Impact fees defeat challenge
Snohomish County, WA - A federal court judge has dismissed a lawsuit that could have meant the return of millions of dollars in development fees to homebuilders.
Snohomish County has collected in excess of $60 million in fees from developers since 1995 to help build new roads, parks and schools near new developments. Two developers asked for reimbursement for themselves, and they were seeking reimbursement for all developers.
The judge ruled that developers should have protested payment of the fees from the beginning. Since they didn't, they can't come back now and seek repayment.
"The fees are to be for only public infrastructure related to development," said Tom Fitzpatrick, assistant chief civil deputy prosecutor. "That's what makes these homes salable. If we could not provide this infrastructure, the (state) Growth Management Act provides that we stop development."
Sundquist Homes and Avance Homes brought the lawsuit. They also sought class-action status for all developers, seeking repayment for all development fees paid to the county since 1995.
U.S. District Court Judge Robert Lasnik issued a written decision Friday on Snohomish County's motion to dismiss the lawsuit. It was mailed to attorneys, who received copies Monday.
David Copley, Seattle lawyer for Sundquist and Avance, said he's disappointed with the decision.
"I disagree with the judge about the law, but I respect him enormously," Copley said.
He said he will consult with his clients before deciding whether to appeal. An appeal would be filed with the 9th Circuit Court of Appeals.
Besides the county, 11 of Snohomish County's school districts and the city of Mill Creek, who all collect development fees, were named as defendants.
Most of the money was used to widen roads, add classrooms and build playgrounds for new neighborhoods as the county's population swelled with new homes in the 1990s and early this decade.
The fees were collected over the years, and most of the money already has been spent, Fitzpatrick said.
"This is a great victory for the taxpayers of Snohomish County and various school districts," Fitzpatrick said. Ironically, he said this is also a victory for the development community.
"People want parks, roads and schools for the homes they buy," Fitzpatrick said.
The money, known as "impact fees," are paid to offset some of the costs needed to serve new neighborhoods. The money has been used for a variety of projects, everything from new schools and park play equipment to new roads.
The fee is collected before a building permit is approved. Developers complain that the fees add to the price of homes.
Sundquist and Avance argued that the county has failed to do the necessary planning required by the Growth Management Act, and it can't legally collect the fees until that planning is accomplished.
In short, the judge said the developers should have raised the issue years ago, protesting any payments and filing administrative claims for damages.
"He's saying you have to go through the administrative process," Fitzpatrick said. "He's saying you have to raise the issue at the time so everybody knows what the lay of the land is."
In the future, developers can follow that administrative procedure if they believe the fees are illegal or improper, Fitzpatrick said.
"The judge gave them a road map of what they need to do in the
future," he said.
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