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023-15 - Ordinance - Relating to Impact Fees for New DevelopmentIntroduced by: Drafted by: Reviewed by: Introduced: Adopted: ORDINANCE NO.023-15 Development Director Development Director City Attorney November 10, 2015 November 10, 2015 AN ORDINANCE OF THE CITY COUNCIL OF PORT ORCHARD, WASHINGTON, RELATING TO IMPACT FEES FOR NEW DEVELOPMENT, REPEALING THE CURRENT IMPACT FEE CHAPTER 16.70 POMC AND ADOPTING A NEW CHAPTER IDENTIFYING A SERVICE AREA, DESCRIBING THE MANNER IN WHICH TRANSPORTATION, SCHOOL AND PARK IMPACT FEES ARE CALCULATED, THE PROCEDURE FOR OBTAINING CREDITS, VARIATIONS FROM THE IMPACT FEE SCHEDULES, EXPLAINING THE PURPOSE OF THE PROJECT LIST, ESTABLISHING AN APPEAL PROCESS AND ADOPTING THE TRANSPORTATION AND PARKS IMPACT FEE SCHEDULES, ADOPTING A NEW CHAPTER 16.70 TO THE PORT ORCHARD MUNICIPAL CODE. WHEREAS, the City desires to adopt a new impact fee ordinance to be consistent with State Law; and WHEREAS, the City SEPA Responsible Official made a threshold determination that this ordinance was exempt under WAC 197-11-800(19); WHEREAS, the City Council considered this Ordinance after taking testimony in a public hearing during its regular meeting of November 10, 2015; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PORT ORCHARD, WASHINGTON, ORDAINS AS FOLLOWS: Section 1. Chapter 16.70 of the Port Orchard Municipal Code is hereby repealed. Section 2. A new Chapter 16.70 is hereby added, which shall read as follows: Chapter 16.70 IMPACT FEES Sections: 16.70.010 Authority and purpose. 16.70.020 Applicability. 16.70.030 Geographic scope. Ordinance No. 023-15 Page 2 of 50 16.70.040 Imposition of impact fees. 16.70.050 Approval of development. 16.70.060 Fee schedules and establishment of service area. 16.70.070 Calculation of impact fees. 16.70.080 Credits. 16.70.090 Variation from impact fee schedule. 16.70.100 Payment of fees. 16.70.110 Time of payment of impact fees. 16.70.120 Project list. 16.70.130 Funding of projects. 16.70.140 Use and disposition of dedicated land. 16.70.150 Refunds. 16.70.160 Appeals. 16.70.170 Relationship to SEPA. 16.70.180 Park and transportation facility requirements in adjoining municipalities/districts. 16.70.190 Necessity of compliance. 16.70.010 Authority and purpose. A. This chapter is enacted pursuant to the City's police powers, the Growth Management Act (chapter 36.70A RCW), the impact fee statutes (RCW 82.02.050 through 82.02.100), the State Subdivision Act (chapter 58.17 RCW) and the State Environmental Policy Act (SEPA, chapter 43.21C RCW). B. The purpose of this chapter is to: 1. Develop a program consistent with the City's parks, open space and recreation plan, six -year road plan and the City's comprehensive plan (parks and transportation elements) and capital improvement plan, for joint public and private financing of park and transportation facility improvements necessitated in whole or in part by development in the City; 2. Develop a program for financing of school facilities consistent with the capital improvement plan of the school district, as such public facilities are necessitated in whole or in part by development in the City; school district; 3. Ensure adequate levels of service in public facilities within the City and 4. Create a mechanism to charge and collect fees to ensure that all new development bears its proportionate share of the capital costs of off -site park, school and transportation facilities reasonably related to new development, in order to maintain adopted levels of park service, maintain adopted levels of service in the City's transportation facilities, and to ensure the availability of adequate school facilities at the time of new development; Ordinance No. 023-15 Page 3 of 50 5. Ensure that the City pays its fair share of the capital costs of parks and transportation facilities necessitated by public use of the parks and roadway system, and ensure that the school district pays its fair share of the capital costs of school facilities; and Ensure fair collection and administration of such impact fees. 16.70.020 Applicability and Definitions. A. Chapter 16.69 of the Port Orchard Municipal Code includes the definitions for this chapter and chapter 16.71 on concurrency management. The requirements of this Chapter apply to all development in the City as "development" or "development activity" is defined in Section 16.69.010 POMC. B. Mitigation of impacts on parks and transportation facilities located in jurisdictions outside the City will be required when: 1. The other affected jurisdiction has reviewed the development's impact under its adopted impact fee/mitigation regulations and has recommended to the City that there be a requirement to mitigate that impact; and 2. There is an interlocal agreement between the City and the affected jurisdiction specifically addressing impact identification and mitigation. 16.70.030 Geographic Scope. The boundaries within which transportation and park impact fees shall be charged and collected are the same as the corporate city limits. The boundaries within which school impact fees shall be charged and collected are the same as the boundaries of the South Kitsap School District No. 402 lying within the corporate city limits. All unincorporated areas annexed to the City on and after the effective date of the ordinance codified in this Chapter shall be subject to the provisions of this Chapter. After the adoption of interlocal agreements with other local and regional governments, the geographic boundaries may be expanded consistent therewith. 16.70.040 Imposition of Impact Fees. A. The City is hereby authorized to impose impact fees on new development. B. Impact fees may be required pursuant to the impact fee schedule adopted through the process described herein, or mitigation may be provided through: 1. the purchase, installation and/or improvement of park, school and transportation facilities pursuant to Section 16.70.080; or 2. The dedication of land pursuant to Section 16.70.080. C. Impact fees: Ordinance No. 023-15 Paize 4 of 50 1. Shall only be imposed for park, school and transportation facilities that are reasonably related to new development; 2. Shall not exceed a proportionate share of the costs of park, school and transportation facilities that are reasonably related to new development; 3. Shall be used for park, school and transportation facilities that will reasonably benefit the new development; 4. Shall not be used to correct existing deficiencies; 5. Shall not be imposed to mitigate the same off -site park, school and transportation facility impacts that are being mitigated pursuant to any other law; 6. Shall not be collected for improvements to state/county. park and transportation facilities unless the state/county requests such improvements and an interlocal agreement to collect such fees has been executed between the state/county and the City; 7. Shall not be collected for improvements to park and transportation facilities in other municipalities unless the affected municipality requests that such impact fees be collected on behalf of the affected municipality, and an interlocal agreement has been executed between the City and the affected municipality for the collection of such fees, 8. Shall be collected only once for each development, unless changes or modifications to the development are proposed which result in greater direct impacts on park, school and/or transportation facilities than were considered when the development were first permitted; 10. May be imposed for system improvement costs previously incurred by the City and school district, to the extent that new growth and development will be served by previously constructed improvements; and provided, that such fee shall not be imposed to make up for any system improvement deficiencies; and 11. Shall only be imposed for park and school facilities on residential development. 16.70.050 Approval of development. Prior to approving or permitting a development or development permit, the Approving Authority shall consult with the Director and the superintendent of the school district concerning mitigation of a development's impacts and impact fees. . 16.70.060 Fee schedules and establishment of service area. Ordinance No. 023-15 Page 5 of 50 A. Impact fee schedules setting forth the amount of the impact fees to be paid by developers are listed in the Appendices attached to the ordinance adopting this Chapter, and incorporated herein by this reference. The Road or transportation impact fee schedule is in Appendix A, Park impact fees are in Appendix B and school impact fees are in Appendix C. B. For the purpose of Road and Park impact fees, the entire City shall be considered one service area. C. For the purpose of school impact fees, the entire boundary of the school district shall be considered one service area. 16.70.070 Calculation of impact fees. A. Director calculates the fees. The Director shall calculate the impact fees set forth in Appendices A and B. The superintendent of the school district shall calculate the school impact fees set forth in Appendix C. The City Council shall have the final decision on the calculation of the impact fees to be imposed under this chapter as set forth in Appendices A and B. B. Factors used in impact fee calculations. The calculation of impact fees shall include the factors identified in RCW 82.02.040 through RCW 82.02.070 and shall: 1. Determine the standard fee for similar types of development, which shall be reasonably related to each development's proportionate share of the cost of projects described in the Project List for each type of impact fee. 2. Reduce the proportionate share by applying the benefit factors described in 16.70.080. C. Proportionate share. In calculating proportionate share, the following factors shall be considered: Identification of all park, school and transportation facilities that will be impacted by users from development; Identification of the point at which the capacity of a park, school or transportation facility has been fully utilized; 3. Updating of the data as often as practicable, but at least annually; 4. Estimation of the cost of construction the projects in the Project List (see, Section 16.70.120 of this Chapter) for roads at the time they are placed on the list; the cost of maintaining the City's level of park service as shown on Appendix B; and the costs relating to the construction of school facilities, and to then update the cost estimates at least annually, considering the: Ordinance No. 023-15 Page 6 of 50 (a) Availability of other means of funding park, school and transportation facilities; (b) Cost of existing park, school and transportation facility improvements; (c) Methods by which park, school and transportation facility improvements were financed; and 5. An adjustment to the cost of the park, school and transportation facilities for past or future payments or reasonably anticipated to be made by new development to pay for particular system improvements in the form of user fees, debt service payments, taxes or other payments earmarked for or proratable to the particular system improvement. 