Published: November 19, 2008 03:11 pm         

Town owes park impact fee refunds

The $1,862 park impact fee found invalid Oct. 17 by Boone County Superior Court I Judge Rebecca S. McClure will remain unenforceable. Members of the Zionsville Town Council, Zionsville Plan Commission and Town of Zionsville decided Monday, Nov. 17, to follow legal advice and not appeal. Bose McKinney and Evans filed a lawsuit Oct. 19, 2006, in Boone County Superior Court I on behalf of its client, the Builders Association of Greater Indianapolis, claiming Zionsville’s park impact fee was higher than Indiana Code allows.

The purpose of a park impact fee is to support upgrades to park infrastructure as the population increases, but it cannot pay for existing deficiencies. Most park impact fees are paid by developers of residential property when they apply for a building permit and the fee is usually passed on to the homeowner in closing costs. Town Manager Ed Mitro said $337,000 has been collected since May 2006 and according to BAGI lawyer Bryan Babb this must be paid back to builders. The town believes builders ultimately want to invest in the parks system in Zionsville and will send to Judge McClure by Dec. 1 a refund proposal that includes giving builders the option to donate some, if not all, of their individual refund to the Zionsville parks system.

“We (the town) do believe the builders are civic-oriented and hold the community in high regard and will want to support the parks,” Zionsville Town Council President Matt Price said. Price added that none of the monies were earmarked for specific parks projects because of the pending lawsuit.

Because the builders pay impact fees up front, money will be refunded directly to them. Price said it will be up to the judge to determine if homeowners will be notified about refunds going to their builders, especially if homeowners indirectly paid the fees in closing costs.

If the builder passed the cost of the impact fee onto the homeowner and is refunded this money, he is basically “double dipping,” Price said. He hopes if homeowners are refunded they, too, will have the option of donating the money, but it is unclear at this time if homeowners will get any type of refund. At press time BAGI lawyer Bryan Babb said he had not received any documents from the town on the advice not to appeal and could not comment on that decision.

The court suit stems from town council approval, on Dec. 5, 2005, of a determination of park impact fees based on a U.S. national average provided by the consulting firm Lehman and Lehman. However, state law requires that Indiana’s impact fees be “directly related” to the “costs of construction or expansion of infrastructure that is necessary to serve the new development” — not a national average — according to court documents.

Price said the town will eventually propose a revised park impact fee because it is an “essential” means to support the parks program.

     

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