A Georgia court case has dismissed Henry County impact fees after finding miscalculations in the county’s 2021 methodology report. The county must refund all impact fees collected since February 2023, an estimated $14+ million. The Atlanta Journal-Constitution first reported the court ruling on February 18. Update: the Henry Herald reported February 27 that Henry County intends to appeal the court ruling.
Henry County Impact Fees Dismissed
A Timeline How We Got Here
- 2003: Henry County adopted its original impact fee ordinance. The 2003 ordinance charged $1,661 in impact fees for a new home. Absent from the ’03 ordinance was a transportation impact fee.
- 2020: Henry County hired an outside consultant, Bill Ross of Ross+associates, to update the impact fees methodology report to include adding a transportation impact fee.
- November 2021: The county finalized its updated impact fees methodology report.
- August 2022: Henry County adopted a new impact fee ordinance, to raise the impact fee to $3,544.46 per new home effective February 2023, and incorporated a transportation impact fee for the first time.
- February 2, 2023: The new impact fee ordinance took effect.
- June 2, 2023: Greater Atlanta Home Builders Association, Inc., Resibuilt Homes, LLC, and Peacthree Building Group, LLC filed suit contesting the county’s new impact fee ordinance.
- July 23, 2024: Henry County approved a revised impact fee ordinance, raising the fee to $7,085.90 per home effective immediately.
- February 4, 2025: Henry County Superior Court issued a ruling in the plaintiffs’ favor to halt Henry County impact fees and order refunds.
Note: impact fees are for all new construction, not just new homes. Commercial and industrial rates also increased in the 2023 and 2024 ordinances. The county’s impact fee ordinance was in unincorporated Henry County only. Each city has a separate ordinance.
The Court’s Findings
Henry County Superior Court Judge Amero found several issues with Henry County’s impact fees methodology report and ordinance. Those issues include the following:
- The Georgia Development Impact Fee Act (DIFA) requires a municipality or county to establish a development impact fee advisory committee before adopting an impact fee ordinance. The advisory committee must be 5-10 people with at least 50% membership from the development, building or real estate industries. The county did not create this advisory committee.
- The methodology report used an incorrect calculation of the cost of improvements. This creates an overestimate of $147.5 million for the cost of all proposed improvements. Because this incorrect calculation affected all impact fee categories, the court found all county impact fees were unlawful.
- Continuing on the same general thought, the methodology report failed to credit all general fund revenues. This calculation affects all impact fee categories. “Until that calculation is done correctly, the county’s impact fees are illegal, and all prior fees collected under the faulty calculations must be [refunded]” (court order page 17).
- The methodology report did not establish a level of service for greenspace. The development impact fee law requires an existing level of service before a county can charge impact fees. Because there were no existing greenway trails at the time of the methodology report, the county cannot charge greenspace impact fees. The greenspace impact fees were thus illegal.
Transportation Impact Fees
In addition, the court ruling found several issues specifically on the county’s transportation impact fees:
- The county and its consultant improperly calculated a level of service for transportation projects, used an outdated 2016 transportation plan for determining road projects in 2020-21, and improperly applied transportation impact fees to remedy existing issues. Impact fees may only pay for impacts caused by new construction. For these reasons, the ruling found the transportation impact fees illegal.
- The county’s methodology report failed to credit T-SPLOST revenue while listing some of the same projects as “funded by impact fees” to which T-SPLOST revenues are contributing. The impact fee law prohibits double-charging impact fees for projects that other funding sources are paying for. This further found the transportation impact fees to be illegal.
- Similarly, the methodology report failed to credit SPLOST V revenue. This again determined transportation impact fees were illegal.
Conclusion
The court ruling determined all “development impact fees collected by the county since February 2, 2023…are all fatally flawed because of the various errors in their computation and implementation” (page 24). The ruling ordered the county to refund all impact fees paid since then. This amount is over $14 million, according to Bloom Parham, the plaintiffs’ law firm. In addition, the county must repay the plaintiffs’ attorneys’ fees and costs, about $500,000. Lastly, the ruling halted the county’s charging of impact fees. The AJC reported the county could not comment on the ruling. Update: the Henry Herald reported February 27 that Henry County intends to appeal the court ruling.
The 25-page ruling is available on the Bloom Parham website.
Featured image shows a home under construction. Google photo.
