Strengthening Nexus Studies

Your development impact fees pay for the roads, parks, and public safety facilities that growth depends on. So here is a question worth asking before your next update: if someone challenged those fees tomorrow, would they hold up?

That question carries more weight than it used to. In 2024, the U.S. Supreme Court’s decision in Sheetz v. County of El Dorado confirmed that legislatively adopted impact fees are subject to the same constitutional scrutiny long applied to case-by-case permit conditions. In plain terms, a fee schedule is now only as strong as the study and the record behind it.

That risk is not hypothetical. In early 2026, a California Superior Court applied Sheetz in one of the first cases of its kind in the state, a challenge to development impact fees adopted by the City of Patterson. The particulars belong to that proceeding, and as a trial court there is no legal precedent in the current findings, but the signal for every agency is the same: courts are now ready to look closely at how a fee is supported, and a strong study is the best answer.

The good news is that a well-built program has little to fear. Courts have continued to uphold fees that rest on credible data and a clear, well-documented methodology. What makes an impact fee defensible is the quality of the work behind it.

  • A clear link between the fee and the growth it serves. Your study should tie each fee to the actual demand new development places on your facilities.
  • Numbers your community can trust. Population and employment projections should come from authoritative sources and agree with your general plan, housing element, and other adopted documents.
  • A service standard you can point to. Document the level of service your fees are designed to maintain and explain any change to it. Understand how that service level relates to any adopted service level policies.
  • A capital plan in place first. Update and adopt your capital plans and master plans before the impact fee study, not while the project is in progress.
  • Support impact fee calculations with a capital plan. Capital improvement plans tied to development impact fee spending are now required to be adopted by most agencies alongside the impact fee study. Adopt it before the study, or in alignment with the requirements specific to the CIP stipulations of the Mitigation Fee Act.

This matters to your agency because the fees that fund your community’s future are worth protecting. A strong record builds public trust, keeps your program on solid footing, and spares your agency the cost and disruption of a challenge later on. The agencies that treat these fundamentals as routine are the ones whose fees keep working year after year.

Let’s talk strategy! Call 800.676.7516 or email info@nbsgov.com to help ensure your impact fee program is built to last.