IN THE

SUPREME COURT OF THE STATE OF ARIZONA

SOUTHERN ARIZONA HOME BUILDERS ASSOCIATION,

Plaintiff/Appellant,

v.

TOWN OF MARANA,

Defendant/Appellee.

No. CV-21-0211-PR

Filed January 17, 2023

Appeal from the Superior Court in Pima County

The Honorable Paul E. Tang, Judge

No. C20184411

REVERSED AND REMANDED

Opinion of the Court of Appeals, Division Two

252 Ariz. 83 (App. 2021)

VACATED

COUNSEL:

Kevin E. O’Malley, Mark A. Fuller (argued), Gallagher & Kennedy, P.A., 

Phoenix, Attorneys for Southern Arizona Home Builders Association

Andrew J. Petersen (argued), Humphrey & Petersen, P.C., Tucson, and 

Frank Cassidy, Frank Cassidy, P.C., Tucson, Attorneys for Town of Marana

Eileen Dennis GilBride, Jones, Skelton & Hochuli, P.L.C., Phoenix, 

Attorneys for Amicus Curiae Home Builders Association of Central 

Arizona

Nancy L. Davidson, General Counsel, League of Arizona Cities and Towns, 

Phoenix, Attorney for Amicus Curiae League of Arizona Cities and Towns

______________
________________________

* Justice King is recused from this matter. Pursuant to article 6, section 

3 of the Arizona Constitution, Justice John Pelander (Ret.) of the Arizona 

Supreme Court was designated to sit in this matter.

2

JUSTICE BOLICK authored the Opinion of the Court, in which CHIEF

JUSTICE BRUTINEL, VICE CHIEF JUSTICE TIMMER and JUSTICES

LOPEZ, BEENE, MONTGOMERY, and PELANDER (RETIRED) joined.*

_______________

JUSTICE BOLICK, Opinion of the Court:

¶1 We hold in this case that the Town of Marana violated A.R.S. 

§ 9-463.05 by assigning the entire cost of upgraded and expanded

wastewater treatment facilities to future homeowners through 

development impact fees. Because the statute governing development fees 

was substantially changed following our seminal decision applying its 

prior provisions, Home Builders Association of Central Arizona v. City of 

Scottsdale, 187 Ariz. 479 (1997), we interpret the statute afresh in light of the 

revised statute’s significant constraints on and requirements for the 

imposition of such fees.

BACKGROUND

¶2 Before approving new development, municipal governments 

must assure they have an adequate 100-year water supply. A.R.S. 

§ 45-576(B), (L).

¶3 Until 2012, Pima County provided sewer and water service to 

residents of the Town of Marana (“Town”). That year, the Town obtained 

operational control over a wastewater reclamation facility (“WRF”) from 

Pima County, assuming the approximately $16.4 million outstanding debt 

on the facility. As acquired, the WRF’s tertiary treatment system’s capacity 

was 3.5 million gallons-per-day (“gpd”).1 However, the WRF’s functional 

capacity was limited by the secondary treatment system’s maximum

capacity of 380,000 gpd.

1 The tertiary treatment stage, which consists of a sand filtration and 

ultraviolet disinfection system, is used to further treat the wastewater 

following the secondary treatment.
SOUTHERN AZ HOME BUILDERS ASSOC. V. TOWN OF MARANA

Opinion of the Court

3

¶4 In 2013, the Town acquired legal title to the WRF, including 

the infrastructure, land, and exclusive rights to the facility’s effluent. As 

acquired, the Town’s residents fully utilized WRF’s operational capacity of 

380,000 gpd. The Town improved the secondary treatment system to

expand the WRF’s output to 500,000 gpd.

