City of Scotts Valley v. County of Santa Cruz (201 Cal. App. 4th 1, 2011)

Opinion

BANKE, J.

I. Introduction

“There is no equitable way to share property tax revenues, only different degrees of inequity.” (Sen. Com. on Local Government, Rep. on Sen. Bill No. 407 (1987-1988 Reg. Sess.) Apr. 20, 1987, p. 2.) This observation is as true today as when it was made during the legislative process more than 20 years ago.

In this case, the City of Scotts Valley (City) claims it has not received all the property tax revenues to which it is entitled. Specifically, the City claims the Auditor-Controller of the County of Santa Cruz (Auditor-Controller) has not properly applied Revenue and Taxation Code section 98, which entitles “no- and low-property tax cities” to a certain percentage of the property taxes paid by their residents. The trial court agreed with the City and granted its petition for a writ of mandate against the County of Santa Cruz and the Auditor-Controller (collectively the County). The court ordered the County to change its allocation methodology and reallocate approximately $2 million in property tax revenues to the City for past fiscal years. The County has appealed, but the trial court’s order did not finally dispose of all claims in the case. Accordingly, the parties urge us to deem the County’s appeal an original writ proceeding. Given the nature and importance of the property tax allocation issues presented by this case, we conclude it is appropriate to do so. We also conclude the trial court was correct, in part, and incorrect, in part, and therefore grant limited writ relief to the County.

II. Background

A. Overview of Relevant Statutes

The factual and procedural background of this case can only be understood with some knowledge of the real property tax system that has given rise to the allocation issues in this case. This system has its roots in the voter’s enactment of Proposition 13 in 1978 imposing a 1 percent cap on real property tax rates, their enactment of Proposition 98 in 1988 imposing a state funding mandate for public education, and negative economic conditions that have since periodically pummeled the state’s economy. To say this system is dense, prolix and arcane is an understatement.

1. Basic Property Tax Allocation

The passage of Proposition 13 (Cal. Const., art. XIII A) fundamentally altered the state’s property tax system. Whereas local governmental entities had previously imposed their own property tax rates, Proposition 13 set the tax rate for all real property statewide at 1 percent of assessed value. The proposition directed counties to collect the property tax and allocate it among local governmental entities as determined by the Legislature. (Cal. Const., art. XTTI A, § 1, subd. (a).)

The Legislature immediately enacted “bailout” legislation to provide state funding to replace local property tax revenues lost as a result of Proposition 13. (Governor’s Off. of Planning & Research, Enrolled Bill Rep. on Sen. Bill No. 1361 (1993-1994 Reg. Sess.) July 20, 1994, p. 1 (hereafter Governor’s Enrolled Bill Report on Senate Bill 1361); Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill No. 617 (1991-1992 Reg. Sess.) as amended Aug. 22, 1992, p. 7.) It also enacted a temporary allocation system for the next fiscal year (fiscal year 1978-1979). (Stats. 1978, ch. 292, § 24, p. 606.) County auditors were generally directed to allocate property tax revenues among local governmental entities in proportion to their tax rates in the preceding fiscal year (i.e., the year prior to the passage of Prop. 13). (Gov. Code, § 26912, subd. (b).)

The following year, the Legislature enacted what is called the “A.B. 8” allocation system (after the applicable Assem. Bill), now codified as Revenue and Taxation Code sections 96 and 96.5 (originally enacted as § 98 [Stats. 1979, ch. 282, § 59, pp. 1028-1029]). “Under AB 8, each fiscal year a local government receives property tax revenues equal to what it received in the prior year (base), plus its share of any increase in revenues due to growth in assessed value within its boundaries. Each year, this increment growth is added to the previous year’s base, and together becomes next year’s base amount.” (Governor’s Enrolled Bill Report on Sen. Bill 1361, p. 1.) Assembly Bill No. 8 (1978-1979 Reg. Sess.) (Assem. Bill 8) “did not eliminate the ‘bailout’ support. ‘Bailout’ was made a permanent feature of the state-local fiscal relationship by means of the permanent shift of the school property tax base to local agencies and state ‘buyout’ of certain county health and welfare program costs.” (Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill No. 617 (1991-1992 Reg. Sess.) as amended Aug. 22, 1992, p. 7.)

Specifically, section 96 directed county auditors to determine the “tax base” for each local taxing entity for the 1979-1980 fiscal year. This was determined by allocating to each entity within a tax rate area, the same amount of property taxes it received from that tax rate area in the previous fiscal year. (§ 96, subd. (a).) Then, under section 96.5, the “tax increment"— the increased (or decreased) tax revenues received in the current tax year— was allocated to the local entities in proportion to their “base.” (§§ 96, subd. (c), 96.5.) Accordingly, local governmental entities that had higher pre-Proposition 13 tax rates relative to other entities, continued to receive a higher proportion of the property tax revenues generated pursuant to the 1 percent tax rate.

Since the 1980-1981 fiscal year, the A.B. 8 allocation system has been implemented through sections 96.1 (originally enacted as § 97 [Stats. 1979, ch. 282, § 59, p. 1028]), 96.2 (originally enacted as § 97.5 [Stats. 1980, ch. 801, § 9, p. 2511]) and 96.5. This statutory allocation process is similar to, and based on, the process for the 1979-1980 fiscal year. First, the tax base is determined, i.e., in each tax rate area, each local governmental entity is allocated the same amount of property tax it was allocated the preceding year. (§ 96.1, subd. (a)(1).) Second, the annual tax increment is allocated under section 96.5 in accordance with the same proportions applicable to the base. (§§ 96.1, subd. (a)(2), 96.5.) In this way, the proportional allocations established in the first fiscal year following the passage of Proposition 13, as modified for the following fiscal year, are perpetuated year after year, unless modified by the Legislature.

2. Tax Equity Allocation (TEA)

In 1987, nine years after the passage of Proposition 13, the Legislature addressed what had become a politically charged dispute over a perceived inequity in the A.B. 8 allocation system. Under the A.B. 8 allocation system, cities that had levied no property tax before the passage of Proposition 13 received none of the property tax being paid by their residents, even though their residents were paying the same 1 percent property tax every other property taxpayer in the state was paying. (Assem. Com. on Judiciary, Analysis of Assem. Bill No. 1197 (1987-1988 Reg. Sess.) as amended Aug. 31, 1988.) Similarly, some “newly incorporated cities” (i.e., cities incorporated after Prop. 13) received a very small tax base and thus commensurately received a very small percentage of property tax revenues. (Joint Conf. Com. Rep. on Assem. Bill No. 1197 (1987-1988 Reg. Sess.) & Sen. Bill No. 612 (1987-1988 Reg. Sess.) p. 26; see Stats. 1988, chs. 944 & 945, pp. 2977-3025 [Brown-Presley Trial Court Funding Act (Gov. Code, § 77000 et seq.)].) To help alleviate this disparity in the receipt of property tax revenues, the Legislature enacted TEA, now codified as section 98 (originally enacted as § 97.35 [Stats. 1987, ch. 1211, § 47.7, p. 4329]).

