Case Questions and Answers
- Note: If you are a potential member of the class, the questions and answers below are provided by the attorneys for the class members—your attorneys—to give candid information related to the facts and law of the case and your involvement as a class member. The official notices mailed in 2022 to about 2500 potential class members was reviewed and edited by the Washington County Water Conservancy District (WCWCD) and then the Court before being sent to potential class members. The information below was prepared by your attorneys and not reviewed by the WCWCD or its staff.
Questions and Answers:
Note: The following questions and answers are provided by counsel for the class members. The 2022 official notice that was provided to potential class members was reviewed and edited by the Washington County Water Conservancy District and then the Court. If you are a potential member of the class, the discussion below was prepared for you by your attorneys in this matter. It therefore provides, we believe, more candid information for those who may be part of the class than the official 2022 notice provided.
What is this case really about?
The representative plaintiffs (builders) in this case have long been involved in an effort to ensure that impact fees imposed on new construction in Utah are legal and fair. They have worked with the state legislature and local officials both generally and specifically to iron out problems where new homes, for example, were being charged a disproportionate cost to connect to services.
These builders have only filed suit against three entities in the past 15 years. The first was a city in Utah County that refunded about $1,000,000 in inappropriate fees to all those who paid them – not just the builders. The second instance involved a sewer district in Northern Utah. As a result of that litigation, $33.25 million in refunds were issued to those who paid 14,000 separate impact fees. The builders have not sued any other entity except for this one case – against the Washington County Water Conservancy District, although these builders pay many hundreds of impact fees each year to other local government entities.
This case is about an isolated instance where the builders recognized a fee as being so unfair that some action must be taken and where the local jurisdiction refused to reconsider or adjust the fee for those builders.
So the WCWCD is still charging that disproportionate fee?
No. Although the dollar amount of the fee for a single home has increased, the WCWCD has revised the documents which calculated the fee and recalculated their impact fees, making changes in the calculations that this litigation argues should have been made in the first place. The builders have not brought a lawsuit against the current impact fees charged by the WCWCD. This case only applies to fees paid to the WCWCD between August 23, 2012 and December 31, 2017.
So how, for example?
The WCWCD no longer is basing impact fees on bonds that will never be issued for the Lake Powell Pipeline.
· It no longer demands that a new home reserve .89 acre foot of water to serve that home but now requires .59 acre foot of annual water resources per home. This is a 33% reduction in the anticipated water demand from a new home.
· It no longer anticipates that impact fees must be collected now in order to pay for the Lake Powell Pipeline Project.
· It is not basing 80% of the fee on one project that was not been permitted and may never be built. The WCWCD has recognized that it must seek other water sources as well as the Lake Powell Pipeline.
· The WCWCD used to charge 100% of the fee it imposed on a single-family home to apartment units. It no longer does so.
Is the WCWCD opposing the class members?
Yes. Vigorously. Although it is not clear exactly what the WCWCD is paying its lawyers to fight this case, it reported that for calendar year 2021 it spent $2,231,803 in legal fees, $1,468,135 out of its “capital projects fund”. This is $1 in legal fees for every $7 in project expenditures it made during that year. As a comparison, in 2013, the year this case was filed, the WCWCD spend only $389,141 in legal fees and charged none of that legal expense to the capital projects fund.
So the Builders do not want to pay impact fees?
The Builders pay impact fees all over the State of Utah. They do not challenge the ability of local governments to collect fair and legal fees to offset the cost of serving new development. Even in this case, the Builders have provided expert witnesses who calculated what the impact fees should have been between 2012 and 2017. The Builders only asked, on behalf of all class members, for a partial refund of the amount between what they should have been charged and what they were charged. They also seek interest on funds paid and attorneys fees as allowed by the Utah Impact Fees Act.
Are the class members supposed to be against the Lake Powell Pipeline Project?
No. The issue here is not whether the LPP is needed and whether it will be built. The issue is that impact fees paid to the WCWCD between 2006 and 2017 were based on conclusions that the plaintiffs here dispute.
