035-22 - South Kitsap School District - ContractDocuSign Envelope ID: 4D5837F6-02D6-4232-B718-4E3737C011 E7
INTERLOCAL AGREEMENT
BETWEEN
CITY OF PORT ORCHARD AND SOUTH KITSAP SCHOOL DISTRICT
THIS AGREEMENT is entered into this 17th day of December, 2021, by and between the
City of Port Orchard (the "City" hereinafter) and the South Kitsap School District No. 402 (the
"District" hereinafter).
WHEREAS, the Washington State Legislature passed the Growth Management Act,
chapter 36.70A RCW, including RCW 82.02.050 through 82.02.100 (the "Authorizing Statutes"
hereinafter), which authorizes the imposition of impact fees on development activity as part of the
financing for public facilities, which financing must provide for a balance between impact fees
and other sources of public funds; and
WHEREAS, the Authorizing Statutes require that impact fees may only be collected for
public facilities which are addressed by a capital facilities element of a comprehensive land use
plan; and
WHEREAS, these Authorizing Statutes allow collection and expenditure of impact fees
only for public facilities which are addressed by a capital facilities element of a comprehensive
land use plan adopted under the Growth Management Act; and
WHEREAS, in 2010 the District requested that the City, on behalf of the District,
implement a fee program based on the Authorizing Statutes; and
WHEREAS, the District has prepared and adopted a capital facilities plan, and
authorization to collect and expend fees is contingent upon the City's adoption of the District's
Capital Facilities Plan (CFP) as part of the City's Comprehensive Plan (RCW 36.70A.070) and on
the CFP's adherence with the Authorizing Statutes; and
WHEREAS, the District's Capital Facilities Plan is adopted as an appendix to the City's
Comprehensive Plan and was last updated in July 2021; and
WHEREAS, under prior agreements between the parties, the District calculated and
collected the applicable school impact fees; and
WHEREAS, pursuant to RCW 82.02.050, counties, cities, and towns are authorized to
collect impact fees on behalf of the District; and
WHEREAS, the District has updated its Capital Facilities Plan and has asked the City to
take over the tasks of calculating and collecting the School Impact Fees from applicants on
behalf of the District; and
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and South Kitsap School District for School Impact Fees
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WHEREAS, the City will need to update its ordinance on impact fees to address the new
procedures requested by the District; and
WHEREAS, prior to the City's adoption of an ordinance describing the features of the
school impact fee program, allowing the District to receive and expend school impact fees in
conformance with the Authorizing Statutes, the City and District desire to enter into an interlocal
agreement; and
WHEREAS, the District agrees to annually provide a copy of its adopted Capital
Facilities Plan to the City for consideration and incorporation pursuant its annual
comprehensive plan update schedule; and
WHEREAS, the City and the District desire to enter into this new Agreement pursuant
to and in accordance with the Interlocal Cooperation Act, Chapter 39.34 RCW, for the purposes
of administering and distributing the authorized school impact fees; and
WHEREAS, this interlocal agreement will set forth the duties and responsibilities of the
parties with regard to implementation of the school impact fee program, as well as indemnification
responsibilities for any legal challenges to the program;
NOW, THEREFORE, in consideration of the mutual promises herein, the parties agree as
follows:
I. Responsibilities of the District.
The District, by and through its officials, officers, employees, agents, and representatives,
agrees to the following:
A. To adopt a capital facilities plan, which meets the requirements of the Authorizing
Statutes.
B. To submit information to the City to support the adoption of a school impact fee
ordinance in the City for the imposition of school impact fees, including the District's capital
facilities plan, a proposed impact fee schedule, and any other information required by the City's
ordinance. Such information should be understandable to the general public and be transparent in
how the impact fee amount is set and how it will be calculated to apply to applicants of different
types of development projects. In order to provide the City with adequate guidance on the
calculation of applicable school impact fees, the impact fee schedule shall provide a listing of all
applicable fee amounts for different types of residential development, including, but not limited
to: detached single family homes, multi -family homes, townhomes or zero lot line homes, duplex,
triplex, and accessory dwelling units both attached and detached.
