SWMBIA sues Bozeman over impact fees - KBZK.com | Continuous News | Bozeman, Montana


SWMBIA sues Bozeman over impact fees

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UPDATE: 6/16/17, 9:45 a.m. - PDF of lawsuit attached to story.

The city of Bozeman faces a lawsuit from the Southwest Montana Building Industry Association (SWMBIA).

According to the complaint, SWMBIA believes the city is misusing impact fees.

The fees are paid by the owners of new developments, to contribute to the costs of infrastructure improvements made necessary by the new growth.

For new homes, generally, the contractors are charged the fees which are then added to the cost of the house.

SWMBIA says the city is collecting an excess of fees and using them for infrastructure different from their original intent.

Impact fees can only be collected for water and sewer services, new roads and fire protection.

They can only be used to address new growth such as paving new streets and cannot be used for maintenance issues such as filling potholes.

The fees apply to new developments, such as the new home construction on the west side of town, and new growth in existing areas, for example building a hotel where a parking lot previously sat.

SWMBIA asks for the city to repay any of the impact fees it says were collected in excess or misused.

This is the second time SWMBIA has sued the city - in 1999 the group challenged the constitutionality of the impact fees when they were introduced.

In 2005, Montana enacted the Impact Fee Act, which lays out exactly how the fees can be collected and used. SWMBIA says the city is in violation of the law by charging too much and using them for other public projects that cannot be funded by these specific fees.  

The city says the fees are collected over several years before a project can begin.

"We collect impact fees from homes for many many years and then build the intersection,” said Chris Mehl, Bozeman City Commissioner. “You can't build one-hundredth of an intersection, because of a home, you can't build part of one-hundredth of a new sewer plant, or the additions of that. You have to save the beans together and spend them at once. That's what we’ve done and we believe we're firmly within state law to do that, state law recognizes how construction happens.”

The city says all impact fees collected are fair and legal.

Bozeman Attorney Art Wittich is representing SWMBIA but was traveling at the time of publication. We will update with his perspective at a later date.

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