Whitefish inches forward on impact fees

The Whitefish City Council on Monday agreed to continue its pursuit of impact fees for new development, specifically for streets and stormwater drains.

The council has been periodically mulling the idea of impact fees for the past five years, but this year new legislation gives cities the enforcement muscle to impose impact fees to pay for public-facility improvements affected by new development.

Senate Bill 185 maps out the process of imposing fees on new development and defines which public facilities can be improved with fee revenue.

There's still some reluctance to take the impact-fee plunge, though, both by council members and city staff.

Council member Erik Garberg was the first to voice his opposition to impact fees, saying he doesn't believe there are any public facilities that are "appropriate for impact fees at this time."

Recently hired planning director Bob Horne said Jackson, Wyo., a ski resort town similar to Whitefish, considered impact fees while he was the planning director there, and after looking at the staff and resources it would take to administer such fees, decided it "would raise more hell than revenue."

Bozeman uses impact fees, but it works there because of a larger population base, he said.

"They have critical mass. I don't know that we have that here," Horne said.

Kalispell may be one of the next Montana cities to jump into the impact-fee arena. The city lobbied for the impact-fee legislation, and this week the Kalispell City Council agreed to hire a consultant to develop a system of fees that meshes with the new state law.

Whitefish Public Works Director John Wilson cautioned that impact fees "won't be a pot of gold," but acknowledged there are few other ways to generate money for capital improvements of public facilities. With no money left in its tax-increment finance district fund, Whitefish only has its resort-tax revenue for major street reconstruction projects. Special-improvement districts can be used in some cases.

"We're pressed to finance street improvements," Wilson said. "that's why impact fees look attractive."

Mayor Andy Feury wondered if a real-estate transaction fee may be more beneficial for Whitefish, but City Attorney John Phelps said state law would have to be changed to accommodate such a fee.

Council member Cris Coughlin also likes the idea of a real-estate transaction fee.

"I talked to a couple of Realtors who though it would be a good idea," she said. "I threw it [the idea of such a tax] out there last year, but no one bit."

Whitefish first seriously broached the idea of impact fees in 2000 when the city hired a Washington consulting firm to conduct a feasibility study.

In 2002 the same firm, Henderson, Young & Co. completed a level-of-service study for Whitefish.

At council member Doug Adams' suggestion, the council decided during a work session to limit the focus of impact fees initially to streets and stormwater collection.

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com