¶5 Owning a facility’s effluent contributes to the 100-year 

assured water supply required for new development, as it can be used to 

“recharge” the aquifer. Recharging, or replenishing, qualifies the Town to 

obtain “recharge credits” that help demonstrate an adequate long-term 

water supply. A.R.S. § 45-855.01 (“the director shall include the amount of 

long-term storage credits . . . in determining . . . whether to designate the 

city, town or private water company as having an adequate water supply”); 

A.R.S. § 45-852.01(C)(1) (laying out a framework for the director to grant 

water storage credits for recharging an aquifer under certain conditions). 

Effluent rights to recharge the aquifer are so valuable to the Town, in fact, 

that it had been trying to acquire the WRF since 2007. The acquisition here

provided a more efficient closed loop water system because reclaimed 

water is added back to the aquifer rather than purchased from Central 

Arizona Project. The Town estimated this would produce $350,000 in 

annual savings as early as 2018.

¶6 In 2013, the Town issued twenty-year bonds with an annual 

debt service of $1.8 million to finance the acquisition of the WRF. The Town 

also commissioned two infrastructure improvement plans (“IIPs”). An IIP 

is required before a municipality may assess fees like the ones at issue here. 

See § 9-463.05. Pursuant to the IIPs, half the acquisition costs were assigned 

to future water customers and half to future sewer customers in the form of 

development impact fees. Infra ¶ 10. None of the costs were assigned to 

existing users.

¶7 In 2017, the Town approved a Capital Improvement Project 

encompassing “multi-phase expansion and upgrades” to the water and 

sewer systems. At issue here is Phase 1, which was completed and became 

operational in 2018. The Town contends that the ultimate cost of Phase 1 

was higher than projected in the Master Plan—around $23 million, not 

including design—however, the Town used the projected cost of $17.5 

million as the basis for assessing the impact fees being challenged here.
SOUTHERN AZ HOME BUILDERS ASSOC. V. TOWN OF MARANA

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¶8 Phase 1 encompassed multiple components. To increase the 

WRF’s capacity to 1.5 million gpd to serve both existing residents and 

anticipated development, a new influent sewer main, a new headworks

facility, and higher capacity influent pumps were installed at a projected 

cost of $982,800. Other new facilities built during the Phase 1 expansion 

included a new secondary treatment system at a projected cost of 

$4,047,600, two secondary clarifiers at a projected cost of $3,047,300, and a 

new solids handling facility at a projected cost of $1,615,700.

¶9 The upgraded secondary treatment system was necessary to 

bring the Town into compliance with the Class B+ water quality standard 

required by its Aquifer Protection Permit. In 2017, the proposal for the new 

upgraded secondary treatment system triggered an Arizona Department of 

Environmental Quality (“ADEQ”) requirement that the Town produce the 

highest quality water, Class A+, based on the best available technology. 

The new system included two secondary clarifiers that settle out the solids 

in the liquid after the secondary treatment and send treated effluent to the

existing downstream processes of final filtration and disinfection, which

helps the system operate more efficiently. The new solids handling facility 

also eliminated the need to pay a third-party contractor to haul away 

sludge, saving residents about $400,000 annually. Through these upgrades, 

the new system improved water quality from barely meeting the Class B+ 

standard to Class A+ quality. The Class A+ water has re-use possibilities 

that Class B+ water did not have, such as improved crop irrigation, 

residential landscape irrigation, fire protection systems, and vineyard spray 

irrigation.

¶10 In 2017, the Town adopted new water and sewer impact fees 

in conjunction with the Capital Improvement Project, effectively replacing

the 2013 development fees. The Town again assigned 100% of the debt 

service to future water and sewer customers via development impact fees. 

To account for the contributions made by the then-current customers for 

the existing utilized capacity, the Town contributed $3.2 million, which it 

received from a refund from an unrelated 2004 bond offering, toward 

financing the WRF and Phase 1.

¶11 In 2018, Southern Arizona Home Builders Association 

(“SAHBA”) filed this declaratory judgment action against the Town. 

