HomeMy WebLinkAboutMINUTES - 01191993 - 1.37/ CONTRA COSTA COUNTY COUNSEL , a ��
651 Pine Street, 9th Floor
P.O. Box 69
Martinez CA 94553
(510) 646-2058
Fax (510) 646-1078
To: Board of Supervisors
From: Dennis C. Graves
Deputy County Counsel
Date: January 11, 1993
Re: Settlement of Santa Fe Railroad Property Tax for Tax Years 1989-90 through
1992-3
I. RECOMMENDED ACTION:
Approve the settlement of the subject litigation, authorize the County Counsel to ,
sign all documents relating to the settlement, and direct the Auditor-controller and Tax
Collector to cancel any outstanding penalties and liens and show the taxes current for
the years in question upon receipt of $134,080.43 from Santa Fe.
II. FISCAL IMPACT:
Positive impact of return of$134,080.43 (including interest) over amounts
impounded in Federal Court Litigation for the four years in issue.
III. BACKGROUND AND REASONS FOR RECOMMENDATION:
The State Board of Equalization makes a "unitary" assessement of railroads,
which is allocated among the Counties. Since the Counties receive the taxes, the
Counties are named parties,in suits for refund on such assessments. Litigation on the
SBE's railroad assessments had been active for tax years going back to the early
1970s. Most of the cases have been settled, and this settlement will bring the Santa Fe
litigation current, except as to minor issues. We believe the settlement is in the best
interest of the County and recommend it be approved.
IV. CONSEQUENCES OF NEGATIVE ACTION:
Unless sufficient Counties approve the proposed settlement by February 12,
1993, the litigation would proceed or the matter would have to a renegotiated.
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD MITTEE
APPROVE OTHER
SIGNATURE (S):
ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
X UNANIMOUS(ABSENT I HEREBY CERTIFY THAT THIS 1S A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON=SHOWN.
CC: via County Counsel ATTESTED 3
PHIL BA CHELOR.CLERK OF 19E BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
M382 (10/88)
BY ,DEPUTY
1 . 37
County Ooun",
s AN 111993
Martinez,CA 94553
January 7, 1993
T0: COUNTY COUNSELS
FROM: RAILROAD LITIGATION COORDINATING COMMITTEE
RE: PROPOSED SETTLEMENT WITH SANTA FE RAILROAD/
PROPERTY TAX YEARS 1989/90 THROUGH 1992/93
A tentative settlement has been reached with Santa Fe Railroad
for tax years 1989/90 through 1992/93 . As most of you will
recall, the counties previously reached agreement with Santa Fe
and Southern Pacific Railroads for tax years 1978 through 1989
and with Union Pacific Railroad for tax years 1978 through 1991.
The tentative agreement with Santa Fe results in payment by Santa
Fe of taxes previously enjoined in the pending federal court
case. Sixteen counties are impacted.
The proposed settlement has been approved by the Office of the
Attorney General and the Executive Director of the State Board of
Equalization. In order for the proposed settlement to go forward
it must be approved by at least nine (9) of the sixteen (16)
counties and any number of counties which comprise at least 51%
of the cash payments due under the proposed settlement. This is
the same process that was used for the previous settlements with
the railroads. If this proposed settlement receives the required
approvals, a hearing will be scheduled before the federal court
in San Francisco to hear a Motion for Entry of Partial Judgment
and to hear any objections from counties who choose not to
approve the settlement. That hearing is being scheduled for
March 1, 1993 .
This settlement represents one more milestone in the lengthy
history of the railroad tax litigation. The railroads have
prevailed on the issue of valuation methodology (Union Pacific
Railroad Co. vs. State Board of Equalization, (1991) 231
Cal.App.3d 983) but there are certain issues including the
equalization issue which has not yet been resolved. The
equalization issue relates to the application of Proposition 13
to other industrial and commercial properties, but not the
railroads. Agreement with Santa Fe at this time was possible
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COUNTY COUNSELS 2 JANUARY 71 1993
because the railroad and the State Board of Equalization have
come to terms on the valuation issue, and Santa Fe was anxious to .
obtain a final determination of its property tax obligation for
the years at issue.
The major features of the settlement are as follows:
1. Santa Fe will pay to counties within 30 days of the date
partial judgment is entered the principal sum of $1,275,960.85.
(See Exhibit "A" attached) .
2. Santa Fe will pay to counties within thirty (30) days of
the date partial judgment is entered the sum of $190, 306.54 in
interest. (See Exhibit "B" attached) .
3 . The settlement only addresses Santa Fe's unitary
property. Outstanding issues concerning escape assessments/
non-unitary property including separate assessment of the value
of commuter lines are not determined by the proposed agreement.
4. The settlement will go forward only if it is approved on
or before February 12 , 1993 at 5:00 p.m. by at least nine
counties and by any number of counties receiving at least 51% of
the total payments due.
5. The settlement package consists of a Stipulation for
Entry of Partial Judgment, a Form of Partial Judgment, and a
Settlement Agreement with a counterpart signature page.
RE UIRED ACTIONSs
1. Approval of Settlement Agreement: Counties supporting
the proposed settlement must approve the settlement agreement on
or before February 12 , 1993 at 5:00 p.m.
