City's program violates constitutional, state law

October 3, 2002

ATLANTA: The Southeastern Legal Foundation and its General Counsel, Valle Dutcher, along with co-counsel and former Georgia Attorney General Mike Bowers, today filed suit in federal district court in Atlanta against the City of Atlanta, challenging the city's $20 million impact development fee program. The plaintiffs include the Greater Atlanta Home Builders Association (GAHBA) and the National Association of Industrial and Office Properties (NAIOP).

In 1990, the State of Georgia implemented the Georgia Development Impact Fee Act (Act), which requires local governments to fairly allocate by proportional share the costs of expanding public facilities, parks, roads, and services by assessing development impact fees on those who build new buildings. Impact fees are paid by developers to offset the "impact" of development in a specific geographical area.

In 1993, the City of Atlanta adopted an impact fee ordinance, creating three service areas to be funded by impact fees -- parks; transportation (roads); and public safety. For parks, the city has designated three service areas -- north, south, and west. For public safety and transportation, the city has designated the entire geographic area as a single service area.

"For more than two years, dozens of neighborhood associations, professional groups, and environmental organizations have raised legitimate complaints about the misuse and misappropriation of impact fees by the City of Atlanta," said Phil Kent, SLF President. "Today, on behalf of our plaintiffs, we are taking the first important step to ensure that the City of Atlanta abides by the law, commits the funds collected to the areas they are intended to serve, and reforms its 'slush fund' approach to impact fees."

"The impact fee in the City of Atlanta does not confer a benefit on those who pay them, but rather is a general revenue-raising measure," said Bowers, a partner at Meadows, Ichter & Trigg. "We are saying that the City of Atlanta is violating the equal protection and 'just compensation' provisions of the United States Constitution, and we are committed to making them stop."

According to the complaint filed today, Atlanta is using the large sums of impact fee money collected in north Atlanta to fund amenities in south Atlanta, such as sidewalks and streetscapes -- a direct violation of the Act.

The engineering study performed for the City prior to the inception of the impact fees program in 1993 noted that fire and police services were at full capacity for the northside. Since 1993, no new stations have been constructed, despite explosive northside growth.

Further, according to transportion and environmental studies, the City of Atlanta's northside has reached traffice gridlock and Atlanta ranks last among major U.S. cities for park space per capita.

"The impact fees program run by the City of Atlanta is a disgrace to our vibrant, successful and growing metropolis," said Kent. "Apart from two City Council members, city officials have ignored or rebuffed legitimate reform proposals for more than two years. Instead of providing necessary services for city residents, the funds have been lost in the general revenue budget or disbursed in a capricious way. It's time for Atlanta to get it right."

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