16.70.080 Credits. A. Credit Allowed. The Director, or, in the case of school impact fees, the superintendent, shall reduce the calculated proportionate share for a particular development by giving credit for the benefit factors described in this section. B. Procedure for Obtaining Credit, Time to Request Credit. Requests for credits against impact fees will not be considered unless the developer makes the request in writing, concurrent with the submission of the application for the underlying development permit triggering the impact fee. C. Benefit Factors. The Director and/or superintendent will consider the following benefit factors when determining whether an impact fee credit is appropriate: 1. Developer's dedication of land and/or construction of system improvements. The value of any dedication of land for, improvement to, or new construction of any system improvements provided by the developer, to facilities required by the City that are identified in the capital facilities plan and that are required by the City as a condition of approving the development activity, as long as the following conditions are satisfied. For school impact fees, the superintendent shall consider the value of any dedication of land provided by the developer identified in the school district's capital facilities plan as long as the following conditions are satisfied to the extent applicable: (a) The system improvements are located on land owned by the City, and (b) A designated public owner is responsible for permanent, continuing maintenance and operation of the system improvements; and Ordinance No. 023-15 Page 7 of 50 (c) The Director determines that the system improvements correspond to the type(s) of park and transportation system improvements that are reasonably related to the development as determined pursuant to this Chapter; (d) The Director determines, after consultation with the school district, as applicable, and after an analysis of supply and demand data, the parks, open space and recreation plan, the six -year road plan and the adopted park and transportation plan, that the proposed park and transportation system improvements better meet the City's need for park and transportation system improvements than would payment of funds to mitigate the park and transportation impacts of the development; (e) In the determination of credit toward the impact fee, the Director or the superintendent shall also consider the extent to which the proposed dedication or conveyance meets the following criteria: The land should result in an integral element of the City park/road system; ii. The land is suitable for future park, school and/or transportation facilities; iii. The land is of appropriate size and of an acceptable configuration; iv. The land has public access via a public street or an easement of an equivalent width and accessibility; V. The land is located in or near areas designated by the City or County on land use plans for park, trail or recreational purposes, or, in the case of schools, is appropriate located for school facilities; vi. The land provides linkage between County and/or other publicly -owned recreation and transportation properties; vii. The land has been surveyed or adequately marked with survey monuments, or is otherwise readily distinguishable from adjacent privately -owned property; viii. The land has no known physical problems associated with it, such as the presence of hazardous waste, drainage erosion or flooding problems which the Director or Superintendent determines would cause inordinate demands on public resources for maintenance and operation; ix. The land has no known safety hazards; X. The developer is able to provide documentation, as nearly as practicable, of the land's compliance with the criteria of this subsection, and of clear title; xi. The developer is able to provide and fund a long-term method, acceptable to the Director or superintendent, for the management and maintenance of the land, if applicable. D. Requirement for System Improvement Plan by City. When the Director has agreed to a developer's proposal to satisfy some or all of the impact fee through the purchase, Ordinance No. 023-15 Page 8 of 50 installation and/or improvement of park and/or transportation facilities, the developer shall prepare and submit a system improvement plan to the Director for approval prior to recordation of a plat or short plat for subdivisions, and prior to issuance of a building permit for all other developments. E. Statutory Benefit Factors. The Director or superintendent may consider any applicable benefit factors, as described in RCW 82.02.060 (as it now exists or may hereafter be amended), that are demonstrated by the applicant not to be included in the calculation of the impact fee. F. Amount of Credit. The credit against the impact fee shall be equal to the fair market value of the purchased/dedicated property or equal to the cost of the completed system improvements. In those situations in which a developer has not yet installed or constructed system improvements and requests a credit for the system improvement(s), the City engineer shall estimate the cost of the system improvements, which shall be the credit allowed to the developer in the decision on the amount of the impact fee. If a credit is granted for a system improvement that has not been constructed, the developer shall pay the full impact fee without the credit, at the time established in Section 16.70.110. After construction and/or installation of the system improvement, the developer may request the credit granted by the City engineer under this subsection, and the City shall refund the difference of the impact fee to reflect the credit, provided, that if the City and the property owner have entered into a development agreement on or before the effective date of the ordinance codified in this section, and the agreement requires the construction of such improvements, the City may allow a credit to be subtracted from the impact fee paid at the time established in Section 16.70.110. G. PRDs, PUD's and Mobile Home Parks. A developer of a planned residential development, a planned unit development, or a mobile home park may receive credit only for park, school and transportation facilities provided in addition to those normally required under SEPA for such developments, pursuant to the City's SEPA Ordinance (chapter 14.04 POMC). H. Credit to Apply Proportionately to Units. The amount of credit determined pursuant to this subsection shall be credited proportionately among all the units in the development, and the impact fee for each unit for which a permit or approval is applied shall be reduced accordingly. I. Limits on Credit Requests. Applicants may not request that an impact fee credit be provided for a proposed development based on taxes, user fees, assessments, improvements, payments or other benefit factors applicable to property that is not included within the proposed development. Credit to be paid back by the City or the school district to a developer under this subsection shall not exceed the total amount of the impact fees paid by the developer. J. Local Improvement Districts. Applicants shall receive credit against the impact fee equal to the amount of an LID assessment paid for transportation -related system improvements identified by the Director as increasing transportation system capacity. Ordinance No. 023-15 Paae 9 of 50 K. Appeals of Credits. The Director or superintendent shall issue a written decision on the developer's request for a credit of the impact fee calculation, which shall explain why the credit was granted or denied. The developer may request reconsideration and appeal the impact fee amount and credit pursuant to Section 16.70.160. If the procedures in Section 16.70.160 are not timely followed to request an appeal of the credit, the Director or superintendent's decision on the impact fee credit shall be final. 