(a) Authorization. Article XI-E of the Maryland Constitution, Article 23A of the Annotated Code of Maryland, and the City of Frederick Charter authorize the city to enact ordinances for the protection and promotion of public safety, health, welfare, comfort, convenience and happiness.
(b) Purpose and intent. This section requires that new residential, commercial, institutional and industrial development pay for its appropriate share of capital improvements to the city’s water and sewer treatment and distribution systems through the imposition of water and sewer impact fees which will be used to finance, defray and reimburse the city for all or a portion of the costs of capital improvements to the city’s water and sewer treatment and distribution systems.
(c) Findings. The mayor and board of aldermen hereby find that:
(1) New residential, commercial, institutional and industrial development imposes increased and excessive demands upon existing city water and sewer treatment and distribution systems.
(2) Planning, economic and demographic studies project that new development will continue and will place ever increasing demands on the city to provide water and sewer to serve the new development.
(3) The contribution made or to be made in the future by new development from taxes by the property owner towards the capital costs of water and sewer treatment and distribution systems do not generate sufficient funds to provide necessary capital improvements to the city’s water and sewer treatment and distribution systems to serve such new development.
(4) To the extent that new development places demands upon water and sewer systems, those demands should be satisfied by shifting the responsibility for financing the provision of such facilities from the public to the development creating the demands.
(5) The city assumes the responsibility for and is committed to providing water and sewer services at levels necessary to cure any existing deficiencies in already developed areas.
(6) Impact fees collected pursuant to this section shall not be used to cure existing deficiencies in water and sewer facilities. The term “existing deficiencies” means those deficiencies which exist as of the effective date of this section.
(7) The department of finance has prepared an analysis assessing the cost of the impact of new development upon existing and future water and sewer treatment and distribution systems.
(8) The mayor and board of aldermen find that the imposition of impact fees to finance water and sewer treatment and distribution systems, the demand for which is created by new development, is in the best interest and the general welfare of the city and its residents, is equitable and does not impose an unfair burden on new development.
(9) Hospitals are uniquely situated in the community by virtue of their contributions to the health, safety and welfare of the citizens of the City of Frederick.
(d) Applicability. Any person who, after the effective date of this section, undertakes residential, commercial, institutional or industrial development shall pay a water and sewer impact fee prior to receiving a permit from the department of permits and inspections. The impact fee also applies to any existing residential, commercial, institutional or industrial structure which is not presently connected to a city water and sewer system, when a new system is constructed or the extension of an existing system has been declared ready for service, and the property owner is required to connect to the new system.
(e) Exemptions.
(1) The following types of development are exempt from the provisions of this section.
(A) New development where no additional water or sewer use is created;
(B) Alterations or expansions of an existing building, where no additional water or sewer use is created;
(C) The replacement of a destroyed or partially destroyed building structure, with a new building or structure of the same size and use, where no additional water and sewer use is created;
(D) Installation of fire sprinkler system;
(E) The off-site replacement of a demolished structure with a new building or structure where no additional water or sewer demand is created, provided the demolition and replacement are performed pursuant to a comprehensive replacement plan, including reconstruction on-site within a defined period of time, which is approved by the director of planning and community development prior to the demolition of the structure.
(2) Any claim of exemption must be made by the applicant, in writing to the department of permits and inspections, no later than the time of application for a building permit. Any claim not so made shall be deemed to be waived.
(f) Definitions. As used in this section:
Building permit means an official document issued by the department of permits and inspections which authorizes construction, alteration, enlargement, conversion, reconstruction, remodeling, rehabilitation, erection, moving or repair of a building or structure.
Change in use means a change in the purpose or level of activity within an existing structure that involves a change in the application of the requirements of the building code.
Development means any man-made change to improved or unimproved real property, including but not limited to buildings or other structures, dumping, extraction, dredging, grading, paving, storage of materials or equipment, land excavation, land clearing, land improvement, landfill operation, or any combination thereof; and any change in the use of a building for which a building permit/zoning certificate is required by law.
