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HomeMy WebLinkAboutOrdinance 6466113 West Mountain Street Fayetteville. AR 72701 (479) 575-8323 Ordinance: 6466 File :dumber: 2021-0-571 AMEND § 158.05 OFF -SITE IMPROVEMENTS/DELAYS: AN ORDINANCE TO AMEND § 158.05 OFF -SITE IMPROVEMENTS/DELAYS TO CONFORM THIS SECTION TO THE: REQUIREMENTS OF A.C.A. § 14-56-103 DEVELOPMENT IMPACT FEES -DEFINITION WHEREAS, long before the enactment of A.C.A. §14-56-103 Development Impact Fees - Definition. the City of Fayetteville constitutionally collected impact fees from developers whose developments impacted the City's infrastructure needs for streets. water and sewer mains and other types of infrastructure: and WHEREAS, when A.C.A. § 14-56-103 was enacted, it provided that a city could collect a development impact fee under ordinances enacted before July 16, 2003... only if collected in compliance with subsections (f)-(h) of this section; and WHEREAS, the City has consistently followed the requirements of A.C.A. § 14-56-103 (t)(g)(h), but the C.D.C. needs an amendment to the old refunding Code section (158.05) so that it precisely follows state law. NOW, THEREFORE, BE IT ORDAINED BV THE CITY COUNCIL OF THE CITY OF FAVETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby amends § 158.05 Off -Site Improvement/Delay in its entirety and enacts a replacement § 158.05 as follows: "158.05 Off -Site Improvement/Development Impact Fees for Specific Infrastructure Improvements Necessitated by a Particular Development. Page 1 Printed on 8118121 Ordinance: 6466 File Number: 2021-0571 A. Detel'tninati077 of Need Fa• Impact Fee If the Planning Commission determines that a particular development would cause a need for a specific infrastructure development that cannot be built until future development occurs, the developer shall pay to the city a development impact fee in an amount determined by the Planning Commission in accordance with the standards prescribed in § 166.04 to be the developer's constitutional proportionate share of the cost of such specific infrastructure need. B. C'nlleCW017 of Inipuct Fee As a part of the approval of the developer's subdivision approval, the developer shall pay the amount determined appropriate, legal and constitutional by the Planning Commission. The city shall deposit these funds into a special interest -bearing account and follow all requirements of A.C.A. § 14-56-103 (f) and (g). C. Refund of Unused Impact Fees If all or a portion of the collected impact fee has not been properly expended upon the specific infrastructure project within seven (7) years from the date the fees were paid, the city, shall refund all unused funds plus accrued interest to the present owner of the property that was subject of the new development and against which the fee was assessed and collected as required by A.C.A. §14-56-103 (h). D. Compliance with State Lax The section shall be interpreted to conform with A.C.A. § 14-56-103 and all requirements of that law as well as any future amendments. PASSED and APPROVED on 8/17/2021 Attest: • • G Y FgYE7TEL�iC ;z= Kara Paxton, City Clerk TreasureE : (c . Page 2 Printed on &1&21 City of Fayetteville, Arkansas 113 West Mountain Street Fayetteville, AR 72701 (479)575-8323 Text File File Number: 2021-0571 Agenda Date: 8/17/2021 Version: 1 Status: Passed In Control: City Council Meetinq File Type: Ordinance Agenda Number: B.2 AMEND § 158.05 OFF -SITE IMPROVEMENTS/DELAYS: AN ORDINANCE TO AMEND § 158.05 OFF -SITE IMPROVEMENTS/DELAYS TO CONFORM THIS SECTION TO THE REQUIREMENTS OF A.C.A. §14-56-103 DEVELOPMENT IMPACT FEES -DEFINITION WHEREAS, long before the enactment of A.C.A. § 14-56-103 Development Impact Fees - Definition, the City of Fayetteville constitutionally collected impact fees from developers whose developments impacted the City's infrastructure needs for streets, water and sewer mains and other types of infrastructure; and WHEREAS, when A.C.A. § 14-56-103 was enacted, it provided that a city could collect a development impact fee under ordinances enacted before July 16, 2003... only if collected in compliance with subsections (f)-(h) of this section; and WHEREAS, the City has consistently followed the requirements of A.C.A. § 14-56-103 (f)(g)(h), but the U.D.C. needs an amendment to the old refunding Code section (158.05) so that it precisely follows state law. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby amends § 158.05 Off -Site Improvement/Delay in its entirety and enacts a replacement § 158.05 as follows: "158.05 Off -Site Improvement/Development Impact Fees for Specific Infrastructure Improvements Necessitated by a Particular Development. A. Determination of Need For Impact Fee If the Planning Commission determines that a particular development would cause a need for a specific infrastructure development that cannot be built until future development occurs, the developer shall pay to the city a development impact fee in an amount determined by the Planning Commission in accordance with the standards prescribed in § 166.04 to be the developer's constitutional proportionate share of the cost of such specific infrastructure need. B. Collection of Impact Fee As a part of the approval of the developer's subdivision approval, the developer shall pay the amount City of Fayetteville, Arkansas Page 1 Printed on 811812021 File Number: 2021-0571 determined appropriate, legal and constitutional by the Planning Commission. The city shall deposit these funds into a special interest -bearing account and follow all requirements of A.C.A. § 14-56-103 (f) and (g). C. Refund of Unused Impact Fees If all or a portion of the collected impact fee has not been properly expended upon the specific infrastructure project within seven (7) years from the date the fees were paid, the city shall refund all unused funds plus accrued interest to the present owner of the property that was subject of the new development and against which the fee was assessed and collected as required by A.C.A. § 14-56-103 (h). D. Compliance with State Law The section shall be interpreted to conform with A.C.A. § 14-56-103 and all requirements of that law as well as any future amendments. City of Fayetteville, Arkansas Page 2 Printed on 811812021 Legistar ID No.: __02 QoC j—QsC]' AGENDA REQUEST FORM FOR: Council Meeting of August 3, 2021 FROM: Mayor Lioneld Jordan ORDINANCE OR RESOLUTION TITLE AND SUBJECT: AN ORDINANCE TO AMEND § 158.05 OFF -SITE IMPROVEMENTS/DELAYS TO CONFORM THIS SECTION TO THE REQUIREMENTS OF A.C.A. §14-56-103 DEVELOPMENT IMPACT FEES -DEFINITION APPROWD FOR AGENDA: Mayor Li City Attorney Kit Williams i i 7 X. ate July 19, 2021 Date 4 DEPARTMENTAL CORRESPONDENCE OFFICE OF THE CITY ATTORNEY TO: Mayor Jordan City Council Kit Williams City Attorney Blake Pennington Assistant City Attorney Jodi Batker Paralegal CC: Susan Norton, Chief of Staff Jonathan Curth, Development Services Director Chris Brown, Public Works Director FROM: Kit Williams, City Attorney DATE: July 19, 2021 RE: Amendment Needed to §158.05 Off -Site Improvements/Delays of the U.D.C. to Conform Refunding Requirements to State Law The City has consistently obeyed A.C.A. §14-56-103 Development Impact Fees -Definitions, subsections (f), (g) and (h) for collection, deposit into special interest -bearing accounts and refunds of unused fees, plus their accrued interest. However, §158.05 Off -Site Improvements/Delays of the Unified Development Code needs to be amended to clarify that this collection and refund procedure completely complies with state law. This issue was brought to my attention by Development Services Director Jonathan Curth who supplied me with an attorney's claim that her client's refund amount should have included a higher amount of interest than what the deposit had actually earned in our interest -bearing account. Attached is my letter explaining that, pursuant to state law, only the actually accrued interest can be refunded to her client. To prevent further confusion, the City Council needs to amend the current Unified Development Code section to precisely conform to state law. Attached is the sections of A.C.A. §14-56-103 (f), (g) and (h) with which the City must comply to continue assessing "Development/ Impact Fees for Specific Infrastructure Improvements Necessitated by a Particular Development." ORDINANCE NO. AN ORDINANCE TO AMEND § 158.05 OFF -SITE IMPROVEMENTS/DELAYS TO CONFORM THIS SECTION TO THE REQUIREMENTS OF A.C.A. §14-56-103 DEVELOPMENT IMPACT FEES -DEFINITION WHEREAS, long before the enactment of A.C.A. § 14-56-103 Development Impact Fees — Definition, the City of Fayetteville constitutionally collected impact fees from developers whose developments impacted the City's infrastructure needs for streets, water and sewer mains and other types of infrastructure; and WHEREAS, when A.C.A. §14-56-103 was enacted, it provided that a city could collect a development impact fee under ordinances enacted before July 16, 2003... only if collected in compliance with subsections (f)-(h) of this section; and WHEREAS, the City has consistently followed the requirements of A.C.A. §14-56-103 (f)(g)(h), but the U.D.C. needs an amendment to the old refunding Code section (158.05) so that it precisely follows state law. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby repeals § 158.05 Off -Site Improvement/Delay in its entirety and enacts a replacement §158.05 as follows: "158.05 Development Impact Fees for Specific Infrastructure Improvements Necessitated by a Particular Development. A. Determination of Need For Impact Fee If the Planning Commission determines that a particular development would cause a need for a specific infrastructure development that cannot be built until future development occurs, the developer shall pay to the city a development impact fee in an amount determined by the Planning Commission in accordance with the standards prescribed in § 166.04 to be the developer's constitutional proportionate share of the cost of such specific infrastructure need. B. Collection of Impact Fee As a part of the approval of the developer's subdivision approval, the developer shall pay the amount determined appropriate, legal and constitutional by the Planning Commission. The city shall deposit these funds into a special interest -bearing account and follow all requirements of A.C.A. § 14-56-103 (f) and (g). C. Refund of Unused Impact Fees If all or a portion of the collected impact fee has not been properly expended upon the specific infrastructure project within seven (7) years from the date the fees were paid, the city shall refund all unused funds plus accrued interest to the present owner of the property that was subject of the new development and against which the fee was assessed and collected as required by A.C.A. §14-56-103 (h). D. Compliance with State Law The section shall be interpreted to conform with A.C.A. §14-56-103 and all requirements of that law as well as any future amendments. PASSED and APPROVED this 3rd day of August, 2021. APPROVED: LIONELD JORDAN, Mayor ATTEST: KARA PAXTON, City Clerk/Treasurer Blake E. Pennington Assistant City Attorney bpeniiiiigtoii@fayetteN,ille-ar.gov Jodi Baker Paralegal Phone 479.575.8313 KIT WILLIAMS FAYETTEVILLE CITY ATTORNEY kwilIiains@fayetteville-ar.gov July 19, 2021 Dana Davis Paul Paul Law Firm 2003 S. Horsebarn Road, Suite 7 Rogers, AR 72758 dpaul@dpaullaw.com Re: Refund of unused impact fee to owner Dear Attorney Paul, 113 W. Mountain Street, Suite 302 Fayetteville, AR 72701-6083 I need to explain why your client received the check from the City of Fayetteville for the refund of the off -site impact fee funds ($86,000.00) plus accrued interest ($6,694.57) for a total of $92,694.57. Planning Staff evidently did not realize that A.C.A. § 14-56-103 Development Impact Fees -Definition which was passed by the Legislature in Acts 1719 and 310 of 2003 changed the requirements when impact fees had been collected, but were not used. The $86,000.00 was an impact fee based upon the rough proportionality of the traffic impact of your large Church which created a need for a left turn lane on Highway 112 (Gregg Avenue) to serve your client's church. However, this money could not be used pursuant to Arkansas Highway and Transportation Department (AHTD) guidelines. Now, AHTD will be substantial improving Highway 112 without cost to Fayetteville and so these funds must be returned to your client pursuant to A.C.A. § 14-56-103 (g) and (h). "(g)(1) The funds collected under a development impact fee ordinance shall be deposited into a special interest -bearing account. (2) The interest earned on the moneys in the separate account shall be credited to the special fund and the funds deposited into the special account and the interest earned shall be expended only in accordance with this section. (3) No other revenues or funds shall be deposited in the special account. (h)(1) The municipality or municipal service agency shall refund the portion of collected development impact fees, including the accrued interest, that has not been expended seven (7) years from the date the fees were paid." The City, pursuant to state law, "shall refund the portion of collected development impact fees, including the accrued interest" after it is clear that the fees will not be expended with seven years. This is precisely what the City has done. The City could not earn 5% per annum so that amount of interest could not have accrued in the special fund holding the $86,000.00. Therefore only the actual amount of accrued interest that the City actually received, $6,694.57 could be refunded to your client. State law makes it clear that only those funds in the special fund can be returned to the developer and that "No other revenues or funds shall be deposited into the special account." A.C.A. § 14-56-103(g)(3). There are simply no other funds that can be legally paid to your client. The road impact fees denoted as a "street assessment' have been part of the City's Unified Development Code for decades and long before the enactment of A.C.A. §14-56-103, the state impact fee statute. We are allowed to continue to use this impact fee ordinance only if "in compliance with subsections (f)-(h)." A.C.A. §14-56-103 (i)(1)(B). As pointed out