Court Opinion

ID: 9380700
Source: CourtListenerOpinion
Date Created: 2023-03-21 00:02:09.704894+00
Date Added: 2024-06-11T17:17:26.833678
License: Public Domain

Filed 3/20/23

                              CERTIFIED FOR PUBLICATION

                 IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                SIXTH APPELLATE DISTRICT

 HAMILTON AND HIGH, LLC, et al.,                    H049425
                                                   (Santa Clara County
            Plaintiffs and Appellants,              Super. Ct. No. 20CV366967)

            v.

 CITY OF PALO ALTO, et al.,

            Defendants and Respondents.

        In this appeal, we consider the application of the Mitigation Fee Act (Gov. Code,
§ 66000 et seq. 1 (Act)) to the City of Palo Alto (City or Palo Alto)’s refusal to refund “in-
lieu parking fees” to plaintiffs, developers who paid the fees years earlier as a condition
of approval of a building project. Plaintiffs contend the City failed to make certain five-
year findings statutorily required by section 66001, subdivision (d), of the Act and is
therefore required to refund their unexpended fees.
        The City counters that the in-lieu parking fee, charged when the developer elects
not to provide parking directly, is not a “fee” subject to the Mitigation Fee Act.
Consequently, the City contends that the five-year finding and refund provisions set forth
in section 66001, subdivision (d), do not apply, and the City has no obligation under the
Act to return the fees.

        1
            Unspecified statutory references are to the Government Code.
       In addition to this principal claim, the City makes a number of alternative
arguments. It maintains that, even if the Act does apply, plaintiffs’ claim for relief is
barred by the statute of limitations and lacks a statutory basis. The City also contends
that it complied with the Act’s requirements by belatedly adopting five-year findings.
Finally, the City asserts that plaintiffs have not satisfied section 65010, subdivision (b), a
“harmless error” provision applicable to parts of the Government Code.
       We conclude that the City’s imposition of in-lieu parking fees in connection with
plaintiffs’ development project is subject to the Mitigation Fee Act, and plaintiffs’ action
is not time-barred. We decide that the City’s failure to timely make five-year findings
under section 66001, subdivision (d) with respect to the parking fund at issue triggers the
refund provision of the Act for the unexpended parking fees paid by plaintiffs. Finally,
we determine section 65010, subdivision (b), does not require that plaintiffs make an
independent showing of prejudice for a violation of section 66001, subdivision (d).
       We reverse the judgment of the trial court and remand with directions to enter a
new judgment granting the mandate petition directing the refund of plaintiffs’
unexpended fees in accordance with applicable statutory provisions, granting the cause of
action for declaratory and injunctive relief, and dismissing the cause of action for
equitable relief.
                    I. FACTS AND PROCEDURAL BACKGROUND 2
       A. The City of Palo Alto In-Lieu Parking Fees and Parking Fund
       In 1985, the Palo Alto City Council (city council) adopted an ordinance which
established the “Commercial Downtown (CD)” zoning district and created detailed
parking regulations set forth in the Palo Alto Municipal Code (municipal code or code).
These regulations included “in-lieu parking provisions” (capitalization omitted). These

       2
         These facts are taken from the largely undisputed evidence presented at the
bench trial and summarized in the trial court’s statement of decision, including those
exhibits subject to judicial notice.
                                                  2
provisions allowed for “payment of an in-lieu monetary contribution to the city to defray
the cost” of new, off-site parking spaces in an assessment district for “sites which would
otherwise be precluded from development due to parking constraints.” (Palo Alto Mun.
Code, former § 18.48.100(d).)
       In 1995, the city council adopted Ordinance No. 4256, which recognized the need
to further address parking demand and mitigate insufficient parking facilities in
downtown Palo Alto (downtown). Ordinance No. 4256 added chapter 16.57 to the
municipal code to establish an in-lieu parking fee for new, nonresidential development in
the “University Avenue parking assessment district” (capitalization omitted) as an
alternative to satisfying downtown parking requirements. (Ordinance No. 4256, adopted
Jan. 17, 1995, § 1B; see Palo Alto Mun. Code, ch. 16.57.) Ordinance No. 4256 provided
that the purpose of the in-lieu parking fee was “to establish a mechanism for funding the
provision of parking to serve new, nonresidential developments which are not able to
meet the parking requirement” set forth in the code. (Ordinance No. 4256, § 1(E).) It
specified that the in-lieu fees are to “be used to finance the construction of new parking
facilities to meet the increased parking demand caused by new nonresidential
developments.” (Id., § 1(F).)
       The municipal code defines “ ‘[f]ee’ ” for purposes of chapter 16.57 as “a payment
in lieu of the provision of required parking spaces.” (Palo Alto Mun. Code,
ch. 16.57.020(d).) Chapter 16.57 creates a special fund, the “University Avenue parking
assessment district in-lieu parking fund . . . into which all fees, and any interest thereon,
shall be deposited” (parking fund). (Id., § 16.57.050.) The parking fund must “be
maintained as a separated capital facilities account in a manner to avoid any commingling
of the fees with other revenues, funds or accounts of the city.” (Ibid.)
       The City requires new, nonresidential development to provide off-street parking
facilities “for new uses and enlargements of existing uses, proportional to the need
created by each use, in order to alleviate traffic congestion.” (Palo Alto Mun. Code,
                                                  3
§ 18.52.010.) The code establishes minimum off-street parking requirements for the
University Avenue parking assessment district. (Id., § 18.52.040) New commercial
development in the University Avenue parking assessment district may meet these
requirements by providing on-site or off-site parking spaces, or “by payment of an in-lieu
monetary contribution to the [C]ity to defray the cost of providing such parking.” (Id.,
§ 18.52.070; see also id.,§ 16.57.010 et seq.) The option to pay the in-lieu parking fee is
not available in all development scenarios but only where specified criteria exist due to
site or other physical constraints. (Id., § 18.52.070(d).) In those cases, building permit
applicants may “pay a fee for each required onsite parking space that they do not provide
for their development projects, due to site constraints, in the Commercial Downtown
(CD) district.” (City of Palo Alto Office of the City Auditor, Audit of Parking Funds,
Dec. 15, 2015.)
       The City calculates in-lieu parking fees based on the projected cost of one new
parking space, which includes land acquisition, construction, and administrative costs.
The municipal code provides for the initial calculation and later recalculation (to reflect
actual design costs based on an awarded construction contract) of the in-lieu parking fee.
(Palo Alto Mun. Code, § 16.57.030(a), (b).)
       The City’s fiscal year “begin[s] on the first day of July each year and end[s] on the
last day of June of the subsequent year.” (Palo Alto Mun. Code, § 2.28.010.) The
municipal code provides for annual review by the city council of the “uses proposed for
expenditure of the moneys in the [parking] fund.” (Id., § 16.57.070.) City staff has
periodically submitted “five-year findings” on the parking fund, consistent with the
Mitigation Fee Act’s reporting requirements for development impact fees. (See generally
§ 66000 et seq.) However, the relevant chapter of the City’s municipal code does not
include a provision related to the five-year reporting requirement of section 66001,
subdivision (d) (hereafter, section 66001(d)). (See Palo Alto Mun. Code, ch. 16.57.) As

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plaintiffs’ principal claims against the City are based on its alleged violation of section
66001(d), we examine the provision in detail below.
       Following adoption of Ordinance No. 4256, in the fiscal year that ended on June
30, 1996, the City collected $231,400 in in-lieu parking fees. Between 1995 and 2003,
the City collected over $1.6 million in such fees, which largely went toward the
construction of two downtown parking garages. From 2003 through May 2012, the City
did not collect in-lieu parking fees due to the availability of parking exemptions during
that time. Between 2012 and 2015, in‐lieu parking fees collected in connection with five
development projects were paid into the parking fund. The collected fees totaled
$4,455,750 and included plaintiffs’ payment in 2013 of $972,000 (later reduced to
$906,900). The parking fund had a positive balance of unexpended fees for the fiscal
year that ended on June 30, 2014, through the fiscal year that ended on June 30, 2020.
The record shows that the parking fund has continuously had a positive balance of
unexpended fees since the fiscal year that ended on June 30, 1996.
       B. Plaintiffs’ 2013 Payment of In-Lieu Parking Fees
       In 2013, plaintiffs Hamilton and High, LLC, the Keenan Family Trust, and
Charles J. Kennan, III (aka Chop Keenan) (collectively, plaintiffs) obtained city approval
to develop a mixed-use building at 135 Hamilton Avenue in downtown Palo Alto (the
property). The property is located within the City’s University Avenue parking
assessment district.
       The City approved the development of the property, subject to numerous
conditions of approval. Two of these conditions addressed parking requirements and
development impact fees. Condition No. 8 required plaintiffs to comply with the City’s
parking requirements, which called for 40 parking spaces. Condition No. 9 required
plaintiffs to pay development impact fees, estimated at more than a half of a million
dollars, prior to issuance of the project’s building permits. In December 2013, plaintiffs
paid the City $1,560,475 in impact fees for the property, including $972,000 in in-lieu
                                                  5
parking fees (equivalent to 16 off-street parking spaces). Following a 2015 audit and
other corrections, the City issued refunds of $4,460 and $60,460, bringing the total in-lieu
parking fees plaintiffs have paid to $906,900.
       C. Proposed Development of the 375 Hamilton Avenue Downtown Garage
       In June 2014, the city council authorized staff to proceed with strategies to
improve parking supply for the downtown University Avenue district, including use of
the estimated $4 million in the parking fund balance as of the end of the 2014 fiscal year.
The city council approved plans to construct a new downtown parking garage at 375
Hamilton Avenue (Hamilton garage), and designated and transferred $1.3 million from
the parking fund for that purpose.
       In February 2019, following the design review and commission of an
environmental impact report (EIR) for the Hamilton garage, staff recommended that the
city council adopt a resolution certifying the EIR, approve various related land use
actions, and authorize a contract with the selected vendor for design services. The staff
proposal budgeted $29.1 million for the garage, which included $6.8 million in in-lieu
parking fees. However, the project stalled after a public hearing in February 2019 in
which some citizens and councilmembers expressed concerns about the cost,
environmental impacts, and need for the proposed garage.
       The city council voted at the February 2019 public hearing to certify the EIR and
approve the architectural review for the Hamilton garage but did not approve contracts to
proceed with its additional design and development. Instead, city council directed city
staff to return to the policy and services committee “with a parking management strategy
and options to address [d]owntown parking needs.” The council provided no timeline for
submission of this information to the council.
       The City’s subsequent annual capital budgets continued to reflect prospective
development of the Hamilton garage without a specific timeline. As of the filing of this
appeal, the City had not adopted any plan to proceed with the Hamilton garage.
                                                 6
       D. The City’s Five-Year Findings for the Parking Fund
       The Mitigation Fee Act imposes certain requirements on cities and other local
agencies when they impose fees “as a condition of approval of a development project.”
(§ 66001, subd. (a).) Among these requirements, the city or agency must make findings
every five years where such fees have been collected but not yet expended. (§ 66001(d).)
We examine the requirements of the Act in detail, post.
       Historically, the City treated the in-lieu parking fee as subject to the requirements
of the Act. City staff reports, submitted to the city council in 2003, 2009, and 2014,
addressed the parking fund in connection with the Mitigation Fee Act’s annual reporting
and five-year reporting requirements. In the 2003 report, city staff explained that the Act
applied to the parking fund for the University Avenue parking assessment district but
asserted that because all in-lieu parking fees in the fund were received in the prior fiscal
year (2002), no findings were required for them.
       In the 2009 and 2014 reports, city staff recommended that the city council make
findings for the unexpended University Avenue in-lieu parking fees and stated that failure
to do so could potentially obligate the City to refund the fees. The city council adopted
the recommended five-year findings in January 2009 and January 2014 (for the fiscal
years that ended on June 30, 2008, and June 30, 2013, respectively).
       The City made its next set of five-year findings in a resolution adopted on January
22, 2019, for the fiscal year that ended on June 30, 2018 (Resolution No. 9816, hereafter
January 2019 five-year findings). The January 2019 five-year findings addressed various
transportation and traffic impact fees but omitted any mention of the parking fund.
Consequently, the City did not make five-year findings for the unexpended fees in the
parking fund for the fiscal year that ended on June 30, 2018.
       In January 2020, Chop Keenan requested that the City refund the in-lieu parking
fees, with interest, that plaintiffs had paid in December 2013 in connection with the
development of the property at 135 Hamilton Avenue. Keenan’s letter stated that a
                                                  7
refund was “required under state law” because it had been more than five years since the
fees were imposed and collected, and the City had “not used those fees for parking
facilities nor provided the findings and public accounting required by Government Code
sections 66001 and 66006.”
       The City, through its city attorney, denied the request. The City’s letter, dated
February 24, 2020, stated the request for a refund was “untimely” and the parking in-lieu
fees were “currently committed to the construction of the” downtown parking garage,
based on the city council’s certification of the EIR and approval of land use actions in
February 2019.
       Plaintiffs responded in a letter dated April 27, 2020, providing a detailed timeline
regarding plaintiffs’ payment of “ ‘impact fees’ ” in December 2013, including those
characterized by the City as “ ‘University In-Lieu Parking Fees,’ ” and the legal basis for
their claim. Plaintiffs asserted that their refund request was “valid and timely” and
requested that the City reconsider its position.
       On May 11, 2020, following plaintiffs’ demand for a refund, the city council
adopted a resolution making additional five-year findings under section 66001(d), for the
fiscal year that had ended on June 30, 2019. 3 (Resolution No. 9887, hereafter May 2020
five-year findings).
       The May 2020 five-year findings included recitals and findings in connection with
the parking fund and its anticipated use to construct a garage “pending further discussion

