Agenda - Planning Commission - 03/03/2016

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January 25, 2016 j Volume 10 Issue 2 Zoning Bulletin municipal corporations are given the authority to collect an impact fee for water and sewer services "to be furnished" to a development. The district court concluded that the Authority and the County had exceeded their statutory authority in collecting the impact fees from TDC. The court found that the County and Authority had failed to demonstrate that they would be able to "furnish" water and sewer services to TDC's subdivision "within any meaningful time in the future or that they even intended to do so, particularly in view of the fact that such services were al- ready being provided by [a private utility company]." The court ordered the Authority and the County to pay TDC $34,268.96 (in refund of impact fees paid), together with prejudgment interest of 6%, as well as attorney's fees. The Authority and the County appealed. They argued that they did not exceed their statutory authority in collecting the impact fees because they "would furnish" those water and sewer services under "longstanding plans" to provide such services to the area of TDC's subdivision development. DECISION: Affirmed. The United States Court of Appeals, Fourth Circuit, affirmed the district court's holding—that the Authority and County exceeded their statutory authority in collecting impact fees from TDC. In so holding, the court explained that "the authority conferred by § 162A-88 to collect a fee for water and sewer services to be furnished to a development must be construed as the power to collect a user fee from those who are going to use the system's services." As such, the court construed the statutory language "to be furnished" to mean that the developer paying the impact fees could expect that it would have water and sewer services within a reasonable time after it completed its construction. Here, the court found that the District's "plans" to expand its water and sewer services to the area of TDC's development were "at best vague." The court found that the District, the Authority, and the County had not—in 10 years since the impact fees were collected—taken concrete steps to actu- ally provide water and sewer services" to TDC's development. Accordingly, the Fourth Circuit determined that it could not conclude that the impact fees that the County and the District assessed and collected were for services "to be furnished" to TDC's development. Despite the District's, and Authority's, and County's "generalized goal" of extending water and sewer services to the entire County, there was no evidence of any steps taken to extend such services to TDC's subdivision—or even of an official decision to do so. The Fourth Circuit concluded that the Authority and County exceeded their statutory authority by requiring TDC to pay the impact fees. See also: See Point South Properties, LLC v. Cape Fear Public Utility Authority, 778 S.E.2d 284 (NC. Ct. App. 2015). Case Note: The Authority and the County had challenged the timeliness of TDC's lawsuit, 4 © 2016 Thomson Reuters