_'i s re C,
a
f""'c 1,11yer OT ra prope-t.,.?n:' L-) tal-c ovc Lie -0 a-.,-7'.
c
iI;s
ti-le sell; r, ain-"!� if +'hc Iein rip'.L-s
-a- --tc a")1.e t o ?Later
-Arco c --o,,
not harr'er' I :?011T see i:.jny jeopa
1) . jC?e1Cr I
-eans t:7!7! t w .lcn cA 11(,'170ft iS 011 <l ')Zl!-Cej Of 0_170?)
s ghat 1U:t-:-c Bancroft obli.-a 1.1o11
be requi rc,' 'Lo "-e pai 0 on' on i.?._ p-roppeL-17 i)ei-, bui1l oil, or
I are al.lowirj Y. -U to be in 1.1ric
7 - 0 -1 -- 0 _), Y J-
pril-a r- positiol- , ann 1 0 0 to ,),-I%r o-p r t' e I -,I-
c:-z c e-1)t pe-..- 1,11 c 1.1� Ictus t Sc c"I u,
ii"! 0._"' 110 Su.iWivril INNi 91-:1E n--(.'i-S1'NT
A'. ,','_CS!:S TC, 'i'Ll, IT, 1.7r �'LLL 11 -1 ZIP IN Ji
It frt
_Jlfl'�rl S —TIN7M
_J'Sr It ,; "BLI) OF T."
T"!
C 4'11 -JIGA;1j 'N:F71DS 7'-1+; '11 A -D�-J,, -1-111 G 7 77,11.".T
j . ...... LL
P.O.:BOX 23351- / TIGARD, (PORTLAND) OREGON 97223 8
(503)639-610
J.cl
zioL r;cj:
O'DONNELI.. DAZE: March 8 , 1982
SULLIVAN & RAMIS
ATTORNEYS AT LAW TO: EJS , Bob Jean and Tigard City Council
1727 N.W. HOYT STREET
PORTLAND. OREGON 97209
(5031 222-4402 FROM:: SFC
RE: Recent Developments in the Law Affecting
City' s Liability Exposure
The City Council should be aware of recent cases and legislation
in four separate areas all of which directly affect the liability
exposure of municipalities .
I. ANTITRUST LIABILITY
In Community Communications Co. , Inc. v. The City of Boulder , No. es
, 1982] the U. S. Supreme Court announced
1350 [January 13that cities
are not exempt from liability under Federal
antitrustiling• then Boulder,
the City enacted a 90-day petitioner
petitioner from expanding his cable television business. The
�; iPa suit in Federal District Court , alleging that such a restriction
T -� yn seeking a preliminary
would violate Section 1 Ot the Shernlarl Pc t, i o osed
injunction to prevent the City from restricting petitioner' s proposed
argued that it was exempt from antitrust
expansion. The City
341 (1943) .
under the "state action" doctrine of Parker . Brown, lUS p licable
The District Court held that the Parker_ exemption
ubjectto antitrust liability.
and that the City was , therefore ,
This case is of obvious interest to the City not only because of the
ranchise, but also because the Federal
pending proposed cable TV f
antitrust statutes provide for treble damages .
antitrust case
Also of interest to the Cdecisionity is hinfBoulderact tagainsteHopkinsville ,
has been filed since the —
Kentucky. Also, liability for antitrust violations involving garbage
collection activities by the City is pending before the Supreme Court.
In Hybrid Equipment Corp. v. City of Akron ,
654 F2d 1187 (6th tire. 1981) ,
petition for certiorari filed, ivo. 81-723 (October 10 , 1981) ,
all solid waste ,
6th Circuit held that the requirement that City ' s energy
that collected by privatetcfrom 11theiesfSherman be uAct becauseght to the garbage
gy
recycling plant was exemp
collection and waste disposal are traditional activities of local
government.
II . LIABILITY LIMITS NOT WAIVED BY PURCHASE OF INSURANCE
In Espinosa v. Southern Pacific Transportation Co. , 291 Or 853 (1981) ,
the Oregon Supreme Court affirmed the Court of Appeal-s holding that
the Oregon Tort Claims Act liability limits are not waived by the
purchase of insurance in excess of the statutory limits .
This case arose from an accident involving a scholbus and a train
near McMinnville in 1976 . The plaintiff , as personal
of the estate of his 8 year old daughter , brought this action against
O'DONNELL. DATE March 8 , 1982
SULLIVAN & RAMIS
ATTORNEYS AT LAW
1727 N.W. HOYT STREET TO: EJS r Bob Jean and Tigard City Council
PORTLAND. OREGON 97209
(503) 2224402 FROM SFC
RE: Recent Developments in the Law Affecting
City' s Liability Exposure
Page 2
the school district and the railroad. Plaintiff ' s decedent was only
1 of 44 children who were killed or injured as a result of the
accident. Thirty-seven actions against the district , the railroad ,
or both, arose out of the occurrence.
In this case the jury found the district 85% at fault and the railroad
15% at fault, assessing plaintiff' s damages against the defendants
jointly and severally at $302 ,1.39 . Judgment in that amount was
entered against both defendants without apportionment. After the
judgment the district moved to apportion and restrict the amount of
judgment against the district to $100 ,000 based on the limits of
liability in ORS 20 . 270. The district had three insurance policies ,
with aggregate coverage of $1 million. The plaintiff introduced
evidence on the motion to the effect that $1 million of insurance
was available to the district as defendant. Notwithstanding this
fact , the trial court granted the motion and entered an amended judgment
against the district in the amount of $100 ,000 , thus elevating
Southern Pacific ' s portion to make up the difference in the total
verdict. The Supreme Court affirmed the Court of Appeals and the
trial court' s ruling and held that the statutory limits i,. ORS 30 . 270
were controlling even in the face of insurance in excess of those
amounts. In other words , the purchase of insurance above the
statutory limits does not amount to a waiver of those limits to the
extent of the insurance available. Consequently , there is no prejudice
to the City in purchasing excess insurance.
III . TORT CLAIMS ACT, NOTICE OF CLAIM REQUIREMENTS AMENDED
An amendment to ORS 30 . 275 streamlines the formal notice of claim
process and adds a new actual notice standard. The new actual notice
standard is of most concern to the City of Tigard.
According to the statute (ORS 30 . 275) actual notice of claim is
received by the public body if someone in the public body who is
responsible for administering tort claims on behalf of the public
body or anyone on whom formal notice could be served acquires actual
notice of the time, place and circumstances giving rise to tha: claim
if the communication is "such that a reasonable person would conclude
that a particular person intends to assert a claim" . ORS 30 .275 (6) .
In addition, the "notice of claim" is satisfied by either commencement
of an action on the claim within the six-month period or by payment of
all or any part of the claim on behalf of the public body at any time.
This is of concern to the City in that the City Council , the City
Administrator, or the City Attorney are all , arguably, persons who
may be charged with actual notice of claim. I believe it is important
to develop a procedure to ensure that when actual notice is received,
it is recognized as such and that a proper response is made.
O'DONNELL. DALE- March 8 , 1982
SULLIVAN & RAMIS
.ATTORNEYS AT LAW
1727 N.W. HOYT STREET TO: EJS, Bob Jean and Tigard City Council
PORTLAND. OREGON 97209
(503) 222-4402 FROM: SFC
RE: Recent Developments in the Law Affecting
City' s Liability Exposure
Page 3
IV. LIABILITY UNDER 42 USC 1983
Attached as an appendix to this memorandum is an outline of the
significant cases and a summary of each of those cases in the area
of §1933 liability of municipalities.
There are two significant cases which deserve special attention at
this time. The first is Monell v. New York City Department of
Social Services , 436 US 658 , 98 S. Ct. 2081, 56 L. Ed. 611 (1978) .
This case is significant in that it clearly establishes that
municipalities are "persons" for purposes of liability under 51983.
Another case is Owen v. City of Independence, 445 US 622 , 100 S. Ct.
1398, 63 L. Ed. 2d 673 (1980) which holds that a municipality cannot
assert the good faith of its officers or agents as a defense to
liability under §1983.
SFC:dn
3/8/82
SE14INAR ON §1.983 LIABILITY
METROPOLITAN ARFA CITY AND COUiQ ATTORNEYS' ASSOCIATION
OVERVIEW AND REVIEW OF NEW CASES
by David A. Aamodt
City Attorney, Roseburg, OR
1. Constitution and Latins - Rights and Privile es and Immunites Secured Thereunder
Maine v. Thiboutot, 448 US 1, 100 S Ct 2502, 65 L Ed2d 555 (1980) - suit over
violation of rights
under, Social Security Act.
§ 1983 does include claims based on mere violation of federal statutes.
Violation of the statutes listed in the attached Appendix from Main v. Thiboutot
would now be included.
V2. Municipalities as "persons"
Monell v. New York Cit—Dept. of Social Services, 436 US 658, 98 S Ct 2081,
56 L Ed2d 611 X1978
Municipalities are "persons" for §1983 purposes.
Municipalities can not be liable solely on a respondeat superior theory.
3. No Allegation of Bad Faith
Gomez v. Toledo, 446 US 635, 100 S Ct 1920, 64 L Ed2d 572 (1980)
Bad faith is not a required allegation. Must allege:
1) Some person has deprived plaintiff of a federal right;
2) Such person acted under color of state or territorial law.
4. Nice ligence is Not Enough
Parratty. Taylor, US , 101 S Ct 1908, 68 L Ed2d 420 (1981) reversing
620 F2d 307 (Hh Cir 1980)
Negligent conduct does not give rise to §1983 claim.
[lobby materials were lost when prison officials failed to follow normal procedures
for receipt of packages arriving by mail .
The prisoner had been deprived of property but the loss of property was not the
result of established state procedure. Therefore, he was not deprived of property
without due process of law.
(§1983 is not merely a species of tort liability.)
5. No Good Faith Immunity Defense
Owen v City of Independence, 445 US 622, 100 S Ct 1398, 63 L Ed2d 673 (1980)
Wrongful termination of a police chief (denied him a hearing) with spurious
allegations made by a councilman.
Municipality at common lati'i could not and under §1983 cannot assert the good
faith of its officers or agents as a defense to liability under §1983.
Municipality has no "discretion" to violate the Federal Constitution. Issue
is whether municipality has conformed to the requirements of the Federal
Constitution and statutes.
(Qualified immunity for municipal officials who carry out governmental policy
still exists, so long as the official acts in "good faith. ")
To establish the immunity defense, the Court in Gomez v. Toledo promulgated
a dual test:
1) An "objectively reasonable basis" for the belief that the conduct was
lawful ;
2) A "subjective belief" that the action was in good faith.
6. Aboslute and Qualified Immunity-of Officials
Degree of immunity depends on circumstances and function performed.
Absolute immunity for:
1). Judges;
2) - Prc;sccutors;
�) La� slators while speaking and debating in the sphere of legitimate
legislative activity;
4) Administrative officials exercising the functions of judges and
prosecutors.
Qualified irimunity for:
1) State executives at senior level ;
2) Federal officials exercising discretion.
7. No Punitive Damages
City of Newport v. Fact Concerts, Inc. , US 101 S Ct 2748, 69 L Ed2d
616 1981
Denial of constitutional rights by cancelling a scheduled concert of Blood, Sweat
and Tears to be held at Fort Adams State Park in Newport. City was concerned
about the rock concert and voted to cancel Facts' entertainment license unless
it deleted Blood, Sweat and Tears.
The City Solicitor told the City Council their action was unlawful . He was
ignored.
The City is absolutely immune from punitive damages aven though the City officials
acted in bad faith.
8. Recapitulation
The Supreme Court in Monell in 1978 opened the door to the flood of §1983
litigation and has been trying to close it ever since. f ; •-)arently, intentional
constitutional and statutory violations must be alleged. The Court is desirous
of deterring local policies which promote the violation o-- civil rights. At
issue is the proper balance between liberty and order. The availability of
the municipal "deep pocket" has made them easy marks. The best defense is to
avoid arbitrary and capricious actions which violate a person's federal ,
constitutional and statutory rights.
In the final analysis, the issue of §1983 liability turns upon which government
official or employee acted, in what capacity he acted, and upon the nature of
the action taken. No longer can a municipality do as it pleases with people's
rights and then assert as a defense, "I 'm a City or County so it doesn't matter."
F
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CASES OF INTEREST
UIITED STATES SUPFT:ME COURT
Agins v. City of Tiburon, 447 U.S. 255 (1980) . Five-acre tract requiremerit
not a "taking" without just compensation.
City of Memphis v. Greene, 451 U.S. 100 (1981) . Racially exclusionary
motive and adverse impact required for cause of action (street closing) .
City of Newport v. Fact Concerts, Inc. , 49 U.S.L.W. 3339 (1981) . Cities are not
liable for punitive damages.
County of Imperial v. Munoz, 449 U.F 54 (1980) . Cause of action must fall
under civil rights statute for exception to Anti-Injunction Act to apply
(condition in use permit) .
Lake Country Estates, Inc. v. Tahoe Regional Planning Agency, 440 U.S. 391
(1979) . Interstate agency can act under "color of state law." Agency
is not immune under Eleventh Amendment.
Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978) .
New York City landmark preservation law was not a "taking."
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922) . A regulation which
goes too far may be a "taking."
San Diego Gas & Electric Co. v. City of San Diego, 49 U.S.L.W. 4317 (1981) .
Rezoning from industrial to part light industrial and part open space does
not constitute a "taking."
• 4 "
Village of Belle Terre v. Boraas, 416 U.S. 1 (1974) . Definition of "family"
in zoning ordinance upheld; must be reasonable, not arbitrary and bear a
rational relationship to permissible state objective.
Warth v. Seldin, 422 U.S. 490 (1975) . Complaint must allege facts
sufficient to short standing.
FIRST CIRCUIT
Cordeco Development Corp. v. Vasquez, 539 F.2d 256 (1st Cir. 1976) , cert.
denied 429 U.S. 978. Qualified immunity available for good faith reliance
on advice of legal advisor and technical analyst in denial of sand
extraction permit.
Corey v. Look, 641 F.2d 32 (1st Cir. 1981) . Severe land use regulations
may be actionable under antitrust statute when used to eliminate land-
owner as a competitor.
Creative Environments, Inc. v. Estabrook, 491 F.Supp. 547 (D.Mass. 1980) .
Developer has no "right" to use of "cluster concept."
Heritage Homes v. Seekonk Water District, 498 F.Supp. 463 (D.Mass. 1980) .
Refusal to include development within service area may result in punitive
damages where refusal was racially motivated, even though developer was
not entitled to compensatory damages.
-2-
Kadar Corp. v. milbury, 549 F.2d 230 (1st Cir. 1977) . Conspiracy cause of
action requires specific allegations of overt acts in 1•:1lich defendants
engaged in furtherance of conspiracy. (Conspiracy to prevent plaintiffs
from developing residential housing.)
SECOND CIRCUIT
Angell v. Zinsser, 473 F.Supp. 488 (D.Conn. 1979) . Preliminary injunction
granted to prevent town from withdrawing CDBG application where purpose in
doing so was to prevent development of housing for minorities.
Archer Gardens v. Brooklyn Center development Corp. , 468 F.Supp. 609 (S.D.
N.Y. 1979) . Use of threat of condemnation to lower rental rates and
force sale of property states conspiracy cause of action.
Aristocrat Health Club of Hartford, Inc. v. Chaucer, 451 F.Supp. 210
(D.Conn.) . Extensive discussion of Younger abstention.
Daubner v. Harris, 514 F.Supp. 856 (S.D.N.Y. 1981) . Evenly applied resi-
dency requirement for subsidized housing is not unconstitutional.
Ellentuck v. Klein, 570 F.2d 414 (2d Cir. 1978) . Challenge to variance
procedure barred by res judicata and collateral estoppel where state
court had .decided due process issues and property oi-.ners failed to seek
Supreme Court of state judgment.
Fred F. French Investing Co. , Inc. v. City of New York, 39 N.Y.2d 587,
385 N.Y.S.2d 5, 350 N.E.2d 381 (1976) . Overburdensome land use restriction
is invalid (not a "taking") .
Guilini v. Blessing, 654 F.2d 189 (2d Cir. 1981) . Court would abstain
from hearing equitable cllims in zoning ordinance challenge in light of
pending state prosecution, but retained jurisdiction of damages claim.
Halprin v. New York City Conciliation and Appeals Board, 50 L.W. 3201
(1981) . Challenge to rent increase in rent-controlled building barred by
res judicata.
Heimbach v. Village of Lyons, 597 F.2d 344 (2d Cir. 1979) . Cause of action
stated by allegations of pattern of harassment and bad faith in administra-
tion of State Building Construction Code and Village zoning ordinance.
Hudson Valley Freedom Theatre, Inc. v. Heinbach, 513 F.Supp. 250 (S.D.N.Y.
1981) . Corporation with no racial identity cannot be target of racial
discrimination.
Kinderhill Farm Breeding Associates v. Appel, 450 F.Supp. 134 (S.D.N.Y. 1978) .
Arbitrary and capricious application of licensing requirements can result
in liability under 42 U.S.C. 01983.
Marty's Adult World of New Britain, Inc. v. Guida, 453 F.Supp. 810 (D.Conn.
1978) . Repeated and consistent actions by a variety of city officials
in denying permit can state cause of action under 42 U.S.C. §1983.
Simmons v. Wetherell, 472 F.2d 509 (2d Cir. 1973) , cert. denied 412 U.S. 940.
Condemnation delay not actionable where result of property oumers challenge
to condemnation.
-3-
P:igginess, Inc. v. Fruchtman, 482 F.Supp. 681 (S.D.N.1. 1979) , aff'd
628 F.2d 1346 (2d Cir. 1980) , cert. denied 449 U.S- 842. City could
enact ordinance banning establishments which offer opposite sex massages.
THIRD CIRCUIT
Centennial Land and Development Co. v. Township of Medford, 165 N.J_Super_.
220, 397 A.2d 1136 (N-J.Super. 1979) . Members of township zoning board
have absolute immunity of quasi-judicial acts.
Gipson v. Township of Bass River, 82 F.R.D. 122 (D.N.J.) Discusses
issue of reasonable relationship between zoning ordinance and the
public welfare; statute of limitations.
Heritage Farms, Inc. v. Solebury Township, 507 F.Supp. 33 (E.D.Pa. 1980) .
Abstention (owners and developers had alleged that township had embarked
upon course of conduct designed to impede and delay plaintiffs' develop-
ment projects.
Riccobono v. Whitpain Township, 497 F.Supp. 1364 (E.D.Pa.) . Discusses
standing, abstention, and statute of limitations (construction permit) .
Rogin v. Bensalem Township, 616 F.-2d 680 (3rd Cir. 1980) , cert.denied
U.S. , 101 S.Ct. 1737. Zoning amendments which lowered permissible
population density were not sufficiently burdensome to constitute a
"taking" of developer's property.
Strickler v. Gozzana, 451 F.Supp. 237 (D.Pa.) . Housing inspection which
is performed in such a manner as to constitute an unreasonable search,
invasion of privacy and loss of property gives rise to a cause of action.
T & M Homes, Inc. v_ Township of Mansfield, 393 A.2d 613 (N.J.Super.) .
Claims of inverse condemnation and cha% 'enges to reasonableness of zoning
ordinances are allowable causes of action under 42 U.S.C. 91983.
Woodsum v. Township of Pembertron, 412 A.2d 1064. No cause of action
for negligence .ander 42 U.S.C. §1983 or for inverse condemnation when
water table in plaintiffs' well was lowered by municipality.
Wooters v. Jornlin, 477 F.Supp. 1140, aff'd 622 F.2d 580, cert. denied
449 U.S. 992. No cause of action under civil rights statutes for
negligent issuance of certificates of occu:�-ancy to homes which were
not built to code.
FOURTH CIRCUIT
Bruce v. Riddle, 631 F.2d 272 (4th Cir. 1980) . Members of county council
absolutely immune from damages liability for passing allegedly unconstitu-
tional zoning ordinance.
Chertkof v. Mayor and City Council of Baltimore, 497 F.Supp. 1252 (D.b'd.
1980) . When abstention is inappropriate, court can certify questions of
law to state supreme court if interpretation of state or local law could
avoid or modify federal questions presented.
-4-
Highfield Water Co. v. Public Service Commission, 488 F.Supp. 1176 (D.Md. 1980) .
Abstention (state takeover of privately owned -later system) .
Kent Island Joint Venture v. Smith, 452 F.Supp. 455 (U.Md. 1978) . Irmunity
for enactment of zoning moratorium.
Ocean Acres Limited Partnership v. Dare County Board of Health, 514 F.Supp.
1117 (E.D.N.C. 1981 ) . Claim alleging constitutional violations in adoption
and administration of septic tank regulation must be brought under civil
rights statute and not under the Fourteenth Amendment.
Shannon Fredericksburg Motor Inn, Inc. v. Hicks, 434 F.Supp. 803 (E.D.Va.
1977) . Immunity of county governing board for dorm zoning.
Tolbert v. County of Nelson, 527 F.Supp. 836 (W.D.Va. 1981 ) . Previous
declaratory judgment in state court precluded property oven er from bringing
civil rights suit in federal court seeking monetary and punitive damages
based on same facts; rezoning is legislative act; no immunity from compensa-
tory damages.
Basiardanes v. City of Galveston, 514 F.Supp 975 (S.D.Tex. 1981 ) . Restriction
of adult movie theaters to area representing 15-20% of city's territory not
a violation of First Amendment free speech guarantee.
Bayou Landing Ltd. v. Watts, 563 F.2d 1172 (5th Cir. ) , cert. denied 439 U.S.
818 (1978) . City ordinance withholding an occupancy permit for adult
bookstore was not a zoning ordinance.
Bayside Enterprises, Inc. v,, Caison, -450 F.Supp. 696 (M.D. Fla. ) . Denial of
building permit can give rise to action under 42 U.S.C. §1983.
Bossier City Medical Suite, Inc. v. City of Bossier, 483 F.Supp. 633 (E.D.La. ) .
May have cause of action under 42 U.S.C. §1983 for denial of certificate of
occupancy to abortion clinic. Discusses abstention and exhaustion of
administrative and judicial remedies.
Couf v. DeBlaker, 652 F.2d 585 (5th Cir. 1981 ) . Federal review of zoning
action limited to question of whether action was arbitrary, capricious and,
without substantial relation to general welfare; mere procedural flaws,
without more, are inadequate for cause of action.
Cowart v. City of Ocala, 478 F.Supp. 774 (M.D.Fla. ) . Denial of building
permit found not to be discriminatory or unreasonable.
Deerfield Medical Center v. City of Deerfield Beach, 661 F.2d 328 (5th Cir.
1981) . Strict scrutiny applied to denial of occupational license to
abortion facility because of right to privacy and First Amendment freedoms
involved.
Dowdell v. City of Apopka, 511 F.Supp. 1375 (M.D.Fla. 1981 ). City's long-
term refusal to provide adequate services to black sections of city
sufficient to show discriminatory intent.
-5-
Gordon v. City of Cartersville, 522 F.Supp. 753 (N.D.Ga. 1981 ) . Discusses
standing requirements for challenge to denial of building permit.
Hawkins v. Town of Shaw, 437 F. 2d 1286 (5th Cir. 1971 ) , aff'd en banc 461
F.2d 1171 . Court found equal protection violation in disparities in provi-
sion of municipal services; toi•rn ordered to submit plan to cure disparities.
Hernandez v. City of Lafayette, 643 F.2d 1188 (5th Cir. 1981 ) . Mayor's veto
of ordinance was a legislative function entitled to absolute immunity; city not
entitled to absolute immunity for legislative acts (zoning regulations) .
Hornsby v. Allen, 326 F.2d 605 (5th Cir. 1964) . Due process violation in denial
of application for liquor license.
Kirkpatrick v. City of Jacksonville, 312 So.2d 487 (Fla. App. 1975) . Damages
not a basis for recovery of just compensation under taking clause.
McCulloch v. Glasgow, 620 F.2d 47 (5th Cir. 1980) . Damages allowed for heart
attach allegedly suffered as a result of town's denial of hearing to landowners
before taking their property.
McGhee v. City of Pensacola, 47 L.W. 2,605 (N.D.Fla. 1979) . Cause of action for
termination of utilities without proper notice.
Matthews v. United States, 526 F.Supp. 993 (M.D.Ga. 1981 ) . Plaintiff who never
sought to assert a civil rights claim was not entitled to attorney's fees under
42 U.S.C. §1988.
The Purple Ottion, Inc. v. Jackson, 511 F.Supp. 1207 (N.D.Ga. 1981) . Strict
scrutiny of Atlanta Adult Entertainment Zoning Ordinance.
Southern Cooperative Development Fund v. Driggers, 527 F.Supp. 927 (M.D.Fla.
1981 ) . Landowners' due process rights would be violated if new zoning regula-
tions were used to deny plat application which complied with regulations in
effect at time plat application was filed.
Universal Amusement Co. , Inc. v. Hofheinz, 616 F.2d 202 (5th Cir. 1980) .
Attorney'.s fees may be recovered against the state; must show bad faith for
award against official personally, whereas good faith is irrelevant where
award is in official capacity.
SIXTH CIRCUIT
Armstrong v. Ross Township, 266 N.W.2d 674 (Mich. ) . Can have cause of action
under 42 U.S. C. 51983 for denial of building permits; since building inspector
had no immunity under Michigan law, there was no immunity under civil rights
statute.
