DANIEL WALKER, as Trustee, etc., et al., Plaintiffs and Appellants, v. CITY OF SAN CLEMENTE et al., Defendants and Appellants.
No. G050552
Fourth Dist., Div. Three.
Aug. 28, 2015.
239 Cal. App. 4th 1350
Rutan & Tucker, Jeffrey M. Oderman, Robert O. Owen and Ajit S. Thind for Defendants and Appellants.
Spach, Capaldi & Waggaman, Madison Spach, Jr.; Brad Malamud and Paul Rosenfield for Plaintiffs and Appellants.
OPINION
ARONSON, J.—The Mitigation Fee Act (
In 1989, defendant and appellant City of San Clemente (City)2 created the “Beach Parking Impact Fee” because the City anticipated that substantial residential development proposed for the City‘s inland areas would significantly increase the demand for public parking at the City‘s beaches. The City therefore imposed the Beach Parking Impact Fee on all new residential developments outside the City‘s coastal zone to defray the cost of acquiring and constructing new beach parking facilities. Between 1989 and 2009, the City collected nearly $10 million in Beach Parking Impact Fees and accrued interest, but the City spent less than $350,000 to purchase a vacant parcel on which it has not constructed any parking facilities.
Plaintiffs and appellants Daniel Walker, as trustee for the 1997 Walker Family Trust, and W. Justin McCarthy (collectively, Plaintiffs) filed this action to compel the City to refund the unused portion of the Beach Parking Impact Fee. Plaintiffs alleged the five-year findings the City made in 2009
We affirm because the City failed to make the five-year findings the Act required and the statutorily mandated remedy for that failure is the refund of all unexpended Beach Parking Impact Fees. The City contends it satisfied the Act‘s requirement of five-year findings when it “receive[d] and file[d]” a 2009 staff report. We disagree. The report‘s findings were mere conclusions, not the specific findings required under the Act. The City therefore failed to justify its continued retention of the unexpended impact fees.
Plaintiffs also appeal, challenging the trial court‘s decision to deny (1) Plaintiffs’ claim the five-year findings the City made in 2004 were untimely; (2) Plaintiffs’ request for an order compelling the City to sell the vacant lot it purchased and refund the sale proceeds with the unexpended Beach Parking Impact Fees; (3) Plaintiffs’ request for an order compelling the City to reimburse the Beach Parking Impact Fee account for the administrative overhead costs the City charged; and (4) Plaintiffs’ request for a judicial determination the City improperly commingled the Beach Parking Impact Fees with other City revenues. As explained below, we affirm the judgment because these claims lack factual or legal merit.
I
LEGAL BACKGROUND: THE MITIGATION FEE ACT
The Legislature passed the Act ” ‘in response to concerns among developers that local agencies were imposing development fees for purposes unrelated to development projects.’ ” (Ehrlich v. City of Culver City (1996) 12 Cal.4th 854, 864 [50 Cal.Rptr.2d 242, 911 P.2d 429] (Ehrlich).) The Act creates uniform procedures for local agencies to follow in establishing, imposing, collecting, accounting for, and using development fees. (Centex Real Estate Corp. v. City of Vallejo (1993) 19 Cal.App.4th 1358, 1361-1362 [24 Cal.Rptr.2d 48] (Centex).) In passing the Act, the Legislature found and declared that “untimely or improper allocation of development fees hinders economic growth and is, therefore, a matter of statewide interest and concern.” (
The Act defines a development fee as “a monetary exaction other than a tax or special assessment ... that is charged by a local agency to the
To establish a development fee a local agency must identify “the purpose of the fee” and “the use to which the fee is to be put.” (
To impose an established development fee as a condition of approval for a specific development project, a 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.” (
Each development fee a local agency collects must be deposited “in a separate capital facilities account or fund in a manner to avoid any commingling of the fees with other revenues and funds of the local agency.” (
For all unexpended development fees, the agency must make findings every fifth year that identify how the fee will be used, demonstrate a reasonable relationship between the fee and the purpose for which it is charged, identify all sources and amounts of funding anticipated to complete financing for incomplete improvements that were identified when the fee was established, and designate the approximate dates for that funding to be deposited into a dedicated account. (
Any party may protest a local agency‘s decision to establish or impose a development fee by tendering any required payment and serving the agency with notice of the protest within 90 days of the fee being established or imposed. (
II
FACTS AND PROCEDURAL HISTORY
In the mid-1980‘s, several real estate developers proposed large residential developments outside the City‘s coastal zone that had the potential to nearly
Based on the parking study, the City in April 1989 adopted an ordinance establishing the Beach Parking Impact Fee. Under the Act, the City identified the fee‘s purpose as “mitigat[ing] the impact of the increased demand on beach parking caused by new residential development in that portion of the City of San Clemente which lies outside the City‘s coastal zone,” and the fee‘s use as financing “the acquisition and/or construction of parking facilities at or near the beach.” The City set the fee at $1,500 per dwelling unit, subject to annual adjustment based on the consumer price index, and identified the construction of parking structures at “the Pier Bowl, North Beach, or State Park” as the intended new parking facilities.
