City holds off on impact fee decision

Developers want refund, say paying fees were illegal under state law

— The Steamboat Springs City Council is not ready to decide if it will refund $47,000 in impact fees to two developers.

The decision came after the council went into executive session Tuesday night. The City Council made few comments in public, but Council President Pro-Tem Paul Strong did recommend tabling the decision until Feb. 4 so City Attorney Tony Lettunich could have more time to do research.

The council's decision on the refund could set a precedent involving up to $80,000 in impact fees already paid to the city.

K&K Builders and Gilstrap Enterprises Inc. argued the impact fees they paid to the city were illegal under state law and should be refunded.

Attorney Bob Weiss, who represented the developers, said Senate Bill 15 prohibits municipalities from collecting impact fees for projects that have already received development approval.

Lettunich said he did not know how many other developers paid impact fees on projects that were approved before an impact fee ordinance went into place. But impact fees from those projects, which would have received building permits in the 14 months the impact fee was in place, could have generated revenue of up to $80,000, he said.

"If we make a decision here, we should apply it evenly throughout the board," Strong said before requesting the council go into executive session to discuss legal issues.

Lettunich said litigation could follow if the council denied the refund and the Colorado Municipal League had indicated it might help the city defend its case.

The city believes the state law does not apply to Steamboat because Steamboat operates under a home rule charter. The city has stated land-use measures are historically of local concern and the Legislature is prevented from regulating them.

Speaking before the council, Weiss said his clients had to pay retroactive fees, and while the city is under a home rule charter, the state has authority in this case.

The council approved the New Development Impact Fee on Nov. 6, 2001. The council implemented the fee as a way to force growth to pay for itself. The developer paid the fee -- which was different for single-family homes, multifamily units and commercial properties -- when the building permit was issued.

At around the same time the council passed the ordinance, Gov. Bill Owens signed into law a bill prohibiting cities from collecting impact fees for projects already approved, even if building permits had not yet been issued.

If voters had not approved an excise tax in November, the city would have had much more at stake. Lettunich said millions of dollars in impact fees could have come from projects that received approval before impact fees went into place.

One of the reasons the city saw the excise tax as an attractive alternative to the impact fee was because it had no restrictions on projects already approved.

In June 2002, K&K Builders paid a total of $29,000 in impact fees on a project that received planning approval in 1997. The company built two multifamily developments of four units each in the Willowbrook subdivision.

In the summer of 2002, Gilstrap paid $18,000 in impact fees for its project in the Curve subdivision.

In August 2001, Gilstrap submitted its application for a fast-food restaurant, gas station and convenience store on the west side of town.

-- To reach Christine Metz call 871-4229

or e-mail cmetz@steamboatpilot.com

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