ORDINANCE NO. 't z. 51 AN ORDINA"ICE OF THE CITY OF ISSAQUAH,

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1 e e DLF/aaf 1011/98 R: I 0/22/98aaf R:4/20/99 R: 11/29/99 ORDINANCE NO. 't z. 51 AN ORDINA"ICE OF THE CITY OF ISSAQUAH, WASHINGTON, RELATING TO COMPREHENSIVE PLANNING, LAND USE AND loning, PARK IMPACT FEES, SPECIFICALLY PROVIDING FOR THE IMPOSITON OF PARK IMPACT FEES, EXEMPTIONS, PROGRAM ELEMENTS, FEE CALCULATION, FEE ADJUSTMENTS, FEE ACCOUNTS, REFUNDS, AND A"I APPEALS PROCESS, ADOPTING BY REFERENCE A PARK IMPACT FEE RATE STUDY, AND ADDING A NEW CHAPTER 18. i 7 TO THE ISSAQUAH LAND USE CODE, PROVIDING FOR SEVERABILITY AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, RCW through , authorize local jurisdictions subject to the Growth Management Act to adopt and enforce ordinances for the imposition and collection of impact fees as pan of the financing of public facilities; and WHEREAS, the City Council of the finds that adequate park facilities should be provided to serve the demand generated from new Development in the City; and WHEREAS, to ensure that adequate park facilities are available to accommodate expected growth when needed, the Council recognizes the cost of new park facilities must be shared by the public and private sectors, and a Proportionate Share of the expense of adequate park facilities necessitated by the impacts of new development should be borne by applicants JßT417256,()()( ': 1.' /90000: - 1 -

2 .. through thc imposition of park impact fccs as authorized by the Growth Managcmcnt Act and RCW 82.0, ; and WHEREAS, the measures adopted through this ordinance are dcsigned to meet these requirements. The measures are further designed to cnsure that Lcvels of Service for park facilities are not degraded below the standards adopted in the Comprehensive Plan by the approval of a Development Pemiit. WHEREAS, an organized framework must be adopted for the determination and analysis of the park impact fees to partialiy fund park facilities necessitated by new Development. and to aliow the imposition and coliection of those fecs by the City pursuant to the Growth Management Act and ali other applicable law; WHEREAS, the rates for Park Impact Fees are based on the Park Impact Fee Rate Study, completed by Henderson, Young and, dated November 22, 1999, and WHEREAS, the adopted a Comprehensive Plan in Ordinance 2061 pursuant to the requirements of the State Growth Management Act, which Comprehenseive Plan was amended concurrently with the adoption of this ordinance, and Level of Service standards are included in the Plan; NOW. THEREFORE. THE CITY COUNCIL OF THE CITY OF ISSAQCAH, WASHINGTON, DO ORDAIN AS FOLLOWS: Section i. Title 18 of the Issaquah Municipal Code is hereby amended by adding a new Chapter 18. I 7, entitled "Park Impact Fees," to read as foliows: Chapter Park Impact Fees Findings and Purpose Definitions Fec Imposed, Applicability ~JBT 41725fJ.()()( '; \:' Ji90000n: - 2-

3 , Exemptions Park Impact Fce Program Elemcnts Fce Calculation Mcthods Fee Collection Fee Adjustments Park Impact Fee Accounts and Refunds Processing Other Authority Appeals Findinl!s and Purpose. The City Council of the finds and detcrniines that growth and development activity in the City will create additional demand and need for Park Facilities in the City, and the Council finds that growth and development activity should pay a proportionate share of thc cost of such facilitics necdcd to serve the growth and developmcnt activity. Thercforc, pursuant to thc Growth Management Act (Chapter 36.70A RCW), and RCW 82, through RCW I 00, which authorize cities to impose and collect impact fees to partially fund public facilities to accommodate new growth, the Council adopts this chapter to impose Park Impact Fees for Park and Rccreational Facilities. Thc provisions of this chapter shall be libcrally construcd in order to carry out thc purposcs of the Council in establishing Park Impact Fees Definitions. I. Affordablc Housing: Housing is considered "affordable" to a family if it costs no more than thirty (30) pcrccnt of thc family's income. The income groups that are the focus of affordable housing are thc low and moderate income families. (a) Low Income group: A family earning bctween zcro (0) and fifty (50) pcrccnt of the King County Median Household Income. (b) Moderatc Income group: A family earning betwccn fifty (50) percent and eighty (80) pcrcent of the King County Median Household Income. "Median incomc" means the mcdian income for the Seattle MSA (King County), as most reccntly deterniined by the Secretary of Housing and Urban Development (HUD) undcr Scction 8(1)(3) of the United Statcs Housing Act of 1937, as amended, or if programs under said Scction 8(1)(3) are terminated, median income determined under the method used by thc Secretary prior to such termination. 2. Average Unfunded Cost: That portion of the average cost of facilities which the City cannot foreseeably finance from any and all public revenue sources available to it based on a PBT (XX';l :OOOIO_120013,'l)I)()Ooo: - 3 -

