HomeMy WebLinkAbout17- Council Office CITY OF SAN BERNARDINO - REQUEST FOR ''OUNCIL ACTION
From: Councilwoman Valerie Pope-Ludlam, Sixth Ward Subject: Special Election/Card Clubs
Dept: Council Office
Date: September 21, 1995
Synopsis of Previous Council Action:
Recommended Motion:
MOTION A - To reconsider the Resolution of the Mayor and Common Council of the City of San
Bernardino calling a Special Election and submitting to the electors a measure to allow Card Clubs
within the City of San Bernardino.
MOTION B - That full reading of the Resolution be waived; and that said resolution be adopted.
Signature
Contact Person: Councilwoman Pope-Ludlam Phone: 5378
Supporting Data Attached: no Ward:
FUNDING REQUIREMENTS: Amount:
Source: (Acct.No.)
(Acct. Description)
Finance:
Council Notes:
AGENDA ITEM NO.
CITY OF SAN BERNARDINO
INTEROFFICE MEMORANDUM
TO: The Mayor and Common Council of the City of San Bernardino
FROM: Dennis A. Barlow, Sr. Asst. City Attorney
DATE: September 20, 1995
RE: Necessity of Holding an Election to Authorize Card Rooms within the City
On Friday, September 15, 1995, Mr. Warner Hodgdon provided this office with a draft
legal opinion from his attorneys which addressed the issue of whether the Mayor and Common
Council of the City of San Bernardino could adopt an ordinance allowing card rooms within the
City without the necessity of putting the matter to a vote of the people, as specifically required
by state law. Their conclusion was, "Probably." (at pg. 3) We have been asked to review this
area and indicate whether we agree with the conclusions of Mr. Hodgdon's attorneys.
Chapter 9.44 of the San Bernardino Municipal Code, adopted in 1913 and in effect since
that time, currently prohibits all games of chance not otherwise prohibited by the California Penal
Code [see Penal Code § 330 and § 330a], and not otherwise specifically allowed by other
provisions of state law [see for instance the State Lottery provisions at Government Code § 8800
et seq.]. Pursuant to Penal Code § 326.5 the City has also authorized bingo by certain,
qualifying, non-profit organizations [see San Bernardino Municipal Code Chapter 5.36].
Business and Professions Code § 19819, adopted in 1983, but effective on July 1, 1984,
now requires:
"No gaming club shall be located within the territorial limits of any county,
city, or city and county which had not permitted gaming clubs prior to
January 1, 1984, unless a majority of electors voting thereon affirmatively
approve a measure permitting legal gambling within that city, county, or
city and county. "
SB 100 approved by the Legislature on July 29, 1995, signed by the Governor on August
3, 1995, and filed with the Secretary of State on August 7, 1995, among other things added
Business and Professions Code § 19819.5 to read as follows:
DRAB/tbm [Gaming.meml
Mayor and Common Council
September 20, 1995
Page 2
"(a) On and after January 1, 1996, neither the governing body nor the
electors of a county, city, or city and county that has not authorized legal
gaming within its boundaries prior to January 1, 1996, shall authorize legal
gaming.
(b) No ordinance in effect on January 1, 1996, that authorizes legal gaming
within a county, city, or city and county may be amended to expand
gaming in that jurisdiction beyond that permitted on January 1, 1996.
(c) This section shall remain in effect only until January 1, 1999, and as of
that date is repealed, unless a later enacted statute, which is enacted before
January 1, 1999, enacts a comprehensive scheme for the regulation of
gaming pursuant to this chapter under the jurisdiction of a gaming or
gambling control commission."
It is apparently this statute that gives some urgency to the question. If gaming is not
authorized before January 1, it may not then be authorized for three years.
As a charter city the City of San Bernardino is in many cases not subject to the general
laws and may legislate in areas that are determined to be municipal affairs. However if a state
enactment is determined to be a matter of statewide concern, it will be applicable to the city
despite any contrary charter or ordinance provision.
There is no standard definition of what is a municipal affair and the courts must make the
determination on a case by case analysis (California Fed. Savings & Loan Assn.. v. City of Los
Angeles (1991) 54 Cal.3d 1, 17). A legal treatise on California municipal law states:
"Generally speaking, the term `municipal affairs' has reference to the
internal business affairs of a city. If a matter is of statewide concern and
beyond the exclusive control of the city, it is not a municipal affair and not
subject to local control." (45 Cal Jur 3d "Municipalities" § 99, footnotes
omitted)
However, the courts have consistently held:
"When there is a doubt as to whether an attempted regulation relates to a
municipal or to a state matter, or if it be the mixed concern of both, the
doubt must be resolved in favor of the legislative authority of the state."
(People v. Moore (1964) 229 Ca1.App.2d 221, 225)
DAB/tbm [Gaming.mem]
Mayor and Common Council
September 20, 1995
Page 3
In their analysis of this issue the attorneys for Mr. Hodgdon in their undated
memorandum, conclude that the subject covered by Business and Professions Code § 19819,
quoted above, is either a gaming statute or a statute relating to voter approval requirements. If
the latter, then they conclude that since elections are generally determined to be municipal affairs
then the city could go ahead and ignore the state statute. If, on the other hand, it is determined
to be a gaming statute then they concede that it is at least a matter that falls within both the city
and state purview (at pg. 11). Under the rule cited in the Moore case, quoted above, any doubt
and any conflict must be resolved in favor of the state enactment.
Looking at Business and Professions Code § 19819 as part of the entire statutory scheme
relating to gaming within the state, it cannot be seriously contended that the statute is only an
elections provision. It is not. It is a provision outlining how gaming must be authorized.
There is no question that the Legislature intended the provision to apply to charter cities
such as San Bernardino. The drafters specifically used the term "city and county." The only
"city and county" in the state is the City and County of San Francisco, a charter city and county.
The State Constitution requires that if a county and its cities consolidate into a combined city and
county, the result must be a charter city and county (California Constitution, Article 11, § 6).
The result is that the Legislature knew full well what is said when it used the term "city and
county." It meant charter entities such as the City of San Bernardino.
In 1991 the State Supreme Court examined a similar issue with regard to an attempt by the
City of Los Angeles to tax banks and other financial institutions. The power of taxation had
historically been considered as "an essential function of municipal government, secure against
legislative usurpation" (California Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54
Cal.3d 1, 13). The court went on to state that under the court-established procedures to determine
whether a subject falls within a municipal affair or was a matter of statewide concern whole areas
should not be cordoned off for one or the other, but the relationship is a fluid one, moving as the
needs dictate. The court declared:
"When a court invalidates a charter city measure in favor of a conflicting
state statute, the result does not necessarily rest on the conclusion that the
subject matter of the former is not appropriate for municipal regulation.
It means rather, that under the historical circumstances presented, the state
has a more substantial interest in the subject than the charter city."
(California Fed. Savings & Loan Assn.., at 18)
The inescapable result is that the State Legislature meant the provision to apply to charter
DAB/tbm [Gaming.mem]
Mayor and Common Council
September 20, 1995
Page 4
cities. Where such an intent is found any doubt is resolved in favor of the Legislative enactment
and against a city ordinance. The courts would certainly find that a state statute, as part of the
state scheme to regulate gaming in this state, is a matter of statewide concern and must prevail
over a conflicting city action.
It is our opinion that an ordinance to authorize gaming in the City of San Bernardino as
a change to an ordinance prohibiting such gaming adopted in 1913, must comply with the state
requirement of a prior vote of the electorate.
We have attached a copy of the draft opinion from Mr. Hodgdon's attorneys. A full
reading will disclose how very tentative their conclusion is.
Dennis A. arlow
DAB/tbm [Gaming.mem]
MUDGE ROSE GUTHRIE ALEXANDER & FEROON
so M..OEN LANE 21ST FLOOR 2121 K STREET. N.W.
NEW�OPK. NEW rORK 1C038-a996
wASNiNGrO N,O.C. 20037-189a
212-510.7cco 333 SOUTH GRAND AVENUE 202-.29-9355
630`Ir7. AVENUE LOS ANGELES, CALIFORNIA 9007 1 - 1 525 SUITE 900,NORTHBRIOOE CENTRE
SUITE 6SO 2 1 3-61 3-1 1 1 2 sls NORTH FLAGLER ORIVE
NEW rORK, N. +. .01.1-0144 WEST PALM BEACH- FL. 33401.4334
212-332--600 407.650-9100
FACSIMILE'
"ORRIS CORPORATE CENTER -WO
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ONE UPPER POND ROAD SLOG. O 75002.PAg15-FRANCE
*AASIPPANY, NEW JERSEY 07054.1075 111 42.61. 57. 71
201.335.0004
INFINI AKASAKA
8-7-IS AKASAKA. MINATO-KU
DONALD L. HUNT
TOKYO 107,JAPAN
PARTNER 1031 3423.3970
DRAFr
MEMORANDUM
(For Discussion Purposes Only)
TO: Double Eagle Sports Internationale (Double Eagle) September 15, 1995
FOR: Consideration and Further Action by the Mayor and Common Council, City Attorney
and Economic Development Commission
(July 26, 1995 City/EDA Commission Unanimous Motion and Directive, i.e., ... 'The Sports Gardens*-_
Stadium/Complex Private Enterprise Investment and Plan of Finance)
RE: PERMISSIBILITY OF ORDINANCE ALLOWING FOR THE OPERATION OF A
GAMING OR OTHER TYPE OF CASINO FACH= IN THE CITY OF SAN
BERNARDINO AND IMPLEMENTATION OF, BUT NOT LIM= TO, THE
SAN BERNARDINO DOWNTOWN PLAN.
BACKGROUND
You have requested us to review the City Charter, Government Code and other
data and documentation applicable to the permissibility of an Ordinance allowing for the
operations of a gaming or other type of casino facility in the City of San Bernardino. This
includes our review of the May 15, 1995 Exclusive Negotiating Agreement (the "Agreement')
between Rounding 'Third, LLC (Rounding Third) and the Economic Development Agency (the
"Redevelopment Agency") of the City of San Bernardino. The fully executed Agreement was
provided to Double Eagle on August 4, 1995 by the Agency along with the Agency's July 31,
1995 Letter to Rounding Third and acknowledgement of consent to the terms and conditions set
forth therein as to Double Eagle Participation.
LA01 \634S\23624.13 95573.1
TABLE OF AUTHORITY
Tab
Constitution of the State of California, § 5 City charter provisions . . . . . . . . . . . . . . A
Charter of the City of San Bernardino, § 33 Ordinances - Publication . . . . . . . . . . . . . B
California Business & Professional Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C
§ 19800 Citation of chapter
§ 19801 Legislative intent; Construction of provisions
§ 19819 Approval of electors required for locating gaming
club in municipality; Exception
§ 19824 Enactment of municipal ordinances
California Penal Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C
§ 330 Gaming
California Code of Civil Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C
§ 1060 Declaratory relief
§ 1085 Issuing courts, and writs of mandates
§ 1086 Issuance on petition when ordinary remedy inadequate
CASE LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D
California Federal Savings & Loan Ass'n v. City of Los Angeles, 54 Cal.3d 1 (1991) . . . 1
Johnson v. Bradley, 4 Cal.4th 389 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Cox Cable San Diego V. City of San Diego, 188 Cal.App.3d 952 . . . . . . . . . . . . . . . 3
Fendrich v. Van de Kamp, 182 Cal.App.3d 246 . . . . . . . . . . . . . . . . . . . . . . . . . . 4
fCo fineau, 68 Cal.App.3d 154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Rees v. Layton, 6 Cal.App.3d 815 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Socialist Party v. Uhl, 155 Cal. 776 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
City of Redwood City v. Moore, 231 Cal.App.2d 563 . . . . . . . . . . . . . . . . . . . . . . . 8
Muehleisen v. Forward, 4 Cal.2d 17 . . . . . . 9
Scheafer v. Herman, 172 Cal. 338 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
People v, ex rel. Martin v. Worswick, 142 Cal. 71 . . . . . . . . . . . . . . . . . . . . . . . 11
Lawing v. Faull, 227 Cal.App.2d 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
In re Portnoy, 21 Cal.2d 237 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
City of Santa Monica v. Grubb, 245 Ca1.App. 2d 718 . . . . . . . . . . . . . . . . . . . . . . 14
City of Santa Clara v. Von Raesfeld, 3 Cal.3d 239 . . . . . . . . . . . . . . . . . . . . . . . . 15
LA01 \6345\23624.13 1 95573.1
City of Redondo Beach v. Taxpayers. Property Owners etc. City of Redondo Beach,
54 Cal.2d 126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
City of Ontario v. Superior Court of San Bernardino County, 2 Cal.3d 335 . . . . . . . .. . 17
Glendale City Employee's Ass'n v. City of Glendale, 15 Cal.3d 328 . . . . . . . . . . . . 18
Lane v. City of Redondo Beach, 49 Cal.App.3d 251 . . . . . . . . . . . . . . . . . . . . . . . 19
Walker v. Los Angeles County, 55 C.2d 626 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Associated Boat Industries of Norther California v. Marshall, 104 Cal.App.2d 21 . . . . . 21
Residents of Beverly Glenn. Inc. v. City of Las Angeles, 34 Cal.App.3d 117 . . . . . . . 22
Hagan v. Fairfield, 238 Cal.App.2d 197 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
LA01 \6345\23624.13 11 95573.1
The City and Redevelopment Agency desire to have certain property within the
Central City South Redevelopment Project Area of the Agency, established pursuant to
Ordinance No. 3572 and as amended by Ordinance No. NIC-564 (the "Project Area"),
development in furtherance of the Redevelopment Agency's redevelopment objectives.
The City and Redevelopment Agency desire to cause approximately thirteen
(13) acres for the property to be developed as a sports, recreation, entertainment complex
including, and centered about, a stadium suitable as a home facility for a minor league
professional baseball team, with the balance to be devoted to commercial activity focused on a
gaming or other type of casino facility. The 13 acre site is referred to as the "Stadium Site",
the 30 acre site is referred to as the "Entertainment Site", and the entire 43 acre sports/gaming
proposed development is referred to as the "Complex".
The City and Redevelopment Agency May 15, 1995 Agreement recognized that
the Rounding Third team has experience in the development and financing of sports, recreation
and related stadium and facilities, including but not limited to, the experience and expertise in
the financing and development of gaming facilities which operate under and in accordance with
the provisions of the laws of the State of California and the municipalities in which such gaming
facilities are located. The Agency July 31, 1995 Letter to Rounding Third which
acknowledgement of consent to the terms and condition set forth therein as to Double Eagle
Participation was also provided to Double Eagle on August 4, 1995.
The City and Redevelopment Agency have further recognized in the May 15,
1995 agreement that constructing a City of San Bernardino ("City") owned baseball stadium and
financing and development of a world class "Complex" requires sources of revenue other than
those usually available to the Redevelopment Agency. Accordingly, following the June 5, 1995
request of the City and Redevelopment Agency, Double Eagle subsequently prepared "The
Sports Gardens" (Stadium/Complex area) private capital investment and plan of finance. The
submittal thereof received the unanimous Common Council and Economic Development
Commission applicable directive at their meeting of July 24, 1995.
On July 24, 1995 and September 5, 1995 the Council/EDA Commission
approved the interim plan of finance for the stadium only ($13 million construction costs and
±$1.7 million land costs). In addition, on August 21, 1995, the Council/EDA Commission
concurrently awarded the contract for the required rough grading and applicable environmental
"clean-up" of the stadium site (±29 acres). The stadium construction costs may increase at the
time it becomes integrated as part of the contemplated "The Sports Garden" overall
Stadium/Complex, recreation, health and commercial development area (at 215 east to "E" street
and Rialto Avenue to Mill Street).
Therefore, the general purpose of this memorandum is for the further
consideration and action by the Mayor, Common Council, City Attorney and Economic
Development Commission.
LA01 \6345\23624.13 2 95573.1
P0"N
L ITRODUCTION
The City of San Bernardino is a charter city (the "City"). The City's charter
neither prohibits the operation of gaming clubs within the City's jurisdiction nor requires any
voter approval prior to the operation of a gaming club or other type of casino facility within the
City's jurisdiction.
California Business and Professions Code §19819 (the "State Voter Approval
Provision," however, purportedly requires that a majority vote approval be obtained prior to
allowing the operation of gaming clubs within a city.
You have asked us to advise you as to whether or not the City's existing
ordinance may be amended to allow for the operation of a gaming or other type of casino facility
without voter approval (the "Ordinance"). Whether the Ordinance or the State Voter Approval
Provision controls in light of this apparent conflict is the main issue discussed in this
memorandum. Additionally, if the City does enact the Ordinance, this memorandum provides
two methods by which the City may obtain a judicial determination of the validity of the
Ordinance; namely, a petition for writ of mandate and an action for declaratory judgment.
For purposes of the analysis below, it is assumed that the manner by which the
Ordinance would be amended does not violate the City's charter.
ISSUE
Is the method by which the City determines whether to allow the operation of
a gaming club a "municipal affair," and therefore within the City's powers notwithstanding the
State Voter Approval Provision to the contrary?
BRIEF ANSWER
Probably. In order to determine whether the Ordinance or the State Voter
Approval Provision controls, a conflict analysis (a "Conflict Analysis") must be undertaken to
determine three issues. First, the subject being governed by the Provisions (the "Subject") must
be determined. Second, whether the Subject involves matters best governed locally (a
"Municipal Affair") or matters best governed statewide (a "Statewide Concern") must be
determined. Finally, based on whether the Subject involves a Municipal Affair or a Statewide
Concern, the extent of the City's authority must be determined. With respect to the third issue,
if the Subject is a Municipal Affair, the City has authority to enact ordinances governing the
Subject, notwithstanding the conflicting State Voter Approval Provision. If the Subject pertains
to a Statewide Concern, the City has authority to enact ordinances governing the Subject unless
the state has (1) occupied the field of the Subject to the exclusion of city regulation or (Z)
preempted the Subject such that the state regulation conflicts with the City ordinance. If the
LA01 \6345\23624.13 3 95573.1
state has either occupied or preempted the field with respect to the Subject, the State Voter
Approval Provision controls, notwithstanding any conflicting provision in the City's charter.
With respect to the present facts, the Subject that is governed by the Provisions
probably concerns voter approval requirements for a city election to determine whether to
establish and operate a gaming club (a "City Gaming Club Election"). There are substantial
arguments to support the position that voter approval requirements for a City Gaming Club
Election involve a Municipal Affair. As such, the Ordinance controls, notwithstanding an
apparent conflict with the State Voter Approval Provision. Moreover, it is of no consequence
whether the City enacts an ordinance with a different voter approval requirement than the
majority voter approval requirement provided by the State Voter Approval Provision, or whether
the City chooses to even hold an election. The dispositive issue is whether a Municipal Affair
is involved. When this is the case, the City may choose to regulate in any manner it chooses
in accordance with its charter.
If the City does enact the Ordinance despite the apparent conflict with the State
Voter Approval Provision, there are two methods by which the City may obtain a judicial
determination of the validity of the Ordinance. The City might either seek a writ of mandate
or a declaratory judgment.
DISCUSSION
In order to determine whether the City may enact the Ordinance to allow a
gaming club to operate within its jurisdiction without first obtaining a majority vote of the
electorate, as may be required by the State Voter Approval Provision, this memorandum
examines three issues. First, this memorandum will determine whether there exists an actual
conflict between the State Voter Approval Provision and the Ordinance. Second, if there exists
such a conflict, this memorandum will determine which of the Provisions is controlling. Finally,
if the City does enact the Ordinance, this memorandum will outline the general procedures by
which the City may obtain a judicial determination of the validity of the Ordinance.
1. Actual conflict must exist between the State Voter Approval Provision and the
Ordinance.
As a preliminary matter, a court must, prior to determining if a Municipal
Affair or a Statewide Concern exists, first satisfy itself that the case presents an actual conflict
between a state statute and a charter city measure.'
Under the present facts, there is an apparent conflict between the Provisions.
The State Voter Approval Provision requires all cities that had not permitted gaming clubs prior
` California Federal Savings & Loan Ass'n v. City of Los Angeles, 54 Cal.3d 1 (1991).
LA01 \6345\23624.13 4 95573.1
to January 1, 1984 to secure majority voter approval before allowing gaming clubs to operate
within the city. The City, however, contemplates enacting the Ordinance which, pursuant to the
City's charter, would allow a gaming club to operate within the City without any voter approval
having been obtained.
Because there does exist a conflict between the Provisions, it is necessary to
determine whether a Municipal Affair or a Statewide Concern is implicated. This is necessary
because once that is ascertained, it can be determined whether the State Voter Approval
Provision or the Ordinance controls.
2. If there is a conflict between the Provisions. a Conflict Analysis must be undertaken
to determine whether the State Voter Approval Provision or the Ordinance controls
A. Conflict Analysis Rules.
Under a Conflict Analysis, to determine whether a state statute or a charter city
measure will control requires asking and answering the following questions.
(1) What is the Subject that the Provisions are governing?
The first step in undertaking a Conflict Analysis requires determining the
Subject that the Provisions are governing. This may be determined by examining the purpose,
the legislative history, and the actual words of the Provisions.
(2) Is the Subject a Municipal Affair or a Statewide Concern?
Once the Subject has been determined, the next step involves determining
whether the Subject is a Municipal Affair or a Statewide Concern.
Courts, when determining whether a given activity is a Municipal Affair or a
Statewide Concern, generally make an ad hoc inquiry, answering the question in light of the
facts and circumstances surrounding each case.' In those instances where a matter implicates
a Municipal Affair and poses a genuine conflict with state law, it has been held that the question
of whether a Statewide Concern exists is the bedrock inquiry through which the conflict between
the state and local interests is adjusted.' Generally, if the Subject of the statute fails to qualify
as one of Statewide Concern, then the conflicting charter city measure is a Municipal Affair and
beyond the reach of legislative enactment.; If, however, the court is persuaded that the Subject
of the state statute is one of Statewide Concern and that the statute is reasonably related to its
2 11L at 16.
' Id
4 IdL
LA01 \6345\23624.13 5 95573.1
resolution, then the conflicting charter city measure ceases to be a Municipal Affair pro tanto,
and the Legislature may, by state statute, address the statewide dimension by its own tailored
enactments.5
The fact, standing alone, that the Legislature has attempted to deal with a
particular Subject on a statewide basis is not determinative of whether a Statewide Concern or
a Municipal Affair is involved.' The Legislature is empowered neither to determine what
constitutes a Municipal Affair nor to change a Municipal Affair into a matter of Statewide
Concern simply by enacting a comprehensive set of general laws governing the Subject.' The
court must be satisfied that there are good reasons, grounded on statewide interests, to label a
given matter a Statewide Concern.'
Courts, to determine if there are good reasons to label a given matter a
Statewide Concern, look to see whether there is a dimension to the Subject that demonstrably
transcends identifiable municipal interests.' For example, courts determine whether there are
substantial geographic, economic, ecological or other distinctions which indicate a need for local
control, or whether these factors may be adequately recognized and comprehensively dealt with
at the state level.`o
In essence, given the inherent ambiguity involved, courts have sought to
allocate the governmental powers under consideration in the most sensible and appropriate
fashion as between local and state legislative bodies."
(3) To what extent does a charter city have authority to govern the
Subject based on its classification as a Municipal Affair or a
Statewide Concern?
5 J,,; Johnson v. Bradley, 4 Cal.4th 389, 404 (1992).
' Johnson, 4 Cal.4th at 406.
' Id
B Id
9 California Federal Savings and Loan Ass'n, 54 Cal.3d at 17.
10 Cox Cable San Diego v. City of San Diego, 188 Cal.App.3d 952, 962 (1987).
" California Federal Savings and Loan Ass'n, 54 Cal.3d at 17.
1A01 \6345\23624.13 6 95573.1
Upon having determined whether the Subject is a Municipal Affair or a
Statewide Concern, the next step involves determining to what extent a charter city has authority
to govern the Subject.
California Constitution, art. XI, §5 provides a charter city with complete
autonomy to enact ordinances that govern Municipal Affairs so long as it does not conflict with
the city's charter, even if it directly conflicts with a state statute.12
In addition to its autonomy with respect to Municipal Affairs, a charter city
may also enact ordinances and regulate matters pertaining to a Statewide Concern so long as it
does not conflict with the city's charter. This ability, however, is subject to two limitations.
First, if it was the intent and purpose of the Legislature to occupy the field of
the Subject to the exclusion of municipal regulation, the charter city remains subject to and
controlled by the applicable general state laws. In order to determine whether the Legislature
intended to fully occupy the field with respect to a Subject, courts have examined whether: (1)
the Subject has been so fully and completely governed by general law as to clearly indicate that
it has become exclusively a matter for the state to regulate, (2) the Subject has been partially
governed by general law couched in such terms as to indicate clearly that a paramount state
interest will not tolerate further or additional local action, or (3) the Subject has been partially
governed by general law, and the Subject is of such a nature that the adverse effect of a local
ordinance on the transient citizens of the state outweighs the possible benefit to the
community.13
Second, even if the Legislature did not intend to fully occupy the field of the
Subject to the exclusion of all municipal regulation, if the municipal ordinance or regulation
conflicts with a state law, the charter city remains subject to and controlled by the applicable
state law."
12 Cox Cable San Diego, 188 Cal.App.3d at 960.
California Constitution, art. XI, §5, specifically provides:
It shall be competent in any city charter to provide that the city governed
thereunder may make and enforce all ordinances and regulations in respect
to municipal affairs, subject only to restrictions and limitations provided in
their several charters . . . . (emphasis added).
