HomeMy WebLinkAbout11-26-07_Provisional Adoption of Ordinance No_ 1730, A22222_18
Report compiled on November 13, 2007
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Andrew Epple, Planning Director
Chris Kukulski, City Manager
SUBJECT: Ordinance 1730 - Amendments to Chapter 3.24 Impact Fees to incorporate
the Transportation Impact Fee Study
MEETING DATE: Monday, November 26, 2007
RECOMMENDATION: Approve the first reading of Ordinance 1730 with an effective date 30
days after second reading, with direction on policy issues as deemed appropriate by the
Commission.
BACKGROUND: The revisions to Chapter 3.24 are primarily in implementation of the updated
transportation impact fee study. The study itself is under final action by Resolution 4082. The
two items are not required to have the same effective date. If first reading is passed on November
26th the second reading of the ordinance could occur on December 10th and the effective date
would be January 9, 2008. If the Commission decides to utilize a phase-in approach as described
below it would be advantageous to have the same effective date for Resolution 4082 and
Ordinance 1730.
In 1983 the City of Bozeman adopted a master plan for the community which included a policy
that new development should pay its own way (see Bozeman Area Master Plan, page 4-3, Public
Facility Goal 8). This policy has continued forward in various City documents ever since. The
City of Bozeman adopted a street impact fee program which became effective in early 1996. In
2005, the state legislature adopted Sections 7-6-1601 through 7-6-1604, MCA establishing
certain procedural and documentary requirements for adoption and implementation of an impact
fee. Revisions and updates to an impact fee must comply with the new statutes.
The City contracted with Tindale-Oliver Associates (TOA) in 2006 to prepare an update of the
fee study which examines demand, cost, and credits and provides a basis for the dollar amount
collected. The study is one part of the documentation required to support an impact fee.
Documentation is also provided through the City’s transportation plan, development standards,
impact fee ordinance, and capital improvements program. A public hearing on the draft report
and on the companion changes to Chapter 3.24 BMC has been advertised and will be held by the
City Commission on November 26th.
Public comment has been received and TOA has prepared a written response, both of which have
been provided to the Commission with this week’s packet for Resolution 4082. The consultant
will be in attendance at the public hearing on November 26th. The draft report is consistent with
the methodological approach and practices which were sanctioned by the settlement agreement
and judicial order resolving the original impact fee litigation.
Particular points of change in the ordinance are:
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Updated references to dates, titles, and names throughout the chapter
Provide updated findings relating to street impact fees (primarily located in the preamble and
Section 3.24.010)
Update definitions in Section 3.24.040
Provide clarifications throughout the chapter
Incorporated updated formulas, methodology, and amounts in Section 3.24.050
Adjust credit provisions in Section 3.24.100 to include review and approval by Staff with
certain defined criteria and provide for an appeal from a Staff decision
Clarify various items regarding development of the CIP and updating of information in
Section 3.24.110
Related information which is not being transmitted under this cover but which previously has
been, or will be, provided to the Commission:
2001 Greater Bozeman Transportation Plan Update (needs, demand forecast, future projects,
standards)
Title 18, Unified Development Ordinance, BMC (Chapters 18.02, 18.44 and 18.78
especially)
City of Bozeman Street Impact Fee Capital Improvements Program (FY 2009-2013 will be
presented to the Commission on December 10th [FY2008-2012 is now available through the
City Finance webpage])
October 31, 2007 draft of the Transportation Impact Fee – Revisions provided under separate
cover and for separate action by the Commission on Resolution 4082.
Recommendation and minutes from the impact fee advisory committee (most recent
Consultant presentation was on Nov 8th, action has been set by the Committee for November
27th) – Revisions provided under separate cover for the Commission with Resolution 4082.
UNRESOLVED ISSUES: Commission direction is required in several areas related to this
action item. Some of the identified options below are mutually exclusive and others could be
approved in combination. Depending on which of the policy choices the Commission chooses,
some revisions to draft ordinance 1730 which helps implement the new study may be required.
The policy options for the ordinance are not all the same as those for the updated study.
Policy Options:
A) Implement the impact fee ordinance revisions as presented. This option assumes the
Commission finds all elements of the draft as presented acceptable and it may or may not wish to
give direction on individual issues identified below.
B) Abandon transportation impact fees. This option would require the City Commission to vote
to repeal Chapter 3.24, BMC. Alternative funding for street development would be required.
C) Phase-in changes in costs. This would require amendment to Section 3.24.050.A. to add a
subparagraph 4 stating the steps and time by which they would occur. This could occur between
the first and second readings of the ordinance. If the Commission selects this option it is
suggested to use a phase-in process of not more than two steps. A first step of one-half the
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Commission Memorandum
difference between the existing street impact fee and the calculated full cost and a second step to
bring the fees to full calculated amounts. The first step could take effect upon the effective date
of Ordinance 1730 and the second step on July 1st. A routine inflationary adjustment is required
to occur on January 1st if the new fee schedule is not adopted and effective prior on that date.
A complete building permit submitted to the Building Division is subject to the impact fees in
place on the date the permit application is made. The application is valid for a period of six
months. If the permit is drawn during that six month period the application is shielded from
changes in impact fees. This provides an automatic opportunity, or “grace period”, for persons to
seek to avoid increases in the impact fee.
If the Commission decides to utilize a phase-in approach it would be advantageous to have the
effective date of Resolution 4082 and Ordinance 1730 be the same.
D) Decline to implement the CBD option included in the study. This would amend Section
3.24.040.A and 3.24.050. As described in the transportation impact fee study and the cover
memo for Resolution 4082, facts exist which support a different demand factor reflective of
differences in travel patterns in the Downtown (referred to in the study and this memo as the
CBD). This is described in more detail in Appendix K.
As noted in the study text and in Appendix K, the existing CBD is not the only place where such
a pattern could possibly be found. If facts were provided establishing that another substantial
area of town had similar travel characteristics then the City could equitably allow the CBD travel
demand pattern to be used. An independent fee study would be required to demonstrate
compliance with the criteria. Such a study is permitted under Section 3.24.050.B.3, BMC.
Appendix K describes several physical characteristics believed to be indicators of likely
opportunity to utilize the CBD calculation. These items have been included in the definition of
central business district in Section 3.24.040.A, BMC. Staff suggests the addition of two other
items to the list of characteristics. First, that the area is the subject of a legally enforceable
common plan of development such as an urban renewal plan, detailed planned unit development,
or similar document. Second, the area should be at least 50% developed as measured by lot area
utilized. The reason for the addition of these items is that they help assure that the development
will possess the identified physical characteristics and that there will be adequate density of
development to provide the synergy of businesses required. If the Commission is not persuaded
that the information presented is adequate to support the differentiated fee then this option should
not be adopted.
E) Administrative Fee. Currently, Section 3.24.110.F authorizes the City to obtain an
administrative fee to cover the cost of operating the impact fee program. This administrative
charge is specifically authorized by statute.
The study as presented does not include an administrative charge. The City Commission could
either direct that an administrative charge be added to the calculated amount or that the
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administrative charge be drawn from the amount already calculated. The maximum which could
be used for this purpose is 5% of the value of the impact fee. The Commission could direct
collection of less than the full possible amount for administration. It is not required that the
Commission amend the ordinance to give direction on the percentage of the administrative
charge. However, formalizing the Commission’s intent in the ordinance helps ensure consistency
in application.
FISCAL EFFECTS: The intended effect is to enable adequate funding to support development
of streets equivalent to the demand created by new development. The adoption of the ordinance
helps to implement the Commission’s action on Resolution 4082. The policy choice on phase-in
and administrative charge will affect the amount of funds available to cover costs of street
construction and program operation. Over the past five years the collection of street impact fees
has averaged $2.5 million per year.
ALTERNATIVES: As suggested by the City Commission.
CONTACT: Please contact Chris Saunders at csaunders@bozeman.net or 582-2260 if you have
questions on this item.
APPROVED BY: Chris Kukulski, City Manager
Andrew Epple, Planning Director
Attachments: Ordinance 1730
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Tindale-Oliver & Associates, Inc. (TOA)
Response to City of Bozeman Transportation Impact Fee Update Study Review
Completed by Southwest Montana Building Industry Association (SWMBIA)
November 19, 2007
The Southwest Montana Building Industry Association (SWMBIA) provided a review of the
methodology, calculations, data sources, compliance with the impact fee state statute, and
assumptions of the Transportation Impact Fee Update Study completed by TOA for the City of
Bozeman. Through a summary of key issues outlined in a letter to Chris Saunders, Assistant
Planning Director, dated November 6, 2007, the SWMBIA suggested several fundamental flaws
with the study and purported its non-compliance with the Montana Act. The purpose of this
document is to provide response to the various issues raised by SWMBIA and address the scope
of the impact fee study relative to compliance with the 2005 Montana Impact Fee State Statute,
hereafter referred to as “the statute.”In summary, TOA’s responses will demonstrate that
there are no “fundamental flaws with the study” and that every requirement in the statute
has been met.TOA’s responses have been formatted to match each corresponding issue.
Introduction
Based on the review of the overall comments presented by the SWMBIA, it is important to first
provide an explanation of the key differences between a consumption-based impact fee study and
a needs-based impact fee study. A consumption-based impact fee study charges new
development based upon the proportion of lane miles of travel (demand), which is considered to
be a reasonable estimate of the vehicle miles of travel, that each unit of new development is
expected to consume on the roadway network. In addition, the cost of capacity being consumed
used in the impact fee study is consistent with Section 7-6-1602 (3) of the statute, since the
actual costs of local roadway improvement projects were used to calculate the cost component
and these projects are considered to be typical of future projects. Finally, it is important to note
that the consumption-based methodology is the same methodology used in the current City of
Bozeman Transportation Impact Fee that has been in place since 1996.
Conversely, a needs-based impact fee study is dependent on a specific set of “necessary”
projects (i.e., needs) that are generally based on a fixed projection of future growth (usually
including a socio-economic forecast of demand by land use). Hence, this approach attempts to
identify with precision a set of future improvements that will be needed to serve future growth.
Given the lack of flexibility to account for fluctuations in the rate of growth and the locations of
where growth really occurs, this method leads to either over-charging or under-charging new
growth. In addition, since the list of needs is a function of the existing roadway conditions, the
more improvement needs there are, the higher the impact fees will be. Similarly, the fewer the
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improvement needs, the lower the impact fees will be. This approach fails to reasonably satisfy
the rational nexus and rough proportionality tests since new development is not paying for the
cost of the capacity being consumed, but rather the cost of a set of projects that it may or may not
really needed or used to serve growth demands. Further, if the growth is faster than projected,
additional projects may be needed to serve growth, indicating that those developments paying the
current impact may have been undercharged for the cost of their new growth. If growth is slower
than projected, then the projects for which the impact fee is charged may not be needed, and the
developments paying the impact fee that were charged the full cost of these projects may actually
be paying too high of an impact fee.
Comment # 1 – Level of Service Baseline
Nowhere in the City's documents do we see the level-of-service standards which constitute the
baseline for establishing the City's responsibility for correcting existing deficiencies and future
development's responsibility for correcting its deficiencies. Several subsections of 7-6-1602 cite
the need to document existing conditions [(1)(a)], establish level-of-service standards [(1)(b)],
and define the methodology for excluding correction of existing deficiencies from the impact fee
[(1)(i) and (5)(c)]. Further, new development must be held to the same level-of service standards
as existing users [(5)(d)].The upshot of these requirements is that the City is responsible
for correcting existing capacity and safety deficiencies, and future development is not.
And as such, development is only responsible for correcting future capacity
deficiencies caused by its traffic.The mechanism (level-of-service standards) which the City
has utilized to divide these improvement responsibilities, never mind the resulting separate City-
responsible and development-responsible capital improvement programs, are not evident in the
traffic impact study reports.
Response # 1 – Level of Service Baseline
The commonly accepted level of service standard ranges from level A through level F. Level F
represents significant congestion, e.g., a traffic jam. The City of Bozeman’s adopted level of
service standard of “C” is defined in Section 18.44.060.D of the Bozeman Municipal Code. This
standard has been consistent during and after the preparation of the 2001 Greater Bozeman Area
Transportation Plan Update. The character of streets is defined in Chapter 11 of the 2001
Greater Bozeman Area Transportation Plan Update, which was adopted after extensive
opportunity for public comment and participation.
In compliance with subsection 7-6-1602(1)(a) of the statute, the capacities used to develop the
proposed impact fees are consistent with those presented in the 2001 Greater Bozeman
Transportation Plan Update (Table 4-1). The capacities represent a conservative level of service
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standard since they are, at a minimum, consistent with the roadway level of service that is being
provided to existing users of the roadway network.
Chapter 2 of the 2001 Greater Bozeman Area Transportation Plan Update examines existing
deficiencies at the time of the preparation of the plan. It notes few deficiencies (see Figure 2-4)
and those noted have been or will be resolved with non-impact fee money, such as the state
funded improvements to the intersection of Main Street and 19th Avenue. Projected deficiencies
shown in Figure 4-1 are the result of the increased traffic from new development as discussed in
Chapter 3 of the plan.
As mentioned previously in the introduction, the proposed impact fee study is a consumption-
based impact fee meaning that new growth is charged based on the amount of capacity
consumed. By definition of this method, new growth is not charged to correct existing
deficiencies since impact fee revenues are dedicated to capacity-adding projects along corridors
that are not deficient (over-capacity). It should be noted that during the annual update cycle of
the Streets Impact Fee Capital Improvement Plan (CIP), hereafter referred to as the “CIP,” the
City evaluates each recommended improvement to make sure that funds are not spent to correct
existing deficiencies. A detailed review is conducted of actual project bid tabulations to assign
expenditures for portions that are associated with growth (impact fees) and non-growth (gas
taxes and special improvement district funds).
Comment # 2 – Improvement Identification
The Code requires specific identification of capacity improvements necessary to address capacity
needs occasioned by future development. These improvements would form the cost basis of the
impact fees to be assessed against future development. While the proposed impact fees are
based upon generic replacement of capacity consumed by each unit of development, we found
no documentation in the impact fee study of the specific required capital improvement
program occasioned by future development traffic, separated from the City's capital
improvement program to correct existing safety and capacity deficiencies. We recognize that the
impact fee studies propose fees based upon typical trip generation characteristics and trip lengths of
the various land uses, and typical costs of improving (increasing the capacity of) roadways. But, no
separate estimates of future development (intensity and types of land uses) for a specific time
period have been made, and these future development estimates translated into estimated
future traffic demands on the roadway network. And finally, no specific improvements required
to remedy these development-created capacity deficiencies have been proposed in the impact fee
study report.We found no specific correlation of development impact fees to specific
capital improvements required by development for a specific time period, never mind
separation of development responsibility from the City's (or other public entities')
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responsibility to correct existing deficiencies during that same time period.Section 7-6-
1602(1)(h) of the 2005 Code is specific in requiring the time period which the impact fees will
cover needed development improvements.
Response # 2 – Improvement Identification
TOA acknowledges (as discussed previously in the introductory response) that compliance with
the statute (Section 7-6-1602 (3)) requires that the impact fee “be based upon the actual cost of
public facility expansion or improvements or reasonable estimates of the costs to be incurred by
the governmental entity as a result of development.” As documented in Appendix B in the
technical report, actual typical capacity expansion project costs for completed projects in the City
of Bozeman (Babcock Road and Durston Road) were used to develop the impact fee costs. It
should be noted that the standard quantities and unit prices were confirmed not only with City
staff, but also with MDOT staff to ensure that the current replacement value of typical roadway
improvements were reflected in the study.
In response to the comment made regarding the time period of the impact fee study and the lack
of “separate estimate of future development,” it should be noted that the 2001 Greater Bozeman
Transportation Plan Update defined future roadway needs through the year 2020. This plan was
based on an extensive demographic and socio-economic forecasting analysis and the use of a
travel demand model to project the future transportation system needs to support future growth.
This is well documented in the plan.
The City’s CIP further establishes priorities and funding sources for projects to be built during
the five-year planning period of the CIP. The CIP is reviewed annually to ensure compliance
with the Impact Fee Ordinance and the Montana Impact Fee Statute (Section 7-6-1602 (1) (k)).
As documented previously, the City’s Streets Impact Fee CIP reflects only the capacity-adding
expenditures associated with programmed improvements that do not correct existing
deficiencies. This ensures that impact fee revenues are not spent to correct existing deficiencies.
With the presence of these supporting documents, it is not necessary for the impact fee study
report to replicate such information. It is sufficient to ensure coordination and correspondence
among the plans, which the impact fee study effort has carefully and specifically done in terms
of planned future roadway capacity improvements and the costing of these projects.
