Filed 8/20/26 The Regents of the U. of Cal. v. City of Riverside CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
THE REGENTS OF THE UNIVERSITY D088029
OF CALIFORNIA,
(Super. Ct. No. CVRI2404605)
Plaintiff and Appellant,
v.
CITY OF RIVERSIDE,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Riverside County,
Daniel A. Ottolia, Judge. Affirmed.
Reed Smith, Raymond A. Cardozo, Phillip H. Babich; University of
California Office of the General Counsel, and Alison L. Krumbein for Plaintiff
and Appellant.
Office of the City Attorney, Rebecca L. McKee-Reimbold, Interim City
Attorney, Ruthann M. Salera, Senior Deputy City Attorney; Jarvis Fay,
Benjamin P. Fay, and Christina Lawrence for Defendant and Respondent.
I
INTRODUCTION
The Regents of the University of California (hereafter, the Regents)
filed a petition for writ of traditional mandamus and declaratory relief
against the City of Riverside (hereafter, the City) challenging a sewer
capacity charge that the City imposed on the Regents as a condition to
connect a UC Riverside student housing project to the City’s main sewer line.
The trial court found the lawsuit untimely under Government Code
section 66022, which sets forth a 120-day statute of limitations applicable to
any judicial action that attacks a resolution adopting or amending a capacity
charge, measured from the effective date of the resolution.1 Based on this
finding, the court sustained the City’s demurrer to the operative writ petition
without leave to amend, and entered judgment for the City.
The Regents contend the trial court erred in finding their suit is subject
to the limitations period described in section 66022. They assert
section 66022 is inapplicable because their suit does not attack the
underlying validity of the resolution that purportedly authorized the City to
impose the sewer capacity charge; instead, they claim, the suit challenges the
improper application of the resolution to the student housing project at issue.
We reject the Regents’ argument and affirm the judgment.
II
BACKGROUND
Because we are reviewing a judgment of dismissal entered after the
trial court sustained a demurrer, the facts set forth below in subsections B
1 Further undesignated statutory references are to the Government
Code.
2
and C are drawn from the factual allegations of the operative writ petition
and other matters properly subject to judicial notice. (Limon v. Circle K
Stores Inc. (2022) 84 Cal.App.5th 671, 680–681.)
A. Legal Background
On July 21, 1986, the California Supreme Court issued San Marcos
Water District v. San Marcos Unified School District (1986) 42 Cal.3d 154
(San Marcos). In San Marcos, the Supreme Court held that, in the absence of
legislative authorization, a public utility may not charge another public
agency a fee designed to fund capital improvements. (Id. at pp. 160–165.)
According to the court, the purpose of the public entity exemption was to
“prevent one tax-supported entity from siphoning tax money from another
such entity; the end result of such a process could be unnecessary
administrative costs and no actual gain in tax revenues.” (Id. at p. 161.)
In response to the Supreme Court’s San Marcos decision, the
Legislature approved legislation that is commonly known as the San Marcos
Legislation. (§§ 54999–54999.6; Stats. 1988, ch. 53, § 1, p. 310; see Utility
Cost Management v. Indian Wells Valley Water Dist. (2001) 26 Cal.4th 1185,
1189–1190 (Indian Wells).) The legislative findings for the San Marcos
Legislation state that the San Marcos decision “seriously impaired” the
“fiscal stability and service capabilities” of California’s public utilities, as well
as their “ability to finance essential future facilities.” (§ 54999, subd. (a).) To
address this concern, the San Marcos Legislation authorizes public utilities to
impose capital facilities fees on other public agencies under specified
conditions. (§ 54999.2; see Regents of University of California v. East Bay
Municipal Utility Distr. (2005) 130 Cal.App.4th 1361, 1385 (East Bay
Municipal) [“The San Marcos Legislation was enacted to ameliorate the fiscal
impact of the San Marcos decision on public utility service agencies”].)
