Tab 08. City of Kalispell Developer Extension (Latecomer) Agreements PamphletFire. flows above the original development's minimum
fire flow requirements are charged in a latecomer fee.
For example, if the original development required a
minimum fire flow of 1500 gallons per minute (gpm)
and a subsequent development requires 2000 gpm,
then the subsequent development would pay a late-
comer fee for the additional 500 gpm.. All subsequent
developments are required to pay for fire flows above
the originalminimum flow.
of
These demands are converted to equivalent residen-
tial units so that residential and commercial demands
can be handled on an equivalent basis.
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CITY OF KALI S RPELL.
Developer Extension
(Latecomer) Aqrcem, ents
The City of Kalispell owns and operates a water and sanitary
sewer utility. These utilities typically provide service within the
City limits. When new development occurs adjacent to the exist-
ing utilities, the developer is often able to connect to the sewer
and water lines without significant off -site improvements.
I When land is annexed to the City, and the developer intends to
serve the new development with Neater and sanitary sewer ser-
vice, the existing utility systems must be extended to the pro-
posed development. These extensions are typically designed
With sufficient capacity to serve the proposed development in
addition to other potential developments in the area. In rare
cases the City rnay extend these utilities and then recover the
cost of those extensions through an impact fee. in most cases,
the cost of the proposed extensions is borne by the developer,
with a portion of the cost recovered through a Developer Exten-
sion Agreement, commonly referred to as latecomer agreement.
A latecomer agreement defines the costs or designing, construct-
!ng and inspecting the utility extensions. The agreement also
specifies how these costs will be paid back to the developer. For
example, a sewer line extension serving a new development
rray cost $275,000; for this example, let us assume the new
extension has the capacity to serve 1000 residential units, and
the proposed deveiopment will consume 20% (200 units) of the
capacity.
Design:
$ 20.000
Construction:
$250,000
tnsi=ctign:
$ 5 000
Total Cost
$275,000
Cost per unit- $275,000/ 1000 or $275
The developer is required to bear the total cost of the
extension ($275,000), but only uses 20% of the capacity
or $55,000 of the total cost. How does the developer
recover the remaining $220,0007 The latecomer agree-
ment is the mechanism by which the developer can
recover the remaining cost of the extension.
In this case, there are 800 additional residential units
that can be served outside of the original development.
As other developments utilize this extension, those de-
velopments pay a latecomer fee of $275 per residential
unit. This is the basic premise of a latecomer agreement,
the developer creates the capacity to serve the units
within the original development as well as units in other
future developments in the same area. The developer
then recovers the original investment that was used to
create the additional capacity for the other future
developments.
All Developer Extension Agreements must be approved
by the City Council.
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The developer is responsible for creating the latecomer
agreement, the City assists in this. The agreement is a
contract between the developer and the City of Kalispell.
The developer agrees to construct the improvements
and deliver the improvements to the City. The City
agrees to collect latecomer fees from subsequent
development and pass the fees to the original developer.
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An agreement may last until the remaining costs have
been recovered, but typically no longer than 10 years.
L7nes the Q(ELereive c0enWn5'3170n frlrnZ9W Ina the
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Yes. The City assesses a 6% administrative fee to defray
the cost of facilitating and managing the agreement.
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No. A latecomer agreement allows for the recovery of
i
costs for increasing the size of a minimum -sized line. For
example, a development may only need 7506 of the. ca-
pacity of an 8-inch water line. F lov ever, this Is the rnin!-
mum size of line required to be installed for any deve•.op-
rnent. A latecomer agreement is not created for tine re-
maining 25%.
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Yes. The City is currently managing Nvo latecomer
agreements.
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(i) There is an agreement with the Ow! Corporation for
water and sanitary sewer improvements installed in
association with the West View Estates Subdivision.
The general area of this latecomer agreerent in-
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cludes Section 36 and adjacent properties.
(2) There is an agreement vvith Montana Venture fart-
ncrs for water and sanitary sewer improvements
installed in association with the Old School Station
Industrial Park. The general area of this latecomer
agreement is the area south of Cemetery Road.
Additional details of these agreements are available by
contacting trce Public -Norks Depattment.
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Yes. The fees are increased each January based on thF
ten-year United States Treasury Note rate as r eported in
the Wall Street Journal cn November 30 (or next business
day) of the previous year, plus i.59c.
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None have been created to date, but could be in the
future.