Committee says impact fees hinder growth

With the intent of encouraging more growth in Whitefish, the city’s Impact Fee Advisory Committee is again recommending three impact fees be discontinued.

The committee suggests eliminating the City Hall, Emergency Service Center, and parks maintenance building impact fees. Dropping those fees will position Whitefish to be more competitive with Kalispell and Columbia Falls, and help change the perception that Whitefish is too expensive, the committee contends.

Member Myra Appel presented to City Council Jan. 7 the committee’s recommendation.

“We should abolish these fees to encourage growth,” she said. “Those with the means to build will look for the most cost effective place to build. The predicted growth in Whitefish may never come unless the city provides incentive to build here.”

The committee wants to keep intact the water, wastewater, stormwater, and paved trail fees. Council will review the recommendations at an upcoming meeting.

Impact fees are applied to new construction projects and serve as a revenue source for the city for capital improvements. Whitefish’s impact fees took effect in late 2007 during the housing boom when the city saw substantial growth. At the time Whitefish was one of the fastest growing cities in the state.

Shortly after the fees were adopted, the new construction market dried up in Whitefish and the Flathead Valley.

The advisory committee once a year reviews how much money has been collected from impact fees and what it’s being used for. Committee members include Appel, Don Kaltschmidt, Bill Halama, City Councilor Chris Hyatt and Whitefish Finance Director Rich Knapp.

In 2012 the city charged $6,443 in impact fees per single family residence. That includes $2,314 for water, $1,864 for wastewater, $210 for stormwater, $813 for Emergency Services Center, $771 for City Hall and $29 for the park maintenance building.

Whitefish’s total fees charged compare with $6,357 in Kalispell and $4,731 in Columbia Falls.

As of Sept. 30, 2012, the city had a cash balance of $1.2 million from impact fee revenue and had spent $154,762 for stormwater, $150,957 for the Emergency Services Center and $3,805 for the parks maintenance building, along with close to $41,000 for administrative fees.

The administrative expenses incurred by collecting impact fees are charged at a rate of 5 percent on top of impact fee rates.