4 .. multi-year fiscal projection found in the Capital Facilities Element of the Comprehensive Plan, 3. Capital Facilities Element: That Capital Facilities Plan adopted by the City Council as part of the City's Comprehensive Plan, and its amendments. 4. Comprehensive Plan: The Comprehensive Plan adopted by Ordinance No on April 17, 1995, including any adopted amendments. 5. Conditions of Approval: As they apply to Park Impact Fee evaluations, those conditions necessary to ensure that the proposed Development wil not cause the Level of Service for parks to fall below the standards adopted in the Comprehensive Plan, The Conditions of Approval shall be binding upon the approval of any pemiit application for which this chapter is applicable as described in Section 18, I Development: Any construction, reconstruction or expansion of a building. structure, or use, any change in use of a building or stnicture or any changes in the use of land, that requires review and approval of a Development Permit. 7. Development Permit: Includes, but is not limited to, a Building Permit, Administrative Site Development Permit, Site Development Permit, Short Plat Application, Preliminary Plat Application, or Project Rezone Applicaiion, or any written authorization from the City which authorizes the commencement of Development. 8. Director: The Director of the Planning Department, or hislher designee. 9. Financial Commitment: Any form of binding and enforceable financial obligation that is acceptable to the City, and provided to the City at the time of Development approval. 10. Park and Recreational Facilities: Those capital facilities identified as Park and Recreational Facilities in any of the following documents: a) the Capital Facilities Element of the City of Issaquah Comprehensive Plan; b) the Parks, Open Space and Recreation Element of the Comprehensive Plan; and c) the Parks Impact Fee Rate Study dated November 22, 1999, attached hereto as Exhibit A and incorporated hercin by reference as if set forth in full. -:J81' D()( '; 1/ /1)00000: - 4-

5 Park Impact Fee: The payment of money imposcd upon development as a condition of approval of a Development Permit to pay for public facilities needed to serve new growth and development. and that is reasonably related to the new development that creates additional demand and need for facilities, that is a proportionate share of the costs of the facilities, and that is used for facilities that reasonably benefit the new development. "Park Impact Fee" does not include a reasonable permit or application fee. 12. Level of Service (LOS): The relationship between Park Facilities and service provision within the City, as specified in the City's Comprehensive Plan, 13. Proportionate Share: That portion of the cost of public facility improvements and facilities that are reasonably related to the service demands and needs of new Development. The proportionate share will be calculated by the meihods required by RCW , and as set forth in the Parks Impact Fee Rate Study attached hereto as Exhibit A. and hereby incorporated by reference as if set forth in full. 14. Service Area: The geographical area in which a defined set of Park Facilities provide service to Development within the area. For the purposcs of this ordinance the Service Area shall be the entire area within the city limits of Issaquah Fee imposed. ApplicabiItv. There is imposed, and shall be collected, from every person who applies for a Development Permit, a Park Impact Fee for each new dwelling unit proposed in the following amounts: Single Family Unit = $3, Multi-Family Unit = $2, The provisions of this chapter apply to all applications for Development Permits made on, and after the effective date of this ordinance Exemptions. The following Developments are exempt from the requirements of this chapter: i. Affordable Housing: An applicant proposing a Development of Affordable Housing, which includes low and moderate income, as defined in Section , shall not be assessed a Park Impact Fee as follows: pat'l f)()(': i ':0001 D. I : L - 5.

6 ~ - a) As a condition of receiving an exemption under this section, the owner shall execute and record in King County's real property title records a City-drafted lien, covenant, or other contractual provision against the property that provides that the proposed housing unit or Development will continue to be used for low or moderate income housing and remain affordable to those households for a penod of not less than 30 years. The lien, covenant, or other contractual provision shall run with the land and apply to subsequent owners and assigns in the event thai the housing unit(s) are exempted. b) Any claim or request for an exemption under this section shall be made no later than the time of application for a building permit. If a building permit is not required for the Development. then the claim shall be made when the first Development Permit is applied for. Any claim not made when required by this section shall be deemed waived. 2. Development Impact Fee Accessory Units: An applicant proposing the of an accessory unit shall not be assessed a Park 3. Change of Use: An applicant proposing a Development involving a change of use and/or structure that has no greater impact than the existing use shall not be assessed a Park Impact Fee. 4. City Proiects: An applicant proposing the Development of a City Project shall not be assessed a Park Impact Fee. 5. Home Occupations: An applicant proposing the Development of a Home Occupation shall not be assessed a Park Impact Fee. 6. Pending Development Pemiit: An applicant shall not be assesscd a Park Impact Fee if one or morc of the following has occurred: I) the City and applicant have signed a park mitigation agreemcnt for the Developmcnt at issue pnor to the effective date of this Ordinance; or 2) the applicant has already provided, or been required to provide as a condition of approval, park mitigation for the Developmcnt at issue pnor to the effectivc date of this Ordinance; or 3) the applicant has submitted a complete building permit application, as defined by the Land Use Code (lmc 18.02), prior to the effective date of this Ordinance; or 4) the applicant has already been assessed a Park Impact Fee for the same Development. 1)ßT4 I 7256_0()('~ i :' :900000: - 6-

