Metropolitan Builders Ass'n v. Village of Germantown

Citation2005 WI App 103,282 Wis.2d 458,698 N.W.2d 301
PartiesMETROPOLITAN BUILDERS ASSOCIATION OF GREATER MILWAUKEE, Plaintiff-Appellant, v. VILLAGE OF GERMANTOWN, Defendant-Respondent.
Decision Date13 April 2005
CourtWisconsin Court of Appeals

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Joshua L. Gimbel and Dereck R. Brower of Michael Best & Friedrich LLP of Milwaukee.

On behalf of the defendant-respondent, the cause was submitted on the brief of Raymond J. Pollen and Amy J. Doyle of Crivello, Carlson & Mentkowski SC of Milwaukee.

Before Anderson, P.J., Brown and Nettesheim, JJ.

¶ 1. BROWN, J.

This case involves a dispute over the use of impact fees that the Village of Germantown assessed on developers. The Village collected these fees for an Aquatic Center/Youth Center. Originally, it had contemplated a regular swimming pool, but it decided to build a spray ground — a playground with water — after voters rejected the swimming pool proposal. The Metropolitan Builders Association of Greater Milwaukee (MBA), an organization whose members include developers that paid the impact fees, challenged the permissibility of applying the fees to this new purpose. They want the money returned to the current owners of the affected lots. We hold that MBA has standing to make this challenge on behalf of its developer members based on the association standing rule our supreme court announced in Wisconsin's Environmental Decade, Inc. v. PSC, 69 Wis. 2d 1, 230 N.W.2d 243 (1975) (hereafter WED). We further hold that a spray ground is within the intended purpose of the impact fees: to build some sort of recreational or youth facility. Finally, we conclude that the Village may apply the collected funds only to the proportion of the cost attributable to development. It must return any excess to the current lot owners.

¶ 2. In April 1992, the Village resolved to prepare a preliminary study of potential impact fees to defray expenditures required for capital improvements that would be necessary to maintain the level of current municipal services for a rapidly growing population. The following month, the Village administrator sent a memorandum to the Village president and trustees, observing that Village staff had met on numerous occasions to discuss potential impact fees. One category for which the Village contemplated such a fee was a recreational facility, possibly including a municipal swimming pool. ¶ 3. At roughly the same time, the Village's Swimming Pool Ad Hoc Advisory Committee began to explore several issues relating to the construction of an aquatic facility. In particular, it considered the design, potential funding sources, and the advantages and disadvantages of constructing a public outdoor swimming pool. Having determined that the community favored such a facility, the committee elected to continue researching the feasibility and costs of such a project. It pursued its efforts into at least 1993.

¶ 4. In 1995, the Village prepared a park and recreation needs assessment. The Needs Assessment read in part:

3. VILLAGE AQUATIC CENTER/YOUTH CENTER. (a) Inventory of Existing Swimming Pool; Current Deficiency. Since the Village has no swimming pool or youth center, the current deficiency is 100%.
(b) Indentif[ication] of Swimming Pool/Youth Center Facilities Required Because of Growth. The life expectancy of a swimming pool and/or youth center is 25 years and the facilities are being sized to accommodate the year 2020 population; i.e. 26,406. On this basis the estimated cost of the project and the amount subject to the Aquatic Center/Youth Center impact fee is determined as follows:

Year 2020 population 26,406 Less 1994 population - 15,486 _______ Growth 10,920 or 41.35% subject to impact fee Aquatic Center/Youth Center Cost $1,800,000 Less deficiency: (58.65%) - 1,055,700 __________ Estimated cost subject to impact fee $ 744,300 The total park and recreation impact fees came to $613.32 per residential unit, and $188.81 represented the portion attributable to the Aquatic Center/Youth Center.

¶ 5. The Village responded with an impact fees ordinance that adopted the Needs Assessment's $613.32 park and recreation impact fee. See VILLAGE OF GERMANTOWN, WIS., ORDINANCE § 3.14 (1995).1 Section 3.14(4) of the ordinance requires the Village to place the fees in an interest-bearing account separate from other Village revenues and to spend them only on the capital costs for which the Village imposed them. Cf. WIS. STAT. § 66.0617(8) (2003-04)2 (statute regulating impact fees, imposing same requirements). The ordinance provides that if the Village fails to expend the collected funds for these purposes within seven years, it must return them to the current owners of the lots on which it assessed them. See VILLAGE OF GERMANTOWN, WIS., ORDINANCE § 3.14(5)(b) and (c); cf. WIS. STAT. § 66.0617(9) (municipality must return fees not used for intended purpose within reasonable time to current owners of affected lots).

