Court Dismisses Impact Fee Lawsuit Against Town

In a decision dated Feb. 4, Superior Court Judge Marguerite Wageling granted the Town of Londonderry’s request for Summary Judgment in a suit brought against the Town by attorney Patricia Panciocco on behalf of her clients regarding impact fees.

Town Manager Kevin Smith said that unless Panciocco appeals the decision, the impact fee issue is for all intents and purposes done.

But it appears that Panciocco will contest the decision. Smith said he had nothing in writing but indications are that she has appealed the court’s ruling.

A Superior Court decision dated Dec. 31, 2012 found that Londonderry’s impact fee program, in place since 1994, had at times been illegal and that refunds were due to parties who paid the illegal fees. The court stated, “The court sees that a full accounting of the impact fee program to be the only solution to the town’s widespread misfeasance,” and ruled that the town employ an independent auditor to fully audit the town’s impact fee collections and expenditures since the program’s creation in 1994.

That audit concluded in August 2013 and found many faults with the program. Town Attorney Michael Ramsdell recommended suspension of the impact fees. They currently remain suspended. Refunds have gone out to parties that paid the illegal fees.

In filing her suit, Panciocco claimed first that the Town of Londonderry violated RSA 674:21(v), which grants municipalities the authority to assess new growth proportionally for new capital facilities owned and oper ated by the municipality from which new growth benefits.

“One obvious example of the Town’s disproportionate shift of capital costs onto new development relates to the Town’s schools. Since 1994, the Town has increased school impact fees three times although its school population peaked in 2002, and as of the date the audit was completed, the town has assessed and collected more than $4,124,959 in school impact fees,” she wrote.

Her second claim cited negligence by the town’s governing body and planning board. “The Town’s planning board is charged with notice of the law, and in its administration of the Town’s impact fee ordinance, it is charged with questioning representations made by Town employees and their consultants to insure recommendations are not blindly followed and to confirm those recommendations are not biased and reasonably represent the truth and common sense to further protect the public interest,” she wrote, claiming the governing body and planning board were negligent in their efforts to supervise town employees entrusted with administering the impact fee ordinance. And she alleged the Town Council was negligent by failing to implement sufficient internal controls over impact fee accounts to protect those funds from misuse and misappropriation, “resulting in substantial harm to the Respondents and the public’s trust in local government.”

Claim 3 claimed Violation of Fiduciary Duties Owed to Impact Fee Payers. “The Town Council failed to protect the Respondents from Town employees and their own malfeasance when it allowed those funds to be improperly expended, and in doing so, failed in the duties owned to fee payers,” she wrote.

Claim 4 alleged Violation of the Public Trust in Government, and Claim 5 alleged Violation of the Municipal Budget Act

Her final claim was for the Town of Londonderry to pay her fees and costs.

The Town moved to have her claims dismissed, and the court in its February decision granted that motion.

The court’s decision states that claims 1 and 2 were based on the same doctrine of law and assert an action for negligence based on the town’s supervision of its employees and/or implementation of an impact fee program. The court said neither of these claims have proper support in the impact fee statute.

In claim 3, the town responded that it owed no special duty to fee payers. The court agreed.

Claim 4 states that “the Town is obligated to oversee its employees and that it failed in that duty, resulting in the public’s lack of trust. The Town responded that the claim does not state a recognized cause of action under state law, and the court agreed.

Concerning Claim 5, the court said the Municipal Budget Act does not provide a cause of action for this case, and the Town motion to dismiss was granted.

And the court ruled that as Panciocco did not prevail in her claims, she is not entitled to legal fees.

“The Court’s decision pretty much means that the impact fee issue is essentially done,” Smith said. “Ms. Panciocco can ask for reconsideration from the Superior Court, and if the court doesn’t grant her reconsideration, then she can appeal it to the state Supreme Court. ”

Panciocco did not respond to multiple requests for comment.

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