3
Permissible capital facilities fees include nondiscriminatory connection
fees, nondiscriminatory capacity charges, or both. (§ 54999.1, subd. (c)(1).) A
connection fee is “a fee to recover the costs of the physical facilities necessary
to directly connect a public agency facility to a public utility service provided
by a public agency, including, but not limited to, meters, meter boxes, and
pipelines to make the connection, and the actual cost of labor and materials
for the installation of those facilities.” (Id., subd. (d).) A capacity charge
refers to “a one-time charge to recover the costs of public utility facilities
necessary to establish new or expand existing public utility service to a public
agency.” (Id., subd. (b).) The San Marcos Legislation defines
“nondiscriminatory” to mean that the capital facilities fee must “not exceed
an amount determined on the basis of the same objective criteria and
methodology applicable to comparable nonpublic users,” and it must not
exceed “the proportionate share of the cost of the public utility facilities of
benefit to the person or property being charged, based upon the proportionate
share of use of those facilities.” (Id., subd. (c)(2).)
The San Marcos Legislation enacted limitations applicable specifically
to capital facilities fees that may be imposed on the University of California,
community college districts, and state agencies, among other entities.
(§ 54999.3.) With respect to these entities, a public utility may continue to
impose capital facilities fees that were imposed and unchallenged prior to
July 21, 1986 (the date of the San Marcos decision) only “[w]here necessary to
defray the actual construction costs of that portion of a public utility facility
actually serving a public agency ….” (Id., subd. (a).) The public utility may
increase the capital facilities fee, but only “in an amount not to exceed the
percentage increase in the Implicit Price Deflator for State and Local
Government Purchases, as determined by the Department of Finance ….”
4
(Ibid.) Further, the public utility may impose a new capital facilities fee, or
increase an existing capital facilities fee more than the percentage increase
reflected in the Implicit Price Deflator for State and Local Government
Purchases, only by negotiation and agreement of the parties. (Id., subd. (b).)
The San Marcos Legislation also granted the University of California,
community college districts, and state agencies a “unique procedural right,”
which is codified in subdivision (c) of section 54999.3. (Utility Cost
Management v. East Bay Municipal Utility Dist. (2000) 79 Cal.App.4th 1242,
1252 (Utility Cost Management).) Under this provision, a public agency
charged a capital facilities fee may request that the public utility imposing
the fee “identify the amount of the capital facilities fee.” (§ 54999.3,
subd. (c).) The same provision places a burden on the public utility to
produce evidence to “establish that the capital facilities fee is
nondiscriminatory and that the amount of the capital facilities fee does not
exceed the amount necessary to provide capital facilities for which the fee is
charged.” (Ibid.)
B. City Resolution No. 22684
On May 13, 2014, the Riverside City Council adopted Resolution
No. 22684 (hereafter, the Resolution), which increased the rate structure for
existing sewer “capacity charges (connection fees) … for residential,
commercial, institutional and industrial customers for the five-year period
from July 1, 2014, through June 30, 2019.”
The Resolution stated, “the Sewer Capacity Charge structure for
residential and commercial development [would] increase 1.32% in [fiscal
year] 2014/15 and adjust annually based on the Engineering News Record
Construction Cost Increase, 20-city average thereafter.” According to the
Resolution, the increased rate structure was intended to finance both
5
operating expenses and capital improvements. In particular, the Resolution
stated the increase was “for the purposes of: (1) meeting operating expenses,
including employee wage and fringe benefits; (2) purchasing or leasing
supplies, equipment or materials; (3) meeting financial reserve needs and
requirements; and (4) obtaining funds for capital projects necessary to
maintain service within existing service areas ….”
The Resolution included an exhibit, which was incorporated into the
Resolution. The exhibit specified the amount of the sewer capacity charges
applicable to different customer classes. It did not expressly identify
universities, community colleges, or the University of California as customers
or customer classes subject to the increased sewer capacity charges.
However, it set forth the sewer capacity charges that applied, as of July 1,
2014, for each “Basic Multi-Family Dwelling Unit” ($3,551), and for members
of an undefined class of customers labeled, “Schools ‘B’ ” ($523 per 1,000
square feet).