earlier (g) requires that the return of unused impact fee must be accompanied by "the accrued interest" rather than any amount that would be less than or greater than the actual accrued interest. "(i)(1)(B) Beginning January 1, 2004, a municipality or municipal service agency shall collect development impact fees under ordinances enacted before July 16, 2003, or under ordinances amended after July 16, 2003, only if collected in compliance with subsections (f)-(h) of this section." Since state law required the City of Fayetteville to refund the unused impact fees "including accrued interest," the City would be violating state law if it attempted to return more than the full amount of accrued interest in received. This would likely also be a violation of the Arkansas Constitution, Article 12 §5 and Article 16 § 13 Illegal exactions. Article 12 §5 (a) states: "No county, city... shall... appropriate money for... any corporation, association, institution or individual." The City can certainly pay just debts such as refunding your client's impact fee ($86,000.00) plus accrued interest ($6,694.57). However, the City cannot refund more than state law allows without committing an Illegal Exaction for which the City could properly be sued by any taxpayer. I apologize for our Planner's mistaken reference to 5% interest which had been superseded by state law about a year earlier. We will make a concerted effort to ensure this mistake will not be made again. My City Attorney's Office has been involved in the refund of unused impact fees primarily if there is some uncertainty about who should receive the refund. This is the first time a mistake in the old Planning memo has caused a concern. Thank you for bringing this to my attention. I hope that I have properly and fully explained to your satisfaction why the City of Fayetteville must precisely follow state law and refund your client exactly $92,694.57. With kindest regards, a-" - �- KIT WILLIAMS Fayetteville City Attorney Cc: Mayor Lioneld Jordan Susan Norton, Chief of Staff Paul Becker, Chief Financial Officer Jonathan Curth, Development Services Director 14-56-103 iOCAL GOVERNMENT 40 4 (2) The development impact fee may be -pledged to the payment of bonds issued by the municipality or municipal service agency to finance capital improvements or public facilities for which the development impact fee may be imposed. (3) No development impact fee shall be assessed for or expended upon the operation or maintenance of any public facility or for the construction or improvement of public facilities that does not create additional capacity. (d)(1) A municipality or a municipal service agency may assess and collect impact fees only. from new development. and only against a particular new development in reasonable proportion to the demand for additional capacity. in public facilities that is reasonably attributable to the use and occupancy of that new development. �2) The owner, resident, or tenant df:a property that was assessed an impact fee and paid it in full shall have the right to make reasonable use of all public facilities that were .financed by the. impact fee. (e)(1). A municipality or -municipal service agency may assess, collect, and expend impact fees only under a development impact fee ordinance adapted ,and amended under this section.. (2) A development'impact fee ordinance shall be adopted or amended by' the governing body. of a municipality or municipal. service agency only after the ,, municipality or municipal service agency has adopted a capital plan bLnd level of service standards for. all of the public facilities that are to be so financed: (3) The development impact fee ordinance shall contain:' -(A.) A statement- of the new public facilities and capital inipr©ve= merits to existing -public` facilities that are to be financed by impact fees' and the level of service standards included inthe-capital plan for the public facilities that are to be financed with -impact fees; (B) The actual ,'foemula or formulas 'far assessing the iriipact fee, which shall be consistent with the level of service standards; (C) The procedure by which impact fees are to be assessed and collected; and (D) The procedure for refund of excess impact fees in accordance with subsection (h) of this section. (f)(1) The municipality or municipal service agency shallcollectthe development impact fee at the time and manner and frorri the party as prescribed in the ordinance and- si hall collect -the fee separate and 'apart from. any other charges to-thedevelopment. (2)(A) ='A development impact fee' shall be collected, at either the closing'on' the property by the owner or the issuance of a certificate of occupancy. by the muxcipality. (B') 'However, a municipal