HomeMy WebLinkAboutAdministrative Order No. 2019-01 Impact Fee Administration Update
TO: ANDREA SURATT, City Manager
FROM: CHRIS SAUNDERS, Community Development Manager
DATE: February 28, 2019
RE: IMPACT FEE ADMINISTRATION MANUAL UPDATE
Attached is the final draft of the 2019 impact fee administration manual incorporating all edits to date. Please
adopt by administrative order. Thank you.
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IMPACT FEE
ADMINISTRATIVE PROCEDURES MANUAL
CITY OF BOZEMAN, MONTANA
APRIL 13, 1996
AMENDED DECEMBER 1998
AMENDED MARCH 2009
AMENDED MAY 2013
AMENDED MARCH 1, 2019
Initially Prepared by
Dr. Arthur C. Nelson, ASCE, AICP
Growth Management Analysts, Inc.
140 Saddleview Run
Atlanta, Georgia 30350
770.396. 6553
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TABLE OF CONTENTS
INTENT AND DEFINITIONS................................................................................1
Construction Permit .............................................................................................................1
Feepayer ...............................................................................................................................1
Impact Units .........................................................................................................................2
Project or Development Project ...........................................................................................2
System Improvements ..........................................................................................................2
IMPOSITION OF IMPACT FEES ..........................................................................2
Feepayer ...............................................................................................................................2
Payment Due ........................................................................................................................2
Determination of Fee ...........................................................................................................2
Expiration of Building Permits. ...........................................................................................2
DETERMINATION OF FEE BASED ON FEE SCHEDULES .............................3
Land-Use ..............................................................................................................................3
Total Building Area and Gross Leasable/Floor Area. .........................................................3
Residences............................................................................................................................4
Mixed-Use Development. ....................................................................................................4
Mixed-Use Structures. .........................................................................................................4
Shell Permit. .........................................................................................................................5
Change of Use. .....................................................................................................................5
Auxiliary Uses. ....................................................................................................................5
House Moves and Manufactured Home Moves...................................................................5
Manufactured Homes. ..........................................................................................................5
Recreational Vehicles (RV's). ..............................................................................................6
Shopping Centers. ................................................................................................................6
Model Homes. ......................................................................................................................6
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Churches. .............................................................................................................................6
Fraternal Organizations/Civic Clubs....................................................................................7
Replacement of Existing Buildings. ....................................................................................7
Redevelopment/further development of sites ......................................................................7
ADMINISTRATIVE DETERMINATION OF DEVELOPMENT IMPACT FEES7
General .................................................................................................................................7
Administrative Determination .............................................................................................7
Special Case of Wastewater .................................................................................................7
INDEPENDENT FEE CALCULATION STUDY ..................................................8
General. ................................................................................................................................8
Impact Units. ........................................................................................................................8
Pre-Application Meeting ......................................................................................................8
General Guidelines...............................................................................................................8
Specific Guidelines for Transportation. If ...............................................................8
Specific Guidelines for Fire Facilities .................................................................................9
Specific Guidelines for Water Facilities ..............................................................................9
Specific Guidelines for Wastewater Facilities ...................................................................10
Sufficiency Determination. ................................................................................................10
Determination of Fee. ........................................................................................................10
Notification of Feepayer ....................................................................................................10
Payment in Deposit. ...........................................................................................................10
USE OF IMPACT FEE FUNDS............................................................................11
A. General ...................................................................................................................11
Administration .......................................................................................................11
Refunds ..................................................................................................................11
Order of Expenditure .............................................................................................11
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Operations and Maintenance..................................................................................11
Annual Capital Improvements Planning. ...............................................................11
B. Transportation ........................................................................................................11
Capital Improvements ............................................................................................11
Priorities Consistent with Plans .............................................................................12
Service Area. ..........................................................................................................12
C. Fire .........................................................................................................................12
Capital Improvements. ...........................................................................................12
Priorities Consistent with Plans .............................................................................12
Service Area. ..........................................................................................................12
D. Water ......................................................................................................................12
Capital Improvements. ...........................................................................................12
Priorities Consistent with Plans. ............................................................................12
Service Area. ..........................................................................................................12
E. Wastewater .............................................................................................................12
Capital Improvements. ...........................................................................................12
Priorities Consistent with Plans. ............................................................................12
Service Area. ..........................................................................................................13
DEVELOPMENT IMPACT FEE CALCULATION/ASSESSMENT PROCESS13
Review ...............................................................................................................................13
EXEMPTIONS ......................................................................................................13
Must Be Claimed by Applicants. ...........................................................................13
Exemptions from Transportation Development Impact Fee ..................................13
F. Exemptions from Fire Development Impact Fee ...................................................14
G. Exemptions from Water Development Impact Fees ..............................................14
H. Exemptions from Wastewater Development Impact Fees .....................................15
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Deferral of Payment ...............................................................................................16
Deferrals Authorized. .........................................................................................................16
Prohibitions. .......................................................................................................................16
I. Deferral Process. ....................................................................................................16
CREDITS ...............................................................................................................17
Voluntary and Project Related. ..........................................................................................17
Mandatory or Required. .....................................................................................................17
Limitations. ........................................................................................................................17
General. ..................................................................................................................17
Land Dedication and Easements. ...........................................................................18
Acquisition and Construction. ...........................................................................................19
Documentation of Awarded Credits. .................................................................................20
Effectiveness. .....................................................................................................................20
Sufficiency .........................................................................................................................21
J. Use of Credits ........................................................................................................21
Limitations. ........................................................................................................................22
Payback. .............................................................................................................................22
COLLECTION OF DEVELOPMENT IMPACT FEES .......................................24
Assessment of Development Impact Fees. ........................................................................24
Payment of Development Impact Fees ..............................................................................24
Deferred Development Impact Fees. .................................................................................24
REFUNDS FOR SERVICE UNAVAILABILITY OR NONEXPENDITURE ....24
APPEALS ..............................................................................................................25
Development Impact Fees Review Committee..................................................................25
Appeal to City Commission ...............................................................................................25
Permit Issued ......................................................................................................................25
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ENFORCEMENT ..................................................................................................25
Misdemeanor......................................................................................................................25
Code Enforcement. ............................................................................................................25
IMPACT FEE ADVISORY COMMITTEE ..........................................................25
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IMPACT FEE
ADMINISTRATIVE PROCEDURES MANUAL
CITY OF BOZEMAN, MONTANA
INTENT AND DEFINITIONS
This document shall be known as the Administrative Procedures Manual, referred to subsequently as the "Manual." The following administrative procedures contained in this Manual are intended to provide guidance to staff in administering the Development Impact Fees Ordinance, codified in Chapter 2 Article 6 Division 9 of the Bozeman Municipal Code, referred to subsequently as the
"Ordinance" as it may be amended from time to time.
Tables and forms are provided for use in determining the amount of the Development Impact Fees for each land development activity. Terminology used in this Manual corresponds to the definitions of words or phrases as established in the Ordinance.
As provided in the Ordinance, the City Manager of the City of Bozeman is the Development Impact
Fee Administrator. However, for purposes of this Manual, the Administrator has delegated her/his
authority to a "Development Impact Fee Coordinator," hereinafter "Coordinator," who shall be a member of the Bozeman Department of Planning and Community Development staff. This Manual shall be adopted by administrative order by the City Manager.
In addition to the above and to terms and phrases deemed in the Ordinance, the following terms or
phrases are defined for use in this Manual:
Construction Permit means
1. a building permit, or
2. permit for manufactured home installation, or
3. a permit to connect to the municipal water or sewer system(s) t, or
4. an extension of a building permit issued prior to that date, or
5. an extension of a permit for manufactured home installation issued prior to that date or
6. any other types of permits or extensions listed in the Ordinance.
Feepayer means that person or entity who pays a Development Impact Fee or her/his successor in interest with the right entitlement to any refund of previously paid Development Impact Fees which is required
by the Ordinance and which has been expressly transferred or assigned to the successor in interest. In the
absence of an express transfer or assignment of the right or entitlement to any refund of previously paid Development Impact Fees, the right or entitlement shall be deemed to "run with the land."
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Impact Units means the number of units of facility impact caused by a development project.
Project or Development Project means a particular development on an identified parcel of land.