16.70.090 Variation from Impact Fee Schedule. With respect to the a transportation or park impact fee, if a developer submits information demonstrating a significant difference between the age, social activity or interest characteristics of the population of a proposed subdivision or development and the data used to calculate the impact fee schedule, the Director may allow a special calculation of the impact fee requirements for the subdivision or development to be prepared by the developer's consultant, at the developer's cost, provided that: the Director shall have prior approval of the qualifications and methodology of the developer's consultant in making such calculation, and any time period mandated by statute or ordinance for the Approving Authority's final decision on the development shall not include the time spent in preparing the special calculation. Whether the Director accepts the data provided by the special calculation shall be at the discretion of the Director. With respect to a school impact fee, if a developer submits evidence demonstrating that a development has obtained approval of an age -restricted development in accordance with applicable federal regulations or that a development has recorded a covenant against the development prohibiting occupancy of the development by a population who are not eligible to attend schools within the school district, the superintendent may allow a special calculation of the impact fee requirement for the development at the discretion of the superintendent of the school district. 16.70.100 Payment of Fees. A. All applicants for development shall pay an impact fee in accordance with the provisions of this Chapter which shall be calculated by the City or school district at the time that the building permit is ready for issuance. Applicants/developers may choose to pay impact fees or a portion thereof prior to the City's issuance of a building permit, but if the early payment is less than the fee calculated at the time the building permit is ready for issuance, the applicant/developer shall pay the difference. If the early payment is more than the fee calculated at the time the building permit is ready for issuance, the City or school district shall refund the difference. B. The impact fee shall be recalculated if the development is modified or conditioned in such a way as to alter park, school or transportation impacts for the development. C. A developer may. obtain a preliminary determination of the impact fee before submitting an application for the development permit by providing the Director or Ordinance No. 023 -15 10 of 50 superintendent with the information needed for processing together with the applicable fee. Such determinations are provided to the developer as estimates only, and they are not binding on the City, given the limited information needed to calculate the preliminary impact fee amount and the fact that the City or school district annually updates the Project List and Impact Fee Schedule. In addition, impact fees are not subject to the vested rights doctrine, and the fee actually paid by the developer will be the impact fee in effect at the time of building permit issuance, regardless of any preliminary determinations. 16.70.110 Time of payment of impact fees. A. Payment of any required impact fees shall be made as a condition of the issuance of a building permit, except as provided in Subsection D herein. School impact fees shall be paid to the school district, and the developer shall present the receipt or proof of payment from the school district to the City for issuance of the building permit. B. Impact fees may be paid under protest in order to obtain the necessary permits/approvals until an appeal of the fee amount is finally resolved. C. When a subdivision or development is conditioned upon the dedication of land, or the purchase, installation or improvement of park and/or transportation facilities, a final plat or short plat shall not be recorded, and a building permit within such plat or development shall not be issued until: 1. The Director has determined in writing that the land to be dedicated is shown on the face of the final plat or short plat, or a deed conveying the land to the City, the school district or special purpose district, as appropriate, has been recorded with the County Auditor; and 2. The Director has determined in writing, after consultation with the designated public owner responsible for permanent, continuing maintenance and operation of the facilities that the developer has satisfactorily undertaken or guaranteed to undertake in a manner acceptable to the Director or superintendent, any required purchase, installation or improvement of school, park or transportation facilities. D. Deferral of Payment of Impact Fees. Payment of impact fees for single family attached or single family detached residential dwelling units may be deferred only until issuance of certificate of occupancy or equivalent certification, pursuant to RCW 82.02.050(3), subject to the following provisions: 1. Each applicant, in accordance with his or her contractor registration number or other unique identification number, is entitled to annually receive deferrals under this section for the first twenty single-family residential construction building permits per City. Any single-family residential building construction permits beyond twenty for the same applicant are subject to payment of impact fees at the time of building permit issuance as required by subsection A above. Ordinance No. 023 -15 Paize 11 of 50 2. A request for deferral must be submitted prior to issuance of a building permit. 3. Application for deferral must be made on a form provided by and acceptable to the City and must include the following information and fees: (a) Name, address, telephone number and e-mail address of the applicant. (b) The specific address, legal description and tax identification number of the single-family dwelling for which deferral is being requested. (c) The building permit application number associated with the requested deferral. (d) The registration number or other unique identification number for the contractor that will be building the structure. (e) A statement by the contractor describing how may deferrals have been granted during the current year for said contractor, describing how many have been requested during the current year, and attesting that the number provided and/or requested is less than twenty for the current calendar year. (f) Applicable fees for processing the application and for future monitoring of the deferred payment of impact fees are required in addition to fees required by this Chapter. Deferral application fees shall include: i. Minimum of four hours base administration fee, at the hourly staff rate required by the development fee schedule adopted in the City's fee resolution, and payable at the time of application submittal. H. Minimum of four hours administration fee at the current hourly staff rate to cover additional time spent processing of final payment of impact fees, including but not limited to preparation of lien release documents, payable before the lien release document shall be released to the applicant. 4. No more than one single-family dwelling may be included on a single application for impact fee deferral. 5. Impact fees shall be calculated on the fees in place at the time that the applicant applies for a deferral. 6. Impact fees deferred under this Section are due no later than the following events, whichever occur first: (a) Issuance of certificate of occupancy or equivalent certification for the single family dwelling; or (b) Eighteen (18) months from the date of the building permit issuance. 7. An applicant seeking a deferral under this subsection must grant and record a deferred impact fee lien against the property in favor of the City of Port Orchard. The deferred impact fee lien must include the legal description, tax account number, and address of the property, and must also be: (a) In a form approved by the City Attorney which ensures that it is binding on all successors on the title to the property after recordation; (b) Signed by all owners of the property, with all signatures Ordinance No. 023-15 Page 12 of 50 acknowledged as required for a deed, and recorded with the Kitsap County Auditor's office; and (c) Junior and subordinate to one mortgage for the purpose of construction upon the same real property granted by the person who applied for the deferral of impact fees. 8. The City may withhold a certificate of occupancy or equivalent certification until the impact fees are paid in full. Upon receipt of final payment of all deferred impact fees for a property, and upon payment of all applicable administration fees in the.City's fee resolution, the City must execute a release of deferred impact fee lien for the property. The property owner at the time of the release, at his or her expense, is responsible for recording the lien release. 9. Foreclosure proceedings. If impact fees are not paid in accordance with a deferral authorized by this Section, the City may institute proceedings to enforce the lien in accordance with chapter 61.12 RCW. 10. Obligation to pay. The extinguishment of a deferred impact fee lien by the foreclosure of a lien having priority does not affect the obligation to pay the impact fees as a condition issuance of certificate of occupancy or equivalent certification. 