Agenda - Planning Commission - 09/16/2010 - Special Meeting

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Zoning Bulletin July 25, 201,0I Volume 4I No. 14 ^`) The town responded that the bond funds —now totaling $89,153.95 due to accrued interest —had been spent in July 2007 "to construct road im- provements to Bush Hill Road." Clare eventually applied to the Board for release of his performance bond. Among other things, he asserted that the town failed to properly account for his impact fee separate from the municipality's general fund, as required by state law. New Hampshire Revised Statutes ("RSA") § 674:21, V(c) provides that: "Any impact fee shall be accounted for separately, shall be segregat- ed from the municipality's general fund, ... and shall be used solely for the capital improvements for which it was collected ...." Section 674:21, V(a) provides that an impact fee can not be used for construction or im- provements not occasioned by the development. The town's own documentation showed that a total of $89,153.95 (the total performance bond fund) was paid to a contractor for road improve- ments. However, the town's records also showed that the town paid the contractor only a total of $75,437.05 for work at the subject intersection and along the relevant portion of road impacted by the Subdivision. Thus, $13.716.90 (i.e., the difference between the sum the town paid out of the bond fund and the amount the contractor earned .for road improvements) of the bond fund was not accounted for in the town's records as being paid for the improvements intended for by the bond requirement. The town said that it had paid more than the $13,716.90 to complete f I the necessary related improvements, to Clare's benefit. The town argued that its "improper accounting should not result in a windfall to Clare." The trial court ruled in favor of the town. Clare appealed. The Court's Decision: Relevant portion of judgment of trial court re- versed in part, and remanded. The Supreme Court of New Hampshire held that the town was not au- thorized —under state law, RSA § 674:21, V(c)—to expend the full amount of the performance bond ($89,153.95), when only a portion of the fee ($75,437.05) was actually attributed in the town's accounting to road im- provements for which the performance bond fee was originally collected. The court explained that while RSA § 674:21 "authorizes municipali- ties to impose impact fees, it comprehensively regulates the municipality's implementation of such fees " Under RSA § 674:21, "the legislature," said the court, "has established that towns are not entitled to collect and expend impact fees for purposes other than those for which they were collected." Also, the statutes "bookkeeping provision" "makes clear that the impact fee funds and [t]own fund are not fungible." "In view of th[ose] explicit statutory requirements," the court conclud- ed that the town was only authorized to pay from Clare's bond fund the $75,437.05, which was, in the town's accounting, the only amount actually attributable to the work for which the impact fee was collected. Although Clare had argued for return of the entire fund because of the town's improper "handling of the bond fund," the court concluded other- wise. It said that payment of the entire fund to Clare was not required. The © 2010 Thomson Reuters 3 101