The Town approved the plaintiff’s application for a subdivision, requiring the developer to post a performance bond of $81,705. The bond was to be used for certain improvements to an intersection used by the subdivision. Beginning in 2005, the Town took steps to prepare for improvements to the subject area, using the bond to finance the preliminary work. In 2007, materials were purchased for improvements to the area and of the $251,686.55 cost, $89.153.95 was paid from the bond posted by the plaintiff. A disagreement arose relating to whether the bond was used as originally allocated or whether the Town has used if for “general maintenance.” The plaintiff note that he did not receive an accounting from the Town of how the bond was spent and appealed the Town’s decision to spend the bond in this manner to the ZBA and to the Community Development Department. Neither body agreed to hear the appeal. Claiming that the town failed to use the bond for the requisite purpose, the plaintiff applied to the planning board for release of his bond, and was denied. The superior court upheld the planning board decision.
On appeal, the plaintiff argued that the town violated RSA 674:21, V(c) and (e) by expending the bond fund for a purpose other than the capital improvements for which it was collected, and he claimed that the Town did not use it within the six year time period as required by statute. The Court quickly dismissed the time limit claim, holding that the plaintiff’s agreement that the bond was held for a specific purpose eliminated the possibility that the bond was improper and subject to the six year period. Further, the court found no reason to disturb the finding that the improvements undertaken and paid for by the town were indeed made for the requisite purpose related to the subdivision. The Court found, however, that because RSA 674:21, V(c) makes clear that impact fee funds and town funds are not fungible, the Town was not authorized to pay the full $89,153.95 from the account to its contractor, when only $75,437.05 was actually attributable to the work for which the impact fee was collected. That the town’s bookkeeping error was apparently a matter of form only, was inapposite. Thus, the Court affirmed the decision of the trial court upholding the planning board to the extent that the plaintiff was not entitled to the return of $75,437.05.
Clare v Town of Hudson, 2010 WL 2383799 (N.H. 6/16/2010).
The opinion can be accessed at: http://www.courts.state.nh.us/supreme/opinions/2010/2010060clare.pdf