CLR Corporation v. Henline, 520 F.Supp. 760 (W.D.Mich. 1981 ) . Zoning ordinance
which would allow only four adult bookstores in a town of 62,000 violated equal
protection rights of store owners.
Danish News Co. v. City of Ann Arbor, 517 F.Supp. 86 (E.D.Mich. 1981 ) . Challenge
to revocation of occupancy certificate and to state nuisance per se statute;
court abstained as to equitable relief requested but retained claims for damages.
Gordon v. City of Warren, 579 F.2d 386 (6th Cir. 1978) . Challenge to setback
requirements as a "taking"; discussion of tolling of statute of limitations.
Sambo' s Restaurants, Inc. v. City of Ann Arbor, 663 F.2d 686 (6th Cir. 1981 ) .
Restaurant's use of its franchise name on signs was speech protected under
the First Amendment and could not be restricted by conditions put on site plan
approval .
SEVENTH CIRCUIT
Devines v. Maier, 665 F.2d 138 (7th Cir. 1981 ) . City order requiring tenants
to vacate uninhabitable buildings resulted in a compensable regulatory taking
of the tenant's property.
Entertainment Concepts III , Inc. v. Maciejewski , 514 F.Supp. 1378 (N.D. I11 .
1981 ) . Civil rights suit brought against officials of village was in essence
suit against village itself making village liable for award of attorney's fees.
Fulton Market Cold Storage Co. v. Cullerton, 582 F.2d 1071 (7th Cir. 1978) .
Tax Injunction Act does not bar an action undr 42 U.S.C. against tax assessors
for systematic overassessment.
International Society for Krishna Consciousness, Inc. v. City of Evanston,
89 Ill . App.3d 701 , 411 N.E.2d 1030 (1980) , cert. denied 50 L.W. 3221 (1981) .
Religious group must show intentional , malicious, or reckless conduct by
municipality in order to recover damages for revocation of special use permit.
!Martin v. Wray, 473 F.Supp. 1131 (D.!-lis. 1979) . Town ordinances prohibiting
display of campaign signs in residential areas were unconstitutional .
Molgaard .v. Town of Caledonia, 527 F-Supp. 1073 (E.D.Wis. 1981 ). Property
owners who had received only conditional approval of plans for mobile home
park had no constitutionally protected property interest under Wisconsin
law in completion of project in accordance with such plans.
Parkway Bank & Trust Co. v. City of Darien, . 357 N.E.2d 211 . Can have cause of
action under 42 U.S.C. §1983 for damages for rezoning which constitutes a
"taking. "
Reichenberger v. Pritchard, 660 F.2d 280 (7th Cir. 1981 ). Allegations of
conspiracy failed to state cause of action when there was no allegation that
plaintiff's expressive activities or business had been interfered with (con-
spiracy to eliminate nude dancing in nightclubs); attorney's fees awarded to
defendant.
Sawmill Products, Inc. v. Town of Cicero, 477 F.Supp. 636 (D. Ill . 1979) . Cause
of action is stated where city engaged i,n several official actions applicable
solely to plaintiff and designed to oust his business from city boundaries.
Schiessle v. Stephens, 525 F.Supp 763 (N.D. I11 . 1981 ) . Abstention; application
of federal antitrust laws to eminent domain proceedings discussed.
Shangri-La Enterprises v. Brennan, 483 F.Supp. 281 (E. D.Wis. ) . Municipality
may prohibit adult book stores within 1 ,000 feet of one another.
-7-
Sterling v. Village of Maywood, 579 F.2d 1350 (7th Cir. 1978). Tenant has no
constitutionally protected interest in continued ►•Dater service; however,
refusal to reinstate tenant' s water could be basis of cause of action.
EIGHTH CIRCUIT
Adler v. Lynch, 415 F.Supp. 705 (D.Neb. 1976) . Grant or denial of zoning
variance is not a legislative act.
Avalon Cinema Corp. v. Thompson, 658 F.2d 555 (8th Cir. 1981 ) . Adult theater
zoning ordinance which left adequate area in city for adult theaters was upheld,
even though ordinance was passed after plaintiff had purchased property and
obtained license for movie theater.
Central Avenue News, Inc. v. City of Minot, 651 F.2d 565 (8th Cir. 1981 ) .
Court abstained under Younger in challenge to city licensing and zoning
ordinances applicable to adult bookstores.
Gorman Towers, Inc. v. Bogoslaysky, 626 F.2d 607 (8th Cir. 1980) . First Amendment
right to petition immunizes absolutely private citizens and their counsel
from 91983 damages liability for prevailing upon city's board of directors to
pass allegedly unconstitutional zoning ordinance.
Park View Heights Corp. v. City of Black Jack, 454 F.Supp. 1223 (E.D.Mo. 1978) .
Injury suffered by delay brought on by adjudication was intervening cause of
plaintiff's injury for which city was not liable.
Robinson v. City of Raytown, 606 S.W.2d 460 (Mo. App. 1980) . Where property
owner failed to allege that city or mayor had undertakin any action to imple-
ment or enforce zoning ordinance which had been improperly enacted, or that
the manner in which it was passed followed customary pattern reflecting an
official policy of the city, petition failed to state cause of action against
either city or mayor.
NINTH CIRCUIT
American Savings & Loan Association v. County of Marin, 653 F.2d 364 (9th Cir.
1981 ). Government regulation can be so onerous as to constitute a "taking"
which constitutionally requires compensation but a police potter regulation is
not invalid simply because it prevents the highest and best use of the land.
Arnel Development Co. v. City of Costa Mesa, 169 Cal .Rptr. 904 (1980) . Zoning
is a legislative act.
Barbaccia v. County of Santa Clara, 451 F.Supp. 260 (N.D.Cal . 1978) . Discussion
of abstention; challenge to state land use control statutes.
City of South Lake Tahoe v. California TRPA, 625 F.2d 231 (9th Cir. 1980) .
Standing; city cannot challenge another political subdivision's plans and
ordinances on constitutional grounds.
Clark v. City of Los Angeles, 650 F.2d 1033 (9th Cir. 1981 ) . City can require
that all commercial activities be conducted wholly within closed buildings.
Flores v. Pierce, 617 F.2d 1386 (9th Cir. 1980) . Allowed damages for lost profits,
emotional distress and attorney's fees in wrongful denial of liquor license.
-8-
Lange V. Nature Conservancy, Inc. , 24 Wash. App. 416. Mere classification of
property in "Inventory of Natural Areas on Private Lands" without any allega-
tion of an accompanying constitutional deprivation does not create any liability
under 42 U.S.C. 51983.
Oceanic California, Inc. v. City of San Jose, 497 F.Supp. 962 (N.D.Cal . 1980) .
Under California law, developer had no vested right in particular development
it proposed for its land, nor could its alleged expectations of future high
intensity use approval by city be a proper basis for its claim of a taking.
Pringle v. City of Covina, 171 Cal . Rptr. 251 . Court upheld adult theater
ordinance requiring such theaters to be located at least 500 feet from a
residential area.
Rancho Palos Verdes Corp. v. City of Laguna Beach, 547 F.2d 1092 (9th Cir. 197E) .
Discussion of abstention.
Santa Fe Land. Improvement Co. v. City of Chula Vista, 596 F.2d 838 (9th Cir. 1979) .
Abstention; downzoning.
Sederquist v. City of Tiburon, 590 F.2d 278 (9th Cir. 1978) . Abstention.
Toso v. City of Santa Barbara, 88 Cal. App. 3d 654, 151 Cal . Rptr. 912 (1979).
Property owner acquires no vested right as against future zoning merely by
purchasing real property; only remedy for "taking" ►vas to have ordinance
declared unconstitutional .
United States v. 429.59 Acres of Land, 612 F.2d 459 (9th Cir. 1980) . Severance
damages.
- 1
L'�I'l'EP S'i'A'1'FS CODF
'i'I'1'LE 42
P.EPIF:DIES
§19SL l:rtual rights under the law (2)Obstructing justice; intimidating party, witness,or
juror
All persons within the jurisdiction of the If two or more persons in any State or Terri-
United States shall have the same right in
c•vc-ry State and 'Territory to make and enforce tory conspire to deter. by force, intimidation, or-
contracts.
rcontracts, to sue, be parties, give evidence, and threat, any party or %"tness in any court of the
Unit^d States from attending such court, or
to the full and equal benefit of all laws and pro- from testifying to any matter pending therein,
ceedings for the security of persons and proper- freely, fully, and truthfully, or to injure such
ty — is enjoyed by white citizens, and shall be
subject to like punishment, pains, penalties, Darty or witness in his person or property on
taxes, licenses, and exactions of every kind,and account of his having so attended or testified,
to no other. or to influence the verdict, presentment, or in-
dictment of any grand or petit juror in any
(R.S. §1977) such court, or to injure such juror in his person
or property on account of any verdict, present-
ment, or indictment lawfully assented to by
§19S2. Property rights of citizens him, or of his being or having been such juror;
or if two or more persons conspire for the pur-
All citizens of the United States shall have pose of impeding, hindering, obstructing, or de-
the same right, in every State and Territory, as feating, in any manner, the due course of jus-
is enjoyed by white citizens thereof to inherit, tice in any State or Territory, with intent to
Purchase, lease, sell, hold, and convey real and deny to any citizen the equal protection of the
Personal property, laws, or to injure him or his property for law-
(R.S.§1978). fully enforcing, or attempting to enforce, the
right of any person, or class of persons, to the
equal protection of the laws;
F 1953.Civil action for deprivation of rights (3)Depriving persons of ril-hts or privileges
Every person who, under color of any statute. If two or mord persons in any State or Terri-
ordinance, regulation. custom, or usage, of any tory conspire or go in disguise on the highway
State or Territory or the District of Columbia, or on the premises of another, for the I'•':rpose
subjects, or causes to be subjected, any citizen of depriving, either directly or indirectly, any
of the United States or other person within the person or class of persons of the equal protec-
jurisdiction thereof to the deprivation of any tion of th,. laws, or of cc tL_l privileges and im-
rights, privileges, or immunities secured by the munities tinder the laws; or for the purpose of
Constitution and laws, shall be liable to the preventing or hindering the constituted au-
party injured in an action at law,suit in equity, thorities of any State or Territory from giving
or other proper proceeding for redress. For the or securing to all persons within such State or
purposes of this section, any Act of Congress Territory the equal protection of the laws; or if
applicable exclusively to the District of Colum- two or more persons conspire to prevent by
bia shall be considered to be a statute of the force, intimidation, or threat, any citizen who is
District of Columbia. lawfully entitled to vote, from giving his sup-
(As amended Pub. L. 96-170, § 1, Dec. 29, 1979, port or advocacy in a legal manner, toward or
93 Stat. 1284.) in favor of the election of any lawfully quali-
fied person as an elector for President or Vice
President, or as a Member of Congress of the
United States; or to injure any citizen in person
1935.Conspiracy to interfere with civil rights or property on account of such support or advo-
cacy; in any case of conspiracy set forth in this
(1)Preventing officer from performing dutiessection, if one or more persons engaged therein
If two or more persons in any State or Terri- do, or cause to be done, any act in furtherance
tory conspire to prevent, by force, intimidation, of the object of such conspiracy, whereby an-
or threat, any person from accepting or holding other is injured in his person or property, or de-
any office, trust, or place of confidence under prived of having and exercising any ri_,ht or
the United States, or from discharging any privilege of a citizen of the United States, the
duties thereof; or to induce by like means any party so injured or deprived may have an
Officer of the United States to leave any State, action for the recovery of damages occasioned
district, or place, where his duties as an officer by such injury or deprivation, against any one
are required to be performed, or to injure him or more of the conspirators.
in his person or property on account of his (IZ.S. § 1980.)
lau-ful discharge of the duties of his office, or
While engaged in the lawful discharge thereof,
or to injure his property so as to molest, inter-
rupt, hinder, or impede him in the discharge of
his official duties;
2
§1956.Action for neglect to prevent
Every person who, havini; knotvledue that §19SS. Proceedings in vindication of civil rights; at-
any of the wrongs conspired to be done, and torney's fees
mentioned in section 1985 of this title, are The jurisdiction in civil and cri:ninal matters
about to be committed, and having power to conferred on the district courts by the
prevent or aid in preventing the commission of proIL
sions of this 'Title, and of Title "CIVIL
the same, neglects or refuses so to do, if such RIGHTS." and of Title"CRIMES."for the
moron-ful act be committed, shall be liable to Lection of all persons in the United Statess in
the party injured, or his legal representatives, their civil rights, and for their vindication,shall
for all damages caused by such wrongful act, be exercised and enforced in conformity with
which such person by reasonable diligence the laws of the United States, so far as such
could have prevented; and such damages may latus are suitable to carry the same into effect;
be recovered in an action on the case; and any but in all cases where they are not adapted to
number of persons guilty of such wrongful ne- the object, or are deficient in the
provisions
gleet or refusal may be joined as defendants in necessary to furnish suitable remedies and
the action; and if the death of any party be punish offenses against lav, the common law,
caused by any such wrongful act and neglect, as modified and changed by the constitution
the legal representatives of the deceased shall and statutes of the State wherein the court
have such action therefor, and may recover.not having jurisdiction of such civil or criminal
exceeding$5,000 damages therein, for the bene- cause is held,so far as the same is not inconsist-
fit of the widow of the deceased, if there be ent with the Constitution and laws of the
one, and if there be no widow, then for the United States, shall be extended to and govern
benefit of the next of kin of the deceased:But the said courts in the trial and disposition of
no action under the provisions of this section
shall be sustained which is not commenced the cause, and, if it is of a criminal the infliction of punishment n the nature, in
within one year after the cause of action has party
accrued. found guilty. In any action or proceeding to en-
force a provision of sections 1981, 1982, 1983,
(R.S. 1981.) 1985, and 1986 of this title, title IX of Public
Law 92-318 [20 U.S.C. 1681 et seq.], or in any
§19F7.Prosecution of violation of certain laws civil action or proceedings, by or on behalf of
the United States of America, to enforce, or
The United States attorneys, marshals, and charging a violation of, a provision of the
deputy marshals, the magistrates appointed by United States Internal Revenue Code, or title
the district and territorial courts,with power to VI of the Civil Rights Act of 1964 142 U.S.C.
arrest, imprison, or bail offenders, and every 2000d et seq.], the court, in its discretion, may
other officer who is especially empowered by allow the prevailing party, other than the
the President, are authorized and required, at United States, a reasonable attorney's fee as
the expense of the United States, to institute _ part of the costs.
Prosecutions against all persons violating any - (R.S. §722; Pub. L. 94-559, §2, Oct. 19, 1976, 90
of the provisions of section 1990 of this title or Stat. 2641.)
of sections 5506 to 5516 and 5518 to 5532 of the
Revised Statutes, and to cause such persons to
be arrested, and imprisoned or bailed, for trial
before the court of the United States or the ter-
ritorial court having cognizance of the offense.
(R.S. §1982; Mar. 3, 1911,ch. 231, §291,36 Stat.
1167; June 25, 1948, ch. 646, §1, 62 Stat. 909;
Oct. 17, 1968. Pub. L. 90-578, title IV,
§402(b)(2),82 Stat. 1118.)
TITLE 28
JURISDICTION
§ 1531. Federal question
II The district courts shall have original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the United States.
As amended Oct.'21, 1976. Pub.L. 94-574, § 2, 90 Stat. 2721; Dec. 1,
1980, Pub.L. 96-486, § 2(a), 94 Stat. 2369.
3
§
13 13.Civil rights and elective franchise The jurisdiction under this section shall
- extend only so far as, to determine the rights or
(a) The district courts shall have original ju- the parties to office by reason of the denial of
risdiction of any civil action authorized by law the right, guaranteed b:: the Constitution of
to be conlnlenced by any person: the United States and secured by any late, to
(1) To recover dantages for injury to his enforce the right of citizens of the United
Person or property, or because of the deprives- States to vote in all the States.
tion of any right or privilege of a citizen of
the united States, by any act clone in further- (June 25, 1948,ch.646, G2 Stat.932.)
ante of any conspiracy mentioned in section
1985 of Title 42; §1143. Civil rights cases
(2) To recover damages from any person
who fails to prevent or to aid in preventing Any of the follow•ing�civil action:. or criminal
any wrongs mentioned in section 1985 of Title prosecutions, commenced in a State court may
42 which he had knowledge were about to be removed by the defendant to the district
occur and power to prevent; court of the United States for the district and
(3) To redres.: the deprivation, under color division ernbracing the place wherein it is pend-
of any State lav, statute, ordinance, regula- Ing:
tion, custom or usage, of any right, privilege (1) Against any person who is denied or
or immunity secured by the Constitution of cannot enforce in the courts of such State a
the United States or by any Act of Congress right under any law providing for the equal
providing for equal rights of citizens or of all civil rights of citizens of the United States, or
persons within the jurisdiction of the United of all persons within the jurisdiction thereof;
States- (2) Por any act under color of authority de-
(4) To recover damages or to secure egtiita- rived from any law providing for equal rights,
ble or other relief under any Act of Congress or for refusing to do any act on the ground
providing for the protection of civil rights, in- that it would be inconsistent with such law.
eluding the right to vote.
(June 25, 1948,ch. 646,62 Stat.938.)
(b)For purposes of this section—
(1) the District of Columbia shall be consid-
ered to be a State;and (7-36. State and Territorial cTatutes and judicial pro-
(2) any Act of Congress applicable exclu- ceedinl;s:full raith and credit
sively to the District of Columbia shall be The Acts of the legislature of any State. Ter-
considered to be a statute of the District of ritory, or Possession of the United States, or
Columbia. copies thereof, shall be authenticated by affix-
(As amended Dec. 29, 1979, Pub. L. 96-170, §2, ing the seal of such State. Territory or Posses-
93 Stat. 1284.) sion theret.o.
The records and judicial proceedings of any
court of any such State, Territory or posses-
1344.Election disputes cion, or copies thereof. shall be proved or ad
The district courts shall have original juris- mizted
dmitted in other courts within the United States
The district courts shall have original scion and its Territories and Possessions by the at.tes-
diction of any civil action to recover possession -
of any office, except that of elector of Presi- tatio:. of the clerk and sea] of the court an-
deut or Vice President, United States Senator. nt ped• if seal exist-s, together with a c ertifi-
Representative in or delegate to Congress, or tate of a jadge of the court that the said atte,
member of a state legislature, authorized by tt.:: ,:. i` ir. ;•ro=er fo m.
law to be eonttnenced, where in it appears thatS-t=Y -�^is• recares and judicial proceed ngs or
the sole question touching the title to office c'�i'`= ' c_ •`f ` ' 1:`-"r"tcat.ed, shall have the
arises out of denial of the right to vote, to any S:- in eery Cour: within
citizen offering to vote, on account of race, the I''_'._cf Sta.t� n d its Territories and Pos-
color or previous condition of servitude. tae:, ll;a-,e by law or usage in the
courts o,, such Sete. Tt ri-i-wry or Pos_cession
from v,` ich the Y Mrs .%nen.
(June 25. 1948,ch 64r,. 62 Stat. 947.)
TITLE IS
CRIMINAL ACTS
§242.Deprivation of rights under color of law by reason of his color, or race, than are pre-
scribed for the punishment of citizens, shall be
Whoever, under color of any law, statute, or- fined not more than $1,000 or imprisoned not
dinance, regulation, or custom, willfully sub- more than one year, or both; and if death re-
jects any inhabitant of any State, Territory, or sults shall be subject to imprisonment for any
District to the deprivation of any rights, privi- term of years or for life.
i leges, or Immunities secured or protected by (June 25, 1948, ch. 645, 62 Stat. 696• Apr. 11,
the Constitution or laws of the United States, 1968, nib. L. 90-284, title I, §103(b). 82 Stat.
or to different punishments, pains,or penalties, 75J
on account of such inhabitant being an alien,or
� l
ANTITRUST WORKSHOP OUTLINE
League of Oregon Cities
1982 Regional Meetings
1 . Introduction
11 . Outline of Antitrust Law
III . The Loss of Automatic Immunity
A. Parker v. Brown
B. Lafayette and Boulder
IV. The New Tests for Immunity
A. "Clear articulation and affirmative express*,,)n"
B. "Active supervision"
C. Brief discussion of cases applying these standards
V. General Consequences for Cities
A. Effect on home rule
B. Immunity vs. liability
VI . Specific Municipal Functions and the Risks
A. Franchising
B. Licensing
C. Land use
D. Procurement of goods and services
E. Miscellaneous public facilities and services
VII . Possible Safeguards
A. The concept of an antitrust audit and compliance program
B. Related procedural techniques
C. The policy issue: to regulate or not to regulate?
VIII . Pursuit of a Legislative Remedy
A. Federal exemption
B. Options for state legislation
IX. Conclusion
OUTLINE OF ANITITRU;i' LAW
Dallas W. Isom
Professor of L. lw, Willamette University, Salem, Oregon
=�. basic Statutes 'There are three basic statutes : The Sherman
Act , the Clayton Act (with Robinson-Patman amendments) and Federal
Trade Commission Act . They provide , respectively , for three means
of enforcing the antitrust laws : criminal prosecution by the Justice
Department, civil suits by private parties , as well as by- the
government, to recover money damages and injunctive relief, and ad-
ministrative regulation and enforcement by the. Federal '.'rade Coin-
mission.
1 . Sherman Act . Section 1 of this act forbids contracts,
combinations and conspiracies among two or more persons or business
entities in restraint of trade . Section 2 forbids monopolization
by a single entity of commerce , as well as attempts to monopolize ,
and conspiracies to monopolize among two or more entities .
2 . Clayton Act . Section 2 (Robinson-Patman Amendment) forbids
sellers to engage in price discrimination between different purchasers
of the same or similar products . Section 3 forbids tying arrangements
(whereby the sale of one product is conditioned upon the buyer ac-
cepting a second product) and exclusive dealing; contracts (whereby
the buyer is required to buy all his requirements ofa certain pro-
duct. from the seller. ) Section 7 forbids mergers between companies
-4-
where the effect may be to lessen competition or tend to create a
monopoly .
Practices which violate the Clayton Act may also violate the
Sherman Act. However, the Clayton Act is more specific and narrower
than the Sherman Act . As to those business practices within the
narrower purview of the Clayton Act enforcement by injunction is
easier to obtain than in a proceeding under the Sherman Act because
actual_ injury to competition need not be proven. The critical
language of the Clayton Act is "mai► lessen competition. "
Thus, the Clayton Act permits potentially anticompetitive business
practices to be nipped in the bud. (This is called the "incipiency
doctrine . ")
3 . Federal Trade Commission Act (FTCA) . Section 5 of this
Act broadly prohibits "unfair methods of competition" and authorizes
the FTC to issue "cease and desist" orders . Under this statute the
FTC can enjoin practices which would not constitute violations
of the Sherman Act , or even the Clayton Act . However, private
parties may not bring suit for practices which violate only the
FICA.
B. Remedies for Private Suitors
Persons (including corp-rations and state and local governmental
bodies) who have been injured in their "business or property" by
violations of the Sherman or Clayton Act may recover treble damages
and attorney fees . Injunctive relief is also available to prevent
continuation of the illegal practice . However, under the rule of
Illinois Brick, a consumer who purchased from an innocent middleman
-5-
may not recover damages from a manufacturer whose violation of the
antl.trust. laws caused injury to -the ultimate consumer In the form
of higher prices or other detriment . This means that a person who
has been injured by an antitrust violation must have dealt directly
With the violator in order to recover damages .
C. Problems in proving an illegal agreement in restraint of trade .
Rarely is there direct evidence (such as eye-witness testimony)
Of an agreement between businessmen to fix prices or engage in other
practices which violate the antitrust laws . Usually, such agree-
ments must be proved by circumstantial evidence. An important aid
for such proof is the doctrine of "conscious parallelism. " When
the behavior of two or more competitors is the same (such as re-
fu-Sing to deal with a certain buyer) and each competitor is in a
Position to know of the other ' s behavior, and the behavior is such
that it could not . be profitably maintained by one unless its competi-
tors behaved the same way, or the behavior is a radical departure
from past behavior, then a jury may infer an agreement among such
competitors to collectively bring about the new behavior. Most
"contracts in restraint of trade" among competitors are proved this
way .
D. The Rule of Reason and the Per se Doctrine .
The Sherman Act states that "eve combination in restraint
of trade" is illegal . However, soon after its enactment the Supreme
Court construed it as condemning only unreasonable restraints , those
wh:i.c}i cause substantial injury to competition. De mini.mis restraints
wE.ru exempted. Later on, the Supreme Court realized that the burden
-6-
of proving substantial injury to competition was, in most cases ,
almost impossible to meet because of. the Inexactness of the science
of economics . The Court then began to develop a group of discrete
types of restraints which were declared to be per se violations of
the Sherman Act. The basic premise of the per se rule is that
history has shown that certain kinds of arrangements among business-
men are inherently anticompetitive , and therefore , where the collabora-
tors collectively have the power to restrain trade substantial injury
to competition is presumed .
Following is a summary of the various kinds of practices which
constitute per se violations. As to each of them, it must be
kept in mind that the threshhold requirement for establishing a per
se violation is a showing that the collaborators have the power to
affect prices or exclude competition as to some product or service--
i .e . , shared monopoly power.