       3
         The staff report accompanying the draft of Resolution No. 9887 provides this
explanation for the failure to make findings in 2019: “Staff has recently revised the
procedure used to calculate fund balances for the purposes of the findings the City is
required to adopt under Government Code section 66001. This change will generally
increase the amount stated it [sic] the resolution adopting such findings. Under the
former methodology, it did not appear that findings were required and therefore a
resolution was not prepared in December 2019/January 2020. The revised methodology
would, however, require findings.” The report does not specify the “procedure” change
that resulted in the requirement for new findings. At oral argument, the City suggested
these findings had been made in response to plaintiffs’ threat of litigation.
                                                   8
by the City Council regarding downtown parking management.” The city council
acknowledged that “under Chapters 16.57 and 18.18 of the Palo Alto Municipal Code,
the City has collected a fee known as the ‘University Avenue Parking In-Lieu Fee’ for
the purpose of constructing public parking spaces within the University Avenue parking
assessment district to serve the parking needs of the district created by the developments
that paid the fees.” Further, “[t]he sum of $6,117,748 represents the most recent audited
total of fees collected pursuant to Chapter 16.57 that remain unexpended, together with
accrued interest thereon (‘the unexpended [] University Avenue Parking In-Lieu Fee
funds’).” The May 2020 findings did not distinguish the fees that had been in the parking
fund for more than five years from those that had been deposited within the past five
years.
         E. Plaintiffs’ Action For Refund of the Unexpended In-Lieu Parking Fees
         On May 22, 2020, plaintiffs filed this action against the City. The combined
petition for writ of mandate and complaint (collectively, petition and complaint) sought
mandamus, declaratory, and injunctive relief based on the alleged failure of the City and
city council (together, defendants) to provide timely or complete public accountings or
findings for the in-lieu parking fees after the city council voted in February 2019 to
“abandon” plans for construction of the downtown parking garage.
         In the mandamus cause of action (Code Civ. Proc., § 1085), plaintiffs alleged that
defendants failed to comply with their mandatory duties to refund the unexpended in-lieu
parking fees after failing to make the public reports and findings required by sections
66001 and 66006 of the Mitigation Fee Act. Plaintiffs further alleged that defendants’
unlawful retention of the in-lieu parking fees warranted declaratory, injunctive, and
equitable relief. The City generally denied the allegations in the petition and complaint.
The parties stipulated to a briefing schedule and hearing date for a writ hearing and bench
trial.

                                                  9
       In their points and authorities, plaintiffs asserted that the City failed to provide
timely and legally adequate findings under the Mitigation Fee Act justifying the retention
of the in-lieu parking fees. In its opposition, the City asserted multiple independent
reasons that plaintiffs were not entitled to a refund of the in-lieu parking fees, including,
that (1) the in-lieu parking fee is not subject to the Mitigation Fee Act’s five-year finding
requirement; (2) the City’s five-year findings issued in January 2019 did not include the
in-lieu parking fees because those fees had not yet been held for five years; (3) this action
was not filed within the one-year statute of limitations applicable to a claim for penalty or
forfeiture, under the reasoning set forth in County of El Dorado v. Superior Court (2019)
42 Cal.App.5th 620, 625 (El Dorado); and (4) the City’s adoption of five-year findings in
May 2020 adequately complied with the requirements of section 66001 and was
supported by substantial evidence.
       On September 7, 2021, the trial court issued its final statement of decision. The
court denied relief as to both the petition for writ of mandate and the complaint for
declaratory and other relief. First, the trial court rejected plaintiffs’ argument regarding
the applicable statute of limitations under Code of Civil Procedure sections 343 or 338.
The court instead followed the reasoning of the appellate court in El Dorado, concluding
that the obligation to refund fees under section 66001(d) for failure to adopt adequate
five-year findings constitutes a penalty or forfeiture and is therefore subject to the one-
year statute of limitations under Code of Civil Procedure section 340, subdivision (a).
       Next, the trial court found, as “a separate and independent basis” for denying the
petition, that the City’s in-lieu parking fee does not come within the “narrow statutory
definition[]” of a fee subject to the five-year findings requirement of section 66001(d).
The court reasoned that, unlike the parking fee at issue in Walker v. City of San Clemente
(2015) 239 Cal.App.4th 1350 (Walker), the in-lieu parking fee provides an “optional
alternative to compliance with City requirements for developer-constructed parking” and
is therefore not imposed as a “ ‘condition of approval’ ” within the meaning of section
                                                  10
66001. The court decided that the availability of the election to provide parking or pay
an in-lieu fee removes the in-lieu parking fee from the statutory definition of a “fee” or
“ ‘exaction’ ” with the meaning of section 66000 and makes it more akin to a traditional
land use regulation.
       Recognizing that its resolution of the principal issues would be subject to de novo
review on appeal, the trial court addressed the merits of the Mitigation Fee Act claim “in
the interest of judicial economy in the event of reversal.” The court assumed, for this
purpose, both the applicability of section 66001(d) to the in-lieu parking fee and the
timeliness of plaintiffs’ claim. It concluded that the city council’s adoption of the May
2020 five-year findings (Resolution No. 9887) was untimely as a matter of law and could
not be cured by remand. The court also doubted the adequacy of the City’s 2020 five-
year findings, noting in a footnote that the belated findings were “questionable” given the
lack of specificity regarding the planned expenditures. The court agreed with the City,
however, that its transfer of $1.3 million from the parking fund in fiscal year 2016 for
planning and design costs was not improper and thus concluded that any refund required
under section 66001 would be limited to the “unexpended funds” from plaintiffs’
December 2013 fee payment. Regarding the application of a harmless error standard
(§ 65010), the court found that the City had offered “no authority” for its assertion that
the doctrine of harmless error should apply to any error or omission in its findings.
Finally, the trial court rejected plaintiffs’ non-statutory claim for equitable restitution,
finding that the “present evidentiary record” did not support a finding that the City had
“wholly failed to proceed” or had “effectively abandoned its plans to use the fee
proceed[s] to construct parking.”
       In accordance with the statement of decision, the trial court entered judgment in
favor of the City. Plaintiffs timely appealed.

                                                  11
                                     II. DISCUSSION
       Plaintiffs contend the trial court erred as a matter of law in deciding three key
issues underlying the judgment. First, plaintiffs argue that the court erred in concluding
the in-lieu parking fee is exempt from the requirements of the Mitigation Fee Act.
Second, plaintiffs assert that the court mischaracterized the gravamen of the action in
ascertaining the cause’s accrual date and relied on inapt case authority in reaching its
conclusion that plaintiffs’ action was time-barred under the one-year statute of limitations
for penalty actions. Third, plaintiffs maintain the trial court abused its discretion by
denying restitution despite the City’s de facto abandonment of the Hamilton garage and
refusal to refund the fees that it collected for the purpose of constructing new parking in
the University Avenue parking district. Plaintiffs assert that each of these erroneous
rulings serves as an independent basis for reversal, which plaintiffs contend should result
in reversal of the judgment and remand with directions to mandate the refund of their
unexpended in-lieu parking fees.
       The City disagrees with plaintiffs’ legal analysis and urges this court to uphold the
judgment in the City’s favor for the reasons stated in the trial court’s statement of
decision. In the event this court declines to do so, the City disputes the merits of
plaintiffs’ refund claim and asserts that plaintiffs have not attempted to show prejudice,
as required by the Government Code’s “harmless error” provision (§ 65010, subd. (b))
(hereafter, § 65010(b)) for matters coming under title 7 (Planning and Land Use).
       This court sought supplemental briefing on whether section 65010(b) applies to
this action. In response, plaintiffs contend it does not. Plaintiffs argue that section
65010(b) applies only where a court is asked to “ ‘hold invalid or set aside’ ” an action of
a public agency, whereas here the court is asked to enforce an express statutory directive
to refund unexpended fees. Plaintiffs maintain that applying the harmless error standard
in this context would effectively nullify the Legislature’s express specification of a
refund remedy under section 66001(d). The City counters that section 65010 applies to
                                                 12
procedures under the Mitigation Fee Act and dictates that any remedy for an alleged error
(such as untimely findings) must be interpreted consistent with section 65010(b)’s
standard of prejudice.
       We consider each of these arguments below, beginning with the statutory
framework for plaintiffs’ claims.
       A. Statutory Framework: Mitigation Fee Act
       The Mitigation Fee Act applies to a monetary exaction imposed by a local agency
as a condition of approval of a development project to defray public facility costs related
to the project. (§§ 66000, subd. (b), 66001.) The Legislature passed the Act “ ‘in
response to concerns among developers that local agencies were imposing development
fees for purposes unrelated to development projects.’ ” (Ehrlich v. City of Culver City
(1996) 12 Cal.4th 854, 864 (plur. opn. of Arabian, J.) (Ehrlich).) “The Act creates
uniform procedures for local agencies to follow in establishing, imposing, collecting,
accounting for, and using development fees.” (Walker, supra, 239 Cal.App.4th at
p. 1357.) It also establishes “procedures for protesting the imposition of fees and other
monetary exactions imposed on a development by a local agency.” (Ehrlich, at p. 864
(plur. opn. of Arabian, J.).)
       The Act defines a “ ‘[f]ee’ ” as “a monetary exaction other than a tax or special
assessment . . . that is charged by a local agency to the applicant in connection with
approval of a development project for the purpose of defraying all or a portion of the cost
of public facilities related to the development project.” (§ 66000, subd. (b).) For
purposes of the Act, a “ ‘[d]evelopment project’ ” “includes a project involving the
issuance of a permit for construction or reconstruction, but not a permit to operate.” (Id.,
subd. (a).) Under the Act, “ ‘[p]ublic facilities’ ” refers to “public improvements, public
services, and community amenities.” (Id., subd. (d).)
       The requirements embodied in the Act apply at various stages of the fee
imposition and development process. Section 66001, subdivision (a), applies when the
                                                13
city or local agency first adopts a fee for a type of development project. (Garrick
Development Co. v. Hayward Unified School Dist. (1992) 3 Cal.App.4th 320, 336
(Garrick).) To establish a development fee, a local agency must identify the fee’s
purpose and the use to which it will be put. (§ 66001, subds. (a)(1), (2).) The agency
must also determine that the “fee’s use” (id., subd. (a)(3) and the “need for the public
facility” are reasonably related to “the type of development project on which the fee is
imposed.” (Id., subd. (a)(4); see Walker, supra, 239 Cal.App.4th at p. 1358.) A
development fee must be used “solely and exclusively for the purpose or purposes” the
agency identified when it imposed the fee on the development project. (§ 66008; see
§ 66006, subds. (a), (f).) It may not be “levied, collected, or imposed for general revenue
purposes.” (§ 66008; see § 66006, subd. (a).)
       Section 66001, subdivision (b), applies to “adjudicatory, case-by-case actions” in
which the agency ascertains the public facility cost attributable to a particular
development. (Garrick, supra, 3 Cal.App.4th at p. 336.) To impose an established
development fee as a condition of approval for a specific project, an agency must
determine “how there is a reasonable relationship between the amount of the fee and the
cost of the public facility or portion of the public facility attributable to the development
on which the fee is imposed.” (§ 66001, subd. (b); see Walker, supra, 239 Cal.App.4th at
p. 1358.) At the time the agency imposes a development fee on a specific project, it must
also “identify the public improvement that the fee will be used to finance.” (§ 66006,
subd. (f).)
       Once a local agency collects a fee, it must abide by certain requirements for its
deposit, use, and accounting. (§§ 66001, subd. (c), 66006, 66008.) “In general, the local
agency must deposit the fee collected ‘with the other fees for the improvement in a
separate capital facilities account or fund in a manner to avoid any commingling of the
fees with other revenues and funds of the local agency . . . .’ (§ 66006, subd. (a).)”
(Home Builders Assn. of Tulare/Kings Counties, Inc. v. City of Lemoore (2010) 185
                                                 14
Cal.App.4th 554, 573 (Home Builders).) Under section 66006, subdivision (b), the local
agency must provide annual accountings of the funds into which it has deposited fees
collected under section 66001.
       Each year, within 180 days of the end of the fiscal year, the local agency must in a
regularly scheduled public meeting inform the public about the development fee fund or
account. (§ 66006, subd. (b)(1), (2).) The annual public accounting must describe the
type of fee in the fund, the account balance and interest earned, and provide an
approximate date when construction will begin if the agency determines it has collected
sufficient funds to finance the public improvement identified when the fee was imposed.
(§ 66006, subd. (b)(1)(A)–(F).) Section 66006 does not include any explicit remedy if
the local agency fails to comply with this annual accounting requirement.
       In addition to the annual accounting requirement under section 66006, section
66001(d) imposes a five-year accounting requirement. It provides, “For the fifth fiscal
year following the first deposit into the account or fund, and every five years thereafter,
the local agency shall make all of the following findings with respect to that portion of
the account or fund remaining unexpended, whether committed or uncommitted: [¶]
(A) Identify the purpose to which the fee is to be put. [¶] (B) Demonstrate a reasonable
relationship between the fee and the purpose for which it is charged. [¶] (C) Identify all
sources and amounts of funding anticipated to complete financing in incomplete
improvements identified in paragraph (2) of subdivision (a). [¶] (D) Designate the
approximate dates on which the funding referred to in subparagraph (C) is expected to be
deposited into the appropriate account or fund.”
       These five-year findings under section 66001(d) must be made “in connection
with” the annual public accounting required by section 66006, subdivision (b). (§ 66001,
subd. (d)(2), hereafter § 66001(d)(2).) In contrast to section 66006, section 66001(d)
includes a specific remedy for failure to comply. It states, “If the [five-year] findings are