Comment # 3 – No Funding Correlation in CIP
The Street Impact Fee Fund (SIFF) FY09-13 Capital Improvements Plan (CIP) defines specific
future capital improvements and the projected sources of funding, including street impact fees,
general and specific city funds, state urban funds, and other sources.However, the TIFF-CIP
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does not correlate funding sources (e.g., street impact fees and non-impact fee sources) to
specific improvements required by future development alone (i.e., street impact fees), nor
does it correlate to specific improvements required to mitigate existing safety and capacity
deficiencies (other funding sources).That lack of correlation makes it impossible to determine
whether both the City and future development are contributing their proportionate "fair share" of
these improvements. What clouds that determination further are several project descriptions in
the TIFF-CIP, which suggest that development (impact fees) may, or will, be paying more than
development's fair share of these projects. Examples include the following:
i)Public Works – PW02.This project budgets $990,000 of street impact fees to
construction of a City Shops Complex Facility. This is a future municipal project,
not a future private development. It is unclear how development traffic would
create a future capacity deficiency for this public works facility.
ii)Street Impact Fees – SIF01.One hundred percent of street impact fees are
budgeted for future undefined right-of-way acquisition, with no specific projects
attached to these right-of-wayneeds, and with no distinction whether future right-of-
way will be required to correct existing safety and capacity deficiencies or future
development capacity deficiencies.
iii)Existing Deficiencies, and Safety, Bicycle, Pedestrian Improvements
Projects.Several project descriptions cite improved capacity and safety, and
bicycle and pedestrian improvements. Several of these projects are proposed
to be funded through 100 percent street impact fees, without differentiating
existing versus development capacity deficiencies, and without recognizing that
correction of safety deficiencies is not the responsibility of future development, but
the city, county, or state's responsibility. Some project descriptions, in fact,
contain statements like "This section has already exceeded the volume of traffic
projected . . . " and "backups at peak hours are already significant", which in
our opinion identifies that the capacity problems are existing, yet 60 to 100
percent of funding is proposed through street impact fees. Further, it is our
interpretation that bicycle and pedestrian facilities do not fall under the "transportation
facility" definition of the 2005 Montana Code, in the sense of providing service
capacity to a roadway. If they do, then we submit that these improvements too
must be development capacity driven.
In summary, the absence of a capital improvement program, with costs, which is well
defined, covers a specific time period, and clearly separates future development's
responsibilities to correct its deficiencies from the City's responsibilities to correct
existing deficiencies, is our concern relative to conformance with Montana Code.Section
7-6-1602(5), subsections (a) through (e), make clear the "fair-share" approach to allocating the
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costs of future capital improvements between future development and the City (and implicitly,
state and county, depending upon roadway ownership).
Response # 3 – No Funding Correlation in CIP
It is important to note that the current CIP is not part of the Transportation Impact Fee Technical
Report that is being adopted. The City of Bozeman Five Year CIP is reviewed annually and
updated to address the changing transportation needs of the community, appropriate funding
sources, and other related transportation issues.
More specifically, in response to Item (i), prior to the expenditure of impact fee funds, a
determination was made that a portion of this improvement was associated with new growth.
Further, as indicate above, if there are concerns about any specific project, there are
opportunities to address issues at advertised City Commission meetings as well as, meetings of
the Impact Fee Advisory Committee.
In response to Item (ii), street impact fees can be used to fund right-of-way acquisition since
these acquisitions of land are along corridors where future lane widening projects are expected to
occur. This expenditure is associated with capacity expansion projects and is preserving the
corridor for future expansion of the road. The acquisition of this ROW minimizes the future cost
of acquisition in areas with rapid growth and increasing land values. As noted previously, the
expenditure of impact fee revenues will not occur to correct existing deficiencies.
In response to item (iii), sidewalks are typically the responsibility of the adjacent development as
set forth in Chapter 18.44 of the Bozeman Municipal Code. Pedestrian and bicycle facilities
reduce potential conflicts between users of each mode (vehicle, bicycle, pedestrian) and create a
defined space for their respective travel needs. In addition, safety improvements enhance the
capacity of the roadway by reducing the number of accidents (usually caused by vehicles trying
to fit into inadequate spacing) and, therefore, increase the flow of through traffic and allow
better utilization of the roadway capacity-expanding project. Finally, from an engineering design
perspective, bicycle and pedestrian improvements improve safety and capacity by separating the
vehicular, bicycle, and pedestrian modes of travel and are commonly included in capacity
expansion projects. This component of the project (bicycle and pedestrian facilities) can be
funded with either impact fee revenues or non-impact fee revenues. They are a small percentage
of the total cost of these projects. The term “transportation facility” as mentioned in the statute
(Section 7-6-1601 (7) (c)) is interpreted to include bicycle and pedestrian facilities and a
definition will be added to the Impact Fee Ordinance to clarify this. However, expenditure of a
stand-alone bicycle and/or pedestrian project would not be considered an impact fee-eligible
project.
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The last paragraph of the SWMBIA comments refers to the need for specific time period for
future growth. This timeframe, as indicated in the 2001 Greater Bozeman Transportation Plan
Update, is 2020. As indicated previously, the projected growth to the year 2020 and the needed
improvements are well documented in the 2020 Plan. As referenced in the comment, Section 7-
6-1602(5), the “fair-share” approach to allocating costs in a consumption based impact fee is
clearly documented in the impact fee study and is carried out through the City’s annual update to
the Five Year CIP, which ensures that future development pays only for the costs associated with
growth-generated improvements and not for correcting existing deficiencies.
Comment # 4 – CBD Justification
While the traffic impact fee study establishes two service areas: (1) non-CBD and (2) CBD, we
have concern whether the size of the non-CBD service area satisfies the "rational nexus"
standard of Section 7-6-1602(1)(g). This standard requires correlation of impact fees with
benefits, and specifically, implies that development impact fees be applied to capital
improvements required by development in the area proximate to the development, where
development's impacts would be greatest. The size of the City's present incorporated limits,
and with a CBD in the center, (approximately one square mile), suggest that impact fees
collected from a development in one corner of the 12-mile approximate non-CBD service area
could be spent on capital improvements in that same service area on "the other side of
town", with no rational nexus, or correlation between the impact fees paid and the benefits
gained from those improvements, both to the development itself and the street system surrounding
that development. This non-CBD service area is expected to grow, as Appendix H-1 of the
City's impact fee study final report states that "the rate of growth of building permits is projected
to increase through 2025, as the City continues annex(ing) urbanized areas in its geographic
proximity."
In line with our review of the City's FY09-13 CIP (Comment 3 above) we also point out that
the FY09-13 program does not break out the improvements by the separate non-CBD and CBD
service areas. Further, it should be recognized that future traffic growth encompasses both
traffic attributable to new development in each service area of the City and pass-through
traffic, with neither origin or destination in each service area of the City. While the City's
impact fee study recognized this regional and pass-through traffic component on the
interstate system for the City as a whole, it did not recognize it on other state highways or
county and city/local roads within each service area.
Response # 4 – CBD Justification
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The proposed impact fee technical report identifies one service area (City of Bozeman) with two
different impact fee schedules to account for a differential in demand for roadway consumption.
The City of Bozeman is considered the only service area where impact fees will be collected
and expended. The definition of the service area was based on the City being characterized as a
compact area with the same roadway network used by all residents.
In compliance with Section 7-6-1602(5)(a) of the statute, “The amount of the impact fee must
be reasonably related to and reasonably attributable to the development’s share of the cost of
infrastructure improvements made necessary by the new development.” The differentiation of
service demand in both areas (Central Business District and Non-Central Business District)
satisfies this requirement of the statute, as well as the dual rational nexus test, since the presence
of linked trips in the CBD requires an adjustment to the percent of new trips generated by
certain non-residential land uses. As such, new development in the CBD pays for the vehicle
miles of travel consumed on the roadway network in the CBD. The discussion on page 7 and
Appendix K of the technical report dated October 31, 2007, documents the adjustments to the
percent new trips for travel in the CBD.
The last paragraph of this comment states, “While the City’s impact fee study recognized this
regional and pass-through traffic component on the interstate system for the City as a whole, it
did not recognize it on other state highways or county and city/local roads within each service
area.” In response, as indicated in the report documentation, the impact fee study methodology
incorporates into the fee calculation the generation of travel demand specific to the level for
each land use included in the fee schedule. Hence, the fee calculated for each land use, whether
residential or non-residential, is based on the amount of vehicle miles of travel each use
generates because of its particular demand characteristics, and not on the general nature of the
traffic on the nearby roadways. Therefore, the consideration of pass-through traffic in the
vehicle stream on “other state highways or county and city/local roads” is immaterial to the
study’s methodology.
Conversely, in the case of the interstate system, since the service area being defined in the
technical report is the City of Bozeman, there was a need to include only a single adjustment
factor to account for interstate travel. As noted, while the study charges for travel on all city,
county, and state roadways, travel on interstate facilities is excluded since the City has not
previously and does not intend in the future to expend impact fee revenues on the interstate
system. This adjustment factor excludes external-to-external trips since these trips go through
the City of Bozeman, but do not stop in the city.
Comment # 5 – Transportation Plan Inadequacies
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The City's separate 2001 Greater Bozeman Area Transportation Plan report
recommends capital improvements to remedy existing deficiencies and future long-
term deficiencies. But, like the City's FY09-13 TIFF-CIP, there appears to be no
correlation between the City's transportation plan document and the traffic impact fee
documents in assigning responsibilities for specific capital improvement projects, and
their costs, to future development, and certainly not by service area(s).
Response # 5 – Transportation Plan Inadequacies
Again, the 2005 Montana Impact Fee Statute does not require the 2001 Greater Bozeman
Transportation Plan Update, the City’s FY 2009-2013 CIP, and Transportation Impact Fee
Technical Report to be in the same document. Each document serves a different purpose in
complying with the statute. Deficiencies are documented in the 2001 Greater Bozeman
Transportation Plan Update and through the studies that support the development of the projects
included in the CIP. Since new development is charged for consumption of capacity, the impact
fee revenues collected are spent by the City based on priorities identified in the CIP.
The annual evaluation of the CIP projects by the City addresses the new growth versus existing
deficiency portions of improvements and assigns the appropriate revenue source for funding
projects. Again, impact fee revenues collected from new growth are not spent to correct existing
deficiencies.
Comment # 6 – General Lack of Data and Analysis
The 2005 Montana Code has altered the "ground rules" for continued application of
impact fees. Now, because of the new state code, more detail is required in defining
impact fees imposed on future development, to correct its capacity deficiencies, and
defining the like responsibilities of cities for correcting existing deficiencies.The present
impact fee study appears to fall short on these specifics of the 2005 code, including
the provision of level-of-service standards, service areas, definition of existing versus
future development deficiencies, and definition of a specific capital improvements
program separating responsibility for correcting existing and future deficiencies
between the City and future development over a specific time period.Therefore, the
"fair share" assignment of improvement responsibility is not clear.While the analysis process
on which the updated traffic impact fees is based is quite rigorous, analytically, it leaves
too broad the City's ability to collect and utilize development impact fees for an indefinite
period without correlating the collected fees to specific scheduled improvements required by
development traffic.The City's 2001 Transportation Plan update has a 2020 planning
horizon, the City has a FY09-13 Street Impact Fee Fund Capital Improvements Plan, and an
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appendix to the City's traffic impact study report references a traffic impact fee revenue
projection to 2025, all of which are different with regard to the time periods, origins, and
uses of projected development traffic impact fees.
Response # 6 – General Lack of Data and Analysis
As a general note, to help clarify the apparent confusion with the statute, existing City
documents, and the information included in the updated Transportation Impact Fee Technical
Report, a Memorandum from Chris Saunders dated October 31, 2007, and entitled “Compliance
with MCA Requirements for Street Impact Fee Development” is attached to this response.
In the case of level of service standards, the City has already established level of service
standards in Section 18.44.060D of the City’s Municipal Code. This was further carried forth by
using the capacities identified in Table 4-1 of the 2001 Greater Bozeman Transportation Plan
Update for calculating the cost per vehicle mile of capacity. The provision of the level of service
standard is met from a consistency standpoint to ensure that new development is not held to a
higher level of service than existing users (per Section 7-6-1602 (5)(d) of the 2005 Montana
Impact Fee Statute). Further, as noted in the response under #1 previously, the 2001 Greater
Bozeman Transportation Plan Update identified deficiencies existing at that time and other funds
were used to correct those. This practice continues through the annual updates of the City’s Five
Year CIP.
With regard to the issue of time periods, as mentioned previously, the horizon of the CIP is over
a 5-year period with identified priorities based on needs in the 2001 Greater Bozeman
Transportation Plan Update, which has a 2020 horizon. Although these plans have different
length horizons, they are directly correlated nonetheless. Appendix H of the Transportation
Impact Fee Technical Report provides an estimate of anticipated revenues through 2025. As
discussed in that appendix, these revenues serve only as planning level guide of anticipated
revenues based on the projected population growth in the 2007 Sewer Facility Plan. As such,
these population projections reflect the most recent and localized data available at the time of the
study. Transportation impact fee revenues will be used to offset the growth in vehicle miles of
travel and will be budgeted accordingly to support projects in the CIP. The revenue projections
assist with planning efforts to prioritize future improvements in the CIP consistent with long
term improvements in the 2001 Greater Bozeman Area Transportation Plan Update.
Comment # 7 – Use of Daily Trips vs. Peak Hour
We have significant concern that one primary basis of the calculated impact fees is daily trips,
and not peak hour trips. Section 7-6-1601 of the 2005 code states that impact fees are charged
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to "fund the additional service capacity required by development". It is atypical to base
transportation impact fee calculations on daily trips, rather than peak hour trips. The City's Comp
Plan Update, like most transportation plans, itself bases its recommended improvements on
weekday morning and afternoon peak hour trips, not daily trips. It is during these peak hour
periods that the roadway network's capacity is taxed by traffic demands from all sources,
capacity deficiencies are identified, and roadway improvements are proposed, scheduled,
funded, and implemented. Therefore, examining roadway capacity on a daily basis is tenuous as
best. For example, churches with Saturday or Sunday services, seldom tax the capacity of
roadway systems, because their activities (travel demands) typically occur during off-peak (non-
commute-to-work) travel periods. The methodology utilized, combined with no specific defined
future land use projections, could lead to over-designed roadways attributable to development
traffic. While the Montana Code does not specify the time period to be examined for
determination of travel demands, deficiencies, and improvement needs, a peak period, such as the
weekday afternoon commuter period, is more appropriate and reasonable to assess the impacts
of both existing and future traffic on roadway capacity than a 24-hour (daily) period. Such is the
case in other states. Then all land uses, relatively, would be compared to impacts for the same
typical congested peak period baseline.
Response # 7 – Use of Daily Trips vs. Peak Hour
It is simply opinion that basing “transportation impact fee calculations on daily trips, rather than
peak hour trips,” is atypical; this contention is not based on fact. The Consultant has completed
numerous transportation impact fee and land use trip characteristics studies in Florida and
elsewhere in the U.S. and all have been based on the use of average daily trip generation. Note
that other studies in Montana, such as those for Gallatin County, the City of Belgrade, and the
City of Missoula, all use daily trips in the calculation of the trip generation rate. As such, it does
not appear to be atypical even in the State of Montana to rely on daily trips from data sources
such as ITE to develop this demand component input variable.
There is no legal requirement to use daily, a.m. or p.m. peak hour standards and capacity in the
impact fee calculation. This is further supported by Section 7-6-1601 of the statute, which does
not include any stipulation that “peak-hour values” should be used to develop the vehicle miles
of travel consumed by new development.
The concept of peak hour capacity also is brought up in the SWMBIA’s comment; however, it is
important to note that development does not just consume capacity during the p.m. peak hour.
Development consumes capacity on a daily basis, and the nexus of proportionality and equity
between specific land uses is better served using daily information. Further, since the daily trip
generation data are utilized only to help develop the appropriate transportation impact fees for
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each comparative land use in the fee schedule, it is not likely that this methodology is “going to
lead to over-designed roadways attributable to development traffic.”
It is important to recognize that the relationship between the average daily and peak hour
measures can differ significantly depending on land use, geography, and time of day of the peak
hour, among other factors. Using the same church example as the SWMBIA comment, while a
church with weekend services may not have the same impact on the capacity of the roadway
system as another land use because of the off-peak travel, it is still the case that a new church
will generate demand for consumption of the adjacent roadway network, regardless of when that
consumption may occur. Again, the concept behind the consumption-based fee is that land uses
pay for what they consume on a daily basis, not just during peak periods. This helps ensure that
there is equity and fairness between the rates charged for the various land uses contained in the
transportation impact fee schedule. For these reasons, and because the majority of trip
characteristic data is based on daily values, the analyses included in the Transportation Impact
Fee Technical Report utilize average daily measures and, in our professional opinion, this use of
average daily values versus average peak hour values is justified.
Comment # 8 – Lack of Pass-Through Analysis
While regional (pass-through) trips for interstate roadways were excluded from the
development impact fee calculations, no such allowances were made for state, county, and city
roads within Bozeman. While we agree that the pass-through percentages may be lower on
these roads than on interstate routes, they are not zero; some such trip making will occur. We
point out also, that even with just two service areas, CBD, and non-CBD, development trips in
one service area may be pass-through trips in the adjacent service area (e.g., a non-CBD to non-
CBD trip that passes through the CBD). This latter example would take on greater importance if
the non-CBD service area was further broken down into several service areas, for rational nexus
reasons.