1 . Price fixing (horizontal) . When competitors , who collective-
ly have the power to affect prices, enter into an agreement for the
.purpose of affecting prices in any way, such agreement is illegal
per se under the Sherman Act . It does not matter whether the in-
tended effect is to raise, lower or merely stabilize prices. In
the landmark Socony-Vacuum case, all the major oil companies agreed
to buy the excess gasoline from independent refiners who were unable
to find buyers for such gasoline or store it . . Prior to the agree-
ment , the excess gasoline had been "dumped" on to the market with
the effect of depressing the price of gasoline to below its cost
-7-
of production. The intended effect of the agreement to take this
excess gasoline off the market was to stabilize upward gasoline
prices . Thus, regardless of the fact that the resulting price
yielded only a modest profit to the oil. companies , the arrangement
was held to be illegal per se .
2 . Resale Price Maintenance . When a supplier, with the ac-
qul.eser=e.. o,.f! a. r.et•a�:l r,. se-ts. a- minimur�i qn m4yimwn
product may be sold at retail, this is illegal per se . However, a
supplier has the right , under the Colgate doctrine to unilaterally
announce a retail price and discontinue dealing with a retailer
who refuses to comply so long as no other measures are taken to
coerce compliance .
3 . Horizontal Territorial Divisions of the Market . It is
Illegal per se for competitors to set up exclusive territories for
each 10 sell in. This obviously is a naked agreement not to compete .
11 . Vertical Territorial Divisions of the Market . The law is a
mess in this area. There is, at most , only a limited per se rule
as to territorial division of the market imposed by a supplier
upon his retailers . It is probably per se illegal for a healthy
manufacturer to induce agreement by each of his retailers that they
will not sell to customers outside a specific territory . It would
appear, however, that a new entrant or a failing company is exempt
from the per se rul.e . Morever, even a healthy company can require
Its retailers to devote their "best efforts" to promoting sales
in a particular territory . Lastly , mere exclusive franchises are
-8-
a
legal, 'L .e . , a supplier may licence but a single retail outlet in
each territory so long as they are not prohibited from selling to
customers outside such territory . However, where territorial
divisions or even exclusive franchises are imposed upon the supplier
by the retailers, the courts will regard such arrangements as
horizontal, i .e . , among competitors , rather than vertical and thus
be deemed per se illegal.
5 . Concerted Refusals to Deal (Group Boycotts) . Where two or
more suppliers in competition agree not to sell to a retailer, or
two or more retailers agree not to buy from a supplier, such agree-
, ments are illegal per se . Such arrangements are usually entered
1
into for the purpose of punishing a supplier who is , for instance ,
directly selling to the consuming public , or a retailer who is
violating the supplier' s resale price maintenance policy or ter-
ritorial division policy. Pure individual refusals to deal are
legal so .long as they are not tainted by an illegal price fixing
scheme .
6. Tying Arrangements . It is illegal per se for a seller to
condition the sale of one product upon the buyer accepting a second
product providing the seller has substantial market power in the
market for the tying product . (The "tying" product is the product
which the buyer really wants , and in which the seller has market
power, either because the product is patented, or is otherwise
unique and the "tied" product is one which the seller would other-
wise have competitors but for the tying arrangement . )
-9-
III JIII,IIII�1111
Where the tying and tied products are "goods or commodities" the
tying arrangement expressly violates Section 3 of the Clayton Act .
Where one or both are services or money, the tying arrangement is
outside the Clayton Act but may violate Section 1 of the Sherman
Act: . (As mentioned previously, a lower level of injury to competi-
tion will violate the Clayton Act than is required for the Sherman
Act . )
7 . Exclusive Dealing. Where a seller obligates a buyer to buy
all his requirements of a product from the seller, or a fixed per-
centage of them, such an arrangement also violates Section 3 of the
Clayton Act providing a "good or commodity" is involved. The per
se rule here, as with vertical territorial divisions is a weak one .
New entrants and failing companies are exempt, and apparently so
are public utilities who, for instance , enter into requirements
contracts with suppliers of fuel for the purpose of ensuring a
reliable source of fuel to run_ the utility.
E. Monopolization.
Section 2 of the Sherman Act makes it illegal for a single
company to acquire or maintain a monopoly by unfair means . The
elements of the offense of monopolization are thus (a) the posses-
sion of monopoly power as to some product, which is defined as
the power to affect prices or exclude competition, and (b) the
acquisition or maintenance of the monopoly by less than "honestly
industrial" practices. Thus monopolies which are acquired by
valid patents, exclusive franchises from the federal government
-10-
or constitute "natural" monopolies because there is room for only
one producer, are legal.
An important aid in proving monopoly power is a presumption that
a company possessing over 70% of the market has the power to affect
prices or exclude competition. In establishing the market share,
two definitions are necessary : (a) the relevant product market , and
(`• ) t:}il. rc7eva.nt YeriY,ranhic market . The relevant product is defined
functionally--all distinct products which are reasonably interchang-
able are included in the relevant product market . The relevant geo-
graphic market is the arena of effective competition. As to some
products the geographic market is national, with others regional and
with many the market is local , encompassing maybe only a single town .
A purely local monopoly can violate the federal Sherman Act so long
as the product, or some of its ingredients , cross state lines .
Once monopoly power is established aS to the relevant product
and geographic markets , the element of unfair conduct in acquiring
it or (if legally acquired) maintaining it must be established. If
the monopoly is a large company with national or regional economic
power, the burden is upon that company to prove that the monopoly
was "thrust upon" it. (This is the Alcoa "big fish" rule . ) On the
other hand, if the monopoly is purely local, the cases indicate that
the burden is upon the plaintiff to prove that the monopoly was
acquired or maintained by "predatory" business practices .
Attempts to monopolize are also forbidden by Section ?_ of the
-11-
Sherman Act . This requires a showing that the defendant (a) intends
to achieve a monopoly, (b) by employing, unfair business practices ,
and (c) there is a dangerous probability of achieving a monopoly.
F: Mergers .
Section 7 of the Clayton Act makes it illegal for a company to
acquire the stock or assets of another company where the effect may
be to lessen competition or tend to create a monopoly . Mergers are
classified as (a) horizontal (between actual or potential competi-
tors) , (b) vertical (between actual or potential suppliers and
buyers) and (c) conglomerate (between commercially unrelated compan-
ies . )
Horizontal mergers are, of course , the most dangerous and a per
se test of sorts has evolved which applies to mergers by large
companies in a market which is already highly concentrated. For
Instance, in a market where the top four companies possess over
75% of the market (as defined by the relevant product and geo-
graphic markets discussed in the material dealing with monopoliza-
tion) any merger involving one of those companies will probably be
deemed per se illegal .
As to vertical and conglomerate mergers, there is no per se
rule . As a practical matter, only vertical mergers involving
Industrial giants (such as between General Motors and a large
supplier of it) are likely to be condemned. As to pure conglomer-
ate mergers it is very difficult to establish a Clayton Act violation.
-12-
Ir
' ANTITRUST LIABILITY: IS HOME. RULE REALLY DEAD?
David Knibb, Attorney
Schweppe , Doolittle , Krug, Tausend & Beezer, P.S.
Seattle, Washington
1. Overview. Federal antitrust laws. Sherman and
Clayton Acts . 15 U.S.C. §1 et seq. Immunity under state
antitrust statutes is controlled by state law.
2. Origin of Federal Immunity. Parker v. Brown , 317
U.S. 341 ( 1943 ) . Based on principles of federalism.
3 . Cracks in the Immunity Wall . Did the state ,
acting as a sovereign, require the questioned act? Gold-
farb v. Virginia State Bar, 421 U.S. 733 ( 1975 ) .
Does a state rubber-stamp approval ensure immunity?
Cantor v. Detroit Edison Co. , 428 U.S. 579 ( 1976 ) . Or
invoke state action? Jackson v. Metropolitan Edison, 419
U.S. 345 (1974 ) .
Did the state comprehensively regulate the questioned
act? Bates v. State Bar of Arizona , 433 U.S. 350 ( 1977 ) .
4 . Loss of Automatic Local Government Immunity .
City of Lafayette v. Louisiana Power & Light Co. , 435 U. S.
389 (1978 ) . Cities and counties enjoy no automatic immun-
ity similar to that enjoyed by the state . Local government
immunity depends on degree it is carrying out state
policy.
Supreme Court badly divided on proper test. No major-
ity opinion.
5 . Lafayette Test Gains Majority. Lafayette plur-
ality opinion accepted by court majority in New Motor
Vehicle Board of California v. Orinn W. Fox Co. , 439 U.S.
96 , 109 (1978 ) ; California Retail Liquor Dealers Associa-
tion v. Midcal Aluminum, Inc. , 445 U.S. 97 , 105 (1980) .
1
Is the state
policy to displace competition with
regulation ( a) clearly articulated; ( 2) affirmatively ex-
pressed; and (3) actively supervised?
6-. Are Home Rule Cities "States" for Immunity Pur-
poses? No . Community Communications Co . v . City of
Boulder, U.S. , 102 S. Ct. 835 (1982) . Federalism
does not extend to "city-states . " Blanket delegation by
state of legislative authority to home rule city does not
meet Lafayette test. Vote: 5-3 .
7. The Dangerous Vacuum. Home rule implies absence
of "clearly articulated , affirmatively expressed, and ac-
tively supervised" state regulation -- the very things
needed for immunity. J. Rehnquist' s dissent:
Nothing short of altering the relationship
between the municipality and the State will
enable the local government to legislate on
matters important to its inhabitants. In order
to defend itself from Sherman Act attacks, the
home rule municipality will have to cede its
authority back to the State.
Is this the only answer? Borrowing protection from sta-
tutes directed at non-home rule cities.
8 . Does Loss of Immunity Mean Liability? Dissent
by Rehnquist assumes yes, by ma3ority says no. No immun-
ity case has ever equated lack of immunity with liability. -
Immunity usually raised and decided as a threshold issue.
See Cantor, Lafayette and J. Stevens' concurring opinion
in Boulder.
9 . In the Trenches: Local Government v . Antitrust .
The lower court cases are not always consistent or easy to
apply as precedents, but some trends are apparent.
10. Cases Upholding Immunity. Shrader v. Horton,
626 F. 2d 1163 (4th Cir. 1980 ) . Mandatory hook-up require-
ment by county water district was immune under statute
authorizing same.
Little Rock School District v. Borden, Inc. , 505 F.
Supp. 77 (E.D. Ark. 1980) . School district enforcement of
state minimum price statute for milk was immune, and
statute was valid.
2
Community Builders v. City of Phoenix , 652 F. 2d 823
(9th Cir. 1981 ) . Division of water service territories
between two cities , and refusal by one city to furnish
water to developer, were immune under statute prohibiting
competition between municipalities in providing utility
services.
Glenwillow Landfill v. City of Akron , 485 F. Supp-
671 (N.D. Ohio 1979 ) . Agreement among city, county and
state agency to sell bonds for new waste disposal facility
was immune. Clearly articulated state statute regarding
public health.
Turf Paradise v. Arizona Downs, F. 2d 1982-1
Trade Cases 1164 ,460 (9th Cir. 1982) . Race track lease
which required race operators to seek agreement on date of
use before asking state commission to resolve conflicts,
was immune under statute directing operators to seek such
agreement.
Miracle Mile Associates v . City of Rochester , 617
F.2d 18 (2d Cir. 1980 ) . City' s lawsuit challenging
regional shopping center that would divert downtown busi-
ness was protected activity (Hoerr-Pennington doctrine)
where city had bona fide interest in preventing adverse
economic impact.
11 . Cases Denying Immunity.
a. Anticompetitive Self-Dealing. Stauffer v.
Town of Grand Lake, 1981-1 Trade Cases 1164 ,029 (D. Colo.
1980 ) . Zoning designed to improve competitive position
for property privately owned by zoning officials was not
immune under comprehensive state zoning statute.
b. Exclusive Leases Not Authorized by Statute.
Pinehurst Airlines v. Resort Air Services , 476 F. Supp.
543 (M.D.N.C. 1979 ) . County' s exclusion of airline based
on exclusive lease of airport facilities to another opera-
tor was not immune. Statute did not direct or authorize
county to grant exclusive license.
C. Lessee May Not be Immune Even if City Is .
Winters v. Indiana & Michigan Electric Co. , 1979-2 Trade
Cases V62 ,797 (N.D. Ind . 1979 ) . Utility' s lease of city
electrical facilities was not immune from monopoly charge
(although PUD approval of lease may give immunity to the
city) .
3
d . Exclusive Lease Authorized -- But Addition-
al Exclusionary Conduct is Not. Guthrie v. Genesee County,
N.Y. , 494 F. Supp. 950 (W.D.N.Y. 1980 ) . Even though sta-
tute authorized county airport authority to grant exclu-
sive licenses , various discriminatory acts against another
operator were not immune.
e . Intentional Exclusionary Conduct Directed
at Potential Competitor of City or its Licensee. Mason
City Center Associates v. Mason City; 468 F. Supp. 737
(N. D. Iowa 1979) . Agreement between city council members
and developer to deny zoning change to developer' s com-
petitor was not immune.
Corey v. Look, 641 F. 2d 32 ( 1st Cir. 1981 ) .
Statute authorizing municipal parking lots and regulation
of parking did not immunize city' s refusal to lease space
and other exclusionary actions against parking lot opera-
tor, on grounds that he sought to compete with municipal
parking lots.
Huron Valley Hospital v. City of Pontiac ,
F.2d 1981-2 Trade Cases 1164 ,395 ( 6th Cir. 1981) .
National Health Planning and Resource Development Act,
which authorized planning agencies to restrict new hospi-
tal entry, did not immunize alleged conspiracy among
hospitals and state health care agencies to deny certifi-
cate . of need to new hospital applicants.
f. Anticompetitive Conduct Authorized , But
State Failed to Consider Anticompetitive ,Effects. City of
Mishawaka v. American Electric Power Co. , 616 F. 2d 976
(7th Cir. 1980 ) . When state PUD lowered utility' s rates
without considering anticompetitive effects, utility' s use
of those lowered rates for price squeeze of municipal
utilities was not immune.
g . Pervasive Regulation No Defense if Specif-
ics Not Regulated . Grason Electric Co. v. Sacramento Muni-
cipal Utility District, 526 F. Supp. 276 (E.D. Cal . 1981) .
Where state left choice of electrical distribution facili-
ties up to utility, its anticompetitive selection was not
immune , even though its operations were pervasively
regulated in other respects.
4
a
BIBLIOGRAPHY
Bangasser, Hugh F. "Exposure of Municipal Corporations to Liability for
Violations of the Antitrust Laws: Antitrust Immunity After the
City of Lafayette Decision." The Urban Law •er, vol. 11, no. 1,
Winter 1979, pp. vii-xxxiii.
Berenson, W. "Antitrust Liability of Municipalities Under Parker_ Doctrine. "
BOaLon University Law Review, vol. 57, 1977, pp. 368-386.
Bergman, J. W. "Antitrust: Municipal Anticompetitive Activity" (Lafayette
v. Louisiana) . Washburn Law Journal, vol. 18, 1978, pp. 129-133.
Bosselman, Fred P. "Does the Lafayette Case Bring Zoning Under the Antitrust
Laws?" Land Use Law and Zoning Digest, February 1979.
Comment: "Antitrust Law--Municipal Corporations--Even When Acting as Agents
of the State, Cities Are Not Automatically Immune From Federal Anti-
trust Laws Under the State-Action Exemption Doctrine. " University of
Cincinnati Law Review, vol. 47, 1978, pp. 469-476.
Comment: "The Erosion of State Action Immunity From the Antitrust Laws:
Lafayette v. Louisiana. " Brookman Law Review, vol. 45, 1978, pp.
165-190.
Comment: "State Action Immunity and Municipalities: The Sherman Act Looks
for New Territory." Nebraska Law Review, vol. 57, 1978, pp. 1140-1157.
Comment: "United States Supreme Court Defines Scope of. Municipal Immunity
Under the Federal Aatitrust Laws." Loyola Law Review, vol. 24, Fall
1978, pp. 804-816.
Davidson, Mark L., and Butters, Robert D. "Parker and Usery: Portended
Constitutional Limits on the Federal Interdiction of Anticompetitive
State Action." Vanderbilt Law Review, vol. 31, 1978, pp. 575-603.
Furman, M. B. "The Airport Car Rental Concessions: The Role of Lafayette
v. Louisiana in Restricting the Threats to Free Competition." California
Western Law Review, vol. 14, 1978, pp. 325-357.
Kennedy, Ronald E. "Of Lawyers, Lightbulbs and Raisins: An Analysis of the
State Action Doctrine Under the Antitrust Laws." Northwestern Univer-
sity Law Review, vol. 74, 1979 , pp. 31-75.
Rogers , C. Paul, III. "The State Action Antitrust Immunity." University of
Colorado Law Review, vol. 49, 1978, pp. 147-184.
Rose, Jonathan. "Municipal Antitrust Liability After City of Lafayette."
Nimlo Municipal Law Review, vol. 42B. Washington, D. C. : National
Institute of Municipal Law "Officers, 1979, pp. 203-258.
Ruck, F. Lee. "Developing Evidence of State Legislative 'Intent. Nim_lo
MunicipalLaw Review, vol. 42B. Washington, D. C. National Institute
of Municipal Law Officers, 1979, pp. 191-202.
Smith, R. Marlin. "Applicability to Municipal Land Use Regulations."
Nimlo Municipal Law Review, vol. 42B. Washington, D. C." National
Institute of Municipal Law Officers, 1979, pp. 178-190.
"Special Issue on: Municipalities and Antitrust Litigation." The Municipal
Washington, D. C. : National Institute of
Attorney, vol. 20, no. I.
Municipal Law Officers, January-February 1979.
Stratton, D. "Federal Antitrust Immunity--Exposure of Municipalities to
Treble Antitrust Damages Sets Limit for New Federalism--Lafayette- v.
Louisiana." Connecticut Law Review, vol. 11, 1978, Pp.
Strom, Fredric A. Local Zoning and the Federal Courts." Zoning and Planning
Law Report, vol. 1, no. 11, October 1978.
Tchorni, E. J. "Law and Municipal Corporations--Are Municipalities Exempt
From Sherman Act Coverage Under Parker_ Doctrine?" _Georgetown Law
Journal, vol. 65, 1977, pp. 547-592.
i
• AFTER BOULDER: Analyzing :Municipal Antitrust E:;Qosure
By: Gregory S. Lashutka, City Attorney, Columbus, Ohio
Douglas W. Vanseoy, Assistant City Attorney, Columbus, Ohio
I. INTRODUCTION
Until about four years ago, local governments and their attorneys had little
cause to concern themselves with antitrust analyses. In 1904, only fourteen.years
after the original passage of the Sherman Act, the United States Supreme Court
had turned aside an antitrust challenge to Texas legislation which permitted only
state licensed harbor pilots to operate in the ports of Texas; the Court had stated
rather summarily that "no monopoly or combination in a legal sense can arise from
the fact that the duly authorized agents of the state are alone allowed to perforin
the duties devolving upon them by law."l Subsequently, in 1943, the Supreme Court
Cp
had upheld a California statutory scheme which expressly restricted competition
among raisin growers, holding in Parker v. Brown that "N he state . . . as sovereign,
imposed the restraint as an act of government which the Sherman Act did not
undertake to prohibit." 2
The holding of Parker v. Brown was that Congress in the exercise of its power
to regulate interstate commerce had not intended to regulate the sovereign acts of
the several states by enactment of the federal antitrust laws; in- shorthand
parlance, many spoke of the states as being "immune" from federal antitrust
regulation under the "state action exemption." 3 Although both Parker v. Brown and
the earlier Texas case had concerned the activities of state rather than local
governments, most observers assumed that a federal antitrust challenge of the
activities of a political subdivision of a state would lead to the same result as
occurred in Parker v. Brown. For example, although both state and local-
governments were parties to National Leag-Lie of Cities v. Usery,4 the Supreme
Court drew no distinction as between such parties in holding that the commerce
clause does not empower Congress to impose minimum wage levels upon state and
local governments as employers.
A. City of Lafayette v. Louisana Power & Lizht Co.5
The 1978 Lafayette decision of the United States Supreme Court marked the
beginning of the end of the complacency of local governments toward antitrust
legislation. In the wake of Lafavette, the City of Columbus, for one, retained
outside counsel to assist in an antitrust inventory or audit which focused upon such
matters as cable television, airport concessions, occupational licensing, purchasing,
document retention and the like. Although the ultimate impact of Lafavette was
unclear, the decision was viewed as raising enough potential for municipal exposure
to warrant the substantial expenditures of municipal resources which a thorough
antitrust audit entails.
The Lafayette litigation was commenced by two Louisiana municipalities who
owned .and operated electric utility systems and who alleged in federal district
court that Louisiana Power & Light Co. and others had engaged in predatory
practices and had in other ways violated the federal antitrust laws. As often
happens in antitrust litigation, LP&L cou_*iterclaimed, alleging that the plaintiff
municipalities had engaged in antitrust violations, including a purportedly illegal
tying arrangement by which one municipality would provide gas and water service
only on the condition that such customers also purchase electricity from the
municipality. The plaintiff municip=alities moved to dismiss the counterclaim on
thea ound that Parker v. Brown rendered the federal antitrust laws inapplicable to
them as political subdivisions of the State of Louisiana.
The key question presented to the Supreme Court in Lafayette was whether
LP'&L's counterclaim had been properly dismissed under Parker v. Brown. A
plurality of the Court (Justices Brennan, Marshall, Powell and Stevens) too!< the
view that federal antitrust laws are applicable to local governmental activities
unless "the State authorized or directed a given municipality to act as it did."
Adopting the test which had been enunciated by the United States Court of Appeals-
for
ppealsfor the Fifth Circuit in Lafavette, the plurality indicated sufficient state
authorization and direction would east if it were found "from the authority given a
governmental entity to operate in a particular area, that the legislature
contemplated the kind of action complained of."7 The four dissenting members of
the Court (Justices Stewart, White, Rehnquist and Blackmun) expressed the view
that federal antitrust statutes have no more application -to political subdivisions of
the states than to the states themselves under Parker v. Brown. The final and
decisive vote in Lafayette was that of Chief Justice Burger, who wrote separately
and expressed the view that the Parker v. Brown "exemption" is available to
municipalities acting within the realm of traditional governmental functions but is
unavailable to municipalities acting in a proprietary capacity. Because the Chief
Justice viewed the Louisiana municipalities' provision of electricity as a
proprietary function, he voted with the plurality to reinstate the counterclaim
which LP&L had filed.
Given the fragmentation of the Court in Lafayette, it was possible to read
the decision as imposing potential antitrust exposure upon local governments only
when they acted in a proprietary capacity. No less authority than Professor Areeda
wrote after Lafayette that "as long as the other Justices remain evenly divided on
the availability of an automatic immunity for municipalities, the proprietary
distinction will remain crucial for Supreme Court decisions."8 It was unclear,
however, after Lafayette exactly which activities the Chief Justice would consider
to be proprietary as opposed to governmental. Because the plurality expressly
refused to reach the question,9 it was also unclear after Lafayette exactly what
remedies would be available against a local governmental entity in the event it
were found to be subject to the antitrust statutes. Finally, it was unclear after
Lafavette whether a state authorization of local governmental authority by way of
a general home rule provision in its constitution would suffice to provide the
necessary authorization for purposes of invoking Parker v. Brown.
B. Communitv Communications Co.. Inc. v. Citv of Boulder 10
On December 19, 1979, the Boulder City Council enacted two ordinances, the
net effect of which was to prohibit Boulder's current cable television company from
expanding its area of service for a period of three months. The stated purpose of
both ordinances was to provide a moratorium on construction to give other cable
companies an opportunity to make proposals to enter the municipality's regulated
market. The trial court considered the Lafavette decision, determined Parker v.
Brown to be "wholly inapplicable,"U and entered a preliminary injunction against
the moratorium ordinances. On appeal, a panel of the United States Court of
Appeals for the Tenth Circuit, with one member dissenting, reversed, holding that
Boulder was "exempt from the antitrust laws"12 under Parker v. Brown. The
majority of the panel read Chief Justice Burger's Lafayette opinion to establish the
determinative test for municipal exemption. After noting that Boulder was not
itself engaged in the cable television business and therefore had no "proprietary
interest,"13 the majority opinion stated as follows:
We conclude that City of Lafavette is not applicable
to a situation wherein the governmental entity is asserting a
_,t_
governmental rather than proorietary interest, and that
instead the Parke, Iideal doc�,ine is applicable to exempt
the Citv fom antitrust liability.
If the majority of the panel was correct in labeling Boulder's activities non-
proprietary in nature, and if the various factions of the Lafayette Court held firm,
the judgment of the Court of Appeals stood a good chance for affirmance.
The 'labeling by the Court of Appeals of Boulder's interest as purely
proprietary was questionable. The trial court had suggested that Boulder was
attempting to "exact tribute" for its licensing of a cable television company by
insisting that the licensee "contribute free services"15 to the municipal government
and entities it designated as worthy. The dissenting judge in the Court of Appeals .
disputed the majority finding that Boulder's interests were solely governmental,
stating that "the City's 'proprietary interest,' and its desire to acquire a greater
proprietary interest, permeated and dictated all of its actions here involved."16
As it turned out, the proprietary/governmental dichotomy did not play a role
in the analysis employed by a majority of the Supreme Court in Boulder. The Chief
Justice's proprietary/governmental approach, so critical in Lafavette because the
Court was otherwise equally divided, became moot in Boulder because Justice
Blackmun, who had dissented in Lafavette, joined the Lafayette plurality and
concurred in the majority opinion in Boulder. Justice Blackmun did not write
separately in Boulder to explain his changed vote; Justice Brennan's majority
opinion -in Boulder indicated that "a majority of the Court"17 had adopted the
Lafayette plurality's standard in two cases 18 decided between Lafavette and
Boulder, but in neither case had the question of municipal liability been at issue.