                                                 15
not made as required by this subdivision, the local agency shall refund the moneys in the
account or fund as provided in subdivision (e).” (§ 66001(d)(2), italics added.)
       Section 66001, subdivision (e) contains a separate refund provision. It states that
“when sufficient funds have been collected . . . to complete financing on incomplete
public improvements . . . and the public improvements remain incomplete, the local
agency shall identify, within 180 days of the determination that sufficient funds have
been collected, an approximate date by which the construction of the public improvement
will be commenced, or shall refund to the then current record owner or owners of the lots
or units, as identified on the last equalized assessment roll, of the development project or
projects on a prorated basis, the unexpended portion of the fee, and any interest accrued
thereon.” (§ 66001, subd. (e).)
       Sections 66020 and 66021 of the Act set forth procedures to protest the initial
imposition of a development fee (or other exaction) on a development project and include
strict time limits in which to file an action to review or set aside the fee imposition. (See
Barratt American Inc. v. City of Rancho Cucamonga (2005) 37 Cal.4th 685, 691, 696
(Barratt American); Sterling Park, L.P. v. City of Palo Alto (2013) 57 Cal.4th 1193,
1207, 1209 (Sterling Park).) However, the Act does not specify procedures for a protest
action or refund demand based upon a local agency’s purported failure at a later stage to
comply with public information and refund procedures under sections 66006 and
66001(d). Furthermore, there are few reported cases examining these latter provisions.
       The trial court decided that plaintiffs are not entitled to relief under section
66001(d). We next consider the standards applicable to our review of that conclusion.
       B. Standard of Review
       Courts generally review a local agency’s establishment or imposition of a
development fee under the Mitigation Fee Act under the rules of ordinary mandamus
review (Code Civ. Proc., § 1085). (Garrick, supra, 3 Cal.App.4th at p. 328; accord
Walker, supra, 239 Cal.App.4th at p. 1362; Boatworks, LLC v. City of Alameda (2019) 35
                                                  16
Cal.App.5th 290, 298.) Only one reported appellate decision has considered the standard
of review for a challenge based upon the retention of unexpended development fees
under section 66001(d). In Walker, the court reasoned that an agency’s compliance with
the Mitigation Fee Act’s five-year findings requirement is subject to the same standard of
review as the agency’s initial adoption of a development fee under the Act. (Walker, at
p. 1363.) We agree. Consistent with Walker, we consider an agency’s five-year
findings—and any subsequent decision to issue (or refusal to issue) a requested refund in
connection with those findings—to be a quasi-legislative action subject to review under
the standards applicable to ordinary mandamus. (Ibid.)
       Under those principles, we apply the same standard of review as the trial court and
review the City’s action de novo. (Walker, supra, 239 Cal.App.4th at p. 1362; McIntyre
v. Sonoma Valley Unified School Dist. (2012) 206 Cal.App.4th 170, 179.) The standard
applicable to ordinary mandamus review is limited “to determining whether the local
agency’s action ‘ “was arbitrary, capricious or entirely lacking in evidentiary support, or
whether it failed to conform to procedures required by law.” ’ ” (Walker, at p. 1362;
American Coatings Assn. v. South Coast Air Quality Management Dist. (2012) 54 Cal.4th
446, 460 (American Coatings).) Where, as here, the relevant facts are largely undisputed
and the issue is one of statutory interpretation, the question is one of law which we
review de novo. (Walker, at p. 1363; see California Charter Schools Assn. v. City of
Huntington Park (2019) 35 Cal.App.5th 362, 369; Small Property Owners of San
Francisco Institute v. City and County of San Francisco (2018) 22 Cal.App.5th 77, 84.)
       C. Applicability of the Mitigation Fee Act
       We first consider whether the in-lieu parking fee meets the Act’s statutory
definition of “fees.” Plaintiffs contend that it clearly does so, based on both the plain text
of the Act and its legislative history. Furthermore, plaintiffs emphasize that the City
itself, prior to 2019, consistently recognized and treated in-lieu fees as subject to the same
procedures and requirements as other development impact fees. The City counters that,
                                                 17
although it historically “voluntarily adopted” five-year findings for the parking fee fund,
it “was not required to do so.” Instead, the City argues that the Mitigation Fee Act does
not apply to this type of in-lieu fee, which a developer voluntarily elects to pay in
exchange for being relieved of a statutory requirement (here, the requirement to provide
on- or off-site parking spaces in connection with new development).
       For the reasons explained below, we decide that the in-lieu parking fee—as
established in the City’s municipal code and imposed on plaintiffs to mitigate the impact
of their development project on parking congestion in the University Avenue assessment
district—is a fee subject to the Mitigation Fee Act.
       The construction of a statute and its applicability to a given case are questions of
law subject to our independent review. (Sierra Pacific Industries v. Workers’ Comp.
Appeals Bd. (2006) 140 Cal.App.4th 1498, 1505 (Sierra Pacific).) We interpret the Act
according to established principles of statutory construction. Our primary task in
construing the statute “is to ascertain the intent of the Legislature so as to effectuate the
purpose of the law.” (Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987) 43
Cal.3d 1379, 1386 (Dyna-Med).) We “look first to the words of the statute [], giving to
the language its usual, ordinary import and according significance, if possible, to every
word, phrase and sentence in pursuance of the legislative purpose.” (Id. at pp. 1386–
1387.) If the meaning remains uncertain, we may consider “the consequences that will
flow from a particular interpretation.” (Id. at p. 1387; see Mejia v. Reed (2003) 31
Cal.4th 657, 663 (Mejia).)
       Applying these principles, we note that the Mitigation Fee Act applies broadly to
“any action” in which a “fee” is imposed “as a condition of approval of a development
project by a local agency.” (§ 66001, subd. (a).) A “ ‘[f]ee’ ” subject to these provisions
is defined as “a monetary exaction other than a tax or special assessment . . . charged by a
local agency to the applicant in connection with approval of a development project for the

                                                  18
purpose of defraying all or a portion of the cost of public facilities related to the
development project.” (§ 66000, subd. (b).)
       By its plain terms, the Act applies when “a monetary exaction” (§ 66000, subd.
(b)) imposed in connection with an applicant’s development project for the purpose of
defraying the cost of public facilities related to the development project is charged by a
local agency “as a condition of approval of a development project by a local
agency . . . .” (§ 66001, subd. (a).)
       According to the adopting ordinance and municipal code, the in-lieu parking fee
allows certain new, nonresidential developments in the University Avenue parking
assessment district to satisfy downtown parking requirements by funding the provision of
parking through the in-lieu mechanism. (See Ordinance No. 4256, adopted Jan. 17, 1995,
§ 1(E); Palo Alto Mun. Code, chs. 16.57.010, 18.18.090, 18.52.070(d).) The resulting
parking fund is designated to “be used to finance the construction of new parking
facilities to meet the increased parking demand caused by [the] new nonresidential
developments.” (Ordinance No. 4256, § 1(F).) The collected fees are limited to use “for
construction of public parking spaces within the assessment district to serve the parking
needs . . . created by the developments that paid the fees.” (Palo Alto Mun. Code,
§ 16.57.060.) Further, payment of the fee established by the in-lieu parking fee
regulation “shall be a condition of the approval of or permit for any new development.”
(Id., § 16.57.010.)
       The municipal code provisions and ordinance adopting the in-lieu fee together
confirm that the in-lieu parking fee is a type of “monetary exaction . . . charged by a local
agency to the applicant in connection with approval of a development project for the
purpose of defraying all or a portion of the cost of public facilities related to the
development project.” (§ 66000, subd. (b).) The municipal code expressly states, for
eligible developments, that payment of the in-lieu parking fee “shall be a condition of the
approval of . . . any new development.” (Palo Alto Mun. Code, § 16.57.010.)
                                                  19
       Further clarifying this application, among other conditions, the City conditioned
its approval of the project at 135 Hamilton Avenue on plaintiffs’ compliance with the
parking requirements set forth in the City’s municipal zoning code. Condition No. 8
specifically addressed plaintiffs’ need to comply with the parking requirements, either by
paying the in-lieu fee or obtaining approval for off-site or underground parking, or “some
combination thereof.”
       Our determination based on the plain language of the Act makes it unnecessary to
resort to extrinsic interpretive aids such as the legislative history of the statute. 4 (See
Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735.) Moreover, the option of paying an
impact fee “in lieu” of some other form of mitigation of the public impact attributable to
new development is unremarkable in the context of development impact fees. As the
United States Supreme Court observed, “[s]uch so-called ‘in lieu of’ fees are utterly
commonplace [citation], and they are functionally equivalent to other types of land use
exactions.” (Koontz v. St. Johns River Water Management Dist. (2013) 570 U.S. 595,
612 (Koontz).) 5

