BACK IN COURT: The City of Manteca will appeal a San Joaquin County judge's decision that lets several developers off the hook for increased building fees — keeping $8 million in potential developer fees out of city coffers.

MANTECA — The City Council will fight a second court battle to enforce increased homebuilding fees after a county court judge ruled that some developers were exempt because of earlier contracts with the city.

The city stands to lose out on $8 million in fees after San Joaquin County Superior Court Judge Carter Holly ruled April 1 that several developers who sued the city should not have to pay the new $4,700 per home government facilities fee — just the old, $350 fee.

Councilmen voted unanimously to appeal the lawsuit during a closed-door council meeting on April 21, and by April 25 city attorneys had filed an appeal with the Third Appellate District Court of California.

Stockton-based Florsheim Homes, Georgia-based Morrison Homes, and Pulte Homes, based in Michigan, argued their development contracts with the city protect them from “unjustified” fee increases and new fees.

In 2006, the City Council voted to increase the “government building facilities fee” from $350 per home to $4,700 to pay for a new police department, library, performing arts center and other city buildings needed for a larger population.

But developers convinced the judge that this was not an increase, but an entirely new fee, rendering the increase null and void under their contracts.

Los Angeles-based attorney Peter Pierce, who represented the city during the lawsuit, said it could be more than a year before the appeals court rules on the lawsuit.

Pierce said this week that the city was still “having some discussions” with developers involved in the suit, but declined to say whether a settlement was in the works.

Florsheim Homes has already offered to pay $700 per home for the remaining 233 houses in its Dutra Estates subdivision if the city agreed to postpone about $700,000 in other fee payments, which are now overdue.

However, councilmen rejected that offer at a meeting on April 21.
Last week, an attorney for Florsheim asked for a restraining order against the city to prevent it from collecting the overdue fees.

Judge Holly agreed to issue the temporary order, and will hear arguments in that case on May 12.