The legislative history reflects the difficulty of the problem: “There is no equitable way to share property tax revenues, only different degrees of inequity. Officials from the no-property-tax cities point out that their constituents pay the same 1% tax rate as everyone else, but their cities receive nothing. County officials note that reallocating revenues benefits the residents of those cities at the expense of countywide health, welfare, and justice programs. . . . The allocation of property tax revenues is a ‘zero-sum game,’ in which there must be a loser for every winner. . . . Rather than searching for perfect equity, the Committee may need to balance the different forms of inequity.” (Sen. Com. on Local Government, Rep. on Sen. Bill No. 407 (1987-1988 Reg. Sess.) Apr. 20, 1987, p. 2.) Indeed, in the 1987-1988 legislative session, 10 different bills were introduced to address the tax revenue situation of no- and low-property-tax cities. (Joint Conf. Com. Rep. on Assem. Bill No. 1197 (1987-1988 Reg. Sess.) & Sen. Bill No. 612 (1987-1988 Reg. Sess.) pp. 27-28.)

TEA is viewed as “a minimum property tax entitlement for each city incorporated before June 5, 1987.” (Joint Conf. Com. Rep. on Assem. Bill No. 1197 (1987-1988 Reg. Sess.) & Sen. Bill No. 612 (1987-1988 Reg. Sess.).) Section 98 thus specifies: “Except as otherwise provided in this section, each qualifying city shall, for the 1989-90 fiscal year and each fiscal year thereafter, be allocated by the auditor an amount determined pursuant to the TEA formula.” (§ 98, subd. (b)(1), italics added.) However, only a “qualifying city,” now defined as a city that receives less than 7 percent of the property tax revenues generated within its tax rate areas, is entitled to TEA. (§ 98, subds. (a), (c), (d).)

TEA is an alternative allocation system. “[T]he auditor in each county with qualifying cities ... is required to make property tax revenue allocations to those cities in accordance with a specified [TEA] formula and to make corresponding reductions in the county’s property tax revenue allocation.” (Legis. Counsel’s Dig., Assem. Bill No. 1197 (1987-1988 Reg. Sess.) 4 Stats. 1988, Summary Dig., p. 289.) Accordingly, each year there must be a comparison between what a qualifying city would receive under the TEA statute and what it would receive under the A.B. 8 statutes, since revenues will be allocated under the TEA statute only if the amount exceeds what would be allocated to the city under the A.B. 8 statutes. (§ 98, subd. (k); Off. of Local Government Affairs, Enrolled Bill Rep. on Assem. Bill No. 1197 (1987-1988 Reg. Sess.) Sept. 9, 1988, p. 2 [receipt of TEA will “only occur if it is no less than what the qualifying cities would have received without the TEA formula”].) What a qualifying city would receive under the TEA statute is determined by the six-step “TEA formula” set forth in the statute. (§ 98, subd. (c)(l)-(6).)

When a qualifying city receives tax revenues under section 98, it is allocated the amount of tax revenues called for by the TEA formula. The A.B. 8 allocation the city would otherwise have received, but for the application of the TEA statute, is allocated to the county. (§ 98, subds. (b)(l)-(2), (j).) Thus, the additional revenues allocated to qualifying cities under the TEA statute are effectively “taken” from the property tax revenues allocated to the counties.

As initially enacted, the TEA statute did not address the tax revenue generated by property held by local community redevelopment agencies, generally referred to as the “redevelopment agency tax increment.” (Off. of Local Government Affairs, Enrolled Bill Rep. on Assem. Bill No. 1197 (1987-1988 Reg. Sess.) Sept. 9, 1988, p. 2 [“SB 709 [(passed the preceding year and which established TEA)] does not contain provisions for redevelopment agency tax increment financing.”].) At the behest of the counties, which complained the failure to take redevelopment tax increment into account resulted in an unfair loss of their tax revenues, the Legislature expanded the TEA formula the following year to do so. (Joint Conf. Com. Rep. on Assem. Bill No. 1197 (1987-1988 Reg. Sess.) & Sen. Bill No. 612 (1987-1988 Reg. Sess.) pp. 25-26.) The augmented formula now “require[s] county auditors to reduce the tax base, upon which the allocation to qualifying cities is determined, by the amount of property tax revenues received by the cities’ redevelopment agencies.” (Off. of Local Government Affairs, Enrolled Bill Rep. on Assem. Bill No. 1197 (1987-1988 Reg. Sess.) Sept. 9, 1988, p. 2.) The Legislature also added a provision that similarly requires county auditors to reduce the TEA of qualifying cities with “dependent special districts within their boundaries.” (Id. at p. 5 [amendment “revises SB 709 by . . . adjusting the [(property tax)] shift to recognize redevelopment, and by reducing the shift to recognize tax cuts and special districts”].) In short, the 1988 amendments to the TEA statute revised “the property tax allocation provisions of [the preceding year] ... to provide a more equitable solution to the long standing issue of shifting property tax revenues to no- and-low property tax cities.” (Off. of Local Government Affairs, Enrolled Bill Rep. on Assem. Bill No. 1197 (1987-1988 Reg. Sess.) Sept. 9, 1988, p. 6.)

3. Educational Revenue Augmentation Funds (ERAF’s)

During the same period of time the Legislature was working to establish a more equitable allocation of property tax revenues, the state was also struggling with the complexities of public school funding. The history of this funding challenge is recited in detail in this court’s opinion in County of Sonoma v. Commission on State Mandates (2000) 84 Cal.App.4th 1264, 1271-1276 [101 Cal.Rptr.2d 784] (County of Sonoma), and was more recently summarized in Los Angeles Unified School Dist. v. County of Los Angeles (2010) 181 Cal.App.4th 414, 419-422 [104 Cal.Rptr.3d 590] (Los Angeles Unified School Dist.). We cannot improve on the discussion in these cases, from which we quote: “Since 1971, the division of state and local responsibility for educational funding has ‘been in a state of flux.’ (City of El Monte v. Commission on State Mandates (2000) 83 Cal.App.4th 266, 278 [99 Cal.Rptr.2d 333].) The state’s responsibility for educational funding has increased since 1971 for three primary reasons.” (Los Angeles Unified School Dist., supra, 181 Cal.App.4th at p. 419.)

