## Facts

- The City of Lemoore retained a consultant to prepare a development impact fee study supporting a program of fees on new residential development.
- After public hearings, the City adopted 13 impact fees in late 2006 and early 2007.
- A homebuilders association challenged seven fees, arguing the City’s methodology and findings violated the Mitigation Fee Act (Gov. Code § 66000 et seq.) and related limits on exactions.
- The challenged categories included law enforcement, parks, refuse-related equipment, fire protection, general municipal facilities, and community/recreational facilities.
- The trial court upheld the fees in substantial part; the homebuilders association appealed, including a claim that certain park fees were barred by the Quimby Act (Gov. Code § 66477).

## Issues

1. What standard of review applies to a city’s legislative adoption of development impact fees challenged under the Mitigation Fee Act.
2. Whether the Mitigation Fee Act requires a city, at fee adoption, to specifically identify each facility to be funded rather than describing facility categories and future needs.
3. Whether existing surpluses in related fee funds prevent adoption of new impact fees for future development.
4. Whether the Act allows inclusion of costs such as vehicles, equipment, and certain operation- and maintenance-related components in fee calculations for public facilities.
5. Whether park and recreation impact fees adopted under the Mitigation Fee Act are preempted by, or impermissible because of, parkland dedication or in-lieu fee authority under the Quimby Act.
6. Whether adopting a higher park service standard for fee calculation was inconsistent with the City’s general plan.
7. Whether the east-side fire protection impact fee satisfied the Act’s reasonable relationship (nexus) requirement.

## Decision

- The Court of Appeal affirmed the judgment upholding the challenged fees except for one.
- The court held that the Mitigation Fee Act does not require a city to identify each specific facility in advance; general descriptions of future facilities and needs may suffice.
- The court held that existing fund surpluses did not bar imposing new fees on new development, given statutory restrictions and refund/accounting mechanisms.
- The court upheld inclusion of vehicles, equipment, and related components as permissible costs in calculating fees for public facilities.
- The court rejected the argument that the Quimby Act preempted park and recreation fees imposed under the Mitigation Fee Act.
- The court found no abuse of discretion in using a 5-acres-per-1,000-residents park standard despite a 3-acres-per-1,000 reference in the general plan.
- The court invalidated the east-side fire protection impact fee because it was not reasonably related to impacts of the assessed development.

## Legal Principles

- Legislative adoption of development impact fees is reviewed under an abuse-of-discretion/substantial-evidence approach; courts do not reweigh the policy judgments supporting a fee program.
- The Mitigation Fee Act requires a reasonable relationship between (a) the fee’s purpose and use and (b) the type of development project on which the fee is imposed, but it does not require project-by-project facility identification at adoption.
- A city may rely on general descriptions of facility categories, growth projections, and cost allocations to satisfy the Act’s facility-identification and nexus requirements.
- Existing surpluses in related fee accounts do not, by themselves, preclude adoption of new fees for impacts of future development where funds are restricted and subject to statutory accounting/refund rules.
- “Public facilities” for fee purposes may include associated items such as vehicles and equipment and may reflect costs tied to providing service capacity.
- Park exactions authorized by the Quimby Act and broader park and recreation impact fees under the Mitigation Fee Act address different functions and can coexist.
- A fee is invalid if the administrative record fails to show the required reasonable relationship and instead indicates the charge operates as a general revenue measure.

## Conclusion

The court largely sustained the City’s impact-fee program under the Mitigation Fee Act, including reliance on generalized facility planning, use of broad cost components, and coexistence with Quimby Act tools, but struck down the east-side fire protection fee for lacking the required nexus to development impacts.


Homebuilders Ass’n of Tulare/Kings Cntys., Inc. v. City of Lemoore, 185 Cal. App. 4th 554, 112 Cal. Rptr. 3d 7 (Ct. App. 2010)