City to consider increasing impact fees for transportation, police and fire
Martin Kidston
(Missoula Current) Citing inflationary costs and a growing list of unfunded needs, the City of Missoula may consider increasing its impact fees to support transportation, police and fire.
City staff has recommended one scenario that would generate roughly $24 million over the next 10 years for transportation. For a 2,000 square-foot house, the transportation impact fee would increase roughly 45% in 2027 followed by a 4% inflationary increase over each of the next nine years.
City staff also has recommended increasing police and fire fees 100% in 2027 followed by a 20% increase in each of the following three years. The fee increases vary based on house side and will be considered by City Council later this year.
Ross Mollenhauer, the city's engineering manager, said the city increased its impact fees by 10% in 2020. But since then, costs have increased, along with Missoula's population, placing greater pressure on the transportation grid.
“Since then, we haven't kept up with inflation and have probably lost ground by an estimated 45%,” said Mollenhauer. “The same money we're bringing in today isn't worth the same as in 2020.”
Funding generated by impact fees has helped make improvements to both Scott Street and Mullan Road, along with a traffic light at the intersection of Orange Street and Cregg Lane.
The funding has also helped match federal grants, which have gone far in addressing other transportation costs. But the revenue generated locally isn't enough, said Aaron Wilson, the city's transportation manager.
“When we did our last long-range transportation plan update, we had a $500 million funding gap between the projects we identified and the funding available,” said Wilson.
Under the current fee rate, the city expects to generate $15 million over 10 years. But projects identified as a high priority carry more than $78 million in unfunded costs. Those projects include nine intersection projects totaling $14 million, along with $13 million in new streets. Other projects, including complete streets, total $13 million while proposed commuter paths add up to $27 million.
Mollenhauer said the city's current impact fees don't come close to funding the work.
“If we had 30% of that ($78 million) total funded by impact fees, we'd have a good chance of doing these projects in the near future,” he said. “That would generate $26 million over 10 years. Currently we're generating $15.”
The Missoula police and fire departments are also seeking an increase in impact fees. The latter is seeking a 100% increase in impact fees starting next year, followed by a 20% increase the three following years.
While voters recently approved a levy to fund the fire department's growth, Chief Lonnie Rash said a boost in impact fees would enable the department to address meaningful growth and fill any pending funding gaps.
It's also looking to build a new fire station, which now carries an estimated cost of roughly $10 million.
“We're talking now about the increased cost of 2027 build totals – the cost to build today,” said Rash. “When we initially went out for the levy, we were looking at building out in the Mullan area where property values were less. Now, we're looking at the Russell and Third street corridor. This (fee increase) helps us fill any particular gap we may find in that growth.”
Members of the Impact Fee Advisory Board on Tuesday wrestled with the proposed fee increases but ultimately recommended they be considered by City Council. Council is expected to consider the increase in July and make a final decision in August.
“From our perspective, our responsibility is to make sure that what we're agreeing to is defensible,” said committee member John Freer. “It's directly attributed to growth, which is another big piece of it, and making sure it's balanced with affordability.”