water or wastewater department, wa- terworks, joint waterworks, or consolidated 'Waterworks system ' op- erating under the Consolidated Waterworks Authorization Act;'§' 25= 20-301 et seq.;omay collect a development impact fee'in connection with and as,a condition to the installation of the water meter serving t the property. L7 41 BUILDING AND ZONING REGULATIONS - PLANNING 14-56-103 (3) At closing, the development impact fee that has been paid or will be paid for the property shall be separately enumerated- on the closing statement. (4) The ordinance may include that the development impact fee- may be'paid in installments at a reasonable interest rate fbr a fixed number of years or that the municipality `or : municipal service agency, may negotiate agreements with' the owner of the property as. to the time and method of paying the impact fee. (g)(1) The hinds collected'under a development impact fee ordinance shall be deposited into a special interest -bearing account. (2) The interest earned on the moneys in the separate account shall be credited to the special fund and the funds deposited into the special account and the interest earned shall be expended'only in accordance with this section. (3) No other revenues or funds shall- be deposited into the special account. (h)(1) The, municipality or municipal service agency shall refund the portion of collected development impact fees,. including 'tl a accrued interest, that has not been expended seven (7) years from the date the fees were paid. . (2)(A) A refund shall be paid to the present owner of the property that was the subject of new development and against which the fee ,a -was assessed and collected. (B) Notice of 'the right to a refund, including the amount of the refund and'the procedure for applying for and receiving fu the rend, shall ' be sent or served- in writing to the present owners of the property no later than thirty (30). days after the date on which the refund becomes due. .(C) The sending by regular mail of the notices to all present owners of record shall be sufficient to satisfythe requirement of notice. (3)(A) The refund shall be made on a pro rata basis and shall be paid in full not later than ninety (90) days after the' date certain upon which the refund becomes due. (B) ' If the municipality or municipal service agency does not pay, a refund in full: within the period set in subdivision (h)(3)(A) .of this section to any person entitled to a refund, that person shall have a cause of action against the municipality for the refund or the unpaid portion in the ' circuit court of the county in which the property is located. (i)(1)(A) On and after July 16, 2003, a municipality or municipal service agency shall levy and collect'a development impact fee only if levied and collected under ordinances enacted in compliance with this section. (B) Beginning January 1, 2004, a municipality or municipal ser- vice agency shall collect development impact fees under ordinances enacted before July 16, 2003, or under ordinances amended after July 16, 2003, only if collected in compliance with subsections (f)-(h) of this section. I r 14-56-201 LOCAL GOVERNMENT 42 4` (2) However, except for the compliance with the collection require- ments under subsections (f)-(h) of this section, this section does not invalidate any development impact fee or a similar fee adopted by a municipality or municipal service agency before July 16, 2003, nor does this section apply to funds collected under any development impactfee or similar _fee adopted July 16, 2003. . (3) . In, addition, a municipality with a park land or. green, space ordinance that has been in existence for ten (10) years on July 16, 2003, and any amendments to the ordinance, which allows the option to pay a fee or to dedicate green space or park land in lieu of a fee, may continue to be administered under the existing, -ordinance. History. Acts 2003, No. 1719, § 1, 2007, No: 310, § 1. RESEARCH -REFERENCES Ark. L. Notes, ;Carl J. Cu-co,,Land Use.. ,an , Arkansas - Philosophy of Property Impact 'Fees: Dues Koontz v. St. Johns 'Rights?, 2014rArk. L. Notes 1626., • River Water Management District Echo SuticnAPTEFt 2 -- BUILDING REGULATIONS ' ndTIAN. i g; 14-56-202. Additional ,powers of cities of 14-56-204: Municipal, regulation of resi- a }, the last class, cities oitlie. > , dential builcl�ng design el - second class, and incorpo- eruents prohibited — FS-nd- raied towns. :' ings Except;ons — 14-86-�203. Removal or razing of buildings: - Definitions:-= 14-56-201:--Authority generally. :c; r• ,.r,: rCASEoNOTES,' r ArrnsysFs . , f i complaint filed by a, lessor and a, lessee sufficiently alleged teat. their .rights or Construction; other ' legal relatiaris were af%ct, by Billboards.'" Avoca, Ark., Ordinance No. '69 wlere a Erection, Construction, Etc: ° town wasmaking demands regarding the ! 