Chapter 19.08
SCHOOL IMPACT FEES

Sections:

19.08.010    Findings, purpose and applicability.

19.08.020    Authority.

19.08.030    Definitions.

19.08.040    School district eligibility.

19.08.050    School facilities plan requirements and procedures.

19.08.060    School impact fee.

19.08.070    Impact fee accounting.

19.08.080    Adjustments, waivers, appeals and arbitration.

19.08.010 Findings, purpose and applicability.

A. Findings. The city council of the city of Bellingham (council) hereby finds that new residential growth and development resulting from forecasted population growth will create additional demand for public school facilities.

B. Purpose. The purpose of this chapter is (1) to ensure that adequate school facilities are available to serve new growth and development; (2) to require that new growth and development pay a proportionate share of the costs of new school facilities needed to serve new growth and development; and (3) to ensure that school impact fees are administered consistently and fairly.

C. Applicability. The terms of this chapter shall apply to all development for which a complete application for approval is submitted on or after the effective date of the ordinance codified in this chapter, except for development that was the subject of a prior State Environmental Policy Act (SEPA) threshold determination that provided for school mitigation. All building permit applications accepted by the city prior to the effective date of this chapter, or for development that was the subject of a prior SEPA threshold determination that included provisions for school mitigation, shall be reviewed for all purposes allowed under state law, including environmental review pursuant to the city of Bellingham environmental policy ordinance, Chapter 16.20 BMC. [Ord. 2015-12-050 § 2 (Exh. B); Ord. 2006-03-022].

19.08.020 Authority.

This chapter is adopted as a basis for the exercise of substantive authority by the city under the Growth Management Act, Chapters 36.70A and 82.02 RCW as a means of mitigating impacts on school facilities as an element of the environment. [Ord. 2006-03-022].

19.08.030 Definitions.

As used in this chapter, the following terms have the meaning set forth below:

Words Defined by RCW 82.02.090. Words used in this title and defined in RCW 82.02.090 shall have the same meaning assigned in RCW 82.02.090 unless a more specific definition is contained herein.

“Average assessed value” means the average assessed value for each dwelling unit type within the Bellingham school district.

“Boeckh Index” means the current construction trade index of construction costs for each school type.

“Building permit” means the permit required for new construction and additions pursuant to BMC Title 17. As used herein, this shall not be deemed to include permits required for remodeling, rehabilitation or other improvements to an existing structure or rebuilding a damaged or destroyed structure, provided there is no increase in the resulting number of dwelling units.

“Capital facilities” means school facilities identified in the district’s six-year school capital facilities plan that are “system improvements” as defined by the State Growth Management Act as opposed to localized “project improvements.”

“City” means the city of Bellingham.

“Council” means the Bellingham city council.

“Department” means the city of Bellingham planning and community development department.

“Developer” means the proponent of a development activity, such as any person or entity who owns or holds purchase options or other development control over property for which development activity is proposed.

“Development” means, for the purposes of this chapter, all single-family subdivisions (short and preliminary/final plats), condominium and multifamily residential development, including planned residential development, and all multifamily structures which require building permits, but excluding remodel or renovation permits which do not result in additional dwelling units.

“Development activity” means any residential construction or expansion of a building, structure or use of land, or any other change in use of a building, structure, or land that creates additional demand and need for school facilities, but excluding remodeling or renovation projects which do not result in additional dwelling units. Also excluded from this definition is “housing for older persons” as defined by 42 USC 3607, when guaranteed by a restrictive covenant.

“Development approval” means any written authorization from the city that authorizes the commencement of a development activity.

“Director” means the city’s planning and community development director or the planning director’s designee.

“District” means the Bellingham School District No. 501.

“District property tax levy rate” means the Bellingham school district’s current capital property tax rate per $1,000 of assessed value.

“Duplex dwelling units” means any residential building containing two separate dwelling units. For purposes of calculating school impact fees to correctly mitigate the impact of new development, each duplex building shall be considered as two single-family dwelling units.

“Encumbered” means school impact fees identified by the district to be committed as part of the funding for capital facilities for which the publicly funded share has been assured, development approvals have been sought or construction contracts have been let.

