High Court Backs Fee on Developers to Build Schools

Times Staff Writer

Concluding that the Legislature has not solved the problem of a “chronic” lack of money to build schools, the state Supreme Court ruled Thursday that local governments can levy fees on developers to pay for school construction necessitated by rapid growth.

The unanimous ruling that such fees can be charged is a victory for growing school districts that are relying increasingly on developer fees to finance school expansion. But the victory may be short-lived because of a bill on the desk of Gov. George Deukmejian.

The court, acting in a San Diego County case and reversing a Court of Appeal decision, said previous legislative attempts to solve the funding problem have fallen short. Specifically, the court said that a 1978 state law designed to finance new school construction did not preempt local governments from imposing their own levies on developers.

‘Stopgap’ Efforts

In an opinion by Justice Stanley Mosk, the court said that the state Legislature “has not taken over any substantial part of the responsibility of financing facilities.” Quoting from a study by the California Building Industry Assn., the court added that legislative efforts to solve the “acute and chronic” problem have been “stopgap.”

At the same time, the court said, educators are hard-pressed to find money to build new facilities because of limits imposed by Proposition 13, the 1978 property tax-cutting initiative.


A recent survey shows 193 of the state’s 1,029 school districts receive up to $125 million annually from developer fees, said James Murdoch, who conducted the study for a group of school districts. The fees range from $254 to $5,547 for each new home built, he said.

The court’s decision upholding the charging of such fees comes as the governor decides whether to sign into law a bill seeking to bar local government from charging developers to help pay for permanent school facilities. If the bill is signed, the court’s ruling would become academic, lawyers involved said.

The bill by Assemblyman Bill Leonard (R-Redlands) seeks to make up for the loss by giving school districts several hundred million dollars in property tax money and other revenue. The legislation is aimed at keeping housing prices down by eliminating development fees while ensuring that there will be funds for new schools. It was backed by the housing industry and many school districts, though some educators opposed it, fearing they would receive less money.

“I have a feeling the housing industry is going to make use of this opinion in any way it can to assist passage of this bill,” said Daniel A. Nordberg, a Newport Beach attorney who represented the school district in Thursday’s case.

Case in Question

The case stemmed from the San Diego County Board of Supervisors’ decision to charge Candid Enterprises $60,000 for a condominium project in Santee. The fees helped pay for expansion in the Grossmont Union High School District.

Candid paid the levy of $1,000 per home under protest in 1978 in order to get a building permit. In 1980, Grossmont experienced a drop in enrollment and stopped collecting the fees. Candid argued that it was treated unfairly because newer builders were not assessed the fee.

But the court said the developer was not denied its equal protection rights, noting: “Developers who are expected to cause or aggravate overcrowding (by building new homes) are required to mitigate it; others are not.” (Candid Enterprises vs. Grossmont Union High School District, L.A. 31877.)

In other rulings Thursday, the court:

- Ruled 5 to 2 that medical malpractice claims are barred if the injured person fails to file suit within one year and knows or should have known that there were grounds for the suit. The case involved a woman who agreed to have a tumor on her appendix removed, but learned after surgery at an East Los Angeles hospital that she was given a hysterectomy. She consulted a lawyer who told her she had no grounds for a suit. By the time she found a lawyer who agreed to take her case, the one-year period specified by the Legislature had expired. (Gutierrez vs. Mofid, L.A. 31922.)

- Unanimously reversed the death sentence of Richard G. Montiel for the 1979 throat-slashing murder and robbery of 78-year-old Gregorio Ante in Bakersfield. The court upheld Montiel’s conviction, but sent the case back to the trial court to retry the penalty phase, citing improper jury instructions. (People vs. Montiel, Crim. 21243.)

- Ruled 5 to 2 that a 1983 law toughening penalties for prison misconduct can be applied to inmates imprisoned before 1983. (In re Rudy J. Ramirez, crim. 23684.)