Requiring 'Off -Site' Improvements

(from Maine Townsman, June 1977)
by Madge Baker, Staff Attorney, Southern Maine Regional Planning Commission

A high population growth rate, particularly in a small community, may place a disproportionate burden on a town's ability to provide additional services, such as roads and schools. By limiting the number of building permits issued, a town may alleviate the economic burden of providing services. Another alternative is to require the developer to assume a fair share of the costs necessitated by the development. In the latter instance, allocation of costs may be accomplished through subdivision review, if planning boards condition approval with an agreement by the subdivider to pay for or construct such "offsite" improvements as upgrading public roads, providing water and sewer lines, or building new classrooms. These costs are then passed onto the purchasers of the lots, who directly benefit from the improvements.

Judicial Tests

The technique of requiring subdividers to provide "off-site" improvements has been used and tested in the courts outside of Maine. The strongest case upholding a planning board decision to require, as a condition of subdivision approval, that the developer improve a town-owned road abutting his property comes from New Hampshire: KBW v. Town of Bennington, 342 A.2d 653 (N. H. 1975). The New Hampshire Supreme Court found the Planning Board action a legitimate use of the town's police power because the improvement was necessitated by that development. Moreover, the court approved the Planning Board action, although neither the state law nor the town regulations mentioned that "off-site" improvements could be required as a condition of subdivision approval.

The same issue has arisen several times in New Jersey. The New Jersey Supreme Court disposed of an early case without having to rule on whether a town could require a developer to pay for "off-site" improvements pursuant to state law. Longridge Builders Inc. v. Planning Board of Town of Princeton, 245 A.2d 336 (N.J. 1968). The court in that case held that a town could exact payments for a public improvement, where other property owners would benefit from the improvement, without first establishing standards for apportioning the costs fairly among all parties affected. In a subsequent case, however, the court did have the opportunity to decide whether state legislation authorized towns to make such exaction. Divan Builders Inc. v. Planning Board of the Township of Wayne, 334 A.2d 30 (N.J. 1975). The court found that even though the state enabling legislation did not at that time specifically mention "off-site" improvements, the towns could adopt standards requiring such improvements when they were necessary to protect the safety and welfare of the community, because the Legislature intended to grant to the towns broad powers of review. "The public interest is not less substantial in the latter context (off-site improvements rather than on-site) since in either case the alternative to developer-installation of the required improvements is municipal construction at public expense." (The New Jersey Legislature has since amended the state enabling legislation to mention off-site improvement s specifically).

The issue has also been raised in Massachusetts in several different contexts. The case most directly in point concerns water lines. The court there ruled that the town's water board could refuse to service three lots in a subdivision until the developer replaced two-inch lines lying under a publicly owned road with six-inch lines. Rounds v. Board of Water and Sewer Commissioners of Wilmington, 196 N.E. 2d 209 (Mass. 1964). In a more recent case the court avoided having to decide whether the Planning Board was authorized in turning down a subdivision on the basis of inadequate "off-site" access by resolving the case on the grounds that disapproval of a subdivision must rest upon violation pf reasonably clear, precise regulations. Canter v. Planning Board of Westborough, 347 N.E. 2d 691 (Appeals Court, Mass. 1976). The court did say, however, that if it had to decide the issue it would look to Rounds, thus indicating that reasonable requirements of "off-site" improvements will receive favorable treatment in Massachusetts courts.

In other states the issue has been examined most closely within the context of cases involving exactions of land and/or fees for schools, parks or recreational areas. A leading case on land and fee exactions was decided in 1965: Jordan v. Village of Menomonee Falls, 137 N.W. 2d (Wis. 1965). The town ordinance required the developer to dedicate land or, where land dedication was not feasible, to pay an established fee for schools and recreational areas. The court ruled that land dedication or fees were justified as a reasonable exercise of the town's police power, providing that: (1) the exactions are authorized by state enabling legislation; (2) the municipality can show the exactions are rational, impartial and conducive to fulfill planning objectives; and (3) the exactions are not so burdensome as to deter the developer from completing the project. In a more recent case on exactions, the Illinois Supreme Court held that a town could reasonably require a large developer to dedicate land and pay $50,000 and the homeowners to pay $200 per household for schools. Board of Education and School District No. 68 v. Surety Developers, Inc., 347 N.E. 2d 149 (1975).