2. Notice of Approval: Counties must notify the Attorney
General's Office (Mr. Robert E. Murphy) at (415) 703-2435 by no
later than 5:00 p.m. on February 12, 1993 and simultaneously
forward to Mr. Murphy an executed copy of the settlement
agreement via facsimile transmission at (415) 703-2592, or by
hand delivery or overnight mail to 455 Goldengate Avenue, Room
6200, San Francisco, CA 94102-3658. A counterpart signature page
is provided to each county for purposes of executing the
agreement.
Unfortunately it has been impossible to settle all issues with
all railroads at one time. The Railroad Litigation Coordinating
Committee will continue to work with the Attorney General, the
State Board of Equalization staff and representatives of the
railroads to attempt to finally settle all issues. If you have
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COUNTY COUNSELS 3 JANUARY 7, . 1993
any questions regarding this proposed settlement or any of the
ongoing negotiations with the railroads, please feel free to
contact any member of the Railroad Litigation Committee.
Very truly yours,
RAILROAD LITIGATION
COORDINATING COMMITTEE
Alan K. Marks
Chair
San Bernardino County Counsel
(909) 387-5459
Dennis Graves
Deputy County Counsel
Contra Costa County
(510) 646-2058
Larry Launer
Assistant County Counsel
Los Angeles County
(213) 974-1881
James May
Assistant County Counsel
Alameda County
(510) 272.6700
John Seyman
Deputy County Counsel
Sacramento
(916) 440-5506
Eleanor Elrod
Deputy City Attorney
City & County of
San Francisco
(415) 554-3820
AKM:am
Encl.
13356.1 AKN:arm
1/7/93 3:01pm
1 . 37
SETTLE IEN7 AGREEMENT
This Settlement Agreement is made and entered into by and between THE ATCHISON,
.TOPEKA & SANTA FE RAILWAY COMPANY, a corporation (hereinafter,"Santa Fe"), and
THE STATE BOARD OF EQUALIZATION OF THE STATE OF CALIFORNIA (hereinafter
"SBE"), and the COUNTIES OF: ALAMEDA, CONTRA COSTA, FRESNO, KERN, KINGS,
LOS ANGELES, MADERA, MERCED, ORANGE, RIVERSIDE, SAN BERNARDINO, SAN
DIEGO, SAN JOAQUIN, STANISLAUS, TULARE, AND THE CITY AND COUNTY OF
SAN FRANCISCO (hereinafter "the Counties"), (collectively "the Parties").
RECITALS
A. Santa Fe has brought a lawsuit against SBE and the Counties styled The Atchison.
Topeka & Santa Fe Railway Company v. State Board of Equalization of the State of California.
et al., No. C 89-4030 DLJ, which was consolidated with Cause No. C 81-4365 DLJ (hereinafter
referred to as the "Litigation"). The Litigation concerns claims about the taxation of Santa Fe's
property for tax years 1989-1990, 1990-1991, 1991-1992 and 1992-1993 (hereinafter "the tax
years at issue");
B. This Settlement Agreement is intended to resolve a portion of Santa Fe's claims
for the tax years at issue, described in more detail below;
C. Santa Fe has alleged in the Litigation that the SBE has valued Santa Fe's rail
transportation property as of January 1, 1989, January 1, 1990, January 1, 1991 and January
1, 1992 substantially in excess of the true market value of such property;
D. Santa Fe has also alleged in the Litigation that the SBE and the Counties have
taxed Santa Fe's rail transportation property at a ratio of assessed value to true market value
jla-:44127-83830.033
which exceeds by at least 5% the ratio of assessed value to true market value of other
commercial and industrial property;
E. Each year, the SBE determines a non-unitary value and a unitary value for
property owned by Santa Fe within the State of California;
F. The SBE determined that the value of Santa Fe's unitary property is
$360,000,000, $340,000,000, $350,000,000 and $210,000,000 for tax years 1989-1990, 1990-
1991, 1991-1992 and 1992-1993 respectively;
G. The SBE has applied an equalization ratio of 68%, 70.38%, 71.06% and 74.21%
to Santa Fe's unitary property for tax years 1989-1990, 1990-1991, 1991-1992 and 1992-1993,
respectively. Application of this equalization ratio has resulted in an assessed value of Santa
Fe's unitaryproperty of$244,800,000,$239,292,000,$248,710,000 and$155,841,000 for Santa
Fe's unitary property for tax years 1989-1990, 1990-1991, 1991-1992 and 1992-1993,
respectively;
H. Injunctions have been entered by the United States District Court enjoining the
collection of a portion of the property taxes on Santa Fe's non-unitary and unitary property for
the tax years at issue;
I. The Parties wish to agree upon values for Santa Fe's unitary property and an
equalization ratio to be applied to such values for the tax years at issue;
J. Time is of the essence of this agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the provisions,
obligations, agreements, releases, covenants, rights and duties contained herein, the sufficiency
and adequacy of such consideration being hereby acknowledged, the Parties agree as follows:
jiw:"127-83830.033 2
1. For tax years 1989-1990, 1990-1991, 1991-1992 and 1992-1993, the value of
Santa Fe's unitary property shall be $166,068,000, $176,822,000, $174,302,000 and
$210,000,000, respectively.
2. For tax years 1989-1990, 1990-1991, 1991-1992 and 1992-1993, an equalization
ratio of 62% shall be applied to the unitary values set forth above, such that the assessed value
of Santa Fe's unitary property shall be $102,962,160 for tax year 1989-1990, $109,629,640 for
tax year 1990-1991, $108,067,240 for tax year 1991-1992, and $130,200,000 for tax year 1992-
1993.
