County pays $6.5M to settle class action over impact fees

Berkeley County has mailed $6.5 million in refund checks to thousands of property owners who paid impact fees for construction projects that were placed on ice during the economic downturn.

The class-action settlement was finalized in late June – checks were mailed earlier this month – and repays half the fees that the affected owners paid the county, according to an attorney for the plaintiffs.

“The goal was, and what we accomplished is, everyone gets 50 cents on the dollar, and that is inclusive of all costs and [attorneys’] fees, everything,” said Clay McCullough of McCullough Khan in Charleston.

He and law partner Ross Appel represented the property owners with James Ward of Richardson Patrick Westbrook & Brickman in Mount Pleasant.

Charleston County Circuit Judge Markley Dennis finalized the settlement June 29 and the county sent checks to more than 4,000 property owners the week of August 15, according to McCullough. He said 4,172 notices were sent to potential claimants and only about a dozen opted out of the settlement.

Most residential property received an average of $670, though some commercial owners received tens of thousands or hundreds of thousands of dollars. The Berkeley County School District’s refund totaled more than $137,300 for impact fees connected to school construction projects.

The class action alleged that Berkeley County only spent about $1.9 million of the $12 million in impact fees it began collecting in 2006, which violates a state law that requires the fees to be spent within three years of a project’s completion date. Otherwise, the county must issue refunds.

The fee program, which raised the cost of development, was repealed during the 2014 election and replaced with a transportation sales tax.

“It is unfortunate that the previous administration placed us in the position we are in now,” Bill Peagler, the county supervisor, said in a written statement he issued shortly after the settlement was first announced.

“As elected officials, entrusted by Berkeley County residents to protect their tax dollars paid to the county – we believe the agreement reached honors that responsibility,” he added.

The county’s attorneys did not respond to interview requests.

Follow Phillip Bantz on Twitter @SCLWBantz

SETTLEMENT REPORT

CLASS ACTION – IMPACT FEES

Amount: $6.5 million

Injuries alleged: Fees collected for projects that were not completed.

Case name: Worley Investments, LLC, et al. v. Berkeley County

Court: Berkeley County Circuit Court

Case No.: 2015-CP-08-1153

Judge: R. Markley Dennis

Date of settlement: Finalized June 28; settlement payments issued mid-August

Attorneys for plaintiffs: Clayton McCullough and Ross Appel of McCullough Khan in Charleston and James Ward Jr. of Richardson, Patrick, Westbrook & Brickman in Mount Pleasant

Attorney for defendants: Brian Duffy and John Linton Sr. of Duffy & Young in Charleston; John West of the West law Firm in Moncks Corner; and John Williams, Berkeley County attorney