City of King City v. Thommarson

Opinion

DRAPER, P. J.

Can a city bond issue, authorized by a two-thirds vote of the people at a maximum interest rate of 6 percent, be amended by a like vote of the people to authorize a higher interest rate? That is the question presented in this original proceeding in mandamus.

Petitioner is a general law city. On April 22, 1969, its council adopted an ordinance calling an election for the issuance of $1,120,000 of general obligation bonds for improvement of the city’s sewage treatment and disposal plant. This ordinance was incorporated by reference in the proposition voted upon by the people. It specified, as required by statute (Gov. Code, § 43610), the maximum interest rate to be paid upon such bonds. It fixed this maximum at 6 percent, the most then allowed by the same code section. The proposal was approved by more than two-thirds of the voters. By statute effective July 25, 1969 (Stats. 1969, ch. 600, § 6) section 43610 was amended to increase the maximum allowable rate to 7 percent. The bond market was such that King City bonds could not be sold at .a 6 percent rate. The council adopted an ordinance on March 24, 1970, submitting to a new

[653]

election the proposition “Shall the maximum interest rate be changed, from 6% to 7% on the $1,120,000 issue of City bonds authorized on June 10, 1969 . . . On April 14, 1970, this proposition was approved by more than two-thirds of the voters. The council then directed respondent city clerk to publish a call for bids on the bonds at a maximum interest rate of 7 percent. He refused to do so, asserting the absence of any express authority in Constitution or statute for amendment of a bond authorization previously approved. The city then filed with us this petition for writ of mandate directing respondent clerk to publish the call for bids.

Application to this court, without earlier petition to a trial court (Cal. Rules of Court, rule 56(a)) seems warranted. Petitioner has moved promptly, applying here only three weeks after the vote upon the amended bond proposition. Delay in decision would be costly, since without the authorized improvements in its sewage system the city will be subject to substantial fines for failure to meet standards set by the Regional Water Quality Control Board. A federal grant will be lost if the city is unable to secure proceeds of the bond issue by June 30. In the current bond market, such problems are likely to arise in many cities. It follows that we should accept jurisdiction