       4
          We nevertheless grant plaintiffs’ unopposed request that this court take judicial
notice of two committee reports comprising legislative history relating to the enactment
of the Mitigation Fee Act in 1987. (See Sen. Local Gov. Com., on Assem. Bill No. 1600
(1987-1988 Reg. Sess.) July 1, 1987; Sen. Rules Comm., Off. of Sen. Floor Analyses, 3d
reading analysis of Assem. Bill No. 1600 (1987-1988 Reg. Sess.) as amended Aug. 26,
1987.) The legislative history provides reinforcement for our determination that the
statute’s plain meaning comports with its purpose and is moreover relevant in
understanding later amendments to the Act, discussed post. (See pt. II.E.)
        5
          In Koontz, the Supreme Court extended the Nollan/Dolan analytical framework
under the unconstitutional conditions doctrine to permitting approvals conditioned on
payment of a monetary fee. (Koontz, supra, 570 U.S. at p. 612.) Nollan v. California
Coastal Commission (1987) 483 U.S. 825 and Dolan v. City of Tigard (1994) 512 U.S.
374 arose in the context of takings challenges under the Fifth Amendment and concerned
the right to just compensation for property exacted by the government as a condition of
land-use permit approval. Together, Nollan and Dolan establish that the government may
not condition the approval of a land-use permit on the owner’s relinquishment of a
portion of his property unless it can establish a “ ‘nexus’ ” and “ ‘rough proportionality’ ”

                                                   20
       Our review of the extensive body of case law concerning these types of fees and
similar government exactions has revealed no case in which the “in lieu” or elective
aspect of the imposition changes the nature of the fee or exaction for purposes of the Act.
In Ehrlich, the California Supreme Court evaluated certain monetary exactions imposed
by the city council in connection with its approval of a new residential development,
including payment of a $280,00 recreation fee in lieu of the construction of tennis courts,
as well as a $33,200 fee in lieu of providing public art. (Ehrlich, supra, 12 Cal.4th at
pp. 862–864 (plur. opn. of Arabian, J.).) The court considered the appropriate standard of
scrutiny for these exactions, including the applicability of the Nollan/Dolan test for a
compensable regulatory taking to nonpossessory monetary exactions. (Id. at p. 859.) A
majority of the court addressed the relationship between the Nollan/Dolan framework
and the substantive standard imposed by the Mitigation Fee Act. (Ehrlich, at pp. 860,
865–867 (plur. opn. of Arabian, J.); id. at p. 898, fn. 2 (conc. opn. of Mosk, J.).) In
synthesizing these standards, a majority of the court appeared to acknowledge that in-lieu
fees are subject to the Act, which the court explained is “for the most part procedural in
nature” (id. at p. 865 (plur. opn. of Arabian, J.)) but “also embodies a statutory standard
against which monetary exactions by local governments subject to its provisions are
measured.” (Ibid.)
       More specifically, the plurality explained that the Act “codifies, as the statutory
standard applicable by definition to nonpossessory monetary exactions, the ‘reasonable
relationship’ standard employed in California and elsewhere to measure the validity of
required dedications of land (or fees imposed in lieu of such dedications) that are
challenged under the Fifth and Fourteenth Amendments.” (Ehrlich, supra, 12 Cal.4th at
p. 865 (plur. opn. of Arabian, J.), italics added.) The majority in Ehrlich agreed “that to
the extent a development mitigation fee is not subject to heightened scrutiny under

between its demand and the effects of the proposed land use. (Koontz, supra, 570 U.S. at
p. 599.)
                                                 21
Nollan and Dolan, there must nonetheless be a ‘reasonable relationship’ between the fee
and the deleterious impacts for mitigation of which the fee is collected.” (San Remo
Hotel L.P. v. City and County of San Francisco (2002) 27 Cal.4th 643, 667 (San Remo),
citing Ehrlich, at pp. 865, 867 (plur. opn. of Arabian, J.); Ehrlich, at p. 897 (conc. opn. of
Mosk, J.).)
       In subsequent cases, including California Building Industry Assn. v. City of San
Jose (2015) 61 Cal.4th 435 (California Building), the California Supreme Court has
clarified aspects of its decision in Ehrlich as well as the standards applicable to various
types of fees. These cases support our reading of the Mitigation Fee Act that the offering
of an election (or in-lieu alternative) does not, as a matter of law, remove the fee from the
purview of the Act.
       In San Remo, the court upheld the application of the Act to a city ordinance which
imposed a “housing replacement” requirement on development seeking to convert
residential units to tourist use. (San Remo, supra, 27 Cal.4th at pp. 668–669.) A
developer could choose to comply with the ordinance “by constructing or bringing onto
the market new units; by sponsoring such construction by a public or nonprofit private
housing developer; or by paying, in lieu of such construction, a fee to a designated City
housing fund.” (Id. at p. 668.) In rejecting the developer’s takings challenge, the court
noted that under the majority’s holding in Erhlich, and pursuant to the Mitigation Fee
Act, a mitigation fee that is not subject to the heightened scrutiny of Nollan and Dolan
must nonetheless satisfy the generally applicable “reasonable relationship” standard
between the fee, its intended use, and the “deleterious public impact of the development.”
(San Remo, at p. 671, citing § 66001; see also Sheetz v. County of El Dorado (2022) 84
Cal.App.5th 394, 409 [noting, under San Remo, that legislatively imposed development
impact fees not subject to the Nollan/Dolan test “remain subject to the means-end judicial
review under the” Act].) The high court applied the “reasonable relationship” standard to
the in-lieu fee paid by the developer and concluded it was consistent with the impacts in
                                                 22
loss of housing units based on the developer’s proposed change in use. (San Remo, at
pp. 678–679.)
       In Sterling Park, the California Supreme Court considered a developer’s challenge
to the city’s inclusionary housing program, which required certain developments to
provide 20 percent of units below market rate by electing one or more of certain
alternatives. (Sterling Park, supra, 57 Cal.4th at p. 1196.) Among the options was “a
cash payment to the City’s housing development fund in lieu of providing below market
rate units or land.” (Ibid.) At issue on appeal was the timeliness of the developer’s legal
challenge to the below market housing requirement, which in turn depended on whether
the requirements at issue “constitute[d] the imposition of ‘any fees . . . or other exactions’
under section 66020, subdivision (a),” of the Mitigation Fee Act. (Id. at p. 1195.)
       In deciding that section 66020 applied to the below market housing requirement,
the California Supreme Court clarified that “other exactions” under section 66020
includes “conditions on development a local agency imposes that divest the developer of
money or a possessory interest in property, but not restrictions on the manner in which a
developer may use its property.” (Sterling Park, supra, 57 Cal.4th at p. 1207.) The court
stated that either of the two options available to the developer (paying an in-lieu fee, or
providing the city an option to purchase below market rate units) “would constitute an
exaction.” (Ibid.) It further observed that “[t]he imposition of the in-lieu fees is certainly
similar to a fee.” (Ibid.)
       We recognize that in Sterling Park our high court was not asked to consider, and
did not decide, whether the below market rate housing program’s in-lieu fee option was
in fact a “fee” imposed as a condition of approval of a development project under section
66001. (See California Building, supra, 61 Cal.4th at p. 482.) Even so, the court’s
recognition that the in-lieu fee was an “exaction” for purposes of section 66020 and
“similar to a fee” (Sterling Park, supra, 57 Cal.4th at p. 1207) strongly supports that
possibility. At a minimum, we do not interpret the court’s qualifying language “similar
                                                 23
to” as precluding a determination that an in-lieu fee may constitute a “fee” under the Act.
Rather, we read the language in Sterling Park as wholly consistent with the statutory
framework, whereby “ ‘[f]ee’ ” represents a specific type of exaction, namely, “a
monetary exaction other than a tax or special assessment, . . . that is charged by a local
agency to the applicant in connection with approval of a development project for the
purpose of defraying all or a portion of the cost of public facilities related to the
development project.” (§ 66000, subd. (b).) When such a fee is imposed as a condition
of approval of a development project (§ 66001, subd. (a)), the procedural requirements of
the Act apply.
       The California Supreme Court’s more recent decision in California Building also
supports our reading of the Act. There, the court held that conditions of a City of San
Jose inclusionary housing ordinance, which required new residential development
projects to sell a percentage of the for-sale units at a price affordable to low- or moderate-
income households, did not effect an “exaction” under the takings clause of the federal or
state Constitution but rather constituted a constitutionally permissible, legislatively
imposed land use regulation related to the public welfare. (California Building, supra, 61
Cal.4th at pp. 442–444, 461.) The court specifically distinguished the type of in-lieu
monetary fee at issue in San Remo (where the high court applied the statutory “reasonable
relationship” standard) from the restrictions imposed by the San Jose ordinance. (Id. at
p. 444.) It explained that whereas the condition in San Remo involved “an lieu monetary
fee . . . imposed to mitigate a particular adverse effect of the development proposal under
consideration” (ibid.), the conditions imposed by San Jose’s inclusionary housing
ordinance “do not require a developer to pay a monetary fee but rather place a limit on
the way a developer may use its property.” (Ibid.) The high court emphasized that the
purpose of a development mitigation fee (such as in San Remo) “is to mitigate the effects
or impacts of the developments on which the fee is imposed” (id. at p. 472), consistent
with the Mitigation Fee Act’s statutory definition and use of the term “ ‘fee’ ” in sections
                                                  24
66000, subdivision (b), and 66001. (Ibid.) By contrast, the court clarified that “[t]he
term ‘fee’ does not purport to encompass use restrictions, and certainly not use
restrictions that are imposed for a different purpose.” (Ibid.)
       The appellate court’s decision in 616 Croft Ave., LLC v. City of West Hollywood
(2016) 3 Cal.App.5th 621 is consistent with our reading of the Act. Like California
Building, 616 Croft involved a challenge to the city’s inclusionary housing ordinance.
Unlike the San Jose ordinance in California Building, the West Hollywood ordinance in
616 Croft provided an election for developers “to sell or rent a portion of their newly
constructed units at specified below-market rates or, if not, to pay an ‘in-lieu’ fee
designed to fund construction of the equivalent number of units the developer would have
otherwise been required to set aside.” (Id. at p. 625.) The court in 616 Croft relied on the
California Supreme Court’s determination in California Building to hold that the
developer’s payment of the in-lieu fee was not an exaction governed by the Mitigation
Fee Act. (Id. at p. 628.) The court reasoned that insofar as the in-lieu fee was merely “an
alternative to the on-site affordable housing requirement” (id. at p. 629), its validity was
logically governed by the same standard the high court applied to the on-site affordable
housing requirement in California Building. (Ibid.) The court further noted that like in
California Building, “the purpose of the in-lieu housing fee here is not to defray the cost
of increased demand on public services resulting from [the developer]’s specific
development project, but rather to combat the overall lack of affordable housing” and
thus falls under the broader class of land use regulation to enhance the public welfare.
(Ibid., citing California Building, supra, 61 Cal.4th at p. 444.)
       Here, the requirement that new nonresidential development provide off-street
parking facilities is “proportional to the need created by each use, in order to alleviate
traffic congestion.” (Palo Alto Mun. Code, § 18.52.010.) The in-lieu parking fee serves
this purpose for new development that would not otherwise be able to satisfy the parking
requirements. (Id., § 18.52.070(d).) The in-lieu fee is directed at “mitigat[ing] a
                                                 25
particular adverse effect of the development proposal under consideration” (California
Building, supra, 61 Cal.4th at p. 444)—namely, the traffic congestion and parking
impacts created by the new downtown development. It is placed into the separate
parking fund for that purpose. (See Palo Alto Mun. Code, § 16.57.050.) Therefore, the
in-lieu parking fee does not conform to the description in California Building of a “use
restriction” imposed for a non-mitigation purpose or directed at improving public
welfare. (California Building, at p. 472.)
       The reasons advanced by the City in support of its contrary argument are not
persuasive. The City argues that unlike the conditions for approval of the project set
forth in condition No. 9, which separately required plaintiffs to pay development impact
fees of more than half of a million dollars prior to issuance of the project’s building
permits, the in-lieu election provided in condition No. 8 allowed plaintiffs to choose to
pay instead of directly providing a certain number of parking spaces. But as we have
already concluded based on the Mitigation Fee Act’s broad coverage when “a monetary
exaction” is imposed in connection with and as a condition of approval of a development
project for the purpose of defraying the cost of facilities related to the project (§§ 66000,
subd. (b), 66001, subd. (a)), the in-lieu or elective aspect of the fee does not remove it
from the Act’s purview.
       The City also points to California Building Industry Assn. v. San Joaquin Valley
Air Pollution Control Dist. (2009) 178 Cal.App.4th 120 (San Joaquin), as well as to the
Supreme Court’s decision in Ehrlich regarding the in-lieu public art fee, as further
support for its contention that an in-lieu fee is not an exaction governed by the Mitigation
Fee Act. We disagree that either case dictates that the type of in-lieu fee at issue here is
not a monetary exaction subject to the Act.
       San Joaquin involved a challenge to a pollution control rule in which developers
were required to reduce indirect pollution caused by new development projects “by
incorporating pollution-reducing features in the project, or by paying a fee to fund off-site
                                                 26
projects that will reduce emissions, or by a combination of the two.” (San Joaquin,
supra, 178 Cal.App.4th at pp. 124–125.) Although the appellate court concluded that the
emissions reduction requirement (including the in-lieu fee) was neither subject to nor in
violation of the Mitigation Fee Act, the in-lieu aspect of the regulation was not relevant to
the court’s determination. Instead, the court relied on the distinction between a
development fee subject to the Act, which requires “approval of the development project
[to] be conditioned on payment of the fee” (id. at p. 131), and a regulatory fee imposed
under the agency’s police power. Because the pollution reduction regulations did not
condition approval of the development on the proposed air quality plan, the court
concluded the fee was not a development fee subject to the Act. (Id. at pp. 128, 131.)
       Here, unlike in San Joaquin, the City’s approval of the project at 135 Hamilton
Avenue was conditioned on payment of the in-lieu parking fee. Moreover, the “condition
of approval” term is expressly written into the municipal code, which provides that
payment of the in-lieu parking fee “shall be a condition of the approval of . . . any new
[eligible] development.” (Palo Alto Mun. Code, § 16.57.010.) That there are alternative
means of complying with the parking condition—whether by directly providing the
required number of new parking spaces or by electing to contribute the equivalent cost by
paying the in-leu parking fee—is not determinative. When the election applies, it is a
condition of approval for the development project. (Cf. San Joaquin, supra, 178
Cal.App.4th at p. 131; § 66001, subd. (a).) Thus, while the City is correct that “a fee
does not become a ‘development fee’ simply because it is made in connection with a
development project” (Barratt American, supra, 37 Cal.4th at p. 699), an in-lieu fee, like
Palo Alto’s in-lieu parking fee, is a development fee for purposes of the Mitigation Fee
Act if it meets the definition set forth in section 66001.
       Further, our conclusion is consistent with the legislative purpose behind the Act to
require local agencies to follow uniform procedures in imposing, accounting for, and
using development fees (Walker, supra, 239 Cal.App.4th at p. 1357; see §§ 66001,
                                                 27
66006) and to create a statutory “mechanism . . . to guard against unjustified fee
retention” (Home Builders, supra, 185 Cal.App.4th at p. 565) in the event an agency’s
procedures fall short.
       Having decided that the Act governs Palo Alto’s in-lieu parking fee, 6 we consider
whether the trial court erred in denying plaintiffs’ refund claim under section 66001(d).
We begin with the City’s assertion that plaintiffs’ claim was not timely filed.
       D. Statute of Limitations
       Plaintiffs challenge the trial court’s ruling that plaintiffs’ action for a refund under
the Act is barred by Code of Civil Procedure section 340’s one-year statute of limitations
applicable to claims based on penalty or forfeiture. Plaintiffs maintain that, in concluding
the action is time-barred, the trial court erroneously relied on dicta in El Dorado, supra,
42 Cal.App.5th 620, and misconstrued the date of accrual of the action. Plaintiffs
contend that the applicable statute of limitations is Code of Civil Procedure section 343’s
four-year “catch all” or, alternatively, Code of Civil Procedure section 338, subdivision
(a)’s three-year statute of limitations for actions “upon a liability created by statute.”
Plaintiffs maintain that, regardless of which limitations period might be applicable, the
action is timely when accrual is properly measured from the City’s denial of plaintiffs’
request for a refund.
       In response, the City does not address plaintiffs’ accrual argument. Regarding the
proper statute of limitations, the City disagrees with the reasoning in El Dorado (that an
action for refund under section 66001(d) is in the nature of a penalty or forfeiture) and
agrees with plaintiffs that the applicable statute of limitations is three years under section
338, subdivision (a). The City nevertheless maintains that the trial court’s judgment

