Chapter 3.63
SCHOOL IMPACT FEES

Sections:

3.63.010    Authority.

3.63.020    Definitions.

3.63.030    Exemptions.

3.63.040    Interlocal agreement between the City and District.

3.63.050    Submission of District capital facilities plan and data.

3.63.060    Annual council review.

3.63.070    Impact fee program elements.

3.63.080    Fee calculations – Application fee.

3.63.085    Deferral of single-family residential impact fees.

3.63.090    Maintenance of fees collected.

3.63.100    Assessment and collection of impact fees.

3.63.110    Determination of the fee, adjustments, exceptions and appeals.

3.63.120    Impact fee accounts and refunds.

3.63.010 Authority.

The ordinance codified in this chapter is adopted as an official control to implement Issaquah’s comprehensive plan policies, the Growth Management Act, RCW 82.02.050 through 82.02.100; and the State Subdivision Act, Chapter 58.17 RCW. This chapter is also necessary to address identified impacts of new development on schools, in order to protect the public health, safety and welfare. (Ord. 2074 § 2, 1995).

3.63.020 Definitions.

For purposes of this chapter, the following terms shall have the indicated meanings:

A. “Capacity” means the number of students the District’s facilities can accommodate District-wide, based on the District’s standard of service, as determined by the District.

B. “Capital facilities plan” means the District’s facilities plan adopted by the school board consisting of:

1. A forecast of future needs for school facilities based on the District’s enrollment projections;

2. An identification of additional demands placed on existing public facilities by new development;

3. The long-range construction and capital improvement projects of the District;

4. The schools under construction or expansion;

5. The proposed locations and capacities of expanded or new school facilities;

6. An inventory of existing school facilities, including permanent, transitional and relocatable facilities;

7. At least a 6-year financing component, updated as necessary to maintain at least a 6-year forecast period, for financing needed for school facilities within projected funding levels, and identifying sources of financing for such purposes, including bond issues authorized by the voters;

8. An identification of deficiencies in school facilities serving the student populations and the means by which existing deficiencies will be eliminated within a reasonable period of time; and

9. Any other long-range projects planned by the District.

C. “City” means the City of Issaquah.

D. “Classrooms” means educational facilities of the District required to house students for its basic educational program. The classrooms are those facilities the District determines are necessary to best serve its student population. Specialized facilities as identified by the District, including but not limited to gymnasiums, cafeterias, libraries, administrative offices, and child care centers, shall not be counted as classrooms.

E. “Construction cost per student” means the estimated cost of construction of a permanent school facility in the District for the grade span of school to be provided, as a function of the District’s design standard per grade span.

F. “Design standard” means the space required, by grade span and taking into account the requirements of students with special needs, which is needed in order to fulfill the educational goals of the District as identified in the District’s capital facilities plan.

G. “District” means the Issaquah School District.

H. “Developer” means the person or entity who owns or holds purchase options or other development control over property for which development activity is proposed.

I. “Development activity” means any construction or expansion of a residential building, structure or use, any change in use of a residential building or structure, or any change in the use of land that creates additional demand for school facilities where such activity requires approval or issuance of a plat, short plat, cluster development, site development permit, residential building permit, mobile home permit, or mobile home park site plan.

J. “Elderly” means a person aged 62 or older.

K. “Encumbered” means impact fees identified by the District as being committed as part of the funding for a school facility for which the publicly funded share has been assured or building permits sought or construction contracts let.

L. “Interlocal agreement” means the agreement between the District and the City, governing the operation of the school impact fee program and describing the relationship, duties and liabilities of the parties.

M. “Grade span” means the categories into which the District groups its grade of students; i.e., elementary, middle or junior high school, and high school.

N. “Impact fee” means a payment of money imposed upon development as a condition of development approval to pay for school facilities needed to serve new growth and development, that is reasonably related to the new development that creates additional demand and need for public facilities, that is a proportionate share of the cost of the public facilities, and that is used for facilities that reasonably benefit the new development. “Impact fee” does not include a reasonable permit or application fee.

O. “Impact fee schedule” means the table of impact fees to be charged per unit of development, computed by the formula adopted under this chapter, indicating the standard fee amount per dwelling unit that shall be paid as a condition of residential development within the City.