The City collected over $300,000 in the Beach Parking Impact Fee‘s first year and continued to collect substantial sums each year as residential development in the City‘s noncoastal zone progressed. In 1994, the City used approximately $337,000 in Beach Parking Impact Fees, and approximately $138,000 in local drainage fund monies, to purchase a vacant lot on El Camino Real adjacent to the City‘s North Beach parking lot. The local drainage fund monies were used because a drainage channel ran under the lot.
In the early 1990‘s, the City continued to study the demand for public beach parking and possible remedies. By 1995, these studies determined the parking structures the City originally contemplated were no longer needed because there was a surplus of parking in the City‘s North Beach area, beach parking “was in equilibrium at the Pier,” and parking needs in those areas could be satisfied with existing parking facilities and “functional parking improvements.” In April 1996, the City therefore adopted an ordinance to reduce the Beach Parking Impact Fee to $750 per dwelling unit, subject to annual adjustments based on the consumer price index. The City maintained the fee‘s purpose as “mitigat[ing] the impact of new development on beach parking,” but the City broadened the fee‘s use to financing improvements to beach parking. When it reduced the Beach Parking Impact Fee, the City already had collected approximately $2 million.
The City continued to collect the reduced Beach Parking Impact Fee throughout the 1990‘s and the 2000‘s, but it did not construct any new public
In 2004, the City “receive[d] and file[d]” the “Five-Year Required Report Mitigation Fee Act City of San Clemente” (2004 Five-Year Report). The City‘s staff prepared the report to comply with the Act‘s requirement that the City make findings to justify its continued retention of the collected but unexpended Beach Parking Impact Fees it had held for more than five years. In 2009, the City again “receive[d] and file[d]” a “Five-Year Required Report Mitigation Fee Act City of San Clemente” (2009 Five-Year Report) to comply with the Act‘s five-year findings requirement. This second report was identical to the first.
By the end of 2009, the City‘s noncoastal zone was essentially built out and the City had collected nearly $6 million in Beach Parking Impact Fees, plus more than $3 million in interest. Nonetheless, the City still had not constructed any new public beach parking facilities, and it did not have a specific plan for using the impact fees.
In August 2012, Plaintiffs filed this action for declaratory and mandamus relief to compel the City to refund the unexpended Beach Parking Impact Fees. Because the statute of limitations expired on any challenge to the City‘s decisions to establish and impose the impact fee and impose it on specific development projects, Plaintiffs did not challenge those actions by the City. Instead, Plaintiffs alleged the City must refund the Beach Parking Impact Fees because it did not timely use the fees for the designated purpose of constructing new beach parking facilities and the City failed to justify its continued retention of the fees. To the contrary, Plaintiffs alleged the City repeatedly had determined that there was no need for new beach parking facilities caused by the development of the City‘s noncoastal zone and that zone was essentially built out. Plaintiffs also claimed the unexpended impact fees must be refunded because the City‘s 2004 Five-Year Report was two years late and its 2009 Five-Year Report failed to make the requisite findings.
After a bench trial, the trial court entered judgment against the City and ordered it to refund the unexpended impact fees to the current owners of the properties on which the fee had been imposed. The parties estimated the amount of unexpended fees together with accrued interest totaled approximately $10.5 million, and the judgment established a formula to determine
III
DISCUSSION
A. Standard of Review
A local agency‘s establishment of a development fee under the Act is a quasi-legislative measure reviewed under the narrow standards applicable to ordinary mandamus (
Neither the parties nor our own research has disclosed any authority discussing the standard of review on whether a local agency properly made
We review de novo any challenge based on an interpretation of the Act‘s requirements. (See Warmington, supra, 101 Cal.App.4th at p. 849.) We apply the substantial evidence standard to review any factual findings the trial court made. (Hensel Phelps Construction Co. v. San Diego Unified Port Dist. (2011) 197 Cal.App.4th 1020, 1029–1030 [129 Cal.Rptr.3d 59].)
