Filed 7/31/13
                            CERTIFIED FOR PUBLICATION


                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                      DIVISION ONE

                                   STATE OF CALIFORNIA



CRESTA BELLA, LP,                                 D060789

        Plaintiff and Appellant,

        v.                                        (Super. Ct. No. 37-2009-00103450-
                                                   CU-MC-CTL)
POWAY UNIFIED SCHOOL DISTRICT,

        Defendant and Respondent.


        APPEAL from a judgment of the Superior Court of San Diego County, Lisa A.

Foster, Judge. Reversed with directions.

        McNeill Law Offices and Walter P. McNeill for Plaintiff and Appellant.

        Best Best & Krieger, James B. Gilpin, Tyree K. Dorward and Matthew L. Green

for Defendant and Respondent.


        Poway Unified School District (the District) imposed school impact fees on Cresta

Bella, LP (Cresta Bella) for a residential development project involving the demolition of

an existing apartment complex and construction of a new, larger apartment complex.

Cresta Bella petitioned for writ of mandate in superior court seeking a partial refund of

the fees based on a claim that it was improperly charged for the entire square footage of
the new apartment complex, rather than only for the increased square footage created by

the development. On the same grounds, it also alleged an unconstitutional taking and

requested declaratory relief. The court denied the mandate petition and entered judgment

in favor of the District on all claims. Cresta Bella appeals.

       We hold that under the statutory scheme applicable to school impact fees, the fees

should not be imposed for the square footage already in existence at the time of the new

development project, absent a study that reasonably supports that reconstruction of

preexisting square footage increases student population. The District's school impact fee

study did not make this showing. Accordingly, Cresta Bella is entitled to a refund of the

portion of the fees derived from the preexisting square footage in its project. We reverse

the judgment and remand the matter to the trial court with instructions to grant the

mandate petition and order the refund. Given our holding providing relief under the

mandate petition, we need not reach the constitutional taking and declaratory relief

claims.

                   FACTUAL AND PROCEDURAL BACKGROUND

       To pay for the construction of school facilities necessitated by student population

increases, school districts are authorized to impose school impact fees for new residential

construction. The fees are subject to statutorily-defined maximum amounts for each

square foot of the new residential construction. (Ed. Code, § 17620, subd. (a); Gov.

Code, § 65995.) There are several alternative statutory formulas for calculating the

maximum fee per square foot (Gov. Code, §§ 65995, 65995.5, 65995.7), which are

commonly known as Level 1, Level 2, and Level 3 fees. Relevant here, in July 2008 a

                                              2
consulting firm retained by the District prepared a district-wide school facilities needs

analysis (SFNA) in which it calculated that the maximum Level 2 fee for the District was

$3.89 per square foot of new residential construction. Based on the SFNA, in August

2008 the District passed a resolution which adopted a school impact fee of $3.89 per

square foot, and which applied the fee to the entire square footage of a development

project, including preexisting square footage (i.e., existing footage that was demolished

and reconstructed).

       Cresta Bella owned an apartment complex consisting of 248 units and 258,169

square feet. It demolished this complex and built a new apartment complex consisting of

368 units and 371,612 square feet. Thus, the new apartment complex had 120 more units

and 113,443 more square feet than the complex being demolished. The District charged

Cresta Bella school impact fees based on the entire square footage of the new apartment

complex (i.e., 371,612 square feet multiplied by $3.89, totaling $1,445,570.60).

       In June 2009, Cresta Bella paid the school impact fees under protest. Cresta Bella

argued it should not have to pay fees for the preexisting square footage in the project

because the District did not evaluate whether preexisting footage in new residential

construction impacts school facilities by increasing student population. It claimed the

District had improperly charged fees for the entire square footage of its project, resulting

in $1,004,277.40 in excess fees.1



1     If the preexisting square footage had been excluded, the fees would have been
$441,293.27 (113,443 additional square footage multiplied by $3.89) rather than
$1,445,570.60.
                                              3
       After exhausting its administrative remedies, in May 2010 Cresta Bella filed a

petition for writ of mandate in superior court seeking a refund of the alleged excess fees.