13 Cox Cable San Die�Q, 188 Cal.App.3d at 961.
14 T,a
LA01 \6345\23624.13 7
95573.1
If the Subject is a Statewide Concern, both of the above limitations apply
regardless of the provisions of the city's charter.t5
B. Application of the Conflict Analysis rules
(1) What subject are the Provisions governing?
It might be argued that the Subject that is governed by the Provisions pertains
either to gaming or to voter approval requirements for a City Gaming Club Election.
The Subject that is governed by the Gaming Registration Act16 (the "Act")
is gaming. Based on this, it might be determined that the Subject that is governed by the State
Voter Approval Provision, which is a part of the Act, also is gaming.
However, a closer examination of the purpose and legislative history of the
Act, as well as the actual words of the State Voter Approval Provision, reveals that the Subject
that is governed by the State Voter Approval Provision more likely involves establishing the
voter approval requirement for a City Gaming Club Election rather than gaming.
The Act was sponsored by the Attorney General, who described some card
clubs as a "magnet for criminal elements," with the problems of some clubs being beyond the
jurisdiction of individual cities.17 The problems of Statewide Concern that the Attorney
General believed required state regulation were the criminal activity and the hidden ownership
that was common to commercial cardrooms." To address these problems, the Act, although
it provided for certain concurrent regulatory controls, mandated that local jurisdictions could not
operate a gaming club until they first met with state requisites for registration.19 Specifically:
It [was] the intent of the Legislature, in enacting this chapter, to have
concurrent jurisdiction with local governments over gaming establishments
within the State of California and to provide uniform, minimum regulation
15 a
16 California Business and Professions Code §§ 19800 et seq.
17 Fendrich v. Van de Kamp, 182 Cal.App.3d 246, 253 (1986) (citing to Assem.Com. on
Governmental Organization, Analysis of Assem. Bill Nr. 1573 (1983-1984 Reg.Sess.) (emphasis
added).
is Id. at 254.
i9 I�L (citing to undated memo in Sen.Com. on Governmental Organization files, furnished
by the Legislative Intent Service).
1A01 \6345\23624.13 8 95573.1
/OON
of the operation of those establishments through registration by the Attorney
General of those who own or manage gaming clubs.20
Although the purpose of the Act was to address the issues of Statewide Concern
related to gaming discussed above, the State Voter Approval Provision does not further this
purpose. The State Voter Approval Provision in no way regulates those aspects of gaming
pertaining to the actual operation of a gaming club nor does the State Voter Approval Provision
regulate the people who own or manage gaming clubs. Rather, the State Voter Approval
Provision provides for voter approval requirements for a City Gaming Club Election; a subject
that was not stated to be a concern of the Attorney General when he sponsored the Act.
Because the State Voter Approval Provision does not in fact regulate the actual
operation of gaming clubs or the registering of its owners and managers, it may be argued that
the State Voter Approval Provision does not even regulate gaming, despite the fact that the State
Voter Approval Provision is a part of the Act. The mere fact that the State Voter Approval
Provision is a part of the Act, which as a whole regulates gaming, is not determinative.21
In fact, upon an examination of the actual words of the State Voter Approval
Provision, it is more plausible that the State Voter Approval Provision merely governs what is
on its face; the voter approval requirement necessary when conducting a City Gaming Club
Election.
With respect to the Ordinance, it governs the same Subject as does the State
Voter Approval Provision. Therefore, if it is determined, upon an examination of the purpose,
legislative history and the actual words concerning the Act and the State Voter Approval
Provision, that the State Voter Approval Provision governs the voter approval requirement
necessary when conducting a City Gaming Club Election, it may also be determined that this is
the Subject that the Ordinance governs as well.
(2) Is the Subiect a Municipal Affair or a Statewide Concern)
a. If the Subiect involves voter a>proval requirements for a
City GaminLy Club Election as op cep tog ming. then it is
a Municipal Affair
Upon an examination of the factors provided in Section 2.A.(2), supra, it
appears that the State Voter Approval Provision governs a Municipal Affair and not a Statewide
Concern if the Subject of the State Voter Approval Provision involves the voter approval
requirement for a City Gaming Club Election.
20 California Business and Professions Code §19801 (emphasis added).
21 Johnson, 4 Cal.4th 389.
LA01 \6345\23624.13 9 95573.1
The California Constitution and case law indicate that city elections are to be
governed by charter provisions. In Johnson v. Bradley, the court engaged in a discussion of
California Constitution, art. XI, §5, stating that while §5(a) articulates the general principles of
self-governance, §5(b) sets out a nonexclusive list of "core" categories that are, by definition,
"municipal affairs."" One of the core categories defined to be a per se Municipal Affair, was
regulation over the conduct of city elections.' A number of courts have also held to this
effect." Based on these authorities, it is reasonable to conclude that the Subject the State Voter
Approval Provision attempts to regulate is a Municipal Affair.
In addition to determining this issue on the narrow grounds that city elections
are to be governed by city charter provisions, the determination that the Subject is a Municipal
Affair also appears to be a reasonable allocation of governmental powers. There is little doubt
that there are aspects to gaming that pertain to a Statewide Concern. Thus, conceptually, it
appears reasonable that the determination of whether or not gaming clubs should be allowed in
the state at all involves a matter of Statewide Concern. Further, it also appears reasonable that
the determination as to the manner in which these gaming clubs should be operated, based on
the concerns driving the passage of the Act, also implicates a matter of Statewide Concern.
There are, however, a number of issues with respect to gaming where it is
reasonable to believe that a Municipal Affair is being implicated. For example, issues such as
the size, location, parking requirements, hours of operation and the number of gaming clubs
allowed in a city are all issues that are best handled at the local level. These all involve matters
that are of a Municipal Affair in nature. In light of this, it appears equally reasonable that the
ultimate decision whether or not to even allow a gaming club to operate within the jurisdiction
22 Id
'3 Id.
California Constitution §5(b)(3) should not be interpreted to only apply in the limited area of
elections for city officials. The procedures and authority to regulate elections for city officials
is specifically provided for in California Constitution §5(b)(4).
For an example of an election not pertaining to voting for city officials, -=, Coffineau v. Fong
EL, 68 Cal.App.3d 138 (1977) (in the case of a charter city, whether the vote necessary to effect
change of name of city shall be a majority vote or a two-thirds favorable vote is a matter
properly governed by provisions of a city charter; such matter is in the hands of residents of
home rule city).
fCo fineau, 68 Cal.App.3d 154; Rees v. Layton, 6 Cal.App.3d 815, 821 (1970); Socialist
Pg_rly v. Uhl, 155 Cal. 776, 788 (1909); City of Redwood City v Moore, 231 Cal.App.2d 563
(1965); Muehleisen v. Forward, 4 Cal.2d 17 (1935); Scheafer v. Herman, 172 Cal. 338 (1916);
People v, ex rel. Martin v Worswick, 142 Cal. 71 (1904); Lawing v. Faull, 227 Cal.App.2d
23 (1964).
LA01 \6345\23624.13 10 95573.1
of the city, including the voter approval requirement in making such a decision, also implicates
a matter best categorized as a Municipal Affair.'
b. If the Subiect involves g ming as opposed to voter approval
rf4, uirements fora ity Laming Club Election, then it is
both a Statewide Concern and a Municipal Affair.
Upon an examination of the factors provided in Section 2.A.(2), supra, the
State Voter Approval Provision, if it actually regulates gaming, as opposed to voter approval
requirements for a City Gaming Club Election, governs issues pertaining to both a Statewide
Concern and a Municipal Affair.
It has been held that the regulation of gambling implicates both municipal and
statewide concerns." This appears to be a reasonable allocation of governmental powers. As
discussed in Section 2.B.(2) a., supra, there are certain issues, such as the decision to allow
gaming within the state and the manner by which gaming clubs should be operated, that are best
handled at the state level, while there are also certain issues, such as determining the size and
location of a gaming club within a city, that are best handled at the local level.
(3) What is the extent of the Citvlq authority with restct to the Subject
that is governed by the Provisions
a. If the Subject that is governed by the Provisions involves
voter approval requirements for a City Gaming Club
Election as op tog ming, the Ordinance controls
If the Subject that is governed by the Provisions involves establishing voter
approval requirements for a City Gaming Club Election, a Municipal Affair is involved. As
such, if the Ordinance conflicts with the State Voter Approval Provision, the Ordinance should
control based on California Constitution, art. XI, §5, if the Ordinance is consistent with the
City's charter.
An argument may be made, however, that even if the Provisions concern a
Municipal Affair, thereby rendering the Ordinance the controlling provision, the Ordinance must
at least allow for some election to take place. It may be argued that the decision to not hold an
election at all goes beyond the authority of the City. This argument is without merit.
This appears especially true based on cities having the authority to prohibit forms of
gaming not prohibited by state law because such a decision involves issues of local concern. As
such, it would appear equally reasonable to conclude that the decision to allow gaming not
prohibited by state law also involves issues of local concern.
26 In re PortnQy, 21 Cal.2d 237 (1942).
LA01 \6345\23624.13 11 95573.1
Once a matter is found to involve a Municipal Affair, the decision whether to
even have an election, regardless of what a state statute requires, has been found to be up to the
charter city.27 In City of Santa Monica v Grubb, Santa Monica sought to issue revenue bonds
without holding an election although an election was required by state law. The court held that
Santa Monica, based on its status as a charter city, had plenary power with respect to its
Municipal Affairs.28 As such, the court held that although state law required an election prior
to an issuance of revenue bonds, since the issuance of revenue bonds was a Municipal Affair,
Santa Monica could issue the bonds without holding an election if it did not violate the city's
charter.
Based on the holding in City of Santa Monica, the fact that no election would
be held prior to the City allowing, by Ordinance, a gaming club to operate in its jurisdiction is
of no legal consequence, since it concerns a Municipal Affair, of which the City has plenary
authority and because it does not violate the City's charter.
b. If the Subiect involves gaminE as o_Nsed to voter approval
requirements for a City Gaming Club Election then the State
Voter Approval Provision controls
As discussed above, the regulation of gaming touches upon issues pertaining
to both a Statewide Concern and a Municipal Affair. As such, if the Subject involves gaming,
as opposed to voter approval requirements for a City Gaming Club Election, the City can enact
the Ordinance only if the state did not occupy the field of gaming and if the state did not enact
a statute that conflicts with the Ordinance.
i. The state has not fully occupied the field of gaming
There is no apparent indication by state legislation that the state seeks to
occupy the entire field of gaming. Although the California Penal Code sections governing this
subject are extensive in their scope, they are far from being all-inclusive. These code sections
do not prohibit all forms of gaming, but rather only twelve specific games.' Since the general
laws do not make illegal all forms of gambling, or even all forms of gaming, they cannot be said
to occupy either field to the exclusion of the exercise of local police power.30
' City of Santa Monica v. Grubb, 245 Cal.App.2d 718 (1966); City of Santa Clara v. Von
Raesfeld, 3 Ca1.3d 239 (1970).
28 COY of Santa Monica, 245 Cal.App.2d at 724 (quoting City of Redondo Beach v.
Taxpayers, Prop.�r y Owners etc. City of Redondo Beach, 54 Cal.2d 126, 137 (1960)).
,, California Penal Code §330.
30 In re Hubbard, 396 P.2d 809, 814 (1964).
LA01 \6345\23624.13 12 95573.1
Provisions of the Act also indicate the state did not intend to occupy the entire
field of gaming. California Business and Professions Code §19801 provides that the
Legislature's intent in enacting the Act was to provide concurrent jurisdiction with local
governments over gaming establishments within the state of California. Moreover, it was the
Legislature's intent not to preempt the authority of any city, county, and city and county from
prohibiting gaming, from imposing any valid local controls or conditions upon gaming, or to
enforce any applicable state and local laws.31 Finally, the Act did not prohibit the enactment,
amendment, or enforcement of any ordinance by any county, city, or city and county relating
to gaming clubs which was not inconsistent with the Act.32
It has also been held that, with respect to gambling, there is no indication that
further local action could not be tolerated.33 Furthermore, it has been held that the regulation
of gambling and gaming is not a matter in which transient citizens of the state are particularly
concerned, as they are or might be in the regulation of traffic or the registration of criminals.'
In light of the analysis above, because the state has not occupied the entire field
of gaming, the City may enact ordinances pertaining to gaming as long as the City's ordinances
do not conflict with the state's regulations.
ii. There is a conflict between the State Voter
Approval Provision and the Ordinance
Given that the regulation of gaming implicates both municipal and statewide
concerns, it has been held that:
[TMhe control of gaming activities is a matter concerning which local
governments possess power to enact and enforce local regulations not in
conflict with general laws, for the purpose of supplementing those laws . .
31 T,a
32 California Business and Professions Code §19824.
33 In re Hubbard, 396 P.2d at 815.
34 IL
35 In re Portnoy, 21 Cal.2d at 239 (emphasis added).
LA01 \6345\23624.13 13 95573.1
Although gaming, under the authority of In re Portnoy, may be regulated at
both the state and charter city level, the City cannot enact the Ordinance, if in fact, it regulates
gaming, because it is in direct conflict with the State Voter Approval Provision.36
C. Probable outcome under the Conflict Analysis.
If the Subject that is governed by the Provisions pertains to the regulation of
gaming, the Subject involves a Statewide Concern. If this is the case, then in the event there
is a conflict between the Ordinance and the State Voter Approval Provision, the State Voter
Approval Provision will control. As a result, the City would not be able to allow a gaming club
to operate without first obtaining a majority vote approval.
However, based upon the analysis in Section 2.B.(1), supra, it is more
probable that the Subject that is governed by the Provisions does not pertain to the regulation
of gaming, but rather to voter approval requirements for a City Gaming Club Election. Voter
approval requirements for a city election involve a Municipal Affair. As such, where there is
a conflict between the Ordinance and the State Voter Approval Provision, the Ordinance should
control. As a result, it is reasonable to conclude that the City can decide to allow a gaming club
to operate without first obtaining majority voter approval if such action does not violate the
City's charter.
3. Procedures by which the City may obtain a judicial determination of the validit;of t_h.P
Ordinance.
There are two methods by which the City may obtain a judicial determination
of the validity of the Ordinance. The City could either choose to file a petition for writ of
mandate or seek declaratory relief.37 The analysis below provides a brief discussion of these
two methods.
A. Petition for Writ of Mandate
Once the City approves the Ordinance, the city clerk may refuse to publish it
if the City Clerk believes that the City did not have legal authority to approve the Ordinance.
5=, sup , Section 1.
37 A third method involving validating proceedings under California Code of Civil
Procedure §860 cannot be applied to validate the Ordinance. Generally, §860 may only be
applied to validate financial transactions of a public agency, such as bonds, assessments and
contracts involving financial obligations. Sgg, City of Ontario v Suyerior Court of San
Bernardino County, 2 Cal.3d 335 (1970).
LA01 \6345\23624.13 14 95573.1
In such an event, the City could file a writ of mandate to compel the city clerk to publish the
Ordinance in accordance with the city clerk's duty under the City's charter.38
Generally, in order for a court to issue the writ of mandate, the City would
have to show: (1) the city clerk is a person, (2) the city clerk failed to perform a clear and
present duty while having had the legal authority and ability to do so, (3) the duty involved a
ministerial action, (4) the City has a clear, present right to, and a beneficial interest in the
performance of the city clerk's duty, and (5) the City either has no other remedy at law, or the
other remedy at law is inadequate.39
The first, fourth and fifth elements could easily be established by the City; the
city clerk is a person, the City would have a clear and present right to the performance of the
city clerk's duty by virtue of the fact that the city clerk's duty is enumerated in the City's charter
and the Ordinance will not become effective without said performance, and the City has no other
remedy at law that would result in the Ordinance taking effect.
As to the third element, it can be established that the city clerk's duty involves
a ministerial action. If a statute requires an official to do a prescribed act at a prescribed time,
it follows that the act is ministerial.40 In this case, under the City's charter, the city clerk is
required to publish ordinances at a specified time and in a specified manner."
It is with respect to the determination of the second element that the City will
obtain a judicial determination of the validity of the Ordinance. The city clerk, by refusing to
publish the Ordinance, could argue that the City did not have the authority to adopt the
38 Charter of the City of San Bernardino, art. III, §33 (June 1992).
Procedures for filing a petition for writ of mandate are governed by California Code of Civil
Procedure §§1063-1108. The format of the petition must comply with the California Rules of
Court and any local rules of the applicable superior court.
39 California Code of Civil Procedure §§1085-86.
40 S-e&, Glendale Citv EmpIQyeec' Assn .. City of Glendale, 15 Cal.3d 328, 344 (1975).
41 Charter of the City of San Bernardino, art. III, §33 provides:
After the passage of each ordinance, and at all times thereafter, the City
Clerk shall maintain on file and open to public inspection a certified copy of
the full text of the ordinance. Within fifteen (15) days after the passage of
each ordinance, it shall be published by the City Clerk . . . Except as
otherwise provided in this Charter, an ordinance shall not take effect or be
valid unless it is published in substantially the manner and at the time
required herein.
LA01 \6345\23624.13 15 95573.1
Ordinance because of the conflicting State Voter Approval Provision and, therefore, publishing
the Ordinance would be beyond the city clerk's legal authority. The court, in order to issue the
writ of mandate on behalf of the City, would therefore have to determine the validity of the
Ordinance.
B. Declaratory Judgment
Once the City enacts the Ordinance, a person interested under a written
instrument, including a statute or ordinance, may bring an action in superior court to determine
the validity of the Ordinance.42 In such an event, the City could seek a declaratory judgment
that the Ordinance is valid.
To be a "person interested," one must have a direct, and not merely
consequential, interest in the litigation.43 In the instant case, persons interested under the
Ordinance would include the parties involved in the establishment of the gaming club, the voters
of the City and possibly the residents of the City, insofar as their health and welfare might be
affected by establishing the gaming club in the City without their consent. In a complaint filed
by such persons, there must be alleged facts which state an actual controversy, as distinguished
from a difference or dispute of hypothetical or abstract character.` Consequently, the City
probably cannot ask for a declaratory judgment unless the Ordinance is challenged by a person
whose rights or obligations are affected by the Ordinance.
If the Ordinance is challenged by a proper interested party, the City will obtain
a judicial determination of the validity of the Ordinance.
CONCLUSION
There is an apparent conflict between the Ordinance and the State Voter
Approval Provision. Based upon an examination of the purpose, legislative history, and actual
words of the Provisions, it is reasonable to conclude that the Subject that is governed by the
Provisions involves voter approval requirements for a City Gaming Club Election. According
to the California Constitution and case law, voter approval requirements for a city election
42 5=, California Code of Civil Procedure §1060; Lane v. City of Redondo Beach, 49 Cal.
App. 3d 251 (1975); Walker v Los m9ele1 County, 55 C.2d 626 (1961).
4s Associated Boat Industries of Northern California v Marshall
j, 104 Ca1.App.2d 21
(1951), construing "interested person" as used in California Government Code §11440, which
section was held indistinguishable from California Code of Civil Procedure §1060 in Residen
of verly Glenn Inc v City of Los Angeles, 34 Cal.App.3d 117,125 (1973).
44 5=, Hagan v. Fairfi eld, 238 Cal.App.2d 197 (1965).
LA01 \6345\23624.13 16
95573.1
involve a Municipal Affair. When a Municipal Affair is involved and when there is a conflicting
charter city ordinance and state regulation, the valid charter city ordinance controls. As a result,
it is reasonable to conclude that the City has the authority to regulate the voter approval
requirements for a City Gaming Club Election in any manner it chooses consistent with the
City's charter. This authority includes the authority to approve the operation of a gaming club
within the City's jurisdiction without any vote of the electorate. Further, the City may obtain
a judicial determination of the validity of the Ordinance by seeking a petition for writ of mandate
or a declaratory judgment.
LA01 \6345\23624.13 17 95573.1
1 RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
2 SAN BERNARDINO CALLING A SPECIAL ELECTION AND SUBMITTING TO THE
ELECTORS A MEASURE TO ALLOW CARD CLUBS WITHIN THE CITY OF SAN
3 BERNARDINO
4
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
5 OF SAN BERNARDINO AS FOLLOWS:
6
7 -
SECTION 1. Special Municipal Election Called.
8
A special municipal election is called and will be held in the City of San Bernardino on
9 Tuesday, , 1995, for the purpose of submitting to the qualified electors of
10 the City, for their approval or disapproval, the measure set forth herein.
11
12 SECTION 2. Measure.
13 The measure to be voted on at the special municipal election as it is to appear on the
ballot shall be as follows:
14
15
Measure Shall card clubs in which Yes ❑
16 any games permitted by law, such as draw
poker, low-ball poker and panguingue (pan)
17 are played be allowed in the City of San No ❑
18 Bernardino?
19 The measure shall be designated on the ballot by a letter printed on the left margin of
20 the square containing the description of the measure as provided in the Elections Code of the
21 State of California.
22
23 SECTION 3. Notice of Election.
24 The City Clerk is hereby directed to publish a notice of the special municipal election
25 which shall contain the following:
26 A. The date of the election;
27 B. That the last day for receipt of primary arguments for or against the measure has
28 been established as p.m. on , in the City Clerk's Office, Second Floor,
DAB/tbm [Cardclub.res] 1 August 16, 1995
^� 7
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO SUBMITTING TO THE ELECTORS A PROPOSED MEASURE WHICH
WOULD ALLOW CARD CLUBS WITHIN THE CITY
1
2 City Hall, 300 North "D" Street, San Bernardino, California;
3 C. That the last day for receipt of rebuttal arguments is p.m. on
4 , in the City Clerk's Office at the above location.
5 The City Clerk is directed to accept arguments and arrange for sample ballots, in
6 accordance with Section 306, and Section 9600, et seq. of the Elections Code.
7 This notice may be combined with a notice of any other special municipal election to
8 be held on the same date.
9
10 SECTION 5. Conduct of Election.
11 The special municipal election called by this resolution shall be held in such precincts
12 and at such polling places as shall be determined by the City Clerk pursuant to law. The City
13 Clerk shall take all steps necessary for the holding of the electiion.
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
DAB/tbm [Cardclub.res] 2 August 16, 1995
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO SUBMITTING TO THE ELECTORS A PROPOSED MEASURE WHICH
WOULD ALLOW CARD CLUBS WITHIN THE CITY
1
2 1 HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
3 and Common Council of the City of San Bernardino at a meeting thereof, held on the
4 day of , 1995, by the following vote, to-wit:
5 Council Mew: AYES NAYS ABSTAIN ABSENT
6 NEGRETE
7 CURLIN
8 HERNANDEZ
9 OBERHELMAN
10 DEVLIN
11 POPE-LUDLAM
12 MILLER
13
14 City Clerk
15
16 The foregoing Resolution is hereby approved this day of , 1995.
17
18 Tom Minor, Mayor
Approved as to form
City of San Bernardino
19 and legal content:
20 JAMES F. PENMAN,
21 City Attorney
22 By
23
24
25
26
27
28
DAB/tbm [Cardclub.res] 3 August 16, 1995
CITY OF SAN BERNARDINO - REQUEST FOR C^UNCIL ACTION
Councilman Eddie V. Negrete, First Ward Subject: Special Election - Gaming
Council Office
August 16, 1995
psis of Previous Council Action:
amended Motion:
To discuss and take possible action to hold a Special Election asking voters if they will support Gaming
City of San Bernardino.
/0444.
Signature
ct Person: Councilman Eddie V. Negrete Phone: 5268
)rting Data Attached: no Ward:
SING REQUIREMENTS: Amount:
Source: (Acct.No.)
(Acct. Description)
—Finance:
:il Notes:
GhK-s-�y
Q-s- 91.s ,#3/
AGENDA ITEM NO. /
FROM ECGN DEI! AGENCY F A V. N13 . 909 „8 4 5-7 15 0?-06-?5 05:03 F .01
EYCLUSrVE NEGOTIATING AGREEMENT BE BVEEN TM
ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAIIN BER A-RDINO
ANM
ROUNDLWG TBIRD, LLC
This Exclusive Negotiating Agreement (the "Agreement") is entered into by and
between the Redevelopment Agency of the City of San Pemardino, a public body, corporate and
politic (the "Agency"), and Rounding Third, ILIX, a Califonua Limited Liability Company
("RT"), and for the convenience of the partie.; snail be dated as of May 15, 1995 (the "Effective
Date").
Section 1 Recitals.
1.1 The Agency desires to have certain property within the Central City South
Redevelopment Project Area of the Agency established pursuant to Ordinance No. 3572 and as
amended by Ordinance. No. MC-564 (the "Project Area"), developed in furtherance of the
Agency's redevelopment objectives- The property eonsist~e of approximately forty-three (433')acres
as shown on Exhibit 1.1.
1.2 The Agency desires to cause approximately thirteen (13) acres of the
property to be developed as a sports, recreation, entertainment complex including, and centered
about, a stadium suitable as a home facility for a minor league professional baseball team, with
the balance to be devoted to commercial activity focused on a gaming or other type of casino
facility. In this Agreemert the 13 acre site is referred to as the "Stadium Site", the 30 acre site
is referred to as the "Entertainment Site", and the entire 43 acre sports/gaming proposed
development is referred to as the "Complex"
1.3 RT has assembled a team.of consultants experienced in the development and
financing of sports, ne creation and related stadia and facilities. RT's team also has experience and
expertise in the financing and development of gaming facilities which operate under and in
accordance with the provisions of the laws of the State of California and the municipalities in
which such gaming facilities are located.
