Berkeley County, SC property owners to receive fee refund

CHARLESTON, SC – Thousands of Berkeley County property owners will receive refunds of transportation impact fees that were paid to the county, but not spent on infrastructure improvements.

Ninth Circuit Judge R. Markley Dennis, Jr. finalized the class action settlement agreement on Wednesday, June 29, 2016. It applies to approximately 4,000 Berkeley County property owners who currently own land on which an impact fee was paid. The affected property owners have already received formal notification that they are part of the class.

Under the terms of the settlement, they will receive a refund of half of the impact fee paid on their property. The fees ranged from about $1,348 for homeowners to many thousands of dollars for businesses and the Berkeley County School District.

The average residential property owner can expect to receive $674. Some commercial property owners will receive tens of thousands, and in some cases, hundreds of thousands of dollars. For instance, the Berkeley County School District will receive a refund of $137,341 for impact fees paid in connection with school construction.

The property owners were represented by Clay McCullough and Ross Appel of McCullough Khan, LLC and Jay Ward of Richardson, Patrick, Westbrook & Brickman.

“This is a great day for thousands of homeowners and businesses in Berkeley County who paid fees, but did not receive the benefits that were promised to them,” said Appel. “After two years of hard work, we are pleased to report that thousands of residential and commercial property owners in Berkeley County will soon be receiving checks in the mail.”

The class action lawsuit alleged that Berkeley County collected approximately $12 million in impact fees from developers since 2006, but only spent roughly $1.9 million on two road projects within the time period specified by state law. The controversial program was terminated in 2014 and replaced by a half-cent transportation sales tax. Since the program’s repeal and after allocating settlement funds, the county has now expended the balance of the impact fees.

State law requires local governments to spend impact fees within three years of the project’s scheduled completion date or refund current owners of property upon which the impact fees were paid. The lawsuit alleged the county did not update its capital improvement plan, which schedules impact fee expenditures, and failed to perform annual program reviews. Both of these actions are required by state law.

Berkeley County Council authorized the collection of impact fees in 2006 to pay for two road projects: a new I-26 interchange called the Sheep Island Interchange and a spine road between the Dorchester County line and U.S. 17-A. Neither has been constructed.

“The impact fee program was repealed and replaced with a more equitable way of funding infrastructure improvements,” said Ward. “The county charged residents for infrastructure projects that were not completed, which is contrary to state law. We are pleased to be returning this unspent money to its rightful owners: the people and businesses of Berkeley County.”

The impact fee program had been criticized by county officials in recent years as bad for small businesses and a “job killer” because it raised the cost of development. Berkeley County Supervisor Bill Peagler called the fees “outrageous” during the 2014 election and Dan Davis, the outgoing county supervisor, said the fees were “one of the worst things that Berkeley County has ever done.”

“This case is ultimately about local government’s responsibility to use public funds according to state law,” said McCullough. “We applaud the current administration for doing the right thing by settling this case.”

About RPWB

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