C. To annually submit to the City a six -year capital facilities plan or an update of the
previously adopted plan, together with an impact fee schedule, which meets the requirements of
the Authorizing Statutes and the school impact fee ordinance, on or before July I" of each year.
This shall include a list of all capital facilities funded or constructed by the District with school
impact fees collected in the previous year(s) from any other city or Kitsap County.
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D. To establish and maintain school impact fee accounts, as required by RCW
82.02.070, as it now exists or may hereafter be amended. The impact fee account(s) shall be
interest -bearing fund(s), and the school impact fees received shall be invested in a manner consistent
with the investment policies of the District.
E. To expend impact fee revenues provided to the District under this Agreement, and
all interest proceeds on such revenues, solely for expenditures authorized by 82.02 RCW, as written
or hereafter amended, and as set forth in the adopted Capital Facilities Plan.
F. To prepare a report to the City to allow the City to meet the requirements of RCW
82.02.070(1) and submit such report to the City on or before March lst of each year, showing the
source and amount of all monies collected, earned, or received and system improvements that were
financed in whole or in part by impact fees.
G. To properly expend impact fees, as required by RCW 82.02.050(4) and
82.02.070(2), as these statutes now exist or may hereafter be amended.
H. To encumber or expend impact fees as required by RCW 82.02.070(3) and where
the District has extraordinary and compelling reasons for noncompliance with this statute, the
District shall identify such reasons in written findings made by the School Board and delivered to
the City Council.
I. To notify property owners of refunds under RCW 82.02.080 and the processing and
payment of any refunds, together with any interest which may be due when a refund is required
pursuant to RCW 82.02.080, as now written, or hereafter amended.
J. To review all covenants and declaration of restrictions for form, as these documents
are required by the school impact fee ordinance to maintain exceptions from payment of impact
fees. In the event that such covenants and/or declarations of restrictions are violated, the District
will have the responsibility for enforcement of same.
K. To maintain all accounts and records necessary to ensure compliance with this
Agreement, the school impact fee ordinance, the Authorizing Statutes, and all other applicable law.
L. To make determinations, pursuant to the City's impact fee ordinance, whether or
not residential activity in the City is exempt from payment of school impact fees, including
approving whether any exemption for school impact fees should be applied for low income
housing or early learning facilities. Any appeals of such a determination shall be handled by the
District.
M. The District shall handle all requests for consideration or appeals of the school
impact fees or dedication in lieu of fee payment from initiation to final decision as set forth under
and consistent with the City's Impact Fee Ordinance. The District's decision on reconsideration
and/or appeal shall be final. Except as provided under Section II below, the District shall be
responsible for defending the school impact fee and/or the District's responsibilities as set forth
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herein regardless of whether an appeal of the school impact fee is fled with an appeal of the
underlying permit or not. The District shall handle all appeals at the District's cost. The scope of
the District's responsibility to defend and indemnify the City is set forth in Section IV below.
II. Responsibilities of the City.
In the event the City adopts a school impact fee ordinance, the City, by and through its officials,
officers, employees, agents and representatives, agrees to the following:
A. Be responsible for the following aspects of the impact fee program:
1. To adopt a school impact fee schedule as part of the City's impact fee
ordinance, based on information submitted by the District, and prepared by
the District in compliance with the Authorizing Statutes and all other
applicable law.
2. To review annually updated information from the District relating to the
school impact fee schedule, and adoption of a new school impact fee schedule
based on information submitted by the District and prepared by the District
under the Authorizing Statutes and all other applicable law.
3. To calculate applicable impact fees to applicants based on the impact fee
schedule received from the District. If a development type is not included on
the District fee schedule, the City shall have the authority to interpret the rate
schedule and to utilize the most applicable development type for calculating
the applicable fee.