SAHBA argued that the development fees violated § 9-463.05 because they 
SOUTHERN AZ HOME BUILDERS ASSOC. V. TOWN OF MARANA

Opinion of the Court

5

disproportionately imposed 100% of the cost of the WRF and Phase 1 

expenses on new development despite those facilities also benefitting

current residents by enabling a higher level of service and saving taxpayer 

money. The Town argued the development fees were valid because the 

expansion and improvements were undertaken to serve future 

development.

¶12 The trial court granted summary judgment in favor of the 

Town. Applying City of Scottsdale, 187 Ariz. at 482, the court ruled that the 

development impact fees bear “a presumption of validity, such which may 

be overturned only if SAHBA establishes the restrictions to be ‘arbitrary and 

without a rational relation to a legitimate state interest.’” The court 

concluded that “the Town’s chief goal in acquiring the WRF was to obtain 

its effluent as a water resource in order to secure recharge credits towards 

water rights as a means for sustaining growth by having access to a 100-year 

designated water supply.” Although acknowledging that “[t]here can be 

no question that this goal benefits current residents along with those 

arriving in the future,” the court concluded that § 9-463.05 was satisfied 

because the development fees “result in a beneficial use to the 

development.” (citing § 9-463.05(B)(1)).

¶13 The court of appeals affirmed. S. Ariz. Home Builders Ass’n v. 

Town of Marana, 252 Ariz. 83, 84 ¶ 1 (App. 2021). Like the trial court, the 

court of appeals applied City of Scottsdale and its presumption of validity, 

id. at 86 ¶ 10 & n.2, and concluded that SAHBA “has not shown” that the 

project increased the level of service to existing development. Id. ¶ 11. The 

court held that because the “upgrades and modernization to the WRF,” id. 

at 88 ¶ 16, were “undertaken for the existential benefit of new 

development,” id. at 89 ¶ 18, the fact that the project also “happens to serve 

existing development as well” does not render the imposition of the entire 

cost upon new development unlawful under § 9-463.05, id. at 88 ¶ 16.

¶14 We granted review of whether the Town violated § 9-463.05

by (1) making future development bear 100% of the cost of acquiring the 

WRF facility; (2) making future development bear nearly all the cost of 

upgrading, modernizing, and improving the facility; and (3) failing to take 

into account what could or could not be included in development fees 

under that statute, and to make any proportionate allocation of costs 
SOUTHERN AZ HOME BUILDERS ASSOC. V. TOWN OF MARANA

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6

between existing and future development. Because these issues present 

overlapping facts, issues, and legal principles, we consider them together.

¶15 This case presents unresolved issues of statewide importance. 

We have jurisdiction under article 6, section 5(3) of the Arizona 

Constitution.

DISCUSSION

¶16 We review de novo a grant of summary judgment, “viewing 

the evidence in the light most favorable to the party against whom 

summary judgment was entered.” Dabush v. Seacret Direct LLC, 250 Ariz. 

264, 267 ¶ 10 (2021). We also review matters of statutory interpretation de 

novo. State v. Jones, 246 Ariz. 452, 454 ¶ 5 (2019). “Our task in statutory 

construction is to effectuate the text if it is clear and unambiguous.” BSI 

Holdings, LLC v. Ariz. Dep’t of Transp., 244 Ariz. 17, 19 ¶ 9 (2018). “Words in 

statutes should be read in context in determining their meaning.” 

Stambaugh v. Killian, 242 Ariz. 508, 509 ¶ 7 (2017).

