HomeMy WebLinkAboutCOW 2008-11-24 Item 4 - Public Hearing - Impact Fees Ordinances for Fire and ParksOrdinances in draft form are attached.
RN\'IIi\\'itD BY COW Mtg. CA &P Cmte
1 MTG. DATE
I 11/24/08
MTG. DATE
11/24/08
12/01/08
1 1
Go UNCIL AGENDA SYNOPSIS
InitralJ ITEM NO.
ttileeteno Date Pn'pared I,y Mayor's review I Council review
11/24/08 1 LV I�
1 12/01/08 1 LV 7 `4
ITEM INFORMATION
I CAS NUMBER: 08-146
ORIGINAL, AGENDA DATE. NOVEMBER 24, 2008
Ordinances for Fire and Parks Impact Fees
C. \'i'i•.(;Oity Discussion n Motion Resolution Ordinance Bid Award Public' Heanrrg n Other
Mfg Date 11/24/08 Mt; Date 111tg Date Jilts Date 12/01/08 lltg Date 1Itg Date 11/24/08 Mtg Date
SPONSOR Cowiiii Mayor Adm Svcs DCD Finance Fire n L i P&R Police PIV
SPONSOR'S Discussion regarding adoption of impact fees for Fire and impact fees for Parks. Decisions
St'MM,\RY needed include:
1) what total dollar value of capital projects for Fire, 2) the split in revenues between
impact fees and City contribution for Fire. 3) what total dollar value of capital projects for
Parks, 4) the split in revenues between impact fees and city contribution for Parks.
Utilities Cmte Arts Comm.
F &S Cmte
n Parks Comm.
DAih: 11/18/08 F &S (action); 11/24/08 CAP (info only)
RECOMMENDATIONS:
SPONSOR /ADMIN. Approve and forward to COW for discussion
COMMITTEE Forward to Committee of the Whole for discussion and public hearing
COST IMPACT FUND SOURCE
EXPENDITURE Ri?()UTRI D AMOUNT BUDGETED APPROPRIATION REQUIRED
Fund Source. REVENUE IS FROM IMPACT FEES; PROJECTS ARE NOT CONSTRUCTED UNLESS FUNDS ARE AVAILABLE
Comments:
RECORD OF COUNCIL ACTION
A
ATTACHMENTS
Informational Memo regarding Fire impact fees with Attachments
Ordinance adopting Fire impact fees with Attachments
Informational Memo regarding Park Impact Fees with Attachments
Ordinance adopting Parks impact fees with Attachments
Performance Audit Report
Minutes from Finance Safety Committee meeting of 11/18/08
U Transportation Cmte
n Planning Comm.
CC: Mayor Haggerton
Rhonda Berry
FROM: Lisa Verner, Mayor's Office
Nick Olivas, Fire Chief
DATE: November 18, 2008
RE: Proposed Fire Impact Fees
ISSUE
BACKGROUND
Additionally, RCW 82.02.050 (4) says, in part:
INFORiMATION MEMORANDUM
To: Finance and Safety Committee (action)
Community Affairs and Parks (information)
Adopt an ordinance for Fire impact fees and an ordinance for Parks impact fees, both for funding
of capital facilities needed by Fire services and Parks services due to anticipated new growth and
development.
The Administration is evaluating new sources of revenue for the City. One such source is
"impact fees" through which new development helps to pay for capital facilities necessitated due
to the new growth. Mayor Haggerton's goal is to analyze options and to adopt impact fees by
the end of 2008:
The Growth Management Act allows impact fees for parks services and for fire services, in
addition to the traffic impact fees the City has already enacted. In order to consider and adopt
impact fees, the City needs to have adopted a Fire Master Plan and identified a level of service
goal for fire services. The 2008 Fire Master Plan, the Mayor's recommendations on
implementation, and the Level of Service for the Fire Department are scheduled for adoption by
Council on December 1, 2008.
Impact fees may be collected and spent only for the public facilities defined in
RCW 82.02.090 which are addressed by a capital facilities element of a
comprehensive land use plan adopted pursuant to the provisions of RCW
36.70A.070...
An ordinance to amend the Capital Facilities Element of the City's Comprehensive Plan is before
the COW on November 10 for public hearing and discussion. It is scheduled for adoption on
December 1. Among other things, the amendment will incorporate by reference the 2008 Fire
Master Plan and the 2008 Parks, Recreation and Open Space Plan, as amended. The Fire Master
Plan, which includes Fire capital projects (some of which will be paid for through impact fees) is
scheduled for adoption on December 1. Then the City will be consistent with RCW 82.02.050
(4).
A public hearing on impact fees is advertised for November 24, 2008.
DISCUSSION
The State Legislature authorized impact fees when it adopted the Growth Management Act in
1990 as one mechanism to help communities address growth. According to RCW 82.02.050 (1),
it is the intent of the State Legislature:
(a) To ensure that adequate facilities are available to serve new growth and
development;
(b) To promote orderly growth and development by establishing standards by
which counties, cities, and towns may require, by ordinance, that new growth
and development pay a proportionate share of the cost of new facilities needed
to serve new growth and development; and
(c) To ensure that impact fees are imposed through established procedures and
criteria so that specific developments do not pay arbitrary fees or duplicative
fees for the same impact.
Impact fees can be assessed for traffic, parks, fire and schools The City already assesses a
traffic impact fee. The Mayor is asking the Council to consider assessing a parks impact fee and
a fire impact fee. None of the school districts which serve Tukwila have asked the City to collect
a school impact fee on their behalf.
Impact fees are used to provide funds for capital projects or capital facilities which are needed
because of new growth. They are used to fund projects which maintain the same level of service
for new growth as is provided for existing development. They may not be used for projects
which are needed due to current deficiencies in public facilities serving existing development.
In essence, impact fees are a mechanism for "growth to pay for growth."
For consideration are two ordinances, one for impact fees for fire services and one impact fees
for parks services. The text of the ordinances is similar. The ordinances address the fee formula,
adjustments, credits, appeals, refunds and exemptions as well as use of the impact fees.
Also, each ordinance includes a spreadsheet for calculating an impact fee and a list of projects
for which the impact fee would be collected.
Conceptually, the fee formula identifies the anticipated growth between 2009 and 2020 (12
years) in several land use categories and the cost of capital facilities needed to serve that growth
and divides the two. The variables include the request for service (either calls for fire /aid service
per land use category or amount of parks needed per resident) and the growth anticipated in each
land use category. Because the City has a strong track record of both residents and employees
using park facilities and fire services, an impact fee for commercial/industrial uses as well as an
impact fee for residential uses is proposed.
Council members may choose which impact fee /city contribution split results in acceptable
levels of impact fees.
RECOMMENDATION
Adopt an ordinance which authorizes assessment of impact fees for capital facilities for
Fire services needed due to new growth
Attachment A: Capital Facility Projects
Attachment B: Fire Services Impact Fee Options
Attachment C: Fire Impact Fee Calculation
Attachment D: Excerpts from Performance Audit
ATTACHMENT A
Questions for consideration:
1) Should the City collect impact fees on the entire list of proposed projects?
2) At what percentage should the City implement Fire Impact fees (90/10 split or 80/20 split
Fire Department Capital Facilities List
1. Construct/build relocated Station 51 25,000 sf S 10,000,000
station; existing 15,000 sf station replacement due
to growth, including bays for ladder truck and new
aid car
2. Purchase aid car for Station 51 (new) 185,000
3. Purchase engine for Station 54 to replace aerial 750,000
ladder truck
4. Purchase land for relocated Station 52, if Station 51 5 544,500'
is relocated
5. Construct/build relocated Station 52, if Station 51 is 5 3,000,000
relocated
1 25,000 gsf building x $400 /psf building construction cost
2 acre site (21,780 sf) x $25 /psf land cost
7,500 gsf building x S400 /psf building construction cost
Cost
TOTAL 14,479,500
ATTACHMENT B
FIRE Impact Fee OPTIONS
Total Project Amount over 12 years (through 2020)
$14,479,500
$10,000,000
FIRE
Single Family
Multi Family
All Commercial
Office
Retail
Industrial
Hotel /Motel /Resort
Hospital /Nursing
Home
Medical /Dental
Leisure Facilities
Restaurant/Lounge
Church /Non profit
Education
Special Public Facil
Fees
90%
$13,031,550
$2,060
$2,683
$3,628
$1,297
$283
90%
$9,000,000
$1,423
$1,853
$2,506
$896
$195
Issaquah
(2006)
$622.25
$853.42
$200.00
$640 00
$200.00
$280.00
$9,610.00
$6,680.00
$2,090.00
$6,090.00
$390.00
$810.00
$3,120.00
City
10%
$1,447,950
SF
MF
Office
Retail
Industrial
10%
$1,000,000
SF
MF
Office
Retail
Industrial
Renton
$488.00
$388.00
$520.00
Fees
80%
$11,583,600
$1,831
$2,385
$3,225
$1,153
$251
$8,000,000
$1,265
$1,647
$2,227
$796
$174
Kev:
SF Per Single Family Dwelling I does not have Fire impact fees
MF Per Multi Family Dwelling I $0.52 per gsf
no com'I assm't since 1/1/08; Fire
Office Per 1,000 gsf Office Uses I Authority
Retail Per 1,000 gsf Retail Uses
Industrial Per 1,000 gsf Industrial Uses
City
20%
$2,895,900
SF
MF
Office
Retail
Industrial
80% 20%
$2,000,000
SF
MF
Office
Retail
Industrial
Redmond
Kent* Bellevue* (1999)
$94.48
132.73
$110.80
$126.76
$13.07
AWC Averages
(2008)
Single Family
Multi Family
Auburn***
$362.66
$383.09
Fees
70%
$10,135,650
$1,602
$2,082
$2,822
$1,009
$220
$7,000,000
$1,107
$1,441
$1,949
$697
$152
$4,343,850
SF
MF
Office
Retail
Industrial
70% 30%
$3,000,000
SF
MF
Office
Retail
Industrial
Per Dwelling
I High I Low
$622 00 I $104.00
$853 00 $104.00
City
30%
TABLE 1. Tukwila Fire Impact Fee Calculation, 2008
Net Growth, 2008 -2020
2007 2007
Land Use Housing Employme Housing
Units 3
Units -I nt 2
Single family 3,822 516
Multi- family 4,107 2,384
Office 6,245 370,500
Retail 20,384 2,418,000
Industrial 20,343 3,860,800
TOTALS 46.972 6,649,300
1. OFM numbers
2. PSRC 2007 Covered Employment Estimates
3. 43 SF dufyr. rest is \1F from 2007 Buildable Lands Report
4. Retail: 500gsf per emp: Office: 250esf per emp; Industrial: 800e.sf per emp; X emp growth
5. 90% of Buildable [ands Repon estimates. at some as 2007 employment
TABLE 2. Tukwila Fire Service Demand Calculation, 2008
Land Use
Single family
Multi- family
Office
Retail
Industrial
NET TOTAL
PERCENT OF
SUBTOTAL
Reallocation of
Special Property
Unclassified
2007 Responses
Incident
Responses
619
866
445
1.039
362
3.332
13%
19%
10%
22%
8%
71%
Other 1.341 29% I I
TOTAL 4,673 100% 100% 1,341 1 4,673 1 100%
Note: The 513,031,550 capital cost is 90% of 514,479,500 (the growth related fire capital cost).
TABLE 3. 2007 Incident Responses by Property Type Allocation to Impact Fee Categories
IMPACT FEE CATEGORIES
Fire Dept. Land Multi
Fire Aid Total Single family family Office Retail Industrial TOTAL
Use Categories
Public Assembly 12 42 54
Educational 18
Health Care* 27
Single- family 159
Apartments 224
Boarding House 0
Hotels 102
Business** 441
Industrial 12
Manufacturing 57
Storage 81
SUBTOTAL 1.133
Special Property 1 275 1 855 1 1,130 1
Unclassified 1 148 1 63 1 211 1
SUBTOTAL 1 423 1 918 I 1,341 1,
TOTAL
INCIDENT
RESPONSES BY
IMPACT FEE
CATEGORY
split 60% Multi- family, 40% Office (Redmond)
split 34% Office, 66% Retail (2007 Tukwila)
Based Proportional Incident
on Net Reallocation Responses
Total of "Other"
Building Employme
Area -4 nt -5
249 1 868 1 19%
349 1 1,215 1 26%
179 1 625 13%
418 I 1,458 1 31%
146 508 1l%
1,341 1 4,673 1 100%
619
619
19%
ATTACHMENT C
Tukwila Fire Impact Fees, 2008
1,482
4,836
4,826
11,144
249 349
868 1,215
I Impact Fee
Per
Residential
Unit
SO
SO
Revised
2007 Responses
Per GFA
50.00 SO
50.00 SO
S0.00 SO
Incident
Responses
per 1,000
Units
227
296
54
48
70 I 47
794
2
305
351 680
866 1 445 1,039
26% 13% 31%
1
1
1
179 418
625 1,458
Per 1,000
Sq. Ft. GFA
Increase in Annual Incident
Responses clue to Growth
Incident Capital Costs
Responses Incident Allocated by
per 1,000 Responses Incident
Employees Responses due
to Growth
117 8% SO
705 49% SO
100.0 148 10% SO
71.5 346 24% 50
25.0 120 8% 50
1.437 100% SO
14
104
244
362
3,332
146 1,341
508 4,673
100%
Brian Sonntag, CGFM
Washington State Auditor
he Puget Sound Region experienced an
unprecedented building boom during this decade.