With the addition of Justice Blackmun's vote in Boulder, the test of the
Lafavette plurality is now the-law of the land. As the majority opinion in Boulder
indicates, municipal activity is not exempt from federal antitrust laws unless it
-5-
constitutes the action of a state in its sovereign capacity or unless it constitutes
municipal action in furtherance or implementation of clearly articulated and
affirmatively exoressed state policy.19 The City of Boulder argued that under
Colorado's broad delegation of home rule powers, the action of a home rule
municipality was in fact the action of the State of Colorado; Justice Brennan's
majority opinion rejected that argument, quoting the dissenting judge of the Court
of Appeals, who had stated, "We are a nation not of 'city-states' but of States.1120 In
this fashion the Supreme Court greatly restricted, for purposes of federal law, the
ability of the several states to delegate part or all of their sovereign powers to
their political subdivisions.
The Boulder majority also rejected the argument that Colorado's plenary
grant of home rule powers to its municipalities was a sufficient articulation of
state policy to give rise to a Parker v. Brown exemption:
But plainly the requirement of 'clear articulation and
affirmative. expression' is not satisfied when the State's
position is one of mere neutrality respecting the municipal
actions challenged as anticompetitive. A state that allows
its municipalities to do as they please can hardly be said to
have 'contemplated' the specific a�jicompetitive actions for
which municipal liability is sought.
Emphasizing that it was holding only that the Parker v. Brown exemption was not
applicable, reserving again as in Lafayette the issue of what remedies are available
against municipal defendants, and reserving judgment concerning "other issues
regarding the applicability of the antitrust laws in the context of suits by private
litigants against government defendants,"22 the Supreme Court reversed the
judgment of the Court of Appeals.
-6-
R. i'VIUNICIPAL I1-IMUNITY AFTER BOULDER
A. Home Rule
The Supreme Court in Boulder did not question the legality of home rule
provisions delegating partial or plenary sovereignty to cities by their respective
states; Justice Brennan in a footnote to his majority opinion stated that the Court
assumed without deciding that the moratorium ordinances were within the scone of
the power delegated to Boulder under the Colorado constitution.23 Boulder does
hold, however, that a state may not as a matter of federal law delegate by way of
home rule powers the "state action exemption" of Parker v. Brown. By precluding a
blanket transfer of the states' antitrust immunity, the Boulder decision threatens to
have a serious impact upon the legal relationships existing between the states and
their political subdivisions.
The allocation of authority as between the states and their political
subdivisions is a matter of peculiarly local, rather than federal, concern. It is
difficult to postulate any constitutional basis upon which Congress could legislate
directly concerning such matters. Boulder in effect holds that Cono ess has
legislated indirectly in this area by enacting the various federal antitrust statutes.
The states may continue after Boulder to delegate various attributes of their
sovereignty to municipalities if they so choose, but municipalities electing to
exercise such authority will do so at the risk of becoming involved in complex and
costly _antitrust litigation. If a home rule municipality after Boulder wishes to
assure itself of Parker v. Brown immunity, it must approach its state legislature
with hat in hand and seek to be directed by statute to engage in the activity in
question.
As a matter of state law, home rule municipalities by definition look to a
broad grant of authority from their respective states as the legal basis for their
-7-
acti�,,ities, while other municipalities look to specific statutory grants of power
from their state legislatures. One of the ironies of Boulder is the fact that
autonomous or quasi-autonomous home rule municipalities are arguably more
exposed to federal antitrust liability than their statutory counterparts. For
example, in Columbus, which is a home rule or charter municipality under the
Constitution of Ohio, one of our first reactions to the Boulder decision was to
review state statutory grants of power to Ohio cities whicIT do not operate as home
rule municipalities. As a matter of state law; however, home rule municipalities
may not be able to invoke legislative enactments which pertain to statutory cities.
B. State Authorization
Boulder hclds that a blanket home rule provision is not a "clear articulation
and affirmative expression" of state policy to displace competition. According to
Justice Brennan's majority opinion, Colorado's grant of home rule powers to Boulder
was completely neutral and contemplated neither the promotion of competition nor
its restriction. At one point, Justice Brennan suggested that Colorado could not
have "contemplated" the Boulder ordinances when it delegated home rule powers to
municipalities, because other Colorado municipalities were free under the home
rule provisions to elect to treat cable television franchises differently than had the
City of Boulder.24
The Boulder case suggests, then, that to clothe its political subdivisions with
Parker v. Brown immunity a state legislature must establish a policy having state-
wide application. It may not be enough under Boulder for a state statute to provide
that political subdivisions "may" engage in specified anticompetitive practices,
because permitting each municipality to elect whether to act or not could be
viewed as a position of "neutrality" on the part of the state. it is noteworthy that
„ hen private litigants have attempted to defend antitrust challenges on the ground
their actions were authorized by the state as sovereign, the Supreme Court has held
that Parker v. Brown immunity is available only if the activities were compelled by
the state, not merely "prompted” or "passively accepted."25
C. Active Supervision
In 1983 the Supreme Court decided an antitrust case involving a state
statutor,j scheme which permitted wine producers to establish the resale price
schedule under which wholesalers sold the product to retailers, California Retail
Liquor Dealers Assoc. v. Mideal Aluminum. Inc.26 The Court held that the price
fixing scheme was "clearly articulated and affirmatively expressed" because the
"legislative policy is forthrightly stated and clear in its purpose to permit resale
price maintenance."27 The Court further held, however, that the activity was not
protected under Parker v. Brown because the state policy restricting competition
was not "actively supervised" by the state itself; rather, California "simply
authorizes price-setting and enforces the prices established by private parties."28
Mideal clearly stands for the proposition that both state authorization and active
supervision are necessary elements of a Parker v. Brown defense.
Justice Brennan in Boulder avoided the "active supervision" prong of the
Rim
Parker v. Brown defense by stating as follows in a footnote:
Because we conclude in the present case that Boulder's
moratorium ordinance does not satisfy the 'clear articulation
and affirmative expression' criterion, we do not reach the
question whether that ordinance must or could satis�g the
"active state supervision" test focused upon in Mideal.
Justice Rehnquist replied as follows in a footnote to his dissent:
The Court understandably avoids determining whether
local ordinances must satisfy the 'active state supervision'
prong of the Mideal test. It would seem rather odd to
require municipal ordinangas to be enforced by the State
rather than the city itself.
Among the many questions left unanswered by Boulder is the question whether the
"active supervisions' element of a Parker v. Brown defense can be satisfied by
municipal rather than state supervision.
Even more than the "state authorization" element, the "active supervision"
element of a Parker v. Brown defense has the potential for disrupting the
traditional allocation of authority as between the states and their respective
political subdivisions. Consider the import of states undertaking the "active
supervision" of the decisions of municipalities so as to clo^'< those decisions with
federal antitrust immunity. Carried to its logical end, Justice Brennan's analysis in
Bcilider may mean that the only means of assuring municipalities federal antitrust
immunity is for the states themselves to undertake the daily operation of municipal
governments.
III. 'MUNICIPAL ANTITRUST EXPOSURE ABSENT I IMUT ITY
The lesson of Boulder is that local governments cannot rely upon Parker v.
Brown to shield their activities from federal antitrust scrutiny. 31
unieipalities :vill
continue to assert i�nmr pity in antitrust litigation, and depending upon the activity
and the state statutory or constitutional provisions involved, some will succeed in
invoking Parker v. Bro:•rn. But given the extensive sphere of activities of a modern
0
municipal corporation, and given the limitations which Boulder places upon the
availability of Parker v. Brown immunity to local governments, it is unlikely that
such immunity will apply to most municipal conduct challenged under the antitrust
laws. It is important, then, to consider what standards of liability apply in the
absence of municipal immunity and to consider chat remedies are available against
municipalities. Unfortunately, the answers to such questions are largely
speculative at this time.
A. Mat Standards of Liability ADDIV?
In the final footnote to his majority opinion in Boulder, Justice Brennan
stated as follows:
We hold today only that the Parker v_ Brown
exemption was no bar to the District Court's grant of
injunctive relief. This case's preliminary posture makes it
unnecessary for us to consider other issues regarding the
applicability of the antitrust laws in the Contex ' suiZY
ts by
private litigants against government defendants.
Justice Brennan went on in that footnote to quote the following Passage from
Lafavette: 'It may be that certain activities, which might appear anticompetitive
when engaged in by private parties, take on a different complexion when adopted
by a local government."32 Justice Brennan also sited Exxon Coro. v. Governor of
Mar__ va,33 where the Court had stated that anticompetitive effect standing alone
r
is an insufficient basis for invalidating a state law. Justice Stevens, althougiz
joining the majority opinion of Justice Brennan, issued a separate concurring
opinion emphasizing that in both Lafayette and Boulder, "the violation issue is
separate and distinct from the exemption issue."34 Furthermore, according to
Justice Stevens, "the violation issue is not nearly as simple as the dissenting opinion
implies."'5
The analysis which dissenting Justice Rehnquist suggests may be appropriate
after Boulder is hardly "simple." Justice Rehnquist suggests that Boulder will
result in many "troubling consequences" for the courts, including "whether the 'Qes
se' rules of illegality apply to municipal defendants in the same manner as they are
applied to private defendants."36 According to Justice Rehnquist, the most
troubling questions will concern the factors to be considered in applying the Rule of
Reason to municipal activities.37 As Justice btevens wrote for the Court in 1978,
the Rule of Reason is not a generalized test of reasonableness:
Contrary to its name, the Rule does not open the field of
antitrust inquiry to any argument in favor of a challenged
restraint that may fall within the realm of reason. Instead,
it focuses directly on the challenged restraint's impact on
competitive conditions.
[T]he inquiry mandated by the Rule of Reason is whether
the challenged agreement is one that promotes competition
or one that suppresses competition. 'The true test of
legality is whether the restraint imposed is such as merely
regulates and perhaps thereby promotes competition or
whether it A
competition.' such as may suppress or even destroy
As Justice Rehnquist notes in his dissent in Boulder, under the traditional
application of the Rule of Reason, "an ordinance could not be defended on the basis
that its benefits to the community, in terms of traditional health, safety, and
public welfare concerns, outweigh its anticompetitive effects."39
-12-
The Boulder majority and the Lafayette plurality have suggested that the
standard of antitrust liability applicable to municipalities may somehow be
�- different from that applicable to private individuals. The Court has not, however,
provided any clue as to the municipal standard it may ultimately adopt. Under such
circumstances, it is to say the least difficult for municipal lawyers to chart a
course of conduct responsive to Lafayette and Boulder.
It may be that although home rule provisions and most state statutory
provisions will not give rise to immunity for municipalities after Boulder, such
provisions will be found to be pertinent to the underlying liability issue. If a
municipality can point to a source in law which authorizes it as a local
governmental entity to engage in the kind of activity which is challenged under the
antitrust laws, it will have taken a step toward distinguishing its challenged
activity from like activity engaged in by a private individual. Similarly, it may be
useful in attempting to distinguish a municipal defendant from a private defendant
to invoke the "traditional governmental functions" language and analysis of
National League of Cities v. Useev40 if the challenged activity is a c;ably within
the sphere of conduct in which local governments have historically engaged.
Justice Stevens' concurring opinion in Boulder and the conclusion to Justice
Brennan's majority opinion both suggest that the unavailability of Parker v. Brown
immunity will not necessarily subject a municipality to the same standard of
liability imposed-upon private individuals. Believing as we do that Boulder renders
Parker v. Brown immunity unavailable to municipalities for most of their
regulatory and other activities, we can only wish that the Supreme Court had seen
fit to provide some guidance concerning the liability standard to which
municipalities will be subject. Until such guidance is forthcoming, local political
r'
ti
subdivisions ;which ;wish to minimize their antitrust exposure can undertake the
ar dzzou.s task of analyzing all their activities in light of the antitrust standards
which are applicable to private individuals. It is not within the scope of this
presentation to provide a survey of antitrust lacy, but the analysis would proceed
something like this: First, does the municipal activity have an adverse effect upon
competition in any market? If so, is the activity in the nature of one that has been
declared a per se violation, such asrice fixing?
P � If not, is the activity lawful under
the Rule of Reason, or, put simplistically, dos the activity tend to promote
competition more than to suppress it? In practice, of course, application of the
antitrust standards requires considerably more sophistication than is suggested by
the questions posed here:
Attorneys who attempt to apply such standards of liability to municipal
activities may find that many governmental activities do not readily lend
themselves to such analysis. We have, however, few other tools to turn to until the
Supreme Court establishes a standard for municipal antitrust liability.
B. What Remedies Will. Lie?
Both the Lafayette plurality and the Boulder majority pointedly left open the
question of what remedies are "appropriate" in the case of municipal antitrust
`ll
violators. The implication is that treble damages, and perhaps even actual
damages, may not be available from municipal defendants, Justices Blackmun and
Rehnquist have both noted the seemingly mandatory language of the Clayton Act
concerning the award of treble damages,42 but a majority of the Court seems to
View the question as an open one. It is perhaps noteworthy as regards the t_-able
damages question that a divided Supreme Court last term held that municipalities
are immune from punitive damages awards under a principle federal civil rights
-14-
statute, 42 U.S.C. § 1933.43 The Court's resolution of the question of antitrust
. damages available against municipalities may directly affect their liability for
antitrust plaintiffs' attorney fees, because many lower courts have held that
41
attorney fees are available only to plaintiffs who obtain a treble damages award.
Whatever the ultimate resolution of the damages question, Boulder clearly
stands for the proposition that injunctive relief is available against a municipality
under the federal antitrust statutes. Even if the Court ultimately holds that no
damages or attorney fees are available against municipal defendants, the
availability of injunctive relief will subject municipalities to complex and costly
litigation and may result in federal equitable decrees concerning matters which
have heretofore been considered subject to the lawful control of local governments.
C. Municipal Officers and Emplovees
Neither Lafayette nor Boulder discussed the potential personal liability of
municipal officers and agents under the federal antitrust laws, although Justice
Stevens devoted a portion of his short concurring opinion in Boulder to deny that
fficials who authorize an anticompetitive
the Court had ever sup ested that public o
program "thereby become parties to a violation of the Sherman Act."45 Unless an
official exercises municipal power to further his or her personal interests at the
expense of the official's own competitors in private industry, there appears to be
little likelihood at this time that personal liability of municipal officers and agents
will arise under the federal antitrust laws.
D. Interstate Commerce and Noerr-Pennin--ton Immunity
Because the antitrust statutes are an exercise of congressional power to
regulate interstate commerce, a federal plaintiff must establish that the
-15-
46
challenged activity has a "not insubstantial" effect upon interstate commerce.'I
As a practical matter, this federal jurisdictional element can often be .met rather
easily, as the Real Estate Board of New Orleans recently learned when it
unsuccessfully argued before the Supreme Court that the fining of brokerage
commissions on sales of residential property in the Ne:v Orleans area had an
insufficient impact upon interstate commerce to support federal jurisdiction.47
Beware of certain aged cases, such as those dealing with local taxi service 48 which
held on particular facts that the requisite interstate commerce element was
absent; the Supreme Court has stated that its interpretation of the interstate
commerce jurisdictional requirement may change to reflect modern methods of
business and commerce.49 Furthermore, be aware that many states have enacted
antitrust statutes governing intrastate commerce.50
Finally, municipal attorneys should be aware that Noerr-Pennin?ton immunity
may be available to private parties who lobby government agencies. Named after
51
t vo, cases which were bottomed upon the First Amendment right to petition the
government, the doctrine immunizes private lobbyists; the availability of this
immunity doctrine to the governmental entity is unclear. The doctrine is important
to municipalities because a number of plaintiffs have successfully avoided the
doctrine in the lower federal courts by alleging that municipal officials actively
joined with the lobbyists in an unlawful conspiracy to restrain trade.52 Thus,
Noer r-Pennin-ton may provide plaintiffs with a strong incentive to allege that
municipal officials have engaged in conduct unlawful under the antitrust statutes.
-16-
IV. CONMPLIANCE PROGP•_A?A
Industrial corporations are very familiar with antitrust compliance programs.
A city should be able to draw upon such prop ams for general assistance in
designing a plan to racet its specific needs. itiIost antitrust compliance plans have
several common .characteristics: (1) a statement of antitrust policy; (2)
implementation of the policy, including education of personnel; (3) establishment of
a "document retention program"; and (s) periodic audits.53
A. Statement of Antitrust Policy
The statement of antitrust ,policy usually includes a brief statement of
substantive antitrust law and the various specific directives stated as "do's" or
"don'ts" designed to provide realistic guides to action. The policy statement may
be packaged in looseleaf form so as to facilitate a flow of supplemental memoranda
addressed to specific issues.
It may be readily apparent that the challenge in drafting an antitrust
compliance statement is to provide a layman with a reasonably accurate statement
of complex legal concepts in language he can understand. This problem is
compounded for city employees by reason of their probably complete unfamiliarity.
with antitrust principles. Only with Lafayette and Boulder did this becone an issue
on which municipal officials needed to focus.
B. Implementation of Policy
The challenge to the implementation program is to provide meaningful
compliance. Too many antitrust compliance programs serve mainly as window
dressing, for possible future reference in the company's legal brief. No compliance
-17-
i,
program at all would be preferable to a "sham" compliance program which provides
evidence both of antitrust awareness and of a willful or negligent failure to
conform to the requirements of the antitrust laws.
Accordingly, real implementation of the antitrust compliance program is '
extremely important. Periodic meetings should be held with municipal personnel at
which time antitrust counsel, together with senior city officials, can review the
requirements of the antitrust laws and the importance attached by the city to
compliance. The "message" that compliance is required must really come from city
management, not primarily from antitrust counsel.54 .mother typical component
of the implementation system involves the establishment of forms for use by city
personnel. Utilization of a standard form for certain specified circumstances may
not only prevent inadvertent antitrust violations but also provide a record to rebut
any unfounded charge of collusion. Another implementation technique is to make
certain that counsel must be consulted before action is taken on certain specific
matters. Finally, employees must understand that they will be dismissed or
disciplined if they are found to have violated the antitrust laws.55
C. Document Retention
The third component of an antitrust compliance program is the establishment
of a "document retention system." The purpose of such a system is to prescribe the
period of time various documents need to be kept. While in the context of the
industrial corporation, there are many good things which can be said about a
"document retention program" on both antitrust and non-antitrust grounds, this
issue may be somewhat more complex when transplanted to the municipal
corporation. A municipality may be under statutory or other constraints with
respect to its records which must be taken into account in the design of any "record
retention program."
-18-
D. Periodic Audits
The fourth component of an antitrust compliance program is the periodic
audit. The audit serves the purpose of monitoring compliance with the antitrust
policy as well as affording an opportunity for making any appropriate
modif ications. Of course, some kind of auditing or inventorying procediTe is
required in developing the antitrust complial-ice program in the first instance.
Focus should be placed upon those particular areas of the municipality's operations
where antitrust exposure might be anticipated. One Antitrust Division official has
offered a list of local governmental action that might raise antitrust issues:
1. any regulatory activity, including occupational licensing and regulation;
2. the operation of sports arenas or convention centers;
3. the provision of water, electric and other utility services;
4. garbage coLection;
S. transit systems, including taxis;
6. public health services;
7. airports;
8. parking lots;
9. procurement practices generally;
10. and certainly not least, zoning.
This would seem to be an appropriate checklist for the preliminary audit of a
rnunicipality. :%,s noted above, Columbus identified various activities for
compliance review.
Finally, detailed consideration should be given to the protection of attorney-
client privilege.56 The question is to what extent statutes, rules and regulations
which grant public access to government records may impede the confidentiality of
MINIMUM I
the antitrust attorney's advice to his municipal client and to what extent, as a
result, the attorney-client privilege may be undermined or unavoidably waived.'?
This issue must be resolved before the compliance program is launched.
_ten_
V. CONCLUSION
Because Par!,-or v. Brotivn immunity arose not by statute but by judicial
decision, the Supreme Court has had ar± especially free hand in determining the
scope of the doctrine. In the years immediately preceding the Lafavette decision,
the Supreme Court had issued several decisions which served to narrow and define
th3 limits of Parker v. Bro:•m immunity.` 8 The timing of the Lafavette and
Boulder cases was also unfortunate in that these cases arose when the Court was
expanding municipal exposure on another principle liability front, the federal civil
rights laws.59
Although it may be useful for municipalities to approach their state
legislatures for statutory authority concerning specific municipal activities which
present a substantial threat of antitrust liability, it is probably neither feasible nor
wise for municioalities to seek state legislation concerning every activity for which
they are presently at some risk under the antitrust laws. Because Boulder's
treatment of the home rule question suggests that state efforts to grant sweeping
powers to their political subdivisions will not suffice to invoke Parker v. Brown
immunity, any realistic effort to convey immunity by state legislation would
require specific statutory authority concerning each of the multitude of activities
presenting a risk of exposure. Moreover, if the Supreme Court ultimately imposes
the Mideal "active state supervision" requirement upon municipalities seeking the
Parker v. Brown immunity, only that legislation which imposes active state
supervision upon the municipal activities will give rise to the immunity. Should the
Supreme Court ultimately establish a liability and remedy test which is acceptable
to cities, those municipalities which rushed in the interim to seek state legislation
may regret their haste.
-21-
If the Supreme Court's ultimate resolution of the liability and remedy issues _
left open in Lafayette and Boulder is unacceptable to municipalities, the solution
lies not with the state legislatures but with Congress. It is within the realm of
possibility, however, that Congress will not grant municipalities leave to violate
the antitrust laws in all their activities. We suspect that in one fo^-n or another,
antitrust law is here to stay for the municipal lawyer.
v
-22-
Footnotes
1. Olsen v. Smith, 195 U.S. 332, 345 (1904).
2. 317 U.S. 341, 352 (1943).
3. See Citv of Lafayette v. Louisiana Power 6c L•ic-ht Co., 435 U.S. 389, 393 n.8
(1978) (Brennan, I.).
4. 426 U.S. 833 (1976).
5. 435 U.S. 389 (1978).
6. Id. at 414.
7. Id. at 415 (footnote omitted), quoting from 532 F.2d at 434.
8. P. Areeda, "Antitrust Immunity for 'State Action' after Lafayette," 95 Harv.
L. Rev. 435, 443 (1981).
9. 435 U.S. at 401-402.
10. 50 U.S.L.W. 4144 (decided January 13, 1982).
11. 485 F. Supp. 1035, 1039 (D. Colo. 1980).
12. 630 F.2d 704, 705 (10th Cir. 1980).
13. Id. at 707.
14. Id. at 708.
15. 485 F. Supp. at 1040.
16. 630 F.2d at 719.
17. 50 U.S.L.rw. at 4147.
18. California Retail Liquor Dealers Assn. v. Mideal Aiuminin. Inc., 445 U.S. 97
(198-OY;- New Motor Vehicle Board of California v. Orrin W. Fox Co., 439 U.S.
96 (1978 .
19. 50 U.S.L.19. at 4146-7.
20. Id. at 4147, quoting from 630 F.2d at 717.
21. Id. at 4147 (emphasis in original).
22. Id. at 4148 n.20.
a
-23-
23. Id. at 4147 n.16.
24. Id. at 4148.
25. Cantor v. Detroit Edison Co., 428 U.S. '079 (1976); Goldfarb v. Virginia State
Bar, 421 U.S. 773 (1975).
26. 445 U.S. 97 (1980).
27. Id. at 105.
a
28. Id.
29. 50 U.S.L.W. at 4146 n.14.
30. Id. at 4152 n.6.
31. Id. at 4148 n.20.
32. Id., quoting from 435 U.S. at 417 n.48.
33. 437 U.S. 117, 133 (1978).
34. 50 U.S.L.W. at 4148.
35. Id. at 4149.
36 Id. at 4150.
37. Id. -
33. rational Society of Professional Engineers v. United States, 435 U.S. 679,
688, 691 (1978).
39. 50 U.S.L.W. at 4150.
40. 426 U.S. 833, 852 (1976).
41. 50 U.S.L.W. at 4148 n.20; 435 U.S. at 401-402.
42. 50 U.S.L.W. at 4150 n.2 (Rehnquist, J., dissenting); 435 U.S. at 442-3 (Brennan,
J., dissenting).
43. Citv of Newport v. Fact Concerts, Inc., 69 L. Ed. 2d 610 (1981).
44. See, e.T., Byram Cor_cretanks Inc. v. Warren Concrete Products Co., 374 F.2d
649 3d Cir. 1967); Knutson v. Daily Review, Inc., 479 F. Supp. 1263 (N.D. Cal.
1979); Locklin v. Day-Glo Color Corp., 378 F. Supp. 423, 428 (N.D. M. 1974).
45. 50 U.S.L.W. at 4148.