A. A.R.S. § 9-463.05, Old and New. 

¶17 Section 9-463.05 was first enacted in 1982, authorizing 

municipal governments to “assess development fees to offset costs to the 

municipality associated with providing necessary public services to a 

development.” A.R.S. § 9-463.05(A) (2011). The main constraint was that 

the development fees “shall result in a beneficial use to the development,” 

§ 9-463.05(B)(1), and that “[t]he amount . . . must bear a reasonable 

relationship to the burden imposed on the municipality to provide 

additional necessary public services to the development,” § 9-463.05(B)(4).2

¶18 In City of Scottsdale, the Court considered a challenge to a 

water resources development fee on the basis that the city’s plans to acquire 

new water were too speculative to confer a beneficial use upon new 

development, as required by the then-operative version of § 9-463.05. 187 

Ariz. at 480, 483. This Court noted that the adoption of the fee “was a 

legislative act that came to the court cloaked with a presumption of 

validity.” Id. at 482. As applied by the Court, the presumption meant “first, 

2

 References to § 9-463.05 in paragraphs 17 through 20 are to the statute as 

it existed in 2011; all other references are to the current version.
SOUTHERN AZ HOME BUILDERS ASSOC. V. TOWN OF MARANA

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that the factual underpinning for the city council’s decision, i.e., that the city 

needed more water, must stand unless shown to be without factual 

support”; and second, “that the wisdom of Scottsdale’s choice of methods 

of meeting its water needs is a legislative, not a judicial, question.” Id. The 

Court rejected plaintiff Home Builders Association’s argument that 

Scottsdale’s water plans were too speculative, holding that “it need only 

develop such plans as will indicate a good faith intent to use development 

fees to provide those services within a reasonable time.” Id. at 484.

¶19 Turning to the statute’s “reasonable relationship” 

requirement, the Court stated that the plaintiff had “the burden of showing 

that Scottsdale’s fee bore no reasonable relationship to the public burden 

created by the proposed development.” Id. at 485. The Court applied a 

two-part test for assessing the validity of these fees: (1) that “the exaction 

imposed on the developer be factually related to the need for public services 

created by the proposed development”; and (2) that “the nature and extent 

of the exaction must bear a reasonable relationship to that portion of the 

public burden created by the proposed development.” Id. at 483. But the 

Court concluded that because the plaintiff did not challenge the amount of 

the fee, remand to the trial court to apply this standard was unnecessary. 

Id. at 485.

¶20 The Court decided the case against the backdrop of Dolan v. 

City of Tigard, 512 U.S. 374 (1994), in which the United States Supreme Court 

had held that under the takings clause of the Fifth Amendment, an exaction 

imposed upon an individual landowner as a condition of development 

must be related both in nature and extent to the proposed development’s 

burden on the community. Id. at 391. The necessary relationship required 

by the Fifth Amendment is “rough proportionality.” Id. The City of 

Scottsdale Court noted that the Supreme Court’s term “rough 

proportionality” was adopted rather than a reasonable relationship test 

because the term “reasonable relationship” is confusingly similar to the 

term “rational basis,” which describes a standard of minimum scrutiny. 

187 Ariz. at 485; Dolan, 512 U.S. at 391. But this Court held that Dolan was 

inapplicable because Home Builders Association did not argue that “there 

was no reasonable relationship between the amount of the fee and the 

community burden.” City of Scottsdale, 187 Ariz. at 485–86.
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¶21 In 2011, the legislature largely transformed § 9-463.05, 

amending all but two subparagraphs of the then-existing statute, and 

adding more than ten pages of new provisions. 2011 Ariz. Sess. Laws 

ch. 243, § 1 (1st Reg. Sess.). The new statute is about four times as long as 

the previous version and consists primarily of procedural requirements and 

substantive limits on the imposition of development fees.

¶22 Perhaps the most noteworthy statutory changes were the 

removal of the “reasonable relationship” standard from the previous 

§ 9-463.05(B)(4), and the new requirement that development fees must not 

be “used to impose on new residents a burden all taxpayers of a 

municipality should bear equally.” § 9-463.05(M).

¶23 The current statute carries over from its predecessor that 

“[d]evelopment fees shall result in a beneficial use to the development.” 

§ 9-463.05(B)(1). But, adopting terminology from Dolan, it adds that the fee 

“shall not exceed a proportionate share of the cost of necessary public 

services, based on service units, needed to provide necessary public 

services to the development.” § 9-463.05(B)(3). It further states that “[c]osts 

for necessary public services . . . shall be based on the same level of service 

provided to existing development in the service area.” § 9-463.05(B)(4). 

