City to study development impact fees

The city of Whitefish plans to begin a study next year that could result in changes to the impact fees it collects.

City Council last month approved a request for qualifications to search for financial and engineering consulting firms to conduct an analysis and update to the city’s service area report for its seven different impact fees currently collected.

Councilor Jen Frandsen, who also serves on the city’s impact fee advisory committee, said it’s time the city review its fees.

“Looking at the amount of time it would take for staff to do this, we are opting for a consultant to do this,” Frandsen said.

By state law, the city is required to review and update its impact fee studies every five years.

Impact fees are one-time charges for new development that increases the demand for city services. It applies to new units in subdivisions as well as new homes built on single lots and some remodeling. The city can spend the fees for public improvements, including planning, site improvements, land acquisition, construction or engineering.

The estimated average impact fee for a single family home is $6,200.

The city currently collects seven impact fees — water, wastewater, stormwater, City Hall, Emergency Service Center, park maintenance building and paved trails.

The report will provide recommendations for City Council to consider continuing or discontinuing current impact fees, according to the city, and provide recommendations for possible new impact fees including for areas such as transportation or affordable housing.

The city’s impact fees for new construction first went into effect in November of 2007 following a growth spurt in the town when it was difficult for the city to keep up with infrastructure needs. Since then Whitefish has collected almost $5 million total in impact fees. In fiscal year 2017, the city collected $650,000 in impact fees.

City Council in 2013 voted to keep impact fees as is, despite a recommendation at the time from the city’s impact fee advisory committee that three of the seven fees be dropped. At the time, the committee was concerned the impact fees might be hurting construction in the city because Whitefish’s fees were higher than those in other cities in the Valley.

The city anticipates awarding the project to a firm in early January and beginning the project immediately thereafter with a target of May 2018 for completion of the study.