1.4 Recognizing that constructing a City of San Bernardino ("City") owned
baseball stadium and financing and developing a world class Complex requires sources of revenue
other than those usually available to the Agency, RT proposes to prepare and present to the
Agency a plan which provides for the construction of the Stadium Site and development of the
entire Complex, all at no cost to the Agency. In addition, this plan will provide not only the
initial financing but also an ultimate revemic .txeam to support the entire Complex, as well as
produce additional revenues to the Agency _�nJ the City.
Pt15t'li- '11G t; 7671 (l3C dt85�
�'- SIT Frcn� 2 �1
FROM ECON DEIJ AGENCY FA); N'7 . : 909 84 5217 09-06-95 0$ :09 P .0.
1.5 The purposes and goals of this Agreement, therefor, are to enable the
parties to work together to develop the Complex and to provide RT v6th the time necessary to
assemble this package in a format suitable for incorporation into a Disposition and Development
Agreement ("DDA").
1.6 The Agency's power and authority to acquire and redevelop property
derives from the Community Redevelopment Law (Health& Safety Code Sections 33000, ot kq.)
and the Agency must comply with all procedural requirements of the Community Redevelopment
Law in carrying out its redevelopment activities.
,Section I Exrl iye Nc—gotiaat_ion.
2.1 For a period of one hundred eighty (180) days from the Effective Date, the
Agency and RT hereby agree to negotiate in good faith for the purpose of entering into a DDA
covering the entire Complex. During this period, the Agency agrees that it will not negotiate with
any other person or entity concerning any aspect of the Complex. The term of this Agreement
will end on the first to occur of:
(i) execution of a definitive DDA; or
(ii.) termination of the 180 day exclusive negotiation period; or
(iii) mutual written consent to terminate.
During the negotiations the Agency further agrees to identify a desired
eon,guration of the Complex, .including the total site proposed for the gatuing/casino facility and
to work with RT's team in the preparation. of preli.-ninary site studies and architectural and
en ,ineeri.n, work.
2.2 During the term of this Agreement, each party shall bear its own. costs.
Section 3. T-rim"rid—Conditions of the Pro pgse�l. Disposition and,
v
3.1 During the exclusive negotiation period, RT will prepare and present to the
Agency a plan uodcr which RT will:
3.1.1 Establish a development entity, the ownership, directors, and senior
management of which are all persons acceptable to the Agency.
3.1.2 Prepare and present to the Agency a DDA pursuant to which RT will make
a payment to the Agency upon execution of the DDA of an amount p.-esendy
estimated to be$15,000,000 for ccrtahi rights as may be g anted to Wr for the
development of the Entertainment Site and the construction of the
ganibiglca.sino facility (such fee in the axn(r nt as may be finally agreed upon
-2-
FROM ECON DE': AGENC'- FA`< N13 ">-39 38.1 5215 e?-05-95 0:3: 10 P .07
by the parties in the DDA shall be herein referred to as the "Development
Fee"). From the proceeds of the Development Fee, the Agency shall remit
to RT a Transaction Fee equal to not more than $1,000,0;00 based upon the
total amount of the Development Fee being equal to 515,000,000, or such
lesser amount of the Transaction Fee reduced proportionately if and to the
extent the Development Fee may be a lesser amount and agreed to by the
,agency in the DDA. If at any time RT is able to obtain a Development Fee
for payment to the Agency, whether in a single transaction or in a series of
transactions. in an aggregate amount greater than the anticipated$15;000,000
Development Fee in cash or in other valuable consideration, such excess
amounts as may become available from time to time shall be that of the
Agency and not as asset, cash or other valuable consideration of RT;
provided, however, the Agency sliall within ten(10) days of receipt of any
such amount in excess of the$15,000,000 figure,re,-nit twenty percent(20%)
of such excess iumunt to RT in addition to the Transaction Fee as set forth
above.
RT or its assignee or successor in interest shall remit funds to the Agency if
and to the extent de;m^d necessary by RT for the acquisition of the
Entercairinient Site, either in whole or in part and from time to time as
deemed appropriate by RT, in such amounts as may bL necessary.o acquire
such sites and to pay all costs reasonably required to be paid as a part of such
acquisition by the agency and disposition from the Ag=cy to RT. As an
alternative thereto, RT may elect to purchase, lease or otherwise acquire an
interest in the Entertai=.ent Site, or any portion thereof, without any
involvement of the Agency in any manner whatsoever assisting in such
acquisitions.
3.1.3 Agree that during tike time set forth in the DDA's Schedule of
Perfomianc--, RT will cause construction of the ganiinWcasino facility, with
parking arxi related structures, to be commenced within ten (10) years after
the execution of the DDA.
3.1 .4 The g.irning/casino development and operation will be subject to at least the
following mininwm conditions:
(ij The operation will be as perinitted under the laws of the State of
California, as from time to time amended.
(ii) The ownership, directors, offiiccrs and scrnior manage.nent of the
entity which Actually operates the gaming/casing facility will all be
.3-
FROM ECON DEU qGENCY F9X N01 . 301'. 134 52:6 3?-90-35 as I ?.a4
subject to approval of appropriate regulatury entities of the State of
California.
(iii) The gaming/casino facility shall be developed and built in
accordance with the City's General Plan and its then current
Development Code, pursuant to a tract reap as may be approved by
the City's Plamling Commission.
3.1.5 The entity which operates the gaming/casino facility will do so under a
franchise agreement with the Agency and the City pursuant to which an
annual franchise fee consistent with franchise fees paid in Southern
California for such facilities will be paid to the City after allowing for:
(i) cost recovery of the baseball stadium construction costs; (ii) any fees
imposed by any current or future regulatory entity of the State of
California; and (iii) any land acquisition and carry costs associated with the
garuing/casino facility whether in the form of a ground lease, note or cash
purchase amount. For example, it is contemplated that the annual franchise
fee during the not to exceed ten (10) year cost recovery period will be
equivalent to sit percent (6%) of gross revemxs, and thereafter will be
equivalent to 13.2% of gross revenues.
3.2 The Agency understands and agrees that the DDA will provide that, at any
time during its term:
3.2.1 The Agencv will sell the Entertainment Site to RT on the terms and for the
purchase price outlined in Section 3.1.2 above. included in the assets to be
conveyed on sale of the Entertainment Site will be azi exclusive franchise
granting to RT or its nominee gaming/casino development, and operation
rights consistent with the City's General Plan.
3.2.2 The Agency and the C ity will grant to RT's nominee or assignee an
exclusive franchise to conduct gaining/casino operations as authori7cd by
Statc law, in the following areas:
(i) the Entertainment Site.; and
(ii) anywhere within the City's redevelopment Frojtct area boundaries for
the term of the DDA.
3.2.3 In addition. the Agency and the City will include within the exclusive
gaming/casino franchise of RT or its designee, a provision designating it
as the exclusive franchise of such business within the City liini.ts for each
200,000 residents therein.
-4-
=ROM ECON DEU AGEN'- t 1 FPY N0 . ?C1? -34 5_15 J'?-CIA-95 03 11 P .9_
3.2.4 The Agency will make available to RT or its nominee the right to purchase,
at fair market value on. the date of purchase as value is determined by
independent appraisal, up to a total of an additional fifty (50') commercially
zoned acres located within the Project Area boundaries.
33 Nothing contained in this Agreement shall be construed to require either
party to enter into the DDA or to consider only those items, terms and conditions as addressed
herein. The DDA, if approved, may contain such modifications to this Agreement or such other
terms and conditions as the parties may approve. Neither party represents or warrants that a DDA
will be entered into by and between the parties solely by the approval and execution of this
Agreement.
sk��- Election.
As part of this Agreement, the Agency agrees to assist RT in requesting the City
to take all actions necessary to call and hold, at RT's expense, a special election designed to
authorize such of the activities discussed in>ftis Agreement which requires an election if mutually
deemed to be advisable that such special election be held prior to the termination of this
Agreement.
S=i-Qn-5. San anuean iof Mission IadlouLfthU rst R al.
The Parties agree that prior to the approval and execution of the DDA the San
Manuel Band of Mission lndiaais ("San Manuel") will have a right of first refusal, for a thirty-day
period to commence not tees than %ixty (60) days prior to any scheduled consideration and
approval of the DDA by the Agency, during which San Manuel will have the exclusive right, on
the terms and subject to the conditions set forch in the DDA, to become the operator of the
gatning/casino operation. to be located on the Entertainment Site and to become the sole
redeveloper or to become a joint venture redeveloper with RT pursuant to any such DDA. Such
DDA if approved and executed with San Manuel as a parry thereto will contain at least the
following terms requiring tbat San Manuel wiles.
(i) Reimburse the Agency for the Agency's out-of-pocket costs arising out of
or connected with this Agreement;
(ii) Pay RT's Transaction Fee and reimburse RT for all of its out-of-pocket
costs arising out of or connected with this Agreement;
(iii) Acknowledge and agree that RT, or its designee, may be the fee owner of
the Entertainmcnt Site and will be authorized to enter into a ground lease
or other transfer or disposition of title to or possession of the underlying
land for the gaming/casino facility;
-5-
FROM ECON PEV AGENCY 000N FaX NO 9 09 394 5216 05-06-95 09 : 12 P .•35
(iv) Acknowledge that RT shall have the exclusive right to purchase the fifty
(50) commercially zoned acres referenced in Section 3.2.4 above; and
(v) Commence to phase out any casino which it then operates in the County of
San Bernardino, not later than the opening date of the first phase of any
gaming/casino facility to be located on the Entertainment Site and to cease
all operations of any such casino within twelve (12) months thereafter.
Sec •on 7. «' T�gnt• S g, dint Venture By RT.
This Agreement, any of the items granted to RT under this Agreement, including
the position of purchaser, owner, landlord, tenant, or developer of the Entertainment Site, the fifty
(50) eomanercially zoned acres, and/or the right to own, operate or lease the gaming/casino
facility may be sold, or assigned, or transferred by a joint venture, or similarly structured by RT,
provided that the Agency gives its prior written approval. Understanding that all parties .need
flexibility to accomplish the goals established by this Agreement, the Agency agrees that it will
grant any reasonable request for such approval. The DDA will contain a provision similar to this
Section 7.
Section 8. Ntiscdlawe—us.
Any amendment to this Agreement must be in writing and signed by both parties.
Whew the consent of either party to this Agreement is required, that party agrees to act
reasonably. This is an agreement giving RT exclusive negotiation rights during its term, and it
does not create a partnership or any other contractual relationship between the parties. Each party
understands and agrees that it will bear its own costs in takirig the auions, preparing the mmterials,
and conducting the negotiations contemplated by this Agreement. Nothing contained herein
commits the parties to finally approve and execute a DDA upon any terms, and the parties
acknowledge that the DDA will be negotiated during the term of this Agreement.
SEtio.n Q• Tc�tthe DDA.
The DDA will be drafted so that performance by RT and its nominee pursuant to
the terns thereof will be available to such parties for a period of ten (10) years from its effective
date.
-6-
=ROM : E,',ON D E V A3ENCY FAX NC• . 909 334 5216 09-06-95 05 : 13 ? .07
IN WITNESS WHEREOF, the Agency and RT have each signed this Agreement
as of the date first set forth above.
REDEVEL.OP.M. ENT AGENCY OF THE
CITY OF SAN BER.NARDINO
Dated: May 15, 1995 By' t"Z/�--
Tom Minor
Chairman
APPROVED AS TO FORM AND ATTES
CONTENT: '
o L'r u
Agency Cot , g reia
ROUNDING THIRD LLC
Dated= May 15, 1995 By:
'llaig Ke egian. Manager
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MUDGE ROSE GUTHRIE ALEXANDER & FERDON LLP
21ST FLOOR, 333 SOUTH GRAND AVENUE
LOS ANGELES, CA 90071-1525
213-613-1112 NEW YORK
PARIS
FACSIMILE: 213-680-1356
PARSIPPANY
TOKYO
WASHINGTON, D.C.
September 27, 1995 WEST PALM BEACH
PR
James Penman, Esq. ®IS I ,°1
City/EDA Attorney
201 North "E" Street SRO , I:
San Bernardino, CA 92401 � �r
Dear Mr. Penman:
As you know, on September 15, 1995, your office was provided with a draft memorandum relating to
the adoption of an ordinance regulating gaming and a draft ordinance amending the City of San Bernardino
Municipal Code provisions relating to special elections and providing for the cancellation thereof. This draft
documentation was applicable to the Redevelopment Agency of the City of San Bernardino and Rounding Third,
LLC Exclusive Negotiating Agreement entered into on May 15, 1995. Had the Mayor and Common Council
made these applicable actions as contemplated for their meetings on September 18, 1995 and September 20,
1995, these required matters would have expeditiously gone forward in compliance with the City of San
Bernardino Municipal Code. This would have negated the present need for the additional amendments to the
City of San Bernardino Municipal Code at that time.
Attached hereto for your further review and consideration are the following draft documents:
1. Draft memorandum regarding permissibility of ordinance allowing for the operation of a gaming
or other type of casino facility in the City of San Bernardino;
2. Draft ordinance of the City of San Bernardino amending Chapter 9.44 of the City of San
Bernardino Municipal Code to permit the licensing of gaming clubs;
3. Draft memorandum regarding permissibility of private party paying for expenses of special
election;
4. Draft memorandum regarding circumstances under which courts have approved enactment of
an ordinance on an urgency basis;
5. Draft resolution of the Community Development Commission of the City of San Bernardino
requesting a special election to be held by the City of San Bernardino, accepting a check for
costs of the City special election in the amount of$110,000 and taking action to reimburse the
City for expenses to be incurred in connection with the special election; and
LA01 \6345\25296.1 95573.1
6. Six versions of a draft ordinance amending certain provisions of the City of San Bernardino
Municipal Code with respect to holding special and all-mail ballot elections as follows:
A. Draft urgency ordinance amending the City Elections Code to require 78 days to elapse
between the call of the special election and the holding of the special election and to
provide for the cancelling of special elections.
B. Draft urgency ordinance amending the City Elections Code to require 78 days to elapse
between the call of the special election and the holding of the special election, to
provide for all mail ballot procedures, and to provide for the cancelling of special
elections.
C. Draft urgency ordinance amending the City Elections Code to require 78 days to elapse
between the call of the special election and the holding of the special election, to
provide for all mail ballot procedures, and to provide for the cancelling of special
elections with different referenced Elections Code sections.
D. Draft ordinance amending the City Elections Code to require 71 days to elapse between
the call of the special election and the holding of the special election and to provide for
the cancelling of special elections.
E. Draft ordinance amending the City Elections Code to require 71 days to elapse between
the call of the special election and the holding of the special election, to provide for all
mail ballot procedures, and to provide for the cancelling of special elections.
F. Draft ordinance amending the City Elections Code to require 71 days to elapse between
the call of the special election and the holding of the special election, to provide for all
mail ballot procedures, and to provide for the cancelling of special elections with
different referenced Elections Code sections.
If you have any questions, please do not hesitate to call.
Very truly yours,
&d66�_0'6�L
Donald L. Hunt
Enclosures
cc: Mayor/EDA Chairman Minor
Lorraine Velarde, Assistant to the Mayor
Rachel Clark, City Clerk
Shauna Clark, City Administrator
Timothy Steinhaus, Agency Administrator
Timothy J. Sabo, Esq., City/EDA Special and Bond Counsel
Steven J. Dzida, Esq., Partner, Jackson, DeMarco & Peckenpaugh
Jeffrey Kinsell, President, Rounding Third, LLC
Aaron Hodgdon, President, Double Eagle Sports Internationale
LA01 \6345\25296.1 95573.1
MUDGE ROSE GUTHRIE ALEXANDER & FERDON LLP
21ST FLOOR, 333 SOUTH GRAND AVENUE
LOS ANGELES, CA 90071-1525
213-613-1112 NEW YORK
PARIS
FACSIMILE: 213-680-1358
PARSIPPANY
TOKYO
WASHINGTON, D.C.
WEST PALM BEACH
DRAFT
MEMORANDUM
(For Discussion Purposes Only)
TO: James Penman, Esq., September 27, 1995
City/EDA Attorney
Ms. Rachel Clark,
City Clerk
Timothy J. Sabo, Esq.,
City/EDA Special and Bond Counsel
FOR: Consideration and Further Action by the Mayor and Common Council, City Attorney
and Economic Development Commission
(July 26, 1995 City/EDA Commission Unanimous Motion and Directive, i.e., ... "The Sports Gardens"
Stadium/Complex Private Enterprise Investment and Plan of Finance)
CC: Mr. Tom Minor,
Mayor/EDA Chairman
Ms. Lorraine Velarde,
Assistant to the Mayor
Mr. Timothy Steinhaus,
Agency Administrator
Steven Dzida, Esq.,
Partner, Jackson, DeMarco & Peckenpaugh
Jeffrey Kinsell,
President, Rounding Third, LLC
Aaron Hodgdon,
President, Double Eagle Sports Internationale
LA01 \6345\23624.13 95573.1
RE: PERMISSIBILITY OF ORDINANCE ALLOWING FOR THE OPERATION OF A
GAMING OR OTHER TYPE OF CASINO FACILITY IN THE CITY OF SAN
BERNARDINO AND IMPLEMENTATION OF, BUT NOT LIMITED TO,THE SAN
BERNARDINO DOWNTOWN PLAN.
BACKGROUND
You have requested us to review the City Charter, Government Code and other
data and documentation applicable to the permissibility of an Ordinance allowing for the
operations of a gaming or other type of casino facility in the City of San Bernardino. This
includes our review of the May 15, 1995 Exclusive Negotiating Agreement (the "Agreement")
between Rounding Third, LLC (Rounding Third) and the Economic Development Agency (the
"Redevelopment Agency") of the City of San Bernardino. The fully executed Agreement was
provided to Double Eagle on August 4, 1995 by the Agency along with the Agency's July 31,
1995 Letter to Rounding Third and executed acknowledgement of consent to the terms and
conditions set forth therein as to Double Eagle Participation.
The City and Redevelopment Agency desire to have certain property within the
Central City South Redevelopment Project Area of the Agency, established pursuant to Ordinance
No. 3572 and as amended by Ordinance No. MC-564 (the "Project Area"), development in
furtherance of the Redevelopment Agency's redevelopment objectives.
The City and Redevelopment Agency desire to cause approximately thirteen(13)
acres for the property to be developed as a sports, recreation, entertainment complex including,
and centered about, a stadium suitable as a home facility for a minor league professional baseball
team, with the balance to be devoted to commercial activity focused on a gaming or other type
of casino facility. The 13 acre site is referred to as the "Stadium Site", the 30 acre site is referred
to as the "Entertainment Site", and the entire 43 acre sports/gaming proposed development is
referred to as the "Complex".
The City and Redevelopment Agency May 15, 1995 Agreement recognized that
the Rounding Third team has experience in the development and financing of sports, recreation
and related stadium and facilities, including but not limited to, the experience and expertise in
the financing and development of gaming facilities which operate under and in accordance with
the provisions of the laws of the State of California and the municipalities in which such gaming
facilities are located. The Agency July 31, 1995 Letter to Rounding Third which
acknowledgement of consent to the terms and condition set forth therein as to Double Eagle
Participation was also provided to Double Eagle on August 4, 1995.
The City and Redevelopment Agency have further recognized in the May 15,
1995 agreement that constructing a City of San Bernardino ("City") owned baseball stadium and
financing and development of a world class "Complex" requires sources of revenue other than
those usually available to the Redevelopment Agency. Accordingly, following the June 5, 1995
LA01 \6345\23624.13 2 95573.1
request of the City and EDA Commission, Double Eagle subsequently prepared "The Sports
Gardens" (Stadium/Complex area) private capital investment and plan of finance. The submittal
thereof received the unanimous Council/EDA Commission applicable directive at their meeting
of July 24, 1995.
On July 24, 1995 and September 5, 1995 the Council/EDA Commission
approved the project areas plan of finance, including the interim funding for the stadium only
($13 million construction costs and ±$1.7 million land costs). In addition, on August 21, 1995,
the Council/EDA Commission concurrently awarded the construction contract for the required
rough grading and applicable environmental "clean-up" of the stadium site (±29 acres). The
stadium construction costs may increase at the time it becomes integrated as part of the
contemplated "The Sports Garden" overall Stadium/Complex, recreation, health and commercial
development area (at 215 east to "E" street and Rialto Avenue to Mill Street).
Therefore, the general purpose of this memorandum is for the further
consideration and action by the Mayor, Common Council, City Attorney and Economic
Development Commission.
INTRODUCTION
The City of San Bernardino is a charter city (the "City"). The City's charter
neither prohibits the operation of gaming clubs within the City's jurisdiction nor requires any
voter approval prior to the operation of a gaming club or other type of casino facility within the
City's jurisdiction.
California Business and Professions Code §19819 (the "State Voter
Approval
Provision however,
purportedly requires that a majori ty vote approval be obtained prior to
allowing the operation of gaming clubs within a city.
You have asked us to advise you as to whether or not the City's existing
ordinance may be amended to allow for the operation of a gaming or other type of casino facility
without voter approval (the "Ordinance"). Whether the Ordinance or the State Voter Approval
Provision controls in light of this apparent conflict is the main issue discussed in this
memorandum. Additionally, if the City does enact the Ordinance, this memorandum provides
two methods by which the City may obtain a judicial determination of the validity of the
Ordinance; namely, a petition for writ of mandate and an action for declaratory judgment.
For purposes of the analysis below, it is assumed that the manner by which the
Ordinance would be amended does not violate the City's charter.
ISSUE
LA01 \6345\23624.13 3 95573.1
Is the method by which the City determines whether to allow the operation of
a gaming club a "municipal affair," and therefore within the City's powers notwithstanding the
State Voter Approval Provision to the contrary?
BRIEF ANSWER
Probably. In order to determine whether the Ordinance or the State Voter
Approval Provision controls, a conflict analysis (a "Conflict Analysis") must be undertaken to
determine three issues. First, the subject being governed by the Provisions (the "Subject") must
be determined. Second,whether the Subject involves matters best governed locally(a"Municipal
Affair") or matters best governed statewide (a"Statewide Concern")must be determined. Finally,
based on whether the Subject involves a Municipal Affair or a Statewide Concern, the extent of
the City's authority must be determined. With respect to the third issue, if the Subject is a
Municipal Affair, the City has authority to enact ordinances governing the Subject,
notwithstanding the conflicting State Voter Approval Provision. If the Subject pertains to a
Statewide Concern, the City has authority to enact ordinances governing the Subject unless the
state has (1) occupied the field of the Subject to the exclusion of city regulation or (2) preempted
the Subject such that the state regulation conflicts with the City ordinance. If the state has either
occupied or preempted the field with respect to the Subject, the State Voter Approval Provision
controls, notwithstanding any conflicting provision in the City's charter.
With respect to the present facts, the Subject that is governed by the Provisions
probably concerns voter approval requirements for a city election to determine whether to
establish and operate a gaming club (a "City Gaming Club Election"). There are substantial
arguments to support the position that voter approval requirements for a City Gaming Club
Election involve a Municipal Affair. As such, the Ordinance controls, notwithstanding an
apparent conflict with the State Voter Approval Provision. Moreover, it is of no consequence
whether the City enacts an ordinance with a different voter approval requirement than the
majority voter approval requirement provided by the State Voter Approval Provision, or whether
the City chooses to even hold an election. The dispositive issue is whether a Municipal Affair
is involved. When this is the case, the City may choose to regulate in any manner it chooses in
accordance with its charter.
If the City does enact the Ordinance despite the apparent conflict with the State
Voter Approval Provision, there are two methods by which the City may obtain a judicial
determination of the validity of the Ordinance. The City might either seek a writ of mandate or
a declaratory judgment.
DISCUSSION
In order to determine whether the City may enact the Ordinance to allow a
gaming club to operate within its jurisdiction without first obtaining a majority vote of the
AfftA
LA01 \6345\23624.13 4
95573.1
electorate,as may be required by the State Voter Approval Provision,this memorandum examines
three issues. First, this memorandum will determine whether there exists an actual conflict
between the State Voter Approval Provision and the Ordinance. Second, if there exists such a
conflict, this memorandum will determine which of the Provisions is controlling. Finally, if the
City does enact the Ordinance, this memorandum will outline the general procedures by which
the City may obtain a judicial determination of the validity of the Ordinance.
1. Actual conflict must exist between the State Voter Approval Provision and the
Ordinance.
As a preliminary matter,a court must,prior to determining if a Municipal Affair
or a Statewide Concern exists, first satisfy itself that the case presents an actual conflict between
a state statute and a charter city measure.'
Under the present facts, there is an apparent conflict between the Provisions.
The State Voter Approval Provision requires all cities that had not permitted gaming clubs prior
to January 1, 1984 to secure majority voter approval before allowing gaming clubs to operate
within the city. The City, however, contemplates enacting the Ordinance which, pursuant to the
City's charter, would allow a gaming club to operate within the City without any voter approval
having been obtained.
Because there does exist a conflict between the Provisions, it is necessary to
determine whether a Municipal Affair or a Statewide Concern is implicated. This is necessary
because once that is ascertained, it can be determined whether the State Voter Approval Provision
or the Ordinance controls.