Impact fees' purpose is to help offset the costs of
services associated with new development, such as
roads, schools, fire facilities and parks.
We chose this audit to examine whether cities are
effectively and efficiently using of this revenue source.
We selected the five cities with the state's highest
impact fee revenue from fiscal years 2004 to 2006 to
find out if:
Cities are collecting and administering impact fees
appropriately and in accordance with state law.
The public is getting what it is paying for
Performance audits are conducted under the
provisions of citizens Initiative 900. This audit
was conducted on our behalf by Ernst Young in
accordance with Generally Accepted Government
Auditing Standards.
Cities have an opportunity to improve transparency
and access to public information by posting their
annual impact fee reports on their Web sites.
While cities are required by state law to report the
information annually, not all cities are posting the
information on their Web sites. It is good policy to
make that information readily available to citizens.
We hope all cities and counties that impose imact fees
will take advantage of the best practices identified in
this audit.
If you are interested in following up on the audit
resolution or public hearings, please check
our Web site at: http: /www.sao.wa.gov/
PerformanceAudit /audit_reports.htm.
Mission Statement
The State Auditor's Office independently serves the citizens of Washington
by promoting accountability, fiscal integrity and openness in state and local
government. Working with these governments and with citizens, we strive to
ensure the efficient and effective use of public resources.
a�
hat is an impact fee? A
one -time fee to offset the cost
of services associated with
new development. Cities can
collect four types of impact
fees: School, fire, park and
transportation impact fees.
Impact fees are intended to
supplement other funding
sources and state law requires
that they be spent on the
facilities for which they are
collected.
How are they administered?
State law allows municipalities
that are required to or choose
to plan under the Growth
Management Act to assess
impact fees. Cities set the rate
for and collect the impact fees.
Who pays impact fees?
Impact fees are charged to
builders as part of the building
permit process. Impact fees are
typically passed invisibly from
the builder to the customer.
1
nitiative 900 requires the State Auditor's Office to identify best practices About Initiative 900
during each performance audit. The following best practices were in place at Washington voters approved
the cities during the audit:
Redmond
The City of Redmond Fire Department's method of allocating costs of new
capital facilities between the City and Fire District 34 should be evaluated for
implementation in other cities and districts.
The City of Redmond's fire impact fee calculation and schedule met all
aspects of the related state laws and demonstrates a leading practice by
taking the following items into consideration:
System improvements that are reasonably related to growth
The proportionate share of the costs of system improvements related to
new development
Redmond employs several leading practices with respect to calculating,
charging, and maintaining its transportation impact fee.
These leading practices Include:
Inflation indexing
Costs based on a long -range plan
Adopted fee schedules by land use
Initiative 900 in November
2005, giving the State
Auditor's Office the authority
to conduct independent
performance audits of
state and local government
entities on behalf of citizens
to promote accountability
and cost effective uses
of public resources.
1 -900 directs the Office
to address the following
elements in each
performance audit:
1 Identification of cost savings.
2. Identification of services that
can be reduced or eliminated.
3. Identification of programs or
services that can be transferred
to the private sector.
4. Analysis of gaps or overlaps
in programs or services and
recommendations to correct them.
5 Feasibility of pooling auditee's
information technology systems.
6. Analysis of the roles and
functions of the auditee and
recommendations to change or
eliminate roles or functions.
7. Recommendations for statutory
or regulatory changes that may
be necessary for the auditee to
properly carry out its functions.
8. Analysis of the auditee's
performance data,
performance measures and
self- assessment systems.
9 Identification of best practices.
Initiative 900 provides no
penalties for auditees that do
not follow recommendations in
performance audit reports.
The complete text of
the Initiative is available
at: www.sao.wa.gov/
PerformanceAudit/
PDFDocuments /i900.pdf.
5
State of Washington Performance Audit of Impact Fees relating to Fire
(Performance Audit attached at end of packet)
State of Washington Performance Audit of Impact Fees
AUDIT AREA 6 FIRE IMPACT FEE SCHEDULE/CALCULATION FINDING
The City of Redmond has developed a leading practice in its fire impact fee
schedule /calculation. Specifically, the schedule /calculation takes into account the impacts of
fire and aid calls by land use type, projected growth by land use type and the fire Capital
Facilities Plan (CFP).
Fire Impact Fees in the City of Redmond
Next, Ernst Young met with the City of Redmond to gain an understanding of the formula it used to
calculate the City's fire impact fee schedule. Exhibit 12 below shows the City of Redmond's fire
impact fee schedule for the performance audit period.
Exhibit 12 City of Redmond's Fire Impact Fee Schedule 1999 -2006
Land Use
Single- family
Multi family
Office
1 Retail
1 Industrial
Excerpts
Impact Fee
$94.48 per residential unit
$132.73 per residential unit
$0.11 per square foot
$0.13 per square foot
$0.01 per square foot
In order to develop the different rates for land use categories as shown above, the City of Redmond
used historical data to determine the number of emergency (fire and aid) calls per land use type.
Ernst Young noted that national emergency call data is available; however, it was important for
Redmond to use Redmond data instead of national data, given that the jurisdiction has unique fire
safety requirements. Page 45 of 67
Ernst Young noted that the City of Redmond's fire impact fee calculation and schedule met all
aspects of RCW 82.02.050 and 82.02.060 and demonstrates a leading practice. Redmond's fire
impact fee calculation and schedule takes the following items into consideration:
System improvements that are reasonably related to growth
The proportionate share of the costs of system improvements related to new development
Finally, the City of Redmond reviewed its fire impact fee schedule in 2006 and noted that updates
were needed. Therefore, the schedule was updated in 2006, and new rates were charged for fire
impact fees.
RECOMMENDATION
Other cities within the State of Washington should be aware of the City of Redmond's leading
practice for the fire impact fees schedule /calculation. Page 47 of 67
Page 41 of 67
DRz- F
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, ESTABLISHING THE ASSESSMENT OF FIRE IMPACT
FEES ON NEW RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL
DEVELOPMENT IN THE CITY; PROVIDING FOR SEVERABILl'1 Y; AND
ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, pursuant to the Growth Management Act of the State of Washington
and RCW 36.70A, the City of Tukwila has an adopted Comprehensive Plan, which
includes provisions for fire protection facilities as part of its Capital Facilities Element;
and
WHEREAS, RCW 82.02.050 authorizes cities to impose impact fees on development
activity as part of the financing for public facilities, including fire protection facilities,
and
WHEREAS, the Tukwila City Council desires to provide funding for fire protection
facilities, as referenced in the Capital Facilities Element of the Comprehensive Plan,
through the imposition of residential and non residential development impact fees;
NOW, THEREFORE, THE CITY COUNCIL OF THE CFI Y OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section I. Findings. The City Council finds and determines that new growth and
development in the City creates additional demand and need for public fire protection
facilities in the City, and the City Council finds that new growth and development
should pay its proportionate share of the costs for new fire service facilities to serve new
growth and development in the City. The City Council believes that this can be
accomplished by the assessment of fire impact fees on new residential, commercial, and
industrial development in the City. It is the Council's intent that the provisions of this
ordinance be liberally construed in establishing the fire impact fee program.
Section 2. Definitions. Terms or words not defined herein shall be defined
pursuant to RCW 82.02.090 when given their usual and customary meaning. For the
purposes of this ordinance, unless the context or subject matter clearly requires
otherwise, the words or phrases defined in this section shall have the following
meanings:
1. The "Act" means the Growth Management Act, Chapter 17, Laws of 1990,
First Extraordinary Session, Chapter 36.70A RCW et seq., and Chapter 32, Laws of 1991,
First Special Session, as now in existence or hereinafter amended.
2. "Building permit" means an official document or certification of the City
of Tukwila issued by the City's building official which authorizes the construction,
alteration, enlargement, conversion, reconstruction, remodeling, rehabilitation, erection,
placement, demolition, moving, or repair of a building or structure.
3. "City" means the City of Tukwila, Washington, County of King
4. "Development activity" means any construction of a building or structure
that creates additional demand and need for fire safety facilities.
5. "Development approval" means any written authorization from the City,
which authorizes the commencement of the "development activity
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6 "Encumber" means to reserve, set aside, or earmark the fire impact fees in
order to pay for commitments, contractual obligations, or other liabilities incurred for
the provision of fire protective services.
7 "Fee payer" is a person, corporation, partnership, an incorporated
association or governmental agency, municipality, or similar entity commencing a land
development activity that requires a building permit and creates a demand for
additional fire capital facilities.
8 "Impact fee" means the payment of money imposed by the City on
development activity pursuant to this ordinance as a condition of granting
development approval in order to pay for the fire facilities needed to serve new growth
and development that is a proportionate share of the cost of fire capital facilities that is
used for facilities that reasonably benefit new development. Impact fees do not include
a reasonable permit fee, an application fee, and the administrative fee for collecting and
handling fire impact fees or cost of reviewing independent -fee calculations.
9. "Owner" means the owner of record of real property, as found in the
records of King County, Washington, or a person with an unrestricted written option to
purchase property; provided, that if the real property is being purchased under a
recorded real estate contract, the purchaser shall be considered the owner of the
property.
10. "Proportionate share" means that portion of the cost for fire facility
improvements that are reasonably related to the service demands and needs of new
development.
11. "Public facilities" means the following capital facilities owned or operated
by governmental entities: (1) public streets and roads; (2) publicly owned parks and
open spaces and recreational facilities; (3) school facilities; (4) fire protection facilities
not part of a fire district; and (5) police facilities and essential public facilities as defined
by Chapter 36.70A RCW.
Section 3. Fire Impact Fee Assessment.
A. The City shall collect fire impact fees from applicants seeking development
approvals from the City for any development activity in the City for which building
permits are required. This will include the expansion of existing uses, which create the
demand for fire protection services.
B. Fire impact fees shall be assessed at the time of a technically complete building
permit application that complies with the City's zoning ordinances and building and
development codes. Fire impact fees shall be collected from the fee payer at the time
the building permit is issued.
C. Except if otherwise exempt, the City shall not issue the required building
permit unless or until the fire impact fees are paid.
Section 4. Use of Fire Impact Fees.
A. Pursuant to this ordinance, fire impact fees shall be used for fire facilities that
will reasonably benefit the City and its residents.
B. Fees shall not be used to make up deficiencies in City facilities serving an
existing development.
C. Fees shall not be used for maintenance and operations, including personnel.
D. Fire impact fees shall be used for but not limited to land acquisition, site
improvements, engineering and architectural services, permitting, financing,
administrative expenses and applicable mitigation costs, and capital equipment
pertaining to fire protection facilities.
E. Fire impact fees may also be used to recoup public improvement costs incurred
by the City to the extent that new growth and development will be served by the
previously constructed improvement.
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F. In the event bonds or similar debt instruments are or have been issued for fire
facility improvements, impact fees may be used to pay the principal on such bonds.
Section 5. Fire Impact Fee Capital Facilities Plan. In order to collect fire impact
fees, the City must first adopt a Fire Capital Facilities Plan as an element of the City's
Comprehensive Plan. The City's Capital Facilities PIan for fire protection services shall
consist of the following elements:
1. The City's capacity over the next six years, based on an inventory of the
City's fire facilities both existing and under construction;
2. The forecast of future needs for fire facilities based upon the City's
population projections;
3. A six-year financial plan component, updated as necessary, to maintain at
least a six-year forecast for financing needed within projected funding levels;
4. Application of the formula set forth in this ordinance based upon the
information in the Capital Facilities Plan; and
5. City Council Action. No new or revised impact fee shall be effective until
adopted by the City Council following a duly advertised public hearing to consider the
City's Capital Facilities Plan or plan update.
Section 6. Fire Impact Fee Formula. The impact fee formula is based on the
assumptions found in Tukwila Fire Impact Fees, 2008, Exhibit A, and Tukwila Fire
Department Capital Facilities List, Exhibit B, attached hereto and by this reference fully
incorporated herein.
FIRE IMPACT FEE CALCULATIONS
Impact Fee
Land Use 1 Per Residential Unit Per 1,000 Sq. Ft. GFA
Single family 1
Multi family
Office
Retail 1
Industrial 1
Section 7. Fire Impact Fee Adjustments.
A. The City may adjust a fire impact fee at the time the fee is imposed to consider
unusual circumstances in specific cases to ensure that impact fees are imposed fairly.
B. In calculating the fee imposed on a particular development, the City shall
permit consideration of studies and data submitted by a developer to adjust the amount
of the fee. The developer shall submit an independent fee calculation study to the Fire
Chief who shall review the study to determine that the study
1. is based on accepted impact fee assessment practices and methodologies;
2. uses acceptable data sources and the data used is comparable with the uses
and intensities planned for the proposed development activity;
3. complies with the applicable state laws governing impact fees;
4. is prepared and documented by professionals who are mutually agreeable
to the City and the developer and are qualified in their respective fields; and
5. shows the basis upon which the independent fee calculation was made.
C. In reviewing the study, the Fire Chief may require the developer to submit
additional or different documentation. If an acceptable study is presented, the Fire
Chief may adjust the fee to that appropriate for the particular development activity. If
an acceptable study is not presented, the developer shall pay the impact fees required
prior to submitting the study
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D. A developer requesting an adjustment or independent fee calculation may pay
the impact fees imposed by this ordinance to obtain a building permit while the City
determines whether to partially reimburse the developer by making an adjustment or
accepting the independent fee calculation.
