Chapter 16.10
SCHOOL IMPACT FEES
Sections:
16.10.020 Impact fee program elements.
16.10.050 Assessment of impact fees.
16.10.070 Adjustments, exceptions, and appeals.
16.10.080 Exemption or reduction for low or moderate income housing.
16.10.090 Impact fee accounts and refunds.
16.10.110 Option for deferred payment of impact fees.
16.10.005 Purpose.
This chapter relating to the assessment and collection of impact fees is adopted pursuant to Chapter 82.02 RCW for the purpose of implementing the capital facilities element of the comprehensive plan and the Growth Management Act by:
A. Ensuring that adequate public school facilities and improvements are available to serve new development;
B. Establishing standards whereby new development pays a proportionate share of the cost for public school facilities needed to serve such new development;
C. Ensuring that school 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; and
D. Providing needed funding for growth-related school improvements to meet future growth needs. (Ord. 98-174 § 1).
16.10.010 Definitions.
“District” or “school district” shall refer to the Issaquah School District No. 411 or the Renton School District No. 403. (Ord. 2013-473 § 1; Ord. 98-174 § 1).
16.10.020 Impact fee program elements.
A. Impact fees will be assessed on every new residential unit in that portion of the city located within the district’s boundaries based on the provisions of this chapter.
B. Impact fees will be imposed on behalf of the district if the district provides to the city a capital facilities plan, the district’s standards of service for the various grade spans, estimates of the cost of providing needed facilities and other capital improvements, and any other data from the district required by the city. Any impact fee imposed shall be reasonably related to the impact caused by the development and shall not exceed a proportionate share of the cost of system improvements that are reasonably related to the development. The impact fee formula shall take into account in the fee calculation future revenues that the district will receive from the development.
C. The impact fee shall be based on a capital facilities plan developed and approved by the district, and adopted by reference by the city as part of the capital facilities element of the city’s comprehensive plan for the purpose of establishing the fee program. (Ord. 98-174 § 1).
16.10.030 Fee calculations.
A. The impact fees for the district shall be calculated based on the formula set out in Attachment A* to the ordinance codified in this chapter.
B. Separate fees shall be calculated for single-family and multifamily residential units, and separate student generation rates must be determined by the district for each type of residential unit. For purposes of this chapter, single-family residential units shall mean single detached dwelling units, and multifamily units shall mean townhouses and apartments. Mobile homes shall be treated as single-family residential units, and duplexes shall be treated as multifamily residential units.
C. The fee calculations shall be made on a district-wide basis to assure maximum utilization of all school facilities in the district used currently or within the last two years for instruction purposes.
D. The formula in Attachment A* provides a credit for the anticipated tax contributions that would be made by the development based on historical levels of voter support for bonds issued in the district.
E. The formula also provides for a credit for school facilities or sites actually provided by a developer which the district finds to be acceptable. (Ord. 98-174 § 1).
*Code reviser’s note: Attachment A to Ordinance No. 98-174 is available in the office of the city clerk.
16.10.040 Fee collection.
A. Impact fees shall be collected by the city and paid to the district pursuant to administrative rules under an interlocal agreement. For administrative convenience while processing the fee payments, the city may temporarily deposit school impact fees in a city account. The city shall deposit the school impact fees collected on behalf of the district in the district’s school impact fee account.
B. The district shall establish a school impact fee account with the office of the King County treasurer, who serves as the treasurer for the district. The account shall be an interest bearing account, and the school impact fees received shall be prudently invested in a manner consistent with the investment policies of the district. (Ord. 98-174 § 1).
16.10.050 Assessment of impact fees.
A. Except as otherwise provided in this chapter, the city shall collect impact fees from any applicant seeking development approval from the city where the development activity requires final plat or PUD approval or the issuance of a residential building permit or a mobile home permit, and the fee for the lot or unit has not been previously paid. No approval shall be granted and no permit shall be issued until the required school impact fees have been paid.
