January, 1996
District / Developer Joint Ventures Authorized for
Construction of School FacilitiesTraditionally, Districts purchase property and award a contract for construction of school facilities to a contractor through a competitive bidding process. Assembly Bill 481 authorizes alternative means of constructing school facilities.
Effective January 1, 1996, Education Code sections 17760-17766 will authorize districts to select a developer through a request for proposal, rather than a bidding process, and enter into a joint venture arrangement to build school facilities using Leroy F. Green funding. For example, a district could contract with a developer and require the developer to purchase the property and construct a school for the district. The district would simply define the performance and design criteria and allow the developer to serve as the project manager. The district's contract with the developer and request for state funding must be approved by the State Board. The State Board must approve or disapprove of the request within 60 days and certify the district's eligibility for state funding for four years.
The purpose of this legislation is to authorize alternative arrangements for construction and financing of school facilities; however, districts cannot use this legislation to avoid payment of prevailing wages.
For further information about how best to arrange for the construction of school facilities, please contact one of our offices.
As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.Generously provided by: Lozano Smith Smith Woliver & Behrens
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February 1996
State Allocation Board Increases Statutory
Developer Fee AmountPursuant to Government Code section 65595(b)(3), the State Allocation Board ("SAB") every two years must establish the appropriate amount of statutory developer fees which school districts may charge "developments," as that term is defined in Government Code sections 65995, et seq. At its meeting on January 24, 1996, the SAB increased the amount of statutory developer fees to $ 1.84 per square foot of residential development and $0.30 per square foot of commercial or industrial development, effective immediately. These amounts were increased from the previous figures of $1.72 and $0.28.
In order to implement the authorized fees, school districts must pass resolutions establishing the justification for such fees and noting the exemption from CEQA requirements for developer fees. If your school district's current fee study does not justify the new fee amount, you must either update the current study or adopt a new study to reflect present conditions.
We now have available a January 1996 revision to our handbook "Developers Fees for School Facilities." This handbook includes a description of the steps necessary to adopt or increase developer fees, sample documents, and applicable code sections. If your district is interested in ordering this handbook, please contact our Monterey office (408-646-1501). The cost is $75.00 if your district has not purchased any of the prior versions of the handbook, and $40.00 if you previously purchased any pre-1994 version of the handbook. If you have already purchased our prior revision, dated May 1994, we will provide you with a complimentary copy of the 1996 revision, charging only for mailing cost.
If you have any questions regarding the statutory developer fee or your district's ability to seek extra-statutory mitigation from developers, please contact any of our offices.
As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.Generously provided by: Lozano Smith Smith Woliver & Behrens
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March 1996
Recent Case may Affect School Districts' Ability to Utilize CEQA to Seek Extra-Statutory Developer Fees In August of 1995, a state appellate court offered the latest direction regarding the impact of new development on school facilities under the California Environmental Quality Act ("CEQA," Public Resources Code §§21000, et seq.). In Goleta Union School District v. Regents of the University of California (1995) 37 Cal.App.4th 1025, the issue was whether the Regents had adequately analyzed the possible impact on schools of a long-range, highly generalized plan to expand the campus of the University of California at Santa Barbara. The Goleta Union School District sued, contending that the environmental impact report ("EIR") prepared for the project was inadequate under CEQA because it did not address impacts on schools or provide for mitigation of such impacts. The trial court agreed, and found for the District, requiring the Regents to revise and recirculate their EIR. The Regents did so, addressing the school facility issue. At a second trial, the court found that the revised EIR's analysis was sufficient. This ruling was upheld by the appellate court. On January 24, 1996, the California Supreme Court denied requests by this firm, the State Department of Education and other organizations to remove the Goleta case from the State's official reporters, meaning that the case will remain valid precedent.
