With little fanfare, the long-sought after billboard ban was given preliminary approval by a unanimous Reno City Council August 23, setting the stage for final passage. The second and final reading is expected to occur on September 13. But in a 4-2 vote the council agreed to appeal Washoe County District Court Judge Scott Freeman’s order to void about 66 unused banked billboard permits. Both Council Members Jenny Brekhus and Naomi Duerr opposed the Reno City Attorney’s request for permission to appeal.

Once the second reading occurs, all new billboards will be banned in Reno with the exception of some unused banked permits that could be used to erect new displays. The new billboard policy and ordinance enforces a billboard ban approved by the people in a 2000 ballot initiative.

Billboard-free view in south Reno along I-580

The people’s vote was never enforced by the past city council. Instead, it allowed new billboards and new permits on a routine basis. When a billboard was demolished, sign owners were granted a new permit to build in a new location or a “banked” permit until a new spot could be found for the billboard. That left 82 unused permits available to become new billboards within Reno city limits. Scenic Nevada challenged 66 of these permits and won the court order last month from Judge Freeman to have them voided.

Council Approves Ban without City Attorney Additions

The new ordinance bans digital billboards and halts the practice of handing out new permits for demolished billboards, known as banking and relocation. That means no new billboards will be allowed within Reno, once the banked permits are used, expire or are voided. It also stops the city from allowing any new billboards based on the challenged 66 banked permits, until litigation ends.

Meanwhile, Lamar Central Outdoor, which owns most if not all of the challenged permits, filed an appeal to the Nevada Supreme Court last week. And the city followed suit, after the 4-2 vote to appeal.

Unexpectedly, City Attorney Karl Hall asked the council at the August 23 meeting to re-enact the 2002 and 2003 ordinances that allowed “banking” billboard permits, to reissue the permits voided by Judge Freeman and to appeal the judge’s order. The council unanimously rejected the first two requests and thankfully passed the billboard ban without them. But it agreed to the appeal.

Council Member Brekhus objected to the city attorney’s proposed ordinance additions, pointing out that the Reno Planning Commission did not get a chance to review them and recommended approval of the billboard ban without them.

“I’d like to act on the recommendation as it came up through the planning commission and then we can talk about (the other ordinance requests) on the agenda another day,” Brekhus said.

Both Council Members Duerr and Paul McKenzie agreed that the city attorney’s request to reenact banking and reissue voided permits should be nixed. Duerr added that 57% of the people voted for the ballot initiative and the community has not endorsed continuing billboards or continuing the banking system in recent feedback received by the city during the master plan update now underway.

City Appeals Judge Freeman’s Ruling

All three council members said they agreed with Judge Freeman’s decision, ordering the city “to cease and desist” from allowing the contested permits to become new billboards. But Councilman McKenzie said appealing the judge’s decision would provide “a seat at the table” with Lamar Central Outdoor and Scenic Nevada in the event of a settlement or in defending the city’s repeal of banking ordinances.

Judge Freeman agreed with Scenic Nevada’s arguments that all of the unused banked permits issued between 2002 and 2012 are invalid because the ordinances allowing them were void during this period. Judge Freeman based his ruling on the Nevada Supreme Court’s decision that found the city’s banking and relocation ordinances were unconstitutional.

“Upon careful review of whether banked permits issued between 2000 and 2012 are invalid, the Court finds the Supreme Court of Nevada’s order unambiguously found the 2002 and 2003 modifications of the (Reno) voter initiated ordinance unconstitutional,” Judge Freeman said in his Aug. 2 order. “As such, this court finds any banked receipts issued under the unconstitutional modifications invalid.”

Council Members Brekhus and Duerr Oppose Appeal

Apparently, the city attorney is concerned the city will be on the hook financially for the banked receipts issued in error, if the state Supreme Court agrees with Judge Freeman and upholds voiding the invalid permits. And Lamar Outdoor, apparently, is looking for a big payout because its attorney has said in court that if the city changes its billboard policy and ordinance, the community will have to pay.

