Parties: Lawrence and Kabrina Allen and the City of West Haven

Issued: March 11, 2025

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Impact Fees

Exactions on Development

The city’s storm water impact fee is not lawful where it is based on parcel size rather than impact on the storm water infrastructure.

 Issue

Is the city’s storm water impact fee lawful where it is based on parcel size rather than impact on the storm water infrastructure?

Summary of Advisory Opinion

Property owners plan to construct a single-family home on a 3-acre parcel of land and were assessed a storm water impact fee exceeding $12,000 as a part of the building process. This fee is imposed in accordance with the adopted storm water impact fee schedule which uses a generic and undefined “developed acre” as the unit of impact. The approach disregards the actual intensity and scope of the proposed development and the expected disruption to natural water flow.

Using “developed acres” as the unit of impact does not adequately quantify how various development proposals will impact storm water runoff and the storm water infrastructure as required by the Impact Fees Act and therefore violates the Act and also fails to produce a roughly proportional result as required by the Takings Clause of the U.S. Constitution. Using this approach does not substantiate the imposition of a $12,660.82 storm water impact fee on the single-family residence proposed by the property owners.

We conclude that the storm water impact fee, as imposed, does not meet the requirements of the Impact Fees Act and has not been shown to be roughly proportional to the impact of the proposed development and is therefore unlawful.

Evidence

The following documents and information with relevance to the issue involved in this Advisory Opinion were reviewed prior to its completion:

1. Request for Advisory Opinion submitted by Lawrence and Kabrina Allen, with attachments, received April 29, 2024.
2. Meeting with Shawn Warnke, city manager and Amy Hugie, city attorney, on May 29, 2024, on behalf of the City of West Haven. Documents related to Allen’s impact fee protest and appeal submitted following the meeting.

Background

Lawrence and Kabrina Allen (the Property Owners) intend to construct a single-family home on a 3.59-acre parcel of land within the City of West Haven (the City). When the Property Owners applied for the building permit, they were assessed a storm water impact fee of $12,660.82 (Storm Water Impact Fee or Impact Fee), which is based on the size of the lot on which development was proposed. The Impact Fee is calculated at $3,526.59 per acre, resulting in the total fee of $12,660.82 for the 3.59-acre parcel (3.59 acres x $3,526.59 per acre = $12,660.82).

The Storm Water Impact Fee was established in accordance with an Impact Fee Facilities Plan (IFPP) and an Impact Fee Analysis (Impact Fees Analysis). These documents projected the City’s growth at an average rate of 100 acres per year over the coming years. The analysis also determined that to maintain the existing level of storm water service, additional improvements would be necessary to handle the increased runoff from the new development, with a projected cost of $2,137,857 for these improvements over the next 6 years. To calculate this fee, the total cost of these improvements was divided by the 100 acres of undescribed projected development per year over the six-year period, which yielded a total of $3,526.59.[1]

However, the Property Owners have protested this approach, arguing that the Impact Fee should instead be based on the scope of the disturbed area and the resulting change to the natural flow of water. They contend that the fee should reflect the increase in storm water runoff caused by the development, not the total size of the parcel. According to the Property Owners, the impact of a single-family home would be the same regardless of whether it is located on a quarter-acre lot or a ten-acre lot. They maintain that charging the Impact Fee based on the size of the parcel rather than the actual disturbed area and change to the natural water flow into the storm water system is unfair and disproportionate, which they argue is unlawful.

Tying the Impact Fee to the size of the lot rather than the scope of the development implies that the land itself is triggering the impact. The Property Owners maintain that “[t]his cannot be the case, as the lot itself has been present within the boundaries of the City of West Haven without being determined as having a negative impact on the City’s storm water management infrastructure. Only now that the [Property Owners] wish to develop approximately 3% of the lot (the proposed footprint of the residential structure, including concrete for hardscapes for garage driveways) does the entirety of this lot, 100% of it, somehow become a negative impact on the storm water management. Indeed, if the land itself is the real problem, why doesn’t the City impose this impact fee on everyone who owns undeveloped land within the City’s boundaries.” Request for Advisory Opinion dated April 29, 2024. The new system improvements necessitated by existing and new development include new storm drain siphons, regional detention, as well as new and replaced storm-drain pipe along identified roadways.

