Chapter 19.91 TRANSPORTATION IMPACT FEES

The purpose and intent of this chapter is for the collection of impact fees for streets and roads, and providing for certain other matters in connection therewith.

(Ord. No. 09-627, § 3, 10-20-09)

19.91.030 Findings and authority.

The city council of the city of Federal Way hereby finds and determines that development activities, including but not limited to new residential, commercial, retail, office, and industrial development, in the city of Federal Way will create additional demand and need for public facilities in the city, and the council finds that such new growth and development should pay a proportionate share of the cost of new facilities needed to serve the new growth and development. The city of Federal Way has conducted extensive research and analysis documenting the procedures for measuring the impact of new developments on public facilities, has prepared the “Rate Study for Transportation Impact Fees, City of Federal Way” dated November 2020 (“rate study”), and incorporates that rate study into this title by this reference. The rate study utilizes a methodology for calculating impact fees that fulfills all of the requirements of RCW 82.02.060(1). A copy of the rate study shall be kept on file with the city clerk and is available to the public for review. Therefore, pursuant to Chapter 82.02 RCW, the council adopts this chapter to assess impact fees for streets and roads. The provisions of this chapter shall be liberally construed in order to carry out the purposes of the council in establishing the impact fee program.

(Ord. No. 20-901, § 3, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.040 Definitions.

The following words and terms shall have the following meanings for the purposes of this chapter, unless the context clearly requires otherwise. Terms otherwise not defined herein shall be defined pursuant to RCW 82.02.090 or given their usual and customary meaning.

“Applicant” means a person who applies for a building permit under Chapter 19.20 FWRC and who is the owner of the subject property or the authorized agent of the property owner.

“Building permit” means an official document or certification which is issued by the building official and which authorizes the construction, alteration, enlargement, conversion, reconstruction, remodeling, rehabilitation, erection, demolition, moving, or repair of a building or structure.

“Capital facilities plan” means the capital facilities element of the city’s comprehensive plan adopted pursuant to Chapter 36.70A RCW and such plan as amended.

“Council” means the city council of the city.

“Development activity” means any work, condition, or activity which requires a permit or approval under the city’s subdivision, zoning, or building code. Exempt permits are set forth in FWRC 19.91.080.

“Development approval” means any written authorization from the city authorizing the commencement of a development activity or use.

“Director” means the director of the department of public works of the city of Federal Way or her/his designee.

“Encumbered” means to reserve, set aside, or otherwise earmark the impact fees in order to pay for commitments, contractual obligations, or other liabilities incurred for public facilities.

“Impact fee” means a payment of money imposed by the city of Federal Way on development activity pursuant to this title as a condition of granting development approval. “Impact fee” does not include a reasonable permit fee, an application fee, the administrative fee for collecting and handling impact fees, or the cost of reviewing independent fee calculations.

“Independent fee calculation” means the street and road impact calculation, and/or economic documentation prepared by an applicant, to support the assessment of an impact fee other than by the use of the rates listed in the fee schedule, or the calculations prepared by the director where none of the fee categories or fee amounts in the transportation impact fee in the fee schedule accurately describe or capture the impacts of the development activity on public facilities.

“Interest” means the average interest rate earned in the last fiscal year by the city of Federal Way.

“ITE” means the Institute of Transportation Engineers.

“P.M. peak hour” means the highest volume of traffic for a continuous hour between 4:00 p.m. and 6:00 p.m. on weekdays.

“P.M. peak hour trips” means the total vehicular trip ends entering and leaving a place of new development activity on the adjacent public road or street during the p.m. peak hour.

“Project improvements” means site improvements and facilities that are planned and designed to provide service for a particular development project and are necessary for the use and convenience of the occupants or users of the project, and are not system improvements. No improvement or facility included in a capital facilities plan adopted by the council shall be considered a project improvement.

“Public facilities,” for purposes of this chapter, means the following capital facilities owned or operated by the city of Federal Way or other governmental entities: public streets and roads.

“Rate study” means the Transportation Impact Fees Program, City of Federal Way, by Fehr & Peers, dated November 2020.

“RCW” means the Revised Code of Washington or, when followed by a numerical designation, a provision of the Revised Code of Washington.

“Residential” means all types of construction intended for human habitation. This shall include, but is not limited to, single-family, duplex, triplex, and other multifamily development.

“Street” or “road” means a public right-of-way and all related appurtenances which enables motor vehicles, transit vehicles, bicycles and pedestrians to travel between destinations, and affords the principal means of access to abutting property, including avenue, place, way, drive, lane, boulevard, highway, street, and other thoroughfare. For purposes of this chapter, public streets and roads are collectively referred to as “transportation.”

