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Benink & Slavens, LLP Announces Streetcar Tax Derailed

SACRAMENTO, Calif., Aug. 21, 2019 /PRNewswire/ -- At its Tuesday meeting, the Sacramento City Council dissolved its 2017 Mello-Roos Streetcar Community Facilities District and rescinded a special tax that it had intended to levy on property owners within the District. Its actions followed a May 6, 2019 ruling by the Honorable Laurie M. Earl of the Sacramento Superior Court that held that a 2017 election to approve the special tax (Measure S) violated the California Constitution.

The District was formed to fund operating deficits of the Sacramento-West Sacramento Riverfront Streetcar project that was to run a route of approximately four miles at a designed cost of $200 million, but costs escalated far beyond that number. Invalidation of the special tax will save taxpayers in the District $2 to $4 million per year.

Judge Earl's ruling was consistent with a 2014 Court of Appeal decision in Shapiro v. City of San Diego that invalidated a Mello-Roos special tax to fund a convention center expansion. As in Shapiro, Judge Earl held that under the California Constitution, the terms "qualified electors" and "electorate" mean all of the City's registered voters, not some specially-chosen subset of landowners. The Streetcar plaintiffs alleged that the City of Sacramento had intentionally disenfranchised its registered voters when it surgically drew the District boundaries around 366 parcels of land to create a gerrymandered landowner voter pool.     

The Sacramento-West Sacramento streetcar saga has a very rocky history which included the 2015 Measure B electoral defeat of a prior streetcar Mello-Roos district by resident voters, and Federal Transit Administration skepticism of the byzantine governing structure and other aspects of this Streetcar project which had delayed a $100 million dollar federal grant, followed by construction bids $76 million over budget.

The plaintiffs in the Streetcar case, Horizon Capital Investments, LLC, William L. Gerkakis as Trustee on behalf of the William L. Gekakis 2008 Trust, and Delphine Cathcart, were represented by Eric J. Benink, Esq. of Benink & Slavens, LLP, a San Diego law firm with substantial expertise in ratepayer and taxpayer litigation against local governments.


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