Maine Law

In considering whether Maine towns can require subdividers to make "offsite" improvements, one must first ask whether the state enabling legislation authorizes a town to require such improvements. Until the Maine Supreme Court rules on the issue, I believe a town should assume the Legislature has granted requisite legal authority. Although 30 M.R.S.A. 4956 does not specifically mention "off-site" improvements, the guidelines in that law do instruct planning boards to look at off-site impacts on roads, water supply, and solid waste and sewage facilities. If planning boards are authorized to consider "off-site" conditions, it seems reasonable to conclude that they can act on the basis of "off-site" conditions. Of course, it could be argued that planning board action is limited by statute to denying subdivision approval because of hazardous "off-site" conditions. However, it would seem more reasonable to conclude that the Legislature intended to give planning boards the option of requiring, as a condition of approval, that a subdivider reduce the development's adverse impact by making improvements on or off the site.

I t is important to note that, in the Site Selection law, the Legislature expressly authorized the Department of Environmental Protection (DEP) to consider "off-site" impacts of any proposed development. The DEP has interpreted the law as authorizing it to require developers to go "off-site" to improve access roads if the land being developed has no access onto a public road, and to require such "off-site" improvements as navigational aids in Eastport Harbor.

Maine case law, on other land use issues, reveals the Supreme Judicial Court's willingness to uphold the right of towns to regulate the use of land, if such regulation bears a reasonable relationship to the evil sought to be eliminated. Inhabitants, Town of Boothbay v. National Advertising Co., 347 A.2d 419 (Me. 1975). In addition, the Maine Court found that an earlier version of the state subdivision legislation authorized towns to exercise discretion in reviewing subdivisions. Boutet v. Planning Board of City of Saco. 253 A.2d 53 (Me. 1969).

Legal Criteria

Because state law authorizes planning boards to make reasonable exactions, a town may use the device, providing application meets other legal tests: (1) does the development actually necessitate the required public improvement(s); (2) is the exaction reasonable; and (3) are the developer's constitutional rights to equal protection and due process guaranteed? Determination of the reasonableness and the necessity of the requirements must be made on a case-by-case basis. However, planning boards should always keep in mind the law requires that a connection between the impact of the development and the improvement required must be demonstrated. Furthermore, if the precedent established in Jordan is followed, then an exaction will be viewed as valid only so long as the developer is not deterred from proceeding with the project.

In order to assure that all developers are treated equitably, and that due process is observed, a town should take the following precautions. Most importantly, it should review any subdivision regulations to determine whether the regulations are sufficiently precise to provide guidelines or standards which (1) would put developers on notice that "off-site" improvements may be required, and (2) would instruct the planning board in applying the requirements in an equitable mariner. Although it can be argued that the regulations need not specifically mention "off-site" improvements, if the planning board adheres to reasonably clear guidelines or standards, developers will have a very difficult time contending that their constitutional rights have been infringed. Moreover, the regulations may need to be more detailed than for other kinds of exactions in order to address such relevant considerations as: how a town determines what improvements are necessitated; how the costs are determined; how allocation of costs are made as between the developer, other property owners, and the town; how the benefits are determined; what bonds, payment schedules, or contracts may be required; what assessments against other land owners may be made and how those assessments are to be apportioned; whether payment may be made in lieu of improvements; what procedures should be followed to achieve compliance; and. what legal remedies exist for aggrieved parties to appeal planning board decisions. (The Township of Wayne, N.J., has adopted comprehensive off-site improvements regulations).

Conclusion

In conclusion, I believe that Maine towns, through subdivision review, can require developers to pay for "off-site" improvements necessitated by their development, providing the developers' constitutional rights are not infringed in the process. However, if a town adopts the necessary regulations, it should be aware that: (1) denial of subdivision approval may be more difficult; and (2) requiring developers to make "off-site" improvements could result in more rapid development, particularly where road, sewer, and water improvements serve other property owners.

Requiring developers to pay for "off-site" improvements necessitated by their developments can help towns avoid disproportionate burdens on municipal budgets, but it is not in itself an effective too[ to control high growth rates. An "off-site" improvements regulation could, however, provide a useful complement to a growth-control ordinance in managing a town's rate of expansion in an orderly and fiscally-responsible manner.