Section 8. Credits. A fee payer can request that a credit, or credits, be awarded to
the fee payer for the value of dedicated land, improvements to, or new construction of
any system improvements provided by the developer to facilities that are identified in
the Capital Facilities Plan and that are required by the City as a condition of approving
the development activity
Section 9. Appeals.
A. Arty fee payer may pay the impact fees imposed by this ordinance under
protest in order to obtain a building permit.
B. Appeals regarding fire impact fees imposed on any development activity may
only be taken by the fee payer of the property where such development activity will
occur. No appeal shall be permitted unless and until the impact fee at issue has been
paid.
C. Determinations of the City staff with respect to the applicability of fire impact
fees to a given development activity, or the availability of a credit, can be appealed to
the City's Hearing Examiner pursuant to this section.
D An appeal shall be taken within 10 working days of payment of the impact fees
under protest or within 10 working days of the City's issuance of a written
determination of a credit or exemption decision by filing with the City Clerk a notice of
appeal giving the reasons for the appeal with an accompanying appeal fee as set forth
in the existing fee schedule for land use decisions.
Section 10. Refunds.
A. If the City fails to expend or encumber the impact fees within six years from the
date the fees were paid, unless extraordinary circumstances or reasons exist, the current
owner of the property on which the impact fees were paid may receive a refund of such
fees.
B. The City shall notify potential claimants by first class mail that they are entitled
to a refund. 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.
C. Owners seeking a refund must submit a written request for a refund of the fees
to the City within one year of the date the right to claim a refund arises or notice is
given, whichever comes later.
D. Any impact fees for which no application has been made within the one -year
period shall be retained by the City and expended on appropriate fire facilities.
E. Refunds of impact fees shall include any interest earned on the impact fees by
the City
Section 11. Exemptions. The fire impact fees are generated from the formula for
calculating the fees as set forth in this ordinance. The amount of the impact fees is
determined by the information contained in the adopted fire department master plan
and related documents, as appended to the City's Comprehensive Plan. All new
development located in the City will be charged a fire impact fee, provided that the
following exemptions shall apply. Any development activity or project which has
submitted a technically complete building permit application prior to the effective date
of this ordinance shall be exempt from the payment of fire impact fees. The following
shall be exempt from fire impact fees:
1. Replacement of a structure with a new structure having the same use, at
the same site, and when such replacement is within 12 months of demolition or
destruction of the previous structure;
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2. Alteration or expansion of or remodeling of an existing dwelling or
structure where no new units are created and the use is not changed;
3. Construction of an accessory residential structure;
4. Miscellaneous improvements including, but not limited to, fences, walls,
swimming pools, and signs;
5. Demolition of or moving an existing structure within the City from one site
to another;
6. Low income housing developed by individuals, nonprofit corporations, or
a housing authority may be exempted from impact fees at the discretion of City staff
subject to:
a. Fiscal impact analysis of the effect of impact fees upon low- income
housing and how exempting housing from impact fees would forward the goals for
low- income housing in the City and King County;
b That adequate documentation be provided that the housing will
remain available for low- income persons for a 10 -year period of time at affordable rents;
and
c. In the case of owner occupied dwellings, that such housing will be
sold or leased at affordable rates to low- income households for a period of 10 years; and
d. The impact fee for exempt development shall be calculated as
provided by this ordinance and paid with public funds. Such payments may be made
by including such amounts in the public share of the system improvements undertaken
within the City for fire protection services and facilities.
Section 12. Authority Unimpaired. Nothing in this ordinance shall preclude the
City from requiring the fee payer to mitigate adverse and environmental affects of a
specific development pursuant to the State Environmental Policy Act, Chapters 43.21C
RCW and/ or Chapter 58.17 RCW, governing plats and subdivisions, provided that the
exercise of this authority is consistent with Chapters 43.21C and 82.02 RCW
Section 13. Severability. If any section, subsection, paragraph, sentence, clause or
phrase of this ordinance or its application to any person or situation should be held to
be invalid or unconstitutional for any reason by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of the
remaining portions of this ordinance or its application to any other person or situation.
Section 14. Effective Date. This ordinance or a summary thereof shall be
published in the official newspaper of the City, and shall take effect and be in full force
five days after passage and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this day of 2008.
Al T E ST /AUTHENTICATED:
Christy O'Flaherty, City Clerk
APPROVED AS TO FORM BY-
Office of the City Attorney
Jim Haggerton, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published.
Effective Date:
Ordinance Number-
Attachments: Exhibit A Tukwila Fire Impact Fees, 2008
Exhibit B Fire Department Capital Facilities List
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EXHIBIT A
Tukwila Fire Impact Fees, 2008
TABLE 1. Tukwila Fire Impact Fee Calculation, 2008
Net Growth, 2008 -2020' Impact Fee
2007 2007 Per
Land Use Housing Em to me Housing Building Employme
g p y Units 3 Area 4 nt 5 Residential Per GFA
Units -1 nt -2 Unit
Single family 1 3,822 516 1 SO
Multi- family 1 4,107 2,384 I 50
Office 1 6,245 370,500 1,482 80
Retail 1 20,384 1 2,418,000 4,836
80.00
Industrial 1 20,343 1 3,860,800 4,826 50.00
TOTALS 1 46,972 1 6,649,300 11,144
1. OFM numbers
2. PSRC 2007 Covered Employment Estimates
3. 43 SF du/yr, rest is ?.4F from 2007 Buildable Lands Report
4. Retail: 500gsf per emp; Office: 250gsf per emp; Industrial: 800gsf per emp; X emp growth
5. 90% of Buildable Lands Report estimates, at same as 2007 employment
TABLE 2. Tukwila Fire Service Demand Calculation, 2008
Land Use
Single family
Multi family
Office
Retail
Industrial
NET TOTAL
PERCENT OF
SUBTOTAL
2007 Responses
Incident
Responses
619
866
445
1,039
362
3,332
13%
19%
10%
22%
8%
71%
Fire Dept Land
Fire Aid Total
Use Categories
Public Assembly I 12
1 42 54
Educational 18 1 30 1 48
Health Care* 1 27 1 90 1 117
Single- family 1 159 1 460 1 619
Apartments 224 1 570 1 794
Boarding House 1 0 1 2 1 2
Hotels 1 102 1 203 1 305
Business 1 441 1 590 1 1,031
Industrial 1 12 1 2 1 14
Manufacturing 1 57 1 47 1 104
Storage 1 81 1 163 1 244
SUBTOTAL 1 1,133 1 2.199 1 3,332
Proportion
Based al
on Net Reallocatio
Total n of
"Other"
19% 1 249
26% 1 349
13% I 179
31% 418
11% 1 146
100% 1 1,341
619
619
Revised
2007 Responses
Incident
Responses
868
1,215
625
1,458
508
4,673
Single- MuIti-
family family
794
2
19%
26%
13%
31%
11%
100%
Other 1,341 29%
TOTAL 4,673 100% 1, 100% 1 1,341 4,673 1 100%
Note: The 513,031,550 capital cost is 90% of 514,479,500 (the growth related fire capital cost).
227
296
TABLE 3. 2007 Incident Responses by Property Type Allocation to Impact Fee Categories
IMPACT FEE CATEGORIES
48
70 47
54
305
351 680
14
104
244
866 445 1,039 362
Per 1,000
Sq. Ft. GFA
SO
80
50
Incident Incident
Responses Responses Incident
per 1,000 per 1,000 Responses
Units Employees
117
705
100.0 148
71.5 346
25 0 120
1,437
Office Retail Industrial TOTAL
3,332
19% 26% 13% 31% 11% 100%
Special Property 1 275 1 855 1 1,130 1 1 1 1 1 1
Unclassified 1 148 1 63 1 211 1 1 1 1 1 1
SUBTOTAL 1 423 1 918 1 1,341 I I 1 1 1 1
Reallocation of
Special Property 249 349 179 418 146 1,341
Unclassified
TOTAL
INCIDENT
RESPONSES BY 868 1,215 625 1,458 508 4,673
L1IPACT FEE
CATEGORY
split 60% Multi family, 40% Office (Redmond)
split 34% Office, 66% Retail (2007 Tukwila)
Increase in Annual Incident
Responses due to Growth
8%
49%
10%
24%
8°%
100%
100%
Capital Costs
Allocated by
Incident
Responses due
to Growth
80
50
50
50
50
50
Fire Department Capital Facilities List
EXHIBIT B
Capital Facility Cost
1. Construct/build relocated Station 51 25,000 sf
station; existing 15,000 sf station replacement due
to growth, including bays for ladder truck and new
aid car
2. Purchase aid car for Station 51 (new)
3. Purchase engine for Station 54 to replace aerial
ladder truck
4. Purchase land for relocated Station 52, if Station 51
is relocated
5. Construct/build relocated Station 52, if Station 51 is
relocated
25,000 gsf building x $400 /psf building construction cost
2 acre site (21,780 sf) x $25 /psf land cost
3 7,500 gsf building x $400 /psf building construction cost
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10,000,000
185,000
750,000
544,500
3,000,000
TOTAL 14,479,500
Page 1 of 1
CC: Mayor Haggerton
Rhonda Berry
RE: Proposed Parks Impact Fees
ISSUE
INFORMATION MEMORANDUM
To: Finance and Safety Committee (action)
Community Affairs and Parks (information)
FROM: Lisa Verner, Mayor's Office
Rick Still, Deputy Parks Recreation Director
DATE: November 18, 2008
Adopt an ordinance for Parks impact fees for funding of capital facilities needed by Parks
services due to anticipated new growth and development.
BACKGROUND
The Administration is evaluating new sources of revenue for the City. One such source is
"impact fees" through which new development helps to pay for capital facilities necessitated due
to the new growth. Mayor Haggerton's goal is to analyze options and to adopt impact fees by
the end of 2008.
The Growth Management Act allows impact fees for parks services and for fire services, in
addition to the traffic impact fees the City has already enacted. In order to consider and adopt
impact fees, the City needs to have an adopted Parks Plan. The City Council adopted the Parks,
Recreation and Open Space Plan on June 23, 2008 and amended this plan on November 17, 2008
by establishing a level -of- service for parks and opens space.
Additionally, RCW 82.02.050 (4) says, in part:
Impact fees may be collected and spent only for the public facilities defined in
RCW 82.02.090 which are addressed by a capital facilities element of a
comprehensive land use plan adopted pursuant to the provisions of RCW
36.70A.070...
An ordinance to amend the Capital Facilities Element of the City's Comprehensive Plan was
before the COW on November 10 for public hearing and discussion. It is scheduled for adoption
on December 1. Among other things, the amendment will incorporate by reference the 2008
Parks, Recreation and Open Space Plan, as amended. The Parks LOS ordinance was approved
on November 17, 2008 and includes a list of Parks capital projects (some of which will be paid
for through impact fees). A public hearing on impact fees is scheduled for November 24, 2008.
DISCUSSION
The State Legislature authorized impact fees when it adopted the Growth Management Act in
1990 as one mechanism to help communities address growth. According to RCW 82.02.050 (1),
it is the intent of the State Legislature:
(a) To ensure that adequate facilities are available to serve new growth and
development;
(b) To promote orderly growth and development by establishing standards by
which counties, cities, and towns may require, by ordinance, that new growth
and development pay a proportionate share of the cost of new facilities needed
to serve new growth and development; and
(c) To ensure that impact fees are imposed through established procedures and
criteria so that specific developments do not pay arbitrary fees or duplicative
fees for the same impact.
Impact fees can be assessed for traffic, parks, fire and schools. The City already assesses a
traffic impact fee. The Mayor is asking the Council to consider assessing a parks impact fee and
a fire impact fee. None of the school districts which serve Tukwila have asked the City to collect
a school impact fee on their behalf.
Impact fees are used to provide funds for capital projects or capital facilities which are needed
because of new growth. They are used to fund projects which maintain the same level of service
for new growth as is provided for existing development. They may not be used for projects
which are needed due to current deficiencies in public facilities serving existing development.
In essence, impact fees are a mechanism for "growth to pay for growth."
The ordinance address the fee foiniula, adjustments, credits, appeals, refunds and exemptions as
well as use of the impact fees. Also, the ordinance includes a spreadsheet for calculating an
impact fee and a list of projects for which the impact fee would be collected.
Conceptually, the fee formula identifies the anticipated growth between 2009 and 2020 (12
years) in five land use categories and the cost of capital facilities needed to serve that growth and
divides them proportionally. The variables include the request for service (the amount of parks
and recreation services needed per resident or per person employed in the City of Tukwila) and
the growth anticipated in each land use category. Because the City has a strong track record of
both residents and employees using park and recreation facilities, an impact fee for
commercial/industrial uses as well as an impact fee for residential uses is proposed.
A brief discussion of two of the attachments is a follows.
Attachment B:
The PARKS Impact Fee Options page compares two differing project totals, three differing City
contributions, and three corresponding differing impact fees for five different land use
categories. These numbers are representing the collection of fees over a 12 year period, 2009 to
2020. The five land use categories below each Capital Project Total amount is: per single family
dwelling, per multi- family dwelling unit, per 1,000 gsf of office use, per 1,000 gsf retail use and
per 1,000 gsf of industrial use.
