HBA OF CENT. ARIZONA v. City of Mesa
226 Ariz. 7, 594 Ariz. Adv. Rep. 22, 243 P.3d 610 (2010)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under A.R.S. § 9-463.05, a public service is deemed "necessary" and can be funded by a development fee if the service is 1) rationally related to the powers legislatively granted to a municipality, and 2) has been traditionally provided by the municipality or is lawfully included in its future planning documents.
Facts:
- The City of Mesa has imposed a development fee for cultural facilities, including a historical museum, an art museum, and a youth museum, since 1998.
- In 2007, Mesa amended its impact fee ordinance based on a consultant's study regarding the costs associated with new development.
- The amended ordinance includes a legislative finding by the city that cultural facilities are a "necessary" public service.
- Mesa calculated the fee by dividing the current cost of its existing cultural facilities by the number of "equivalent dwelling units" in the city.
- The city does not have specific or concrete plans to construct new cultural facilities or expand existing ones with the collected fees.
- Mesa's existing cultural facilities are primarily located in the western part of the city, while most new development is occurring in the eastern part.
Procedural Posture:
- Home Builders Association of Central Arizona (HBA) filed a complaint against the City of Mesa in Arizona superior court (trial court).
- HBA sought a declaratory judgment that Mesa's cultural facilities development fee violated state statute A.R.S. § 9-463.05.
- Both HBA and Mesa filed cross-motions for summary judgment.
- The superior court granted summary judgment in favor of the City of Mesa, upholding the fee.
- HBA (appellant) filed a timely appeal of the superior court's judgment to the Arizona Court of Appeals, with Mesa as the appellee.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a municipality's development fee for cultural facilities, such as museums, violate A.R.S. § 9-463.05, which permits such fees only for 'necessary public services'?
Opinions:
Majority - Swann
No, the development fee for cultural facilities does not violate A.R.S. § 9-463.05 because such facilities qualify as 'necessary public services' under a broad interpretation of the statute. The court established a two-part test for what constitutes a 'necessary' public service: it must be rationally related to the powers granted to a municipality, and it must be a service traditionally provided or lawfully planned for. Here, the legislature granted Mesa the power to fund tourism-related improvements, which includes cultural facilities, thus satisfying the first prong. Because Mesa has provided these facilities and charged a fee for them for over a decade, it satisfies the second prong as a traditional service. The court, citing Scottsdale III, also held that the statute does not require specific, 'locked-in' plans for the use of the funds, only a good-faith intent to use them to maintain services as the city grows, which Mesa demonstrated through its commissioned study.
Analysis:
This decision significantly clarifies the meaning of 'necessary public services' under Arizona's development fee statute, adopting a broad and flexible standard favorable to municipalities. By rejecting a narrow definition of 'necessary' as 'absolutely essential,' the court empowers cities to fund a wider range of amenities that contribute to community character and quality of life. This precedent establishes a clear, deferential two-part test that strengthens municipal authority to make new developments pay for their impact on services beyond core infrastructure, so long as there is a rational link to the city's powers and a history or plan for the service.
