Group wants millions repaid

Arundel homeowners sue over impact fees

County denies refunds due

Next hearing in suit scheduled Jan. 16

Anne Arundel

January 02, 2004|By Ryan Davis | Ryan Davis,SUN STAFF

Following a legal victory last month, lawyers representing a group of Anne Arundel County homeowners say that as many as 40,000 residents will soon be entitled to partial refunds of fees paid to the county government.

In advance of a Jan. 16 hearing, lawyers from both sides are trying to determine how many tens of millions of dollars will be at stake when the class-action case goes to trial. Lawyers from both sides say a trial is likely before summer.

But county officials say it's premature to count on refunds.

"I'm not conceding there is any money due," said Senior Assistant County Attorney William D. Evans Jr.

Homeowners represented by attorneys Phillip F. Scheibe and John R. Greiber Jr. contend that the county has improperly spent some impact fees - charges levied to pay for infrastructure improvements to accommodate growth - and has held some collected money for too long.

For example, Scheibe and Greiber say, spending money on portable classrooms does not qualify as a proper use of the fee.

When asked how much money the county might have to refund, Scheibe said, "The best I can tell you is it's a substantial sum of money and that's as far as I want to go right now."

Evans could not give a figure. "I'm not sure how much is on the table. ... I don't know," he said.

Anne Arundel County approved impact fees in 1987. At issue are fees that may have been misspent or held too long. The county must use money collected from impact fees within a prescribed period of time for purposes such as increasing the capacity of schools and roads.

"I think it's important that people understand all the monies have gone for roads or schools," Evans said. "The plaintiffs take issue with where they've been spent, but in any event, they've all been spent on roads and schools."

For a single-family home, the county's impact fee has increased over the years from $877 to more than $4,000. Scheibe said developers pass on those fees to the homebuyers, and the current owners would be entitled to the refunds.

The lawsuit bears the name of homeowners from a section of Seven Oaks, a planned community near Odenton, but Scheibe and Greiber say they represent any homeowner in a house that had its impact fee misused.

On Dec. 8, Circuit Judge Philip T. Caroom made a series of decisions on the case, which was filed in February 2001.

In some rulings, Caroom sided with the county and ruled that money was properly spent. By Evans' estimate, Caroom removed more than $35 million from the dispute.

In other rulings, Caroom sided with the homeowners group. Scheibe said that the only issue at stake now is how much the county must pay in connection with those decisions. Scheibe, who is a former county attorney, said he cannot envision a scenario where the amount would be zero.

But Evans said that number could be zero, and that several issues will be determined Jan. 16. "A lot is up in the air," he said.

In siding with the homeowners, Caroom ruled that the county misspent impact fee revenue in ways that included using it on portable classrooms.

He also ruled that the county improperly extended the timeframe in which it could use the impact fee money.

The law requires that money collected from impact fees be spent within six years. The timeframe can be extended for three years, Evans said, if the county agrees to use the money on projects that more directly benefit the homeowners who paid the impact fees.

He said the statute of limitations has passed and the money has been spent, so the homeowners should not be allowed to sue.

Greiber has said the county can provide impact fee refunds without experiencing serious financial hardship because it has $40 million collected from impact fees in a reserve fund.

Scheibe said the two sides will need to work out how the county would pay refunds.

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