“First, in the 1970’s, the California Supreme Court held that the state must ameliorate the disparities in local property tax-based educational funding. (Serrano v. Priest (1971) 5 Cal.3d 584 [96 Cal.Rptr. 601, 487 P.2d 1241]; Serrano v. Priest (1976) 18 Cal.3d 728 [135 Cal.Rptr. 345, 557 P.2d 929].) Second, in 1978, the voters adopted Proposition 13, now article XIIIA of the California Constitution, which limited local property taxation. (See, e.g., County of Los Angeles v. Sasaki (1994) 23 Cal.App.4th 1442, 1450-1452 [29 Cal.Rptr.2d 103] . . . .) Finally, in 1988, the voters enacted Proposition 98, which established a minimum guaranteed state funding entitlement for schools. (Cal. Const., art. XVI, § 8, subd. (b) . . . .)” (Los Angeles Unified School Dist., supra, 181 Cal.App.4th at pp. 419-420.)

“The state’s ability to meet its increased financial obligation to schools under Proposition 98 was severely tested in fiscal year 1991-1992, when the state ‘faced an unprecedented budgetary crisis . . . with expenditures projected to exceed revenues by more than $14 billion.’ (Department of Personnel Administration v. Superior Court (1992) 5 Cal.App.4th 155, 163 [6 Cal.Rptr.2d 714].) In response to this economic crisis, the Legislature enacted the 1992 ERAF legislation, Revenue and Taxation Code former section 97.03 (presently § 97.2). The ERAF legislation lessened the burden imposed by Proposition 98 on the state General Fund by reducing the property tax allocation of cities, counties, and special districts, and shifting the amount of the reduction to ERAF’s for distribution to schools.” (Los Angeles Unified School Dist., supra, 181 Cal.App.4th at p. 420, fn. omitted.)

“The ERAF reallocation design can be summarized as requiring reduction of property tax revenues previously allocated to counties by use of a specified formula, deposit of the reduced amounts into ERAF’s, and distribution of the ERAF funds to schools. Another portion of the same legislation deemed the ERAF revenues to be part of the state General Fund revenues for purposes of calculating the minimum educational funding guarantee under Proposition 98. The overall result of these statutes is that the tax revenues of the counties are decreased, school revenues remain the same, and the minimum school funding guarantee of Proposition 98 is satisfied in part by the ERAF funds. This legislative adroitness fulfilled the funding of Proposition 98 by reallocating available finite funds from one local governmental entity to another. (Legis. Analyst, Rep. to Joint Legis. Budget Com., analysis of 1993-1994 Budget Bill, p. 90.)” (County of Sonoma, supra, 84 Cal.App.4th at pp. 1275-1276, fns. omitted.)

The Legislature, however, did not view the ERAF legislation so much as a reshuffling of tax revenues, but as bringing to an end the state “bailout” of local governmental entities under Assem. Bill 8. (E.g., Governor’s Off. of Planning & Research, Enrolled Bill Rep. on Sen. Bill No. 1135 (1993-1994 Reg. Sess.) as amended June 23, 1993, pp. 1-2 [“In order to balance last year’s State budget, SB 617 [(ERAF I)] was enacted to begin the ‘undoing’ of the SB 154 and AB 8 bailout created in 1978-79.”] and p. 3 [“SB 1135 [(ERAF II)] would complete the repeal of the SB 154 and AB 8 bailout by shifting [additional] . . . property tax revenues from local governments to the ERAF____”].)

a. ERAF I

The first ERAF tax revenue shift (ERAF I), enacted in 1992, was implemented through two different statutory mechanisms, now codified as sections 97 and 97.2 (originally enacted as § 97.03, see Historical and Statutory Notes, 58D West’s Ann. Rev. & Tax. Code (2009 ed.) foil. § 97.2, pp. 272-274]).

Section 97.2 effectuated a permanent reallocation of property tax revenues to the ERAF’s. From each county, a statutorily specified amount of property tax revenue was reallocated to the ERAF created for that county. (§ 97.2, subd. (a)(1).) From each city, 9 percent of its property tax revenue was reallocated to the local ERAF. (§ 97.2, subd. (b)(1).) These reallocations were implemented by modifying the A.B. 8 allocation process. (See § 97.2 [“Notwithstanding any other provision of this chapter, the computations and allocations made . . . pursuant to Section 96.1 or its predecessor section [(the A.B. 8 statutes)] shall be modified ... as follows . . . .”].) For each entity subject to the mandated reallocations, the county auditor was directed to deem the property tax revenues allocated to the entity in the previous fiscal year (fiscal year 1991-1992) to have been lower by the amount reallocated to the ERAF. (See § 97.2, subds. (a)(1), (b)(1) & (c)(1).) This reduced each entity’s tax base for the 1992-1993 fiscal year. The property tax revenues not allocated to cities and counties through this “reduction” were allocated to the ERAF’s. (Former § 97.5, subd. (d)(1), repealed Stats. 1994, ch. 1167, § 2, p. 6906.)

The base “reductions” and reallocations to ERAF’s only had to be made once, for the 1992-1993 fiscal year. Thereafter, the impact on cities and counties was self-perpetuating through the A.B. 8 allocation process. (Los Angeles Unified School Dist, supra, 181 Cal.App.4th at p. 425 [“By incorporating the ERAF legislation into section 96.1’s yearly allocation of property taxes, the Legislature implemented an annual shift of property taxes to ERAF’s for distribution to the schools.”].) The ERAF’s, in turn, received a tax base through the mandated “reductions” and reallocations, and effectively became another entity receiving a share of the local property tax revenue through the A.B. 8 allocation process.

Section 97.2 specifically refers to the TEA statute. Subdivision (b)(4) states: “In the 1992-93 fiscal year and each fiscal year thereafter, the auditor shall adjust the computations required pursuant to Article 4 (commencing with section 98 [(the TEA statute)]) so that those computations do not result in the restoration of any reduction required pursuant to this section.” (§ 97.2, subd. (b)(4).) This had the effect of making the ERAF tax revenue shift mandated by section 97.2 a deduction from the TEA allocation under section 98, which effectively reduced the amount of the TEA guarantee to qualifying cities to slightly less than 7 percent.

Section 97 employed a somewhat different approach to funding the ERAF’s. This reallocation was based on population. Each county reallocated $1.92 per resident to the local ERAF, and each city reallocated $1.65 per resident. (§ 97, subd. (a)(l)-(2).) Like the reallocations under section 97.2, the reallocations required by section 97 were put into effect by deeming the property tax revenue allocations of the previous fiscal year to have been lower by the amounts of the population-based reallocations, thus “reducing]” the tax base. (§ 97, subd. (a).) The funds reallocated to ERAF’s in the 1992-1993 fiscal year under section 97, however, were restored to the cities and counties in the 1993-1994 fiscal year. (§ 97, subd. (b).) Unlike section 97.2, section 97 contains no reference to the TEA statute.

b. ERAF II

The state’s budget crisis and difficulty in meeting the school funding mandate of Proposition 98 continued, leading to the enactment of additional ERAF provisions the following year, in 1993 (ERAF II), now codified as sections 97.1 (enacted as § 97.02 [Stats. 1994, ch. 1167, § 3, p. 6906; Stats. 1993, ch. 68, § 9, p. 948]) and 97.3 (enacted as § 97.035 [Stats. 1994, ch. 1167, § 3, p. 6906]).