4. To receive payments of impact fees from applicants on behalf of the District
as part of development permit applications.
5. To determine whether applicants are excluded from the application of the
school impact fee and/or whether an applicant is eligible for deferral in
accordance with Ch. 20.182 of the Port Orchard Municipal Code.
6. To timely provide information to the District about requests for refunds or
challenges to the school impact fees, including forwarding those requests
directly to the District.
7. For administrative convenience while processing the fee payments, school
impact fees may be temporarily deposited in a City account. As soon as
practicable, the City will transmit the school impact fees collected and any
interest for the District to the District. The District shall deposit the fees
into the School Impact Account established by the District.
To refuse to issue a permit, or, if the impact fee is subject to deferral, to refuse
to issue a certificate of occupancy, until the impact fees are paid to the City.
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III. The City shall not be responsible for any appeals, administrative or judicial, of any
decisions or determinations relating to the school impact fee ordinance. The City shall
timely notify and tender as appropriate to the District any judicial appeal of the school
impact fees, as provided in Section IV herein. Examination of Records.
A. Each Party's records and documents with respect to all matters covered by this Agreement
shall be subject to inspection, review, or examination, by the other Party or other appropriate state
agency.
B. Each Party agrees to cooperate with any evaluation activities conducted by the other Party
that pertain to the subject of this Agreement This includes allowing the other party or appropriate
state agencies and/or any of their employees, agents, or representatives, to have full access to and
the right to examine and inspect, make excerpts or transcripts, during normal business hours, of
the Party's records or matters relating to this Agreement, except to the extent that any such records
are subject to the attorney -client privilege and are not subject to the Public Records Act with
respect to matters covered by this Agreement. The requesting Party shall provide fourteen (14)
days' advance notice to the other Party of examination and inspection of records relating to this
Agreement and shall arrange a mutually agreeable date and time to conduct such examination and
inspection.
C. To the extent the requesting Party prepares, creates, or produces any written evaluation or
other written memorialization or documentation ("record report") of its inspection, review, or
examination of the other Party's records pertaining or relating to the subject of this Agreement,
the requesting Party shall first provide the other Party with a reasonable opportunity to review and
comment on the report prior to finalization. .
IV. Indemnification and Hold Harmless.
A. The District is a separate municipal corporation, with the authority to adopt its capital
facilities plan and to encumber and/or spend the school impact fees collected by the City from
property owners/developers in the City. The District acknowledges that because the District
gathers, collects, creates, and interprets the data used to develop its capital facilities plan, that the
District, not the City, is in the best position to ensure that its capital facilities plan conforms to the
Authorizing Statutes and all other applicable law. The District further acknowledges that because
the District will make its own discretionary decisions about how to encumber and/or spend the
school impact fees collected by the City, that the District, not the City, is in the best position to
ensure that its related actions conform to the Authorizing Statutes and all other applicable law.
With this in mind, the parties have agreed to indemnify the other as follows:
1. The District shall, at its own cost and expense, protect, defend, indemnify and hold
harmless the City, its officers, employees and agents, from any and all costs, claims, judgments or
awards of damages, including attorneys' fees and expert witness fees, arising out of or in any way
resulting from the acts or omissions of the District, its officers, employees or agents, relating to
the District's implementation of the school impact fee program, performance of the duties set forth
in Section I of this Agreement, or compliance with the school impact fee ordinance, the
Authorizing Statutes or applicable law, all as may be amended from time to time.
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2. It is the District's responsibility to refund any fees with interest, which are determined
by a court of competent jurisdiction to have been improperly paid, regardless of whether the
District erroneously established the fee amount and/or the City collected the school impact fee
amount.
3. The District agrees that while the City will be calculating and collecting the impact fees
from applicants, these calculations will be based on the District's established fees. The District
agrees to handle any disputes or appeals related to the school impact fees and will defend, at its
own cost and expense, the City in any disputes or appeals that may arise.