It also pleaded causes of action alleging an unconstitutional taking and requesting

declaratory relief. To refute Cresta Bella's challenge to the imposition of fees for the

preexisting square footage, the District argued there was no improper fee calculation

because in an attached exhibit (Exhibit H) the SFNA considers the impact of preexisting

units in new residential construction.

       After considering the parties' evidentiary presentations and arguments, the trial

court, citing Exhibit H of the SFNA, concluded that the District had not imposed an

improper or unconstitutional fee. Accordingly, the court denied the writ petition and

entered judgment in favor of the District on all claims.

                                         DISCUSSION

       To review Cresta Bella's challenge to the school impact fees, we first summarize

the statutes and case authority governing school impact fees. We then set forth

information in the SFNA and other matters relevant to the District's imposition of the fees

and the trial court's decision denying Cresta Bella's request for a partial refund.

       As we shall detail below, under the statutory scheme and relevant case authority, a

school district that qualifies for a Level 2 fee must set the maximum amount of the fee

based on a rather complex formula that incorporates a variety of statutorily-defined

variables. The Level 2 statutory formula setting the maximum fee does not allow the

school district to recoup the total actual costs estimated for new school facilities

necessitated by the projected increases in student population from new residential

                                              4
development; rather, only a portion of these estimated costs are recoupable under the

Level 2 formula. In addition to calculating the maximum Level 2 fee, the school district

must establish that there is a reasonable relationship between the development activity

and the impact on the school district; i.e., that the type of development activity subjected

to the school impact fees tends to increase the student population and thereby requires

the district to construct new school facilities.

       The District's SFNA concludes that the District may properly charge school

impact fees for reconstruction of existing residential units (i.e., preexisting square

footage) because the statutorily-defined maximum Level 2 rate does not allow the District

to recoup the estimated actual costs of constructing new school facilities to accommodate

projected new students from newly-added (nonpreexisting) square footage. However, as

we shall explain, the SFNA does not contain any information showing that reconstruction

of preexisting square footage contributes to an increase in student population in the

District. Accordingly, the District's imposition of fees for the preexisting square footage

in Cresta Bella's project does not pass the required reasonable relationship test.

                                  A. The Statutory Scheme

       Legislation authorizing school impact fees was enacted to provide a " 'reasonable

method of financing the expansion and construction of school facilities resulting from

new economic development within the district.' " (Shapell Industries, Inc. v. Governing

Board (1991) 1 Cal.App.4th 218, 227 (Shapell).) To this end, Education Code section

17620, subdivision (a)(1)(B) permits school districts to levy fees against new residential

construction in the district to fund the construction or reconstruction of school facilities,

                                               5
subject to the limitations set forth in Government Code section 65995 et seq.2 Under the

relevant Government Code provisions, the school impact fees are based on a particular

monetary amount for each square foot of "assessable space" of residential construction.

(§§ 65995, subd. (b)(1), 65995.5.) Section 65995.5 provides for a Level 2 fee that may

be used when the school district meets certain statutorily-specified criteria that show a

particular need for additional funds for school construction.3 The school district must

also follow specified procedures to adopt the fee, including "[c]onduct and adopt a school

facility needs analysis [SFNA] pursuant to Section 65995.6." (§ 65995.5, subd. (b)(2).)

The SFNA is designed "to determine the need for new school facilities for unhoused

pupils that are attributable to projected enrollment growth from the development of new

residential units over the next five years." (§ 65995.6, subd. (a).)4 The projections are

"based on the historical student generation rates of new residential units constructed

during the previous five years that are of a similar type of unit to those anticipated to be

2       Education Code section 17620 states in relevant part: "(a)(1) The governing board
of any school district is authorized to levy a fee . . . against any construction within the
boundaries of the district, for the purpose of funding the construction or reconstruction of
school facilities, subject to any limitations set forth in [Government Code] Section 65995
[et seq.] . . . . This fee . . . may be applied to construction only as follows: [¶] . . . [¶] (B)
To new residential construction."
        Subsequent unspecified statutory references are to the Government Code.

