DATE:
March 18, 2025
TO:
Mayor and City Council
FROM:
Rachel Molina, City Manager
BY:
Pam Lee, City Attorney
SUBJECT:
Rescinding Approval of City Council Resolution No. 2020-69, Which Established A Special A-04 Storm Drainage Impact Fee in the A-04 Drainage Corridor
RECOMMENDED ACTION
It is recommended that the City Council review the report and adopt Resolution No. 2025-06 to rescind Resolution No. 2020-69, which established a Special A-04 Storm Drainage Impact Fee in the A-04 Drainage Corridor.
BACKGROUND
The A-04 drainage course is natural regional drainage channel on the Master Plan of Drainage along the western portion of the City, just east of Interstate 15, mostly between Main Street and Eucalyptus Street. This channel conveys large quantities of stormwater through the City. Because of its significance, Main Street near Pyrite is often inundated with flood waters during storm events. On December 1, 2020, in its desire to protect life and property in the A-04 drainage corridor from future storm events and encourage responsible development in that area, the City Council passed Resolution No. 2020-69, adopting a special A-04 Storm Drainage Impact Fee (“A-04 Fee”) to fund storm drainage infrastructure in the area. Developers with residential and commercial projects being developed on properties located within the A-04 drainage corridor and benefitting from the City’s construction of the A-04 storm drainage infrastructure were intended to be responsible to pay for said benefits.
On April 28, 2022, Apex HM, LLC, Desert-Candle, LP, LCTH Investment, LP, and California Arroyo Fund, Inc. (the “Developers”) filed a Petition for Peremptory Writ of Mandate and Complaint in San Bernardino County Superior Court against the City (Case No. CIVSB2208845), challenging the validity and implementation of the A-04 Fee under Resolution No. 2020-69. On December 17, 2024, following a bench trial, the Court issued a peremptory writ of mandate declaring that the A-04 Fee was not adequately supported by the nexus study (which was prepared by a third-party consultant), enjoining the City from collecting any further A-04 Fees, and requiring the City to rescind Resolution No. 2020-69.
ISSUES/ANALYSIS
In light of the Court’s December 17, 2024 Peremptory Writ, the City will no longer collect any future A-04 Fees established by Resolution No. 2020-69. All previous A-04 Fees that were paid to the City, and which were not paid under protest, do not need to be returned. The City can keep such funds for any other A-04 draining infrastructure use.
Furthermore, any developer that constructs any residential or commercial project within the A-04 drainage corridor will now have to construct their own storm drain improvements at their cost and expense to ensure that any adverse impacts from flooding or storm flows are minimized for their own project and properties downstream. Accordingly, staff recommends the rescission of Resolution No. 2020-69 in compliance with the Court’s ruling.
CITY GOAL SUPPORTED
Financial Health – Maintain a balanced budget and adequate reserves.
FISCAL IMPACT
No impact to the General Fund, as the A-04 Fee is a development impact fee to be collected and used for a specific purpose. No additional revenues from the A-04 Fee also means that there will be little to no specific expenditures on future A-04 storm drainage infrastructure for the time being. Such infrastructure will be borne by the developers constructing in the A-04 drainage corridor.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENT(S)
Resolution No. 2025-06 Rescinding Resolution 2020-69 and Ceasing Collection of A-04 Fees. 01071.0006/1059301.1
01071.0006/1059301.1
City of Hesperia STAFF REPORT City of Hesperia STAFF REPORT City of Hesperia
STAFF REPORT
City of Hesperia
STAFF REPORT
Staff Report to the City Council
March 18, 2025