Section 97.1 required another reallocation of property tax revenues based on population. Each county was deemed for the previous fiscal year (fiscal year 1992-1993) not to have been allocated $0.78 per resident and each city was deemed not to have been allocated $0.99 per resident (§ 97.1, subd. (a)(1)), thereby “reducing]” the tax base for counties and cities for the 1993-1994 fiscal year. The property tax revenues not allocated to the counties and cities because of their “reduc[ed]” tax bases were reallocated to the ERAF’s. (§ 97.1, subd. (a)(2).) These reallocations are also perpetuated in future years through the A.B. 8 allocation process. (See § 97.1, subd. (a) [“Notwithstanding any other provision of this chapter, the computations and allocations made . . . pursuant to Section 96.1 or its predecessor section [(the A.B. 8 statutes)] . . . shall be modified ... as follows . . . .”].) Section 97.1 contains no reference to the TEA statute.

Section 97.3, the second ERAF II statute, further “reduced” the local tax base for the 1993-1994 fiscal year. (§ 97.3, subds. (a)-(c).) The statute specified amounts certain—$1,998 billion from counties and $288 million from cities—by which the local tax base was to be deemed “reduced.” (§ 97.3, subds. (a)(1), (b)(1).) It also directed the Director of Finance to parcel these amounts among counties and cities pursuant to complex formulas set forth in the statute. (§ 97.3, subds. (a)(2)(A)-(E), (b)(2)(A)-(E).) The formula applicable to cities specified among other things that “[t]he amount of property tax revenue that is estimated to be attributable in the 1993-94 fiscal year to the amount of the city’s state assistance payment received by that city pursuant to Chapter 282 of the Statutes of 1979 [(the A.B. 8 ‘bailout’ legislation)] shall be determined.” (§ 97.3, subd. (b)(2)(A).) The property tax revenues not allocated to the cities and counties because of their further “reduced” tax bases were reallocated to the ERAF’s (§ 97.3, subd. (d)), and the effect of these “reductions” are carried forward through the A.B. 8 allocation process. (See § 97.3 [“Notwithstanding any other provision of this chapter, the computations and allocations made . . . pursuant to Section 96.1 or its predecessor section [(the A.B. 8 statutes)] shall be modified ... as follows . . . .”].) Like section 97.1, section 97.3 contains no reference to the TEA statute.

c. ERAF III

In 2004, more than 10 years after enactment of the initial ERAF statutes, the Legislature dramatically reduced the amount of VLB’s payable to cities and counties from 2 percent to 0.65 percent of a vehicle’s assessed value. (§§ 10752, 10752.1; Sen. Rules Com., Off. of Sen. Floor Analyses, Unfinished Business Analysis of Sen. Bill No. 1096 (2003-2004 Reg. Sess.) as amended July 27, 2004, p. 1.) To ameliorate the effect of this loss of revenue, the Legislature enacted section 97.70, commonly referred to as the “VLF swap.” (§ 97.70.)

Under section 97.70, counties essentially hold back from the allocation to ERAF’s an amount of property tax revenues equivalent to the lost VLF revenue. (§ 97.70, subd. (a)(1)(A).) That property tax revenue is, instead, deposited in a “Vehicle License Fee Property Tax Compensation Fund” (VLF Fund). (§ 97.70, subd. (a)(2).) Counties then distribute the revenues in this fund to cities in place of lost VLF revenues. (§ 97.70, subd. (b)(l)(A)-(B); Sen. Rules Com., Off. of Sen. Floor Analyses, Unfinished Business Analysis of Sen. Bill No. 1096 (2003-2004 Reg. Sess.) as amended July 27, 2004, pp. 2-3.) Section 97.70 specifically refers to the TEA statute and states: “This section shall not be construed to ... [][].. . [f ] [r] educe ad valorem property tax revenue allocations required under Article 4 (commencing with Section 98 [(the TEA statute)]).” (§ 97.70, subd. (f)(4).) This ensures that property tax revenues diverted from an ERAF to the VLF Fund to reimburse a qualifying city for lost VLF revenue are not construed as property tax receipts, but are instead treated as VLF revenue. Otherwise, the reimbursement would “increase” a qualifying city’s property tax revenues, affecting its entitlement to TEA.

In conjunction with the VLF swap, the Legislature enacted another ERAF statute, section 97.71 (ERAF III). Unlike ERAF’s I and II, which were implemented by modifying the A.B. 8 allocation process—that is, by “reducing” the local tax base by deeming the previous year’s property tax allocation to have been smaller—ERAF 111 was implemented by modifying the VLF swap for fiscal years 2004-2005 and 2005-2006, thereby reducing the amount of VLF reimbursement to cities and counties. (§ 97.71, subds. (a)-(b); Legis. Counsel’s Dig., Sen. Bill No. 1096 (2003-2004 Reg. Sess.) 6 Stats. 2004, Summary Dig., pp. 80, 82.) Thus, rather than cross-referencing the A.B. 8 allocation statutes (§§ 96.1, 96.5), the prefatory language of ERAF III states: “The total amount of revenue required to be allocated to each county and each city and county under Section 97.70 [(the VLF swap)] shall be reduced by the dollar amount . . .” specified in the statute. (§ 97.71, subd. (a)(1); cf. § 97.2 (ERAF I) [“Notwithstanding any other provision of this chapter, the computations and allocations made by each county pursuant to Section 96.1 or its predecessor section [(the A.B. 8 statutes)] shall be modified for the 1992-93 fiscal year ... as follows . . . .”] & § 97.1, subd. (a) (ERAF II) [“Notwithstanding any other provision of this chapter, the computations and allocations made by each county pursuant to Section 96.1 or its predecessor section [(the A.B. 8 statutes)], as modified by Section 97.2 or its predecessor section for the 1992-93 fiscal year, shall be modified for the 1993-94 fiscal years as follows: . . . .”].) In short, ERAF III “took back” some of the reimbursement otherwise provided by way of the VLF swap. (See § 97.71, subd. (c) [the “amount of revenue that is not allocated [under section 97.70] . . . shall be deposited in the county” ERAF].)