2. If there is a conflict between the Provisions a Conflict Analysis must be undertaken to
determine whether the State Voter Approval Provision or the Ordinance controls
A. Conflict Analysis Rules.
Under a Conflict Analysis, to determine whether a state statute or a charter city
measure will control requires asking and answering the following questions.
i (1) What is the Subiect that the Provisions are governing?
The first step in undertaking a Conflict Analysis requires determining the
Subject that the Provisions are governing. This may be determined by examining the purpose,
the legislative history, and the actual words of the Provisions.
(2) Is the Subject a Municipal Affair or a Statewide Concern?
' California Federal Savings & Loan Ass'n v City of Los Angeles, 54 Cal.3d 1 (1991).
LA01 \6345\23624.13 5 95573.1
Once the Subject has been determined, the next step involves determining
whether the Subject is a Municipal Affair or a Statewide Concern.
Courts, when determining whether a given activity is a Municipal Affair or a
Statewide Concern, generally make an ad hoc inquiry, answering the question in light of the facts
and circumstances surrounding each case.' In those instances where a matter implicates a
IMunicipal Affair and poses a genuine conflict with state law, it has been held that the question
of whether a Statewide Concern exists is the bedrock inquiry through which the conflict between
the state and local interests is adjusted.' Generally, if the Subject of the statute fails to qualify
as one of Statewide Concern, then the conflicting charter city measure is a Municipal Affair and
beyond the reach of legislative enactment.4 If, however, the court is persuaded that the Subject
of the state statute is one of Statewide Concern and that the statute is reasonably related to its
resolution, then the conflicting charter city measure ceases to be a Municipal Affair pro tanto,
and the Legislature may, by state statute, address the statewide dimension by its own tailored
enactments.5
The fact, standing alone, that the Legislature has attempted to deal with a
particular Subject on a statewide basis is not determinative of whether a Statewide Concern or
a Municipal Affair is involved.' The Legislature is empowered neither to determine what
constitutes a Municipal Affair nor to change a Municipal Affair into a matter of Statewide
Concern simply by enacting a comprehensive set of general laws governing the Subject.' The
court must be satisfied that there are good reasons, grounded on statewide interests, to label a
given matter a Statewide Concern.'
Courts, to determine if there are good reasons to label a given matter a
g g
Statewide Concern, look to see whether there is a dimension to the Subject that demonstrably
transcends identifiable municipal interests.9 For example, courts determine whether there are
substantial geographic, economic, ecological or other distinctions which indicate a need for local
' Id. at 16.
3 Id.
4 Id.
5 Id.; Johnson v. Bradley, 4 CalAth 389, 404 (1992).
6 Johnson, 4 CalAth at 406.
' Id.
' Id.
9 California Federal Savings and Loan Ass'n, 54 Cal.3d at 17.
LA01 \6345\23624.13 6 95573.1
control, or whether these factors may be adequately recognized and comprehensively dealt with
at the state level.10
In essence, given the inherent ambiguity involved,courts have sought to allocate
the governmental powers under consideration in the most sensible and appropriate fashion as
between local and state legislative bodies."
(3) To what extent does a charter city have authority to govern the
Subject based on its classification as a Municipal Affair or a Statewide
Concern?
Upon having determined whether the Subject is a Municipal Affair or a
Statewide Concern, the next step involves determining to what extent a charter city has authority
to govern the Subject.
California Constitution, art. XI, §5 provides a charter city with complete
autonomy to enact ordinances that govern Municipal Affairs so long as it does not conflict with
the city's charter, even if it directly conflicts with a state statute.12
In addition to its autonomy with respect to Municipal Affairs, a charter city may
also enact ordinances and regulate matters pertaining to a Statewide Concern so long as it does
not conflict with the city's charter. This ability, however, is subject to two limitations.
First if it was the intent and ose of the Legislature t
pure g o occupy the field of
the Subject to the exclusion of municipal regulation, the charter city remains subject to and
controlled by the applicable general state laws. In order to determine whether the Legislature
intended to fully occupy the field with respect to a Subject, courts have examined whether: (1)
the Subject has been so fully and completely governed by general law as to clearly indicate that
it has become exclusively a matter for the state to regulate, (2) the Subject has been partially
governed by general law couched in such terms as to indicate clearly that a paramount state
I
1° Cox Cable San Diego v. City of San Diego, 188 Cal.App.3d 952, 962 (1987).
" California Federal Savings and Loan Ass'n, 54 Cal.3d at 17.
12 Cox Cable San Diego, 188 Ca1.App.3d at 960.
California Constitution, art. XI, §5, specifically provides:
It shall be competent in any city charter to provide that the city governed
thereunder may make and enforce all ordinances and regulations in respect
to municipal affairs, subject only to restrictions and limitations provided in
their several charters . . . . (emphasis added).
LA01 \6345\23624.13 7 95573.1
interest will not tolerate further or additional local action, or (3) the Subject has been partially
governed by general law, and the Subject is of such a nature that the adverse effect of a local
ordinance on the transient citizens of the state outweighs the possible benefit to the
community."
Second, even if the Legislature did not intend to fully occupy the field of the
Subject to the exclusion of all municipal regulation, if the municipal ordinance or regulation
conflicts with a state law,the charter city remains subject to and controlled by the applicable state
law.14
If the Subject is a Statewide Concern, both of the above limitations apply
regardless of the provisions of the city's charter.15
B. Application of the Conflict Analysis rules.
(1) What subject are the Provisions governing?
It might be argued that the Subject that is governed by the Provisions pertains
either to gaming or to voter approval requirements for a City Gaming Club Election.
The Subject that is governed by the Gaming Registration Act 16 (the "Act") is
gaming. Based on this, it might be determined that the Subject that is governed by the State
Voter Approval Provision, which is a part of the Act, also is gaming.
However, a closer examination of the purpose and legislative history of the Act,
as well as the actual words of the State Voter Approval Provision, reveals that the Subject that
is governed by the State Voter Approval Provision more likely involves establishing the voter
approval requirement for a City Gaming Club Election rather than gaming.
The Act was sponsored by the Attorney General,who described some card clubs
as a "magnet for criminal elements," with the problems of some clubs being beyond the
I
13 Cox Cable San Diego, 188 Cal.App.3d at 961.
14 Id.
15 Id.
16 California Business and Professions Code §§ 19800 et seq.
LA01 \6345\23624.13 8 95573.1
jurisdiction of individual cities." The problems of Statewide Concern that the Attorney General
believed required state regulation were the criminal activity and the hidden ownership that was
common to commercial cardrooms.18 To address these problems, the Act, although it provided
for certain concurrent regulatory controls, mandated that local jurisdictions could not operate a
gaming club until they first met with state requisites for registration.19 Specifically:
It [was] the intent of the Legislature, in enacting this chapter, to have
concurrent jurisdiction with local governments over gaming establishments
within the State of California and to provide uniform, minimum regulation of
the operation of those establishments through registration by the Attorney
General of those who own or manage gaming clubs.20
Although the purpose of the Act was to address the issues of Statewide Concern
related to gaming discussed above, the State Voter Approval Provision does not further this
purpose. The State Voter Approval Provision in no way regulates those aspects of gaming
pertaining to the actual operation of a gaming club nor does the State Voter Approval Provision
regulate the people who own or manage gaming clubs. Rather, the State Voter Approval
Provision provides for voter approval requirements for a City Gaming Club Election; a subject
that was not stated to be a concern of the Attorney General when he sponsored the Act.
Because the State Voter Approval Provision does not in fact regulate the actual
operation of gaming clubs or the registering of its owners and managers, it may be argued that
the State Voter Approval Provision does not even regulate gaming, despite the fact that the State
Voter Approval Provision is a part of the Act. The mere fact that the State Voter Approval
Provision is a part of the Act, which as a whole regulates gaming, is not determinative.2'
In fact, upon an examination of the actual words of the State Voter Approval
Provision, it is more plausible that the State Voter Approval Provision merely governs what is
on its face; the voter approval requirement necessary when conducting a City Gaming Club
Election.
" Fendrich v. Van de Kamp, 182 Cal.App.3d 246, 253 (1986) (citing to Assem.Com. on
Governmental Organization, Analysis of Assem. Bill Nr. 1573 (1983-1984 Reg.Sess.) (emphasis
added).
18 Id. at 254.
19 Id. (citing to undated memo in Sen.Com. on Governmental Organization files, furnished
by the Legislative Intent Service).
20 California Business and Professions Code §19801 (emphasis added).
21 Johnson, 4 Cal.4th 389.
LA01 \6345\23624.13 9 95573.1
With respect to the Ordinance, it governs the same Subject as does the State
Voter Approval Provision. Therefore, if it is determined, upon an examination of the purpose,
legislative history and the actual words concerning the Act and the State Voter Approval
Provision, that the State Voter Approval Provision governs the voter approval requirement
necessary when conducting a City Gaming Club Election, it may also be determined that this is
the Subject that the Ordinance governs as well.
(2) Is the Subject a Municipal Affair or a Statewide Concern?
a. If the Subject involves voter approval requirements for a City
Gaming Club Election, as opposed to gaming, then it is a
Municipal Affair.
Upon an examination of the factors provided in Section 2.A.(2), supra, it
appears that the State Voter Approval Provision governs a Municipal Affair and not a Statewide
Concern if the Subject of the State Voter Approval Provision involves the voter approval
requirement for a City Gaming Club Election.
The California Constitution and case law indicate that city elections are to be
governed by charter provisions. In Johnson v. Bradley, the court engaged in a discussion of
California Constitution, art. XI, §5, stating that while §5(a) articulates the general principles of
self-governance, §5(b) sets out a nonexclusive list of "core" categories that are, by definition,
10 "municipal affairs."' One of the core categories defined to be a per se Municipal Affair, was
regulation over the conduct of city elections.23 A number of courts have also held to this
22 Id.
23 Id.
California Constitution §5(b)(3) should not be interpreted to only apply in the limited area of
elections for city officials. The procedures and authority to regulate elections for city officials
is specifically provided for in California Constitution §5(b)(4).
For an example of an election not pertaining to voting for city officials, see, Coffineau v. Fong
Eu, 68 Cal.App.3d 138 (1977) (in the case of a charter city, whether the vote necessary to effect
change of name of city shall be a majority vote or a two-thirds favorable vote is a matter
properly governed by provisions of a city charter; such matter is in the hands of residents of
home rule city).
LA01 \6345\23624.13 10 95573.1
effect.24 Based on these authorities, it is reasonable to conclude that the Subject the State Voter
Approval Provision attempts to regulate is a Municipal Affair.
In addition to determining this issue on the narrow grounds that city elections
are to be governed by city charter provisions, the determination that the Subject is a Municipal
Affair also appears to be a reasonable allocation of governmental powers. There is little doubt
that there are aspects to gaming that pertain to a Statewide Concern. Thus, conceptually, it
appears reasonable that the determination of whether or not gaming clubs should be allowed in
the state at all involves a matter of Statewide Concern. Further, it also appears reasonable that
the determination as to the manner in which these gaming clubs should be operated, based on the
concerns driving the passage of the Act, also implicates a matter of Statewide Concern.
There are, however, a number of issues with respect to gaming where it is
reasonable to believe that a Municipal Affair is being implicated. For example, issues such as
the size, location, parking requirements, hours of operation and the number of gaming clubs
allowed in a city are all issues that are best handled at the local level. These all involve matters
that are of a Municipal Affair in nature. In light of this, it appears equally reasonable that the
ultimate decision whether or not to even allow a gaming club to operate within the jurisdiction
of the city, including the voter approval requirement in making such a decision, also implicates
a matter best categorized as a Municipal Affair."
b. If the Subiect involves gaming, as opposed to voter approval
requirements for a City Gaming Club Election, then it is both
a Statewide Concern and a Municipal Affair.
Upon an examination of the factors provided in Section 2.A.(2), supra, the
State Voter Approval Provision, if it actually regulates gaming, as opposed to voter approval
requirements for a City Gaming Club Election, governs issues pertaining to both a Statewide
Concern and a Municipal Affair.
za Coffineau, 68 Cal.App.3d 154; Rees v. Layton, 6 Cal.App.3d 815, 821 (1970); Socialist
Party v. Uhl, 155 Cal. 776, 788 (1909); City of Redwood City v. Moore, 231 Cal.App.2d 563
(1965); Muehleisen v. Forward, 4 Cal.2d 17 (1935); Scheafer v. Herman, 172 Cal. 338 (1916);
People v. ex rel. Martin v. Worswick, 142 Cal. 71 (1904); Lawing v. Faull, 227 Cal.App.2d
23 (1964).
u This appears especially true based on cities having the authority to prohibit forms of
gaming not prohibited by state law because such a decision involves issues of local concern. As
such, it would appear equally reasonable to conclude that the decision to allow gaming not
prohibited by state law also involves issues of local concern.
LA01 \6345\23624.13 11 95573.1
It has been held that the regulation of gambling implicates both municipal and
statewide concerns.26 This appears to be a reasonable allocation of governmental powers. As
discussed in Section 2.B.(2) a., supra, there are certain issues, such as the decision to allow
gaming within the state and the manner by which gaming clubs should be operated, that are best
handled at the state level, while there are also certain issues, such as determining the size and
location of a gaming club within a city, that are best handled at the local level.
(3) What is the extent of the City's authority with respect to the Subiect
that is governed by the Provisions?
a. If the Subject that is governed by the Provisions involves
voter approval requirements for a City Gaming Club Election,
as opposed to gaming, the Ordinance controls.
If the Subject that is governed by the Provisions involves establishing voter
approval requirements for a City Gaming Club Election, a Municipal Affair is involved. As such,
if the Ordinance conflicts with the State Voter Approval Provision, the Ordinance should control
based on California Constitution, art. XI, §5, if the Ordinance is consistent with the City's
charter.
An argument may be made, however, that even if the Provisions concern a
Municipal Affair, thereby rendering the Ordinance the controlling provision, the Ordinance must
at least allow for some election to take place. It may be argued that the decision to not hold an
election at all goes beyond the authority of the City. This argument is without merit.
Once a matter is found to involve a Municipal Affair, the decision whether to
even have an election, regardless of what a state statute requires, has been found to be up to the
charter city.27 In City of Santa Monica v. Grubb, Santa Monica sought to issue revenue bonds
without holding an election although an election was required by state law. The court held that
Santa Monica, based on its status as a charter city, had plenary power with respect to its
Municipal Affairs.2' As such, the court held that although state law required an election prior
to an issuance of revenue bonds, since the issuance of revenue bonds was a Municipal Affair,
Santa Monica could issue the bonds without holding an election if it did not violate the city's
charter.
26 In re Portnoy, 21 Cal.2d 237 (1942).
27 City of Santa Monica v. Grubb, 245 Cal.App.2d 718 (1966); City of Santa Clara v. Von
Raesfeld, 3 Cal.3d 239 (1970).
28 City of Santa Monica, 245 Cal.App.2d at 724 (quoting City of Redondo Beach v.
Taxpayers, Property Owners etc. City of Redondo Beach, 54 Cal.2d 126, 137 (1960)).
LA01 \6345\23624.13 12 95573.1
Based on the holding in City of Santa Monica, the fact that no election would
i be held prior to the City allowing, by Ordinance, a gaming club to operate in its jurisdiction is
of no legal consequence, since it concerns a Municipal Affair, of which the City has plenary
authority and because it does not violate the City's charter.
b. If the Subject involves gaming, as opposed to voter ap rp oval
requirements for a City Gaming Club Election, then the State
Voter Approval Provision controls.
As discussed above, the regulation of gaming touches upon issues pertaining
to both a Statewide Concern and a Municipal Affair. As such, if the Subject involves gaming,
as opposed to voter approval requirements for a City Gaming Club Election, the City can enact
the Ordinance only if the state did not occupy the field of gaming and if the state did not enact
a statute that conflicts with the Ordinance.
i. The state has not fully ccupied the field of izaming.
There is no apparent indication by state legislation that the state seeks to occupy
the entire field of gaming. Although the California Penal Code sections governing this subject
are extensive in their scope, they are far from being all-inclusive. These code sections do not
prohibit all forms of gaming, but rather only twelve specific games.29 Since the general laws
do not make illegal all forms of gambling, or even all forms of gaming, they cannot be said to
occupy either field to the exclusion of the exercise of local police power."
i
Provisions of the Act also indicate the state did not intend to occupy the entire
field of gaming. California Business and Professions Code §19801 provides that the Legislature's
intent in enacting the Act was to provide concurrent jurisdiction with local governments over
gaming establishments within the state of California. Moreover, it was the Legislature's intent
not to preempt the authority of any city, county, and city and county from prohibiting gaming,
from imposing any valid local controls or conditions upon gaming, or to enforce an applicable
g Y Pp
state and local 31
laws. Finally, Act did not prohibit the enactment amendment,endment
or
P ,
enforcement
of any ordinance by any county, city, or city and county relatin g gaining amin g clubs
which was not inconsistent with the Act.32
29 See, California Penal Code §330.
30 In re Hubbard, 396 P.2d 809, 814 (1964).
31 Id.
32 California Business and Professions Code §19824.
LA01 \6345\23624.13 13 95573.1
It has also been held that, with respect to gambling, there is no indication that
further local action could not be tolerated.33 Furthermore, it has been held that the regulation
of gambling and gaming is not a matter in which transient citizens of the state are particularly
concerned, as they are or might be in the regulation of traffic or the registration of criminals.'
In light of the analysis above,because the state has not occupied the entire field
of gaming, the City may enact ordinances pertaining to gaming as long as the City's ordinances
do not conflict with the state's regulations.
ii. There is a conflict between the State Voter Approval
Provision and the Ordinance.
Given that the regulation of gaming implicates both municipal and statewide
concerns, it has been held that:
[T]he control of gaming activities is a matter concerning which local
governments possess power to enact and enforce local regulations not in
conflict with general laws,for the purpose of supplementing those laws . . .3s
Although gaming,under the authority of In re Portnoy,may be regulated at both
the state and charter city level, the City cannot enact the Ordinance, if in fact, it regulates
gaming, because it is in direct conflict with the State Voter Approval Provision.16
C. Probable outcome under the Conflict Anal
If the Subject that is governed by the Provisions pertains to the regulation of
gaming, the Subject involves a Statewide Concern. If this is the case, then in the event there is
a conflict between the Ordinance and the State Voter Approval Provision, the State Voter
Approval Provision will control. As a result, the City would not be able to allow a gaming club
to operate without first obtaining a majority vote approval.
However, based upon the analysis in Section 2.B.(1),supra, it is more probable
that the Subject that is governed by the Provisions does not pertain to the regulation of gaming,
but rather to voter approval requirements for a City Gaming Club Election. Voter approval
requirements for a city election involve a Municipal Affair. As such, where there is a conflict
between the Ordinance and the State Voter Approval Provision, the Ordinance should control.
33 In re Hubbard, 396 P.2d at 815.
34 Id.
31 In re Portnoy, 21 Cal.2d at 239 (emphasis added).
36 See, supra, Section 1.
LA01 \6345\23624.13 14 95573.1
As a result, it is reasonable to conclude that the City can decide to allow a gaming club to
operate without first obtaining majority voter approval if such action does not violate the City's
charter.
3. Procedures by which the City may obtain a judicial determination of the validity of the
Ordinance.
There are two methods by which the City may obtain a judicial determination
of the validity of the Ordinance. The City could either choose to file a petition for writ of
mandate or seek declaratory relief.37 The analysis below provides a brief discussion of these
two methods.
A. Petition for Writ of Mandate.
Once the City approves the Ordinance, the city clerk may refuse to publish it
if the City Clerk believes that the City did not have legal authority to approve the Ordinance.
In such an event, the City could file a writ of mandate to compel the city clerk to publish the
Ordinance in accordance with the city clerk's duty under the City's charter.38
Generally, in order for a court to issue the writ of mandate, the City would have
to show: (1)the city clerk is a person, (2) the city clerk failed to perform a clear and present duty
while having had the legal authority and ability to do so, (3) the duty involved a ministerial
action, (4) the City has a clear, present right to, and a beneficial interest in the performance of
the city clerk's duty, and (5) the City either has no other remedy at law, or the other remedy at
law is inadequate.39
The first, fourth and fifth elements could easily be established by the City; the
city clerk is a person, the City would have a clear and present right to the performance of the city
clerk's duty by virtue of the fact that the city clerk's duty is enumerated in the City's charter and
3' A third method involving validating proceedings under California Code of Civil
Procedure §860 cannot be applied to validate the Ordinance. Generally, §860 may only be
applied to validate financial transactions of a public agency, such as bonds, assessments and
contracts involving financial obligations. —See, Cily of Ontario v. Su erior Court of San
Bernardino County, 2 Cal.3d 335 (1970).
38 Charter of the City of San Bernardino, art. III, §33 (June 1992).
Procedures for filing a petition for writ of mandate are governed by California Code of Civil
Procedure §§1063-1108. The format of the petition must comply with the California Rules of
Court and any local rules of the applicable superior court.
39 California Code of Civil Procedure §§1085-86.
LA01 \6345\23624.13 15 95573.1
the Ordinance will not become effective without said performance, and the City has no other
remedy at law that would result in the Ordinance taking effect.
As to the third element, it can be established that the city clerk's duty involves
a ministerial action. If a statute requires an official to do a prescribed act at a prescribed time,
it follows that the act is ministerial." In this case, under the City's charter, the city clerk is
required to publish ordinances at a specified time and in a specified manner.41
It is with respect to the determination of the second element that the City will
obtain a judicial determination of the validity of the Ordinance. The city clerk, by refusing to
publish the Ordinance, could argue that the City did not have the authority to adopt the Ordinance
because of the conflicting State Voter Approval Provision and, therefore, publishing the
Ordinance would be beyond the city clerk's legal authority. The court, in order to issue the writ
of mandate on behalf of the City, would therefore have to determine the validity of the
Ordinance.
B. Declaratory Judgment.
Once the City enacts the Ordinance, a person interested under a written
instrument, including a statute or ordinance, may bring an action in superior court to determine
the validity of the Ordinance.42 In such an event, the City could seek a declaratory judgment
that the Ordinance is valid.
4° See, Glendale City Employees' Assn v. City of Glendale, 15 Ca1.3d 328, 344 (1975).
41 Charter of the City of San Bernardino, art. III, §33 provides:
After the passage of each ordinance, and at all times thereafter, the City
Clerk shall maintain on file and open to public inspection a certified copy of
the full text of the ordinance. Within fifteen (15) days after the passage of
each ordinance, it shall be published by the City Clerk . . . Except as
otherwise provided in this Charter, an ordinance shall not take effect or be
valid unless it is published in substantially the manner and at the time
required herein.
42 See, California Code of Civil Procedure §1060; Lane v. City of Redondo Beach, 49 Cal.
App. 3d 251 (1975); Walker v. Los Angeles County, 55 C.2d 626 (1961).
LA01 \6345\23624.13 16 95573.1
To be a "person interested," one must have a direct, and not merely
consequential, interest in the litigation.43 In the instant case, persons interested under the
Ordinance would include the parties involved in the establishment of the gaming club, the voters
of the City and possibly the residents of the City, insofar as their health and welfare might be
affected by establishing the gaming club in the City without their consent. In a complaint filed
by such persons, there must be alleged facts which state an actual controversy, as distinguished
from a difference or dispute of hypothetical or abstract character."" Consequently, the City
probably cannot ask for a declaratory judgment unless the Ordinance is challenged by a person
whose rights or obligations are affected by the Ordinance.
If the Ordinance is challenged by a proper interested party, the City will obtain
a judicial determination of the validity of the Ordinance.
CONCLUSION
There is an apparent conflict between the Ordinance and the State Voter
Approval Provision. Based upon an examination of the purpose, legislative history, and actual
words of the Provisions, it is reasonable to conclude that the Subject that is governed by the
Provisions involves voter approval requirements for a City Gaming Club Election. According
to the California Constitution and case law, voter approval requirements for a city election
involve a Municipal Affair. When a Municipal Affair is involved and when there is a conflicting
charter city ordinance and state regulation, the valid charter city ordinance controls. As a result,
it is reasonable to conclude that the City has the authority to regulate the voter approval
requirements for a City Gaming Club Election in any manner it chooses consistent with the City's
charter. This authority includes the authority to approve the operation of a gaming club within
the City's jurisdiction without any vote of the electorate. Further, the City may obtain a judicial
determination of the validity of the Ordinance by seeking a petition for writ of mandate or a
declaratory judgment.
43 Associated Boat Industries of Northern California v. Marshall, 104 Cal.App.2d 21
(1951), construing "interested person" as used in California Government Code §11440, which
section was held indistinguishable from California Code of Civil Procedure §1060 in Residents
of Beverly Glenn, Inc. v. City of Los Angeles, 34 Cal.App.3d 117,125 (1973).
" See, Hagan v. Fairfield, 238 Cal.App.2d 197 (1965).
LA01 \6345\23624.13 17 95573.1
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING
CHAPTER 9.44 OF THE SAN BERNARDINO MUNICIPAL CODE TO PROVIDE FOR
THE PERMITTING AND LICENSING OF GAMING CARD CLUBS WITHIN THE CITY
AND TO DECLARE SUCH ORDINANCE TO BE AN EMERGENCY ORDINANCE.
I
WHEREAS, the City of San Bernardino (the "City") and the Economic
Development Agency of the City of San Bernardino (the "Agency") desire to have certain
property within the Central City South Redevelopment Project Area of the Agency established
pursuant to Ordinance No. 3572 and as amended by Ordinance No. MC-564 (the "Project
Area"), developed in furtherance of the Agency's redevelopment objectives.