1. ::. i -- remogal ofbillboards; therefore,.the lessor C sti-uctiun. and the lessee, were-ent'tled to declaratory i-'Seetian`'14`56-202 conferred upon cities 'relief under §. 16-1 M. Tiky•wer'ear- 6£'the1 firfit' class the' exclusive power to gums gthat the town lacked power4o regu- issue or refuse to issue building permits late the billboards at issue. Statewide and td. regulate the building of houses fand OutdoorAdver.,, LLC v Tawa of-Avvea,::104 thereby denied such;power,to dties of the Ark. App..,10, 289 � W.3d,.1•Il (2408). ,,, second class, despite the general powers listed in § 14-56-201. First State Bank v ` Erl6etion;'Constructibn, €Etc. City of Elkins, 2018 Ark. 191, 546 S. W.3d In light of the devastation caused -by a 427 (2018) (answering question of law tornado, the . city ,had +thee- authority to certified y,the;federal dis#z�et court). adopt an ordinance' wi �ch'added new re- quirements for tha construction and an- Billboais. choring of manufactured homes_'Smith v. = Motion to dismiss for failurel to state! a' ; ,City of Arkadelphia, 336 Ark:' °42;'' 984 claim was improperly granted because a S.W.2d 392 (1999). r 158.03 FAYETTEVILLE CODE OF ORDINANCES TITLE XV UNIFIED DEVELOPMENT CODE filed with the City Engineer prior to the acceptance of the improvements by the city. A walk-through shall be performed at the end of the two (2) year period and all deficiencies corrected prior to the release of the bond. (13) Erosion and Sediment Control. For developments in excess of 5 acres, an acceptable guarantee shall be provided at the time of the issuance of the drainage permit in the amount of 100% of the total cost to install the approved Erosion & Sediment Control Plan to insure the continuation of the proper maintenance of the plan. The guarantee shall remain in place until permanent stabilization has been achieved for the development site. (Code 1965, App. C., Art. III, §C: Ord. No. 1750, 7-6-70; Code 1991, §§159.35, 163.13; Ord. No. 3895, §1, 6-20-95; Ord. No. 4100, (Ex. A), 6-16-98; Ord. No. 5140, 5-06-08; Ord. No. 5184, 10-7-08) 158.04 Grading; Bonds/Sureties The Building Official may require bonds or other sureties in such form and amounts as may be deemed necessary to assure the work, if not completed in accordance with the approved plans and specifications, will be corrected to eliminate hazardous conditions. (Code 1991, §161.23; Ord. No, 3551, 6-4-91; Ord. No. 4100 (Ex. A), 6-16-98) 158.05 Off -Site Improvements/Delays C Ir f cot* C_x> (A) Proportionate Share. If the Planning Commission determines that a needed off -site improve- ment cannot be built until future development occurs, the developer shall pay to the city an amount determined by the Planning Commission, in accordance with the standards prescribed in §166.04. to be the developer's proportionate share of the cost of said off -site improvements as of the date of final plat or large scale development approval. (1) The city shall deposit said money into an interest bearing escrow account until such time as the off -site improvement is constructed and shall provide for payment of interest on said amount at the rate of 10% per annum, or the maximum rate allowable under Arkansas law, whichever is lower. (2) If the off -site improvement is not constructed within five (5) years from the date of the first payment into the escrow account by a developer, the Planning Commission shall hold a public hearing, after notification to all affected property owners, to determine the dispo- sition of all money in the escrow account. Following the public hearing, the Planning Commission may: (a) Determine that the off -site improvement is still necessary and feasible, and can be built within a reasonable time, in which case the escrow account shall be continued for a period specified by the Planning Commission; or (b) Determine that the off -site improvement is not necessary, or will not be feasible, or that insufficient development has occurred to render the improvement likely in the foreseeable future, in which case the Planning Commission shall refund the monies to the then current owner of the land for which such fee was paid with interest since the date of payment. Interest shall be based on a 5% percent annual rate. Supp. No. 17 CD158:4 Received 08/09/21 4:19 PM 41LDEPARTMENTAL CORRESPONDENCE OFFICE OF THE CITY ATTORNEY TO: Mayor Jordan City Council Kit Williains City Attorney Blake Pennington Asstst«,,t City Attorney Jodi Batker Pzaralcmi CC: Susan Norton, Chief of Staff Paul Becker, Finance Director Jonathan Curth, Development Services Director i FROM: Kit Williams, City Attorney - DATE: August 9, 2021 RE: Grandfathering