7 Park Impact Fee Proiiram Elements. A. Thc City shall impose and collcct Park Impact Fees on every Development Pennit within the Service Area, except as provided in , Exemptions. B. Any Park Impact Fee imposed shall be reasonably related to the impact caused by the new Devclopment and shall not exceed a Proportionate Share of the cost of Park and Recreational Facilities that are reasonably related to the new Development. C. Thc Park Impact Fee imposed may include costs for Park and Recreational Facility improvements previously incurred by the City to the extent that new Dcvelopment will be served by the previously constructed improvements provided that such fee shall not be imposed to correct any system improvement deficiencies. D. The Park Impact Fee imposed for any Development shall be calculated and determined by the procedures established by this ordinance and based on the methods set forth in the Parks Impact Fcc Rate Study in Exhibit A, attached hereto and incorporated herein by reference as if set forth in full E. In computing the fee applicable to a given Development, credit shall be given for the fair market value, measured at the time of dedication, for any dedication of land for, improvements to, or new construction of any Park and Recreational Facilities that are idcntified in the Capital Facilities Element and that arc required by the City as a condition of approving thc Development. F. Park Impact Fees shall be used for Park and Recreational Facilities that will reasonably benefit the new Development, and only those Park and Recreational Facilities addressed by the City's Capital Facilities Element of the Comprchensive Plan Fee Calculation Methods. All data and other information necessary to determine impact fee amounts will be madc available to the public upon request. Data such as park needs, and facility improvement projects and costs, and related fee schedules will be updated as necessary. Forms and procedures will be established administratively Fee Collection. At the time of application for a Building Permit, the Park Impact Fee shall be calculated based on the Park Impact Fee schedule established in the Park Impact Fee Rate Study in Exhibit A attached hereto and incorporated herein by rcference as if set forth in full. No Building Permit shall be issued until the impact fee has bccn paid in full by the applicant, provided pbt'l i 7256_IX J( '; 1 :'QOO 1 1I ;llOfX)(X) L - 7-

8 .. that, payment of fees may be phased if the Building Permits for the Development are also phased. The Park Impact Fee shall be collected by the City, and maintained in a separate account, as required by Section Park Impact Fees may be paid under protest in order to obtain a Building Permit Fee Adjustments. A. Fees calculated by the City may be adjusted by the Director, in any of the following circumstances: 1. The applicant demonstrates that a Park Impact Fee assessment was improperly calculated; or 2, The applicant provides studies and data that. when considered, suggest that adjustment of the fee would be appropriate; or 3. Unusual circumstances exist which, when considered, suggest that imposition of the standard fee would be unfair. B. Any appeal of the decision of the City with regard to Park Impact Fee amounts shall follow the process for the appeal of the underlying Development Permit, as set forth in the Issaquah Land Use Code, and Section Park Impact Fee Accounts and Refunds. A. Park Impact Fee receipts shall be earmarked specifically and retained in a special interest bearing account established by the City solely for Park Impact Fees. All interest shall be retained in the account and expended for the purpose or purposes for which said fees were imposed. Annually, the City shall prepare a report on the source and amount of all Park Impact Fees collected, interest earncd, and the Park and Recreational Facilities that were financed in whole or in part by said fees. B. Park Impact Fees shall be expended by the City only in conformance with the Capital Facilities Element of the Comprehensive Plan. C. Park Impact Fees shall be expended or encumbered by the City for a permissible use within six (6) years of receipt by the City, unless there exists an extraordinary or compelling reason for fees to be held longer than (6) years. Such extraordinary or compelling reasons shall be identificd in written findings by thc City. jjbt'll 7256.!))l',lmOO :900000: - 8 -

9 .. D. The current owner of property on which a Park Impact Fce has been paid may receive a refund of such fees if the City fails to expend or encumber the fees within six (6) years of receipt of the fees by the City on Park Facilities intended to benefit the Development for whieh said fees were paid. In determining whether Park Impact Fees have been encumbered, such fees shall be considered encumbered on a first in, first out basis. The City shall noti fy potential claimants by first-class mail deposited with the United States postal service at the last known address of the claimants. E. An owner's request for a refund must be submitted to the City in writing within one (1) year of the date the right to claim the refund arises or the date that notice is given, whichever date is laer. Any Park Impact Fees that are not expended or encumbered by the City in conforniance with the Capital Facilities Element within these time limitations, and for which no application for a refund has been made within this one (1) year period, shall bc retained and expended consistent with the provisions of this section. Refunds of Park Impact Fees shall include interest earned on such fees. F. Should the City seek to terminate any or all Park Impact Fcc requirements, all unexpended or unencumbered funds, including interest earned, shall be refunded pursuant to this section. Upon the finding that any or all fee requirements are to be tcrniinated, the City shall place notice of such termination and 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. All funds available for refund shall be retained for a period of one (I) year. At the end of one (i) year, any remaining funds shall be retained by the City, and must be expended by the City consistent with the provisions of this chapter. The notice requirements set forth above shall not apply if there arc no unexpended or unencumbered balances within the account or accounts being terminated. G. An applicant may request and shall reccive a refund, including interest earned on the Park Impact Fees, when: 1. The applicant does not proceed to finalize the Development; and 2. No impact on the City has resulted. "Impact" shall be deemed to include cases where the City has expended or encumbered the Park Impact Fees in good faith prior to the application for refund. In the event that the City has expended or :mt417256, D()( '; 1 ((1001 o. i 2001.PJOOOOO: - 9-