-24-
46. See, e.g., Hospital Buildin? Co. v. Rex Hospital Trustees, 425 U.S. 738 (1976).
_ s
47. i cLain v. Real Estate Board of New Orleans, 444 U.S. 232 (1980).
48. See United States v. Yellow Cab Co., 332 U.S. 218, 230-23I (1947).
49. McLain, supra, 44.1 U.S. at 241.
50. See, e.?., Alas. Stat. secs. 45.50.562 et seq.; Ark. Stat. Ann. 1979, secs. 70-101
et seq.; Colo. Rev. Stat. 1973, sees. 6-4-101 et seq.; 6 Del. C. secs. 2101 et seq.
,(1980 Cum. Supp.); Harv. Rev. Stat. 1976, secs. 480-4 et seq.; D-1. Ann. Stat. ch.
38, secs. 60-3 et seq.; Iowa Code 1979, secs. 553.4 et seq.; Kan. Stat. Ann.
1976, secs. 50-101 et seq.; 'Me. Rev. Stat. Ann. secs. 1101 et seq.; -1'Id. Com. Lar✓
Code Ann. 1975, secs. 11-204 et sea. (1930 Cum. Supp.); %Iinn. Stat. 1980, secs.
3250.51 et seq.; Mo. Ann. Stat. secs. 416.031 et seq.; 'Mont. Rev. Codes Ann.
1979, secs. 30-14-205 et seq.; Neb. Rev. Stat. 1943, secs. 59-801 et seq.; N.M.
Stat. Ann. 1978, secs. 57-1-1 et seq.; N.Y. Gen. Bus. Law secs. 340 et seq.
(1980-81 Cum. Supp.); Ohio Rev. Code secs. 1331.01 et seq.; R.I. Gen. Laws
1969, secs. 6-36-4 et seq. (1980 Cum. Supp.); Tex. Bus. & Com. Code Sinn. tit.
2, sec. 15.04; W. Va. Code 1980, secs. 47-18-3 et seq.; Wis. Stat. Ann, secs.
133.03 et seq. (1980-81 Cum. Supp.).
51. United Mine Workers of America v. Pennington, 381 U.S. 657 (1965); Eastern
Railroad Presidents Conference v. Noerr ;Motor Freight, Inc., 3665 U.S. 127
(1961).
52. See Mason Citv Center Associates v. City of Mason City, 468 F. Supp. 737,
744-6 (N.D. Iowa 1979) and cases cited therein. Areeda argues forcefully that
to avoid Noerr-Pennington a pleading should be required "to soecifv the
nature of the alleged conspiracy [and] facts that might tend to'prove the
alleaation." 95 Harv. L. Rev. at 452.
53. Anderson, "Antitrust Compliance in Action," 20 Antitrust Bulletin 731, 744
(1975). -
54. Id. at 745.
55. A municipality may not be as free to dismiss or discipline an employee as is
an industrial corporation. Assuming that typically a public employee may be
dismissed "for cause," the question is whether such dismissal could be
sustained merely on the basis of the employee's failure to comply with an
antitrust compliance pr gram.
56. Antitrust counsel involved in establishing compliance programs for industrial
corporations must always be aware of the limits on privilege and
confidentiality when they receive oral and written statements from the
company's employees and when they render advice. However, the rules
defining the extent of the attorney-client privilegewhen applied to a
corporate client are not entirely clear. See Upjohn Co. v. United States, 66
L. Ed. 2d 584 (1981).
-25-
57. For example, the Florida "Sunshine Act" provides that "all meetings . . . of
any state agency . . . are declared to be . . . open to the public. . . ." Fln.
Stat. Ann. § 286.011. One Florida decision rejected a discovery request
(grounded on this Section) for the substance of a conversation between an
attorney representing a school board and the superintendent of schools.
Mitchell v. School Board of Leon County, 335 So. 2d 354 (1976). Although the
court noted that the Sunshine Act should not be construed so as "to
discourage the representatives of the people from seeking legal counsel," it
also warned that its holding did not automatically protect all communications
between a public agency and its attorney.
58. Bates v. Arizona, 433 U.S. 350 (1977); Cantor v. Detroit Edison Co., 438 U.S.
5 79 (1976); Goldfarb v. Virginia State Bar, 421 U.S. 773 1195 .
59. Owen v. City of Independence, 445 U.S. 622 (1980); Monell v. New Yor',. Cit,,
Deot. of Social Services, 436 U.S. 658 (1978).
-99-
• Nationals;
nstitute
Iof
.. :4 _
Municipal
c F S Law Officers '
-- 1000 Connecticut Avenue. N.W., Suite 800. Washington. D.C. 20036 (202) 466-542",
`. National Municipal Litigation Center of the National Municipal Legal Defense Fund
PRESIDENT
JAMES B. BRENti AN
City Attorney
:.tilwaukee.Wisconsin
FIRSTPRESIDENT
HENRYNRY W.CINDERHILL,JR THE TREMENDOUS ANI) EVER GROtIING IMPACTW.
City Attcney ON MUNICIPALITIES Of' THE ANTITRUST LAVJS
Charlotte.North Carohna ---
SECOND VICE PRESIDENT
BENJA.MrN L.BROWN
City Solicitor
Baltimore.Maryland
THIRD VICE PRESIDENT
J.LAMAR SHELLEY
City Attorney
?freta.Arizona
TREASURER
ROY D. RATES
City Attorney
Columbia.South Carolina
GENERAL COUNSEL REPORT ON
CHARLES S RHY:`E
Washington.DC INITIAL RESULTS OF
TRUSTEES NIMLO_ANTITRUST QUESTIONNAIRE
GEORGE AGNOSr
City Attorney
San Francisco.Caliinrno
r
ROGER F.CUTLER
City Attorney
Salt Lake City.Utah By : Charles S . Rhyne_
IOHNDEKKER NIMLO General Counsel.
t)ircctor of La-
Wichita.Kansas
JEFFREY S GODDESS
City Solicitor
Wilmington.Dela-are
LEE E HOLT
City Attorney
Dallas.Texas
GEORGE F. KNOX.JR
City Attorney
!.3:3mi.Flonda
WALTER M.POWFLL
Municipal Counse!nr
Oklahoma City.Oklahnrna ---------'---_—
ALLEN G.SCHWA RrZ
CcvporationCounsel NIMLO President James B.. Brennan has made Antitrust Law
New York.NewYcri, a major :subject at NIMLO' s Midyear Seminar which will be
WILLIAM H.TAURI-- held April 25-26 , 1952 in Washington, D. C. Register now
cxporation Counsel
nan.Acc.Illinois and learn even Tnorc! about: this "sudd(-!n" fini:lncial throat
.1LARUN A. WILSON to municipalities , their Officials both officially and
C,tyAttorttey individually and to their- taxpayers .
Kansas City.MIStb.ln
Jov" WITT
Citi aey
5:.a blego.California
MAX P.ZALL
City Attorney
D-.n er.Colorado
To date , atL-orneys representing over 255 citi-es aril cc�u;zri_Ls
in 47 States have responded to NI,R,O' s antitrust cluesLionnaire , a
COPY of which is attached. While ;_he contents of the replies vary,
it is clear beyond quest: ion that t.-he issue of Federz:l and State anti-
trust laors have suddenly become a major important concern of local.
governments . This is an interim report in the hope of persuading
NIMLO members who have not.: answered Vo do so and ,above all. to s,ol.i.cit
the views of each of yot., a.s tO f�h3t action -municipalities shoult '_akc
on this problem. This :sampling of responses indi caLes to muriicipali. ties
the nature and growing impact of the problem involved. Acting to-
gether we must come up with answers as the picture herein presented
indicates that this problem is in. the beginning of the begi.-izning which
we must stop now or its impact will stifle local government in per-
forming its vital functions .
Please help with your ideas if you do not yet have an antitrus*L
problem in your municipality. head on and you will realize why .
NIMLO President James B. Brennan now in Washington working or,
NIMLO and municipal problems is making "antitrust" a major subject
at NIMI LO' s Midyear meeting, April. 25-27 , 1982 . Be sure to attend
this important Conference . Your municipalities have a great stake
in what_ this conference does on "antitrust" as you will learn from
this interim report .
This matter started on a national scale in the landmark 5-4
decision in Lafayette v. Louisiana Power_ and Light Co . , 435 U. S . 389
(1978) . That case , which involved the distribution of electric service,
for the first time since 1890 defined "persons" to include municipalities
under_ the federal antitrust statutes . The Court found the Parker
"state action" doctrine inapplicable there as no express state authori-
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zat:i_on or directive to the municipalities existed to engage in anti-
competitive conduct .
In Parker v. Brown, 317 U. S. 341 (1973) , the decision which
articulated the so-called "Parker State Action Doctrine" , the Court
held that actions taken pursuant to the authorization of state legis-
lation were exempt from federal antitrust laws . Parker held as
exempt from such laws a program authorized by the California Agricultural.
Products Act .under which ten producers of raisins fixed production
limits and also fixed the wholesale price of raisins . Though the
state action "Parker" exemption was held not to be available to the
Cities of Lafayette and Plaquemine , Louisiana, their case was settled
favorably to those cities and no decision was made as to whether an
actual antitrust violation had occurred.
Municipalities have since found themselves subject to potential
and actual antitrust litigation with regard to a growing .list of
municipal services . NIMLO' s survey indicates that alleged antitrust
exposure now extends into areas of cable television franchising,
solid waste disposal , energy recycling, water supply, zoning to permit
or restrict residential or commercial development , taxicab franchises
at public airports , the supply of aircraft fuel at air terminals ,
concession rights at airports , public markets , and recreational
facilities , ambulance service , municipal. hospital services , certification
of physicians at public hospitals , police tow car operations , cemetery
grave markers , transit service , business licensing , operation of
municipal civic centers and auditoriums , and many others .
We have been advised of no antitrust litigation to date that has
ultimately resulted in a final adverse judgment against a. unit of local
government. Every such lawsuit is either still pending, been dis-
missed by a Court, or settled favorably to the municipality. Notwith-
standing this fact, raunici_pal. attorneys , chief elected officials ,
acrd taxpayers have legit i.nu.rt.e .reason to be concerned over both pot (.•riti al
and actual antitrust- su.i.(_-:; reporl.ed upon herein and their_ rapidly
growing number . The fotlowi.rig i.:; it summary of the reports to NIT•iLO ' s
questionnaire :
i) 'Local. govel.rnnents are being forced to devote
increasing amounts of' tim(.> and consideration towards
dealing with antitrust related issues .
ii) Businesses and individuals now have a new and
powerful law with which to se(-k municipal action and
perhaps secure it under the Federal Antitrust Acts .
Applicants who seek municipal franchises , permits ,
concessions, or contracts and are denied them may take
action under the Federal antitrust statutes if they can
meet the requirements of these statutes and now have the
Eotential recovery of treble damages , attorneys fees and
court costs.
iii) Municipal projects , often clearly in the public,
as well as national interest, are being delayed in the
face of actual or threatened lawsuits due to uncertainties
oi: fact and law crowed by this new threat. to municipalities,
its taxpayers and its municipal officials , since more of
these lawsuits make their claims against municipal officials
in both their official and individual capacities .
,r iv) Projects are being delayed to enable municipal
t\ .
officials to review the activities of their government
vis-a-vis the Federal antitrust laws . The result- is delay
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or denial of a host of essent:i�il. unvrovided serv.i_ce�j
while steadily escalating cost figures due 1.o the current
economic situation must be factored in .
v) The monetary awards sought in antitrust suits ,
when subject to the treble damage , and attorneys fees and
court costs provisions in the Sherman and Clayton Acts ,
reach astronomical sums . These amounts , if awarded , may
be sufficient to cripple many local governments and raise
local taxes to ever higher amounts .
Compounding the growing uncertainty over potential antitrust
liability is the uncertainty over legal defenses available to the
municipality. The "state action" exemption of Parker is being
narrowed. It now appears to be restricted to situations where the
municipal actions are taken in conformity with a clearly articulated
and expressed state policy that-is actively supervised by the state .
A major narrowing came in the most recent United States Supreme Court
decision applying the federal antitrust statute to a municipality,
Community Cormunications Co. , Inc . v. City of Boulder, Colorado,
50 L.W. 4144 (Jan. 13, 1.982) . In that case the Court held the City
of Boulder' s Colorado constitutional "home rule" powers insufficient
to insulate the municipality from Federal antitrust liabilitier, under
the Parker "state action" exemption . The 5-3 decision held that: the
necessity of municipal actions be-Ing in conformity ty wj th a cic!ara.y
articulated and expressed state policy were not: met by actin; under the
broad home rule powers of the City of Boulder which did not expressly
empower. the City to grant cable television franchises .
The Cities of Phoenix and Scottsdale , Arizona were sued in
Community Builders , Inc . v. City of Phoenix, 652 F. 2d 823 (9th Cir. 1.981.) .
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The municipalities , in compliance with the exrnress p)O] i.cy of the
state , agreed to each serve specific areas outside their corporate
liuits with water supply. Mii!-e one city did not charge a hookup Y�ze ,
the policy of the other ,!as t-o Levy a fee of $400 per unit . As a
result, home builders alleged Sherman Act antitrust violations of
Horizontal division of ter-1- i.tory, concerted refusal to deal. , an
illegal tying arrangement , and an attempt to monopolize Daimat r-
amounting to $512 , 000 ($1 ,036 ,000 when trebled) were sought . The
cities ' request for summary _judgment was granted in the district court
and affirmed on appeal . The Appellate Court held that under the
Parker doctrine, as elucidated by Lafayette , the actions of the city
though anticompetitive, were exempt from antitrust laws Riven Ari-/ona ' s
express policy.
In a similar case , Tuld of Colorado v. The City of Scottsdale
and the City of Phoenix, 665 F. 2d 1054 (9th Cir. 1981) the court ?-geld
Community Builders to be dispositive. Tuld sought $250 , 000 ($750 ,000
when trebled) plus attorneys fees and costs .
The City of Akron has been sued in Hybud Equip . Corp. et al . v.
Akron, et al, 654 F. 2d 1187 (6th Cir. 1981) . The City, in order to
insure the success of a new downtown energy recycling plant and to
secure the necessary funding for it, adopted ordinances effectively
monopolizing for the city all garbage collection and disposal and
eliminating market competition for recyclable wastes . The City
prevailed in the district court decision , which was upheld by the Court
of Appeals . The City of Akron was held deemed t,� be exempt: from the
Sherman Act . Garbage collection and incineration were held to be
lraditional -local government activities , which the courts treated as
permissible for municipalities to monopolize . Further, the District
P-,i,l Circ-uit Court of -i11tOrP!-,2tc-d the r-ale Provisions of the state
constitution to aUt11OriZO Che creatic:i of a municipal solid waste 11,nrior-oly- On app--C-al,
this decision was accc!pted by the Urlited States Supn2i-.c-! Court for review, t-11---n Vacated
and rENEL%nded in licl-It of ti__ EkDI-A:2er ca--.2, 50 L.W. 3667 (Feb. 22, 1.9-01) .
In order to secure underwriting and purchasers for special
revenue bonds to finance a landfill disposal operation, the member
1ove r-nments of the Des Moines Metropolitan Area Solid Waste Agency
Z
enacted ordinances requiring all solid :caste to be deposited only
at the Agency landfill . This resultL-d in an action in the local
Federal Court under the Sherman Antitrust Act . Central Iowa Refuse
Systems , Inc. v. Des Moines Metropolitan Area Solid Waste Agency, et al.
No. 79-32-1 (S. D. Ion-.a) All the member cities are named defendants .
Pleadings are currently being filed and plaintiffs are seeking both
damages and a permanent injunction . Construction has been delayed
more than one year as a result of the Agency' s reluctance to proceed
before the final outcome of this suit . Increased cg-9-ts--Oue toibis
delay are estimated to have reached $150 ,000 and are growing daily.
In Wollen v. Surtran Taxicabs-, jju-c . , 461 F. Supp . 1025 (N. D. Texas
1978) , antitrust allegations were brought against the Texas Cities
of Dallas , Fort Worth , Irving, Grapevine , Coppell zinc] Euless (the
actions against . thelatter two municipalities were subsequently dismissed) .
-'-ie antitrust allegations challenged the single operatior concept for
ground transportation between Dallas—Fort Vlort:h Regional Airport- and
the Cities of Dallas and Forth Worth. These two ciVies owned the air-
port facility and the Cities of Irving .and Grapovine h,30 adopted 1-1)"
Airport Code of Rules and Regulations establishing; the, system. Plaintiffs
are seeking damages of $3 million ($9 million when trebled) . T I i e
district court action, cited above , denied plaintiffs ' inorion to dis-
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miss on the grounds of .1 "Parker state action" ir:rnuni.ty. This case
y
has now beers cert- i_fi_ed as a class action. Trial on the mer:i_ts of the
antitrust issue is awaiting dete-rmination of the separate issue of
the motion of a second group of plaintiffs to intervene.
Antitrust charges were brought against a city, its mayor and
city council. in CaRi_tal Ambulance Service , Inc . v. Columbia , So. Carolina .
Civil Action No. 30-670-6 (C . D . So . C .^1980) . The suit alleged that
violations of the Sherman acid Clayton Antitrust Acts occurred by virtue
of the City, absent st.at:c! authorJ.zation, restraining competition and
creating a monopoly in ambulance service . The suit charged defendants
with encouraging and subsidizing the existing private service , alleged
to be operating without a .Franchise . while denying applicant a
franchise . The action was dismissed by a consent decree .
The City of Pittsburgh , Pennsylvania and the Urban Redevelopment
Authority of Pittsburgh were named defendants in. Jonnet Development
Corp. v. Caliquire , et al . Civil Action No . 81-421 (W.D.Pa. 1981) .
The plaintiffs charged Sherman Act violations by the defendants , alleg-
ing a conspiracy to monopolize the do-yntow_n hotel busine*s throuah
public acquisition of a building for subsequent reconveyance to a
third party for development: . All claims for equitable relief have
been dismissed and plaintiffs appealed to the U. S . Court. of Appeals
for the Third Circuit . Civil. Action No. 81-2182. The damage claims
are expected to be argued in May, 1932 .
Cape Girardeau, Mo. was sued for an antitrust violation with re-
gard to a municipal zoning decision. Westborough Mall , Inc. et al . v.
City of Cape Girardeau, Mo . et al . , No. S80-105C (E.D.Mo. 1981) .
Only one of three Sherman Act Antitrust counts specified a level of
damages, and that totaled60 million
$ ($180 million when trebled) . The
City prevailed in district court and the case is now pending on appeal in
the U. S. Court of Appeals for the Eig}ith Circuit .
'The City o Louis has been sued for attempti_nri to 'revoke a
cable television franchise in Melhar Corporatio-n_ v. Cj:Ly of St` Louis
Civil No. 81-0671 C (4 ) (E.l). Mo. 1981) . The coMpla.int was dismissed
on the district court level and i .; currently pending on appeal ..o the
U.S. Court of Appeals for the Eight Circuit. Civil . No. 82-1064 .
The plaintiff's complaint, which includes two counts under the Sherman
Act, seeks injunctive relief to permit construction of a cable television
system as well as damages of $24 million ($72 million when trebled) .
In William Danks v. City and County of Denver, et al , Civil Action
No. 82 CV00484 (D.C. Colo. ), the plaintiff ' s suit against the City and
County of Denver includes a claim of antitrust violation . Denver ' s
proposed award of an exclusive cable television franchise, without
express statutory power or regulation by the State of Colorado, is
alleged by the plaintiff to constitute a grant of an illegal ::;onopol.y
in violation of section 1 of the Sher:-lan Act as well as the st.,tc
antitrust laws.
In B & W Aero Corp. v. Stead Aviation Corporation, the Manchester
Airport Authority was joined as a defendant. The suit, seeking, an
injunction and $1 ,000 ,000 ($3 , 000,000 when trebled) in da;t.a,es, was dismiss-
ed on motion. Civil No. 80-427-D (D . N. H. Jan . Vii, 1981) . it alleged
that airport regulation regarding the sale of _aviation fuc_l_cr`nsti. :utced
the creation and maintenance of an illegal mono,>oly.
Dayton , Ohio has been joined as a defendant: In James Dav_i_3 Morroc,
V. Ma s. South, et al . C.i � i l No. C' - ; -:,1 -137 (S.D. Ohic>) . The plaintiff
Challenged the termination of utility service by an investor-owned
utility company- for non-payment of charcJes. The Ci Ly, which
awarded the franchise, is being sued for $750 , 000 ($a . 25 mi.11.i.vn when
trebled) for an antitrust violation.
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U
9-ur: City, 1OWa ha!; h0(20 suc,d for alleged anti-
truss_ viola-
tions involving zoning and de.ieloprlent .
----•------. .--_--- - Scott V. City of S.iou>c
Ci.tx,.- i:owa No. C. 79-A 001) (N.t _ Iowa) . The p1.ailitlffs charge - Lhe
City with per se and r-rrle W violations of sections 1 & 2 of
theSherman Antitrust 11ct:, :.nr .Ludic ._4 engaging in an illegal restr�iint
of tirade, a conspiracy to restrain trade, conspiracy to ?lone.) olize.
trade and the monopoly o t r;:ic;t: and coiiur.e rce. The City is also
eharUed with violating t-.ht� 1:01v.c Competition Law. The sir:t.if.f: in
Scott owns property adjacent to a potential regional shoppi.nci center
site. Though originally not subject to zoning restrictions, it was
annexed by the City and th(-rea*:ter brought under the development laws.
Plaintiffs assert that thc� C-:ity, i.n order to stimulate urban rene%-.;,A1
Of .its downtown, enacted an interii;l development ordinance and placed
a moratorium on building permits during that period . This, in com-
bination with the rezoning of other properLy, is alleged to have
resulted in the relocation of the shopping center and an adverse effect
upon the commercial development of plaintiff ' s property. The suit!
seeks the rezoning of the property and damages of $1. million ($3
million when trebled) or, absent rezoning, damages of $5 nl i ll i-ori f$ 15
million when trebled) . This suit .is still pending with no issues deckled.
Pontiac , Michigan is rt defendant in an antitrust suit dealing
with the provision of_ h4�i t al Ger ,;
Huron Valley Hospital, Inc_.
V. City of Pontiac, 4G6 F. Supp. 1301 (E.D. Mich. 1979 ) . The City
had been ordered by the State to update or repi .3ce its aginri munlcl.pal
hospital. It sought and received the required State Certificat_c of Necd_
At the same time, the plairlti+:f non-profit organization, located 20
-iles west of the City, was denied a Certificate of Need to construct
a small health care faciLity. This suit was subsequently filed,
containing Allegations that the City and the irui:iic.i�al hospi_t al
authority conspired to exclude it from the health facilitie and
services market and to fix Prices, thereby violating section 2 of
the Sherman Act. No dollar amount for damages was specified. The
City prevailed in district court and was granted summary judgment.
466 F.Supp. 1301 (E-D. Mich. 1979) .. The actions were deemed to be
within the "state action" exemption of Parker.
In addition, the Noerr-Pennington doctrine was held to exempt
defendant ' s efforts to influence the actions of the state agencies.
The Noerr-Pennington doctrine is from the United States Supreme Court
decisions of Eastern Railroad Presidents_Conf. v. Noerr Motor Freight,
Inc. 365 U. S. 127 (1961) and United Mine 11orkers v. Pennington, 381_
U.S. 657 (1965) . It protects the first Amendment ri }its of
to cooperate to ?-nfluence and petition government bodies without,
in fact, violating any of the antitrust laws. In Noerr, the Court un-
- i
animously held not to violate the antitrust laws a joint effort conducted
by an association of railroad presidents to influence Legislation and I
agency practices favorable to their businesses. Public
participation
in the government processes -%-,as held to 01.1tweigh antitrust conc:c�T-ns. �
In Pennington, a joint e.ffort by the United dine l orkers and
private
coal cc i'panies to :influence governi::ent was ��lso held,
- by a 6--3 decisic,n, '
not. to violate the antitrust.. any anticornj,eti i::i-ve f
purpose of the activity did not effect. ii.::: lec slit
T y, even though the
"sole purpose in senkin(j to inf luenco t:h(� )-)asF;acy,! and rnforcemcn-it of �
laWs was to destroy the truckers as ccnif�ct i.tor�:. . 3G; U.1; t 1.35_
In California Motor Transport Co. v. Tr1,cking Unlimited 404 U.S . s08
(1972
, the Noerr-Pennington dnc-tr.i ne was he .'Id i nappl i r:jgh:l e, by a 7_-0
vote, 1f:here the concerted political actio= Y a i.t wc�s m�..-.,
sham to rcstrai.n
1
• -1 1--
trade ,
C.i,L_y-of 1'orzt`iac wac; :ippc a l c.cl an l epee order was vac:jtett
CJ.vil i+ction No. 79--1265 (() Lh Cir , ticc . 11 , 1981) . Fuz Lher pro-
ceedings are stayed pendin(J c..ompl.etion of ongoing state administra-
tive and judicial proceed.rigs (brought by Huron Valley) t•,hile no
dollar Figures have been (Jive n, the Legal expenses to a private law
firm Lo defend this action are reported as"significant:'
The City of Plinneapol_is and the Minneapolis Housin�3 and _DeveIc)finent
Authority (MHDA) were defendants in Cedar-Riverside Associates, Inc.
v. United States 459 F. Supp, 1290 (1;. Minn. 1978 ) . The plaintiffs,
private developers of a "new town in to%-.n, " alleued that the City
and M11DA consp��d together and tjith other groups to restrain competition.
