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City keeps new home fees in place

March 30, 2005|by GREGORY T. SIMMONS

gregs@herald-mail.com

HAGERSTOWN - Despite facing questions about the legality of a fee the City of Hagerstown is charging for new home construction, the City Council voted 4-0 on Tuesday to keep the fee in place.

An item on the City Council's Tuesday night agenda, if approved, would have repealed a fee on new home construction, four months before the fee was set to expire, and would have allowed the return of more than $200,000 collected under the fee.

The Interim School Impact Fee was designed to help pay for school construction because of increased home construction and projected shortfalls in county school construction budgets.

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The item almost didn't even make it to the discussion phase during Tuesday night's voting session.

When Mayor William M. Breichner called for a motion from the council members to bring the item to the council floor, the four present council members paused in silence until Councilman Kristin B. Aleshire spoke.

Aleshire asked City Attorney William Nairn if he was allowed to make a motion to bring the resolution to the floor if he was going to vote against it.

Assured that he could do so, Aleshire called up the resolution. To hear further discussion on the item, Councilman N. Linn Hendershot seconded the motion, and then Aleshire took the opportunity to speak against it.

Aleshire said the city received "threatening legal actions" in the form of letters from attorneys of developers who asked to be exempted from the city policy.

The city's school impact fee was set in the hope that the county would develop such an impact fee, which eventually would replace the city's. The city's fee was to expire on July 1.

Aleshire said "I do not agree (with this resolution) without exhausting our possibilities," one possibility being "that we would lose that litigation."

"I cannot support this motion," Aleshire said.

Breichner called for a vote after Aleshire spoke, and the four council members present voted against the resolution, in effect upholding the policy the council instituted on Dec. 14. Councilman Lewis C. Metzner was absent.

"I think that was a very wise choice, quite frankly," Breichner said after announcing the motion's defeat.

The letters referenced by Aleshire were received by various city officials in February.

The first, dated Feb. 7, was signed by Jason Divelbiss, a local land-use attorney.

In the three-page letter, Divelbiss wrote that he was representing South Mountain Builders, the contract purchaser and developer for 27 lots along Jefferson Boulevard.

"Unfortunately, the project's viability is already challenged," Divelbiss wrote, in part. "(O)ne cannot presume that either a $7,000-$8,000 increase to the purchase price of completed homes or a similar reduction in the project's return are realistic and acceptable terms."

Two other letters came from attorneys representing K. Hovnanian Homes, which is the developer of Kensington Villas along Eastern Boulevard, and Ben Shaool.

Frederick, Md.-based lawyer Thomas E. Lynch said in a Feb. 17 letter that he represented the Kensington Villas developer.

Lynch wrote, in part, that the city's policy is invalid because "it violates the Charter of the City of Hagerstown ... and Maryland Law."

A Feb. 28 letter from Bethesda, Md.-based attorney Jack Garson said his client, Shaool, was in the early stages of construction of more than 400 homes and that those homes should be exempted because "the City of Hagerstown does not have the authority to impose this fee."

Before Tuesday's meeting, Breichner said the city recently discussed the legal ramifications of the city's policy in a closed-door session, which is what led to Tuesday's proposed resolution.

Breichner said that at that time, a majority of the council favored repealing the fee due to the possibility of legal action.

Another provision in the defeated resolution was to give authority to refund the money collected under the fee.

Officials have stopped collecting the fee since the disputes arose, but through Feb. 17 the city had collected $213,981 on 33 lots, according to city financial records.

When City Administrator Bruce Zimmerman asked for a clarification on whether city staff should resume collecting the fees, Aleshire suggested taking it up at a future meeting. Aleshire was not opposed.

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