Option A indicates the impact fees and City contribution amounts if the Capital Projects Totaled
$12,250,000. This is the total amount of projects that corresponds to the Level -of- Service
adopted by the City Council.
Option B indicates the impact fee and City contribution amounts if a lesser level -of- service is
chosen for a total project amount of $8,750,000. This lesser level -of- service is shown to
represent another option the City Council could choose.
Both Options A B, have three additional breakdowns included identifying what the cost
association is for three different collection rates and corresponding City contribution rates. If
impact fees are collected at 90% of the total and the City's Contribution is 10 80% impact fees
and 20% City's contribution; and 70% impact fees and 30% City's Contribution are listed across
the page to the right for each land use category.
The main issue before the City Council is adopting an ordinance for Parks impact fees for
funding of capital facilities needed by Parks services due to anticipated new growth and
development. There are two main sub issues the City Council needs to determine to establish the
Parks Impact Fees
Sub -Issue One: The City Council needs to determine what Level -of- Service they want to collect
impact fees.
Sub -Issue Two: The City Council needs to determine what percentage of the Capital Projects
Total Cost they want to contribute.
SPECIAL NOTE:
The finance and Safety Committee has requested two pieces of additional information:
1. What is the Impact Fee /City Contribution percentage being collected /paid by the city for
future growth for the six sample cities' park impact fees near the bottom of Attachment A.
This information is being collected from these cities and will be provided to the City
Council.
2. What is the justification for the `Hours Der Week' listed on Attachment B?
An analysis of the Tukwila Community Center users indicates that a resident uses their
facility pass 2.44 times more than that of a business pass holder. The ratio for the formula
would be the same if we use 1.0 time per week for a business user and 2.44 times per week
for resident OR if we use 0.41 times per week for a business user and 1.0 time per week for
resident. Since the ratio would be the same the percent used for the Impact Fee Cost
Allocation would be the same.
Attachment C
Table 1: 2008 Park Impact Fee Calculation was based upon the City of Redmond's Park Impact
Fee model. On the left of the foiiii, the five land use categories are listed. The next three
columns indicate the 2007 units for the respective land uses; followed by the next three columns
indicate the 2020 estimated units for the respective land uses. The Net Growth from 2008 to
2020 is calculated by subtracting the 2020 minus the 2007 numbers.
At the very top right hand comer of Attachment C, a formula is shown for how the numbers are
calculated to develop a `percent of hours' of park use for each land use category. These
percentages are then multiplied by Impact Fee to collect the funds to meet the level -of- service
identified on Attachment B to determine the Cost Allocation per land use. The Cost Allocation
is multiplied by the number of units (A -1 or A -2, respectfully) to determine the cost per unit or
Impact Fee.
Note: Exhibit A, Table 1: 2008 Park Impact Fee Calculations the sample used is the adopted
Level of Service of $12,250,000 and a 90% Impact Fee ($11,025,000) with a 10% City's
Contribution ($1,225,000). The City will need to contribute the $1,225,000 for the capital
improvements plus the ongoing maintenance and operations cost for the life of the projects
RECOMMENDATION
Adopt an ordinance which authorizes assessment of impact fees for capital facilities for
Parks Level -of- Service services needed due to new growth
Attachment A: Project List Park Impact Fees
Attachment B: Parks Services Impact Fee Options
Attachment C: Parks Impact Fee Calculations
Attachment A
Questions for consideration:
1) Should the City collect Impact Fees on the entire list of projects?
2) At what percentage should the City implement Park Impact Fees (90/10 split or 80/20 split
Project List Park Impact Fees
Duwamish Riverbend Hill
Trail Connections
Tukwila Pond
Southgate Park
City of Tukwila Pool
Boat Launch
TOD Pedestrian Bridge
Develop Phase II
Green River Trail to Renton Black/Cedar River
Development Phase II
Expand and Develop
[Extend land lease]; expand features and services
Christianson, Codiga, Fort Dent, Log Cabin
Sounder Connection
Total
Project Cost
$3,000,000
1,000,000
$3,000,000
1,000,000
$1,500,000
$750,000
52,000,000
S12,250,000
ATTACHMENT B
PARKS IMPACT FEE OPTIONS
ATTACHMENT C
TUKWILA PARKS IMPACT FEES 2008
TABLE 1: 2008 PARK IMPACT FEE CALCULATION
a T
'1% t ii
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, ESTABLISHNG THE ASSESSMENT OF PARKS
IMPACT FEES ON NEW RESIDENTIAL, COMMERCIAL, AND
INDUSTRIAL DEVELOPMENT IN THE CITY; PROVIDING FOR
SEVERABILITY; AND ESTABLISHNG AN EFFECTIVE DATE.
WHEREAS, pursuant to the Growth Management Act of the State of Washington
and RCW 36.70A, the City of Tukwila has an adopted Comprehensive Plan, which
includes provisions for parks facilities as part of its Capital Facilities Element; and
WHEREAS, RCW 82.02.050 authorizes cities to impose impact fees on development
activity as part of the financing for public facilities, including parks facilities; and
WHEREAS, the Tukwila City Council desires to provide funding for parks
facilities, as referenced in the Capital Facilities Element of the Comprehensive Plan,
through the imposition of residential and non residential development impact fees;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. Findings. The City Council finds and determines that new growth and
development in the City creates additional demand and need for public parks facilities
in the City, and the City Council finds that new growth and development should pay its
proportionate share of the costs for new parks facilities to serve new growth and
development in the City. The City Council believes that this can be accomplished by the
assessment of parks impact fees on new residential, commercial, and industrial
development in the City. It is the Council's intent that the provisions of this ordinance
be liberally construed in establishing the parks impact fee program.
Section 2. Definitions. Terms or words not defined herein shall be defined
pursuant to RCW 82.02.090 when given their usual and customary meaning. For the
purposes of this ordinance, unless the context or subject matter clearly requires
otherwise, the words or phrases defined in this section shall have the following
meanings:
1. The "Act" means the Growth Management Act, Chapter 17, Laws of 1990,
First Extraordinary Session, Chapter 36.70A RCW et seq., and Chapter 32, Laws of 1991,
First Special Session, as now in existence or hereinafter amended.
2. "Building permit" means an official document or certification of the City
of Tukwila issued by the City's building official which authorizes the construction,
alteration, enlargement, conversion, reconstruction, remodeling, rehabilitation, erection,
placement, demolition, moving, or repair of a building or structure.
3. "City" means the City of Tukwila, Washington, County of King.
4. "Development activity" means any construction of a building or structure
that creates additional demand and need for parks facilities.
5. "Development approval" means any written authorization from the City,
which authorizes the commencement of the "development activity
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6. "Encumber" means to reserve, set aside, or earmark the parks impact fees
in order to pay for commitments, contractual obligations, or other liabilities incurred for
the provision of parks services.
7. "Fee payer" is a person, corporation, partnership, an incorporated
association or governmental agency, municipality, or similar entity commencing a land
development activity that requires a building permit and creates a demand for
additional parks capital facilities.
8. "Impact fee" means the payment of money imposed by the City on
development activity pursuant to this ordinance as a condition of granting
development approval in order to pay for the parks facilities needed to serve new
growth and development that is a proportionate share of the cost of parks capital
facilities that is used for facilities that reasonably benefit new development. Impact fees
do not include a reasonable permit fee, an application fee, and the administrative fee for
collecting and handling parks impact fees or cost of reviewing independent fee
calculations.
9. "Owner" means the owner of record of real property, as found in the
records of King County, Washington, or a person with an unrestricted written option to
purchase property; provided, that if the real property is being purchased under a
recorded real estate contract, the purchaser shall be considered the owner of the
property.
10. "Proportionate share" means that portion of the cost- for parks facility
improvements that are reasonably related to the service demands and needs of new
development.
11. "Public facilities" means the following capital facilities owned or operated
by governmental entities: (1) public streets and roads; (2) publicly owned parks and
open spaces and recreational facilities; (3) school facilities; (4) fire protection facilities
not part of a fire district; and (5) police facilities and essential public facilities as defined
by Chapter 36.70A RC41'.
Section 3. Parks Impact Fee Assessment.
A. The City shall collect parks impact fees from applicants seeking development
approvals from the City for any development activity in the City for which building
permits are required. This will include the expansion of existing uses, which create the
demand for parks services.
B Parks impact fees shall be assessed at the time of a technically- complete
building permit application that complies with the City's zoning ordinances and
building and development codes. Parks impact fees shall be collected from the fee
payer at the time the building permit is issued.
C. Except if otherwise exempt the City shall not issue the required building
permit unless or until the parks impact fees are paid.
Section 4. Use of Parks Impact Fees.
A. Pursuant to this ordinance, parks impact fees shall be used for parks facilities
that will reasonably benefit the City and its residents.
B. Fees shall not be used to make up deficiencies in City facilities serving an
existing development.
C. Fees shall not be used for maintenance and operations, including personnel.
D. Parks impact fees shall be used for but not limited to land acquisition, site
improvements, engineering and architectural services, permitting, financing,
administrative expenses and applicable mitigation costs, and capital equipment
pertaining to parks facilities.
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E. Parks impact fees may also be used to recoup public improvement costs
incurred by the City to the extent that new growth and development will be served by
the previously constructed improvement.
F. In the event bonds or similar debt instruments are or have been issued for
parks facility improvements, impact fees may be used to pay the principal on such
bonds.
Section 5. Parks Impact Fee Capital Facilities Plan. In order to collect parks
impact fees, the City must first adopt a parks capital facilities plan as an element of the
City's Comprehensive Plan. The City's Capital Facilities Plan for parks services shall
consist of the following elements:
1. The City's capacity over the next six years, based on an inventory of the
City's parks facilities both existing and under construction,
2. The forecast of future needs for parks facilities based upon the City's
population projections;
3. A six-year financial plan component, updated as necessary, to maintain at
least a six-year forecast for financing needed within projected funding levels;
4. Application of the formula set forth in this ordinance based upon the
information in the Capital Facilities Plan; and
5. City Council Action. No new or revised impact fee shall be effective until
adopted by the City Council following a duly advertised public hearing to consider the
City's Capital Facilities Plan or plan update.
Section 6. Parks Impact Fee Formula. The impact fee formula is based on the
assumptions found in Tukwila Parks Impact Fees, 2008, Exhibit A, and Tukwila Parks
Capital Facilities List, Exhibit B, attached hereto and by this reference fully incorporated
herein.
Land Use
Single Family
Multi- Family
Office
Retail
Industrial
PARKS IMPACT FEE CALCULATIONS
Impact Fee
Per Residential Unit 1 Per 1,000 Sq. Ft. GFA
Section 7. Parks Impact Fee Adjustments.
A. The City may adjust a parks impact fee at the time the fee is imposed to
consider unusual circumstances in specific cases to ensure that impact fees are imposed
fairly.
B. In calculating the fee imposed on a particular development, the City shall
permit consideration of studies and data submitted by a developer to adjust the amount
of the fee. The developer shall submit an independent fee calculation study to the
Director of Parks and Recreation, who shall review the study to determine that the
study:
1. is based on accepted impact fee assessment practices and methodologies;
2. uses acceptable data sources and the data used is comparable with the
uses and intensities planned for the proposed development activity;
3. complies with the applicable state laws governing impact fees,
4. is prepared and documented by professionals who are mutually agreeable
to the City and the developer and are qualified in their respective fields, and
5. shows the basis upon which the independent fee calculation was made.
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C. In reviewing the study, the Director of Parks and Recreation may require the
developer to submit additional or different documentation. If an acceptable study is
presented, the Director of Parks and Recreation may adjust the fee to that appropriate
for the particular development activity If an acceptable study is not presented, the
developer shall pay the impact fees required prior to submitting the study
D. A developer requesting an adjustment or independent fee calculation may pay
the impact fees imposed by this Ordinance to obtain a building permit while the City
determines whether to partially reimburse the developer by making an adjustment or
accepting the independent fee calculation.
Section 8. Credits. A fee payer can request that a credit, or credits, be awarded to
the fee payer for the value of dedicated land, improvements to, or new construction of
any system improvements provided by the developer to facilities that are identified in
the Capital Facilities Plan and that are required by the City as a condition of approving
the development activity.
Section 9. Appeals.
A. Any fee payer may pay the impact fees imposed by this ordinance under
protest in order to obtain a building permit.
B Appeals regarding parks impact fees imposed on any development activity
may only be taken by the fee payer of the property where such development activity
will occur No appeal shall be permitted unless and until the impact fee at issue has
been paid.
C. Determinations of the City staff with respect to the applicability of parks
impact fees to a given development activity, or the availability of a credit, can be
appealed to the City's Hearing Examiner pursuant to this section.
D. An appeal shall be taken within 10 working days of payment of the impact fees
under protest or within 10 working days of the City's issuance of a written
determination of a credit or exemption decision by filing with the City Clerk a notice of
appeal giving the reasons for the appeal with an accompanying appeal fee as set forth
in the existing fee schedule for land use decisions.
Section 10. Refunds.
A. If the City fails to expend or encumber the impact fees within six years from the
date the fees were paid, unless extraordinary circumstances or reasons exist, the current
owner of the property on which the impact fees were paid may receive a refund of such
fees.
B The City shall notify potential claimants by first class mail that they are entitled
to a refund. 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.