The Property Owner requested that the City amend how the impact fee is calculated. The City declined to do so, finding that the city would need to do another impact fee study to change the way fees are accessed. The City apparently investigated a hybrid methodology of “developable area” and “impervious surface area” but concluded that having two methodologies would inherently lead to conflict when administering the impact fee. Furthermore, the City determined that the Property Owner’s request did not meet the established standards to adjust the impact fee established in the Impact Fee Analysis.

The Property Owners argue that the Storm Water Impact Fee exceeds the actual impact of developing their single-family home and is therefore unlawful. As a result, the Property Owners have requested this Advisory Opinion to determine whether the City’s imposition of a $12,660.82 Storm Water Impact Fee as a condition of approval of their single-family residence on a three-acre parcel is lawful.

Analysis

I.     Basing the Impact Fee on acreage alone does not address the relative extent to which the particular development will contribute to the cost of public facilities

The Utah Impact Fees Act, found in Utah Code Chapter 11-36a, defines an impact fee as “a payment of money imposed upon new development activity as a condition of development approval to mitigate the impact of the new development on public infrastructure.” Utah Code § 11-36-102(9)(a). Government-mandated contributions, such as impact fees, are considered exactions when imposed as a condition of development approval. To be legally valid, an exaction must address a specific problem created by the development and must be roughly proportional to the anticipated impact.

Impact fees raise concerns under the Takings Clause of the U.S. Constitution and Article I Section 22 of the Utah Constitution, which both protect private property from governmental taking without just compensation. A municipality may not “force some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U.S. 40, 49 (1960).

The principles governing exactions are outlined in the U.S. Supreme Court’s landmark decisions in Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S 374 (1994) which the Utah Legislature has distilled and codified in Utah Code § 10-9a-508(1). The analysis has been termed the “rough proportionality test,” requires that:

(a) an essential link exists between a legitimate governmental interest and each exaction; and,

(b) each exaction is roughly proportionate, both in nature and extent, to the impact of the proposed development.

Utah Code § 10-9a-508(1) (emphasis added). If a proposed impact fee satisfies this test, and is otherwise legal, it is valid. If the impact fee fails the test, it violates protections guaranteed by the Takings Clauses of the U.S. and Utah Constitutions and is illegal. Call v. West Jordan, 614 P.2d 1257, 1259 (Utah 1980).

As with all exactions, the amount of the impact fee must be roughly proportional to the impact generated by the development. Greater impacts justify higher fees. See B.A.M. Development, LLC v. Salt Lake County, 2008 UT 74, ¶12 (holding that the exaction and the costs of mitigating the impact must be roughly equivalent); see also Utah Code § 11-36a-102(8)(a) (defining impact fees in relation to the impact of the new development), Utah Code § 11-36a-603(1) (requiring the refund of impact fees where no impact occurs), Utah Code § 11-36a-402 (allowing for offsets of impact fees where the developer provides system improvements that reduce the need for additional facilities). See also, Tooele Assocs. Ltd. P'ship v. Tooele City Corp., 2011 UT 4, 247 P.3d 371 (Utah Sup. Ct.) (emphasizing that the ultimate test of constitutionality is whether the fee is reasonably related to the benefits conferred). An impact fee that requires a developer to pay more than its fair share, or a disproportionate amount for impacts it did not create, is unconstitutional. See generally Call v. City of West Jordan, 614 P.2d 1257 (Utah, 1980).

