Chalk up another Utah Supreme Court win for the cities in their impact-fee battle with the Home Builders Association of Utah.
In an opinion issued Tuesday, the court affirmed a district court judge's decision to toss out a lawsuit filed by the association against North Logan.The lawsuit challenged the city's water connection, park, road and sewer connection impact fees. The association said the city set the fees without following standards established by the Supreme Court in 1981.
The court standards are used so cities cannot require newly developed properties to bear more than their equitable share of capital costs.
North Logan argued its fees were reasonable and that the city followed the court standard in setting the fees. The district court and higher court agreed. The court found the city presented evidence showing the fees were calculated so they equitably distributed the burden of maintaining and improving existing capital facilities.
"North Logan . . . has demonstrated that it carefully considered numerous factors designed to balance capital costs between existing users and new developments. In fact, the evidence North Logan introduced indicated that its calculations for assessing the costs of new development would have justified higher fees than those charged," wrote Justice Leonard H. Russon.
A consultant recommended the city's road impact fee be about $1,500 per residential unit but the city set the fee lower at $1,000. The court also said existing residents might actually be subsidizing new park development.
The court found the association attacked the city's decisionmaking process and tendered no evidence showing the city's cost calculations were in error. The court said the association had the burden of proving the fees were unreasonable and that different fees would have resulted by applying the court's standards properly.
"Home Builders points to no evidence that indicates how existing residents would be unfairly benefitted at the cost of new development," Russon wrote.
Home Builders Association's attorney Darrel J. Bostwick said the decision might influence how the association deals with other cities' impact fees. He said the ruling implies that anyone challenging impact fees would have to supply alternative figures, requiring a costly study.
"If a challenger has any hope at all of winning, they probably will have to spend 30, 40 or 50 thousand dollars on their own studies," he said. "So even if you can theoretically make a challenge, as a practical matter no one ever will.
"Basically, it gives cities and counties free rein to charge whatever they want," Bostwick said.
In January the Supreme Court reversed a lower court's decision and ruled that a jury should decide whether American Fork's impact fees are illegal. The association sued American Fork on similar claims as those made in the suit against North Logan. A district court judge ruled in favor of the association, but the Supreme Court overturned his decision and said the city should have the chance to present facts and arguments on the reasonableness of the fees.
The association also has a pending lawsuit against South Ogden challenging that city's impact fees.
The Associated Press contributed to this story.