APPEAL from a judgment of the Kings County Superior Court. James T. LaPorte, Judge. (Super. Ct. No. 07C0185).
The opinion of the court was delivered by: Levy, J.
CERTIFIED FOR PUBLICATION
In late 2005, respondents, the City of Lemoore and the Lemoore City Council (City), engaged Colgan Consulting Corporation and Joseph Colgan (Colgan) to conduct a development fee impact study and prepare a report (Colgan Report). In late 2006 and early 2007 the City adopted various development impact fees based on the Colgan Report. Appellant, Home Builders Association of Tulare/Kings Counties, Inc. (HBA), challenged certain of these fees as being invalid under the Mitigation Fee Act (Gov. Code*fn1 , § 66000, et seq.).
The trial court upheld the majority of the disputed impact fees. HBA contends the trial court erred in that it applied an incorrect and excessively deferential "quantum of proof." HBA further argues that the various fees violate certain Mitigation Fee Act requirements. HBA also contends that some of these fees are preempted by the fees imposed for neighborhood and community parks that serve a subdivision under the Quimby Act (§ 66477).
As discussed below, the fire protection impact fee for the east side of the City is invalid in that it is not reasonably related to the burden created by the development project. However, the balance of the judgment upholding the remaining disputed fees will be affirmed.
Between October and December 2006, the City received Colgan's findings on the development impact fee study. Based on this report, the City held public hearings on the adoption of various impact fees. In December 2006 and January and February 2007, the City adopted 13 impact fees for new housing in Lemoore.
In May 2007, HBA filed and served its first amended petition for writ of mandate and complaint. HBA challenged 7 of the impact fees adopted pursuant to the Colgan Report. According to HBA, the Colgan Report incorporated and applied a variety of accounting methods that are unlawful under the Mitigation Fee Act. Specifically, HBA objected to development impact fees for law enforcement, park land acquisition and improvement, refuse vehicles and containers, fire protection, general municipal facilities, and community/recreational facilities. HBA also challenged the process by which the City accounts for and spends the impact fees collected.
The City initially demurred to the first amended petition/complaint and moved to strike all allegations that the fees were special taxes, proceeds of taxes, were excessive as such, and violated the California Constitution. The trial court overruled the demurrer but granted the motion to strike. HBA did not amend. Accordingly, all constitutional issues were removed and the case proceeded on the statutory claims raised by HBA as to the City's alleged noncompliance with the Mitigation Fee Act.
Thereafter, the City moved for summary judgment/summary adjudication. The trial court granted summary adjudication in the City's favor on the causes of action regarding the fire protection impact fees, police impact fees, municipal facilities impact fees, and the administration of the impact fees. The court concluded that the City had adequately demonstrated that it complied with the Mitigation Fee Act and that its determination of the amount of these disputed fees was neither arbitrary nor capricious. However, the court found that triable issues of material fact existed with respect to the causes of action regarding the park land acquisition, park land improvement, community/recreation, and refuse vehicles and containers impact fees.
Following a trial on the remaining causes of action, the trial court ruled in favor of the City on the validity of those fees with one exception. The court invalidated the park land improvement impact fee as applied to subdivisions subject to the Quimby Act.
1. The Mitigation Fee Act
At issue in this appeal is whether, in adopting the disputed impact fees, the City complied with the Mitigation Fee Act. This act embodies a statutory standard against which monetary exactions by local governments subject to its provisions are measured. (Ehrlich v. City of Culver City (1996) 12 Cal.4th 854, 865.) It was passed by the Legislature "'in response to concerns among developers that local agencies were imposing development fees for purposes unrelated to development projects.'" (Id. at p. 864.)
The Mitigation Fee Act requires the local agency to identify the purpose of the fee and the use to which the fee will be put. (§ 66001, subd. (a)(1) and (2).) The local agency must also determine that both "the fee's use" and "the need for the public facility" are reasonably related to the type of development project on which the fee is imposed. (§ 66001, subd. (a)(3) and (4).) In addition, the local agency must "determine how there is a reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed." (§ 66001, subd. (b).) "Public facilities" are defined as including "public improvements, public services, and community amenities." (§ 66000, subd. (d).)
2. The Standard of Review and Burden of Proof
The City's adoption of the development impact fees under the Mitigation Fee Act involved a quasi-legislative action. (Cf. Warmington Old Town Associates v. Tustin Unified School Dist. (2002) 101 Cal.App.4th 840, 849.) Thus, the City's action is reviewed under the narrower standards of ordinary mandate. (Garrick Development Co. v. Hayward Unified School Dist. (1992) 3 Cal.App.4th 320, 328.) Accordingly, judicial review is limited to an examination of the proceedings before the City to determine whether its action was arbitrary, capricious, or entirely lacking in evidentiary support. (San Francisco Fire Fighters Local 798 v. City and County of San Francisco (2006) 38 Cal.4th 653, 667.) The action will be upheld if the City adequately considered all relevant factors and demonstrated a rational connection between those factors, the choice made, and the purposes of the enabling statute. (Shapell Industries, Inc. v. Governing Board (1991) 1 Cal.App.4th 218, 232.) This issue, i.e., whether the City's action was arbitrary or capriciousness, is a question of law. (Id. at p. 233.) "The inquiry into arbitrariness or capricious is like substantial evidence review in that both require a reasonable basis for the decision." (Garrick Development Co. v. Hayward Unified School Dist., supra, 3 Cal.App.4th at p. 328.)