3. Santa Fe shall pay to the Counties within thirty (30) days of the entry of partial
judgment as specified in paragraph 10, below, ONE MILLION, TWO HUNDRED SEVENTY-
FIVE THOUSAND, NINE HUNDRED SIXTY DOLLARS AND EIGHTY-FIVE CENTS
($1,275,960.85). This amount, which represents payment of a portion of property taxes
previously enjoined by the United States District Court for the Northern District of California
for the tax years at issue, shall be allocated and paid to the Counties as set forth on Exhibit A
hereto, which is incorporated herein by this reference. In addition, Santa Fe shall pay to the
Counties within thirty (30) days of the entry of partial judgment as specified in paragraph 10,
below, ONE HUNDRED NINETY THOUSAND, THREE HUNDRED SIX DOLLARS AND
FIFTY-FOUR CENTS ($190,306.54). This amount, which represents interest on the property
tax payments specified in Exhibit A, calculated for convenience only through December 31,
1992, shall be allocated and paid to the Counties as set forth on Exhibit B hereto, which is
incorporated herein by this reference. Pursuant to the injunctions previously entered by the
Court, no penalties or late payment fees shall be assessed against Santa Fe for the tax years at
jlw:44127-83830.033 3
issue. Upon Santa Fe's timely payment of all amounts required by this agreement, the Counties
shall certify that all unitary assessments for the tax years at issue have been "Paid in Full."
4. The Parties acknowledge that this Settlement Agreement does not resolve or affect
in any way the claims of Santa Fe or the SBE concerning the taxation of Santa Fe's non-unitary
property classified by the SBE in classes 11, 12, 41, 42, 191, 192, 193, 891, 892 or 893 for the
tax years at issue.
5. The Parties acknowledge that the SBE may attempt to levy escape assessments and
increase the non-unitary values of Santa Fe's property classified by the SBE in classes 891 and
892 (formerly classified in classes 191 and 192), for tax years 1989-1990, 1990-1991 and 1991-
1992, in accordance with California Revenue and Taxation Code §§ 861, et seq., even though
Santa Fe contends that any such assessments are illegal and discriminatory under various
provisions of federal and state law. The Parties acknowledge that Santa Fe reserves the right
to challenge any escape assessments or any other increase in non-unitary values by any means
legally available to Santa Fe. In the event any such escape assessments or any other increase
in non-unitary values are imposed upon Santa Fe, the Parties agree to immediately stipulate to
the entry of a preliminary injunction enjoining the collection of any taxes related to the escape
assessments or any other increase in non-unitary values, pendente lite.
6. The Parties acknowledge that this Settlement Agreement resolves all issues related
to the taxation of Santa Fe's unitary property for the tax years at issue.
7. The SBE and the Counties agree not to list or advertise any delinquencies, record
any tax liens, or place any other forms of encumbrance on the properties which are the subject
of this Settlement Agreement for the tax years at issue before the date payment is due pursuant
j1v:"127-83830.033 4
to this Settlement Agreement. If payment is not made by that date, the restrictions in this
paragraph shall become inoperative. Interest on any amounts remaining unpaid as of 31 days
following entry of partial judgment as provided in paragraph 10, below, shall accrue and be paid
at the rate of ten percent (10%) per annum.
8. The Parties will authorize their respective counsel to execute whatever form of
documentation is necessary or required to terminate the Litigation with respect to the issues
resolved by this Agreement, and further agree to allow Santa Fe to amend its pleadings in the
Litigation to conform to the terms of this Settlement Agreement within sixty (60)days after entry
of partial judgment as provided in paragraph 10, below.
9. The Parties shall bear their own legal fees, court costs and other expenses
incurred in connection with the issues settled herein, including any legal fees incurred in
finalizing this Settlement Agreement.
10. This Settlement Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same agreement.
Except as set forth below, this Settlement Agreement shall be binding only upon execution by
all Parties hereto on or before February 12, 1993 at 5:00 PM. If all of the Counties do not
approve this Settlement Agreement on or before February 12, 1993 at 5:00 PM, then upon
execution or approval of this Settlement Agreement by any number of Counties which are to
receive at least 51% of the property tax payments specified in paragraph 3 (exclusive of
interest), as allocated in Exhibit A ($650,740.03) and upon execution or approval of this
Settlement Agreement by at least nine Counties, prior to February 12, 1993 at 5:00 PM, the
proposed settlement set forth herein shall be submitted to the United States District Court for
jlw:44127-83830.033 5
r' ti
the Northern District of California for approval of a Stipulated Partial Judgment setting forth the
terms outlined herein. Pending the Counties' opportunity to review the proposed settlement, a
Stipulation for Entry of Partial Judgment may be submitted 'to the Court for approval of a
Stipulated Partial Judgment setting forth the terms outlined herein, provided that any Hearing
on such Stipulation shall not be set prior to February 15, 1993. . Any County which approves
this Settlement Agreement shall notify the Attorney General's Office (Mr. Robert E. Murphy)
at (415) 703-2435 by no later than 5:00 PM on February 12, 1993, and shall simultaneously
forward to Mr. Murphy an executed copy of this Settlement Agreement via Facsimile
transmission at ,(415) 703-2592, hand-delivery or overnight mail to 455 Golden Gate Avenue,
Room 6200, San Francisco, California 94102-3658. If fewer than 9 Counties or Counties
receiving less than 51 % ($650,740.03)of the payments specked in Exhibit A have given notice
of their approval of this Settlement Agreement in the manner provided prior to 5:00 PM on
February 12, 1993, then the Stipulation for Entry of Partial Judgment shall be deemed
withdrawn and any Hearing on such stipulation shall be vacated.
