The state's highest court ruled Wednesday in favor of several Anne Arundel County developers and property owners who sued the county to recover millions of dollars in impact fees paid from 1988 to 1996.
Development impact fees, which the county requires builders to pay to offset costs to public infrastructure, must be refunded if the county does not use the money within six years for the capital improvement projects for which they were collected.
That suit originally was filed in February 2001. County officials contended that the law allows them to extend that six-year time period.
The Court of Appeals said Wednesday that county officials did not properly fill out the paperwork necessary for the extension.
The case will be sent back to Anne Arundel County Circuit Court to determine how much the developers are entitled to, and it could take about a year for the county to issue refunds.
The Circuit Court had dismissed the case in July 2001, but the developers appealed the decision. The Court of Special Appeals, the state's intermediate appellate court, reversed the lower court the next year. The case was appealed again in 2006 by both the county and the developers.
Although the original lawsuit called for a refund of nearly $30 million, the lower courts reduced that amount to less than $5 million.
"This issue preceded my administration, but I have the responsibility to deal with it," said County Executive John R. Leopold, who added that the county may appeal the circuit court's findings once they are handed down.
"The added burden is a burden that makes budgeting more difficult. ... My job is to provide essential services, and any additional financial burden lessens our ability to do that."
Leopold recently presented his budget for fiscal 2010, which, despite no layoffs or furloughs for county employees, reflected cuts to nearly all government departments, as well as cuts in grant funding.
"Our litigation efforts have been successful, to a point, in providing a significant reduction in the amount sought by the plaintiffs," Leopold said.
"We've been able to reduce the financial burden to the taxpayers."
William Strong, one of the plaintiffs in the lawsuit, said he had applied for a building permit in 1988 to develop the property on which he lived as a child and was charged an impact fee.
"I'm completely against the whole theory of impact fees," said Strong, of Glen Burnie.
"It's just another sneaky tax."