“Estimated facility construction cost” means the planned costs of new schools or the actual construction costs of schools of the same grade span recently constructed by the district, including on-site and off-site improvement costs. If the district does not have this cost information available, construction costs of school facilities of the same or similar grade span within another district are acceptable.

“Facility design capacity” means the number of students each school type is designed to accommodate, based on the standard of service as determined by the district.

“Growth Management Act/GMA” means the Growth Management Act, Chapter 17, Laws of the State of Washington of 1990, First Executive Session, as now in existence or as hereafter amended.

“Interest rate” means the current interest rate as stated in the Bond Buyer Twenty Bond General Obligation Bond Index.

“Interlocal agreement” means the 1999 agreement between the city and the district concerning collection and handling of school impact fees.

“Land cost per acre” means the estimated average land acquisition cost per acre (in current dollars) based on recent school site acquisition costs, comparisons of comparable site acquisition costs in other districts, or the average assessed value per acre of properties comparable to school sites located within the district.

“Low income housing” means the city’s definition of low income housing as set forth in the current city of Bellingham consolidated plan (or successor thereto).

“Multifamily dwelling unit” means any residential building containing three or more dwelling units.

“Permanent facilities” means school facilities of the district with a fixed foundation.

“Relocatable facilities” means factory-built structures, transportable in one or more sections, that are designed to be used as education spaces and are needed to prevent the over building of school facilities, to meet the needs of service areas within a district, or to cover the gap between the time that families move into new residential developments and the date that construction is completed on permanent school facilities.

“Relocatable facilities cost” means the total cost, based on actual costs incurred by the district, for purchasing and installing portable classrooms.

“Relocatable facilities student capacity” means the rated capacity for a typical portable classroom used for a specified grade span.

“School capital facilities plan” or “school CFP” means the Bellingham school district’s six-year plan for capital facility improvements adopted by the school board consisting of those elements required by BMC 19.08.040 and meeting the requirements of the GMA.

“School impact fee” means a payment of money imposed upon development as a condition of development. The school impact fee does not include a reasonable permit fee, an application fee, the administrative fee for collecting and handling impact fees, or the cost of reviewing independent fee calculations.

“Single-family dwelling unit” means any attached or detached residential dwelling unit designed for occupancy by one or two families or households, including mobile homes. For purposes of this chapter and to correctly mitigate the impact of new development, duplex buildings are classified as two single-family dwelling units.

“Standard of service” means the standard adopted by the district which identifies the program year, the class size by grade span and taking into account the requirements of students with special needs, the number of classrooms, the types of facilities the district believes will best serve its student population, and other factors as identified in the district’s capital facilities plan. The district’s standard of service shall not be adjusted for any portion of the classrooms housed in relocatable facilities which are used as transitional facilities or from any specialized facilities housed in relocatable facilities.

“State match percentage” means the proportion of funds that are provided to the district for specific capital projects from the state’s common school construction fund. These funds are disbursed based on a formula which calculates district assessed valuation per pupil relative to the whole state assessed valuation per pupil to establish the maximum percentage of the total project eligible to be paid by the state.

“Student factor” or “student generation rate” means the number of students of each grade span (elementary, middle school, high school) that the district determines are typically generated by different dwelling unit types within the district. The Bellingham school district will use a survey or statistically valid methodology to derive the specific student generation rate. [Ord. 2015-12-050 § 2 (Exh. B); Ord. 2009-12-086; Ord. 2006-03-022].

19.08.040 School district eligibility.

A. School Capital Facilities Plan Required. The Bellingham school district shall be eligible to receive school impact fees upon adoption by the city council of a six-year school capital facilities plan. This action will also constitute adoption by the city of the schedule of school impact fees specified in such facilities plan. The district’s plan shall meet the applicable requirements of the State Growth Management Act.

B. Expiration of District Plan. For purposes of school impact fee eligibility, the district’s school CFP shall expire on December 31, 2021, or when an updated plan meeting the requirements of the GMA is adopted by the city council, whichever date first occurs.