'this violation of section 1 of the Sherman Act was clair;ied to have
prevented the developers from effectively participating in the project.
The City and MHDA moved to dismiss this complaint, asserting the
Noerr-Pennington exemption . The court_denied-any- immunity based on
NOer.r-Pennington, holding defendants actions were not of such "signal
importance" to overcome the antitrust laws . It then proceeded to find
that the state action exemption of Parker, as elucidated in Lafayette,
would suggest a statepolicyto displace competi.on in this eyrie. How-
- �--- ----�___f
ever, the court then proceeded to discuss the possibility of the defendants
_.��_—_--------- ---------------
exceeding the scope of their lawful monopoly. Finding no immunity to
apply in such circumstances, the court reused to dismiss the charge.
The only remaining antitrust issue was whether in fact, the munic-
ipality had exceeded the bounds of the stage action exemption. On the
subsequent appeal of this case, the arguments only involved the validity
f the district courts' dismissal of 4 claim--, which did not involve
antitrust.. The decision was affirmed. 606 F. 2d 254 (8th Cir. 1979) .
In Schrader.- v. Horton 626 F. 2d 1163 (4th Cir. . 1980) , thO. court
affirmed a federaldistrictcourt rul.i.nc1 according Tazewo-11
Va. antitrust exemption under the Parker doctrine . 471 F. Supp_ L236
(W.D. Va. 1979) _ Plaintiff lando-wners chal.lencjei a county ordinance
requiring that they connect at their own expense vi.th the public water
system of the Tazewell County Water and Sewer Authority and terminate
use of their existing state approved private water. system. They
claimed the requirement violated the Sherman and Clayton dinL4 tL7USt
Acts as it eliminated all competition from private systems, and consti-
tuted an intentional water supply monopoly. The federal district
court found Virginia state policy regarding monnocily by a public water
service to be clear in Va. Code Ann. §15. 1-1261 . It also noted that
the county ' s actions ,.;c-,re not taken as a business venture , but rather
to insure adequate water supplies to the public.
The Cay of Brockton, Blass. ,- the -Brockton Transit Authority (BAT) and
others were joined as defendants in Crocker v. Padnos 483 F. Supp. 229
(D. Mass. 1980) . The suit bx;ough_ by__Ulaint_iff private transit-- operators
included charges that defendants violated the antitrust laws (no pro-
vision cited by plaintiff) by engaging in "an unlaw ul and unreasonable
restraint on the al.ienabi.lity of the plaintiff ' s business" 483 ['.Supp. at
231 . Applying the Parker state �:ct:i<:n excl�pt ion, rls, el.11c:i�l�,tcd by 1,i_lftlyettc,
the court found the City anci Bi,`i` to 1-le "acting pursuant to, a stage
policy to displace competition and are csxenlpL from the antitrust :Laws" 483
F.Supp. at 232 . It reli (i>d on ,tate .law ; aiiLhot-Jzinq t:}t_ Inllnlcl_)c11. _frilllspnrt a
tion agency- -and creating thc� position est. /ldlll:i.ru � trr:Lor (M,iss. e:: nc reel
Laws, Ch. 161B) as well. as the authorization directing enLit.i.es and per-
sons to seek federal assistance (mass- Genc_ral Lai.s, Ch. 16113 §22) .
Plaintiffs had sought $500,000 under th .- antitrust count ($1. 5 Million
when trebled) .
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In City of Gainc-:-;vi.I.Ie v. Florida Power and Lj (-Jit: Co. 428 F.Stipp_
1258 (S. D. Fla. 1980) , L I i(_ CiLies of Gainesvi I le, AI a chuL! , I i,irto�,', FL.
Meade, Homestead, Kissimmoo, MounL Dora , Newberry, St. Cloud , Starke, and
Tallahassee joined with (:)I_hi2r -)Iaintiffs alleging the defendant ele-ctri_c
utility violated a number of. Ecderal statutes including the anti t r-,ist_
!!;t-.aLutQs . The utilil:y al-loging t1le Plaintiffs viclate(!
the clrltitT.'Llst. lati-.." . Fedli *ral district court dismissed these c-Untel
claims for procedural reasons .
Guthrie V. Genesee- County, Ne%,r York 484 F . Stipp. 950 (U`.D. , N. Y.
3.980) contained antitrust-. CharCJ(2S against a county %..,hich owned a pu1ji,ic
airport. The plaintiff alloqc--di Chat: the defendant county
and privat.e
fixed base operator, in violation of sections 1, & 2 of the Sherman Act,
contracted, combined and conspired to restrain trade , with the intent
to e1iminate plaintiff ' F-, compet-ition. The f--deral district court grant-od
the clef e-ndant's motion to c.j.srji ss as plaintiff had no stcindiri,j to sue_
Guthriewas a former shareholder of the corporation which provioi.1s1y
operated the airport. However, the federal district court. then pro-
ceeded to discuss the antitrust claim and the County' s motion to dis-
miss it based on the Parker 'Istate action" e;,,.emption. The coui:t hold the
legislative grant of authority "too_t_-_1nious to conclu
County ' s actions (award of an exclusive
_operating agreement) were �..rithin
the intended scope of activity authorized by the State of New York" 484 F.
Supp, . at 958.
A municipality was charged with committing antitrust violations by
allegedly using zoning laws to hinder development of a shopping canter
to compete with proposed downtown development. Mason City Center
Associates 'v.
City of Mason City, Iowa 468 F.Supp. 737 (N.D. Iowa 1.979) .
w1i
The federal district court re-f.uoe.d to recognize a Porker state action
exemption, holding that the "Iowa zoning law . . . does not compel or
----- ---- -- - -- ------
contemplate anticompetitive acjrec-ments on the part of TOVIZi municipalities, "
468 F. Supp. at 743. 1-t proceeded to hold t-he facts before it insuffi-
cient to determine whether a Noerr-Pennington political speech exer:;ption
is applicable. Defendants' motion to dismiss was consequently denied.
In Pinehurst Airlines, Inc. v. Resort Air- Services 476 F. Supp. 543
(M.D. No. Car. 1979) , the Moore County, North Carolina Board of Commis-
sioners and Airport Committee were sued for alleged antitrust viola-
tions involving the operation of a municipal airport. Thep-j i.ntiff
asserted t]izit ,nexclus.__ive _grant to a fixed base operator con�f_itu�ed
an antitrust violation. The court examined the intent of -state authorizing
legislation and determined it was not to direct or authorize an exclusive
fixed base operator status. Thus, the Parker "state action' exempti.on was
not applicable. T11E' G'OUI"t also denied the availability of a Noerr-Pennington
----------
exemption. It held the doctrine-not;to apply where the-_ actions were
not to influence legislation favorable to themselves or detrimental
to others, but alleg(_�d to effectuate a favorable disposition or imple-
mentation of the statutory framework that-was already in existence"
476 F. Supp. at 556. It also held that i .f the dCci cions of the h i.rport C.onuai s
sion can be shown to have been cont.ro.l-lccl by the defendant:, Noc_z_r.-l'enninc3tor:
would not be available_ The court denied defendant' :_; moti-ori to dismiss
the antitrust c:ia.rgc.s, while dismissing the ot-hor. counts.
An antitrust- ciction involv.incr ambu? ,: Ice :service was brought_
against the Boai. (i of commi ;sion,_�rs aI C M -Irl; Court y, Nevod_ .Inc! t-hc�
City C"'Illissioner-s, the' Mayors and t.hc, Cities o". ].as vec a s t. N.--)I-tli
Las Vegas, Nevada . United Pacific Ventures v. Mc�rc:y, Inc. Civil LV.
80-163 (D.C . Nev. 1981) . The suit- v.as fi .lCd by <zr, ambulance company
whose ZIPPIA-cation for l i.ccnsinq wcis -c3e:iicc7.
J'] ,1J-l)tif f sought pa;t
trebled damages of $ 1, .6
([Ii J. '-c "r1c' damages of $3/-,00
daily -nitj .1. j,,]c3(jjjzerlt, JA.U,`- i.ntere..;t.
Tho. plaii-itifff; alj_(,cjecj t1lat defendant violated sections I and 2
Of the Sherman Act. Th" found that the municipal entities were
immune from anti. t--rusL foi.: attoulance service
under the Paril-er "state
Ci-L-ji�-t �Jevada Revised StatutcE;
§268. 081 (j) authorizij,cj
ambulance
Lpa I i ties,
§244 . 187 ( 1) (c) authorizing
exclusive franchises ouLsicle cOT-P(;1:ate limits, 5450B establi sh illu a
Stat-- licensing systeiij, covering imbulances, that conforms with the
Federal Emergency Service:; Act of 1973, 42 U- S.C. §300d et
seq, which rccognj.z(--!F, jr,.t * -)l ,yeti
effects, the court determined
that the citi-es , actions were c10a1--JY Articulated and affirmately ex-
pressed as state policy and were ictively supervised by the state.
The plaintiffs v,,(--:re also chatcjecj %.,ith antitrust. violations in
regard to the licensing efforts themselves. This action was held to I-x-
ex(npt
under the Noerr-Penninata doctrine. The court also held that the
Plaintiff failed to e-stablLsh that defendants, acts occurred either
Within the flov.7 of interstate c;ORM-lerce or substantially affected inter-
state commerce.
No further
by plaintiffs against the municipalities
after the case was flisillissed by this unreported decision. Civil LV
80-163 (D.C. Nev. 1981) . Prior to Cie fjjijg 0, this lawsuit,
.L and partially
in response to concern regarding anti tl.-'.lst c'xF)()Sul-(-, th(` City of Las
Vegas amended its Ambulance Licens-ing Ordinance tj(-) facijj.tatc: the
licensing of additional companies.
In discussing the Parker "state action" exemption, the court in
Mercy noted California Liquor Dealers v. Midcal Aluminum, 100 U-S. 937
-16- r
(1980) . By an 8-0 decision; the United States Suprema- Court h(_-1d the
Parker exemption to be applicable to the California syste',,, of resale
price maintenance and price posting for wine. Midcal reiterated the
requirement that for the Parker. "state action" exemption to bu appli-
cable to a program, that program must be "first 'one clearly articulated
and affirmatively expressed as state policy ' ; second, the policy must
be ' actively supervised ' by the state itself. " 100 S .Ct. at 943 .
Attached are copies of legislation or constitutional provisions
said to exempt .local governments from this cable t. v. threat. Do you
have better ideas you want national consideration of. If so, send them
in by April 19 , 1982 to NIMLO headquarters .
The attached letter_ from Itichrr,ond, Virginia just received today
expresses in a few words the impact- of. the "Antitrust Litigation
Explosion" which threatens every municipality, large or small .
The- very reason f_c;r existence of most municipalities :is to take r;c�nu
of the actions now held to be challengeable under the pr.inciplr.s of
Federal and State antitrust statutes .
Whether the answers to this enormously costly "antitrust" explosion
to local government taxpayers is to be found in Federal or state
legislation, now is the time and the NIMLO Washington Seminar
on April 25-27 , 1982 is tho place for us to formulate our action program.
President Brennan hoi.,, to s e. you �i, l h<,ar y,)u tl-iere• r,n1 to receive, you.- �•�r.. tater,
recommendations for reproduction and :?i !.t .r.i l)u t.i c,n to tba t Cc,nf cronce .
Send them in by April 1.5, 1982 to NTIM1,0 he,idquarters , 1.000 Connecticut
Ave. , N.W. , Suite 800 , Washington, D. C. 20036 .
+, � At t-ZlChnlerl t A
i q f r ,� National :
Institute o
F'. f r
Municipal f
Lav Officers
l(k)0 Connecticut Avenue, N.W., Suite 8(Y). Washington. D.C. 20036 (202) 466-542.4
National Municipal Litigation Venter of the ,'''National Municipal Legal Defense fund
tDf NT ME1 t01?jV\tDi.TM
f-S D. BRENNAN -----'---
-xncy TO: N T-9T0
.s,l:cc.Wisconsin _ (��
FROM: Charles S. Myne -��^
T VICE PRESIDENT
xY W.vNDERtnLI..JR. pg: Ilecluest fof- inf:orZtxit'ior1 regarding antitrust litigation
.,;c.Nonh Carolina involving the city
OIJD ViCL•' PRESIDENT DNrE: February 3, 1982
%TMAYN L.SRO%VN
°nLcilnr
-:,o:e.hlaryland
By How, you have received .tron NE-10 and read the cc,trplete copies of all
VICE PRESIDENT the recent opinions of the United States Supreme Court in Ccxrn-uii-t" Co:Irri=_-
,tAcSHELLEY cations Co. ,Inc. V. City of Boulder, No. 80-1350 (Jan. 13, 19U2T Ze ,s-der
n
...-izona recisioInvolved a )0- y rtx�ratori&n and may be settled with no court de-
-.SURER cision made as to whether the City violated the Antitrust Act. (City of
D. BA,rEs Lafayette v. Louisiana Pa..er and LiPJzL- CO. , 435 U.S. 389 (1973).
AWL mcy
^bra.South Carolina Liability for antitrust violatiOTLS involving garbage collection activities
;ERALCOUNSEI. by the City is pending before the Suprerrn Court. In Hybud Equi , ent CO v.
%P-LES n st�RttYNe Cit of A]cronTU, f9 , 654 F.?.d 1187 (CA 6) , petit. for cert. 30. � -
723
e Sixth. Circuit held that the requiren-n that all solid waste,
S f EES: including that collected b private c C
Y P ampanie.�, be brought to the City's s energy
',.cGEAGNOST recycling plant-, was exempt from the Sherman Act because garbage coil-ction
_.it0mcy and waste disposal are traditional activities of local government xrithin the
tzncis!o.Californi.t nlealldno. of Nati
cR r.CUTLER o l�agtie of Cities v. Usk, 426 U.S. 833 (1-976) .
t�n'y A cable antitrust case has been filed since the decision in Boutldcr
��cit,.Utah against Hopkinsville, Mucky. No answer has been filed and the case
DEKKER is under study.
:t.-xaLaw
: a.Kansas In order to assess the impact that the Court's decision may have on local
.-nREY S.GODDESS go'vernra- Its nationwide, we ask that you respond to the questions on the reverse
iolici!or side of this memrand
'-_,:ton.Dctaware um as ccn-pletel y as possible and return your response to
NIMLD headquarters, 1000 Connecticut Ave. ,N.W. ,Suite 800,tdashi ngton,D.C.20036,
HOLT b Feb
Y nia=Y 22, oras soon thereafter as possible.
T"&s nis attempt to assess the impact of the Court's decision is a cQo 0
,.'.GE F.KNox.ll+, p�.rative
effort by N7 ff-O, the Il.S. Conference of Mayors, the National Lague of Cities,
At!,rncy the National Association of Counties, and the International City MLmagei„ent
,.Florida
.TER M.POWELL Association. Similar questionnaires are being sent to the nembers of those
:,;at Counselor organizations. An ad hoc advisory ccmTiittee on local government antitrust
:vr:a City.Oklahoma liability with represent�tive-s from each of hose organizations has been forruad
_N G. SCHWARTZ and will utilize the info=tion collected to reconrrlen�? sOn� kind of future
-anon Counscl COLLrSe of action t0 +
York.New York each Organization s proper officials.
at.TAUSE Please take a portion Of your tine- to compile this infortt><ation w�zicll will
linois l aid all local goverrr*nr_nt„G faced with expanded potential liability under the
.14 .Ili°ors antitrust laws dLie to the P,oul.dcr decl.Slon.
;�:V A. WILSON - —�--
-ssovri .
W.W TT
A rornc y
>eto.calirornis
P.ZALL
QUESTIONNAIRE ON A14TITRUST ACTIONS AGAINST LOCAL GOVERNMENTS
1. Identify the number of antitrust actions filed against your
municipality within the last five years , specifying as to each :
A. The case name _ Specify if government officials were named
as defendants .
B. The court in which the case was filed and docket num'Der .
C. The antitrust law under which the action was brought . (e. g. ,
The Sherman Act, The Robinson-Patman Act . )
D. The local government action which prompted the suit . .(e . g
U �
a zoning decision, a franchise matter. )
E. Plaintiff' s claimed damages when trebled . Any other relief
sought, including equitable relief.
F. The status of the action as of the date of reporting in-
cluding citation to any decision rendered with respect to
it. (e. g. , pending, settled, dismissed. )
If the case was settled or otherwise disposed of. , did the
city make any payment to plaintiff, or alter the action
which prompted the suit? If yes, please explain.
2 . Identify any other costs incurred as a consequence of antitrust
exposure. (e. g. , actions altered, delayed or otherwise influenced
by a concern for antitrust exposure . )
3 . Do you anticipate the filing of antitrust actions against the
municipality as a result of the Boulder decision? If yes , hr-ief-ly
explain. -- -
Please return to NIMLO, 1000 Connecticut Avenue, N. W. , Suite 800 ,
Washington, D. C. 20036 by February 22 , or as soon thereafter as
possible.
• Y It -1 C� I11j.1.•:�t J1
Respond ants to NIMLO, NL(-', NACO, USCM and IC;-?=i C);.�c_>ticni�air.c
STATE DATE
Alabama
Gadsden 2/16
Birmingham 2/10
Hoover 2/19
Tuscaloosa 2/11
Alaska
Kenai 2/ 8
Arizona
Casa Grande 2/12
Glendale 2/ 9
Mesa 2/11
Tempe 2/ 9
Scottsdale 2/ a
Arkansas
Little Rock 2/ g
Rogers 2/14
California
Carlsbad 2/16
Hermosa Beach 2/ 9
Los Angeles 2/23
Simi Valley 2/ 9
Roseville 2/ 9
San Diego 2/ 9
Fountain Valley 2/ g
Livermore 2/17
Alhambra 2/ 3
Atascadero 2/ g
Banning 2/10
Corona 2/10
Desert Hot Springs 2/10
Redlands 2/10
Burbank 2/ 9
Carmel--by-the-Sea 2/ g
Corina 2/10
Daly City 2/12
E1 Segundo 2/11
Escondido 2/10
t
Ra
2 -
Garden Grove 2/ 9
Inglewood 2/ 9
Long Beach 2/12
Modesto 2/12
Redding 1-2/ 9
San Buenaventura 2/ 8
San Francisco 2/ 8
South San Francisco 2/11
Stockton 2/11
Vallejo 2/16
El Monte 2/16
Merced 2/19
Oceanside 2/17
Colorado
Telluride 2/15
Aurora ?_/ 8
Colorado Springs 2/19
Grand Junction 2/ 9
Broomfield 2/19
Delta 2/10
Durango 2/ 9
Lakewood 2/10
Denver
Steamboat Springs 2/10
Sterling 2/10
Connecticut
Bridgeport. 2; 9
Groton 2/17
Milford 2/10
Winchester 2/ 8
Delaware
Newark 2/19
Wilmington 3/ 1
Florida
DeLand 2/ 8
Delray Beach 2/10
Ft. Lauderdale 2/7.3
Lakeland 2/16
Miami ?/22
Manatee 2/11
Tamarac 2/ 9
Georc�.ia
Albany 8
Columbus 2/ 27
Hawaii
Honolulu 2/10
Id a 110
Coeur D'Rlene 2/19
Pocatello 2/11
Illinois
13ridgevie,,,
Burbank 2/12
Cary 2/11
Danville 2/ 9
Decatur 2/17
Deerfield 2/17
Morton 2/25
Niles 2/25
U-1-bana 2/
10
Des plaine8
2 s /18
Dixon 2/19
Elgin 2/8
rvergreen Park 2/12
Hickory Hills 2/12
Hometown 2/12
Lake Bluff 2/ 8
Lansing 2/18
McCook 2/12
McHenry 2/11
Moline 2/ 8
Oakwood Hills 2/11
Peoria 2/ 8
St . Charles 2/11
Watseka 2/11
Woodstock 2/ 8
Naperville
Iowa
Cedar Rapid, 2/lo
Daveport 2/ 9
Johnston 2/16
Sioux City 2/19
Kansas
Derby 2/18
Hutchinson 2/ 9
Kansas City 2/ 8
Pittsburg 2/16
Wichita 2/ 8
,league of Kansas Municipalities 2/ 9
Kentucky
F't. M4tc2ie11 2127
Marion 1
2/1
Shively' 2/1
Winchester 2/11
9 -
Louisiana
Slidell. 2/ 8
Maine
Augusta 2/ 2
Bangor 2/11
Lewiston 2/ 9
South Portland 2/28
Waterville 2/19
Maryland
Annapolis 2/ 8
13altimore 2/1.0
Baltimore County 2/11
Cambridge 2/ 5
Cumberland 2/11
Massachusetts
Newton Centre 2/ 8
Michigan
Allen Park 2/ 9
Big Rapids 2/ 7
Durand 2/10
Grosse Pointe Park 2/ 8
Grosse Pointe Wooas 2/11
Harper Woods 2/10
Monroe 2/11
North Muskegon 2/ 8
Norton Shores 2/18
Roseville 2/10
Traverse City 2/10
Minnesota
Brooklyn Par;, 2/ 9
Duluth 2/11.
Hopkins 2/ 8
Owatonna 2/ 8
Missouri
Berkeley 2/ 8
Cape Girardeau 2/11
Clayton 2/16
Harrisonville 2/ 8
Mission Ifil.ls 2/10
Raytown 2/11
St. Charles 2/ 9
St . Louis 2/16
- S -
tf<.ntan��
Billings 2/11
Great Falls 2/ 8
Sidney
2/23
NebL•aska
Central. Ci Ly 2/ 8
Lexington 2/ 9
Lincoln 2/24
North platu.! 2/22
Nevada
Las Vegas 2/23
Steno 2/11
New Hampshire
Manchester 2/10
New Jersey
Atlantic County 2/ 9
Milltown 2/11
Newark 2/10
Jersey City 2/24
Belmar 2/25
Pompton Lakes 2/ 8
Spring Lake 2/10
New Mexico
Corrales 2/12
New York
Fulton 2/ 9
Mt. Vernon, 2/16
New Rochelle 2/ 8
Niagara Falls 2/19
North Carolina
Carrboro 2/ 8
Charlotte 2/10
Fayetteville 2/ 9
Goldsboro 2/16
Wilmington 2/ 8
Wilson 2/ B
North Dakota
Bismarck 2/11
Minot 2/ 9
6 -
Ohio
Akron 2/22
Brunswick 2/10
Canton 2/11
Cuyahoga Heights 2/1.6
Dayton 2/16
Madeira 2/11
Middletown 2/10
North College Hill 2/11
Oakwood 2/11
Oxford 2/22
Parma 2/ 9
Shaker Heights 2/16
Solon 2/16
Steubenville 2/ 9
Toledo 2/ 8
Warrensville 2/ 9
Oklahoma
Dewey 2/ 9
Enid 2/ 8
Oregon
Depoe Bay 2/ 8
Estacada 2/11
Portland 2/24
Florence 2/12
Gresham 2/ 9
Salem 2/ 9
Newport- 2/ 8
Pendleton 2/ 8
Roseburg 2/ 9
Yachats 2/ 8
Pennsylvania
Pittsburg 2/ 8
South Carolina
Aiken 2110
Columbia 2/ 9
Greenville 2/1.113)
Spartanburg 2/11
South Dakota
Aberdeen 2/14
Tennessee
Chattanooga 2/17
East Ridge 2/ 8
7 -
Lc�l:�e1. 2/12
McL;wen
`T Mur f reesl)o3-o 2/12
t-:ernph i.s
2/10
Gat Iinburcl 2/25
49averly ?/ 5
11:unicipal2/12
'1'�cJil[1.Lc:a Ilc:t%.L50? ;
Service 2/22
Texas
Arlington
Bay City 1_/28
Beaumont 2/ 9
El Paso 2/ 8
Freeport 2/10
Irving 2/18
Kingsville 2/10
Weatherford 2/ 9
Texarkana 2/ 9
2/ 8
Utah
Logan 2/ 9
Murray City 2/11
Salt Lake City 2/16
Vermont
Brattleboro 2/16
Montpelier 2/ 9
Virginia
Charlottesville 2/22
Chesapeake 2/ 8
Norfolk 2/17
Virginia Beach 2/11
Williamsburg 2/ 8
West Virginia
Moundsville
2j 8
Wisconsin
Eau Claire 2/17
Menomonee Falls 2/ 8
Reedsburg 2/19
Kenosha 2/ 8
Wauwatosa 2/ 9
West Bend 2/ 9
Wisconsin Dells 2/19
Wyoming
Casper
2/ 9
Attachm_,nt C
REPORTED STATE STATUTES AND CONSTITUTIONAL PROVISIONS C I,AIhtf?D '['U
PROVIDE EXEMPTIONS FROM THE: FE:DF.JZAl, AND STATE ANTITRUST -ACTS
The Following provisions contained in state statutes and constitu-
tions have been reported to NIMLO or cited in case law as -;ranting
local governments a Parker "state action" exemption from the federal
antitrust statutes:
Arizona (utility service - water supply)
Ariz. Rev. Stat.
