Settling a losing lawsuit is good governance

Last week the Encinitas City Council voted to settle a high-profile lawsuit on a 3-2 vote, with Councilmembers Tony Kranz, Lisa Shaffer and me voting to settle. I’d like to share with my fellow Encinitas citizens the reasoning behind my vote.

For me, this was the fiscally responsible decision, given that we were faced with a lawsuit by the Building Industry Association (BIA) that we could not win.

The principles that created the lawsuit were worthy. Before I was elected, a unanimous city council changed rules at one emotion-filled council meeting to make it harder for high-density developers to build out-of-scale projects in Encinitas. But the rules were changed in ways that were inconsistent with state law. And, the BIA sued the city.

Continuing to fight on principle is a waste of taxpayer money, especially because we can accomplish most of our goals by settling the lawsuit, rewriting our city’s ordinances and clearly directing the city staff that interprets those ordinances. The BIA has already spent $200,000 and the city has spent about $120,000 in legal fees. That number could easily rise to a $1 million or more dollars, and for what gain?

Here are some of the reasons we couldn’t win the lawsuit:

• Policies have to be adopted by ordinance (and come back for a second reading at a subsequent meeting), not by motion.

• It’s illegal to have building size requirements that apply only to affordable units but not to market-rate units. Legally, we can require that affordable units be “comparable” in size — we just can’t specify that size. Our new density bonus rules will spell this out.

• We can’t apply rule changes retroactively, which means that six pre-existing “pipeline projects” will be allowed to proceed under the old rules. The difference is a relatively modest five additional units, 68 units across six projects instead of 63 units.

• State law requires us to have a legally compliant, certified housing element and we don’t have one. We haven’t updated ours for 23 years. There is no legal defense to this. In the settlement, we agree to update it, which we are actually already in the process of doing.

• The biggest win for Encinitas in this settlement is that we are still rounding down the numbers of homes allowed in calculating base density, and not up. This is a big deal and will be codified in our new ordinance.

I know some are unhappy that we settled this lawsuit, and it’s regrettable that there’s a vacuum of information right now because we did not simultaneously release the city’s new density bonus and inclusionary ordinances, as I had hoped we would. But hemorrhaging money on a losing lawsuit is not good governance and it’s not leadership. It’s better to make internal changes, get out of court and regain control of our city. That’s what’s happening.

Might we be sued again? Of course. There’s always that risk — whether it’s the BIA or some other party. Our legal system allows anyone to sue anytime. If the BIA wanted to continue the legal fight about rounding on base density right now, they wouldn’t have settled.

The lesson I’ve learned is that whenever possible we need to make required internal changes both to official policies and established city cultural norms before the Council finds itself legislating technically-complicated changes after many hours of emotional testimony. Sometimes important decisions such as this are worth risking a lawsuit. But if we can accomplish most of the same goals outside of court, that’s certainly better.

Catherine S. Blakespear is a member of the Encinitas City Council and is currently serving as the city’s Deputy Mayor. She can be reached at [email protected]