Response # 8 – Lack of Pass-Through Analysis
This issue also was brought up as part of the SWMBIA’s Comment #3, and a brief response was
provided thereto. However, for purposes of completeness, this issue is again addressed in more
detail herein. Since the City is considered one service area there is no need to consider pass-
through traffic between the non-CBD and CBD. Given the typical person’s aversion to travel
delay, it is unlikely that a significant quantity of traffic would choose to pass through the City
without having some destination within the City. The exclusion of the external-to-external trips
on the interstate system is directly related to excluding travel on the interstate system. As noted
before, the Transportation Impact Fee Technical Report explains that the study is consumption-
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based, charging for travel on city, county, and state roads. Therefore, the demand per unit of
development accounts for the average number of daily trips, the lengths of these trips, and the
proportion of travel that is new travel, rather than travel that is estimated to have been on the
defined road system (city, county, and state roads). The study further accounts for travel on
local roadways (subdivision roads) by adding a half mile to the total trip length assessed for the
gas tax revenue credit. This provides a more conservative gas tax credit since the logic is that
gas tax revenues are being generated by this travel.
Comment # 9 – Need for New Plan Data (and Costs)
The manner in which the costs are presented does not define what the cost is for each trip
today. In summary, "a weighting was assigned based on project types in the 2001 Greater
Bozeman Transportation Plan for all city roadway improvements." The weighting
assumes 16% for new construction of two travel lanes and a continuous left turn lane (three lane
section): 54% for addition of a continuous left turn lane along a two-lane undivided roadway
(three lane section) and 30% of the addition of two travel lanes to an existing two-lane divided
roadway (five lane section). In other words, the weighted composite cost assumes a combination
of the different types of improvements noted above (lane capacity expansion and related costs).
Significantly, the Study notes that "the City of Bozeman is currently updating the Greater
Bozeman. This is problematic given that the weighting is based on a previous study which is
slated to be updated, and therefore will presumably alter these weighting factors.
Another problem is that the State construction costs are part of the overall cost per lane mile. A
blended cost analysis is used. The Study notes: "The weighted average cost per lane mile
includes city and state projects and is based on weighting by the distribution of city and state
lane miles of roadway being constructed in the 2001 Greater Bozeman Transportation Plan."2
Again, since the plan will be updated, the assumptions regarding improvements to State roads will
also likely be modified. Accordingly, City costs are based on only two recent projects, are
blended together with State costs to derive a cost per lane mile based on (1) the percentage of
money spent by impact fee payers on state versus city roads and (2) the percentage allocation of
the three types of road improvement projects forecasted in 2001 in the City's Transportation
Plan. The Study notes that these figures will change once the update to the transportation plan
is finished. So why not wait until accurate data is available before changing the fee levels?
Response # 9 – Need for New Plan Data (and Costs)
As mentioned previously, each unit of development is charged based on consumption of capacity
using the cost per vehicle mile of capacity developed in the study. The Transportation Impact
Fee Technical Report is based on an assessment that is a snapshot in time. It is the City’s
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prerogative to determine when this particular snapshot occurs; hence, the current study was
completed on a schedule determined by the City and makes use of the most current information
available during that time period. As such, the study utilizes the 2001 Greater Bozeman
Transportation Plan Update to develop the weighted costs since it represents the most recent and
localized information available at the time of the study. City and MDOT staff confirmed that the
mix of improvements included in this plan is consistent with recently completed city and state
projects that provided the cost data used in the study.
Projects designed to solve some of the identified needs in the 2001 Greater Bozeman
Transportation Plan Update that have been built in the past two to three years are considered
typical projects and it is not likely that the weighting used in the study will be significantly
different than what would be reflected in the updated transportation plan now being developed.
As noted previously, the sample of available project data was the best available during the time
of the study. When the updated Transportation Plan is completed in the next 1 to 2 years, the
Transportation Impact Fee could be revisited, if necessary. Given that the current Transportation
Impact Fee is based on cost data that are more than 12 years old, waiting any longer to update the
fee will only make the likely increase even greater than what is being proposed.
Comment #10- Residential vs. Nonresidential Forecasts
The Study does not include any type of independent forecast of demand for roads from new
residential and nonresidential growth in Bozeman. The only reference to a specific data
source for increased demand data is population (first noted on page 1), which is based on the
2007 City of Bozeman Sewer Facility Plan. This information appears to be used only in
Appendix H to forecast gross revenues based on new population, residents per dwelling unit
of 2.26 and an assumed residential mix of new housing of 37% single family, 53% multi-
family and 2% mobile homes. The only discussion of nonresidential growth is in a
footnote stating, "non-residential revenues are assumed to be 39% of total collections." No
further breakdown or discussion is provided. To truly know what the likely demand from growth
is for additional road miles, a forecast of growth for both residential and nonresidential land uses
is needed. From this forecast, the capital projects for which impact fees would be utilized as
well as the amount of impact fee revenues could be ascertained.
Response #10 - Residential vs. Nonresidential Forecasts
The 2001 Greater Bozeman Transportation Plan Update (see Chapter 3, Travel Demand
Modeling) and the 2020 Bozeman Community Plan (see Chapter 5, Housing) include detailed
demographic and socio-economic forecasts that are used as inputs to the travel demand model.
The model provides a list of future needs that serve as a basis for accommodating anticipated
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growth. This is important since these plans help meet the statutory requirements of the Montana
Code with regard to long range forecast needs and that then assist in the identification of capital
improvements to meet them.
The consumption-based approach allows the City the flexibility of selecting projects that best
serve the demand for capacity to serve new growth. Further, the consumption-based fee enables
a more responsive scheduling and location of capacity expanding projects that provides a greater
correlation of fees paid and benefits received.
As noted in a previous response, the impact fee revenue projections presented in Appendix H of
the study serve only as a guide in terms of revenue generation based on population growth.
Comment # 11 – Inadequate Local Demand Information
The Study states, "There are 12 input variables used in the impact fee demand component
equation."3 Of the 12, only three pertain to the demand component—number of trips generated,
length of those trips and proportion of travel that is new travel, rather than travel that is
already on the road system. Since the Study does not forecast total new travel or all existing
travel, information on the third component is not provided. Instead of calculating the trip
length by using lane capacity (assuming a current level of service such as D) and existing
trips in the City system (based on existing land uses), the Study's approach is to take a survey
of only two or three local sites for only four of the land use categories and then use findings
from these four categories to adjust Florida surveys of other land uses completed by the
contractor. Local interviews were conducted at three single family, two
condominium/townhouse, two office and three shopping center locations. Using only two or
three sites is not adequate to provide meaningful data. As an example, one single family
site had a trip length of 1.59 while a second had a trip length of 4.53, about three times longer
than the other site. The third location was 3.23. For the two residential
condominium/townhouse projects one trip length was over a third greater than the other.
The three office samples range from 1.64 to 2.83, a 72% variation. The derivation of trip
length is even more problematic for the shopping center category. The table indicates that
the average weighted trip length for the sample of 35 sites is 3 miles. However, 32 of the
35 sites are in Florida, with most of them in unincorporated county areas. If one used the
three Bozeman shopping center sites, the same figure is about 2 miles, a significant
difference. This difference further indicates the problem of not relying on local, defensible
data.
In addition, the comprehensiveness of interviewing those using each site varies significantly.
The first office site had a survey for every 316 square feet (153 for 48,344 square feet) while
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the third site had a survey of every 227 square feet (269 for 61,199 square feet),
significantly more comprehensive in getting a full analysis of that particular site. A similar
problem exists with the shopping center category. A total of 329 surveys were taken for a
35,888 square foot center while only 502 were taken for a 159,852 square foot center. To
maintain the same ratio, 1,466 surveys should have been taken at the second site.
Response #11 – Inadequate Local Demand Information
The impact fee technical report does outline the 12 input variables used to develop the impact fee
equation, including the demand, cost, and credit components. The three variables associated
with the calculation of demand per unit of development are trip generation rate, trip length, and
percent new trips. All three variables are indeed used to develop the total vehicle miles of travel
per unit of development.
Based on the SWMBIA comment, it is apparent that there is some confusion regarding the third
demand variable, percent new trips. This variable refers to those trips to a particular land use
that would not have been on the road otherwise if not for the need to access that use. This is
what is meant by “new travel,” rather than travel that is already on the road system. A trip to a
particular use that is classified as “travel that is already on the road” references the occurrence of
trip capture, or pass-by trips, where a trip is already occurring for another purpose and a stop is
made at that use because it is convenient to do so (e.g., it is “on the way” to the original
destination). As a result, the information included in the study related to percent new trips (or,
new travel) is correct and has no relation to the “forecast [of] total new travel or all existing
travel” mentioned in the comment.
Regarding the issue of trip length, trip length by land use was estimated using the relationship
between the origin-destination survey data collected in the City of Bozeman for both residential
and non-residential land uses and data collected previously in the Consultant’s Trip
Characteristics Database (TCS). A detailed description of the information in the TCS database is
presented in Appendix A, page A-1. A discussion of the data collected from local sites is
included on pages 4 and 5 of the technical report and the raw data is summarized in the City of
Bozeman Trip Characteristics Study, Final Report.
While it is recognized that the ideal situation from a local data standpoint would be for the City
to have available extensive trip characteristic study information for all of the specific land uses
contained in its transportation impact fee schedule, this is an occurrence that the Consultant has
not encountered previously. It is not the case in Bozeman, either. As a result, it was necessary
to develop a method for estimating local trip characteristics in a manner that would meet the
City’s schedule and budgetary requirements, while also providing the best estimates of the local
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condition—a method that has been utilized successfully elsewhere.
As such, the local data produced for the City were used to the extent possible to estimate the
average trip lengths for land uses that were not studied as part of the trip characteristics study,
but are included in the TCS. As noted in the Transportation Impact Fee Technical Report, the
Consultant’s TCS is a compilation of data collected for all three aforementioned demand
variables (i.e., trip generation rate, trip length, and percent new trips). It is our professional
opinion that this process (the use of data collected for the specific purpose of estimating the
average length of trips to and from land uses) results in better trip length estimates for all uses
than would the use of lane capacity, as suggested by the SWMBIA. In the impact fee
methodology used, trip length is not directly tied to lane capacity since lane capacity is
incorporated into the cost per vehicle mile of capacity variable to estimate the total impact cost
(see pg. 23 of the technical report) by land use.
Finally, regarding the specific trip length results of the local trip characteristics studies, it is
important to note that travel characteristic variability is always going to be present among
different sites of a particular land use. The SWMBIA’s comment discusses the differences in
trip lengths for the three single family residential use sites. Because of the respective sites’
locations and socio-economic characteristics of their residents, the noted variability in trip length
is not unexpected or unusual. This is why the data is combined with information from the other
site studies to help mitigate the impact of the variability issue. In addition, it is important to note
that the collection of local data for the non-residential sites, specifically the origin-destination
surveys used to develop both the trip length and percent new trips variables, was driven by the
number of trips to and from each site that the surveyors experienced and not the comparative
square footages of the sites. Since the number of surveys completed at the sites met minimum
statistical standards for sample size, there is no need or requirement for attempting to maintain
some arbitrary surveys-per-square-foot ratio.
Comment # 12 – Inadequate Local Trip Length Data
Another problem with the calculation of the trip length is how the other land use category trip
lengths are derived. Except for the four land uses noted above, all the other impact fee
land use categories are using data solely from Florida. This includes the apartment category
where the sample is 11 apartment complexes in four Florida counties. The consultant
assumes that all the data in Florida is applicable to Bozeman except for the trip length. The
consultant looks at the Bozeman trip length for single family and compares it to the Florida
single family findings. For example, if the difference is 55%, it is assumed that other related
categories from the Florida survey should be reduced by that amount. This is assumed even
though Bozeman is a City, in a different climate and has different characteristics than the Florida
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counties. The consultant applies the following trip reduction factors! 55% of the single family
trip lengths found in Bozeman to lodging and recreation land uses; a residential
condominium trip length reduction of 55% to mobile home park; an office trip length
reduction of 43% to institutions, medical office and industry land uses; and a retail trip
length reduction of 62% to all retail land uses other than shopping centers. (As shown above,
the retail shopping center category used as a base is overstated.) The consultant notes that a
"review of 2000 Census Data specifically demographic and journey-to-work characteristics
... was conducted to establish a relationship between the studies in the Trip Characteristics
Database and the City of Bozeman for land uses that were not studied locally. This review
shows that the adjustment factor discussed previously for residential and non-residential trip
lengths are justified."4 Further discussion on this analysis and conclusion is needed.
Response # 12 – Inadequate Local Trip Length Data
As noted in a previous response to a similar issue, the ideal situation is to have available all
local data for every one of the specific elements needed to calculate a transportation impact fee
for each land use pertaining to the City of Bozeman’s desired impact fee schedule. Since this is
not the case, the impact fee study used local data where possible in the development of the
demand component variables (trip generation rate, trip length, and percent new trips). As noted
in the study, the trip generation rates primarily rely on data from ITE’s Trip Generation
document, which is a national data source that is widely referenced and used in impact fee and
other studies.
Trip length and percent new trips data were developed based on the local studies conducted and
data collected previously in the TCS database. Although most of the data included in the TCS
database are from Florida, the Transportation Impact Fee Technical Report provides additional
support documentation that indicates that demographic (median age, age by sex, average
household size, vacancy status, housing units), journey-to-work (travel time, mode share,
vehicle occupancy), and socio-economic (median household income, income distribution) data
were used to establish a comparative relationship between the City of Bozeman and
communities in Florida in terms of travel characteristics. This analysis, along with the locally-
collected trip characteristics data, provides a logical basis to account for the differences in travel
demand using the trip length adjustment factors for residential and non-residential land uses
noted in the study, given the present dearth of more specific local trip characteristic information
for the City. It also should be noted, as documented on pages 4 and 5 of the Transportation
Impact Fee Technical Report, that the adjustment factors were applied uniformly to land use
categories.
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Comment # 13 - Failure to Apply Existing Data
It is interesting to note that although the consultant uses local data on four land uses to justify
deriving local trip lengths for all land uses, the Study also states (in the same paragraph)
"the trip generation rate data recommended in the fee schedule is primarily based on the
ITE Trip Generation reference report (7th edition) which is a national source."5 This is a
common approach. What is significant is that the local surveys and Florida surveys also have
trip generation data, which have not been used. Given the problems with the trip length data, the
consultant should have used a local city wide calculation process to derive more defensible
and accurate trip length data.
Response # 13 - Failure to Apply Existing Data
It is the case that information from ITE’s Trip Generation report was used for the trip generation
rates for most land uses. This was done specifically due to the number of data samples collected
in that particular resource for many of the land uses. As mentioned previously for trip length, a
larger number of samples is always more desirable to help mitigate data variability between site
studies. Additionally, though, it is important to note that the local data collected is consistent
with the recommended ITE trip generation rates for the respective uses. Furthermore, it should
be noted that the ITE reference does not have available any trip length or percent new trips data
that may have been collected in conjunction with the trip generation information; thus, it is not
possible to estimate total vehicle miles of travel for any land use using just this document. Since
the local trip characteristics information that was collected provides a sampling of local travel
demand, the use of TCS data for the calculation of the trip length and percent new trips variables
served two purposes.
First, the unique travel demand in the City of Bozeman, collected by studying local sites,
was incorporated into the recommended trip lengths and percent new trips calculations;
and
Second, since only four land use categories were studied out of a total of 34 land uses in
the fee schedule, the local data were utilized to derive adjustment factors for the land uses
where local data were not collected, but data were available for Florida-based sites.
As suggested previously, the use of local data for the actual land uses studied and as a basis for
adjusting the trip lengths for the studies of other land uses provides the most accurate measure of
the lengths of trips (if complete local information is not available).
Other impact fee studies in Montana have used National Household Transportation Survey
(NHTS) person travel data by trip purpose to make adjustments to trip purpose-specific trip
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lengths generated by the MDOT Urban Travel Demand Model. This method attempts to
generate local specific land use trip characteristics information for impact fee calculation
purposes by using national-level data to adjust Montana travel demand model data that do not
include the specific land uses contained in an impact fee rate schedule. It is our professional
opinion that using land use-specific impact fee origin-destination surveys provides a more
accurate estimate of the travel demand by land use than the method described above.
Comment # 14 – Justification of CBD Discounts
The City's consultant includes a 15% discount for nonresidential that will be built in the
Central Business District (CBD). The consultant cites a 1998 City of Tampa study, 1973
Downtown Portland study and a 2004 Montana study. The first two studies are quite old and
reflect downtowns that are much denser than Bozeman and have high parking fees. The third
study, "Montana Three City Parking Generation/Land Use Pattern Correlation Study," issued in
September 2004, notes that a central business district is more parking efficient, but does not
discuss percentage differences. Therefore, further discussion is needed in the Study to
explain the 15% reduction.
Response # 14 – Justification of CBD Discounts
The comment refers to a “15% discount for non-residential that will be built in the Central
Business District.” This reference was not discussed or presented in this manner anywhere in the
impact fee study with respect to a CBD adjustment factor. The only reference for a “15%
discount” would be the interstate adjustment factor; this is applied to the gross vehicle miles of
travel calculated for each respective unit of development by land use to account for not charging
for travel on the interstate system.
With regard to the citation of the indicated studies, these were referenced in the discussion of the
specific discounts applied to the percent new trips variable for certain non-residential land uses,
as presented in Appendix K of the technical report. As discussed in the Transportation Impact
Fee Technical Report on page 7, these discounts are applied to account for the high level of
captured trips in the downtown area. The Montana Parking Study provided confirmation that
there are more linked trips in the CBD since there are parking efficiencies that arise from a
business being located in the CBD. In addition, the study illustrated that, regardless of the
density of the CBD (Tampa, Portland, Bozeman), there is a need to adjust the percent new trips
(i.e., 1 minus the percentage of captured trips) factor to account for the linked trips.