System Improvements means projects listed in the Capital Improvement Program and which are designed to provide service to the community at large, in contrast to Project Improvements as defined in 2.06.16930, BMC. System improvement costs are those costs incurred to provide additional capacity needed to serve new development within the City for planning, design and construction, land acquisition,
land improvement, design and engineering related thereto, including the cost of constructing or
reconstructing System Improvements or facility expansions, including but not limited to the construction contract price, surveying and engineering fees, related land acquisition costs (including land purchases, court awards and costs, attorney's fees, and expert witness fees) and expenses incurred for qualified staff or any qualified engineer, planner, architect, landscape architect, or financial consultant for preparing or
updating the Capital Improvement Program, and City’s administrative costs not to exceed five (5%)of the
total amount of such costs. System improvement costs shall also include projected interest charges and other finance costs if and to the extent the Development Impact Fees are to be used for the payment of principal and interest on bonds, notes, or other financial obligations issued by or on behalf of the City to finance the Capital Improvement Program. Such costs do not include routine and periodic maintenance
expenditures, personnel training, and other operating costs.
IMPOSITION OF IMPACT FEES
Feepayer. Any person who, after the effective date of the Ordinance, seeks to develop land by applying for a Construction Permit to make an improvement to land which will generate additional impacts, shall be required to pay Development Impact Fees in the manner and amount set forth in the Ordinance.
Payment Due. The Development Impact Fees must be paid prior to the issuance of a Construction Permit
for any activity requiring payment of an impact fee. Payment shall be made in the form of cash, personal check, cashier's check, money order, wire transfer, or credit card, payable to the City of Bozeman, Montana. If a check is not cashable or transaction does not complete, the Construction Permit will be deemed to have not been issued and the Development Impact Fees not paid and returned payment fees
may apply.
Determination of Fee. The amount of the Development Impact Fee shall be determined by the Impact Fee Coordinator. The Applicant has the option of requesting the Impact Fee Coordinator to determine the method of fee calculation based on either the fee schedules of the Ordinance or administratively in cases where the fee schedules does not include a reasonably proximate land use category, or to pursue at her/his
cost an independent fee calculation study as provided below.
1. All Projects. The amount of the impact fee shall be determined by the Impact Fee Coordinator during the review of a construction permit. The fee schedule to be used to determine the amount of the impact fee that is due is the impact fee schedule in effect on the date a complete construction permit is submitted. A construction permit application is considered to be complete when the application which
contains all the required elements has been submitted to the City’s Building Division and within 15
days of the date of submission all permit review fees have been paid and the necessary drawings and documents uploaded to the E-Plan electronic plan review system.
Expiration of Building Permits. If an applicant has paid a Development Impact Fee required by the Ordinance and has obtained a Construction Permit for which the Development Impact Fee was paid and
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which later expires without the possibility of further extension, the applicant shall be entitled to a refund
of the Development Impact Fees paid less administrative retainage and without interest. To be eligible to
receive such refund, the applicant shall be required to submit an application to the Impact Fee Coordinator for such refund within thirty (30) days after the expiration of the Construction Permit for which the Development Impact Fee was paid.
DETERMINATION OF FEE BASED ON FEE SCHEDULES
Land-Use. The amount of the fee is determined by the fee schedules adopted through the Ordinance times
any assessment factor provided in the Ordinance. The tables shall be adjusted annually for inflation on January 1st. No further action is required for the inflation adjusted schedules to take effect.
If the type of development activity is not specified in the fee schedules, the Impact Fee Coordinator shall use the fee applicable to the most nearly comparable type of land use on the fee schedule as described by
the Ordinance. The Impact Fee Coordinator is responsible to determine the category applicable to each
project. If it is determined that there is no comparable type of land use in the fee schedule, the Impact Fee Coordinator may determine the fee administratively. In the event that the classification of a particular use of land into the classification established by the ordinances is unclear, the North America Industrial Classification System, as published by the Superintendent of Documents, U.S. Government Printing
Office, latest edition, and/or the latest edition of the Trip Generation Manual as published by the Institute
of Transportation Engineers, whichever is appropriate, shall be used as the final authority.
Total Building Area and Gross Leasable/Floor Area. There is a difference between total building area and gross leasable/floor area. Total building area means the total floor space of a building as measured to the outside surfaces of exterior walls excluding architectural projections and including basements,
mezzanines, penthouses, halls and corridors, stairways, elevator shafts, and all areas with floor surfaces
with clear standing headroom of at least 78 inches regardless of use.
Gross leasable/floor area means that portion of the total building area that is useable by tenants as measured to the outside surfaces of exterior walls but excluding halls, stairways, elevator shafts, attached garages, porches and balconies. Development Impact Fees assessed on nonresidential and non-
recreational development for transportation are to be based on gross leasable/floor area; this affects office,
commercial, industrial, and institutional development. Development Impact Fees assessed on nonresidential development for fire facilities are based on total building area.
There will be two ways to calculate the gross leasable/floor area of a building being assessed Development Impact Fees for transportation. The first is to have the Planning Office or the Building Official, whichever
is most appropriate, calculate total building area then subtract halls, stairways, elevator shafts, attached
garages, porches and balconies. To save time, the second is to multiple total building area by 0.85; this factor, called the efficiency ratio, roughly represents the share of the total building area that is leasable. Floor area within parking garages is not included for determining transportation impact fee. The Impact Fee Coordinator shall decide which calculation approach to use on a case-by-case basis.
Care must be given to the calculation of gross leasable area affecting commercial activities,
especially retail. In recent years, shopping centers have leased open mall floor area and sidewalks to cart, kiosk, or other small-area vendors. Many other stores extend retail activities to their sidewalks in "sidewalk sale" promotions. In recent years, therefore, the total area effectively used for retail activity has increased substantially. Thus, for retail activities, the gross leasable area adjustment
factor shall not be less than 0.85 and may be higher in the judgment of the Impact Fee Coordinator
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for the reasons provided above.
Residences. Residences are calculated based on the area of the individual dwellings measured to the
inside of the exterior walls. The assessed square footage includes all spaces and walls within the exterior walls but excludes unfinished attics, carports, attached garages, porches that are not protected from the weather (such as screened porches) and mobile home hitches. Both finished and unfinished basements and guesthouses and other similar spaces finished for human occupation are
included. A later conversion of a guesthouse to an independent home is assessed the difference
between the fee due for the total area of the guesthouse and main dwelling as a single entity and for the area of the main home and area of the newly created independent dwelling as two separate homes.
Mixed-Use Development. If a development involves multiple structures that include both residential
and non-residential land uses or a building contains both residential and non-residential land uses, the
Development Impact Fees are assessed for each use based on the fee schedules and the results aggregated. In some cases, applicants may suggest that the total impact fee should be reduced to account for internal trips between residential and non-residential land uses. There are no provisions in the Ordinance for such a reduction. However, the applicant has the option of completing an Independent Fee Calculation Study
in accordance with the Ordinance and this Manual to demonstrate whether a reduction may be considered.
The same process is used to determine the applicability of the Trip Exchange District schedule to a given area of the community. Care must be taken when evaluating such a request to ensure that adequate surety is provided that the mix of uses will be constructed required to support the reduction in vehicle trips.
Mixed-Use Structures. In many instances, a particular structure may include auxiliary uses associated
with the primary land use. For example, in addition to the actual production of goods, manufacturing
facilities usually also have office, warehouse, research and other associated functions. The Development Impact Fee generally should be assessed based on the primary land use. If the applicant can document that a secondary land use accounts for over 25 percent of the gross floor area of the structure, then the impact fee may be assessed based on the disaggregated square footage of the primary and secondary land
uses. For example, the Development Impact Fee for a large retail store with a warehouse comprising more
than 25 percent of the GLA shall be assessed in the following manner:
1. Determine the Development Impact Fee for the retail activity based on the square footage of the showroom;
2. Determine the Development Impact Fee for the warehouse activity based on the square footage devoted
to storage; and
3. Sum the disaggregated fees to determine the total Development Impact Fee for the structure.
This procedure should be followed only when the applicant can clearly document, to the satisfaction of the Impact Fee Coordinator and the Building Official the square footage accounted for by the primary and secondary land uses (see special instructions for shopping centers below). The Impact Fee
Coordinator shall be guided by the fact that some facilities can have a variety of internal configurations
that change over time such as 25 percent retail and 75 percent warehouse in one configuration switching to 75 percent retail and 25 percent warehouse in another configuration. The Impact Fee Coordinator shall assess the impact fee reflecting the greatest impact affecting all space for which future Construction Permits would not be needed to achieve the highest impact level.
