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Missoula looking to generate $18M in Mullan impact fees over 30 years

Mullan Road Development
Posted at 10:24 AM, Feb 23, 2021
and last updated 2021-02-23 12:24:41-05

MISSOULA — The impact fees proposed for new development in the greater Mullan area came into clearer focus on Monday night, and they could cross the finish line next week with final approval by the Missoula City Council.

The fees, developed in part by the national planning consultant Tischler-Bise, represent a one-time charge placed upon new development to help cover the cost of placing infrastructure ahead of current and future growth in the Mullan area.

The cost of that work, including engineering, is expected to push $35 million. If adopted, the impact fees would cover roughly half of that cost over 30 years.

“If we look at the projected growth, we’re projecting total revenue of $18.6 million,” said Colin McAweeney, an economic analyst with Tischler-Bise. “If everything goes well, it’s how impact fees should work out, where the growth cost is fully offset by the impact fees.”

The $13 million federal grant received by Missoula County in 2019 reduces the $35 million cost, as does the $1.3 million contributed by the county and the $2 million derived from existing city impact fees.

Jeremy Keene, director of public works for the City of Missoula, said that leaves around $18.6 million left to fund from the project total.

“This project funds a backbone of infrastructure that helps support the (Mullan) master plan,” said Keene. “This is a little different approach for the city. We’re being proactive in the way we provide infrastructure and how it gets built, and the impact fees are a way to do that.”

The proposed fees include a latecomer’s fee, meaning the city will build the sewer and water network and recover its costs as new development connects to the system. It’s also proposing a transportation special impact fee.

Keen said the approach spreads the costs equitably to those who will benefit from the imp0rovements. Without the fees, those costs would instead be spread citywide, regardless of where one resides.

Getting ahead of the growth also provides predictability, Keene added.

“One of the biggest things we struggle with in development is the capacity of roads and the availability of water and sewer,” he said. “It allows us to put key infrastructure in place. We’re building that ahead of a lot of the development happening.”

According to Tischler-Bise, the greater Mullan area currently claims around 9,000 residents, though that’s expected to increase to 26,000 residents in 30 years. The area currently employs 3,200 people, though that’s also expected to increase to 10,000 employees.

Missoula Mayor John Engen lauded the proposal, saying it would eliminate piecemeal development and help the city meet its housing demands.

“It makes housing production faster and less expensive,” Engen said. “Those are two goals we expressed pretty boldly in policy.”