Whitefish sees dip in impact fee collections

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Following a peak for 2016, the city of Whitefish’s total impact fee collections dropped last year.

Whitefish collected about $650,000 in impact fees in fiscal year 2017, while it collected over $1 million in impact fees in fiscal year 2016.

Finance Director Dana Smith said while impact fee collections were down in FY2017, which runs from July 1, 2016 to June 30, 2017, collections did exceed budget expectations and were around the same amount as FY14 and FY15.

“Fiscal year 2016 had some very significant commercial projects including two hotels and the City Hall and parking structure project, as well as a large residential development,” she said.

It collected a total of about $738,000 in fiscal year 2014 and about $640,000 in fiscal year 2015.

Impact fees are one-time charges for new development that increases the demand for city services. It applies to new units in subdivisions as well as new homes built on single lots and some remodeling. The city can spend the fees for public improvements, including planning, site improvements, land acquisition, construction or engineering.

The city currently collects seven impact fees — water, wastewater, stormwater, City Hall, Emergency Service Center, park maintenance building and paved trails.

Smith said that impact fee revenues are trending significantly higher in the first couple of months of fiscal year 2018, which is a “great forecaster of strong building permits and continued growth in the city.”

Impact fees can be used for public improvements and to recoup the costs previously incurred by the city.

Paved trail impact fees are used for the expansion of the city’s trail system. In FY17, about $63,000 was used for the completion of two stairways and other trail related projects. City Hall impact fees in the amount of $188,000 were used in FY17 to fund the continued construction of the City Hall and parking structure project. In the future the impact fees collected will be redirected to the tax increment finance fund to repay outstanding debt obligations from the project.

The city’s FY18 budget and Capital Improvements Program identify projects eligible for water impact fees and planned within the next five years. Those anticipated in the next year are the south water reservoir land acquisition and increased capacity for various cast iron water main replacement projects.

The FY18 budget also provides for wastewater impact fees to be expended on any additional Highway 93 utility improvement project costs, sewer main upgrade costs that remain from Greenwood to Columbia Avenue and the Flathead Avenue sewer improvements.

The estimated average impact fee for a single family home is $6,200.

The new wastewater treatment plant that is in the planning stages will be eligible for partial funding from the wastewater impact fees.

The estimated average impact fee for a single family home is $6,200.

The city this year is set to study its impact fees. A project that could result in changes to the fees it collects.

City Council last week approved hiring FCS Groups as the consultant to conduct that study. The cost of the study has been budgeted at $44,000. By state law, the city is required to review and update its impact fee studies every five years.

The city’s impact fees for new construction first went into effect in November of 2007 following a growth spurt in the town when it was difficult for the city to keep up with infrastructure needs. Since then Whitefish has collected almost $5 million total in impact fees.

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