TR9303-CS 930308 (214) 954-3338
Fac~e (~14) 964-3334
March 8, 1993
Mr. Alan Ratliff
City Manager
City of Coppell
P.O. Box 478
Coppell, Texas 75019
Re: Substandard Roadway Fees
Dear Mr. Ratliff:
Pursuant to your request, the undersigned provides the following opinion
concerning the City of Coppell SuDdivision Regulations which provide for substandard
roadway fees. Specifically, you ask whether substandard roadway fees constitute impact
fees subject-to Chapter 395 of the Local Government Code, and whether the City should
continue to collec~ such fees until an impact fee ordinance pursuant to Chapter 395 of the
Local Government Code is adopted. For the reasons set forth herein, we conclude that
the Coppeil Substandard Roadway Fee is an impact fee that does not comply with the
requirements of Chapter 395 of the Local Government CodeJ
Chapter 395 of the Local Government Code prohibits the imposition of any impact
fee by a city unless specifically authorized by the Act. Section 395.001 (4) of the Local
Government Code defines an impact fee as "a charge or assessment imposed by a
political subdivision against new deve{opment in order to generate revenue for funding or
recouping costs of capital improvements or facility expansions necessitated by and
attributable to such new development." The definition includes capital recovery fees,
contributions in aid of construction, and any' other fee that functions as an impact fee.
The Act specificallY applies to the funding of off-site facilities. The intent of the
legislature was to preserve existing subdivision exactions for on-site facilities and
regulations relating to the extension of water and sewer facilities. Accordingly, the
definition of impact fees spec'dically excludes the dedication of land for put31ic parks and
~ Previously, Larry Jackson of the firm opined in a oonfldentlal memorandum to the
City Council as to the potential Invalidity of the substandard roadway fees.
Alan Ratliff
March 8, 1993
Page 2
right-of-way easements for: (1) on-site water distribution; (2) waste water collection; (3)
drainage facilities; and (4) streets, sidewalks or curbs required by a valid ordinance. The
Act also exempts lot or acreage fees which are placed in trust for reimbursing developers
for construction of over-sized water and sewer mains, and by implication, the construction
of over-sized lines to accommodate other developments served by the same facilities.
The question arises, however, whether perimeter streets are "on-site" or "off-site" ,
improvements for purposes of impact fees. Section 395.001(4)(B) exempts dedication ,~
and construction of on-site streets required by valid ordinance and necessitated and~
attributable to new development. Once the right-of-way is dedicated, however, the
question arises whether the construction or payment for the construction of the street
would be a required off-site improvement subject to Chapter 395. Furthermore, if another
property owner has dedicated right-of-way adjacent to the developer's tract, the question "')
also arises whether the construction or improvement is also covered by the ACt, since the (
making of such improvement appears to be off-site in nature.
Although the definition of "on-site" improvement is subject to different interpretations
and has not been construed by any court in Texas, we are of the opinion that an on-site
facility means an improvement or facility which is for the primary use or benefit of a new
development and/or which has the primary purpose of safe and adequate provision of
roadway, water or waste water facilities to serve the new development, and which is not
included in the impact fee's capital improvement plan for which the developer or property
owner is solely responsible under subdivision or other applicable regulations, in other
words, an "on-site" improvement is an improvement located within the boundaries of a
platted subdivision, or if the property has not been platted, an improvement to be located
within the boundaries of the property to be platted. Off-site improvements are all
improvements which are not on-site. Accordingly, we conclude that the substandard
roadway fee ordinance is an impact fee ordinance since it relates to off-site roadway
improvements which are adjacent to or outside of a platted subdivision.
After the adoption of the impact fee statute (Chapter 395 of the Local Government
Code), it is necessary for a city, within the time period specified in the statute, to adopt
an impact fee ordinance in accordance with Chapter 395 of the Local Government Code
if it desires to collect impact fees for capital improvements and facility expansions.
Section 395.074 requires an impact fee that was in place on June 20, 1987, to be
replaced by an impact fee made under Chapter 395 on or before June 20, 1990. Under
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Alan Ratliff
March 8, 1993
Page 3
that section, any political subdivision that had an impact fee that was not replaced under
Chapter 395 on or before June 20, 1988, is liable to any party who after June 20, 1988,
pays an impact fee that exceeds the maximum permitted under subchapter (B) of Chapter
395 by more than 10% for an amount equal to two (2) times the difference between the
maximum impact fee allowed and the actual impact fee imposed, plus reasonable
attorneys' fees and costs. Since the Coppell substandard roadway fees have not been
replaced by an impact fee adopted pursuant to Chapter 395, the City is liable to any party
who, after June 20, 1988, pays an impact fee that exceeds the maximum permitted under
subchapter (B) of Chapter 395 by more than 10% for an amount equal to two (2) times
the difference between the maximum impact fee allowed and the actual impact fee
imposed, plus reasonable attorneys' fees and court costs. Whether or not the City
desires to continue to collect the substandard roadway fees while it is in the process of
adopting a proper impact fee ordinance for roadway facilities will depend upon whether
or not it is willing to assume the risk of having to make refunds in double the amount of
~ excess collectio_ns_q~_~c, blc c.~orneys~ .
Your advise that previously the City adopted an impact fee ordinance for water
facilities. You further advise that staff neglected to include impact fees for roadway
facilities at that time. Nonetheless, if that ordinance complies with Chapter 395 of the
Local Government Code, the time, effort and expense necessary for a proper impact fee
ordinance for roadway facilities may be reduced. Under Chapter 395, there is an
extensive procedure for the adoption of an impact fee. T~he procedure_Js~ime consuming,
includes public hearing~j_.pu, blJc_n~[tification,_~n_~.~!~._c.~h_.m_ay..mquire-the-ci~ t~o emp. lo_~
.c_onsb~an~b ~.~_~._a_od~oJ[ect the necessa_~_~_a_ta_~0__Suppo~ tbe_i ~m_p_as[ '~
The City Engineer has been provided with a list of cities which have adopted impact fees
for roadway facilities and consultants available to assist, if necessary.
Additionally, you ask if the City may pass a moratorium or otherwise suspend
development until a proper impact fee ordinance for roadway facilities is adopted. The
City is prohibited by Section 395.076 from passing a moratorium on development pending
the adoption of a proper impact fee ordinance, nor do we believe the City may condition
approval upon the payment of substandard roadway fees or deny plat approval on the
basis of inadequate right-of-way to provide access to the proposed development. If a plat
meets all the requirements of applicable City ordinances, regulations and zoning which
are lawful, the approval of the plat is a ministerial function by the City Council, the denial
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Alan Ratliff
March 8, 1993
Page 4
of which will subject the City to a claim for damages.
If the City desires to collect impact fees for roadway facilities, Section 17(a) and (13)
of the Coppell Subdivision Regulations should be repealed and replaced with an impact
fee ordinance for roadway facilities adopted pursuant to Chapter 395 of the Local
Government Code. Please ensure that the City Council is made aware of our opinion and
recommendation. In the meantime, we will await further instruction from you.
Thank you for your attention to this matter. If you have any questions, please do
not hesitate to contact me.
Very truly yours,
NICHOLS, JACKSON, KIRK & DILLARD
PGS/mdm
cc: Ken Griffin, P.E.
City Engineer
PO Box 478
Coppell, TX 75019
(fax 393-0948)
By:
Peter G. Smitl/(
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