Development activities invariably generate impacts on public infrastructure, and impact fees are a mechanism by which the developer bears its fair-share costs of these. In furtherance of the constitutional standard articulated above, impact fees must also be determined and calculated in accordance with the provisions of the Utah Impact Fees Act referenced above. Theoretically, and ideally, if a local government follows the procedures outlined in the Impact Fees Act for determining an impact fee, the result will be a fee that proportionally offsets the impact of each development proposal that comes before the local government. In other words, by enacting an impact fee schedule in compliance with the Impact Fees Act, the schedule should comply with the rough proportionality requirements of the Constitutions.

The principle of rough proportionality is embedded in the language of the Impact Fees Act itself. For example, in conducting the Impact Fee Analysis, a municipality must “estimate the proportionate share of . . . the costs of impacts on system improvements that are reasonably related to the new development activity.” Utah Code § 11-36a-304(1).

Also, “in analyzing whether or not the proportionate share of the costs of public facilities are reasonably related to the new development activity, the [municipality] shall identify . . . the relative extent to which development activity will contribute to the cost of existing public facilities and system improvements in the future. . .” and the City “shall base impact fees on realistic estimates and the assumptions underlying those estimates shall be disclosed in the impact fee analysis.” Utah Code § 11-36a-304(2)(e); Utah Code § 11-36a-305(2) (emphasis added). Furthermore, “Proportionate share" is defined as “the cost of public facility improvements that are roughly proportionate and reasonably related to the service demands and needs of any development activity.” Utah Code § 11-36a-102(16).

These requirements imposed by the Impact Fees Act fulfill the City’s constitutional burden of establishing that impact fees are roughly proportional and reasonably related to the impact of development. See Dolan v. City of Tigard, 512 U.S. 374 (1994).

Unfortunately, in this instance, the Impact Fee Analysis upon which the Storm Water Impact Fee is based does not provide sufficient information to establish “the relative extent to which the development activity will contribute” to the storm water system demand, nor “realistic estimates and assumptions underlying those estimates” as required by the Impact Fees Act. See Utah Code § 11-36a-304(2)(e); Utah Code § 11-36a-305(2).[2] At the core of the issue, relying on the undefined term “developed acres” seems to lack the nuance needed to establish a proportional relationship between the impact fee charged and development proposed.

The Impact Fees Analysis is brief and skips important explanations. For instance, the Impact Fees Analysis identifies the costs of future system improvements and contrasts that with undefined “growth in acres” to come up with a calculation of “cost per acre.” City Storm Water Impact Fee Analysis, Zion Public Finance, Inc., October 15, 2022, page 8. This cost forms the basis for the Storm Water Impact Fee calculations. However, the Impact Fees Analysis does not include a definition of “growth in acres” nor directly connect this apparently averaged, generic and undefined growth to the storm water facilities themselves.

The Impact Fees Analysis generic treatment of all “developed acres” uniformly leads to a disproportionate burden on low-density, low disturbance development. This one-size-fits-all approach fails to adequately analyze the specific proportional share of impact on the storm water system attributable to the proposed single-family residence.

To meet the requirements of the Impact Fees Act, the Impact Fees Analysis must include a determination of “the relative extent to which development activity will contribute to the cost of existing public facilities and system improvements in the future.” UTAH CODE § 11-36a-304(2)(e). The Impact Fees Analysis does not achieve compliance by citation alone. It needs to provide some reasoned explanation or basis for how its findings accomplish the objectives of the Impact Fees Act.

According to documents provided, the City based the Impact Fee on two factors — (1) the estimated cost of storm water projects within the planning window and (2) expected acreage developed. The required system improvement costs were averaged across all acres, which fails to consider the significant differences in storm water runoff between low-density/impact and high-density/impact developments.

By choosing “developed acres” as the unit of demand and leaving it undefined and disconnected from any measured impact on the storm water system, the Impact Fees Analysis circumvents the constitutional protections embedded in the Impact Fees Act. While precise mathematical calculations are not required, there must be an individualized assessment demonstrating that the impact fee is roughly proportional and reasonably related to the impact. See Dolan v. City of Tigard, 512 U.S. 374 (1994).