C. ND2 Student Housing Project
The City is a charter city organized and existing under the laws of the
State of California.
The Regents are a California constitutional corporation, authorized and
empowered to administer a public trust called the University of California.
The Regents operate UC Riverside, a university within the City that provides
undergraduate and graduate education to students.
In September 2023, the Regents approved a joint initiative between
UC Riverside and the Riverside Community College District (RCCD) called
the North District Phase 2 (ND2) student housing project. ND2 provides
1,568 beds to UC Riverside and RCCD students in apartment-style housing.
6
On December 11, 2023, after construction on ND2 began, the City
demanded that the Regents pay a sewer capacity charge of $1,366,365 to
obtain a construction permit necessary to connect ND2 to the City’s sewer
system.2 The City claimed the sewer capacity charge was permissible under
section 54999.3, subdivision (a).
After the City demanded payment of the sewer capacity charge, the
parties exchanged correspondence about the propriety of the charge. In a
letter to the City, the Regents questioned whether the sewer capacity charge
qualified as a capital facilities fee that could lawfully be imposed on the
University of California. The Regents asked the City to supply information
about how the sewer capacity charge was calculated, defined, and used,
whether the sewer capacity charge qualified as a capital facilities fee, and
whether the City imposed the sewer capacity charge prior to July 21, 1986.
In reply, the City provided the Regents with documentation purporting to
justify the sewer capacity charge.3 In subsequent correspondence, the
Regents maintained that the City failed to establish that it could lawfully
impose the sewer capacity charge on the University of California, while the
City argued the charge was lawful.
2 The parties interchangeably use the terms sewer capacity charge,
sewer capacity fee, and Disputed Fee when referring to the levy that the City
imposed on the Regents. For purposes of this opinion, we use the term sewer
capacity charge when referring to the monetary exaction at issue.
3 According to the operative writ petition, the City provided “a
development fee schedule, a 1961 letter agreement between the City and The
Regents, a 1962 sewer easement grant by The Regents to the City, and a
1980 City resolution establishing charges related to disposal of sewage.”
7
On July 2, 2024, the City informed the Regents that it would not issue
the sewer construction permit for the ND2 student housing project because
the sewer capacity charge had not yet been paid.
The parties thereafter entered into a reservation of rights agreement
under which the Regents deposited $1,659,801 under protest into an escrow
account pending resolution of the dispute. A few days later, the City issued a
sewer construction permit for the ND2 student housing project.
D. Writ Proceeding
On August 19, 2024, the Regents filed a petition for a writ of traditional
mandamus (Code Civ. Proc., § 1085) and declaratory relief (id., § 1060)
against the City in the Superior Court for the County of Riverside.
In the operative first amended writ petition, the Regents alleged the
sewer capacity charge was invalid, and the City wrongfully withheld issuance
of the sewer connection permit for ND2, because the sewer capacity charge
was not “necessary to defray the actual construction costs of that portion of a
public utility facility actually serving” a public agency in violation of the San
Marcos Legislation. (§ 54999.3, subd. (a).) The Regents also argued the
sewer capacity charge was unlawful because the City could not demonstrate
it had imposed the sewer capacity charge on the Regents or any other public
agencies prior to July 21, 1986. The Regents requested a writ of mandate
directing the City to rescind its demand for payment of the sewer capacity
charge and execute all documents necessary to release the escrowed funds to
the Regents. The Regents also requested declaratory relief stating that the
sewer capacity charge violated the San Marcos Legislation.
The City demurred to the operative writ petition on the basis that the
lawsuit is untimely. The City argued the Regents’ action is subject to
section 66022, which sets forth a 120-day statute of limitations for “[a]ny
8
judicial action or proceeding to attack, review, set aside, void, or annul an
ordinance, resolution, or motion adopting a new fee or service charge, or
modifying or amending an existing fee or service charge, adopted by a local
agency,” measured from “the effective date of the ordinance, resolution, or
motion.” (§ 66022, subd. (a).) According to the City, the statute of limitations
began running when the City enacted the Resolution on May 13, 2014, and it
expired 120 days later, on September 10, 2014. Because the Regents did not
file suit until August 19, 2024, the City argued the lawsuit is time-barred.
