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Legislation spells end for Mesa impact fee court case

They couldn’t win in court, so they took the fight to the Legislature – and won.

The Home Builders Association of Central Arizona and the Goldwater Institute, a litigious government watchdog group with a libertarian bent, were unable to convince the courts that impact fees Mesa charged to new home construction for cultural programs are illegal. Instead, lawmakers approved legislation that effectively curtails those fees.

The bill, SB1525, is now awaiting action by Gov. Jan Brewer.

“We’re tired of doing impact fee legislation so we’re all looking forward to letting this law take effect and working together with the cities under the new structure,” said Connie Wilhelm, executive director of the Home Builders Association.

Arizona law had never defined “necessary public services,” a term that Mesa’s city council decided in June 2007 applied to cultural facilities like museums and theatres. The bill, which was approved by the Legislature April 19, provides the missing definitions that were the impetus for the lawsuit.

Clint Bolick, who heads the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation, said there has always been a widely agreed upon list of necessary services such as roads and sewers.

The proposed law now defines what is and isn’t necessary.

For instance, fire and police stations are necessary. Parks of more than 30 acres are not. Wastewater plants are necessary. Golf courses are not. Libraries are necessary. Libraries with more than 10,000 square feet of space are not.

“That list reflects the real world,” Bolick said

State law requires impact fees, which are levied on new development so existing taxpayers aren’t burdened with the cost, to be for a necessary public service. Because that term wasn’t defined, courts have broadened government powers, Bolick said.

The Home Builders Association filed suit against the city in 2007, and Judge Douglas Rayes found in Mesa’s favor in July 2009.

Rayes found that Mesa calculated the impact fees after substantial review and he determined the fees were reasonable, given the public burden created by new development.

Rayes also found that the Home Builders Association did not prove the fees were created arbitrarily, capriciously or prove that the City Council abused its discretion.

The Arizona Court of Appeals upheld the decision in November. On April 19, the Arizona Supreme Court declined to hear the case, effectively ending it.

Bolick said that if the Arizona Supreme Court had accepted the case, the Home Builders Association would have ended its appeal, since the legislation passed.

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