Date: THE ATCHISON, TOPEKA AND SANTA FE
RAILWAY COMPANY
By
Daniel J. Westerbeck
Vice President and Tax Counsel
Date: THE STATE BOARD OF EQUALIZATION
OF THE STATE OF CALIFORNIA
By
Burton Oliver
Its Executive Director
jlw:44127-83830.033 6
COUNTERPART SIGNATURE PAGE
SETTLEMENT AGREEMENT
THE ATCHISON TOPEKA AND SANTA FE RAILWAY COMPANY
CASE NO. 89-4030 DLJ.
COUNTY OF: CONTRA COSTA
BY:
TITLE:
DATE:
EXHIBIT A
THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY
TAX DUE EACH COUNTY BASED UPON AGREED
UNITARY VALUES FOR TAX YEARS 1989, 1990, 1991 AND 1992
COUNTY TOTAL TAX DUE
ALAMF.DA $ 2,422.06
CONTRA COSTA $ 116,708.60
FRESNO $ 38,625.89
KERN $ 72,685.78
KINGS $ 11,176.26
LOS ANGELES $ 302,428.02
MADERA $ 9,033.83
MERCED $ 15,048.17
ORANGE $ 86,430.64
RIVERSIDE $ 28,940.76
SAN BERNARDINO $ 425,218.58
SAN DIEGO $ 105,432.69
SAN FRANCISCO $ .10,194.14
SAN JOAQUIN $ 25,516.63
STANISLAUS $ 12,010.73
TULARE $ 14,088.07
TOTAL $ 1,275,960.85
EXHIBIT B
THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY
INTEREST DUE EACH COUNTY BASED UPON AGREED
UNITARY VALUES FOR TAX YEARS 1989, 1990, 1991 AND 1992
O�UNTY TOTAL INTEREST
DUE
ALAMEDA $ 328.31
CONTRA COSTA $ 17,371.83
FRESNO $ 5,763.31
KERN $ 10,548.51
KINGS $ 1,650.24
LOS ANGELES $ 45,150.95
MADERA $ 1,344.26
MERCED $ 2,244.26
ORANGE $ 12,915.79
RIVERSIDE $ 4,306.46
SAN BERNARDINO $ 63,722.32
SAN DIEGO $ 15,765.54
SAN FRANCISCO $ 1,516.51
SAN JOAQUIN $ 3,800.57
STANISLAUS $ 1,792.12
TULARE $ 2,085.80
TOTAL $ 190,306.54
1 Paul J. Mooney - 006708
Jim L. Wright - 010531
2 FENNEMORE CRAIG
Suite 2200, One Renaissance Square
3 Two North Central Avenue
Phoenix, Arizona 85004-2390
4 (602) 257-5492
5 Attorneys for Plaintiff
The Atchison, Topeka and Santa Fe
6 Railway Company
7 IN THE UNITED STATES DISTRICT COURT
8 NORTHERN DISTRICT OF CALIFORNIA
9 THE ATCHISON, TOPEKA & SANTA FE ) MASTER CONSOLIDATED
RAILWAY COMPANY, ) NUMBER C 81 4365 DLJ
10 )
Plaintiffs, ) NO. C 89 4030 DLJ
11 )
VS. ) NOTICE OF MOTION AND
12 ) MOTION FOR ENTRY OF
STATE BOARD OF EQUALIZATION OF ) STIPULATED PARTIAL
13 THE STATE OF CALIFORNIA, et al . , ) JUDGMENT OF THE
ATCHISON, TOPEKA &
14 Defendants. ) SANTA FE RAILWAY COMPANY
15
16 PLEASE TAKE NOTICE that on March 1, 1993 at 3 :30 PM, or as
17 soon thereafter as counsel can be heard in Department 3 of the
18 above-entitled court before the Honorable D. Lowell Jensen, 450
19 Golden Gate Avenue, 17th Floor, San Francisco, California, the
20 plaintiffs will move this Court for entry of a stipulated Partial
21 Judgment in the form set out in the Stipulation filed herewith
22 (Exhibit 1) .
23 The Motion for Stipulated Partial Judgment is made pursuant
24 to Rule 65 of the Federal Rules of Civil Procedure and will be
25 based upon this Notice, a Stipulation for Entry of Partial
26
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NOTICE OF MOTION AND MOTION FOR ENTRY OF STIPULATED PARTIAL
JUDGMENT
JLW:55890-83830.033
P'
I Judgment, a Settlement Agreement and a proposed form of Partial
2 Judgment (Exhibit 2) all filed with this Motion together with
3 Preliminary Injunctions issued herein together with all pleadings
4 and other documents of record.