B. The District shall, at its own cost and expense, protect, defend, indemnify and hold
harmless the City, its officers, officials, employees and agents, from any and all costs, claims,
judgments or awards of damages, including attorneys' fees and expert witness fees, resulting from
any challenge to the constitutionality or legality of the school impact fee ordinance or the fee
schedule or the calculation of impact fees or determination applicable to any individual permit
application. If a lawsuit is fled, the City shall immediately send a copy to the District and tender
defense to the District. Once the District assumes defense of any appeal relating to the school
impact fee ordinance, fee schedule, individual determinations, or collection of impact fees, the
District shall not be responsible to reimburse the City for any of the City's attorneys' fees or
litigation costs incurred thereafter.
C. The District further agrees that the District shall, at its own cost and expense, defend,
indemnify, and hold harmless the City, its officers, officials, employees, and agents from any and
all costs, claims, judgments or awards of damages, including attorneys' fees or expert witness fees
arising out of or in any way resulting from the District's failure to refund impact fees, or interest
on such impact fees. The District's failure to refund impact fees, or interest on such impact fees
includes but is not limited to a determination that impact fees from development activity that was
not completed are not refundable because the funds were expended or encumbered by the District,
whether or not the District's determination was made in good faith; provided, however, that once
the District assumes defense of any such claim or action, the District shall not be responsible to
reimburse the City for any of the City's attorneys' fees or litigation costs incurred thereafter.
D. The City shall, at its own cost and expense, protect, defend, indemnify and hold harmless
the District, its officers, employees, or agents from any and all costs, claims, judgments, awards,
attorneys' fees or expert witness fees arising out of or in any way resulting from the acts or
omissions of the City, its officers, officials or employees relating to the performance of the City's
responsibilities as set forth in Section II of this Agreement. The City's decision to use the
information provided by the District (initially or annually) when adopting or updating a school
impact fee ordinance shall not be the basis for City liability, nor shall the City's calculation,
imposition, or collection of school impact fees to any applicant be a basis for City liability, and
the parties agree that if the City relies upon the information provided by the District (initially or
annually) in the adoption of a school impact fee ordinance, any subsequent fee schedule, or the
imposition of fees on applicants in accordance with that fee schedule, the City shall not be required
to defend any appeal or challenge to the District's information, data, use of school impact fees,
calculation of fees, or decisions on reconsideration/appeal. Once the City assumes defense of any
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claim or action, the City shall not be responsible to reimburse the District for any of the District's
attorneys' fees or litigation costs incurred thereafter.
E. The duties of the parties to each other under this Section IV shall survive termination or
expiration of this Agreement.
V. Effective Date and Termination.
A. The District's authorization to receive impact fees under this Agreement may be terminated
without cause by the City, in whole or in part, at any time, but only upon the repeal or invalidation
of the school impact fee ordinance (or any fee schedules adopted hereunder). All other obligations
under this Agreement shall remain in effect until both of the following conditions have been
satisfied:
The City or the District provides written notice that this Agreement is being
terminated; and
2. The District no longer retains unexpended or unencumbered impact fees and
interest earned thereon.
The obligations under Section IV, Indemnification, shall be continuing and shall not be
diminished or extinguished by the termination of this Agreement.
B. The District shall have the duty to ensure that upon termination of this Agreement, any
remaining expended or unencumbered impact fees and interest earned thereon are either properly
expended or refunded pursuant to chapter 82.02 RCW.
C. Nothing herein shall limit, waive, or extinguish any right or remedy provided by this
Agreement or by law that either party may have in the event that the obligations, terms, and
conditions set forth in this Agreement are breached by the other party.
VI. Modification.
No changes or modifications to this Agreement shall be valid or binding upon either party
unless such changes or modifications are in writing and executed by both parties.
