A lawsuit filed last month in U.S. District Court in Missoula alleges the city of Whitefish incorrectly calculated its impact fees for water and wastewater services, that the fees were illegal, and that they resulted in the overbilling of companies and individuals that were charged the fees as part of the process of applying for building permits.
The plaintiffs include Jeff Beck, Robert Odenweller, Terri Odenweller, Amy Weinberg, Zac Weinberg, Alta Views, LLC, and Riverview Company LLC. They are being represented by attorneys from Laird Crowly, PLC, in Missoula, and Odegaard Kovavich Snipes, PC, in Great Falls.
Among the other allegations in the suit is the claim that through the imposition of the excessively high fees the city violated the constitutional rights of the plaintiffs.
Whitefish has been charging the fees since 2007, and the one-time fees are intended to compensate for the cost of infrastructure to provide services.
The fees in question were passed by the city council in 2018 and became effective in 2019. Another resolution setting higher impact fees for water and wastewater services was passed in July 2019 and became effective in September 2019.
In the suit, which was filed Feb. 24, the plaintiffs asked on behalf of themselves and others eligible to join the suit that a judge grant relief from the city of Whitefish, including an admission of the unlawfulness of impact fee rates set in 2019; refunds for impact fees paid; a court order setting aside all resolutions that affected or are affecting unlawful impact fees; a prohibition on the city continuing to charge unlawful impact fees; and compensation for the impact fees to be paid as pre-judgment interest. Plaintiffs are also asking for the city to pay attorneys’ fees and expert’s fees, and for any additional relief the court may deem proper.
Attorneys for the law firm Hammer, Quinn & Shaw PLLC, are representing the city of Whitefish, and on March 17 they filed a response to the allegations in the suit, including denying the allegation that the city has been charging unlawful impact fees for water and wastewater services since January 2019. Attorneys for the city have also asked that the suit be dismissed with prejudice.
The city has to use its impact fees toward capital improvement projects with a useful life of 10 years or more. In 2021 the money went towards a wastewater treatment plant project, as well as paved trail expansions and water projects.
Prior to the suit being filed, the city had already initiated an audit of its impact fees after discovering what the city has described as a discrepancy in the fixture counts it was using for the fees compared to the 2018 Universal Plumbing Code. During a presentation of the city’s 2021 impact fees report at a February council meeting, City Manager Dana Smith said the city had audited its figures and would be issuing a total of $196,000 in refunds to property owners, with refund totals varying between property owners. The city was able to immediately correct a portion of those charges for open permits, with the amount coming out to about $63,000. She estimated that the average refund amount per property owner would be between $700 to $850.
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