McIntosh v. Aubry

In McIntosh v. Aubry (1993) 14 Cal.App.4th 1576, Riverside County wanted to encourage establishment of a privately operated residential care facility for disturbed or abused minors. In its effort to establish such a facility the county agreed with a private entity, Helicon, to sublease to Helicon a portion of an undeveloped tract of land over which the county held a long-term ground lease. Under the terms of the sublease Helicon would pay no rent for the first 20 years and would construct the care facility at its own expense. The county further agreed to place children in the facility and pay Helicon for their care. In addition to the rent forbearance and agreement to pay for the care of children placed in Helicon's facility, the county agreed to waive certain inspection costs it typically charged developers and to advance the cost of performance and payment bonds. Helicon entered into a construction contract with a general contractor which did not require the compliance with the PWL. The court held that, notwithstanding the fairly substantial financial incentives the county provided, the project did not involve the use of public funds within the meaning of the PWL. "A theme recurrent in plaintiffs' briefing is that aspects of this case (rent forbearance, inspection costs, bond premiums, public purpose) have a 'cumulative' effect warranting public-works status even if the individual aspects do not. We reject that approach as unworkable. Parties must be able to predict the public-works consequences of their actions under reasonably precise criteria and clear precedent. Subdivision (a) of section 1720 would become a quagmire under plaintiffs' approach, the only certain result being constant litigation. The Legislature has formulated precise criteria tailored to many situations in this area ... and is uniquely suited to balance and address the several policy concerns raised here." (McIntosh v. Aubry, supra, 14 Cal.App.4th at p. 1593.)