The adjustment in percent new trips for certain land uses in the CBD is recommended because
the travel demand in the CBD for these land uses is lower than the same land uses located
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outside of the CBD. As mentioned previously, this is in compliance with Section 7-6-1602(5)(a)
of the statute which states that, “The amount of the impact fee must be reasonably related to and
reasonably attributable to the development’s share of the cost of infrastructure improvements
made necessary by the new development.”
Comment # 15 – Home Size Differential Unjustified
The impact fee differential by single family detached units is derived incorrectly. Although it is
unlikely that new detached houses will be less than 1,500 square feet, the methodology
affects the two remaining categories of 1,500 – 2,499 square feet and 2,500 square feet or
larger. As reflected in Appendix E-1, "Analysis of the Travel Behavior of Low-Income
Households," no local data is used. In addition, the national data that is used is based on
different years. Data from 2001 was used for average national annual household vehicle miles
of travel (VMT). The year 2005 was used to compare median annual family/household
national incomes with housing unit size. The year 2007 was used for Gallatin County
definitions of low and very low income households. As part of the calculations, an "average
size single family (detached) housing unit size of 1,500 – 2,499 square feet" is used.6 As
indicated, this statistic is a national statistic upon which the local fee is calculated.
Response # 15 – Home Size Differential Unjustified
The main purpose in developing a tiered approach for the single family detached residential
transportation impact fee is to provide a fee that is more proportional to the consumption of
roadway capacity. In general, smaller homes have less people and cars and consume less
capacity. Whether to implement the tiered fee for the single family detached land use is a policy
decision for the City Commission. The effect of not implementing the tiered concept is to
increase the impact fee for affordable housing.
The Consultant has developed a methodology for tiering the single family detached residential
transportation impact fee that uses a comparative relationship between housing unit size and
household travel behavior to determine appropriate relative fees for each size tier. One concept
related to residential tiering that must be highlighted is that this is a supplementary analysis that
is used to provide specific tiers for the single family detached residential fee in order to support
local efforts to consider affordable housing and low-income families in the determination of
appropriate impact fees.
Additionally, the single family tiering analysis is based on the best available data for completing
such an analysis. Specifically, for purposes of tiering two primary data sources are used: the
National Household Travel Survey (NHTS) and the American Housing Survey (AHS). At the
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time of the Bozeman study, the most recent databases available to examine the housing size-
travel relationship were 2005 for the AHS and 2001 for the NHTS. While local data would be
preferable, the level of detailed information required to establish a relationship between home
size and vehicle miles of travel is not available. In terms of the local data that were used, it was
necessary to utilize the 2007 Average Median Income (AMI) and local definitions for the “very
low income” (50 percent of the AMI) and “low income” (80 percent of the AMI) thresholds
established by the Gallatin County “Road to Home” Down Payment Assistance Program (which
relies on information from the federal Department of Housing and Urban Development). This
income information was used to help derive the vehicle miles of travel for these two low-income
land use categories.
This effort is consistent with the City’s process of evaluating workforce and affordable housing
options in the planning process. Finally, it should be recognized that the specific housing size
ranges for each of the tiers are based on the overall assessment of travel in the U.S. by housing
unit size and represent break-points where comparatively significant changes in travel behavior
are noted to occur—they do not necessarily reflect local experience in the size of housing that
has been or will be constructed.
Comment # 16 – Failure to Account for Non-Growth Costs
Some of the road costs entail adding a third lane to a two lane road; however, the cost
estimates indicate that the existing two lanes are being reconstructed when the third lane is
added. This appears to be a concern as we have been unable to identify a "methodology that
the governmental entity will use to exclude operations and maintenance costs and correction
of existing deficiencies from the impact fee" as required by Montana Code Annotated 7-6-
1601.1.i. As the reconstruction of two existing lanes may serve to offset maintenance costs or
correct existing deficiencies rather than provide new capacity for new development,
these costs should not be included in the impact fees.
Response # 16 – Failure to Account for Non-Growth Costs
As mentioned previously, the City reviews every bid tabulation for roadway improvements and
assigns the growth and non-growth-related components to appropriate funding sources. In the
Transportation Impact Fee Technical Report, Appendix B, Table B-3 presents a detailed
breakdown of the two scenarios relating to the construction of a three-lane section (full
reconstruct and offset). As shown in that table, the cost associated with full reconstruction is the
cost to prepare capacity for use by new growth and is not an operational or maintenance cost. In
addition, based on a review of the 2001 Greater Bozeman Transportation Plan Update and
discussion with City Engineering staff, the weighting calculation shows that most of the future
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Tindale-Oliver & Associates, Inc. City of Bozeman
November 19, 2007 23 Impact Fee Study – SWMBIA Response
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improvements will be offset construction and a lower cost per lane mile was used for
improvements where offset construction was planned. As noted previously, corridors where
these improvements are made, as well as future planned CIP projects, are reviewed individually
to ensure that no impact fees are used to pay for deficiencies, operational improvements, or
maintenance.
Comment # 17 – Double Counting
Insufficient detail appears in the improvement descriptions of the improvements utilized in the
Final Report to determine whether the construction costs included in the "construction" line
of Table 2 include design, engineering, and inspection costs as well as the costs of
materials and installation of the roadway improvements. It is recommended that in order to
ensure that design costs, engineering costs, and inspection costs are not being double counted
in the impact fee methodology, that additional information and support be provided relative to
the construction costs estimates employed in the Final Report.
Response # 17 – Double Counting
As documented in the Transportation Impact Fee Technical Report, Table 2 and Appendix B,
Table B-6 provide full supporting documentation showing that there is no duplication of cost in
the calculation of the total cost per lane mile. The design and construction engineering
inspection costs (see page 8 of the Transportation Impact Fee Technical Report) are percentages
of the total construction costs (8.5 percent each) based on discussion with City Engineering staff
and a review of recently completed projects. It should be noted that the calculation of the
construction cost is presented in Appendix B, Table B-3 and B-4 of the Transportation Impact
Fee Technical Report in great detail. It is, therefore, the opinion of the Consultant that additional
documentation is not needed to verify that there was no double counting of the construction
costs.
Comment # 18 – Additional Cost Data Necessary
The tables in Appendix B appear to indicate that most of the lane mile costs are derived from the
State roadway project of 19th Avenue between Babcock St. and Kagy Blvd. One must question
whether a single roadway project can be representative of all future roadway projects within
the City of Bozeman. Moreover, to the extent that this improvement exceeds the standards of
other roadways located within the City, such reliance on the costs of a single roadway improvement
represents a potential increase in the level of service standards to which new development will be
held. As a result, it is recommended that cost estimates of additional roadway improvements be
provided as support for the per lane-mile construction costs utilized in the report to provide a
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Tindale-Oliver & Associates, Inc. City of Bozeman
November 19, 2007 24 Impact Fee Study – SWMBIA Response
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reasonable estimate of different roadway improvements and to ensure that the typical roadway level
of service standards of the City of Bozeman are perpetuated to new development.
Response # 18 – Additional Cost Data Necessary
As previously discussed in Response #9, the Consultant did not base the construction costs for
city and state roadway projects on one project. At the time of the study, the City had recently bid
two capacity expansion improvements (Babcock Road and Durston Road) and MDOT had an
engineer’s estimate for the South 19th Avenue lane widening project. The Consultant considered
this availability of data to be promising since it provided a firm basis for evaluating the detailed
bid tabulations that were provided by staff and ensuring that current market prices and standard
quantities would be reflected in the impact fee cost estimates.
The Consultant made additional inquiries to MDOT staff regarding other recent bid tabulations
for lane widening projects within geographic proximity to Bozeman. These inquiries affirmed
the fact that the State had not recently bid any of these projects and that the South 19th Avenue
engineer’s estimate represented a typical improvement with respect to the addition of travel
lanes. Based on discussion with City staff, city roads are constructed up to state standards so the
weighted cost calculation employed the project costs for the South 19th Avenue project.
The South 19th Avenue project is typical of an expansion within a less-constrained urban
condition. In contrast is the possible future expansion of Rouse, where segments of the corridor
are very constrained by existing development. The City has a long standing policy to acquire as
much necessary right of way as possible for a planned street improvement and, therefore, South
19th Avenue is a reasonable approximation of future five-lane projects such as West Kagy
Boulevard, West Oak Street, or Cottonwood Road.
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449
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Tindale-Oliver & Associates, Inc. City of Bozeman
August 2007 1 Impact Fee Study
City of Bozeman Transportation Impact Fee Study
Southwest Montana Building Industry Association
Response to 7/25 Draft Report Comments
The following are responses to comments provided to the Impact Fee Advisory
Committee.
1. The draft report at Table C-3 lists the predicated City of Bozeman expansion
projects. However, it includes Project No. 4306 concerning adding lanes and
reconstruction from Four-Corners North. Please explain why is this would be
considered a city project rather than a county project? As shown in Table C-3,
this project was financed by the Montana Department of Transportation; as such it
was funded using a combination of federal gas tax revenues and state matching
gas tax revenues. In an effort to provide a conservative revenue credit, all
capacity expansion projects in Gallatin County were considered to estimate the
equivalent pennies of dedicated to capacity expansion.
2. Table C-3, includes numerous “intersection upgrades/signal” projects. Further
explanation of how this is growth-related projects is necessary, particularly where
it states “city-wide signals”. Why isn’t cost sharing with existing residents
necessary for replacing signals? The intersection upgrade/signal is specifically
for projects that added new signals to the roadway system. As such, these new
signals are considered to be capacity adding and are used in the estimation of the
average annual state expenditures dedicated to capacity expansion projects for
purposes of the revenue credit.
3. Project No. 4952 lists lane reconstruction for Babcock to Kagy, but does not
clarify which street it actually is, is it Wilson or Church? As shown in the final
report, this project is on South 19th Avenue. This project is growth related since it
adds travel lanes thereby adding capacity to the roadway network.
4. After reviewing Table F-1, concerning the changes to the impact fee schedule, it
is disconcerting as to why Tindale-Oliver states that a percentage change is “N/A”
for the various residential fee levels. Is this because they breakdown the fees
based on square footage of the homes, and whether it is low income housing?
Regardless, it appears the bulk of residential (i.e. 1,500 square feet and above)
will increase almost $4,000 per unit. This comment has been addressed in the
final report where the proposed fee schedule has been tiered and the current single
family fee is comparable to all the tiered ranges.
5. Further explanation is necessary of why Tindale-Oliver utilizes the costs of the
improvements on Durston and Babcock Roads to set the standard of per mile
charge for future projects. Without knowing which specific projects will be
upgraded (in fact they don’t even refer to the transportation plan or CIP to list
various projects in their report), it is difficult to know if the Durston/Babcock
costs are similar. As shown in pages 8 through 10 of the final report and
Appendix B, the city costs were developed based on a detailed review of the 2001
Greater Bozeman Transportation Plan projects. Specific project types by
improvement type (new road construction of two lanes, three lane sections, and
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Tindale-Oliver & Associates, Inc. City of Bozeman
August 2007 2 Impact Fee Study
five lane sections) were reviewed and used to develop the weighted cost per lane
mile. The calculation of the weighted cost per lane mile is directly related to
programmed improvements in the plan, the Durston and Babcock Road bid
tabulations were used since they reflect recent unit prices and quantities that
reflect the cost to construction a lane mile of improvement.
454
Southwest Montana
Building Industry Association 1716 West Main Ste 8-G Bozeman, MT 59771 (406) 585-8181 FAX (406) 585-7530
Wednesday, November 21, 2007
July 25, 2007
Impact Fee Advisory Committee
PO Box 1230
Bozeman, MT 59715
RE: Transportation Impact Fee Study
Dear Committee Members,
As you know, the proposed transportation study is technical and requires substantial time for
thorough review. Given the limited timeframe, I would ask the committee to consider providing
the building industry with additional time to thoroughly review the transportation study. Our
past efforts with the water and wastewater studies were positive and resulted in a net change to
the fees.
As the Impact Fee Advisory Committee begins to review the proposed study, the following
questions are submitted for your review:
1. The draft report at Table C-3 lists the predicted City of Bozeman expansion
projects. However, it includes Project No. 4306 concerning adding lanes and
reconstruction from Four Corners-North. Please explain why is this would be
considered a city project rather than a county project?
2. Table C-3 includes numerous “intersection upgrades/signal” projects. Further
explanation of how this is growth related projects is necessary, particularly where
it states “city-wide signals”. Why isn’t cost sharing with existing residents
necessary for replacing signals?
3. Project No. 4952 lists lane reconstruction for Babcock to Kagy, but does not
clarify which street it actually is; is it Wilson or Church? Also, further explanation
of why this is entirely growth related is necessary.
4. After reviewing Table F-1 concerning the changes to the impact fee schedule, it is
disconcerting as to why Tindale-Oliver states that a percentage change is “N/A”
for the various residential fee levels. Is this because they break down the fees
455
Southwest Montana
Building Industry Association 1716 West Main Ste 8-G Bozeman, MT 59771 (406) 585-8181 FAX (406) 585-7530
Wednesday, November 21, 2007
based on square footage of the homes, and whether it is low income housing?
Regardless, it appears the bulk of residential (i.e., 1500 square feet and above) will
increase almost $4,000.00 per unit.
5. Further explanation is necessary of why Tindale-Oliver utilizes the costs of the
improvements on Durston and Babcock Roads to set the standard of per mile
charge for future projects. Without knowing which specific projects will be
upgraded (in fact they don’t even refer to the transportation plan or CIP to list the
various projects in their report), it is difficult to know if the Durston/Babcock costs
are similar.
Transportation is a critical component to the overall impact fee schedule and its imperative
this study receive adequate review. I would appreciate Tindale-Oliver addressing these
initial questions and concerns.
The first hearing before the City Commission is scheduled for September 10th; which does
not provide adequate time. While these questions are obviously from the laymen
perspective, SWMBIA is in the process of retaining a consultant and will have additional
questions and concerns. It would be in the public interest to keep this at the advisory level
so these questions can be adequately addressed prior to forwarding onto the Commission. I
encourage the IFAC to slow down this process and ensure the study receives the necessary
review.
Sincerely,
Shawn Cote, Government Affairs Director
Southwest Montana Building Industry Association
456
planning · zoning · subdivision review · annexation · historic preservation · housing · grant administration · neighborhood
coordination
CITY OF BOZEMAN
DEPARTMENT OF PLANNING AND COMMUNITY DEVELOPMENT
Alfred M. Stiff Professional Building
20 East Olive Street
P.O. Box 1230
Bozeman, Montana 59771-1230
phone 406-582-2260
fax 406-582-2263
planning@bozeman.net
www.bozeman.net
MEMORANDUM
____________________________________________________________________________________
TO: Impact Fee Advisory Committee
FROM: Chris Saunders
DATE: October 31, 2007
RE: Compliance with MCA Requirements for Street Impact Fee Development
____________________________________________________________________________________
Section 7-6-1602 MCA establishes the requirements in state law for documentation for the development of
an impact fee. The statute leaves to the judgment of each community where each piece of information is
organized. The table below lists each element and shows where in the City of Bozeman documentation of
facility planning and fee calculation the required item is provided. The listed section(s) is a primary, but not
exclusive, location where the subject is discussed. Collectively the facility plan, design standards and
specifications policy, fee study, capital improvement program, unified development ordinance, and impact
fee ordinance satisfy the required documentation. All referenced documents are available through the City
offices.
Documentation Item Document(s) Page or Section
describes existing conditions of the facility 2001 Greater Bozeman
Transportation Plan Update;
Title 18, Unified
Development Ordinance,
BMC
Chapter 2 Existing
Conditions, Chapters
18.44 (Transportation
Facilities and Access)
and 18.78 (trip study)
establishes level of service standards 2001 Greater Bozeman
Transportation Plan Update;
Title 18, Unified
Development Ordinance,
BMC, Design and
Specifications Manual
Chapter 11
(Recommended Major
Street network and
Street Standards),
Chapter 18.44
(Transportation
Facilities and Access)
forecasts future additional needs for service for a defined
period of time 2001 Greater Bozeman
Transportation Plan Update;
Street Impact Fee Study
Chapter 3 and 4;
Chapter 2
identifies capital improvements necessary to meet future
needs for service (please note the plan calls for
improvements when demand requires, not on a fixed time
frame)
2001 Greater Bozeman
Transportation Plan Update;
Title 18, Unified
Development Ordinance,
BMC
Chapters 4, 6, 9, 10,
11; Chapter 18.78 (trip
study)
identifies those capital improvements needed for continued
operation and maintenance of the facility 2001 Greater Bozeman
Transportation Plan Update;
Title 18, Unified
Development Ordinance,
BMC
Chapters 4, 9-11;
Chapter 18.78 (trip
study)
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Documentation Item Document(s) Page or Section
makes a determination as to whether one service area or
more than one service area is necessary to establish a
correlation between impact fees and benefits
Street Impact Fee Study Chapter 2, Appendix
K
makes a determination as to whether one service area or
more than one service area for transportation facilities is
needed to establish a correlation between impact fees and
benefits
Street Impact Fee Study Chapter 2, Appendix
K
establishes the methodology and time period over which
the governmental entity will assign the proportionate share
of capital costs for expansion of the facility to provide
service to new development within each service area
Street Impact Fee Study Chapters 2 and 3,
Appendices B-D
establishes the methodology that the governmental entity
will use to exclude operations and maintenance costs and
correction of existing deficiencies from the impact fee
2001 Greater Bozeman
Transportation Plan Update
& Street Impact Fee Study,
Street Impact Fee Capital
Improvement Program
Chapters 4, 9-11, 13;
Chapter 2, Appendices
C&D; Street CIP;
individual project
design
establishes the amount of the impact fee that will be
imposed for each unit of increased service demand Street Impact Fee Study Chapters 2 and 3,
Appendix B
has a component of the budget of the governmental entity
that:
(i) schedules construction of public facility capital
improvements to serve projected growth;
(ii) projects costs of the capital improvements;
(iii) allocates collected impact fees for construction of
the capital improvements; and
(iv) covers at least a 5-year period and is reviewed and
updated at least every 2 years
Capital Improvements
Program for General Fund,
Street Maintenance Fund and
Street Impact Fee Fund
Section for each fund
when applicable to an
individual funding
source
The data sources and methodology supporting adoption
and calculation of an impact fee must be available to the
public upon request
2001 Greater Bozeman
Transportation Plan Update
& Street Impact Fee Study,
Unified Development
Ordinance, Design and
Specification Manual, City
Budget, bid tabulations,
impact fee ordinance
All documents are
available at City
offices, many are also
available on-line
The ordinance or resolution adopting the impact fee must
include a time schedule for periodically updating the
documentation required under subsection (1)
Chapter 3.24, BMC Section 3.24.110,
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ORDINANCE NO. 1730
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA, AMENDING CHAPTER 3.24, IMPACT FEES, BMC TO CONFORM TO
REQUIREMENTS OF STATE LAW, ADOPT UPDATED TRANSPORTATION IMPACT
FEES, INCORPORATE AND ADOPT DOCUMENTATION REQUIRED BY STATE LAW.