C. Owners seeking a refund must submit a written request for a refund of the fees
to the City within one year of the date the right to claim a refund arises or notice is
given, whichever comes later
D Any impact fees for which no application has been made within the one -year
period shall be retained by the City and expended on appropriate parks facilities.
E. Refunds of impact fees shall include any interest earned on the impact fees by
the City
Section 11. Exemptions. The parks impact fees are generated from the formula for
calculating the fees as set forth in this ordinance. The amount of the impact fees is
determined by the information contained in the adopted parks master plan and related
documents, as appended to the City's Comprehensive Plan. All new development
located in the City will be charged a parks impact fee, provided that the following
exemptions shall apply. Any development activity or project which has submitted a
technically complete building permit application prior to the effective date of this
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ordinance shall be exempt from the payment of parks impact fees. The following shall
be exempt from parks impact fees:
1. Replacement of a' structure with a new structure having the same use, at
the same site, and when such replacement is within 12 months of demolition or
destruction of the previous structure;
2. Alteration or expansion of or remodeling of an existing dwelling or
structure where no new units are created and the use is not changed,
3. Construction of an accessory residential structure;
4. Miscellaneous improvements including, but not limited to, fences, walls,
swimming pools, and signs;
5. Demolition of or moving an existing structure within the City from one site
to another;
6. Low income housing developed by individuals, nonprofit corporations, or
a housing authority may be exempted from impact fees at the discretion of City staff
subject to:
a. Fiscal impact analysis of the effect of impact fees upon low income
housing and how exempting housing from impact fees would forward the goals for
low- income housing in the City and King County;
b. That adequate documentation be provided that the housing will
remain available for low- income persons for a 10 -year period of time at affordable rents;
and
c. In the case of owner- occupied dwellings, that such housing will be
sold or leased at affordable rates to low income households for a period of 10 years; and
d. The impact fee for exempt development shall be calculated as
provided by this ordinance and paid with public funds. Such payments may be made
by including such amounts in the public share of the system improvements undertaken
within the City for parks services and facilities.
Section 12. Authority Unimpaired. Nothing in this Ordinance shall preclude the
City from requiring the fee payer to mitigate adverse and environmental affects of a
specific development pursuant to the State Environmental Policy Act, Chapters 43.21C
RCW and /or Chapter 58.17 RCN, governing plats and subdivisions, provided that the
exercise of this authority is consistent with Chapters 43.21C and 82.02 RCW.
Section 13. Severability. If any section, subsection, paragraph, sentence, clause or
phrase of this ordinance or its application to any person or situation should be held to
be invalid or unconstitutional for any reason by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of the
remaining portions of this ordinance or its application to any other person or situation.
Section 14. Effective Date. This ordinance or a summary thereof shall be
published in the official newspaper of the City, and shall take effect and be in full force
five days after passage and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this day of 2008.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, City Clerk
APPROVED AS TO FORM BY:
Office of the City Attorney
Jim Haggerton, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number.
Attachment: Tukwila Parks Impact Fees, 2008, Exhibit A
Tukwila Parks Capital Facilities List, Exhibit B
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EXHIBIT A
TUKWILA PARKS IMPACT FEES 2008
TABLE 1 2008 PARK IMPACT FEE CALCULATIONS
Tukwila Parks Capital Facilities List
Project List Impact Fees 2009 to 2015
Duwamish Riverbend Hill
Trail Connections
Tukwila Pond
Southgate Park
City of Tukwila Pool
Boat Launch
TOD Pedestrian Bridge
EXHIBIT B
Develop Phase II
Green River Trail to Renton Black/Cedar River
Development Phase II
Expand and Develop
[Extend land lease]; expand features and services
Christianson, Codiga, Fort Dent, Log Cabin
Sounder Connection
C:\Documents and Settings\A11 Users\ Desktop \Keilp\.MSDATA \ordinances\Parks Impact Exhibit B.doc
LV:ksn 11/14/2008
Total
Page 1 of 1
Project
Cost
3,000,000
1,000,000
3,000,000
1,000,000
1,500,000
750,000
2,000,000
12,250,000
Use of Impact Fees in
Federal Way, Olympia, Maple Valley,
Redmond and Vancouver
Report No. 1000014
October 14, 2008
www.sao.wa.gov
Washington State Auditor Brian Sonntag, CGFM
PERFORMANCE AUDIT REPORT
Brian Sonntag, CGFM
Washington State Auditor
Li he Puget Sound Region experienced an
unprecedented building boom during this decade.
Impact fees' purpose is to help offset the costs of
services associated with new development, such as
roads, schools, fire facilities and parks.
We chose this audit to examine whether cities are
effectively and efficiently using of this revenue source.
We selected the five cities with the state's highest
impact fee revenue from fiscal years 2004 to 2006 to
find out if:
Cities are collecting and administering impact fees
appropriately and in accordance with state law.
The public is getting what it is paying for.
Performance audits are conducted under the
provisions of citizens Initiative 900. This audit
was conducted on our behalf by Ernst Young in
accordance with Generally Accepted Government
Auditing Standards.
Cities have an opportunity to improve transparency
and access to public information by posting their
annual impact fee reports on their Web sites.
While cities are required by state law to report the
information annually, not all cities are posting the
information on their Web sites. It is good policy to
make that information readily available to citizens.
We hope all cities and counties that impose imact fees
will take advantage of the best practices identified in
this audit.
If you are interested in following up on the audit
resolution or public hearings, please check
our Web site at: http: /www.sao.wa.gov/
PerformanceAudit/audit_reports.htm.
Mission Statement
The State Auditor's Office independently serves the citizens of Washington
by promoting accountability, fiscal integrity and openness in state and local
government. Working with these governments and with citizens, we strive to
ensure the efficient and effective use of public resources.
What is an impact fee? A
one -time fee to offsetthe cost
of services associated with
new development. Cities can
collect four types of impact
fees: School, fire, park and=-
transportation impact fees.
impact fees are intended to=
supplement other funding
sources and state law requires
that they bespent on
facilities for which they are==
collected.
How are they administered?
=State law allows municipalities
I required to or choose-=
=to plan under the Growth
Management Act to assess
impact fees. Cities set the_ rate_:=
for and -the impact
:Who pays impact fees?
_Impact fees are charged to
builders as part of the building____
permit process. Impact fees
typically passed .invisibly frorn__-
the builder to the customer
1
Objectives
The audit was designed to determine:
1. The method each city uses to calculate impact fees based on the direction in
state law (RCW 82.20.050);
2. How each city demonstrates that these fees are appropriate; and
3. How effectively each city uses impact fees to pay for public facilities that:
Correspond to the demand for public facilities from new development.
Benefit new development proportionate to its share of the financing of new
or expanded facilities; and are consistent with a comprehensive plan or a
capital element of a comprehensive land use plan that has been adopted in
accordance with state law.
If the city does not meet these objectives, what are the resulting costs to all residents
and what can be done to reduce those costs?
Additionally, the audit addressed the nine elements contained in Initiative 900,
outlined on page 5 of this summary.
The audit cost $726,466.
Legislature
Several of the issues identified during the audit are caused by a lack of clarity in
laws governing impact fees, particularly regarding the items cities may purchase
with impact fee money. For instance, Olympia interpreted the law regarding road
impact fees to allow it to spend the money on bike trails. Redmond interpreted the
law regarding fire impact fees to allow the City to purchase fire trucks. The law states
the fees can only be spent on fire "facilities;" however the law does not define a
fire facility. The Legislature has an opportunity to empower cities to improve their
performance and definitively comply with state law.
Issues
The audit identified three main conclusions regarding the five cities' collection and use
of impact fees.
Lack of clarity in state law may be causing some cities to calculate and spend
impact fees in a manner that could be inappropriate.
One city is charging builders higher impact fees than they should and their fees
are not supported by a capital facilities plan as prescribed by law. We recommend
that city discontinue charging the fees until they are supported.
New developments in some cities are receiving questionable benefits for the
impact fees paid.
Best Practices Identified for All Municipalities
The audit identifies a number of best practices that streamline or improve the
collection, assessment and use of impact fees in order to minimize the costs and
maximize the benefits associated with them.
The complete text of
Initiative 90015 available
at www.sao.wa.gov/
PerformanceAudit
PDFDocuments /i900.
pdf.
Visit www.
sao.wa.gov/
PerformanceAudit/
audit reports.htm
for:
Full report
Cities' responses,
action plans
Public hearings
Cities' annual
status reports
2
Audit Issues
udit R
inanciiaf Impacts
1. Capital Facilities
State law defines capital facilities for
fire, transportation, park and school
impact fees. However, the definitions are
ambiguous, resulting in cities applying
varying interpretations of the term.
2. Fire Districts
The City of Redmond Fire Department
has developed a leading practice in its
relationship with Fire District 34. The fire
department's method of allocating costs
of new capital facilities between the city
and Fire District 34 should be evaluated
for use by other cities and districts.
3. Park Zoning
Olympia may not be spending park impact
fees as effectively as it could, based on
the results of a citizen survey and based
on other cities' use of multiple park
zones.
4. Interest- Bearing Accounts
Each city uses a different method to
allocate interest payments to impact
fee general ledger accounts.
The City of Vancouver's method
of allocating interest is a leading
practice among the Cities.
5. School Impact Fee Interest
Olympia and Federal Way do not remit any
interest they earn on school impact
fees to the school districts; therefore,
the interest income is not spent on the
purpose for which the impact fee was
imposed, as required by state law.
The Washington Legislature should amend
RCW 82.02.090 to better define capital
facilities and the following terms:
1. "Fire protection facilities"
2. "Public streets and roads"
3. "School facilities"
4. Address whether transportation impact
fees can be spent on multimodal
transportation (i.e., biking, walking, etc.).
Washington cities should be aware of the
City of Redmond's leading practice in its
relationship with Fire District 34 and attempt
to institute a similar contract if that city has a
relationship with a neighboring fire district.
Olympia should consider removing
the "one-haft to one mile" and "10- to
20- minute walk" from its definition of a
"Neighborhood Park."
Olympia should consider dividing the City
into two park zones to demonstrate a clear
relationship between where impact fees are
collected and spent. Two zones for park
impact fees would appear to be reasonable,
as the City is approximately six miles across.
Cities should consider using technology
similar to Vancouver's system that
allows for daily allocation of interest and
minimizes manual data entry.
Cities should not allocate interest based
on a rate that is not equal to actual
interest earned.
The Legislature should consider modifying
RCW 82.02.070 to better define "separate
interest- bearing accounts."
Cities should allocate actual interest earnings
on school impact fees collected and remit
those interest earnings to the appropriate
school district(s) so the interest earned on
impact fees can be spent in accordance with
state law.
$876,709
A more accurate
allocation of costs
between a city and
related fire districts.
$36,974
Using an
automated system
will reduce staff
time currently
used in manual
processes.
Accurately
tracking interest
income reduces
the risk of errors
or fraud.
Clarifying an
ambiguous law will
help cities.
$9,469
3
Audit issues
l udit Recommendations
F inancial Impacts-
6. Fire Impact Fee Schedule/
Calculation
Olympia's fire impact fee schedule/
calculation does not effectively
demonstrate the connection between
growth and system improvements.
Olympia does not take into
account the cost of public facilities
necessitated by new development or
the availability of other financing.
Redmond has developed a leading
practice in its fire impact fee
schedule /calculation, specifically the
method it uses to take into account
the impacts of fire and aid calls by
land use type, projected growth by
land use type and the fire Capital
Facilities Plan.
7. School Impact Fee Schedule/
Calculation
Some cities that collect school impact fees
are not consistently reviewing impact fee
calculations prepared by school districts.
8. Transportation Impact Fee
Schedule /Calculation
Redmond uses several leading practices
in calculating, charging and maintaining
its transportation impact fee.
9. Permit System
Redmond inputs collection, interest
earnings, and expenditure of each
impact fee in a database and in the
City's cash receipt system. The City is
duplicating work by entering the same
information twice.
Vancouver and Olympia integrated their
permitting systems with their accounting
systems. This is a leading practice that
results in more effective intemal controls
and limits manual data entry.
Cities should be aware of Redmond's
leading practice for the fire impact fees
schedule /calculation.
The City of Olympia should revisit its fire
impact fee schedule and consider if it
is suitable to continue charging the fire
impact fee. Specifically, Olympia should
more effectively address RCW 82.02.050
and 82.02.060 in its calculation and
demonstrate the fire impact fee it charges
reasonably relates to system improvements
that are reasonably attributable to growth.
Additionally, the City of Olympia should
consider implementing a periodic review
of its fire impact fee calculation and
schedule to determine if the fee is still
adequate, given the city's capital facility
needs and anticipated growth.
Cities should revisit their review process
of the school impact fee calculation /schedule
and capital facilities plan, knowing they
may be involved if litigation results from the
school impact fee assessed.
Cities should consider a construction cost
adjustment to align transportation impact
fees with the cost of projects they fund.
Cities that calculate impact fees based on
a short-term project list should consider
expanding that list to include projects
farther in the future that will be needed to
accommodate growth.
-Cities should adopt a transportation
impact fee schedule that allows
developers to easily determine the impact
fee to be paid upon building permit
issuance. The transportation fee schedule
should be based on typical land uses and
trips per land use.
Redmond should eliminate database
tracking of individual impact fee collection,
expenditures, and interest allocation to
save staff time.
All cities should maintain a permit system
that automatically interfaces with its
accounting system. Leading practices are
in place in Vancouver and Olympia.
