City of Oak Creek
Common Council Report
Meeting Date: June 20, 2006
Item No.:
Recommendation: That the Council adopt Resolution No. 10646-062006 extending the time in which the City has to expend collected impact fees.
Background: [1] This year the Wisconsin State Legislature passed two pieces of legislation related to impact and other developer fees, Wisconsin Act 203 and Wisconsin Act 477. Act 203 was passed on March 27, 2006 and took effect on April 10 and Act 477 was passed on April 27 and will take effect on June 13, 2006. Both pieces of legislation significantly modify the way a municipality may impose impact and other developer fees.
Wisconsin Act 203 amended Wisconsin Statute §66.0617 to require that impact fee revenues collected must be expended within seven (7) years from the time of collection. Impact fees not expended within this time period must be refunded to the current property owner of the parcels for which impact fees were imposed (not necessarily the same person who paid the fee originally). This does not mean that a municipality must stop collecting impact fees after seven years, but that revenues collected in the first year of impact fee collection must be spent by the end of year seven.
Wisconsin Act 203 also states that it is possible to extend the time period an additional three years (up to a total of 10 years) if the municipality adopts a resolution stating that, due to extenuating circumstances or hardship in meeting the seven year limit, an additional three years is needed to use the impact fees that were collected.
Act 203 applies not only to impact fees adopted after the effective date of the Act, but also to impact fees already in place. The Act does not include a “grandfather clause” for impact fees that may have already been in place for more than 10 years. If a community has been collecting an impact fee for more than 10 years and has not spent any of the funds yet, or has spent less than the amount that was collected more than 10 years ago, they may be required to issue refunds under this Act.
Wisconsin Act 477 makes several significant changes to impact fee law, as described below.
□ Under this bill, an impact fee may only be imposed by a municipality (city, village, or town), but not a county as the statute currently allows.
□ Currently, the statute allows for an impact fee for parks, playgrounds and other recreational facilities. Act 477 removes other recreational facilities and adds “land for athletic fields” to the list of eligible facilities. The statute does not define what other recreational facilities are, so it is unknown how the removal of this item will affect municipalities with park impact fees in place. One recreational facility that would likely be contested is community recreational centers, since these facilities may not fit under the parks or playgrounds category.
□ This bill includes more specific requirements for placing each fee in a segregated account. and also requires municipalities to include the total impact fee revenues and expenses in their annual budget summary.
□ Act 477 also changes how a municipality collects impact fees. The statute is currently worded to say that an impact fee must be paid by a developer either in full or in installment payments before a building permit may be issued or other required approval may be given by the political subdivision. Under Act 477, a developer or property owner must pay an impact fee in full to a municipality within 14 days of the municipality’s issuance of either a building permit or an occupancy permit. This Act removes the option of requiring payment of the fees as a condition of subdivision plat or CSM approval.
□ The final provision of this bill is that municipalities may no longer impose fees or other charges to fund the acquisition or improvement of land, infrastructure, or other real or personal property as a condition of subdivision approval under §236.45 of the Wisconsin Statutes. A municipality would still be able to require a land dedication, easement, or other public improvement, but any requirement must bear a rational relationship to a need for the land dedication, easement, or other public improvement resulting from the subdivision of land. This provision would invalidate the fees-in-lieu of dedication that many communities impose for parkland acquisition and/or park development. This would require municipalities that wish to continue collecting fees to adopt park and recreation impact fees instead, with the prerequisite preparation of a public facilities needs assessment and holding of a public hearing.
Fiscal Impact: The adoption of this resolution will give the City an additional three years in which to expend certain impact fees. In the absence of such a resolution, it is likely that the City would be required to refund those unexpended fees which were collected over seven years ago.
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Prepared by:
Doug Seymour, AICP Director of Community Development |
Respectfully submitted,
Patrick DeGrave City Administrator
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Fiscal Review by:
Beverly A. Buretta, CMC City Clerk
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