Whitefish looks to settle federal class action suit

Whitefish is signaling its intention to settle a class action lawsuit filed against the city involving impact fees.  

City Council on Monday will decide whether to approve a settlement agreement resulting in a $400,000 contribution from the city toward payments to members of the lawsuit and issuing refunds for those who paid the related impact fees.  

Council meets at 7:10 p.m. at City Hall, 418 E. Second St. 

The lawsuit filed in the U.S. District of Montana in 2022 alleged that the city overcharged for impact fees for new development. The dispute involved fixture counts for single-head, standalone showers.  

Whitefish officials in September 2021 admitted they made an error in calculating impact fees that likely resulted in overcharges for new developments and planned to issue refunds accordingly. The city began an audit to remedy the error, but the class action lawsuit was filed in the meantime by five individuals and two developers.  

In the court documents, the city contested the allegations and filed a third-party complaint against the consultant hired to calculate impact fees FCS Group. The city noted that if the allegations were true then FCS breached its contract with the city by recommending impact fees that failed to comply with federal, state and local laws. 

As part of the settlement agreement, FCS Group will contribute $1 million to the same settlement fund as the city that will provide payments approved by the court.  

Whitefish City Attorney Angela Jacobs said refunds due to individuals or entities as a result of the city’s error will be issued based on calculations made by attorneys overseeing the settlement fund in an amount of about $210,700.  

“The refund amounts have not been reduced by attorney fees or costs,” Jacobs said in a memo to Council. “If an individual or entity was due a refund, they will receive its full value.”  

The case had been scheduled to go to trial in July. 

Jacobs said the settlement is not an admission of wrongdoing by the city which still stands by the impact fees that were calculated by FSC Group and has consistently acknowledged its error.  

“However, there would be significant cost associated with moving forward to trial, which may result in burdening city ratepayers with increased water and wastewater rates,” she said. “Additionally, the settlement reaffirms the city’s commitment, first announced four years ago, to issuing impact fee refunds due as a result of the city’s fixture count error.”  

ALSO ON the agenda for Monday, Council will hold three public hearings.  

Council will consider a request from the Whitefish Community School to expand into a day care center located at 805 Park Ave.  The school seeks a conditional use permit to expand the existing day care use of 15 or fewer children into a day care center for more than 15 children. The school facility is expected to expand by less than 2,000 square feet.  

Council will look at a request for a conditional use permit from Barbara McCartney to construct a guest house at 3 Tides Way.  

Council will consider a resolution removing engraving fees for its columbarium at the city cemetery. Those fees will be billed directly from Glacier Memorials Gardens rather than collected by the city.  

Finally, Council will consider awarding engineering contracts for the Armory Road and East Sixth Street reconstruction projects. The Armory Road contract is recommended to go to Morrison Maierle and the Sixth Street contract to HDR. 

Deputy Editor Heidi Desch may be reached at 758-4421 or hdesch@dailyinterlake.com.