“System improvements” means public facilities that are included in the city of Federal Way’s capital facilities plan, and such plan as amended, and are designed to provide service to service areas within the community at large, in contrast to project improvements.

“Transportation” means public streets and roads and related appurtenances.

“Transportation impact fee account(s)” means the account(s) established for the transportation impact fees that are collected. The account(s) shall be established pursuant to FWRC 19.91.110 and shall comply with the requirements of RCW 82.02.070.

(Ord. No. 20-901, § 4, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.050 Transportation impact fees methodology and applicability.

The transportation impact fee rates are generated from the formula for calculating impact fees set forth in the rate study, which is on file with the public works department. Except as otherwise provided for independent fee calculations in FWRC 19.91.070, exemptions in FWRC 19.91.080, and credits in FWRC 19.91.090, all new development activity in the city will be charged the transportation impact fee applicable to the type of development as set forth in the transportation impact fee in the current fee schedule as adopted by council.

(Ord. No. 20-901, § 5, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.060 Assessment of impact fees.

(1) The city shall collect impact fees, based on the land use categories and rates on the current fee schedule, from any applicant seeking development permits, issuance of a building permit or approval for a change in use, except for development exempt under FWRC 19.91.080. This shall include, but is not limited to, the development of residential, commercial, retail, office, and industrial land, and includes the expansion of existing uses that creates a demand for additional system improvements as well as a change in existing use that creates a demand for additional system improvements. The public works department is authorized to determine the appropriate land use category found in the rate schedule that applies to the application.

(2) All impact fees shall be due and payable pursuant to the guidelines established in FWRC 19.100.070(3), except as authorized under FWRC 19.91.066.

(3) The public works department shall establish the transportation impact fee rate for a land use that is not listed in the fee schedule. The applicant shall submit all information requested by the city for purposes of determining the impact fee rate pursuant to FWRC 19.91.070.

(4) For a change in use of an existing building or dwelling unit, including any alteration, expansion, replacement or new accessory building that generates additional trips and permitted after city incorporation, the impact fee shall be paid for the land use category of the new use, less any impact fee that would have been paid for the land use category of the existing building or dwelling unit set forth in the current fee schedule (regardless of whether impact fees were paid for the prior use). Other existing buildings or dwelling units permitted under King County prior to incorporation of the city must submit documentation of mitigation fees paid in order to receive an impact fees credit for the prior use.

(5) For mixed use developments, impact fees shall be imposed for the proportionate share of each land use based on the applicable measurement in the transportation impact fee rates set forth in the fee schedule.

(6) The department of community development services shall not issue the required building permit until a lien has been recorded pursuant to FWRC 19.100.075(3), or the transportation impact fees set forth in the fee schedule have been paid as set forth in the fee schedule or in the amounts that they exceed any credits allowable under this chapter. For a change in use where a building permit is not required, the applicant shall not occupy or permit a tenant to occupy the subject property unless and until the impact fee has been paid.

(Ord. No. 20-901, § 6, 12-1-20; Ord. No. 16-822, § 3, 8-9-16; Ord. No. 10-658, § 3, 5-18-10; Ord. No. 09-627, § 3, 10-20-09)

19.91.066 Option for deferred payment of transportation impact fee.

An applicant may request, at any time prior to building permit issuance, and consistent with the requirements of this section, to defer to final building inspection the payment of a transportation impact fee for single-family residential dwelling units pursuant to FWRC 19.100.075. Per RCW 82.02.050(3)(b), the term of this deferral may not exceed 18 months from the date of building permit issuance.

(Ord. No. 20-901, § 7, 12-1-20; Ord. No. 16-822, § 5, 8-9-16.)

19.91.070 Independent fee calculations.

(1) If, in the judgment of the director, none of the fee categories or fee amounts set forth in FWRC 19.91.060 accurately describes or captures the impacts of a new development on roads, the department may conduct independent fee calculations and the director may impose alternative fees on a specific development based on those calculations.

(2) The applicant may opt not to have the impact fees determined according to the fee structure in the transportation impact fee schedule listed in the city fee schedule, in which case the applicant shall prepare and submit to the director an independent fee calculation for the development activity for which a development permit is being sought. The documentation submitted shall be prepared by a professional engineer or certified planner and shall show the basis upon which the independent fee calculation was made using procedures consistent with those established in the Trip Generation Handbook, current edition, by the Institute of Transportation Engineers. An independent fee calculation shall use the same methodology used to establish impact fees set forth in the transportation impact fee schedule, shall be limited to adjustments in trip generation rates and lengths used in the rate study, and shall not include travel demand forecasts, trip distribution, transportation service areas, costs of road projects, or cost allocation procedures.