Preamble
WHEREAS, the City of Bozeman is committed to addressing the community’s expressed
needs and desires for services; and
WHEREAS, the City of Bozeman is committed to meeting those desires and demands for
services in a fiscally responsible manner; and
WHEREAS, the City of Bozeman is committed to meeting those desires and demands for
services in a manner which recognizes the fiscal and legal interest of all of the system users now and in
the future and not a limited subset of users; and
WHEREAS, the City of Bozeman has developed and adopted an impact fee capital
improvements program, which distinguishes current and future transportation needs and provides a
lawful, logical, balanced, operationally sound, and cost effective basis upon which to maintain and
develop the City’s transportation system; and
WHEREAS, Sections 7-6-1601 through 7-6-1604, MCA provide specific authority and
guidance about the necessary documentation to establish an impact fee and procedures to adopt and
administer an impact fee; and
WHEREAS, The City of Bozeman adopted an impact fee program in 1996 through ordinance
1414; and,
WHEREAS, Bozeman has commissioned updates to the impact fee studies which calculate the
cost of individual impact fees; and,
WHEREAS, the State of Montana adopted Sections 7-16-1601 through 7-16-1604 providing
guidance to local governments regarding impact fees and establishing certain standards for impact fee
adoption; and,
WHEREAS, Bozeman wishes to update its ordinance relating to impact fees to incorporate
newly adopted studies for transportation facilities; and,
WHEREAS, the City of Bozeman retained Tindale-Oliver & Associates, Inc. to analyze and
assess growth and development projections capital improvement needs in order to determine the
additional demand created by new development for transportation facilities anticipated to be placed on
the City as a result of new development; and,
WHEREAS, Tindale-Oliver & Associates reviewed the existing demand and needs for
transportation facilities, the existing facilities available to meet that demand, and the method of
financing the existing systems and needed new facilities; and,
WHEREAS, Tindale-Oliver & Associates additionally reviewed the contribution made or to be
made in the future in cash or by taxes, fees, or assessments by property owners towards the capital
costs of transportation facilities; and,
WHEREAS, Tindale-Oliver & Associates reviewed and relied upon the City of Bozeman’s
current level of service (LOS) standards and facility cost assumptions in recommending transportation
459
p. 2
impact fees; and,
WHEREAS, Tindale-Oliver & Associates has prepared a transportation impact fee study dated
October 31, 2007 (the Fee Study), including the assumptions, population and residential and non-
residential development projections, capital infrastructure and impact fee calculations, which study has
been submitted to and reviewed by City staff and officials; and,
WHEREAS, in addition to the Fee Study, Tindale-Oliver & Associates and the City have
prepared, updated, and relied upon other documentation, as required by section 7-6-1602 of the
Montana Code Annotated, in developing the transportation facilities impact fees adopted pursuant to
this Ordinance (collectively, the “Impact Fee Data and Analysis”), including but not limited to the
following:
(1) 2001 Greater Bozeman Transportation Plan Update;
(2) Title 18, Unified Development Ordinance; BMC;
(3) Design and Specifications Manual;
(4) Street Impact Fee Capital Improvement Program;
(5) Capital Improvements Program for General Fund, Street Maintenance Fund, and Street
Impact Fee Fund;
(6) the City of Bozeman Trip Characteristics Study, Final Report, dated August, 31 2007;
(7) the City Budget; and
(8) Specified bid tabulations.
WHEREAS, the Fee Study and Impact Fee Data and Analysis are hereby incorporated and
approved for purposes of developing and implementing transportation impact fees in accordance with
Montana law; and
WHEREAS, the Fee Study has been presented to and reviewed by the City’s Impact Fee
Advisory Committee and the City Commission, which have determined that:
(1) impact fees are necessary to offset the costs to the City associated with meeting the
transportation facility demands created by projected new residential and non-residential
development in order to maintain the existing levels of service (LOS) currently provided to City
residents and relied upon in the Fee Study and supported by other Impact Fee Data & Analysis;
(2) the amount of the impact fees recommended in the Fee Study are reasonably related and
attributable to new development’s share of the cost of infrastructure improvements made
necessary by such development;
(3) the expenditure of impact fees, pursuant to the terms of this Ordinance, will result in a
beneficial use to such new development reasonably related to the impact fees, per dwelling unit,
by type and per increment of non-residential development;
(4) the recommended impact fees do not include the cost to correct any existing deficiencies in
the transportation system or for operation or maintenance costs;
(5) the amount of the impact fees recommended in the Fee Study to not exceed a
proportionate share of the costs incurred or to be incurred by the City in accommodating the
development, based on the identified need for transportation system improvements required to
serve new development and the non-impact fee contributions new development is reasonably
anticipated to make in the future; and,
WHEREAS, based on the findings and recommendations set forth in the Fee Study and the
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p. 3
Impact Fee Data and Analysis, the benefits resulting from impact fee expenditures for transportation
facility improvements to be constructed with impact fee revenues is citywide and therefore the City has
determined that one transportation service area, as established by this Ordinance, is appropriate; and
WHEREAS, based on the findings and recommendations set forth in the Fee Study and the
Impact Fee Data and Analysis, Central Business District land uses have reduced impacts on the
transportation system; and
WHEREAS, the City has prepared and will update on an annual basis impact fee capital
improvement plans and documentation that include transportation improvements to ensure that new
development paying impact fees under this Ordinance receive a beneficial use from facilities
constructed through the expenditure of impact fees, as required by law; and,
WHEREAS, the City has and will continue to designate impact fee revenues solely for the
purpose of providing transportation system capital improvements required to accommodate new
development and has and will continue to implement its impact fee capital improvement program to
ensure impact fee revenues are not used to correct existing deficiencies in facilities or to fund
operations and maintenance costs; and
WHEREAS, this Ordinance is necessary to protect the public health, safety and general welfare
of the citizens of Bozeman; and
WHEREAS, the Impact Fee Advisory Committee has reviewed and made recommendation
regarding the impact Fee Study and revisions to ordinance and that recommendation has been received
by the City Commission; and,
WHEREAS, the Consultant assisting the City of Bozeman in the preparation of the
transportation impact fee program did receive and respond to public comment and when appropriate
made revisions to the draft Fee Study; and
WHEREAS, the amendments were the subject of a public hearing held on November 26,
2007.
NOW THEREFORE, BE IT ORDAINED BY the Bozeman City Commission:
Section 1
That Chapter 3.24 of the Bozeman Municipal Code be amended so that it reads:
Chapter 3.24
IMPACT FEES
Sections:
3.24.010 Legislative Findings
3.24.020 Authority and Applicability
3.24.030 Intent
3.24.040 Definitions
3.24.050 Street Transportation Impact Fees
3.24.060 Fire Protection Impact Fees
3.24.070 Water Impact Fees
3.24.080 Wastewater Impact Fees
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3.24.090 Refunds of Development Impact Fees Paid
3.24.100 Credits Against Development Impact Fees
3.24.110 Miscellaneous Provisions
3.24.010 Legislative Findings
The City Commission of the City of Bozeman, Montana finds that:
A. The protection of the health, safety, and general welfare of the citizens of the city
requires that the street, fire protection, water, and wastewater systems of the city be
expanded and improved to accommodate continuing growth within the city and within
those areas directly served by its Fire Department and within those areas connected to its
water and wastewater systems.
B. New residential and nonresidential development imposes increased and excessive
demands upon existing city facilities.
C. New development often overburdens existing public facilities, and the tax revenues
generated from new development often do not generate sufficient funds to provide
public facilities to serve the new development.
D. New development is expected to continue and will place ever-increasing demands on the
city to provide public facilities to serve new development.
E. The creation of an equitable development impact fee system would enable the City to
impose a proportionate share of the costs of required improvements to the city's street
transportation, fire protection, water, and wastewater systems on those developments
that create the need for them.
F. All types of development that are not explicitly exempted from the provisions of this
chapter will generate demand for city's street transportation, fire protection, water, and
wastewater services or facilities that will require improvements to city facilities and
equipment.
G. The city's street transportation impact fee study, dated January 1996 October 31, 2007,
prepared by Tindale-Oliver & Associates and as updated, and the fire impact fee study
dated October 1995 and as updated, prepared by James Duncan and Associates, and
water and wastewater impact fee studies dated July 2007, prepared by HDR Engineering,
set forth reasonable methodologies and analyses for determining the impacts of various
types of development on the city's street, fire protection, water and wastewater systems
and for determining the cost of acquiring land and the cost of acquiring or constructing
facilities and equipment necessary to meet the demands for such services created by new
development.
H. The City establishes as city standards the assumptions and service standards referenced in
the impact fee studies and other duly adopted documents as part of its current plans for
the major street transportation system and for the city's fire protection, water, and
wastewater systems.
I. The documentation required by 7-6-1602, MCA is collectively contained in the City’s
facility plans, impact fee studies, development regulations, financial records, capital
improvements program, design and specification manual, and other city documents.
IJ. The development impact fees described in this chapter are reasonably related to the
service demands and needs of new development and are based on the above-cited impact
fee studies and documentation and do not exceed the costs of acquiring additional land
and the costs of acquiring or constructing additional facilities or equipment required to
serve the new developments that will pay the fees.
JK. All transportation improvements upon which the transportation impact fees are based
and upon which transportation impact fee revenues will be spent, based on the
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p. 5
limitations set forth in this chapter will benefit all new development in the city; and it is,
therefore, appropriate to treat the entire city as a single service area for purposes of
calculating, collecting, and spending the street transportation impact fees, while
recognizing differences in the demand for service based upon the identified factors set
forth in the transportation impact fee study.
KL. All of the fire protection improvements listed in the fire impact fee study will benefit all
new development that receives fire protection service directly from the City Fire
Department; and it is, therefore, appropriate to treat the entire city and all properties
served directly by the City Fire Department as a single service area for purposes of
calculating, collecting, and spending the fire protection impact fees.
LM. All of the water system improvements listed in the water impact fee study will benefit all
new development that connects to the city water system; and it is, therefore, appropriate
to treat the entire city and all properties connected to the city water system as a single
service area for purposes of calculating, collecting, and spending the water impact fees.
MN. All of the wastewater system improvements listed in the wastewater impact fee study
will benefit all new development that connects to the city wastewater system; and it is,
therefore, appropriate to treat the entire city and all properties connected to the city
wastewater system as a single service area for purposes of calculating, collecting, and
spending the wastewater impact fees.
NO. There is both a rational nexus and a rough proportionality between the development
impacts created by each type of development covered by this chapter and the
development impact fees that such development will be required to pay.
P. The City’s facility planning, capital improvement program, development review, and
bidding processes create a public process by which, on a specific and detailed basis, the
capacity expanding components of construction can be identified and funded distinctly
from those components which are not capacity expanding by providing for evaluation by
the City and the Impact Fee Advisory Committee of future needs related to growth,
identification of applicable funding sources, and monitoring of construction and
payments.
OQ. This chapter creates a system by which development impact fees paid by new
developments will be used to expand or improve the city transportation, fire protection,
water, and wastewater systems in ways that benefit the development that paid each fee
within a reasonable period of time after the fee is paid.
PR. This chapter creates a system under which development impact fees shall not be used to
cure existing deficiencies in public facilities or to pay maintenance or operations costs
associated with providing public facilities.
3.24.020 Authority and Applicability
A. This chapter is enacted pursuant to the city's self-government powers, the authority
granted to the City by the Montana State Constitution, Sections 7-6-1601 through 7-6-
1604, and Sections 7-1- 4123, 7-1-4124, 7-3-4313, 7-7-4404, 7-7-4424, 7-13-4304, and
69-7-101 of the Montana Code Annotated.
B. The provisions of this chapter shall apply to all of the territory within the limits of the
city.
C. The provisions of this chapter related to the fire protection impact fees shall also apply
to all properties located outside the city that are served directly by the City Fire
Department.
D. The provisions of this chapter related to water impact fees shall also apply to all
properties located outside the city that are connected to the city water system.
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p. 6
E. The provisions of this chapter related to wastewater impact fees shall also apply to all
properties located outside the city that are connected to the city wastewater system.
3.24.030 Intent
A. This chapter is adopted to help implement the comprehensive plan of the city, the city's
1993 2001 transportation plan update prepared by Robert Peccia & Associates, and as
updated, the September 2006 draft of the water facility plan prepared for the City by
Allied Engineering and Robert Peccia and Associates, and as updated, and the May 2006
draft of the wastewater facility plan prepared for the City by HDR Engineering and
Morrison-Maierlie, Inc., and as updated.
B. The intent of this chapter is to ensure that new development bears a proportionate share
of the cost of improvements to the city street transportation, fire protection, water, and
wastewater systems; to ensure that such proportionate share does not exceed the cost of
the street transportation, fire protection, water, and wastewater facilities and equipment
required to serve such new developments; and to ensure that funds collected from new
developments are actually used to construct improvements to the city street
transportation, fire protection, water, and wastewater systems that reasonably relate to
the benefits accruing to such new developments.
C. It is the further intent of this chapter that new development pay for its proportionate
share of public facilities through the imposition of development impact fees that will be
used to finance, defray, or reimburse all or a portion of the costs incurred by the City to
construct improvements to the city street transportation, fire protection, water, and
wastewater systems that serve or benefit such new development.
D. It is not the intent of this chapter to collect any money from any new development in
excess of the actual amount necessary to offset new demands for street transportation,
fire protection, water, or wastewater improvements generated by that new development.
E. It is not the intent of this chapter that any monies collected from any development
impact fee and deposited in an impact fee fund ever be co-mingled with monies from a
different impact fee fund or ever be used for a type of facility or equipment different
from that for which the fee was paid.
3.24.040 Definitions
A. “Central Business District” (CBD) means land uses established within a B-3, “Central
Business District,” zoning district or land uses, not in the B-3 zoning district that meet
the following criteria, pursuant to the transportation fee study and an independent fee
calculation study as provided in section 3.24.050(B)(3):
1. The use of shared and consolidated parking;
2. A high degree of pedestrian and bicycle access to and throughout the proposed
development;
3. The availability of public transit;
4. Extensive trip capture within the proposed development where trips to the
proposed development result in visits to multiple businesses in the area via a
mode other than automobile;
The following additional physical development characteristics are associated with CBD
land uses:
1. The majority of buildings associated with the proposed development are multi-
story buildings, often more than two stories;
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2. Diverse business proprietorships within the development;
3. Primary use at the ground floor is commercial;
4. The majority of individual businesses within the development are less than
20,000 square feet;
5. Structures within the development are in near to each other and the public
street (with small or no setbacks);
6. Having a high percentage building coverage on the lot and typically in excess of
0.5; and
7. The physical characteristics are shared among the entire business area, not just
one or a few of the businesses.
8. The area should be at least 50% developed as measured by lot area utilized.
9. The area is the subject of a city enforceable common plan of development,
such as an urban renewal plan.
B. "Development" means any construction or expansion of a building, structure, or use, any
change in use of a building or structure, or any change in the use of land, which creates
additional demand for public services.
C. "Development impact fees" means the street transportation impact fee, fire protection
impact fee, water impact fee, and wastewater impact fee established by this chapter.
D. "Development Impact Fees Review Committee" means the committee composed of the
Impact Fee Coordinator, the Building Official, the Director of Public Service, the Fire
Chief, and the Director of Planning and Community Development, or their designees
appointed to serve in the member's place at a meeting.
E. "Encumber" means to legally obligate by contract, or otherwise commit to use by
appropriation or other official act of the City.