C. Revising the School Facilities Plan (CFP).

1. The school district may initiate revisions to the school CFP or fee schedule prior to the 2021 expiration date. The revised plan shall first be approved by the school board and then transmitted to the city. The district’s revised plan will then be considered by the city council as part of the city’s annual comprehensive plan amendment process, unless the school board of the district declares, and the city finds, that an emergency exists.

2. The Bellingham city council may, by resolution, recommend that the district initiate a review of the school CFP or impact fee schedule prior to the expiration date.

3. The school capital facilities plan may include revised data for the impact fee formula and/or calculations, and a corresponding modification to the fee schedule. [Ord. 2015-12-050 § 2 (Exh. B); Ord. 2009-12-086; Ord. 2006-03-022].

19.08.050 School facilities plan requirements and procedures.

A. Minimum Requirements for the District’s School Capital Facilities Plan. To be eligible for school impact fees, the district must submit a six-year school CFP to the city pursuant to the procedure established by this chapter. The plan shall contain data and analysis necessary and sufficient to meet the requirements of the State GMA and Chapter 82.02 RCW. The plan must provide sufficient detail to allow computation of the fees according to the formula contained in the school CFP.

B. Council Adoption. Following receipt of the district’s school CFP or amendment thereto, the city council shall schedule a public hearing to consider adoption or amendment of said plan as part of the city’s annual comprehensive plan amendment process.

C. If an updated school facilities plan has not been adopted by the city council prior to the existing plan’s expiration date due to the district’s failure to submit an updated plan, the district shall not be eligible to receive school impact fees until the updated plan has been adopted by the council. [Ord. 2015-12-050 § 2 (Exh. B); Ord. 2009-12-086; Ord. 2006-03-022].

19.08.060 School impact fee.

A. Fee Required. Each development activity, as a condition of approval, shall be subject to the school impact fee established pursuant to this title. The school impact fee shall be calculated in accordance with the formula established in the school CFP adopted by city council and referenced in the Bellingham comprehensive plan. The school impact fee due and payable shall be as shown in the school CFP.

B. Impact Fee Schedule. The school impact fees specified in the district’s school capital facilities plan and adopted by the city council shall constitute the city’s schedule of school impact fees. The planning and community development department and the school district shall, for the convenience of the public, keep available an information sheet summarizing the schedule of school impact fees applicable throughout the city.

C. Service Areas Established. For purposes of calculating and imposing school impact fees for various land use categories per unit of development, the geographic boundary of the Bellingham school district constitutes a separate service area.

D. Impact Fee Limitations.

1. School impact fees shall be imposed for district capital facilities that are reasonably related to the development under consideration, shall not exceed a proportionate share of the costs of system improvements that are reasonably related to the development, and shall be used for system improvements that will reasonably benefit the new development.

2. School impact fees must be expended or encumbered for a permissible use within 10 years of receipt by the district.

3. To the extent permitted by law, school impact fees may be collected for capital facilities costs previously incurred to the extent that new growth and development will be served by the previously constructed capital facilities; provided, that school impact fees shall not be imposed to make up for any existing system deficiencies.

4. A developer required to pay a fee pursuant to RCW 43.21C.060 for school facilities shall not be required to pay a school impact fee pursuant to RCW 82.02.050 through 82.02.090 and this title for the same facilities.

E. Fee Determination.

1. For nondiscretionary residential building permits, the applicability of school impact fees will be determined at the time of building permit application. The amount of the fee due shall be based on the fee schedule in effect at the time of permit application. Credit amounts and allocation of credits to be applied against the fees shall be determined by the district at the time of permit approval in accordance with subsection (F) of this section.

2. Residential development activities that are subject to discretionary review by the city such as long plats and planned developments shall include in the conditions of approval a determination of the project’s school impact fee obligation under this chapter. Said determination shall include any credits for in-kind contributions provided under subsection (F) of this section. Final determinations may be appealed pursuant to the procedures established in BMC 19.08.080.

3. In all cases, the amount of school impact fees shall be that which is in effect at the time of application for building permit. The fee shall be paid at building permit issuance. Payment of the school impact fee for single-family detached and attached residential construction may also be deferred as allowed per Chapter 19.10 BMC.