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The procedure described above is for circumstances when the uses are not segregated on separate floors.
In a mixed use structure with multiple floors which are intended for different uses each floor shall be
considered separately for the purposes of determining the 25% secondary land use threshold.
Shell Permit. Developers will often apply for a building permit to construct the "shell" of a building. Interior completion permits would be issued later to finish construction of the interior of the structure. The Development Impact Fee shall be paid prior to the issuance of the Construction Permit for
construction of the shell. The amount of the fee should be based on the intended land use as approved by
the Impact Fee Coordinator. If the intended land use is not known, the impact fees shall be assessed based on that land use which generates the least impact and is allowed under the existing zoning for the lot or parcel. If it is found during review of the application for a remodeling permit that the actual land use differs from the intended land use (as described by the developer) resulting in higher impact units, the
permit will be issued only upon payment of a Development Impact Fee for the difference in the impact
units assessed originally and the impact units proposed.
If a shell permit was issued prior to the effective date of any Ordinance and left unfinished, permits for interior completion applied for on or after the effective date would be credited for the lesser use. If the actual use is greater than the lesser use, the difference shall be paid by the permit applicant. Subsequent
change of use, redevelopment, or modification of the structure may be subject to an impact fee based on
the procedures for Change of Use.
Change of Use. In the case of a change of use, redevelopment, or modification of an existing use which requires the issuance of a Construction Permit and for which higher impact units compared to the previous use result, the impact fee shall be based upon the net increase in the impact units for the new use as
compared to the previous use. The amount of the impact fee that is due as a result of the change in land
use shall be determined at the time that the applicant applies for the Construction Permit. The impact fee shall be paid prior to the issuance of a Construction Permit. If the change of land use does not require the issuance of a Construction Permit then there shall be no requirement to pay a Development Impact Fee. The Impact Fee Coordinator shall calculate the impact fee due to a change in use. Under no circumstances
will a refund of the Development Impact Fee be granted for change of use.
Auxiliary Uses. No Development Impact Fee shall be assessed for auxiliary land uses, such as a clubhouse or tennis court in an apartment complex, unless it can be clearly established by the Planning Office that the land use serves as an individual attraction. However, structures that meet the definition of a Dwelling in the Bozeman Zoning Ordinance are not exempted as auxiliary uses.
House Moves and Manufactured Home Moves. Development Impact Fees shall be assessed for house
moves and manufactured home moves into the benefit district as though they were newly constructed structures.
Manufactured Homes. When a person applies for a manufactured home installation permit to tie down a manufactured home on a lot, the applicant may request a determination by the Impact Fee Coordinator
as to whether or not a manufactured home (or other dwelling unit) was legally in place on that lot, parcel,
or space prior to the effective date of the Ordinance. If so, no impact fee shall be assessed for installation of the manufactured home. If not, the appropriate impact fee for the installation of a manufactured home residence must be paid prior to the issuance of the requested permit. An exemption will also be granted if it can be documented that an impact fee has been paid previously for the tie down of a manufactured
home on that same lot, parcel, or space. Documentation to be used by the Impact Fee Coordinator may
include utility bills for the period of time in question, the tax rolls records or other such record.
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Recreational Vehicles (RV's). Several provisions apply to RVs:
1. Developed RV Parks. No development impact fees shall be assessed for "move in" of a recreational
vehicle in an RV park developed prior to the effective date of the Ordinance.
2. New, Phased, or Seasonal RV Parks. When building permits/slab permits are issued for construction of a New, Phased, or Seasonal RV Park, the impact fee for a manufactured home residence shall be assessed for each new RV site. The impact fee shall be paid prior to the issuance of the first
Construction Permit.
3. New Units in a Pre-Ordinance RV Park. For any applicants who are required to get a manufactured home permit to add a new unit to pre-existing RV parks, impact fees shall be assessed in the same manner as a new manufactured home.
4. RV's Located Outside of RV Parks. RV owners who apply for a Construction Permit shall pay the
Development Impact Fees at the same rate as for a manufactured home (one time) and are entitled to
the same exemptions as manufactured home owners.
Shopping Centers. The entire area of shopping centers shall be assessed entirely as a retail activity regardless of the intended use of individual retail spaces. For example, shopping center space used by restaurants, whether fast food or quality, would not be assessed differently that the shopping center as a
whole. The reason is that much of the food consumption within shopping centers is incidental to the
primary purpose of the center and that over time the volume of space used for food changes. Space used for offices of the shopping center management is also counted in the total to be assessed. The overall effect is an averaging of impacts over a wide range of potential uses of shopping center buildings.
This assessment applies only to those shopping center spaces that are connected by common roof or
shelter. Shell permit procedures do not apply. Each out-parcel of a shopping center area more than 100
feet away from the shopping center or across a publicly dedicated right-of-way maintained by the City or the State and not otherwise connected to it by a common roof or shelter shall be assessed at the time of the building permit for the class of use intended.
For clarification and consistent with procedures presented earlier, care must be given to the calculation of
gross leasable area affecting all retail development generally and shopping centers in particular. Shopping
centers typically lease open mall floor area and sidewalks to cart, kiosk, or other small-area vendors. "Sidewalk sale" promotions are common. The Development Impact Fees assessed for shopping centers will be the total floor area (as defined earlier) times an efficiency ratio of 0.85. Nonetheless, if the particular design of a shopping center indicates large open air areas that have the potential for retail or
restaurant activities especially in peak summer months, such area will be added to the total floor area
calculation to which the 0.85 efficiency ratio will be applied.
Model Homes. Single household model homes placed on single household lots shall pay the single household rate. Single household model homes placed on multi-household lots shall pay the single household rate. Multi-household model homes on multi-household lots shall pay the multi-household
rate. Model homes on commercial lots shall pay at the same rate as the general commercial land use
category on the fee schedule. The exception is any model home set up for display as part of a trade show because in these situations building permits are not issued.
Churches. Churches fit two distinct categories: 1. Churches with active weekday school and other
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programs and 2. Churches without such programs. Churches claiming to fit the second category must
submit a letter to the Impact Fee Coordinator documenting that their activities take place at limited times,
during off-peak times defined as weekends and weekdays before 7 am and after 5 p.m. The letter must be provided to the Impact Fee Coordinator prior to the issuance of permits. The letter must be signed by the person(s) authorized to conduct the business of the church; satisfactory proof of such authorization shall be determined on a case-by-case basis by the Impact Fee Coordinator. In such cases, the impact fee
classification for Warehousing will be assessed. This is because there will be a similarity of characteristics
with large floor area compared to the number of anticipated trips to the structure during normal business hours. In all other situations the Development Impact Fees will be calculated using the Mixed-Use Structure procedure above.
Fraternal Organizations/Civic Clubs. Fraternal organizations and civic clubs are required to submit a
letter documenting that their activities take place at limited times such as weekends and during off-peak
times, before 7 am and after 5 p.m. The letter must be provided to the Impact Fee Coordinator prior to the issuance of permits. The letter must be signed by the person(s) authorized to conduct the business of the organization/club; satisfactory proof of such authorization shall be determined on a case-by-case basis by the Impact Fee Coordinator. The Development Impact Fee to be assessed would be the same as for
churches. As with churches, if other activities are anticipated or intended the Development Impact Fee
will be calculated based on the Mixed-Use Structure procedures above.
Replacement of Existing Buildings. A replacement building will be allowed without payment of an impact fee, provided that no additional impact will be produced over and above that produced by the original use of the land (e.g., if the existing building is torn down, destroyed by fire or other natural
disaster, or otherwise eliminated or moved off of the site, or if the original structure is converted to a
utility building, garage, or other non-residential/non-commercial use). In the latter example, the applicant shall document such conversion to the satisfaction of the Impact Fee Coordinator.
Redevelopment/further development of sites: These sites have previously paid for needed service capacity expansion in fees paid earlier, either impact or monthly. The fee shall be
determined and charged on the basis of the net increase in number of dwellings and/or non-
residential building area.
ADMINISTRATIVE DETERMINATION OF DEVELOPMENT IMPACT FEES
General. Whenever possible, Development Impact Fees shall be assessed in accordance with the land use type in the fee schedules adopted in the Ordinance.
Administrative Determination. If it is determined by the Impact Fee Coordinator that there is no
comparable type of land use in the fee schedule, the Impact Fee Coordinator shall administratively determine the fee based on the methods for calculating the fee provided in the Ordinance and this Manual. If the applicant disagrees with the determination of the Impact Fee Coordinator, then he/she must prepare an independent fee calculation study in accordance with the Ordinance and this Manual.
