## Facts

- Mesa amended its development impact fee ordinance in 2007 to allocate a portion of impact fees to maintenance of municipal cultural facilities (e.g., museums and arts centers).
- Mesa adopted a legislative finding that each service funded by the fee, including cultural facilities, constituted a “necessary public service.”
- Mesa had included a cultural-facilities component in its impact fee program since at least 1998.
- Mesa commissioned an outside consultant to study costs associated with new development and used the study to support the 2007 amendments.
- At the time of amendment, Mesa lacked specific plans to construct or expand cultural facilities, but directed fees to maintain existing facilities.
- The cultural-facilities fee was calculated using the city’s inventory of cultural facilities and the number of equivalent dwelling units, linking the fee to growth and expected use.
- The Home Builders Association of Central Arizona (HBA) sued for declaratory relief, asserting the cultural-facilities portion violated A.R.S. § 9-463.05.
- The superior court granted summary judgment for Mesa; HBA appealed.

## Issues

1. Whether municipal cultural facilities qualify as “necessary public services” under A.R.S. § 9-463.05(A), permitting their funding through development impact fees.
2. Whether the cultural-facilities fee satisfied A.R.S. § 9-463.05’s requirements that the fee provide “beneficial use” to the development and be reasonably related to the burden imposed by new development.

## Decision

- The Arizona Court of Appeals affirmed summary judgment for Mesa.
- The court held Mesa’s cultural facilities are “necessary public services” within A.R.S. § 9-463.05(A), authorizing development fees to fund them.
- The court held the cultural-facilities fee satisfied the statute’s “beneficial use” and “reasonable relationship” requirements, given the supporting study and cost-allocation methodology.

## Legal Principles

- Under A.R.S. § 9-463.05, “necessary public services” may include cultural facilities when they are rationally connected to municipal powers and implemented through lawful municipal planning and finance processes.
- A municipality is not confined to a fixed, historic list of “necessary” services; it may designate new necessary services if it complies with applicable statutory planning requirements.
- The “beneficial use” and “reasonable relationship” requirements are met when a municipality uses a reasonable methodology tying service costs (including maintenance) to new development and the development will have access to and benefit from the funded services.

## Conclusion

The court upheld Mesa’s cultural-facilities impact fee, interpreting “necessary public services” broadly enough to include cultural amenities and deferring to a study-based methodology showing a reasonable connection between growth, fee amounts, and benefits to new development.


Home Builders Ass'n of Cent. Ariz. v. City of Mesa, 226 Ariz. 7, 243 P.3d 610 (Ct. App. 2010)