The Regents opposed the demurrer. They argued that section 66022
does not apply to their claims because the operative writ petition challenges
the allegedly unlawful application of the Resolution to the Regents—not the
validity of the Resolution. Further, the Regents asserted the statute of
limitations did not begin running when the City approved the Resolution in
2014 because it was unclear from the face of the Resolution whether the
increased rate structure for sewer capacity charges applied to the Regents.
In the Regents’ view, the statute of limitations could only have started
running if the Resolution had “clearly and unambiguously” stated that it
applied to the Regents, or when “the City later assert[ed] any such position.”
After a hearing, the trial court sustained the demurrer without leave to
amend. The court determined that section 66022 applies to the action
because the Regents’ claims challenge the validity of the Resolution and not
merely the allegedly improper application of the Resolution to a particular
project. According to the court, the statute of limitations expired 120 days
after the enactment of the Resolution and the Regents’ lawsuit is untimely
because it was not filed until more than ten years after the Resolution’s
enactment. After the court sustained the demurrer without leave to amend,
it entered a judgment of dismissal in favor of the City.
9
III
DISCUSSION
The Regents challenge the order sustaining the demurrer to their writ
petition on timeliness grounds. They claim their lawsuit is not subject to the
120-day statute of limitations set forth in section 66022 because the lawsuit
challenges only the allegedly unlawful application of the Resolution to their
student housing project, rather than the validity of the Resolution.
By contrast, the City contends the Regents’ lawsuit necessarily attacks
the soundness of the Resolution and, therefore, it is subject to the 120-day
limitations period set forth in section 66022. In the City’s view, the lawsuit is
untimely because the Regents did not bring suit until August 19, 2024, more
than 10 years after the City adopted the Resolution on May 13, 2014.
For reasons we shall explain, we agree with the City.
A. Legal Standards
“ ‘A demurrer tests the legal sufficiency of the [pleading]. [Citation.]
On appeal from a judgment of dismissal following an order sustaining a
demurrer, we examine the [pleading] de novo in order to ascertain “whether
it alleges facts sufficient to state a cause of action under any legal theory,
such facts being assumed true for this purpose.” [Citation.] We give the
[pleading] a reasonable interpretation, reading it as a whole and viewing its
parts in context. [Citations.] We assume the truth of the properly pleaded
factual allegations, facts that can be reasonably inferred from those pleaded,
and facts of which judicial notice can be taken. [Citation.] But we do not
assume the truth of pleaded contentions and legal conclusions. [Citations.]
And we may disregard allegations which are contrary to law or to a fact of
which judicial notice may be taken. [Citation.]’ [Citation.] On appeal, the
[petitioner] bears the burden of demonstrating that the superior court erred
10
in sustaining the demurrer.” (R.L. v. Merced City School Dist. (2025) 114
Cal.App.5th 89, 110 (R.L.).)
“ ‘We review de novo questions of interpretation and constitutionality of
a statute.’ [Citation.] ‘ “In ascertaining the meaning of a statute, we look to
the intent of the Legislature as expressed by the actual words of the statute”
[citation], “giving them a plain and commonsense meaning” [citation].’
[Citation.] ‘ “If there is no ambiguity in the language, we presume the
Legislature meant what it said and the plain meaning of the statute
governs.” ’ ” (R.L., supra, 114 Cal.App.5th at pp. 110–111.)
B. Analysis
The outcome of this appeal depends on whether the Regents’ operative
writ petition is subject to the 120-day statute of limitations codified in
section 66022 and, if so, when the limitations period began to run.
