RULING PUTS UTILITY TAX IN LIMBO\Agoura Hills places road improvements on hold.

Byline: R.A. Hutchinson Daily News Staff Writer

Long-awaited road repairs are being put off indefinitely, as city budget writers wait for courts and lawmakers to unravel the implications of state Supreme Court support for a law requiring voter approval of special taxes.

On Dec. 14, the court declared a Santa Clara County transportation tax illegal. In making that decision, the court upheld Proposition 62, a 1986 initiative that bans special taxes on hotel and motel occupancy, utility bills and business licenses without two-thirds voter approval.

For Agoura Hills, that leaves in question up to $1.6 million in utilities tax revenue collected through Dec. 31, according to City Manager David Adams. The City Council passed a utility-users tax in June 1994 to help eradicate a $695,000 deficit in its $6.5 million annual budget.

"It's really frustrating for everybody. It's frustrating for the City Council because they can't move forward with projects; it's frustrating for the people who oppose the utilities tax and want it on the ballot immediately," Adams said.

The $100,000 generated monthly by the tax was slated to cover a variety of capital improvement projects during the 1995-96 fiscal year, which ends June 30. The projects include installation of a traffic light at Forest Cove Lane and Thousand Oaks Boulevard, the addition of a right-turn lane and left-turn signal at Canwood Street and Kanan Road, and various street resurfacing projects throughout the city.

"The thing about roads, what you don't spend in maintaining them, you will spend - in a greater measure - to replace them," said Mayor Ed Corridori. "The things that are being delayed are things paid for from the General Fund. We can't appropriate money we don't know we have."

Adams said several legal questions must be resolved: Is the Dec. 14 court ruling retroactive to 1986 when Proposition 62 first was approved? Does money collected since then have to be refunded? Are governmental agencies that passed or increased existing special-use taxes since 1986 required to put those taxes on the ballot?

Agoura Hills, as well as other cities or agencies throughout California, has spent money collected through the taxes prior to an initial Supreme Court ruling in September, finalized Dec 14.

"So now that they have changed the rules, the question is when do we have to put it on the ballot? And, if it fails, what do we do with the money already collected?" Adams said. "We're kind of in a quandary."

Debbie Thornton, communications director for the League of California Cities, said that before the preliminary September ruling, lower trial and appellate courts had ruled against Proposition 62. The league is working with state legislators to write a law establishing how governmental agencies must deal with existing special-use taxes.

"We relied on prior court decisions over the past nine years that allowed cities to adopt or increase special taxes," Thornton said. "We feel that is a strong argument for making the court's decision effective on Dec. 14."

She said the legislation would allow cities to leave intact existing taxes and increases because they were enacted prior to Dec. 14.

"This is a critical issue, one that needs to be addressed. Whether it is addressed by the legislative process or the judicial system, it will take up most of 1996," Thornton said.

On the other side of the issue, the Howard Jarvis Taxpayers Association, which sponsored Proposition 62, has formed a "legal action team" to lobby for enforcement of the measure. Representatives of the group say they will begin filing lawsuits where they do not see a good-faith effort by agencies to comply the court ruling.

A local group anti-tax group, Citizens Against New Local Taxes, formed after the Agoura Hills tax was passed. The organization has concentrated its efforts on trying to recall the City Council, but co-founder Barbara Murphy said she is talking with attorneys about filing a lawsuit against the city.

"We would like to be that test case," she said.

Until the legal issues are resolved, Agoura Hills officials are placing the $100,000 generated monthly by the tax into an escrow account that totaled about $389,000 from September to year's end.

Corridori said the City Council is willing to put the matter to a vote - as soon as they know what they have to vote on.

"The last court ruling only addresses those taxes that hadn't been enacted. It does not address those taxes that have been enacted since then," he said.

When the latest decision was handed down on Dec. 14, Adams said there was only a five-day window for the city to ask for the issue to be placed on the March ballot. With several questions left to be resolved, Adams said the city's staff decided against trying to rush it through in time for the deadline.

"The court didn't say when it had to go to a vote. We wouldn't know whether to ask voters to approve the existing tax or if they needed to vote on a new tax. There were just too many questions," Adams said.

H. Jere Robings, president of the Ventura County Alliance of Taxpayers, said governmental agencies could have avoided the current problems by putting all taxation measures on the ballot. Some cities, including Thousand Oaks, did place special assessment districts on the ballot.

"It's a matter now of seeing whether actions taken have to be voted on," Robings said.