Sandpoint council adopts new impact fee schedule, approves fees at full recommended level

The Sandpoint City Council voted Wednesday to adopt a new development impact fee schedule tied to the 2025 Capital Improvement Plan, approving implementation at 100% of the consultant's recommended maximum supportable fees.

The public hearing on the Capital Improvement Plan (CIP) and development impact fee study opened and closed with no members of the public testifying. Council deliberations followed testimony from city staff and the consultant, Nicholas Hough of TischlerBise, who joined the meeting remotely.

Why it matters: impact fees are one-time charges on new development intended to recover growth-related costs for parks, pathways, police, fire and streets. Council members debated whether to phase increases over three years or put new rates in place immediately; proponents said full implementation aligns with a “growth pays for growth” principle, while supporters of phasing said the city should avoid overcommitting the community if projected capital needs outpace the city’s ability to deliver projects.

Community Planning & Development Director Jason Welker summarized the study and the options considered. Mayor Jeremy Grama reminded council that, under Idaho law, a developer may ask for a site-specific analysis to contest a fee amount: “If a developer or property owner chooses to contest their impact fees, they do have the right under Idaho code to ask for a site specific analysis,” Grama said. Consultant Nicholas Hough replied, “To the best of my knowledge, yes. It doesn't happen very often, but I do believe that that's true.”

Council members pressed staff on how the CIP and the fee schedule interact. Hough explained the study used an incremental-expansion approach for parks, pathways, police and fire — meaning fees reflect the city’s current level of service and future incremental expansions, not a mandatory project list — while the transportation (streets) fee is tied to a plan-based approach and a growth-related percentage of specific street projects. Hough said the city generally has up to eight years to spend fee revenues and that fees based on current level of service do not automatically obligate the city to build every listed CIP project.

Councilman Rick Howarth raised concerns about potential effects on development, asking whether higher fees could discourage building. The consultant provided an example: on a 2,000-square-foot house at an assumed $250 per square foot construction cost, current fees represent about 1.06% of construction costs and the proposed maximum-supportable fee would be about 2.5% — a difference of roughly 1.4 percentage points in total construction cost.

After deliberation, President Ruhl moved to adopt the fees at the 100% level; the motion was seconded by Councillor Schreiber. The roll-call vote left the council evenly split until Mayor Grama cast the tie-breaking vote in favor. The motion passed and the fee schedule will be incorporated into the city’s annual fee schedule and into the budget process.

What council decided and next steps: Council adopted the impact fees at the full recommended level and will set the specific fee schedule formally in the annual budget and fee ordinance. Staff told council the implementation of fees is administered through the annual fee schedule and that council can revisit and adjust fees at future annual budget hearings. Welker and the consultant also said staff will continue to refine the streets-related CIP and traffic-engineering inputs used to calculate that component of the fees.

Votes at a glance: Motion to initiate impact fees at 100% — moved by President Ruhl, seconded by Schreiber. Roll call produced a tie which Mayor Grama broke in the affirmative; the motion passed.

Background: The study and staff report, prepared with TischlerBise, described roughly $58 million in identified capital needs, of which staff said about $15 million are eligible for impact fees. The remainder, staff said, would need to be funded by other sources (general fund, grants, bonds or phased construction). The council discussed the accounting and legal requirement that impact-fee collections must be tied to allowable projects and that unspent fee revenues may require tracking or return under certain circumstances.

Council members emphasized the distinction between the CIP (a project list and planning document) and the incremental fee calculations for most service categories. Several members asked staff to ensure that projects listed in the CIP are not implied mandates to obligate the city unless council separately approves each project.