F. "Impact Fee Capital Improvement Program" means the capital improvements program
for the street transportation system, the city fire protection system, and the city water
and wastewater systems, which shall assign monies from each impact fee fund to specific
projects and related expenses for improvements to the type of facilities or services for
which the fees in that fund were paid, and shall not include improvements needed to
correct existing deficiencies or operations or maintenance costs.
G. “Impact Fee Coordinator” means the Director of the City’s Division of Planning and
Community Development or the Director’s designee.
H. "Impact fee funds" means the street transportation impact fee fund, fire protection
impact fee fund, water impact fee fund, and wastewater impact fee fund established by
this chapter.
I. "Impact fee studies" means the street transportation impact fee study, dated January 1996
October 31, 2007, prepared by Tindale-Oliver & Associates and as updated, and the fire
impact fee study, dated October 1995 and as updated, prepared by James Duncan and
Associates, and the water and wastewater impact fee studies dated May 2007, prepared by
HDR Engineering.
J. "Improvement" means planning, land acquisition, engineering design, construction
inspection, on-site construction, off-site construction, equipment purchases, and
financing costs associated with new or expanded facilities, buildings, and equipment that
expand the capacity of a facility or service system and that have an average useful life of
at least ten years. “Improvement” does not include maintenance, operations, or
improvements that do not expand capacity.
K. "Independent fee calculation study" means a study prepared by an applicant for a
building permit or water or wastewater connection permit calculating the cost of
expansions or improvements to the city's street transportation, fire protection, water, or
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p. 8
wastewater systems required to serve the applicant's proposed development; that is
performed on an average cost (not marginal cost) methodology; uses the service units
and unit construction costs stated in the impact fee studies; and is performed in
compliance with any criteria for such studies established by this chapter or by the City.
L. "Initiation of construction" means the date of the preconstruction meeting with the City
Engineer or his/her designee, or the date of the first visible change in the physical
condition of the improved site caused by the first person furnishing services or materials
to effect construction of the improvement, whichever occurs first.
M. "Project-related improvements" means site-related improvements including, without
limitation, all access streets adjacent to the proposed development or leading only to the
proposed development and not included on the transportation system; all streets and
driveways within the development; all acceleration, deceleration, right, or left turn lanes
leading to any streets and driveways within the development; all traffic control devices for
streets and driveways within the development; all water lines or facilities adjacent to,
leading to, or located within the development and serving only the development; all
wastewater lines or facilities adjacent to, leading to, or located within and serving only the
development; and all off-site improvements necessary for the safety and code compliance
of a development. Credit for incidental improvements shall not be allowed. 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 thereby
created that may be potentially used by other developments presently or in the future.
N. “Transportation system” means capacity-adding improvements to collectors or arterial
roads of three lanes or more, which are included on the 2001 Greater Bozeman
Transportation Plan Update or the City’s impact fee capital improvement program, and
which will benefit new development as required by law and this chapter. The
transportation system includes only those bicycle and pedestrian facilities built in
conjunction with and included in a capacity-adding transportation facility otherwise
eligible for impact fee funding pursuant to the terms of this chapter. The “transportation
system” does not include project-related improvements.
3.24.050 Street Transportation Impact Fees
A. Imposition of Street Transportation Impact Fees
1. On or after March 23, 1996, any person who seeks to obtain any of the
following forms of development approval is required to pay a transportation
impact fee in the amount specified in Table 3.24.050:
a. A building permit;
b. Any other permit that will result in the construction of improvements
that will generate additional traffic; or
c. Any extension of any such permit that was issued before the effective
date of this chapter;; or
d. Any delayed payment of impact fees as specified and approved by
the City Commission in accordance with the BMC Title 17, Chapter
2 for Workforce Housing Lots.
2. Notwithstanding the above subsection, no impact fee shall be imposed earlier
than the issuance of a building permit for developments requiring a building
permit.
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3. No permits of the types described in Subsection A(1) of this section shall be
issued until the street transportation impact fee described in this chapter has
been paid, unless the development for which the permit is sought is exempted
by Subsection F of this section.
B. Computation of Amount of Street Transportation Impact Fee
1. An applicant required by this chapter to pay a street transportation impact fee
may choose to have the amount of such fee determined pursuant to either
Subsection (B)(2) or (B)(3) of this section. The amount of the fee calculated
pursuant to either Subsection (B)(2) or (B)(3) shall be subject to the following
adjustment:
a. For the first expansion of an existing nonresidential building, the
amount calculated shall not include the amount calculated for the
expansion of up to thirty percent as compared with its size on
February 22, 1996, or two thousand square feet, whichever is less.
2. Unless an applicant requests that the City determine the amount of such fee
pursuant to Subsection (B)(3) of this section, the City shall determine the
amount of the required street transportation impact fee by reference to Table
3.24.050. The fee amounts set forth in such table include credits for expected
future receipts of state and federal highway funds and expected future receipts
of gas tax revenues, and all other non-impact fee sources of funding anticipated
to be made by or as a result of new development to be applied to the street
transportation improvements required to serve new development.
a. If the applicant's development is of a type not listed in Table 3.24.050,
then the City shall use the fee applicable to the most nearly
comparable type or land use in the table. In making a decision about
which use is most nearly comparable, the City shall be guided by the
most recent edition of "Trip Generation: An Information Report"
prepared by the Institute of Transportation Engineers; or if such
publication is no longer available, then by a similar publication. If the
City determines that there is no comparable type of land use listed in
the table, then a new fee shall be determined by:
1. Finding the most nearly comparable trip generation rate
from the above publication; and
2. Applying the formula set forth in Subsection (B)(3)(d) of
this section.
b. If the applicant's development includes a mix of those uses listed in
Table 3.24.050, then the fee shall be determined by adding up the fees
that would be payable for each use if it were a freestanding use
pursuant to Table 3.24.050.
c. If the applicant is applying for an extension of a permit issued
previously, then the fee shall be the net increase between the fee
applicable at the time of the current permit application and any street
transportation impact fee previously paid pursuant to this chapter for
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the same structure. In the event that the fee applicable at the time of
the current permit application is lower than the street transportation
impact fee previously paid pursuant to this chapter for the same
structure, there shall be no refund of street transportation impact fees
previously paid.
d. If the applicant is applying for a permit to allow a change of use or
the expansion, redevelopment, or modification of an existing
development, the fee shall be based on the net positive increase in the
fee for the new use as compared to the previous use. However, no
new fee shall be imposed unless an additional unit of service demand
is created, in accordance with Table 3.24.50. If necessary to
determine such net increase, the City shall be guided by the most
recent edition of "Trip Generation: An Information Report" prepared
by the Institute of Transportation Engineers; or if such publication is
no longer available, then by a similar publication. In the event that
the proposed change of use, expansion, redevelopment, or
modification results in a net decrease in the fee for the new use or
development as compared to the previous use or development, there
shall be no refund of street transportation impact fees previously paid.
3. An applicant may request that the City determine the amount of the required
street transportation impact fee by reference to an independent fee calculation
study for the applicant's development prepared by qualified professional traffic
engineers and/or economists at the applicant's cost and submitted to the City
Engineer. Any such study must show the traffic engineering and economic
methodologies and assumptions used, including, but not limited to, those forms
of documentation listed in Subsections (B)(3)(a) and (B)(3)(b) of this section
and must be acceptable to the City pursuant to Subsection (B)(3)(c) of this
section.
a. Traffic engineering studies must include documentation of trip
generation rates, trip lengths, any percentage of trips from the site
that represent net additions to current trips from the site, the
percentage of trips that are new trips as opposed to pass-by or
divert-link trips, and any other trip data for the proposed land use.
b. Economic studies must include documentation of any special factors
that the applicant believes will reduce the traffic volumes otherwise
attributable to the proposed land use.
c. The City shall consider all such documentation and any independent
fee calculation study submitted by the applicant, but shall not be
required to accept any such study or documentation that the City
deems to be inaccurate or unreliable and may request that the
applicant submit additional or different documentation for
consideration. Any independent fee calculation study submitted by an
applicant may be accepted, rejected, or accepted with modifications
by the City as the basis for calculating street transportation impact
fees.
d. Upon acceptance, or acceptance with modifications, of an
independent fee calculation study and documentation, the City shall
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use the following formulas to determine the street transportation
impact fee:
Net Impact Fee = Total Impact Cost – Gas Tax Credit – Ad Valorem Credit
Where:
Total Impact Cost = ((Trip Rate × Assessable Trip Length × % New Trips) /
2) × (1 -Interstate Adj. Factor) × (Cost per Lane Mile / Avg. Capacity Added
per Lane Mile)
Total Gas Tax Credit = Present Value (Annual Gas Tax Credit), given 4.6%
interest rate & 25-year facility life
Annual Gas Tax Credit = (((Trip Rate × Total Trip Length × % New Trips) /
2) × Effective Days per Year × $/Gallon to Capital) / Fuel Efficiency
And where:
Trip Rate = the average daily trip generation rate, in vehicle-trips/day
Assessable Trip Length = the actual average trip length for the category,
in vehicle miles
Total Trip Length = the assessable trip length plus an adjustment factor of
half a mile is added to the trip length to account for the fact that gas taxes
are collected for travel on all roads including local roads
% New Trips = adjustment factor to account for trips that are already on
the roadway
Divide by 2 = The total daily miles of travel generated by a particular
category (i.e., rate X length X % new trips) is divided by two to prevent
the double-counting of travel generated among land use codes since every
trip has an origin and a destination.
Interstate Adjustment Factor = adjustment factor to account for the travel
demand occurring on interstate highways (15.0%)
Cost per Lane Mile = unit cost to construct one lane mile of roadway, in
$/lane mile($3,678,522 per study and will be subject to inflationary
adjustments)
Average Capacity Added per Lane Mile = represents the average daily
traffic on one travel lane at capacity for one lane mile of roadway, in
vehicles/lane-mile/day (8,658 per study)
Cost per Vehicle Mile of Capacity = unit cost to construct to provide a
vehicle mile of capacity ($472.92 per study)
Present Value = calculation of the present value of a uniform series of cash
flows, gas tax payments in this case, given an interest rate, “i,” and a
number of periods, “n;” for 4.6% interest and a 25-year facility life, the
uniform series present worth factor is 14.6768
Effective Days per Year = 365 days
$/Gallon to Capital = the amount of gas tax revenue per gallon of fuel that
is used for capital improvements, in $/gallon ($0.102)
Fuel Efficiency = average fuel efficiency of vehicles, in vehicle-
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miles/gallon (17.70)
C. Payment of Street Transportation Impact Fee
1. An applicant for any of the permits or extensions listed in Subsection (A)(1) of
this section shall pay the street transportation impact fee required by this
chapter to the City prior to the issuance of any such permit.
2. All funds paid by an applicant pursuant to this chapter shall be identified as
street transportation impact fees and shall be promptly deposited in the street
transportation impact fee fund described in Subsection D of this section.
D. Street Transportation Impact Fee Funds
1. A single street transportation impact fee fund is created and such fund shall be
maintained in an interest bearing account.
2. Such fund shall contain only those street transportation impact fees collected
pursuant to this chapter and any interest which may accrue from time to time
on such amounts.
E. Use of Street Transportation Impact Fee Funds. The monies in the street transportation
impact fee fund shall be used only as follows:
1 To acquire land for and/or acquire or construct capacity-adding capital
improvements to the street transportation system reasonably related to the
benefits accruing to new development subject to the terms of this chapter, in
accordance with the requirements of Montana law; or
2 To pay debt service on such capital improvements to the transportation system;
or
3 For purposes of refunds or credits, as described in Sections 3.24.090 or
3.24.100(G)); and
4. May not be used for
a. operations or maintenance purposes;
b to correct existing deficiencies; or
c. for bicycle or pedestrian facilities not built in conjunction with and
included in a capacity-adding transportation system facility, otherwise eligible
for impact fee funding.
F. Exemptions from Street Transportation Impact Fee
1. The following types of development shall be exempted from payment of the
street transportation impact fee:
a. Alterations, remodeling, rehabilitations, expansions of existing
buildings, or other improvements to an existing structure where no
additional vehicle trips will be produced over and above those
produced by the existing use;
b. 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;
c. 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;
d. The installation or replacement of a mobile home on a lot or a mobile
home site when a street transportation impact fee for such lot or site
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p. 13
has previously been paid pursuant to this chapter or where a mobile
home legally existed on such site on or prior to the effective date of
this chapter;
e. 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 street transportation impact fee for such
site has previously been paid in an amount that equals or exceeds the
street transportation impact fee that would be required by this chapter
for such development.
2. Any such claim for exemption must be made no later than the time when the
applicant applies for the first permit or a type listed in Subsection (A)(1) of this
section for the proposed development, and any claim for exemption not made
at or before that time shall have been waived.
3. The City Manager or his designee shall determine the validity of any claim for
exemption pursuant to the criteria set forth in Subsection (F)(1) of this section.
TABLE 3.24.050
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The following transportation impact fees apply to developments not designated as a Central Business
District land use.
ITE LUC Land Use Unit Fee*
RESIDENTIAL:
210 Single Family (Detached)
Less than 1,500 sf and very low income(2) du $2,171
Less than 1,500 sf and low income (3) du $3,147
Less than 1,500 sf du $3,968
1,500 to 2,499 sf du $5,396
2,500 sf or larger du $6,082
220 Apartments du $3,339
230 Residential Condominium/ Townhouse du $2,946
240 Mobile Home Park du $1,593
LODGING:
310 Hotel room $3,063
320 Motel room $1,678
RECREATION:
430 Golf Course hole $12,295
411 City Park acre $546
444 Movie Theaters 1,000 sf $6,463
INSTITUTIONS:
610 Hospital 1,000 sf $6,023
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ITE LUC Land Use Unit Fee*
620 Nursing Home bed $381
520 Elementary School student $315
530 High School student $477
540 University (7,500 or fewer students) (4) student $609
550 University (more than 7,500 students) (4) student $529
560 Church/ Synagogue 1,000 sf $2,428
565 Day Care 1,000 sf $7,433
OFFICE:
710 50,000 sf or less 1,000 sf $3,977
710 50,001-100,000 sf 1,000 sf $3,623
710 100,001-200,000 sf 1,000 sf $3,084
710 greater than 200,000 1,000 sf $2,460
720 Medical Office 1,000 sf $9,584
RETAIL:
820 under 50,000 sf 1,000 sf $9,378
820 50,000-99,000 sf 1,000 sf $9,587
820 100,000-199,000 sf 1,000 sf $9,331
820 200,000-299,000 sf 1,000 sf $8,567
820 greater than 300,000 sf 1,000 sf $8,144
812 Building Material/ Lumber 1,000 sf $21,209
813 Discount Super-Store 1,000 sf $26,996
817 Nursery/Garden Center 1,000 sf $18,903
851 Convenience Store 1,000 sf $44,607
931 Quality Restaurant 1,000 sf $22,036
934 Fast Food Rest w/ Drive-Thru 1,000 sf $61,225
841 New/Used Auto Sales 1,000 sf $12,033
890 Furniture Store 1,000 sf $1,684
912 Bank/ Savings Drive-in 1,000 sf $31,706
INDUSTRY:
110 General Light Industrial 1,000 sf $2,290
140 Manufacturing 1,000 sf $1,250
150 Warehouse 1,000 sf $1,627
151 Mini-Warehouse 1,000 sf $810
(1) Source: Transportation Impact Fee Study, Appendix F, Table F-1
(2) Defined as 50% of city median income based on 2007 Gallatin County Average Median Income (AMI)
(3) Defined as 80% of city median income based on 2007 Gallatin County Average Median Income (AMI)
(4) Impact fee to be assessed on structures with classroom facilities. All auxiliary structures such as
administrative buildings and research centers are to be charged at the office land use rate.
The following transportation impact fees apply to developments designated as Central Business District
land uses.
ITE LUC Land Use Unit Fee*
RESIDENTIAL:
210 Single Family (Detached)
Less than 1,500 sf and very low income(2) du $2,171
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ITE LUC Land Use Unit Fee*
Less than 1,500 sf and low income(3) du $3,147
Less than 1,500 sf du $3,968
1,500 to 2,499 sf du $5,396
2,500 sf or larger du $6,082
220 Apartments du $3,339
230 Residential Condominium/ Townhouse du $2,946
240 Mobile Home Park du $1,593
LODGING:
310 Hotel room $2,835
320 Motel room $1,333
RECREATION:
430 Golf Course hole $4,333
411 City Park acre $182
444 Movie Theaters 1,000 sf $2,333
INSTITUTIONS:
610 Hospital 1,000 sf $6,023
620 Nursing Home bed $381
520 Elementary School student $315
530 High School student $477
540 University (7,500 or fewer students) (4) student $609
550 University (more than 7,500 students) (4) student $529
560 Church/Synagogue 1,000 sf $2,428
565 Day Care 1,000 sf $7,433
OFFICE:
710 50,000 sf or less 1,000 sf $3,187
710 50,001-100,000 sf 1,000 sf $2,911
710 100,001-200,000 sf 1,000 sf $2,475
710 greater than 200,000 sf 1,000 sf $1,974
720 Medical Office 1,000 sf $9,584
RETAIL:
820 under 50,000 sf 1,000 sf $5,284
820 50,000-99,000 sf 1,000 sf $5,452
820 100,000-199,000 sf 1,000 sf $5,182
820 200,000-299,000 sf 1,000 sf $5,115
820 greater than 300,000 sf 1,000 sf $4,999
812 Building Material/Lumber 1,000 sf $21,209
813 Discount Super-Store 1,000 sf $26,996
817 Nursery/Garden Center 1,000 sf $18,903
851 Convenience Store 1,000 sf $44,607
931 Quality Restaurant 1,000 sf $6,009
934 Fast Food Rest w/ Drive-Thru 1,000 sf $22,164
841 New/ Used Auto Sales 1,000 sf $12,033
890 Furniture Store 1,000 sf $1,684
912 Bank/ Savings Drive-in 1,000 sf $24,133
INDUSTRY:
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ITE LUC Land Use Unit Fee*
110 General Light Industrial 1,000 sf $2,290
140 Manufacturing 1,000 sf $1,250
150 Warehouse 1,000 sf $1,627
151 Mini-Warehouse 1,000 sf $810
(1) Source: Transportation Impact Fee Study, Appendix F, Table F-2
(2) Defined as 50% of city median income based on 2007 Gallatin County Average Median Income (AMI)
(3) Defined as 80% of city median income based on 2007 Gallatin County Average Median Income (AMI)
(4) Impact fee to be assessed on structures with classroom facilities. All auxiliary structures such as
administrative buildings and research centers are to be charged at the office land use rate.
