Town Manager Claims Impact Fee Suspension Helps Town

In an extensive letter about promoting local economic development written by Town Manager Kevin Smith on July 9 to an area daily newspaper, he said that “One measure taken by Londonderry’s five member Town Council was to indefinitely suspend the town’s impact fee program. That isn’t to say we’re not protecting the town’s interests when it comes to future growth, as we continue to use fiscal impact statements and developer agreements for off-site improvements.

“However,” he wrote, “the council found it prudent to suspend a program that imposes fees on builders and job creators that often are never even used by the town and are only returned to the developer years later. Not to mention by suspending this program, Londonderry positions itself as one of the only few communities in the region to not impose these additional costs on developers.”

Londonderry’s impact fees were the subject of a lawsuit in 2012, and Rockingham Superior Court ordered an audit of the fees in a decision rendered Dec. 31, 2012. That decision also ordered the fees to be suspended and called the town’s handling of the program “lackadaisical” and noted misfeasance since their inception in 1994.

During that period, when the fees were suspended and the audit conducted, Town Attorney Michael Ramsdell suggested that the impact fees be suspended until the auditors issued their report and the impact fee ordinance could be reviewed and made clearer. The town agreed to do so.

“The suspension was done when this issue was litigated, but the Council decided after the court order came out,” Smith said. “The decision was made by the Town Council at that time to indefinitely keep the impact fee suspension in place, at least until through the end of the litigation.”

Smith said the litigation is still ongoing and is now at the state Supreme Court. “That being said, I believe it is the intention of the Council, when it is over at the Supreme Court level, to keep the suspension in place, and that has been my recommendation to the Council as well, and to instead use developer agreements and offsite improvements,” Smith said. “The idea is to keep it suspended indefinitely and to make it an incentive for development to want to come here. That has happened in the last six months to a year.”

While he said the impetus for suspending the impact fees was not to make the town more business friendly, but was the result of the court order, “what grew out of that was actually other ways to go about protecting the town financially for the future without having an impact fee program. We can do it through exactions, offsite improvements and developer agreements, and by doing that we actually make the town more competitive with the other towns that have impact fees.”

Councilor John Farrell said he didn’t remember when the decision was made but remembered the fees being suspended for the audit at the time of the court decision.

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