“Section 66022 is part of the Mitigation Fee Act (§§ 66000–66025;
Stats. 1987, ch. 927, § 1, p. 3131), which, like the San Marcos Legislation,
places various limits on the fees and charges that local agencies (including
utility districts) can impose on persons or property holders.” (Indian Wells,
supra, 26 Cal.4th at p. 1191.) Subdivision (a) of section 66022, states, in
pertinent part, “Any judicial action or proceeding to attack, review, set aside,
void, or annul an ordinance, resolution, or motion adopting a new fee or
service charge, or modifying or amending an existing fee or service charge,
adopted by a local agency, as defined in Section 66000, shall be commenced
within 120 days of the effective date of the ordinance, resolution, or motion.”
Subdivision (c) of section 66022 limits the reach of subdivision (a),
stating that the 120-day statute of limitations “shall apply only to fees,
capacity charges, and service charges described in and subject to Sections
66013, 66014, and 66016.” Section 60013, in turn, defines a “capacity charge”
11
as a charge for new or existing public facilities “that are of proportional
benefit to the person or property being charged ….” (§ 66013, subd. (b)(3).)
The Regents do not dispute that the sewer capacity charge that the
City imposed on them satisfies the statutory definition of a “capacity charge,”
as described in section 66013 and referenced in section 66022. Nevertheless,
the Regents claim their lawsuit is not subject to the 120-day statute of
limitations set forth in section 66022, subdivision (a), because the lawsuit
does not attempt “to attack, review, set aside, void, or annul” a resolution
adopting or modifying a capacity charge. (§ 66022, subd. (a).)
In support of this argument, the Regents invoke a distinction between
adjudicative acts and legislative acts, which the Court of Appeal drew in N.T.
Hill Inc. v. City of Fresno (1999) 72 Cal.App.4th 977 (N.T. Hill). In that case,
a residential developer challenged water capacity fees that the City of Fresno
imposed on him in connection with the development of a residential
subdivision. The question presented on appeal was whether the developer’s
lawsuit was subject to section 66020, a statutory provision that is not at issue
in the current appeal, although it is also a part of the Mitigation Fee Act.
Section 66020 imposes procedural requirements when a party protests a local
agency’s imposition of fees, dedications, reservations, or other exactions on a
development project. In determining that the developer’s lawsuit was not
subject to the procedural requirements of section 66020, the N.T. Hill court
contrasted the type of claims that are governed by section 66020 and those
that are subject to section 66022, the provision at issue in the present appeal.
The N.T. Hill court explained, “[S]ection 66022 comes into play when a
lawsuit challenges a legislative decision by a local agency promulgating or
changing a section 66013 capacity charge and section 66020 comes into play
when a lawsuit challenges an adjudicatory decision by a local agency
12
imposing such a charge on a specific residential development. Put slightly
differently, section 66022 applies when the plaintiff’s goal is a judicial finding
that the legislative decision adopting the charge cannot be enforced in any
circumstance against any existing or future development because of some
procedural or substantive illegality in the decision and section 66020 applies
when the plaintiff’s goal is a judicial finding that the charge set by the
legislative decision cannot be demanded or collected in whole or part with
respect to the specific development. In the latter situation, the fundamental
validity of the legislative decision enacting or modifying the fee is not in
issue.” (N.T. Hill, supra, 72 Cal.App.4th at pp. 986–987.)
The Regents liken the City’s imposition of the sewer capacity fee in this
case to an adjudicatory decision and claim they are challenging the allegedly
unlawful application of the Resolution to a particular project (the ND2
student housing project)—not the validity of the Resolution establishing the
sewer capacity rates. However, the Supreme Court and other appellate
courts have rejected this same argument under analogous circumstances.
For example, in Indian Wells, the plaintiff filed a lawsuit seeking a
refund of charges that a public agency had paid to a public utility for capital
improvements. The plaintiff argued the lawsuit was not subject to the 120-
day statute of limitations in section 66022 because the action purportedly
challenged the public utility’s adjudicatory decision to impose the fees on a
particular water user in a particular case, not a legislative decision to set fees
at a certain rate. (Indian Wells, supra, 26 Cal.4th at p. 1194.) Assuming
without deciding that the N.T. Hill court’s distinction between adjudicatory
decisions and legislative decisions was proper, the Supreme Court rejected
the plaintiff’s argument and concluded that the “clear gravamen of [the]
action [was] an attack on the validity of the ordinances giving rise to the fee,
13
not on the discretionary application of those ordinances” to the public agency.