*Compiler's Note: The Street Transportation Impact Fees listed in this formula shall be adjusted
annually as per 3.24.110.K.
3.24.060 Fire Protection Impact Fees
A. Imposition of Fire Protection Impact Fees
1. On or after March 23, 1996, any person who seeks to obtain:
a. A building permit; or
b. Any other permit that will result in construction that will generate
demand for fire protection services; or
c. Any extension of any such permit that was issued before the effective
date of this chapter, is required to pay a fire protection impact fee in
the amount specified in this chapter; or
d. Any delayed payment of impact fees as specified and approved by
the City Commission in accordance with the BMC Title 17, Chapter
2 for Workforce Housing Lots.
2. No permits of the types described in Subsection (A)(1) of this section shall be
issued until the fire protection impact fee described in this chapter has been
paid, unless the development for which the permit is sought is exempted by
Subsection F of this section.
B. Computation of Amount of Fire Protection Impact Fee
1. An applicant required by this chapter to pay a fire protection impact fee may
choose to have the amount of such fee determined pursuant to either
Subsection (B)(2) or (B)(3) of this section. The amount of the fee calculated
pursuant to either Subsection (B)(2) or (B)(3) of this section shall be subject to
the following adjustment:
a. For the first expansion of an existing nonresidential building, the
amount calculated shall not include the amount calculated for the
expansion of up to thirty percent as compared with its size on
February 22, 1996, or two thousand square feet, whichever is less.
2. Unless an applicant requests that the City determine the amount of such fee
pursuant to Subsection (B)(3) of this section, the City shall determine the
amount of the required fire protection impact fee by reference to Table
3.24.060.
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p. 18
a. If the type of development that a permit is applied for is not listed in
Table 3.24.060, then the City shall use the fee applicable to the most
nearly comparable type or land use in the table.
b. If the type of development that a permit is applied for includes a mix
of those uses listed in Table 3.24.060, then the fee shall be determined
by adding up the fees that would be payable for each use if it were a
freestanding use pursuant to Table 3.24.060.
c. If the applicant is applying for an extension of a permit issued
previously, then the fee shall be the net increase between the fee
applicable at the time of the current permit application and any fire
protection impact fee previously paid pursuant to this chapter for the
same structure. In the event that the fee applicable at the time of the
current permit application is lower than the fire protection impact fee
previously paid pursuant to this chapter for the same structure, there
shall be no refund of fire protection impact fees previously paid.
d. If the applicant is applying for a permit to allow a change of use or
for the expansion, redevelopment, or modification of an existing
development, the fee shall be based on the net increase in the fee for
the new use as compared to the previous use. In the event that the
proposed change of use, expansion, redevelopment, or modification
results in a net decrease in the fee for the new use or development as
compared to the previous use or development, there shall be no
refund of fire protection impact fees previously paid.
3. An applicant may request that the City determine the amount of the required
fire protection impact fee by reference to an independent fee calculation study
for the applicant's development prepared at the applicant's cost by qualified
professional fire protection experts and/or economists and submitted to the
City Fire Chief. Any such study shall be based on the same service standards
and unit costs for fire protection used in the fire impact fee study prepared by
James Duncan and Associates dated October 1995 and as updated, and must
document the economic methodologies and assumptions used. Any
independent fee calculation study submitted by an applicant may be accepted,
rejected, or accepted with modifications by the City as the basis for calculating
fire protection impact fees. If such study is accepted or accepted with
modifications as a more accurate measure of the demand for new fire
protection facilities and equipment created by the applicant's proposed
development than the applicable fee shown in Table 3.24.060, then the fire
protection impact fee due under this chapter may be calculated according to
such study.
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p. 19
C. Payment of Fire Protection Impact Fees
1. An applicant required by this chapter to pay a fire protection impact fee shall
pay such fee to the City prior to the issuance of any of the permits listed in
Subsection (A)(1) of this section.
2. All funds paid by an applicant pursuant to this chapter shall be identified as fire
protection impact fees and shall be promptly deposited in the fire protection
impact fee fund described in Subsection D of this section.
D. Fire Protection Impact Fee Funds
1. A single fire protection impact fee fund is created and such fund shall be
maintained in an interest bearing account.
2. Such fund shall contain only those fire protection impact fees collected
pursuant to this chapter and any interest which may accrue from time to time
on such amounts.
E. Use of Fire Protection Impact Fee Funds. The monies in the fire protection impact fee
fund shall be used only:
1 To acquire or construct fire protection improvements within the city; or
2 To pay debt service on any portion of any future general obligation bond issue
or revenue bond issue used to finance the acquisition or construction of fire
protection improvements within the city; or
3 As described in Sections 3.24.090 or 3.24.100(G).
F. Exemptions from Fire Protection Impact Fee
1. The following types of development shall be exempted from payment of the
fire protection impact fee:
a. Reconstruction, expansion, or replacement of a previously existing
residential unit that does not create any additional residential units.
b. Construction of unoccupied accessory units related to a residential
unit.
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.
d. Projects for which a fire protection impact fee has previously been
paid in an amount that equals or exceeds the fire protection impact
fee that would be required by this chapter.
2. Any such claim for exemption must be made no later than the time when the
applicant applies for the first permit of a type listed in Subsection (A)(1) of this
section for the proposed development, and any claim for exemption not made
at or before that time shall have been waived.
3. The City Manager or his designee shall determine the validity of any claim for
exemption pursuant to the criteria set forth in Subsection (F)(1) of this section.
Table 3.24.060
FIRE PROTECTION IMPACT FEE SCHEDULE
TYPE OF DEVELOPMENT
FIRE PROTECTION IMPACT FEE
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p. 20
FIRE PROTECTION IMPACT FEE SCHEDULE
RESIDENTIAL
Single-Family Detached $178.61 per unit
Single-Family Attached $149.99 per unit
Duplex $112.49 per unit
Multi-Family $ 81.90 per unit
Mobile Home $ 81.90 per unit
OFFICE/INSTITUTIONAL PER 1,000 SQUARE FEET
Under 10,000 square feet $ 90.79
Between 10,000 and 49,999 square feet $174.66
50,000 square feet and over $350.31
COMMERCIAL/HOTEL PER 1,000 SQUARE FEET
Under 10,000 square feet $174.66
Between 10,000 and 49,999 square feet $266.43
Between 50,000 and 99,999 square feet $441.10
100,000 square feet and over $524.97
INDUSTRIAL PER 1,000 SQUARE FEET
Under 10,000 square feet $174.66
Between 10,000 and 49,999 square feet $350.31
50,000 square feet and over $524.97
*Compiler's Note: The Fire Protection Impact Fees listed in this formula shall be adjusted annually as
per 3.24.110.K.
3.24.070 Water Impact Fees
A. Imposition of Water Impact Fees
1. On or after March 23, 1996, any person who seeks to obtain a permit for
connection to the city water system, or who is subject to subsection (B)(2)(b)
and applies for a city permit to expand or add to the structure served by a
previously approved water connection, or any extension of such a permit issued
before the effective date of this chapter, is required to pay a water impact fee in
the amount specified in this chapter; or
2. Any delayed payment of impact fees as specified and approved by
the City Commission in accordance with the BMC Title 17, Chapter
2 for Workforce Housing Lots.
3. No permits for connection to the city water system shall be issued until the
water impact fee described in this chapter has been paid, unless the
development for which the permit is sought is exempted by Subsection F of
this section.
B. Computation of Amount of Water Impact Fee
1. The City shall determine the amount of the required water impact fee by
reference to Table 3.24.070 unless the applicant chooses to submit an
individualized calculation pursuant to subsection (B)(2)(a) or the City
determines the application to be subject to subsection (B)(2)(b). If the
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p. 21
applicant is applying for a replacement for a water connection permit issued
previously, then the fee shall be the net positive difference between the fee
applicable at the time of the current permit application and any water impact
fee previously paid pursuant to this chapter for the same structure. In the
event that the fee applicable at the time of the replacement permit application
is lower than the water impact fee previously paid pursuant to this chapter for
the same structure, there shall be no refund of water impact fees previously
paid.
3. Individualized Calculations.
a. An applicant may request that the City determine the amount of the
required water impact fee by reference to an independent fee calculation
study for the applicant's development prepared at the applicant's cost by a
professional engineer and/or economist and submitted to the City Public
Service Director. Any such study shall be based on the same service
standards and unit costs used in the water impact fee study prepared by
HDR Engineering dated May 2007, and as updated, and must document
the economic methodologies and assumptions used. Any independent fee
calculation study submitted by an applicant may be accepted, rejected, or
accepted with modifications by the City as the basis for calculating water
impact fees. If such study is accepted, or accepted with modifications, as a
more accurate measure of the demand for new water facilities created by
the applicant's proposed development than the applicable fee shown in
Table 3.24.070, then the water impact fee due under this chapter may be
calculated according to such study.
b. The City may identify a user as having extraordinary demands for water
service which are not accurately represented by the average usage which
was relied upon by the methodology which generated Table 3.24.070. In
this circumstance the City shall prepare a customized calculation based
upon the Large Meter calculation methodology in Exhibit 6 of the Water
Impact Fee study. The impact fee paid for water meters larger than 3
inches as of the effective date of this ordinance may be adjusted based on
actual usage. If usage is greater than 110% of anticipated volume during
the 12 month period of time beginning 6 months after building occupancy
is granted by the City, an additional impact fee may be charged, using the
same techniques for calculating peak day and storage EDUs and
multiplying by the peak day impact fee cost per EDU and the storage
impact fee cost per EDU then in effect. The additional impact fee is the
positive net between a previously calculated impact fee and the impact fee
based upon the metered demand.
C. Payment of Water Impact Fee
1. An applicant required by this chapter to pay a water impact fee shall pay such
fee to the City prior to the issuance of a water connection permit.
2. All funds paid by an applicant pursuant to this chapter shall be identified as
water impact fees and shall be promptly deposited in the water impact fee fund
described in Subsection D of this section.
D. Water Impact Fee Funds
1. A single water impact fee fund is created and such fund shall be maintained in
an interest bearing account.
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p. 22
2. Such fund shall contain only those water impact fees collected pursuant to this
chapter and any interest which may accrue from time to time on such amounts.
E. Use of Water Impact Fee Funds. The monies in the water impact fee fund shall be used
only:
1. To acquire or construct improvements to the city water system; or
2. To pay debt service on any portion of any future general obligation bond issue
or revenue bond issue used to finance improvements to the city water system;
or
3. As described in Sections 3.24.090 or 3.24.100(G).
F. Exemptions from Water Impact Fees
1. The following types of development shall be exempted from payment of the
water impact fee:
a. Alteration or expansion of an existing building that does not require
an additional or larger water meter;
b. Replacement of a building or structure of the same size that does not
require an additional or larger water meter;
c. The location of mobile home on a site for which a water impact fee
was previously paid, and that does not require an additional or larger
water meter.
2. The installation of fire lines for fire protection shall be exempted from payment
of the water impact fee.
3. Any such claim for exemption must be made no later than the time when the
applicant applies for the first permit of a type listed in Subsection (A)(1) of this
section for the proposed development, and any claim for exemption not made
at or before that time shall have been waived.
4. The City Manager or his designee shall determine the validity of any claims for
exemption pursuant to the criteria set forth in Subsections (F)(1) and (F)(2) of
this section.
Table 3.24.070
WATER IMPACT FEE SCHEDULE*
SIZE OF WATER METER COST PER METER
3/4 inch $ 3,310
1 inch $ 8,275
1 ½ inch $ 16,550
2 inch $ 26,480
3 inch $ 52,960
Larger than 3 inch calculated
*Compiler's Note: The Cost Per Meter Fees listed in this formula shall be adjusted annually as per
3.24.110.K.
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p. 23
3.24.080 Wastewater Impact Fees
A. Imposition of Wastewater Impact Fees
1. On or after March 23, 1996, any person who seeks to obtain a permit for
connection to the city wastewater system, or who is subject to subsection
(B)(2)(b) and applies for a city permit to expand or add to the structure served
by a previously approved water connection, or any extension of such a permit
issued before the effective date of this chapter is required to pay a wastewater
impact fee in the amount specified in this chapter; or
2. Any delayed payment of impact fees as specified and approved by
the City Commission in accordance with the BMC Title 17, Chapter
2 for Workforce Housing Lots.
3. No permits for connection to the city water system shall be issued until the
water impact fee described in this chapter has been paid, unless the
development for which the permit is sought is exempted by Subsection F of
this section.
B. Computation of Amount of Wastewater Impact Fee
1. The City shall determine the amount of the required wastewater impact fee by
reference to Table 3.24.080 070 unless the applicant chooses to submit an
individualized calculation pursuant to subsection (B)(2)(a) or the City
determines the application to be subject to subsection (B)(2)(b). If the
applicant is applying for a replacement for a wastewater connection permit
issued previously, then the fee shall be the net positive difference between the
fee applicable at the time of the current permit application and any wastewater
impact fee previously paid pursuant to this chapter for the same structure. In
the event that the fee applicable at the time of the replacement permit
application is lower than the wastewater impact fee previously paid pursuant to
this chapter for the same structure, there shall be no refund of wastewater
impact fees previously paid.
2. Individualized Calculations.
a. An applicant may request that the City determine the amount of the
required wastewater impact fee by reference to an independent fee
calculation study for the applicant's development prepared at the
applicant's cost by a professional engineer and/or economist and
submitted to the City Public Service Director. Any such study shall be
based on the same service standards and unit costs used in the wastewater
impact fee study prepared by HDR Engineering dated May 2007, and as
updated, and must document the economic methodologies and
assumptions used. Any independent fee calculation study submitted by an
applicant may be accepted, rejected, or modified by the City as the basis
for calculating wastewater impact fees. If such study is accepted or
accepted with modifications as a more accurate measure of the demand for
new wastewater facilities created by the applicant's proposed development
than the applicable fee shown in Table 3.24.080, then the wastewater
impact fees due under this chapter shall be calculated according to such
study.
b. The City may identify a user as having extraordinary demands for
wastewater service which are not accurately represented by the average
usage which was relied upon by the methodology which generated Table
3.24.080. In this circumstance the City shall prepare a customized
calculation based upon the methodology in the Water Impact Fee study.
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p. 24
When applicable an adjustment for high strength discharge will be applied.
The impact fee paid for water meters larger than 3 inches as of the
effective date of this ordinance may be adjusted based on actual usage. If
usage is greater than 110% of anticipated volume during the 12 month
period of time beginning 6 months after building occupancy is granted by
the City, an additional impact fee may be charged, using the same
techniques for calculating treatment and collection in EDUs and
multiplying by the impact fee cost per EDU. The additional impact fee is
the positive net between a previously calculated impact fee and the impact
fee based upon the metered demand.
C. Payment of Wastewater Impact Fee
1. An applicant required by this chapter to pay a wastewater impact fee shall pay
such fee to the City prior to the issuance of a wastewater connection permit.
2. All funds paid by an applicant paid pursuant to this chapter shall be identified
as wastewater impact fees and shall be promptly deposited in the wastewater
impact fee fund described in Subsection D of this section.
D. Wastewater Impact Fee Funds
1. A single wastewater impact fee fund is created and such fund shall be
maintained in an interest bearing account.
2. Such fund shall contain only those wastewater impact fees collected pursuant to
this chapter and any interest which may accrue from time to time on such
amounts.
E. Use of Wastewater Impact Fee Funds. The monies in the wastewater impact fee fund
shall be used only:
1. To acquire or construct improvements to the city wastewater system; or
2. To pay debt service on any portion of any future general obligation bond issue
or revenue bond issue used to finance improvements to the city wastewater
system; or
3. As described in Section 3.24.090 or Section 3.24.100(G).
F. Exemptions from Wastewater Impact Fees
1. The following types of development shall be exempted from payment of the
wastewater impact fee:
a. Alteration or expansion of an existing building that does not require
an additional or larger water meter;
b. Replacement of a building or structure of the same size that does not
require an additional or larger water meter;
c. The location of mobile home on a site for which a wastewater impact
fee was previously paid and that does not require an additional or
larger water meter;
2. Any such claim for exemption must be made no later than the time when the
applicant applies for the first permit of a type listed in Subsection (A)(1) of this
section for the proposed development, and any claim for exemption not made
at or before that time shall have been waived.