Hospital means an institution that:
(1) Has a group of at least five (5) physicians who are organized as a medical staff for the institution;
(2) Maintains facilities to provide, under the supervision of the medical staff, diagnostic and treatment services for two (2) or more unrelated individuals; and
(3) Admits or retains the individuals for overnight care.
Impact fee means any monetary exaction imposed by the city as a condition of or in connection with approval of a development project for the purpose of defraying all or some of the cost of or repayment of costs previously expended from other city funds for capital improvements to the city’s water and sewer treatment and distribution systems.
(g) Hearing required for establishing or increasing an impact fee. Prior to establishing or increasing any impact fee, the mayor and board of aldermen shall hold a public hearing at which oral and written testimony may be given. Action to establish or increase any impact fee shall be taken only by ordinance or resolution.
(h) Imposition and collection of impact fees.
(1) Except as provided in this section and any amendment thereto, the city shall impose water and sewer impact fees as conditions of approval of all development. No building permit, plumbing permit, final inspection, or certificate of occupancy, or other permit for development, may be approved unless the provisions of this section have been fulfilled.
(2) Impact fees shall be collected by the department of permits and inspections prior to the issuance of a permit. 11-1
(i) Impact fee schedule. The initial computation of the impact fee will be based on plumbing plans and riser diagrams using the fixture unit chart and the impact fee adjustment factors, set forth below. These charges are payable prior to the issuance of a permit. Prior to the approval of a use and occupancy permit, a field inspection will verify actual installation and the impact fees will be adjusted if changes from the plans occurred. The applicant shall be responsible for payment of additional impact fees when a site visit reveals fixtures installed above those previously approved and paid for.
On any single parcel of land classified as commercial and having multiple buildings with multiple dwelling units within one building, the first residential dwelling unit will be billed for sewer and water charges at the prevailing residential rate and any additional dwelling units will be billed at the prevailing commercial rate.

Fixtures and other connections which are not included in the above list will be rated by the department of permits and inspections upon request for installation by a user. Ten (10) fixture unit values will equate to one residential house or dwelling.

Impact Fee Adjustment Factors for Commercial, Industrial and Institutional Customers.
Adjustment Factor is applied, per account, to fixture units in excess of ten (10).
Note 1--Impact Fee Adjustment Factor shall be determined by the department of permits and inspections on a case by case basis and shall include an evaluation of the facility’s ability to recycle or reuse water in the car washing process.
Note 2--Dedicated irrigation and outdoor landscaping services shall be supplied through separate metered water service connections only. Impact Fee Adjustment Factors for these services shall be determined by the department of permits and inspections on a case by case basis.
Note 3--Impact Fee Adjustment Factor for customer(s) classified or predominately engaged in manufacturing activities shall be determined by the department of permits and inspections on a case by case basis after completing an engineering analysis on their projected water use.
Note 4--The Impact Fee Adjustment Factor for swimming pools shall be determined by the department of permits and inspections on a case by case basis based on the size of the pool, type of filtration system and the means of filter system backwash wastewater disposal.
Any establishment not covered by the above customer/business type will be classified by the department of permits and inspections based on the best available information and data from recognized sources.

(j) Fixture unit credits.
(1) Fixture unit credits may be given under the following conditions:
(A) Fixture unit credits may be paid up front, if approved by the department of permits and inspections, for future water or sewer service to a building. These fixture units will gradually be used up as the tenant spaces are filled.
(B) Fixture units that are demolished under a valid plumbing demolition permit may receive credit to be used to offset future impact fees at the same address or building. The amount of the credit is the same as would have been charged under the original fixture unit calculation. A tenant is not entitled to use credits from another tenant space without permission of the land owner.
(C) Fixture unit credits may be granted for fixtures demolished and are used to offset new/concurrent construction in the same address or building.
(2) No fixture unit credits will be given that are existing in a residence that is converted to a commercial use. All fixtures that are not taken out must be paid at a commercial rate. A credit of ten (10) fixture units may be given for abandoning the use of each dwelling unit.