3       The district must satisfy at least two of four criteria related to multitrack year-
round scheduling of students; voting results on a school financing local bond measure;
school debt obligations for capital outlay; and relocatable classrooms. (§ 65995.5, subd.
(b)(3).)

4      "Unhoused pupils" refers to students for whom there are no seats in the existing
school facilities.

                                                6
constructed . . . ." (Ibid.) The SFNA must evaluate the funds necessary to meet the

district's facility needs, and include a consideration of such factors as surplus property

owned by the district, excess capacity in existing facilities, and local sources of revenue

other than fees. (§ 65995.6, subd. (b).)

       Further, the school district must calculate the maximum Level 2 fee that may be

imposed per square foot of residential construction based on a formula set forth in section

65995.5, subdivision (c). The Level 2 formula involves calculations based on a variety of

statutorily-defined variables, and ultimately provides for a fee that reflects only a portion

of the estimated new facilities costs generated by the projected new unhoused pupils

identified in the SFNA. (§ 65995.5, subds. (c), (h).) After the preparation of the SFNA,

the district must provide a 30-day period for public review and comment, and thereafter

at a public hearing adopt the SFNA and the authorized Level 2 fee for a one-year period.

(§ 65995.6, subds. (c), (f).)

       In addition to these specific provisions governing imposition of school impact fees

on new residential development, the Government Code also contains provisions (known

as the Mitigation Fee Act, § 66000.5) which include a general reasonable relationship

standard for imposition of developer fees. This statute provides that when a local agency

imposes a fee as a condition of approval of a development project, it must determine that

there is a reasonable relationship between (1) the need for the public facility for which

the fee will be used, and (2) the type of development project on which the fee is imposed.




                                              7
(§ 66001, subd. (a)(3) & (4).)5 As explained in Shapell: "[F]acilities fees are justified

only to the extent that they are limited to the cost of increased services made necessary by

virtue of the development. [Citations.] The Board imposing the fee must therefore show

that a valid method was used for arriving at the fee in question, 'one which established a

reasonable relationship between the fee charged and the burden posed by the

development.' " (Shapell, supra, 1 Cal.App.4th at p. 235.)

       In the context of school impact fees, the reasonable relationship standard can be

satisfied by showing: (1) the projected total amount of new housing expected to be built

within the District; (2) the estimated number of students to be generated by the new

housing; and (3) the estimated cost to provide the necessary school facilities for that

approximate number of students. (Shapell, supra, 1 Cal.App.4th at p. 235; Warmington

Old Town Associates v. Tustin Unified School Dist. (2002) 101 Cal.App.4th 840, 860

(Warmington).) This showing may properly be derived from district-wide estimations

concerning anticipated new residential development and impact on school facilities.

(Garrick Development Company v. Hayward Unified School District (1992) 3

Cal.App.4th 320, 335 (Garrick); Canyon North Co. v. Conejo Valley Unified School

District (1993) 19 Cal.App.4th 243, 251; Warmington, supra, 101 Cal.App.4th at p. 862.)



5      Section 66001 states: "(a) In any action establishing, increasing, or imposing a fee
as a condition of approval of a development project by a local agency, the local agency
shall do all of the following: [¶] (1) Identify the purpose of the fee. [¶] (2) Identify the
use to which the fee is to be put . . . . [¶] (3) Determine how there is a reasonable
relationship between the fee's use and the type of development project on which the fee is
imposed. [¶] (4) Determine how there is a reasonable relationship between the need for
the public facility and the type of development project on which the fee is imposed."
                                             8
The district is not required to evaluate the impact of a particular development project

before imposing fees on a developer; rather, the required nexus is established based on

the justifiable imposition of fees "on a class of development projects rather than

particular ones." (Garrick, supra, 3 Cal.App.4th at p. 335.) Further, because the fee

determination process "will necessarily involve predictions regarding population trends

and future building costs, it is not to be expected that the figures will be exact. Nor will

courts concern themselves with the District's methods of marshalling and evaluating

scientific data. [Citations.] Yet the court must be able to assure itself that before

imposing the fee the District engaged in a reasoned analysis designed to establish the

requisite connection between the amount of the fee imposed and the burden created."