P. “Permanent facilities” means facilities of the District with a fixed foundation that are not relocatable facilities.

Q. “Relocatable facilities” means any factory-built structure, transportable in 1 or more sections that is designed to be used as an education space and is needed to prevent the overbuilding of school facilities, to meet the needs of service areas within the 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.

R. “Relocatable facilities cost per student” means the estimated cost of purchasing and siting a relocatable facility in the District for the grade span of school to be provided, as a function of the District’s design standard per grade span.

S. “Site cost per student” means the estimated cost of a site in the District for the grade span of school to be provided, as a function of the District’s design standard per grade span.

T. “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 by the District. 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 any other specialized facilities housed in relocatable facilities.

U. “Student factor” means the number derived by the District to describe how many students of each grade span are expected to be generated by a dwelling unit. Student factors shall be based on District records of average actual student generated rates for new developments constructed over a period of not more than 5 years prior to the date of the fee calculation; provided, that if such information is not available in the District, data from adjacent Districts, or Districts with similar demographics or County-wide averages may be used. Student factors must be updated on an annual basis, and separately determined for single-family and multifamily dwelling units and for grade spans.

V. “Transitional facilities” means those school facilities that are being used pending the construction of permanent facilities; provided, that the necessary financial commitments are in place to construct the permanent facilities. (Ord. 2214 § 1, 1998; Ord. 2074 § 3, 1995).

3.63.030 Exemptions.

The following development activities do not create any additional school impacts and are exempt from the requirements of this chapter:

A. Reconstruction, remodeling or construction of the following facilities, subject to the recording of a covenant or recorded declaration of restrictions precluding use of the property for other than the exempt purpose; provided, that if the property is used for a nonexempt purpose, then the school impact fees then in effect shall be paid.

1. Shelters or dwelling units for temporary placement, which provide housing to persons on a temporary basis for not more than 4 weeks.

2. Construction or remodeling of transitional housing facilities or dwelling units that provide housing to persons on a temporary basis for not more than 24 months, in connection with job training, self-sufficiency training and human services counseling, the purpose of which is to help persons make the transition from homelessness to placement in permanent housing.

3. Any form of housing for the elderly, including nursing homes, retirement centers, and any type of housing units for persons age 55 and over, which have recorded covenants or recorded declaration of restrictions precluding school-aged children as residents in those units.

B. Low, moderate or mid-moderate income affordable housing with a recorded lien, covenant, or other contractual provision consistent with subsection (B)(1) of this section. For purposes of this subsection:

Affordable housing: A dwelling unit reserved for occupancy by eligible households and having housing expenses no greater than 30 percent of a given percent of the King County median household income, adjusted for household size, as follows:

Low income affordable housing: Renter-occupied housing affordable to a household earning 50 percent of the King County median income, adjusted for household size, or owner-occupied housing affordable to a household earning 60 percent of King County median income, adjusted for household size.

Mid-moderate income affordable housing: Renter-occupied housing affordable to a household earning 70 percent of the King County median income, adjusted for household size, or owner-occupied housing affordable to a household earning 80 percent of King County median income, adjusted for household size.

Moderate income affordable housing: Renter or owner-occupied housing affordable to a household earning 80 percent of the King County median income, adjusted for household size.

The amount of the school impact fees not collected from low, moderate or mid-moderate income affordable housing developments shall be paid from public funds other than impact fee accounts. In no event shall this subsection be construed to require the City to provide any funds for school impact fees not collected.

1. As a condition of receiving an exemption under this subsection, the owner shall execute and record in King County’s real property title records a City-drafted lien, covenant, or other contractual provision against the property that provides that the proposed housing unit or development will continue to be used for low, moderate or mid-moderate income affordable housing. In the event that the property does not comply with the affordability requirements of the covenant then the owner shall pay a school impact fee based upon the schedule then in effect. The lien, covenant, or other contractual provision shall run with the land and apply to subsequent owners and assigns in the event that the housing unit(s) are exempted.