WHEREAS, the Agency desires, but not limited to, to cause approximately
thirteen (13) acres of the property to be developed as a sports, recreation and entertainment
complex including, and centered about, a stadium suitable as a home facility for a minor league
professional baseball team, with the balance to be devoted to commercial activity focused on a
gaming or other type of casino facility. The approximate 13 acre site is referred to as the
"Stadium Site", the approximate 30 acre site is referred to as the "Entertainment Site", and the
entire approximate 43 acre sports/gaming proposed development is referred to as the "Complex".
Additional commercial, health and recreation development is also contemplated within the overall
area.
WHEREAS, the City has authorized preparation of architectural plans for the
stadium and site to accommodate 5,000 seats (1,700 car parking) with expansion to 10,000 seats
requiring 3,400 car parking and in addition to existing Agency owned land, the Agency is
LA01 \6345\25023.4 1
95573.1
i
acquiring approximately twenty nine (29) acres from the Southern Pacific Transportation
Company for the stadium/complex and expansion.
WHEREAS, on May 15, 1995, the Agency entered into an agreement (the "May
15, 1995 Agreement") with Rounding Third, LLC, (to be incorporated as The Sports Gardens,
Inc.) ("Rounding Third") and the Agency recognized that Rounding Third has assembled a team
I
experienced in the development and financing of sports, recreation and related stadium facilities
including, but not limited to, the financing and development of gaming facilities which operate
under and in accordance with the provisions of the laws of the State of California and the
municipalities in which such gaming facilities are located.
WHEREAS, the City and Redevelopment Agency have further recognized in the
May 15, 1995 Agreement that constructing a City of San Bernardino owned baseball stadium
and financing and development of a world class Complex requires sources of revenue other than
those usually available to the Redevelopment Agency. Accordingly, following the June 5, 1995
City and Redevelopment Agency request of Double Eagle Sports Internationale ("Double
Eagle"), wherein the May 31, 1995 Agency Staff s Report and Recommendations as to stadium
costs and the various project areas Plan of Finance was reviewed, Double Eagle subsequently
M submitted "The Sports Gardens" (Stadium/Complex area) private capital investment and plan of
finance. The submittal thereof received the unanimous Common Council and Economic
Development Commission applicable directive at their meeting of July 24, 1995. The Agency
July 31, 1995 Letter to Rounding Third addressed the May 15, 1995 Agreement and included
an acknowledgement of consent to the terms and condition set forth therein as to Double Eagle
LA01 \6345\25023.4 2
95573.1
Participation. The fully executed July 31, 1995 letter and May 15, 1995 Agreement was
provided to Double Eagle by the Agency on August 4, 1995.
WHEREAS, the City is anxious to complete the baseball stadium by
approximately May, 1996, and has acquired additional land from the Southern Pacific
Transportation Company (approximately 29 acres) which requires extensive environmental
cleanup of the site.
WHEREAS, on July 24, 1995 and September 5, 1995 the Council/EDA
Commission approved the interim plan of finance for the stadium only ($13 million construction
costs and ±$1.7 million land costs). In addition, on August 21, 1995, the Council/EDA
Commission concurrently awarded the contract for the required rough grading and applicable
environmental "clean-up" of the stadium site (±29 acres). The stadium construction costs may
increase at the time it becomes integrated as part of the contemplated "The Sports Gardens"
overall Stadium/Complex, recreation, health and commercial development area (Rte. 215 east
to "E" street and Rialto Avenue to Mill Street).
WHEREAS, the September 5, 1995 Plan of Finance required the refunding,
j refinancing and restructuring of indebtedness in seven redevelopment project areas through the
issuance of applicable bonded indebtedness of approximately $114,000,000 by the Agency
through the year 2005, and which refunding, refinancing and restructuring is expected to
generate $29,000,000 in new capital only for redevelopment purposes.
WHEREAS, the City has limited capital to implement the development of public
improvements necessary, but not limited to, the San Bernardino Downtown Plan. The
development of "The Sports Gardens" Stadium/Complex, recreation, health and commercial
LA01 \6345\25023.4 3 95573.1
areas will provide the private enterprise investment to reimburse the City and Agency September
5, 1995 interim funding of approximately $15,000,000 for the stadium as well as generating on-
going revenues and capital to the City which will provide funding to implement the development
of public improvements necessary, but not limited to, the San Bernardino Downtown Plan.
WHEREAS, the adoption of Senate Bill 100 prohibits the governing body and the
electors of any county, city, or city and county that has not authorized legal gaming within its
boundaries prior to January 1, 1996, from authorizing legal gaming and would also prohibit the
amendment of an ordinance in effect on January 1, 1996, to expand gaming in the jurisdiction.
WHEREAS, the detrimental impact of Senate Bill 100 on the long-term financial
resources of the City would prevent implementation of the Complex as relied on through the
May 15, 1995 Agreement and would eliminate the needed public revenue stream anticipated
from the May 15, 1995 Agreement to reimburse the City/EDA interim funding for the stadium
and consequently the completion of the public improvements necessary, but not limited to, in
order to complete the San Bernardino Downtown Plan and would be injurious to the future
socio-economic viability of the City and the Agency.
WHEREAS, the amendment of Chapter 9.44 of the City Municipal Code and
development of the Complex, as well as implementation of the Agency's redevelopment plans
F
are of vital importance to the City's socio-economic well-being.
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO DO ORDAIN AS FOLLOWS:
LA01 \6345\25023.4 4 95573.1
i
SECTION 1: Chapter 9.44 of the San Bernardino Municipal Code is hereby amended to add
Sections 9.44.040 through 9.44.240 which shall read in their entirety as follows:
"Chapter 9.44
GAMES OF CHANCE AND GAMING CARD CLUBS
Sections:
9.44.040 Gaming card clubs permitted.
9.44.050 Definitions.
9.44.060 Confidential disclosure unlawful.
9.44.070 Permits and licenses required.
9.44.080 License and permit applications - procedure.
9.44.090 Application fees.
9.44.100 Application review and approval procedures.
9.44.110 Expiration of permits and licenses.
9.44.120 Registration, fingerprinting and photographing of employees of licensed card
clubs.
9.44.130 Transfer of interest of pointholder in card club.
9.44.140 Investigations - updating.
9.44.150 Suspension and revocation of permits and licenses.
9.44.160 Annual license fees.
9.44.170 Gross revenue license tax.
9.44.180 Alternative gross license tax.
LA01 \6345\75023.4 5 95573-1
9.44.190 Second alternative gross license tax.
9.44.200 Records, reports and supplemental information.
9.44.210 Rules and regulations.
9.44.220 Unlawful acts.
9.44.230 Penalties.
9.44.240 Severability.
i
Section 9.44.040 Games Permitted. In accord with the provisions of the California Business
and Professions Code Section 19819 gaming card clubs shall be permitted in the City of San
Bernardino under the provisions of this chapter.
Section 9.44.050 Definitions. For the purpose of this chapter, certain words and phrases used
herein are defined as follows:
"Applicant" shall mean every "person" as defined by this section, who requests
a license, and, every individual who requests a pointholder's or key management employee's
permit from the San Bernardino Common Council.
"Card Club" shall mean a business, activity or enterprise conducting card games,
and, licensed under the provisions of this chapter.
"Card Club Operations Certificate" shall mean authorization for a "person"
licensed to operate a card club, whose pointholders have been issued pointholder permits, and,
whose key management employees have been issued key management employee permits to
fir 'A
LA01 \6345\25023.4 6 95573.1
commence operation of card games at a specific location within a specific building, such
operation having been reviewed and approved as being in compliance with parking, zoning,
security, fire and various other local regulations.
"Card Playing Area" shall mean the physical location within the card club
premises where the playing of those card games specified in the card club license is permitted.
"Commence" shall mean and include commence, begin, initiate, start, open, and
establish.
"Conduct" shall mean and include conduct, transact, maintain,prosecute, practice,
manage, operate and carry on.
"Draw poker" shall mean a card game in which each player is dealt five cards
face down and after betting may discard cards and get replacements. Each player bets that the
value of the hand held is greater than that of the hands held by the other players.
"Employee" shall mean every individual, employed either as an agent, employee,
or otherwise, of the licensee, or under the direction of the licensee of any card club.
"Game" or "games" shall mean draw poker, low ball poker, panguingue, or other
games not prohibited by state law. In no event shall horse racing be deemed to be a game for
purposes of this Ordinance.
"Gross revenues" shall mean and include seat rental fees, tournament fees, and
any revenues directly derived from gaming operations but shall not include that portion of fees
charged to players that are returned to the players as tournament or jackpot bonuses or any
revenues derived from food, beverage, parking or merchandise sales.
i
LA01 \6345\25023.4 7 95573.1
"Key management employee" shall mean every individual, whether or not such
individual is a named officer or director of the licensee, with the power to direct operations,
direct supervisory and general employees of a card club, and any individual with the actual or
apparent authority to direct the counting of revenue generated by the club, including any person
employed by the licensee to manage the card club.
"Lease" means any formal or informal, written or oral contract or understanding
or arrangement whereby any person operating a card club obtains the use or possession of any
property, real or personal, to be used, occupied, or possessed in connection with the conduct
of games at any card club. The term "lease" includes without limitation, payments to an
affiliated person under a real property lease, a personal property lease, an unsecured note, a
deed of trust, a mortgage, or a trust indenture.
i
"Lessor" means any person who leases any property, real or personal, to a person
operating a card club for use in connection with the conduct of games or related activities.
"License" shall mean a grant from the Common Council authorizing a "person"
as described by this chapter to operate a card club within the City.
"Licensee" means the "person" as described by this chapter, to whom a card club
license has been issued pursuant to this chapter, and includes initially, The Sports Gardens, Inc.
"Owner" shall mean every individual or any other entity having any interest, legal
or equitable, in any card club or card club license. Except as otherwise provided in this chapter,
each owner, whether an individual or other entity, shall be required to have a pointholder's
permit. A stock holder in a corporation which is an owner shall not be deemed to be an owner
solely by reason of such stock ownership.
LA01 \6345\25023.4 8 95573.1
"Panguingue" is a card game of the rummy family that is played with five or more
regular 52 card packs from which the eights, nines and tens have been removed, the object being
to win bonuses by melding certain groups of cards during the play and extra bonuses by melding
all the cards in the hand and any card game substantially thereto.
"Permit" shall mean a grant of permission from the Common Council to a person
allowed by this chapter, allowing such person to become a pointholder in a card club or a key
management employee of a card club licensee within the City. Two types of permits are
provided for under this chapter, pointholder permits and key management employee permits.
"Person" shall mean and include any individual, partnership, corporation, or
combination thereof.
"Playing cards" or "card games" shall mean the playing of the game of draw
poker, low ball poker, panguingue or other games not prohibited by state law.
"Point" shall mean any interest whatever, or at all, in the ownership, division of
profits, or revenue of a card club, whether legal, equitable, or of whatever kind or character.
"Pointholder" shall mean any individual having an interest in the ownership,
division of profits or revenue of a card club, whether directly or indirectly, through a
partnership, joint venture, closely held corporation or non-publicly traded corporation or as a
beneficial owner of at least 10% of the voting stock of a publicly-traded corporation.
"Premises" shall mean land together with all buildings, improvements, and
personal property located thereon and related to a card club.
"Publicly-Traded Corporation" shall mean a corporation with a class of securities
registered under the Securities Exchange Act of 1934, as amended.
LA01 \6345\25023.4 9 95573.1
Section 9.44.060. Confidential disclosure unlawful. It shall be unlawful for any individual to
disclose to any unauthorized individual, news organization or any other entity, any data or
information required under the provisions of this chapter to be kept and maintained confidential.
Section 9.44.070. Permits and licenses required. It is the declared policy of the Common
Council that pointholders and key management employees apply for and be issued permits after
an individual personal background investigation, and that such parties be controlled so as to
better protect the public health, safety, morals, good order and public welfare. Except as
provided in this Ordinance with respect to a card club license, and except as to The Sports
Gardens, Inc., no applicant, person, licensee, key management employee permittee, or
pointholder permittee shall acquire a vested right in any permit issued, registration, finding of
suitability, or approval granted by the Common Council or any other action of the Common
Council at any stage of the proceedings. Subject to the powers of the Common Council to
suspend or revoke a card club license, licensees shall have vested rights therein for the term of
any license.
A. It shall be unlawful for any person or other entity to commence or conduct or purport
to commence or conduct, within the City any business, activity, enterprise, undertaking, or place
where tables or other items or units of furniture are used directly or indirectly for playing cards
or card games and for the use of which a fee, commission, or compensation is directly or
indirectly charged, accepted, or received from players or participants in any such playing of card
games until such person or other entity shall have first obtained a card club license and until
LA01 \6345\25023.4 10 95573.1
such licensee has secured a card club operations certificate for the operation of such card games
at a specific location, within a specific building under and in compliance with the provisions of
this chapter.
B. An applicant for a card club license or various permits is seeking the granting of a
privilege. Therefore, the burden of proving qualifications to receive such a permit or license
is at all times on the applicant. An applicant must accept all risks of adverse public notice,
r
publicity, embarrassment, criticism, financial loss, or all other actions and consequences which
may result from activities with respect to reviewing, processing, approving or disapproving any
application, and, a waiver of any claims for damages against the City or its agents resulting
therefrom shall be presumed upon the filing of an application.
i
C. An applicant for a license or permit pursuant to this chapter may claim any privilege
afforded by the Constitution of the United States in refusing to answer questions by the Common
Council. However, a claim of privilege with respect to any testimony, evidence, or requested
information pertaining to an application may constitute sufficient grounds for denial of any such
license or permit.
Section 9.44.080. License and permit application -- procedure Any person desiring or
proposing to commence or conduct any business, activity, enterprise or undertaking pertaining
to or involving a card club, shall file an application with the City Clerk using such forms as are
provided by the City. Each application shall contain a statement as follows: "The undersigned
applicant(s) declare(s) under penalty of perjury that the foregoing is true and correct."
LA01 \6345\25023.4 11 95573.1
A. Card club license application. The card club license, if granted, will be issued only in
the name of an individual, a sole-proprietorship, a partnership, or a corporation (such entity to
be referred to as license applicant), and, the license may require that, concurrent with the
granting of the card club license, each pointholder and key management employee of the license
applicant be issued permits allowing such individuals or entities to be involved in the activities,
profits and direction of the card club operation (such individuals and entities to be referred to
as pointholders permit applicants and key management employee permit applicants respectively).
i
Pointholder permits shall be issued only in the name of an individual. City officials and
employees and their families shall not be eligible to apply for card club licenses, pointholder
permits or any form of employee permit or registration card.
In addition to other information as may be required by said application forms for
a card club license, the applicant shall complete and provide the following information in as
great a detail as is available or as the Common Council may require:
(1) The date of the application;
(2) The true name of the applicant;
i
(3) The status of the applicant as being an individual, a sole proprietorship,
a partnership or a corporation;
(4) If the applicant is an individual, the residence and business address and
personal history record of such applicant;
(5) If the applicant is other than an individual, the name, residence, and
business address of each of the copartners or stockholders who qualify as pointholders and the
name, residence, and business address of each of the officers and directors of the entity.
LA01 \6345\25023.4 12 95573.1
(6) An application for a pointholders permit, including a personal history
record for every pointholder who has, or is proposed to have, a financial interest, direct or
remote, in the proposed card club activity;
(7) An application for a key management employee's permit, including a
personal history record for every pointholder who is, or is proposed to be a key management
employee of the proposed card club;
(8) A description of the premises to be used in relation to card club activity
including, but not limited to card playing area, restaurants and parking;
(9) A development concept including floor plans, site plans, schematics, and
renderings or as detailed information as is available;
(10) A statement of the type and nature of the games proposed to be played;
(11) The number of tables or other units to be placed, employed or used;
(12) A description of any other business conducted or proposed to be conducted
at the same location;
(13) A financial plan and source of funding for the development including
projected development cost;
(14) A statement of the applicant's experience in the operation and management
of card clubs or other lawful gambling or other relevant activities;
(15) A one year cash flow projection which shall be a confidential document
and not open to public inspection;
(16) A statement that such building will conform to all the laws of the State and
the City for occupancies of the nature proposed;
LA01 \6345\25023_4 13 95573.1
(17) A complete description and layout of all security measures proposed in as
great a detail as available, which shall be a confidential document and not open to public
inspection;
(18) If the Common Council determines that a landlord whose lease rental
payments are based upon a percentage of the revenues of profits of the card club or financier,
by reason of the extent of his holdings or his inherent financial control, cannot, in fact, be
separated from the card club, and that as a practical matter, a single entity exists regardless of
l
the apparent form of the organization, the Common Council may require that all such individuals
be designated pointholders and subject to all investigatory, financial and background reporting
procedures established by this chapter for card club pointholders. Any such determination shall
not, however, be deemed to make any such lessor an owner or operator of the card club for
purposes of this Ordinance or applicable state law.
(19) Each application for a card club license, a pointholder's permit or a key
management employee's permit shall include the following:
(a) A statement that the applicant understands that the application shall
be considered only after a full background investigation and report has been made by such
members of the City staff as are designated by the Mayor or City Administrator;
(b) A statement that the applicant understands and agrees that any
business or activity conducted or operated under any license or permit issued under such
application shall be operated in full conformity with all the laws of the State and the laws and
regulations of the City applicable thereto, and that any violation of any such laws or regulations
LA01 \6345\25023.4 14
� 95573.1
in such place of business, or in connection therewith, may render any license or permit therefore
subject to immediate suspension or revocation;
(c) A statement that the applicant has read the provisions of this chapter
and particularly the provisions of this section and understands the same and agrees to abide by
all rules and regulations contained in this chapter;
(d) A balance sheet and income statement prepared in accordance with
generally accepted accounting principles. The financial statements required by this subsection
shall be confidential documents and shall not be open to public inspection. Documents shall be
available only to the Common Council and those officials having direct jurisdiction involving
the provisions of this chapter and to any court of competent jurisdiction where any matter
relating thereto may be actually pending.
(20) Concurrently with the filing of their applications, the card club license
applicant and the pointholder and key management employee permit applicants shall be
fingerprinted and photographed by the City of San Bernardino Police Department. Applicants
shall authorize the City to obtain any available criminal offender record information relating to
applicant and shall further authorize the updating of that information on an annual basis if a
license or permit is granted;
(21) If an applicant for a card club license is a publicly-traded corporation, each
person having a beneficial interest of at least 10% in the applicant corporation shall be identified
and may be required to meet all the requirements of individual applicants.
LA01 \6345\25023.4 15 95573.1
B. Pointholder and key management employee permit application. As set forth in Section
9.44.080(A), the applications for all pointholder and key management employees shall be
submitted as part of the application for a card club license or within sixty days of the adoption
of this Ordinance, in the case of The Sports Gardens, Inc. Each permit applicant shall be
responsible for providing complete and accurate information and for signing the permit
application. However, it shall be the responsibility of the card club license applicant (or licenses
for subsequent applications) to submit the completed applications and pay any application fees.
Failure to submit complete applications for each proposed pointholder and key
management employee may be grounds for denial or revocation of a card license. However, the
inability of applicant to secure a pointholder permit application from a stockholder of applicant
shall not preclude applicant from receiving a license or permit so long as any such stockholder
does not participate directly or indirectly in the management of operation of the card clubs or
in the proceeds therefrom.
C. Card club operations certificate application. The card club operations certificate shall
be issued only to the card club licensee. This certificate may be applied for concurrently with
the card club license or at any later time up to 360 days after granting of a card club license.
Failure to apply for a card club license may be grounds for revocation of the card club license.
The card club operations certificate application shall be submitted to the City
Clerk. In addition to other required information as may be set forth on application forms
provided by the City, the application shall include the following:
LA01 \6345\25023.4 16 95573.1
(1) Detailed floor plans of the interior of the proposed card club facility
specifying at a minimum:
(a) the location of all card playing areas;
(b) the manner in which the card playing area(s) shall be separated
from other areas;
(c) the location of any and all other proposed businesses and facilities
within the card club structure.
(2) Detailed plans of the parking facilities including a lighting and security
plan.
(3) A detailed statement of all proposed security measures (both physical and
operational).
(4) A detailed statement of all plans, both physical and operational, for the
handling of money, including but not limited to provisions, if applicable, for
(a) players banks (limited to cash only);
(b) purchase of chips and protection against counterfeit chips;
(c) check-cashing or credit procedures;
(d) procedures for bringing money to or removing money from the
premises;
(e) procedures for determining and depositing daily gross receipts.
(5) An independent evaluation of the internal accounting and administrative
control system proposed to be used by applicant.
LA01 \6345\25023.4 17 95573.1
owl-,
All information provided regarding security measures, internal controls, or
provisions relating to the handling of cash, chips, and cards shall be deemed confidential and
shall not be available for public inspection.
Section 9.44.090. Application fees. For purposes of clarification, the fees set forth in this
chapter are for both regulation and revenue purposes and are levied pursuant to the authority of
Article XI, Section 5 of the Constitution of the State of California. The Common Council shall
I
have the authority to increase or decrease these fees by resolution from time to time. Each
application for any license or permit shall be subject to fees and deposits, payable to the City
as follows:
A. A card club license application fee of Thirty-five Thousand Dollars ($35,000.00) which
shall be retained by the City for the payment of the costs of the initial investigation.
B. The card club license application fee shall cover the initial investigation costs of the
license application and a combined total of up to twenty (20) pointholder and key management
employee permit application. If a license applicant has pointholders and key management
employees exceeding twenty (20) in number, a fee of $750.00 per pointholder or key
management employee exceeding the twenty (20) shall be paid to and retained by the City as
I
payment of the costs of investigation.
u►01 \6345\25023.4
18 95573.1
C. Except in the case of The Sports Gardens, Inc.'s license issued pursuant to this
Ordinance, attached hereto as Exhibit A, a card club license fee of Twenty-five Thousand
Dollars ($25,000.00) which shall be paid to the City prior to the issuance of the card club
license.
D. No additional fee shall be required for the card club operations certificate.
Section 9.44.100. Application review and approval procedures. Whenever an application for
a permit or license pursuant to this chapter has been filed and all application and permit fees as
established by Section 9.44.090 are deposited with the City Clerk, the City Clerk shall
immediately refer such application, or a true copy thereof, to the Chief of Police and the Mayor.
A. Card club license, pointholder permit and key management employee permit approval
process.
(1) Investigation and report. Upon receipt of a card club license application,
the Mayor or City Administrator shall cause an investigation to be made covering all matters
relevant to the proposed activity of the applicant, individual pointholders, and key management
employees. Such matters may include but are not limited to the following:
(a) Identity, character and background of the license applicant and all
individual pointholders, and all key management employees;
(b) Interior floor plan of buildings and site plan as to parking, traffic
movement and aesthetics;
LA01 \6345\25023.4 19 95573.1
(c) Compliance with City's General Plan, zoning, and environmental
requirements;
(d) Type of tables to be used and their proposed locations, area where
food and beverages are proposed to be served and means for excluding persons under 18 years
of age from card playing areas;
(e) Type and degree of security personnel and facilities to be provided;
(f) The financial stability of the pointholders involved in the application
and the financial ability of the applicant to comply with the conditions and requirements of the
City in the event the application is approved.
The investigation of the card club application shall be completed as soon as
practicable after a complete application is received. (At the discretion of the Common Council,
an application shall not be deemed complete until complete permit applications for all proposed
pointholders and key management employees have been submitted.)
Following the investigation, the completed report of the investigation together with
the Mayor or City Administrator's findings and recommendations shall be forwarded to the
Common Council. The Common Council shall not consider any application for a card club
license or individual permits until the Mayor or City Administrator's findings and
recommendations are forwarded for review.
(2) Common Council action. Upon receiving the complete card club
application and the Mayor or City Administrator's findings and recommendations, the Common
Council shall make a determination on the permit applications within 45 days.
LA01 \6345\25023.4 20 95573.1
(3) Common Council determination. The Common Council by resolution shall
either grant, conditionally grant, or deny the card club license application and the individual
permit applications. If the Common Council rules that an application be denied, the order will
be accompanied by written reasons upon which the order is based. All such orders and reasons
will be made public. It shall be possible for the Common Council to tentatively approve the
application of a license applicant, but, disapprove the application for a permit of one or more
of the pointholders or key management employees. In such cases the Common Council can
grant the license applied for subject to the condition that any pointholder or key management
employee disapproved of the removed as an individual having any interest or control in the card
club. Compliance with the removal condition shall be monitored, reviewed and approved of by
the Mayor or City Administrator, prior to final issuance of the card club license.
This chapter initially limits the number of licensed clubs in the City to a maximum
of one (1), subject to the provisions of Section 3.2.3. of the May 15, 1995 Agreement, between
the Economic Development Agency of the City of San Bernardino and The Sports Gardens, Inc.,
(as successor in interest to, and formerly known as Rounding Third, LLC, a California Limited
Liability Company). The Common Council shall determine, in its judgment, which, if any, of
the various applicants who wish to open card clubs within such location will receive a card club
license. In determining whether to grant a license, the Common Council shall be guided by the
policy that licenses shall be issued only to those persons who will operate such licensed clubs
so as to best process the public health, safety, morals, good order and welfare of the residents
of the City. Applications shall additionally be considered on the basis of the criteria set forth
in Section 9.44.100(A)(4) without being limited thereto. The action of the Common Council in
LA01 \6345\25023.4 21 95573.1
accordance with this ordinance shall be final. In the event the findings or actions of the
Common Council shall be challenged, the challenger shall be required to pay the total costs of
defense of such challenge unless it is the prevailing party.