5 DATED: December 31, 1992 .
6 FENNEMORE CRAIG
7
8 By
Paul J. Mh6ney
9 Jim L. WtIlght
Suite 2200
10 One Renaissance Square
Two North Central Avenue
11 Phoenix, Arizona 85004-2390
Attorneys for Plaintiff
12 The Atchison, Topeka & Santa Fe
Railway Company
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NOTICE OF MOTION AND MOTION FOR ENTRY OF STIPULATED PARTIAL
JUDGMENT
7LW:55890-83830.033
1 PROOF OF SERVICE BY MAIL
(Code Civ. Proc. Secs. 1013a, 2015 .5)
2
3 I do hereby declare that I am a citizen of the United
States, employed in the County of Maricopa, State of Arizona,
4 over 18 years old, and that my business address is Suite 2200,
One Renaissance Square, Two North Central Avenue, Phoenix,
5 Arizona 85004-2390. I am not a party to the within action. On
the 31st day of December, 1992 . I deposited in the United States
6 Mail a true copy of:
7 NOTICE OF MOTION FOR ENTRY OF STIPULATED PARTIAL JUDGMENT
8
in said action, in a sealed envelope, with the postage thereon
9 fully prepaid, addressed as follows :
10 SEE ATTACHED LIST
11 I declare under penalty of perjury that the foregoing is
true and correct.
12
EXECUTED at Phoenix, Arizona this 31st day of December,
13 1992.
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Paul J. Money
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NOTICE OF MOTION AND . MOTION FOR ENTRY OF STIPULATED PARTIAL
JUDGMENT
JLW:55890-83830.033
�i
1 Mr. James Williams Ms. Kitt Berman
BOARD OF EQUALIZATION OF COUNTY SUPERVISORS
2 ASSOCIATION
THE STATE OF CALIFORNIA OF CALIFORNIA
3 1020 "N" Street 1100 "K" Street
Sacramento, California 95814 Sacramento, California
4 95814
5 Robert E. Murphy, Esq. Laurence E. Garrett, Esq.
Deputy Attorney General General Tax Attorney
6 CALIFORNIA DEPT. OF JUSTICE THE ATCHISON, TOPEKA &
Room 6200 SANTA FE RAILWAY COMPANY
7 455 Golden Gate Avenue 920 Southeast Quincy Street
San Francisco, California 94201 Topeka, Kansas 66612-1116
8
Kelvin H. Botty, Jr. , Esq. Dennis L. Myers, Esq.
9 Senior Deputy County Counsel County Counsel
COUNTY OF ALAMEDA COUNTY OF MERCED
10 Room 463 2222 M Street
1221 Oak Street Merced, California 95340
11 Oakland, California 94612
12 Victor J. Westman, Esq. Adrian Kuyper, Esq.
County Counsel County Counsel
13 COUNTY OF CONTRA COSTA COUNTY OF ORANGE
County Administration Building 10 Civic Center Plaza
14 Post Office Box 69 Post Office Box 1379
Martinez, California 94553 Auburn, CA 92702-1379
15
Max E. Robinson, Esq. William C. Katzenstein, Esq.
16 County Counsel County Counsel
COUNTY OF FRESNO COUNTY OF RIVERSIDE
17 Suite 121P, 2220 Tulare Street Suite 300
Post Office Box 1549 3535 Tenth Street
18 Fresno, California 93716 Riverside, California
92501-3674
19
Bernard C. Barmann, Esq. Alan K. Marks, Esq.
20 County Counsel County Counsel
COUNTY OF KERN COUNTY OF SAN BERNARDINO
21 Room 500 4th Floor,
1415 Truxtun Avenue 385 North Arrowhead
22 Bakersfield, California 93301 San Bernardino, CA 92415
23 Denis A. Eymil, Esq. Lloyd M. Harmon, Esq.
County Counsel County Counsel
24 COUNTY OF KINGS COUNTY OF SAN DIEGO
Kings County Governmental Center 355 County Admin. Center
- 25 1400 West Lacey Boulevard 1600 Pacific Highway
Hanford, . California 93230 San Diego., . California 92101
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NOTICE OF MOTION AND MOTION FOR ENTRY OF STIPULATED PARTIAL
JUDGMENT
JLW:55890-83830.033
1 DeWitt W. Clinton, Esq. John F. Cheadle, Esq.
County Counsel County Counsel
2 LOS ANGELES COUNTY COUNTY OF SAN JOAQUIN
648 Hall of Administration ,Room 711, 222 East Weber
3 500 West Temple Stockton, California 95202
Los Angeles, California 90012
4
Jeffrey L. Kuhn, Esq. Louise Renne, Esq.
5 County Counsel County Counsel
COUNTY OF MADERA COUNTY OF SAN FRANCISCO
6 209 West Yosemite Avenue Room 206, City Hall
Madera, California 93637 San Francisco, CA 94102
7
Michael H. Krausnick, Esq. Lita O'Neill Blatner, Esq.