4. Redevelopment Agencies

This case not only involves the A.B. 8 statutes, the TEA statute and the ERAF statutes, it also touches on redevelopment. Cities and counties can establish a redevelopment agency to promote economic development within a designated area. (Health & Saf. Code, §§ 33100, 33101, 33120, 33131.) Once established, a redevelopment agency is a separate legal entity from the city or county that created it. (Pacific States Enterprises, Inc. v. City of Coachella (1993) 13 Cal.App.4th 1414, 1422-1424 [17 Cal.Rptr.2d 68].)

The activities of a redevelopment agency are generally funded by what is called tax-increment financing. (See Cal. Const., art. XVI, § 16; Health & Saf. Code, § 33670; Los Angeles Unified School Dist., supra, 181 Cal.App.4th at p. 421.) The tax increment is the increase in property tax revenues that occurs in a redevelopment area after the creation of a redevelopment agency. (Health & Saf. Code, § 33670, subd. (b); Los Angeles Unified School Dist., at p. 421.) In tax-increment financing, the tax increment is allocated to the redevelopment agency and used to fund its redevelopment activities. (Cal. Const., art. XVI, § 16; Health & Saf. Code, § 33670; see Los Angeles Unified School Dist, at pp. 421-422.)

Until 1994, a redevelopment agency could enter into “pass-through” agreements with entities within its redevelopment area that had previously received a share of the property tax revenues. Under such agreements, an agreed amount of the tax increment was passed through to such entities and not retained by the redevelopment agency. (See former subd. (b) of Health & Saf. Code, § 33401, repealed by Stats. 1993, ch. 942, § 23, p. 5358.) Such agreements resulted in significant amounts of “ ‘local property taxes [being] diverted to redevelopment activities,’ ” with an attendant significant “ ‘cost [to] the state General Fund.’ ” (Historical and Statutory Notes, 41A West’s Ann. Health & Saf. Code (1999 ed.) foll. § 33607.5, p. 173, quoting Stats. 1995, ch. 141, § 1, p. 543.) “ ‘The Community Redevelopment Law Reform Act of 1993 replaced negotiated agreements with a statewide formula to provide all cities, counties, special districts, and schools affected by redevelopment project areas a set percentage of their anticipated property tax revenues.’ ” (Ibid.) Accordingly, since 1994, the redevelopment tax increment has been passed through to taxing entities within a redevelopment area under a statutorily specified formula. (Health & Saf. Code, § 33607.5; Los Angeles Unified School Dist, supra, 181 Cal.App.4th at p. 422.) With this statutory overview, we turn to the dispute between the City and County.

B. The Dispute Between the City and County

The City is a “qualifying city” under the TEA statute, and in December 1995, the Santa Cruz County Auditor-Controller notified the city manager by letter that the City would be receiving property tax revenues under the TEA statute for the 1995-1996 fiscal year. However, two months later, in February 1996, the Auditor-Controller advised the city manager by letter that the Auditor-Controller’s office had discovered it had “erred in the calculation of the City ... as a no/low property tax city under the Tax Equity Allocation formula (TEA).” The Auditor-Controller explained that an audit by the State Controller’s Office (SCO) had found the “base revenue” amount did not reconcile with “the actual revenue report.” “To respond,” the Auditor-Controller’s office had “examined the TEA computation,” which had been done “prior to the enactment of the ERAF legislation and before the inception of the Scotts Valley Redevelopment Agency” (SVRA). (Italics added.)

With respect to the ERAF issue, the Auditor-Controller stated his office had found “an error on [Vc] the computation relating to the amount of Education Revenue Augmentation Fund adjustment to the TEA basis.” Stating that his office had “consulted other county tax professionals” and legal counsel, the Auditor-Controller provided an explanation of the error that characterized ERAF I as having been “amended one [sic] in 1992” and “reenacted in its present form ... in 1994” (apparently as ERAF II). With respect to the redevelopment issue, the Auditor-Controller stated his office had found an “omission of Scotts Valley Redevelopment Agency allocations.” Specifically, “base revenue reduction of redevelopment agency funds had not been computed according to . . . Section 98 (c)” (the amended TEA formula requiring that redevelopment increment be taken into account).

Under its revised ERAF and redevelopment increment analyses, the Auditor-Controller projected the City was not likely to receive TEA in the foreseeable future and requested repayment of the TEA it had received the preceding year. The city manager accepted the Auditor-Controller’s explanation, and did not take the matter to the city council.

The following year, in March 1997, the SCO issued its audit report for the audit to which the county Auditor-Controller had referred in his letter to the City. The report stated, among other things, that the County had “used an incorrect base when computing the tax equity allocation (TEA) adjustment for one city.” As to this finding—“Finding No. 1”—the report recommended “[t]he county should recompute the TEA formula adjustments to conform with the Revenue and Taxation Code.” No other directions were given. The report also set forth the County’s “Response” to Finding No. 1—that it was “a little misleading. The state auditor felt an error could exist and accordingly we reviewed the matter and discovered that the creation of a new Redevelopment Agency was not taken into account. We identified the amount of overpayment and provided a process for recovery . . . ,”

In 2006, either the mayor or a councilman alerted the city manager that other cities were claiming a right to TEA and asked the city manager to investigate. In September 2006, the City’s finance director sent a letter to the county Auditor-Controller asking whether the TEA formula was being properly applied to the City. Within a couple of weeks, the Auditor-Controller responded the City was not entitled to TEA. The finance director did not, at that point, understand the Auditor-Controller’s methodology for concluding the City was not entitled to TEA. Only after a number of conversations, did the finance director come to understand how the County was analyzing the issue.

In June 2007, the City filed a combined petition for writ of mandate and complaint for declaratory relief in the Santa Cruz Superior Court alleging four causes of action against the County, all based on the claim the Auditor-Controller was not properly applying the TEA statute and had failed to allocate to the City all the property tax revenues to which it was entitled. Even though the City was a qualified city under section 98 entitled to receive approximately 7 percent of the property tax revenues paid by its residents, the City alleged it was receiving only between 3.5 and 4.5 percent of the local revenues. This was happening because in determining the comparative A.B. 8 allocation figure, the Auditor-Controller was deeming the City to have been allocated (a) property tax revenues that were actually allocated to and received by the county ERAF and (b) redevelopment tax increment actually allocated to and received by the SVRA. This resulted in the comparative A.B. 8 allocation figure being higher than the TEA formula allocation figure, which resulted in the City being allocated property tax revenues under the A.B. 8 statutes, rather than under the TEA statute.

The County answered and denied any misapplication of the property tax statutes, and subsequently filed a cross-complaint against the City and the SVRA. The case was then transferred to the San Mateo Superior Court. The County and the Santa Cruz County Redevelopment Agency subsequently filed a combined second amended cross-complaint for breach of contract, damages, and declaratory relief against the City and the SVRA and a petition for writ of mandate against the State Controller.

