City eyes lesser amount for potential impact fee increase

Whitefish City Council is leaning toward easing in one piece of a proposed increase to the city’s development impact fee.

Council last week directed city staff to draft an ordinance that would gradually increase the fee over five years that the city collects related to paved trails. Impact fees are one-time charges for new development that increases the demand for city services. The city currently collects fees in seven areas — water, wastewater, stormwater, City Hall, Emergency Service Center, park maintenance building and paved trails — that make up the total impact fee.

FCS Group recently completed a study of the city’s impact fees. Whitefish’s impact fee for an average single-family home is currently $6,658, but the study is suggesting the city increase that fee by roughly $1,200 to a total of $7,942. Council, however, last week said that the paved trails fee should be increased a lesser amount and then gradually increase over five years to the total suggested.

If eventually approved as such, the paved trails fee would initially be set at $646 and increase capping out at $1,293. The current paved trails impact fee is $442.

Council will still hold a public hearing and vote on the matter when it considers the ordinance likely this fall. City staff is recommending that any changes not go into effect until Jan. 1, 2019.

Councilor Katie Williams suggested that the paved trails fee be less than the total recommended amount.

“I love the parks,” she said. “But given the fact that we’re preaching affordability for housing, it seems it should be lower and then we can reassess in five years. We can still get money to support the trails, but decrease that burden.”

Councilor Andy Feury said it would be “short-sighted not to put money in the bank for trails.”

Councilor Frank Sweeney said the fee shouldn’t be less because other solutions are available to assist such housing. Though cities can’t waive impact fees under state law, other options for helping projects have been floated.

“This isn’t enough to move the needle for affordability,” Sweeney said.

Though the item wasn’t scheduled for a public hearing. During the general public comment portion of the meeting, Whitefish builder Mark Van Everen asked Council to consider what an increase in impact fees would do to construction.

“I would urge you to use some caution in these fees,” Van Everen said. “I know the total fee is divided up a lot of ways, but we write one check for this. It’s often startling to people to pay that before we even break ground.”

The study recommends Whitefish increase three of its seven individual fees, and reduce impact fees in four areas.

The city can spend impact fees for public improvements, including planning, site improvements, land acquisition, construction or engineering. Impact fees can be used for public improvements and to recoup the costs previously incurred by the city.

The impact fee study notes that Whitefish could collect a total maximum fee of $9,234, but it is not being recommended at this time for the city to levy the maximum allowed.

Though impact fees vary based on a number of factors, to calculate the cost for an average single-family home the city used a home of 2,500-square-feet in size that includes four bedrooms, three bathrooms. If the entire recommended amount were implemented that would put Whitefish’s fee at $7,942. For comparison, the total impact fee collected for the same home in Missoula would be $6,360, Bozeman would be $9,145 and Kalispell would result in a $9,466 fee.

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