The statute does not define “level of service.”

¶24 The statute lists examples where development fees may not 

be used. These include the “[c]onstruction, acquisition or expansion of 

public facilities” if they are not necessary public services or facility 

expansions identified in the IIP, § 9-463.05(B)(5)(a), and “[u]pgrading, 

updating, expanding, correcting or replacing existing necessary public 

services to serve existing development in order to meet stricter safety, 

efficiency, environmental or regulatory standards,” § 9-463.05(B)(5)(c), or 

“to provide a higher level of service to existing development,” § 9-

463.05(B)(5)(d). “Necessary public service” is defined to include municipal 

water and wastewater treatment facilities. § 9-463.05(T)(7)(a)–(b).

¶25 In assessing development fees, municipalities must use 

“qualified professionals” to calculate the fees in an IIP based on “projected 

demand for necessary public services or facility expansions required by 

new service units for a period not to exceed ten years.” § 9-463.05(D)(2), 

(E)(6).
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¶26 Finally, the statute instructs that “[i]n any judicial action

interpreting this section, all powers conferred on municipal governments 

in this section shall be narrowly construed to ensure that development fees 

are not used to impose on new residents a burden all taxpayers of a 

municipality should bear equally.” § 9-463.05(M).

B. Applying A.R.S. § 9-463.05. 

¶27 We first articulate our decisional framework. The trial court 

and court of appeals applied the deferential treatment toward municipal 

authority to impose development fees from City of Scottsdale, which 

predated the significant statutory changes that were made after that 

decision. Those changes were tantamount to a repeal-and-replacement of 

the prior statute rather than minor revisions. Supra ¶ 21. As non-charter 

municipalities have no inherent powers and derive their authority solely 

from statute, 1 McQuillan Mun. Corp. § 2:10 (3d ed.); see State ex rel. Brnovich 

v. City of Tucson, 242 Ariz. 588, 607 ¶ 81 (2017) (Bolick, J., concurring), 

development fees are valid only if the municipality complies with the 

express statutory requirements of § 9-463.05 in implementing such fees. 

¶28 By its own terms, City of Scottsdale is largely inapplicable here. 

The Court there explained that the legislative acts at issue that were

“cloaked with a presumption of validity” were the city’s decision that it 

needed more water and its choice of methods to accomplish that goal. 

187 Ariz. at 482. That presumption of validity does not apply here at all, 

given that the Town’s policy decisions regarding the need for new and 

improved facilities are unchallenged.

¶29 As to the amount of the development fees, which the Court

concluded were not at issue, City of Scottsdale also applied a highly

deferential “reasonable relationship” standard and assigned to those 

challenging the fees the “burden of showing that Scottsdale’s fee bore no 

reasonable relationship to the public burden created by the proposed 

development.” Id. at 485. That standard was removed from the statute in 

2011 and replaced with a proportionality standard. § 9-463.05(B)(3) (“The 

development fee shall not exceed a proportionate share of the cost of 

necessary public services, based on service units, needed to provide 

necessary public services to the development.”).
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¶30 In applying § 9-463.05 as amended, the court of appeals 

committed two principal errors. First, it applied from City of Scottsdale a 

presumption of validity to the Town’s assessment of development fees. 

S. Ariz. Home Builders Ass’n, 252 Ariz. at 86 ¶ 10. Second, it credited the 

Town’s intent that the project was “entirely for purposes of new 

development.” Id. at 87 ¶ 13; id. at 89 ¶ 18 (emphasizing the “larger 

context” that “the acquisition of the WRF and the various upgrades put in 

place were undertaken for the existential benefit of new development”). 

The Town’s intent is irrelevant; we determine whether the fees are 

permissible solely on the basis of the Town’s compliance with statutory 

requirements.

