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2. Ordinance 1587 - Establishing Impact Fees - 2nd ReadingCity of Kalispell Charles A. Harball Office of City Attorney City Attorney 312 First Avenue East P.O. Box 1997 Kalispell, MT 59903-1997 MEMORANDUM TO: Mayor Pamela B. Kennedy and Kalispell City Council FROM: Charles Harball, City Attorney James H. Patrick, City Manager Tel 406.758.7708 Fax 406.758.7771 charball@kalispell.com SUBJECT: ordinance No. 1587 — Establishment of Impact Fees MEETING DATE: Monday, October 16, 2006 — Regular Council Meeting BACKGROUND: Montana state legislation regulating impact fees to fund capital improvements, MCA 7-6-1601 through 7-6-I604, became effective April 19, 2005 and set forth the procedures and requirements for the imposition of impact fees by local governments. City Council has, pursuant to statute, established and appointed an Impact Fee Advisory Committee, which has been meeting in noticed public meetings with the City's consultant, HDRIEES. On September 5, 2006 City Council set a public hearing held on October 2, 2006 on said proposed amendments to the fees, schedules, charges and classifications of these utility services of the City of Kalispell and the City Clerk gave the necessary Notice thereof as required by Section 69- 7-111, MCA. RECOMMENDATION: MENDATION: Following the public hearing, Council considered Ordinance 1587 that establishes and authorizes the procedure for the implementation of impact fees pursuant to the requirements of state law. Council should pass ordinance 1587 on second reading. FISCAL EFFECTS: The fiscal effects of adopting impact fees to fund capital improvements is significant to the City's ability to plan for meeting the demands of growth on the City's infrastructure. Respectfully submitted, Char arb ll, City Attorney J e s H. Patrick, City Manager ORDINANCE NO. 1587 AN ORDINANCE AUTHORIZING AND ESTABLISHING THE PROCEDURE AND IMPOSITION OF IMPACT FEES TO FUND CAPITAL IMPROVEMENTS IN THE CITY OF KALISPELL, A[JTHORIZING THE CITY ATTORNEY TO CODIFY SAME AND DECLARING AN EFFECTIVE DATE, WHEREAS, Montana State legislation regulating impact fees to fund capital improvements, FICA 7-6-1601 through 7-6-1604, became effective April 19, 2005 and sets forth the procedures and requirements for the imposition of impact fees by local governments; and WHEREAS, an impact fee represents a fee for service payable by all users creating additional demand on a city facility; and WHEREAS, it is the finding of the City Council that it is in the best interests of the City of Kalispell that certain impact fees be considered and imposed to fund capital improvements and that a procedure be established for this purpose that is compliant with state law. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, MONTANA, AS FOLLOWS: SECTION I Establishment of a Standin Irn act Fee Committee. The City shall maintain a standing impact fee advisory committee. This impact fee advisory committee shall include at least one representative of the development community and one certified public accountant. The committee shall review and monitor the process of calculating, assessing, and spending impact fees. The committee shall be provided with adequate financial reports on a semiannual basis, shall meet at least annually, and shall provide the City Council with a report of their findings and recommendations. The City shall provide the committee with the appropriate advice and counsel of professional City Staff and/or an appropriate professional consultant selected by the City. The City Council shall not consider or adopt any impact fees that have not been first considered by the committee. The Impact Fee Committee shall serve in an advisory capacity to the City Council. SECTION II Calculation and Im osition of Im act Fees. Any impact fees to fund capital improvements of the City of Kalispell shall not be approved and adopted by City Council unless those fees have been calculated in accordance with 7-6-1602 MCA or as such statute may later be amended. Impact fees may not be imposed for remodeling, rehabilitation, or other improvements to an existing structure, or rebuilding a damaged structure, unless there is an increase in units that increase service demand as set forth by state law. 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. The data sources and methodology supporting adoption and calculation of an impact fee shall be available to the public upon request. SECTION III Collection of Impact Fees. (a) Upon collection, all impact fees shall be deposited in a special proprietary fund, which. shall be invested with all interest accruing to the fund. (b) The City may impose impact fees on behalf of local districts. (c) If the impact fees are not hereafter collected or spent in accordance with this ordinance or are not in compliance with 7-6-1602 MCA, any impact fees that were collected must be refunded to the person who owned the property at the time that the refund was due. (d) The Kalispell Building Department shall collect all impact fees imposed and shall collect them no earlier than the date of issuance of a building permit if a building permit is required for the development or no earlier than the time of wastewater or water service connection or well or septic permitting. SECTION IV. Contributions in Lieu of Impact Fee Payments. The City may accept the dedication of land or the construction of public facilities in lieu of payment of impact fees if: (a) the need for the dedication or construction is clearly documented pursuant to 7M6- 1602 MCA; and (b) the land proposed for dedication for the public facilities to be constructed is determined to be appropriate for the proposed use by the City of Kalispell; and (c) the value of the proposed dedication or construction has been established by an independent appraiser or construction engineer, which appraisal or estimate has been subject to peer review; and (d) in the event the value of the proposed dedication or construction exceeds the impact fee due from an individual development no credits against future impact fee obligation shall be established. In that event, the City shall pay the excess worth to the contributor. SECTION V. A ppeal Process. Any party upon whom an impact fee has been imposed has the right to appeal the imposition or amount of the impact fee. The Appellant must perfect the appeal by giving written notice of the appeal to the Building Department along with the full amount of the required impact fee, in cash or cash equivalent as an appeal bond. The form of the written notice shall be sufficient if it identifies the name and address of the appellant and a short statement giving the reason why the impact fee is wrongly imposed or in the wrong amount. Upon receiving the Notice of Appeal and cash bond, the building department official shall, within 24 hours, notify the City Manager who will place the matter before the City Council on its next regularly scheduled City Council Meeting that is more than S days following the filing of the appeal. The City Council shall hear evidence from the Appellant and City staff and shall make the determination whether the impact fee imposed upon the Appellant is compliant with state law and city ordinance. In the event that the City Council determines that the imposition of the impact fee is not compliant with either state law or the city ordinance, the City shall return the cash bond paid by the appellant. SECTION VI. This Ordinance shall be effective thirty (30) days from and after the date of its final passage and approval. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR THIS 16TH DAY OF OCTOBER, 2006. Pamela B. Kennedy Mayor ATTEST: Theresa White City Clerk.