Council hashes out impact fee plans at meeting

The discussion over impact fees hit the Kalispell City Council on Monday during a study session.

Before the council are proposals to increase police and fire impact fees to help cover capital improvements over the next 20 years.

Impact fees are one-time assessments charged at the time of development. They’re designed to offset the cost of adding city services to new properties.

On Monday, council members heard presentations on what the departments’ needs are and why officials arrived at the increased fee proposals.

Wade Rademacher, administrative captain with the Kalispell Police Department, said that over the next 20 years, the department might look at expanding its building on First Avenue East.

“We’re looking at constructing an additional 7,272 square feet,” he said.

No immediate plans are in the works for the police department, but impact fees typically go toward building projects.

Rademacher said that he looked at department plans in Bozeman and Missoula, as well as the relatively new facility in Whitefish for his report.

He projected that the Kalispell department would need about 20,000 square feet for a growing police force that serves a growing population.

The city’s planning office projects a Kalispell population of more than 32,000 in 2035. That’s at a 2-percent annual growth rate.

At current construction costs, that addition would be a $2.2 million project.

The current police impact fee for single-family homes is $41. There are lesser fees for multi-family units and commercial property, the latter of which is assessed per 1,000 square feet.

The proposed new impact fee would be $277 for a single-family home.

“I know it’s a big increase, but the numbers, I think from before are pretty outdated,” Rademacher said.

The police department impact fees are among the lowest for the city. They would also see the largest relative jump.

But the department is already showing signs that it’s outgrowing the building.

“We’re down to some very small offices that I think you could classify as closets that we’re working out of,” Police Chief Roger Nasset said.

As for the Kalispell Fire Department, impact fees go toward substations and vehicle replacement. Large fire engines can run as high as $750,000.

The current impact fee is $483 for a single-family home. The proposed increase would bring the fee to $1,067.

That in addition to the multi-family and commercial fees would fund $9.6 million in capital improvements over the next 20 years.

“Really, it’s equipment and facilities,” Fire Chief Dave Dedman said.

In addition to population and staffing factors, the fire department is greatly impacted by its response area. National standards dictate that fire departments have certain response times.

The department’s capital improvement plan includes three substations at $2.5 million apiece. They would be placed at the north, south and west outer boundaries of Kalispell.

“As we grow, we’re going to encompass more undeveloped areas,” Dedman said.

During the council’s discussion, members brought up some concerns about the impact fee model.

A main concern was that various other impact fees have risen over the years.

Last year, the council voted to double the sanitary sewer fee to $5,700. The decision came on a contentious split vote.

“I have a fear that we may be pricing people out of the city,” council member Tim Kluesner said.

The fear is that developers would look outside Kalispell’s borders for the next big commercial or housing project.

The sewer fee was increased in part to pay the ongoing debt service for the 2009 wastewater treatment plant expansion.

If police and fire capital needs arise before the impact fee funds are able to cover them, there was concern of a similar cycle.

“The fear I have on it is you get into a speculation situation,” council member Phil Guiffrida said.

He meant that if the city issues bonds for a project with repayment from the impact fees, that plan could be foiled by a development slump.

No official decision was made on the impact fees during Monday’s meeting.

But toward the end of the session, council members indicated that more needed to be done than just impact fee adjustments.

“I think we need to be looking more philosophically at the big picture,” Mayor Mark Johnson said.

Reporter Matt Hudson may be reached at 758-4459 or by email at mhudson@dailyinterlake.com.