Impact Fee Litigation Continues Against Town of Londonderry

Attorney Patricia Panciocco, representing a group of developers, has responded to the ongoing impact fee litigation in Rockingham Superior Court by filing for both Attorney’s Fees and a Respondent’s Statement of Claims.

Her filing claims negligence, violation of fiduciary duties, violation of the public trust, and a request that the town be required to pay respondents’ costs and attorney’s fees.
In a filing dated Oct. 15, Panciocco accuses the Town of Londonderry of violating RSA 674:21(v), stating that it grants municipalities the authority to assess new growth proportionally for new capital facilities owned and operated by the municipality from which new growth benefits.
“One obvious example of the Town’s disproportionate shift of capital costs onto new development relates to the Town’s schools,” she wrote. “Since 1994, the Town has increased school impact fees three times, although its school population peaked in 2002, and as of the date the audit was completed, the Town has assessed and collected more than $4,124,959 in school impact fees.”
In 2012, there were only 72 more students enrolled in the Town’s schools than there were in 1994, she said.
“Furthermore, a fairly recent discussion during a Londonderry Planning Board meeting, as has been the case during other board meetings, confirmed there are 200 empty seats in the Town’s schools that the School District has been trying to fill with students from other communities.” Panciocco’s filing states.
Panciocco also charges the town with:
• Negligence.
“The Town’s governing body is charged with notice of the law in addition to being obligated to insure Town employees are properly performing their duties within the limits of the law in order to protect the public interest,” she wrote. “The Town’s planning board is charged with notice of the law, and in its administration of the Town’s impact fee ordinance, it is charged with questioning representations made by Town employees and their consultants to insure recommendations are not blindly followed and to confirm those recommendations are not biased and reasonably represent the truth and common sense to further protect the public interest.”
She continued, “Both the Town’s governing body and its planning board appear to not have even read RSA 674:21 (V), as they had not read the Audit when recently asked about how they would handle it, and were negligent in their efforts to supervise and question Town employees entrusted with administering the Ordinance.”
She said the Town Council was negligent in its failure to implement sufficient internal controls over impact fee accounts to protect those funds from misuse and misappropriation. “The governing body and its planning board also failed in its duty to engage in proper oversight over, and to properly review studies prepared by the Town’s consultant, resulting in substantial harm to the Respondents and the public’s trust in local government,” she said.
“The Respondents hereby request the Court’s review but reserve the right to supplement these allegations with additional facts to support its claim,” Panciocco wrote.
• Violation of Fiduciary Duties Owed to Impact fee Payers.
“RSA 674:21(V) appoints the Town’s governing body, in this case the Londonderry Town Council, with oversight over impact fee accounts and further states they may not be withdrawn without their written prior authorization,” she wrote. “As the fiduciary charged with that financial oversight, the Town Council holds private property owned by fee payers in trust until the statutory prerequisites of RSA 674:21(V) have been timely satisfied, to insure the interests of those fee payers remain paramount over all other concerns, including those of the Town.”
She claims the Council failed to protect respondents from Town employees and their own malfeasance when it allowed those funds to be improperly expended.
• Violation of the Public Trust in Government
“The Town and its governing body are charged with the oversight of public employees and with protecting the public and its assets in a manner that does not compromise public trust,” she wrote. “The Town and its governing body have a duty to question Town employees in the performance of their duties when asked to approve or authorize any expenditure whether those funds are public, private or held in trust, rather than blindly following the recommendation of those Town employees.”
• Violation of the Municipal Budget Act
“Municipal officials and employees are imputed with notice of the Municipal Budget Act, as are all citizens – presumed to know the law,” she wrote, saying that through the actions of the Town Council and town employees, the Town violated RSA 32:8 and the Municipal Budget Act, “which forbids Town employees and representatives from paying or agreeing to pay money, or from incurring liability requiring the Town expend money in excess of, or for which there has not been a voter appropriation.
She said the Council and Town employees regularly entered into contracts obligating the Town to pay money or incur liability “because they can rely upon readily available impact fee monies owned by private fee payers.”
Panciocco also asks the court to have Londonderry pay her fees and costs.
“While the Respondents recognize courts in this State generally adhere to American rule that each party bears its own costs and attorney fees in relation to litigation, when a substantial benefit has been conferred upon the public at large by a private litigant, an award of attorney fees and costs is in order,” she wrote.
“Since adopting its Ordinance in 1994, Londonderry has regularly engaged in a pattern and practice of abusing its power over the land use process and ignoring complaints from landowners and others who work in the construction industry,” she wrote. “This fact is amplified by the reaction of the Londonderry Planning Board and various Town employees when they were advised on numerous occasions that the Town was well outside the bounds of RSA 674:21(V) in its maladministration of the Ordinance.”
She noted that the facts in the Town’s recent court-ordered audit “shock the conscience and border on criminal, which requires a strong message that a municipality’s misappropriation of funds entrusted to it by impact fee payers will not be tolerated, and an award of the Respondents’ costs and attorney fees because a substantial number of private citizens who cannot afford to join in this effort will also benefit from the Respondents’ effort to prosecute this case against an out of control governmental body.
She then asked the court to:
• Order the Town to return all impact fees collected from new development.
• Order the Town to suspend the application of its Ordinance until it prepares “well-grounded studies that comport confirmed facts about the Town.”
• Award the Respondents their costs and attorney fees.
In its decision of Dec. 31, 2012, Rockingham Superior Court found that the impact fee program in place since 1994 had at times been illegal and that refunds were due to parties who paid the illegal fees. The court also said that “The court sees that a full accounting of the impact fee program to be the only solution to the town’s widespread misfeasance.” The court then ruled that the town employ an independent auditor to fully audit the town’s impact fee collections and expenditures since the program’s creation in 1994.
On Aug. 19, Town Attorney Michael Ramsdell reported to the Town Council that the audit was complete.
Ramsdell said at that time that the impact fee ordinance on the books required amendment.
“Although the audit may be complete, I do not feel that all the work is done,” Panciocco told the Council at that time.
Town Manager Kevin Smith referred all questions regarding the court filing to town Attorney Michael Ramsdell. Messages left at Ramsdell’s office have not been returned.
Panciocco also did not offer comment.
Panciocco represents Mesiti Development, Inc.; Brook Hollow Corporation; Taschereau Investments, LLC; David Lauze; R.J. Moreau Communities, LLC; Cooper development, LLC; JVL Construction Company, Inc.; and Wesley Tate.

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