HomeMy WebLinkAboutAdministrative Order 2025-02 Repeal of AO 2019-01 Adopting the Impact Fee Admin Manual ADMINISTRATIVE ORDER 2025-02
Repeal of Administrative Order 2019-01 Adopting the Impact Fee Administration Manual
dated March 1,2019 and Adoption of an Updated Impact Fee Administration Manual.
WHEREAS, an administrative manual for impact fees was adopted in 2019 per 2.06.1700.E,
BMC, and
WHEREAS, Ordinance 2169 passed final adoption on October 22, 2024, which ordinance
comprehensively amends all municipal code requirements for impact fees and entirely repeals
and replaces the text of 2.06 Division 9, BMC, and
WHEREAS,the scope and content of revisions in Ordinance 2169 makes the administrative
manual adopted under Administrative Order 2019-01 outdated, and
WHEREAS, an updated impact fee administrative manual consistent with Ordinance 2169 has
been prepared, and
WHEREAS, additional refinement for methodology for impact fee credits will be prepared upon
filling the position of the City Engineer and participation of that person in the development of
procedures which will be incorporated into further updates to the administrative manual,
NOW,THEREFORE,Administrative Order 2019-01 is repealed,the impact fee administrative
manual adopted by it is repealed, and the February 28, 2025, edition of the administrative manual
authorized in 2.06.1640.E, BMC is adopted by this order with an effective date of March 1,
2025.
Dated this Z��day of February, 2025
Chuck Winn
Interim City Manager
Administrative Order 2025-02
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IMPACT FEE
ADMINISTRATIVE PROCEDURES MANUAL
CITY OF BOZEMAN, MONTANA
APRIL 13, 1996
AMENDED DECEMBER 1998
AMENDED MARCH 2O09
AMENDED MAY 2013
AMENDED MARCH 1, 2019
AMENDED FEBRUARY 28, 2025
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TABLE OF CONTENTS
l. INTENT...............................................................................................................................1
2. DEFERRAL OF PAYMENT ..............................................................................................I
DeferralsAuthorized............................................................................................................I
General Description of the Deferral Process. ......................................................................1
3. CREDITS.............................................................................................................................2
Limitations...........................................................................................................................2
Landor Easement. ...............................................................................................................2
Acquisition and Construction. .............................................................................................3
Methodology for Determining Value of Credits..................................................................3
Documentation of Awarded Credits. ...................................................................................3
Useof Credits ......................................................................................................................4
Limitations on Use of Credits..............................................................................................5
Payback................................................................................................................................5
4. OTHER PROCEDURES.....................................................................................................6
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IMPACT FEE
ADMINISTRATIVE PROCEDURES MANUAL
CITY OF BOZEMAN, MONTANA
1. INTENT
This document is the Impact Fee Administrative Procedures Manual, referred to subsequently as the
"Manual." The following administrative procedures contained in this Manual provide guidance to
staff in administering the Development Impact Fees Ordinance, codified in Chapter 2 At 6
Division 9 of the Bozeman Municipal Code, referred to subsequently as the "Ordinance" as it may be
amended from time to time. Terminology used in this Manual corresponds to the definitions of
words or phrases as established in the Ordinance.
Tables and forms for use in determining the amount of the Development Impact Fees for each land
development activity are provided separately.
This Manual is adopted by administrative order of the City Manager. If there is any conflict between
this manual and provisions of the municipal code the municipal code takes precedence.
2, DEFERRAL OF PAYMENT
Deferrals Authorized. The City Commission adopted Resolution 4433 authorizing a deferral
program for transportation impact fees. Residential and non-residential construction projects
requiring a Certificate of Occupancy may request to defer payment of transportation impact fees.
Property owners may not be eligible for deferment if they are determined to be a higher risk for
default or non-payment. Financial disqualifications are set by the City Commission and should be
referenced directly in Resolution 4433. Tracking of deferrals is done through Smartsheets.
General Description of the Deferral Process.
Process Anticipated
Time Frame
Application for deferral submitted to the Community Development
Department in conjunction with the initial Building Permit application
using Project Dox application processing software.
Application is reviewed by staff. The department will notify the 5-10 working
applicant of approval or denial through Project Dox. days
Agreement and Notice of intent to lien is prepared by the City and 5-7 working
Signed by the Community Development Director or designee. days
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Applicant signs Agreement and records the Agreement at the Gallatin 2-3 working
County Clerk and Recorder and provides evidence of the recording at days
least two working days before issuance of the building permit.