       6
         In light of this conclusion, we need not address plaintiffs’ alternative argument
that the City is judicially estopped from disputing application of the Mitigation Fee Act to
the in-lieu parking fee due to its earlier treatment of the in-lieu parking fees it collected as
subject to the Act’s five-year findings requirement.
                                                  28
should be affirmed on other grounds. To the extent that the timeliness of plaintiffs’
action turns on when the action accrued, regardless of which statute of limitations
applies, we begin with that question.
       Plaintiffs characterize this action as an action for refund relief. They contend that
because they filed the action less than three months after the City denied their refund
request, the action was timely filed within one year of its accrual.
       The relevant facts are not in dispute; therefore, we decide the application of the
statute of limitations as a question of law. (International Engine Parts, Inc. v. Feddersen
& Co. (1995) 9 Cal.4th 606, 611; see also Aryeh v. Canon Business Solutions, Inc. (2013)
55 Cal.4th 1185, 1191; Blaser v. State Teachers’ Retirement System (2019) 37
Cal.App.5th 349, 364.)
       As a rule, a civil action may be brought only within the prescribed statute of
limitations period once a cause of action has accrued. (Code Civ. Proc., § 312; Fox v.
Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806.) A cause of action typically
accrues at the time “ ‘when a suit may be maintained.’ ” (Howard Jarvis Taxpayers
Assn. v. City of La Habra (2001) 25 Cal.4th 809, 815 (Howard Jarvis).) “ ‘ “Ordinarily
this is when the wrongful act is done and the obligation or the liability arises, but it does
not ‘accrue until the party owning it is entitled to begin and prosecute an action thereon.’
” [Citation.] In other words, “[a] cause of action accrues ‘upon the occurrence of the last
element essential to the cause of action.’ ” ’ ” (Ibid.) Stated differently, “a cause of
action accrues at ‘the time when the cause of action is complete with all of its
elements.’ ” (Fox, at p. 806.)
       We agree with plaintiffs that the thrust of their action under section 66001 is for
refund relief. It is the nature of the right sued upon, that is, “the ‘gravamen’ of the cause
of action” which determines the applicable statute of limitations. (Hensler v. City of
Glendale (1994) 8 Cal.4th 1, 22; see E-Fab, Inc. v. Accountants, Inc. Services (2007) 153
Cal.App.4th 1308, 1316.) Plaintiffs filed the petition and complaint in May 2020, three
                                                 29
months after the City’s February 2020 letter denying Chop Keenan’s refund request. The
action sought a writ directing the City “to make restitution of all such Fees unlawfully
retained by the City without adequate or timely accounting . . . , including refunds of all
such Fees paid by Plaintiffs.” The action also sought declaratory and injunctive relief
regarding the City’s “continued retention of such Fees” and for “an equitable and
injunctive decree directing the [City] to promptly make restitution and refunds of the
subject Fees which have not been properly or timely used for their ostensible purpose and
for which the [City] ha[s] failed to make timely findings or accountings.”
       Insofar as the action seeks, in plaintiffs’ words, “to compel compliance with the
refund ‘mechanism’ – not to compel the City to make ex post facto findings after the
deadline has already run” (underscoring omitted), we agree that accrual of the action
could not occur prior to the City’s action denying the refund request. While any
obligation of the City to issue findings arose on the statutorily prescribed due date (within
180 days after the end of the relevant fiscal year, pursuant to sections 66001(d)(2) and
66006, subdivision (b)(1)), it is not “ ‘ “when the wrongful act is done and the obligation
or the liability arises” ’ ” but when “ ‘ “ ‘the party owning it is entitled to begin and
prosecute an action thereon’ ” ’ ” that determines the action is complete with all of its
elements. (Howard Jarvis, supra, 25 Cal.4th at p. 815.) Section 66001(d)(2) directs that
the local agency shall refund the unexpended money in the fund “as provided in
subdivision (e).” However, section 66001(d)(2) does not specify a time period or process
for the refund based on a failure to make the required five-year findings.
       Under these circumstances, only upon the City’s refusal to issue a refund could
plaintiffs maintain a suit based upon a refund demand for alleged noncompliance with the
Mitigation Fee Act’s accounting and findings requirements. (Howard Jarvis, supra, 25
Cal.4th at p. 815 [cause of action accrues “ ‘when a suit may be maintained’ ”].) As
stated in analogous actions involving tax and other types of refunds, “[t]he cause of
action for a refund does not accrue until the claim for refund has been denied or rejected
                                                  30
in some manner.” (State of California ex rel. Dept. of Motor Vehicles v. Superior Court
(1998) 66 Cal.App.4th 421, 435 (State of California) [concerning timeliness of class
claims in action for refund of motor vehicle license fees]; see also Geneva Towers Ltd.
Partnership v. City of San Francisco (2003) 29 Cal.4th 769, 772; Miller & Lux v. Batz
(1904) 142 Cal. 447, 450–453.)
       To summarize the relevant timeline, the City made five-year findings on certain
development fee funds in a resolution adopted in January 2019 for the fiscal year that
ended on June 30, 2018, but omitted any findings on the parking fund. In January 2020,
Chop Keenan requested that the City refund the in-lieu parking fees, with interest, that
plaintiffs had paid in December 2013 in connection with the development of the property
at 135 Hamilton Avenue. In February 2020, the City issued the letter rejecting Keenan’s
request for a refund under the Mitigation Fee Act. And on May 11, 2020, after rejecting
the refund request and about two weeks before plaintiffs filed this action on May 22,
2020, the city council adopted the May 2020 five-year findings under section 66001(d),
in which it addressed the parking fund for the fiscal year that ended on June 30, 2019.
       We decide that, at the earliest, plaintiffs’ action for a refund accrued on February
24, 2020, when the City denied the request for a refund of the unexpended in-lieu parking
fees. (See State of California, supra, 66 Cal.App.4th at p. 435.) Plaintiffs’ filing of the
petition and complaint less than three months after the denial of their request, and only
weeks after the City attempted to remedy any perceived deficiencies by issuing the May
2020 five-year findings, was timely regardless of whether the applicable statute of
limitations is one year under El Dorado and Code of Civil Procedure section 340, or three
or four years under Code of Civil Procedure sections 338 and 343, respectively.
       Because plaintiffs’ action is timely under any of the three, possible statute-of-
limitations periods discussed by the parties, we need not definitively resolve for purposes
of this appeal whether the trial court erred in applying the one-year statute of limitations
for an action upon a statute for a penalty or forfeiture. (See Code Civ. Proc., § 340, subd.
                                                 31
(a); El Dorado, supra, 42 Cal.App.5th at p. 627.) We similarly need not address
plaintiffs’ alternative arguments concerning continuous accrual, based on the City’s
issuance of supplemental findings in May 2020, or equitable tolling.
       Having decided that plaintiffs’ claim was timely, we turn to the merits of
plaintiffs’ refund claim.
       E. Merits of Plaintiffs’ Statutory Refund Claim
       On May 11, 2020, following plaintiffs’ demand for a refund, the Palo Alto city
council adopted a resolution making additional five-year findings under section 66001(d),
for the fiscal year that ended on June 30, 2019. (May 2020 five-year findings). Plaintiffs
contend the City’s belated, five-year findings are legally insufficient. 7 Plaintiffs submit
that this court should therefore reverse the judgment and direct the trial court to order the
requested refund of the unexpended in-lieu parking fees in accordance with section 66001
(or, alternatively, under principles of equitable restitution).
       The City disputes this proposed disposition. The City asserts that even if the five-
year findings are deemed deficient, the proper remedy would be a remand with directions
to the City to cure any legal defect.
       We review de novo the City’s adoption of the January 2019 five-year findings
(omitting any mention of the parking fund) and May 2020 five-year findings (addressing
the parking fund) and decide whether the actions are “ ‘ “entirely lacking in evidentiary
support, or . . . failed to conform to procedures required by law.” ’ ” (Walker, supra, 239
Cal.App.4th at p. 1362; American Coatings, supra, 54 Cal.4th at p. 461.)
       The relevant dates are not in dispute. The City began collecting in-lieu parking
fees and depositing them in the parking fund in the fiscal year that ended on June 30,