In the case at hand, we are not convinced that the Storm Water Impact Fee as applied to this single-family residence sufficiently meets the standard of being roughly proportional. There is no clear connection between the size of the lot and the amount of storm water runoff produced. Storm Water runoff is more directly influenced by the intensity of development and the disturbance to natural water flow post-development, rather than the size of the parcel itself.

The City has the burden to establish that the Impact Fee charged is roughly proportional and reasonably related to the impact. Because this burden has not been met, imposition of a $12,668.82 Storm Water Impact Fee as a condition of approval of a single-family residence on a 3.69 acre parcel is not lawful.

Conclusion

Assessing an impact fee using a generic and undefined “developed acre” as the unit of impact disregards the actual intensity and scope of the proposed development as well as the expected disruption to natural water flow. Similarly, using “developed acre” does not adequately quantify how various development proposals will impact storm water runoff and the storm water infrastructure as required by the Impact Fees Act to produce a roughly proportional result as required by the Takings Clause of the U.S. Constitution.

Using this approach does not substantiate the imposition of a $12,660.82 Storm Water Impact Fee on the single-family residence proposed by the Property Owners. We conclude that the storm water impact fee is not roughly proportional and is therefore unlawful.

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Jordan S. Cullimore, Lead Attorney

Office of the Property Rights Ombudsman

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NOTE:

This is an advisory opinion as defined in § 13-43-205 of the Utah Code. It does not constitute legal advice and is not to be construed as reflecting the opinions or policy of the State of Utah or the Department of Commerce. The opinions expressed are arrived at based on a summary review of the factual situation involved in this specific matter and may or may not reflect the opinion that might be expressed in another matter where the facts and circumstances are different or where the relevant law may have changed.

While the author is an attorney and has prepared this opinion in light of his understanding of the relevant law, he does not represent anyone involved in this matter. Anyone with an interest in these issues who must protect that interest should seek the advice of his or her own legal counsel and not rely on this document as a definitive statement of how to protect or advance his interest.

An advisory opinion issued by the Office of the Property Rights Ombudsman is not binding on any party to a dispute involving land use law. If the same issue that is the subject of an advisory opinion is listed as a cause of action in litigation, and that cause of action is litigated on the same facts and circumstances and is resolved consistent with the advisory opinion, the substantially prevailing party on that cause of action may collect reasonable attorney fees and court costs pertaining to the development of that cause of action from the date of the delivery of the advisory opinion to the date of the court’s resolution. Additionally, a civil penalty may also be available if the court finds that the opposing party—if either a land use applicant or a government entity—knowingly and intentionally violated the law governing that cause of action.

Evidence of a review by the Office of the Property Rights Ombudsman and the opinions, writings, findings, and determinations of the Office of the Property Rights Ombudsman are not admissible as evidence in a judicial action, except in small claims court, a judicial review of arbitration, or in determining costs and legal fees as explained above.

The Advisory Opinion process is an alternative dispute resolution process. Advisory Opinions are intended to assist parties to resolve disputes and avoid litigation. All of the statutory procedures in place for Advisory Opinions, as well as the internal policies of the Office of the Property Rights Ombudsman, are designed to maximize the opportunity to resolve disputes in a friendly and mutually beneficial manner. The Advisory Opinion attorney fees and civil penalty provisions, found in § 13-43-206 of the Utah Code, are also designed to encourage dispute resolution. By statute they are awarded in very narrow circumstances, and even if those circumstances are met, the judge maintains discretion regarding whether to award them.

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Endnotes:

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[1] This fee includes the planning, surveying, and engineering fees directly connected to construction of the storm water system improvements, as permitted by law, and gives a credit of $96.41 for deficiencies in the existing system.

[2] Although not explicitly briefed, we assume that various types of development will result in different changes to the natural flow of water, consequently affecting the storm water system in distinct ways. For instance, covering a parcel with impervious surfaces such as parking lots, cement pads, and buildings will produce runoff that differs significantly from areas with agricultural use, playing fields, gravel paths, gardens, or undeveloped natural landscapes.