$185,565
$345,313
Cities benefit
by having more
confidence that the
school impact fee they
charge is appropriate.
Impact fees will
more closely
match the costs
they support.
Cities may charge
a fee that better
represents the cost
of growth.
Developers will be
able to calculate
and understand
their transportation
impact fee
without outside
assistance.
$76,280
4
i_ nitiative 900 requires the State Auditor's Office to identify best practices
ei dur each performance audit. The following best practices were in place at
the cities during the audit:
Redmond
The City of Redmond Fire Department's method of allocating costs of new
capital facilities between the City and Fire District 34 should be evaluated for
implementation in other cities and districts.
The City of Redmond's fire impact fee calculation and schedule met all
aspects of the related state laws and demonstrates a leading practice by
taking the following items into consideration:
System improvements that are reasonably related to growth
The proportionate share of the costs of system improvements related to
new development
Redmond employs several leading practices with respect to calculating,
charging, and maintaining its transportation impact fee.
These leading practices include:
Inflation indexing
Costs based on a long -range plan
Adopted fee schedules by land use
Vancouver
The City of Vancouver uses the Emphasys SymPro system to assist in
managing the city treasury function, including interest allocation. The system
tracks investment earnings and interfaces with the city's general ledger
to retrieve the daily balances for all accounts to which to allocate interest.
Investment earnings are then allocated across the general ledger accounts
based on their average daily balances.
The City of Vancouver's school impact fee review process is a leading
practice, as the City demonstrates the most in -depth and comprehensive
review of the school impact fee calculation and schedule.
Vancouver and Olympia
The cities of Vancouver and Olympia integrated their permitting systems with
their accounting systems. This was identified as a leading practice among
the Cities due to the tighter internal controls and minimal manual entry.
About Initiative 900
Washington voters approved
_Initiative 900 in November_
2005; giving the State
Auditor's Office the authority
to conduct independent
performance audits of
state and local government_-
entities on behalf of citizens
toprornote accountability
and cost- effective uses
'of public resources.
1 -900 directs'the Office
to address the following
elements in each
performance audit:
Identification of cost savings.
6:
Identification of services that can be reduced or eliminated::
Identification of programs or
services that can be transferred_ if
to the private sector.
Analysis of gaps or overlaps
in programs or services and
recommendations to correct them.
Feasibility of pooling auditee's_
information technology systems.
Analysis of the roles and
functions of the auditee and.
recommendations to change or
eliminate roles or functions.
Recorrimendations forstatutory
or regulatory changes that rnay_°
be necessary for the auditee to
properly carry out its functions.
Analysisof the auditee's
per formance__data,
performance
self assessment systems=
9. identification of best practices_.
:Initiative 900 provides no
penalties forauditees that do
riot- followrecommendations in
performance audit reports._
The`complete text of
-the Initiative is available'
at: ww w.sao.wa.gov/
PerformanceAudit
PDFDocuments /i900.pdf.
5
We made the following recommendations to the Washington Legislature:
Amend RCW 82.02.090 to better define capital facilities and alleviate ambiguity.
Consider modifying RCW 82.02.070 to better define "separate interest bearing
accounts."
n 900 requires the legislative bodies for the governments in this report
to hold at least one public hearing to consider the audit results and receive
comments from the public within 30 days of this report's issue.
The corresponding legislative body must consider this report in connection with
its spending practices. A report must be submitted by the legislative body by
July 1 each year detailing the status of the legislative implementation of the State
Auditor's recommendations. Justification must be provided for recommendations
not implemented. Details of other corrective action must be provided as well.
The state Legislature's Joint Legislative Audit and Review Committee (JLARC) will
summarize any statewide issues that require action from the Legislature and will
notify the appropriate fiscal and policy committees of public hearing agendas.
Follow -up performance audits of any state or local government entity or program
may be conducted when determined necessary by the State Auditor.
Initiative 900 provides no penalties for state agencies or local governments that do
not follow recommendations made in performance audit reports.
To receive electronic notification
of audit reports, sign up at:
https: /www.sao.wa.gov /applications/
subscriptionservices/
ILARCposts its 1 -900
public hearings and
agendas at: http:
www.leg.wa.gov/
ILARC/i- 900.htm
6
Washington State Auditor
sonntagb @sao.wa.gov (360) 902 -0360
Director of Performance Audit
Linda Long, CPA, CGFM, CGAP Iongl @sao.wa.gov (360) 902 -0367
Brian Sonntag, CGFM
Communications Director
Mindy Chambers chamberm @sao.wa.gov (360) 902 -0091
To request a public record from the State Auditor's Office:
Mary Leider, Public Records Officer Ieiderm @sao.wa.gov (360) 725 -5617
For general information from the State Auditor's Office:
Main phone number (360) 902 -0370
Web site http: /www.sao.wa.gov
Toll-free hotline for reporting government waste and abuse (866) 902 -3900
To find your legislator http: /apps.leg.wa.gov /districtfinder
To contact the City of Federal Way:
Mayor Jack Dovey jack.dovey @cityoffederalway.com (253) 835 -2401
To contact the City of Olympia:
Mayor Doug Mah dmah @ci.olympia.wa.us (360) 753 -8447
To contact the City of Maple Valley:
Mayor Laure lddings council@ci.maple-valley.wa.us (425) 413 -8800
To contact the City of Redmond:
Mayor John Marchione mayor @redmond.gov (425) 556 -2101
To contact the City of Vancouver:
Mayor Royce Pollard mayor @ci.vancouver.wa.us (360) 696 -8211
Americans with Disabilities
In accordance with the Americans with Disabilities Act, this document will be made available in alternate formats.
Please call (360) 902 -0370 for more information.
7
State of Washington
Performance Audit of Impact Fees
i!i ERNST& YOUNG
Quallfyln Everything We Do
AUDIT AREA 3 PARK ZONING
State of Washington Performance Audit of Impact Fees
FINDING
The use of multiple zones is seen as an effective way to reasonably relate the collection and
expenditures of park impact fees to areas experiencing growth as discussed at the end of this
page. Based on the use of one zone, the City of Olympia is potentially spending neighborhood
park impact fees that are inconsistent with its definition of a neighborhood park and results of a
citizen survey. Therefore, the City of Olympia may not be spending park impact fees as
effectively as it could using multiple zones.
BACKGROUND
Original Finding Identification
During Phase 1 of the performance audit, Ernst Young noted that the City of Olympia and the
City of Redmond use only one zone for the assessment, collection, and expenditure of park
impact fees. The City of Vancouver uses multiple park zones in an effort to demonstrate a
reasonable relationship between the fee charged to the developer and the park needs
generated by growth in that zoning area.
According to RCW 82.02.050 3 (a), impact fees "Shall only be imposed for system
improvements that are reasonably related to the new development." While there are no
requirements in Washington State law to have multiple park zones, Ernst Young noted that
other cities find zoning to be an effective way to make the impact fee relationship, a reasonable
relationship.
Audit Work Conducted
During Phase 3 of the audit, Ernst Young examined the potential finding further. First, Ernst
Young met with the City of Vancouver to gain an understanding of how multiple park zones work
for Vancouver. Next, Ernst Young met with the City Olympia to gain an understanding of why
one zone was selected for assessing, collecting, and spending park impact fees in Olympia.
Finally, Ernst Young sampled some park impact fees that were collected to determine where
they were potentially spent within the City of Olympia.
Ernst Young LLP Page 26 of 67
State of Washington Performance Audit of Impact Fees
Vancouver's Rationale for Multiple Park Zones
Ernst Young noted that the City of Vancouver has chosen to implement ten different park
zones (or districts) so as to provide a clear demonstration between where fees are spent and
where fees are collected. The size of each zone is large enough so that an adequate amount of
funding can be collected in each area. The ten park zones span the urban unincorporated area
of the county, as the City of Vancouver and Clark County operate under the same parks
department. If one were to look at the city limits of Vancouver, there would be approximately
four park zones within the City limits. In addition to multiple zones effectively demonstrating the
connection between where fees are spent and where they are collected, the City offered the
following other benefits of having multiple park zones:
The impact fees assessed vary by zone to account for the differences in and value
across the city. Therefore, a developer building a house in zone one, where and is
more expensive, will pay a higher impact fee, where as a developer building a home in
zone ten, where land is cheaper, will pay a smaller impact fee.
Multiple park zones allow the City to have the ability to not collect impact fees in a zone
if the zone at some point contains all necessary parks to meet the level of service
standards and there is not significant anticipated growth in the zone.
The City of Vancouver did provide some disadvantages to having multiple park zones, which
included the following:
Accounting is more difficult with multiple park zones.
There is Tess flexibility with spending the park impact fees collected_
Spending the impact fees within the six -year time period (as required by law) is more
difficult.
City of Olvmoia One Zone Research
Ernst Young met with the City of Olympia to gain an understanding of how one park zone
works for the City and how effectively the single zone demonstrates the connection between
where fees are collected and where they are spent. Ernst Young noted that because the City
operates its parks system as a single zone, Olympia may spend park impact fees collected in
the City on any park within the City limits.
Ernst Young LLP Page 27 of 67
State of Washington Performance Audit of Impact Fees
Types of Parks in Olympia
First, Ernst Young noted that the City of Olympia develops the following types of parks using
park impact fees, as per the City's Capital Facilities PIan
Neighborhood Parks: Neighborhood parks are a common gathering place for families
and children, all within a 10 -20 minute walk from home.
Community Parks: Community parks are places for organized recreation programs and
sports activities. Community parks will include athletic fields and picnic shelters or other
facilities for large -scale community use.
Special Use Parks: Special use parks offer unique features and are typically more
special- interest oriented. Examples of these parks are the Japanese Garden and
Heritage Fountain. These parks are used by the entire community and become
treasured places in the community.
Open Space Parks: Open space is for passive use, nature trails, and wildlife habitat.
Questions Regarding the Neighborhood Park Designation
After gaining an understanding of the various types of parks, Ernst Young became concerned
about the neighborhood park designation. All other parks (community, special use, and open
space) in the City of Olympia are built for use by the entire City (as per their definition shown
above); thus, implementation of a single park zone appears reasonable, as the entire
community benefits from the development of these parks regardless of where a home is built.
However, neighborhood parks are built specifically for neighborhoods, as the definition in
Olympia's capital facility plan indicates that they are a 10 -20 minute walk from a home.
Furthermore, Olympia's Park and Open Space Standards and Definitions document describes
neighborhood parks as generally small in size and serve an area of approximately one -half
to one mile radius but serve all residents in the community." Based on this understanding, Ernst
Young noted that one park zone might allow a park impact fee to be collected on one side of
the City, yet be spent on building a neighborhood park across town, outside of the City's own
definition of neighborhood parks. In this scenario, the neighborhood park may not benefit the
citizens and developers who paid the park impact fee, as the neighborhood park is built further
than a 10 -20 minute walk and further than one -half to one mile away.
The City of Olympia's Justification for One Zone
The City of Olympia implemented park impact fees in 1993 and has utilized one zone since its
implementation. The justification for the City's determination to use one zone in 1993 is based
Ernst Young LLP Page 28 of 67
State of Washington Performance Audit of Impact Fees
on reasoning similar to that identified by the City of Vancouver as disadvantageous to having
multiple park zones (noted above). The City of Olympia further explained to Ernst Young that
the "reasonableness" of one zone can be understood based on the outcome of an Olympia
citywide survey conducted in 2006. The survey was conducted by the City to assess residents'
opinions and behaviors regarding City services. The survey included the following City
government programs and services:
Communication with citizens
Garbage and recycling
Sewer
Drinking water
Storm and surface water
Parks
Public safety
Transportation services
The survey selected 400 residents, at random, from a list of utility customers. The survey was
conducted over the phone and has a margin of error of ±1- 5% at the 95% confidence interval.
The direct results of the parks portion of the survey included the following:
"39% visited a park in Olympia 12 or more times in the past year
7 in 10 were "very satisfied" with their park experiences.
Majorities were "definitely" willing to travel up to six miles to get to an open space area
(59 and a special use park (52 44% were "definitely" willing to travel to a
community park.
3 in 5 were "definitely" (36 or "probably" (25 willing to travel three miles to a
neighborhood park.
1 in 3 respondents (or someone in their household) had participated in a recreational
activity provided by the City.
9 in 10 agreed that art events are valuable to the quality of life in the City "4
Ernst Young's Views on the Survey Results
The survey results for the special use, open space, and community parks (bullet three above)
do support the City's definition and plan for usage of these parks by citizens across the City in a
single park zone. However, the survey results (bullet four above) do not support the City's
definition and /or implementation of a single park zone for neighborhood parks. The survey
Ernst Young LLP Page 29 of 67
State of Washington Performance Audit of Impact Fees
shows that a total of 61% of Olympia residents would "definitely" or "probably" travel up to three
miles to visit a neighborhood park. The City of Olympia is approximately six miles across;
therefore, survey results for neighborhood parks do not correlate to the City's approach of one
zone.
