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Impact fees plan headed to City Council

by BILL BULEY
Staff Writer | November 15, 2023 1:00 AM

COEUR d’ALENE — The Coeur d’Alene Planning Commission on Tuesday recommended that the City Council adopt proposed Capital Improvement Plans and increases in impact and annexation fees.

The hearing with the council to adopt the CIPs is scheduled Nov. 21. The hearing to adopt an impact fee study and update fees is tentatively scheduled for Dec. 5.

The impact fees would pay for future improvements in parks, transportation, police and fire departments to keep up with growth.

The proposed impact fees would raise the cost of a new 2,500-square-foot single-family home in Coeur d’Alene about $9,000.

For new accommodation structures of 50 rooms or more, a 53,526-square-foot, 89-room hotel would pay $325,487 in impact fees based on the proposed $3,730 per room. The cost would be about $475,000 based on the proposed $9.04 per square foot.

More than 50% of the fees would go toward parks.

Which formula would be used has not been determined.

The same hotel would face impact fees of $299,638 in Post Falls; $268,235 in Nampa; $170,712 in Hayden and $147,731 in Twin Falls.

The fees would be less for accommodations with fewer than 50 rooms.

“Accommodations are listed both by fee per square foot and fee per room with the intention that the lower of the two scenarios would be charged to the developer,” according to a staff report.

Planning Commissioner Sarah McCracken questioned the proposed hotel impact fees.

“They seem really high,” she said. “If they were not as high as presented, what would be the ramifications?”

Melissa Cleveland of Welch Comer, who gave a presentation to the Planning Commission, said the proposed fees would be blended into residential fees.

“So residential fees probably go up,” she said.

McCracken said the accommodation impact fee for Coeur d'Alene is far more than any of the other cities and “not proportionate."

Cleveland said the explanation for that was people staying in hotels use parks “because they’re here to recreate.”

“They’re kind of a targeted audience for parks fees,” she said.

Cleveland said other cities are not charging new accommodations the nonresidential park fees.

“If you strip that out, you'd be real close to those others. But users of hotels use parks," she said.

Commissioner Peter Luttropp said the city needs to give developers an opportunity to provide input on the proposed fees.

“Others have not had a chance to look at this and comment,” he said.

Under one example, a new 5,315-foot restaurant in Coeur d'Alene would pay impact fees of $32,421. In comparison, the same structure would pay impact fees of $50,758 in Post Falls, $40,978 in Hayden and $51,236 in Nampa.

In another example, a new, 18-unit, 18,879-square-foot apartment building in Coeur d'Alene would pay impact fees of $113,029. In comparison, based on the charge by square foot, it would cost $176,490 in Post Falls, $115,038 in Nampa; $71,955 in Hayden and $71,692 in Twin Falls.

Luttropp was the lone no vote on recommending the City Council adopting the CIPs and fees.

“I think we need broader input,” he said.

But Luttropp said, if the impact fees are not increased, the costs to maintain and improve city services would otherwise be passed on to residents.

Commissioner Lynn Fleming said larger hotels should be charged by the square foot, while smaller ones should be charged by the room.

She said large hotels host conventions and have ballrooms the size of football fields, and those guests have more of an impact on the city.

Commissioner Phil Ward said the higher fees would increase the cost of a single-family home by $8,000 to $10,000, and could price someone out of buying a house.

He said people with building applications already in should not have to pay the higher fees. He also asked about exemptions for affordable housing.

“I think it’s really important we be fair,” he said.

Cleveland said smaller homes would pay less in impact fees as the proposal is to charge single-family by square foot.

If adopted, the fees as proposed would not go into effect until spring, and completed application forms filed with the city would remain under the current fee structure.

Under the Capital Improvement Plans, the city has identified about $9 million in fire department needs, including a new fire station, land for expansion ladder truck and fire truck. All are impact-fee eligible.

Planned park expansion projects total $14.4 million, while improvements to existing parks are pegged at $2.6 million.

The transportation project list for the next 10 years is estimated at $79.6 million.

Police needs are estimated at $8.4 million including police station expansion and downtown substation.

Not all of those costs are eligible to be funded through impact fees.

City officials have said that impact fees, which are one-time fees, need to change, as the population of Coeur d’Alene is expected to grow by 13,000 to a population of 72,000 residents by 2034.

The existing development impact fee study was completed in 2004 and neither the fees nor study have been adjusted since, according to a staff report. The annexation fee was last adopted by resolution in 1998.

According to a report in the city's preliminary financial plan for 2022-23, a goal was to "Seek every remedy for growth to pay for itself through an increase in annexation fees, increase in impact fees, and low tax increases."

The city's annexation fee, $750 per residential unit, is proposed to increase to $1,133.

The impact fees would escalate annually for five years at 3.9% to avoid the current situation, officials said.

The city, along with the FCS Group, Iteris and Welch Comer, previously developed a 38-page impact fee study.

Cleveland said the fees proposed are the maximum and the council could lower them.

“That’s as high as they go,” she said.