10 .. cncumbered the fecs in good faith, no rcfund shall be forthcoming. However, within a period of three (3) 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 Park 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 delennine whether to grant a credit, and such detenninations may bc appealed by following the procedures set forth in Section H. Interest due upon the refund of Park Impact Fees required by this chapter shall be calculatcd according to the average rate received by the City on invested funds throughout the period during which the fces were retained ProcessInl!. applicable Park Impact Fees Development Pennit. The City shall as a nonnal part detennine any of proccssing a Other Authoritv. Nothing in this ordinance is intended to limit the City's authority under thc State Environmental Policy Act or any other source Appeals. Any detennination of the Park Impact Fee amount, decision to approve, condition or deny a Development proposal based on the requircments of this chapter may be appealed according to the appcal procedure for the underlying Development Pemiit or approval involved, as set forth in thc Issaquah Land Use Code. An applicant of a Development Pennit may pay the Park Impact Fees imposed by this chapter under protcst in order to obtain thc approval for the Dcvelopment and/or Development Pennit. No appeal shall be pennitted unlcss and until thc Park Impact Fees at issue have been paid. ljbt do(', i / /90000 I - 10-

11 .. Section 2. Severability Clause. If any section, sentence, clause or phrase of this ordinance should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause or phrase of this ordinance. Section 3. Effective Date Clause. This ordinance or a summary thereof consisting of the title shall be published in the offcial newspaper of the City, and shall take effect and be in full force five (5) days after publication. J)~,1999. Passed by the City Council of the, the t, -r day of Approved by the Mayor of the the M~, APPROVED: l ý I " 1(".-'.1:': i),1 AVA FRISINGER, MAYOR l' z; day of ATTEST/AUTHENTICATED: ~ t~ Cl Y CLERK, LINDA RUEHLE APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY: BY~.~~ FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: /1-'1' rr I'/ - (. - 'f 7 (l. -is -'1'1 ljßt ix)(',i:'oou '900000f

12 e. EFFECTIVE DATE: ORDINANCE NO. 2- ~~7 1?'i!C'r( ljbt IX)( ':1/ / : - 12-

13 .. Exhibit A to Ordinance No RATE STUDY FOR IMPACT FEES FOR PARKS AND RECREATIONAL FACILITIES (1999 Inventory Level of Service) CITY OF ISSAQUAH, WASHINGTON Final Report '" November 22, 1999 r Heerson

14 .. TABLE OF CONTENTS Executive Summary ''''''''''''''''''''''''''''''''''''''''''''''''''.".,,."..,."...".,,,..,,,,,,,,...,,,,.."....,,,,,,,.,."" Statutory Basis and Methodology"""""""""""."""."""""""."""""""""""".""".".."." 4 2, Level of Service Standard..""""".",,,,,,,,,,,,,.,,,,,,,..,,,,.,,,,,,,,,,,.,,,,,,,,,.,,...,,,,,,,,,,""""""'" i 2 3, Park and Recreational Facilily Needs ",,,,,,,,,,,,,,,"""'"'''''''''''''''''''''''''''''''''''''''''''''''''' 15 4, Impact Fees """""'"'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''',..".""".""."",...,19 Appendix A: Per Person Ratios for Parks and Recreational Facilities""""""""""",,2 i Appendix B: Costs of Parks and Recreational Faciiities"""".""""""""."",,,,,,,,,,,,,.,,,,23 Appendix C: Deficiency or Reserve Capacily of Parks and Recreation Facilities.25

15 .. Executive Summary The purpose of this study is to establish the rates for impact fees for parks and recreation facilities in the, Washington. Rates The rates for impact fees for park land and recreation facilities are: Type Dwellinçi Unit Impact Fee Single Family Multi-Family $3,147 $2,189 Impact Fees VS. Other Developer Contributions Impact fees are charges paid by new development to reimburse local governments for the capital cost of public facilities that are needed to serve new development and the people who occupy or use the new development. Throughout this study the term "developer" is used as a shorthand expression to describe anyone who Is obligated to pay impact fees, including builders, owners or developers. The impact fees that are described in this study do not Include any other forms of developer contributions or exactions, such as mitigation or voluntary payments authorized by SEPA (the State Environmental Policy Act, RCW 43,21C), system development charges for water and sewer authorized for utilities (RCW for municipalities, for sewer districts, and for water districts), local Improvement districts or other special assessment districts, linkage fees, or land donations or fees in lieu of land. ADJUSTMENTS FOR OTHER SOURCES OF REVENUE FOR PARK LAND AND RECREATION FACILITIES The Impact fees In this study recognize the existence of other sources of revenue that are available to pay for the capital cost of park land and recreation facilities, These other revenues are accounted for by adjustlng Q,e" reducing) the cost of capital Investment for parks and recreational facilities to account for the portion of costs that are paid by the other sources of revenue. CREDITS FOR OTHER CONTRIBUTIONS BY DEVELOPER A developer who contributes land, improvements or other assets may receive a.credlt' which reduces the amount of Impact fee that Is due, This credit is in additlon to the adjustment for other revenues described In the preceding paragraph, Henderson. 199 Inventory Level of Servce November 22, 199 Page 1