(4) Requirements for issuance. In the event a full and complete application
for a card club license is presented to the Common Council, and the payments required by this
chapter in connection therewith have been duly made to the City, and the investigations and
reports required under the provisions of this chapter have been duly completed, the Common
Council shall have jurisdiction to consider such application. The application shall be considered
on the basis of the following, without being limited thereto:
(a) The effect of the granting of such license insofar as the same would
affect business, employment and economics in the City;
(b) The financial stability of the applicants, key management
employees, and pointholders, including the personal history, business experience, general
reputation, character, and any other matters deemed by the Common Council to be necessary
or important;
(c) The business and financial history of the key management
employees of the enterprise or other manager or active operating head, including his or her
personal history, moral background, reputation, and character; and
(d) Any other relevant data, facts or considerations.
LA01 \6345\25023.4 22
95573.1
(5) Grounds for denial. The Common Council may, in its discretion, deny
or condition a license or permit application for any of the following reasons, without being
limited thereto, or for any other reason consistent with the general policy of this chapter:
(a) Conviction of any crime punishable as a felony or of any crime of
violence, any crime involving fraud, gambling, loan cere, bookmaking, thievery, bunco, moral
turpitude, or any crime involving evasion of taxes, or any other crime of moral turpitude
indicating a lack of business integrity or business honesty, whether committed in the State of
California or elsewhere, whether denominated as a felony or as misdemeanor and
notwithstanding the passage of time since the conviction.
(b) Failure of the applicant to have a valid registration from the
Attorney General of the State of California issued pursuant to the Gaming Registration Act.
�I
(c) Failure of the proposed business or activity to be operated in
compliance with Federal, State or City law or regulation.
(d) Identification by any law enforcement agency, legislative body or
crime commission as a member of, or an associate of, organized criminal elements.
(e) Knowingly making any false statement in the application or as to
any other information presented as part of the application process.
(f) Failure to satisfy the Common Council as to the source of funds
to be invested in the proposed venture.
(g) Prior unsuitable operation as a card or gaming licensee in another
jurisdiction without regard to whether disciplinary action was taken at that time or whether the
acts were sufficient to justify revocation of a license.
LA01 \6345\25023.4 23
95573.1
(h) Applicant does not have the financial capability or business
experience to operate a card club in a manner which would adequately protect the patrons of the
card club and the citizens of the community.
(i) Applicant is presently under indictment or the subject of a criminal
complaint for any of the crimes described in Section 9.44.100(A)(5).
0) Making or causing to be made any statement in an application or
document provided to the Common Council or its agents or orally to a Common Council
member or agent in connection with an application, which statement was at the time and in the
light of the circumstances under which it was made, knowingly false or misleading.
(k) Lack of evidence that there is adequate financing available to pay
potential current obligations and, in addition, to provide adequate working capital to financing
opening of the card club proposed.
(l) Failure of any person named in the application when summoned by
the Common Council to appear and testify before it or its agents at such time and place as it
may designated.
(m) Inadequate security plan.
(6) Grant of card club license to The Sports Gardens, Inc. Pursuant to the
provisions of Section 3.2.2 of the May 15, 1995 Agreement, the Agency and the City have
agreed to grant to The Sports Gardens, Inc. an exclusive franchise to conduct gaming/casino
operations, as authorized by State law, in the areas of (i) the Entertainment Site, and (ii)
anywhere within the City's redevelopment project area boundaries, and accordingly, the
LA01 \6345\25023.4 24 95573.1
Common Council hereby grants a card club license to The Sports Gardens, Inc., pursuant to the
provisions of this Ordinance.
B. Card club operations certificate approval process.
(1) Mayor or City Administrator authorized to grant. The application for a
card club operations certificate and all related materials including detailed state and floor plans,
and detailed statements of security and operations procedures shall be reviewed by the Mayor
or City Administrator and such staff as either may designate. The plans and specifications
required by this section shall be in sufficient detail to obtain building permits.
The Mayor or City Administrator shall have the authority to grant, conditionally
grant or deny issuance of a card club operations certificate in accordance with the criteria set
forth in subsection (2) below.
The Mayor or City Administrator shall approve or disapprove any plans,
specifications or proposed procedures within 40 days of receipt thereof. Any disapproval shall
be in writing and shall include reasons for the disapproval. Any item neither approved nor
disapproved within 40 days shall be deemed approved. The applicant, upon receipt of a
disapproval, shall revise those plans, specifications or procedures which are disapproved and
resubmit then to the Mayor or City Administrator.
(2) Criteria for issuance of a card club operations certificate. A card club
operations certificate is required before a card club license can commence operations. The
certificate shall be issued when all of the following have been complied with:
(a) The applicant has a valid card club license;
LA01 \6345\2507-3.4 25 95573.1
(b) The card club site has been fully developed in accordance with all
plans and specifications submitted to and approved by City and the site has been inspected to
verify compliance with all such plans and specifications;
(c) The applicant has taken all steps necessary to insure that the club
will be operated in the manner set forth in this chapter and as approved by the City and has
documented such to the satisfaction of the Mayor or City Administrator;
(d) All zoning, environmental, building and any other local or state
requirements for the design, construction or operation of the card club have been complied with.
C. Issuance of licenses or permits. If the action of the Common Council, or the Mayor or
City Administrator as appropriate, on any application is to grant the same, the City Clerk may
thereupon issue the necessary licenses, permits and renewals thereof upon payment of fees as
required by this chapter until such time as such license or permit is either surrendered,
suspended, revoked, or expires.
Section 9.44.110. Expiration of permits and licenses Permits and licenses issued under the
provisions of this chapter shall be and remain valid until either surrendered in writing or allowed
to expire by the permittee or licensee, or suspended or revoked by the Common Council or
Mayor or City Administrator as provided in this chapter.
Except as herein provided, card club licenses shall, unless renewed, expire
annually on the anniversary date of their issuance. Except with respect to The Sports Gardens,
the initial license for each licensee shall be dated as of the day upon which the same is issued
i
LA01 \6345\25023.4 26 95573.1
and, unless sooner revoked shall expire at midnight of the fifth anniversary of the date the card
club which is the subject of such initial license shall commence operations. If the initial license
shall be surrendered or revoked prior to the end of such fifth anniversary, then the license
granted relative to the operation of the card club in lieu of the initial license shall expire at the
same time that the initial license would have expired (i.e. the fifth anniversary of the date on
which the card club commenced operations). The initial license for The Sports Gardens, Inc.
shall expire on the 99th yearly anniversary of the date of adoption of this Ordinance.
The card club operations certificate shall be and remain valid as long as the card
club license is valid and no physical or procedural changes are made with respect to the club,
club site, or operation of the club.
In the event of surrender, suspension, revocation, or expiration, no permit fee or
license fee, or any portion thereof shall be refunded.
B. Renewal of card club licenses. The holder of an unsurrendered, unexpired, unsuspended,
unrevoked, and valid card club license issued pursuant to the provisions of this chapter shall be
entitled to have the license renewed annually in accordance with the following procedure:
(1) An application for renewal of any such license shall be filed with the City
Clerk no later than 120 days before the expiration date of the license for which renewal is
sought.
(2) If such application for renewal is not filed within the time specified by
Section 9.44.1 10(A), such licensee may thereafter file a written application for renewal of any
LA01 \6345\25023.4 27
95573.1
such expired license, but in such event, such licensee shall pay a penalty fee of Ten Dollars
($10.00) for each table or unit affected by such renewal, for each day of delinquency.
(3) The application for renewal shall be accompanied by the full amount of
the required renewal license fee as set forth in Section 9.44.160.
(4) The card club licensee shall file with the City Clerk an affidavit made
subject to the penalties of perjury on a form approved by the City Attorney containing a full and
complete statement including the following information:
(a) Any change in individuals with whom the licensee has any operating
agreements pertaining to the licensed operation;
(b) Any change in pointholders, the full, true and correct names and
addresses of such new and correct names and addresses of such new pointholders, or trustors
for pointholders;
(c) The full, true, and correct names and addresses of each and every
new key management employee.
(d) If no changes have occurred from the previous renewal, licensee
shall so certify and attest.
Failure to make full payment of annual fees or failure to file or filing any false
statement in any affidavit and/or certification and attestation as is required by this subsection
may be deemed grounds for the revocation of such card club license pursuant to the procedures
set forth in this chapter.
LA01 \6345\25023.4 28 95573.1
C. Renewal of card club license ministerial. Upon compliance by a card club licensee with
the requirements of Section 9.44.110 and if no material changes have occurred that have not
already been acted upon, the card club license shall automatically be deemed renewed for
another one year period and the City Clerk shall issue such renewal.
Section 9.44.120. Registration, fingerprinting and photographing of employees of licensed
card clubs. It shall be unlawful for any licensed card club in the City to employ any person in
connection with its operations or to allow any person to do business on its premises who is not
the holder of a valid registration card issued by the Chief of Police. No registration card will
be issued without such person having been first fingerprinted and photographed by the Police
Department.
Applications for registration cards shall be reviewed subject to the procedures to
be adopted and implemented by the City of San Bernardino Police Department. An application
may be granted or denied by the Chief of Police. The Chief of Police may deny an application
for registration for any relevant cause denoted in Section 9.44.100(A), without being limited
thereto. Applicants for employee registration card shall authorize the City to obtain any
available criminal offender record information relating to the applicant and shall further
authorize the updating of that information on an annual basis if a registration card is issued.
In recognition of the delays which may be encountered in obtaining all information
on each applicant, the Chief of Police is hereby authorized to issue provisional registration cards
which shall be valid for a period not to exceed six months and shall be issued under the terms
and conditions to be determined by the Chief of Police.
LA01 \6345\25023.4 29 95573.1
Every employee shall keep his registration card on his person and available for
inspection at all times when actively engaged in the conduct of any card club activities.
Every licensee shall, before employing any person in connection with the licensed
card club activity, ascertain that such person holds a valid registration card issued in accordance
with this regulation, and shall cause his employment records to reflect such fact.
It shall be the responsibility and duty of the Chief of Police to establish the
necessary procedures to implement and administer the provisions of this Section.
The information received by the Chief of Police pursuant to the provisions of this
Section shall be treated as confidential.
Section 9.44.130. Transfer of interest of pointholder in card club. A. Permission Required.
It shall be unlawful for any pointholder, having any interest whatever, or at all, in the ownership
of a card club, whether legal or equitable, or as trustor or trustee, or of whatever kind or
character, to transfer or sell any points and/or interest in a card club to any person who is or
by reason of such transaction would become a pointholder without the prior consent and
i
` permission of the Common Council.
B. No licenses or pointholder shall knowingly permit any individual, partnership, or other
entity to make any investment whatever in or in any manner whatever participate in the profits
of any licensed card club, or any portion thereof, except in accordance with these regulations;
provided, however, that the purchase or other acquisition of stock in a publicly-traded
corporation shall not be deemed to be such an investment or participation unless by pointholder.
LA01 \6345\25023.4 30 95573.1
Except as otherwise provided in Section 9.44.080(B), a licensee which is a publicly-traded
corporation shall not have responsibility with respect to any transfers, sales or assignments of
shares of its common stock or other securities.
C. No licensee or pointholder shall knowingly permit any investment in any licensed card
club operation or any portion thereof or participation in the profits thereof by any person acting
as agent, trustee, or in any other representative capacity whatever for or on behalf of another
person without first having fully disclosed all facts pertaining to such representation to the
Common Council. Except as otherwise provided in Section 9.44.080(B), a licensee which is a
publicly-traded corporation shall not have responsibility with respect to any transfers, sales or
assignments of shares of its common stock or other securities. No person acting in any such
representative capacity shall hold or acquire any such interest or participate without first having
fully disclosed all facts pertaining to such representation to the Common Council and obtained
written permission of the Common Council to so act.
D. Transfer of Interest and Escrow Required. No transfer, sale or hypothecation of a point,
or new investment in an existing licensed card club shall be permitted until the Common Council
has received, reviewed, and approved an application for transfer of interest, and until each new
pointholder has been granted a pointholder's permit authorizing the holding of such interest in
a point; provided, however, that not such approval shall be required for sales of stock of a
publicly-traded corporation other than to a pointholder. No money or other thing of value
constituting any part of the consideration for the transfer or acquisition of any interest in a
u01 \6345\25023.4 31
95573.1
licensed card club operation shall be paid over, received or used prior to complete compliance
with all prerequisites set forth in the law and these regulations for the consummation of such
transaction. Notwithstanding the foregoing, such funds may be placed in escrow pending
completion of the transaction. Any loan, pledge or other transaction in an attempt to evade the
requirements of this regulation may be deemed a violation and, as such, would constitute
grounds for disapproval of the point transfer.
E. Assignment. Any party desiring to buy, sell, accept transfer, assign or otherwise
hypothecate any interest of a pointholder (other than stock of a publicly-traded corporation to
a person other than pointholder) in a licensed card club shall file with the City Clerk, on forms
approved by the City Attorney, and furnished by the City Clerk, a written application for
permission to allow transfer of such interest. Each such application shall contain and clearly and
truthfully set forth, under oath and/or affirmation, in addition to such other information as the
City Clerk and/or the Common Council may require, the following:
(1) The date of the application;
(2) The true name of the applicant;
(3) The status of the applicant as being an individual, partnership, corporation
or other entity;
(4) The residence and business address of the applicant;
(5) If the applicant is other than an individual, the name, residence and
business address of each co-partner, co-partnership, shareholder or other interest holder;
LA01 \6345\25023.4 32 95573.1
(6) The name of the licensed card club and the names of the existing
pointholders from which a transfer of interest or points is sought;
(7) The number of points and/or nature of interest sought to be sold,
transferred, assigned or otherwise hypothecated;
(8) The source of funds to be sued by the applicant in acquiring such points
or interest;
(9) A statement that the applicant(s) understands that the application will be
considered by the Common Council only after a full investigation and report have been made
and the report of investigation and forwarded to the Common Council;
(10) A balance sheet and income statement prepared in accordance with
generally accepted accounting principles and submitted under penalty of perjury (but which need
not be audited) whether he is an individual, partnership or other entity;
(11) The statements required by this subsection shall be confidential, and the
documents containing such information shall be deemed to be confidential documents, and shall
not be open to public inspection, but shall be available only to those City officials having direct
jurisdiction where any matter relating thereto may be actually pending, except that the names
and cities and states of residence only of such pointholders shall be open to public inspection,
but all other statements and/or documents shall remain confidential.
F. Investigations Required. Whenever an application pursuant to the provisions of this
section has been filed with the City Clerk for a permit to the provisions of this Section, the City
LA01 \6345\25023.4 33 95573.1
Clerk shall immediately refer such application, or a true copy thereof, to the Mayor or City
Administrator, who shall promptly and diligently cause an investigation to be made as follows:
(1) A full and complete investigation of the applicant and each pointholder
whose names and addresses are shown upon the application;
(2) Concurrently with the filing of an application, each applicant shall be
fingerprinted and photographed by the City of San Bernardino Police Department and shall
authorize the City to obtain any available criminal offender record information relating to
applicant and shall further authorize the updating of that information on an annual basis if the
application is approved;
(3) It shall be the responsibility and duty of the Mayor or City Administrator
to supervise and direct the Chief of Police to establish the necessary procedures to administer
the provisions of this Subsection; and
(4) The information received by the Chief of Police pursuant to the provisions
of this Subsection shall be treated as confidential.
G. Investigation Fees. For the purposes of clarification, the investigation fees set forth in
this Section are for regulation, revenue purposes and reimbursement to the City for the costs of
investigating and processing the applications, as provided for in this Section, pursuant to the
authority set forth in Article XI, Section 5 of the Constitution of the State and may be increased
or decreased from time to time by resolution adopted by the Common Council. Each such
application for transfer of interest of a pointholder to an applicant permittee shall be
accompanied by a fee, payable to the City as follows;
LA01 6345 25023.4
� � 34 95573.1
(1) An application fee in the amount of Five Hundred Dollars ($500.00) for
each pointholder permit applicant, which fee shall be retained by the City for the payment of the
costs of the investigation of the applicant;
(2) The fees set forth in this Subsection shall be the property of, and be
retained by, the City, whether the permit, and permission to transfer interest in the license is
granted or denied.
H. Granting or Denial of Applications.
(1) Whenever an application for a permit as required under the provisions of
this Section is presented to the Common Council, and the fees required by this Section in
connection therewith have been paid to the City Clerk, the Common Council may consider such
application on the basis of the following, without being limited thereto:
(a) The financial stability of the applicant;
(b) Conviction of criminal offenses as denoted in Section
9.44.100(A)(5); and
(c) Any other information deemed by the Common Council to be
matters of necessary inquiry.
(2) The Common Council may, in its discretion, either grant, conditionally
grant or deny the permit applied for. The action of the Common Council shall be final.
LA01 \6345\25023.4 35 95573.1
Section 9.44.140. Investigations - Updating_
All pointholders and key management employees of card clubs shall have their
background and criminal history investigations updated annually. The card club license annual
renewal fee shall be used to cover the cost of such investigations.
Section 9.44.150. Suspension and revocation of permits and licenses
A. All permits and licenses authorized and issued under the provisions of this chapter shall
be subject to, and accepted as subject to:
(1) Immediate suspension by the Mayor or City Administrator under the
circumstances provided below until a decision is rendered by the Common Council pursuant to
this chapter. The matter of such suspension shall be submitted to the Common Council at the
first meeting following the Mayor or City Administrator's action. A permit or license may be
immediately suspended if the Mayor or City Administrator finds that:
(a) The Attorney General has suspended or revoked an applicant's
registration under the California Gaming Registration Act; or
(b) A permittee/licensee, or any agent or employee thereof with the
knowledge of such permittee/licensee, has violated, or permitted, allowed or caused the violation
of any provision of this chapter, any regulation issued pursuant to this chapter, any condition
of approval imposed upon the issuance of the permit or card club license, or any state law or
regulation relating to the operation of a card club where the continued operation of the club in
the light of such violation jeopardizes, or threatens to jeopardize the public welfare.
LA01 \6345\25023.4 36 95573.1
(2) Suspension or revocation by the Common Council after a public hearing
held after not less than thirty (30) days' notice to the permittee/licensee and/or any other
interested person, if the Common Council finds that:
(a) The Attorney General has suspended or revoked an applicant's
registration under the California Gaming Registration Act; or
(b) A permittee or licensee or any agent or employee thereof with the
knowledge of the permittee or licensee, has violated, or permitted, allowed or caused the
violation of any provisions of this chapter, any regulation issued pursuant thereto, any condition
of approval imposed upon the issuance of the card club license, or any state or federal law or
regulation relating to the operation of a card club; or
(c) A permittee/licensee has failed to pay, when due and payable, any
of the fees provided for in this chapter within ten (10) days after written notice of any such
failure;
(d) A permittee/licensee has made any fraudulent statements as to a
material fact on an application form or as to any other information presented as part of the
application process; or
(e) A permittee/licensee knowingly commits any act which would have
constituted grounds for denial of application for a permit or license.
(f) The permittee or licensee has knowingly continued to employ in any
card club any individual whom the Common Council or any court has found guilty of cheating
or using any improper device in connection with any game, whether as a licensee or player at
LA01 \6345\25023.4 37 95573.1
a licensed game, or any person whose conduct of a licensed game as an employee of a licensee
resulted in revocation, or suspension of the permit of such permittee;
(g) The permittee or licensee has been convicted of a crime
denominated in Section 9.44.100(A)(5). Such a conviction may be deemed by the Common
Council as suitable grounds for revocation or suspension of the licensee's card club license, prior
to the exhaustion of the licensee's appellate rights, if the conviction acts as a detriment to card
club activity in the city.
(3) The Common Council may limit, condition, suspend or revoke the permit
of an individual pointholder or key employee permittee without affecting the license of the card
club.
(4) The Common Council may order the sale or transfer of points or interest
held by an individual pointholder permittee whose permit has been revoked.
(5) The Common Council may order a licensed card club to keep an individual
pointholder whose permit has been revoked, from coming onto the premises of the card club,
or, not to pay such pointholder any remuneration for services as an employee and/or any profits,
income or accruals on his investment as a pointholder in the card club.
B. Fine in lieu of suspension or revocation. In event of a violation described in subsections
9.44.150(A)(2)(b through g), a fine, not to exceed ten thousand dollars ($10,000) per day for
each violation which continues after seven (7) days following written notice from the Mayor or
City Administrator of such violation, may be imposed on the licensee in lieu of suspension or
revocation; provided, however, that in the event the violation is for non-payment of fees, the
LA01 \6345\25023.4 38 95573.1
fine shall amount to five percent of the unpaid fees plus one and one-half percent per month
accrued daily after the first 30 days.
C. Conduct of the Common Council hearing.
(1) Oral evidence shall be taken only on oath or affirmation.
(2) Both the City and the permittee/licensee shall have the right to call and
examine witnesses; to introduce exhibits; to cross-examine witnesses; to cross-examine opposing
witnesses on any matter relevant to the issue, whether or not that matter was covered in the
direct examination; to impeach any witness regardless of which party first called the witness to
testify; and to rebut the evidence against any witness.
(3) The technical rules relating to evidence and witnesses shall not apply.
However, only evidence relevant to the subject matter of the hearing and which is not repetitious
will be accepted. Hearsay evidence is admissible, but is not sufficient in itself to support a
suspension or revocation of the license.
D. Decision of Common Council. The decision of the Common Council shall be final and
conclusive. Except as specifically provided in Section 9.44.180(B), in the event of suspension
or revocation of license, no part of any license fee previously paid shall be refunded.
i
E. New application upon revocation. In the event of revocation, no new permit or license
shall be issued to such permittee or licensee except upon application made thereafter as in the
i
case of a new applicant.
LA01 \6345\25023.4 39 95573.1
Section 9.44.160. Annual license fees.
The Common Council hereby determines that an annual fee is payable with respect
to all licenses issued pursuant to the provisions of this chapter which fee shall be payable
annually on the anniversary date of each license issuance, and license fees are hereby initially
fixed as follows and may be increased or decreased from time to time by resolution adopted by
the Common Council:
A. An annual license fee of Twenty-five Thousand and no/100th Dollars ($25,000.00) shall
be payable in advance of the beginning of each year in which card club operations are
conducted.
B. All annual license fees shall become the absolute property of the City and shall not be
refunded due to the cessation of, or failure to begin such business, whether voluntary or
involuntary. No refund of the new application fee deposit shall be made.
Section 9.44.170. Gross revenue license tax.
In addition to the initial application fees and the annual license fees set forth in
Sections 9.44.090 and 9.44.160 respectively, and in lieu of the gross receipts tax imposed by
Chapter 3.56 of the City of San Bernardino Municipal Code, there is hereby imposed the
following gross revenue license tax. This tax shall apply to card club operations only and shall
LA01 \6345\25023.4 40 95573.1
be additional to and have no effect on the City's share of the pari-mutuel pool imposed by
California Business and Professions Code commencing with Section 19610.
Should it be determined that Business and Professions Code commencing with
Section 19610.3 or any section which replaces it is the sole revenue producing measure which
can be applied to the business of the card club licensee, then all permits and licenses granted
pursuant to this ordinance shall be deemed revoked and all card club operations shall cease.
The gross revenue license tax shall be payable monthly, based on the total
monthly gross revenue of the card club so licensed according to the following schedule.
TOTAL MONTHLY GROSS REVENUE MONTHLY GROSS REVENUE
LICENSE TAX
(1) up to $500,000 10%
(2) $500,000 but less than $2,500,000 $40,000 plus 11% of excess over
$500,000
(3) $2,500,000 but less than $5,000,000
$260,000 plus 12% of excess over
$2,500,000
(4) $5,000,000 but less than $7,500,000
$560,000 plus 13% of excess over
$5,000,000
(5) $7,500,000 or more
$885,000 plus 14% of excess over
$7,500,000
A. Statement of Revenue. Each licensee shall file with the City on or before the 15th day
of each calendar month a statement under oath, showing the true and correct amount of gross
revenue derived from the card club business, operated pursuant to licenses issued pursuant to
this chapter, for the operations of the preceding month. Such statement shall be accompanied
r
LA01 \6345\25023.4 41 95573.1
by the payment of the correct amount of gross revenue license tax due and owing in accordance
with the provisions of this Section. A certification shall be attached of the statement or included
therein, which certification or declaration shall be substantially in the following form:
"I hereby declare under penalty of perjury that the foregoing is true and correct.
Licensee, Managing Partner, or Owner" (Strike out the titles which are not
applicable).
At the end of each fiscal year, the licensee shall employ at its expense a nationally
recognized firm of certified public accountants to conduct an audit of licensee's financial records
in accordance with generally accepted auditing standards. Such audit shall conclude with the
expression of the auditor's opinion on the financial statement of the licensee's card club
operations in accordance with generally accepted auditing principles. The auditor shall express
Air a separate opinion on the licensee's gross revenues and related permit fees and taxes paid to the
city for the period then ended. Also, the licensee shall provide the city with an annual update
of the evaluation of its internal accounting and administrative controls as outlined in Section
9.44.080(C) of this ordinance. Such audit report shall be filed with the City Clerk no later than
one hundred twenty (120) days after the fiscal year end. In the event that such evaluation
discloses material weaknesses or reportable conditions in the licensee's system of internal
accounting and administrative controls, the licensee shall submit a program to the Mayor or City
Administrator within thirty (30) days of such evaluation outlining licensee's program to correct
such weaknesses or conditions. All reports or evaluations submitted hereunder shall be
confidential and shall not be available for public inspection.