Special Case of Wastewater. If wastewater service is provided by the city, but water service is either
wholly or partially provided by private well, which does not already have a city standard or equivalent water meter installed, the Impact Fee Coordinator shall administratively determine the fee based on the methods for calculating the fee provided in the Ordinance and this Manual. If the applicant disagrees with the determination of the Impact Fee Coordinator, then he/she must prepare an independent fee calculation
study in accordance with the Ordinance and this Manual.
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INDEPENDENT FEE CALCULATION STUDY
General. If an applicant shall opt not to have the impact fee determined according to the fee schedule in
the Ordinance or determined administratively, then the applicant shall prepare and submit an independent fee calculation study in accordance with the Ordinance and this Manual.
Impact Units. The critical element of any Development Impact Fee analysis is the extent to which a proposed development impacts on the community. The nature of impact is reflected by the impact units
generated by new or expanded development. The methodology for determining impact units is provided
in the adopted impact fee studies.
Pre-Application Meeting. Before beginning the independent fee calculation study, the applicant or her/his representative(s) shall attend a pre-application meeting held jointly between the Impact Fee Coordinator and whichever of the following agencies are associated (as listed below) with the impact fee
in question and any other person(s) whom the Impact Fee Coordinator requests:
FEE TO BE STUDIED ASSOCIATED CITY AGENCY
Fire Fire Department
Transportation Department Of Public Works
Water Department Of Public Works
Wastewater Department Of Public Works
No agreement or understanding with regard to data, assumptions or methodology shall be binding upon the city unless provided to the developer in writing. If the applicant wishes to waive the pre-application meeting he/she must do so in writing.
General Guidelines. The independent fee calculation study shall follow the methodologies contained in
the reports referenced above and in the Ordinance. The independent fee calculation study shall be prepared and presented by professionals qualified in their respective fields. The methodology shall be consistent with best professional practice and support the central claim of the study. The study shall provide all necessary supporting documentation and information. The results of the independent fee
calculation study shall be submitted to the Impact Fee Coordinator and the appropriate agency(ies) listed
above.
Specific Guidelines for Transportation. If an applicant shall elect not to have the Transportation Development Impact Fee determined according to the fee schedule or by Administrative determination, the applicant shall conduct an independent fee calculation. The applicant shall prepare and submit to the
Impact Fee Coordinator an Independent Transportation Development Fee Calculation Study for the
development for which a building permit is sought. The Independent Transportation Development Fee Calculation Study shall follow the prescribed methodologies and formats for the study established by the Impact Fee Coordinator but in no event shall it deviate from the assumptions and formulas used in the study referenced above. Such documentation submitted shall show the basis upon which the Independent
Transportation Development Impact Fee Calculation was made, including but not limited to the
following:
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1. Documentation of trip generation rates appropriate for the proposed development.
2. Documentation of trip length appropriate for the proposed development.
3. Documentation of trip data, for example, origination and destination information and capture and diversion data, appropriate for the proposed development.
4. Documentation of the extent to which the proposed development cannot be altered in use or purpose such that the future impact units will be the average impact level assumed in the fee
schedule.
This documentation shall be prepared and presented by qualified professionals in their respective fields and shall follow best professional practices and methodologies. If any person involved in such documentation shall be licensed by the state of Montana, such person shall affix to the document their professional seal or stamp.
Specific Guidelines for Fire Facilities. If an applicant shall elect not to have the Fire Development
Impact Fee determined according to the fee schedule or by Administrative determination, the applicant shall conduct an independent fee calculation. The applicant shall prepare and submit to the Impact Fee Coordinator an Independent Fire Development Impact Fee Calculation Study for the development for which a construction permit is sought. The Independent Fire Development Impact Fee Calculation Study
shall follow the prescribed methodologies and formats for the study established by the Impact Fee
Coordinator but in no event shall it deviate from the assumptions and formulas used in the study. Such documentation submitted shall show the basis upon which the Independent Fire Development Impact Fee Calculation was made, including but not limited to the following:
1. Documentation of demand appropriate for the proposed development.
2 . Documentation of the extent to which the proposed development cannot be altered in use or purpose
such that the future impact units will be the average impact level assumed in the fee schedule.
This documentation shall be prepared and presented by qualified professionals in their respective fields and shall follow best professional practices and methodologies. If any person involved in such documentation shall be licensed by the state of Montana, such person shall affix to the document their
professional seal or stamp.
Specific Guidelines for Water Facilities. If an applicant shall elect not to have the Water Development Impact Fee determined according to the fee schedule or by Administrative determination, the applicant shall conduct an independent fee calculation. The applicant shall prepare and submit to the Impact Fee Coordinator an Independent Fee Calculation Study for the development for which a construction permit
is sought. The Independent Fee Calculation Study shall follow the prescribed methodologies and formats
for the study established by the Impact Fee Coordinator but in no event shall it deviate from the assumptions and formulas used in the study referenced above. Such documentation submitted shall show the basis upon which the Independent Fee Calculation was made, including but not limited to the following:
1. Documentation of the peak daily water flow in gallons appropriate for the proposed development.
2. Documentation of the extent to which the proposed development cannot be altered in use or purpose
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such that the future impact units will be the average impact level assumed in the fee schedule.
This documentation shall be prepared and presented by qualified professionals in their respective fields
and shall follow best professional practices and methodologies. If any person involved in such documentation shall be licensed by the state of Montana, such person shall affix to the document their professional seal or stamp.
Specific Guidelines for Wastewater Facilities. If an applicant shall elect not to have the Wastewater
Development Impact Fee determined according to the fee schedule or by Administrative determination,
the applicant shall conduct an independent fee calculation. The applicant shall prepare and submit to the Impact Fee Coordinator an Independent Fee Calculation Study for the development for which a building permit is sought. The Independent Fee Calculation Study shall follow the prescribed methodologies and formats for the study established by the Impact Fee Coordinator but in no event shall it deviate from the
assumptions and formulas used in the study referenced above. Such documentation submitted shall show
the basis upon which the Independent Fee Calculation was made, including but not limited to the following:
1. Documentation of the peak daily wastewater flow in gallons appropriate for the proposed development.
2. Documentation of the extent to which the proposed development cannot be altered in use or purpose
such that the future impact units will be the average impact level assumed in the fee schedule.
This documentation shall be prepared and presented by qualified professionals in their respective fields and shall follow best professional practices and methodologies. If any person involved in such documentation shall be licensed by the state of Montana, such person shall affix to the document their professional seal or stamp.
Sufficiency Determination. The appropriate department listed above will review the independent fee
calculation study for the appropriate impact fee for sufficiency, methodology, technical accuracy and findings and will make recommendations concerning the amount of the Development Impact Fee to the Impact Fee Coordinator. The review for sufficiency should be completed within thirty (30) business days after the submission of a complete independent fee calculation study. Should the submitted study be
judged incomplete and additional information be required the time necessary to receive the additional
information shall not be counted against the thirty (30) business day review period. The date at which the independent fee calculation study is found to be sufficient, or thirty (30) business days after submission if there is no finding, shall be the effective date for payment of fees established pursuant to an independent fee calculation study.
Determination of Fee. The final determination of the amount of the impact fee shall be made by the
Impact Fee Coordinator and shall be based on the recommendations of the associated City agency which conducted the sufficiency determination, and on her/his own review of the documentation presented.
Notification of Feepayer. Within forty-five (45) business days of submittal of the independent fee calculation study, the Impact Fee Coordinator shall notify the applicant in writing of the acceptance,
conditional acceptance, or rejection of the study. If the applicant disagrees with the findings of the Impact
Fee Coordinator, the applicant may appeal the decision in accordance with Chapter XI.
Payment in Deposit. To enable the applicant to proceed with the proposed development, the Development Impact Fee(s) that would be assessed were it not for the outcome of an independent fee
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calculation study will be assessed, collected, and deposited as provided in the Ordinance and Manual. If
the outcome of an independent fee calculation study shows that lower Development Impact Fees should
be assessed and the Impact Fee Coordinator accepts the lower fee calculation, then the difference between the Development Impact Fees already assessed, collected, and deposited and the revised fees shall be refunded to the applicant without interest. If the outcome of an independent fee calculation study shows that higher Development Impact Fees should be assessed and the Impact Fee Coordinator accepts the
higher fee calculation, then prior to the issuance of the Certificate of Occupancy by the Building
Department the difference between the Development Impact Fees already assessed, collected, and deposited and the revised fees shall be paid to the City by the applicant without interest.