§9-516. Declaration of public policy; eminent domain
D. It is declared the public policy of the state that when a
city or town has purchased the property or plant of a public
utility serving in an area within or without the boundaries of the
city or town pursuant to this article, the corporation commission
shall not be authorized or empowered to grant a new certificate of
convenience and necessity or franchise to any person, firm or cor-
poration to provide the same kind of public utility service within
the area or territory previously authorized tosaid public utility
under its certificate of convenience and necessity or f_rancl,i.s;e�, but.
if the city or town refuses to provi0e Ot.ili ty service to ci portion
or part of the area or territory previously authorized to the: public
utility, the corporation commission mar., is!�.ue it r,ew c(-!rti.fic,iLc! of
convenience and necessity or franchise to a pull i c ut.i.1 i.t.y to provide
utility service in thal: pol-tinji c;r 1,ji t of i.hcr ,,t:c.�, <�r t:c j. r it.,ry.
Arizona (cable
I�uiz Rev. Stilt .
§9 . 507 . App I i ca t:j.ori for.- I i :ens, hea r-iny; terms; conditions
A Any person deli-riri(j Lo obtain a license to const.i--L,(7t- , op(3rlt_e
and 111airitairl a cahin tc, h--Visi(Dr syster. from it IJ,.-et-ising aut-liority
shall make applicatAori to -,uch Licensing authority in thQ lorr-: siDt"Cl -
fied by the licerisirvj ituthority ane: shall cc :ipjY, with requ.irt--it--,
its
specified by thr-, IA,.---nsin-j autlh .)riLy.
§9 . 508 . License reql.lirecl before construction ; provisions existinq
systems
A. A cable te-lev.i.si.on system shall not be constructo(I wit-1-ij.11
any incorporated city Or town or within the unincorporated area of a
county without a license therefor having first been issued pursuant to
the provisions of this article. This subsection shall not apply to
extensions of existing cable television systems wholly within thF
area of jurisdiction.
Marland '(broad antitrust exemption for _ services servic s or (-o
by Local Governments
,Md . Ann. Code
911-203. Exemptions,
This subtitle doe.,; no!- make illegal the action of:
(3-2) A political subdivision of the State in furnishing SerViCOS Or
commodities.
P•t�rin_ (c,nble television)
Me . Rev. Stat.
Title 30 9215.1 Police Power- Ordinances
A municipality may enact police power ordinances for tho following
purposes: 2. Public ways and other public property.
H. The municipal officers may contract on such terms and conditions
and impose such fees, as are in the best interests of the municipality,
including the grant of an exclusive. franchise for a period not to
exceed 15 years, .for the placing and maintenance of cable television
systems and appurentances or parts thereof, along public ways and
including contracts with cable television companies which receive the
services of television signal transmission offered by any public
utilities using public ways for such transmission.
Massachusetts (public-transportation)
Mass. Ann. Laws
Chapter 161 B
§2 Authorized Regional Transit Authorities; Powers to Hold Property,
etc.
The territory within and the inhabitants of each of the following
groups of_ cities aro towns may, upon compliance with section fourteen ,
become a body politic and corporate and a political subdivision of
the co:<<monwealth uncles the name preceding each
"Ir.ockton Regional Tr.ansi L Authority. rhe C..i.t.y of 13r-c-:ckton and
the towns of AbingL-on, : von, Bri.dgcwater ,, Easton, Harrison, Stoughton,
West Bridgwater. and ?;h i tan.
44 . Ad:itinisLrator ; :', p-)i.ntmcnt , Sal -ii-
The
alarThe af`airs of an authority shall bo E,y an administrator
who shall be appointed by and serve at the pleasure of the advisory
board of the a:rtho-: ity established pursuant: t-.o section five; provi(ieo ,
hov;ever, �_h;AL the: admin j !-it C,11_OL shill not be a ppo .i rited until aft-e y.
board has Prov i (led t:I ic, no 1- L ! i -i on r(-_q.u irod I jy cj au:I:::o M of'
fourteen; and provided, fur I-liei- , that the administrator shall i-()I- hold
any elective of Fi(_(2, except- Lhat. of to %,rn ineeti n(-j me,,-,,ber , in any city
or town aiLhin the jurJ_f;di.(_L-j.on of such authority. The administi-ator
shall. be the chi-el: (2xocut- ii/e officer of the authority and shall Y-eceivc-_-
such annual salary as shall bt, determined by said advisory board . Upon
his appointment, the administrator shall give the state treasurer a
bond for the faithful performance of his official duties in such penal
succi and .%Yith such sureties as may be approved by the advisory board.
(1973 , 1141 , §1 ; 1976 , 312 91 , approved August 24 , 1976 , effective 90
days thereafter) .
922 . Securing of Federal Assistance.
Each authority is authorized and directed from time to time to
take all necessary action to secure any federal assistance which is
or may become available to the coilunonwealth or any of its subdivisions
for any of the purposes of this chapter. If any federal law, administra-
tive regulation or practice requires any action relating to such federal
assistance to be taken by any department or instrumentality of the
commonwealth other than the authority such other department or instrumenta-
lity is authorized and directed to take all such actions, including
without limitation filing applications for assistance, supervising the
expenditure of federal grants or loans and making any determinations
and certifications necessary or appropriate to the foregoing, and the
authority is authorized and directed to take all action necessary to
permit such other department or instrumentality to comply with all
federal requirements. (1973, 1141, 91. )
Michigan (public utility-broad authorization
Mich- Const. of 1.963 Art. VII
Soc. . 24 Public service faci1i, :i(-s. Sul-)jecL to t.hi.s, constitution ,
any
City or village may acquire, own ol: oporate , wit_lii.n or without
its corporate limits, public service facil. ities for supplying i•;r,ter. ,
light, heat, power, sewage disposal and transportation to tlic, munic-
ipality and the inhabitants thereof.
Services outside corporate limits. Any city or vi.11.age may sell_
and deliver heat, power or light without its corporate limits in an
amount not exceeding 25 percent of that furnished by i.c '�•.rithin the
corporate limits, except as greater_ amounts may be permitted by jaw;
may sell and deliver water and provide sewage disposal services
outside of its corporate limits in such amount as may be determined
by the legislative body of the city or village; and may operate trans-
portation lines outside the municipality within such limits as r.-jay L,!
prescribed by law.
Sec. 34. Construction of constitution and law c.oncernind counties,
townships, cities, villages. The provisions of this consti-
tution and law concerning counties, townships, cities and villages shall
be liberally construed in their favor _ Powers granted to CouzltiE!s
and townships by this constitution and by law shal.1 include those
fairly implied and not prohibited by this c•onsti.t.ution .
(Convention Comment. This is a new section intended to direct the
courts to give a liberal or broad construction to statutes and co-t
stitutional provisions concerning ali lova ! doverrnnentF;. home: rule
cities and villages already enjoy a broad construction of their
po,:7ers and it is the int�nt.ion hcrc to extund to countic and town-
ships within the powers grantee? lr, Ui(c r: e(jlii.va:tcnt latitlldU in t.hc
interpretation of the constitution and stat-utes. )
j
Minnesota (housing redevelopment)
Minn. Stat. Ann.
y462 .41 `i Purpose: Public -"riterr.-st; Decl �-,rat;.on of. 3'ol.icy. ivi -
sic.
n 1. > it is herel;y c! _I that there i.:j; not in tir.i s stzrtk.� a
suffic:lent supply of adcg:iate, afc_, ani} sanitary dl -• el.ling c:cco:nnocia_
tions and that in certain urban and rural areas ther-e,_>f Lher_e exist
substandard conditions, unsafe and unsanitary housinr, and buildings
and structures used or be used for livin-; , cor.;r;:crci.al ,
industrial or r-)ther pui:F;0!;c.s o:. any c:;�,,}�inat:io,I of such uses tihi.ch. . . .
are injurious to the }�ca.l.t:h, safer_y, ri,urals an r
d •.•:c.l_-are of t}ie c.i.tizc•ns
Of this .Mate, cause an Lncreaso and spread Of crir?e , ]VCnlle d
J' elinruency ,
and disease, inflict bl. i.cftlt upon the economic value of large areas,
and, by impairing the vaJ.ue of private investments, threaten the
source of public revenues while decentralizing
coau-riurri.ties to areas
improperly planned and not related to public facilities, and require
many persons of low income to occupy unsafe, unsantar<
s , and ovcr-
crowded dwellings.
Subd. 2., It is found that the public interest requires the
clearance, replanning, reconstruction, and neighborhood rehabilitation
Of such substandard and '_insanitary areas, and the provision of decent,
safe, and sanitary housing for persons of low income and their families;
that such redevelopment and tine provision Of such housing for pe.r:sons
Of IoW income and their families al--(, essential t:o pr otf-,ct t}re source s
of public revenues; that, in order to protect the financial stability
of comrr.unities, it is necessary to redevelop substandard and blighted
areas according to a comprehensive community plan for development and
by encouraging the production of housinc, property planned and relatecl
to public facilities; that these conditions cannot be remed.ic.d by the
--Binary operations of 'Private enterp.riscc or by re(J01 ation alone; that
provision must be made to encourage pi:ivate enterpri.sc, to engacje in
redevelopment or to provide housing facilities in subst<nda-rd
-7
to be constructed in �ICC�7rt73I1C'i' r:1.th °;l1Cli CUifIL�I C'.ICI1' 1.V1 1�1.aP ; Lh-it
p1:c,vi.sion must also }-)e madc to "nc,ouracj(! invesi.n1e:it_ cA' funds ill, and
for the acquisition by private enterp.risc� cit fair pr-_ics of., re c11 Pro-
perty required for such purposes in substandard areas, and for public
assistance thereto and to encourci(4e iffLmediate devul.opment by the grant-
ing of partial tax exemptions where justified as hereinafter determined;
that local public bodies roust be created and authorized to undertake
redevelopment. . .
Subd. 4 . It is hereby Oeclar.ed that certain sl.u:a or deteriorated areas,
or portions thereof, require acgi)isition ancs clearance, a,; provided
in sections 462 . 411. to 462 . 711 , sine_ the prevailing co/ldi.tion of
decay may make impracticable reclai.rnation of the area by cOnservatlon
or rehabilitation, but other areas or portions thereof are, through
the mearis provided in section 462 . 411 to 462 . 711 susceptible of con-
servation or rehabilitation in such a manriel- th at the conditions and
evils hereinbefore enu-meratc!O mav be el-iminated, remedied or prevente-d;
salvable slum or deteriorated areas Should be conserved arrd .rebahil i tatec'l
to the extent feasible through voluntary action and thc! regulatory pro-
cess; and all powers conFerrec? by sections 462 . 411 to 462 . 711, are for
public uses and purposes for which Public money n-�c1y be expended and
such other powers exercised; any the necessity ill the public interest
for the provisions o� sc?c:tions 462 . 411 to 462 . 711 is hereby declared
as a matter of leyi.slaLi.ve determination . `t'he mu'_ i.ci.p-'li.ty , to the
greatest extent: it determines to bC, foasible in carrying out the pro--
vi siorls of sections 462 . 411 to 46,2 . 71 1 , shall afford maximum opportunity
consistent with the sound needs of t}-:Cr rr,ur:ici.pc1l.it.y as a whole, to the
rehabilitation or redevul.opmerlt c:f arcr_ }:; Firi.v�it:e enLerprise.
Nebraska (water_ .r:i)F)ly)
Neb. Rev. Stat
14 . 102 . Metropolitan cities; addit:ioria.1 poti,(,rs. In ac-,(jit:ioli to the
pOwC.rS granted in soc.tion 14-1.0.1 met roP:)l.itan citier:, FIs Hie] (2in dtt Iinc�cl,
shall have poorer by ordi fiances:
( 3) '1'r, pr(-)vi.de 'all ner,�af`�il r. ule:> and regulation; ior the protect-ion
and prF_!servation of ti(�cjlt_tj wi t_h.in the city; and for this purpose
L-hey i:;,:ly provide ior. the of the use of water fr. c m puh'- i.c
water- supplies where the use of water from other sources shall bo
deenu_d unsafe;
Virginia _(t•;_ater supply wind sewer connections)
Va. Code Ann,
815. 1.-1.261 , Water- and sewer. connections. - Upon the acquisi ton or
construction of any wat;(-r.- =system or sewer system under the provisions
of: this chapter.-, the ovirv�r, tenant, or occupant of each lot of parcel
of land which abuts upon a street or other puLiic way containing a
water main or a water system, a sanitary sewer which is a part of or
which is served or may be served by such sewer system and upon which
lot or parcel a building shall have been constructed for residential
commercial or industrial use shall , if so required by the rules and
regulations or a resolution of the authority, with concurrence of
such local governmeriL, municipality, or county that m y be involved,
r_ -)nnect such building with such water main or sanitary sewer, and
shall cease to use arty other s-7urce of water supply for domestic use
or any other method for the disposal of sewage, sewage waste or othc-r
Polluting matter. All such connections shall be made in accordance
with .rules and regulations which shall be adopted from time to time by
the authority, ' which rules and regulations may provide for a charge_
for making any such connection in such reasonable amount as the authority
r ay fix 'and establish.
l Provided, however, notwithstanding any other Provision of this
chapter-, those persons having a domestic supply' or source of potable
water shall not be required to discontinue ttie use of same, but may
be required to pay a coxinect ion fee, a front footacfc fee , and a monthly
nonuser service charge that shall not be more than the proportion of the
minimum monthly user charge as debt service comparecl to the total
operating and debt set-vice costs. Such fees and r_harc3es nay not be
less than any monthly nonuser fee or service charge being charged by
any county, city or to::n in which the authority operates.
Nevada (garbage and disposal, fire protection and suppression, ambulance
sere ae)
Nev.Rev. Stat.
§244 .187 . Franchises for garbage collection , disposal services; fire
protection, suppression; ambulance service.
1. - Any board of county commissioners may grant exclusive franchises
to operate any of the following services outside the _Limits of. incor-
porated cities within the county:
(a) Garbage and disposal .
(b) Fire protection and suppression.
(c) Ambulance service to pick up patients outside the limits of
such incorporated cities.
9258 . 081 . Agreements, franchises to provide public services. An
incorporated city may provide by lease, r:r_,ntr. ztci_ or franchise .any of
the following services which by charter or general law can be performed
by the city itself within the corporate 1 imit.s ()C thc: city:
1. Ambulance services.
1. Computer services.
3. Fire protection and suppression services.
4 . Garbage and disposal services.
-10-
5. Police protect: i.on tend WaLchman sel-vi.cec..
6 . . Search and r.escuc! services.
7. Specific city inspection services.
8. Any other service demanded by the the city
which is within thr� pcUt•,er <>L -he cit-y by chari=c r or 1�,: to t.r-,vide.
945013. 300 Local authorities may adopt more rr,strictiv !1
e rcg1.. - tiU71 ;.
1. This act does not prc-clude local authorities from adopt:in-; more
restrictive rules or reyu Lations than those adopted by the bc)ar.d
pursuant to the provisions of this chapter.
2. No local authority may adopt rules or regulations less restrictive
than those established by the board.
3. The board shall determine whether local rules and regulations
are less or more restrictive than those adopted by the board.
(Note: Nev. Rev. Stat. §45013. 300 applies to a state licensing system
covering amublance . )
i
Att�aclinti:.tit. I)
DEPARTMENT OF LAW
RjcNMOND ,VIRGI NIA
2.3 21 S)
WC-1
February 24, 1982
Charles S. Rhyne, Esquire
National Institute of Municipal I :,w Officers
1000 Connecticut Avenue, N. W.
Suite 800
Washington, D. C. 20036
Re_ NIMLO Memo of February 3, 1982
Dear Mr. Rhyne:
In response to your request for information- regarding
antitrust litigation involving the City, Richmond is
currently involved in two consolidated cases in the
U. S. District Court for the Eastern District of Virginia
regarding certain zoning decisions made by the City. I
shall respond to your questions by numbered paragraph.
1-A. The name of the first, case is Richmond 1Iilton 7?ssoci--
ates, et al . v. 'Zhe City of Richmond, Virginia, et al. ,
filed December 23, 198 The defendants are the City of
Richmond, the City Council an6 its members in their official
capacities, the planning Conmtission and its morbers in their
official capacities, the Richmond Redevc)opment and Housing
Authority in his official and individual capacity, the
Mayor in his official and individual capacity, the City
M inagor in hiS individual and offi.c-i,il capjjci ty, ttte City
char Lc-s S . I;hyne, m—ctui i e 2 . 1••ebruary 2.4, 1982
Attorney in his oi:f.ic i..al and individual capacity, the
Director of Planning in his official and individual
capacity, a hotel. consultant to the City in his individual
capacity, the corporation for which he works, and a second
outside corporation_ The second case, involving the same
g�-ner.al factual allr,gati.ons , is styled Canal Square
_Associates v. The Cid_ of Rich_mond_. The City is the only
defendant in that cCISC-1 . That case is brought by the owners
of the land, whereas the first case is being brought by the
developers .
1-B_ Both actions were filed in the u. S. District Court for
the Eastern District of Virginia and have been assigned to
Judge Robert R. Merhige, Jr. The docket number of the
Hilton case is 81.-11.00-R and the docket number of the Canal
Square case is 81-1.115-R.
1-C. The Hilton suit was brought under the Sherman Act,
the Virginia Antitrust Act, two other Virginia statutes
and Section 1983 - The Canal Square_ suit was brought pur-
suant to all of the above except the Sherman_ Act.
1-D. The local government action which prompted the suit
involved allegations that the City violated the antitrust
laws in using its zoning power to prevent a Hilton hotel.
from building in an area of. Richmond which it wanted to
build while alloc•:ing the building of another hotel in an
area where the City felt it was necessary to build to
protect a declining retail core, and in bringing a case in
state court to determine whether the City has a reversionary
interest in the :Land involved.
1-E. In the Hilton suit plaintiffs alleged damages, when
trebled, of $280,000, 000 and no other specific relief.
In the Canal Square suit, no specific figure was pled; both
monetary damages and an injunction are being sought.
Charles S. Rhyne, Esquire 3 - February 24 , 1932 �
1-F. Answers were filed this week to the Hilton suit.
An answer is due within the month in the Canal Square
suit. The court has ordered the suits consolidated, and
a jury trial has been set for September l., 3.988 .
2. Not applicable.
3 . None, other than the above.
I hope this is helpful . We feel this is a very important
case, and would be interested in any help that NIMLO could
give. I appreciate the fact that you are providing such
a strong effort in aiding cities who are facing `hese
problems_ If I can be of any further assistance, please
do not hesitate to contact me.
Yours very truly,
William H. Hefty
Acting City Attorne
SVI-M:kh
LAW CW1-1C�`_-i
1175 C- STT4,_=T. NA-1.
'N C;
THE t-lUtlICIPAL ;-,NTTTRUST AUDIT:
A PRUDE!Til SAFEGUARD FOR MUNICIPAL, OPER1,1'ION,
FRANCHISING, AND REGULATION
OF' CABLE '"ET,I?V-CS101d SYSTEMS
March 19 , 29822
By: 14icholas P. Miller*
Kermit W. Almstedt**
The Supreme Court ' s recent City of Boulder1/ decision holes
that municipalities are immune from the federal antitrust laws
crily when acting pursuant to a "clearly articulated and affirma-
tively expressed state Policy to displace competition . "
The
decision, which is c_!xpIE-tined in 6.c�tail in the. I-larch 2 , 1982 Legal
Analysis which this i-riemora,110LII-:1 accoripanies , leaves unresolved many
iTO.port-ant issues about. p-ocis'ellIr how the, antitrust laws will apply
to municipal actions . But it does make clear that municipa 1 i ties
row must heed the potential antitrust consequences of their
actions .
This is especially true regarding activities related to the
municipal operation , franchis-Ing-- , and regulati-on of cable tele-
vision systems . In sow,.� circu.-,.istances, the public interest is
best served by conducting these activities in a way which is not
completely consistent with conventional notions of competition.
Nicholas P . Mil-ler formerl,7 served as Communications
Counsel to the Uni tod States on Commerce,
Science, and Transport_ation ,. ;.!id a- a con�;,il_tart to the
President ' s Office- of i,olicv . IIB now is a
partner in the Washington , of -Preston, Thorgrimson,
Ellis & Holman.
"_*/ Kermit N. Almste,• t for-r-Lierly s,rvod as Chief Counsel for
antitrust en-forcement in the Missouri Attorney General ' s office
and as Counsel to U. S. Senator John C. Danforth. He now is a
pa_--tner in the
tq,j S -1 -
1, 4 ngton, 1-;.C . office o--F Preston, Thorgrinison,
"J-1is & Holman .
1/ Cit/ COM—IT(L-11-lica.ti011s Corr). r1. City of Boulder, 50
U. S.L.W. 4144 (jai) . 13 .- 1982)
T,: thos=e circumstances , municipalities must care`ully e\raluate
how to achieve their objectives in a wry wti11C}] minimizes clntl-
trust risk, and must a-ssure that i.ts efforts to minimize
ai.titrust risk are not thwarted by municipal employees acting
inconsistently with those efforts .
One way to do so is by conducting an "artitrust cudit" of
the type well-rlanaged private busiresses routinely conduct to
minimize antitrust risks . In this memorandum we briefly explain
the antitrust audit concept and how it can be applied to municipal
operation, franchising, and regulation of cable television systems .
The Audit Concept
Basically, an antitrust audit iS a review of an entity ' s
operations to identify, in a confidential_ manner protected by the
attorney-client privilege , potential antitrus', problems before
they become lawsuits. This is done by examining basic policies ,
day-to-day activities , and officials' and employees ' attitudes
affecting those policies and by then devising an effective
antitrust compliance program. 2/
Vhc Should Perform the Audit?
The first decision is whether the audit should be performed
by expert outside counsel or regular municipal attorneys . Expert
outside counsel will bring cable expertise , antitrust expertise ,
and objectivity to the task. Regular municipal attorneys will
bring greater familiarity with the municipality and with local
circumstances .
The municipality ' s decision depends on its evaluation of the
importance of these assets , as well as on whether it can afford
the expense of significant involvement by expert outside counsel
and whether it can afford to divert regular municipal attorneys
from their ordinary duties. The best decision, we think, is to
have expert outside counsel conduct the audit with assistance
from regular municipal attorneys . That t•�ay, the municipality can
efficiently draw on the asses of each.
For explanations of antitrust audits for private
businesses, see Garrett, Antitrust Compliance 59-81 (1978) ;
Brodl.ey, "Compliance" in Antitrust Advisor (fIills , ed. 1971 ) ;
Toll & Sauer, "Corporate Antitrust Audit Establishing A Document
Retention_ Program, " ABA Law Notes, April, 1974 at 17-21 .
- 3 -
Backcrround Research
After counsel has been selected, the first step in the audit
process should be background research into gen(_--ra.l cable .issues
and the local cable situation . I'his research should provide not
an extensive analysis of these issuer but instead a quick overviet•.7.
Regarding general cable issues , counsel should be familiar
t:ith the basic economics of cable television, the role muni-
cipalities generally play regarding cable television, and recent
legal developments regarding the application o1: antitru-st
concepts to municipal cable activities. Expert outside counsel
with a background in both cable and antitrust should already be
familiar with these issues .
Regarding the local cable situation, counsel should review
state statutes and municipal ordinances govern-4-ng cable
regulation, the economics of local cable operations , and the
general local political and economic F=actors affecting municipal
cable activities.
_in-anunity Review
The next step is to review state statutes and their legis-
lative history to determine, generally, which municipal cable
activities, if any, may have antitrust immunity and which may
not. This determination has obvious consequences for the rest of
the audit. Activities which clearly are immune from the anti-
trust laws must be analyzed in a different light than activities
that possibly are subject to them.
Document Review
The adage that "faded ink is more poc:erf_ul than the
strongest memory" applies to antitrust cases. it is important ,
therefore, to carefully review municipal files for documents
relevant to antitrust aspects of municipal cable activities . The
files that should be reviewed include:
-- minutes of City Council meetings at which cable issues
were discussed;
-- minutes or meetings of any board or commission which
may operate or regulate a cable television system;
-- files of officials who make cable policy;
-- files of officials or employees who have frequent
contact with cable companies;
-- any file bearing the name of a cable television
company;
n _
-- any file bearing the title "antitrust" (or sinti'_ar
title) .
During this review, counsel should look for evidence of
possible antitrust violations. Such evidence might be a "smoking
gun" mento (which turn up with surprising frequency in searches of
records during private business antitrust audits) or records of
contacts from which anticompetitive action might be inferred.
Examples might be the minutes of a meeting at which a franchise
was denied in order to avoid "disruptive competition, " or
records of a series of ex parte meetings with representatives of
one cable compani7 from which it could be inferred that the
company ' s representatives persuaded municipal officials to tale
action favoring that company over others.
Interviews
The next step is to conduct interviews with appropriate city
officials and employees . The interviewees should include all
officials and employees who make cable policy cr have contact
with cable companies.
The purposes of the interviews are to learn more about
possible problems uncovered during the document review, to learn
about day-to-day cable-related practices , and to learn_ about the
general attitudes officials and employees have towards competi-
tion . For these objectives to be achieved the interviews must be
frank. That will happen only if the municipality makes a deci-
sion , which can be explained at the beginning of each interview,
that potential antitrust violations that are uncovered will not
be the basis of disciplinary action against the interviewee.
The Audit Report
The final step in the audit is reporting the results to city
officials . The report should describe the scope of any antitrust
immun-4ty, describe actual or potential antitrust problems ,
and recommend operational changes to minimize those problems .