       7
          The trial court addressed this issue in its finding in the event of appellate reversal
on the legal issues discussed ante. The parties dispute the legal effect of this finding by
the trial court. As the question whether the City’s findings were timely under section
66001(d) is a matter of law subject to de novo review, we need not reach this issue.
                                                  32
1996. The City issued five-year reports under section 66001(d) for the parking fund for
fiscal years 2003 and 2009 that showed unexpended fees in the fund.
        On December 31, 2013, prior to issuance of the project’s building permits (in
conformity with condition Nos. 8 and 9), plaintiffs paid the City $1,560,475.16 in
development impact fees for the property, including $972,000 in in-lieu parking fees
(later reduced to $906,900). Under the City’s municipal code, this payment occurred in
the fiscal year that ended on June 30, 2014. (Palo Alto Mun. Code, § 2.28.010.)
        On January 13, 2014, the city council adopted five-year findings under section
66001(d) for the fiscal year that ended on June 30, 2013 (Resolution No. 9389). These
findings addressed $90,696 in unexpended “University Avenue Parking In-Lieu Parking
Development Fees” collected between 2001 and 2008, together with accrued interest. On
January 22, 2019, the city council adopted its next set of five-year findings for the fiscal
year that ended on June 30, 2018 (Resolution No. 9816), omitting any mention of the in-
lieu parking fees but addressing other categories of development fee funds maintained by
the City. As noted ante, the record shows there was a positive balance of unexpended
fees in the parking fund for the fiscal years ending on June 30, 2014, through June 30,
2020.
        On May 11, 2020, after plaintiffs requested a refund based on the omission of in-
lieu parking fees from the January 2019 five-year findings, the city council adopted the
May 2020 five-year findings for the fiscal year that ended on June 30, 2019. (Resolution
No. 9887.) The May 2020 five-year findings, issued 10 months after the fiscal year that
ended on June 30, 2019 (and 22 months after the fiscal year that ended on June 30, 2018),
addressed $6,117,748 in unexpended, University Avenue in-lieu parking fees, together
with accrued interest.

                                                 33
           1. The City was Obligated to Issue Five-Year Findings
       The City contends that, under these circumstances, it was not required to adopt
five-year findings for the fiscal year that ended on June 30, 2018, because on that date no
in-lieu parking fees in the parking fund had been held for more than five years.
       The City bases this assertion in part on the timing of its prior findings with respect
to the parking fund. The City made substantive five-year findings related to the parking
fund in January 2009 and in January 2014 (for the fiscal years that ended on June 30,
2008 and June 30, 2013, respectively). According to the City, “five years thereafter”
under section 66001, subdivision (d)(1) (hereafter § 66001(d)(1)), meant the City’s next
set of five-year findings on the parking fund came due for the fiscal year that ended on
June 30, 2018. 8
       In 2016 the City transferred $1.3 million from the parking fund to the capital fund.
The City contends this transfer exhausted the balance of fees that had been in the parking
fund for five years prior to June 30, 2018. In other words, the City maintains that insofar
as the parking fund balance for the fiscal year that ended on June 30, 2013 (five years
prior to the June 30, 2018 date) was $657,961, the City’s transfer of $1.3 million from the
fund in fiscal year 2016 for design planning and environmental review related to the new
downtown parking garage “expended that entire balance, and significantly more
(including much of [plaintiff]s’ $906,900 payment),” even as other in-lieu parking fees
(like plaintiffs’) continued to be deposited into the parking fund.
       The City’s position appears to be that, when making five-year findings under the
statute, it must account only for that portion of unexpended fees in the fund that were
deposited more than five years earlier. The City argues that, based on the plain language

       8
         Neither party has asked this court to opine upon the application of section
66001(d)(1) to the City’s five-year timetable with respect to the date of the first deposit
of fees into the parking fund (i.e., in the fiscal year that ended on June 30, 1996). We
assume arguendo, for purposes of deciding this appeal, the accuracy of the June 30, 2018
date.
                                                 34
of the statute, the five-year findings apply only to “that portion of the account or fund
remaining unexpended” for the fifth fiscal year following the initial deposit into the fund
(§ 66001(d)(1)) of individual fee payments. The city asserts that section 66001(d) refers
only to that portion of the fees deposited at least five years prior, not the entire balance of
the fund or account. It asserts that if the Legislature had intended findings for amounts
held less than five years, the statutory language would have required five-year findings
for the entire remaining balance of the account, rather than “that portion” of the account.
       The City claims that its reading of the statute is consistent with what it maintains
is the “obvious purpose . . . to require local agencies to account for long-held funds it has
not yet spent rather than more recently collected funds.” The City further argues that to
interpret the five-year findings provision as applicable to all unexpended fees in the fund,
including recently collected fees, would be inconsistent with other provisions of the Act.
(See, e.g., § 66020 subds. (d)–(e).) Applying this interpretation of the law, the City
maintains that it was not required to adopt five-year findings for the parking fund in
January 2019 because it had not held any unexpended in-lieu parking fees for more than
five years as of June 30, 2018.
       Plaintiffs dispute this interpretation as an “erroneous re-writing” of section
66001(d). They argue that the plain language of the statute does not limit a local
agency’s duty to make five-year findings based on when it received the balance of the
unused fees in the fund. Plaintiffs assert the City’s reading of the statute would make the
five-year findings requirement unworkable, since the time for the agency to make
findings would be “constantly in flux, depending on when fee payments were received.”
       Plaintiffs contend that section 66001(d) requires five-year findings as to “ ‘that
portion of the fund remaining unexpended, whether committed or uncommitted’ ”
(§ 66001(d)(2)), regardless of when the fees were deposited. Plaintiffs assert that the
City recognized this standard when it belatedly issued its May 2020 five-year findings,

                                                  35
which addressed all of the in-lieu parking fees in the fund to that date without regard to
when the City received the fees.
       We agree with plaintiffs that the City’s proposed interpretation of section
66001(d) is contrary to the plain language of the statute. The provision states, “For the
fifth fiscal year following the first deposit into the account or fund, and every five years
thereafter, the local agency shall make all of the following findings with respect to that
portion of the account or fund remaining unexpended, whether committed or
uncommitted . . . .” (§ 66001(d)(1).)
       Assigning the language its ordinary meaning (Dyna-Med, supra, 43 Cal.3d at
pp. 1386–1387), we decide the phrase “following the first deposit into the account or
fund” (§ 66001(d)(1)) refers to the date that the first payment is made on a development
fee into the fund or account following that fee’s initial establishment—not the date of
each subsequent payment of fees into the fund.
       As stated in Walker, “when a local agency has not used all of a development fee
within five years of the date it started to collect the fee, the agency must make findings
that (1) identify the agency’s purpose in holding the unexpended balance; (2) demonstrate
a reasonable relationship between the unexpended balance and the purpose identified
when the agency assessed the fee; (3) identify the sources and funding anticipated to
complete any incomplete public improvement identified when the fee was established;
and (4) designate the approximate date the agency expects that funding to be deposited in
the account holding the unexpended balance.” (Walker, supra, 239 Cal.App.4th at
p. 1363, italics added, citing § 66001(d)(1).)
       We do not agree with the City that the requirement to make findings “with respect
to that portion of the account or fund remaining unexpended” (§ 66001(d)(1)) is limited
to those fees that remain unexpended following the fifth fiscal year after their initial
deposit into the account or fund by a particular depositor, because such a construction
would be inconsistent with the statutory intent to require reporting at regular, five-year
                                                 36
interludes following the “first deposit” into the account or fund. (Ibid.) The
Legislature’s use of “account or fund” in subdivision (d)(1) of section 66001 is notably
distinct from the language of subdivision (c), which directs the management of every fee
received (“[u]pon receipt of a fee subject to this section, the local agency shall deposit,
invest, account for, and expend the fees pursuant to [s]ection 66006” (§ 66001, subd. (c),
italics added)).
       Amendments to the Act in 1996 crystallized this distinction by changing the
wording of section 66001(d) to its current form. Whereas the original language required
findings “once each fiscal year with respect to any portion of the fee remaining
unexpended or uncommitted in its account five or more years after deposit of the fee”
(former § 66001(d), added by Stats. 1987, ch. 927, § 1), the revised language refers to
findings “[f]or the fifth fiscal year following the first deposit into the account or fund,
and every five years thereafter, . . . .” (§ 66001(d), added by Stats. 1996, ch. 569, § 1,
italics added). The Legislature thus altered the relevant reference point for the five-year
findings from individual fees paid to the account or fund as a whole.
       The Legislative Counsel’s Digest for the 1996 amendments confirmed that the
changes “would revise the local agency’s duties with respect to these unexpended fees,
including requiring the local agency, for the 5th fiscal year following the first deposit into
an account or fund, and every 5 years thereafter, to include specified information in
findings relating to the funding of a project.” (Legis. Counsel’s Dig., Sen. Bill No. 1693
(1995-1996 Reg. Sess.) 6 Stats. 1996, ch. 569, italics added.) 9
       Our reading of the statute—that is, that the five-year finding requirement under
section 66001(d)(1) applies to the fund itself rather than to the timing of the deposit of

       9
         The bill summaries provided by the Legislative Counsel’s Digest, printed as a
preface to every bill considered by the Legislature, are not binding but “are entitled to
great weight.” (Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158,
1170; see also Walker, supra, 239 Cal.App.4th at p. 1364, fn. 3.)
                                                  37
individual fees—is rendered all the more reasonable when considered in connection with
the Legislature’s direction that a local agency maintain all fees received for a specified
improvement in a single, designated fund or account. (§ 66006, subd. (a).) 10 Since fees
received in connection with different development projects must be kept in a single fund
or account “with the other fees for the improvement” (ibid.), the phrase “following the
first deposit into the account or fund” (§ 66001(d)(1) can only refer to one date—the date
the agency first began to collect that mitigation fee.
       To the extent there is any uncertainty about whether subdivision (d)(1) of section
66001 was intended to apply, as the City contends, to more recently collected fees that
have been in the fund for less than five years, we may consider “the consequences that
will flow from a particular interpretation.” (Dyna-Med, supra, 43 Cal.3d at p. 1387.) If
the requirement to make five-year findings applied only to those fees in the fund that
were deposited more than five years prior, the five-year findings would not accurately
reflect “that portion of the account or fund remaining unexpended” (§ 66001(d)(1), italics
added) five years after the first fee was collected, and every five years thereafter. Nor
would it appear to satisfy the statutory purpose of requiring the local agency to
“ ‘reexamine the necessity for the unexpended balance of the fee, as specified, every 5
years, and refund to then current owner or owners of the development project any
unexpended portion of the fee for which need cannot be demonstrated at the time of this
review, together with any accrued interest.’ ” (Walker, supra, 239 Cal.App.4th at

       10
          Pursuant to section 66006, subdivision (a), “If a local agency requires the
payment of a fee specified in subdivision (c) in connection with the approval of a
development project, the local agency receiving the fee shall deposit it with the other fees
for the improvement in a separate capital facilities account or fund in a manner to avoid
any commingling of the fees with other revenues and funds of the local agency, except
for temporary investments, and expend those fees solely for the purpose for which the fee
was collected. Any interest income earned by moneys in the capital facilities account or
fund shall also be deposited in that account or fund and shall be expended only for the
purpose for which the fee was originally collected.”
                                                 38
p. 1364, quoting Legis. Counsel’s Dig., Assem. Bill No. 1600 (1987-1988 Reg. Sess.) 4
Stats. 1987, ch. 927, Summary Dig., p. 301.) 11 We note that our reading of the statute is
also consistent with the five-year reports issued by the City with respect to the parking
fund in January 2009 and in January 2014, which did not break out fees by date of
deposit.
       In summary, we hold that section 66001(d)(1) requires that a local agency make
five-year findings for the fifth fiscal year after the first deposit of a fee into an account or
fund and at five-year intervals thereafter. Five-year findings must report all unexpended
fees in the account or fund, irrespective of the date at which the fees were deposited, as
long as the account or fund during the five-year period contained a positive balance of
unexpended fees.
       We therefore reject the City’s contention that it was not required to make five-year
findings on the unexpended portion of the parking fund for the fiscal year that ended on
June 30, 2018.
            2. The City’s Belated Findings Do Not Satisfy the Act
       The City contends that even if it were required to make the five-year findings, it in
fact satisfied that obligation when the city council adopted the May 2020 five-year
findings. The City argues that a strict interpretation of the statutory deadline is not
supported by the plain language or intent of the Mitigation Fee Act and is contrary to
established case authority interpreting similar statutory deadlines as “directory” rather
than “mandatory.” The City further argues that even if the May 2020 five-year findings