¶31 Statutory interpretation requires us to determine the meaning 

of the words the legislature chose to use. We do so neither narrowly nor 

liberally, but rather according to the plain meaning of the words in their 

broader statutory context, unless the legislature directs us to do otherwise. 

Matthews v. Indus. Comm'n, 520 P.3d 168, 175 ¶ 35 (Ariz. 2022). Here, the 

legislature did just that, expressly directing that “all powers conferred on 

municipal governments in this section shall be narrowly construed to 

ensure that development fees are not used to impose on new residents a 

burden all taxpayers of a municipality should bear equally.” § 9-463.05(M). 

Thus, instead of the deference exhibited by the courts below and in City of 

Scottsdale, 187 Ariz. at 484 (“We would be reluctant to deprive the city of 

the flexibility needed to deal with these projects unless the legislature made 

it clear that it intended no such flexibility.”), the legislative rewrite of § 9-

463.05 greatly constrained municipal authority to assess development fees. 

To be clear, our role is not to second-guess the Town’s policy judgments

regarding what facilities are needed to assure a safe and secure 100-year 

water supply, but to narrowly construe the Town’s authority to assess 

development fees, as § 9-463.05(M) instructs, so as to ensure that new 

residents do not bear a disproportionate share of the costs of necessary 

public services.

¶32 As a threshold matter, most if not all of the acquired, new, 

improved, and expanded facilities clearly provide necessary public 

services. The statute defines “necessary public services” as including both 

water and wastewater facilities and the functions performed by those 

facilities. § 9-463.05(T)(7)(a)–(b). We also readily conclude that the facilities 

confer a beneficial use on new development, § 9-463.05(B)(1), given that 
SOUTHERN AZ HOME BUILDERS ASSOC. V. TOWN OF MARANA

Opinion of the Court

11

“[w]ithout the assurance of a water supply, developers would be unable to 

develop and market their land.” City of Scottsdale, 187 Ariz. at 482 

(construing an unchanged provision of the prior statute). But this only 

begins the statutory inquiry.

¶33 The court of appeals, trial court, and the Town all 

acknowledge that the acquisition and improvement of the Town’s water 

facilities benefit both new and existing development. The court of appeals 

concluded, however, that although “the upgrades and modernization to the 

WRF incidentally improve[d] the processes serving existing residents,” 

they “[did] not make the development fees unlawful when such upgrades 

were only undertaken so that the WRF would have the capacity to provide 

necessary public services to new development.” S. Ariz. Home Builders 

Ass’n, 252 Ariz. at 88 ¶ 16. To the contrary, the statute requires proportional 

allocation of costs between existing and future residents for necessary 

public services that serve both, regardless of the municipality’s motivation. 

§ 9-463.05(B)(3)–(4), (B)(5)(a)–(b), (M). Nor is any exception made to the 

proportionality requirement for “incidental” benefits.

¶34 The acquisition of the WRF to obtain the effluent and recharge 

credits to assure a renewable and reliable water supply, the ability to create 

a closed-loop water system thereby eliminating the need to purchase CAP 

water and lowering costs, and the improvement in water quality all benefit 

existing as well as future users. Thus, the costs should be allocated 

proportionately.

¶35 Section 9-463.05(B)(5)(d) excludes from development fees the 

cost of “[u]pgrading, updating, expanding, correcting or replacing existing 

necessary public services to provide a higher level of service to existing 

development.” The term “level of service” is undefined, but by its plain 

meaning the adjective “higher” suggests not a new or different service but 

a better service. Higher is defined as “of greater degree, amount, cost, 

value, or content than average, usual, or expected.” Higher, 

Merriam-Webster Dictionary, https://www.merriam- webster.com/dictio

nary/higher (last visited Jan. 11, 2023); Ariz. State House Summary for S.B. 

