County and Driggs consider updates to 14-year-old fees
Four local government bodies are reviewing one tool that is supposed to help new private development support the cost of public facilities and system improvements. Driggs and Teton County are in the process of updating their impact fees, while Victor and the Teton County Fire Protection District are looking to implement impact fees for the first time.
An impact fee is a one-time payment a developer or property owner makes at the time of building permit; the fee goes toward construction of capital projects (like facilities and roads), but cannot pay for maintenance, repairs, or operating costs. In Idaho a city or county can’t charge impact fees unless it has an up-to-date capital improvement plan.
Driggs, the county, Victor, and the fire district are each individually working with consultant TischlerBise to develop impact fee studies and capital improvement plans. (Tetonia does not have impact fees and is not pursuing them at this time.) The studies must demonstrate that new development creates a need for capital improvements; that new development will benefit from payment of the fees; and that the fee is fair and proportionate.
Each study suggests a maximum justified amount that the city, county, or district can collect, based on its capital improvement needs; the governments have the option to collect less than the maximum.
Teton County adopted its capital improvement plan and impact fee ordinance in 2008, and the Driggs plan and ordinance is similarly outdated. At the county level, the fee goes toward recreation, roads, pathways, the sheriff’s office, and emergency management. In Driggs it funds recreation, roads, and pathways.
County building official Wendy Danielson started working in the building department just as the impact fees were first implemented, in August of 2008. It was after the bottom fell out of the economy, she pointed out, so the county didn’t capture any revenue from the boom years that preceded the Great Recession.
When first recording the county’s impact fee for nonresidential development, apparently someone missed a decimal point when calculating project growth, Danielson added. As a result, the fee for retail, for instance, is currently $532 per 1,000 square feet and for industrial it’s only $100 per 1,000 square feet, when those numbers should be much higher. It’s not an error that has substantively hurt the county, however; there has been very little commercial development outside of the cities in the past 14 years.
A few efforts have been made to update the county plan, most recently in 2021, but when the board of county commissioners voiced some concerns about the legal applicability of the draft plan, and the planning administrator later resigned, the process halted once again.
State statute says that capital improvement plans should be updated every five years so that impact fees reflect the jurisdiction’s current needs, and Teton County’s new planning administrator, Jade Krueger, said that in her experience, counties and cities that are undergoing the amount of growth seen right now in Teton Valley usually update their plans every one to two years.
“It’s overdue, for sure,” she said about the county’s CIP update. “We’re just trying to get back in compliance and looking at what we have been charging for fees.”
Right now the county charges a flat fee for residential development. Krueger said that the proposed new fees depends on the square footage of the house, meaning that, as she put it, “people building McMansions will pay more to the county than your average Joe.”
In Driggs, too, the city will consider fees that reflect the size of residential units. In its 2008 impact fee ordinance, Driggs chose to use fees that were only 50% of the maximum justified amount, in order to not dis-incentivize development within the city. Now, Driggs staff is recommending that the city use the maximum justified amount, “ensuring that new growth pays for associated impacts to city transportation and parks facilities and services as well as to fire district facilities,” according to a city council meeting staff report.
Meanwhile, neither Victor nor the Teton County Fire Protection District charge impact fees, which is likely to change soon. Victor’s comprehensive plan, adopted in 2021, includes the adoption of a capital improvement plan and impact fee ordinance as one method of achieving the city’s goals.
The fire district has also been eyeing impact fees for some time, although the process stalled during a change in leadership earlier this year.
Fire Chief Mike Maltaverne said that since he joined the department in June, it’s been a priority to catch up with the three other elected bodies as they began their own impact fee studies.
“We’re so limited by the state of Idaho in how we can bring in funding, which forces us to look at alternative methods to generate revenue,” Maltaverne said. “Impact fees are an excellent tool for the district to collect funds.”
He explained that as more people move to the valley, the fire district’s resources need to increase to meet the growth.
“The community expects us to deliver a certain level of service, and we’re delivering that today, but as the community grows, people will still expect the service to continue,” Maltaverne said. “If we have a big influx of people and don’t do anything to collect revenue from them even as demand for service goes up, then our level of service goes down.”
The district has been pondering its capital needs for a few years. Station 1 in Driggs, which is the administrative headquarters of the district, was built in 1990 and upgraded 20 years ago. The district wants to renovate the station or relocate it to somewhere in Driggs where its growth isn’t hampered by proximity to the airport. However, Maltaverne said, the TischlerBise impact fee study does not take into account any major changes to Station 1.
“We took a more conservative approach to capital improvements,” he said. “We didn’t feel comfortable including anything in the study that addressed major facility needs, because we’re in the preliminary phase of what to do.”
Instead, the fire district’s capital improvement plan only addresses the addition, over the next ten years, of one engine bay and the related vehicles and gear. The plan also only uses 87% of the district’s program costs, because 13% of the district’s fire and medical response happen over the border in Alta, and Teton County, Wyoming, pays a flat fee for that response.
The fire district will need an intergovernmental agreement with the other entities in the county so that fire impact fees can be collected by the cities or county and passed on to the district.
Each entity is at a slightly different place in the process. The county impact fee committee met one last time on Nov. 1 in order to make a recommendation to the board of county commissioners on both the county and fire district plans, while Victor has just decided to use the Victor Urban Renewal Agency as its review committee. After press time on Tuesday night, the Driggs City Council reviewed and discussed its own impact fee study and capital improvement plan.
Chief Maltaverne acknowledged that people may argue that new and increased impact fees are another impediment to building affordable housing. He pointed out that he hasn’t seen a lot of starter homes on the lower end of the financial scale being built in the county. But more importantly, he added, each government body has the ability to discount or waive impact fees for affordable housing projects. (In Driggs, deed restricted affordable housing development is already exempt from all impact fees.)
He said that he’s empathetic to the taxpayer who bemoans the implementation of more fees. However, he views the impact fee as a boon for people who already live here.
“That’s the beauty of an impact fee, we’re setting it up for someone who doesn’t even live here yet. It’s a one-time fee, not a property tax, not a mill levy,” Maltaverne said. “I look at it this way—if I’m coming to Teton County and building my dream home, I’ve already gone to the bank, prequalified, hired an architect. When I pull a building permit, I’ve already committed to building a home. I don’t see an impact fee as a deterrent.”