Chapter 17.12
TRANSPORTATION IMPACT FEES
Sections:
17.12.010 Authority and purpose.
17.12.040 Imposition of transportation impact fees.
17.12.050 Fee schedules and establishment of service area.
17.12.060 Calculation of impact fees.
17.12.070 Deferral of payment of transportation impact fees.
17.12.100 Funding of projects.
17.12.130 Relationship to SEPA.
17.12.140 Relationship to concurrency.
17.12.010 Authority and purpose.
A. This chapter is enacted pursuant to the city’s police powers, the Growth Management Act as codified in Chapter 36.70A RCW, the enabling authority in Chapter 82.02 RCW, Chapter 58.17 RCW relating to platting and subdivisions, and the State Environmental Policy Act (SEPA), Chapter 43.21C RCW.
B. The purpose of this chapter is to:
1. Develop a transportation impact fee program, consistent with the Shelton comprehensive plan, for joint public and private financing of transportation improvements necessitated in whole or in part by development in the city;
2. Ensure adequate levels of transportation and transportation service within the city consistent with the comprehensive plan;
3. Create a mechanism to charge and collect fees to ensure that all new development bears its proportionate share of the capital costs of off-site transportation facilities directly necessitated by new development, in order to provide an adequate level of transportation service consistent with the comprehensive plan;
4. Ensure that the city pays its fair share of the capital costs of transportation facilities necessitated by public use of the transportation system; and
5. Ensure fair collection and administration of such impact fees.
C. The provisions of this chapter shall be liberally construed to carry out its purpose in the interests of public health, safety and welfare. (Ord. 2020-0224 § 2, 2024)
17.12.015 Definitions.
The following are definitions provided for administering the transportation impact fee. The public works director or designee shall have the authority to resolve questions of interpretation or conflicts between definitions.
A. “Adequate level of transportation service” means a system of transportation facilities which have the capacity to serve development without decreasing levels of service below the city’s established minimum (see Chapter 17.07).
B. “Capacity” means the maximum sustainable flow rate at which vehicles or persons can be expected to traverse a point or uniform segment of a lane or roadway during a specified time period, usually expressed as vehicles per hour, passengers per hour, or persons per hour.
C. “Capital improvement program (CIP)” means the section of the annual city budget that contains a comprehensive list of the adopted citywide capital improvement needs, including specific multimodal transportation system improvements. The CIP is cross-referenced in the capital facilities element of the Shelton comprehensive plan and multimodal transportation system capital improvements are derived from the annually adopted six-year transportation improvement program (TIP).
D. “City manager” means the city manager of the city of Shelton.
E. “Development activity” means any construction or expansion of a building, or structure, or use, or any change in the use of land that creates additional demand and need for public transportation facilities. Development activity does not include:
1. Replacement of a structure with a new structure of the same size and use at the same site or lot when the application for a building permit for such replacement occurs within five years of the demolition or destruction of the prior structure;
2. Alterations, expansion, enlargement or remodeling, rehabilitation, or conversion of an existing dwelling unit where no additional units are created, and the use is not changed;
3. The construction of accessory residential structures that will not have an impact on public facilities;
4. Alterations of an existing nonresidential structure that does not expand the usable space or will not create additional impacts on public facilities greater than the highest level of impact that previously has been caused by use of that structure;
5. Miscellaneous improvements, including but not limited to fences, walls, swimming pools and signs;
6. Demolition or moving a structure;
7. The reuse, remodel, tenant improvement, or change in the use of existing structures located in the downtown core, unless the owner or agent proposes new construction or expansion of the height, bulk, or footprint of existing structures.
F. “Director” means the director of the department of public works of the city of Shelton. The director shall have authority to make decisions pursuant to this chapter, including but not limited to determining whether an impact fee or exemption applies. Director decisions shall be appealable to the hearing examiner.
G. “Finance director” means the finance director of the city of Shelton or his/her designee.
H. “Impact fee” or “transportation impact fee” means a payment of money imposed upon development approval to pay for public streets and roads needed to serve new growth and development, and that is reasonably related to the new development that creates additional demand and need for public streets and roads, that is a proportionate share of the cost of the public streets and roads, and that is used for public streets and roads that reasonably benefit the new development. “Impact fee” does not include a reasonable permit or application fee otherwise established by city council resolution.
I. “Jurisdiction” means a municipality or county.
J. “Off-site transportation road improvement” means improvement, except a frontage improvement, to an existing or proposed city road or street outside the boundaries of a development, which improvement is required or recommended in accordance with this title.