School districts should become familiar with the Goleta case and how to respond to it, as the case is likely to become as commonly relied upon by developers as the case of Mira Development Corp. v. City of San Diego (1988) 205 Cal.App.3d 1201 has been by school districts. Some developers are relying on Goleta to contend that CEQA no longer requires consideration of school impacts, and further, that Mira, the case that first clarified that schools were entitled to mitigation beyond statutory amounts, has been overruled. In fact, Goleta accomplishes neither result. It is critical to recognize that Goleta is purely a CEQA case and does not address Mira or consider the ongoing ability of a city or county to condition new development on the payment of extra-statutory fees. Also, Goleta seems to confirm that an analysis of impacts on schools must be included in an EIR.
The primary confusion caused by the Goleta case stems from its statement that "school overcrowding per se, does not constitute a significant effect on the environment under CEQA." We take this simply to confirm what CEQA already requires: "if a project would cause overcrowding of a public facility and the overcrowding causes an adverse effect on people, the overcrowding would be regarded as a significant effect" under CEQA. (CEQA Guidelines §15064(f).) Thus, school districts must be certain to describe the negative effects stemming from overcrowding, rather than simply concluding that overcrowding will occur, when commenting on a proposed development project or related EIR. Such negative effects would include, but are not limited to, declining quality of education, increased safety threats, increases in traffic, and most important, the need to construct new facilities or expand existing ones.
Districts should also be prepared for other arguments developers may raise and misunderstandings that will undoubtedly arise among cities and counties as to the effect of the case. Passing and often vague statements made by the court are particularly likely to generate fertile ground for debate.
Based on the court's observation that a five-fold increase in student population would almost certainly lead to a finding of significant impacts, developers may argue that only a five-fold increase or worse would be recognized as significant. Developers are also likely to contend that a board must take binding action to address how it will accommodate growth from a particular new development prior to that project's approval, since the court made brief reference to the fact that the Goleta board never took such action. Finally, some may rely on Goleta for the contention that a city, county or other lead agency can simply list mitigation options available to a school district to lessen the impact of new development without having to address the feasibility of those methods. It is our opinion that none of these contentions are explicitly supported by the Goleta opinion. Nevertheless, it is difficult to foresee how the case will be interpreted in the future.
School districts may wish to consider adopting board resolutions addressing some of the points raised by Goleta to stem some of the developers' arguments. Additionally, Goleta provides even more reason for districts to adopt long-term, relatively detailed facilities plans.
If you have any questions regarding a school district's continuing ability to seek and receive extra-statutory mitigation, would like to discuss the impact of Goleta on your particular district, or are interested in the type of board resolution mentioned above, please contact any of our offices.
As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.Generously provided by: Lozano Smith Smith Woliver & Behrens
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July 1996
Private Religious University must Pay Statutory Developer Fees for New Construction Project In the latest court decision to address payment of statutory school impact fees for new development projects under Government Code sections 53080 and 65995, an appellate court has ruled that a private religious university is not exempt from paying such fees. (Loyola Marymount University v. Los Angeles Unified School District (May 29, 1996) 96 Daily Journal D.A.R. 6166.)
Loyola Marymount University planned to build a new business school building that would replace a building previously being used. The University protested the imposition of developer fees based on numerous theories. Rejecting each of these theories, the appellate court ruled that the University had to pay developer fees at a commercial rate. The court specifically found that: (1) a business school is "commercial construction" within the meaning of the Government Code; (2) the University's tax exempt status does not exempt it from paying the fees; and (3) the business school would not be used exclusively for religious purposes, and therefore does not qualify for a statutory exemption.
The court rejected the University's argument that it would be inconsistent with the legislative intent of the Government Code to impose impact fees because no new students would be generated from merely replacing a previously existing structure. Significantly, the court recognized that the University's unsupported assertion that no new students would be generated was insufficient to overcome the findings of the school district's developer fee justification studies.