(3) The applicant submitting an independent fee calculation will be required to pay the city of Federal Way a fee to cover the cost of reviewing the independent fee calculation. The fee required by the city for conducting the review of the independent fee calculation shall be charged on an hourly rate as adopted by the council at the time of the submittal.

(4) There is a rebuttable presumption that the calculations set forth in the rate study and the fee set forth in the transportation impact fee schedule are valid. The director shall consider the documentation submitted by the applicant, but is not required to accept such documentation or analysis which the director reasonably deems to be inapplicable, inaccurate or not reliable. The director may require the applicant to submit additional or different documentation for consideration. The director is authorized to adjust the impact fees on a case-by-case basis based on the independent fee calculation, the specific characteristics of the development, and/or principles of fairness.

(5) Determinations made by the director pursuant to this section may be appealed as set forth in FWRC 19.91.180.

(Ord. No. 20-901, § 8, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.080 Exemptions.

(1) Except as provided for below, the following shall be exempted from the payment of transportation impact fees:

(a) Alteration or replacement of an existing nonresidential structure that does not expand the usable space, add any residential units or generate any additional p.m. peak trips.

(b) Miscellaneous improvements which do not generate increased p.m. peak trips, including, but not limited to, fences, walls, residential swimming pools, and signs.

(d) A change of use that does not generate one or more p.m. peak hour trips.

(e) Miscellaneous permits such as electrical, fire protection system, mechanical, plumbing, right-of-way use, shoreline and sign permits which do not generate any new trips.

(f) Rezones, comprehensive plan amendments, land surface modifications, commercial subdivisions, boundary line adjustment and lot line eliminations, which do not generate any trips.

(g) Structures constructed by a regional transit authority as defined in RCW 82.02.090.

(2) The director shall be authorized to determine whether a particular development activity falls within an exemption identified in this section or under other applicable law. Determinations of the director shall be subject to the appeals procedures set forth in FWRC 19.91.180.

(Ord. No. 20-901, § 9, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.090 Credits.

(1) An applicant may request that a credit or credits for impact fees be awarded to him/her for the total value of system improvements, including dedications of land, improvements and/or construction provided by the applicant. Credits will be given only if the land, improvements, and/or the facility constructed are for one or more of the transportation projects listed in the rate study as the basis for calculating the impact fee.

(2) The director shall determine if requests for credits meet the criteria in subsection (1) of this section or under other applicable law. Determinations of the director shall be subject to the appeals procedure set forth in FWRC 19.91.180.

(3) Each request for a credit or credits shall include a legal description of the dedicated land, a detailed description of improvements or construction provided, and a legal description or other adequate description of the development to which the credit will be applied.

(4) For each request for a credit or credits, the director shall determine the value of the dedicated land, improvements, or construction on a case-by- case basis. In the event that the applicant disagrees with the director’s valuation, the applicant may submit an appraisal for the director’s consideration, prepared by a state certified MAI (Member of the American Institute of Appraisers) or licensed engineer and be licensed in good standing pursuant to Chapter 18.40 RCW et seq., in the category for the property to be appraised, and shall not have a fiduciary or personal interest in the property being appraised.

(5) The appraiser and/or licensed engineer shall be directed to determine the fair market value of the total value of the dedicated land, improvements, and/or construction provided by the applicant. The applicant shall pay for the actual costs for the appraisal.

(6) After receiving and reviewing the appraisal, the director will determine the dollar amount of any credit, the basis for the credit, the legal description of the real property dedicated where applicable, and the legal description or other adequate description of the project or development to which the credit may be applied with issuance of the building permit. If the total value of any such dedication, improvement or construction cost exceeds the amount of the impact fee obligation, the developer will not be entitled to reimbursement of the difference.

(7) No credit shall be given for project improvements or right-of-way dedications for direct access improvements to and/or within the subject development above and beyond what is proposed in the capital facilities plan.

(8) Any claim for credit must be made before payment of the impact fee and prior to the issuance of the building permit or a permit for a change in use. The failure to timely file such a claim shall constitute a final bar to later request any such credit.

(9) Determinations made by the director pursuant to this chapter shall be subject to the appeals procedures set forth in FWRC 19.91.180.

(10) No impact fee for a specific development shall be increased or decreased once said fee has been paid.

(Ord. No. 20-901, § 10, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.100 Adjustments.

