Preston, the city’s legal counsel, told the Nampa City Council on a special meeting morning that Idaho law narrowly limits when municipalities can impose fees and that using fee statutes to replace tax revenue risks violating constitutional and statutory limits.

“You can call a dog a cat all you want. It’s still a dog,” Preston said, arguing courts will void arrangements in which a user fee is a disguised tax. He reviewed the difference between police power (regulation) and taxation authority the legislature reserves to itself, and cited recent case law including Hillview Mobile Park v. Pocatello to show courts scrutinize fees that function as revenue-raisers rather than payments for a specific, proportionate service.

Why it matters: Council members are considering how to respond to a revenue shortfall they and other jurisdictions have attributed to changes under House Bill 389. Several neighboring cities, Preston said, have attempted to raise revenue through fees; he warned that statutory fee-authorizing language (for example, Idaho’s fee statute cited by counsel) cannot be used to replicate general tax authority.

Preston told the council that a narrow option exists in conditional use permits (CUPs) where, when a payment or exaction is truly voluntary, courts have on occasion upheld developer-paid measures tied to specific on- or off-site improvements. Even there, he said, any requirement must be proportionate and non-coercive. “It has to be truly, truly voluntary,” he said.

Council responses split on approach and prudence. Councilman Reynolds urged the council to focus on educating the public and seeking a legislative remedy to HB 389 rather than attempting to craft local mitigation fees that could increase housing costs. “We’re better off to stay on the very clear side of that,” Reynolds said, adding that stacking additional fees would risk making homes less affordable.

Councilman Griffin proposed a different tack: he urged the council to consider narrowly framed, voluntary contributions from developers — for example, modest per-unit amounts — if developers offer them without coercion and with clear parameters about use. Griffin cited past voluntary donations to local schools as precedent for structured goodwill payments.

Daniel of Public Works/Development Services clarified that the city currently charges fees-for-service and statutorily guided impact fees for capital system improvements but has not imposed an operational (ongoing) fee for services such as police salaries. Preston reiterated that impact fees are limited to capital projects and cannot lawfully be used as a general revenue substitute.

Outcome and next steps: The council did not take legislative action at the meeting. Multiple members expressed reluctance to pursue local mitigation fees without clearer legislative authority and preferred pursuing changes at the state level. The council then voted to adjourn into executive session pursuant to Idaho Code 74-206(1)(c).

Votes at a glance:
Motion: Adjourn to executive session pursuant to Idaho Code 74-206(1)(c).
Mover: Councilman Rodriguez; Second: Mayor Clegg. Roll-call vote recorded as Yes from all members present; motion carried.

What to watch: Whether the council pursues a legislative request to clarify authority for local fee structures or instead adopts policies to accept narrowly documented voluntary developer contributions under circumstances courts would deem non-coercive.