Transcript A Defensible Approach to Impact Fees and Fee Exemptions

An Overview of
Impact Fees in
Colorado
2005
Impact Fee
Roundtable
Eric Bergman, Moderator
Tina Axelrad, Panelist
Carolynne White, Panelist
October 6, 2005
1
Overview of Panel Discussion
 Today’s
Landscape in Colorado (Tina Axelrad)
 The Legal Landscape in Colorado (Carolynne
White)
 Colorado’s Use of Impact Fees (Eric Bergman)
 Lessons Learned: Considerations During
Implementation
 Questions and Answers
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Today’s Landscape in
Colorado
2005
Impact Fee
Roundtable
Tina Axelrad
Principal, Clarion Associates
[email protected]
October 6, 2005
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The Impact Fee
Regulatory device
 Encourages orderly development of land
 Coordinates development/facilities
 Features distinguish it as a land use
regulation:

– Only exacted on new growth
– Only exacted for capital facilities
– Fees do not exceed costs to accommodate
growth (proportionate share)
– Fees spent for capital facilities: benefit
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Colorado Landscape
 Pre-SB
15 - Impact fees under home rule powers or
implied authority
– Imposed on new development to fund capital facilities
– Rational nexus principles govern
 Impact
fees adopted under SB 15
– Imposed as condition of development permit issuance
– Imposed to fund capital facilities to serve new
development
– Legislatively adopted
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Colorado Landscape

Impact fees under SB 15 (cont.)
– Imposed to fund any capital facility:
Directly related to service local government authorized
to provide;
Estimated life of at least five (5) years
Required by charter or policy
– Fees established at level no greater than necessary to
defray impacts directly related to proposed development.
– Cannot use fee to remedy deficiencies.
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Colorado Landscape

Impact fees under SB 15 (cont’d)
– Cannot “double dip” (by requiring fee payer to pay
fees and also provide site-specific improvement for
which fees will pay for).
– Must collect and account for fees consistent with
state law.
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Colorado Statutory and
Case Law on Impact
Fees
2005
Impact Fee
Roundtable
Carolynne C. White
Brownstein, Hyatt & Farber, PC
[email protected]
October 6, 2005
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Krupp v. Breckenridge Sanitation
District, 19 P. 3d 687 (Colo. 2001)
Issue:
Whether an impact fee levied against a development
by a special district is a development exaction
subject to a constitutional takings analysis under
Nollan and Dolan
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Krupp v. Breckenridge Sanitation
District, 19 P. 3d 687 (Colo. 2001)
 Special
District = “local government”
– BUT, special district is not a “local government” under
SB 15
 23,500
acre Service Area
 Town permit conditioned on payment of “Plant
Investment Fee” (PIF)
 Fee Schedule based on:
Demand Unit (in Single Family Equivalents)
X
Cost ($4,000/SFE)
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Nollan & Dolan
 Nollan
– dedication of an easement a taking for its
lack of an “essential nexus” between stated
objective and the exaction
 Dolan – dedication of land a taking for failure of the
government to demonstrate that the dedication was
“roughly proportional” in amount to the impact of
the development
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Dolan’s Facts
 Non-Legislative
Adjudication, or ad hoc application, of a preexisting, generally applicable law
 Possessory
Exaction
Required Mrs. Dolan to “deed portions of the
property to the city.”
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What are the Issues?
 Risk
of leveraging/Extortion – Do Nolan/Dollan
apply to impact fees in Colorado?
 Time of imposition
 What is a “Capital Facility?”
 What is “directly related?”
 Collection and Accounting
 Affordable Housing Waivers
 Can special districts impose impact fees under SB
15?
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“… risk of leveraging or
extortion…”
Contrast: A legislatively-adopted, generallyapplicable fee schedule ensures that:
“a specific landowner cannot be singled out
for extraordinary concessions as a
condition of development.”
Krupp v. Breckenridge Sanitation District,
19 P. 3d 687 (Colo. 2001)
see also San Remo Hotel v. City and County of San Francisco,
41 P.3d 87 (2002)
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Time of Imposition
“… as a condition of issuance of a development
permit…” Colo. Rev. Stat. § 29-20-104.5.
 Development Permit: “any preliminary or final
approval of an application for rezoning, PUD,
conditional or special use permit, subdivision,
development or site plan, or similar application for
new construction.” Colo. Rev. Stat. § 29-20-103.