16 . Park Impact Fee Rate Study. WHO PAYS IMPACT FEES Impact fees are paid by new development. Impact fee rates for new development are based on the type of land use: residential. retail. office, commercial, industrial and other types of new construction, Due to the statutory requirement regarding the relationship between impact fees and the development that pays-and benefits from--the fees, only new residential development (Le" houses. apartments, mobile home parks, and other residential construction) is charged impact fees for parks and recreational facilities. Nonresidential new development is not charged park and recreational facilities impact fees, as explained In Chapter 1. SERVICE AREAS FOR IMPACT FEES Impact fees in some jurisdictions are collected and expended within senice areas that are smaller than the jurisdiction that is collecting the fees. Impact fees are not required to use senlce areas unless such 'zones" are necessary to establish the relationship between the fee and the development. Park land and recreation facilities impact fees are collected and expended throughout the boundaries of the because of the compact configuration of the City and the accessibility of its park system to all residences, TIMING OF PAYMENT OF IMPACT FEES Impact fees are usually collected at the time the local government issues a permit or order allowing land to be developed. in the impact fees are calculated at the time the an application is submitted for a building permit. Impact fees are collected at the time the building permit is issued. USES OF IMPACT FEE REVENUE Impact fee revenue wii be used for the capital cost of public facilties, Impact fees cannot be used for operating or maintenance expenses. The cost of public facilites that can be paid for by impact fees Include park and facilties planning, land.acqulsltion. site Improvements. necessary off-site improvements. construction, engineering. architectural, permitting. financing. and administrative expenses, applicable Impact fees or mitigation costs, and capital equipment pertaining to park land and recreation facilties. The public facilties that can be paid for by impact fees are "system Improvements" (which are typically outside the development "and designed to provide senice to senice areas wiin the communhy at large" as provided Ìl RCW (9)). as opposed to "project Improvements" (which are typically provided by the developer on-site witin the development or adjacent to the development "and designed to provide senlce for a particular development project and that are necessary for the use and convenience of the occupants or users of the project' as provided in RCW 82,02.050(6). Henderson, 199 Inventory Level of Service November Page 2

17 . Park Impact Fee Rate Study. EXPENDITURE REQUIREMENTS FOR IMPACT FEES Impact fees must be spent on capital projects contained In an adopted capital facilties plan, or they can be used to reimburse the government for the unused capacity of existing facilities, Impact fee payments that are not expended within 6 years must be refunded, In order to verify these two requirements, impact fee revenues must be deposited Into separate accounts of the government. and annual reports must describe revenue and expenditures, DEVELOPER OPTIONS A developer who is liable for impact fees has several options regarding impact fees. The developer can submit data and or/analysis to demonstrate that the Impacts of the proposed development are less than the impacts calculated in this rate study, The developer can appeal the impact fee calculation by the City of Issaquah, If the local government falls to expend the impact fee payments within 6 years of receipt of such payments, the developer can obtain a refund of the Impact fees. The developer can also obtain a refund if the development does not proceed and no Impacts are created. ORGANIZATION OF THE STUDY Chapter 1 summarizes the statutory basis for developing impact fees, discusses Issues, and presents the methodology and formulas for determining the amount of the impact fee. Chapter 2 describes and documents the level of service standard for the parks and recreational facilities which is measured by the amount of capital Investment per person. Chapter 3 documents the value of parks and recreational facilities that are needed to serve growth that Is forecast. in Issaquah, net of any existing reserves and/or any Cit investment In parks and recreational facilties. Chapter 4 documents the growth cost per person and calculates the impact fee per dwellng unit, Appendix A documents the per person ratios of park land and recreational facilties, Appendix B documents the cost per unit of capacity of park land and recreational facilties, Appendix C documents the need for park land and recreational facilities using categories specified In RCW 82,02.050(4). Henderson, 199 Inventory Level of Service November 22, 199 Page 3

18 . Park Impact Fee Rate Study _ 1. Statutory Basis and Methodology Local governments charge Impact fees for several reasons: 1) to obtain revenue to pa for some of the cost of new public facilities; 2) to implement a public policy that new development should poy a portion of the cost of facilities that It requires. and that existing development should not pay all of the cost of such facilities; and 3) to assure that adequate public facilities will be constructed to serve new development. This study of impact fees for park iand and recreation facilities for Issaquah, Washington describes the methodology that is used to develop the fees. presents the formulas, variables and data that are the basis for the fees. and documents the calculation of the fees. The methodology is designed to comply with the requirements of Washington State Law, STATUTORY BASIS FOR IMPACT FEES The Growth Management Act of 1990 created RCW 82, ,090 to authorizes local governments in Washington to charge impact fees. and provide specific requirements for impact fees. The impact fees that are described in this study are not mitigation payments authorized by the State Environmental Policy Act (SEPA). There are several important differences between impact fees and SEPA mitigations, Two aspects of Impact fees that are particularly noteworthy are: 1) the ability to charge for the cost of public facilities that are "system improvements" (I.e., that provide service to the community at large) as opposed to "project improvements" (which are "on-site" and provide service for a particular development); and 2) the abilit to charge small-scale development their proportionate share, whereas SEPA exempts small developments, The following synopsis of the most significant requirements of the law includes citations to the Revised Code of Washington as an aid to readers who wish to review the exact language of the statutes, TYPES OF PUBLIC FACILITIES Four types of public facilties can be the subject of Impact fees: 1) public streets and roads; 2) publicly owned parks, open space and recreation facilities; 3) school facilities; and 4) fire protection facilties On jurisdictions that are not part of a fire district). RCW (2) and (4), and RCW 82.02,09(7) Henderson, 199 Inventory Level of Servce November 22, 199 Page 4

