Home builders continue fight against township impact fees

Group says fees are really a tax, and townships have limited tax authority.

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By Denise G. Callahan, Staff Writer Updated 6:11 PM Thursday, September 2, 2010

COLUMBUS — Area home builders are asking the Ohio Supreme Court to determine whether Hamilton Twp.’s impact fees are legal.

Hamilton Twp. in Warren County is the first township in Ohio to impose the fees.

A group of home builders and the Home Builders Association of Greater Cincinnati filed an appeal with the high court Thursday, Sept. 2. The 12th District Court of Appeals based in Middletown sided with Warren County Common Pleas Judge James Flannery in July, saying the fees are acceptable.

The home builders filed suit five months after the township instituted the fee in May 2007. They argue impact fees are really a tax, and townships have limited taxation authority.

Flannery ruled last fall that Hamilton Twp. may charge the impact fees to help pay for capital expenditures for police, fire safety, parks and roads. The appeals court concurred with Flannery in a decision July 23.

Hamilton Twp. officials were expecting this matter to go to the highest legal authority, but Law Director Warren Ritchie said he is encouraged by two lower courts agreeing the fee is permissible and not a forbidden tax.

“They would have a stronger leg to stand on if there was an issue and one appellate district ruled one way and a district in another part of the state ruled in a contrary fashion,” he said. “There is no conflict of law here. So whether the Supreme Court feels this is a case of first impression is up to them.”

Joe Trauth, who represents the home builders, said there is an even bigger issue that might tip the scales in favor of the court accepting the case. The Supreme Court only accepted jurisdiction in about 7 percent of the discretionary appeals filed in 2009.

“The jurisdictional issue is an important one, because the court has never spoken on the authority or the scope of a limited home rule township,” he said. “What the opposition is arguing is they are akin to a municipality. But that’s not true, otherwise we wouldn’t need two different forms of government.”

Only limited home rule townships may impose impact fees.

The township has collected $1.98 million since September 2007. The money has been held in an escrow account pending the outcome of the lawsuit filed by the home builders.

The township is charging approximately $6,153 for a single-family detached home. A new retail/commercial structure is charged based on square footage — $7,265 for roads, $432 for fire and $265 for police — per 1,000 square feet.

Contact this reporter at (513) 696-4525 or dcallahan@coxohio.com.

Impact fees

Impact fees are implemented by local governments to be paid by builders who have new or planned developments to pay for some costs incurred by public services necessary for the developments, such as roads. The fees are designed to limit the economic burden on jurisdictions dealing with population growth.

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