15
Time of Imposition continued
 Is
a building permit a “development permit”?
 Can an impact fee be imposed at subdivision?
 Who is exempt from paying impact fees?
 Can counties impose impact fees on 35 acre
parcels that are exempt from subdivision
requirements?
 Political v. legal considerations?
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“… capital facilities…”
 “…
any improvement or facility that:
– is directly related to any service that a local
government is authorized to provide;
– has estimated life of five (5) years;
– is required by charter or general policy
 Is equipment “capital facilities”?
 When must impact fee funds be expended?
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“…directly related…”
The impact fee can be “no greater than necessary
to defray such impacts directly related to the
proposed development.”
Colo. Rev. Stat. § 29-20-104.5(2).
The charge “was primarily of benefit to the
Krupps and directly related to their project
development.”
Krupp v. Breckenridge San. Dist.,
1 P. 3d 178,182 (Colo. Ct. App. 2000).
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Collection and Accounting
 “…
interest-bearing account which clearly
identifies the category, account, or fund of
capital expenditure for which such charge was
imposed.” Colo. Rev. Stat. § 29-1-803(1).
 Accounting standards to ensure “fairness in the
use” of land development charges. Colo. Rev.
Stat. § 29-1-801.
 Bloom v. City of Ft. Collins, 784 P. 2d 304
(Colo. 1989).
19
Affordable Housing
Waivers
 “…
may waive an impact fee … on the
development of low- or moderate-income
housing or affordable employee housing…”
 What about economic development; growth
management policies; preferred land uses?
 Douglas
Co. Sch. Dist. v. Bainbridge, Inc.,
929 P. 2d 691 (Colo. 1997)
20
Can special districts impose
impact fees under SB 15?
Statute does not expressly authorize
 Legislative history does not support
 BUT . . .
 Krupp court approved of impact fee
imposed by special district
 Special districts may have authority under
enabling legislation
 Answer: municipality or county and
special district to design most appropriate
arrangement

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Colorado Communities
Use of Impact Fees
2005
Eric Bergman
Office of Smart Growth,
Colorado Heritage
Planning Grants
[email protected]
Impact Fee
Roundtable
October 6, 2005
22
Land Use Planning Survey
County Survey:
Undertaken April, 2004 by interns
with the Office of Smart Growth
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Land Use Planning Survey
Municipal Survey:
Undertaken July – September, 2004, by
Carolynne White in cooperation with the
Office of Smart Growth
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Land Use Planning Survey
County Survey:
 64 Counties surveyed
 59 Counties responded
25
Land Use Planning Survey
County Survey:
 Of those 59 counties, 20 indicated they
were using impact fees (34%)
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Land Use Planning Survey
Municipal Survey:
 270 municipalities surveyed
 To date, 153 have responded
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Land Use Planning Survey
Municipal Survey:
 Of those 153, 94 indicated they were using
impact fees (61%)
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Lessons Learned:
Considerations for
Implementation
2005
Eric Bergman
Tina Axelrad
Carolynne White
Impact Fee
Roundtable
October 6, 2005
32
Considerations During
Implementation
 Fully
consider legal limitations and implications
– How are benefits and burdens of impact fees
allocated?
 Work
with counsel in design of fee program
 Prepare and adopt support study
–
–
–
–
Base fees on up-to-date CIP or LOS
Comply with “directly related” nexus standard
Identify past deficiencies, and correct
Ensure benefit; consider benefit districts as option
 If
waivers are provided, must replenish impact fee
account with non-impact fee revenues
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Considerations During
Implementation
 Draft
detailed legislative findings:
– that the fees are “directly related to” new
development
– that all impact fee eligible expenditures are for
“capital facilities”
– that facilities for which impact fees are collected
are required by the charter or general policy
– that fees will not be used to cure past
deficiencies
34
Considerations During
Implementation
 Draft
fee ordinance carefully and thoughtfully…
– Incorporate fee schedule by reference into fee ordinance
– Consider provision for automatic inflation adjustments
– Allow independent analysis
 Be
prepared for careful administration
– Keep good records; track fees paid and revenues spent in
the event of challenge
 Provide
for refunds if monies not spent
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Questions and Discussion
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