19 . Park Impact Fee Rate Study. TYPES OF IMPROVEMENTS Impact fees can be spent on "system Improvements" (which are fypicafly outside the development). as opposed to "project improvements" (which are fypicafly provided by the developer on-site witin the development), RCW (3)(0) and RCW (6) and (9) BENEFIT TO DEVELOPMENT Impact fees must be limited to system improvements that are reasonably related to, and which wil benefit new development, RCW 82.02,050(3)(0) and (c), Local governments must establish reasonable service areas (one area. or more than one. as determined to be reasonable by the local government). and local governments must develop impact fee rate categories for various land uses, RCW (6) PROPORTIONATE SHARE Impact fees cannot exceed the development's proportionate share of system improvements that are reasonably related to the new development. The impact fee amount shall be based on a formula (or other method of calculating the fee) that determines the proportionate share. RCW 82.02,050(3)(b) and RCW (7) REDUCTIONS OF IMPACT FEE AMOUNTS Impact fees rates must be adjusted to account for other revenues that the development pays Of such payments are earmarked for or proratable to particular system improvements), RCW 82.02,050(7)(c) and (2) and RCW (7)(b) Impact fees may be credited for the value of dedicated land. Improvements or construction provided by the developer Of such facilities are In the adopted CFP and are required as a condition of development approval), RCW (3) EXEMPTIONS FROM IMPACT FEES Local governments have the discretion to provide exemptions from Impact fees for low-income housing and other "broad public purpose" development. but all such exemptions must be paid from pubflc funds (other than Impact fee accounts). RCW (2) DEVELOPER OPTIONS Developers who are flable for impact fees can submit data and or/analysis to demonstrate that the Impacts of the proposed development are less than the Impacts calculated In this rate study. RCW (5). Developers can pa Henderson, 199 Inventory Level of Service November Page 5

20 . Park Impact Fee Rate Study. impact fees under protest and appeal Impact fee calculations. RCW (4) and RCW (4) and (5). The developer can obtain a refund of the Impact fees If the local government falls to expend the Impact fee payments witin 6 years. or terminates the Impact fee requirement. or the developer does not proceed with the development (and creates no impacts), RCW CAPITAL FACILITIES PLANS Impact fees must be expended on public facilities In a capital facilities pian (CFP) element (or used to reimburse the government for the unused capacity of existing facilities), The CFP must conform with the Growth Management Act of and must identify existing deficiencies in facilty capacity for current development. capacity of existing facilities available for new development. and additional facility capaciiy needed for new deveiopment. RCW (4). RCW 82,02,060(7). and RCW 82.02,070(2) NEW VERSUS EXISTING FACILITIES Impact fees can be charged for new public facilities (RCW 82,02.060(1)(a)). and for the unused capacity of existing public facilities (RCW 82,02.060(7)) subject to the proportionate share limitation described above. ACCOUNTING REQUIREMENTS The locai government must separate the impact fees from other monies. expend the money on CFP projects within 6 years. and prepare annual reports of collections and expenditures. RCW 82.02,070(1)-(3) ISSUES RELATING TO IMPACT FEES Prior to calculating Impact fee rates, several Issues wil be addressed In order to determine the need for, and validiiy of such fees: responslblliy for public facliltles, the need for new revenue for additional park land and recreation facilties, the benefit of new park land and recreation facilities to new development. and low Income housing, RESPONSIBILITY FOR PUBLIC FACILITIES In general. local governments that are authoried to charge Impact fees are responsible for specific public facilties for which they may charge such fees, The Cliy of Issaquah Is legally and financially responsible for the parks and recreation facilities It owns and operates witin Its jurisdiction. In no case ma a local government charge impact fees for private facilities, but It ma charge impact fees for some public facilties that It does not administer If such facilties are "owned or operated by government entities" (RCW 82,02.09 (7). Thus. a cliy or Henderson. 199 Inventory Level of Servce November Page 6