Council Member Brekhus opposed the request for an appeal. She said she had a “difficult time” appealing Judge Freeman’s decision which she said was well written, well rationalized and correct.

“I’m just not inclined to want to appeal a decision that I think is right,” she said. She also said that the city attorney’s office has not responded to her request for a briefing on permits issued in error. Plus, she said the billboard industry was present during the development of the banking ordinances and were the primary advocates for banking.

“I do want to note on the record that during the rule making of the banked receipts this billboard company (Lamar Central Outdoor) or its predecessor (Clear Channel Outdoor) was present all throughout this determination,” she said. “Their fingerprints were on the rule making; they were the primary advocates of the rule making of the banked receipts.”

She said Lamar was aware of the billboard controversy including the people’s ballot initiative and litigation. Lamar purchased all of Clear Channel’s billboards and banked permits in January 2016, in the midst of litigation. Five months later the state Supreme Court ruled that a period of “interim invalidity” existed, casting doubt on the validity of the banked permits issued between 2000 and 2012.

“So they progressed with full knowledge…they proceeded at their own risk,” Brekhus said. “I’m not supportive of the appeal.”

Council Member Duerr said she was satisfied with Judge Freeman’s ruling and voiced her concerns on appealing. She said it would “send the wrong message to the public” after approving a new billboard policy and ordinance to close the billboard bank and ban digital billboards.

“And what I’m concerned about is that Lamar is engaged in dozens of law suits against communities around the country,” she said. “If we were to appeal, it would give this party a foothold in yet another case.”

She added that appealing Judge Freeman’s ruling would be fruitless and instead suggested joining with Scenic Nevada against Lamar in the appeal.

“My recommendation would be to wait and see if Lamar appeals on their own and, if they do, consider joining in with Scenic Nevada to defend the council’s policy position because that’s our adopted position at this point,” she said. “I think it’s fruitless to go argue in court against our own adopted position.”

City Attorney Wants a Say

Deputy City Attorney Chandeni Sendall defended the city attorney’s request for permission to appeal, saying the end goal for the council might be finding the permits are invalid, but there are other procedural issues that she believes set a bad precedent and that the city council has a right to decide the validity of the banked receipts.

Without the appeal, “It leaves us out as the odd person, potentially, to put all the blame on,” she said. “In that regard I would definitely say the liability is much higher, if we don’t participate to preserve our right for city governance.”

Councilman McKenzie agreed, explaining he was worried about the possible results if the city was not involved.

“I think we should be there and argue the fact that this council has the legislative ability to change rules and if these (banked billboard permits) were issued in violation of the constitution then there should be no liability to us,” McKenzie said. “We should be there to make those arguments and we shouldn’t be depending on someone else to make those arguments.”

But he also was concerned about appealing a decision that he agrees with.

“I hate to direct our attorneys to appeal a ruling that basically follows what we prefer,” McKenzie said. “It is what we were looking for, the banked receipts, many of us, me included, had hoped that that’s what the courts were going to rule. And that is why I felt that we should leave it up to the courts.”

He reasoned that the city should be a party, but should not appeal the judge’s order. “We need to get involved but the arguments we need to make aren’t to the judge’s ruling (to void the permits), but it’s the fact we need to be there to protect our interests,” he said. “Not sure how to do that.”

Council Member Duerr also spoke about the city attorney’s concern that the city might be held responsible for invalid billboard permits, saying the problem is there is no way to predict what the courts would do. She asked whether the city could appeal the procedural issues without arguing that Judge Freeman “came to the wrong conclusion about invalidity” of the banked permits.

Deputy City Attorney Sendall said the city was limited by what can be appealed. She told the council that, perhaps, the details of the arguments that are made eventually to the state Supreme Court are something to be discussed in a closed attorney-client session. “But your point is well made,” she said. “We’re listening is all I would say.”

Mayor Hillary Schieve and Council Members Oscar Delgado and Neoma Jardon voted with McKenzie to approve filing the appeal.