(Ibid.) The Supreme Court reasoned, “the essence of [the plaintiff’s]
argument is that the ordinances were invalid ab initio because they imposed
hidden capital facilities fees on public entities in excess of the amounts
permitted under the San Marcos Legislation.” (Id. at pp. 1194–1195.)
The Court of Appeal’s decision in Utility Cost Management, supra, 79
Cal.App.4th 1242, is in accord. There, the plaintiff sought a refund of water
and wastewater fees paid by a school district to a public utility on the basis
that the amount paid “for capital improvements was greater than the amount
that was permitted under section 54999.3.” (Id. at p. 1246.) Specifically, the
plaintiff alleged the school district paid capital facilities fees “ ‘in excess of the
amount necessary to defray the actual construction costs of … [the] public
utility facilities that were actually serving [the school district].’ ” (Id. at
p. 1248.) The Court of Appeal concluded the action was untimely under
section 66022 because it was filed more than 120 days after the utility last
revised its fee rates. (Id. at p. 1251.) In reaching this conclusion, the court
rejected the plaintiff’s argument that section 66022 was inapplicable because
the lawsuit did “not seek to invalidate any of [the utility’s] rate decisions,”
and was instead “seeking a refund of the excess fees that were paid.” (Id. at
p. 1250.) The court reasoned, “While it may be true that [the] complaint does
not expressly challenge the validity of the rate decisions that were adopted by
[the public utility], its claim for damages necessarily depends upon a finding
that those rate decisions were invalid.” (Id. at p. 1251.)
Similarly, in California Psychiatric Transitions, Inc. v. Delhi County
Water District (2003) 111 Cal.App.4th 1156 (California Psychiatric), the
Court of Appeal affirmed a finding that section 66022 barred a lawsuit in
which the developer of a residential care facility sought a refund of water and
14
sewer connection fees he had paid under protest to a public utility. The
developer alleged the fees were illegal because they violated section 66013,
which “provides that water and sewer connection fees ‘shall not exceed the
estimated reasonable cost of providing the service for which the fee ... is
imposed.’ ” (Id. at p. 1159.) Relying on Indian Wells, the court rejected the
developer’s claim that section 66022 was inapplicable because the developer
did not seek to attack the public utility ordinance specifying the amount of
the water and sewer connection fees applicable to residences and rest homes.
(California Psychiatric, at p. 1163.) As the court explained, “[t]he fact that
the action sought a refund of particular fees instead of a declaration that the
ordinance is invalid is simply not relevant. The underlying claim by [the
developer] is that [the] fee structure does not comply with the statutory
mandate that connection fees reflect the estimated cost of labor and
materials. Regardless of the remedy sought, this clearly is an attack on the
ordinance.” (Id. at p. 1163.)
Here, the Regents likewise allege the Resolution does not comport with
a statutory mandate—namely, the San Marcos Legislation. They specifically
allege the sewer capacity fee imposed under the Resolution is invalid because
“the City has failed to demonstrate that the [sewer capacity charge] is
‘necessary to defray the actual construction costs of that portion of a public
utility facility actually serving a public agency’ as required by Section
54999.3 ….” They further allege the sewer capacity charge is improper
because the City cannot show that it imposed sewer capacity charges on the
Regents—or any other public entities—prior to July 21, 1986. Like the
claims at issue in Indian Wells, East Bay Municipal, and California
Psychiatric, these claims necessarily depend on a finding that the Resolution
is invalid because it imposes sewer capacity charges without accounting for
15
whether those charges are necessary to defray the actual construction costs of
public utility facilities serving public agencies, and without regard to whether
the charges were imposed prior to the date the Supreme Court issued the San
Marcos decision. Thus, the Regents’ action seeks “to attack, review, set aside,
void, or annul” the Resolution, and it is subject to the 120-day statute of
limitations codified in section 66022.