3. The City Manager or his designee shall determine the validity of any claim for
exemption pursuant to the criteria set forth in Subsection (F)(1) of this section.
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p. 25
Table 3.24.080
WASTEWATER IMPACT FEE SCHEDULE
SIZE OF WATER METER COST PER METER*
3/4 inch $ 2,955
1 inch $ 7,388
1 ½ inch $ 14,775
2 inch $ 23,640
3 inch $ 47,280
Larger than 3 inch calculated
*Compiler's Note: The Cost Per Meter Fees listed in this formula shall be adjusted annually as per
3.24.110.K.
3.24.090 Refunds of Development Impact Fees Paid
Refunds of development impact fees shall be made only in the following instances and in the
following manner:
A. Upon application to the Impact Fee Coordinator by the applicant, the City shall refund
the development impact fee paid if capacity is available and service is denied.
B.
1. Upon application to the Impact Fee Coordinator, the City shall refund the
development impact fee paid and not expended or encumbered within ten
years from the date the development impact fee was paid or in a manner not in
accordance with this chapter or section 17-6-1602 of the Montana Code
Annotated. Refunds shall be paid to the owner of the property at the time the
refund is due. In determining whether development impact fees have been
expended or encumbered, fees shall be considered 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 publish written notice within thirty days
after the expiration of the ten year period from the date development impact
fee was paid. The published notice shall contain the heading "Notice of
Entitlement to Development Impact Fee Refund."
C. If an applicant has paid a development impact fee required by this chapter and has
obtained any of the types of permits or extensions listed in Sections 3.24.050 (A)(1),
3.24.060 (A)(1), 3.24.070 (A)(1), or 3.24.080(A)(1), and the permit or extension for which
the fee was paid later expires without the possibility of further extension, then the
applicant who paid such fee shall be entitled to a refund of the fee paid, without interest.
In order to be eligible to receive such refund, the applicant who paid such fee shall be
required to submit an application for such refund within thirty days after the expiration
of the permit or extension for which the fee was paid.
D. A refund application shall be made to the Impact Fee Coordinator within one year from
the date such refund becomes payable under Subsections A and B of this section, or
within one year from the date of publication of the notice of entitlement of a refund
under Subsection B of this section, whichever is later. Any refund not applied for within
said time period shall be deemed waived.
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p. 26
E. 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.
F. A refund shall include a pro rata share of interest actually earned on the unused or excess
development impact fee paid.
G. All refunds shall be paid within sixty days after the Impact Fee Coordinator determines
that such refund is due. (Ord. 1418 § 7, 1996; Ord. 1414 § 1 (part), 1996)
H. Any refund payable pursuant to Subsections A and B of this section, shall be made to the
record owner of property as of the date the refund was due.
3.24.100 Credits Against Development Impact Fees
A. After the effective date of this chapter, mandatory or voluntary land or easement
dedications for street transportation, fire protection, water, or wastewater improvements,
and mandatory or voluntary acquisition or construction of capital improvements to the
street transportation system or the city fire protection, water, or wastewater systems by
an applicant in connection with a proposed development may 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. Projects or land dedications not listed on the impact fee capital improvements
program; or
2. Land dedications for, or acquisition or construction of, project-related
improvements as defined in Section 3.24.040(G) or Section 3.24.040; or
3. Any voluntary land or easement dedications not accepted by the City; or
4. Any voluntary acquisition or construction of improvements not approved in
writing by the City prior to commencement of the acquisition or construction.
B. In order 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
easements, or to acquire or construct specific improvements to the major street
transportation 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 approved not later than the initiation of
construction of improvements or the acceptance by the City of land dedications, or the
applicant's claim for the credit shall be waived. The granting of credit shall be approved
by the City Commission. The City shall approve a credit only after showing that the need
for the dedication or construction is clearly documented pursuant to section 7-6-1602 of
the Montana Code Annotated, and that any land dedication proposed for credit is
determined to be appropriate for the proposed use.
1. Upon receipt of a complete application for impact fee credit the Impact Fee
Coordinator shall coordinate review of the application for compliance with the
requirements of this chapter and other relevant requirements. Upon completion of
the review the Impact Fee Coordinator shall either: forward the application to the
City Manager, or when required to the City Commission, for approval or; if the
application is insufficient or otherwise does not conform to the City’s requirements
shall communicate in writing to the applicant the reason the credit request failed. If
the application satisfies the requirements and is approved the credit may be provided
in any of the allowed forms as described in Subsection G.
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p. 27
a. Factors for Consideration
(1) When credit is sought for an improvement listed in the second through
fifth years of the CIP after the current fiscal year there shall be a rebuttable
presumption that any credit shall be awarded as a credit balance and not as
cash.
(2) The final decision to approve a credit request in excess of $1,000,000 from
a single impact fee fund shall be made by the City Commission.
(3) In the event that the City Manager believes that a credit request may result
in a significant effect on policy decisions the credit request may be referred
to the City Commission for final action regardless of the dollar amount.
(4) In the event that the City considers that award of a credit may negatively
impact its ability to construct improvements listed sooner in time on the
CIP they may decline to award a credit at that time without removing the
item from the CIP.
2. Appeals relating to staff decisions on credit requests may be appealed to the City
Commission per Subsection 3.24.110.I
C. The credit due to an applicant shall be calculated and documented as follows:
1. Credit for qualifying land or easement dedications shall, at the applicant's
option, be valued at:
a. One hundred percent of the most recent assessed value for such land
as shown in the records of the City Assessor; or
b. That fair market value established by a private appraiser acceptable to
the City in an appraisal paid for by the applicant.
2. In order to receive credit for qualifying acquisition or construction of street
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 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.
D. Approved credits shall become effective at the following times:
1. Approved credit for land or easement 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 street 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
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p. 28
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, and the
amount and terms of such security are accepted by the City. At a minimum, such
security must be in the amount of the approved credit or an amount determined to
be adequate to allow the City to construct the improvements for which the credit
was given, whichever is higher. 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 also send the credit holder a letter
stating the credit balance available to him (or her).
E. Approved credits may be 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. Each time a request to use credit from a mandatory or voluntary
dedication, acquisition, or construction is presented to the City, the City shall reduce the
amount of the development impact fee of the same type otherwise due from the
applicant and shall note in the city records the amount of credit remaining, if any. In the
case of a mandatory dedication, acquisition, or construction, any credit in excess of the
amount of the development impact fee otherwise due under this chapter shall be deemed
excess credit that is remaining and available for use by the applicant. In the case of a
voluntary dedication, acquisition, or construction, any credit in excess of the amount of
the development impact fee of the same type and applicable to the project, as shown in
Tables 3.24.050, 3.24.060, 3.24.070, or 3.24.080, shall be deemed excess credit that is
remaining and available for use by the applicant. Upon request of the credit holder, the
City shall also send the credit holder a letter stating the amount of credit remaining to
him (or her).
F. Approved credit shall only be used to reduce the amount of development impact fees of
the same type otherwise due under this chapter and shall not be paid to the applicant in
cash or in credit 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, except as
described in Subsection G of this section.
G. If the amount of approved credit for a mandatory dedication, acquisition, or construction
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 credit to the applicant in cash. Such written request must
be approved 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 discretion:
1. Arrange for the reimbursement of such excess credit from the impact fee fund
for the same type of service or facility from development impact fees paid by
others;
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p. 29
2 . Arrange for the reimbursement of such excess credit through the issuance of a
promissory note payable in not more than ten years and bearing interest equal
to the interest rate paid by the City for its long-term debt; or
3. Reject the request for cash and provide credit. Such excess credit shall be
valued at one hundred percent of actual developer costs for the excess
improvements, or at the actual appraised value of such excess improvements, at
the City's option.
H. Credit may be transferred from one holder to another by any written instrument clearly
identifying the credit issued under Subsection C of this section that is to be transferred,
provided that such instrument is signed by both the transferror and transferee, and that
the document is delivered to the City for registration of the change in ownership.
I. In the event that land is annexed into the city from Gallatin County after the effective
date of this chapter, and that road or fire impact fees have been previously paid to the
County, 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 applicant applies for the first permit of a type listed in Sections 3.24.050(A)(1)
or 3.24.060(A)(1) that creates an obligation to pay the type of development impact fee
against which the credit is requested, or the applicant's claim shall be waived.
3.24.110 Miscellaneous Provisions
A. Interest earned on monies in any impact fee fund shall be considered part of such fund
and shall be subject to the same restrictions on use applicable to the impact fees
deposited in such fund.
B. No monies from any impact fee fund shall be spent for periodic or routine maintenance
of any facility of any type or to cure deficiencies in public facilities existing on the
effective date of this chapter.
C. Nothing in this chapter shall restrict the City from requiring an applicant to construct
reasonable project improvements required to serve the applicant's project, whether or
not such improvements are of a type for which credit is available under Section 3.24.100.
D. The City shall maintain accurate records of the development impact fees paid, including
the name of the person paying such fees, the project for which the fees were paid, the
date of payment of each fee, the amounts received in payment for each fee, and any
other matters that the City deems appropriate or necessary to the accurate accounting of
such fees, and such records shall be available for review by the public during city business
hours.
E. At least once during each fiscal year of the City, the City Administrative Services Director
shall present to the City Commission a proposed impact fee capital improvements
program for the major street transportation system, fire protection system, water system,
and wastewater system, which identifies the capacity-adding capital improvements that
will benefit new development subject to the terms of this chapter, exclusive of any
improvements needed to correct existing deficiencies or for operation or maintenance
purposes. Such capital improvements program shall assign monies from each impact fee
fund to specific projects and related expenses for improvements to the type of facilities
or services for which the fees in that fund were paid. Any monies, including any accrued
interest, not assigned to specific projects within such capital improvements program and
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not expended pursuant to Sections 3.24.090 or 3.24.100(G) shall be retained in the same
impact fee fund until the next fiscal year. The Impact Fee Capital Improvements
Program shall be adopted by the City Commission as a supplemental document to the
city budget. The Impact Fee Capital Improvements Program shall schedule the
construction of capital improvements to serve projected growth and project capital
improvement costs, expenditures and impact fee fund revenues for a five year period.
The individual fee funds shall maintain a positive fiscal balance. The program may be
amended by a majority vote of the City Commission. The City Manager shall adopt and
revise, as needed, an administrative impact fee manual to carry out the purposes of this
chapter.
F. The City shall be entitled to retain not more than five percent of the development impact
fees collected as payment for the expenses of collecting the fee and administering this
chapter.
G. If a development impact fee has been calculated and paid based on a mistake or
misrepresentation, it shall be recalculated. Any amounts overpaid by an applicant shall be
refunded by the City to the applicant within thirty days after the City's acceptance of the
recalculated amount, with interest at the rate of five percent per annum since the date of
such overpayment. Any amounts underpaid by the applicant shall be paid to the City
within thirty days after the City's acceptance of the recalculated amount, with interest at
the rate of five percent per annum since the date of such underpayment. In the event
the underpayment is caused by an error attributed solely to the City, the applicant shall
pay the recalculated amount without interest. In the case of an underpayment to the
City, the City shall not issue any additional permits or approvals for the project for which
the development impact fee was previously paid until such underpayment is corrected;
and if amounts owed to the City are not paid within such thirty day period, the City may
also repeal any permits issued in reliance on the previous payment of such development
impact fee and refund such fee to the then current owner of the land.
H. In order to promote affordable workforce housing of the City, the City Commission
may waive impact fees for Workforce Housing Lots approved by the City Commission
pursuant to the BMC Title 17, Chapter 2 by paying some or all of the impact fee from
other funds of the city that are not restricted to other uses. In order to promote the
economic development of the city and the provision of affordable housing in the city,
the City Commission may agree to pay some or all of the development impact fees
imposed on a proposed development by this chapter from other funds of the city that
are not restricted to other uses. Any such decision to pay development impact fees on
behalf of an applicant shall be at the discretion of the City Commission and shall be
made pursuant to goals and objectives previously adopted by the City Commission to
promote economic development and/or affordable housing.
I. Any determination made by any official of the city charged with the administration of
any part of this chapter may be appealed to the Development Impact Fees Review
Committee by filing:
1. A written notice of appeal on a form provided by the City;
2. A written explanation of why the appellant feels that a determination was in
error; and
3. An appeal fee of five hundred dollars with the Impact Fee Coordinator within
ten working days after the determination for which the appeal is being filed.
The Development Impact Fees Review Committee shall meet to review the
appeal within thirty working days of the date the written appeal was presented to the
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Impact Fee Coordinator. If the appellant is dissatisfied with the decision of the
Development Impact Fees Review Committee, the appellant may appeal the
decision to the City Commission by filing a written request with the City Clerk
within ten working days of the Committee's decision. At the regular meeting
following the filing of the appeal, the City Commission shall fix a time and place for
hearing the appeal; and the City Clerk shall mail notice of the hearing to the
appellant at the address given in the notice of appeal. The hearing shall be
conducted at the time and place stated in such notice given by the City Commission.
The determination of the City Commission shall be final. If the City Commission
concludes that all or part of a determination made by an official of the city charged
with the administration of any part of this chapter was in error, then the appeal fee
described above shall be returned to the appellant.
J. Updating of impact fee information.
1. The facility plans described in this chapter shall be reviewed by the City at least once
every five years and if a revision of a facility plan to address changed conditions is
deemed necessary, by the City, the plan shall be updated.
2. The development impact fees described in this chapter, fee studies, data and analysis
relied upon and required by section 7-6-1602, MCA, and the administrative
procedures and manual of this chapter shall be updated at least once every three
fiscal years.
3. The impact fee capital improvement program shall be reviewed and updated as
provided in section 3.24.110(E) above.
4. The purpose of the review and updating of impact fee related documentation is to
ensure that:
a The demand and cost assumptions underlying such fees are still valid;
b. The resulting fees do not exceed the actual cost of constructing improvements
that are of the type for which the fee was paid and that are required to serve
new development;
c. The monies collected or to be collected in each impact fee fund have been, and
are expected to be, spent for improvements of the type for which such fees
were paid; and
d. That such improvements will benefit those developments for which the fees
were paid.
K. The development impact fees shown in Tables 3.24.050, 3.24.060, 3.24.070, and 3.24.080
shall be adjusted annually to reflect the effects of inflation on those costs for
improvements set forth in the impact fee studies. On January 1st of each year unless and
until the fees in Tables 3.24.050, 3.24.070, and/or 3.24.080 are revised or replaced, and
then beginning in the subsequent calendar year, each fee amount set forth in each such
table shall be adjusted by multiplying such amount by one(1) plus the value of the
Construction Cost Index published in the first December edition of the current year. –
Source: Engineering News Record. The right-of-way component of the transportation
impact fee shall be adjusted by multiplying the value of the right-of-way component of
the fee by one(1) plus the percentage value of the increase in taxable value from the
preceding year. – Source: Montana Department of Revenue. Such adjustments in such
fees shall become effective immediately upon calculation by the City and shall not require
additional action by the City Commission to be effective.
L. Violation of this chapter shall be a misdemeanor and shall be subject to those remedies
provided in Bozeman Municipal Code Section 1.16.010. Knowingly furnishing false
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information to any official of the city charged with the administration of this chapter on
any matter relating to the administration of this chapter, including without limitation the
furnishing of false information regarding the expected size, use, or traffic impacts from a
proposed development, shall be a violation of this chapter. In addition to, or in lieu of,
any criminal prosecution, the City or any applicant for a permit of the types described in
Sections 3.24.050(A)(1), 3.24.060(A)(1), 3.24.070(A)(1), or 3.24.080(A)(1) shall have the
right to sue in civil court to enforce the provisions of this chapter.
M. The section titles used in this chapter are for convenience only and shall not effect the
interpretation of any portion of the text of this chapter.
N. Any judicial action or proceeding to attack, review, set aside, or annul the reasonableness,
legality, or validity of any development impact fee must be filed and service of process
effected within ninety days following the date of imposition of the fee or the final
determination of the City Commission, whichever is the later.
Section 2
Repealer. All resolutions, ordinances and sections of the Bozeman Municipal Code and parts
thereof in conflict herewith are hereby repealed.
Section 3
Savings Provision. This ordinance does not affect the rights and duties that matured, penalties that
were incurred or proceedings that were begun before the effective date of this ordinance.
Section 4
Severability. If any portion of this ordinance or the application thereof to any person or
circumstance is held invalid, such invalidity shall not affect other provisions of this ordinance which may be
given effect without the invalid provisions or application and, to this end, the provisions of this ordinance are
declared to be severable.
Section 5
Effective Date. This ordinance shall be in full force and effect on the _________ day of
____________________, 20_____.
PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, at a regular
session thereof held on the ________________ day of _________________, 20_______.
_________________________________________
JEFF KRAUSS, Mayor
ATTEST:
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_____________________________________
STACY ULMEN
City Clerk
PASSED, ADOPTED AND FINALLY APPROVED by the City Commission of the City of Bozeman,
Montana, at a regular session thereof held on the _______ day of __________________20_____.
_________________________________________
JEFF KRAUSS, Mayor
ATTEST:
_____________________________________
STACY ULMEN
City Clerk
APPROVED AS TO FORM:
___________________________________
PAUL J. LUWE
City Attorney
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