K. “Project improvements” means site improvements and facilities that are planned and designed to provide service for a particular development project that are necessary for the use and convenience of the occupants or users of the project, and are not system improvements. No improvement or facility included in the capital facilities plan or capacity project identified in the six-year TIP approved by the city council shall be considered a project improvement.
L. “Proportionate share” means that portion of the cost of public multimodal transportation system improvements that are reasonably related to the service demands and needs of new development.
M. “Service area” means a geographic area defined by ordinance or intergovernmental agreement in which a defined set of public streets and roads provides service to the development within the area.
N. “Six-year transportation improvement program or TIP” means a subset of projects contained in the city’s capital improvement program. The TIP is a set of comprehensive street programs/projects which after a public hearing is annually adopted by the city council per RCW 35.77.010 for the purpose of advancing plans for not less than six years as a guide for carrying out the coordinated transportation/street construction program. The six-year TIP shall contain a small group of capacity projects which will be considered reasonably funded for determining transportation concurrency and impact fees. The adoption of the six-year TIP will obligate the city to actively pursue funds to implement the capacity component of the transportation improvement program as best possible with the available revenue sources.
O. “System improvements” means public facilities that are included in the capital facilities plan and are designed to provide service areas within the community at large, in contrast to project improvements. (Ord. 2020-0224 § 2, 2024)
17.12.030 Geographic scope.
The boundaries within which impact fees shall be charged and collected are co-extensive with the corporate city limits, and shall include all unincorporated areas annexed to the city on and after the effective date of the ordinance codified in this chapter. (Ord. 2020-0224 § 2, 2024)
17.12.040 Imposition of transportation impact fees.
A. The director is hereby authorized to impose transportation impact fees on new development according to the provisions of this chapter. Impact fees are due at the time of building permit issuance at the fee in effect at that time, unless the fees are deferred in accordance with Section 17.12.070.
B. Transportation impact fees:
1. Shall only be imposed for system improvements that are reasonably related to the new development;
2. Shall not exceed a proportionate share of the costs of system improvements that are reasonably related to the new development;
3. Shall be used for system improvements that will reasonably benefit the new development;
4. May be collected and spent only for system improvements which are addressed by the Shelton comprehensive plan, identifying:
a. Additional demands placed on existing public facilities by new developments; and
b. Additional public facility improvements required to serve new development;
c. A list of projects eligible for funding via transportation impact included within the TIP, which is updated annually;
5. Shall be collected only once for each building permit, unless changes or modifications to the building permit are proposed which result in greater direct impacts on transportation facilities than were considered when the building permit was first approved. (Ord. 2020-0224 § 2, 2024)
17.12.050 Fee schedules and establishment of service area.
A. An impact fee schedule setting forth the amount of the transportation impact fees to be paid by a development is set out in the yearly updated city master fee schedule and is incorporated herein by this reference.
B. Transportation impact fees shall be updated annually at a rate adjusted in accordance with the Engineering News Record (ENR) Construction Cost Index for the Seattle area, using an October – September annual measure to establish revised fee schedules effective January 1st of the subsequent year.
C. For the purpose of this chapter, the entire city shall be considered one service area. (Ord. 2020-0224 § 2, 2024)
17.12.060 Calculation of impact fees.
A. A credit, not to exceed the impact fee otherwise payable, shall be provided for the value of any dedication of land for right-of-way, improvement to, or new construction of any transportation system improvements provided by the developer to facilities that are identified as capacity improvements in the comprehensive plan or transportation improvement program and that are required by the city as a condition of approving the development activity. The determination of value shall be consistent with the assumptions and methodology used by the city in estimating the capital improvement costs. The director shall be responsible for developing and implementing policies for transportation impact fees.
B. The director may adjust the standard impact fee at the time the fee is imposed to consider unusual circumstances in specific cases to ensure that impact fees are imposed fairly, per RCW 82.02.060(6). Studies and data can be submitted by a developer requesting a fee adjustment per RCW 82.02.060(7).
C. The amount of fee to be imposed on a particular development may be adjusted by the director after considering studies and other data available to the director or submitted by the developer demonstrating to the satisfaction of the director that an adjustment should be made in order to carry out the purposes of this chapter.