The Regents present several additional arguments to avoid this result.
They claim the City’s imposition of the sewer capacity charge was an
adjudicatory decision because the City exercised its discretion when it
determined that the Regents are subject to the Resolution. They claim the
Resolution is facially ambiguous whether it applies to the Regents because it
does not expressly state that it applies to the Regents, the University of
California, the RCCD, or universities. (See Indian Wells, supra, 26 Cal.4th at
p. 1194 [assuming the N.T. Hill court’s distinction between adjudicative and
legislative decisions is a valid distinction, the public utility’s imposition of
charges on an educational entity was a legislative decision because the
ordinances giving rise to the charges “expressly referred to educational
entities” and “unambiguously applied” to the educational entity].)
We are not persuaded. The Resolution states it applies to “residential,
commercial, institutional and industrial customers,” an expansive range of
customers that comfortably includes educational institutions like the
University of California and its campus at UC Riverside. Further, the
exhibit incorporated into the Resolution sets forth the sewer capacity charge
rates that apply to customers depending on how they use their properties, not
the customers’ identities. Relevant here, it states that the increased sewer
capacity charges apply to multi-family dwelling units. ND2—a large student
housing project with apartment-style housing units—undoubtedly constitutes
16
a multi-family dwelling unit. In fact, the Regents do not meaningfully argue
otherwise. At the very least, the Resolution’s reference to multi-family
dwelling units placed the Regents on notice the sewer capacity charges could
apply to their housing projects.
Even if we were to agree with the Regents that the Resolution is
ambiguous on its face about whether it applies to the Regents, the City
unambiguously demanded that the Regents pay the sewer capacity charge on
December 11, 2023. With this demand for payment, the City indicated it had
decided to impose a sewer capacity charge on the Regents pursuant to the
San Marcos Legislation. Thus, insofar as there is any ambiguity about
whether the Resolution applies to the Regents, the City’s unequivocal
demand for payment would “itself [be] a ‘resolution or motion’ establishing [a
service charge], and the 120-day statute of limitations under section 66022
[would] begin[ ] to run with the adoption of that resolution or motion.”
(California Psychiatric, supra, 111 Cal.App.4th at p. 1163.) However, the
Regents did not file suit until August 19, 2024, more than 120 days after the
City demanded payment of the sewer capacity charge. Thus, the suit still
would be untimely even if the statute of limitations did not start running
until the City imposed the sewer capacity charge on the Regents.4
4 The Regents maintain that this issue “requires assessment of factual
matters outside the pleadings and thus is not cognizable on demurrer.” We
disagree. The operative writ petition alleges, “On December 11, 2023 … the
City demanded that The Regents pay … a sewer capacity fee, which is the
Disputed Fee, in the amount of $1,366,365 …. The City claimed that the
Disputed Fee was owed by the Regents pursuant to California Government
Code section 54999.3 ….” (Fn. omitted.) These allegations, which we accept
as true, show the Regents were on notice of the City’s decision that the
Resolution applied to the Regents as of December 11, 2023.
17
The Regents also argue section 66022 is inapplicable because the San
Marcos Legislation does “not specify that the 120-day statute of limitations
applies to any and all actions that assert” violations of the San Marcos
Legislation. The Regents’ argument is difficult to discern. Insofar as they
mean to suggest that section 66022 does not apply to any claims asserting
violations of the San Marcos Legislation, the Supreme Court has squarely
rejected that argument. (Indian Wells, supra, 26 Cal.4th at p. 1193.)
Alternatively, to the extent the Regents are arguing that section 66022 is
inapplicable because it only governs certain types of actions alleging San
Marcos Legislation violations (specifically, actions seeking to attack or set
aside resolutions that institute fees and charges alleged to violate the San
Marcos Legislation), we have already concluded the Regents’ suit depends on
the validity of the Resolution and therefore qualifies as the type of action to
which section 66022 applies. In either circumstance, the Regents’ claim fails.