B. For a plat or PUD applied for on or after September 30, 1994, 50 percent of the impact fees due on the plat or PUD shall be assessed and collected from the applicant at the time of final approval, using the impact fee schedules in effect when the plat or PUD is approved. The balance of the assessed fee shall be allocated to the dwelling units in the project, and shall be collected when the building permits are issued. Residential developments proposed for short plats shall be governed by subsection (D) of this section.
C. If on September 30, 1994, a plat or PUD had received preliminary approval, such plat or PUD shall not be required to pay 50 percent of the impact fees at the time of final approval, but the impact fees shall be assessed and collected from the lot owner at the time the building permits are issued, using the impact fee schedule in effect at the time of building permit application. If on September 30, 1994, an applicant had applied for preliminary plat or PUD approval, but had not yet received such approval, the applicant shall follow the procedures set forth in subsection (B) of this section.
D. For existing lots or lots not covered by subsection (B) of this section, application for single-family and multifamily residential building permits, mobile home permits, and site plan approval for mobile home parks, the total amount of the impact fees shall be assessed and collected from the applicant when the building permit or mobile home permit is issued, using the impact fee schedules in effect at the time of permit application. (Ord. 98-174 § 1).
16.10.060 Effective date.
No fee shall be assessed or collected on any pending building permit which has been applied for prior to the effective date of the impact fee. (Ord. 98-174 § 1).
16.10.070 Adjustments, exceptions, and appeals.
A. The following are excluded from the application of the impact fees:
1. Any form of housing exclusively for senior citizens, including nursing homes and retirement centers, so long as these uses are maintained;
2. Reconstruction, remodeling, or replacement of existing dwelling units which does not result in additional new dwelling units. In the case of replacement of a dwelling, a complete application for a building permit must be submitted within three years after it has been removed or destroyed;
3. Shelters for temporary placement, relocation facilities, transitional housing facilities and community residential facilities;
4. Any development activity that is exempt from the payment of an impact fee pursuant to RCW 82.02.100, due to mitigation of the same system improvement under the State Environmental Policy Act;
5. Any development activity for which school impacts have been mitigated pursuant to a condition of plat or PUD approval to pay fees, dedicate land or construct or improve school facilities, unless the condition of the plat or PUD approval provides otherwise; provided, that the condition of the plat or PUD approval predates the effective date of this chapter;
6. Housing units which fully qualify as housing for persons age 55 and over meeting the requirements of the Federal Housing Amendments Act of 1988, 42 U.S.C. 3607(b)(2)(c) and (b)(3), as subsequently amended and which would have recorded covenants or other legal arrangements precluding school-aged children as residents in those units;
7. Mobile homes permitted as temporary dwellings pursuant to NMC 18.32.170; and
8. The addition of an accessory dwelling units as defined in NMC 18.06.183 and 18.08.030 (B)(7), by (a) constructing a new accessory dwelling unit on property with an existing dwelling, (b) reconstructing or remodeling an existing dwelling into a dwelling and an accessory dwelling unit, or (c) constructing a new dwelling and remodeling, replacing or otherwise converting an existing dwelling into an accessory dwelling unit.
B. Arrangement may be made for later payment with the approval of the district only if the district determines that it will be unable to use or will not need the payment until a later time; provided, that sufficient security, as defined by the district, is provided to assure payment. Security shall be made to and held by the district, which will be responsible for tracking and documenting the security interest.
C. The fee amount established in the schedule shall be reduced by the amount of any payment previously made for the lot or development activity in question, either as a condition of approval or pursuant to a voluntary agreement with a district entered into after the effective date of this chapter.