8 County Counsel County Counsel
COUNTY OF STANISLAUS COUNTY OF TULARE
9 2nd Floor 2900 West Burrel
1100 H Street County Civic Center
10 Modesto, California 95353 Visalia, California 93291
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NOTICE OF MOTION AND MOTION FOR ENTRY OF STIPULATED PARTIAL
JUDGMENT
ILW:55890-83830.033
I Paul J. Mooney 006708
Jim L. Wright - 010531
2 FENNEMORE CRAIG
Suite 2200, One Renaissance Square
3 Two North Central Avenue
Phoenix, Arizona 85004-2390
4 (602) 257-5492
5 Attorneys for Plaintiff
The Atchison, Topeka and Santa Fe
6 Railway Company
7 IN THE UNITED STATES DISTRICT COURT
8 NORTHERN DISTRICT OF CALIFORNIA
9 THE ATCHISON, TOPEKA & SANTA FE ) MASTER CONSOLIDATED
RAILWAY COMPANY, ) NUMBER C 81 4365 DLJ
10 )
Plaintiffs, ) NO. C 89 4030 DLJ
11 )
vs . ) STIPULATION FOR ENTRY
12 ) OF PARTIAL JUDGMENT RE
STATE BOARD OF EQUALIZATION OF ) CASE N0. C 89-4030
13 THE STATE OF CALIFORNIA, et al . , )
14 Defendants . }
)
15
16 Plaintiff, The Atchison, Topeka and Santa Fe Railway
17 Company, ( "Santa Fe" ) , and defendant, California State Board of
18 Equalization ( "SBE") ; collectively referred to as "the Parties" ,
19 stipulate as follows :
20 1. For the reasons stated below, the Parties enter into
21 this stipulation because there are 16 different county
22 defendants, only some of whom have participated directly in the
23 settlement negotiations, and as a result it has been impossible
24 to obtain input from all of the affected Counties regarding the
25 proposed settlement. The Attorney General (which is representing
26 the SBE in this matter) has taken the lead in defending this
-1-
STIPULATION FOR ENTRY OF PARTIAL JUDGMENT
JLW:55879-83830.033
1 litigation. The Attorney General and the SBE are reluctant to
2 impose on the Counties the terms of the proposed settlement
3 without giving all Counties an opportunity to review the proposed
4 settlement and express their support or opposition thereto. This
5 Stipulation has been prepared based upon the best judgment of the
6 parties who have .been controlling the litigation throughout.
7 2 . In order to give the Counties an opportunity to be ,
8 heard with respect to any opposition they may have, Santa Fe and
9 the SBE are desirous of having this Court schedule a hearing at
10 which time any County may appear and lodge whatever objections
11 they may have to the merits of the proposed Settlement Agreement
12 (Exhibit 1) or to the form of Judgment (Exhibit 2) which has been
13 submitted herewith to effectuate it. After considering any such
14 objections, the Court can either approve the Judgment in its
15 present form, consider modification of the Judgment to address
16 those concerns voiced by the Counties in a manner which is
17 consistent with the proposed settlement, and if . such
18 modifications are approved by Santa Fe and the -SBE, modify the
19 proposed settlement or reject the proposed settlement outright.
20 Moreover, it is expressly agreed by Santa Fe and the SBE that
21 unless the proposed settlement enjoys the support of at least 9
22 Counties and any number of Counties which comprise at least 51%-
23 of the cash payments due under the proposed settlement, prior to
24 February 12, 1993 at 5 :00 PM, this Stipulation shall be withdrawn
25
26
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STIPULATION FOR ENTRY OF PARTIAL JUDGMENT
JLVP:55879-83830.033
1 and the hearing vacated. '
2 3 . Finally, the parties respectfully request that the
3 Court schedule a hearing as soon as possible after Febraury 12 ,
4 1993 , which is the last date for the Counties to approve the
5 proposed settlement. Time is of the essence because if the
6 Judgment is not entered on or before March 1, 1993 , the
7 considerations which. motivated Santa Fe to compromise its claims
8 as. outlined herein will result in the need to renegotiate the
9 settlement on different terms.
10 DATED: December 31, 1992 .
11 FENNEMORE CRAIG OFFICE OF THE ATTORNEY GENERAL
12
13 By ASC_ By
Paul J. &oney Robert E. Murphy
14 Jim L. W ight Deputy Attorney General
Suite 2200 Room 6200
15 One Renaissance Square 455 Golden Gate Avenue
Two North Central Avenue San Francisco, CA 94102
16 Phoenix, AZ 85004-2390 Attorneys for Defendant
Attorneys for Plaintiff California State Board of
17 The Atchison, Topeka & Equalization
Santa Fe Railway Company
18
19
20
21
22
23
24 ' The Exhibit 1 Settlement Agreement has been circulated to
each of the Counties in order to allow the individual County
25 Boards of Supervisors an opportunity to review the terms of the
proposed settlement and report their approval or rejection to the
26 Attorney General prior to the hearing on this Stipulation for
Entry of Partial Judgment.
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STIPULATION FOR ENTRY OF PARTIAL JUDGMENT
JLW-55879-83830.033
1 PROOF OF SERVICE BY MAIL
(Code Civ. Proc. Secs. 1013a, 2015 .5)
2
3 I do hereby declare that I am a citizen of the United
States, employed in the County of Maricopa, State of Arizona,
4. over 18 years old, and that my business address is Suite 2200,
One Renaissance Square, Two North Central Avenue, Phoenix,
5 Arizona 85004-2390. I am not a party to the within action. On
the 31st day of December, 1992 . I deposited in the United States
6 Mail a true copy of:
7 STIPULATION FOR ENTRY OF PARTIAL JUDGMENT
8
in said action, in a sealed envelope, with the postage thereon
9 fully prepaid, addressed as follows :
10 SEE ATTACHED LIST
11 I declare under penalty of perjury that the foregoing is
true and correct.
12
EXECUTED at Phoenix, Arizona this 31st day of December,
13 1992 .
14
15
16 Paul J. 06oney
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STIPULATION FOR ENTRY OF PARTIAL JUDGMENT
JLW:55879-83830.033
1 Mr. James Williams Ms. Kitt Berman
BOARD OF EQUALIZATION OF COUNTY SUPERVISORS
2 THE STATE OF CALIFORNIA ASSOCIATION
1020 "N" Street OF CALIFORNIA
3 Sacramento, California 95814 1100 "K" Street
Sacramento, Calif. 95814
4
Robert E. Murphy, Esq. Laurence E. Garrett, Esq.