B. The Trial Court Properly Ordered the City to Refund the Unexpended Beach Parking Impact Fees
1. The City Failed to Make the Required Five-Year Findings
The City contends its 2009 Five-Year Report contained all the necessary findings the Act required for the City to retain the nearly $10 million in unexpended Beach Parking Impact Fees it still held 20 years after it started collecting the fee. We disagree because the City misconstrues both the five-year findings required under the Act and the City‘s own 2009 Five-Year Report.
As explained above, when a local agency has not used all of a development fee within five years of the date it started to collect the fee, the agency must make findings that (1) identify the agency‘s purpose in holding the unexpended balance; (2) demonstrate a reasonable relationship between the unexpended balance and the purpose identified when the agency assessed the fee; (3) identify the sources and funding anticipated to complete any incomplete public improvement identified when the fee was established; and (4) designate the approximate date the agency expects that funding to be deposited in the account holding the unexpended balance. (
The five-year findings requirement establishes “a mechanism ... to guard against unjustified fee retention” by a local agency (Home Builders,
Here, the City‘s 2009 Five-Year Report failed to make the specific findings the Act required.4 For example, the Act required the City to make a finding demonstrating a reasonable relationship between the unexpended Beach Parking Impact Fees and the purpose for which the fee was originally charged. (
The Act also required the City to make findings that (1) identified the sources and funds anticipated to complete financing for incomplete beach parking improvements that were identified when the Beach Parking Impact Fee was established, and (2) designated the approximate dates when it anticipates receiving that funding. (
The City‘s findings in the 2009 Five-Year Report, made 20 years after it established and began collecting the Beach Parking Impact Fee, fail to demonstrate the City still needs the nearly $10 million in fees and interest it collected to address public beach parking issues created by new development in the noncoastal zone. The report also fails to show how it will use those funds to address beach parking issues, what improvements the City intends to construct with the funds, the cost of those improvements, whether the City requires more money, and if so, when the City anticipates receiving that money. This is information the Act required, but the City failed to provide.6
As explained above, the five-year findings requirement imposed a duty on the City to reexamine the need for the unexpended Beach Parking Impact Fees to finance beach parking improvements that purportedly were required by the new development in the City‘s noncoastal zone. The City may not rely on findings it made 20 years earlier to justify the original establishment of the Beach Parking Impact Fee, or the findings it made 13 years earlier to justify reducing the amount of the fee. Instead, the Act required the City to make new findings demonstrating a continuing need for beach parking improvements caused by the new development in the noncoastal zone. The City failed to do so.
Similarly, the City contends its failure to identify the specific improvements it intended to finance with the Beach Parking Impact Fee does not make the City‘s finding adequate. When the City established the Beach Parking Impact Fee in 1989 the Act required the City to identify how it would use the fee. (
Moreover, we review the City‘s action, not the trial court‘s, and we are not bound or limited by the trial court‘s ruling. (SN Sands, supra, 167 Cal.App.4th at p. 191; Cresta Bella, supra, 218 Cal.App.4th at p. 451.)
The City also contends the 2009 Five-Year Report‘s findings on the source and amount of additional funding and the approximate date on which it would receive that funding complied with the Act‘s requirements. According to the City, the Act did not require it to specify the amount of additional funding it anticipated needing or when it would receive that funding because the City “had not yet identified or prepared cost estimates for the specific parking improvement projects it was planning to construct.” We disagree. The Act clearly required a finding that “identif[ied] all sources and amounts of funding anticipated to complete financing in incomplete improvements.” (
2. A Refund Is the Statutorily Mandated Remedy
The City contends the trial court should have remanded the matter to the City to make new findings correcting the “technical deficienc[ies]” in the City‘s five-year findings rather than requiring the City to forfeit the unexpended impact fees that the City properly had collected. The Act‘s plain language prohibits this remedy.
The City does not claim
Moreover, the cases on which the City relies do not apply to the current facts. SN Sands does not apply here because the City did not use an incorrect legal standard in making its five-year findings. The City properly identified the findings the Act required it to make, but simply failed to make those specific findings.