1525, 50th Leg., 1st Reg. Sess. (Mar. 15, 2011) (using development fees for 

“upgrading . . . existing infrastructure improvements to provide better 

service to existing development” is prohibited (emphasis added)). The 

Town contends that the level of service for existing residents is the same: 
SOUTHERN AZ HOME BUILDERS ASSOC. V. TOWN OF MARANA

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“They get tap water. They flush the toilet and it goes away.” But the 

uncontroverted evidence demonstrates that the improvement in water 

quality from B+ to A+, which ADEQ mandated as a condition of the project, 

provides healthier water that may be used for a wider variety of purposes—

to the entire community’s benefit. Construing the statute narrowly to

achieve a fair allocation of costs, as § 9-463.05(M) requires, the Town may 

not impose the entire cost of the facilities necessary to improve water 

quality on new residents. To the contrary, § 9-463.05(B)(4) requires that 

new development costs shall be based on the same level of service provided 

to existing development. Therefore, the task is identifying the cost to 

provide B+ quality water to new residents and allocating proportionally the 

increased costs of improving water quality.

¶36 In its answer to the complaint, and through its witnesses, see

Ariz. R. Civ. P. 30(b)(6), the Town admitted that the remaining Phase 1 

projects and improvements—accounting for approximately 90% of the 

estimated Phase 1 project costs—would benefit both existing and future 

residents; and despite present disagreement between the parties, the Town 

is bound by those admissions. See, e.g., Answer to Plaintiff’s Complaint ¶ 30

(stating that “upgrading and modernizing the Marana WRF benefited and 

provided, and continues to benefit and provide, a higher level of service to 

current and future Town residents”). Examples of those projects and 

improvements include replacement of the Biolac® system to reduce 

nitrogen levels; replacement of the secondary treatment system, including 

secondary clarifiers, to achieve ADEQ compliance and improve water 

quality; and adding a solids handling facility, which will eliminate reliance 

on a third-party contractor and reduce costs. Again, such costs should be 

proportionally distributed.

¶37 At no time did the Town and its consultants calculate what 

should be included or excluded in the development fee, apart from 

assigning 100% of the costs to new development. As previously noted, the 

Town contributed roughly $3.2 million, or approximately 15% of the 

Phase 1 costs. However, that contribution was untethered to any 

calculation regarding the relative proportion of costs of necessary services 

attributed to new development and existing users. Rather, the IIPs 

allocated the full cost of all Phase 1 expenditures to new development, 

although that was ultimately partly offset by the Town’s contribution.
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¶38 In sum, we conclude that the Town violated § 9-463.05 by 

making future development bear 100% of the cost of acquiring the WRF; by 

making future development bear nearly all the cost of upgrading, 

modernizing, and improving the facility; and by failing to determine what 

could or could not be included in development fees or to make any 

proportionate allocation of costs between existing and future development. 

Our conclusion, however, does not absolve new development from paying 

its proportionate share of costs that may properly be included under the 

statute. Nor do we second-guess the Town’s determination of what 

facilities or services are needed to serve the needs of its residents. The 

statutory violation consists of requiring new residents to bear the entire cost 

of the new, expanded, and improved services and facilities. Under the 

statute, the proper allocation of costs requires discrete, evidence-based 

findings of fact and careful adherence to the narrow statutory authority

conferred upon municipalities.

¶39 SAHBA asks us to remand to the trial court with instructions 

to grant summary judgment in its favor. But because the trial court never 

made the determinations set forth in the preceding paragraph, we remand 

for it to do so consistent with the decisional framework set forth in this 

opinion. SAHBA remains free to argue that certain expenses may not be 

included in development fees at all. The Town may argue that certain 

expenses pertain exclusively to new development, and the Town may count 

its $3.2 million contribution in the calculation. Alternatively, the trial court 

may determine that the Town should recalculate the development fees in 

the first instance.

CONCLUSION

¶40 For the foregoing reasons, we vacate the court of appeals’ 

opinion, reverse the trial court’s judgment, and remand to the trial court for 

further proceedings consistent with this opinion.