ARIZONA DAILY STAR: Sat., June 30, 2007
Justices side with developers over fire district special fees
By Howard Fischer; Capitol Media Services
PHOENIX — Fire districts cannot charge special fees to developers to make up for inadequate tax proceeds, the state Supreme Court ruled Friday. The justices sided with a major Arizona builder in ruling a $387 "facilities benefit charge" levied by the Northwest Fire/Rescue District near Tucson on each new house is illegal. The court said there is no authority for such a special fee.
Justice Michael Ryan, writing for the unanimous court, acknowledged the "economic strain" fire districts face in rapidly growing areas, because the structure of state tax laws means revenues cannot keep up with construction. But Ryan said, absent specific authority, these fire districts can't supplement their property taxes with this type of fee.
Friday's ruling is a defeat for the more than 130 fire districts in the state that interceded in the case to protect their ability to levy fees. But it is a key victory for developers, and potentially, for the home buyers who would end up paying the fee through higher sale prices.
Randy Karrer, a division chief for the department, said the decision leaves just one option: get the Legislature to change the law.
This legal battle goes back to 2003 when three partially completed homes in the 140-square-mile district caught fire, resulting in the fire department's being dispatched. That led to the district's Governing Board's decision to assess a $387 fee that had to be paid before building permits could be issued for new houses.
The fee was based on a consultant's report on the cost of providing the facilities to meet the needs of communities under construction. When U.S. Home Corp. refused to pay, the district sued. In the interim, the fee has remained uncollected. Karrer said he believes the district would have collected more than $600,000 by now had there been no challenge.
FULL STORY: http://www.azstarnet.com/sn/relatedstories/189892.php