Building Permit issued, less deferred fees
Project is built/completed varies
Applicant notifies Building Division of request for final inspection and 10 working
Certificate of Occupancy days
Payment of deferred fees—Prior to issuance of Certificate of Occupancy 2-3 working
and preparation of Release of the recorded Agreement and Notice of days
intent to lien
Preparation and recording of Release with the Gallatin County Cleric and Recorded by
Recorder applicant
3. 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 their 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 waived
Limitations. No credit may be awarded for any land or construction of improvements barred by
2.06.1700.A,BMC
The City reserves the right to determine the amount to be credited, obtaining input from the Department
of Utilities, Department of Transportation and Engineering, 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 must 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 manner established in 2.06.1700, BMC.
Land or Easement. In addition to any applicable requirements of Chapter 2 Article 8, land grants or
easement dedications to satisfy credits towards Development Impact Fees are subject to the
following review:
A. Credits for a land grant are 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:
1. The delivery to the City Attorney of a warranty deed,with sufficient funds to pay all costs of
transfer of title including recording;
2. 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
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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;
3. 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;
4. Submission of title insurance in an amount equal to the value of land dedication as of the date
the City accepts title.
B. 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 setting 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. A. 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 Impact Fee Coordinator.The
Department of Utilities, Department of Transportation and Engineering, or Fire Department,
whichever is appropriate,shall review engineering and cost estimates and a determination of sufficiency.
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. Credits shall not be given for improvements which do not meet
County,Municipal or State design standards,whichever is applicable.
B. 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 the elements that
create capacity expanding capital improvements. Qualifying acquisition or construction must be for
improvements included in the City Capital Improvements Program. In some situations, this may
require amendment to the Impact Fee Capital Improvement Program (IFCIP) if the acquisition or
construction is not on the IFCIP but is determined by the City Commission to be consistent with the
land use plan and relevant issue plans.
C. The impact fee coordinator in cooperation with the Department of Utilities, Department of
Transportation and Engineering, 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 using the methodology described in this manual and in
2.06, Div 9 BMC. The City may establish either a percentage or fixed cost for impact fee
funding of construction.
Methodology for Determining Value of Credits. Different fee types may require different
methodology to represent a best fit that adheres to the requirements of enabling legislation and other
applicable law. Qualifying work is subject to the definitions and limitations in Chapter 2,Article 6,
Division 9,BMC.
Documentation ofAwarded Credits.
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A. To document approval of a requested credit the Impact Fee Coordinator will provide a written
determination as to which capital improvements and/or land dedications are eligible for credits
and what the amount of the credit is for each. The written determination shall include the
following:
1. The dollar amount of the credit,
2. The reason for the credit,
3. The legal description or other adequate description of the project or development to which
the credit may be applied,
4. Any conditions of the award of credits; and
B. The applicant must sign and date a duplicate copy of the written letter indicating agreement to
the terms of the letter and return the signed document to the Impact Fee Coordinator before
credit becomes available for use. The failure of the applicant to sign, date, and return such
document within 60 business days nullifies the approval of a credit.
C. Credits awarded by the City are perfected by electronic records kept in the City's finance records.
1. Before any electronic record is encoded, the applicant shall sign as stated in B immediately
above and the signed letter is 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.
Use of Credits
1. Approved credits must only be used to reduce the amount of Development Impact Fees of the same
type.
2. Approved credits are used to 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 in the record,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 credit balance, if any. Upon request of the credit holder,the City will send the credit holder a
written statement of the credit holder's remaining credit balance.
3. If the amount of approved credits 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. The applicant must submit a written
request for reimbursement no later than the initiation of construction of improvements or the
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acceptance by the City of a land grant or easement dedication 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.
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 and notarized by both the transferror and transferee.A writing from the City may be
requested showing the result of the change in credit balances.
Limitations on Use of Credits. 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 a 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 10 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 other than impact fees for developers to be reimbursed for
water,wastewater and transportation improvements they make which future developers may connect to.
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The process is called "payback" and nothing in the Ordinance or this Manual prevents its continuing use.
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.
4. OTHER PROCEDURES
Instructions on detailed procedures for calculation and recording of fees for individual projects are
documented in the Standard Operating Procedures folder of the Planning Division of the C. D. Dept
Teams channel to enable access by all department staff members.
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