5 Deputy Attorney General General Tax Attorney
CALIFORNIA DEPT. OF JUSTICE THE ATCHISON, TOPEKA &
6 Room 6200 SANTA FE RAILWAY COMPANY
455 Golden Gate Avenue 920 Southeast Quincy Street
7 San Francisco, California 94102 Topeka, Kansas 66612
8 Kelvin H. Botty, Jr. , Esq. Dennis L. Myers, Esq.
Senior Deputy County Counsel County Counsel
9 COUNTY OF ALAMEDA COUNTY OF MERCED
Room 463 2222 M Street
10 1221 Oak Street Merced, California 95340
Oakland, California 94612
11
Victor J. Westman, Esq. Adrian Kuyper, Esq.
12 County Counsel County Counsel
COUNTY OF CONTRA COSTA COUNTY OF ORANGE
13 County Administration Building 10 Civic Center Plaza
Post Office Box 69 Post Office Box 1379
14 Martinez, California 94553 Auburn, CA 92702-1379
15 Max E. Robinson, Esq. William C. Katzenstein, Esq.
County Counsel County Counsel
16 COUNTY OF FRESNO COUNTY OF RIVERSIDE
Suite 121P, 2220 Tulare Street Suite 300
17 Post Office Box 1549 3535 Tenth Street
Fresno, California 93716 Riverside, California
18 92501-3674
19 Bernard C. Barmann, Esq. Alan K. Marks, Esq.
County Counsel County Counsel
20 COUNTY OF KERN COUNTY OF SAN BERNARDINO
Room 500 4th Floor,
21 1415 Truxtun Avenue 385 North Arrowhead
Bakersfield, California 93301 San Bernardino, CA 92415
22
Denis A. Eymil, Esq. Lloyd M. Harmon, Esq.
23 County Counsel County Counsel
COUNTY OF KINGS COUNTY OF SAN DIEGO
24 Kings County Governmental Center 355 County Admin. Center
1400 West Lacey Boulevard 1600 Pacific Highway
- 25 Hanford, California 93230 San Diego, California 92101
26
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STIPULATION FOR ENTRY OF PARTIAL JUDGMENT
JLW:55879-83830.033
I DeWitt W. Clinton, Esq. John F. Cheadle, Esq.
County Counsel County Counsel
2 LOS ANGELES COUNTY COUNTY OF SAN JOAQUIN
648 Hall of Administration Room 711, 222 East Weber
3 500 West Temple Stockton, California 95202
Los Angeles," California 90012
4
Jeffrey L. Kuhn, Esq. Louise Renne, Esq.
5 County Counsel County Counsel
COUNTY OF MADERA CITY AND COUNTY OF SAN
6 FRANCISCO ,
209 West Yosemite Avenue Room 206, City Hall
7 Madera, California 93637 San Francisco, CA 94102
8 Michael H. Krausnick, Esq. Lita O'Neill Blatner, Esq.
County Counsel County Counsel
9 COUNTY OF STANISLAUS COUNTY OF TULARE
2nd Floor 2900 West Burrel
10 1100 H Street County Civic Center
Modesto, California 95353 Visalia, California 93291
11
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JL�V:55879-83830.033
1 . 37
1
2
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6
7
8 IN THE UNITED STATES DISTRICT COURT
9 NORTHERN DISTRICT OF CALIFORNIA
10 THE ATCHISON, TOPEKA & SANTA FE ) MASTER CONSOLIDATED'
RAILWAY COMPANY, ) NUMBER C 81 4365 DLJ
11 )
Plaintiffs, ) NO. C 89 4030 DLJ
12 )
VS. ) PARTIAL JUDGMENT RE CASE
13 ) NO. C 89-4030
STATE BOARD OF EQUALIZATION OF )
14 THE STATE OF CALIFORNIA, et al . , )
15 Defendants . )
16
17 The Court, having considered the Stipulation for Entry
18 of Partial Judgment filed by the attorneys representing plaintiff
19 The Atchison, Topeka & Santa Fe Railway Company ("Santa Fe" ) , and
20 the State Board of Equalization of the State of California
21 ( "SBE") , and having held a hearing to consider any objections to
22 the terms set forth in that Stipulation, and the Court being
23 fully apprised of the issues' :
24
25 ' Exhibit 1 to the Stipulation for Entry of Partial
Judgment, the Settlement Agreement, has been circulated to each
26 of the Counties in order to allow the individual County Boards of
Supervisors an opportunity to review the terms of the proposed
-1-
PARTIAL JUDGMENT
JLW:55906-83830.033
� s
OIL
1 NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND
2 DECREED that partial judgment be entered in favor of the
3 plaintiff Santa Fe on its claims of discriminatory assessment and
4 overvaluation of a portion of its rail transportation property
5 located within the. State of California in violation of 49 U.S.C.
6 § 11503 , as follows:
7 1. For tax years 1989-1990, 1990-1991, 1991-1992 and
8 1992-1993 (collectively, "the tax years at issue" ) , the value of
9 Santa Fe's unitary property shall be $166, 068, 000, $176, 822 , 000,
10 $174, 302 , 000 and $210, 000, 000, respectively.
