The Arizona Court of Appeals, Division One, holds that an Ordinance authorizing the mayor to enter into a development agreement is a referable legislative act, and that a referendum petition strictly complies with the statute even if it deviates from the order set forth in statute, as long as all required components are present.

The City of Tempe adopted an Ordinance authorizing the mayor to enter into an agreement with a developer to purchase and develop 12.5 acres of City-owned land near Tempe Town Lake. A citizens’ group sought to challenge the Ordinance via a referendum, but the City Clerk rejected the group’s petition, taking the position that the City Council’s approval of the Ordinance was a non-referable administrative act.

The citizens’ group challenged the City Clerk’s rejection in superior court, seeking an order compelling the City Clerk to file and process the referendum petition and an injunction to block the Ordinance from taking effect. The court found that the Ordinance was referable, but it refused to grant an injunction because the group’s referendum petition did not strictly comply with statutory requirements and was therefore invalid. The citizens’ group appealed the ruling that the petition was invalid, and the City cross-appealed the ruling that the Ordinance was subject to referendum.

The court of appeals affirmed the superior court’s ruling that the Ordinance was subject to referendum but reversed the ruling that the group’s petition did not strictly comply with statutory requirements.

The citizens’ group used a form provided by the City Clerk to create its petition. The petition included all required information, but the sections labeled “Referendum description” and “Petition for Referendum” were listed in reverse order when compared to the statute. The court of appeals held that the legislature did not intend for such a minor modification to defeat strict compliance, reasoning that if the legislature had intended to require that petition components be presented in a certain order, it would have written that requirement into the statute as it had in other statutes, such as the ones that prescribe the order in which information is to be presented on a ballot.  Because the group’s petition contained all the statutorily required components, the court of appeals found that it strictly complied with the statute.

Whether the Ordinance was referable turned on whether it was a legislative or administrative act. A city council’s legislative acts are subject to referenda, but its administrative acts are not. To distinguish between a legislative and an administrative act, a court must consider whether the action is (1) permanent or temporary, (2) of general or specific (limited) application, and (3) a matter of policy creation or a form of policy implementation. The court of appeals found that the Ordinance was (1) permanent in nature because it provided certainty to the developer in the form of lease extensions, exceptions to the zoning code, and restrictions on the use of the land; (2) a general legislative act because it declared its public purpose and specified ways and means to accomplish that purpose; and (3) a matter of policy creation because it did not refer to any previously declared policy decision it intended to implement, but rather set forth the Ordinance and Development Agreement as a policy that would be furthered through the execution of a series of excise tax leases.

Judge Morse authored this opinion, in which Judges Perkins and Brown joined.

Posted by: Heather Robles