Higher impact fees remain on horizon for Kalispell
Using a smaller utility planning area and lower projected growth rates still means higher water and sewer impact fees for people wanting to connect to Kalispell’s municipal services in coming years.
That was the word Tuesday as members of the advisory impact fee committee reviewed a water impact fee study prepared by Morrison-Maierle Inc.
The study was undertaken after the City Council in February rejected water and sewer impact fee recommendations from a prior 2010 study by HDR Inc.
Adjustments recommended in the 2010 study would have reduced Kalispell’s base water impact fee from $2,213 to $1,930 per “equivalent residential unit,” a 3/4-inch water meter connection. But it would have doubled the base sewer impact fee from $2,499 to $5,345.
Several council members argued the HDR study was out of date, using a high growth rate and service demand projections that already had been proven wrong and failing to account for a much smaller annexation boundary Kalispell adopted in 2011. City officials took the HDR study up for consideration nearly 19 months after it had been prepared.
But the large planning area and high-growth projections used in the HDR study were two major factors that helped keep the water and sewer impact fees down. This latest study, done at the council’s request, recommends a base water impact fee of $2,502. And that total continues to grow.
Factoring in a $312,736 settlement the council approved last year with Owl Corporation is expected to add another $34 to $68 to the fee. That settlement was approved because of botched latecomer fee collections related to an oversized water line Owl Corporation extended to West View Estates at the city’s request.
The updated study for the sewer impact fee is ongoing. But the recommended adjustment to that fee also is anticipated to be the same or larger compared to the 2010 study.
For this latest round of water and sewer impact fee studies, Morrison-Maierle is using Kalispell’s 29-square-mile annexation boundary instead of the 77-square-mile utility planning area used before. The firm also is projecting service demand growth at 2 percent a year instead of the 4 percent used before.
The smaller utility planning area and the lower growth rate mean fewer projects will be needed to keep up with water service demands through a 2035 planning window. But they also mean fewer new customers available to absorb the growth-related infrastructure costs impact fees are meant to cover.
The water impact fees are calculated based on future growth-driven infrastructure needs as well as reimbursement for the right to use existing excess capacity in the city’s wells, pumps, storage tanks and transmission lines.
Impact fee committee members have met twice to review the water impact fee study and expect to reach a recommendation for the City Council at their next meeting in November, when they also will start to take up the latest sewer impact fee study.
Paul Burnham, an engineer with Morrison-Maierle, advised the committee not to dwell only on whether the water impact fee amount is high or low or reasonable compared to water well development costs in the county.
“Look at it objectively and recognize that it is the actual cost for growth,” he said. “To be fair to citizens currently in the city, growth should pay for growth, and that’s the number.”
State law governs how impact fees are calculated and says they must be reviewed and adjusted every two years. Kalispell’s water and sewer impact fees are nearly two years behind that schedule.
The city also charges impact fees for stormwater and police and fire services. Combined, the fees total $6,375 for construction of a new single-family home. They can amount to tens of thousands or hundreds of thousands of dollars for larger developments.
Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.