USE OF IMPACT FEE FUNDS
A. General
Administration. The city shall retain not more than five (5) percent of the funds collected as
compensation for the expense of collecting and administering the Development Impact Fees.
Refunds. Funds may be used to provide refunds pertaining to Expiration of Building Permits as provided in this Manual. Funds may be used to make refunds required as provided below pertaining to the non-expenditure of funds as provided in the Ordinance.
Order of Expenditure. Funds shall be expended in the order in which they were collected,
otherwise known as the first-in-first-out ("FIFO") basis.
Operations and Maintenance. Impact fees funds shall not be used for correction of existing deficiencies, periodic or routine maintenance, or operations.
Annual Capital Improvements Planning. Each fiscal period the City Manager shall present to the
City Commission a proposed capital improvement program for impact fee funded improvements,
assigning funds, including any accrued interest, from the Development Impact Fee Funds to specific improvement projects and related expenses. Monies, including any accrued interest, not assigned in any fiscal period shall be retained in the same individual Impact Fee Fund until the next fiscal period. Funds must be used for the same type of facility for which they were collected.
The programming of improvements will primarily be the responsibility of the Department responsible for
the specific function. However, the Impact Fee Coordinator shall coordinate with the Department Director to assure that all public facilities are consistent with the requirements for expenditure of impact fees. The Impact Fee Advisory Committee shall be consulted during the development of the annual preparation of the Capital Improvement Program.
B. Transportation
Capital Improvements. Funds collected from transportation Development Impact Fees shall be used for the purpose of improvements to and expansion of transportation facilities associated with the Major Street Network as defined in the most recent long range transportation plan and in accordance with the City Capital Improvements Program. " Improvement" and “transportation
system” are defined in Section 2.06.1630, BMC. It also includes recoupment of funds previously
spent to provide current excess capacity that reasonably accommodates new development. It also includes debt service including principal and interest.
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Priorities Consistent with Plans. Priorities for the use of transportation Development Impact Fees
in the Capital Improvements Program must be consistent with the growth policy and long range
transportation plan of the city as amended and adopted by the City Commission.
Service Area. Funds shall be used exclusively for capital improvements or expansion within the transportation service area from which the funds were collected.
C. Fire
Capital Improvements. Funds collected from fire Development Impact Fees shall be used for the
purpose of capital improvements to and expansion of fire facilities and rolling stock as shown in city's Capital Improvement Program. " Improvement" is defined in Section 2.06.1630, BMC. It also includes recoupment of funds previously spent to provide current excess capacity that reasonably accommodates new development.
Priorities Consistent with Plans. Priorities for the use of fire Development Impact Fees in the
Capital Improvements Program must be consistent with the growth policy and fire master plan of the city as amended and adopted by the City Commission.
Service Area. Funds shall be used exclusively for capital improvements or expansion within the fire service area from which the funds were collected.
D. Water
Capital Improvements. Funds collected from water Development Impact Fees shall be used for the purpose of capital improvements to and expansion of water facilities as shown in city's Capital Improvement Program. Improvement" is defined in Section 2.06.1630, BMC. It also includes recoupment of funds previously spent to provide current excess capacity that reasonably
accommodates new development.
Priorities Consistent with Plans. Priorities for the use of water Development Impact Fees in the Capital Improvements Program must be consistent with the growth policy and water facility plan of the city as amended and adopted by the City Commission.
Service Area. Funds shall be used exclusively for capital improvements or expansion within the
water service area from which the funds were collected.
E. Wastewater
Capital Improvements. Funds collected from wastewater Development Impact Fees shall be used for the purpose of capital improvements to and expansion of wastewater facilities as shown in city's Capital Improvement Program. Improvement" is defined in Section 2.06.1630, BMC. It also includes
recoupment of funds previously spent to provide current excess capacity that reasonably
accommodates new development.
Priorities Consistent with Plans. Priorities for the use of wastewater Development Impact Fees in the Capital Improvements Program must be consistent with the Comprehensive Plan of the city as amended and adopted by the City Commission.
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Service Area. Funds shall be used exclusively for capital improvements or expansion within the
wastewater service area from which the funds were collected.
DEVELOPMENT IMPACT FEE CALCULATION/ASSESSMENT PROCESS
Review. The Impact Fee Coordinator shall complete a record of the impact fee determination for any application accepted by the Building Division for a Construction Permit unless an exemption from impact fees has been requested by the applicant which meets the criteria for exemption from impact fees in
Section 8 of this Manual.
EXEMPTIONS
Must Be Claimed by Applicants. Any exemption provided by the Ordinance must be claimed by the applicant at the time of the application for a construction permit. Any exemption not so claimed shall be deemed waived by the applicant. The specific exemptions follow:
Exemptions from Transportation Development Impact Fee
1. The following types of development shall be exempted from payment of the Transportation Development Impact Fee:
a. A one-time, post-ordinance expansion of existing non-residential buildings by up to, but not including the lesser of thirty percent (30%) or 2,000 square feet as compared with their size
on the effective date of the Ordinance. For example, if a building is 10,000 square feet and an
expansion is proposed for 1,500 square feet, the expansion will not be assessed development impact fees but any further expansion regardless of size will be assessed development impact fees.
b. Alterations or expansions of existing buildings where the use is not changed, no additional
residential units are created, and no additional vehicle trips will be produced over and above
those produced by the existing use.
c. Construction of accessory buildings or structures that will not produce additional vehicle trips over and above those produced by the primary building or land use.
d. The replacement of a destroyed or partially destroyed building or structure with a new
building or structure of the same size and use where no additional vehicle trips will be
produced over and above those produced by the original building or structure.
e. The installation or replacement of a manufactured home on a lot or a manufactured home site when a Transportation Development Impact Fee for such lot or site has previously been paid pursuant to this chapter or where a manufactured home legally existed on such site on or
prior to the effective date of this chapter.
f. Any other type of development for which the applicant can demonstrate that the proposed land use and development will produce no more vehicle trips from such site over and above the trips from such site prior to the proposed development, or for which the applicant can show that a Transportation Development Impact Fee for such site has previously been paid in an
amount that equals or exceeds the Transportation Development Impact Fee that would be
required by this chapter for such development. The demonstration of land use and trip
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generation shall be either for a category of uses actually paid, or a category of use which was
active at the time the most recent facility plan relevant to the fee type was adopted.
g. When a property changes from one nonresidential use to another within an existing nonresidential building, the area included in the calculation of change in demand shall exclude the first 2,000 square feet of gross floor area
2. Any such claim for exemption must be made no later than the time when the applicant applies for
the first Construction Permit for the proposed development, and any claim for exemption not
made at or before that time shall have been waived.
3. The Impact Fee Coordinator shall determine the validity of any claim for exemption pursuant to these criteria.
F. Exemptions from Fire Development Impact Fee
1. The following types of development shall be exempted from payment of the Fire Development
Impact Fee:
a. A one-time, post-ordinance expansion of existing non-residential buildings by up to, but not including the lesser of thirty percent (30%) or 2,000 square feet as compared with their size on the effective date of the Ordinance. For example, if a building is 10,000 square feet and an
expansion is proposed for 1,500 square feet, the expansion will not be assessed development
impact fees but any further expansion regardless of size will be assessed development impact fees.
b. Reconstruction, expansion, or replacement of a previously existing residential unit that does not create any additional residential units.
c. Projects that the applicant can demonstrate will produce no greater demand for fire protection
from such land than existed prior to issuance of such permit. The demonstration of land use and demand generation shall be a category of use which was active at the time the most recent facility plan relevant to the fee type was adopted.
d. Projects for which a Fire Development Impact Fee has previously been paid in an amount that
equals or exceeds the Fire Development Impact Fee that would be required by the current
construction permit.
2. Any such claim for exemption must be made no later than the time when the applicant applies for the first Construction Permit for the proposed development, and any claim for exemption not made at or before that time shall have been waived.
3. The Impact Fee Coordinator shall determine the validity of any claim for exemption pursuant to
these criteria.
