Kalispell City Council continues its work trying to hammer out a viable transportation impact fee policy in another work session tonight at 7 p.m., at which no formal votes are allowed.
City staff have offered up a number of research papers and memos in response to requests by council members at previous work sessions grappling with this contentious issue. A transportation impact fee would charge developers additional costs for the road improvements made necessary by the increased traffic generated by those new developments.
For two years Kalispell has been trying to come up with a workable policy while developers have criticized the fees as unfair to retail commercial development, some of which might be required to pay millions, and possibly out of line with state law. The deteriorating economy and attendant slowdown in new construction has only heightened the urgency of this issue for both the city and the business community.
At its last work session, the city council ordered Public Works Director Jim Hansz to reduce the number of road projects listed in the city’s Capital Improvement Plan (CIP), which amounts to roughly $12 million in projects intended to be paid for through traffic impact fees. Developers have questioned whether these projects were on roads directly impacted by new development, or simply a wish list of projects Kalispell has needed for years but lacks the funding to do.
In a memo to council, Hansz removed six large projects from the CIP, slashing the funds needed in half, to about $6 million. The projects cut included an upgrade to Four Mile Drive between Stillwater Road and U.S. Highway 93 ($1.8 million); an extension of Grandview Drive to Whitefish Stage Road ($3 million); 18th Street West extension to Sunnyside Drive ($450,000); reconstruct 7th Avenue East ($356,000); reconstruct Three Mile Drive and upgrade it to a three-lane road ($534,000).
Additionally, dropping the extension of Rose Crossing from Farm to Market Road to Whitefish Stage Road, thus creating a new east-west arterial street, would cut a project estimated at $2 million, reducing the estimated impact fees by 65 percent. For a typical single family home the impact fee would then be $305. Council will consider these options.
In a memo to council, Interim City Manager Myrt Webb tried to clear up some policy questions related to traffic impact fees. He recommended the city issue credit to a developer when they undertake an improvement also on the city’s Capital Improvement Plan, but not if it’s something already required by the developer to do. He also said if the city wants to grandfather in some ongoing developments, it should do so at the time a building permit is issued, and there must be a time limit on these grandfather clauses, since some projects have build out periods as long as 20 years.
Another memo compares Kalispell’s proposed traffic impact fees to fees in place in Bozeman and Missoula. While Kalispell is smaller than either city, its population has grown at a much faster rate between 2000 and 2008, at 43 percent, compared to 38 percent growth in Bozeman and 18 percent in Missoula. Broadly, Kalispell’s traffic impact fees come in lower than Bozeman but higher than Missoula, which uses a different fees structure. According to the memo, a 24-hour market in Kalispell would pay $27, 918 in impact fees. The same market in Bozeman would pay $27,975, while the same store in Missoula would pay between $2,231 and $3,205.
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