Chapter 16.15
TRANSPORTATION IMPACT FEES
Sections:
16.15.010 Findings and authority.
16.15.030 Assessment of impact fees.
16.15.040 Independent fee calculations.
16.15.080 Establishment of impact fee account.
16.15.090 Authorization for interlocal agreements.
16.15.140 Existing authority unimpaired.
16.15.150 Option for deferred payment of impact fees.
16.15.010 Findings and authority.
The city council finds and determines that new development, including but not limited to new residential, commercial, retail, office, industrial and institutional development, in the city will create additional demand and need for public facilities (public streets and roads) in the city and finds that new growth and development should pay a proportionate share of the cost of new public facilities needed to serve the new growth and development. The city has conducted a study documenting the procedure for measuring the impact of new development on public facilities and has prepared rate calculations. The city council accepts the methodology and data contained in the rate calculations. Therefore, pursuant to Chapter 82.02 RCW, the city council adopts this chapter to assess impact fees for public facilities. (Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.020 Definitions.
The following terms shall have the following meanings unless the context clearly requires otherwise. Terms otherwise not defined herein shall be defined pursuant to RCW 82.02.090, or given their usual and customary meaning.
A. “Act” means the Growth Management Act, Chapter 36.70A RCW.
B. “Applicant” means the owner of real property according to the records of the King County department of records and elections, or the owner’s authorized agent.
C. “Building permit” means the official document or certification that is issued by the building department and that authorizes the construction, alteration, enlargement, conversion, reconstruction, remodeling, rehabilitation, erection, tenant improvement, demolition, moving or repair of a building or structure.
D. “Capital facilities” means the right-of-way facilities or improvements included in the capital facilities plan.
E. “Capital facilities plan” means the capital facilities plan element of the city’s comprehensive plan adopted pursuant to Chapter 36.70A RCW, as may be amended in the future.
F. “Certificate of occupancy” means the term as defined in the International Building Code, as adopted by the city. In the case of a change in use or occupancy of an existing building or structure that may not require a building permit, the term shall specifically include certificate of occupancy and for residential development, the final inspection.
G. “Department” means the department of community development.
H. “Director” means the director of the department of community development or the director’s designee.
I. “Encumbered” means to reserve, set aside or otherwise earmark the impact fees in order to pay for commitments, contractual obligations or other liabilities incurred for public facilities.
J. “Impact fee” means a fee imposed by the city on an applicant prior to issuance of a building permit, or a certificate of occupancy if a building permit is not required, pursuant to this chapter as a condition of granting the building permit, or certificate of occupancy permit if no building permit is required. The impact fee shall be assessed in order to pay for public facilities needed to serve new growth and development, and 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 fee, application fee, or the cost for reviewing independent fee calculations.
K. “Impact fee account” or “account” means the account established for the system improvements for which impact fees are collected. The account shall be established pursuant to this chapter, and shall comply with the requirements of RCW 82.02.070.
L. “Independent fee calculation” means the study or data submitted by an applicant to support the assessment of an impact fee other than the fee imposed in NMC 16.15.030.
M. “Interest” means the interest rate earned by local jurisdictions of the State of Washington Local Government Investment Pool, if not otherwise defined.
N. “Interlocal agreement” or “agreement” means a roads interlocal agreement, authorized in this chapter, by and between the city and other government agencies concerning the collection and expenditure of impact fees, or any other interlocal agreement entered by and between the city and another municipality, public agency or governmental body to implement the provisions of this chapter.
O. Repealed by Ord. 2015-530.
P. “Owner” means the owner of real property according to the records of the King County department of records and elections; provided, that if the real property is being purchased under a recorded real estate contract, the purchaser shall be considered the owner of the real property.
Q. “Project improvements” means site improvements and facilities that are planned and designed to provide service for a particular development or users of a project, and that are necessary for the use and convenience of the occupants or users of the project, and are not system improvements. No improvement or facility included in the capital facilities plan shall be considered a project improvement.
R. “Proportionate share” means that portion of the cost of public facility improvements that are reasonably related to the service demands and needs of new development.
S. “Public facilities” means publicly owned streets and roads of the city, including related sidewalk and streetscape improvements required by the city’s comprehensive plan and related development agreements.
T. “Residential” means housing, such as single-family dwellings, accessory dwelling units, apartments, condominiums, mobile homes and/or manufactured homes, intended for occupancy by one or more persons and not offering other services. For the purpose of this chapter, an accessory dwelling unit, as defined in NMC Title 18, is considered an adjunct to the associated single-family dwelling unit and is not charged a separate impact fee.