21 . Park Impact Fee Rate Study - county ma charge Impact fees for parks and recreation facilties, and enter into an agreement wit school districts for the transfer, expenditure, and reporting of parks Impact fees for parks and recreational facilities at school sites, NEED FOR ADDITIONAL PARK LAND AND RECREATION FACILIIES The need for additional park land and recreation facilties is determined by using standards for levels of service for park land and recreation facilities to calculate the quantity of facilties that are required. The required quantity is then compared to the existing inventory to determine the need for additional land and facilities. The analysis of needed park land and recreation facilties must comply with the statutory requirements of identifying existing deficiency, reserve capacity and new capacity requirements for facilties. An analysis of the need for additional park land and recreation facilties is presented In Appendix A. NEED FOR NEW REVENUE FOR ADDITIONAL PARK LAND AND RECREATION FACILITIES The need for new revenue for park land and recreation facilities is demonstrated by comparing the cost of new facilties for the next 6 years to the existing sources of revenue for the same 6 years. The City's 6-year plan for park land and recreation facilties does not have enough revenues from other sources to pay needed costs without Impact fees, DETRMINING THE BENEFIT TO DEVELOPMENT The law Imposes three tests of the benefit provided to development by impact fees: 1) proportionate share, 2) reasonably related to need, and 3) reasonably related to expenditure (ReW (3)). 1. Proportionate Share. First, the "proportionate share" requirement means that Impact fees can be charged only for the portion of the cost of public facilties that is "reasonably related" to new development. In other words, Impact fees cannot be charged to pa for the cost of reducing or eliminating deficiencies In existing facilties. Second, there are several important implications of the proportionate share requirement that are not specifically addressed in the law, but which follow directly from the law: Costs of facilties that will be used by new development and existing users must be apportioned between the two groups in determining the amount of the fee, This can be accomplished In either of two ways: (1) by allocating the cost between new and existing users, or (2) calculating the cost per unit (I.e" acre of park land, etc,), and applying the cost only to new development when calculating Impact fees, Henderson. J 99 Inventory level of Servce Ci1y of Issaquah November 22, 199 Page 7

22 . Park Impact Fee Rate Study. Impact fees that recover the costs of existing unused capacity should be based on the government's actual cost rather than the replacement cost of the facilty. Carrying costs may be added to reflect the government's actual or Imputed Interest expense, The third aspect of the proportionate share requirement Is its relationship to the requirement to provide adjustments and credits to impact fees, where appropriate. These requirements ensure that the amount of the impact fee does not exceed the proportionate share,. The "adjustments" requirement reduces the impact fee to account for past and future payments of other revenues (If such payments are earmarked for or proratable to the system improvements that are needed to serve new growth),. The "credit" requirement reduces impact fees by the value of dedicated land, Improvements or construction provided by the developer (if such facilities are in the adopted CFP and are required as a condition of development approval). The law does not prohibit a local government from establishing reasonable requirements on determining credits. For example, the location of dedicated land and the quality and design of a donated public facilty can be required to conform to adopted local standards for such facilties. Without such adjustments and credits, the fee-paying development might pay more than its proportionate share, 2. Reasonably Related to Need. There are many ways to fulfill the requirement that Impact fees be "reasonably related" to the development's need for public facilties, Including personal use and use by others in the family or business enterprise (direct benefit), use by persons or organizations who provide goods or services to the fee-paying propert (Indirect benefi), and geographical proximity (presumed benefit), These measures of relatedness are Implemented by the following techniques:. Impact fees for park land and recreation facilities are charged to properties which benefit from new park land and recreation facilties. Park land and recreation facilties are provided by the Cit of Issaquah to all kinds of propert throughout the City regardless of the type of use of the propert. Impact fees for park land and recreation facilties, however, are only charged to residential development in the City, because the dominant stream of benefits redounds to the occupants and owners of dwellng units. As a matter of policy, the elects not to charge park Impact fees to non-residential properties. Henderson. 199 Inventory Level of Service November 22, 199 Page 8

23 . Park Impact Fee Rate Study. The relative needs of different types of growth are considered In establishing fee amounts (I.e.. single family dwellng units versus multi family dwellng units, etc.), Feepayers can pay a smaller fee if they demonstrate that their development will have less Impact than is presumed In the Impact fee schedule calculation for their propert classification, Such reduced needs must be permanent and enforceabie (I.e" via land use restrictions). Issaquah's parks and recreation facilities serve the entire City, therefore the impact fees for these parks and recreational facilities are based on a single district which encompasses the City and Urban Growth Management Area. 3. Reasonably Related to Expenditures. Two provisions of the law tend to reinforce the requirement that expenditures be "reasonably related" to the development that paid the Impact fee, First, the requirement that fee revenue must be earmarked for specific uses related to public faciiitíes ensures that expenditures are on identifiabie projects, the benefit of which can be demonstrated. Second, impact fee revenue must be expended within 6 years, thus requiring a timeliness to the benefit to the fee-payer. Low INCOME HOUSING A fundamental premise of Impact fees Is that growth should pay for its fair share of the public facilties that it needs, One possible drawback to Impact fees paid by residential development is the potential negative effect of the impact fees on the affordabllty of housing. The effect of an impact fee on the affordabilty of housing varies according to the cost of the house, The more expensive the house, the smaller the effect because the Impact fee (which Is the same for all dwelling units, regardless of cost) adds a smaller percentage to the cost of the house, Thus, the least effect Is on the highest price housing and the largest effect is on low-income housing. Any given impact fee will be a larger percentage of the cost of a low priced home, and the Inelasticity of Income of buyers of low income housing ma cause some to be priced out of the market if relief is not provided. The 's impact fee ordinance exempts low and moderate Income housing from impact fees. Henderson, 199 Inventory level of Service November 22, 199 Page 9