2. Any request for an exemption under this subsection shall be made prior to issuance of a building permit. If a building permit is not required for the development, then the exemption request shall be made when the first development permit is applied for. Any request not made when required by this subsection shall be deemed waived.

3. The Issaquah School District shall pay or bear the cost of the impact fees that are not collected pursuant to this exemption.

C. Rebuilding of legally established dwelling unit(s) destroyed or damaged by fire, flood, explosion, act of God or other accident or catastrophe, or remodeling of existing legally established dwelling unit(s); provided, that such rebuilding takes place within a period of 1 year after destruction, and so long as no additional dwelling units are created.

D. Condominium projects in which existing dwelling units are converted into condominium ownership and where no new dwelling units are created.

E. Any development activity that is exempt from the payment of an impact fee pursuant to RCW 82.02.100, due to mitigation of the same system improvement under the State Environmental Policy Act.

F. Any development activity for which school impacts have been mitigated pursuant to a condition of plat approval to pay fees, dedicate land or construct or improve school facilities, unless the condition of the plat approval provides otherwise; provided, that the condition of the plat approval predates the effective date of fee imposition as provided in IMC 3.63.070(C).

G. Any development activity for which school impacts have been mitigated pursuant to a voluntary agreement entered into with the District to pay fees, dedicate land or construct or improve school facilities, unless the terms of the voluntary agreement provide otherwise; provided, that the agreement predates the effective date of fee imposition as provided in IMC 3.63.070(C).

H. Accessory Units. A development permit for an accessory unit shall not be assessed a school impact fee. (Ord. 2839 § 1, 2018; Ord. 2746 § 6 (Exh. C), 2015; Ord. 2529 §§ 2, 3, 2008; Ord. 2074 § 4, 1995).

3.63.040 Interlocal agreement between the City and District.

As a condition of the City’s authorization and adoption of a school impact fee ordinance, the City and District shall enter into an interlocal agreement governing the operation of the school impact fee program, and describing the relationship and liabilities of the parties thereunder. (Ord. 2074 § 5, 1995).

3.63.050 Submission of District capital facilities plan and data.

A. On an annual basis, the District shall submit the following materials to the City Council:

1. The District’s capital facilities plan (as defined in IMC 3.63.020 herein) and adopted by the school board;

2. The District’s enrollment projections over the next 6 years, its current enrollment and the District’s enrollment projections and actual enrollment from the previous year;

3. The District’s standard of service;

4. The District’s overall capacity over the next 6 years, which shall take into account the available capacity from school facilities planned by the District but not yet built and be a function of the District’s standard of service as measured by the number of students which can be housed in District facilities;

5. An inventory of the District’s existing facilities.

B. To the extent that the District’s standard of service identifies a deficiency in its existing facilities, the District’s capital facilities plan must identify the sources of funding other than impact fees, for building or acquiring the necessary facilities to serve the existing student population in order to eliminate the deficiencies within a reasonable period of time.

C. Facilities to meet future demand shall be designed to meet the adopted standard of service. If sufficient funding is not projected to be available to fully fund a capital facilities plan which meets the adopted standard of service, the District’s capital facilities plan should document the reason for the funding gap, and identify all sources of funding that the District plans to use to meet the adopted standard of service.

D. The District shall also submit an annual report to the City Council showing the capital improvements which were financed in whole or in part by the impact fees.

E. In its development of the financing plan component of the capital facilities plan, the District shall plan on a 6-year horizon and shall demonstrate its best efforts by taking the following steps:

1. Establish a 6-year financing plan, and propose the necessary bond issues and levies required by and consistent with that plan and as approved by the school board consistent with RCW 28A.53.020, 84.52.052 and 84.52.056 as amended; and

2. Apply to the state for funding, and comply with the state requirements for eligibility to the best of the District’s ability. (Ord. 2074 § 6, 1995).

3.63.060 Annual council review.

On at least an annual basis, the City Council shall review the information submitted by the District pursuant to IMC 3.63.050(A) herein. The review shall occur in conjunction with any update of the capital facilities plan element of the City’s comprehensive plan. (Ord. 2074 § 7, 1995).

3.63.070 Impact fee program elements.

A. The City shall impose impact fees on every development activity in the City for which a fee schedule has been established.