D. After the effective date of this chapter, whenever a development is granted approval subject to a condition that the developer actually provide school sites, school facilities, or improvements to school facilities acceptable to the district, or whenever a developer has agreed, pursuant to the terms of a voluntary agreement with the district, to provide land, provide school facilities, or make improvements to existing facilities, the developer shall be entitled to a credit for the value of the land or actual cost of construction against the fee that would be chargeable under the formula provided by this chapter. The land value or cost of construction shall be estimated at the time of approval but must be documented. If construction costs are estimated, the documentation shall be confirmed after the construction is completed to assure that an accurate credit amount is provided. If the land value or construction costs are less than the calculated fee amount, the difference remaining shall be chargeable as a school impact fee.
E. Impact fees may be adjusted by the city, at the city’s discretion, if one of the following circumstances exist; provided, that the discount set forth in the fee formula fails to adjust for the error in the calculation or fails to ameliorate for the unfairness of the fee:
1. The developer demonstrates that an impact fee assessment was incorrectly calculated; or
2. Unusual circumstances identified by the developer demonstrated that if the standard impact fee amount was applied to the development, it would be unfair or unjust.
F. A developer may provide studies and data to demonstrate that any particular factor used by the district may not be appropriately applied to the development proposal, but the district’s data shall be presumed valid unless clearly demonstrated to be otherwise by the proponent.
G. Any appeal of the decision of the director or the hearing examiner with regard to imposition of an impact for or fee amounts shall follow the appeal process for the underlying permit and not be subject to a separate appeal process. Where no other administrative appeal process is available, an appeal may be taken to the hearing examiner using the appeal procedures for variances. Any errors in the formula identified as a result of an appeal should be referred to the council for possible modification.
H. Impact fees may be paid under protest in order to obtain a building permit or other approval of development activity, when an appeal is filed. (Ord. 98-174 § 1).
16.10.080 Exemption or reduction for low or moderate income housing.
A. Low or moderate income housing projects being developed by public housing agencies or private non-profit housing developers shall be exempt from the payment of school impact fees. The amount of the school impact fees not collected from low or moderate income household developments shall be paid from public funds other than impact fee accounts. The impact fees for these units shall be considered paid for by the district through its other funding services, without the district actually transferring funds from its other funding sources into the impact fee account. In no event shall this section be construed to require the city to provide any funds for school impact fees not collected. The department of community development shall review proposed developments of low or moderate income housing by such public or non-profit developers pursuant to criteria and procedures adopted by administrative rule to determine whether the project qualifies for the exemption.
B. Private developers who dedicate residential units for occupancy by low or moderate income households may apply to the division for reductions in school impact fees pursuant to the criteria established for public housing agencies and private non-profit housing developers pursuant to subsection (A), and subject to the provisions of subsection (A). The department shall review proposed developments of low or moderate income housing by such private developers pursuant to criteria and procedures adopted by administrative rule, whether the project qualifies for the exemption. If the department recommends the exemption, the department shall reduce the calculated school impact fee for the development by an amount that is proportionate to the number of units in the development that satisfy the adopted criteria.
C. Individual low or moderate income home purchasers (as defined pursuant to the King County Comprehensive Housing Affordability Strategy (CHAS)) who are purchasing homes at prices within their eligibility limits based on standard lending criteria and meet other means tests established by rule by the department are exempted from payment of the impact fee; provided, that at such time as the property in question is transferred to another owner who does not qualify for the exemption, at which time the fee shall be due and payable.
D. The department is authorized to adopt administrative rules to implement this section. Such rules shall provide for the administration of this program and shall:
1. Encourage the construction of housing for low or moderate income households by public housing agencies or private non-profit housing developers participating in publicly sponsored or subsidized housing programs;
2. Encourage the construction in private developments of housing units for low or moderate income households that are in addition to units required by another housing program or development condition;
3. Ensure that housing that qualifies as low or moderate costs meet appropriate standards regarding household income, rent levels or sale price location, number of units and development size, consistent with county-wide planning policies as identified in the comprehensive plan;
4. Ensure that developers who obtain an exemption from or reduction of school impact fees will in fact build the proposed low or moderate housing and make it available to low or moderate income households for a minimum of 15 years;
5. Ensure that individual low or moderate income purchasers appropriate eligibility standards based on income and other financial tests.