While the dispute between the City and County was developing, the SCO was conducting another audit of the County. According to a senior management auditor with the SCO responsible for supervising audits pertaining to the allocation of property taxes, “the audit scopes . . . indicate[d] that the SCO did not consider any TEA computations at all.” Rather, the only statement about TEA in the subsequently issued audit report dated July 2008 was that: “In the past, SCO auditors have accepted the County’s TEA formula computation. However, the legal challenge in the County has raised the possibility that it may not be in compliance with the Revenue and Taxation Code. At this time, this finding does not warrant a reportable condition, but is only an observation until the legal issues are resolved.” The report took no position on the issues, stating that after the conclusion of the litigation, “this process will be reviewed again to determine if any adjustments or corrections are warranted and the report will be modified accordingly.”

The parties stipulated to bifurcate the trial on the writ petitions and filed extensive memoranda, declarations and exhibits in support of their respective positions. They also agreed the issues boiled down to whether ERAF’s II and III “apply” to qualifying cities entitled to TEA under section 98 and whether tax increment allocated to a redevelopment agency should be included in the comparative A.B. 8 allocation figure. After an all-day hearing, the trial court granted the City’s petition for a writ of mandate.

The court ruled the County had misapplied the relevant statutes and the City had not received all the property tax revenues to which it was entitled under the TEA statute. However, the court rejected the City’s claim it was entitled to recoup tax revenues back to the 2001-2002 fiscal year, agreeing with the County that the three-year limitations period set forth in Code of Civil Procedure section 338 applied and the City could recover revenues only back to the 2003-2004 fiscal year. The court ordered $292,113 be reallocated to the City for the 2003-2004 fiscal year, $423,353 for the 2004-2005 fiscal year, $464,344 for the 2005-2006 fiscal year, and $377,727 for the 2006-2007 fiscal year. The court further ordered the reallocation to be made in equal payments over three years, and the County to calculate future TEA in accordance with the court’s ruling, absent a change in the controlling law.

In so ruling, the trial court rejected the County’s affirmative defense that in 1997 the SCO had “directed” the Auditor-Controller to use the methodology for determining the comparative A.B. 8 allocation figure challenged by the City. The court pointed out Finding No. 1 in the March 1997 SCO audit report said nothing about the comparative A.B. 8 allocation figure or the effect of the ERAF statutes, but only instructed the County to “recompute the TEA formula adjustments [set forth in section 98, subdivision (c)] to conform with the Revenue and Taxation Code.” (Italics added.) The court also rejected the County’s numerous equitable defenses that the City should be barred from pursuing its claims because of the passage of time and alleged acquiescence in the Auditor-Controller’s annual allocation determinations. The court additionally denied the County’s petition for a writ of mandate requiring the SCO to eliminate the note in its July 2008 audit report about the pending litigation and to issue a “clean” report.

After the parties failed to reach an agreement that would allow for dismissal of all claims and entry of final judgment, the trial court stayed issuance of a writ against the County pending appellate review. It also made a determination pursuant to Code of Civil Procedure section 166.1 that the case presents a controlling question of law involving legal issues of statewide importance that would benefit from immediate appellate review. However, rather than filing an original writ proceeding challenging the trial court’s rulings, the County filed a notice of appeal. As we noted at the outset, both parties have requested that we deem the County’s improper appeal to be an original writ proceeding. We agree with the trial court that this is a case in which immediate appellate review is warranted, and therefore deem the County’s appeal to be a petition for a writ of mandate challenging the trial court’s ruling that the County has misapplied the TEA statute and a directive that the County change its methodology for determining the comparative A.B. 8 allocation figure and reallocate property tax revenues to the City. (See Olson v. Cory (1983) 35 Cal.3d 390, 401 [197 Cal.Rptr. 843, 673 P.2d 720]; H. D. Arnaiz, Ltd. v. County of San Joaquin (2002) 96 Cal.App.4th 1357, 1366-1367 [118 Cal.Rptr.2d 71].)

III. Discussion

A. Standard of Review

We have granted writ review of the trial court’s order granting the City’s petition for a writ of ordinary mandamus. “A traditional writ of mandate under Code of Civil Procedure section 1085 is a method for compelling a public entity to perform a legal and usually ministerial duty. [Citation.] The trial court reviews an administrative action pursuant to Code of Civil Procedure section 1085 to determine whether the agency’s action was arbitrary, capricious, or entirely lacking in evidentiary support, contrary to established public policy, unlawful, procedurally unfair, or whether the agency failed to follow the procedure and give the notices the law requires.” (Klajic v. Castaic Lake Water Agency (2001) 90 Cal.App.4th 987, 995 [109 Cal.Rptr.2d 454], fn. omitted; accord, Shelden v. Marin County Employees’ Retirement Assn. (2010) 189 Cal.App.4th 458, 463 [116 Cal.Rptr.3d 883].) The trial court reviews legal questions, including questions of statutory construction, de novo. (See Shelden, supra, at p. 463; Clovis Unified School Dist. v. Chiang (2010) 188 Cal.App.4th 794, 798 [116 Cal.Rptr.3d 33].)

Appellate review in an ordinary mandamus proceeding “ ‘is ordinarily confined to an inquiry as to whether the findings and judgment of the trial court are supported by substantial evidence.’ ” (Agosto v. Board of Trustees of Grossmont-Cuyamaca Community College Dist. (2010) 189 Cal.App.4th 330, 336 [118 Cal.Rptr.3d 300], quoting Saathoff v. City of San Diego (1995) 35 Cal.App.4th 697, 700 [41 Cal.Rptr.2d 352].) However, a Court of Appeal engages in de novo review “ ‘when the case involves resolution of questions of law where the facts are undisputed.’ ” (Agosto, at p. 336, quoting Saathoff, at p. 700; accord, Schram Construction, Inc. v. Regents of University of California (2010) 187 Cal.App.4th 1040, 1051-1052 [114 Cal.Rptr.3d 680].) Accordingly, we also review the questions of statutory construction presented in this case de novo. (See Margarito v. State Athletic Com. (2010) 189 Cal.App.4th 159, 166 [116 Cal.Rptr.3d 888]; Farahani v. San Diego Community College Dist. (2009) 175 Cal.App.4th 1486, 1491 [96 Cal.Rptr.3d 900].)

B. Statute of Limitations

We first consider the County’s arguments that the City’s property tax allocation claims are time-barred, thus precluding consideration of the merits. As we have recited, the trial court ruled the three-year statute of limitations set forth in Code of Civil Procedure section 338 applies to the City’s claims, barring recovery for fiscal years prior to the 2003-2004 fiscal year. In the trial court, the County advocated this result. However, on appeal, the County contends the three-year statute commenced running more than a decade earlier, although at different times, on what it calls the City’s “ERAF II” and “redevelopment” allocation claims. While now couched as statute of limitations arguments, what the County has done on appeal is repackage the equitable defenses it raised in the trial court, all of which the trial court rejected. We conclude the County cannot reverse course on appeal and is barred from raising its new statute of limitations arguments by the doctrine of invited error. Even were that not the case, we further conclude the County’s new limitations arguments are without merit.