B. Any impact fee imposed shall be reasonably related to the impact caused by the development and shall not exceed a proportionate share of the cost of school facilities that are reasonably related to the new development. The impact fee formula shall account in the fee calculation for future revenues the District will receive from the development.

C. The impact fee shall be based on the capital facilities described in the capital facilities plan developed by the District and approved by the School Board, and adopted by reference as part of the capital facilities element of the City’s comprehensive plan for the purpose of establishing the fee program. (Ord. 2855 § 1, 2018; Ord. 2074 § 8, 1995).

3.63.080 Fee calculations – Application fee.

A. The fee shall be calculated and assessed at building permit issuance, unless otherwise specified on a final plat. The fee shall be based generally on the formula set forth in the adopted Issaquah School District capital facilities plan, but the Issaquah City Council may impose a greater or lesser fee than the formula may otherwise provide in order to ensure that such fees reflect a proportionate share of the cost of school facilities reasonably related to new development in the City.

B. Separate fees shall be calculated for single-family and multifamily types of dwelling units, and separate student generation rates must be determined by the District for each type of dwelling unit. For the purpose of this chapter, mobile homes shall be treated as single-family dwellings and duplexes shall be treated as multifamily dwellings.

C. The fee shall be calculated on the basis of a District-wide service area, using the appropriate factors and data to be supplied by the District, as indicated in the adopted Issaquah School District capital facilities plan. The fee calculations shall also be made on the basis of a District-wide service area to assure maximum utilization of all school facilities in the District used currently or within the last 2 years for instructional purposes. The fee shall be uniform for each single-family type and multifamily type of new development occurring within the boundaries of the City of Issaquah.

D. Applications for a change of use shall receive credit based on the existing use. This credit is calculated by deducting the fee amount of the existing use from the fee of the proposed use.

E. The formula used to calculate the fee shall provide a credit for the anticipated tax contributions that would be made by the development based on historical levels of voter support for bond issues in the District.

F. The formula shall also provide for a credit for school facilities or sites actually provided by a developer which the District finds acceptable.

G. The City may also impose an application fee to cover the reasonable costs of administration of the impact fee program. The application fee shall be assessed and collected on the date a complete application is filed for approval or issuance of a final plat, final short plat, a cluster development, site development permit, residential building permit, mobile home permit, or mobile home park site plan, where the application fee for the lot or unit at issue has not been previously paid. (Ord. 2855 § 2, 2018; Ord. 2523 § 2, 2008; Ord. 2214 § 2, 1998; Ord. 2074 § 9, 1995).

3.63.085 Deferral of single-family residential impact fees.

A. An applicant for a building permit for a single-family detached or attached residence may request a deferral of the full impact fee payment until the date of final inspection or 18 months from the date of building permit issuance, whichever occurs first. Deferral of impact fees shall be granted under the conditions set forth in this section.

B. An applicant for deferral must request the deferral at the time of building permit application and must receive the deferral no later than the time of issuance of a building permit. Any request not so made shall be deemed waived.

C. To receive a deferral, an applicant must:

1. Submit a separate application for deferral for each single-family detached or attached residence for which the applicant wishes to defer payment of the impact fees. Each application must be accompanied by the nonrefundable administrative fee established by the City Council in order to reimburse the City for all costs associated with the deferral.

2. Grant and record a deferred impact fee lien against the property in favor of the City in the amount of the deferred impact fee. The deferred impact fee lien must:

a. Be in a form approved by the City;

b. Be signed by all owners of the property, with all signatures acknowledged as required for a deed;

c. Include the legal description, tax account number, and address of the property;

d. Be recorded in King County;

e. Be binding on all successors in title after the recordation; and

f. Be junior and subordinate to 1 mortgage for the purpose of construction granted by the person who applied for the deferral of impact fees.

