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Zoning Bulletin October 10, 20101 Volume 41 No. 19 <br />Validity of Zoning Regulations —City Adopts <br />Ordinance Imposing Sewer Impact Fees and <br />Water Capital - Recovery Fees <br />Home builders challenge ordinance, contending fees are <br />arbitrary and beyond City's authority <br />Citation: St. Clair County Home Builders Ass'n v. City of Pell City, <br />2010 WL 3518657 (Ala. 2010) <br />ALABAMA (09/10/10) —This case involved the challenge to the va- <br />lidity of an ordinance that imposed impact fees for sewer service and <br />capital recovery fees for water service. <br />The Background/Facts: In 2007, in an effort to obtain funds to make <br />necessary improvements to the municipal sewer and water systems, the <br />city adopted an ordinance (the "Ordinance ") which imposed sewer im- <br />pact and water capital recovery fees. The fees were imposed on, among <br />others, new home builders. Sewer impact fees were in the amount of <br />$2,300 per unit. Water capital recovery fees were per unit and based on <br />the size of the line. Those fees ranged from $1,550 to $19,740. <br />Following adoption of the Ordinance, residential home builders (the <br />"Home Builders ") filed a "Class Action Complaint" against the city, <br />the city council, members of the city council, the utility supervisor, and <br />the mayor (collectively, the "City "). The Home Builders argued that <br />the Ordinance was "facially invalid" because the City lacked the pow- <br />er to impose the impact fees and capital- recovery fees. They argued <br />that there was "no constitutional provision or legislation providing the <br />city with such taxing authority." <br />The Home Builders also argued that, even if the Ordinance was fa- <br />cially valid and the fees properly imposed, "the method of computa- <br />tion of the fees" imposed through the Ordinance was "arbitrary and <br />unreasonable." The Home Builders said this was because there was <br />"no relationship between the fees charged and the benefits realized by <br />the Home [B]uilders." <br />The trial court entered judgment for the City. It upheld the validity <br />of the Ordinance. <br />The Home Builders appealed. <br />DECISION: Affirmed. <br />The Supreme Court of Alabama first determined that the impact fees <br />and capital- recovery fees were service fees, as opposed to taxes. The fees <br />were not considered general revenue to be used for any purpose. Instead, <br />® 2010 Thomson Reuters 7 <br />19 <br />