U. “Road” means a right-of-way which affords the principal means of access to abutting property, including avenue, place, way, drive, lane, boulevard, highway, street, and other thoroughfare, except an alley.
V. “System improvements” means public facilities included in the capital facilities plan which are designed to provide service to service areas within the community at large, in contrast to project improvements. (Ord. 2020-605 § 3 (Att. B); Ord. 2015-530 § 1; Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.030 Assessment of impact fees.
A. It is hereby assessed and the city shall collect transportation impact fees in the amount established in the Transportation Impact Fee Rate Analysis, March 2020, and its Appendix A, “Impact Fee Rate Table,” attached as Attachment A to the ordinance codified in this chapter and hereby incorporated by reference (“Attachment A”), from any applicant seeking a building permit from the city, or certificate of occupancy permit if a building permit is not required.
B. All impact fees shall be collected from the applicant prior to issuance of the building permit, or certificate of occupancy permit if no building permit is required, using the impact fee schedule then in effect or pursuant to an independent fee calculation accepted by the director pursuant to NMC 16.15.040.
C. The director shall establish the impact fee rate for a land use that is not listed on the schedule in Attachment A to the ordinance codified in this chapter. The applicant shall submit all information requested by the director for purposes of determining the impact fee rate pursuant to NMC 16.15.040. The cost per trip adopted in the schedule in Attachment A to the ordinance codified in this chapter shall be the basis for establishing the impact fee rate.
D. For a change in use of an existing building or dwelling unit, the impact fee shall be the applicable impact fee for the land use category of the new use, less any impact fee previously paid for the land use category of the prior use. For any change in use that includes an alteration, expansion, replacement or new accessory building, the impact fee shall be the applicable impact fee for the land use category of the new use, less any impact fee previously paid for the land use category of the prior use.
E. For building permits for mixed use developments, impact fees shall be imposed for the proportionate share of each land use based on the applicable measurement in the schedule in Attachment A to the ordinance codified in this chapter.
F. The building department shall not issue any building permit, or certificate of occupancy if no building permit is required, unless and until the impact fee has been paid.
G. The transportation impact fee rate established in Attachment A to the ordinance codified in this chapter shall be adjusted annually based on the Seattle Construction Cost Index (Seattle CCI) maintained by Mortenson (https://www.mortenson.com/cost-index/seattle), provided the impact fees shall never be reduced solely because of a decline in the Seattle CCI. The annual adjustment should occur in conjunction with the annual fee schedule update, typically at the first of the new year. (Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2010-430 § 3; Ord. 2010-421 § 3; Ord. 2004-299 § 1; Ord. 2000-232 § 1).
16.15.040 Independent fee calculations.
A. If, in the judgment of the director, none of the fee categories or fee amounts set forth in the schedule in Attachment A to the ordinance codified in this chapter accurately describes the impacts resulting from issuance of the proposed building permit, or certificate of occupancy if no building permit is required, the applicant shall provide to the director for review and evaluation an independent fee calculation, prepared by a traffic engineer approved by the director. The director may impose on the proposed building permit, or certificate of occupancy if no building permit is required, an alternative impact fee based on this calculation. With the independent fee calculation, the applicant shall pay to the department an administrative processing fee of one hour of staff time at the then-current rate established by the adopted city fee schedule.
B. If an applicant requests not to have the impact fees determined according to the schedule in Attachment A to the ordinance codified in this chapter, then the applicant shall submit to the director an independent fee calculation, prepared by a traffic engineer approved by the director and paid for by the applicant, for the building permit, or certificate of occupancy if no building permit is required. The independent fee calculation shall show the basis upon which it was made and shall include, but not be limited to, trip generation characteristics. With the request, the applicant shall pay to cover the costs of reviewing the independent fee calculation as follows: $350.00 per fee calculation, plus a deposit of $350.00 towards the city’s actual costs incurred in reviewing the independent fee calculation. If the city’s actual costs are lower than the deposit amount, the difference shall be remitted to the applicant.
C. While there is a presumption that the calculations set forth in the city’s rate calculations are correct, the director shall consider the documentation submitted by the applicant, but is not required to accept such documentation that the director reasonably deems to be inaccurate or not reliable, and may, in the alternative, require the applicant to submit additional or different documentation. The director is authorized to adjust the impact fee on a case-by-case basis based on the independent fee calculation, the specific characteristics of the building permit, or certificate of occupancy permit if no building permit is required, and/or principles of fairness.