       11
         On our own motion, we further take judicial notice of the cognizable legislative
history of the 1996 amendments to section 66001(d), reflecting the Legislature’s
consideration of changes to the reporting requirements (see, e.g., Sen. Housing & Land
Use Com., com. on Sen. Bill No. 1693 (1995–1996 Reg. Sess.) as amended Apr. 9, 1996;
Sen. Rules Com., Off. of Sen. Floor Analyses, Analysis of Sen. Bill No. 1693 (1995-1996
Reg. Sess.) as amended Aug. 28, 1996). (Evid. Code, §§ 452, subd. (c), 459, subd. (a);
see Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc. (2005) 133
Cal.App.4th 26, 29.)
                                                  39
were legally inadequate, the proper remedy would be to remand the findings to the city
council for the opportunity to cure any legal deficiency before imposing the refund
remedy.
       Plaintiffs counter that the purpose of the statutory deadlines specified in sections
66001 and 66006 is to ensure timely public accountings and findings. As such, plaintiffs
point to the appellate court’s determination in Walker that “a refund is the statutorily
mandated remedy” for noncompliance with section 66001(d). (Walker, supra, 239
Cal.App.4th at p. 1367, capitalization omitted.) Plaintiffs urge this court to follow the
reasoning of the Walker court, which after considering the statutory language and
legislative history of the Act, concluded there was no support for a remand in light of the
Mitigation Fee Act’s “clear mandate” to refund the unexpended fees. (Id. at p. 1369.)
       Having considered the statutory language and relevant legal authorities, we agree
with Walker that a refund is the statutorily mandated remedy for failing to make required
five-year findings under section 66001(d). (See Walker, supra, 239 Cal.App.4th at
pp. 1367–1370.) While the City is correct that courts routinely interpret similar statutory
deadlines as “directory” rather than “mandatory,” here the statute expressly specifies the
remedy for an agency’s failure to make the required findings.
       As a general rule, “a ‘ “directory” or “mandatory” designation does not refer to
whether a particular statutory requirement is “permissive” or “obligatory,” but instead
simply denotes whether the failure to comply with a particular procedural step will or will
not have the effect of invalidating the governmental action to which the procedural
requirement relates.’ ” (California Correctional Peace Officers Assn. v. State Personnel
Bd. (1995) 10 Cal.4th 1133, 1145 (California Correctional).) If noncompliance with a
particular procedural step invalidates the governmental action, the requirement will be
termed “ ‘mandatory’ ”; otherwise, “it is ‘directory’ only.” (Ibid.; see Edwards v. Steele
(1979) 25 Cal.3d 406, 410 (Edwards).) As applied to time limits on government action,

                                                 40
“[t]ime limits are usually deemed to be directory unless the Legislature clearly expresses
a contrary intent.” (California Correctional, at p. 1145.) One test applied by California
courts in ascertaining what effect to give a statute’s timing requirement is whether “ ‘a
consequence or penalty is provided for failure to do the act within the time
commanded.’ ” (Edwards, at p. 410.) “Under this framework, ‘statutes setting forth time
frames for government action that do not include a self-executing consequence are almost
universally construed as directory, rather than mandatory or jurisdictional.’ ” (Tran v.
County of Los Angeles (2022) 74 Cal.App.5th 154, 166 (Tran).)
       Applying those principles here, the Mitigation Fee Act provides that when five-
year findings are required by section 66001(d)(1), they must be “made in connection with
the public information required by” section 66006, subdivision (b). (§ 66001(d)(2).)
That provision in turn directs that the local agency “shall” make certain information
available to the public “within 180 days after the last day of each fiscal year.” (§ 66006,
subd. (b)(1).) Together, these provisions establish a statutory timeline for a local agency
to make the required five-year findings “within 180 days after the last day of each fiscal
year.” (§§ 66006, subd. (b)(1), 66001(d)(2).) In establishing the 180-day deadline—a
change enacted as part of the 1996 amendments to section 66001—the Legislature
evinced an intent to require local agencies to comply with the statutory timeline, or be
required to refund the unexpended fees in the fund or account. 12

       12
          Prior to establishment of the 180-day deadline, a local agency had 60 days after
the close of the fiscal year to make public the specified information. (See Legis.
Counsel’s Dig., Sen. Bill No. 1693 (1995-1996 Reg. Sess.) 6 Stats. 1996, ch. 569.)
Legislative committee documents discussing the change acknowledge that the then-
proposed amendments would increase the reporting duties of local agencies with respect
to development fees but also extend the deadline to comply. (See, e.g., Sen. Rules Com.,
Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill No. 1693 (1995-1996 Reg.
Sess.) as amended May 7, 1996 [noting the bill expands the reporting requirements
related to development fee funds, and that “[t]he additional information may take more
time for local agencies to comply but this bill allows six months to complete the reporting

                                                41
       In the absence of a clear contrary intent, such a statutory time limit would
typically be deemed directory. (California Correctional, supra, 10 Cal.4th at p. 1145;
Edwards, supra, 25 Cal.3d at p. 410.) However, section 66001(d)(2) states that “[i]f the
findings are not made as required by this subdivision, the local agency shall refund the
moneys in the account or fund as provided in subdivision (e).”
       This provision unequivocally imposes a direct consequence for an agency’s failure
to make five-year findings “as required by this subdivision.” (§ 66001(d)(2).) That
consequence is to require the agency to refund the unexpended portion of the fees in the
account or fund to the record owner(s) of the development project(s). (Id., subds. (d)(2),
(e).) Thus, contrary to the City’s claim that there is no government “action” that is
invalidated if it fails to make the required findings, the action being invalidated is the
agency’s continued retention of the unexpended balance of the fees in the fund after
having failed to make the required findings for that five-year period. Moreover, to the
extent the consequence imposed by the statute for failure to make required five-year
findings applies directly, without further statutory requirements, it is tantamount to a
“ ‘self-executing consequence’ ” (Tran, supra, 74 Cal.App.5th at p. 166), and the City’s
reference to “similar directory deadlines across all areas of state law” is unavailing.
       Nor do the distinguishable facts in Walker render it inapposite to our analysis here.
As the City points out, Walker involved a longstanding “beach parking impact fee”
(capitalization omitted) which the City of San Clemente continued to collect even after
several beach parking studies confirmed that San Clemente had adequate beach parking.
(Walker, supra, 239 Cal.App.4th at p. 1361.) The trial court entered judgment against
San Clemente after a bench trial on the plaintiffs’ action for declaratory and mandamus
relief and ordered the city to refund the unexpended beach parking impact fees based in
part on its failure to make the required five-year findings. (Id. at p. 1362.)