As noted above, before imposing a fee under the Mitigation Fee Act, the local agency is charged with determining that the amount of the fee and the need for the public facility are reasonably related to the burden created by the development project. If such a fee is challenged, the local agency has the burden of producing evidence in support of its determination. (Garrick Development Co. v. Hayward Unified School Dist., supra, 3 Cal.App.4th at p. 329.) The local agency must show that a valid method was used for imposing the fee in question, one that established a reasonable relationship between the fee charged and the burden posed by the development. (Shapell Industries, Inc. v. Governing Board, supra, 1 Cal.App.4th at p. 235.) In other words, the action was not arbitrary or capricious.
However, this burden of producing evidence is not equivalent to the burden of proof. In general, the imposition of various monetary exactions, such as special assessments, user fees, and impact fees, is accorded substantial judicial deference. (San Remo Hotel v. City and County of San Francisco (2002) 27 Cal.4th 643, 671.) In the absence of a legislative shifting of the burden of proof, a plaintiff challenging an impact fee has to show that the record before the local agency clearly did not support the underlying determinations regarding the reasonableness of the relationship between the fee and the development. (Silicon Valley Taxpayers' Assn., Inc. v. Santa Clara County Open Space Authority (2008) 44 Cal.4th 431, 444.)
There have been occasional comments from courts of appeal that the burden of proof in a fee case falls on the local agency. These cases cite Beaumont Investors v. Beaumont-Cherry Valley Water Dist. (1985) 165 Cal.App.3d 227 as support for this shift. However, in Beaumont Investors, the local agency failed to produce any evidence to support its calculation of the disputed fee. Thus, it was a failure to meet the burden of production, not the burden of proof. In ruling that the facilities fee was invalid because the local agency failed to develop a record from which costs reasonably related to the development could be determined, Beaumont Investors conflated the two concepts. In contrast here, the City produced a record to support the disputed fees. Thus, Beaumont Investors and its progeny are distinguishable.
Here, the standard applicable to ordinary mandate applies and there is no basis for shifting the parties' burdens. Thus, the City had the initial burden of producing evidence of the reasonableness of the relationship between the fee charged and the burden posed by the development. However, HBA had the burden of proving that the record before the City did not support the City's underlying determinations.
3. Community/Recreation Facility Impact Fee (Resolution No. 2007-1)
The City relied on the Colgan Report in adopting the various development impact fees. Colgan proposed the community/recreation facility impact fee to fund the cost of adding community and recreation facilities that will be needed to maintain the current level of service as the City grows. Colgan calculated these fees based on the existing ratio of community and recreation facility asset value to population, the rationale being that the need for such facilities is based on the size of the population to be served. Colgan determined that the City had invested $5,477,160 in existing community recreational facilities and then divided that number by the current population to arrive at the per capita cost. That cost was then multiplied times the population per unit of development type to arrive at the fee per unit. This calculation is known as the standard-based method.
Regarding future needs, Colgan noted that the existing community and recreational facilities are unique and will not be duplicated. These facilities include the civic auditorium, a youth plaza skate park, a teen center, the train depot complex, and a golf course. Rather, the City intends to expand the range of recreational choices by constructing other types of facilities including a municipal aquatic center, a municipal gymnasium and fitness center, and a naval air museum. These facilities are expected to cost in excess of $5 million while the impact fee is projected to yield approximately $3.2 million.
HBA objects to the community/recreation facility impact fee on two grounds. HBA argues that the fee violates the Mitigation Fee Act's requirement that the public facilities be identified and that the fee is preempted by the Quimby Act.
a. The City Adequately Identified the Public Facilities
Section 66001, subdivisions (a)(1) and (2), require the City to "[i]dentify the purpose of the fee" and "[i]dentify the use to which the fee is to be put." If the use is financing public facilities, the facilities must be identified. However, the statute provides flexibility regarding how that identification may be made. It may, but need not, "be made by reference to a capital improvement plan as specified in Section 65403 or 66002, may be made in applicable general or specific plan requirements, or may be made in other public documents that identify the public facilities for which the fee is charged." (§ 66001, subd. (a)(2).) Similarly, Lemoore City Code, section 8-10-3, requires that impact fee resolutions shall be adopted in accordance with the provisions of the Mitigation Fee Act. Regarding the content of such resolutions, Lemoore City Code, section 8-10-2, requires the city council to "list the specific public improvements to be financed."
HBA contends the City disregarded these provisions in establishing the community/recreation facility impact fee in that no specific public improvements were identified. Rather, reference was made to examples of future facilities without any actual plan or commitment. The crux of HBA's complaint is the City's use of the standard-based method to calculate the fees to maintain the current level of service, i.e., the ratio of the value of existing facilities divided by the current population to arrive at the per capita cost. HBA argues the Mitigation Fee Act requires the identification of a specific improvement plan and its attendant costs, not simply a type or category of future public facilities. In other words, the City must use a plan-based approach.
Contrary to HBA's position, section 66001 is not so limiting. Rather, it is acceptable for the local agency to identify the facilities via general plan requirements. In fact, a "fee" may be "established for a broad class of projects by legislation of general applicability." (§ 66000, subd. (b).) It would be unreasonable to demand the specificity urged by HBA and require local agencies to make a concrete showing of all projected construction when initially adopting a resolution. Such a ...