With population growth comes a need for new parks, fire stations, walking trails, and other amenities. Cities use impact fees to pay for them – ranging in Idaho from $2,000 to more than $5,000 for a new single-family home.
Idaho allows impact fees to be charged on residential and commercial development specifically for parks, fire, police and streets. Other states allow impact fees for schools, sewer and water, libraries, cultural facilities and other things. In Idaho, a cousin to impact fees – hook-up fees – cover sewer and water extensions into new subdivisions.
Impact fees are charged to developers but are typically borne by homebuyers. Impact fees of varying rates are also charged on apartments and other living dwellings as well as commercial structures.
Impact fees may sound like just a multi-thousand-dollar government penalty for buying a new home, but there are specific rules and limitations on how much jurisdictions can charge and how the money can be used, said Anne Wescott, a Boise impact fee consultant who was worked with 50 jurisdictions in the Intermountain West including several in the Treasure Valley.
“Impact fees are only about the capital side for infrastructure necessitated by growth,” she said. “Is it needed to serve growth? If not, it’s not eligible.”
Impact fees can pay for a fire station, a park, or a police station – but not for operations or maintenance. Impact fees can pay the entire cost or a fraction of the cost, depending on how much a given project is specifically defined as driven by growth vs. just the need of the existing city.
“The key piece of impact law is proportionalize,” Wescott said.
Jurisdictions – mostly cities but also districts such as Ada County Highway District – establish a list of projects to fund with impact fees and how much those projects are driven by growth to determine what the impact fees will be.
“It is third grade math, the cost of a capital project necessitated by growth divided by the new households,” Wescott said.
The impact fees are determined collaboratively between the city and development community.
Impact fees are overseen by advisory committees typically composed of developers, though in Boise’s case developers are joined by real estate agents, citizens at large, and utility representatives that make impact fee recommendations to the City Council.
“(The advisory committee members) feel we are doing it transparently and have a fair rate structure,” Boise Chief of Staff Jade Riley said.
Idaho cities typically require developers to pay for all the streets, parks and utility installation within their housing developments. The impact fees are generally for police, fire, park or street facilities outside a development but that are made necessary, at least in part, by new developments and population growth.
Many of the growing mid-size and larger cities in Idaho have impact fees.
Parks carry the largest impact fee charged by the city of Meridian, though Ada County Highway District’s impact fee more than doubles the total charged for a newly built single-family home in Meridian: $4,973.
ACHD charges $2,956 across Ada County. Meridian’s park impact fee is $1,113, while fire is $681 and police is $223. The parks impact fee was the first one in Meridian in 1996 with police and fire following in 2006, said Todd Lavoie, Meridian’s chief financial officer.
“The citizens made it very clear they love our parks,” Lavoie said.
Meridian used $6 million in parks impact fees in the past four years to build Reta Huskey Park, Hillsdale Park and Keith Bird Legacy Park – all in newly developed sections of Meridian – and will develop a 77-acre park site provisionally called “77 South.”
“That’s $6 million we didn’t have to collect property taxes from our city taxpayers,” Lavoie said. “Our property tax levy rate has gone down every year and we can thank impact fees for that.”
Parks are often the largest impact fee. Outdoor recreation is a priority across Idaho and city leaders are attuned to the need for parks to keep up with growth and impact fees are the practical way to fund them, impact fee consultant Anne Wescott said.
“Parks are expensive,” Wescott said. “Treasure Valley parks are directly related to quality of life. We want to be within a mile of a park. There is no way out of the general fund to fund them.”
Meridian applied $500,000 in police impact fees to a new $3.76 million public safety training complex that opened in September 2015. That’s proportionality at play: Growth is calculated to account for a 13 percent share of the cost to build the training complex.
Impact fees allowed Twin Falls to fill the last missing 1.4-mile link of the Snake River Canyon Rim Trail that opened in 2017.
That stretch from Pole Line Road and Eastland Drive to the Evel Knievel jump site now gives Twin Falls a 7.5-mile continuous trail from the city-owned Shoshone Falls Park at the east edge of the city to Washington Street near the west edge.
“It changes the use of the trail significantly,” Twin Falls Parks and Recreation Director Wendy Davis said. “It creates easier access to views of the falls without having to sit in lines of traffic (to drive down to Shoshone Falls). In Idaho and in Twin Falls, a lot of people come to Idaho for outdoor recreation opportunities.”
Twin Falls had pieced the Snake River Canyon Rim Trail together over 24 years, starting in 1994 with the first .47 mile section near Canyon Springs Road. Numerous individual segments were eventually tied together with expansions in 2001, 2002, 2004, 2005, 2006 and 2105 – but a gap remained until 2017.
Twin Falls started charging impact fees in August 2009 at $1,606 per single-family home. The rate has been increased four times since to the current $2,137, said Mitch Humble, Twin Falls deputy city manager of community development.