D. The impact fee shall provide for system improvement costs previously incurred by the city to the extent that new growth and development will be served by the previously constructed capacity improvements; provided, that such fees shall not be imposed to make up for any system improvement deficiencies. (Ord. 2020-0224 § 2, 2024)
17.12.070 Deferral of payment of transportation impact fees.
An applicant for a building permit for a single-family detached or attached residence may request a deferral of the full impact fee payment, per RCW 82.02.050(3), until final inspection or eighteen months from the date of original building permit issuance, whichever occurs first. Deferrals of impact fees are considered under the following conditions:
A. The applicant shall submit to the city a written request to defer the payment of an impact fee prior to issuance of the building permit.
B. To receive a deferral an applicant shall:
1. Submit an impact fee deferral application form for each building permit;
2. Grant and record at the applicant’s expense a deferred impact fee lien in a form approved by the city against the property in favor of the city in the amount of the deferred impact fee that:
a. Includes the legal description, tax account number, and address of the property;
b. Requires payment of the impact fees to the city prior to final inspection or eighteen months from the date of original building permit issuance, whichever occurs first;
c. Is signed by all owners of the property, with all signatures acknowledged as required for a deed and recorded in Mason County;
d. Binds all successors in title after the recordation; and
e. Is junior and subordinate to one mortgage for the purpose of construction upon the same real property granted by the person who applied for the deferral of impact fees.
C. The amount of impact fees deferred shall be determined by the fees in effect at the time the applicant applies for a deferral.
D. The city shall withhold final inspection until the impact fees have been paid in full. Upon receipt of final payment of impact fees deferred under this subsection, the city shall execute a release of deferred impact fee lien for each single-family attached or detached residence for which the impact fees have been received. The applicant, or property owner at the time of release, shall be responsible for recording the lien release at his or her expense.
E. The extinguishment of a deferred impact fee lien by the foreclosure of a lien having priority does not affect the obligation to pay the impact fees as a condition of final inspection.
F. Any application for deferral must be submitted prior to building permit issuance. Any request not so made shall be deemed waived.
G. If impact fees are not paid in accordance with the deferral and in accordance with the term provisions established herein, the city may institute foreclosure proceedings in accordance with Chapter 61.12 RCW.
H. An applicant is entitled to defer impact fees pursuant to this section for no more than twenty single-family attached or detached home building permits per year in the city. (Ord. 2020-0224 § 2, 2024)
17.12.080 Payment of fees.
A. All nonresidential and multifamily developers shall pay an impact fee in accordance with the provisions of this chapter at the time that the applicable building permit is ready for issuance, at the rate in effect at that time. Single-family residential developers pay the impact fee at the time the applicable building permit is ready for issuance, at the rate in effect at that time, but may defer the fee in accordance with Section 17.12.070. The fee paid shall be the amount contained in the yearly master fee schedule.
B. If the development is modified or conditioned in such a way as to alter the trip generation rate for the development after building permit issuance, the impact fee will be recalculated accordingly.
C. If the building permit expires through suspension or abandonment, the impact fee shall be refunded at the request of the applicant as provided in Section 17.12.110(A); provided, that if the applicant reapplies for a new permit, the impact fee shall be recalculated at current rates and the amount of the impact fee already paid and not refunded may be credited toward the new impact fee.
D. Impact fees may be paid under protest in order to obtain a permit or other approval of development activity. (Ord. 2020-0224 § 2, 2024)
17.12.090 Project list.
A. The director shall annually review the city’s comprehensive land use and transportation plan (“comprehensive plan”), capital facilities plan, and the projects outlined within the city’s six-year transportation improvement program and shall:
1. Identify each project in the comprehensive plan that is growth-related and the proportion of each such project that is growth-related;
2. Forecast the total moneys available from taxes and other public sources for road improvements over the next six years;
3. Calculate the amount of impact fees already paid; and
4. Identify those comprehensive plan projects that have been or are being built but whose performance capacity has not been fully utilized.
B. The director may use this information to prepare annual updates to the city’s transportation improvement program, which shall comprise:
1. The projects on the comprehensive plan that are growth-related and that should be funded with forecast public moneys and the impact fees already paid;
2. The projects already built or funded pursuant to this chapter whose performance capacity has not been fully utilized; and
3. An update of the estimated costs of the projects listed.
C. The city council shall review and approve the annual transportation improvement program.
D. Once a capacity project is placed in the city’s six-year transportation improvement program, a fee shall be imposed on every development that impacts the project until the impact fee share of the project has been fully funded, in which case the director shall administratively remove the project from the project list. (Ord. 2020-0224 § 2, 2024)
17.12.100 Funding of projects.
A. Transportation impact fees shall be placed in appropriate deposit accounts within the street’s capital improvement fund.
