5. PB&J Appeal - Transportation Impact FeesCity of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903
Telephone: (406) 758-7701 Fax: (406) 758-7758
REPORT TO: Mayor Kennedy and Members of Council
FROM: Jane Howington, City Manager
r
SUBJECT: Reconsideration of PB&J Impact Fees
MEETING DATE: December 7, 2009
At the last Council meeting, PB&J submitted a letter requesting reconsideration from
Council on the proposed impact fees estimates for their potential relocation from 220 First
Avenue East to 35 First Avenue East. The attached memo from Engineering provides a review of
how those fees were calculated.
I have discussed this matter with Public Works and we have determined that there may be
a reasonable alternative in the calculation of the transportation impact fees that more directly
determines the impact of the change in business location. The current determination of impact
was derived from industry published data as that is the only empirical data made available to the
staff for calculating the fees. However, the city engineers agree that direct information from the
business may provide more applicable data from which to derive the fees. For example, the
business may be able to provide certain historical retail data as history from the last year from
which we may reasonably extrapolate the level of traffic generated as a result of the business.
Certainly, specific data is likely to be more precise than general data in making the calculations.
The risk faced by the applicant, however, is that the data figures that they provide may actually
generate a higher fee than the averages published by the industry. The discretion to take this risk
is appropriately left to the applicant as the City must use the most reliable data available to it.
The past discussions on this matter have apparently assumed that the applicants have the
alternative to produce their own engineer's traffic studies to determine the transportation impact
fees. Also discussed was the fact that for the "Mom & Pop" business such a study may be too
expensive to pursue. We would like to discuss the possibility of accepting raw data from
applicants that may be used for the calculations in lieu of the industry published data.
2011gAvenue East, P.O. Box 1997, Kalispell, MT 59903 Phone (406)758-7720 — Fax (406)758-7831
www.kalispell.com
To: Jane Howington, City Manager
Cc:
From: Paul E. Burnham, P.E., Assistant City Engineer
Re: PB & J Christian Bookstore Relocation - Impact Fees
Date: December 3, 2009
The PB & J Christian Bookstore is proposing to move from 220 First Avenue East to 35 First
Avenue East. The current bookstore location includes a small sandwich and coffee shop.
The proposed location will include the same amenities. The owner of the bookstore has
proposed a minor remodel at the new location to include additional kitchen fixtures and
food preparation area. The proposed location is the prior home to Montana Tour and
Travel, the City of Kalispell Parks and Recreation Department and, most recently, the Busy
Bee Play Center.
The difference between the existing use and the proposed use, including the additional
fixtures and food preparation area at 35 First Avenue East is:
Water:
$
0.00
Sewer:
$
607.26
Storm:
$
0.00
Police:
$
0.00
Fire:
$
0.00
Transportation: $
1,227.18
The City Council is in receipt of a letter from the owner of the current bookstore. In that
letter, Ms. Johnson indicates that the proposed location is smaller than the current
location by 150 square feet, that the store does not intend to expand services, and that
the store is not adding additional staff or creating new jobs.
I believe the underlying question in the letter is: why does the City of Kalispell require the
payment of additional impact fees if the store is not expanding but only relocating and not
creating additional impacts to the various systems?
The City collects impact fees on new construction, renovation, or change of use of an
exiting building or structure. This procedure follows Senate Bill 185, which authorizes
cities to collect impact fees when the new construction, renovation, or change of use
creates a net increase in demand from that particular building or structure.
As background, Senate Bill 185, 2005 Legislature contains the following definitions:
Impact Fee: any charge imposed upon development by a governmental entity as part of the
development approval process to fund the additional service capacity required by the
development from which it is collected.
Development: construction, renovation, or installation of a building or structure, a change
in use of a building or structure, or a change in the use of land when the construction,
installation, or other action creates additional demand for public facilities.
This procedure is also codified in City of Kalispell Ordinance No. 1587. This ordinance
indicates: "If impact fees are imposed for remodeling, rehabilitation, or other
improvements to an existing structure or use, only the net increase between the old and
new demand may be imposed."
Several precedents of how the impact fee policy is applied to a relocation can be found in
the following recent developments of similar nature: Bob's Bail Bonds, Flathead Food
Bank, Flathead Youth Home, Janitor's World, and the City Halt Renovation.
These entities moved from one building to another and were required to pay the
difference in impact fees between the previous use and the proposed use of the new
location.
Why does Senate Bill 185 and Ordinance No. 1587 use the difference in demands at the
new location in calculating impact fees?
The impact fees are used to pay for improvements or additions to the City's systems and
services that are impacted by the development. When an entity moves from one location
to another, the entity does not necessarily increase the demand to the overall system.
However, when the entity increases the demand at a specific point (the new location)
from the previous demand at that same point, and the old location is occupied again by a
similar use, then there has been an overall increase to the system.
For example, in this case, the bookstore has a specific transportation and wastewater
demand at the existing location and will theoretically have the same transportation and
wastewater demand at the new location. The demand at the new location is an increase
from the previous demand at that same location, i.e., the demand of a bookstore and
small food service area is greater than the demand of the previous uses, including the
travel service, the Parks and Recreation offices, and the play center.
For the sake of clarifying this example, let us assume that an entity moves into the existing
bookstore location, and this entity has the same demands as the previous use, i.e, a
bookstore with a small food service area. The combined demands of the existing location
and the new location will have created an additional demand to the transportation and
wastewater systems. This additional demand is paid for through impact fees, and is
reasonably paid for by the entity making the additional demand to an existing use.
Otherwise, the entity that now wants to move into the existing location finds that the
available capacity is diminished from the original use.
This is the direction the City Council has given staff, through Ordinance No. 1587,
regarding the implementation of impact fees. Please let me know how you would like to
proceed with this.
Mayor Kennedy and Members of Council
City Of Kalispell
210 East 1" Street
Dear Kari Gabriel
i.:C.r1i
I am the owner of PB&J Christian Bookstore and I am interested in relocating my business to 35 Vt Ave
East. In doing this I have investigated the cost for this relocation with the city. The transportation impact
fees have been estimated to cost $1800.00 for this relocation.
The reason I am writing to you is to request reconsideration of the impact fee charge. I offer the
following rationale for this request:
1. My business is not expanding. In fact the new site will have 150 sq. ft. less than the present
store.
2. We are not expanding our services so the impact of additional traffic or car trips is not
anticipated.
3. We are not adding anything to the menu so the impact to water and sewer is not
anticipated.
4. We will not be adding additional staff or creating new jobs.
We understand that if we expand our business, new impact fees may be assessed.
It is important to the continued success of our business that we make this relocation. If we are required
to pay this fee, we will not be able to make this move and our continued presence in the downtown area
of Kalispell will be compromised.
Thank you for this consideration. Should you have any questions, please don't hesitate to contact me.
c o
Sin ly Nancy Johnson