By Myrna Trauntvein
Times-News Correspondent
Utah does have laws regarding impact fees and Nephi City
Council members agreed they needed to know just what they
are.
For that reason, the invited city attorney, Denton Hatch,
to give a presentation concerning the state statutes
governing the collection of impact fees.
"We have been kicking around the idea of collecting
impact fees for some time," said Chad Brough, mayor.
"Impact fees are designed to allow the developer to pay
the impact of the development on capital facilities," said
Hatch.
For example, if a sewer plant can handle the current use
but a development might put enough stress on the system to
require updates, who should pay for the expansion?
Engineers would then determine the cost of improving the
facility to meet the new growth and would determine a fee
which should be charged per resident for the new facility.
That would be an impact fee.
"It is assumed that existing residents have already paid
for the system," said Hatch.
Hatch said the state law regarding impact fees began with
A., Section 11-36-102 which was a list of definitions.
He said impact fees were money imposed upon development
as a condition of approval and can be used to pay for
capital facilities that have a life expectancy of ten years
or more.
"Capital facilities include only water rights, water
supply, waste water treatment, storm water drainage, flood
control, municipal power, roadway, parks and recreation
facilities, open space, trials, and public safety
facilities," said Hatch.
Another example of an allowed impact fee would be the
police department, said Hatch.
If the police department had to grow because of the
impact, he said, the new building could be paid for by those
who made it necessary.
"Say the new police department building cost $100,000 and
there were 1,000 new residents which made that expansion
necessary then," he said, "each resident would need to pay
$100."
"That of course, is an over-simplification," said
Hatch.
The figure would be determined by studies which would
need to be done prior to establishing that particular impact
fee.
Before imposing impact fees the city must prepare a
capital facilities plan which must identify demand placed
upon existing capital facilities by the new development.
"The city must give notice of the plan 14 days before the
date of a hearing and make a copy of the plan available to
the public," he said.
A separate analysis needs to be made of each impact fee
and the accounts must be kept separate from one another. The
city, said Hatch, would need to establish a separate ledger
account for each facility for which an impact fee is
collected.
Hatch presented each council member with a copy of the
state law and suggested each read it carefully.
The law stipulates that a local municipality may only
impose impact fees on development when it is necessary to
achieve equitable allocation to the cost born in the past
and to be born in the future when compared to the benefits
received and yet to be received.
In addition, said Hatch, the city must, before collecting
impact fees, must pass an impact fee enactment. The fee
imposed may not exceed the highest fee justified by the
impact fee analysis performed.
All costs may be included by the city such as the expense
of construction, acquiring land, improvements, materials and
other costs.
One interesting note is that, were the council to
complete the process of imposing impact fees, the city could
collect for public facilities which were previously incurred
to the extent the new growth and development will be served
by the previously constructed improvement.
"Impact fees must be, normally, expended within six years
of the time they are collected," said Hatch.
"Suppose it takes seven years to collect enough money to
complete a planned project?" ask Hatch.
That would be allowed if the city identified the project
and the reason it took so long to collect the needed
funds.
Municipalities are required, however, to refund any
impact fees which are paid by the developer if the developer
does not proceed with the development and requires a
refund.
The state law also allows for challenges to be made, said
Hatch.
Any person may file a request for information with the
city and that information must be supplied within two weeks
of receipt.
"The municipality may supply and appeals procedure to
decide challenges to impact fees," said Hatch.
A decision must be made no longer than 30 days after the
date of the challenge is filed, he said. All challenges must
be made within the time period set forth in the statute.
"Some impact fees may be challenged by arbitration and a
non-binding arbitration may be appealed to the district
court within 10 days," Hatch said.
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