Sandpoint panel reviews draft impact-fee approach; consultants stress limits on use for maintenance

Sandpoint’s Development Impact Fee Advisory Committee heard a presentation on April 2025 progress for a citywide update to impact fees, with consultants and staff outlining which capital projects can be funded, growth projections for the next 10 years and a timeline that could bring an updated fee schedule to City Council by early summer.

The discussion centered on legal limits for impact fees and what counts as “growth-related” capital. "Impact fees are one-time payments that new growth pays to offset their new demand on infrastructure," said Colin, a consultant with Just Advice, who led the presentation. He told the committee impact fees may only be used for capital additions that increase system capacity — not routine maintenance. "Impact fees cannot go to maintenance, cannot go to operations," he said. "If you have a leaky roof, that was not because of people that moved in here in 2026."

The committee’s advisory role and the study’s timetable were emphasized. Jason Welker, Sandpoint’s community planning and development director, said the study team aims to finish the impact-fee study by early June and to present the updated fee schedule to City Council shortly thereafter. The consultants said they expect to return to the advisory committee with draft fee calculations in approximately four weeks for review before Planning & Zoning and then council consideration.

Why it matters

The study will determine fees charged at building permits for parkland, transportation (streets, intersections and multimodal pathways), police and fire capital, and — potentially later — utilities and stormwater if the city compiles additional capital plans. The committee and consultants stressed that incorrectly classifying projects as growth-related could expose the city to legal challenge or require the city to find non-impact-fee funds to make a project whole.

Key points from the presentation

- Scope and limits: Consultants said Idaho law requires an identifiable nexus between fees collected and growth-related capital; collected fees must be spent in a timely way (typically eight years, with limited extraordinary authority to extend to 11 years). Colin said, "These studies are the nexus step — need, benefit and proportionality." The consultants advised the city to document which portion of each CIP project is attributable to growth and what other revenue sources will cover non-growth shares.

- What fees can and cannot pay for: Examples given as eligible included new park acreage, net-new playgrounds, intersection improvements that add capacity, and additional fire or police apparatus added to serve a larger population. Ineligible items include routine roadway reconstruction, repaving or deferred maintenance unless the project adds measurable capacity (for example a multimodal pathway addition that increases usable network length). "If you're reconstructing a road and not adding any new lanes and it's a one-to-one replacement, that generally would not be impact-fee eligible," Colin said. But if a reconstruction adds multimodal lanes or connections that expand capacity, the eligible share can be calculated proportionally.

- How fees are calculated: The consultants described three common approaches — cost recovery for previously issued debt, incremental expansion (preserving current levels of service as the city grows), and plan-based approaches tied to a capital plan. They noted plan-based approaches can produce higher fees but commit the city to other revenue sources if growth does not meet projections.

- Residential schedule: The draft approach shifts from a simple residential/multifamily split to a square-footage-based residential schedule (with additional fine-grain categories for very small units such as ADUs). Consultants said this improves proportionality by tying expected trips and service demand more closely to unit size.

- Growth projections and demand drivers: The study uses 2020 census counts plus building permits since then. Consultants said Sandpoint has about 4,300 housing units on the city record and roughly 400 new homes built since the 2020 census. Building-permit trends over the last five years average roughly 108 units per year; the consulting team used those trends as the baseline for 10-year growth projections. The study also accounts for seasonal and overnight visitors when estimating demand for parks, public safety and transportation. Colin noted seasonal and overnight visitors increase peak demand and recommended the team discount or separately account for nonresident use when setting city-resident levels of service for particular parks or facilities.

Committee discussion and examples

Committee members raised specific local examples to test eligibility rules. Members pointed to Cedar Street and other older neighborhoods where deferred pavement life, narrow rights-of-way and missing sidewalks have accumulated maintenance needs. Consultants repeatedly distinguished between maintenance (ineligible) and capacity-adding projects (potentially eligible). As Colin explained in the Cedar Street example, if a project adds a multimodal path that expands access, 15–30% (or the proportionate share) of the reconstruction could be eligible.

The committee also discussed City Beach and other high-use facilities where many users live outside Sandpoint. Consultants said user-fee data, seasonal-use counts and adjustments in level-of-service calculations can be used to discount nonresident demand and avoid charging city residents twice for infrastructure heavily used by visitors.

Policy constraints and state statutes

Consultants reviewed state-level constraints repeatedly raised in the presentation: the eight-year spending timeline (11 years in extraordinary circumstances), strict rules about eligible categories and the need for defensible documentation if the city seeks to adopt higher fees. Members also discussed House Bill 389 and its impact on jurisdictions' ability to raise ongoing operating revenue, which affects the city’s ability to fund operations for new facilities once capital is built.

Formal action

The committee approved the minutes from its February 6 meeting by voice vote at the start of the meeting. "All in favor?" the chair asked; attendees said "Aye" and the chair declared the minutes approved. The advisory committee did not take any other formal votes on fees or CIP adoption during the session.

What’s next

Consultants said they will incorporate committee feedback, finalize growth assumptions and present draft fee calculations and the package of capital projects for review at the advisory committee’s next scheduled meeting — likely within a month — before forwarding recommendations through Planning & Zoning and then the City Council. Jason Welker said the team hopes the council could consider an ordinance with a new fee schedule this summer; exact dates will depend on committee and department reviews and on council scheduling.

Ending

Committee members requested additional detail from department heads for particular projects and asked to see the draft CIP lists before the next meeting. Consultants and staff emphasized the study’s legal and technical constraints and the importance of documenting the growth-related portion of each project.