D. Determinations made by the director pursuant to this section may be appealed to the hearing examiner under the procedures set forth in NMC 16.15.130. (Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.050 Exemptions.
A. The following building permit applications, or certificate of occupancy if no building permit is required, shall be exempt from impact fees:
1. Replacement of a structure with a new structure of the same use at the same site when the replacement occurs within 12 consecutive months of the demolition or destruction of the prior structure.
2. Replacement, alteration, expansion, enlargement, remodeling, rehabilitation or conversion of an existing dwelling unit where no additional units are created and the use is not changed.
3. Alteration of an existing nonresidential structure that does not increase the square footage or change the use.
4. Miscellaneous improvements, including but not limited to fences, walls, swimming pools, mechanical units, and signs.
5. Demolition or moving of a structure.
B. The director shall be authorized to determine whether a particular development for a proposed building permit, or certificate of occupancy if no building permit is required, falls within an exemption of this chapter. Determinations of the director shall be subject to the appeals procedures set forth in NMC 16.15.130. (Ord. 2020-605 § 3 (Att. B); Ord. 2015-530 § 2; Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.060 Credits.
A. An applicant may request a credit or credits for the value of dedicated land, improvements, or construction if the land and/or the facility constructed are included within the capital facilities plan or the director makes the finding that such land and/or facility would serve the goals and objectives of the capital facilities plan.
B. Each request for a credit or credits shall include a legal description of land donated, a detailed description of improvements or construction provided, and a legal description or other adequate description of the development to which the credit will be applied.
C. For each request for a credit or credits, the director shall determine the value of the dedicated land, improvements, or construction on a case-by-case basis. If the applicant disagrees with the director’s valuation, the applicant may submit an appraisal for the director’s consideration, prepared by a state-certified real estate appraiser who has an MAI or SRA designation from the Appraisal Institute, establishing the fair market value of the dedicated land, improvements, or construction. The applicant shall pay the cost of the appraisal.
D. After the director has determined the amount of the credit, the department shall include the determination, with issuance of the building permit, or occupancy permit if no building permit is required, a statement setting forth the dollar amount of the credit, the basis for the credit, where applicable, the description of the land donated to which the credit is applied and the date of the determination.
E. Any claim for credit must be made before payment of the impact fee and prior to issuance of the building permit, or certificate of occupancy if no building permit is required. Any claim not so made shall be deemed waived.
F. No credit shall be given for project improvements or right-of-way dedications for direct access improvements to and/or within the subject development.
G. Determinations made by the director pursuant to this chapter shall be subject to the appeals procedures set forth in NMC 16.15.130. (Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.070 Adjustments.
Pursuant to and consistent with the requirements of RCW 82.02.060, the city’s rate calculations have provided adjustments for past and future payments made or reasonably anticipated to be paid by the new development which are earmarked or pro-ratable to the same new system improvements that will serve the new development. The schedule in Attachment A to the ordinance codified in this chapter has been reasonably adjusted for taxes and other revenue sources that are anticipated to be available to fund system improvements. (Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.080 Establishment of impact fee account.
A. An impact fee account is established for the fees collected pursuant to this chapter and shall be entitled the “transportation impact fee account.” Impact fees shall be earmarked specifically and deposited in the special interest bearing account and shall be prudently invested in a manner consistent with the investment policies of the city. Funds withdrawn from this account shall be used in accordance with NMC 16.15.110. Interest earned on impact fees shall be retained in the account and expended for the purpose for which the impact fees were collected.
B. On an annual basis, the finance director shall provide a report to the council on the account showing the source and amount of all moneys collected, earned, or received, and system improvements that were financed in whole or in part by impact fees.
C. Impact fees shall be expended or encumbered within the time period established by RCW 82.02.070 (currently 10 years of receipt), as may be amended in the future, unless the council identifies in written findings an extraordinary and compelling reason or reasons for the city to hold the fees beyond the statutory time period. Under such circumstances, the council shall establish the period of time within which the impact fees shall be expended or encumbered. (Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.090 Authorization for interlocal agreements.
The city manager is authorized to execute, on behalf of the city, an interlocal agreement with other state and local governments for the collection, expenditure, and reporting of impact fees. (Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.100 Refunds.
