Local Agency, Not Caltrans, Is Responsible For Calculating And Imposing Fees For Projects That Impact The State Highway System

In Woodward Park Homeowners Association, Inc. v. City of Fresno, (— Cal.Rptr.3d —, 2007 WL 1096885, Cal.App. 5 Dist., Apr. 13, 2007), a California Court of Appeal considered the issue of whether a city erred when it approved a new commercial development project that it determined would have significant impacts on freeway traffic and subsequently calculated a fee for the impact, but failed to impose the fee or other mitigation measures. The Court of Appeal concluded that the city must require feasible mitigation measures for the significant freeway traffic impacts it identified just as it must for other significant environmental impacts.


The City of Fresno (“City”) approved a new commercial development on vacant land near Woodward Park. The traffic discussion in the environmental impact report (“EIR”) for the project discussed the impact of the project on surface streets and the nearby freeway. The freeway traffic portion of the discussion in a draft EIR included a table that identified the projects impact on segments of SR41 and two interchanges. The EIR listed the project’s total fair share estimate as $31,155. However, the draft EIR refused to require payment of the fee because Caltrans had not provided the information that City wanted. The draft EIR stated, “It is noted that Caltrans did not provide a source document or ‘nexus study’ for the cost per trip by improvement or segment along SR41 identified in [the table].” The draft EIR concluded that, because Caltrans failed to provide this documentation, “such fees have not been required as mitigation or conditions of approval by the City of Fresno.”

A Caltrans official disputed the draft EIR’s failure to require mitigation of the identified impacts and informed City that it was the City’s responsibility under the California Environmental Quality Act (“CEQA”) to conduct any necessary nexus study. Caltrans also informed the City that the project’s fair share was $445,817.

The final EIR insisted that, because the City was not satisfied with the information provided by Caltrans, it was relieved of any obligation to require mitigation. The final EIR, however, did include “a revised calculation of what the fee would have been if it had been imposed.” The fee in the final EIR was increased to $43,897. In response, to new data provided by the City, Caltrans revised its fair share estimate downward to $306,558. The City continued to contend that it was not obligated to require any form of freeway impact mitigation because Caltrans did not provide it with the proper information. The City did state that it did not object to the developer paying the fee on a voluntary basis. In a meeting, a city council member mentioned the payment of a $45,000 fee “in a spirit of compromise.” However, no enforceable obligation was ever imposed on the developer to pay the $45,000 suggested fee.

The City certified an EIR and a statement of overriding considerations and approved the project. The Woodward Park Homeowners Association (“Association”) filed a petition in a superior court in which it asked the court to reverse the City’s action of approving the project. The superior court denied the Association’s petition.


The City refused to require the mitigation fee because of its longstanding disagreement with “Caltrans over what information Caltrans should supply to the city for use in calculating impact fees.” The Court of Appeal concluded that this practice by the City is illegal because “CEQA does not allow agencies to approve projects after refusing to require feasible mitigation measures for significant impacts.” It stated, “There is no foundation for the idea that the city can refuse to require mitigation of an impact solely because another agency did not provide information.”

CEQA gives the City four options when it identifies an impact of a project: (1) to find that the impact of the project is insignificant; (2) to find that, although the impact is significant, no mitigation is feasible and the project is justified; (3) to require mitigation measures that render the impact insignificant; (4) “to find that mitigation measures are within another agency’s responsibility and that the other agency has adopted them or can and should do so.” The court opined, “Caltran’s behavior does not create a fifth option” and that there was “no legal basis upon which the city could decide to require no mitigation at all for the project’s freeway impacts.”

The conflict between the City and Caltrans is irrelevant to the City’s obligation to require mitigation of the impacts under CEQA. The City’s failure to require mitigation of the impacts that have already been acknowledged “only punishes the public.” The court held that the City’s actions violated CEQA and that it must perform another environmental review process if it wants to approve the project.

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