The report must include a proposed antitrust compliance
program. This is a program, designed to make clear to city
of-Eicials and employees , cable companies, and the public that the
municipality is committed to complying with the antitrust laws
regarding all non-immune activities. Such a program can serve
two purposes. First, it can reduce the incidence of
anticompetitive conduct. Second, if antitrust litigation occurs ,
the existence of a compliance program which the municipality
rigorously endeavors to enforce may be evidence of the munici-
pality ' s good faith.
The compliance program should include a statement of policy,
a series of seminars for officials and employees at which the
general application of tiit antitrust laws and the municipality '
5 -
compliance policy are explained, and a set of guidelines
F
explaining what especially sensitive activities should be
undertaken only with clearance from the municipa_ attorney.
The audir also should include a schedule for "spot-checks"
and re-auditing so that compliance can be monitored on an on-
going basis.
Disclosure
The purpose of the audit is to provide protection against
antitrust lawsuits by identifying actual and potential problems
and remedying them. The purpose is not to give ammunition to
potential antitrust plaintiffs. Consequently, when reviewing
documents, conducting interviews, and making its report, counsel
should take' care to avoid disclosure of information that could be
used against the municipality in an antitrust laWSUit. This
means that counsel must be, throughout the audit process, keenly
aware of the scope of the attorney-client privilege and of the
possible effect of public-records disclosure laws .
Conclusion
After the City of Boulder decision municipalities face two
risks . The first is the risk of actual antitrust liability. The
second is the risk of time-consuming and expensive litigation.
Even if the municipality ultimately prevails in an antitrust
suit, the expense of defense is encrmous. Therefore , one of the
municipality' s prime objectives should be to minimize its
exposure to possible suits.
One prudent response to this situation, which municipalities
should seriously consider, is an antitrust auCit. An antitrust
audit costs time and money. But this cost will be repaid several
times over in lawsuits that either are never brought or are
successfully defended against.
t
IL—
r
I I •tet
o private safety agencies that have Akron case is the first antitrust claim
a reed in writing to jointly plan a 9-1-1 against a city that the court h:is sent
sy tem.
back to the lower courts since the
Boulder decision.
In January, 1982, the Division sent a
lett%r to cities and counties. The Akron's ordinance requires that all waste
lette%said that unless a city or collected from the city's businesses and
count had a "letter of intent" on file 237,000 residents be taken to the re-
with the Division by April 1 , 1982, that Cycling plant the city plans to build.
city or county could not participate in Steam generated at the plant is to be
the firs quarter's distribution of tax sold to a local utility company. The
monies (s eduled for June of 1952) , ordinance was intended to guarantee
Since that time, the-Division of Emer- the plant an adequate supply of refuse
gency Servi es has relaxed that deadline, to make the project economically sound .
and the mono will be distributed on
schedule to a 1 cities and counties on a Private trash haulers challenged the
per capita bas 's. ordinance, arguing that it violates
antitrust laws, restrains interstate
The intent of t} 9-1-1 legislation was commerce and takes property without
to fund 9-1-1 sy ems' planning, instal- just compensation.
lation and operate n, and monies re-
ceived are to be s -cifically dedicated The city contended that its home rule
charter and the involvement of a state
for that purpose. T} refore, it is
recommended that cite s establish a agency (the Ohio Water Development
separate fund for the -1-1 money which Authority) in the sale of bonds to fi-
nance the project protects it from anti -
is estimated to amount o $1 .50 per
capita annually, trust claims. Officials from the U.S.
Department of Energy and the Environ-
No clear understanding exi ts, as we go mental Protection Agency testified on be-
to press, with regard to th establish- half of the city, saying that the project
ment of "local jurisdictions ' for 9-1-1. and the anticompetitive actions intended
Until more information is ava able and to ensure its success, were in line with
unless a 9-1-1 system is alrea in national energy and environmental policy.
place in your area, it is advis that A lower court and the 6th U.S. Circuit
the money be allowed to accumula e for Court of Appeals ruled in favor of the
any future planning, implementati or city. The appeals court ruling inJul}'
operation of a 9-1-1 system. It i_ ex- said that Akron's action was a valid use
pected that more information will b of local police powers under the 10th
available before the June disburseme t. Amendment to the U.S. Constitution. In
hundreds of cases, the court said, courts
Slij3�'@3Yle Court cites
have upheld "the authority of local gov-
Boulder antitrust rule ernments to monopolize and control local
garbage collection by eliminating or re-
The U.S. Supreme Court last month told
a federal appeals court to reconsider straining competition" among private
whether an Akron, Ohio, ordinance giving Competitors. "If. any area of t}�e law
g g can be said to be well settled," the
the city exclusive rights to the refuse appeals court said, "this one is."
collected within its boundaries can be
challenged on antitrust grounds. The Supreme Court's Boulder decision un-
settled that point and upended the Akron
The high court based its order on its case. In the Boulder decision the court
recent ruling in the Boulder cable tele- said that liome rule authority doesn't
vision case that cities do not automati- automatically extend state antitrust im-
:ally enjoy states' immunity from anti- munity to cities. Instead, the high court
trust claims. (See January Update) The said, immunity from antitrust action
Continued
could come only through state legislation giving local government specific
authority to regulate or otherwise restrain trade in specific areas.
(Reprinted from NLC's Nation's Cities Weekly, 3/15/82. )
April 14, 1982 WASE.NGTON COUNTY,OREGON
Mayors, Councilors and City Managers
Board of County Commissioners
Washington County, Oregon
SUBJECT: Washington County Public Officials Caucus
Thursday, May 6, 1982, 7:30 P.M.
Tigard Senior Center, 8815 S.W. O'Mara St.
Dear Washington County Official:
The City of Tigard is pleased to host the next Public Officials Caucus. Due
to the regional meeting of the League of Oregon Cities and the budget season,
we felt it best to delay a bit and have the next Caucus in early May, rather
han in late April. Please mark Thursday, May 6, 1982 at 7:30 p.m. on your
calendar for the next Caucus.
The general topic we would like to discuss is Urbanization: Comprehensive
Plan coordination, annexations, Boundary Commission costs of urban services
and related topics. Any other suggestions you have would be appreciated.
Agendas, a map to the Senior Center and additional materials will be mailed
about a week before the meeting.
Yours truly,
Wilbur A. Bishop
Mayor
cv
cc: City Council
151
12755 S.W. ASH P.O. BOX 23397 TIGARD, OREGON 97223 PH:639-4171
League of Oregon Cities
SALEM: Local Government Center, 1201 Court Street N.E., P.O. Box 928, Salem 97308, Telephone:(503)588-6466
EUGENE: Hendricks Hall, University of Oregon, P.O. Box 3177, Eugene 97403, Telephone:(503) 686-5232
Salem, Oregon
April 6, 1982 -
To: (1 ) Mayors of Oregon Cities }
(2) City Managers/Recorders of Oregon Cities -_-
City tax base questions and political races will be hot issues on the May 18th pri-
mary election ballot, but several ballot measures of importance to cities will be
listed on the ballot as well . The 1981-Legislature placed five questions on the
May ballot , three of w>rah"the League Executive Committee has voted to support .
All three of the mea lures have an impact on cities : state bonding authority for
municipal water projects (Ballot Measure f`1 ) , state bonding authority for correc-
tions facilities (Ballot Measure n3) , and a measure to increase the gasoline tax
by three cents (Ballot Measure /;4) .
Attached you will find a summary of- the measures , along with a sheet outlining what
the responsibi 1 ities aTrd--I--im-i-tations are for involvement by public officials in the
elections process.
The gas tax issue is of particular importance since a statewide poll conducted in
January by the Committee for Good Roads Again indicates that with a good public ed-
ucativnal program, Ballot Measure #4 can pass in the primary. In fact , the May pri-
mary will probably be the last chance to increase city, state and county road fund
dollars for a long time. A little effort on your part to give our citizens the
facts on how gas tax dollars are used , and how winter storms have damaged city
maintenance budgets can make a big difference in the vote May 18th.
Please take the time to discuss these issues at your next council meeting. The Exec-
utive Committee encouraged your council to adopt a formal resolution in support of
one or all of the measures to increase public awareness of these important public
policy issues. If you have any questions or desire further information, please
don' t hesitate to call the League office.
Sincerely,
Stephen C. Bauer
Executive Director
SCB:bas
Enclosures
OFFICERS: Mayor R. A."Gua"Keller,Eugene.president• DIRECTORS:Mayor Kent Aldrich,Salem a Henry G.Bates.counciimember,La Grande•Mayor Alen B.Berg.Corvallis e
Mayor Jack Nelson,Beaverton,vice-president•Gerald"Lou" Mayor Ruth Burlelgh, Bond• Mike Lindberg.commissioner,Portland• Mayor John Lundell,The Dallas•Robert L.
Hannum, councilmember, Medford, treasurer • Stephen McWilliams,city manager, Redmond•Sandra J. Ronnie,councilmember,Springfield•JIM E.Watson,city manager,
C.Bauer,executive director. Klamath Falls
WHAT CAN AN ELECTED OR APPOINTED OFFICIAL DO TO
SUPPORT OR OPPOSE A BALLOT MEASURE
The following guidelines state some general legal principles found in case and
statutory law. City officials are encouraged to consult with their city attorney
when specific questions arise.
1 . Cities are subject to the general rules prohibiting the use of public funds to
advocate a position on a ballot measure. The prohibition includes not only the
direct contribution of public funds , but also indirect expenditures such as the
use of the city' s equipment and facilities and staff during their working hours.
For example, city personnel cannot be used to do research nor write speeches
designed to advocate a particular position on a ballot measure. In addition, it
would be improper for a city to pay travel expenses for officials to promote a
campaign position.
2. City officials both elected and appointed, can develop and distribute objective
material on the effects of a ballot measure and can use public funds to do so.
Such material should be "informational", providing the public with a "fair
presentation" of the relevant facts and should not advocate a particular position .
For example, city personnel can be asked to do research and prepare information
that fairly assesses the effects of the measure on the community. City officials
can use such information in meeting with individuals and organizations , such as
newspaper editors, legislators, local civic organizations and special interest
groups , to explain objectively the measure's impact. Election advocates "pro
and con" can also use the information. The distinction between legitimate
research/information efforts and impermissible campaign advocacy may be diffi-
cult to apply in specific instances. Therefore, it would be advisable to have
your attorney review material before it is distributed.
3• Elected city officials may fully campaign for or against a ballot measure if
they do not use public funds. The courts have recognized the right , if not the
duty, of public officials to speak out on major issues, particularly on matters
that affect the governmental body on which they serve. In doing so, they may
use the objective information prepared by the city or other promotional material
prepared by other organizations or campaign committees.
Thus, when city officials speak on ballot measures , the content of the talk will
be determined by whether or not public funds are involved. A city official can
speak without restriction as long as expenditure of public funds such as travel
expenses, salary or a staff-prepared speech is not involved in any way. The
use of information from staff-prepared fact sheets in a speech or campaign
literature does not make the speech or literature staff-prepared . If public
funds are involved , officials should limit themselves to an informational
presentation.
4 . Similarly, city councils can take a position on a ballot measure if public funds
then are not used to advocate that position.
5. Non-elected city employees can campaign in their individual capacity outside of
their hours of employment and without the expenditure of public funds. However,
public employees must not be required no coerced to aid a campaign. Staff can
say, "Here are the facts; please vote". They cannot say, "Vote 'yes ' " at
least not while on city time. '
i ;
MEASURE ?;1
Ballot Title: USE OF STATE BOND PROCEEDS TO FINANCE MUNICIPAL WATER
PROJECTS
Question: Shall the state lend funds it may now borrow to towns and
communities for building water projects for municipal use?
This constitutional amendment, if approved would expand the state's
existing water development fund to include loans for municipal water
projects. The present law constitutionally limits the state to fund
secured loans for building irrigation and drainage projects.
Under the measure, only communities of under 30,000 would be eligible
for loans, and half of the fund would still be held aside for irrigation
and drainage projects. Companion legislation, passed during the 1981
regular session, defines eligible projects which include "dams , storage
reservoirs, wells or well systems, pumping plants, pipelines , canals,
ditches, revetments and all other structures and facilities necessary or
convenient for supplying water."
The measures were the financial assistance component of Governor Atiyeh 's
package on drinking water.
A�1
i
MEASURE ##3
Ballot Title: STATE BONDS FOR FUND TO FINANCE CORRECTIONS FACILITIES
Question: Shall the state sell general obligation bonds for fund
to finance state, regional , county or city corrections
facilities?
This constitutionalamendment authorizes the state to sell up to $60
million in general obligation bonds for the construction of local and
state correctional facilities. The authorization terminates after 10
years. Regional approaches are encouraged under the measure, as well as
less expensive alternatives to incarceration, such as work camps and
restitution centers.
Since 1975, the state has attempted to reduce the need for prison con-
struction through passage of the Community Corrections Act and placing
budget emphasis on probation staffing. Despite these efforts , a need
for 400 more state felony prison cell spaces exists. This is partially
due to the rapid population increase Oregon has experienced : over one
million new people since the last state prison was built.
By using state bonds, ballot measure #3 provides funding to meet local
corrections needs developed through a statewide plan, without relying on
property taxpayers. Additionally, the tax exempt state general obliga-
tion bonds are less expensive annually than a lump sum general fund
appropriation, or than local bond issues for local facilities. The cost
is estimated to be about $3 per person, per year.
MEASURE ;;1
Ballot Title: USE OF STATE BOND PROCEEDS TO FINANCE MUNICIPAL WATER
PROJECTS
Question: Shall the state lend funds it may now borrow to towns and
communities for building water projects for municipal use?
This constitutional amendment, if approved would expand the state's
existing water development fund to include loans for municipal water
projects. The present law constitutionally limits the state to fund
secured loans for building irrigation and drainage projects.
Under the measure, only communities of under 30,000 would be eligible
for loans, and half of the fund would still be held aside for irrigation
and drainage projects. Companion legislation, passed during the 1981
regular session, defines eligible projects which include ''dams, storage
reservoirs , wells or well systems, pumping plants, pipelines , canals,
ditches, revetments and all other structures and facilities necessary or
convenient for supplying water.''
The measures were the financial assistance component of Governor Atiyeh's
package on drinking water.
I
MEASURE ri3
Ballot Title: STATE BONDS FOR FUND TO FINANCE CORRECTIONS FACILITIES
Question: Shall the state sell general obligation bonds for fund
to finance state, regional , county or city corrections
facilities?
This constititonal amendment authorizes the state to sell up to $60
million in general obligation bonds for the construction of local and
state correctional facilities. The authorization terminates after 10
years. Regional approaches are encouraged under the measure, as well as
less expensive alternatives to incarceration , such as work camps and
restitution centers.
Since 1975, the state has attempted to reduce the need for prison con-
struction through passage of the Community Corrections Act and placing
budget emphasis on probatiu- staffing. Despite these efforts, a need
for 400 more state felony prison cell spaces exists. This is partially
due to the rapid population increase Oregon has experienced : over one
million new people since the last state prison was built.
By using state bonds, ballot measure #3 provides funding to meet local
corrections needs developed through a statewide plan, without relying on
property taxpayers. Additionally, the tax exempt state general obliga-
tion bonds are less expensive annually than a lump sum general fund
appropriation, or than local bond issues for local facilities. The cost
is estimated to be about S3 per person, per year.
4�
MEASURE ;Y4
Ballot Title: RAISES TAXES ON COMMERCIAL VEHICLES , MOTOR VEHICLES FUEL FOR ROADS
Question: Shall truck and other commercial vehicle taxes and motor vehicle fuel
taxes be raised for road repair, improvement and construction?
This tax measure would raise the state tax on gasoline and other motor vehicle fuels
by one cent per gallon on July 1 , 1982, one cent again on July 1 , 1983, and one cent
more on July 1 , 1984. At the end of the three-year period , the state gas tax would
be 11 cents per gallon. Measure 4 would also increase the weight-mile taxes on com-
mercial vehicles an average of 12.5? on July 1 , 1982, 11 . 1? on July 1 , 1983 , and 10
on July 1 , 1984. Approximately $21 million per year would be raised by the proposed
increases and would amount to around 53 million annually in dedicated new road money
for cities.
If streets, roads and highways in Oregon are not maintained , they will continue to
deteriorate until they cannot be repaired by resurfacing, but will need total recon-
struction. Unfortunately, in the last 10 years the purchasing power of highway tax
dollars has shrunk dramatically due to the combination of inflating construction costs
and declining wholesale gasoline sales.
Additionally, the tax on gasoline has increased very little over the years. In 1967,
the gas tax was 7 cents a gallon. Oregon Department of Transportation figures esti-
mate that in that year the average m. p.g. of our cars was 12.4 and the average mileage
driven was 10,000, co-ting the average motorist $60 per year for the Highway Fund.
Right now, the gas tax is 8 cents per gallon; ODOT calculates the average m.p.g. is
up to 13.2 and the average yearly mileage remains at 10,000. The greater gas milage
totally offsets the 1 cent tax increase and the Highway Fund in 1982 still only nets
$60 per year from the average motorist. Drivers of gas-guzzlers in 1967 who have
switched to fuel -efficient smaller cars (getting as much as 3 times the mileage of
the 1967 models) are paying less now to support roads than they did 13 years ago. In
that same period the Portland CPI has increased 2.7 times .
Should Ballot Measure 4'4 pass, that same motorist driving 10,000 miles a year at the
rate of 13.2 m.p.g. in 1984 would pay S83 into the Highway Fund -- and all of that
money would go to support the roads and streets and highways upon which that vehicle
travels.
r
i
MEASURE #4
Ballot Title: RAISES TAXES ON COMMERCIAL VEHICLES , MOTOR VEHICLES FUEL FOR ROADS
Question: Shall truck and other commercial vehicle taxes and motor vehicle fuel
taxes be raised for road repair, improvement and construction?
This tax measure would raise the state tax on gasoline and other motor vehicle fuels
by one cent per gallon on July 1 , 1982, one cent again on July 1 , 1983, and one cent
more on July 1 , 1984. At the end of the three-year period, the state gas tax would
be 11 cents per gallon. Measure 4 would also increase the weight-mile taxes on com-
mercial vehicles an average of 12.5% on July 1 , 1982, 11 . 1% on July 1 , 1983 , and 102
on July 1 , 1984. Approximately $21 million per year would be raised by the proposed
increases and would amount to around $3 million annually in dedicated new road money
for cities.
If streets, roads and highways in Oregon are not maintained , they will continue to
deteriorate until they cannot be repaired by resurfacing, but will need total recon-
struction. Unfortunately, in the last 10 years the purchasing power of highway tax
dollars has shrunk dramatically due to the combination of inflating construction costs
and declining wholesale gasoline sales.
Additionally, the tax on gasoline has increased very little over the years. In 1967,
the gas tax was 7 cents a gallon. Oregon Department of Transportation figures esti-
mate that in that year the average m.p.g. of our cars was 12.4 and the average mileage
driven was 10,000, costing the average motorist $60 per year for the Highway Fund.
Right now, the gas tax is 8 cents per gallon; ODOT calculates the average m.p.g, is
up to 13.2 and the average yearly mileage remains at 10,000. The greater gas milage
totally offsets the 1 cent tax increase and the Highway Fund in 1982 still only nets
$60 per year from the average motorist. Drivers of gas-guzzlers in 1967 who have
switched to fuel-efficient smaller cars (getting as much as 3 times the mileage of
the 1967 models) are paying less now to support roads than they did 13 years ago. In
that same period the Portland CPI has increased 2.7 times .
Should Ballot Measure #4 pass, that same motorist driving 10,000 miles a year at the
rate of 13.2 m.p.g. in 1984 would pay $83 into the Highway Fund -- and all of that
money would go to support the roads and streets and highways upon which that vehicle
travels.
WHAT CAN AN ELECTED OR APPOINTED OFFICIAL DO TO
SUPPORT OR OPPOSE A BALLOT MEASURE
The following guidelines state some general legal principles found in case and
statutory law. City officials are encouraged to consult with their city attorney
when specific questions arise.
1 . Cities are subject to the general rules prohibiting the use of public funds to
advocate a position on a ballot measure. The prohibition includes not only the
direct contribution of public funds , but also indirect expenditures such as the
use of the city's equipment and facilities and staff during their working hours.
For example, city personnel cannot be used to do research nor write speeches
designed to advocate a particular position on a ballot measure. In addition, it
would be improper for a city to pay travel expenses for officials to promote a
campaign position.
2. City officials both elected and appointed , can develop and distribute objective
material on the effects of a ballot measure and can use public funds to do so.
Such material should be "informational", providing the public with a "fair
presentation" of the relevant facts and should not advocate a particular position .
For example, city personnel can be asked to do research and prepare informat" -1
that fairly asses-;es the effects of the measure on the community. City offici- ' s
can use such information in meeting with individuals and organizations , such as
newspaper editors, legislators, local civic organizations and special interest
groups , to explain objectively the measure ' s impact. Election advocates "pro
and con" can also use the information. The distinction between legitimate
research/information efforts and impermissible campaign advocacy may be diffi-
cult to apply in specific instances. Therefore, it would be advisable to have
your attorney review material before it is distributed.
3. Elected city officials may fully campaign for or against a ballot measure if
they do not use public funds . The courts have recognized the right , if not the
duty, of public officials to speak out on major issues , particularly on matters
that affect the governmental body on which they serve. In doing so, they may
use the objective information prepared by the city or other promotional material
prepared b-y other organizations or campaign committees.
Thus, when city officials speak on ballot measures , the content of the talk will
be determined by whether or not public funds are involved . A city official can
speak without restriction as long as expenditure of public funds such as travel
expenses, salary or a staff-prepared speech is not involved in any way. The
use of information from staff-prepared fact sheets in a speech or campaign
literature does not make the speech or literature staff-prepared . If public
funds are involved , officials should limit themselves to an informational
presentation.
4 . Similarly, city councils can take a position on a ballot measure if public funds
then are not used to advocate that position .
�. Non-elected city employees can campaign in their individual capacity outside of
their hours of employment and without the expenditure of public funds. However,
public employees must not be required no coerced to aid a campaign. Staff can
say, "Here are the facts; please vote' . They cannot say, "Vote 'yes ' ", at
least not while on city time.
i ,
Department of Transportation
LMETROPOLITAN BRANCH
VICTOR ATIVEM 5821 N.E. GLISAN, PORTLAND, OREGON 97213
aovenaon
March 3, 1982 Telephone 238.-8226
In Reply Refer to
WILBUR BISHOP, Mayor Flle No. PLA 6
City of Tigard
P. 0. Box 23397
Tigard, OR 97223
Subject: Six Year Highway Improvement Program
The Oregon Transportation Commission adopted the Six Year Highway
Improvement Program for fiscal years 1982-1987 in January, following
18 statewide meetings where recommendations were received on local
needs and priorities. Project listings are described on page two.
The North Tigard/South Tigard project is in the program in the fiscal
year 1987, however, we have split the project into a north and south
unit, and will attempt to advance the south unit at an earlier date
subject to the availability of additional funds.
Ballot Measure 4, on the May 1982 primary election ballot, could
increase the gasoline tax by three cents over the next three years.
Should this measure pass, funding would become available for projects
not identif�d in the program and meetings would be planned to
prio.riti7,e projec o added to the program.
i
ROBERT N. BOTHMAN
Metropolitan Administrator
RNB:pa
THE COMMITTEE FOR
GOOD ROADS AGAIN
POST OFFICE BOX 906 . PORTLAND, OREGON 97207
Business, labor, agriculture, cities and counties have organized the
C MMIttee for Good Roads Again to support ballot measure 4 in Oregon's
May, 1982 election.
If passed, ballot measure 4 will raise the motor vehicle gas tax and
the truck weight/mile tax for repairing our damaged roads.
Among those urging YES on 4 are Associated Oregon Industries, Oregon
AFL-CIO, Oregon Tru@�XEsociation, Oregon Forest Industries Council
and the Joint Council of Teamsters.
Questions and Answers on Ballot Measure 4
Flow much will ballot One cent a year for the next three years. For a driver whose
measure 4 raise the car averages 18 miles per gallon for 12,000 miles a year, each
gas tax? 1� increase will cost $6.67 a year.
What about the truck Me truck weight/nu-le tax will go up at the same percentage
weight/ mile tax? rate as the gas tax: an average of 12.5% in 1982, 11% in
1983 and 10% in 1984. For a heavy diesel truck driven 50,000
miles a year, this means about $500 in additional taxes a year.
Haw much revenue will Each increase will bring in about $21 million a year. Oregon's
these increases bring C onstituti-on requires that this money be spent for roads.
in and how will it be Cities will receive 12% of the money and counties, 20%. For
spent? local road projects, ballot measure 4 will make available:
Counties Cities
1982-83 $4 million $2.5 million
1983-84 $8.5 million $5.1 million
1984-85 $13 million $7.9 million
Why does the Committee Until this year, Oregsmians have not had an increase in their
for Good Fads Again state gas tax since 1967. In the meantime, Oregonians have
support ballot been driving more fuel-efficient cars.
measure 4?
The result? State and local governments have not had enough
money for basic road *pai,-G. Currently, as much as half of
the cities' 5,000 miles and the counties' 14,000 miles of paved
roads are in poor condition.
Ballot measure 4 will not solve the whole problem of Oregon's
?_ 'Halter Hoffman damaged roads. But it will help. And with the broad base of
Treasurer support it already has, ballot measure 4 can pass in May.
November, 1981