In December 2003, Anne Arundel County Circuit Court Judge Philip Caroom ruled on an initial series of Summary Judgments, and found:
1. The County had improperly "extended" fees which should have been refunded in several districts and years during the period FY1988 through FY1996.
2. The County improperly used school impact fees for "ineligible" purposes---projects that did not create capacity: South Shore Elementary School, Park Elementary School and Temporary Relocatable Classrooms.
After a period for unproductive settlement efforts, the court directed hearings to determine the exact amounts of refunds resulting from the Summary Judgments.
Thursday, September 1, 2011
Court Case
In 2000, several property owners in the Seven Oaks Subdivision (Odenton, MD; School District 1, Transportation District 4) investigated why, given the fees, schools remained old and overcrowded and roads choked and unexpanded.
That investigation led to a Class Action Lawsuit after discovery that, in fact, many of the transportation fees had not been either spent or refunded, and many of the school funds had been used for replacement schools (with no capacity increases), and county-wide temporary relocatable classrooms (often called "trailers"), both of which were prohibited uses under the impact fee ordinance.
The Class Action was originally termed as Cambridge Commons, Et Al v. Anne Arundel County, Maryland with the name taken from one of class representatives, Halle Development, Inc., and is now known as Halle Development, Inc., Et Al, v. Anne Arundel County, Maryland.
Halle was the original developer of Seven Oaks, and continues to own property there. The class action is not for Halle, the developer, but for Halle, the property owner, and the additional class representatives include typical residential property owners throughout the county.
That investigation led to a Class Action Lawsuit after discovery that, in fact, many of the transportation fees had not been either spent or refunded, and many of the school funds had been used for replacement schools (with no capacity increases), and county-wide temporary relocatable classrooms (often called "trailers"), both of which were prohibited uses under the impact fee ordinance.
The Class Action was originally termed as Cambridge Commons, Et Al v. Anne Arundel County, Maryland with the name taken from one of class representatives, Halle Development, Inc., and is now known as Halle Development, Inc., Et Al, v. Anne Arundel County, Maryland.
Halle was the original developer of Seven Oaks, and continues to own property there. The class action is not for Halle, the developer, but for Halle, the property owner, and the additional class representatives include typical residential property owners throughout the county.
If you live in an Anne Arundel County home permitted after September 1987 your builder probably paid a development impact fee in order to assist the county to pay the expected costs of new school and road capacity increases required to accommodate your new home.
Under the county's Impact Fee Ordinance, as adopted in 1987, the fees were to be levied and collected as real property taxes, and placed and used in one of twelve special tax districts: five for transportation, and seven for schools.
Once collected, all fees, together with accruing interest, was required to be expended or encumbered by the end of the sixth fiscal year following collection.
A fiscal year begins on July 1 and ends on June 30th of the following calendar year: Example: FY 1988 began on July 1, 1987 and ended on June 30, 1988. Fees collected in FY1988 were required to have been expended or encumbered by July 1, 1994 (the end of the sixth year following collection).
The County's Controller was required, at the end of the refund year, to determine whether these special taxes for each district had been timely expended or encumbered, and if not, to advertise refunds for two consecutive weeks prior to August 30th (60 days later).
After filing an application in response to that advertisement, the current property owner was entitled to a refund of some or all of their proportionate fair share of available unused fees in that district, to which the Controller was required to add 5% interest per annum from the date of collection (typically 35% over a seven year holding period).
So, if the proportionate fair share of refunds for each home in a given fiscal year was $200 dollars, the Controller was required to refund $270 dollars ($200 of refunds plus seven years of interest at 5%, or $70 dollars).
Under the county's Impact Fee Ordinance, as adopted in 1987, the fees were to be levied and collected as real property taxes, and placed and used in one of twelve special tax districts: five for transportation, and seven for schools.
Once collected, all fees, together with accruing interest, was required to be expended or encumbered by the end of the sixth fiscal year following collection.
A fiscal year begins on July 1 and ends on June 30th of the following calendar year: Example: FY 1988 began on July 1, 1987 and ended on June 30, 1988. Fees collected in FY1988 were required to have been expended or encumbered by July 1, 1994 (the end of the sixth year following collection).
The County's Controller was required, at the end of the refund year, to determine whether these special taxes for each district had been timely expended or encumbered, and if not, to advertise refunds for two consecutive weeks prior to August 30th (60 days later).
After filing an application in response to that advertisement, the current property owner was entitled to a refund of some or all of their proportionate fair share of available unused fees in that district, to which the Controller was required to add 5% interest per annum from the date of collection (typically 35% over a seven year holding period).
So, if the proportionate fair share of refunds for each home in a given fiscal year was $200 dollars, the Controller was required to refund $270 dollars ($200 of refunds plus seven years of interest at 5%, or $70 dollars).
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