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017-22 - Resolution - Interlocal Agreement with SKSD for School Impact FeesRESOLUTION NO. 017-22 A RESOLUTION OF THE CITY OF PORT ORCHARD, WASHIGNTON AUTHORIZING THE MAYOR TO EXECUTE AN INTERLOCAL AGREEMENT WITH SOUTH KITSAP SCHOOL DISTRICT NO.402 FOR THE COLLECTION OF SCHOOL IMPACT FEES. 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 City had previously adopted a school impact fee program at the request of the District; 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 WHEREAS, pursuant to RCW 82.02.050, counties, cities, and towns are authorized to collect impact fees on behalf of the District; and WHEREAS, under prior agreements between the parties, the District calculated and collected the applicable school impact fees; 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 WHEREAS, this new 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; and WHEREAS, the City Council finds it in the public interest to authorize the Mayor to execute the proposed interlocal agreement with South Kitsap School District No. 402 which is attached to this Resolution as Exhibit "1"; now, therefore, Resolution No. 017-22 Page 2 of 12 THE CITY COUNCIL OF THE CITY OF PORT ORCHARD, WASHINGTON, DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Agreement Authorized. The Mayor is hereby authorized to execute interlocal agreement with South Kitsap School District No. 402 in substantially the form attached hereto as Exhibit "1". Section 2. Posting on Website Required. The Clerk is directed to post a copy of this Agreement, once fully executed, on the City's website. PASSED by the City Council of the City of Port Orchard, SIGNED by the Mayor and attested by the City Clerk in authentication of such passage this 25th day of January 2022. Robert Putaansuu, Mayor 1111pII1Nirrlllil� ATTEST: ,,.,``�y4 pORT ,C;rr., ZZ - • SEAL - Brandy Rinearson, MMC, City Clerk /r+f4l�o +f I f 111 �0 1518605.1 - 366922 -0007 DocuSign 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 Interlocal Agreement between City of Port Orchard and South Kitsap School District for School Impact Fees Page 1 of 9 1463647.2 - 366922 -0007 DocuSign Envelope ID: 4D5837F6-02D6-4232-B718-4E3737C011 E7 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. Interlocal Agreement between City of Port Orchard and South Kitsap School District for School Impact Fees Page 2 of 9 1463647.2 - 366922 -0007 DocuSign Envelope ID: 4D5837F6-02D6-4232-B718-4E3737C011E7 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 Interlocal Agreement between City of Port Orchard and South Kitsap School District for School Impact Fees Page 3 of 9 1463647.2 - 366922 -0007 DocuSign Envelope ID: 4D5837F6-02D6-4232-B718-4E3737C011E7 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. Interlocal Agreement between City of Port Orchard and South Kitsap School District for School Impact Fees Page 4 of 9 1463647.2 - 366922 -0007 DocuSign Envelope ID: 4D5837F6-02D6-4232-B718-4E3737C011E7 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. Interlocal Agreement between City of Port Orchard and South Kitsap School District for School Impact Fees Page 5 of 9 1463647.2 - 366922 -0007 DocuSign Envelope ID: 4D5837F6-02D6-4232-B718-4E3737C011E7 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 Interlocal Agreement between City of Port Orchard and South Kitsap School District for School Impact Fees Page 6 of 9 1463647.2 - 366922 -0007 DocuSign Envelope ID: 4D5837F6-02D6-4232-B718-4E3737C011 E7 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 Interlocal Agreement between City of Port Orchard and South Kitsap School District for School Impact Fees Page 7 of 9 1463647.2 - 366922 -0007 DocuSign Envelope ID: 4D5837F6-02D6-4232-B718-4E3737C011 E7 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. Interlocal Agreement between City of Port Orchard and South Kitsap School District for School Impact Fees Page 8 of 9 1463647.2 - 366922 -0007 DocuSign Envelope ID: 4D5837F6-02D6-4232-B718-4E3737C011 E7 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 Interlocal Agreement between City of Port Orchard and South Kitsap School District for School Impact Fees Page 9 of 9 1463647.2 - 366922 -0007 DocuSign Envelope ID: 4D5837F6-02D6-4232-B718-4E3737C011 E7 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 Interlocal Agreement between City of Port Orchard and South Kitsap School District for School Impact Fees Page 10 of 9 1463647.2 - 366922 -0007