1. The County’s Arguments in the Trial Court

In the trial court, the County asserted the City’s claims were barred by the 60-day period for bringing a “validation action” (Code Civ. Proc., § 860; Gov. Code, § 53511), which it maintained began running at the close of each fiscal year. The County alternatively asserted the three-year period in Code of Civil Procedure section 338 applied. The County maintained under that statute, “liability cannot extend, as a matter of law, backwards beyond Fiscal Year 2003-04.” The City responded that neither the 60-day, nor the three-year, period applied and the applicable limitations period was set forth in section 96.1, which bars the reallocation of property taxes for years that have been audited by the State Controller and for which all findings have been resolved. The trial court rejected the County’s argument that the validation statutes applied, but agreed with the County that Code of Civil Procedure section 338 applies and bars claims for fiscal years prior to 2003-2004.

In addition to its statute of limitations defenses, the County raised a host of equitable defenses, which it repeatedly characterized as such and treated as distinct from its limitations defenses. The County first invoked the doctrine of laches. It asserted the City’s claims “would have existed” by the 1995-1996 fiscal year since the SVRA was operative, ERAF II was in effect, and the City had been told by the Auditor-Controller that, in light of a state audit, he had changed his determination that the City was entitled to TEA. The County further asserted the city manager had been told the SCO had instructed the County to use the challenged methodology for determining the A.B. 8 comparative allocation figure and posited the City made a “decision to accept the SCO’s determination” for “strategic” reasons. The County suggested these reasons had to do with financial difficulties being experienced by the SVRA, which the City addressed in part by renegotiating a passthrough agreement between the SVRA and the County. The County claimed that had the City challenged its methodology for determining the comparative A.B. 8 allocation figure, it “would not have agreed to any renegotiation” of the passthrough agreement, “much less the terms and conditions” that were reached. Thus, the County maintained it had been prejudiced by the City’s asserted “decision to acquiescene [sic] and accept the determinations of the SCO and the [County] Auditor in 1996.” It additionally claimed it was prejudiced because the City had accepted Proposition 172 sales tax revenues channeled to local governmental entities to offset the ERAF II shift of property tax revenues. The County further asserted the “facts” underlying its laches defense supported denying relief to the City under the “doctrines of unclean hands, failure to exhaust administrative remedies, estoppel, and, waiver.”

The City disputed the County’s assertions and objected, on speculation grounds, to all of the County’s evidence as to what it “would have done” had the City, in 1996, challenged the way in which the County determined the comparative A.B. 8 allocation figure. The City also claimed that had it had any negotiating “strategy” in mind, it would have filed suit as soon as the passthrough agreement was renegotiated.. Further, any legal right had to be waived by the city council, and could not be waived by the alleged “acquiescence” of the city manager. And even if the city council had understood the City had a right to TEA and knowingly failed to pursue it—of which there was no evidence—the law holds that “as with estoppel, laches is not available where it would nullify an important policy adopted for the benefit of the public.” (Feduniak v. California Coastal Com. (2007) 148 Cal.App.4th 1346, 1381 [56 Cal.Rptr.3d 591].) The City maintained the Legislature’s enactment of the TEA statute represented an important policy decision infusing a degree of fairness into the complicated morass of property tax allocation for the benefit of taxpayers residing in no- and low-property-tax cities. Also, far from being prejudiced, the City claimed the County had received millions in property tax revenues to which it was not entitled.

The trial court sustained the City’s objections to the County’s evidence and thus ruled the County had failed to support its laches defense with a concise statement of the law and relevant evidence as required by California Rules of Court, rule 3.1113(b), and also had failed to meet its burden of showing prejudice.

The County additionally based a number of equitable defenses on Finding No. 1 in the SCO’s March 1997 audit report. Characterizing the finding as a directive to utilize the challenged methodology for determining the comparative A.B. 8 allocation figure, the County asserted the Auditor-Controller “neither possessed discretion nor was legally entitled” to do anything different and therefore there was no different “ministerial action” that could be enforced by a writ of mandate. The County acknowledged a writ of mandate can generally issue when a taxing authority or official fails to act in accordance with the law. However, it claimed that “due to the unique facts associated with the 1997 SCO Audit,” the Auditor-Controller “possessed no legal option” to do anything other than use the challenged methodology to determine the comparative A.B. 8 allocation figure. (Emphasis omitted.) The County therefore asserted that if the trial court ruled against it on the statutory allocation issues, the appropriate remedy was declaratory relief, not a writ of mandate.

The County also asserted the City had “waived” its claims against the County by failing to “administratively contest” or seek “judicial review” of Finding No. 1 and by “acquiescing]” in that finding “by seeking an extended repayment plan” from the Auditor-Controller to repay previously allocated TEA. The County similarly argued the City was barred from pursuing its claims by “administrative collateral estoppel.” The County claimed the City could have, and should have, taken issue with Finding No. 1 directly with the State Controller, and the Auditor-Controller was bound to adhere to that finding on a going-forward basis.

The City responded there was, again, no evidence the city council knowingly forfeited any rights under the TEA statute. And even if there was, public officials and public agencies cannot alienate public rights by “ ‘mere failure to assert such rights [o]n behalf of the public which they represent.’ ” (City of Santa Cruz v. Pacific Gas & Electric Co. (2000) 82 Cal.App.4th 1167, 1177-1180 [99 Cal.Rptr.2d 198]; see Civ. Code, §3513.) The City also asserted the Auditor-Controller was obligated to comply with the relevant statutes and could not avoid issuance of a writ compelling such compliance by claiming he/she was acting at the direction of the State Controller. The City further claimed the County had failed to establish, and could not establish, that Finding No. 1 “required” the Auditor-Controller to use the methodology for determining the comparative A.B. 8 allocation figure challenged by the City.

In rejecting the County’s equitable defenses based on Finding No. 1, the trial court first mled the County had not identified any authority that it was “under a duty to follow the findings in the SCO audit report” that could excuse it from complying with the controlling property tax statutes. The court secondly mled Finding No. 1 was not a directive that the County utilize the challenged methodology for determining the comparative A.B. 8 allocation figure. Specifically, the court found: “[Although the County states otherwise, there is no apparent ‘directive’ regarding the methodology to be used in calculating the AB8 amount in Finding No. 1 of the SCO’s 1997 report. Finding No. 1 noted that the county had used an incorrect tax base property tax amount to calculate the TEA formula adjustment because it had failed to take into account the City RDA. There is no discussion of ERAF or the AB8 calculation. The SCO’s recommendation for Finding No. 1 was ‘The County should recompute the TEA formula adjustments to conform with the Revenue and Taxation Code.’ [f] The County has failed to demonstrate to the Court that (1) it was following the direction of the SCO in computing the tax allocations or (2) that it had a duty to do so.” (Italics added.) The court further found that, since Finding No. 1 “only recommends that the County Auditor recompute the TEA formula in accordance with the Revenue and Taxation Code,” there was no reason for the City to have challenged the finding. As for the City’s agreement to repay “the extra TEA amount it had been paid as a result of the County Auditor’s failure to deduct the tax increment paid to the City RDA from the TEA base,” the court found it did not show the City “knowingly gave up its right to pursue any misallocation by the County or mistake in calculating the AB 8 amount.”

