Tuesday, December 19, 2006

County Squanders $4.7 Million, Revisited

The latest chapter in the saga of the allegedly misspent impacts fees has taken an unfortunate turn. A Circuit Court Judge has ordered that the County refund more than $4.7 million (now, with interest, over $11 million) in improperly spent impact fees to homeowners who paid the fees between 1988 and 1995.

The crux of the dispute focuses on the requirements of the 1987 impact fee law passed by the County:

The law provided that impact fee money had to be spent within six years, though extensions were possible; required the county to spend money on schools only if it increased student capacity; and laid out how money could be spent on roads.

Among the instances of improper expenditures, according to the Judge:

  • "The county improperly spent more than $2.8 million in impact fees to expand Park Elementary School in Brooklyn Park and South Shore Elementary School outside Annapolis without adding any more seats."
  • "The county spent money on trailers, called relocatable classrooms, which the court ruled wasn't allowed under the law."
  • "Sections of East West Boulevard in Severna Park were paid for with money collected in other districts."

    To add additional drama to the case, the County has already spent about $500,000 in legal fees defending itself and, the one of the homeowners' lead attorneys, Phillip Scheibe, is a former County Councilman and former County Attorney who advised John Gary (County Executive 1994-1998) on impact fees.

    One wonders if Mr. Scheibe, in his work for the County under Mr. Gary, didn't stumble onto spending "irregularities" and think that he had come upon a cash cow. After all, he and his partner were seeking $1.3 million (over $100k apiece per year) for their work on the case since 2000.

    Both sides say they will appeal, the homeowners' attorneys, because they think they should be receiving more money (over $30 million), and the County, because it lost.

    Given the fact that impact fees in the County desperately need to be raised to help offset some of the costs on new growth, much more oversight has to be given to the manner in which these dollars are spent, both to lessen the blow of development as well as avoid these costly imbroglios in the future.

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