(Shapell, supra, 1 Cal.App.4th at p. 235.)

       In Warmington, supra, 101 Cal.App.4th 840, the court recognized that the required

reasonable relationship between school facility needs and fees on new residential

construction does not necessarily exist when a district imposes fees on the demolition and

reconstruction of already-existing units. The Warmington court evaluated the statutory

scheme and concluded that although the statutes did not require a district to exclude

preexisting square footage from the fees for new residential construction, the district

could reasonably include the preexisting footage only if its fee study determined that




                                              9
reconstruction of preexisting square footage contributes to an increase in student

population. (Warmington, supra, 101 Cal.App.4th at pp. 852-867.)6

       Warmington held that under the reasonable relationship standard set forth in

section 66001, school impact fees on preexisting square footage in new residential

construction required an evaluation by the school district as to whether the demolition

and reconstruction of preexisting units in a new development project causes an increase

in student population. (Warmington, supra, 101 Cal.App.4th at pp. 857-867.) That is,

the school district's methodology for imposing the fees must consider whether

reconstruction of existing units will "generate additional numbers of students over and

above those who occupied the previous homes at the site." (Id. at p. 859, italics added.)

The trial court in Warmington found that fees could be imposed only for the additional

square footage created by the development project, and thus awarded a partial refund to

the developer based on the fees imposed for the preexisting square footage. (Id. at p.

847.) The appellate court in Warmington affirmed the trial court's partial refund order,




6       Warmington's conclusion that the statutory scheme did not mandate exclusion of
preexisting footage was based on the fact that in some statutory provisions the
Legislature explicitly required a credit for preexisting footage, for example for new
commercial or industrial construction (Ed. Code, § 17620, subd. (a)(1)(A)), for
remodeling in the same residential structure (Ed. Code, § 17620, subd. (a)(1)(C)(i)), and
for reconstruction of structures destroyed in a disaster (Ed. Code, § 17626). In contrast,
there is no provision mandating a credit for preexisting footage in new residential
construction. (Warmington, supra, 101 Cal.App.4th at pp. 854, 856.) However,
Warmington then applied the reasonable relationship standard generally applicable to
developer fees and concluded this required an evaluation of whether reconstruction of
preexisting footage increased student population. (Id. at pp. 857-867.)
                                            10
reasoning that the district's school impact fee study did not analyze whether the

replacement of preexisting units would generate new students. (Id. at pp. 859-862, 867.)

                                  B. The District's SFNA

       As mandated by the Level 2 statute (§ 65995.6, subd. (a)), the District's SFNA

evaluates the need over the next five years for new school facilities for projected new

students generated by anticipated new residential development (i.e., unhoused students)

in the District. The SFNA estimates that 269 new "[n]on-mitigated" residential units

would be constructed in the District; these new units would total 629,770 square feet; and

they would generate 147 new students.7 An evaluation of the District's existing

resources revealed that the District did not have adequate seats to house all students

generated from existing residential units, and there were no surplus properties or local

funds available to meet the expected school facility needs arising from the estimated new

residential construction.

       Using the statutory formula set forth in section 65995.5, subdivision (c), the SFNA

calculates the maximum Level 2 rate at $3.89 per square foot of new residential

construction. To reach this figure, the SFNA divides the statutorily-permitted costs for

new school facilities required for the estimated 147 new students ($2,450,543) by the

total square footage of the projected new residential units (629,770 square feet) in the



7       Nonmitigated units referred to units for which the impact on the District had not
already been mitigated. In this regard, the SFNA explains that the construction of an
additional 1,652 units was actually anticipated in the District, but the impacts of these
units on the District had already been mitigated through "participation in community
facilities district[s.]"
                                             11
District. The SFNA explains the $2.4 million school facilities cost used in this formula

was not an estimate of the actual cost of the anticipated new facilities, but rather was

derived from a statutory standard using one-half of site acquisition and development costs

and per-pupil construction grant figures.