G. Exemptions from Water Development Impact Fees
1. The following types of development shall be exempted from payment of the Water Development Impact Fee:
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a. Renewal of existing service lines with new lines of the same capacity.
b. Alteration or expansion of an existing building that does not require an additional or larger
water tap.
c. Replacement of a building or structure of the same size that does not require an additional or larger water tap.
d. The location of manufactured home on a site for which a Water Impact Fee was previously
paid, and that does not require an additional or larger water tap.
e. See also special cases for water in Section 3.
2. The installation of fire lines for fire protection shall be exempted from payment of the Water Development Impact Fee.
3. Any such claim for exemption must be made no later than the time when the applicant applies for
the first Construction Permit for the proposed development, and any claim for exemption not
made at or before that time shall have been waived.
4. The Impact Fee Coordinator shall determine the validity of any claims for exemption pursuant to these criteria.
H. Exemptions from Wastewater Development Impact Fees
1. The following types of development shall be exempted from payment of the Wastewater
Development Impact Fee:
a. Renewal of existing service lines with new lines of the same capacity.
b. Alteration or expansion of an existing building that does not require an additional or larger water tap.
c. Replacement of a building or structure of the same size that does not require an additional or
larger water tap.
d. The location of manufactured home on a site for which a Wastewater Impact Fee was previously paid, and that does not require an additional or larger water tap.
e. See also special cases for wastewater in Section 3.
2. Any such claim for exemption must be made to the Impact Fee Coordinator no later than the time
when the applicant applies for the first Construction Permit for the proposed development, and any claim for exemption not made at or before that time shall have been waived.
3. The Impact Fee Coordinator shall determine the validity of any claim for exemption pursuant to these criteria.
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DEFERRAL OF PAYMENT
Deferrals Authorized. The City Commission adopted Resolution 4433 authorizing a deferral
program. Any type of project requiring a Certificate of Occupancy may request to defer payment. There are certain restrictions based on the property owner. These restrictions are to reduce likelihood of default. Those restrictions are set by City Commission resolution.
Only transportation impact fees can be deferred at this time.
Prohibitions. If one or more of the following apply then the deferral of payment is not allowed.
• The property owner has had a foreclosure on any properties in the past four years.
• The property owner has had any bankruptcy filing in the past four years.
• The property owner has outstanding and unsatisfied Civil Judgment.
• Taxes or other governmental fees due to the City of Bozeman on this property or other properties owned by the same property owner are late or unpaid.
• All zoning or subdivision review steps for this site are not completed.
• The property owner has been convicted of a felony offense involving theft or a related offense, or fraud.
I. Deferral Process.
Process Anticipated Time Frame
Application for deferral submitted to the Community Development Department in conjunction with the initial Building Permit application
Application is reviewed by staff. The department will notify the applicant of approval or denial. 5-10 working days
Agreement and Notice of intent to lien is prepared by the City (please contact staff at least 5-7 working days prior to the anticipated date that the building permit will be issued for the project)
5-7 working
days
Applicant signs Agreement and records the Agreement at the Gallatin County Clerk and Recorder and provides evidence of the recording at least two working days before issuance of the building permit.
2-3 working days
Building Permit issued, less deferred fees
Project is built/completed varies
Applicant notifies Building Division of request for final inspection and Certificate of Occupancy ((please contact Community Development
staff at least 10 working days prior to anticipated date that the
Certificate of Occupancy is desired)
10 working days
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Payment of deferred fees – Prior to issuance of Certificate of Occupancy and preparation of Release (please contact Community Development staff 2-3 working days prior to anticipated date that the Certificate of Occupancy will be issued for the project)
2-3 working days
CREDITS
An applicant may obtain credit against all or a portion of Development Impact Fees otherwise due or to
become due by offering and having her/his offer accepted by the city to dedicate non-site-related land
and/or construct non-site related improvements. Any claim for credit must be made no later than the
initiation of construction of improvements or the acceptance by the City of land dedications. Any claim not made is deemed waived. Credits are of two types:
Voluntary and Project Related. Credits for capital improvements or land dedications shall be given
in accordance with the Ordinance and this Manual. No credit shall be given for project
improvements and/or land dedications.
Mandatory or Required. All mandatory or required capital improvements and/or land dedications made by an applicant, subsequent to the effective date of the Ordinance, except for project improvements, shall be credited on a pro rata basis in accordance with the standards of Chapter 2
Article 6 Division 9, BMC, against Development Impact Fees for the same facilities or land used by
the same facilities otherwise due or to become due for the development that prompted the municipality to require such contributions. The term pro rata means the share of the capital improvements and/or land dedications not attributable to the applicant's development.
Limitations. All mandatory or required land dedication fortransportation, fire protection, water, or
wastewater improvements, and all mandatory or required acquisition or construction of Improvements to
the Major Street System or the City fire protection, water, or wastewater systems by an applicant in connection with a proposed development shall result in a pro rata credit against the Development Impact Fee for the same type of service or facility otherwise due for such development, except that no such credit shall be awarded for:
1. Land dedications for or acquisition or construction of Project Improvements, or
2. Any voluntary land dedications not included in the City IFCIP, required or provided through other legal or administrative process, or otherwise not accepted by the City, or
3. Any voluntary acquisition or construction of improvements not included in the City IFCIP or otherwise not approved in writing by the City prior to commencement of the acquisition or construction.
The City reserves the right to determine the amount to be credited, obtaining input from the Department
of Public Works and the Fire Department as well as the information required from the applicant claiming credit, as outlined below. The offer to construct or dedicate land in lieu of paying development impact fees shall be made in an application with the Impact Fee Coordinator identifying the capital improvements and/or land dedications for which credits are claimed. If the Impact Fee Coordinator conditionally accepts
such an offer, the credit shall be determined and provided in the following manner.
General. To obtain a credit against Development Impact Fees otherwise due, an applicant must submit a written offer to dedicate to the City specific parcels of qualifying land or to acquire or construct specific
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improvements to the Major Street System or the City fire protection, water, or wastewater systems in
accordance with all applicable state or City design and construction standards, and must specifically
request a credit against such Development Impact Fees. Such written request must be made on a form provided by the City, must contain a statement under oath of the facts that qualify the applicant to receive a credit, must be accompanied by documents evidencing those facts, and must be filed not later than the initiation of construction of improvements or the acceptance by the City of land dedications against which
the credit is requested, or the applicant's claim for the credit shall be waived. The issuance of credits must
be approved by the City Commission or City Manager per 2.06.1690, BMC.
Land Dedication and Easements. Qualifying land dedication must be included in the City Capital Improvements Program. In some situations, this may require amendment to the IFCIP if the land affected is not on the IFCIP but is determined by the City Commission to be consistent with the Comprehensive
Plan and relevant facility plans. The credit due to an applicant for dedication of land shall be calculated
and documented as follows:
1. Credit for qualifying land dedications shall, at the applicant's option, be valued at:
a. one hundred (100) percent of the most recent assessed value for such land as shown in the records of the City Assessor, or
b. documentation appropriate to such other method of valuation as the City Commission may
have accepted prior to the effective date of the Ordinance for particular land dedications and/or roadway improvements, or
c. that fair market value established by a private appraiser acceptable to the City in an appraisal paid for by the applicant. If this method is chosen, such appraisals shall value the land at its
then current zoning and without the improvements for which the dedication is offered or the
permit in question is sought, unless the land in question is subject to a valid agreement, zoning approval or development order which prescribes a different valuation, in which case the agreement, zoning approval or development order shall control.
2. Credits for land dedication shall be created when the following procedures have been completed
and the title to said land has been accepted by the City Attorney and recorded with the Gallatin
County Clerk and Recorder:
a. The delivery to the appropriate governmental body of a deed, with sufficient funds to pay all costs of transfer of title including recording;
b. A title opinion written by a licensed State of Montana attorney or title abstractor and rendered
within sixty (60) days of submission thereof. the content of which is satisfactory to the City
Attorney and verifying that the proffered deed will convey unencumbered fee simple title to the appropriate governmental body and the issuance of which occurs prior to recording of the deed and escrow of taxes;
c. A certified copy of the most recent assessment of the property for tax purposes together with
the escrow of taxes for the current year, pursuant to Montana Statutes then in effect, or the
payment of said taxes for the year;
d. Submission of title insurance in an amount equal to the value of land dedication as of the date the City accepts title.
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3. In the event the dedication takes the form of an easement, the value of the easement shall be
perfected in the manner similar to land dedication except that the extent to which the applicant
retains use of the land shall be considered as a factor in lowering the value of the easement. All remaining requirements for land dedication shall apply to easements unless determined to be inappropriate according to a opinion written by the City Attorney.