Manufactured Home, Respers, Mountain Defense, and Hadley do not apply because they involve administrative mandamus proceedings under
As explained above, however, judicial review under
The City also argues the trial court should have remanded the matter for the City to correct its findings because the law abhors forfeitures and therefore requires statutes imposing them to be strictly construed. (See Enfantino v. Superior Court (1984) 162 Cal.App.3d 1110, 1113 [208 Cal.Rptr. 829]; Hernandez v. Temple (1983) 142 Cal.App.3d 286, 290 [190 Cal.Rptr. 853].) Although it is true forfeitures are disfavored, it does not logically follow that forfeitures are unenforceable. To the contrary, courts must enforce unambiguous statutory forfeitures and may not avoid them by rewriting the statute under the guise of statutory construction. (People v. Indiana Lumbermens Mutual Ins. Co. (2010) 190 Cal.App.4th 823, 829-830 [118 Cal.Rptr.3d 555].) Assuming
Finally, the City contends
C. Plaintiffs’ Appeal from the Trial Court‘s Judgment Lacks Merit
Although the trial court entered judgment in Plaintiffs’ favor and ordered the City to refund the entire unexpended balance of the Beach Parking Impact Fee, Plaintiffs also appealed from the judgment. They contend the trial court erroneously denied their request for additional relief. We find these claims unpersuasive.
1. The Statute of Limitations Barred Plaintiffs’ Claims Regarding the 2004 Five-Year Report
Plaintiffs contend the trial court erred in finding the four-year limitations period in
A party may be equitably estopped to assert the statute of limitations when his or her conduct induced another not to file a lawsuit within the applicable limitations period. (Doheny Park Terrace Homeowners Assn., Inc. v. Truck Ins. Exchange (2005) 132 Cal.App.4th 1076, 1089 [34 Cal.Rptr.3d 157].) Plaintiffs, however, point to no conduct by the City during the applicable limitations period that induced them not to bring an action challenging the 2004 Five-Year Report. The only conduct by the City that Plaintiffs identify is a letter from the City‘s attorney that stated the City filed the 2004 Five-Year Report in 2003, but that letter was sent in 2012—several years after the limitations period already had expired.
2. The City‘s Deficient Five-Year Findings Do Not Require the City to Sell the Vacant Lot It Purchased with Beach Parking Impact Fees
Plaintiffs contend the trial court erred in denying their request to compel the City to sell the vacant lot it purchased adjacent to its North Beach parking lot and refund the sale proceeds to the affected property owners. According to Plaintiffs, the Act required the City to use the Beach Parking Impact Fee for the designated purpose of acquiring and constructing public beach parking, but the City‘s purchase of a vacant lot failed to further the purpose of the fee because the City did nothing with the lot for approximately 20 years. Plaintiffs, however, fail to cite any authority that would have allowed the trial court to order the City to sell the lot.
When a local agency fails to make the required five-year findings,
Here, the vacant lot the City purchased is not an “unexpended portion” of the Beach Parking Impact Fee. To the contrary, the City expended a portion of the impact fee to purchase the lot and Plaintiffs concede no one challenged that purchase. Nothing in the Act or any other authority Plaintiffs have cited authorized the trial court to order the City to undo what was at the time a valid use of the impact fees. The City has not yet constructed any public beach parking on the vacant lot, but it also has not used the lot for any purpose inconsistent with public beach parking.
The only limitation the Act places on the use of a development fee is the requirement that the local agency use the fee “solely and exclusively for the purpose or purposes ... for which the fee was collected.” (
3. The Act Did Not Prohibit the City from Charging the Administrative Overhead Costs Associated with the Beach Parking Impact Fee
Plaintiffs contend the trial court erred in refusing to order the City to return administrative overhead costs it charged the account holding the impact fees. In Plaintiffs’ view, the City must return these administrative costs before it refunds the unexpended Beach Parking Impact Fees because the Act required the City to use the impact fees exclusively for acquiring and constructing public beach parking, and that purpose does not include paying administrative overhead costs. We do not find this argument persuasive.