11 2 . For the tax years at issue, an equalization ratio
12 of 62t shall be applied to the unitary values set forth above,
13 such that the assessed value of Santa Fe' s unitary property shall
14 be $102, 962 , 160 for tax year 1989-1990, $109 , 629 , 640 for tax year
15 1990-1991, $108, 067,240 for tax year 1991-1992 , and $130,200, 000
16 for tax year 1992-1993 .
17 3 . Santa Fe shall pay to the Counties within thirty
18 (30) days of the entry of -this Partial Judgment, ONE MILLION, TWO
19 HUNDRED SEVENTY-FIVE THOUSAND, NINE HUNDRED SIXTY DOLLARS AND
20 EIGHTY-FIVE CENTS ($1,275,960. 85) . This amount, which represents
21 payment of a portion of property taxes previously enjoined by
22 this Court for the tax years at issue, shall be allocated and
23 paid to the Counties as forth on Exhibit A hereto, which is
24
25 Partial Judgment and report their approval or rejection to the
26 Attorney General prior to the hearing on the Stipulation for
Entry of Partial Judgment .
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PARTIAL JUDGMENT. .
JLW':55906-83830.033
1 incorporated herein by this reference. In addition, Santa Fe
2 shall pay to the Counties within thirty (30) days of the entry of
3 this Partial Judgment, ONE HUNDRED NINETY THOUSAND, THREE HUNDRED
4 SIX DOLLARS AND FIFTY-FOUR CENTS ($190, 306 .54) . This amount,
5 which represents interest on the property tax payments specified
6 in Exhibit A, calculated for convenience only through December
7 31, 1992, shall be allocated and paid to the Counties as set
8 . forth on Exhibit B hereto, which is incorporated herein by this
9 reference. Pursuant to the injunctions previously entered by the
10 Court, no penalties or late payment fees shall be assessed
11 against Santa Fe f or the tax years at issue. Upon Santa Fe' s
12 timely payment of all amounts required by this Partial Judgment,
13 the Counties shall certify that all unitary assessments for the
14 tax years at issue have been "Paid in Full. "
15 4. This Partial Judgment does not resolve or affect
16 in any way the claims of Santa Fe or the SEE concerning the
17 taxation of Santa Fe' s non-unitary property classified by the SEE
18 in classes 11, 12, 41, 42, 191, 1941, 193 , 891, 892 or 893 for the
19 tax years at issue.
20 5. Notwithstanding the terms of this Partial
21 Judgment, the Parties acknowledge that the SBE may attempt to
22 levy escape assessments and increase the non-unitary values of
23 Santa Fe' s property classified by the SEE in classes 891 and 892
24 (formerly classified in classes 191 and 192) , for tax years 1989-
25 1990, 1990-1991 and 1991-1992 , in accordance with California
26 Revenue and Taxation Code §§ 861, et sea.` , even though Santa Fe
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PARTIAL JUDGMENT
ILW:55906-83830.033
1 contends that any such assessments are illegal and discriminatory
2 under various provisions of federal and state law. The Parties
3 further acknowledge that Santa Fe reserves the right to challenge
4 any escape assessments or any other increase in non-unitary
5 values by any means legally available to Santa Fe. In the event
6 any such escape assessments or any other increase in non-unitary -
7
on-unitary7 values are imposed upon Santa Fe, the Parties have agreed to
8 immediately stipulate to the entry of a preliminary injunction
9 enjoining the collection of any taxes related to the escape
10 assessments or any other increase in non-unitary values, pendente
11 lite.
12 6. This Partial Judgment resolves all issues related
13 to the taxation of Santa Fe' s unitary property for the tax years
14 at issue.
15 7. The SBE and the Counties shall not list or
16 advertise any delinquencies, record any tax liens, or place any
17 other forms of encumbrance on the properties which are the
18 subject of this Settlement Agreement for the tax years at issue
19 before the date payment is due pursuant to this Partial Judgment.
20 If payment is not made by that date, the restrictions in this
21 paragraph of the Partial Judgment shall become inoperative.
22 Interest on any amounts remaining unpaid as of 31 days following
23entry of this Partial Judgment shall accrue and be paid at the
24 rate of ten percent (10%-) per annum.
25 8 . Santa Fe shall be permitted to amend its pleadings
26 in the above-captioned case to conform to the terms of the
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PARTIAL JUDGMENT
JLW:55906-83830.033
I parties' Settlement Agreement within sixty (60) days after entry
2 of this Partial Judgment.
3 9 . The Parties shall bear their own legal fees, court
4 costs and other expenses incurred in connection with the issues
5 resolved by this Partial Judgment.
6 10 There is no just reason for delay and judgment is
7 entered at this time.
8 DONE IN OPEN COURT this day of 1993 .
9
10
The Honorable D. Lowell Jensen
11 Judge of the United States District
Court, Northern District of California
12
13 APPROVED AS TO FORM:
14 FENNEMORE CRAIG OFFICE OF THE ATTORNEY GENERAL
15
16 By By.
Paul J. Mooney Robert E. Murphy
17. Jim L. Wright Deputy Attorney General
Suite 2200 Room 6200
18 One Renaissance Square 455 Golden Gate Avenue
Two North Central Avenue San Francisco, Calif . 94102
19 Phoenix, Arizona 85004-2390 Attorneys for Defendant
Attorneys for Plaintiff California State Board of
20 The Atchison, Topeka &Santa Fe Equalization
Railway Company
21
22
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24
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PARTIAL JUDGMENT
]LW:55906-83830.033