3. Notice shall be provided within a week of building permit issuance by posting each property using the following notice method:

a. 4-Foot by 4-Foot Board. The responsibility for posting the sign rests with the project applicant. The sign shall be designed as follows:

i. Size. 4-by-4-foot constructed of wood;

ii. Color. Yellow background, black lettering;

iii. Lettering Style. Helvetica or similar style; signs shall be prepared using templates or attachable letters. Hand-lettered signs are not acceptable;

iv. Content of Sign/Notice. The title shall be in 3-inch capital letters, and the remaining sign contents shall be in 1.5-inch upper and lower case (see Permit Center for diagram). The content must include:

(A) The title “NOTICE OF DEFERRED IMPACT FEES”;

(B) “City of Issaquah”;

(C) “Notice that these fees must be paid to the City by the Applicant before house can be occupied”;

(D) The name, address and telephone number of the applicant;

(E) The name, address and telephone number of the Development Services Department;

(F) Other information as the Director/Manager may determine to be necessary to adequately notify potential home owners of the pending requirement;

v. Location. The sign shall be installed:

(A) Midpoint on the street frontage from which the site is addressed or as otherwise directed by the Director/Manager;

(B) At either a location 10 feet back in from the property line or signs which are structurally attached to an existing building shall be exempt from the setback provision; provided, that no sign is located more than 10 feet back from the property line without approval from the Director/Manager; and

(C) The sign must be easily read from the surrounding vicinity and must not be visually obstructed in any way, including, but not limited to, obstruction by vegetation or any other obstruction;

vi. Installation. The sign must be secured to a 4-inch by 4-inch wood post, long enough to set the post 36 inches below grade and back fill with dirt (see Permit Center for diagram);

vii. Certification of Installation. The project applicant must notify the Permit Center that the sign has been posted to proper specifications by submitting a signed “Notification of Sign Installation” to the Permit Center before deferral of impact fees may occur (obtain such forms from the Permit Center);

viii. Maintenance and Signage Removal. The project applicant shall be required to maintain the sign and surrounding area in good condition until 14 days after the deferred impact fees have been paid to the City. Removal of the sign prior to the deferred impact fees being paid may invalidate or postpone any other decision-making or permit process. The sign must be removed by the project applicant no later than 30 days after the deferred impact fees have been paid to the City, and the post holes must be filled to prevent public injury.

D. The amount of the impact fees deferred shall be determined by the fees in effect at the time the applicant applies for a deferral.

E. The City shall withhold final inspection until the impact fees have been paid in full. No temporary certificate of occupancy (TCO) will be granted on a residence that is part of the deferral program. Upon receipt of final payment of impact fees deferred under this subsection, the City shall execute a release of the deferred impact fee lien for each single-family detached or attached residence for which the impact fees have been received. The applicant, or the property owner at the time of the release, shall be responsible for recording the lien release at his or her expense.

F. The extinguishing of a deferred impact fee lien by the foreclosure of a lien having priority does not affect the obligation of the applicant or the property owner to pay the impact fees as a condition of final inspection.

G. If impact fees are not paid in accordance with the deferral and in accordance with the terms and conditions provided in this section, the City may institute foreclosure proceedings in accordance with Chapter 61.12 RCW.

H. Each applicant for a single-family detached or attached residential construction permit, in accordance with his or her contractor registration number or other unique identification number, shall be entitled to annually receive deferrals for the first 20 single-family residential construction building permits. For purposes of this subsection, an “applicant” includes an entity that controls the applicant, is controlled by the applicant, or is under common control with the applicant. (Ord. 2771 § 1, 2016).

3.63.090 Maintenance of fees collected.

The impact fee and the application fee shall be collected by the City, and maintained in separate accounts. All school impact fees shall be paid to the District from the school impact fee account monthly. The City shall retain all application fees associated with the City’s administration of the impact fee program. (Ord. 2214 § 3, 1998; Ord. 2074 § 10, 1995).

3.63.100 Assessment and collection of impact fees.

A. Impact fees shall be imposed upon development activity in the City as follows:

1. $15,276 per single-family residential unit;

2. $4,399 per multifamily residential unit.

These fees may be collected by the City from any applicant where such development activity requires final plat, PUD approval, issuance of a residential building permit or a mobile home permit, and the fee for the lot or unit has not previously been paid.

