HomeMy WebLinkAboutUNITED STATES POSTAL SERVICE ASPEN STATON - 34 91 - CORRESPONDENCE - LEGAL COMMUNICATIONCity of Fort Collins
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November 4, 1991
Sharad C. Shrestha, PE
Program Manager, Design & Construction
United States Postal Service _
Facilities Service Office
80455 E. Tufts Avenue Pkwy, Ste. 400
Denver, CO 80237-2881
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Re: Street Oversizing Fee for New Fort Collins Post Office
Facility
Dear Mr. Shrestha:
On November 1, 1991, we met to discuss, among other things,
the Fort Collins street oversizing fee as it relates to the new
United States post office facility in Fort Collins. You may recall
that Matt Baker explained how the street oversizing fee is
structured, being a fee to reimburse the City for some of the
expenses that the City must incur in the construction of the City's
streets impacted by individual developments. Mr. Baker explained
that the City is divided into mile square sectors for the purpose
of modeling a formula to establish the street oversizing fee.
The fee is based upon the impact of traffic generated by each
development upon the City's arterial and collector street system
and, being based upon impact, may be characterized, in my opinion,
as a type of "user" fee. Although itis often difficult to
precisely categorize all fees and charges that a government might
impose, the fee is not, to me, closely akin to a sales, use or ad
valorem property tax,. and it is not closely akin to a governmental
police power type of fee, such as a fee charged for the -checking -of
plans, the making of copies of documents or the issuing of building
permits. The genesis of the fee is the impact of the development
upon the usage of the street system, which makes the fee a type of
"user" fee, similar to the types of fees charged by the City's
Storm Drainage Utility. Those types of user or proprietary fees
are well supported in the law, and they can even include a "payment
in lieu of taxes" as a part of a "profit component" accruing to the
City's general fund. The City's street oversizing fee does not
include any "profit component" and is simply based upon engineering
calculations by nationally -recognized formulas to accommodate a
portion of the impact and incremental cost caused because of
individual developments.
The case of United States v. City of Columbia, Missouri, 914
F.2d 151 (8th Circ., 1990), is an excellent example of a federal
court decision supporting the payment of utility user fees.
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Sharad C. Shrestha, PE
November 4, 1991
Page 2
Indeed, under the decision of United States v. New Mexico, 102 S.
Ct. 1373 (1982), even sales and use taxes may properly be charged
by a unit of local government against general contractors hired by
the federal government for the purpose of constructing federal
projects. Only when the federal government is constructing the
project utilizing its own resources, rather than those of a private
contractor, can the federal government avoid the payment of sales
and use taxes under that ruling. I recognize that Congress enacted
a law found at 40 U.S.C. Section 619(f) that limits the United
States and its contractor's liability to pay certain fees to units
of local government, but I do not believe that that limitation
includes street oversizing fees. Furthermore, oddly enough, it
seems that the United States Postal Service cannot avail itself of
that feeexemption anyway because of language found at 39 U.S.C.
Section 410(a), which seems to exempt the Postal Service from both
the benefits and detriments of 40 U.S.C.Section 619.
A case involving the Postal Service specifically is Rochester
v. United States Postal Service, 541 F.2d 967 (2nd Cir. Ct. App.,
1976). In that case, the Second Circuit Court of Appeals decided
that the Postal Service must comply with 31 U.S.C. Section 6506 in
the construction of a postal facility. Section 6506 is a part of
the "Intergovernmental Cooperation Act," which requires the Postal
Service to fully take into account local. viewpoints and to
specifically recognize that there is tremendous value in the "sound
and orderly development of urban and rural areas." Section 6506
directs the President to prescribe regulations for the
consideration of achieving various specific objectives of both the
United States and the local communities, including among them,
"balanced transportation systems, including highway, .
pedestrian, mass transit, and other means to move people and
goods." Furthermore, that Section provides that:
To the extent possible, all national, regional, state and
local viewpoints shall be considered in planning
development programs and projects of the United States
Government or assisted by the Government. State and
local government objectives and the objectives of
regional organizations shall be considered within a
framework of national public objectives. . . .
It seems to me a reading of Section 6506 would lead one to the
conclusion that the Postal Service has been requested (if not
directed) by Congress to cooperate with local governmental agencies
in meeting mutual objectives, included among them achieving a
balanced transportation system. The City's arterial and collector
street system is a classic example of the City's attempt to achieve
a balanced transportation system.
.t
Sharad C. Shrestha, PE
November 4, 1991
Page 3
If you have questions regarding the engineering methods used
by the City to arrive at a formula for the calculation of the
street oversizing. fee, please contact Matt Baker, because he is
most familiar with those engineering formulas. Although it may be
argued that the formula is not perfect and that discrepancies
sometimes arise, I believe that there are a number of cases which
support the idea that neither the United States government nor any
state or local government is required to derive formulas with
absolute precision, as long as the formulas derived are possessed
of a rational basis, can demonstrate a nexus between the traffic
impact and the fee imposed and do not arbitrarily or unduly
discriminate against users in the same class. Capital Greyhound
Lines v. Brice, 339 U.S. 542 (1950). It seems to me that the test
for the legitimacy of user fees is found in the case of
Massachusetts v. United States, 435 U.S. 444, 55 L. Ed.2d 403, 98
S. Ct. 1153 (1978), which test requires that the charges must not
discriminate against the governmental function and must be based
upon a fair approximation of use, and finally must be structured to
produce revenues that do not exceed the cost of providing the
benefits. See also State of Maine v. Department of the Navy, 702
F. Supp. 322 (U.S. Dist. Ct., Dist. of Maine, 1988).
If you have any further questions regarding this fee or would
like to discuss the concept of the City's street oversizing fee as
being an impact -based fee, please do not hesitate to contact me.
Also, as I understand it, Matt Baker expressed a willingness to
recalculate the fee based upon a specific analysis of the traffic
generated by the post office site if you were to request him to do
SO. I do not recall whether you were to provide him with a new
traffic study or whether he had sufficient information upon which
to do the recalculation at the present time.
Sincere ,
W. Paul Eckman
Deputy. City Attorney
WPE:whm
cc: Tom Peterson, Director of Planning
Matt Baker, SID Coordinator