WASTEWATER IMPACT FEES: A RECENT RULING WITH NATIONAL IMPLICATIONS{TC 'WASTEWATER IMPACT FEES: A RECENT RULING WITH NATIONAL IMPLICATIONS'}

摘要

Impact fees are one-time charges that water and wastewater utilities assess new customers inorder to provide new or expanded services. Statutes in many states exist that specifically allowfor them. Unfortunately, these laws are vague in many cases, thus inviting the legal challengesthat have become more prevalent.It is important for those involved with enterprise fund operations to understand what makes animpact fee system defensible or subject to challenge. In Colorado, the Supreme Court’s recentruling in Krupp v. Breckenridge Sanitation District in February of 2001 set precedence for thecriteria under which impact fees are valid. Although this applies most directly to Colorado, itsimplications are useful in many other states.The plaintiffs in the Krupp v. Breckenridge Sanitation District case argued that the wastewaterimpact fees were a constitutional “takings” and were unfairly determined. The Colorado SupremeCourt ruled unanimously in favor of the Breckenridge Sanitation District (the District). TheDistrict had implemented a “growth pays for growth” policy involving impact fees, as well as asingle-family equivalency schedule to convert costs to multi-family and other types of units. Inaddition, the District hired a utility economics consulting firm to analyze its impact fees. Theexpert provided a report that confirmed the validity of the customer class distinctions and theequity of the fees. The Supreme Court concluded that the impact fees were justifiable, and thedifference in fees between single-family and multi-family units was fair.The impact fee methodology followed in the expert’s report is the Buy-In Method. This methodcomprises reimbursement and improvement components. A reimbursement fee is a “buy-in”portion for new customers to pay for an equitable share of existing facilities and resources. Theimprovement fee portion recovers the costs of new facilities needed for growth. Following thismethodology indicated that the District’s impact fees were within the justifiable and defensiblerange of fees.