B. For a plat applied for on or after the effective date of the ordinance codified in this chapter, 50 percent of the impact fees due on the plat shall be assessed at the time of final approval and collected from the applicant prior to the recording of the final plat, using the impact fee schedule in effect at the time of final plat approval. The balance of the assessed fee shall be allocated to the dwelling units in the project, and shall be collected when the building permits are issued, based on the fee schedule in effect at the time of building permit issuance. Residential developments proposed for short plats shall not be governed by this subsection, but shall be governed by subsection D of this section.

C. If on the effective date of the ordinance codified in this chapter a plat has already received preliminary approval, such plat shall not be required to pay 50 percent of the impact fees at the time of final approval, but the impact fees shall be assessed and collected from the lot owner at the time the residential building permits are issued, using the impact fee schedules then in effect at the time of building permit issuance. If on the effective date of the ordinance codified in this chapter an applicant has applied for preliminary plat approval, but has not yet received such approval, the applicant shall follow the procedures set forth in subsection B of this section.

D. For existing lots or lots not covered by subsection B of this section, for application for single-family and multifamily residential building permits, a site development permit, a cluster development permit or a short plat approval, the total amount of the impact fees shall be assessed and collected from the applicant when the building permit is issued, using the impact fee schedules in effect at the time of building permit issuance.

E. The City shall not grant final plat approval nor issue the required residential building permit unless and until the impact fees set forth in the impact fee schedule have been paid.

F. Any application for preliminary plat approval or multifamily development which has been approved subject to conditions requiring the payment of impact fees established pursuant to this chapter shall be required to pay the fee in accordance with the conditions of approval. (Ord. 2856 § 1, 2018; Ord. 2822 § 1, 2017; Ord. 2776 § 1, 2016; Ord. 2743 § 1, 2015; Ord. 2718 § 1, 2014; Ord. 2693 § 1, 2013; Ord. 2659 § 1, 2012; Ord. 2623 § 1, 2011; Ord. 2597 § 1, 2010; Ord. 2564 § 1, 2009; Ord. 2553 § 4 (Exh. B3), 2009; Ord. 2529 § 1, 2008; Ord. 2523 § 2, 2008; Ord. 2509 § 1, 2007; Ord. 2467 § 1, 2006; Ord. 2451 § 1, 2006; Ord. 2400 § 1, 2004; Ord. 2376 § 1, 2003; Ord. 2351 § 1, 2002; Ord. 2302 § 1, 2001; Ord. 2237 § 1, 1999; Ord. 2214 § 4, 1998; Ord. 2191 § 1, 1998; Ord. 2163 § 1, 1997; Ord. 2143 § 1, 1997; Ord. 2074 § 11, 1995).

3.63.110 Determination of the fee, adjustments, exceptions and appeals.

A. The City shall determine a developer’s impact fee, based upon the fee schedule adopted in IMC 3.63.100(A).

B. The fee amount established in the schedule shall be reduced by the amount of any payment previously made for the lot or development activity in question, either as a condition of approval or pursuant to a voluntary agreement.

C. Whenever a developer is granted approval subject to a condition that the developer actually provide a school facility acceptable to the District, the developer shall be entitled to a credit for the actual cost of providing the facility, against the fee that would be chargeable under the formula provided by this chapter. The cost of construction shall be estimated at the time of approval, but must be documented, and the documentation confirmed after the construction is completed to assure that an accurate credit amount is provided. If construction costs are less than the calculated fee amount, the difference remaining shall be chargeable as a school impact fee.

D. The standard impact fees may be adjusted, if one of the following circumstances exists; provided, that any discount used in the fee formula fails to adjust for the error in the calculation or fails to ameliorate for the unfairness of the fee:

1. The developer demonstrates that an impact fee assessment was improperly calculated; or

2. Unusual circumstances identified by the developer demonstrate that if the standard impact fee amount was applied to the development, it would be unfair or unjust.

E. In cases where a developer requests an independent fee calculation, adjustment exception or a credit pursuant to RCW 82.02.060(3), the City shall consult with the District and the District shall advise the City prior to the City making the final impact fee determination.

F. A developer may provide studies and data to demonstrate that any particular factor used by the District may not be appropriately applied to the development proposal.