The trial court rejected the County’s administrative estoppel argument for the additional reason the County had not established, and could not establish, all the requisite elements to impose such an estoppel. The County could not show that, in auditing the county, the SCO had acted in a “judicial capacity” and rendered an adjudicatory decision. Nor could it show the State Controller has authority to administratively adjudicate a dispute between a county and a city therein, or that the City had had an opportunity to fairly and fully litigate its claims against the County in the course of the audit.

2. The County’s Arguments on Appeal

While the County agrees the three-year statute of limitations under Code of Civil Procedure section 338 applies, it now contends the three-year period commenced running (a) on July 9, 1993, as to the City’s ERAF II allocation claims and (b) in 1997, as to the City’s redevelopment allocation claims.

The County bases its first argument on the assertion the Auditor-Controller had a “ministerial obligation to comply” with a July 9, 1993, letter sent by the Department of Finance (DOF) to county auditors informing them of the amounts by which local governmental tax bases were to be deemed “reduced” under ERAF II Because an amount was specified for the City, the County claims the letter was a “determination of the DOF” that the City “bore the economic responsibility for the ERAF II Shift.” It asserts the City was required to challenge “this 1993 directive” within three years.

The County bases its second argument on the facts proffered in support of its laches defense in the trial court: the SVRA was operative by the 1995-1996 fiscal year, the City was allegedly told during that timeframe the County had been instructed by the SCO to use the challenged methodology for determining the comparative A.B. 8 allocation figure, and the Auditor-Controller was required to comply with Finding No. 1 in the SCO March 1997 audit report, which the County continues to assert “directed” the Auditor-Controller to use the challenged methodology. The County contends the City was required to “challenge the [1997] SCO determination” within three years.

As a general rule, theories not raised in the trial court cannot be raised for the first time on appeal. This is a matter of fundamental fairness to both the trial court and opposing parties. (People ex rel. Dept, of Transportation v. Superior Court (2003) 105 Cal.App.4th 39, 46 [129 Cal.Rptr.2d 60].) There are exceptions to this rule, including where a new theory pertains only to questions of law based on undisputed facts. (Shelter v. Superior Court (2008) 158 Cal.App.4th 1697, 1709 [71 Cal.Rptr.3d 207].) But even then, whether an appellate court will entertain a new theory raised for the first time on appeal is strictly a matter of discretion. (See Hussey-Head v. World Savings & Loan Assn. (2003) 111 Cal.App.4th 773, 783, fn. 7 [4 Cal.Rptr.3d 171].) Moreover, where a new theory contemplates a factual situation that is “ ‘open to controversy’ ” and was not placed at issue in the trial court, it cannot be advocated on appeal. (Richmond v. Dart Industries, Inc. (1987) 196 Cal.App.3d 869, 879 [242 Cal.Rptr. 184].) Likewise, when a party bears some responsibility for the claimed error, they are generally estopped from taking a different position on appeal or are deemed to have waived the error. (E.g., Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 403 [87 Cal.Rptr.2d 453, 981 P.2d 79] [estoppel]; Telles Transport, Inc. v. Workers’ Comp. Appeals Bd. (2001) 92 Cal.App.4th 1159, 1167 [112 Cal.Rptr.2d 540] [waiver].) “[W]here a deliberate trial strategy results in an outcome disappointing to the advocate, the lawyer may not use that tactical decision as the basis to claim prejudicial error.” (Mesecher v. County of San Diego (1992) 9 Cal.App.4th 1677, 1686 [12 Cal.Rptr.2d 279].)

Given the state of the record here—including that the County urged the trial court to apply the three-year limitations period in Code of Civil Procedure section 338 and affirmatively represented the consequence would be the preclusion of claims based on fiscal years prior to fiscal year 2003-2004—we conclude the County invited the error of which it now complains and thus is estopped to assert, or has waived, the contrary arguments it now advances on appeal, i.e., that the three-year statute began running years earlier and is a complete bar to the City’s ERAF II and redevelopment claims.

Even if the arguments were properly before us, we would reject them. As to the County’s first argument directed at the City’s ERAF II claims, there is no evidence in the record, for example, that in making the calculations required under ERAF II and communicating those numbers to the counties, the DOF even had in mind, let alone intended anything by implication, with respect to the alternative allocation system established by section 98. There, likewise, is no evidence as to what the governing body of the City knew or understood about the July 9, 1993, letter from the DOF to county auditors concerning the ERAF II “reductions.” Accordingly, we disagree with the County’s assertion that the DOF’s July 1993 letter was a “fundamental decision” as to the City’s entitlement to TEA under section 98. Citing Dillon v. Board of Pension Commrs. (1941) 18 Cal.2d 427 [116 P.2d 37] (Dillon), the County argues the DOF’s 1993 letter was the equivalent of a pension board’s decision denying an application for a pension, which must be challenged within three years. We see no similarity, including because an applicant for a pension takes the affirmative step of applying for such and receives notice of an adverse decision on his or her application. Here, the City had no part in triggering the DOF’s letter, and there is no evidence as to what, if any, notice the City had with respect to the letter.

As for the County’s second argument—that the City’s redevelopment claims are time-barred—we agree with the trial court that the County did not establish that the City was told in 1997 that the County had been directed by the SCO to use the challenged methodology for determining the comparative A.B. 8 allocation figure. To begin with, as the trial court found, Finding No. 1 in the March 1997 SCO audit report did no more than direct the County to “recompute the TEA formula adjustments to conform with the Revenue and Taxation Code.” As we have discussed, the “TEA formula” means the six-step formula set forth in the TEA statute. (§ 98, subd. (c).) Finding No. 1 said nothing about the method for determining the comparative A.B. 8 allocation figure, let alone the inclusion in that comparative calculation of property tax revenues allocated to the SVRA. In addition, the Auditor-Controller’s 1996 letter to the city manager referring to the then ongoing audit and explaining the problem the Auditor-Controller’s office had discovered with respect to redevelopment stated (a) the office had failed to account for the SVRA at all and (b) the TEA statute required that redevelopment be taken int