11. Deferral process not subject to review proceedings. Per RCW 36.70E .140(2), the processing of an impact fee deferral application is not subject to the project permit review requirements of chapter 36.7013 RCW. 16.70.120 Project List. A. The Director shall annually review the City's parks, open space and recreation plan, the six -year road plan and the projects listed in Appendices A and B, and shall: 1. Identify each project in the comprehensive plan that is growth -related and the proportion of each such project that is growth -related; 2. Forecast the total money available from taxes and other public sources for park and transportation improvements for the next six years; 3. Update the population, building activity and demand and supply data for park and transportation facilities and the impact fee schedule for the next six -year period; 4. Calculate the amount of impact fees already paid: 5. Identify those comprehensive plan projects that have been or are being built but whose performance capacity has not been fully utilized; B. The Director shall use this information to prepare an annual draft amendment to the fee schedule in Appendices A and B, which shall comprise: 1. The projects in the comprehensive plan that are growth -related and that should be funded with forecast public monies and the impact fees already paid; and Ordinance No. 023-15 13 of 50 2. The projects already built or funded pursuant to this Chapter whose performance capacity has not been fully utilized. C. The City Council, at the same time that it adopts the annual budget and appropriates funds for capital improvement projects, shall, by separate ordinance, establish the annual project list by adopting, with or without modification, the Director's draft amendment. D. Once a project is integrated into the Fee Schedule in Appendices A and B, a fee shall be imposed on every development until the project is removed from the Project List by one of the following means: 1. The City Council by ordinance removes the project from the Project List and Appendix A and/or B, in which case the fees already collected will be refunded if necessary to ensure that impact fees remain reasonably related to the park and transportation impacts of development that have paid an impact fee; provided, that a refund shall not be necessary if the Council transfers the fees to the budget of another project that the Council determines will mitigate essentially the same park and transportation impacts; or 2. The capacity created by the project has been fully utilized, in which case the Director shall remove the project from the Project List. E. The school district shall annually review and update its capital facilities portion of the City's comprehensive plan and submit such updated plan to the City by July 1' of each year. The school district's updated capital facilities plan shall identify projects that are growth - related, include the amount of school impact fees paid, calculate the impact fees as required by chapter 82.02.050 through 82.020.90, and may include a proposed school impact fee schedule adjustment to Appendix C, for adoption by the City Council. 16.70.130 Funding of Projects. A. An impact fee fund is hereby created for parks and transportation fees. Separate accounts shall be established for each fee type. The school district shall be responsible for the creation of its own impact fee fund and shall be solely responsible for the deposit of fees in such fund, and the calculation/use/refund of such fees. The Director shall be the manager of the City's fund. The City shall place park and transportation impact fees in appropriate deposit accounts within the impact fee fund. B. The parks and transportation impact fees paid to the City shall be held and disbursed as follows: 1. The fees collected for each project shall be placed in a deposit account within the impact fee fund, with the exception of school impact fees, which shall be collected by the school district; Ordinance No. 023-15 Paae 14 of 50 2. When the Council appropriates capital improvement project (CIP) funds for a park or transportation project on the Project List, the park or transportation fees held in the impact fee fund shall be transferred to the CIP fund. The non -impact fee monies appropriated for the project shall comprise both the public share of the project cost and an advancement of that portion of the private share that has not yet been collected in park or transportation impact fees; 3. The first money spent by the Director on a project after a council appropriation shall be deemed to be the fees from the impact fee fund; 4. Fees collected after a project has been fully funded by means of one or more council appropriations shall constitute reimbursement to the City of the funds advanced for the private share of the project. The public monies made available by such reimbursement shall be used to pay the public share of other projects; 5. All interest earned on impact fees paid shall be retained in the account and expended for the purpose or purposes for which the impact fees were imposed. C. Projects shall be funded by a balance between impact fees and public funds, and shall not be funded solely by impact fees. D. Impact fees shall be expended or encumbered for a permissible use for ten (10) years after receipt, unless there exists an extraordinary or compelling reason for fees to be held longer than ten (10) years. The Director may recommend to the Council that the City hold park or transportation fees beyond ten (10) years in cases where extraordinary or compelling reasons exist. Such reasons shall be identified in written findings by the Council. =The superintendent of the school district shall prepare written findings evidencing such extraordinary or compelling reason for fees to be held longer than ten (10) years which findings shall be approved by the board of directors of the school district. E. The school district and the Director shall prepare an annual report on the impact fee accounts 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. The school district shall be responsible for compliance with RCW 82.02.070. 16.70.140 Use and Disposition of Dedicated Land. All land dedicated or conveyed pursuant to this Chapter shall be set aside for development of park, school and transportation facilities. The City or the school district to which land is dedicated or conveyed pursuant to this Chapter shall make every effort to use, develop and maintain land dedicated or conveyed for park, school and transportation facilities. In the event that use of any such dedicated land is determined by the Director, Superintendent, eF the Geunpf to be infeasible for development of park, school or transportation facilities, the dedicated land may be sold or traded for another parcel of land. The proceeds from such a sale shall be used to acquire land or develop park, school or transportation facilities. Ordinance No. 023-15 Page 15 of 50 16.70.150 Refunds. A. A developer may request and shall receive a refund from either the City (for parks and transportation impact fees) or the school district (for school impact fees) when the developer does not proceed with the development activity for which impact fees were paid, and the developer shows that no impact has resulted. B. If the City or school district fails to expend or encumber the impact fees within ten (10) years of the date the fees were paid or the date established by the findings adopted under 16.70.130(D) on public facilities intended to benefit the development activity for which the impact fees were paid. In determining whether impact fees have been encumbered, impact fees shall be considered encumbered on a first in, first out basis. The City or school district shall notify potential claimants by first class mail, deposited with the U.S. Postal Service at the last known address of claimants. The request for a refund must be submitted to the City or school district in writing within one (1) year of the date the right to claim the refund arises or the date notice is given, whichever is later. Any impact fees that are not expended within these time limitations and for which no application for refund has been made within the one (1) year period shall be retained and expended on the indicated capital facilities. Refunds of impact fees under this Section shall include interest earned on the impact fees. The School District shall be responsible for compliance with this section and RCW 82.02.080 for school impact fees. C. In the event that impact fees are refunded for any reason, they shall be refunded by the City with respect to park and transportation fees (and the school district with respect to school impact fees) and shall be returned with interest earned to the owners as they appear of record with the County Assessor at the time of the refund. D. When the City seeks to terminate any or all impact fee requirements, all unexpended or unencumbered funds shall be refunded pursuant to this Section. Upon the finding that any or all fee requirements are to be terminated, the City shall place notice of such termination and the availability of refunds in a newspaper of general circulation at least two times and shall notify all potential claimants by first class mail to the last known address of the claimants. All funds available for refund shall be retained for a period of one (1) year. At the end of one (1) year, any remaining funds shall be retained by the City, or, if applicable, the school district, but must be expended on a project under the adopted plans of the City or school district. This notice requirement shall not apply if there are no unexpended or unencumbered balances within an account or accounts being terminated. The school district shall be responsible for compliance with this section for school impact fees under RCW 82.02.080. 16.70.160 Appeals. A. Decision of the Director or Superintendent, Reconsideration and Appeals. The Director or the Superintendent shall issue a written decision on the parks, school and/or transportation impact fee amount as described in this Chapter. Because RCW 82.02.070(5) allows the appeal of an impact fee determination to be handled separately from the processing Ordinance No. 023-15 Page 16 of 50 of the underlying permit application, this procedure is exempt from the permit processing requirements in Title 23 of the Port Orchard Municipal Code (pursuant to RCW 36.70B.140). 