Acquisition and Construction. To receive credit for qualifying acquisition or construction of
transportation, fire protection, water, or wastewater improvements, the applicant shall submit complete
engineering drawings, specifications, and construction cost estimates to the City. The City shall preliminarily determine the amount of credit due based on the information submitted, or, if it determines that such information is inaccurate or unreliable, then on alternative engineering or construction costs acceptable to the City. If the actual construction costs are less than originally estimated the amount of
credit shall be reduced so that the total compensation for improvements does not exceed the actual cost
of installation. Qualifying acquisition or construction must be included in the City Capital Improvements Program. In some situations, this may require amendment to the IFCIP if the acquisition or construction is not on the IFCIP but is determined by the City Commission to be consistent with the Comprehensive Plan and relevant facility plans.
1. Except as provided elsewhere, credit against impact fees otherwise due will not be provided until:
a. the construction is completed and accepted by the City or the State, whichever is applicable;
b. a suitable maintenance and warranty bond is received and approved by the Impact Fee Coordinator, when applicable; and
c. all design, construction. inspection, testing, bonding, engineering certification, as-built
drawings, and acceptance procedures are in strict compliance with the then current City
ordinances, when applicable.
2. Credit may be provided before completion of specified capital improvements if adequate assurances are given by the applicant that the standards set out above will be met and if the applicant posts security as provided herein for the costs of such construction. Security in the
form of a performance bond, irrevocable letter of credit or escrow agreement shall be posted with
and approved by the Impact Fee Coordinator in an amount determined by the applicable Department consistent with the then current applicable Ordinances plus fifty percent (50%). If the capital improvement project will not be completed within one (l) year of the acceptance of the offer by the City, the amount of the security shall be increased by ten percent (10%)
compounded, for each year of the life of the security. The security shall be reviewed and
approved by the Impact Fee Coordinator prior to acceptance of the security. If the capital improvement is to be owned by other than the City, such other jurisdiction may assign its rights in such security to such other jurisdiction if the jurisdiction requests it and the law permits it.
3. The Department of Public Works or Fire Department, whichever is appropriate, retains the right
to independently determine the amount of credit to be approved or recommended by securing
other engineering and construction cost estimates and/or property appraisals for those improvements and/or land dedications through the use of the methodology described herein and in the Ordinance. The City may establish either a percentage or fixed cost for impact fee funding of construction.
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4. Prior to any credit being considered awarded the City shall provide a written determination as to
which capital improvements and/or land dedications are eligible for credits and what the amount
of the credit shall be for each. The written determination shall include the following:
a. the dollar amount of the credit,
b. the reason for the credit,
c. the legal description or other adequate description of the project or development to which the
credit may be applied,
d. any conditions of the award of credits; and
The applicant must sign and date a duplicate copy of such letter or certificate indicating his agreement to the terms of the letter or certificate and return such signed document to the Impact Fee Coordinator before credit will be given. The failure of the applicant to sign, date, and return such
document within 60 business days shall nullify the credit.
Documentation of Awarded Credits. Credits awarded by the city are perfected by issuance of electronic records that shall be kept on the City's computers.
1. Before any electronic record is encoded, the applicant shall sign a form provided by the City indicating acceptance of its terms of the credit for which the electronic record shall be effective.
This form may be included or be an integral part of the City's documents accepting the
dedication and/or acquisition or construction of Improvements.
2. In case of any disagreement between the City and the applicant, the credit information shown on the electronic record as encoded in the City's computers shall govern.
3. The Finance Department in coordination with the Impact Fee Coordinator shall determine the
manner in which electronic records are encoded and archived.
Effectiveness. Approved credits shall become effective at the following times:
1. Approved credits for land dedications shall become effective when the land has been conveyed to the City in a form acceptable to the City and at no cost to the City and has been accepted by the City Commission. When such conditions have been met, the City shall note that fact in the credit record
maintained by the City Finance Department. Upon request of the credit holder, the City shall send
the credit holder a letter stating the credit balance available to him (or her).
2. Approved credits for the acquisition or construction of transportation, fire protection, water, or wastewater improvements shall generally become effective when (a) all required construction has been completed and has been accepted by the City and all other relevant agencies, and (b) a suitable
maintenance and warranty bond has been received and approved by the City, and (c) all design,
construction, inspection, testing, bonding, and acceptance procedures have been completed in compliance with all applicable City and state procedures. However, approved credits for the construction of improvements may become effective at an earlier date if the applicant posts security in the form of a performance bond, irrevocable letter of credit, or escrow agreement as provided
above. When such conditions have been met, the City shall note that fact in the credit record
maintained by the City Finance Department. Upon request of the credit holder, the City shall send
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the credit holder a letter stating the credit balance available to him (or her).
Sufficiency. The Department of Public Works and/or Fire Department, whichever is appropriate, shall
review engineering and cost estimates and a determination of sufficiency. In order to be eligible for credits, capital improvements or land dedications must meet the following standards:
1. It must be related to the mitigation of impacts from the development for which the building permits have been applied.
2. The term "site-related improvement" means that which is defined in the Ordinance.
3. The same guidelines which apply to the use of Development Impact Fee funds for specific facilities limit those improvements and land dedications which are eligible for credits for the same facilities. Credits shall not be given for capital improvements or land dedications for site-related purposes under any circumstances.
4. Credits shall not be given for improvements which do not meet County, Municipal or State design
standards, whichever is applicable.
J. Use of Credits
1. Approved credits shall be used to first reduce the amount of Development Impact Fees due from any proposed development for the same type of service or facility for which the applicant dedicated land
or acquired or constructed Improvements until the amount of the credit is exhausted. The unused
balance shall be noted on the electronic Certificate. Each time an applicant requests to use some or all of the credit shown thereon, the City shall reduce the amount of the Development Impact Fee of the same type otherwise due from the applicant in accordance with such request, and shall note in the credit record maintained by the City Finance Department the balance remaining under such
Certificate, if any. Upon request of the credit holder, the City shall send the credit holder a letter
stating the credit balance available to him (or her).
2. Approved credits shall only be used to reduce the amount of Development Impact Fees of the same type otherwise due under the Ordinance, and shall not be paid to the applicant in cash or in credits against any Development Impact Fees for a different type of facility or service or against any other
monies due from the applicant to the City.
3. If the amount of approved credits from mandatory or required dedications or acquisition of improvements exceeds the amount of the Development Impact Fees of the same type otherwise due under this chapter, the applicant may request in writing that the City provide for reimbursement of any excess credits to the applicant in cash. Such written request must be filed not later than the
initiation of construction of improvements or the acceptance by the City of land dedications or the
applicant's claim shall be waived. Upon receipt of such a written request the City may, at its option, instead arrange for the reimbursement of such unused credits from the Impact Fee Fund for the same type of service or facility from Development Impact Fees paid by others. The City at its option, and provided the applicant requests in writing, may provide for reimbursement of any
unused credits to the applicant in cash or note for not more than ten (10) years bearing interest equal
to the interest paid by the City for its long term debt. The provision of cash rather than credit is at the sole discretion of the City.
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4. Credits may be transferred from one holder to another by any written instrument clearly identifying
the record or records issued that evidence the credits to be transferred, provided that such instrument
is signed by both the transferror and transferee. A letter may be requested showing the result of the change in credit balances.
5. In the event that land is annexed into the City from Gallatin County after the effective date of the Ordinance, and that Transportation or Fire Impact Fees have been previously paid to the County at
the time of a subdivision or minor subdivision of such land, an applicant proposing a development
on the land may request in writing a credit against the Transportation Impact Fee equal to the amount of any road impact fee paid to the County for the same land, and may also request a credit against the Fire Protection Impact Fee equal to the amount of any fire protection impact fee paid to the County for the same land. Such written request must be filed not later than the time when an
annexation agreement is completed, or the applicant's claim shall be waived.
Limitations. Credits are subject to several limitations.
1. The City is under no obligation to mandate or require improvements for which credit may be requested. If adequate facilities do not exist at the time of application for a Construction Permit or at the time of application for a plan amendment, zone change, conditional use permit,
variance, special permit, or any other discretionary decision, the City is under no obligation to
mandate or require improvements for which credit may be requested.
2. Should a person voluntarily proffer necessary system improvements that are not on the City's IFCIP, the City is under no obligation to accept the proffer. Such acceptance may lead to development patterns unanticipated by the City or detrimental to the orderly and desirable
pattern of development as evidenced by City policies and existing development patterns.
