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San Benito
June 22, 2024

Courts: District sues county, alleges failure to collect developer fees

The Hollister School District is suing San Benito County for an undetermined amount of money while claiming the county neglected to collect developer impact fees owed to the district over several years.

The district has submitted amended lawsuit filings to the San Benito County Superior Court in recent weeks and months after initially filing a lawsuit in June 2017, according to court records. The district alleges San Benito County neglected to collect developer fees and has formally requested public records — from January 2013 through 2016 — which would detail building permits in order to calculate a dollar figure. The Hollister district in lawsuit filings also repeatedly requested accounting information dating back to a period of around 2002 or 2003 when the two sides first agreed to have the county collect such fees on the district’s behalf.

It’s been more than a year since the Hollister district submitted its request under the Public Records Act, and the county still hasn’t supplied detailed information on building permits and corresponding developer fees, according to the court documents. Going further, there is concern related accounting questions may extend beyond the Hollister School District and affect other public entities that rely on the county to handle collection of developer fees.

Hollister School District officials have taken the step of filing a lawsuit in the midst of the confusion, though, and have been mulling over the matter for more than a year now after submitting a public records request in January 2017 for the county’s permit information. In the meantime, the Hollister district in June 2016 opted by resolution to increase its developer impact fees from what’s called “Level 1” to “Level 2” charges and in late 2016 opted to start collecting its own developer fees instead of having the county do it.

Delaying the matter at the outset of last year, the county took five months to respond to that public records request, legally due within 10 days after such a filing. Only after the Hollister School District in writing threatened litigation on the lack of response to the public records request did county officials finally respond in May, according to documents filed in the superior court.

For now, the number of building permits at stake and precise dollar amounts are unclear. Hollister School District Trustee Robert Bernosky was openly frustrated by the ordeal and did say the district, through its own analysis of broader accounting issues, contends it has been shorted by more than $1.4 million. But it isn’t yet clear if the permit issue is related, he said.

“So no, we don’t know exactly what the dollar amount is yet,” Bernosky said. “That’s part of getting the public records. We don’t know.”

The lawsuit showed up on this week’s closed-session agenda for a Hollister School District board meeting. Bernosky said district officials have regularly discussed the matter in closed session since he was elected in November 2016.

The ordeal points to broader chaos when it comes to auditing and accounting of developer fees — and school districts’ shares of such revenue. Typically, developers pay a range of impact fees to government entities like cities, counties and school districts to help them offset the additional costs that come with such growth. Such developer fees are calculated with the use of studies that take into account cost forecasts for each affected government entity.

“Between the office of education, county tax collector and county auditor and school districts,” Bernosky said. “it wasn’t done cleanly.”

Bernosky said the district wants the money it’s owed and to make sure the process is fixed going forward.

County Supervisor Jaime De La Cruz, a four-term board member who has openly weighed running for the elected tax collector position long held by Mary Lou Andrade, said the county officials are still in the process of figuring out details. He said the next step is for the county to hold talks with the school district, while attorneys for the two sides have been mulling over scheduling on that end.

De La Cruz was more definitive on the county’s failure to respond with the district’s January 2017 public records request and abide by the Public Records Act.

“I can share with you: If anyone submits a public request, we’ve got to make sure we provide a response,” he said.

Among requests from the district in court filings:

• Detailed accounting of permit data dating back about 15 years when the two sides agreed the county would collect the developer fees

•  A “recalculation” to ensure the district receives money owed

•  For the county to inform developers that they’re subject to payment of fees to the district

• Recalculation of funds to ensure the district receives money it is owed

• Direct developers in the future that they are subject to paying building permit fees to the HSD

The filings go as far as to allege that the district believes the alleged omission “may have been intentional and willful.”

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