Homebuilders Association of Tulare/Kings Counties, Inc. v. City of Lemoore

The city of Lemoore, California (the city) and the Lemoore City Council (the council) (defendants) hired a consulting corporation to conduct a development-impact-fee study and prepare a report. Based on the report, the city adopted 13 impact fees for new housing in the city, including (1) the community-/recreation-facility impact fee, which was motivated by a need to expand the range of recreational choices in the city; (2) the police impact fee, which was intended to maintain the current level of service for police facilities, vehicles, and equipment; (3) the municipal-facilities impact fee, which was intended to maintain the city’s current level of service for municipal facilities, vehicles, and equipment; and (4) the fire-protection impact fee, which was implemented even though the facilities and equipment needed to service the east side of the city were already available. The report used a standard-based method to calculate the fees by taking the value of the city’s investment in existing facilities and services, dividing that value by the existing population to obtain a per-capita cost, and then multiplying the per capita cost by the expected population per unit of development. Home Builders Association of Tulane/Kings Counties, Inc. (HBA) (plaintiff) sued the city, alleging that the various fees violated the Mitigation Fee Act (MFA). HBA challenged the report’s use of the standard-based method and several of the impact fees adopted based on the report. The trial court upheld most of the city’s impact fees. HBA appealed, alleging that the trial court had erred in applying an overly deferential evidentiary standard in reviewing the impact fees and that the community-/recreation-facility, police, municipal-facilities, and fire-protection impact fees violated the MFA.