The impact fees are broken down to $301 for police, $670 for fire, $534 for streets and $632 for community parks. Twin Falls saw a 3.8 percent increase in impact fees in April, the largest increase, to fund portions of the main police station remodel and expansion into the old city hall space, building a new fire station and build a new community park, Humble said.
The police impact fee paid $900,000 of the $3.5 million main police station remodel and expansion. The parks impact fee paid the full cost of the $800,000 Snake River Canyon Rim trail segment. The street impact fee could fully pay for another new traffic signal, Humble said.
“For us, the impact fees have been helpful,” Humble said. “They helped us put up traffic signals we would not have been able to do.”
Twin Falls has collected $6.1 million in impact fees since 2009. The city has collected 25 percent less over those nine years than Humble originally expected because right after impact fees started, new home construction plummeted with the recession.
“We have not had the growth we thought we would,” he said.
Before the 2008 recession, Twin Falls issued some 550 building permits a year. Since then, the highest has been 236 permits.
Nampa started impact fees in 2007 for streets, parks, fire, police that currently add up to $1,806 for a single-family home.
The breakdown is $1,242 for parks, $185 for fire, $379 for streets with no current impact fee for police because of a surplus of unused impact fees in that account, said Patrick Sullivan, Nampa’s director of building safety and facilities development.
Nampa collected $1.658 million in impact fees in fiscal 2017 and $1.1 million in fiscal 2018. The city expects to collect $4.86 million in street impact fees in the next 10 years, $6.3 million in parks impact fees and $1.1 million in fire impact fees, Sullivan said.
“We go through the next 10 years,” Sullivan said. “What are the capital improvements attributable to growth?”
Impact fees will fully pay for 47 acres of Nampa park development over the next 10 years, including the 28.2 acres for Ora Brandt Park now under construction, he said.
Impact fees paid about two-thirds of the cost for the police department’s mobile command unit and the full cost of five Chevrolet Tahoe SUV’s and a SWAT transport vehicle that are attributable to population growth. Impact fees will pay for a new Fire Station 6 and a variety of street intersection improvements, bridges and culverts.
“Impact fees have met all the needs of growth,” Sullivan said. “They are able to pay for all the projects identified in the capital improvement plan. If we didn’t have impact fees, the burden of fire, police, parks and streets would fall solely on tax revenue. If we didn’t have impact fees, we’d have to pull more from the general fund.”
Idaho Falls and Pocatello
Idaho Falls does not have impact fees nor are they currently under consideration, said Kerry Beutler, assistant planning director in Idaho Falls.
“Developers pay for whatever they expect in utility work in sewer, power, roads as well,” Beutler said. “We have discussions coming up every once in a while about (impact fees for) parks and open space.”
The city of Pocatello does not have impact fees but does require various construction related fees be paid depending on the scope of a project. Capacity and connection fees are also charged for connection into the City’s water and sanitary sewer system, city spokesman Logan McDougall said.
As the state’s largest city, Boise’s impact fee for single-family residential varies across the city with a wide range of park impact fees depending on where a housing development is placed.
If existing parks are near a development, the parks impact fee can be as low as $279, while developers (ultimately homeowners) at the fringes with no parks nearby could see a parks impact fee as high as $1,193.
The total impact fee on a single-family home in Boise ranges from $4,305 to $5,498, based on the seven park zones that Boise uses. The city of Boise imposes $509 in fire impact fees and $235 in police impact fees and he Ada County Highway District adds a $2,956 street impact fee.
The city has collected $31 million in impact fees since collecting the park fee in 1994 and adding police and fire impact fees in 2008, city Chief of Staff Jade Riley said.
“Anything associated with pure growth we have been able to capture that with impact fees,” Riley said. “We believe in a capital perspective and equipment perspective, one-time capital costs, we feel our impact fee program has been very successful. “
Impact fees paid for the construction of Charles F. McDevitt Sportsplex, Optimist Park, Borah Park picnic shelter, Veterans Park shelter, Peppermint Park, Warm Springs Park restroom, Marianne Williams Park, Boise River Greenbelt widening and Oregon Trail extension.
Impact fees paid $422,877 of the $635,353 purchase price of the Hyatt Hidden Lakes Reserve and another $422,000 to pave the parking lot in recent years.
The fire impact fee bought a brush truck and fire engine for a Harris Ranch fire station, the construction of which was 71 percent covered with $2 million in impact fees, which will also be used to build a northwest fire station.
About $1.8 million has been collected in police impact fees, which will go toward construction of or buying a building for a downtown police station.
The last fiscal year collected $3.1 million in impact fees for fire, police and parks combined. Impact fees will increase 1 to 2 percent in October, Riley said.