A. If the city fails to expend or encumber the impact fees within the statutory time period established by RCW 82.02.070 (currently 10 years of receipt), as may be amended in the future, or such other time period established pursuant to NMC 16.15.080, the current owner of the property for which impact fees have been paid may receive a refund of the fee. In determining whether impact fees have been expended or encumbered, impact fees shall be considered expended or encumbered on a first in, first out basis.
B. The city shall notify potential claimants by first class mail deposited with the United States Postal Service at the last known address of such claimants.
C. Property owners seeking a refund of impact fees must submit a written request for a refund of the fees to the director within one year of the date the right to claim the refund arises or the date that notice is given, whichever is later.
D. Any impact fees for which no application for a refund has been made within the one-year period shall be retained by the city and expended on the appropriate public facilities.
E. Refunds of impact fees under this chapter shall include any interest earned on the impact fees by the city.
F. If the city terminates the impact fee program, all unexpended or unencumbered funds, including interest earned, shall be refunded pursuant to this chapter. The city shall publish notice of the termination and the availability of refunds in a newspaper of general circulation at least two times and shall notify all potential claimants by first class mail to the last known addresses of the claimants. All funds available for refund shall be retained for a period of one year after the second publication. At the end of one year, any remaining funds shall be retained by the city, but must be expended for the appropriate public facilities. This notice requirement shall not apply if there are no unexpended or unencumbered balances within the account.
G. The city shall also refund the impact fee paid plus interest to the current owner of property for which the impact fee had been paid, if the development is never completed or occupied; provided, that if the city expended or encumbered the impact fee in good faith prior to the application for a refund, the director may decline to provide the refund. If within a period of three years, the same or subsequent owner of the property proceeds with the same or substantially similar development, the owner can petition the director for an offset. The petitioner shall provide receipts of impact fees previously paid for a development of the same or substantially similar nature on the same property or some portion thereof. The director shall determine whether to grant an offset. The determination of the director may be appealed pursuant to the procedures in NMC 16.15.130. (Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.110 Use of funds.
A. Impact fees may be spent for system improvements, including but not limited to transportation planning, engineering design studies, land surveys, right-of-way acquisition, engineering, permitting, financing, administrative expenses, construction of streets and roads and related facilities such as curbs, gutters, sidewalks, bike lanes, storm drainage and installation of traffic signals, signs and street lights.
B. Impact fees may be used to recoup cost for system improvement previously incurred by the city to the extent that new development will be served by the previously constructed system improvements.
C. In the event that bonds or similar debt instruments are or have been issued for the advanced provision of system improvements, impact fees may be used to pay debt service on such bonds or similar debt instruments to the extent that system improvements provided are consistent with the requirements of this chapter and are used to serve the new development. (Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.120 Review of schedule.
A. The schedule in Attachment A to the ordinance codified in this chapter should be reviewed by the council no later than five years after the effective date of the ordinance codified in this chapter, and every five years thereafter.
B. The schedule in Attachment A to the ordinance codified in this chapter may be reviewed by the council as it deems appropriate in conjunction with the update of the capital facilities plan. (Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.130 Appeals.
A. An appeal of an impact fee imposed on a building permit, or certificate of occupancy if no building permit is required, may only be filed by the applicant of the subject property. An applicant may either file an appeal and pay the impact fee imposed by this chapter under protest, or appeal the impact fee before issuance of the building permit or certificate of occupancy if no building permit is required. No appeal may be filed after the impact fee has been paid and the building permit or certificate of occupancy has been issued.
B. An appeal shall be filed with the hearing examiner on the following determinations of the director:
1. The applicability of the impact fees to a given building permit or certificate of occupancy found in NMC 16.15.030 and 16.15.050;
2. The decision on an independent fee calculation in NMC 16.15.040;
3. The availability or value of a credit in NMC 16.15.060; or
4. Any other determination which the director is authorized to make pursuant to this chapter.
C. An appeal, in the form of a letter of appeal, along with the required appeal fee, shall be filed with the department for all determinations by the director, prior to issuance of a building permit, or certificate of occupancy if no building permit is required. The letter must contain the following:
1. A basis for and arguments supporting the appeal; and
2. Technical information and specific data supporting the appeal.
D. The fee for filing an appeal shall be in accordance with the adopted city fee schedule.
E. Within 28 days of the filing of the appeal, the director shall mail to the hearing examiner the following:
1. The appeal and any supportive information submitted by the appellant;
2. The director’s determination along with the record of the impact fee determination and, if applicable, the independent fee calculation; and
3. A memorandum from the director analyzing the appeal.
F. The hearing examiner shall review the appeal from the applicant, the director’s memorandum, and the record of determination from the director. No oral testimony shall be given, although legal arguments may be made. The determination of the director shall be accorded substantial weight.