LA01 \6345\25023.4 42 95573.1
B. Any failure or refusal of any such licensee to make any statement as required within the
I
time required, or to pay such sums due as gross revenue license taxes when the same are due
and payable in accordance with the provisions of the chapter, shall be and constitute full and
sufficient grounds for the revocation or suspension of the permits and licenses issued pursuant
to this chapter in the sole discretion of the Common Council.
Section 9.44.180. Alternative gross revenue license tax.
A. As an alternative to paying the annual $25,000 license fee provided for in Section
9.44.090, and the gross license tax set forth in Section 9.44.170, licensee may elect to pay a
license fee of$3,025,000, which amount may be increased or decreased from time to time by
resolution adopted by the Common Council. In such event an Alternative Gross Revenue
License Tax schedule shall apply for a sixty consecutive month period after the card club begins
operation. Licensee may elect any month after card club opens as the starting month for use of
this alterative gross license tax schedule. Once begun, the alternative schedule shall apply for
sixty consecutive months without interruption.
B. At any time after paying the alternative $3,025,000 license fee provided for by this
section, licensee may apply for refund of all of such fee except $25,000, which is the normal
license fee. At such time, $50,000 shall be deducted for each month during which licensee paid
a gross revenue license tax using the alternative gross license tax schedule provided for by this
section. Upon such election by licensee to request a refund, the City shall refund the alternative
license fee to licensee as herein provided within 60 calendar days. In no event shall interest
LA01 \6345\25023.4 43 95573.1
accrue on any portion of such a refund. Provided further that if licensee should request a refund
of all or any remaining portion of the alternative license fee, the regular gross license tax
schedule set forth in Section 9.44.170 shall become effective immediately.
C. The alternative gross license tax schedule provided for in this section may be increased
or decreased from time to time by resolution of the Common Council and shall initially be as
follows:
TOTAL MONTHLY GROSS REVENUE MONTHLY GROSS
REVENUE LICENSE TAX
(1) up to $500,000 4%
(2) $500,00 but less than $2,500,000 $16,000 plus 9.5% of excess
over $500,000
(3) $2,500,000 but less than $5,000,000 $206,000 plus 11% of excess
over $2,500,000
(4) $5,000,000 but less than $7,500,000 $481,000 plus 12.5% of
excess over $5,000,000
(5) $7,500,000 or more $793,500 plus 13.2_% of
excess over $7,500,000
Section 9.44.190. Second alternative gross license tax. In the event that
licensee completes a fully sixty months using the alternative gross license tax schedule provided
for in subsection (3) above, without applying for a refund of all or any portion of the alternative
license tax, then the second alternative gross license tax schedule set forth below shall become
effective. The licensee shall be permanently eligible to use this second alternative gross license
tax schedule set forth below instead of the tax schedule provided for in Section 9.44.170. The
u01 \6345\25023.4
44 95573.E
second alternative gross license tax schedule which may be amended from time to time by
resolution adopted by the Common Council shall initially be as follows:
TOTAL MONTHLY GROSS REVENUE MONTHLY GROSS
REVENUE LICENSE TAX
(1) up to $500,000 10%
(2) $500,00 but less than $2,500,000 $40,000 plus 11% of excess
over $500,000
(3) $2,500,000 but less than $5,000,00 $260,000 plus 12% of excess
over $2,500,000
(4) $5,000,000 but less than $7,500,000 $560,000 plus 13% of excess
over $500,000
(5) $7,500,000 or more $885,000 plus 14% of excess
over $7,500,000
Section 9.44.200 Records, reports and supplemental information. A. Each
licensed establishment shall make and maintain complete, accurate and legible records of all
transactions pertaining to revenue subject to taxes and fees imposed by this chapter. Such
records shall include but not be limited to a general ledger maintained in accordance with
generally accepted accounting principles, together with appropriate supporting records such as
cash receipts and disbursements logs and journals, payroll journal, canceled checks, and original
paid invoices. Such general ledger shall be maintained in a fashion suitable for producing
financial statements in accordance with generally accepted accounting principles. Such records
shall be maintained for at least three (3) 12-month fiscal years and shall be maintained on the
premises of the licensed card club and made available for examination and copying by the City
or its designee, except there is no obligation to retain bar and restaurant patron tickets.
LA01 \6345\75023.4 45 95573.1
B. In the event information requested of a licensee can be furnished only by someone other than
the licensee (such as a landlord, supplier or an accountant), the licensee shall make every bona
fine effort to obtain such information as requested and furnish the same or have it furnished
directly by the person who has the information available.
C. In addition to such other information and data required by this regulation, each licensed
establishment shall maintain the following:
(1) If a partnership or corporation:
(a) A Schedule showing the dates of capital contributions, loans or
advances, the names and addresses of the contributors and percentage or ownership interest held
of record by each.
(b) A record of the withdrawals or distributions of funds or assets, to
partners or stock holders.
(c) A record of salaries paid to each partner, stockholder and key
management employees.
(d) A copy of the partnership or corporate agreement, certificate of
limited partnership and accurate corporate stock transfer book if applicable.
(e) Copies of any and all public filings required by the Securities
Exchange Commission.
(2) If a sole proprietorship:
(a) A schedule showing the name and address of the proprietor and the
amount and date of his original investment.
LA01 \6345\25023.4 46 95573.1
(b) A record of subsequent additions thereto and withdrawals
therefrom.
(3) The records required to be kept by this regulation shall be in ink or any
other permanent form of recordation.
D. Access to records and facilities.
(1) Notwithstanding the audit requirements specified in Section 9.44.210 of
the chapter, the licensee shall allow the Mayor or City Administrator or his designee unrestricted
access to all book, records, and facilities pertaining to the card club, including but not limited
to cash counting rooms. Any information obtained pursuant to this Section or any statement
filed by the licensees or permittees shall be deemed confidential in character and shall not be
subject to public inspection except in connection with the enforcement of the provisions of this
chapter. It shall be the duty of the Mayor or City Administrator to preserve and keep such
statements so that the contents thereof shall not become known except to the persons charged
by the law with the administration of the provisions of this chapter or pursuant to the order of
any court of competent jurisdiction.
(2) Any failure or refusal of any permittee or licensee to make and file any
statement as required within the time required, or to permit inspection of such books, records,
accounts and reports, of such permittee or licensee in accordance with the provisions of this
chapter shall be and constitute full and sufficient grounds for the revocation or suspension of the
permit and licenses of any such permittee or licensee in the sole discretion of the Common
i
Council.
LA01 \6345\25023.4 47
95573.1
Section 9.44.210. Rules and Regulations. The Common Council may from time to time enact
rules and regulations governing the operation of card clubs and the activity conducted in card
clubs by patrons. Such rules and regulations include, but are not limited to, the following:
Rule No. 1. Acceptance of a permit or license issued under the provisions of this
chapter shall be deemed to be acceptance of and agreement to be bound b and observe each and
P P g Y
all of the terms conditions and provisions of this chapter and of the rules and regulations
established thereby relating to such permits and licenses.
Rule No. 2. No permittee, licensee or other individual in charge or control
I
thereof shall use, operate or permit the use of more tables or units than those for which licensee
holds then current and valid authorization too operate r
too use in the City and for which h
Pe Y
c to
prescribed license fee has been paid to the City.
Rule No. 3. No permittee, licensee or other individual in charge or control of
any card club operating under any license held or issued pursuant to the provisions of this
chapter during any time that such license or permit issued by the City has been or is suspended
or revoked.
Rule No. 4. Each and all of the games conducted or operated in the City pursuant
to the provisions of this chapter shall be conducted and operated in full conformity with, and
subject to, all the provisions of the laws of the State and of the City.
Rule No. 5. No permittee or licensee holding a permit or license pursuant to the
provisions of this chapter, and no agent, representative or employee of the licensee and no other
person in charge or control of any such licensed premises, game or authority shall:
LA01 \6345\25023.4 48 95573.1
(a) Permit or allow any person under the age of eighteen (18) years to
play any of the games authorized by the card club license.
(b) Permit or allow any person under the age of eighteen (18) years at
any time to be in the card playing area.
(c) Permit or allow the playing of any card games other than those
specifically authorized by the card club license or permit any form of unlawful gambling to
occur anywhere on the card club premises.
(d) Permit or allow any person other than players and card club
employees holding valid registration cards in the card playing area. Spectators and those waiting
to play shall be excluded from the card playing area in a manner acceptable to the Chief of
Police.
Rule No. 6. If shall be unlawful for any individual player or other unauthorized
person to enter any secure areas within the premises or for any operator, agent or employee of
any duly licensed card club to permit any player or unauthorized person to enter any secure
areas within the card club premises.
Rule No. 7. The card club, including the entire premises, shall be open for
inspection during all hours to the Chief of Police, or his duly authorized representatives without
a search warrant.
Rule No. 8. The playing of all games provided for in this chapter shall be
confined to designated "card playing areas." No card gambling shall be permitted in any
restaurant or lounge.
LA01 \6345X25023.4 49 95573.1
Rule No. 9. The Common Council may by resolution establish a minimum table
rental fee schedule for all permitted games.
Rule No. 10. All "card playing areas" shall be accessible to all patrons.
Rule No. 11. All players financed either in whole or in part by the house may
be required to wear an insignia or identifying badge if deemed necessary by the Chief of Police.
Rule No. 12.
(a) For the purposes of this Ordinance and Rule, the words and phrases
hereinafter set forth shall have the following meanings ascribed to them unless the context
clearly requires to the contrary:
(1) "Blind cut" or "false cut" shall mean a maneuver which
appears to cut the deck, but does not in fact do so.
(2) "Blind shuffle" shall mean to false shuffle or to give the
deceptive impression of intermixing playing cards, while actually retaining the same sequence
of all or a group of cards.
(3) "Burn" is a discard in accordance with the rules of the
game, made before the draw when playing draw poker.
(4) "Capping the deck" shall mean to place cards on to the top
of the deck.
(5) "Cheating" shall mean, in addition to those acts defined
herein, any and all undefined acts of fraud, misrepresentation, dishonesty or manipulation of
cards done with the purpose of defrauding or gaining an unfair advantage over another player
whether or not an actual advantage is gained.
LA01 \6345\25023.4 50 95573.1
(6) "Cooler" shall mean a deck of cards, secretly prearranged
in a known sequence or marked to be substituted for the deck in play.
(7) "Daubing" shall mean to mark cards by applying a faintly
visible substance to the back of the cards.
(8) "Second dealing" or "seconds" shall mean to deal a card
which is second from the top of the deck.
(9) "Hand mucking" shall mean the surreptitious switching of
cards for those that are dealt to a player.
(10) "Hold-out" shall mean a mechanical device used for the
purpose of surreptitiously switching or retaining cards.
(11) "Hopping the cut" shall mean to surreptitiously nullify the
cutting of the deck.
(12) "Middle dealing" shall mean to deal a card from the center
of the deck.
(13) "Playing Partners" shall mean any scheme or action in which
two or more players act in concert to communicate information or to otherwise act for the
purpose of defrauding or gaining an unfair advantage over another player, whether or not an
actual advantage is gained.
(14) "Punching" shall mean to mark the back of the cards by
creating a dimple or indentation thereon.
(15) "Roughing Fluid" shall mean a liquid chemical applied to
the back of the cards for the purpose of marking them by roughing the surface.
i
LA01 \6345\25023.4 51 95573.1
(16) "Run-up" or "stacking" or "stocking" shall mean to shuffle
the cards in such a fashion as to surreptitiously arrange the sequence to known cards.
(17) "Shiner" shall mean a mirror or other reflecting device used
for the purpose of enabling a player to see cards which the player is not entitled to see under
the rules of the game being played.
(18) "Slick sleeve" or "mohair sleeve" shall mean a long sleeve
on a clothing garment to assist in holding out a playing card.
(19) "Slug" shall mean a group of cards.
(20) "Transmitter" shall mean an electronic or radio device used
for the purpose of transmitting signals or information to another player, who receives such
signals or information by use of a "receiver."
(21) "White flash" shall mean a form of daubing whereby a
chemical is used to create a "white on white" marking on the back of the cards.
(b) No cheating shall be permitted or tolerated by any licensee,
permittee or employee. All individuals caught cheating in the establishment shall be reported
to the appropriate law enforcement authorities and the licensee shall cooperate fully in the
prosecution of all individuals who are criminally charged with cheating in the licensed
establishment. Cheating devices shall be confiscated and shall not be returned to the individual
or persons using or bringing such devices on the premises whether or not the offender is arrested
or prosecuted. Permitting or tolerating cheating shall be grounds for immediate suspension or
revocation of card club license or imposition of additional conditions.
LA01 \6345\25023.4 52
95573.1
I
(c) It shall be unlawful for any individual as a player or dealer to deal,
draw distribute or burn any playing cards other than the top card of the deck. The "top card"
is defined as the uppermost face down card of the face down deck. It shall, therefor be unlawful
to deal or cause to be dealt what is known as a second, bottom or to engage in Greek dealing
or middle dealing.
(d) It shall be unlawful for any individual as a player, dealer, employee
or agent to shuffle or cause to be shuffled any playing cards that are to be used or are being
used in a licensed card game, other than in a random manner. It shall be unlawful to
predetermine, or to prearrange the sequence of playing cards by value or suit, or to retain or
hold back a card or cards either individually, or as a group or slug as an effort to circumvent
a random mixing of the playing cards. Any blind shuffle, run-up, stacking or stocking of the
deck to gain an unfair advantage in play, whether or not an advantage is gained, is unlawful.
(e) It shall be unlawful for any patron or any other person not a
permittee or licensee to brin g Y cards into a card club. It shall be unlawful for an person other
than a permittee, licensee, authorized employee or a patron then playing cards to have playing
cards in his or her possession while in a card club. It shall be unlawful for any person in a card
club other than on-duty employees with valid registration cards to have playing cards in his or
her possession outside of a designated card playing area.
(f) It shall be unlawful for any player or dealer to palm, hold-out or
conceal any card or cards during a card game, whether by sleight of hand, mechanical apparatus,
or by clothing such as a slick sleeve. It shall also be unlawful for any individual, player or
dealer to switch, exchange or cause to be exchanged any playing card, or cards, as a means of
LA01 \6345\25023.4 53 95573.1
deception. The deceptive practices known as hand mucking, capping the deck, introducing
additional cards into a game, or switching the deck with a "cooler" are prohibited.
(g) It shall be unlawful for any individual to use any technique in a
card game, designed to accomplish a "blind" or false cut, or to use a fraudulent technique to
nullify a cut once performed by a player, or to influence or indicate to another individual to cut
the deck at a specific location.
(h) It shall be unlawful for any individual, player or dealer to
deliberately mark or alter any card or card when there is a likelihood that such cards will be
used in a licensed game, or when such cards are in play. It shall be unlawful to knowingly use
any altered or marked cards in a card game. "Marking and altering" as used herein include
sanding, daubing, white flash, white on white, punching, adding to, removing from or blocking
out, the existing design whether on the face, backside or edge of any card or cards. Any
deliberate crimping, warping, bending, cutting, trimming, shaving or alteration by any means
that would or may cause an advantage for any player over other players, whether or not such
advantage is gained, is unlawful.
(i) It shall be unlawful for any individual to use any mechanical or
electrical apparatus or other devise so as to gain any advantage or to gain information that would
enable a player or dealer to deceive others. Such devices include, but are not limited to, hold-
outs, table bugs, shiners, transmitters,receivers, puncher, chemical solutions, shading, roughing,
fluids, inks or dyes.
0) It shall be unlawful for any individual to play partners or to
knowingly aid or abet another in any cheating action prohibited by this Ordinance.
LA01 \6345\25023.4 54 95573.1
(k) It shall be unlawful for any individual or group to use any of the
cheating techniques prohibited by this Ordinance, or to cheat in any manner whatever, whether
or not such techniques are specifically defined or are successful. The licensee or management
shall immediately notify the Police Department upon the detection of any individuals suspected
of cheating.
(1) It shall be the responsibility of the licensee, management and their
employees to fully cooperate with card game surveillance and protection personnel in the
detection, apprehension and identification of those individuals involved in cheating or fraudulent
practices. Management shall retain and deliver to the Police Department as evidence in arrest
or detention all playing cards and implements suspected of involvement in cheating.
Management shall cooperate with card club surveillance personnel whether provided by a
governmental policing agency, a city-contracted service, city-administered or licensee-assigned.
(m) The Police Department upon being notified by card room personnel
or game surveillance personnel that an individual or individuals are being detained for cheating
at play shall respond to the card room. The Police Department shall ascertain the identity of
those involved in the cheating, the circumstances involved and decide what police action, if any,
is deemed appropriate. The Police Department shall assist as legally required in any citizen's
arrest.
(n) The licensee shall cause these rules to be reproduced and available
in the licensed premises.
(o) It shall be unlawful for any permittee, licensee or other person to
violate any of the rules or regulations set forth in this chapter.
LA01 \6345\25023-4\ 55 95573.1
(p) The Common Council reserves the right to add to, amend or repeal
any of these rules and regulations, and to adopt additional rules and regulations.
(c) The Common Council further reserves the right to adopt by
resolution additional emergency rules and regulations which shall become effective immediately
upon adoption, and the violation of any such emergency rules and regulations may constitute
grounds for the suspension and revocation of the permits and licenses issued pursuant to the
provisions of this chapter.
Section 9.44.220 Unlawful acts.
A. Unlawful locations. It shall be unlawful for any individual to play, or permit the playing
of, any game regulated or referred to by the provisions of this chapter at any place within the
City, except a place operated under a license held or issued pursuant to the provisions of this
chapter, and operated, owned, controlled and directed by pointholder and key management
employees issued permits pursuant to the provisions of this chapter.
B. Unlawful games. The only lawful games permitted are draw poker, low ball poker and
panguingue and such other games not made unlawful by state law, played on the premises of
duly licensed card clubs and permitted by their license.
LA01 \6345\25023.4 56
95573.1
C. Unlawful interest. It shall be unlawful for any City employee or City official to directly
or indirectly own, operate or have any interest, legal or equitable, in any card club or card club
license. It shall be unlawful for any City employee of City official to directly or indirectly
conduct business with or be employed in any manner whatever by a card club or card club
licensee.
For purposes of this Section 9.44.220 indirect performance of any prohibited act
shall include but not be limited to the performance of such prohibited act by the spouse or other
person related by blood or marriage to any party prohibited form directly performing such act.
For purposes of this Section 9.44.220, the term "conduct business" shall include
but not be limited to the provision of loans or any other form of financing, sale or lease of any
real or personal property, and the provision of any services, supplies, goods or materials, but
shall not include the conduct of business as a patron or customer in manner available to the
general public.
Section 9.44.230 Penalties. Any individual violating any of the provisions of this chapter or any
of the rules and regulations set forth, established or promulgated in this chapter shall be guilty
of a misdemeanor.
Section 9.44.240 Severability. It is hereby declared to be the intention of the Common Council
that the sections, paragraphs, sentences, clauses and phrases of this Ordinance are severable, and
LA01 \6345\25023.4 57
95573.1
i
if any phrase, clause, sentence, paragraph or section of this Ordinance shall be declared invalid
by the valid judgment or decree of a court or competent jurisdiction, such invalidity shall not
affect any of the remaining phrases, clauses, sentences, paragraphs and sections of this
Ordinance."
SECTION 2: This Ordinance is an emergency ordinance in that there are serious financial
implications which could result from delay and could therefore affect the public peace, health,
safety, comfort, convenience and general welfare of the City of San Bernardino, its citizens and
the general public, and the same shall therefore take effect and be in full force immediately upon
the final passage and adoption thereof, as provided in the City Charter.
SECTION 3: Within fifteen (15) days after its passage, the City Clerk shall cause this
Ordinance to be published at least once in a newspaper of general circulation published and
circulated in the City of San Bernardino pursuant to the City Charter; and immediately upon
final passage and adoption this Ordinance shall be in full force and effect.
LA01 \6345\25023.4 58 95573.1
ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING CHAPTER 9.44 OF
THE SAN BERNARDINO MUNICIPAL CODE TO PROVIDE FOR THE PERMITTING
AND LICENSING OF GAMING CARD CLUBS WITHIN THE CITY AND TO DECLARE
SUCH ORDINANCE TO BE AN EMERGENCY ORDINANCE.
I HEREBY CERTIFY that the foregoing ordinance was duly adopted by the
Mayor and Common Council of the City of San Bernardino at a meeting
thereof, held on the day of , by the following vote, to wit:
Council Members: AYES NAYES ABSTAIN ABSENT
City Clerk
The foregoing ordinance is hereby approved this day of ,
I
Mayor
City of San Bernardino
Approved as to form
and legal content:
City Attorney
By:
LA01 \6345\25023.4 59 95573.1
MUDGE ROS,- GUTHRIE ALEXANDER & a-ERDON LLP
DRAFT
333 SOUTH GRAND AVENUE
LOS ANGELES, CALIFORNIA 90071
(213) 613-1112
MEMORANDUM
FOR: James Penman, Esq. , September 27, 1995
City/EDA Attorney
Ms. Rachel Clark,
City Clerk
Timothy J. Sabo, Esq. ,
City/EDA Special and Bond Counsel
CC: Mr. Tom Minor,
Mayor/EDA Chairman
Ms . Lorraine Velarde,
Assistant to the Mayor
Mr. Timothy Steinhaus,
Agency Administrator
Steven Dzida, Esq. ,
Partner, Jackson, DeMarco & Peckenpaugh
Jeffrey Kinsell,
President, Rounding Third, LLC
Aaron Hodgdon,
President, Double Eagle Sports Internationale
RE: Permissibility of Private Party Paying for Expenses of
Special Election for City of San Bernardino.
Background
The Redevelopment Agency of the City of San Bernardino
(the "Agency) and Rounding Third, LLC ( "Rounding Third") have
entered into an Exclusive Negotiating Agreement dated May 15, 1995
(the "Agreement" ) , under which, pursuant to Section 4 of the
Agreement, the Agency agreed to assist Rounding Third in requesting
the City of San Bernardino to take all actions necessary to call
and hold, at Rounding Third' s expense, a special election to
authorize gaming in the City of San Bernardino.
Issue
May Rounding Third, a private entity, pay for, directly
or indirectly, the City of San Bernardino' s expenses for holding a
special election?
LA01 \6345\25271.1 95573.1
I
Analysis
We have found nothing in the California Code which
would prohibit Rounding Third from paying for the expenses of
holding a special election. In addition, discussions with the
California Secretary of State' s Elections Division indicated that
they were not aware of any legal prohibition against private
entities reimbursing or paying for a city' s expenses for holding an
election.'
The only potentially applicable statutory provision
that was found is California Elections Code §13001 (a) , which
provides the following:
. all expenses, authorized and necessarily
incurred in the preparation for and conduct of
elections as provided in this code . . . shall be paid
from the treasury of the city. All payments shall be
made in the same manner as other city
expenditures are made .
Based upon §13001, cities governed by the California Code are
required to pay for the expenses of an election. In addition,
based upon the last sentence of the text above, such expenditure
must not be made other than in the manner that payments are
generally made by a city. However, §13001 (a) does not prohibit an
arrangement whereby a city, upon making payments for election
expenses, is reimbursed by a private entity for such incurred
election expenses.
Further, even if §13001 (a) was interpreted to somehow
limit the ability of entities other than a city to pay for
elections, it is not applicable to a charter city, such as the City
of San Bernardino, if the charter does not restrict such payments .
This is true because matters pertaining to the conduct and
regulation of elections are express municipal affairs under
California Constitution, art . XI, §5 . As such, when there are
conflicts between local ordinances and state statutes, the local
ordinances prevail .
An examination of the City of San Bernardino Charter
and the City of San Bernardino Municipal Code did not reveal any
regulations governing the payment of expenses for an election. As
such, if California Elections Code §13001 is interpreted to limit
the City, the City could adopt an ordinance which allows for
' Pursuant to telephone conversations with Ms. Pam Giarrizzo,
an attorney in the legal department of the Elections Division of
the Secretary of State' s office, at (916) 657-2166 .
LA01 \6345\25271.1 2 95573.1
entities other than the City to pay for election expenses.' Once
this has been done, Rounding Third should be authorized to pay or
reimburse the City for the expenses of holding a special election.
2 The existence of a charter provision, municipal code
provision or resolution that expressly provides for private
entities to pay for election expenses if §13001 was interpreted to
limit such activity is necessary. This necessity arises because
§2 .56 . 001 of the San Bernardino Municipal Code requires that
special elections must be conducted pursuant to general law unless
the charter, an ordinance, or resolution provide otherwise.
LA01 \6345\25271.1 3 95573.1
MUDGE Rost GUTHRIE ALEXANDER & r-ERDON LLP
DRAFT
MEMORANDUM
FOR: James Penman, Esq. , September 27, 1995
City/EDA Attorney
Ms. Rachel Clark,
City Clerk
Timothy J. Sabo, Esq. ,
City/EDA Special and Bond Counsel
CC: Mr. Tom Minor,
Mayor/EDA Chairman
Ms. Lorraine Velarde,
Assistant to the Mayor
Mr. Timothy Steinhaus,
Agency Administrator
Steven Dzida, Esq. ,
Partner, Jackson, DeMarco & Peckenpaugh
Jeffrey Kinsell,
President, Rounding Third, LLC
Aaron Hodgdon,
President, Double Eagle Sports Internationale
RE: Circumstances under which courts have approved a legislative
body's enactment of an ordinance on an urgency basis.