24 . Park Impact Fee Rate Study. Methodology and Relationship to Capital Facilties Plan Issaquah's parks and recreational facilties Impact fees are calculated using the following methodology: Costs are determined per unit of capacity of park and recreational facilty. Costs are from the list of projects in the City's Capital Improvement Plan for Park Land Development and Trails. The costs per unit of capacity are applied to standards for units of capacity per person (using the ratios of 1999 inventory to 1999 population) to determine the capital investment per person, The total investment per person is adjusted to reflect the availability of other sources of revenue to the City. Finally, the amount of the impact fee Is determined by charging each fee-paying development for the number of units of demand that it generates multiplied times the amount of the investment per person that is to be paid by growth. Calculation of Impact Fee Amounts Six formulas are used to determine the amount of impact fees for parks and recreational facilities that are required as a result of new development: 1. Pork and Recreation Capital Investment Per Person Capacity Average Per x Cost per = Person Facilty Capital Investment Per Person 2. Value Needed for Growth CapItal Forecast Investment x Population = per Person Growth Value Needed for Growth 3. Investment Needed for Growth Value Value of Investment Needed Existing = Needed for Growth Reserve for Growth Capacity 4. Investment to be Paid by Growth Investment City Investment Needed Investment = to be Paid for Growth for Growth by Growth Henderson, 199 Inventory Level of Servce November Page 10

25 . Park Impact Fee Rate Study. 5. Growth Cost Per Person Investment to be Paid by Growth.. Growth Population = Growth Cost per Person 6. Impact Fee Per Dwellng Unit Growth Cost Per Person Average x Persons per = Dwelling Unit Impact Fee Per Dwelling Unit Henderson. 199 Inventory Level of Servce November Page 11

26 . Pork Impact Fee Rate StUdY. 2. Level of Service Standard This chapter includes a description of the first formula and each variable that Is used In the formula, an explanation of the use of data in the formulas, and the calculation of the level of service standard for park land and recreational facilities, using formula 1. FORMULA 1: Park and Recreation Capital Investment Per Person The capital investment per person is calculated by multiplying the capacity of parks and recreational facilities times the average costs of those Items, Capacity Per Person x Average Cost per Facilty = Capital Investment Per Person There are two variables that require explanation: (A) capacity per person, and (B) the average cost of each type of park land and recreational facility. VARIABLE (A): CAPACITY PER PERSON Capacity is a measurement of the size or number of facilities of a certain type, such as number of acres of active parks, or number of soccer fields. The units of capacity per person were determined by dividing Issaquah's 1999 inventory of parks and recreational facilities by the City's 1999 population. Appendix A lists the 199 ratios, VARIABLE (B) COSTS OF PARKS AND RECREATIONAL FACILITIES The 6-year CIP Projects and Financing Plan ( ) for Park Land Development and Trails Identifies capital projects required to maintain the CItys current inventory of park and recreational facilities, and to meet the growt demand based on the adopted standards for level of service. The CIP already distinguishes between capacity projects (I.e" additions to the CItys inventory) and non-capacity projects 0.e" repair, maintenance of the existing inventory of park and recreational facilities), 'Most of the additional capacity in park and recreational facilities wiil be provided by constructing new facilities, however some capacity ma be provided by expanding existing facilties. Throughout this study, any reference to new facilities Includes expansion of existing facilities as well as construction of new facilities. The costs in this study represent the costs of actual projects In the 6-year CIP, or if there are no CIP projects for a type of park or facilty, the cost is the actual cost Henderson. 199 Inventory Level of Service November Page 12

27 . Park Impact Fee Rate Study. paid for the land or facilities acquired previously by the City. Appendix B lists each type of park and recreational facilty. Its unit of capacit. cost per unit. and the source of the cost data. The cost of each new park includes land. design, landscaping, site improvements. some recreational facilties (e,g.. equipment or apparatus not separately listed in this study), and legal and administrative costs (which Includes contingency), The cost of recreational facilities includes design. site preparation. construction. and legal and administrative costs (which includes contingency). The cost of facilities does not include land if the facilties are customarily located at a park. If the facilty is usually located at any site other than a park. the cost includes land, The cost of new parks and recreation facilities in this rate study does not include any costs for interest or other financing. If borrowing is used to "front fund" the costs that wil be paid by impact fees. the carrying costs for financing can be added to the costs. and the impact fee can be recalculated to include such costs. CALCULATION OF PARK AND RECREATION CAPITAL INVESTMENT PER PERSON Table i (on the next page) lists the types of land and facilities that make up Issaquah's park system. For each component listed alphabetically in column 1. the ratio of capacity per person using the 199 ratios is listed In column 2. and the average cost per facility is listed In column 3. Finally. column 4 presents the calculated capital investment per person by multiplying the ratio by the average cost. Henderson. 199 Inventory Level of Servce City of Isaquah November Page 13