Council approves reduced road fees

Kalispell's road impact fees will be 38 percent of what was originally proposed -at least until April 1, 2011.

After that, the transportation impact fees will be 51 percent of the original proposed fees.

That compromise emerged Monday from a special City Council meeting.

It is a compromise that could lead to a legal challenge.

Here are the council's decisions by the numbers:

n The council voted 7-2 to remove five of the 10 street-improvement projects that the road impact fees were supposed to pay for.

So the estimated needed money dropped from $12.4 million to $6.3 million, which is 51 percent of the original figure. Council members Jim Atkinson and Randy Kenyon dissented, wanting to stick to the $12.4 million list.

The removed projects were upgrading parts of Three Mile Drive and Four Mile Drive, extending Grandview Drive to Whitefish Stage Road, extending 18th Street, and upgrading Seventh Avenue East North where it connects to Whitefish Stage Road.

Left on the list are extending Rose Crossing from Whitefish Stage Road to Farm-To-Market road, plus upgrading parts of Four Mile Drive, Stillwater Road, West Springcreek Road and Two Mile Drive.

n The council voted 5-4 not to delay action on the road impact fees for two years in hopes that the economy will improve. Instead the impact fees take effect April 1 this year.

Mayor Pam Kennedy plus council members Tim Kluesner, Kari Gabriel and Duane Larson wanted the two-year delay. Hank Olson, Wayne Saverud, Bob Hafferman, Atkinson and Kenyon opposed the delay.

n The council voted 8-1 to charge only 75 percent of the proposed impact fees for any developer who applies for a building permit by April 1, 2011. Seventy-five percent of 51 percent is 38 percent of the original amount. Kluesner dissented.

In other words, the original proposed road impact fee of $928 for a new house now will be about $355 through April 1, 2011, and roughly $473 after that date.

Another example: For a new 1,000-square-foot, 24-hour convenience store, the original proposed fee would have been $27,918. Under Monday's compromise, that operation would pay $10,608 if it is built or annexed prior to April 1, 2011 - or $14,238 after that date.

An impact fee is a one-time charge on a new home or commercial building that is built in or annexed into Kalispell. Its purpose is to help the city pay the extra capital costs of serving that structure.

The proposed road-impact fees are controversial because new buildings would be assessed fees depending upon the amount of traffic they are expected to create. Commercial impact fees vary according to the type of business, its size and its predicted traffic.

High-traffic projects could expect to pay tens of thousands to hundreds of thousands of dollars. Glacier Town Center and its planned centerpiece 550,000-square-foot outdoor shopping center could pay millions of dollars.

That prompted heavy opposition to the fees by Kalispell's biggest developers, the construction industry and the Kalispell Chamber of Commerce. However, there also was substantial public support for the originally proposed fees.

"I think this is the best compromise possible given the divisiveness of the issue," said Mayre Flowers, director of Citizens for a Better Flathead, which pushed for the originally recommended fees.

Ken Kalvig, an attorney representing Glacier Town Center developer Wolford Development, said the council's decisions still left it too hazy for him to calculate the expected road impact fees for Wolford's project.

Kalvig said there is a high probability that the adopted road impact fees will be challenged in court. He contended they are illegal under Montana law.

However, City Attorney Charles Harball told the council that the fees solidly follow state law.

Phil Harris, developer of Hutton Ranch Plaza, said he is undecided about filing a legal challenge, but suspects someone will contest Monday's decision in court.

"I appreciate the council working as long and hard as it did," Harris said. "But I'm disappointed in a couple of regards."

He criticized the lack of exempting projects already with preliminary plats - saying preliminary plats essentially are contracts between developers and the city, reached after developers already had calculated a project's costs. He said that adding impact fees after a preliminary plat is approved is changing that contract without due process.

Harris also said that if the impact fees scare off a major construction project, the city will lose a significant amount of future property tax revenue.

Reporter John Stang may be reached at 758-4429 or by e-mail at jstang@dailyinterlake.com