       In addition to calculating the Level 2 rate, the SFNA also evaluates whether the

$3.89 Level 2 fee complied with the statutory reasonable relationship standard, and

concludes it did. In support of this conclusion, the SFNA compiles the actual costs of

constructing existing schools in the District, and using these figures calculates that the

estimated 147 new students generated by the anticipated new residential housing in the

District would actually result in $9,259,987 in school facility costs, which in turn could

support a fee of $14.70 per square foot of new residential housing (i.e., $9,259,987 school

facility cost divided by 629,770 total square feet of new future units). The SFNA

concludes: "The amount to be included in the [Level 2 fee] is specified by statute. . . .

The estimated average school facilities cost impacts on the School District per square

foot of residential development is $14.70. As the actual school facilities cost impacts per

square foot of residential construction is greater than the [Level 2 fee], it is reasonable for

the School District to determine that the [Level 2 fee] of $3.89 per square foot . . . [is]

roughly proportional and reasonably related to the actual impacts caused by residential

development on the School District."

       In an attached exhibit (Exhibit H), the SFNA also considers an estimation that

some of the projected new residential units would arise from "[r]esidential

[r]edevelopment"; i.e., the demolition and replacement of existing units with new units.

                                              12
Based on a review of historical data, the SFNA estimates that 23 of the 269 new units

would be replacement units, which would result in 131 estimated new students (instead of

147 new students). Using the actual cost data from past school construction in the

District, the SFNA then calculates that the estimated actual school facilities costs for the

131 net new students would be $8,307,585, which translates to a fee of $13.19 per square

foot of new residential housing (i.e., $8,307,585 total cost for net new students divided by

629,700 total square footage of all new units, including replacement units). The SFNA

then reasons that because the actual cost impact of $13.19 per square foot is greater than

the maximum Level 2 fee of $3.89 per square foot, the District would be "fully justified"

in levying the Level 2 fee on all new residential units, including on units that replace

existing units.8

       After complying with the public review requirements and holding a public hearing

on August 18, 2008, the District passed a resolution adopting the SFNA and "Level 2


8       This portion of the SFNA states: "[T]he total cost impact per square foot . . . is
$13.19 which is greater than the Alternative No. 2 Fee of $3.89 per square foot calculated
in the Analysis. It should be noted that the actual cost impact produced by students
generated from all non-mitigated Future Units, without consideration of those who have
been displaced by Residential Redevelopment is $14.70 per square foot. . . . In summary,
Residential Redevelopment was considered by reducing the projected number of
unhoused student[s] from non-mitigated Future Units by the estimated number of
students occupying units projected to be demolished over the next five (5) years. As a
result, the number of projected unhoused students was reduced. The cost impact
generated from this reduced number of unhoused students was then divided by the total
assessable square footage, including that attributable to Residential Redevelopment.
Despite reducing impacts by considering existing students living in units to be
demolished, the total cost per square foot . . . exceeds the Alternative Fees justified in the
Analysis. The School District is, therefore, fully justified in levying the Alternative Fees
calculated in the Analysis on all non-mitigated Future Units, including those from
Residential Redevelopment which may occur over the next five (5) years."
                                             13
Fees in the amount of $3.89 per square foot of new non-mitigated residential

construction, including square footage realized as a result of demolition and

reconstruction not previously mitigated . . . ." (Italics added, boldface omitted.) Thus,

the District's resolution adopted the SFNA's recommendation that the fees be imposed on

preexisting square footage.

       When denying Cresta Bella's request for relief in the ensuing litigation, the trial

court found that in Exhibit H of the SFNA, the District had considered the cost impact of

the preexisting residential units. The court concluded the District's methodology satisfied

the reasonable relationship test required by the statutory scheme and constitutional

principles.

                                        C. Analysis

       A school district "has the initial burden of producing evidence sufficient to

demonstrate . . . a reasonable relationship between the [school impact] fee charged and

the burden posed by the development." (Home Builders Assn. of Tulare/Kings Counties,

Inc. v. City of Lemoore (2010) 185 Cal.App.4th 554, 562.) If the district meets this

burden, the developer challenging the fee must "show that the record before the local

agency clearly did not support the underlying determinations regarding the

reasonableness of the relationship between the fee and the development." (Ibid.) When

reviewing the imposition of district-wide school impact fees, we apply the standard

applicable to quasi-legislative acts. (Garrick, supra, 3 Cal.App.4th at p. 328.) We

perform the same function as the trial court, and determine whether the school district's



                                             14
action was arbitrary, capricious, or entirely lacking in evidentiary support. (Ibid.;

Shapell, supra, 1 Cal.App.4th at p. 233.)