VII. Integration.
This Agreement, together with the school impact fee ordinance and any definitions adopted by
the City to implement the ordinance, contains all of the terms and conditions agreed upon by the
parties. No other understandings, oral or otherwise, regarding the subject matter of this Agreement
shall be deemed to bind either party.
VIII. Severability.
In the event that any term or condition of this Agreement or the school impact fee ordinance,
or application of either to any person or circumstances is held invalid, such invalidity shall not
affect other terms, conditions, or applications of this Agreement which can be given effect without
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the invalid term, condition or application. To this end, the terms and conditions of this Agreement
are declared severable.
IX. Rights of Other Parties.
It is understood and agreed that this Agreement is solely for the benefit of the parties hereto
and conveys no right to any other party.
X. Disputes.
Jurisdiction of any dispute arising under this Agreement shall be in Kitsap County Superior
Court, or the U.S. District Court, Western District of Washington. Prior to filing in Superior Court
or District Court, the Parties agree to attempt to settle any dispute arising under this Agreement
through good faith negotiation and/or mediation. Any incurred cost for negotiation/mediation will
be split between the parties.
XI. Governing Law and Filing.
This Agreement shall be construed and enforced in accordance with the laws of the State of
Washington. The laws of the State of Washington shall govern the validity and performance of
this Agreement. This Agreement shall become effective upon occurrence of the following:
A. Approval of the Agreement by the official action of the governing bodies of each of the
parties hereto;
B. Execution of the Agreement by the duly authorized representative of each of the parties
hereto;
C. The filing of a copy of this Agreement with the following public officials:
1. The City Clerk of the City of Port Orchard; and
2. The Secretary of the Board of Directors of the South Kitsap School District.
D. Both parties agree to post this agreement in its respective website in accordance with RCW
39.34.040.
XII. Administration.
A. The City's representative for purposes of administering this Agreement is the Mayor.
B. The District's representative for purposes of administering this Agreement is the
Superintendent.
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XIII. Waiver.
Waiver of any default in the performance of this Agreement shall not be deemed to be a waiver
of any subsequent default. Waiver or breach of any provision of the Agreement shall not be
deemed to be a waiver of any other or subsequent breach and shall not be construed to be a
modification of this Agreement.
XIV. Effective Date and Duration.
This Agreement shall not take effect unless and until it has been duly executed by both
parties and either filed with the County Auditor or posted on either party's website, however, the
City will not begin calculating and/or collecting impact fees for the District until January 1, 2022.
This Agreement shall remain in effect through December 31, 2026 and shall automatically renew
for one additional five (5) year period, unless earlier terminated pursuant to the provisions of
Section V above.
XV. Miscellaneous Provisions
A. No Joint Venture. Nothing contained in this Agreement shall be construed as
creating any type or manner of partnership, joint venture, or other joint enterprise between the
parties.
B. No Separate Entity Necessary. The parties agree that no separate legal or
administrative entities are necessary to carry out this Agreement.
C. Ownership of Property. Except as expressly provided to the contrary in this
Agreement, any real or personal property used or acquired by either party in connection with its
performance under this Agreement will remain the sole property of such party, and the other party
shall have no interest therein.
D. Execution in Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original and all of which shall constitute one and
the same agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement this day of
rrMln4ffN. aVRZ;Z
City of Port Orchard South Kitsap School District No. 402
DocuSigned by:
Igo( t*f P�-M,SWuL
By: Fs ae�rue ..
Robesrt�utaansuu, Mayor
By: vw. �IGW
Tim Winter, Superintendent
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and South Kitsap School District for School Impact Fees
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A fled by:
6VAAJA UJd V)-
Brandy �t 4CBrrea' , City Clerk
Vda ] iCMG&—
APPROVED AS TO FORM:
FDocuSignnedd by: '', . 1^
a
Char f6031ke"K20,kricher, City Attorney
APPROVED AS TO FORM:
Buzz Porter, District Attorney
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and South Kitsap School District for School Impact Fees
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