(3) No fixture unit credits will be given for demolished fixtures that are within a dwelling unit that will remain a dwelling unit.
(4) No fixture unit credits will be given for demolished fixtures that were installed without a plumbing permit, or that are served by a well or septic.
(5) No fixture unit credits will be given that were demolished without the required plumbing permits and inspections, unless otherwise authorized by the department of permits and inspections.
(6) Fixture unit credits are not refundable and remain with the property.
(k) Appeals.
(1) An applicant may appeal the amount of the impact fees imposed pursuant to this section by filing written notice of appeal to the director of engineering within ten (10) days of receiving notice of the amount of impact fees imposed by the department of permits and inspections. The notice of appeal shall be entitled “Notice of Appeal of Impact Fee” and shall include a statement of the nature and reasons for the appeal. The applicant bears the burden of proof to demonstrate that the amount of the impact fees was not calculated according to the procedures established by this section.
(2) Notwithstanding any provision herein to the contrary, a hospital may appeal said amount of impact fees, in writing, to the board of aldermen. The board of aldermen, via a written agreement, may adjust the amount and schedule of impact fees payable hereunder in any manner it deems appropriate, taking into consideration (A) the impact of the proposed development on the city’s water and sewer systems; and (B) the best interests of the City of Frederick.
(l) Impact fee accounts. The city shall establish separate impact fee accounts for water and sewer, and impact fees collected shall be deposited in the appropriate accounts. The funds of the accounts shall not be commingled with other funds of the city. The impact fee accounts shall be interest bearing and the accumulated interest shall become a part of the accounts.
(m) Use of impact fee proceeds. Impact fees shall be expended only for the use for which they were imposed. Impact fees maybe used to pay the principal, interest and other costs of bonds, notes and other obligations issued or undertaken by or on behalf of the city to finance such improvements.
(n) Refunds.
(1) Except as described in subsection (n)(3), upon application of the property owner, the city shall refund that portion of any impact fee which has been on deposit for more than ten (10) years and which is unexpended and uncommitted. The refund shall be made to the then-current owner or owners of lots or units of the developments.
(2) If a property owner is entitled to a refund, the city shall notify the property owner by first class mail deposited with the United States Postal Service. The property owner must submit a request for a refund to the finance department in writing within one year of the date the right to claim the refund arises or the date the notice is given, whichever is later. Any impact fees that are not expended or encumbered within the time limitations established herein, and for which no application for a refund has been made within this one year period, shall be retained and expended in accordance with this section.
(3) If fees in any impact fee account are uncommitted for three (3) or more years after deposit, the city shall make findings, at least once each fiscal year while such condition prevails, to identify the purpose to which such fees shall be put and to show a roughly proportional and reasonable relationship between the fee and the purpose for which it was collected. If the city makes such findings, the fees are exempt from the refund requirement.
(4) The city may refund by direct payment, by offsetting the refund against other impact fees due for development projects by the owner of the same or other property, or otherwise by agreement with the owner.
(5) An applicant who has paid an impact fee for which the necessary building permit has expired prior to construction, for which the building permit has been revoked prior to construction, or for which the building permit has been cancelled prior to construction, shall be eligible to apply for a refund. The applicant must submit a request for a refund to the finance department in writing within one year of the date the subject permit expired, was revoked, or was cancelled. Any impact fees, for which no application for a refund has been made within this one year period, shall be retained and expended in accordance with this section.
(o) Severability. If any subsection, sentence, clause, phrase or portion of this section is for any reason held to be invalid or unconstitutional by the final decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this section. (Ord. No. G-02-20, § 1, 10-3-02; Ord. No. G-04-3, 4-15-04; Ord. No. G-04-12, 7-15-04; Ord. No. G-05-1, 2-17-05)

Editor’s note--The effective date of this section, as referenced in subsection (c)(6), is November 1, 2002, the effective date of Ordinance No. G-02-20 which enacted the section.
For the charter authority referenced in subsection (a), see Charter Article II, Section 24 General Powers, and Article XIX, Section 219 Charter Powers Not Exclusive.