Amended Impact Fee Ordinance Thank you, City Council, for allowing this proposed ordinance to remain on the first reading during your August 3,,d meeting so I could make a minor, but important, revision to the proposed ordinance. Often when the Planning Department or my office believes a Code section needs a significant rewrite to comply with changed circumstances, procedures, or state law, we repeal the existing Code section in its entirety rather than trying to insert many separate amendments. That repeal and replace procedure is usually easier to understand and more concise and logical. That is what I started to do with this very old impact fee Code section, so it would more closely conform to the state law. I was only suggesting an amendment as I stated in my last WHEREAS Clause: "the U.D.C. needs an amendment to the old refunding Code section (158.05) so it precisely follows state law."" (emphasis added) However, I stated in Section 1.: "hereby repeals §158.05... and enacts a replacement §158.05 as follows."(emphasis added) When I read "repeals" out loud to you, I realized that I may have inadvertently left open a way to attack the proposed amended §158.05. State law says that "development impact fees under ordinances enacted before July 16, 2003 (which would include §158.05), or under ordinances amended after June 16, 2003" (emphasis added) would remain valid with proper collection and refund provisions. Although that is in reality what I was proposing, an amendment to §158.05, I did not want there to be any misunderstanding, nor leave any opening for someone legally to challenge that amendment and validity of §158.05 with its required impact fees because I had stated it was being repealed and replaced rather than being amended. If we had been challenged, I believe a Court would have properly interpreted your intention as one of amendment rather than a repeal. But I do not want to take that chance nor give a challenger any opportunity to contest your ordinance. That is why I have slightly redrafted the introductory language in Section 1 to read: "hereby amends §158.05... to read as follows." I also kept the most of the Code sections title which is being amended before adding the impact fee language. Through the years, I have found that careful consideration and draftsmanship will prevent unnecessary litigation and will strengthen the City's case if we are sued more strongly than even a good brief or argument. Therefore, I ask that you amend Section 1 of the proposed ordinance to the language in the revised ordinance attached to this memo. Basically, it just replaces "repeals" with "amends" and includes much of the old Code sections title. ORDINANCE NO. AN ORDINANCE TO AMEND § 158.05 OFF -SITE IMPROVEMENTSIDELAYS TO CONFORM THIS SECTION TO THE REQUIREMENTS OF A.C.A. §14-56-103 DEVELOPMENT IMPACT FEES -DEFINITION WHEREAS, long before the enactment of A.C.A. § 14-56-103 Development Impact Fees — Definition, the City of Fayetteville constitutionally collected impact fees from developers whose developments impacted the City's infrastructure needs for streets, water and sewer mains and other types of infrastructure; and WHEREAS, when A.C.A. §14-56-103 was enacted, it provided that a city could collect a development impact fee under ordinances enacted before July 16, 2003... only if collected in compliance with subsections (f)-(h) of this section; and WHEREAS, the City has consistently followed the requirements of A.C.A. § 14-56-103 (f)(g)(h), but the U.D.C. needs an amendment to the old refunding Code section (158.05) so that it precisely follows state law. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby amends § 158.05 Off -Site Improvement/Delay to read as follows: "158.05 Off -Site Improvement/Development Impact Fees for Specific Infrastructure Improvements Necessitated by a Particular Development. A. Determination of Need For Impact Fee If the Planning Commission determines that a particular development would cause a need for a specific infrastructure development that cannot be built until future development occurs, the developer shall pay to the city a development impact fee in an amount determined by the Planning Commission in accordance with the standards prescribed in § 166.04 to be the developer's constitutional proportionate share of the cost of such specific infrastructure need. B. Collection ofimpact Fee As a part of the approval of the developer's subdivision approval, the developer shall pay the amount determined appropriate, legal and constitutional by the Planning Commission. The city shall deposit these funds into a special interest -bearing account and follow all requirements of A.C.A. §14-56-103 (f) and (g). C. Refund of Unused Impact Fees If all or a portion of the collected impact fee has not been properly expended upon the specific infrastructure project within seven (7) years from the date the fees were paid, the city shall refund all unused funds plus accrued interest to the present owner of the NORUiWF.ST ARKVW .Democrat 10(�Az& Pv -6X: `5''=1--,:!