requirements”]; Sen. Housing & Land Use Com., com. on Sen. Bill No. 1693 (1995-1996
Reg. Sess.) as amended Apr. 9, 1996 [same].)
                                                 42
          On appeal, the Walker court agreed that the five-year findings were inadequate.
(Walker, supra, 239 Cal.App.4th at p. 1367.) It furthermore rejected San Clemente’s
argument that the trial court should have remanded the matter for the city “to make new
findings correcting the ‘technical deficienc[ies]’ in the [] five-year findings rather than
requiring the [c]ity to forfeit the unexpended impact fees that [it] properly had collected.”
(Ibid.)
          The court explained that the language of section 66001(d) and related legislative
history confirm that “the Legislature intended that a local agency must refund
unexpended development fees if the agency fails to make the required five-year
findings.” (Walker, supra, 239 Cal.App.4th at p. 1368.) The court reasoned that
although case authority in other contexts might support remand for a government agency
to correct deficient findings, that authority does not permit the court to “disregard” the
Act’s “clear mandate” requiring the city “to make findings to support its quasi-legislative
decision to retain the unexpended” fees and further “specif[ying] the remedy for the
[c]ity’s failure to do so.” (Id. at p. 1369.)
          We recognize that Walker is factually distinguishable and that the instant situation
does not mirror the extreme facts of that case, in which the local agency apparently had
no intention of using the fees collected for their intended purpose. (Cf. Walker, supra,
239 Cal.App.4th at pp. 1360–1361.) Even so, we reject the City’s contention that the
decision in Walker was driven by those facts; instead, the statutory language and purpose
dictated the court’s analysis of the statutory remedy.
          Here, like in Walker, the City has pointed to nothing in the statute’s language or
purpose that would negate or mitigate the unambiguous refund provision. The City
argues that the Act does not state that the five-year findings required by section 66001(d)
have to be adopted “timely.” This ignores the language specifying “If the findings are
not made as required by this subdivision, the local agency shall refund the moneys in the
account or fund as provided in subdivision (e).” (§ 66001(d)(2), italics added.) Since the
                                                   43
findings required by subdivision (d) of section 66001 must be made “in connection with”
(§ 66001(d)(2)) the annual public information on the 180-day timeline after the end of the
fiscal year (§ 66006, subd. (b)(1)) and are intended to require any agency to regularly
reexamine its basis for retaining the unexpended fees in the fund, we decide there is no
statutory support to exempt untimely five-year findings from the refund remedy or
authorize a remand to supplement untimely findings on that basis.
       It is undisputed that more than 180 days had elapsed between the fiscal year that
ended on June 30, 2018, and the City’s May 2020 five-year findings. Therefore, those
findings were untimely and noncompliant with the requirements of the subdivision.
(§§ 66001(d)(2), 66006, subd. (b)(1).) We decide that the May 2020 five-year findings
“ ‘ “failed to conform to procedures required by law” ’ ” (Walker, supra, 239 Cal.App.4th
at p. 1362; American Coatings, supra, 54 Cal.4th at p. 461), rendering the unexpended
portion of the parking fund subject to the refund provision of section 66001(d)(2).
       F. Harmless Error
       There remains the City’s argument that, notwithstanding any legal deficiency
(including untimeliness) in the May 2020 five-year findings, a refund of the in-lieu
parking fees is not appropriate under the so-called “harmless error” provision of the
Government Code. (§ 65010(b).) The City contends that under section 65010(b), the
court cannot invalidate the City’s action (or omission) based on its failure to make
required findings under the Act unless plaintiffs demonstrate that (1) the error was
prejudicial, (2) they suffered substantial injury from the error, and (3) a different result
would have been probable had the error not occurred—a showing plaintiffs have not tried
to make here. We disagree with the City and decide that, given the mandatory nature of
the refund provision, the prejudice standard of section 65010(b) does not apply to section
66001(d).
       Whether section 65010(b) applies to section 66001(d) is a question of law subject
to our independent review. (Sierra Pacific, supra, 140 Cal.App.4th at p. 1505.) Section
                                                  44
65010 is “a general statutory directive to courts to apply the doctrine of harmless error to
agency proceedings under title 7 of the Government Code.” (El Dorado, supra, 42
Cal.App.5th at p. 629.) Title 7 of the Government Code has three divisions: “Planning
and Zoning” (§ 65000 et seq.), “Subdivisions” (§ 66410 et seq.), and “Official Maps”
(§ 66499.50 et seq.). (El Dorado, at p. 628.) The Planning and Zoning division of title 7
contains 12 chapters, including chapter one (“General Provisions”) encompassing the
harmless error provision (§ 65010(b)), and chapters six through nine encompassing the
Mitigation Fee Act (§ 66000 et seq.). Structurally, the Mitigation Fee Act thus comes
under the same title (title 7) and division (Division 1, Planning and Zoning), as section
65010.
         Turning to the language of the statute, section 65010(b) provides that a court may
not set aside or hold invalid the “action or inaction” of a public agency or its legislative
body based on an error or omission in “any matter pertaining to . . . findings, . . . reports,
recommendations, appeals, or any matters of procedure subject to this title, unless the
court finds that the error was prejudicial and that the party complaining or appealing
suffered substantial injury from that error and that a different result would have been
probable if the error had not occurred.” In short, section 65010(b) requires a finding of
“prejudice, substantial injury to the complaining party, and probability of a different
result before a court can overturn the decision of an administrative agency based on
procedural errors in zoning and planning matters.” (Environmental Defense Project of
Sierra County v. County of Sierra (2008) 158 Cal.App.4th 877, 887 (Environmental
Defense Project).)
         The City contends that by its express terms, section 65010 applies to findings and
procedures under the Mitigation Fee Act, since the city council’s adoption of findings
under the Act is a “ ‘matter[] of procedure subject to this title’ ” (title 7 of the
Government Code). Plaintiffs maintain, however, that an action (as in this case) to
enforce a statutorily imposed mandate to refund fees under section 66001(d), is not
                                                   45
subject to section 65010(b), which applies when a party seeks to “h[o]ld invalid or set
aside” agency action on the ground of error as to a matter of procedure subject to title 7.
(§ 65010(b), italics added.) Plaintiffs argue that “the relatively few cases which have
applied [section] 65010(b), and its predecessor” (former § 65801) illustrate the limited
scope of its application, which was intended to curtail judicial invalidation of zoning
decisions for non-prejudicial, technical, or procedural errors. Plaintiffs further maintain
that applying the harmless error standard in this context would defeat the statutory
purpose behind the Legislature’s express specification in section 66001(d) of a refund
remedy for failure to make five-year findings.
       In evaluating these arguments, we are guided by the standard principles of
statutory interpretation. (See ante, pt. II.C.) “ ‘It is axiomatic that in the interpretation of
a statute where the language is clear, its plain meaning should be followed.’ ” (Security
Pacific National Bank v. Wozab (1990) 51 Cal.3d 991, 998.) Where two statutes are to
be construed, “ ‘they “must be read together and so construed as to give effect, when
possible, to all the provisions thereof.” ’ ” (Mejia, supra, 31 Cal.4th at p. 663.)
“ ‘[E]very statute should be construed with reference to the whole system of law of which
it is a part, so that all may be harmonized and have effect.’ ” (Ibid.)
       Applying these principles to our review of sections 65010(b) and 66001(d), we
decide that section 65010(b) does not inject a prejudice standard into the refund
determination under section 66001(d).
       Courts have generally described section 65010(b) (formerly section 65801) as “a
‘curative statute’ enacted by the Legislature for the purpose of ‘terminating [the]
recurrence of judicial decisions which had invalidated local zoning proceedings for
technical procedural omissions.’ ” (Rialto Citizens for Responsible Growth v. City of
Rialto (2012) 208 Cal.App.4th 899, 921 (Rialto Citizens); El Dorado, supra, 42
Cal.App.5th at p. 629; see Taschner v. City Council (1973) 31 Cal.App.3d 48, 62
[describing the legislative objective of former § 65801 “to correct the notion . . . that any
                                                  46
minor deviation from the mode prescribed by the State Zoning Law is a jurisdictional
error which is fatal to the zoning action”], disapproved on another ground by Associated
Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal.3d 582, 596, fn. 14.)
          Those reported cases that have applied section 65010(b) (and its predecessor,
§ 65801) have reflected this purpose in relation to planning and zoning law violations.
(See, e.g., Rialto Citizens, supra, 208 Cal.App.4th at pp. 916–923 [assessing prejudice in
relation to city’s defective compliance with requirements pertaining to general plan
amendments and development agreement approvals]; Tran, supra, 74 Cal.App.5th at
pp. 172–173 [applying § 65010(b) to board of supervisors’ untimely decision to impose
limits on applicant’s conditional use permit]; Sounhein v. City of San Dimas (1992) 11
Cal.App.4th 1255, 1260 [deciding that city’s failure to provide notice and hearing
procedures in connection with the adoption of a zoning ban on second unit accessory
apartments was not harmless, given the flawed public process, rendering the ordinance
void].)
          Other cases have declined to apply section 65010(b) where the remedy sought was
inconsistent with the statutory scope of relief. Thus, the court in Environmental Defense
reasoned that a plaintiff seeking declaratory relief on the proper interpretation of state
zoning law did not need to prove prejudice, since section 65010(b) “applies only when a
party is seeking to have a court set aside or declare invalid an ‘action, inaction, or
recommendation.’ ” (Environmental Defense, supra, 158 Cal.App.4th at p. 887.)
          Similar reasoning applied in El Dorado—notably, the only reported decision
addressing an attempt to invoke section 65010(b) in litigation seeking to enforce the
Mitigation Fee Act’s refund remedy for failure to make five-year findings under section
66001(d). In El Dorado, the appellate court recognized section 65010 as “a general
statutory directive to courts to apply the doctrine of harmless error to agency proceedings
under title 7 of the Government Code” but rejected its application to the action to recover
unexpended development impact fees under section 66001. (El Dorado, supra, 42
                                                  47
Cal.App.5th at p. 629.) The El Dorado court reasoned that section 65010(b) “does not
purport to require a litigant to plead harmless error in seeking relief when an agency fails
to comply with an express statutory directive to make findings, such as in section 66001.”
(Ibid.) The court also observed it is unclear how the requirement to establish prejudice
under section 65010 comports with the refund mechanism of section 66001 “when it is
the failure itself [to make the prescribed five year findings] that entitles the current owner
to the refund without any further showing of injury.” (Ibid.)
       We agree with the court’s reasoning on this issue in El Dorado. It is apparent
from section 65010(b)’s reference to “any matters of procedure subject to this title” that
the harmless error standard applies broadly with respect to procedural matters subject to
title 7 of the Government Code. The Mitigation Fee Act, which is situated within title 7,
meets that general criterion.
       The language of section 65010(b), however, is more specific in that it refers to
determinations of whether an “action, inaction, or recommendation by any public agency
or its legislative body . . . on any matter subject to this title shall be held invalid or set
aside by any court on the ground of . . . any error, irregularity, informality, neglect, or
omission (hereafter, error) as to any matter pertaining to petitions, applications, notices,
findings, records, hearings, reports, recommendations, appeals, or any matters of
procedure subject to this title.” (§ 65010(b).) As we explained in our statute of
limitations analysis (see ante, pt. II.D.), plaintiffs’ action here does not seek to hold
invalid or set aside the City’s findings, or any other action by the City under the Act
(apart from its continued retention of that portion of unexpended fees in the fund as of the
required five-year findings). Rather, plaintiffs seek to enforce the refund requirement for
the City’s failure to make the statutorily required five-year findings. We decline to
interpret section 65010(b) more broadly than it is written and agree with plaintiffs that
section 65010(b) is not applicable to the circumstances underlying this appeal.

                                                   48
       Furthermore, applying the prejudice standard of section 65010(b) would be
incongruous with the standard for a refund of unexpended impact fees under section
66001(d). By the terms of the statute, a refund is the mandated remedy for an agency’s
failure to make five-year findings when required. (Walker, supra, 239 Cal.App.4th at p.
1367.) The refund mechanism is premised on agency noncompliance with statutory
perquisites for the continued retention of the fees, not on any independent finding of
prejudice or injury to the owner of the property whose fees have been retained. “When
[five year] findings are required by this subdivision, they shall be made in connection
with the public information required by subdivision (b) of [s]ection 66006. . . . If the
findings are not made as required by this subdivision, the local agency shall refund the
moneys in the account or fund as provided in subdivision (e).” (§ 66001(d)(2), italics
added.) This language leaves no doubt of the Legislature’s intent to exact compliance
with the five-year findings requirement by mandating a refund of the unexpended fees if
the agency does not make the required findings. The if-then nature of the statutory
mandate (if the agency fails to make the required findings, then it must refund the unused
fees) is consistent with the manifest purpose of the statute “ ‘to guard against unjustified
fee retention’ by a local agency.’ ” (Walker, at p. 1363.)
       We recognize that the prescribed remedy for an agency that has not made the
required five-year findings to “refund the moneys in the account or fund” (§ 66001(d)(2))
might be viewed as severe where the error or omission in making the required findings
could be perceived as slight or emendable. However, such speculation about the
preferred policy outcomes or possible mitigators goes beyond our role in interpreting the
statutes. “ ‘This court has no power to rewrite the statute so as to make it conform to a
presumed intention which is not expressed.’ ” (California Teachers Assn. v. Governing
Bd. of Rialto Unified School Dist. (1997) 14 Cal.4th 627, 633.)
       Moreover, “[w]e will not interpret a statute in a way that frustrates its fundamental
purpose.” (In re M.G. (2022) 86 Cal.App.5th 1004, 1010.) We agree with plaintiffs that
                                                 49
to interpret the findings required by section 65010(b) (namely, prejudicial error,
substantial injury, and a different, probable result had the error not occurred) as
applicable to a refund action under section 66001(d)(2) would frustrate the design and
manifest purpose of the refund mechanism. By construing section 65010(b) more
narrowly, we harmonize and give effect to each statute (Mejia, supra, 31 Cal.4th at
p. 663) and give precedence to the more specific over general provision (id. at p. 666; see
Code Civ. Proc., § 1859). Accordingly, we conclude that section 65010(b)’s general
standard for invalidating or setting aside agency action (or inaction) for procedural error
under the Planning and Zoning Law does not prevail over the refund remedy explicitly
prescribed in section 66001(d)(2).
       G. Complaint Causes of Action
       Having decided that plaintiffs have established a statutory right to relief under the
Mitigation Fee Act, we need not address their alternate ground for equitable relief based
on principles of equitable restitution as set out in the third cause of action. 13 Regarding
plaintiffs’ second cause of action for declaratory and injunctive relief, we conclude that
plaintiffs have demonstrated an entitlement to declaratory and injunctive relief, with
respect to the applicability of the Mitigation Fee Act to plaintiffs’ payment of in-lieu
parking fees and to plaintiffs’ entitlement to a refund of those unexpended fees, pursuant
to section 66001(d)(2).
                                     III. DISPOSITION
       The judgment is reversed. On remand, the trial court is directed to enter a new
judgment (1) granting the mandate petition directing the City of Palo Alto to comply with
the refund requirement as set forth in Government Code section 66001, subdivision

       13
          To the extent the request for equitable relief is duplicative of the relief sought in
the mandate petition, and being that “restitution is a remedy and not a freestanding cause
of action” (Reid v. City of San Diego (2018) 24 Cal.App.5th 343, 362), we direct the trial
court to dismiss the third cause of action for equitable relief and restitution.
                                                  50
(d)(2), (2) granting the declaratory and injunctive relief cause of action regarding the
application of Government Code section 66001, to the in-lieu parking fees paid by
plaintiffs, 14 and (3) dismissing the equitable relief and restitution cause of action.
       Plaintiffs are entitled to recover their reasonable costs on appeal. (Cal. Rules of
Court, rule 8.278(a)(5).)

       14
         The amount of unexpended fees in the parking fund attributable to plaintiffs
(based on their December 2013 payment of in-lieu parking fees) and subject to the refund
provision is not before us. We therefore leave determination of this amount to the trial
court.
                                                  51
                                  ______________________________________
                                             Danner, J.

WE CONCUR:

____________________________________
Bamattre-Manoukian, Acting P.J.

____________________________________
Wilson, J.

H049425
Hamilton and High, LLC et al. v. City of Palo Alto et al.
Trial Court:                               Santa Clara County Superior Court
                                           No. 20CV366967
Trial Judge:                               Hon. Cynthia C. Lie

Counsel for Plaintiffs and Appellants      David P. Lanferman
Hamilton and High, LLC, The                Rutan & Tucker, LLP
Keenan Family Trust and Charles J.
Keenan:

Counsel for Defendants and                 Rick W. Jarvis
Respondents City of Palo Alto and          Jarvis Fay LLP
City Council of the City of Palo Alto:     Molly Stump
                                           Terence Howzell
                                           Office of the City Attorney, City of Palo
                                           Alto

     H049425
     Hamilton and High, LLC et al. v. City of Palo Alto et al.