Following a work session on Tuesday, the Kalispell City Council is expected to vote on what it wants to do with the city’s two-year-old transportation impact fees at its next regular meeting on Monday, Jan. 23.

That could mean increasing fees by about 12 percent for the next two years, as recommended by the city’s impact fee advisory committee.

Or it could mean reducing them, getting rid of them entirely or just pledging to continue to look for a new way to raise money for major, growth-related road construction projects.

Depending on the vote’s outcome, legislation could be introduced in early February.

Council members wrestled with the topic during the two-hour work session with no clear consensus.

Mayor Tammi Fisher said she’s concerned about the transportation impact fees, in part because of the up-front costs imposed on businesses and developers, but also because of the small amount of money they have raised.

Transportation impact fees have raised just $140,000 since their adoption in 2009, when they joined the other impact fees the city charges for water, sewer, storm water, police and fire services.

“After spending two years on this I’d like to see some resolution. I think it would be good for us to say when something is not working, we get rid of it,” Fisher said.

New council member Phil Guiffrida III, who took office this month, requested the work session.

Guiffrida said transportation impact fees are dampening economic development efforts and should be repealed. The city’s other impact fees should then be looked at one by one, he said.

“We need jobs. Anything the city can do to get out of the way of business I am 100 percent for,” Guiffrida said.

Since transportation impact fees were adopted, council members have charged just 75 percent of the allowable rate, hoping to keep them affordable.

Altogether, Kalispell’s various impact fees total $6,709 for construction of a single-family home — and potentially tens of thousands of dollars for larger developments.

The one-time charges on new construction, expansions, additions and renovations that put additional demand on city services and infrastructure are meant to help cover future costs associated with growth.

“Let’s get out of the way, start reducing fees and get the economy rolling,” Guiffrida said.

LIKE SEVERAL other council members, Guiffrida questioned the accuracy of a 2008 study the proposed transportation impact fees are based on.

That study projected the construction of 7,700 new “dwelling units” in Kalispell and the generation of about 134,000 new average daily trips on city roads by 2030.

“Even if the economy got back to normal, that number of dwelling units seems high,” council member Bob Hafferman said.

Hafferman said the transportation impact fees are needed but should be reduced, and fail to take into account other city regulations and development costs imposed on builders.

The study based the transportation impact fee on five road projects with a combined cost of about $24 million.

Based on the growth forecast, a proposed fee of $55 per average daily trip, up from the $49 approved two years ago, would raise $6.9 million of impact fee revenue to help pay for the $24 million of road projects.

The rest of the funding for the road projects would have to come from other sources.

Myrna Terry of Terry Construction said during a public comment period Tuesday that after more than two years of collecting the fees the city has taken no steps to raise the rest of the funding needed — a concern also raised by council member Jeff Zauner.

“This has been active for two years and we’ve collected roughly $140,000 less expenses incurred for the study — and not a good study, I agree,” Zauner said. “How many more years will we kick the can down the road?”

TERRY KRAMER of Kramer Construction told the council that Kalispell needs jobs and a more vibrant economy.

One of his larger clients had money earmarked for a project in Kalispell but decided to go out of state, in part because of costs and fees in the city, he said.

“We’ve collected $140,000 since 2009. That’s nothing. Property taxes would exceed that in one year when we’re talking about $10 million or $20 million worth of work,” Kramer told the council.

“We hope you look at incentives to get this economy going again.”

SOME COUNCIL members disputed the assertion that transportation impact fees are slowing or preventing economic activity. Council member Randy Kenyon called it “absurd” and said many more factors are at play.

“It may be if you look at the fees as a total they may discourage developers, but I still think it’s disingenuous to hang your hat on impact fees being the source for the lack of growth,” he said.

The fees offset the growth-related costs that fall on existing taxpayers, Kenyon said.

“If you give that $140,000 back it will have to be made up somewhere else.”

Council member Wayne Saverud said the fees are an attempt at tax equity. He doubted eliminating them would generate “a bunch of new jobs or even a few.”

“I don’t think we can blame impact fees for losing jobs or credit a reduction of impact fees for creating jobs. I think that’s too simplistic,” Saverud said.

Council member Jim Atkins said transportation impact fees are an important city tool.

“Are they effective? Not terribly ... But it is generating some funds. If it’s only $140,000 in the last two years, I don’t think that would put anyone out of business or change anyone’s mind because we’re too expensive,” he said.

At the end of the day, if the city continues to grow, money for big projects will have to come from somewhere, Atkinson said.

“Somebody has to pay for the roads. Who are we going to stick it to? Let’s stick it to all of us as equally as we can.”

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.