       In the context of school impact fees imposed on new residential development, the

Warmington court recognized that the statutory reasonable relationship standard is

satisfied if there is a connection between the new construction activity and an increase in

student population. (Warmington, supra, 101 Cal.App.4th at p. 860.) Furthermore, in

the context of fees on development that includes both newly-added and preexisting

square footage, Warmington held that although the statutory scheme does not mandate a

credit for preexisting footage, the imposition of fees on preexisting footage nevertheless

must pass muster under the reasonable relationship standard. To justify fees on

preexisting footage, Warmington interpreted the reasonable relationship standard to

require a showing that reconstruction of preexisting footage also contributes to an

increase in student population. If the school district does not show this connection

between replacement of preexisting footage and increase in students, the fees may be

imposed only on the newly-added footage that has been shown to increase student

population. (Warmington, supra, 101 Cal.App.4th at pp. 854-867.)

       We agree with Warmington's conclusions on these points. Given that the entire

focus of the school impact fee statutory scheme is to impose development fees for

increases in student population, the reasonable relationship standard properly turns on the

connection between new construction and an increase in student population. (See, e.g.,

§ 65995.6, subd. (a) [SFNA should "determine the need for new school facilities . . .

attributable to projected enrollment growth from the development of new residential

                                             15
units . . . ,"], italics added; Warmington, supra, 101 Cal.App.4th at p. 857 [underlying

purpose of school impact fee statutory scheme is "to address the impact on the affected

school district of the increase in student population generated by the development"],

italics added.) Further, to justify fees on preexisting square footage, there must be a

correlation between reconstruction of preexisting square footage and an increase in

student population. (Warmington, supra, 101 Cal.App.4th at p. 859.) Absent a showing

that replacement of preexisting square footage generates new students, there is no

" 'reasonable relationship between the fee charged and the burden posed by the

development.' " (Shapell, supra, 1 Cal.App.4th at p. 235.)

       It is apparent from the record of the proceedings before the trial court that Cresta

Bella did not dispute the District's calculation of the Level 2 fee of $3.89 per square foot,

and for the most part did not dispute that the District's imposition of this fee for newly-

added square footage of residential construction satisfied the statutory reasonable

relationship standard. The essential focus of Cresta Bella's challenge was that the District

did not show the imposition of this fee on the preexisting square footage passed the

reasonable relationship test. At times, both before the trial court and now on appeal,

Cresta Bella has made cursory suggestions that the entire school impact fee was

improper. Cresta Bella has not presented any developed argument explaining why fees

on the newly-added square footage were improper, and we reject any such contention.

The District's SFNA supports that the development of additional square footage in

residential construction generates additional students, and Cresta Bella has not refuted

this showing. Accordingly, the District properly collected fees for the newly-added

                                             16
square footage. (See Warmington, supra, 101 Cal.App.4th at p. 860.)9 Thus, we turn to

the crux of Cresta Bella's challenge, which is the propriety of the fees for the preexisting

square footage.

       Consistent with the reasonable relationship test delineated in Shapell, supra, 1

Cal.App.4th at page 235, the District's SFNA shows the projected amount of district-wide

new housing is 629,770 square feet; the estimated number of students generated by this

new housing is 147 students; and the estimated costs to provide school facilities for these

new students is $9,259,987 or $14.70 per square foot of new residential construction.

Further, in Exhibit H the SFNA reflects that under its methodology the demolition and

reconstruction of preexisting units in residential construction projects will not generate

new students. Thus, based on the preexisting units factor, the SFNA reduces the

projected new students to 131 and the estimated school facilities costs to $8,307,585 or

$13.19 per square foot. The SFNA then concludes that the District may reasonably

impose fees on preexisting square footage because under the statutory formula setting the

maximum Level 2 rate at $3.89 per square foot, the District cannot recoup all of its

facilities costs generated by the estimated new residential construction.