G. Any appeal of the decision of the City with regard to fee amounts shall follow the process for the appeal of the underlying development application, as set forth in the Issaquah Municipal Code. Any errors in the formula identified as a result of the appeal should be referred to the Council for possible modification.

H. Impact fees may be paid under protest in order to obtain a permit or other approval of development activity. (Ord. 2855 § 3, 2018; Ord. 2771 § 2, 2016; Ord. 2074 § 12, 1995).

3.63.120 Impact fee accounts and refunds.

A. Impact fee receipts shall be earmarked specifically and retained in a special interest-bearing account established by the District solely for the District’s school impact fees. All interest shall be retained in the account and expended for the purpose or purposes for which impact fees were imposed. Annually, the District, based in part on its report prepared pursuant to IMC 3.63.050, shall prepare a report on the impact fee account showing the source and amount of all moneys collected, earned or received, and capital or system improvements that were financed in whole or in part by impact fees. The District shall submit a copy of this report to the City Council. The City shall maintain separate school impact fee and administration fee accounts pursuant to IMC 3.63.090, and shall prepare a report on the source and amount of all school impact fees collected and transferred to the District.

B. Impact fees for the District’s system improvements shall be expended by the District only in conformance with the capital facilities plan element of the comprehensive plan.

C. Impact fees shall be expended or encumbered by the District for a permissible use within 6 years of receipt by the District, unless there exists an extraordinary or compelling reason for fees to be held longer than 6 years. Such extraordinary or compelling reasons shall be identified to the City by the District in a written report. The City Council shall identify the District’s extraordinary and compelling reasons for the fees to be held longer than 6 years in the Council’s own written findings.

D. The current owner of property on which an impact fee has been paid may receive a refund of such fees if the impact fees have not been expended or encumbered within 6 years of receipt of the funds by the District on school facilities intended to benefit the development activity for which the impact fees were paid. In determining whether impact fees have been encumbered, impact fees shall be considered encumbered on a first in, first out basis. The District shall notify potential claimants by first-class mail deposited with the United States postal service addressed to the owner of the property as shown in the County tax records.

E. An owner’s request for a refund must be submitted to the District in writing within 1 year of the date the right to claim the refund arises or the date that notice is given, whichever date is later. Any impact fees that are not expended or encumbered by the District in conformance with the capital facilities plan within these time limitations, and for which no application for a refund has been made within this 1-year period, shall be retained and expended consistent with the provisions of this section. Refunds of impact fees shall include any interest earned on the impact fees.

F. Should the City seek to terminate any or all school impact fee requirements, all unexpended or unencumbered funds, including interest earned, shall be refunded to the current owner of the property for which a school impact fee was paid. Upon the finding that any or all fee requirements are to be terminated, the City shall place notice of such termination and the availability of the refunds in a newspaper of general circulation at least 2 times and shall notify all potential claimants by first-class mail addressed to the owner of the property as shown in the County tax records. All funds available for refund shall be retained for a period of 1 year. At the end of 1 year, any remaining funds shall be retained by the District, but must be expended by the District, consistent with the provisions of this section. The notice requirement set forth above shall not apply if there are no unexpended or unencumbered balances within the account or accounts being terminated.

G. A developer may request and shall receive a refund, including interest earned on the impact fees, when:

1. The developer does not proceed to finalize the development activity as required by statute or City Code including the Uniform Building Code; and

2. No impact on the District has resulted. “Impact” shall be deemed to include cases where the District has expended or encumbered the impact fees in good faith prior to the application for a refund. In the event that the District has expended or encumbered the fees in good faith, no refund shall be forthcoming. However, if within a period of 3 years, the same or subsequent owner of the property proceeds with the same or substantially similar development activity, the owner shall be eligible for a credit. The owner must petition the District and provide receipts of impact fees paid by the owner for a development of the same or substantially similar nature on the same property or some portion thereof. The District shall determine whether to grant a credit, and such determinations may be appealed by following the procedures set forth in IMC 3.63.110.

H. Interest due upon the refund of impact fees required by this section shall be calculated according to the average rate received by the District on invested funds throughout the period during which the fees were retained. (Ord. 2074 § 13, 1995).