The Act requires a local agency to expend development fees “solely and exclusively for the purpose or purposes ... for which the fee was collected” and prohibits an agency from levying, collecting, or imposing a development fee “for general revenue purposes.” (
Nonetheless, we conclude using a portion of a development fee to facilitate compliance with the Act‘s requirements constitutes a use that furthers the purpose for which the fee was collected. For example, the Act requires that a local agency establish a separate account for each development fee it collects and account for the fee to ensure it is not commingled with any of the agency‘s other funds. The administrative costs to comply with these requirements further the purpose for which the fee was collected because those costs ensure the fee is available for the designated purpose once sufficient funds are collected. Indeed, without the administrative costs of accounting for the fee, the local agency would not know how much it has collected.
Here, the City established a cost allocation plan that assessed administrative costs associated with the programs the City oversaw. For example, the City established a formula for charging each program for the accounting services required to maintain the program‘s accounts and also for any other services the City‘s staff provided. The City worked with an independent consultant to create its cost allocation plan and it annually reviews the allocations for accuracy. The City‘s financial services officer testified the charges made against the Beach Parking Impact Fee account were allocated
Plaintiffs point to nothing in the administrative record that shows the City used any portion of the Beach Parking Impact Fee for general revenue purposes. Indeed, Plaintiffs do not challenge the reasonableness or the necessity for any of the administrative costs the City charged, but simply argue no portion of a development fee may be used to pay administrative costs as a matter of law. We decline to impose such a broad prohibition without some clear basis in the Act, and Plaintiffs have pointed to none.
Plaintiffs contend the only administrative costs expressly permitted under the Act are the costs associated with conducting the public hearing required to establish the fee. (See
Although Plaintiffs do not cite any legal authority or identify a principle of statutory interpretation to support their construction of the Act, Plaintiffs implicitly rely on the statutory interpretation maxim expressio unius est exclusio alterius, “which means ’ “the expression of certain things in a statute necessarily involves exclusion of other things not expressed.” ’ ” (In re Sabrina H. (2007) 149 Cal.App.4th 1403, 1411 [57 Cal.Rptr.3d 863].) This maxim is “a ‘mere guide’ to be utilized when a statute is ambiguous“; it ” ‘is no magical incantation, nor does it refer to an immutable rule.’ ” (Ibid.; see In re Christopher T. (1998) 60 Cal.App.4th 1282, 1290 [71 Cal.Rptr.2d 116].) It “is generally applied to a specific statute [that] contains a listing of items to which the statute applies” and prevents courts from implying additional exceptions to a general rule when a statute specifies other exceptions. (In re Sabrina H., supra, 149 Cal.App.4th at p. 1411; see In re Christopher T., supra, 60 Cal.App.4th at p. 1290.) The maxim, however, “does not apply when no reasonable inference exists that items not mentioned were excluded by deliberate choice.” (Silverbrand v. County of Los Angeles (2009) 46 Cal.4th 106, 126 [92 Cal.Rptr.3d 595, 205 P.3d 1047]; see Barragan v. Superior Court (2007) 148 Cal.App.4th 1478, 1484, fn. 3 [56 Cal.Rptr.3d 660].)
Here, Plaintiffs point to nothing in the Act or its history that shows the Legislature intended to prohibit a local agency from using a portion of a development fee to pay administrative costs directly related to the fee and the agency‘s compliance with the Act. Section 66008‘s mandate that a local agency use a development fee exclusively for the purpose for which the fee was collected and section 66018‘s authorization to use a portion of a fee to
4. Plaintiffs Failed to Establish the City Improperly Commingled Beach Parking Impact Fees with Other City Revenues
Plaintiffs contend the trial court erred in finding the City did not improperly commingle the Beach Parking Impact Fee funds with other City funds. Although Plaintiffs concede this challenge “does not affect the refund,” they nonetheless contend the trial court should have ordered the City to segregate the impact fees from other City funds because the Act prohibits a local agency from commingling a development fee with other revenues. This contention lacks merit because substantial evidence supports the trial court‘s finding the City did not commingle the funds.
The City‘s financial services officer testified the Beach Parking Impact Fee is collected from a developer as part of a lump-sum payment to cover four separate development fees. Upon receipt, the City places the funds into a “Public Facilities Construction Fee Fund” and separates the funds into four separate accounts for each of the development fees. The funds in each
IV
DISPOSITION
The judgment is affirmed. Plaintiffs shall recover their costs on appeal.
Rylaarsdam, Acting P. J., and Fybel, J., concurred.
The petition of defendants and appellants for review by the Supreme Court was denied November 10, 2015, S229788.