Finally, the Regents claim it is costly and inefficient to require a public
entity to challenge an ordinance before it is certain a public utility will rely
on the ordinance to impose a capital facilities fee on the public entity in a way
that violates the San Marcos Legislation. We appreciate these concerns. As
the Supreme Court has explained, section 66022 “require[s] state agencies
and educational entities to keep close watch on public utilities at the time
they adopt their rate ordinances and to bring prompt challenges, perhaps
without a final determination that the fee is excessive or that the agency or
educational entity is even subject to the fee.” (Indian Wells, supra, 26 Cal.4th
at p. 1190; see Regents of University of California v. City and County of San
Francisco (2004) 115 Cal.App.4th 1109, 1117 (San Francisco) [section 66022
“requires a certain vigilance on the part of the utility customer”].)
18
“To some extent at least, [the Regents’] concern is mitigated by
section 54999.3, subdivision (c), which requires public utilities, upon request
or when imposing or increasing a capital facilities fee, to ‘identify the amount
of the capital facilities fee.’ ” (Indian Wells, supra, 26 Cal.4th at p. 1196.) As
noted, subdivision (c) also places a burden on public utilities to “produc[e]
evidence to establish that the capital facilities fee is nondiscriminatory and
that the amount of the capital facilities fee does not exceed the amount
necessary to provide capital facilities for which the fee is charged.”
(§ 54999.3, subd. (c).) Together, “[t]hese provisions help ensure that public
entities such as [the Regents] have the information they need to assess, at
least preliminarily, whether to challenge new or increased fees.” (Indian
Wells, at p. 1197.)
In any event, the Regents’ claim “goes fundamentally to the wisdom of
the statute of limitations, not its applicability. To that extent, [the Regents]
should direct [their] concern to the Legislature.” (Indian Wells, supra, 26
Cal.4th at p. 1197; see McKneely v. Superior Court (2023) 91 Cal.App.5th
1232, 1246 [“In reviewing statutes enacted by the Legislature, it is not the
function of the judiciary ‘to evaluate the wisdom of the policies embodied in
such legislation; absent a constitutional prohibition, the choice among
competing policy considerations in enacting laws is a legislative function.’ ”].)
Here, the Legislature rationally concluded that a relatively short
statute of limitations is necessary, despite its possible drawbacks, “ ‘so that
local agencies will be promptly informed of any challenges to their ability to
collect fees and spend the revenues thereby generated.’ ” (N.T. Hill, supra, 72
Cal.App.4th at p. 992; see East Bay Municipal, supra, 130 Cal.App.4th at
p. 1386 [“ ‘The purpose of such a short statute of limitations is to enhance the
budgetary stability of public utilities, by promptly informing them of any
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challenges to their ability to charge and collect capital facilities fees.’ ”];
Utility Cost Management, supra, 79 Cal.App.4th at p. 1252 [“it is critical that
these types of refund actions be subject to a short statute of limitation so that
local agencies can make spending decisions confident in the knowledge that
they are spending funds that are, in fact, available”]; San Francisco, supra,
115 Cal.App.4th at p. 1117 [“While a 120–day period is short for a statute of
limitations, it is necessary for public policy reasons. … [I]t enhances the
budgetary stability [of utilities] by promptly informing them of fee
challenges.”].)
In sum, we conclude the Regents’ suit against the City is a judicial
action attacking a resolution adopting or modifying a service charge. Thus, it
is subject to the 120-day statute of limitations set forth in section 66022.
Because the Regents did not file suit within 120 days of the effective date of
the Resolution, the suit is untimely as a matter of law.5
5 Given our determination that the action is untimely, we do not address
the City’s alternative claim that the action is subject to dismissal because the
Regents failed to bring their suit as a reverse validation action under Code of
Civil Procedure section 863. Nor do we address the Regents’ contention that
the operative writ petition presents a question of law that we should resolve
on the merits in the first instance.
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IV
DISPOSITION
The judgment is affirmed. The City of Riverside is awarded its
appellate costs.
McCONNELL, P. J.
WE CONCUR:
O’ROURKE, J.
BUCHANAN, J.
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