F. Credit for In-Kind Contributions.

1. A developer may request, and the district may grant a credit against school impact fees otherwise due under this title for the value of any dedication of land, improvements to, or new construction of any capital facilities identified in the district’s school facilities plan provided by the developer. Such requests must be accompanied by supporting documentation of the estimated value of such in-kind contributions. All requests must be submitted to the district in writing prior to the city’s determination under subsection (E) of this section.

2. Where the district determines that a development activity is eligible for a credit for a proposed in-kind contribution, it shall provide the department and the developer with a letter setting forth the justification for and dollar amount of the credit, the legal description of any dedicated property, and a description of the development activity to which the credit may be applied. The value of any such credit may exceed the impact fee obligation of the development, but the district shall not be responsible for reimbursing the developer for the difference.

3. Where there is agreement between the developer and the school district concerning the value of proposed in-kind contributions, the developer’s eligibility for a credit, and/or the amount of any credit, the director may (a) approve the request for credit and adjust the impact fee obligation accordingly, and (b) require that such contributions be made as a condition of development approval. Where there is disagreement between the developer and the district regarding the value of in-kind contributions, however, the director may render a decision that can be appealed by either party pursuant to the procedures in BMC 19.08.080.

4. For subdivisions, planned residential developments and other large-scale projects where credits for in-kind contributions are proposed or required, it may be appropriate or necessary to establish the value of the credit on a per-unit basis as a part of the development approval. Such credit values will then be recorded as part of the plat or other instrument of approval and will be used in determining the fee obligation, if any, at the time of building permit application for the development activity. In the event that such credit value is greater than the impact fee in effect at the time of permit application, the fee obligation shall be considered satisfied.

G. SEPA Mitigation and Other Review.

1. The city shall review development proposals and development activity permits pursuant to all applicable state and local laws and regulations, including the State Environmental Policy Act (Chapter 43.21C RCW), the State Subdivision Law (Chapter 58.17 RCW), and the applicable sections of the Bellingham Municipal Code. Following such review, the city may condition or deny development approval as necessary or appropriate to mitigate or avoid significant adverse impacts to school services and facilities, to assure that appropriate provisions are made for schools, school grounds, and safe student walking conditions, and to ensure that development is compatible and consistent with the district’s services, facilities and capital facilities plan.

2. Impact fees required by this title for development activity, together with compliance with development regulations and other mitigation measures offered or imposed at the time of development review and development activity review, shall constitute adequate mitigation for all of a development’s specific adverse environment impacts on the school system for the purposes of BMC Title 16. Nothing in this chapter prevents a determination of significance from being issued, the application of new or different development regulations, and/or requirements for additional environmental analysis, protection, and mitigation measures to the extent required by applicable law. [Ord. 2016-08-031 § 4; Ord. 2015-12-050 § 2 (Exh. B); Ord. 2009-12-086; Ord. 2006-03-022].

19.08.070 Impact fee accounting.

A. Collection and Transfer of Fees.

1. School impact fees shall be due and payable to the city at the time of issuance of building permits for all development activities.

2. The district shall establish an interest-bearing account separate from all other district accounts in which to deposit the impact fees. The city will remit to the district all impact fees collected, with interest. The district shall deposit all impact fees received from the city in the impact fee account.

3. The district shall institute a procedure for the disposition of impact fees and providing for annual reporting to the city that demonstrates compliance with the requirements of RCW 82.02.070, and other applicable laws.

B. Use of Funds.

1. School impact fees may be used by the district only for capital facilities that are reasonably related to the development for which they were assessed and may be expended only in conformance with the district’s adopted school facilities plan.

2. In the event that bonds or similar debt instruments are issued for the advance provision of capital facilities for which school impact fees may be expended, and where consistent with the provisions of the bond covenants and state law, school impact fees may be used to pay debt service on such bonds or similar debt instruments to the extent that the capital facilities provided are consistent with the requirements of this title.

3. The responsibility for assuring that school impact fees are used for authorized purposes rests with the district. All interest earned on a school impact fee account must be retained in the account and expended for the purpose or purposes for which the school impact fees were imposed, subject to the provisions of subsection (C) of this section.

4. The district shall provide the city an annual report showing the source and the amount of school impact fees received by the district and the capital facilities financed in whole or in part with those school impact fees.