Pursuant to and consistent with the requirements of RCW 82.02.060, the rate study has provided adjustments for future taxes to be paid by the development activity which are earmarked or pro-ratable to the same new public facilities which will serve the new development. The transportation impact fee rates in the fee schedule acknowledge taxes and other revenue sources which are anticipated to be available to fund public improvements.

(Ord. No. 20-901, § 11, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.110 Establishment of impact fee account.

(1) Impact fee receipts shall be earmarked specifically and deposited in a special interest-bearing account.

(2) The city shall establish a separate impact fee account for the fees collected pursuant to this chapter: transportation impact fee account. Funds withdrawn from the account must be used in accordance with the provisions of this chapter and applicable state law. Interest earned on the fees shall be retained in the account and expended for the purposes for which the impact fees were collected.

(3) On an annual basis, the finance director shall provide a report to the council on the transportation impact fee account showing the source and amount of all moneys collected, earned, or received, and the public improvements that were financed in whole or in part by impact fees.

Impact fees shall be expended or encumbered within 10 years of receipt.

(Ord. No. 20-901, § 12, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.120 Authorization for interlocal agreement.

The mayor is authorized to execute, on behalf of the city, an interlocal agreement with other agencies having authority over transportation facilities to identify impacts and provide mitigation for those impacts. In no case shall mitigation payments to the city be reduced to account for mitigation payments to other jurisdictions.

(Ord. No. 11-684, § 15, 1-18-11; Ord. No. 09-627, § 3, 10-20-09)

19.91.130 Administrative guidelines.

The public works director is hereby authorized to adopt internal guidelines for the administration of transportation impact fees, which may include the adoption of a procedures guide for transportation impact fees.

(Ord. No. 09-627, § 3, 10-20-09)

19.91.140 Refunds.

(1) If the city fails to expend or encumber the impact fees within 10 years of when the fees were paid, the current owner of the property on which impact fees have been paid may receive a refund of such fees. 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.

(2) The city shall notify potential claimants by first class mail deposited with the United States Postal Service at the last known address of such claimants. A potential claimant or claimants must be the owner of record of the real property against which the impact fee was assessed.

(3) Property owners seeking a refund of impact fees must submit a written request for a refund of the fees to the director within one year of the date the right to claim the refund arises or the date that notice is given, whichever is later.

(4) Any impact fees for which no application for a refund has been made within this one-year period shall be retained by the city and expended on the appropriate system improvements.

(5) Refunds of impact fees or offsets against subsequent impact fees under this section shall include any interest earned on the impact fees by the city.

(6) When the city seeks to terminate any or all components of the impact fee program, all unexpended or unencumbered funds from any terminated component or components, including interest earned, shall be refunded pursuant to this section. Upon the finding that any or all fee requirements are to be terminated, the city shall place notice of such termination and the availability of refunds in a newspaper of general circulation at least two times and shall notify all potential claimants by first class mail at the last known address of the claimants. All funds available for refund shall be retained for a period of one year after the second publication. At the end of one year, any remaining funds shall be retained by the city, but must be expended for the appropriate public facilities. This notice requirement shall not apply if there are no unexpended or unencumbered balances within the account or accounts being terminated.

(7) The city shall also refund to the current owner of property for which impact fees have been paid all impact fees paid, including interest earned on the impact fees, if the development activity for which the impact fees were imposed did not occur; provided, however, that, if the city has expended or encumbered the impact fees in good faith prior to the application for a refund, the director can decline to provide the refund. If within a period of three years, the same or subsequent owner of the property proceeds with the same or substantially similar development activity, the owner can petition the director for an offset in the amount of the fee originally paid and not refunded. The petitioner must provide receipts of impact fees previously paid for a development activity of the same or substantially similar nature on the same real property or some portion thereof. The director shall determine whether to grant an offset, and the determinations of the director may be appealed pursuant to the procedure in FWRC 19.91.180.

(Ord. No. 20-901, § 13, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.150 Use of funds.

(1) Pursuant to this title, transportation impact fees:

(a) Shall be used for one or more of the transportation projects listed in the rate study as the basis for calculating the impact fee, which are system improvements that will reasonably benefit the new development activity;

(b) Shall not be imposed to make up for deficiencies in public facilities; and

(2) Transportation impact fees may be spent for public improvements to streets and roads as herein defined and including, but not limited to, transportation planning, engineering design studies, land survey, right-of-way acquisition, necessary off-site improvements, engineering, architectural, permitting, financing, administrative expenses, construction of streets and roads and related facilities such as curbs, gutters, sidewalks, bike lanes, storm drainage and installation of traffic signals, signs and street lights, and any other expenses which can be capitalized.