Since this action was filed, the WCWCD has officially and formally changed its impact fee calculations in a manner consistent with what the lawyers for the class members have argued in this case. The WCWCD is not basing any of its current impact fees on those disputed 2006 assumptions.
How much will the potential refunds be?
This depends on whether the court will agree with a proposed settlement negotiated by attorneys for both the WCWCD and the plaintiff class members. In each of the 2022 notices to a potential class member there was an estimate of the total fees that are associated with that person or entity’s name. If that potential class member turns out to be the person entitled to a refund, it appears that about 14% of the fees paid would be refunded.
Who received the notices of the class action?
The WCWCD and the class attorneys suggested to the Court that the notice be sent to all persons or entities associated with the payment of each of almost 10,000 impact fees. Notice was sent to:
· the applicant for the subdivision or building permit which triggered the fee;
· the owner of the land involved;
· the person shown on the WCWCD records as paying the fee; and,
· if the fee was paid by a bank or title company as the result of a real estate closing, each of the parties to that closing (such as the buyer and the seller, if a sale of the property was involved) were sent a notice.
The almost 10,000 fees involve more than 2,500 separate companies and individuals, many of whom paid more than one if not a large numnber of fees.
88% of the notices were mailed to Washington County or Iron County addresses.
The great majority of potential class members are individual homeowners who built their own home themselves or hired a builder to build the house for them. Overall they did not pay a majority of the fees at issue here, but there are hundreds of couples and individual homeowners who paid one or two impact fees and may join the home builders and others in receiving refunds.
Do all those individual potential class members share in any refund?
No. Notice was sent to all potential class members. The Class Administrator has not determined who should get the refund. The engineering firm who filed an application is probably not the entity who bore the financial burden of the fee. The landowner also may not have borne the burden because a subdivider may have paid the fee, not the landowner who sold the land to the subdivider. There are many hundreds of individuals who either built their own home, paid a contractor on a “cost plus” basis, or otherwise directly paid the fee to the WCWCD. Other homeowners acquired their home long after the fee was paid by the builder or the builder signed a note to pay the fee. Those buyers did not pay the fee themselves but it may have been paid from funds due to the builder when a house was sold. All this would need to be sorted out by the Class Administrator in a manner consistent with the court order once it is determined that a refund is to be paid.
Are legal counsel for the class members taking this seriously?
Yes, the attorneys working on behalf of class members are invested thousands of hours and hundreds of thousands of dollars in expenses to pursue a fair result for the class members. The expert witnesses who have testified on behalf of the class members in deposition and who have concluded, and stated under oath, that the WCWCD impact fees imposed were not fair or legal include:
· the author of national textbooks on impact fees, presidential professor of municipal planning and a Fellow of the American Institute of Planners. The leading case in the area of impact fees and conditions imposed on building permits is Dolan v. Tigard City Oregon, a US Supreme Court case. That case quotes and relies upon a report by this expert in its analysis.
· an attorney who was the author of many changes to the text of the state impact fee statute from 1995 going forward who served for a number of years as legislative representative for the Utah League of Cities and Towns;
· a seasoned regional water engineer; and
· a retired lead accountant from a Utah accounting firm which audits a number of municipalities on an annual basis.
Is a settlement possible?
Certainly. A settlement has been negotiated but must be approved by the court to be finalized.
Who are the attorneys for the class members?
Three law firms are now involved. Kirton McConkie is the state’s largest law firm, with offices in Salt Lake City, St. George, Boise, and Lehi. Anderson Call & Wilkinson is a very small firm which includes an attorney who specializes in land use regulations and impact fees. Checketts Law is also a small firm whose principal attorney was with Kirton McConkie when it became involved in this litigation.
Will class members be obligated to pay attorney fees for their legal counsel?
Any fees paid to legal counsel and all expenses incurred to pursue the case will come from the proceeds of the litigation. After those costs and fees are paid, the balance of the refunds will be distributed to class members by the class administrator.
Where can I get other information about the case?
Please send any questions to info@impactfeeclassaction.com. We will respond promptly to your inquiry.