Since the State Allocation Board increased the maximum school impact fees most California school districts are eligible to charge on residential and commercial construction in January, school districts across the state have acted to increase their school impact fees. However, while increasing school impact fees is one thing, making sure they are collected in full is another. In a recent court decision, Calexico Unified v. City of Calexico, the court made clear that districts need to monitor cities and counties within their borders to ensure these authorities do not issue building permits without confirming that applicants have paid school impact fees.

Education Code section 17620, subdivision (b), requires cities and counties to obtain certification from districts that school impact fees have been paid before issuing any building permit. Unfortunately, some cities and counties issue building permits without confirming that applicants have paid school impact fees.

That is what happened in the Calexico case. Between 2017 and 2020, the City of Calexico issued 213 building permits without obtaining certification from Calexico Unified that school impact fees had been paid. The unpaid fees amounted to approximately $1,000,000. Calexico Unified sued the City of Calexico to try to recover the lost school impact fees.

While the court was sympathetic to Calexico Unified, the court ultimately ruled that the District could not recover the unpaid fees from the City. The doctrine of sovereign immunity—which was originally designed to provide legal protection for the kings and queens of England—meant that the City of Calexico could not be held liable. The District was out of luck.

What the Calexico case means is that once a city or county issues a building permit to an applicant who has not paid school impact fees, it will be extremely difficult for a school district to recover the unpaid school impact fees. Therefore, it is critically important for school districts to monitor cities and counties to ensure building permits are not being issued illegally without payment of school impact fees.

If a district discovers that a city or county in its borders is issuing permits without certification that school impact fees have been paid, although the school district cannot sue the city or county for the unpaid fees, it can take other steps to stop the city or county from continuing to violate the law.

Tao Rossini lawyers have expertise in the field of school impact fees. Districts with questions regarding collection of school impact fees or other school impact fee questions should contact the authors of this article or their regular Tao Rossini counsel.

By Barry Nutovic