(3) Transportation impact fees may also be used to recoup system improvement costs previously incurred by the city to the extent that new growth and development will be served by the previously constructed improvements or incurred costs.

(4) In the event that bonds or similar debt instruments are or have been issued for the advanced provision of public improvements for which impact fees may be expended, impact fees may be used to pay debt service on such bonds or similar debt instruments to the extent that the facilities or improvements provided are consistent with the requirements of this section and are used to serve the new development.

(Ord. No. 20-901, § 14, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.160 Periodic adjustment of rates.

(1) The transportation impact fee in the fee schedule will be amended to reflect changes to the 20-year transportation project list as part of adoption of amendments to the capital facilities element of the city’s comprehensive plan. Amendment to the schedule for this purpose shall be adopted by the council.

(2) Beginning January 1, 2021, and for every year thereafter, the transportation impact fee in the fee schedule shall be adjusted by the annual change in the June Consumer Price Index for the Seattle area.

(3) A new rate study, which establishes the transportation impact fee in the fee schedule, shall be updated every three years, unless the city determines that circumstances have not changed to warrant an update.

(Ord. No. 20-901, § 15, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.170 Administrative fees.

(1) There shall be a fee for the administration of the transportation impact fee program in an amount equal to five percent of the amount of the total transportation impact fee determined from the fee schedules. The administrative fee shall be deposited into an administrative fee account within the transportation impact fee funds. Administrative fees shall be used only to defray the cost incurred by the city in performing actions related to implementation of this chapter and update of the transportation impact fee program. The administrative fee is not creditable or refundable.

(2) The administrative fee, in addition to the impact fee, shall be paid by the applicant at the same time as the impact fee.

(Ord. No. 20-901, § 16, 12-1-20; Ord. No. 09-627, § 3, 10-20-09)

19.91.180 Review by director and appeals.

(1) The applicant may pay the impact fees imposed by this title under protest so that the building permit, or a change in use when no building permit is required. No appeal shall be permitted until the impact fees at issue have been paid.

(2) Requests for review regarding the impact fees imposed on any development activity may be filed only by the applicant for the development activity at issue.

(3) The applicant must first file a request for review regarding impact fees with the director, as provided herein:

(a) The request shall be in writing on the form provided by the city;

(b) The request for review by the director shall be filed within 14 calendar days after the applicant’s payment of the impact fee at issue. The failure to timely file such a request shall constitute a final bar to later seek such review;

(d) The director shall issue his/her determination in writing.

(4) Determinations of the director with respect to the applicability of the impact fees to a given development activity, the availability or value of a credit, or the director’s decision concerning the independent fee calculation which is authorized in FWRC 19.91.070, or any other determination which the director is authorized to make pursuant to this chapter, may be appealed by the applicant or owner using the same process as the underlying development permit application or process I of this title if there is no underlying development permit, substituting the director of public works for the director of community development. The appeal, in the form of a letter of appeal, must be delivered to the department of community development within 14 calendar days after issuance of the decision of the director. In those cases where the proposed development activity may require a public hearing under the authority of other chapters of this code, the hearings may be combined. For example, if the underlying development permit application is a preliminary plat, the appeal shall be heard at the preliminary plat public hearing.

(Ord. No. 09-627, § 3, 10-20-09)

19.91.190 Existing authority unimpaired.

Nothing in this title shall preclude the city from requiring the applicant or the proponent of a development activity to mitigate adverse environmental impacts of a specific development pursuant to the State Environmental Policy Act, Chapter 43.21C RCW, based on the environmental documents accompanying the underlying development approval process, and/or Chapter 58.17 RCW, governing plats and subdivisions, so long as the exercise of such authority is consistent with the provisions of Chapters 43.21C and 82.02 RCW.

(Ord. No. 09-627, § 3, 10-20-09)

19.91.200 Relationship to State Environmental Policy Act (SEPA).

(1) All development shall be subject to the environmental review pursuant to SEPA and other applicable city ordinances and regulations.

(2) Further mitigation in addition to the impact fee shall be required for identified adverse impacts appropriate for mitigation pursuant to SEPA that are not mitigated by an impact fee program.

(Ord. No. 09-627, § 3, 10-20-09)

19.91.210 Relationship to concurrency management.

Neither compliance with this chapter nor the payment of any fee hereunder shall constitute a determination of transportation concurrency under this chapter.

(Ord. No. 09-627, § 3, 10-20-09)