Nonetheless, if the proffer is accepted by the City and the IFCIP is amended to include the proffer, credit consideration is given as provided above.
3. Should such person voluntarily proffer necessary improvements that are on the City's IFCIP, the City is under no obligation to accept the proffer or to provide credit if accepted. The City may
wish to dictate the timing and financing of the improvement or perhaps modify the anticipated
nature of the improvement.
4. Credit for incidental improvements shall not be allowed. For example, if a development project technically requires a water line of 8.25 inches but water lines come only in 8 and l0 inch increments, the capacity of the line between 8.25 inches and 10 inches shall not qualify the
applicant for a credit unless that line is shown on the IFCIP and further unless the additional
capacity of that line will clearly accommodate anticipated and desirable future development in the area. The same holds for transportation, traffic lights, and all other improvements which involve increments that may incidentally lead to additional capacity. The presumption shall be made that the minimum improvement needed to serve a project shall be deemed to be a project
improvement even if additional capacity is created that may be potentially used by others
developments presently or in the future.
5. If the City elects to provide reimbursement for provision of infrastructure through a mechanism other than impact fee credits then the project does not need to be placed on the IFCIP.
Payback. The City provides mechanisms for developers to be reimbursed for water, wastewater and
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transportation improvements they make which future developers may connect to. The process is called
"payback" and nothing in the Ordinance or this Manual prevents its continuing use. However, the
following guidelines are to be used. In any event, payback shall not alter or reduce any Development Impact Fees due. Nor is payback to be, in any way, considered a form of credit for Development Impact Fee purposes.
1. The payback is at the discretion of the City Commission.
2. The development project necessitating such improvements is otherwise consistent with the
Comprehensive Plan, Zoning Ordinance, Subdivision Ordinance, and all other relevant ordinances and facility plans of the City.
3. A single improvement may be eligible for partial funding by a combination of both payback and impact fee revenues. In order to utilize impact fee funds the portion of the project funded by
impact fees must meet all of the requirements for impact fee funding. The total calculated
compensation for the project improvement may not exceed the total real cost of the project after deducting the value of project related improvements.
4. The payback process is approved by the City Attorney and involves at least the following elements:
a. A payback area is shown on relevant maps in the City Engineer’s Office indicating the
number of units, area, or other means of determining of the proportionate share of development that will be affected in the future. The City shall require anyone seeking a Construction Permit within such payback area to reimburse the developer of the pro rata share of the improvement subject to payback.
b. The developer posts with the Finance Department the address and telephone number to be
contacted by any future developer wishing to use the payback facility.
c. The developer seeking payback signs a form provided by the City Engineer’s Office stating under oath the price per unit of development to be charged, that no one is to be refused the opportunity to offer payback, and that the payback period expires on the tenth anniversary
date, or other time as may be established by the City Commission, of the form.
d. The developer shall use a form approved by the City Attorney that will he/she will execute whenever any payback is made stating the date of payment, number of development units paid back, the payback balance remaining, and any other information deemed necessary by the City Attorney. Once a properly executed form is received by the City, Construction
Permits may be issued if consistent with all other standards and provisions of the City.
e. Should anyone be unable to contact the developer for payback and this is verified by the City Engineer’s Office using a process approved by the City Attorney, or should anyone be denied the opportunity to offer payback: as evidenced by a process approved by the City Attorney, the payback process to which the developer agreed shall be deemed null and void and no
further payback shall be required by the City for issuance of any Construction Permit in the
payback area.
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COLLECTION OF DEVELOPMENT IMPACT FEES
Assessment of Development Impact Fees. Before a Construction Permit is issued by the building permit
coordinator, the coordinator verifies that the total Development Impact Fees have been calculated and that they are entered into the City’s records.
Payment of Development Impact Fees. If the applicant pays the Development Impact Fee at the time when they pick up the building permit, then a Cashier registers the payment. No Construction Permit shall
be issued unless full payment of the impact fee is made. This constitutes a red-tagging of the permit.
Deferred Development Impact Fees. If fees are deferred as to time of payment they must be paid prior to an issuance of a certificate of occupancy or any use of the building.
REFUNDS FOR SERVICE UNAVAILABILITY OR NONEXPENDITURE
Refunds of Development Impact Fees shall be made only in the following instances and in the following
manner:
Upon Application to the Impact Fee Coordinator by the Applicant, the City shall refund ninety-five percent (95%) of the Development Impact Fee paid if capacity is available and service is denied. The City shall retain five percent (5 %) of the fees paid as an administrative fee.
1. Upon application to the Impact Fee Coordinator by the Applicant, the City shall refund ninety-five
percent (95%) of the Development Impact Fee paid and not expended or encumbered if the City, after
collecting the fee when service is not available, has failed to encumber the fee or commence construction within ten (10) years from the date the Development Impact Fee was paid. The City shall retain five percent (5%) of the fee paid as an administrative fee. In determining whether Development Impact Fees have been expended or encumbered, fees shall be considered expended or encumbered
on a first-in, first-out (FIFO) basis.
2. When the right to a refund exists due to a failure to expend or encumber Development Impact Fees, the City shall provide written notice of entitlement to a refund to the Applicant who paid the Development Impact Fee at the address shown on the Application for development approval, or to an Applicant's successor in interest who has given the City notice of the transfer or assignment of the
right or entitlement to a refund and who has provided the City with a mailing address. The City shall
also publish such notice within thirty (30) days after the expiration of the ten (10) year period from the date Development Impact Fee was paid. The published notice shall contain the heading "Notice of Entitlement to Road Facilities Development Impact Fee Refund."
A refund application shall be made to the Impact Fee Coordinator within one (1) year from the date
such refund becomes payable under this Chapter 12 or within one (1) year from the date of
publication of the Notice of Entitlement of a Refund under this Chapter 12, whichever is later. Any refund not applied for within said time period shall be deemed waived.
A refund application shall include information and documentation sufficient to permit the Impact Fee Coordinator to determine whether the refund claimed is proper and, if so, the amount of such
refund.
A refund shall include a pro rata share of interest actually earned on the unused or excess Development Impact Fee paid.
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All refunds shall be paid within sixty (60) days after the Impact Fee Coordinator determines that
such refund is due.
APPEALS
Development Impact Fees Review Committee. Appeals regarding the amount of the fee as well as Land-Use types not shown on the adopted fee schedules shall be referred to a Development Impact Fees Review Committee, which shall consist of the Building Official, the Director of Public Works, and the Fire Chief
each of whom have one vote. The Impact Fee Coordinator shall be an ex-officio member. The Impact
Fee Coordinator may request a determination of any matter from the Impact Fee Review Committee.
The Development Impact Fees Review Committee shall meet to review the appeal within thirty (30) business days of the date when the written appeal was presented to the Impact Fee Coordinator. The applicant shall he notified of the date and time of the Development Impact Fee Review Committee
meeting and shall be provided with a reasonable opportunity to present her/his case to the Committee.
Similarly, any departmental personnel named in the appeal will be provided with the same opportunity to defend or explain her/his decision(s). Following the presentation of both sides of the dispute, the Development Impact Fee Review Committee shall agree on the substance of a decision, which shall be put in writing.
Appeal to City Commission. If the applicant is dissatisfied with the decision of the Development Impact
Fees Review Committee, he/she may appeal the decision to the City Commission by filing a written request with the Clerk of the Commission within ten (10) business days of the Committee's decision.
Permit Issued. The Building Official must issue the building permit if the appropriate impact fee is paid. Any reduction of impact fees resulting from an appeal shall be by refund. No interest will be paid on
overpayment
ENFORCEMENT
Misdemeanor. As a reminder, a violation of the Ordinance shall be a misdemeanor punishable according to law. City Staff who are aware of such violations shall present their evidence to the City Attorney for appropriate legal action. In addition to or in lieu of any criminal prosecution, the City or any applicant
shall have the power to sue in civil court to enforce the provisions of the Ordinance.
Code Enforcement. As a reminder, in addition to the enforcement language above, the code enforcement staff of the city may be authorized by the Impact Fee Coordinator to enforce specified provisions of the Ordinance.
IMPACT FEE ADVISORY COMMITTEE
The City established an appointed advisory board to make recommendations regarding impact fees
through resolution 3840. The Impact Fee Advisory Committee was created for the purpose of advising the City Commission regarding the process of calculating assessing and spending impact fees