       The District argues that unlike the circumstances in Warmington, its imposition of

the school impact fee on preexisting square footage satisfied the reasonable relationship



9      Likewise, to the extent Cresta Bella is attempting to raise a challenge to the fees
on the newly-added square footage under constitutional taking principles, any such claim
was not supported by developed argument either before the trial court or on appeal.
Thus, we decline to evaluate any such contention. (See T.P. v. T.W. (2011) 191
Cal.App.4th 1428, 1440, fn. 12.)
                                             17
standard because in Exhibit H the SFNA considers the reduced cost impact from

preexisting square footage. We are not persuaded.

       As stated, without a showing that reconstruction of preexisting footage increases

student population, there is no reasonable relationship between the school impact fee and

the burden posed by the development activity. Here, the SFNA's analysis contains no

evaluation of the nexus between replacement of preexisting footage and the generation of

new students. To the contrary, Exhibit H of the SFNA recognizes that under the

methodology used in its analysis, replacement of preexisting units do not generate new

students because the units were already in existence prior to the new construction. The

fact that under the statutory formula the District cannot recover all its new facilities costs

created by the increased students arising from the construction of additional residential

units does not show that reconstruction of preexisting units was projected to be a

contributing cause of the need for new school facilities. Rather, the premise of the

SFNA's analysis is that the cause of the District's need for new school facilities is

additional residential units, not preexisting units.

       There is no information or analysis in the District's SFNA reflecting that the

District can be expected to incur an increase in student population based on the

demolition and reconstruction of preexisting square footage in the District's residential

units. Under the analysis in Exhibit H, the District's position is that it is reasonable to

charge fees for reconstruction of preexisting square footage (even though it has not been

shown to increase student population) because (due to the statutory formula setting a

maximum fee) the District cannot charge fees to fully recoup the costs generated by

                                              18
newly-added footage. Hence, in the District's view, fees on preexisting footage are

reasonable because a developer is not being charged more than the burden created by

newly-added footage. The problem with this position is that it is the statutory cap, not

the reconstruction of preexisting units, that has burdened the District with uncompensated

costs arising from newly-added units. In short, under the District's study, the

reconstruction of preexisting units is not the cause of the increased financial burden on

the District; rather, newly-added units, combined with the statutory cap, cause this

burden.

       There may be circumstances in a particular school district's housing reconstruction

trends that could support a correlation between reconstruction of preexisting residential

units and the generation of new students; however, it is not contained in the SFNA under

consideration in this case. Thus, the District did not carry its burden to produce evidence

showing a reasonable relationship between the need for new school facilities and the

replacement of preexisting square footage. Accordingly, the District's failure to exclude

preexisting square footage from its fees for new residential construction was arbitrary and

unreasonable under the statutory scheme, and Cresta Bella is entitled to a refund for the

fees imposed on the preexisting square footage in its project.

       We note that when rejecting Cresta Bella's protest to the imposition of fees on the

preexisting square footage, the District pointed out that the preexisting units had never

been subjected to school impact fees because they were built in 1964, which was before

the enactment of the school impact fee statutes. On appeal, the District suggests that for

this reason Cresta Bella should now pay fees for the preexisting square footage. In

                                             19
Warmington, the court rejected this contention, and we agree with its conclusion.

(Warmington, supra, 101 Cal.App.4th at p. 862.) The fact that no fees had been levied

for preexisting units in the past does not show that the units cause an increased need for

school facilities when the units are demolished and reconstructed.

       Given our conclusion that Cresta Bella is entitled to a partial refund under the

statutory reasonable relationship standard, we need not reach its constitutional taking

claim nor its request for declaratory relief.

                                       DISPOSITION

       The judgment is reversed and the matter remanded to the trial court. The trial

court shall grant the petition for writ of mandate and order a partial refund to Cresta Bella

based on the portion of the fees derived from the preexisting square footage in the

development project. Respondent to pay appellant's costs on appeal.




                                                                                HALLER, J.

WE CONCUR:



HUFFMAN, Acting P. J.



NARES, J.




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