1. Director's Decision.. a. Request for Reconsideration. In order to request reconsideration of the Director's Decision, the developer shall make a written request to the Director for a meeting to review the fee amount, together with a written request for reconsideration. The request for reconsideration include the City's administrative fee, shall state in detail the grounds for the request, and shall be filed with the Director within fifteen (15) days after issuance of the Director's decision on the impact fees. At this meeting, the Director shall consider any studies and data submitted by the developer seeking to adjust the amount of the fee. The Director shall issue a written decision on reconsideration within ten (10) working days of the Director's receipt of the request for reconsideration or the meeting with the developer, whichever is later. b. Appeal. A developer may appeal the amount of the impact fee established in the Decision on Reconsideration of the Director to the hearing examiner. This appeal must be filed with the City planning department within fourteen (14) days of issuance of the Decision on Reconsideration. The hearing on the appeal of the Decision on Reconsideration shall be consolidated with the processing of the underlying permit application, if at all possible. An appeal of the Decision on Reconsideration may be filed even though there is no appeal of the underlying permit. The hearing examiner shall conduct an open record hearing on the appeal of the Decision on Reconsideration, and if it is not consolidated with the underlying permit, the examiner's decision shall issue within ten working days of the hearing (unless a longer period is agreed to by the developer). 2. Superintendent's Decision. a. Request for Reconsideration. In order to request reconsideration of the Superintendent's decision, the developer shall make a written request to the Superintendent for a meeting to review the fee amount, together with a written request for reconsideration. The request for reconsideration shall include the administrative fee, state in detail the grounds for the request, and shall be filed with the Superintendent within fifteen (15) days after issuance of the Superintendent's decision on the impact fees. At this meeting, the Superintendent shall consider any studies and data submitted by the developer seeking to adjust the amount of the fee. The Superintendent shall issue a written decision on reconsideration within ten (10) working days of the Superintendent's receipt of the request for reconsideration or the meeting with the developer, whichever is later. b. Appeal. A developer may appeal the amount of the impact fee established in the Decision on Reconsideration of the Superintendent to the hearing examiner chosen by the District. This appeal must be filed with the Superintendent within fourteen (14) days of issuance of the Decision on Reconsideration. The hearing on the appeal of the Decision on Reconsideration shall not be consolidated with the processing of the underlying permit Ordinance No. 023-15 Page 17 of 50 application. An appeal of the Decision on Reconsideration may be filed even though there is no appeal of the underlying permit. The hearing examiner shall conduct an open record hearing on the appeal of the Decision on Reconsideration and issue a decision within ten working days of the hearing (unless a longer period is agreed to by the developer). B. Burden of Proof in Appeals. In an appeal of the Decision of the Director or Superintendent on Reconsideration, the developer shall bear the burden of proving: 1. That the Director or Superintendent committed error in calculating the developer's proportionate share, as determined by an individual fee calculation, or if relevant, as set forth in the impact fee schedule, or in granting credit for the benefit factors; or That the Director or Superintendent based their determination upon incorrect data C. Appeals of Hearing Examiner's decision. 1. Appeals from the decision of the school district's hearing examiner on the Superintendent's Decision on Reconsideration shall be to superior court as provided in chapter 36.70C RCW. 2. Appeals from the decision of the hearing examiner on the Director's Decision on Reconsideration shall follow the process for the underlying permit (i.e., if the City's code provides that the hearing examiner's decision is a recommendation to the City Council, then the City Council shall make the final decision; or if the City's code provides that the hearing examiner's decision is final, then the hearing examiner's decision may be appealed to superior court as provided in chapter 36.70C RCW). 16.70.170 Relationship to SEPA. A. As provided in RCW 82.02.100, a person required to pay a fee pursuant to RCW 43.21C.060 for system improvements shall not be required to pay an impact fee under this Chapter for the same system improvements. B. Nothing in this Chapter shall be construed to limit the City's authority to deny development permits when a proposal would result in probable significant adverse impacts identified in an environmental impact statement and reasonable mitigation measures are insufficient to mitigate the identified impact. 16.70.180 Park and transportation facility requirements in adjoining municipalities/districts. Level of service requirements and demand standards different than those provided in the City's comprehensive park plan shall be applied to park and recreation facility impacts in adjoining municipalities/districts if such different standards are provided in an interlocal agreement between the City and the affected municipality. Otherwise, the standards Ordinance No. 023-15 18 of 50 contained in the City's comprehensive plan shall apply to park and transportation impacts in adjoining jurisdictions. 16.70.190 Necessity of compliance. A development permit issued after the effective date codified in this chapter shall be null and void if issued without substantial compliance with this Chapter by the Director, the department and the Approving Authority. Section 10 . Effective Date. This ordinance shall be in full force and effect on January 1, 2016 after posting and publication as required by law. A summary of this Ordinance may be published in lieu of the entire ordinance, as authorized by State Law. Section 11. Severability. Each and every provision of this Ordinance shall be deemed severable. In the event that any portion of this Ordinance is determined by final order of a court of competent jurisdiction to be void or unenforceable, such determination shall not affect the validity of the remaining provisions thereof provided the intent of this Ordinance can still be furthered without the invalid provision. PASSED by the City Council of the City of Port Orchard, APPROVED by the Mayor and attested by the Clerk in authentication of such passage this 10th day of November, 2015. ' � y Timothy C. Matf hes, Mayor ATTEST: 42� /-D � _ 4-6� Brandy Rinearson, CIVIC, City Clerk APPROVED AS TO FORM: SPONSORED BY: Carol A. Morris, City Attorney �,.�`�� Q ° • . 0h'C,S;'%, ek Ashby, Councilmember Y SE Lo lb 6<<1,,111 UJ1A%1,,r Appendix A Ordinance No. 023-15 pt•c�t��` TRANSPORTATION IMPACT FEE RATE STUDY PREPARED BY: TS1 Transportation Solutions, Inc. TRANSPORTATION SOLUTIONS, INC. 8250165T" AVENUE NE SUITE 100 REDMOND, WA 98052 CONTACT: VICTOR SALEMANN, PE 425.883.4134 Appendix A Ordinance No. 023-15 SEPTEMBER 2015 Ta b I e of Contents 1. Impact Fee Rate Study Overview 1 1.1 Introduction 1 1.2 Definition of Impact Fees 1 1.3 Statutory Basis for Impact Fees 1 2. Impact Fee Analysis 3 2.1 Methodology 3 2.2 Current Impact Fee Methodology in Port Orchard 3 2.3 Other Impact Fee Methodologies 3 2.4 Projects Eligible for Impact Fees 4 2.4.1 Project Improvements 4 2.4.2 Planned Transportation Projects 2.4.3 Maintenance Projects and Programs 2.5 Eligible Project Costs 2.5.1 Planned Roadway Projects 2.5.2 McCormick Urban Village Development 4 4 2.6 Impact Fee Calculation 6 2.6.1 Growth Share of Project Costs 6 2.7 Proportionate Growth Share and Impact Fee Calculation for Planned Roadway Projects 8 2.8 Growth Share and Impact Fee Calculation for McCormick Woods Development 8 2.9 Resulting Transportation Impact Fees 8 3. Additional Issues for Consideration 9 3.1 Anticipated Annual Revenues from Impact Fees 9 3.2 Anticipated Grant Revenue 9 3.3 Anticipated Need for Other Public Funds 9 4. Impact Fee Rate Schedule 9 S. Future Impact Fee Updates 9 5.1 Future Impact Fee Updates 9 6. Transportation Impact Fee Comparison 10 6.1 Comparison of 2013 TIF Base Rates in Western Washington 10 7. Credits and Adjustments 10 7.1 Impact Fee Credits 10 7.2 Impact Fee Adjustments 10 Appendix A Ordinance No. 023-15 1. Impact Fee Rate Study Overview 1.1 Introduction This rate study summarizes the policy and technical development of a Transportation Impact Fee program for the City of Port Orchard, Washington. The following technical segments will describe the impact fees, basis for fees, rate methodology, proposed projects, analyses performed to determine impact fees, and rate schedules. 1.2 Definition of Impact Fees Impact fees are a comprehensive grouping of charges based on new development within a local municipality. These fees are assessed to pay for capital facility improvement projects necessitated by new development growth (including but not limited to parks, schools, streets/roads, etc.). Transportation Impact Fees are collected to fund improvements that add capacity to the transportation system, accommodating the travel demand created by new development in Port Orchard. The Revised Code of Washington (RCW) Section 82.02.050 identifies the intent of impact fees as the following: To ensure that adequate facilities are available to serve new growth and development; To promote orderly growth and development by establishing standards by which counties, cities, and towns may require, by ordinance, that new growth and development pay a proportionate share of the cost of new facilities needed to serve new growth and development; and To ensure that impact fees are imposed through established procedures and criteria so that specific developments do not pay arbitrary fees or duplicative fees for the same impact. 