An ordinance, enacted on an urgency or emergency basis,
takes effect immediately upon enactment by the public body.
Generally, an emergency has been defined to involve unforeseen
circumstances calling for immediate action to prevent harm.
The following are examples of when an urgency or
emergency has been found to exist authorizing the enactment of an
urgency ordinance in California.
Northaate Partnership v. City of Sacramento, 154 Cal. App.3d 65
(1984)
Facts: An ordinance raising taxes was enacted on an urgency
basis prior to Proposition 13 taking effect.
Holding: The need to provide for payment of the city's expenses
and to mitigate the revenue loss likely to result from
Proposition 13 was sufficient to support the use of
urgency procedures. This urgency was especially
apparent because the ordinance could not have been
effectively enacted in time if ordinary procedures were
utilized.
LA01 \6345\24989.2 95573.1
In re Park Beyond the Park, 157 Bankr. 887 (1993)
Facts: An ordinance regulating the number of parking spots per
square foot of development was enacted on an urgency
basis.
Holding: Because lack of such ordinance will have an adverse
impact on traffic, on street parking, and on
residential neighborhoods, it was held that there was
an immediate threat to the public peace, health, safety
and general welfare.
Potter v. City of Compton, 59 P. 540 (1936) .
Facts: An ordinance creating a civil service board was enacted
on an urgency basis.
Holding: It was held that the council may have determined there
to be a risk of unrest and impairment of service unless
actions were taken to allay the concerns of city
employees, thereby supporting the need to enact the
ordinance on an urgency basis.
Crown Motors v. City of Redding, 232 Cal.App. 3d 176 (1991)
Facts: Crown Motors was close to securing approval on an
advertising sign for its business. The city enacted an
ordinance, on an urgency basis, prohibiting such
approval unless certain measures and standards were
followed.
Holding: It was found that Crown Motors would have obtained
approval to erect the sign unless the ordinance was
enacted on an urgency basis. The court also supported
the right for the city to place adequate standards for
the development and erection of such signs.
Ex Parte Statham, 187 P. 986 (1920) (2nd Dist. Court of Appeal)
Facts: An old ordinance regulating solicitations of custom and
patronage had been repealed leaving no regulation in
place. A new ordinance, therefore, was enacted
regulating this subject on an urgency basis.
Holding: It was held that the potential disturbance of the peace
and safety of the general public until a new ordinance
was enacted supported the urgency measure.
Sonoma County Organization of Public/Private Employees v County of
Sonoma, 1 Cal.App.4th 267 (1991)
Facts: The county was under labor unrest. The county enacted,
on an urgency basis, an ordinance allowing for
LA01 \6345\24989.2 2
95573.1
management to place employees on administrative unpaid
absences.
Holding: It was found that the labor unrest was creating
problems and risk of harm to patients at the health
care facilities where work stoppages were occurring,
thereby supporting a need to enact the ordinance on an
urgency basis.
LA01 \6345\24989.2 3 95573.1
The attached ordinance makes the following changes to the existing
San Bernardino Municipal Code:
(1) Amends 52.56.170 so that special elections may be
held after 78 days from the call of the special
election, as opposed to the current requirement of
90 days. Such amendment would allow for a special
election that is called on October 2, 1995 to be
held on December 19, 1995.
(2) Adds 52.56.176 which provides the City with the
ability to cancel a called special election 15 days
before it is held (such time frame will allow a
decision to cancel an all mail ballot election
prior to the ballots being sent out) .
The attached ordinance also contains urgency language to allow for
it to become effective immediately.
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING
SECTION 2.56.170 OF AND ADDING SECTION 2.56.176 TO THE SAN
BERNARDINO MUNICIPAL CODE RELATING TO CALLING AND CANCELING SPECIAL
ELECTIONS AND TO DECLARE SUCH ORDINANCE TO BE AN EMERGENCY
ORDINANCE.
WHEREAS, on May 15, 1995, the Redevelopment Agency of the
City of San Bernardino entered into an agreement (the "Agreement")
with Rounding Third, LLC ("Rounding Third") ; and
WHEREAS, pursuant to the Agreement, if the citizens of
the City of San Bernardino (the "City") approve the operation of
card clubs within the City and if the City approves a card club
license for Rounding Third, the City will be provided with funding
and revenue capability to implement the development of the public
improvements necessary, but not limited to, the San Bernardino
Downtown Plan, which improvements are of vital importance to the
City's socio-economic well-being; and
WHEREAS, the State of California has approved S.B. 100
which precludes the holding of any election by the voters to
approve the operation of card clubs on or after January 1, 1996;
and
WHEREAS, Section 2.56.170 of the San Bernardino Municipal
Code requires that at least ninety days elapse between the time a
special election is called and the time such special election may
be held, which requirement would not allow the City to hold a
special election before January 1, 1996, which therefore would
prevent the citizens of the City from voting to approve the
operation of card clubs; and
WHEREAS, if the citizens cannot vote to approve the
operation of card clubs in the City, the City will not receive the
funding and revenue capability to implement the development of the
public improvements necessary, but not limited to, the San
Bernardino Downtown Plan, which improvements are of vital
importance to the City's socio-economic well-being; and
WHEREAS, the City of San Bernardino wishes to provide the
opportunity for its citizens to approve by special election the
operation of card clubs.
NOW THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO DO ORDAIN AS FOLLOWS:
SECTION 1. Section 2.56.170 of the San Bernardino
Municipal Code is hereby amended to read as follows:
112 .56. 170 Special Elections
The Mayor and Common Council shall call a
special election to be held on a Tuesday, not
less than seventy-eight (78) nor more than one
hundred thirty-five (135) days following such
call. If an established election date set by
Section 10 of the Charter of the City of San
Bernardino or Elections Code §1000 falls
within that time period, such special election
shall be held on that date. Two or more
special elections of the City may be combined
into one election. If the special election
held does not involve filling a vacancy on the
Council, the special election may be canceled
prior to the established election date as
provided in Section 2 . 56. 176. If the special
election is held to fill a vacancy on the
Council, it shall be called prior to an
anticipated vacancy or within thirty (30) days
after such vacancy. In such cases, the
election shall be held not less than seventy-
eight (78) nor more than one hundred thirty-
five (135) days following such vacancy. Any
such special election so called shall be held
in compliance with the provisions of the
Charter and applicable ordinances of the City.
Unless the election is not held as provided in
Section 2.56. 175, the candidate receiving the
plurality of votes cast at such special
election shall be elected to fill the vacancy.
Notwithstanding any other provision of general
law, the procedural and time limit
requirements for holding special elections
provided in this Section shall govern and the
City Clerk is authorized to adjust other time
limits or procedural requirements as is
necessary so that all such limits and
requirements may be satisfied within the time
available between the calling and holding of
the special election. "
SECTION 2. Section 2.56. 176 is hereby added to the San
Bernardino Municipal Code to read as follows:
112 .56. 176 Special Election for purposes other
than filling vacancy in office; cancellation
If, by 5 P.M. on the 15th day before a
municipal election that does not involve
filling a vacancy on the Common Council, the
Mayor and the Common Council determine that
the purposes for holding such municipal
election are no longer applicable and that
holding such municipal election is no longer
necessary, the Mayor and the Common Council
may, at a regular or special meeting held
before the municipal election, direct that
such municipal election not be held.
The City Clerk shall publish a notice of
the facts of why a municipal election is no
longer deemed necessary. Publication shall be
made pursuant to Section 6061 of the
Government Code in any newspaper of general
circulation as designated by the Clerk. "
SECTION 3. This Ordinance is an emergency ordinance in
that the State has adopted S.B. 100, which precludes the holding of
an election to obtain voter approval for a card club on or after
January 1, 1996, which will deny the citizens of the City of San
Bernardino the opportunity to vote on such issue and that there are
serious financial implications which could result from such delay,
including the impairment of funding and revenue raising capability
to implement the necessary improvements with respect to, but not
limited to, the San Bernardino Downtown Plan, and could therefore
affect the public peace, health, safety, comfort, convenience and
general welfare of the City of San Bernardino, its citizens and the
general public, and the same shall therefore take effect and be in
full force immediately upon the final passage and adoption thereof,
as provided in the City Charter.
ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING SECTION 2.56.170
OF AND ADDING SECTION 2.56.176 TO THE SAN BERNARDINO MUNICIPAL CODE
RELATING TO CALLING AND CANCELING SPECIAL ELECTIONS AND TO DECLARE
SUCH ORDINANCE TO BE AN EMERGENCY ORDINANCE.
I HEREBY CERTIFY that the foregoing ordinance was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a meeting thereof, held on the
day of by the following vote, to wit:
Council Members: AYES NAYES ABSTAIN AB.SENr
City Clerk
The foregoing ordinance is hereby approved this day
of ,
Mayor
City of San Bernardino
Approved as to form
and legal content
City Attorney
By:
The attached ordinance makes the following changes to the existing
San Bernardino Municipal Code:
(1) Amends §2.56.170 so that special elections may be
held after 78 days from the call of the special
election, as opposed to the current requirement of
90 days. Such amendment would allow for a special
election that is called on October 2, 1995 to be
held on December 19, 1995.
(2) Amends §2.56.171 so that the City may hold an all-
mailed ballot election for any issue pursuant to
Elections Code §§4101 and 4103 , not just those
issues pertaining to vacancies on the Common
Council.
(3) Adds §2.56.176 which provides the City with the
ability to cancel a called special election 15 days
before it is held (such time frame will allow a
decision to cancel an all mail ballot election
prior to the ballots being sent out) .
The attached ordinance also contains urgency language to allow for
it to become effective immediately.
p -
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING
SECTION 2.56.170 OF AND ADDING SECTION 2.56.176 TO THE SAN
BERNARDINO MUNICIPAL CODE RELATING TO CALLING AND CANCELING SPECIAL
ELECTIONS AND TO DECLARE SUCH ORDINANCE TO BE AN EMERGENCY
ORDINANCE.
WHEREAS, on May 15, 1995, the Redevelopment Agency of the
City of San Bernardino entered into an agreement (the "Agreement")
with Rounding Third, LLC ("Rounding Third") ; and
WHEREAS, pursuant to the Agreement, if the citizens of
the City of San Bernardino (the "City") approve the operation of
card clubs within the City and if the City approves a card club
license for Rounding Third, the City will be provided with funding
and revenue capability to implement the development of the public
improvements necessary, but not limited to, the San Bernardino
Downtown Plan, which improvements are of vital importance to the
City's socio-economic well-being; and
WHEREAS, the State of California has approved S.B. 100
which precludes the holding of any election by the voters to
approve the operation of card clubs on or after January 1, 1996;
and
WHEREAS, Section 2. 56. 170 of the San Bernardino Municipal
Code requires that at least ninety days elapse between the time a
special election is called and the time such special election may
be held, which requirement would not allow the City to hold a
special election before January 1, 1996, which therefore would
prevent the citizens of the City from voting to approve the
operation of card clubs; and
WHEREAS, if the citizens cannot vote to approve the
operation of card clubs in the City, the City will not receive the
funding and revenue capability to implement the development of the
public improvements necessary, but not limited to, the San
Bernardino Downtown Plan, which improvements are of vital
importance to the City's socio-economic well-being; and
WHEREAS, the City of San Bernardino wishes to provide the
opportunity for its citizens to approve by special election the
operation of card clubs.
I
NOW THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO DO ORDAIN AS FOLLOWS:
SECTION 1. Section 2.56. 170 of the San Bernardino
Municipal Code is hereby amended to read as follows:
"2.56. 170 Special Elections
The Mayor and Common Council shall call a
special election to be held on a Tuesday, not
less than seventy-eight (78) nor more than one
hundred thirty-five (135) days following such
call. If an established election date set by
Section 10 of the Charter of the City of San
Bernardino or Elections Code §1000 falls
within that time period, such special election
shall be held on that date. Two or more
special elections of the City may be combined
into one election. If the special election
held does not involve filling a vacancy on the
Council, the special election may be canceled
prior to the established election date as
provided in Section 2.56. 176. If the special
election is held to fill a vacancy on the
Council, it shall be called prior to an
anticipated vacancy or within thirty (30) days
after such vacancy. In such cases, the
election shall be held not less than seventy-
eight (78) nor more than one hundred thirty-
five (135) days following such vacancy. Any
such special election so called shall be held
in compliance with the provisions of the
Charter and applicable ordinances of the City.
Unless the election is not held as provided in
�rrr� "vim
Section 2.56. 175, the candidate receiving the
plurality of votes cast at such special
election shall be elected to fill the vacancy.
Notwithstanding any other provision of general
law, the procedural and time limit
requirements for holding special elections
provided in this Section shall govern and the
City Clerk is authorized to adjust other time
limits or procedural requirements as is
necessary so that all such limits and
requirements may be satisfied within the time
available between the calling and holding of
the special election. "
SECTION 2. Section 2 .56. 171 of the San Bernardino
Municipal Code is hereby amended to read as follows:
112 . 56. 171 Special Elections; alternate
procedure
The Common Council may, as an alternative
to the procedure outlined in Section 2 .56. 170,
call a special election to be held on a
Tuesday, within the time limits set by Section
2 . 56. 170 to be conducted wholly by mail
ballots. Such election shall be conducted in
accordance with the provisions of Sections
4101 and 4103 of the Elections Code of the
State of California. "
SECTION 3. Section 2.56. 176 is hereby added to the San
Bernardino Municipal Code to read as follows:
112.56. 176 Special Election for purposes other
than filling vacancy in office; cancellation
If, by 5 P.M. on the 15th day before a
municipal election that does not involve
filling a vacancy on the Common Council, the
Mayor and the Common Council determine that
the purposes for holding such municipal
election are no longer applicable and that
holding such municipal election is no longer
necessary, the Mayor and the Common Council
may, at a regular or special meeting held
before the municipal election, direct that
such municipal election not be held.
The City Clerk shall publish a notice of
the facts of why a municipal election is no
longer deemed necessary. Publication shall be
made pursuant to Section 6061 of the
Government Code in any newspaper of general
circulation as designated by the Clerk. "
SECTION 4. This Ordinance is an emergency ordinance in
that the State has adopted S.B. 100, which precludes the holding of
an election to obtain voter approval for a card club on or after
January 1, 1996, which will deny the citizens of the City of San
Bernardino the opportunity to vote on such issue and that there are
i
serious financial implications which could result from such delay,
including the impairment of funding and revenue raising capability
to implement the necessary improvements with respect to, but not
limited to, the San Bernardino Downtown Plan, and could therefore
affect the public peace, health, safety, comfort, convenience and
general welfare of the City of San Bernardino, its citizens and the
general public, and the same shall therefore take effect and be in
full force immediately upon the final passage and adoption thereof,
as provided in the City Charter.
ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING SECTION 2.56.170
OF AND ADDING SECTION 2.56.176 TO THE SAN BERNARDINO MUNICIPAL CODE
RELATING TO CALLING AND CANCELING SPECIAL ELECTIONS AND TO DECLARE
SUCH ORDINANCE TO BE AN EMERGENCY ORDINANCE.
I HEREBY CERTIFY that the foregoing ordinance was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a meeting thereof, held on the
day of by the following vote, to wit:
Council Members: AYES NAYES ABSTAIN ABSFNr
City Clerk
The foregoing ordinance is hereby approved this day
of ,
Mayor
City of San Bernardino
Approved as to form
and legal content
City Attorney
By:
Off' NAR
O '
v J
HAD IN
CITY OF SAN BERNARDINO
OFFICE OF THE CITY ATTORNEY
JAMES F. PENMAN
City Attorney
Opinion No. 95-09
September 25, 1995
TO: Mayor Tom Minor
RE: Necessity of Holding an Election to Authorize Card Rooms within the City
ISSUE
The question has been presented whether the Mayor and Common Council of the City of San
Bernardino can adopt an ordinance allowing card rooms within the City without the necessity of
putting the matter to a vote of the people, as specifically required by state law.
CONCLUSION
The City of San Bernardino, even under its charter powers, may not authorize card rooms
within the city without a vote of the electorate. To attempt to do so would expose the city to liability
for the expenditure of any funds in reliance thereon.
ANALYSIS
Chapter 9.44 of the San Bernardino Municipal Code, adopted in 1913, and amended in 1965,
prohibits all games of chance not otherwise prohibited by the California Penal Code [see Penal Code
§ 330 and § 330a], and not otherwise specifically allowed by other provisions of state law [see for
instance the State Lottery provisions at Government Code § 8800 et seq.]. Specifically this chapter
provides:
DAB/tbm[Gaming.opn] l7
?/,;;tc) '� CITY HALL ( �
300 NORTH 'D'STREET - SAN BERNARDINO, CALIFORNIA 92418
(714) 384-5355
Mayor Tom Minor
September 25, 1995
Page 2
"It is unlawful for any person, either as principal, agent, employee or
otherwise, knowingly to permit any house, room, apartment or place owned
by him or under his charge or control, to be used in whole or in part for
playing, conducting, dealing or carrying on therein any game of chance not
mentioned in sections 330 and 330a of the Penal Code of the state or other
state law, with cards, dice, billiard balls, pool balls, cues, pins, checkers,
counters, quoits, beans, spindles, tables, wheels, or machines, or any other
device, contrivance or apparatus, for money, checks, chips, credit or any other
representative of value or for any merchandise or any other thing of value."
(San Bernardino Municipal Code § 9.44.010)
The chapter also adds:
"It is unlawful for any person to play or bet at or against, or as owner or
employee to open, deal, play, carry on or conduct, any game of chance not
mentioned in Section 330 or 330a of the Penal Code of the state or other state
law, which is played, conducted, dealt or carried on with cards, dice, billiard
balls, pool balls, cues, pins, checkers, counters, quoits, beans, spindles, tables,
wheels, machines or any other device, contrivance or apparatus, for money,
checks, chips, credit or any other representative of value or for any
merchandise or any other thing of value." (San Bernardino Municipal Code
§ 9.44.020)
Pursuant to the authority found in Penal Code § 326.5, the City has also authorized bingo by
certain, qualifying, non-profit organizations [see San Bernardino Municipal Code Chapter 5.36].
Business and Professions Code § 19819, adopted in 1983, but effective on July 1, 1984, now
requires:
"No gaming club shall be located within the territorial limits of any county,
city, or city and county which had not permitted gaming clubs prior to January
1, 1984, unless a majority of electors voting thereon affirmatively approve a
measure permitting legal gambling within that city, county, or city and county.
Prior to this enactment, there was no necessity for an election to authorize gaming within a
city. The city's legislative body could do so merely by the passing of an ordinance. But for those
municipalities which wished to introduce gaming into their communities after the specified date of
January 1, 1984, an election would be necessary.
DAB/tbm[Gaming.opn]
Mayor Tom Minor
September 25, 1995
Page 3
SB 100 approved by the Legislature on July 29, 1995, signed by the Governor on August 3,
1995, and filed with the Secretary of State on August 7, 1995, among other things added Business
and Professions Code § 19819.5 to read as follows:
"(a) On and after January 1, 1996, neither the governing body nor the electors
of a county, city, or city and county that has not authorized legal gaming
within its boundaries prior to January 1, 1996, shall authorize legal gaming.
(b) No ordinance in effect on January 1, 1996, that authorizes legal gaming
within a county, city, or city and county may be amended to expand gaming
in that jurisdiction beyond that permitted on January 1, 1996.
(c)This section shall remain in effect only until January 1, 1999, and as of that
date is repealed, unless a later enacted statute, which is enacted before
January 1, 1999, enacts a comprehensive scheme for the regulation of gaming
pursuant to this chapter under the jurisdiction of a gaming or gambling control
commission."
It is apparent that this statute gives some urgency to the question. If gaming is not authorized
before January 1, it may not then be authorized for the period of the moritorium.
In the discussions involving these issues the use of the terms"gaming" and "gambling" are
both used with an apparent attempt to somehow differentiate between the two. In practice it seems
that"gaming" is usually used to refer to card rooms as they are legalized in various areas of the state,
and "gambling" is used to refer to other types of games of chance. As legally defined, however,
"gaming" and"gambling" have the same meaning, and can be used interchangeably (See Business and
Professions Code § 19802 and Black's Law Dictionary, 5th Ed.).
As a charter city the City of San Bernardino is in many cases not subject to the general laws
and may legislate in areas that are determined to be municipal affairs. However if a state enactment
is determined to be a matter of statewide concern, it will be applicable to the city despite any contrary
charter or ordinance provision.
There is no standard definition of what is a municipal affair and the courts must make the
determination on a case by case analysis (California Fed. Savings & Loan Assn.. v. City of Los
Angeles(1991) 54 Cal.3 d 1, 17). A legal treatise on California municipal law states:
"Generally speaking, the term `municipal affairs' has reference to the internal
business affairs of a city. If a matter is of statewide concern and beyond the
exclusive control of the city, it is not a municipal affair and not subject to local
control." (45 Cal Jur 3d "Municipalities" § 99, footnotes omitted)
DAB/tbm [Gaming.opnl
Mayor Tom Minor
September 25, 1995
Page 4
However, the courts have consistently held:
"When there is a doubt as to whether an attempted regulation relates to a
municipal or to a state matter, or if it be the mixed concern of both, the doubt
must be resolved in favor of the legislative authority of the state." (People v.
Moore (1964) 229 Cal.App.2d 221, 225)
Looking at Business and Professions Code § 19819 as part of the entire statutory scheme
relating to gaming within the state, it cannot be seriously contended, as has been done by some, that
the statute is only an elections provision. It is not. It is a provision outlining how gaming must be
authorized. Elections statutes are those that regulate how elections are to be conducted, not what
subjects must be placed before the electorate.
There is no question that the Legislature intended the provision to apply to charter cities such
as San Bernardino. The drafters specifically used the term "city and county." The only "city and
county" in the state is the City and County of San Francisco, a charter city and county. The State
Constitution requires that if a county and its cities consolidate into a combined city and county, the
result must be a charter city and county (California Constitution, Article 11, § 6). The result is that
the Legislature knew full well what is said when it used the term"city and county." It meant charter
entities such as the City of San Bernardino.
In 1991 the State Supreme Court examined a similar issue with regard to an attempt by the
City of Los Angeles to tax banks and other financial institutions. The power of taxation had
historically been considered as "an essential function of municipal government, secure against
legislative usurpation" (California Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54
Cal.3d 1, 13). The court went on to state that under the court-established procedures to determine
whether a subject falls within a municipal affair or was a matter of statewide concern whole areas
should not be cordoned off for one or the other, but the relationship is a fluid one, moving as the
needs dictate. The court declared:
"When a court invalidates a charter city measure in favor of a conflicting state
statute, the result does not necessarily rest on the conclusion that the subject
matter of the former is not appropriate for municipal regulation. It means
rather, that under the historical circumstances presented, the state has a more
substantial interest in the subject than the charter city." (California Fed.
Savings&Loan Assn.., at 18)
The inescapable result is that the State Legislature meant the provision to apply to charter
cities. Where such an intent is found any doubt is resolved in favor of the Legislative enactment and
DAB/tbm[Gaming.opnl
Mayor Tom Minor
September 25, 1995
Page 5
against a city ordinance. The courts would certainly find that a state statute, as part of the state
scheme to regulate gaming in this state, is a matter of statewide concern and must prevail over a
conflicting city action.
It is our opinion that an ordinance to authorize gaming in the City of San Bernardino as a
change to an ordinance prohibiting such gaming adopted in 1913, must comply with the state
requirement of a prior vote of the electorate.
It has been contended that other cities have adopted gaming ordinances without a vote of the
people, apparently concluding that San Bernardino should not have to comply with state statutes that
others may have ignored. First of all, violation of the law by others does not justify or authorize the
City of San Bernardino to do the same. Secondly, the only city that has been specifically suggested
to us as having done so is the City of Compton. We contacted the City of Compton and obtained a
copy of their ordinances. They first adopted an ordinance many years ago authorizing gaming and
recently approved an amendment to that ordinance restricting the gaming activities. It was not an
ordinance authorizing gaming as covered by Business and Professions Code § 19819, quoted above,
and therefore did not fall under the requirement to have an election.
This very question of calling for an election was discussed by the Mayor and Common
Council at an adjourned meeting held on Wednesday, September 20, 1995, which was the last day
that an election could be called for this year. (See San Bernardino Municipal Code § 2.56.170
Special Elections). The vote to call such a special election failed on a vote of three in favor, three
opposed, and one abstention. The supporters of gaming cannot then circumvent the requirement of
a vote of the people, which was not authorized by the Council, by declaring that it was not needed
in the first place.
DAB/tbm [Gaming.opnl
Mayor Tom Minor
September 25, 1995
Page 6
Since the issue must be submitted to the voters for their approval and the time to do that
before the imposition by the state of a moritorium has passed, it seems clear that, for the time being,
the issue is dead.
Respectfully submitted,
DENNIS BARLOW
Sr. Asst. City Attorney
Concur:
JAMES F. PENMAN
L� �- &:��
ity Attorney
cc: Council Members
Rachel Clark, City Clerk
David C. Kennedy, City Treasurer
Shauna Clark, City Administrator
All Department Heads
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