�E, AP. 72,U '=9'•l i -A): _-a�?�F,g• Pi.;;: ti1lA� •. ^v AFFIDAVIT OF PUBLICATION I, Brittany Smith, do solemnly swear that I am the Accounting Legal Clerk of the Northwest Arkansas Democrat -Gazette, a daily newspaper printed and published in said County, State of Arkansas; that I was so related to this publication at and during the publication of the annexed legal advertisement the matter of. Notice pending in the Court, in said County, and at the dates of the several publications of said advertisement stated below, and that during said periods and at said dates, said newspaper Ordinance: 6466 File Number: 2021-0571 was printed and had a bona fide circulation in said County; that said newspaper had been regularly printed and published AMEND § 158.05 OFF -SITE IMPROVEMENTS/DELAYS: AN ORDINANCE TO AMEND § In said County, and had a bona fide circulation therein for the period of one month before the date of the first publication of 158.05 OFF -SITE IMPROVEMENTS/DELAYS TO CONFORM THIS SECTION TO said advertisement; and that said advertisement was published in the regular daily issues of said newspaper as stated below. THE REQUIREMENTS OF A.C.A. §14-56-103 DEVELOPMENT IMPACT FEES - DEFINITION WHEREAS, long before the City of Fayetteville enactment of A.C.A. § 14-56-103 Development Impact Fees - Ord 6466 Definition, the City of Fayetteville constitutionally collected impact fees from developers whose developments impacted the City's Was inserted in the Regular Edition on: infrastructure needs for streets, water and sewer mains and other August 22, 2021 types of infrastructure; and WHEREAS, when A.C.A. §14-56- 103 was enacted, it provided that a Publication Charges: $215.84 city could collect a development impact fee under ordinances enacted before July 16, 2003... only if collected in compliance with subsections (f)-(h) of this section; &di t Sen-6- ano WHEREAS, the City has Brittany 9tith consistently followed the requirements of A.C.A. §14-56-103 Subscribed and sworn to before me Cathy Wiles (f)(g)(h), but the U.D.C. needs an amendment to the old refunding This 2t� day of , 2021. Benton COUNTY Code section (158.05) that it , NOTARY PUBLIC -ARKANSAS sstate la NOW, THEREFORE aEtT My Commission Expires 02 20-20 RDAINED BY THE CRY ss Commiion No. 12397118 FAYETTE IR LLE, NCIL OF THE I TY OF KANSAS: 6 Section 1: That the City Council of V the City of Fayetteville, Arkansas hereby amends § 158.05 Notary Public ., / 4 Off -Site Improvement/Delay in its entirety and enacts a replacement M Commission Expires: �f y p §158.05 as follows: "158.05 Of( -Site Improvement/Development Impact Fees for Specific Infrastructure Improvements Necessitated by a Particular Development. A. Determination of Need **NOTE** Please do not pay from Affidavit For Impact Fee If the Planning Commission Invoice will be sent. determines that a particular development would cause a need for a specific infrastructure development that cannot be built until future development occurs, the developer shall pay to the city a development impact fee in an amount determined by the Planning Commission in accordance with the standards prescribed in §166.04 to be the developer's constitutionai proportionate share of the cost of such specific infrastructure need. B. Collection of Impact Fee As a part of the approval of the developer's subdivision approval, the developer shall pay the amount determined appropriate, legal and constitutional by the Planning Commission. The city shall deposit these funds into a special interest - bearing account and follow all requirements of A.C.A. § 14-56-103 (f) and (g). C. Refund of Unused Impact Fees If all or a portion of the collected impact fee has not been properly expended upon the specific infrastructure project within seven (7) years from the date the fees were paid, the city shall refund all unused funds plus accrued interest to the present owner of the property that was subject of the new development and against which the fee was assessed and collected as required by A.C.A. §14-56-103 (h). D. Compliance with State Law The section shall be interpreted to conform with A.C.A. § 14-56-103 and all requirements of that law as well as any future amendments. PASSED and APPROVED on 8/17/2021 Approved: Lioncld Jordan, Mayor Attest: Kara Paxton, City Clerk Treasurer This publication was paid for by the City Clerk -Treasurer of the City of Fayetteville, Arkansas. Amount paid: $ 215.84 75455755 Aug 22, 2021