G. The hearing examiner shall make findings of fact and conclusions of law regarding the decision. The hearing examiner may, so long as such action is in conformance with the provisions of this chapter, reverse or affirm, in whole or in part, or modify the determination of the director, and may make such order, requirements, decision or determination as ought to be made, and to that end shall have the powers which have been granted to the director by this chapter. The hearing examiner’s decision shall be final.
H. The hearing examiner shall distribute a written decision to the director and the appellant within 15 working days. (Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.140 Existing authority unimpaired.
Nothing in this chapter shall preclude the city from requiring the applicant for a building permit, or certificate of occupancy if no building permit is required, to mitigate adverse environmental impacts of a specific development pursuant to the State Environmental Policy Act, Chapter 43.21C RCW, based on the environmental documents accompanying the underlying development approval process, and/or Chapter 58.17 RCW, governing plats and subdivisions; provided, that the exercise of this authority is consistent with the provisions of RCW 82.02.050(1)(c). Nothing in this chapter shall preclude the city from entering into a development agreement as authorized in RCW 36.70B.170 et seq. and Chapter 17.09 NMC, addressing, without limitation, the amount and payment of impact fees imposed or agreed to in accordance with any applicable provisions of state law, any reimbursement provisions, other financial contributions by the property owner, inspection fees, or dedications. (Ord. 2021-634 § 9; Ord. 2020-605 § 3 (Att. B); Ord. 2014-494 § 3 (Att. B); Ord. 2000-232 § 1).
16.15.150 Option for deferred payment of impact fees.
An applicant may request, at any time prior to building permit issuance, and consistent with the requirements of this section, to defer to final inspection the payment of an impact fee for single-family residential construction building permits. The following shall apply to any request to defer payment of an impact fee:
A. The applicant shall submit to the city a written request to defer the payment of an impact fee for a specifically identified building permit. The applicant’s request shall identify, as applicable, the applicant’s corporate identity and contractor registration number, the full names of all legal owners of the property upon which the development activity allowed by the building permit is to occur, the legal description of the property upon which the development activity allowed by the building permit is to occur, the tax parcel identification number of the property upon which the development activity allowed by the building permit is to occur, and the address of the property upon which the development activity allowed by the building permit is to occur. All applications shall be accompanied by an administrative fee as provided for in the city’s adopted permit and impact fee schedule.
B. The impact fee amount due under any request to defer payment of impact fees shall be based on the schedule in effect at the time the applicant provides the city with the information required in subsection (A) of this section.
C. Prior to the issuance of a building permit that is the subject of a request for a deferred payment of impact fees, all applicants and/or legal owners of the property upon which the development activity allowed by the building permit is to occur must sign a deferred impact fee payment lien which shall be consistent with RCW 82.02.050(3), as may be amended, and in a form acceptable to the city attorney. The deferred impact fee payment lien shall be recorded against the property subject to the building permit and be granted in favor of the city in the amount of the deferred impact fee. Any such lien shall be junior and subordinate only to one mortgage for the purpose of construction upon the same real property subject to the building permit. In addition to the administrative fee required in subsection (A) of this section, the applicant shall pay to the city the fees necessary for recording the lien agreement with the King County recorder.
D. The city shall not approve a final inspection until the impact fees identified in the deferred impact fee payment lien are paid in full.
E. The term of the impact fees deferred under this section shall not exceed 18 months from the date of building permit issuance.
F. Upon receipt of final payment of the deferred impact fee as identified in the deferred impact fee payment lien, the city shall execute a release of deferred impact fee lien for the property. The property owner at the time of the release, at his or her own expense, is responsible for recording the lien release.
G. In the event that the deferred impact fee is not paid within the time provided in this section, the city shall institute foreclosure proceedings under the process set forth in Chapter 61.12 RCW.
H. An applicant is entitled to defer impact fees pursuant to this section for no more than 20 single-family residential construction building permits per year in the city. For purposes of this section, an “applicant” includes an entity that controls the applicant, is controlled by the applicant, or is under common control with the applicant.
I. If any terms or conditions of other sections in this chapter conflict with this section, then this section shall prevail. (Ord. 2020-605 § 3 (Att. B); Ord. 2016-543 § 2).