A two-year battle over the constitutionality of Newton County's impact fee ordinance concluded Monday when Newton County Superior Court Judge Horace Johnson Jr. found in favor of the county.
At question was whether the road impact fees adopted by the Newton County Board of Commissioners met the proportionality requirements of the Georgia Development Impact Fee Act.
The home builders associations alleged that the county's impact fee ordinance was weighted too heavily on residential growth with impact fees assessed for road improvements coming 88.6 percent from new residences and only 11.4 percent from new commercial businesses.
The lawsuit brought before Johnson to rule on was considerably scaled down from the one originally filed by the Newton County Home Builders Association and the Home Builders Association of Georgia in December 2005.
The home builders decided not to pursue their original complaint that residential impact fees were paying 100 percent of the impact fees collected for parks, recreation and libraries.
Since the impact fees were implemented in March 2005, Newton County has collected $6.51 million in impact fees according to Newton County Impact Fee Coordinator Kellie Lundy. However, only a small portion of those fees ($409,000) have been collected from commercial businesses.
In September the BOC made the decision to release all collected impact fees from an escrow account where they had been held since the home builders filed their lawsuit after the Georgia Supreme Court decided not to hear an appeal by the home builders who were seeking to bar the county from spending collected impact fees until the conclusion of the case.
"We're certainly glad that we got that favorable ruling," said Newton County Chairman Aaron Varner Tuesday. "Hopefully we can move forward and take some of these projects that have been planned for some time off the drawing board and planned for construction."
Two projects which have already moved forward as a result of the releasing of the impact fees are Denny Dobbs Park and the Porter Memorial Branch Library. Both projects are located in District 2 in the Oak Hill area.
Road impact fees
According to the trial brief filed by the county, residential developments are charged a flat rate of $1,762 per single-family house while commercial developments are broken down into categories that differentiate the intensity of their use. The more intense the use, the higher the impact fee charged.
Attorneys for the home builders alleged that the impact fee amount levied on new residences was not supported by any data and was, therefore, arbitrary. In their presentation before Johnson they questioned why the BOC decided to change the initial breakdown of impact fees charged for road improvements.
According to a consolidated pre-trial order filed Monday, in a September 2004 draft report of the county's Capitol Improvements Elements ordinance, impact fees from new residences were to account for 68.5 percent of impact fees collected for road improvements leaving the remaining 31.5 percent to come from new businesses.
"We believe this is a reflection of the true proportionality," said Deron Hicks, attorney for the Home Builders Association of Georgia to Johnson.
However, at the request of the BOC, the ordinance was amended to decrease the amount of impact fees levied on commercial and industrial development. As a result, the final ordinance adopted by the county in February 2005 had new residences paying 88.6 percent of impact fees collected for road improvements.
"We were asked to look more deeply into the methodology as to who was causing the traffic on the roads," said Bill Ross, a consultant with the planning firm hired by the county to write the impact fee ordinance and who was brought forward as a witness by the home builders.
The county's rationale for changing the allocation levels was that residential growth comprised far more than two thirds of new growth in the county; therefore, an 89/11 split was a more accurate picture of the reality of growth in the county than the original 68.5/31.5 split.
"Because of the residential growth, twice as many commuters leave the county than come into the county," said Andrew Davis, attorney for Newton County.
After he was asked to revisit the breakdown of road impact fees, Ross said he consulted with Tim Preece, a transportation consultant employed by the county, who had generated some road data on the types of trips drivers in the county were making.
According to the county's trial brief, the trip generation data breaks down trips into five categories based on where the trip begins and where the trip ends. The five categories are home-based-work, home-based-shopping, home-based-other, non-home based and commercial vehicle. The trip data does not account for trips beginning or ending outside of the county.
In reformulating the breakdown for road impact fees, Ross concluded that the vast majority of previously excluded road trips of commuters leaving Newton County for work and that the vast majority of non-home based trips (such as a trip from a job in the county to lunch then back to work) were also residential.
"It was a judgment call on my part," Ross said.
The home builders argued that the non-home based trips should not have been credited 100 percent to residential development.
They then brought Preece to the stand to testify on his thoughts about the allocation of all non-home based trips into the residential category.
"I was not comfortable making that assumption," Preece said, adding that he felt it would have been more reasonable to include some of the non-home based trips in the commercial category.
On cross-examination, Preece said he did not have any empirical data to support his disagreement with Ross on the non-home based trips.
In the county's closing remarks attorney Ed Tolley said that the Georgia Development Impact Fee Act was not written as a "one size fits all category," and that the act left some discretion to local governments as to how it was applied.
"Nobody has testified that the county has strayed from the statutory scheme," Tolley said. "The burden of the proof is on (the home builders) to demonstrate through evidence that the ordinance is unreasonable. We do not believe they've established that the commission was unreasonable."
In closing remarks for the home builders associations, Hicks said the home builders were more concerned that the present 89/11 split would unfairly penalize the home builders if and when greater commercial/industrial growth comes to the county.
"It's not about where we are today. It's about where we fear we will be in 15 years," Hicks said. "It needs to be fair and it needs to be fair now."
In response, Davis, attorney for the county, said the impact fee ordinance was part of the county's legislative process and could be amended in the future to account for changes in the county's residential/commercial makeup.
In his decision to find in favor of the county and to deny all of the relief sought by the home builders, Johnson said that the conclusions Ross drew on the breakdown of car trips were reasonable.
After the judgment was announced, Hicks said the home builders associations had not made any decisions as to whether they would continue to pursue the case in a higher court.
"We're going to assess whether we're going to appeal," Hicks said. "We're very respectful of the (Newton County Superior Court's) decision."