B. The transportation impact fees paid to the city shall be held and disbursed as follows:
1. When the city council appropriates streets capital improvement funds for a project on the project list, impact fees held within such fund may be used in accordance with the project list. The non-impact fee moneys appropriated for the project may comprise both the public share of the project cost and an advancement of that portion of the private share that has not yet been collected in transportation impact fees;
2. The first money spent by the director on a project after a city council appropriation shall be deemed to be the fees from the impact fee account;
3. Fees collected after a project has been fully funded by means of one or more city council appropriations shall constitute reimbursement to the city of the public moneys advanced for the private share of the project;
4. All interest earned on transportation impact fees paid shall be retained in the account and expended for the purpose or purposes for which the transportation impact fees were imposed.
C. Projects shall be funded by a balance between transportation impact fees and other sources of public funds, and shall not be funded solely by transportation impact fees.
D. Transportation impact fees shall be expended or encumbered for a permissible use within ten years of receipt, unless there is an extraordinary or compelling reason for fees to be held longer than ten years. The finance director may recommend to the city council that the city hold fees beyond ten years in cases where extraordinary or compelling reasons exist. Such reasons shall be identified in written findings by the city council. Developers may request a refund of impact fees not expended within ten years per RCW 82.02.080.
E. The city shall prepare an annual report on the transportation impact fee account showing the source and amount of all moneys collected, earned or received and projects that were financed in whole or in part by transportation impact fees. (Ord. 2020-0224 § 2, 2024)
17.12.110 Refunds.
A. A developer shall receive a refund on request when the developer does not proceed with the development activity for which transportation impact fees were paid, and the developer shows that no transportation impact has therefore resulted; however, the impact fee administrative fee shall not be refunded.
B. If an owner appears to be entitled to a refund of transportation impact fees, the finance director shall notify the owner by any means reasonably calculated to reach the owner, and by first class mail deposited with the United States Postal Service at their last known address. The owner must submit a request for a refund to the finance director in writing within one year of the date the right to claim the refund arises or the date the notice is given, whichever is later. Any transportation impact fees that are not expended or encumbered within the time limitations established by this chapter, and for which no application for a refund has been made within this one-year period, shall be retained and expended on any project.
C. In the event that transportation impact fees must be refunded for any reason, they shall be refunded with interest earned to the owners as they appear of record with the Mason County assessor at the time of refund.
D. When the city seeks to terminate any or all impact fee requirements, all unexpended or unencumbered funds 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 to the last known address of claimants. Claimants shall request refunds as in subsection B of this section. All funds available for a 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 on any city projects. This notice requirement shall not apply if there are no unexpended or unencumbered balances within an account or accounts being terminated. (Ord. 2020-0224 § 2, 2024)
17.12.120 Appeals.
A developer may appeal to the hearing examiner any transportation impact fee by completing in full the notice of appeal form supplied by the public works department and paying all applicable appeal fees. Such appeals shall be filed no later than fifteen calendar days following the director’s determination of applicable fees. The hearing examiner shall hold a public hearing and issue a written decision. The developer shall bear the burden of proving:
A. That the director committed material and substantial error in calculating the developer’s proportionate share, as determined by an individual fee calculation or, if relevant, as set forth in the fee schedule, or in granting credit for the benefit factors; or
B. That the director’s decision was based on data that was materially and substantially incorrect and which, therefore, necessarily resulted in an erroneous decision. (Ord. 2020-0224 § 2, 2024)
17.12.130 Relationship to SEPA.
A. All development shall be subject to environmental review pursuant to SEPA and other applicable city ordinances and regulations.
B. Payment of the impact fee shall constitute satisfactory mitigation of those transportation impacts related to the specific improvements identified within the city’s TIP.
C. 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.
D. Nothing in this chapter shall be construed to limit the city’s authority to deny building permits when a proposal would result in significant adverse transportation impacts identified in an environmental impact statement and reasonable mitigation measures are insufficient to mitigate the identified impact. (Ord. 2020-0224 § 2, 2024)
17.12.140 Relationship to concurrency.
Neither compliance with this chapter or the payment of any fee hereunder shall constitute a determination of concurrency under Chapter 17.07. (Ord. 2020-0224 § 2, 2024)