Testing of Park Impact Fees Collected
Ernst Young conducted an analysis of park impact fee collections during the audit period 2004
2006 and the expenditure of the 2004 and 2005 collections Ernst Young found that
although there were community, special use, or open space park systems located close to
where the impact fees were gathered, roughly 96% of the neighborhood parks were not built
within the one -half to one mile radius of where the impact fees were gathered. Ernst Young
also found that the average distance between the location where an impact fee was collected
and the location where the impact fee was potentially used (the average distance of the impact
fee collection to the three possible parks where the impact fee was spent) on a neighborhood
park was approximately four and one -half miles. This four and one -half mile average shows
that neighborhood parks are not built within the one -half to one mile radius or 10 to 20- minute
walking distance from the location of the development, based on Olympia's definition of
neighborhood parks. Given that neighborhood parks are constructed at locations that on
average may be several miles from the impact fee collection development site, neighborhood
parks are being developed in current neighborhoods lacking parks, raising the question of
whether the single zone approach most effectively demonstrates the connection between the
impact fees and the growth that paid them.
System Approach to Parks in Olympia
To support its neighborhood park definition, City planners in Olympia explained the one -half to
one mile distance is a goal for the City's system of parks This goal is based on a standard level
of service of neighborhood park acres for 1,000 residents. Olympia has a goal of 1.44 acres per
1,000 residents. Olympia utilizes a 20 -year plan for its parks system. In the next 20 years, the
City hopes to realize its current definition of a neighborhood park.
Olympia explained to Ernst Young that its park planning utilizes a "systems approach."
According to RCW 82.02.050 3(c), Impact fees are permitted to be "used for system
improvements that will reasonably benefit the new development." Olympia's parks may be
considered appropriate improvements given the definition of System Improvements in RCW
Ernst Young LLP Page 30 of 67
State of Washington Performance Audit of Impact Fees
82.02.090: "public facilities that are included in the capital facilities plan and are designed to
provide service to service areas within the community at large, in contrast to project
improvements
RECOMMENDATIONS
Cities should consider the use of multiple zones to more effectively demonstrate a clear
relationship between where impact fees are collected and spent. Ernst Young recommends
that the City of Olympia take both of the following actions in its approach to park planning:
1. Consider revising the "one -half to one mile" and "10-20 minute walk" statements from its
definition of a "Neighborhood Park" if the City's intent is to build these neighborhood
parks for the entire City rather than for a more localized neighborhood.
2. Consider dividing the City into two park zones to more effectively demonstrate a clear
relationship between where impact fees are collected and spent. Two zones for park
impact fees would appear to be reasonable, as the City is approximately six miles across
and according to the survey:
"3 in 5 were "definitely" (36 or "probably" (25 willing to travel three miles to a
neighborhood park."
If 61% of the citizens are "definitely" or "probably" willing to travel three miles to a
neighborhood park, then dividing the City into 2, three -mile wide zones would appear to
be appropriate to meet the demands of the City residents.
Note: The City of Redmond uses only one park zone as well; however, the audit focused on the
City of Olympia because it exhibited the greatest opportunity during the Phase 1 planning
process. No detailed performance audit work was conducted at the City of Redmond; however,
the City of Redmond should consider the above recommendations as well.
POTENTIAL COST SAVINGS AND /OR OTHER IMPACTS
There is no direct potential cost savings associated with the recommendations above.
However, with the current definition of a neighborhood park, Ernst Young calculated the dollar
amount of impact fees that were collected during the performance audit period (2004 -2006) that
Ernst Young LLP Page 31 of 67
were potentially spent more than three miles away (Note. Ernst Young used three miles,
rather than one -half to one mile, due to the results of the survey discussed above). This dollar
figure was calculated by performing the following steps:
1. Randomly selected a sample of 50 neighborhood park impact fees collected during the
period (12% of the entire population). A total of 417 neighborhood park impact fees
collected during the performance audit period have been expended.
2. Determined the distance between the address where the impact fee was collected and
where the impact fee could have potentially been spent within the City on a
neighborhood park. Ernst Young used Google Maps to perform this function.
3. Out of 50 samples selected, Ernst Young noted that 80% of impact fees were
potentially spent on a neighborhood park more than three miles away
4. Ernst Young then extrapolated the results of the testing to the remaining 417 impact
fees collected for the period by determining that 80% of the entire amount was
potentially spent on neighborhood parks greater than three miles away. The total dollar
figure came to $36,974.
5. Finally, Ernst Young noted that park impact fees have been collected in the City of
Olympia since 1993 under the same methods and park definitions. However, Ernst
Young did not obtain data outside of the performance audit period (i.e., outside the
scope of the audit) and was therefore unable to calculate the total dollar amount of park
impact fees spent on neighborhood parks in areas that did not experience growth since
the inception of the fee in 1993.
Refer to Appendix E Olympia Park Impact Fee Collection and Spending for a detailed
map of the sample of 50 park impact fees tested.
Exhibit 7 Estimated Olympia Park Impact Fees Potentially Spent on Neighborhood Parks Greater Than Three Miles Away
During the Performance Audit Period of 2004 -2006
Estimated Olympia Park Impact Fees
Potentially Spent on Neighborhood Parks
Greater Than Three Miles Away
Ernst Young LLP
State of Washington Performance Audit of Impact Fees
$36,974
Page 32 of 67
State of Washington Performance Audit of Impact Fees
AUDIT AREA 6 FIRE IMPACT FEE SCHEDULE /CALCULATION
FINDING
The City of Redmond has developed a leading practice in its fire impact fee
schedule /calculation. Specifically, the schedule /calculation takes into account the impacts of
fire and aid calls by land use type, projected growth by land use type and the fire Capital
Facilities Plan (CFP).
The City of Olympia's fire impact fee schedule /calculation does not appear to effectively
demonstrate the fee's connection to system improvements related to growth, the cost of public
facilities necessitated by new development or the availability of other financing.
BACKGROUND
Original Finding Identification
During Phase 1 of the performance audit, Ernst Young noted that the City of Olympia collects
fire impact fees at a flat per- square -foot rate ($0.159 per square foot), regardless of the land use
type. Therefore, a single family home pays the same rate per square foot as a restaurant or
manufacturing facility. The fire impact fee rate was determined by an outside consultant in
1994. Ernst Young noted that the fire impact fee has not been updated since its adoption in
1994.
During Phase 1, Ernst Young noted that the City of Redmond assesses fire impact fees based
on the type of land use. To determine the fire impact fee that each type of land use pays, the
City of Redmond takes into consideration the number of historical fire and aid calls based on the
type of land use (i.e., multi- family vs. retail, etc.).
Audit Work Conducted
During Phase 3 of the performance audit, Ernst Young spent more time working with the cities
of Redmond and Olympia to gain a better understanding of how the impact fee calculation and
schedule were determined.
Ernst Young LLP Page 41 of 67
State of Washington Performance Audit of Impact Fees
Fire Impact Fees in the City Olvmr is
City of Olympia Planning and Fire Department
Ernst Young met with the City of Olympia's Fire Department and Planning Department to gain
a better understanding of the impact fee calculation that what was prepared in 1994 to
determine the reasoning behind a flat rate for all land uses. The City of Olympia was initially
unable to explain how the calculation was determined in 1994, as there were no individuals
currently within the City who were working when the calculation was determined Further
information was later provided by the City to speak to the independent study that was conducted
in 1994 to determine the impact fee rate. The information provided explained how the City's
approach was standards driven, using prior years' costs against the total area of fire coverage
to define a per- square -foot fee for any new development in the City to maintain that standard
level of service. The City maintained that this method allows it to forecast the cost of new fire
protection based on prior years' incurred expenses. However, the City did state that this
method did not directly relate to its forecasted expenses for fire protection facilities in its capital
facilities plan. The City of Olympia also explained to Ernst Young that there have been very
few (if any) developer complaints regarding the fire impact fee requiring a detailed explanation
of the study.
Rate Study
Ernst Young was able to obtain a copy of the fire impact fee study prepared for the City by an
independent consultant in 1994 Ernst Young reviewed the study to gain an understanding
of how the calculation was prepared, and the rate was ultimately determined. Ernst Young
noted that the fire impact fee rate per square foot was calculated by the independent consultant
using the following steps:
1. Determined the City of Olympia's fire protection facilities inventory as of June 1992 and
the 1992 square feet of development served by the current inventory. Using these
figures, a fire apparatus per square foot was determined for the City for 1992. See
Exhibit 9 below.
Ernst Young LLP Page 42 of 67
Exhibit 9 - Fire Apparatus per Square Foo of Development
AiparatuS. Per
eveloprnerit
7
u��'
3 38,171,851 1 000000078
6 38.171,851 1 .000000157
3 38,171,851 1 .000000078
1 38.171.851 1 .000080028
38,171,851 1 .000000026
Stations
Pumpers
Rescue Units
1 Aerial Units
Hazardous Materiais Units 1
2. Next, the 1992 cost per inventory item was determined, as well as a cost per square
foot. See Exhibit 10 below.
Exhibit 10 - Capital Cost per Square Foo of Development'
po en.
Stations
Pumpers
Rescue Units
Aerial Units
Hazardous Materials Units
.*guarOlfti Oda
.000000078
.000000157
.000000078
.000000026
.000000026
Total Cost/Sq Ft
3. Previous years' expenditures for fire protection facilities were then determined. See
Exhibit 11 below.
Exhibit 11 Previous Expenditures for Fire Protection Facilities
ga
1985
1986
1987
1088
1989
1990
|1881
1992
1993
9-Year Total
State of Washingto Performance Audit of Impact Fees
$.131352
.043175
.00429 1
0104 1
.00208 1
0.1012971
1,684,000
275,000
55,000
400,000
80,000
�37,870
285,940
137,530
47,120
47,280
42,460
109,780
28,308
36,410
4. An annual average of the nine-year total was calculated ($85 Using this number,
along with the 1992 square feet of development (38.171.851). an annual average per
square foot of development was computed: $0.0022491.
Ernst Young LLP Page 43 of 67
State of Washington Performance Audit of Impact Fees
5. Using a discount rate of 7 the net present value of 27.5 years of future payments (at
$0.0022491) will total $0 032157 per square foot.
6. Therefore, the impact fee rate is $0.159140 per square foot ($0.191297 (from
Exhibit 14) minus $0.032157.))
Upon completion of reviewing Olympia's fire impact fee calculation to arrive at the $0.159 per
square foot assessed to developers, Ernst Young could not determine whether Olympia's rate
study meets the following requirements by Washington State law:
"Should only be imposed for system improvements that are reasonably related to the
new development" (RCW 82.02.050). Furthermore, "system improvements" are
defined in RCW 82.02.090 as public facilities that are included in the capital
facilities plan and are designed to provide service to service areas within the
community at large, in contrast to project improvements."
"Should not exceed a proportionate share of the costs of system improvements that
are reasonably related to the new development" (RCW 82 02.050)
A schedule of impact fees adopted for each type of development activity subject to
impact fees, including (RCW 82.02.060):
The amount of the impact fee to be imposed for each type of system
improvement
The schedule should be based on a formula or other calculation method
The formula should take into account proportions including, but not limited
to:
1. The cost of public facilities necessitated by new development
2. The methods by which public facilities were financed
3. The availability of other means of funding public facility improvements
4. An adjustment to the cost of the public facilities for past or future
payments either made or anticipated to be made, including payments
proratable to the system improvement, along with
a. User fees
b. Debt service payments
c. Taxes
Ernst Young noted that the City of Olympia's fire impact fee calculation does not appear to
include all required considerations:
Ernst Young LLP Page 44 of 67
1. System improvements that are needed due to growth (a requirement of RCW 82.02.050);
rather, the calculation uses previous years' expenditures.
2. Proportionate share of the costs of system improvements related to new development (a
requirement of RCW 82.02.050), as no such information related to new development is
mentioned in the calculation.
3. The formula used to determine the fire impact fee amount does not appear to take the
following items into consideration (a requirement of 82.02.060):
The cost of public facilities necessitated by new development
The methods by which public facilities have been financed
The availability of other means of funding public facility improvements
4. The calculation was conducted in 1994 and has not been revised or updated since
implementation, even though costs and growth patterns have changed.
5. The calculation includes capital facilities that are currently ambiguous under RCW
82.02.090. As stated in Audit Area 1 of this report, RCW 82.02 090 defines the term
capital facilities for fire, transportation, park and school impact fees. However, the
definitions provided are ambiguous, resulting in the Cities applying varying
interpretations of the definition of a "fire protection facility." Under the same guidelines
as those defined in Audit Area 1 of this report, the City of Olympia's use of fire apparatus
(i.e., pumpers, rescue units, aerial units and hazardous materials units) as components
to its fire impact fee calculation should be considered.
Fire Impact Fees in the City of Redmond
Next, Ernst Young met with the City of Redmond to gain an understanding of the formula it
used to calculate the City's fire impact fee schedule. Exhibit 12 below shows the City of
Redmond's fire impact fee schedule for the performance audit period.
Exhibit 12 City of Redmond's Fire Impact Fee Schedule 1999 -2006
Y_ a id. In pact:Fe
a
Single- family 1 $94.48 per residential unit
Multi- family I $132.73 per residential unit
Office 1 $0.11 per square foot
1 Retail 1 $0.13 per square foot
1 Industrial 1 $0.01 per square foot 1
State of Washington Performance Audit of Impact Fees
in order to develop the different rates for land use categories as shown above, the City of
Redmond used historical data to determine the number of emergency (fire and aid) calls per
Ernst Young LLP Page 45 of 67
State of Washington Performance Audit of Impact Fees
land use type. Ernst Young noted that national emergency call data is available; however, it
was important for Redmond to use Redmond data instead of national data, given that the
jurisdiction has unique fire safety requirements.
