This city will ask developers if it may keep nearly half a million dollars it collected from them illegally.
In return, the city promises to publicize the names of the generous.
The Idaho Supreme Court last month ruled Coeur d’Alene and Hayden’s impact fees were a tax and therefore illegal. Rather than challenge the court decision, or risk further legal challenge, Coeur d’Alene officials Tuesday night agreed to give back the $476,000 it collected from 410 permit-holders since 1993.
But when the city sends out letters telling developers and homeowners where to pick up their money, it will include a pitch:
“In the spirit of community, we will ask them if we can keep the money and use it for the projects we originally planned,” said City Treasurer John Austin.
The fees were designed to pay for new roads and other city services made necessary by growth.
City officials say the money offsets the cost of new development without putting the financial burden on existing taxpayers.
Will it work? “I have not the foggiest idea,” said City Councilman Mike McDowell.
But it’s apparently not as crazy as it sounds.
“If they have any money of ours, we’ll probably be inclined to let them have it,” said Peter Forsch, project coordinator for McCormack Properties.
The city “was reasonably wellintentioned when it instituted the fees,” he said, and he believes in the cause.
Forsch and dozens of other builders support impact fees.
In fact, several builders already donated fees to the city of Hayden, said former mayor Dick Panabaker.
Hayden’s impact fee program was struck down by the same ruling.
It had collected $180,000 in fees.
“They’d rather just see the roads fixed,” Panabaker said.
Many builders pass impact fees on by increasing the price of a new house, said Coeur d’Alene Councilwoman Nancy Sue Wallace.
“If they take the money, I wonder if the property owner will go to the developer and say they want their share?” she said.