The court also made one more significant point regarding the standard of review to be used by a court. It found that protests of developer fees are not reviewed under the restrictive "strict scrutiny" standard used for reviewing governmental takings. In the recent case of Ehrlich v. City of Culver City (1996) 12 Cal.4th 854, the California Supreme Court concluded based on controlling federal case law that requiring only a specific individual to make a payment or dedication of land triggers the stricter standard of review. Where a developer fee is applied in a like fashion to all similarly situated parties, however, this stricter standard of review is not applicable. As the appellate court concluded: "the heightened scrutiny standards articulated by the United States Supreme Court in takings clause cases have no application in California cases involving development fees."
Counsel for the school district has indicated that it is more likely than not that the University will appeal this decision to the California Supreme Court, although no such appeal has yet been filed.
If you have any questions regarding how this case affects your district or about developer fee issues in general, please contact any of our offices.
As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.Generously provided by: Lozano Smith Smith Woliver & Behrens
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October, 1996
State Is Not Immune from Liability for Dangerous Condition of Public Property During Construction A California Court of Appeal recently held the State is not immune from liability resulting from a temporary dangerous condition of public property which arises during construction. Since school districts are subdivisions of the State, this decision will govern school district liabilitiy in similar situations.
In Henry Winig, et al v. State of California, (Sept. 5, 1995) 95 D.A.R. 11868, plaintiffs were passengers in a truck traveling on a stretch of Interstate Highway 80 under construction. A car traveling toward the plaintiffs crossed the shoulder, drove into an excavation made to install a median barrier, and collided with the plaintiffs' pickup, causing serious personal injuries. The plaintiffs sued the State and the State moved for summary judgment on the theory that the construction project was proceeding in accord with the plans for its construction and that it was immune from liability pursuant to Government Code section 830.6. The trial court granted the State's motion for summary judgment.
However, the appeals court reversed and concluded that the trial court had misread the statute. The court rejected the State's argument that Government Code section 830.6, which immunizes the State from liability "for an injury caused by the plan or design of a construction of, or an improvement to public property" if the plan or design is properly approved, should be interpreted to cover construction work as well as finished improvements.
In its decision, the court emphasized that the plan or design of an improvement to public property is the plan or design of the finished product, and not the plan or design for constructing the improvement. Thus, State immunity only applies to the plan or design of the improvement and not the means of its construction. Attorneys for the State intend to appeal to the California Supreme Court. Any change by the Supreme Court will be reported in a supplemental news brief.
As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.Generously provided by: Lozano Smith Smith Woliver & Behrens
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October, 1995
Local Public Entity May Bar a Contractor from
Bidding on its Public Works Projects After
Finding of NonresponsibilityA recent California Court of Appeals' decision ruled that a city had the authority to bar a contractor from bidding on its public works projects for five years after the city found the contractor nonresponsible for filing a false claim. Stacy &Witbeck, Inc. v. City and County of San Francisco (July 19, 1995 Daily Journal D.A.R. 9400).
The City and County of San Francisco (City) is a chartered city and county and, therefore, has its own laws governing competitive bidding. The San Francisco Administrative Code provided that any contractor who violated the provisions of the Code would be found nonresponsible and would be barred from bidding on public works projects for a period of five years.
Stacy &Witbeck, Inc. was a contractor on a City project when it submitted a claim to the City for contract damages. The City's Public Utilities Commission (PUC) later found the claim to be false, which was a violation of the Administrative Code. The PUC then found Stacy &Witbeck, Inc. to be nonresponsible and barred it from bidding on public works projects for five years. Stacy &Witbeck, Inc. sued the City alleging, among other things, that various state laws regulate contractors and thus preempt local regulations.
The Court of Appeals disagreed. While disciplinary action affecting a contractor's license is completely covered by state general law, the Court said, "the matter of how municipalities interpret and carry out their duties under the competitive bidding mandates of their own Charter or the Public Contract Code" is not preempted. Therefore, as we interpret the Court's opinion, a local public entity such as a city or school district may implement regulations which allow it to bar a contractor from bidding on its public works projects after the public entity has found the contractor to be nonresponsible.
If you have any questions about the issues raised by this decision, please contact one of our offices.
As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.Generously provided by: Lozano Smith Smith Woliver & Behrens
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