C. Refunds.

1. School impact fees not spent or encumbered within 10 years after they were collected shall, upon receipt of a proper and accurate claim, be refunded, together with interest, to the then current owner of the property. In determining whether school impact fees have been encumbered, impact fees shall be considered encumbered on a first in, first out basis. At least annually, the city, based on the annual report received from the district pursuant to subsection (B)(4) of this section and shall give notice to the last known address of potential claimants of any funds, if any, that it has collected that have not been spent or encumbered. The notice will state that any persons entitled to such refunds may make claims.

2. Refunds provided for under this section shall be paid only upon submission of a proper claim pursuant to city claim procedures. Such claims must be submitted to the director within one year of the date the right to claim the refund arises, or the date of notification provided for above, whichever is later. [Ord. 2009-12-086; Ord. 2006-03-022].

19.08.080 Adjustments, waivers, appeals and arbitration.

A. Administrative Adjustment of Fee Amount.

1. An applicant for a building permit or the school district may, within 21 days of acceptance by the city of a complete building permit application, submit a letter to the director requesting an adjustment to the impact fees imposed by this title. The director may adjust the amount or waive the entire fee, in consideration of studies and data submitted by the developer and the district, if one of the following circumstances exists:

a. It can be demonstrated that the school impact fee assessment was incorrectly calculated;

b. Unusual circumstances of the development activity demonstrate that application of the school impact fee to the development would be unfair or unjust;

c. A credit for in-kind contributions by the developer, as provided for under BMC 19.08.060(F), is warranted;

d. Any other credit specified in RCW 82.02.060(1)(b) may be warranted.

2. Upon application by the owner, a partial exemption of not more than 80 percent of school impact fees, with no explicit requirement to pay the exempted portion of the fee from public funds, may be granted to a low-income housing development, as defined below:

a. The director of planning and community development, after approval by the Bellingham School District, may grant an exemption to a low-income housing project listed in an annual consolidated action plan approved by city council.

b. The city council, after approval by the Bellingham School District, may grant an exemption to a low-income housing project not included in an annual consolidated action plan.

c. The decision of the director of planning and community development or the city council, as applicable, to grant, partially grant or deny an exemption shall be based on the public benefit of the specific project, the extent to which the applicant has sought other funding sources, the financial hardship to the project of paying the impact fees, the impacts of the project on school facilities and services, and the consistency of the project with adopted city plans and policies relating to low-income housing.

d. An exemption granted under this subsection must be conditioned upon requiring the developer to record a covenant approved by the director of planning and community development that prohibits using the property for any purpose other than for low-income housing. At a minimum, the covenant must address price restrictions and household income limits for the low-income housing, and require that, if the property is converted to a use other than for low-income housing as defined in the covenant, the property owner must pay the applicable impact fees in effect at the time of any conversion. Covenants required by this subsection must be recorded with the Whatcom County auditor.

e. “Low-income housing” means housing with a monthly housing expense that is no greater than 30 percent of 80 percent of the median family income adjusted for family size, for Bellingham, as reported by the United States Department of Housing and Urban Development.

3. To avoid delay pending resolution of the adjustment or appeal, school impact fees may be paid under protest in order to obtain a development approval.

4. Failure to exhaust this administrative remedy shall preclude appeals of the school impact fee pursuant to subsection (B) of this section.

B. Appeals of Decisions – Procedure.

1. The director’s final impact fee determination may be appealed to the hearing examiner under the provisions of Chapter 2.56 BMC. The appeal provisions of Chapter 16.20 BMC shall govern appeals of mitigation requirements imposed pursuant to this chapter.

2. At the hearing, the appellant shall have the burden of proof, which shall be met by a preponderance of the evidence. The impact fee may be modified upon a determination that it is proper to do so based on the application of the criteria contained in subsection (A) of this section. Appeals shall be limited to application of the impact fee provisions to the specific development activity and the provisions of this title shall be presumed valid.

C. Arbitration of Disputes. With the consent of the developer and the district, a dispute regarding imposition or calculation of a school impact fee may be resolved by arbitration. [Ord. 2015-07-029 § 3; Ord. 2009-04-019; Ord. 2006-03-022].