Atherton will revisit road-impact fee refund


The refund of about $1.65 million worth of fees paid by builders to the town of Atherton to repair roads torn up by heavy construction vehicles was approved by a divided City Council in February, stirring up a chorus of criticism among some residents.

Now, with the town struggling to balance its budget and facing a long-term structural deficit, two councilmen who voted for the refunds have placed the matter on the July 21 council agenda for reconsideration.

Councilmen Jerry Carlson and Charles Marsala said they want the council to consider a compromise plan that would significantly lower the amount of money the town would refund.

As it was approved in February, the refund would go to anyone who paid the fee from July 2006 to mid-September 2009, when the fee was rescinded.

Under the compromise plan, proposed earlier by Mr. Marsala but not accepted by the council majority, the refund would be limited to the additional money paid by builders as a result of the fee hike imposed in August 2007 -- a 40 percent boost. That means builders who paid fees from July 2006 to Aug. 17, 2007, would get no refund, and those who paid the increased fee from mid-August 2007 on would get only 40 percent of the fee back.

"It's all about finding a compromise that's going to work," Mr. Marsala said.

Mr. Carlson said he's been talking with a number of residents about the plan, and getting positive feedback, but both he and Mr. Marsala acknowledge the compromise plan leaves the door open to possible litigation.

The refunds were approved in the face of uncertainty about whether the fees were legal. The town was receiving complaints and threats of lawsuits over the fee, and Wynne Furth, the town's attorney, cited a 2005 Southern California court case that touched indirectly on the issue and concluded that the California vehicle code pre-empts any local impact fees for damage to roads.

The council vote approving the refunds in February was 3-1, with Mayor Kathy McKeithen opposed and Councilman Jim Dobbie absent. Mr. Dobbie has publicly expressed opposition to the refund.

In a letter to their council colleagues, Councilmen Carlson and Marsala wrote of the compromise plan: "While we may run a higher risk of potential litigation by refunding less (of the fee than previously approved), there had been a tacit acceptance to pay the fee before it was increased by 40 percent."

They requested that, for the July 21 meeting, staff provide a calculation of the amount of money the compromise plan would entail in refunds.

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Like this comment
Posted by Menlo Voter
a resident of Menlo Park: other
on Jul 14, 2010 at 10:46 am

You know, the interesting thing about these fees is that for other than developers, the builders likley passed these costs through to the owners. Do you think these builders are going to give this refunded money back to their clients? If they're honorable they will, but with the current economic climate, I'm betting a lot won't.

They shouldn't be refunding any of the road impact fees. The legality of charging those fees has never been fully explored and it is quite possible they are completely legal.

Like this comment
Posted by John P Johns
a resident of another community
on Jul 14, 2010 at 11:41 am

Marsala and Carlson are backpeddling on this issue for the wrong reason. They are doing so because the Town needs money.

Atherton's road impact fee is leagl.

When I was Finance Director, Jerry Carlson approved a motion by the Finance Committee to have a law firm that specializes in impact fees render an opinion on the legality of Atherton's road impact fees. The opinion that came back was that the Road Impact fee was legal.

This was an opinion that Sohagi & Associates did not hesitate to issue nor did the firm qualify its opinion. Sohagi was in fact ready to litigate this case for Atherton should it be necessary.

The reason that the Town should revisit its decision to refund road impact fees is that these fees are legal. This is a fight any good litigator would be willing to take on.

It is truly remarkable that the Town would listen to the opinion of a firm (Furth's law firm) that is inconsistent with the opinion of an expert in the field (Sohagi). It is even more remarkable that the City takes its advice from a firm that is closing its doors because it can't find enough clients that are willing to pay for the advice of the firm.

Shouldn't the fact that McDonough, Holland and Allen is going out of business be an indication that it is time to find another law firm to serve Atherton as City Attorney?

Like this comment
Posted by Richard Andrews
a resident of Atherton: other
on Jul 16, 2010 at 9:32 pm

This about face by Marsala is inexplicable. He objected to the road impact fees on principal. Now, apparently because the Town is running out of money, he wants to reinstate the fee at least partialy.

Some might suggest this constitutes a new pragmatism. Others might suggest that it is Marsala's way of repudiating his former developer friends. The friends who wouldn't help him out during his financial crisis.

What most will view this as the height of irresponsibility because it opens the Town up to further litigation. It would have been one thing for the Town to stand its ground all along.

Because of Marsala's antics, the Town will find its position indefensible if it does U turn on road impact fees.

Sorry, but further commenting on this topic has been closed.

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