¶ 6. On November 3, 1998, the Village held a referendum asking the voters to decide whether it should appropriate funds for a swimming pool/aquatic center. The $1.8 million cost projected in the Needs Assessment had grown to $2.97 million. Pursuant to the ordinance, impact fees would only cover 41.35% of the cost. The voters rejected the proposal. A May 1999 referendum on the issue produced the same result. ¶ 7. By 2001, the Village had collected approximately $103,000 for the Aquatic Center/Youth Center that would have to be returned if not used by the seven-year deadline. As a result, in early 2002, the Village began to explore other ideas for the proposed aquatic or youth center. It proposed a spray ground in March. A spray ground is essentially a playground with giant water sprinklers. It has water features typically found in the beach entry portion of an aquatic center but without standing water. The water and chlorination system is similar to that used in a traditional pool. In April, the town's finance committee approved "the use of aquatic center fees for a spray ground aquatic facility." The Village extended the seven-year time limit by two years to allow for implementation of the spray ground construction.

¶ 8. MBA challenged this alternative use of the fees, invoking VILLAGE OF GERMANTOWN, WIS., ORDINANCE § 3.14(6), which allows developers who want to contest the collection, use or amount of impact fees to file an appeal to the Village Board. See also WIS. STAT. § 66.0617(10) (requiring municipalities to implement such a procedure). MBA is a not-for-profit trade association whose membership comprises home builders. Some of these developers do business in the Village and have paid impact fees for the Aquatic Center/Youth Center. The organization's purposes include advocating affordable housing and monitoring municipalities' compliance with impact fees ordinances, which it claims "directly impact a[n] MBA member's cost of construction, proposed development, and marketing." According to MBA, when developers pass these costs on to their consumers, the end result adversely affects the affordability of the end product. ¶ 9. In response to MBA's challenge, the Village adopted a resolution denying its appeal. The resolution stated the Village's conclusion that "the spray ground, which is an aquatic recreational opportunity," fell within the ambit of permissible uses for the fees. It also declared that MBA lacked standing to challenge the fees because it did not qualify as a developer within the meaning of VILLAGE OF GERMANTOWN, WIS., ORDINANCE § 3.14(6). MBA subsequently requested a hearing before the Village Board. The Village granted its request but limited the hearing to the standing issue. Ultimately, the Village affirmed its previous resolution that the MBA lacked standing.

¶ 10. Following this determination, MBA filed a complaint with the circuit court for certiorari and declaratory relief. The circuit court denied relief both on the merits and based on MBA's lack of standing. MBA appeals.

¶ 11. When this court reviews a certiorari action, we review the municipality's decision rather than that of the circuit court. See Winkelman v. Town of Delafield, 2000 WI App 254, ¶ 3, 239 Wis. 2d 542, 620 N.W.2d 438

(purpose of certiorari review to test the validity of an agency's decision). The scope of our review extends only to examining whether the Village (1) kept within its jurisdiction, (2) properly applied the law, (3) acted arbitrarily or unreasonably or according to its will and not its judgment, and (4) made a decision based on evidence one might reasonably use to make the relevant determination. Id. We will uphold the Village's factual findings so long as sufficient evidence supports them, even if other evidence would support the opposite conclusion. See CBS, Inc. v. LIRC, 219 Wis. 2d 564, 567 n.3, 579 N.W.2d 668 (1998).

¶ 12. MBA's right to challenge the use of the impact fees for a spray ground implicates the second of the four considerations above. Standing presents a question of law for our de novo review. Chenequa Land Conservancy, Inc. v. Village of Hartland, 2004 WI App 144, ¶ 12, 275 Wis. 2d 533, 685 N.W.2d 573 (hereafter Chenequa).

¶ 13. We conclude based on WED that MBA has standing so long as any of its developer members has the right to challenge the use of the impact fees. In WED, our supreme court stated that the Wisconsin rule of standing had two parts: first, whether the challenged action caused direct injury to the petitioner's interest and second, whether the interest affected was one recognized by law. See WED, 69 Wis. 2d at 10. Noting that federal cases constitute persuasive authority, the court observed the similarity of the federal test, which asked (1) whether the challenged action resulted in injury in fact and (2) whether the injured interest arguably fell within the zone of interests...

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