FAQs

Impact fees are used to expand capital elements of infrastructure (water, sewer, fire/EMS, and transportation) to increase service capacity. The fees paid enable the City to keep current on needed construction which protects public health and safety, reduces delay in construction, and more equitably requires those creating new demand for service to offset those costs.

Title 7, Chapter 6, Part 16, Impact Fees to Fund Capital Improvements, in state law authorizes local governments to adopt impact fees. The law also establishes requirements for documentation of costs and service demand, and sets some processes for collection and expenditure of impact fees.

Chapter 2, Article 6 Division 9, Impact Fees, in the Bozeman Municipal Code establishes further details and authority to implement impact fees. 

No. Impact fees are only charged when there is an increase in demand for services. Impact fees are only charged once so long as demand for service is not increased. A building permit to remodel an office layout but not add more area, replacement of a use with another use in the same category, or other work that does not add service demand is not charged impact fees. Building permit and other review fees may still apply. 

The City updates the required service area reports and supporting documentation on a regular schedule. The City hires professional consultants in the impact fee field to support local staff in assembling the needed service area reports. The service area reports identify the cost for each unit of demand and assigns those costs to different kinds of development. The City Commission, after a public review process, considers and adopts the service area reports. City of Bozeman staff review each building permit and based on the data from the permit calculate and document the fee charged to a particular project.

Impact fees provide an equitable funding source for constructing streets, water, sewer, and Fire/Emergency Medical Services needed by new development. As a fee for service, the amount of impact fees collected automatically rise or decline as the rate of development changes. Impact fees help ensure levels of service are maintained, that lack of infrastructure is not an impediment to new development, and supports more efficient and comprehensive infrastructure projects at lower total cost than piecemeal work. Impact fees more closely connect those who create a need for infrastructure with those who pay for infrastructure. As a fee for service, all persons, agencies, businesses, and non-profits equitably contribute to meeting infrastructure needs.

The City first adopted impact fees in 1996. They have been used continuously since then. The City does update impact fees every few years so the costs are as close to actual cost of construction as is reasonable. The current project to update impact fees began at the end of 2022.

We are starting with the Fire/EMS fee. Transportation will follow next and Water and Wastewater will be the last.