A Wisconsin appeals court struck down a builders association‘s challenge to a $3,190 fee the town of Oak Grove charges developers for new projects.
In a decision filed Tuesday, the District 3 Court of Appeals ruled the St. Croix Valley Home Builders Association improperly challenged Oak Grove’s ordinance because the association did not first file an appeal with the town.
Oak Grove enacted the ordinance in 2003, and the association in 2008 sued the town over the fee.
Oak Grove put the fee in place to cover town expenses, such as road improvements and fire wells, associated with the development of residential units, said Catherine Munkittrick, the town’s attorney.
Attorneys and representatives for the builders association did not return repeated calls for comment.
According to court documents, the association argued the ordinance is unconstitutional and negatively affects developers who have to pay the fee when applying for a building permit.
But Munkittrick said the town built an appeals process into the ordinance for developers to dispute paying the $3,190 fee. She said the only challenge to date has been the builders association’s court case.
“This has applied to every building permit issued after the adoption of the ordinance,” she said of the fee.
Munkittrick said she does not know how many new residential developments have been built since 2003 or how much money the town has collected through the fee.
State law lets municipalities require impact fees from developers for public improvements, said J. Scott Mathie, vice president of government affairs for the Metropolitan Builders Association in Waukesha.
But, Mathie said, many municipalities improperly use the fees.
“In this type of economic condition, or in any type really, a lot of communities lack a good reason for these fees to be collected,” he said. “Housing tends to pay for itself with property taxes, and impact fees are supposed to be used for transitional costs that aren’t recouped quickly by local governments.”
Mathie said he is unfamiliar with the Oak Grove case, but said he was not surprised by the five-year delay in challenging the ordinance.
“A lot of times, the communication channels aren’t there between local governments and builders associations,” he said. “So what happens is you have individual builders that know about the change, but they don’t want to disrupt the local community because they might be enjoying business there.”
According to the appeals court’s ruling, people can challenge the fee, but they first must do so through the town.
“No one’s ever appealed,” Munkittrick said, “including the developers who’ve done work here.”