The City of Redmond determined its fire impact fee schedule (Exhibit 12) by performing the
following calculation steps in 1999:
1. Determined the capital facility needs for the fire department as of 1999 Once the capital
facility needs were identified, the City of Redmond determined the percentage of those
needs that arose due to growth.
2. Obtained 1997 historical incident response (fire and aid) data from the City fire
department. Response data is logged by the City of Redmond according to 13 land use
categories. The land use incident response data was further organized into the following
land use categories:
a. Single- family
b. Multi- family
c. Office
d. Retail
e. Industrial
3. Determined the increase in annual incident responses due to growth, by land use type
4 Allocated the capital facility needs by incident responses due to growth (calculated in
step one above) to each land use type, based on the proportionate number of incident
calls per land use type.
5 Calculated the anticipated growth per land use type over a 17 -year period.
6. Determine the impact fee to be paid by each land use type (Exhibit 16) by dividing the
capital costs allocated to each land use type (step four) by the anticipated growth per
land use type (step five).
Ernst Young noted that the City of Redmond's fire impact fee calculation and schedule met all
aspects of RCW 82.02.050 and 82.02.060 and demonstrates a leading practice. Redmond's fire
impact fee calculation and schedule takes the following items into consideration
System improvements that are reasonably related to growth
The proportionate share of the costs of system improvements related to new
development
Ernst Young LLP Page 46 of 67
State of Washington Performance Audit of Impact Fees
Finally, the City of Redmond reviewed its fire impact fee schedule in 2006 and noted that
updates were needed. Therefore, the schedule was updated in 2006, and new rates were
charged for fire impact fees.
RECOMMENDATION
Other cities within the State of Washington should be aware of the City of Redmond's leading
practice for the fire impact fees schedule /calculation.
The City of Olympia should revisit its fire impact fee schedule and consider if it is suitable to
continue charging the fire impact fee. Specifically, Olympia should more effectively address
RCW 82.02.050 and 82.02.060 in its calculation and demonstrate that the fire impact fee
charged reasonably relates to system improvements that are reasonably attributable to growth.
Additionally, the City of Olympia should consider implementing a periodic review of its fire
impact fee calculation and schedule to determine that the fee is still adequate, given the yearly
changes in growth expectations and capital facility needs.
POTENTIAL COST SAVINGS AND OTHER IMPACTS
There are no direct potential cost savings associated with this finding and recommendation.
However, Ernst Young looked at and compared the City of Olympia's fire impact fee in two
ways:
1. Scenario 1: Ernst Young used the City of Redmond's calculation and growth data to
project what the City of Olympia's fire impact fee schedule could have potentially been
during the audit period, based on actual costs defined in the City of Olympia's 2003
capital facilities plan.
2. Scenario 2: Ernst Young took the City of Olympia's current fire impact fee calculation
and removed the capital facilities in question (i.e., fire apparatus).
Ernst Young then took the above two scenarios and compared them to the amount of fire
impact fees that were collected during the audit period.
Ernst Young LLP Page 47 of 67
Scenario 1: Fire Impact Fee Schedule Calculation Based on the City of Redmond's
Calculation
Ernst Young used the City of Redmond's calculation, noted as a leading practice in our finding
in this audit area, as a way to demonstrate what the City of Olympia's fire impact fee might have
been if it was directly tied to its fire CFP. Ernst Young also used the City of Redmond's
growth data and historical statistical fire and aid response data to develop a potential fire impact
fee schedule for the .City of Olympia. To do this, Ernst Young performed the following steps
1. Used the City of Olympia's Fire CFP from 2003 as a basis for the needed capital
facilities. (Note: Ernst Young could not determine the capital facilities in the 2003 CFP
that were due to growth; therefore, Ernst Young used 100% of the fire capital facilities
from the plan for purposes of this calculation.)
2. Inserted Olympia's CFP data into Redmond's calculation Olympia did not have
sufficient historical incident response data (determines the fee each land use type pays)
or anticipated growth data to use in the calculation Therefore, for purposes of this
calculation, Ernst Young used Redmond's historical incident response data and
Redmond's anticipated growth with the following adjustments Ernst Young noted that
the City of Redmond is a high growth city, where as the City of Olympia is somewhat of
a low- growth city; therefore, Ernst Young did not use 100% of the City of Redmond's
growth in the calculation for the City of Olympia. Rather, Ernst Young looked at the
population growth between the two cities during the period 2000 -2007 and noted that
the City of Olympia's growth was 36% of the City of Redmond's growth, based on
population statistics. Therefore, Ernst Young used 36% of Redmond's growth in the
calculation and applied this to the growth rates by land use type noted below.
Note: The City of Redmond's anticipated growth over the 17 -year period varies by
land use type. The information below details the City of Redmond's anticipated
growth rate by land use type for the 17 -year period and the City of Olympia's
estimated growth rate by land use type at 36% of Redmond's anticipated growth.
Single- family
1 Multi- family
1 Office
Retail
Industrial
State of Washington Performance Audit of Impact Fees
c f %R tiiorid'.s_ -_.City`of-Qlyrripia's_Estiiiiafed
pr as a C'fo�rvth Forecas ted Growth
54% 19%
63% 23%
133% 48%
65% 23%
24% 1 9%
Ernst Young LLP Page 48 of 67
After performing the above steps, Ernst Young estimated the potential fire impact fee
schedule for the City of Olympia for the performance audit period. Exhibit 13 below shows the
potential fire impact fee schedule for the City of Olympia.
Exhibit 13 Potential Olympia Fire
Anticipated Growth
YLaidse
Single- family
Multi- family
Office
J _Retail
1 Industrial
Impact Fee Schedule Based on Anticipated Growth Equal to 36% of Redmond's
State of Washington Performance Audit of Impact Fees
Im pact Fee-
1 $82.73 per residential unit
1 $116.22 per residential unit
1 $97.02 per 1,000 sq. ft.
1 $110.99 per 1,000 sq. ft.
1 $11.45 per 1,000 sq. ft.
Next, Ernst Young obtained a list of all fire impact fees collected for the performance audit
period (2004 -2006) (Note: A total of $491,036 in fire impact fees was collected for the period.)
Using this data, Ernst Young recalculated each fire impact fee collected. Using the above fire
impact fee schedule, it shows that the City of Olympia under this scenario would have
potentially collected $145,723 in fire impact fees, which is $345,313 less than what the City
charged under its current calculation.
Scenario 2: Recalculation of the City of Olympia's Fire Impact Fee Calculation
Ernst Young used the fire impact fee study prepared for the City by an independent consultant
in 1994' to recalculate the fire impact fee schedule by removing the capital facility items in
question (i.e., fire apparatus, etc.).
1. Ernst Young determined the City of Olympia's fire protection facilities inventory as of
June 1992 and the 1992 square feet of development served by the current inventory
This was done by removing the capital facilities (Le., fire apparatus) in question, as seen
in Exhibit 14 below.
Ernst Young LLP Page 49 of 67
Exhibit 14 Fire Apparatus per Square Foot of Developrnent
Stations
Pumpers
Rescue Units
1 Aerial Units
Hazardous Materials Units
2. Next, the 1892 cost per inventory item was datannined, as well as a cost per square
foot. See Exhibit 15 below.
Exhibit 15 Capita Cost per Square Foo of Development'
Stations
3
/g
|Z
4
i4
3B.171.8§�
38,171,851
38.171.851
30.1-74.851-
State of Washingto Performance Audit of impact Fees
Apparatus
~x '.r����--�-'
Foot
38.171.851 .000000078
1 704000045-7
,04900-909-7g
Total Cost/Sq Ft 0.1313521
izsot
3. Previous years' expenditures forfina protection facilities were then determined. See
Exhibit 16 below (same as Exhibit 15 shown above).
Exhibit 16 Previous Expenditures for Fire Protection Facilities
1985
1988
1987
1988
1989
1990
1991
1992
1993
1 9-Year Total
:Expenditures
37,870
285,940
137,530
47,120
47,280
42,460
109,780
28,308
36,410
$772,698
4. An annua average of the n r tota was calculated ($85,855). Using this number
along with the 1992 square feet of development (}8.171.851). an annual average per
square foot of development was computed ao$O.0U224S1.
5. Using a discount rate of 7%, the net present value of 27.5 years of future payments (at
$0.O0224S1) will total $O.O32157 per square foot.
Ernst Young LLP Page 50 of 67
6. Therefore, the fire impact fee rate is $0.099 per square foot ($0.131352 [from
Exhibit 19] minus $0.032157).)
Ernst Young took the new fire impact fee calculation of $0.099 per square foot of development
and recalculated under this scenario what should have been collected in fire impact fees over
the audit period. Ernst Young calculated that $305,470 would have been collected; which is
$185,656 less than what the City charged under its current calculation.
Comparison of Scenarios 1 and 2 above to the Actual Fire Impact Fees Collected
Finally, Ernst Young compared the above two fire impact fee calculations to the actual amount
of fire impact fees collected by the City of Olympia during the audit period (2004- 2006).
Exhibit 17 Comparison of Potential Fire Impact Fees Collected During the 2004 -2006 Performance Audit Period
491,036
Potential Overcharge
Potential Undercharge
145,723
345,313
State of Washington Performance Audit of Impact Fees
otential Fire
tmpact=F_ees
ollected=Utnder
'cePario 2
305,470
185,565
Potential. Fire
Impact Fees
ollected Based
:PPiiserOf
.updated CFP
7
In looking at the above table, the City of Olympia has potentially overcharged for fire impact fees
anywhere from $185,565 to $345,313; however, please note the potential for an undercharge,
as stated below in the final comments to this audit area.
Lastly, Ernst Young noted that the City of Olympia's fire impact fee schedule /calculation has
been the same since its inception in 1994; however, since Ernst Young only had fire impact
fee collection data for the audit period, it was unable to calculate an overcharge for the life of the
fire impact fee (i.e., 1994 2008).
Please note that this is simply an estimated fire impact fee schedule for the City of Olympia, as
growth and historical fire and aid call data was not sufficient from the City. The City asserts it
has undercharged the fire impact fee. Ernst and Young believes this assertion may be possible
based on the fire impact fee calculation the City uses not being tied to its Capital Facilities Plan
(CFP) and the City's CFP appears to not be up -to -date. The City is planning on building a new
fire station that costs roughly $7.9 million; however, this facility was not included on the 2003
Ernst Young LLP Page 51 of 67
State of Washington Performance Audit of Impact Fees
CFP. Had the City tied its impact fee calculation to its CFP and updated its CFP, it is possible
that the City may have undercharged, rather than overcharged. Although, the City provided
Ernst Young population statistics, fire and aid call data, and construction data, it was
insufficient to validate the City's assertion.
Ernst Young LLP Page 52 of 67
City of Tukwila
Finance and Safety Committee
FINANCE AND SAFETY COMMITTEE
Meeting Minutes
November 18, 2008, 5:00 p.m.; Conference Room #3
PRESENT
Councilmembers: Dennis Robertson, Chair; Pam Linder and Kathy Hougardy
Staff: Rick Still, Lisa Verner, Gail Labanara, Viki Jessop, Shawn Hunstock, Mary Miotke, Nick Olivas,
David Haynes, Derek Speck, Rhonda Berry and Melissa Hart
Guests: Mark Segale, Bill Arthur and Chuck Parrish
CALL TO ORDER: Chair Robertson called the meeting to order at 5:04 p.m.
The agenda was amended to reflect the new order of business as presented below.
I. PRESENTATIONS No presentations.
II. BUSINESS AGENDA
A. Interlocal Aereement to Provide Tourism and Marketing Services to the City of Des Moines
Katherine Kertzman indicated that the proposed agreement is very similar to the previous interlocal
agreement with the City of Des Moines. The notable change is the term of the agreement, which went
from a three -year term to a one -year term that will renew for subsequent one -year terms unless otherwise
terminated with 120 days notice. Des Moines's payment will remain the same, 100% of lodging tax
collected per year. UNANIMOUS APPROVAL. FORWARD TO NOVEMBER 24 COW FOR
DISCUSSION.
B. Impact Fee Ordinances for Fire and Parks
Staff reported that Administration is evaluating new sources of revenue for the City. One such source is
impact fees; through which new development helps to pay for capital facilities necessitated due to the
new growth.
The Growth Management Act allows impact fees for parks services and fire services, in addition to
traffic impact fees, which the City has already enacted. Lisa Verner stated the regulations regarding
impact fees state that the amount collected must be used for capital facilities and the amount collected
cannot fund a 100% of a project. Since impact fees cannot fund 100% of a project, prior to impact fee
implementation, the City would need to indicate the fee split, such as 90% impact fees and 10% City
funding.
The information proposed by staff is based on the City of Redmond's model. The State of Washington
conducted a Performance Audit of impact fees which stated, "The City of Redmond has developed a
leading practice in its fire impact fee schedule /calculation."
Committee members asked clarifying questions from staff and recommended the following information
be provided to Council at the Committee of the Whole Meeting:
Do neighboring cities collect impact fees and what are their impact fee /city splits?
What is the impact fee /city funded split for the City of Redmond?
How were the percentages achieved in the calculation worksheets?
Committee Chair Robertson requested staff to simplify the information provided and reorganize the
packet of back -up documentation so the presentation is more straightforward. FORWARD TO
NOVEMBER 24 COW FOR DISCUSSION.