E. As a condition of receiving an exemption under subsection (B) or (C) of this section, the owner must execute and record a city-approved lien, covenant, and/or other contractual provision against the property for a period of 10 years for individual owners, and 15 years for private developers, guaranteed that the proposed development will continue to be used for low or moderate income housing. In the event that the pattern of development or the development is no longer for low or moderate income housing, then the owner shall pay the impact fee amount from which the owner or any prior owner was exempt. The lien, covenant, or other contractual provision shall run with the land and apply to subsequent owners. (Ord. 98-174 § 1).
16.10.090 Impact fee accounts and refunds.
A. Impact fee receipts shall be earmarked specifically and retained in a special interest-bearing account established by the district pursuant to NMC 16.10.040 solely for the district’s school impact fees. All interest shall be retained in the account and expended for the purposes identified in subsection (B) of this section. Annually, the city shall prepare a report, based in part on a report submitted by the district, on each impact fee account showing the source and amount of all moneys collected, earned or received, and capital or system improvements that were financed in whole or in part by impact fees.
B. Impact fees for the district’s system improvements shall be expended by the district for capital improvements including but not limited to school planning, land acquisition, site improvements, necessary off-site improvements, construction, engineering, architectural, permitting, financial and administrative expenses, relocatable facilities, capital equipment pertaining to educational facilities, and any other expenses which could be capitalized, and which are consistent with the district’s capital facilities plan.
C. In the event that bonds or similar debt instruments are issued for the advanced provision of capital facilities for which impact fees may be expended and where consistent with the provisions of the bond covenants, 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.
D. Impact fees shall be expended or encumbered (i.e., committed as part of the funding for a facility for which the publicly funded share had been assured, or building permits applied for, or construction contracts let) by the district for a permissible use within the time period prescribed by RCW 82.02.070(3)(a), as may be amended (which is currently 10 years of receipt by the city) unless there exists an extraordinary or compelling reason for fees to be held longer than such period. Such extraordinary or compelling reasons shall be identified to the city by the district. The city must prepare written findings concurring with the district’s reasons, and authorizing the later encumbrance or expenditure of the fees prior to the district so encumbering or expending the funds, or directing a refund of the fees.
E. The current owner of property on which an impact fee has been paid may receive a refund of such fees if the impact fees have not been expended or encumbered within the time period prescribed by subsection (D) of this section. In determining whether impact fees have been unencumbered, impact fees shall be considered encumbered on a first in, first out basis. The city shall notify potential claimants by first-class mail addressed to the owner of the property as shown in the county tax records.
F. An owner’s request for a refund must be submitted to the city in writing within one year of the date the right to claim the refund arises or the date that notice is given, whichever date is later. Any impact fees that are not expended or encumbered within these time limitations, and for which no application for a refund has been made within this one-year period, shall be retained and expended consistent with the provisions of this section. Refunds of impact fees shall include any interest earned on the impact fees.
G. Should the city seek to terminate any or all school impact fee requirements, all unexpended or unencumbered funds, including interest earned, shall be refunded to the current owner of the property for which a school impact fee was paid. Upon the finding that any or all fee requirements are to be terminated, the city shall place notice of such termination and the availability of refunds in a newspaper of general circulation at least two times and shall notify all potential claimants by first-class mail addressed to the owner of the property as shown in the county tax records. All funds available for refund shall be retained for a period of one year. At the end of one year, any remaining funds shall be retained by the city, but must be expended for the district, consistent with the provisions of this section. The notice requirement set forth above shall not apply if there are no unexpended or unencumbered balances within the account or accounts being terminated.