1.3 Statutory Basis for Impact Fees The purpose of this study is to establish the rates for impact fees for streets in the City of Port Orchard, Washington. Transportation Impact Fees are a financing mechanism authorized by the Growth Management Act (GMA) of Washington State (see RCW 36.70A.070 and 82.02.050 et seq.). However, impact fees are not mandatory; they are simply authorized by the GMA as a local option. State law imposes strict limitations on impact fees. These limitations are intended to assure property owners that the fees collected are reasonably related to their actual impacts and will not be used for unrelated purposes. If impact fees are imposed, the funds collected from developments can be expended only on transportation system improvements, which are: (a) identified in the comprehensive plan as needed for growth, and (b) reasonably related to the impacts of the new development from which fees are collected. Specifically, condition (a) requires that impact fees are not used on improvements needed to remedy existing deficiencies. Those needs must be entirely funded from public sector resources. Condition (b) is satisfied if the local government defines a reasonable service area, identifies the public facilities within the service area that require improvement during the designated planning period, and prepares a fee schedule taking into account the type and size of the development as well as the type of public facility being funded. To achieve the goal of simplicity, impact fee calculations are applied on an average basis for the entire transportation system, rather than project -by -project. This is a key difference between impact fees and State Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 Environmental Policy Act (SEPA) mitigation, whereby pro-rata shares of specific project improvements are collected. Pre -calculated impact fees are easier to administer than traditional SEPA development mitigation, at the point of development review. However, more complex administrative procedures are necessary to track the funds collected from each development. This is necessary to assure that the funds are expended only on eligible transportation system improvements, and also to assure that impact fee revenues are used within six years. Fees not expended within six years must be refunded with interest to the current owner of the property. The methodology and results described next are consistent with the requirements of the GMA. All calculations are based on the adopted transportation facilities list described in the City of Port Orchard Comprehensive Plan. The procedures described herein can be formally enacted by an impact fee ordinance incorporating this report by reference. Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 2. Impact Fee Analysis 2.1 Methodology The primary basis for the impact fee is that growth should pay a proportionate share of the cost to provide the future transportation capacity. This is developed by comparing the improvement costs for growth in the Comprehensive Plan's adopted transportation facilities list to an estimate of capacity of the facilities used by growth. The analysis strictly focuses on those projects that provide capacity improvements needed for growth. The improvements for maintenance such as pavement overlays and physical obsolescence, as well as improvements necessary to mitigate existing level of service deficiencies and not eligible for funding with impact fees. However, agencies have been encouraged by the Department of Commerce to consider multimodal transportation improvements and, to that end, shoulder widening, sidewalks, bike lanes and parallel trails are reasonable to include as both vehicle and non -motorized capacity enhancements. 2.2 Current Impact Fee Methodology in Port Orchard The City of Port Orchard does not currently have a Transportation Impact Fee This study will be the basis of a program that implements Transportation Impact Fees for the City. 2.3 Other Impact Fee Methodologies Other cities and counties employ various methodologies to compute impact fees. Some cities charge the full cost of every project attributable to growth in their fee. This method assumes that existing residents get no benefit from the projects, and growth creates 100% of the need for the projects. This is seldom true and is not consistent with GMA requirements, but happens nevertheless. Other agencies go through rigorous analyses to compute the growth share of every capital project to more accurately capture the growth share of each project. The City of Sammamish chose this approach. This approach requires significant analysis in traffic forecasting tools and proportionate share calculation. The Sammamish example is interesting in that the resulting impact fee, the highest in the state, represented about 35% of the City's Capital Program cost. The recovery of expended costs on capital projects that serve growth is rare, but was used in the City of Sammamish to recover the cost of the 228th Avenue Project. The City of Newcastle adopted a similar approach to recover costs for the Coal Creek Parkway improvements. Other agencies choose to set the impact fee by what they consider to be a rate acceptable to the market and comparable to their neighbors so as not to discourage development. This method typically results in an underfunded Capital Program that lags behind the impacts of growth and ultimately results in concurrency failures. Other cities use zone -based fee structures to capture the differences between commercial and residential zones. This can create challenges when the impact fee on the north side of the street is 10 times higher than the fee on the south side. This is why many cities use a single -zone structure. Each method comes with advantages and risks. In general, the higher the fee, the more supporting documentation is required. Cities also allow various levels of adjustment for special conditions within their impact fee ordinances. Deductions for trip length associated with certain land uses, reductions to trip generation in mixed -use areas, and credits for provision for alternative modes or TDM programs are all utilized. Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 2.4 Projects Eligible for Impact Fees Not all planned transportation projects and programs are eligible for impact fees. The complete list of projects is divided below into the following categories, in order to arrive at a list of qualifying improvements that will form the basis for impact fees calculated for the City of Port Orchard: • Project Improvements • Planned Transportation Projects needed within 20 years • Maintenance Projects 2.4.1 Project Improvements Project improvements are transportation improvements necessary for a specific development that do not provide significant system benefits. These are typically low -volume local streets that serve driveways and parking areas. They may provide connections to other developments, but not forthe purpose of significant system capacity. Other project improvements include safety improvements and new access connections to existing arterials that serve only one development. Project improvements are typically required by other development regulations or as SEPA mitigation for specific development impacts not anticipated in the Comprehensive Plan. Project improvements are not eligible for impact fees. For the purpose of this rate analysis, roadway extensions that connected existing developments, but were not significant arterials, were considered project improvements that could be required under other City codes and regulations, but would not be included in the impact fee calculation. 2.4.2 Planned Transportation Projects The roadway projects identified in the Twenty -Year Capital Improvement Plan (CIP) are anticipated to be needed to serve motorized traffic growth for the next twenty years. The roadway capacity provided is accomplished by adding turn lanes to increase through lane capacity, by lane widening or separating non - motorized modes, adding signals or roundabouts for intersection capacity, and other improvements to increase the capacity of the roadway system for all modes. The proportional share of these projects reasonably related to growth are eligible for impact fees. 2.4.3 Maintenance Projects and Programs Maintenance programs, general studies, and non -capital activities are generally not eligible for impact fees. A component of ongoing pavement preservation could be eligible for impact fees if it is demonstrated that growth increases the magnitude of pavement reconstruction requirements. For instance, if existing conditions require a two-inch asphalt overly, but added traffic from growth requires a three-inch asphalt overlay to achieve the same pavement life, the cost of the additional inch of asphalt could be attributed to growth. Also, if the overlay or reconstruction provides increased lane widths, intersection improvements, or shoulder widening the cost of the expansion could be considered eligible. The projects below are not included in the impact fee calculation list, because of their classification as primarily maintenance projects. These projects will be each be more thoroughly evaluated to determine if any portion of the project may be eligible for inclusion in the impact fee program. Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 Project Title TIP Priority Number Project Description Cost Budgeted Arnold Creek Crossing 1.7 Replace wooden span under Bay Street for Arnold $400,000 Creek culvert Annual Residential Paving 19 . May include repairing or replacing existing $2,050,000 Program pavement in residential areas Annual Sidewalk 1.10 Repair and replace concrete sidewalks and curb $60,000 Improvement Program ramps as needed Pavement Management System/ADA Transition 1.11 Prepare a Pavement Management System and $250,000 Plan Transition Plan to inventory and rate all streets Sidney Avenue (north of SR 16) Overlay 2.9 Overlay Sidney Avenue and construct a shoulder $500,000 Cline Avenue Repairs 2.10 Replace sidewalk and parking strip on the west side $250,000 of the road. The east side has been replaced Total $3,510,000 2.5 Eligible Project Costs Project costs for each eligible group of impact fee projects in the City of Port Orchard are summarized below. These costs include various elements, all necessary for the construction of transportation improvements including design, permitting, right-of-way, construction, and construction management. Ongoing or future maintenance is not an eligible impact fee cost. Some projects have been removed from the project list because they are not capacity projects or are considered maintenance projects/programs. 2.5.1 Planned Roadway Projects The cost of planned impact fee -eligible roadway projects identified in the City's Capital Improvement Plan totals $51,199,090 and is summarized below. Project Title TIP Priority Project Description Cost Number Budgeted Tremont Street Widen Tremont from two travel lanes to four Widening 1.1 travel lanes with sidewalks and stormwater $17,500,00 improvements. SR 160 Corridor Pre- 1.3 The pre -design phase for this widening project $100,000 Design* with 3 lanes (incl. TWLTL), bike lanes, sidewalks. Bethel Corridor Re 1'4 City sponsored re -engineering of previous $750,000 Engineering County Corridor Plan design Anderson Hill/Clifton 1'S Intersection improvements at Anderson Hill & $1,000,000 Intersection Old Clifton Road. Old Clifton/Campus 1.6 Construct roundabout at the intersection of Old $1,000,000 Parkway Intersection Clifton Road and Campus Parkway. Sedgwick West 2.1 Design/ROW phase for City -sponsored Corridor $1,156,070 Design/ROW Plan between SR16 and Bethel Rd Sedgwick West 2'2 Construction phase of City -sponsored Corridor $3,468,208 Construction Plan between SR16 and Bethel Rd Bethel Corridor 2'3 ROW/construction phase of City -sponsored $24,000,000 ROW/Construction Corridor Plan SR160 Roundabout #1 2.4 Construction of a new roundabout located $1,481,481 between Bravo Terrace and Geiger Rd on SR160 SR160 Roundabout #2 2.5 Construction of a new roundabout located $1,481,481 between Geiger Rd and Ramsey Rd on SR160. Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 Project Title TIP Priority Project Description Cost Number Budgeted Sidney Avenue South Widen to three lanes (incl. TWLTL), with bike Widening 2.8 lanes, sidewalks, traffic calming, and $6,261,850 stormwater improvements. Road is currently two -lanes without sidewalks. Old Clifton Shoulder & 2.10 This project would widen the road to four lanes $2,000,000 Pedestrian and add street lighting, sidewalks, and storm drainage. Old Clifton/ McCormick Woods Dr 2.11 Signal improvements at the intersection of Old $1,000,000 Intersection Clifton Road and McCormick Woods Drive. Total 1 $61,199,090 *Estimated cost based on similar projects 2.5.2 McCormick Urban Village Development The above table includes four (4) projects that are at least partially funded by the impact fees associated with the McCormick Urban Village Development Agreement. Refer to the table below for the four (4) projects covered within the McCormick Development impact fee. The mitigation fees for the McCormick Woods share of these projects are collected through pre-existing agreements and are, in some cases, subject to credits for improvements already made to support the McCormick Urban Village Development. TIP Priority Cost GEM's Project Title Number Project Description Budgeted Proportionate Share Anderson Hill/Clifton 15 Intersection improvements at Anderson Hill $1,000,000 $173,000 Intersection & Old Clifton Road. Old Clifton/Campus 1'6 Construct roundabout at the intersection of $1,000,000 $371,000 Parkway Intersection Old Clifton Road and Campus Parkway. Road is currently two -lanes without Old Clifton Shoulder & 2.10 sidewalks. This project would widen the $2,000,000 $2,000,000 Pedestrian road to four lanes and add street lighting, sidewalks, and storm drainage. Old Clifton/ Signal improvements at the intersection of McCormick Woods Dr 2.11 Old Clifton Road and McCormick Woods $1,000,000 $110,000 Intersection Drive. Total $5,000,000 $2,654,000 2.6 Impact Fee Calculation The impact fee for the City of Port Orchard has been computed based upon trip generation (the increase in traffic) resulting from growth, and the cost of improvements related to growth. 2.6.1 Growth Share of Project Costs The growth share of project costs for the City of Port Orchard has been computed based upon proportional trip generation (the increase in traffic compared to current traffic) resulting from growth. Growth share of the eligible project cost is defined as the proportion of the impacted roadway capacity which will be consumed by twenty-year traffic growth, as forecasted by the calibrated citywide travel demand model. Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 The citywide travel demand model was developed in TransCAD software using existing land use and roadway information provided by the City of Port Orchard, Kitsap County, and Puget Sound Regional Council (PSRC). Trip generation was based upon rates established by the Institute of Transportation Engineers (ITE) Trip Generation Manual, 91 Edition and calibrated based on 2015 traffic counts and knowledge of local conditions. The trip distribution and traffic assignment sub -models were calibrated based on local knowledge and regional and national guidance, including the Kitsap County travel demand model and FHWA calibration best practices. A model calibration plot and base year traffic flow graphic are presented in Appendix C. Future traffic conditions were forecasted by incorporating 20-year land use growth allocations provided by Kitsap County and spatially distributing City and UGA growth totals based on zoning. A network plot displaying twenty-year growth is presented in Appendix C. The proportionate growth share of budgeted project cost was calculated by dividing 20-year average daily traffic (ADT) growth by the total available capacity of each impacted road or intersection after improvement. ADT was calculated by applying a reasonably estimated K-factor to the PM peak hour traffic volume which was generated by the citywide planning model. A citywide transportation impact fee rate was calculated by dividing the capacity -based growth share of budgeted project cost by forecasted twenty-year PM peak hour trip growth citywide. The result is an impact fee which charges added transportation demand proportionately to their capacity usage and which can be revised as growth forecasts and planned projects change. The methodology can be described as follows: [Growth Share of Project Cost] = [20-year ADT Growth] / [Total Available Capacity] [Impact Fee Rate ($/PM trip)] = [Growth Share of Project Cost] / [Net new PM peak hour trips] The following tables summarize the budgeted cost, eligible cost, growth share, and forecasted daily trip growth for each of the roadway and multimodal projects identified in the City's Capital Improvement Plan. Project Title TIP Priority Number cost Budgeted Growth Share Growth Share Tremont Street Widening 1.1 $17,500,000 7.4% $1,289,439 SR 160 Corridor Pre -Design* 1.3 $100,000 69.2% 1 $69,173 Bethel Corridor Re -Engineering 1.4 $750,000 38.9% $291,509 Anderson Hill/Clifton Intersection 1.5 $1,000,000 44.5% $445,420 Old Clifton/Campus Parkway Intersection 1.6 $1,000,000 13.9% $138,575 Sedgwick West Design/ROW 2.1 $1,156,070 46.1% $533,072 Sedgwick West Construction 2.2 $3,468,208 46.1% $1,599,214 Bethel Corridor ROW/Construction 2.3 $24,000,000 38.9% $9,328,302 SR160 Roundabout #1 2.4 $1,481,481 72.8% $1,078,882 SR160 Roundabout #2 2.5 $1,481,481 72.8% $1,078,882 Sidney Avenue South Widening 2.8 $6,261,850 37.0% $2,316,608 Old Clifton Shoulder & Pedestrian 2.10 $2,000,000 51.0% $1,020,234 Old Clifton/ McCormick Woods Dr Intersection 2.11 $1,000,000 49.9% $498,698 TOTAL $61,199,090 32.2% $19,688,007 Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 2.7 Proportionate Growth Share and Impact Fee Calculation for Planned Roadway Projects Impact fees were calculated based upon the growth share's costs identified in Section 2.6 above. The proportionate growth share impact fee for planned roadway projects is based upon a conservative and defensible fee established from the total project costs and estimated 20-year traffic growth is shown below: Growth Share of Eligible Project Costs of $19,688,007 divided by 7,714 new PM trips = $2,552.24 /PM trip 2.8 Growth Share and Impact Fee Calculation for McCormick Woods Development As part of the McCormick Woods Development Agreement, developer GEM 1 has agreed to pay a fee of $1,992.36 per PM peak hour trip for mitigation of transportation network needs associated with the McCormick Woods development. The citywide impact fee of $2,456.73 considers the proportionate share of all growth trips equally based on the traffic forecast generated by the calibrated citywide travel demand model. This citywide fee should be reduced for trips in the