H. A developer may request and shall receive a refund, including interest earned on the impact fees, when:
1. The developer does not proceed to finalize the development activity as required by statute, city code or the Uniform Building Code; or
2. No impact on the district has resulted. “Impact” shall be deemed to include cases where the district has expended or encumbered the impact fees in good faith prior to the application for a refund. In the event that the district has expended or encumbered the fees in good faith, no refund shall be forthcoming. However, if within a period of three years, the same or subsequent owner of the property proceeds with the same or substantially similar development activity, the owner shall be eligible for a credit. The owner must petition the city and provide receipts of impact fees paid by the owner for a development of the same or substantially similar nature on the same property or some portion thereof. The city shall determine whether to grant a credit, and such determinations may be appealed by following the procedures set forth in NMC 16.10.070.
I. Interest due upon the refund of impact fees required by this section shall be calculated according to the average rate received by the city or the district on invested funds throughout the period during which the fees were retained. (Ord. 2013-473 § 2; Ord. 98-174 § 1).
16.10.100 Fee schedule.
A. School Impact Fees. School impact fees on development in the city located within the boundaries of the district shall be imposed at the rate for single-family dwelling units and the rate for multifamily dwelling units established in the district’s capital facilities plan adopted by reference as a subelement of the capital facilities element of the city’s comprehensive plan.
B. City Administrative Fee. The city shall charge a fee for administering the school impact fee program in the amount established by resolution. The applicant shall pay the fee to the city at the time of paying the development application fee. (Ord. 98-174 § 1).
16.10.110 Option for deferred payment of impact fees.
An applicant may request, at any time prior to building permit issuance, and consistent with the requirements of this section, to defer to final inspection the payment of an impact fee for single-family residential construction building permits. The following shall apply to any request to defer payment of an impact fee:
A. The applicant shall submit to the city a written request to defer the payment of an impact fee for a specifically identified building permit. The applicant’s request shall identify, as applicable, the applicant’s corporate identity and contractor registration number, the full names of all legal owners of the property upon which the development activity allowed by the building permit is to occur, the legal description of the property upon which the development activity allowed by the building permit is to occur, the tax parcel identification number of the property upon which the development activity allowed by the building permit is to occur, and the address of the property upon which the development activity allowed by the building permit is to occur. All applications shall be accompanied by an administrative fee as provided for in the city’s adopted permit and impact fee schedule.
B. The impact fee amount due under any request to defer payment of impact fees shall be based on the schedule in effect at the time the applicant provides the city with the information required in subsection (A) of this section.
C. Prior to the issuance of a building permit that is the subject of a request for a deferred payment of impact fees, all applicants and/or legal owners of the property upon which the development activity allowed by the building permit is to occur must sign a deferred impact fee payment lien which shall be consistent with RCW 82.02.050(3), as may be amended, and in a form acceptable to the city attorney. The deferred impact fee payment lien shall be recorded against the property subject to the building permit and be granted in favor of the city in the amount of the deferred impact fee. Any such lien shall be junior and subordinate only to one mortgage for the purpose of construction upon the same real property subject to the building permit. In addition to the administrative fee required in subsection (A) of this section, the applicant shall pay to the city the fees necessary for recording the lien agreement with the King County recorder.
D. The city shall not approve a final inspection until the school impact fees identified in the deferred impact fee payment lien are paid in full.
E. The term of the impact fees deferred under this section shall not exceed 18 months from the date of building permit issuance.
F. Upon receipt of final payment of the deferred impact fee as identified in the deferred impact fee payment lien, the city shall execute a release of deferred impact fee lien for the property. The property owner at the time of the release, at his or her own expense, is responsible for recording the lien release.
G. In the event that the deferred impact fee is not paid within the time provided in this section, the city shall institute foreclosure proceedings under the process set forth in Chapter 61.12 RCW. A school district may also institute foreclosure proceedings as set forth in RCW 82.02.050(3).
H. An applicant is entitled to defer impact fees pursuant to this section for no more than 20 single-family residential construction building permits per year in the city. For purposes of this section, an “applicant” includes an entity that controls the applicant, is controlled by the applicant, or is under common control with the applicant.
I. If any terms or conditions of other sections in this chapter conflict with this section, then this section shall prevail. (Ord. 2016-543 § 1).