McCormick Woods development in order to credit GEM 1 for the fee required by the existing development agreement. In this way, growth trips associated with McCormick Woods will pay only the difference between the citywide impact fee of $2,456.73 per PM peak hour trip and the existing fee of $1,992.36 per PM peak hour trip. This yields: Citywide Impact Fee of $2,552.24 /PM trip less McCormick Woods Development Impact Fee of $1,992.36/PM trip = $559.88 /PM trip 2.9 Resulting Transportation Impact Fees If the above calculated rates were adopted in an impact fee ordinance, the fees paid by several typical developments are summarized below. The McCormick Woods fee reflects the amount due in addition to the existing fee of $1,992.36 per PM peak hour trip per the Development Agreement. Single-family home $2,552.24 per unit Apartment $1,582.39 per unit Assisted living $561.49 per bed General office $3,802.84 per 1,000 square feet Specialty retail center $4,565.96 per 1,000 square feet Light industrial $2,475.67 per 1,000 square feet Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 3. Additional Issues for Consideration 3.1 Anticipated Annual Revenues from Impact Fees Based on anticipated residential and employment projections for the City of Port Orchard, below is the anticipated annual revenue from the proposed Transportation Impact Fees: Estimated growth trips per year: 386 trips/year x $2,552.24 /PM trip = $985,165/year 3.2 Anticipated Grant Revenue Roadway projects are generally eligible for state and federal grant funds. These funds are not predictable and vary in amount by grantor. Fifty percent of the total project cost is a reasonable estimate for grants on roadway projects. 3.3 Anticipated Need for Other Public Funds Based on a growth share of 32.2% of total project cost and a 50% assumption for grants, the City will still need to identity other revenue sources to cover approximately 17.8% of the cost of planned roadway projects. 4. Impact Fee Rate Schedule The table in Attachment A establishes the effective Transportation Impact Fee for various land uses both residential and non-residential in Port Orchard. It includes adjustments for pass -by trips. 5. Future Impact Fee Updates 5.1 Future Impact Fee Updates The Port Orchard impact fee rate analysis generated in this report should be reviewed and approved or updated in the following manner: A. The schedule in Attachment A should be reviewed by the Council no later than three years after the effective date of the approved ordinance, and every three years thereafter. and e. The schedule in Attachment A should be reviewed by the Council in conjunction with the update of the Transportation Improvement Program. Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 6. Transportation Impact Fee Comparison 6.1 Comparison of 2013 TIF Base Rates in Western Washington To provide a relative comparison of the City of Port Orchard Transportation Impact Fees to those within the State of Washington and on a national level, below are some road impact fee metrics from the Comparison of 2013 TIF Base Rates in 60 Cities and 5 Counties in Western Washington'. The Port Orchard rate of $2,552.24 per trip would be below the average impact fee, but far from the lowest in Washington. Washington Average Transportation Impact Fee: Washington Maximum Transportation Impact Fee: Washington Minimum Transportation Impact Fee: City of Poulsbo Transportation Impact Fee: City of Gig Harbor Transportation Impact Fee: Pierce County Transportation Impact Fee: Kitsap County Transportation Impact Fee: Proposed Bainbridge Island Transportation Impact Fee $2,880 $14,707 (City of Sammamish) $515 (Kitsap County) $2,835 $2,102 $1, 742 $515 $1,632.47 Attachment B provides the Comparison of 2013 TIF Base Rates in 60 Cities and 5 Counties in Western Washington documentation identified above. 'City of Bellingham, WA Public Works. "Comparison of 2013 TIF Base Rates in 60 Cities and 5 Counties in Western Washington" (Chris Comeau, AICP, 2012) 7. Credits and Adjustments 7.1 Impact Fee Credits An applicant may request that credit for impact fees be awarded to him/her for the total value of system improvements, including dedications of land, improvements, and/or construction provided by the applicant. Credits should be considered on a case -by -case basis and should not exceed the impact fee payable. Claims for credit should be made before the payment of the impact fee. Credits for the construction should be provided only if the land, improvements, and/or the facility constructed are listed as planned transportation projects in the Rate Analysis and Impact Fee Ordinance. No credit should be given for code - based frontage improvements or right -or -way dedications, or direct access improvements to and/or within the subject development (project improvements) unless the improvement is part of a project listed in the Rate Analysis and Impact Fee Ordinance. 7.2 Impact Fee Adjustments An applicant may submit an independent fee calculation for the proposed development activity. The documentation submitted should be prepared by a traffic engineer licensed in Washington State and should be limited to adjustments in the trip generation rates used in the fee calculation. The impact fee per trip should not be adjusted. Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 Attachment A - IMPACT FEE RATE SCHEDULE Transportation Impact Fee Rate Schedule — Residential Impact Fee Per $2,552.24 Trip Rate: Land Use Group ITE Code' ITE Land Use Category' ITE Trip Rate % Pass By Trips' Net New Trips per Development Unit Impact Fee per Development Unit ° Dwelling210 Single -Family Detached 1.00 0% 1.000 $2,552.24 per DU Housing Dwelling 220 Apartment 0.62 0% 0.620 $1,582.39 per DU Dwelling 231 Low -Rise Condo / Townhouse 0.78 0% 0.780 $1,990.75 per DU Dwelling 240 Mobile Home Park 0.59 0% 0.590 $1,505.82 per DU Dwelling - Group 251 Sr. Housing Detached 0.27 0% 0.270 $689.10 per DU Dwelling - Group 252 Sr. Housing Attached 0.25 0% 0.250 $638.06 per DU Dwelling - Group 253 Congregate Care Facility 0.17 0% 0.170 I $433.88 per DU Dwelling - Group 2546 Assisted Living (limited data) 0.22 0% 0.220 $561.49 per Bed Dwelling - Group 6206 Nursing Home 0.22 0% 0.220 $561.49 per Bed 1 Institute of Transportation Engineers, Trip Generation Manual (9th Edition) 2 Trip generation rate per development unit, for PM Peak Hour of the adjacent street traffic (4-6 pm). Note: Sq. Ft. rate expressed per 1000 SF (KSF). 3 Average Pass -by Rates, per Trip Generation Manual (9th Edition) User's Guide and Handbook: an ITE Recommended Practice, 2012. Additional pass -by rate adjusted based on local conditions and engineering judgment. ' DU = Dwelling Unit Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 Transportation Impact Fee Rate Schedule - Non -Residential Impact Fee per Trip Rate: $2,552.24 Land Use Group ITE ITE Land Use Category' ITE Trip % Pass Net New Trips per Impact Fee Code Rate2 B Tri s3 Development Unit Per Development Unita Education 520 Public Elementary School 1.21 0% 1.210 $3,088.21 per KSF Education 522 Public Middle/Junior High School 1.19 0% 1.190 $3,037.17 per KSF Education 530 Public High School 0.97 0% 0.970 $2,475.67 per KSF Education 534 Private School K-8 (limited data) 3.27 0% 3.270 $8,345.82 per KSF Education 536 Private School K-12 limited data 2.75 0% 1 2.750 $7,018.66 per KSF Industrial 110 General Light Industrial 0.97 0% 0.970 $2,475.67 per KSF Industrial 130 Industrial Park 0.85 0% 0.850 $2,169.40 per KSF Industrial 140 Manufacturing 0.73 0% 0.730 $1,863.14 per KSF Institutional 566 Cemetery 0.84 0% 0.840 $2,143.88 Per acre Medical 610 Hospital 0.93 0% 0.930 $2,373.58 per KSF Medical 630 Clinic (limited data) 5.18 0% 5.180 $13,220.60 per KSF Medical 720 Medical/DentalOffice 3.57 0% 3.570 1 $9,111.50 per KSF Office 710 General Office 1.49 0% 1.490 $3,802.84 per KSF Office 715 Sin le Tenant Office 1.74 0% 1.740 $4,440.90 per KSF Park and Ride 090 Park and Ride with Bus Service 0.62 0% 0.620 $1,582.39 per S ace Port and Terminal 030 Intermodal Truck Terminal 0.83 0% 0.830 $2,118.36 per KSF Recreation 411 City Park 3.50 25% 2.625 $6,699.63 per Acre Recreation 420 Marina (limited data) 0.19 25% 0.143 $364.97 per Slip Recreation 430 Golf Course 0.30 25% 0.225 $574.25 per Acre Recreation 437 Bowling Alley 1.51 25% 1.133 $2,891.69 per KSF Recreation 441 Live Theater (limited data) 0.02 25% 0.015 $38.28 per KSF Recreation 444 Movie Theater 3.80 25% 2.850 $7,273.88 per KSF Recreation 491 Racquet/Tennis Club 0.84 25% 0.630 $1,607.91 per KSF Recreation 492 Health Fitness Club 3.53 25% 2.648 $6,758.33 per KSF Recreation 493 Athletic Club 5.96 25% 4.470 $11,408.51 per KSF Recreation 495 Recreational Community Center 1 2.74 25% 2.055 1 $5,244.85 per KSF Retail - Automotive 853 Convenience Marketw/Gas Pumps 19.07 66% 6.484 $16,548.72 per VSP Retail - Automotive 941 Quick Lubrication Vehicle Stop 5.19 42% 3.010 $7,682.24 per VSP Retail - Automotive 944 Gasoline/Service Station 13.87 42% 8.045 $20,532.77 per VSP Retail -Automotive 945 Gas Station w/Convenience Market 13.51 56% 5.944 $15,170.51 per VSP Retail - Automotive 946 Gas Station w/Convenience Market and Car Wash 13.86 56% 6.098 $15,563.56 per VSP Retail - Automotive 947 Self -Serve Car Wash 5.54 42% 3.213 $8,200.35 per VSP Retail - Large 814 Variety Store 6.82 34% 4.501 $11,487.63 per KSF Retail - Large 815 Free Standing Discount Store 4.98 17% 4.133 $10,548.41 per KSF Retail - Large 850 Supermarket 9.48 36% 6.067 $15,484.44 per KSF Retail - Large 854 Discount Supermarket 8.34 23% 6.422 $16,390.49 per KSF Retail - Small 590 Library 7.30 0% 7.300 $18,631.35 per KSF Retail - Small 816 Hardware/Paint Store 4.84 26% 3.582 $9,142.12 per KSF Retail - Small 826 Specialty Retail Center 2.71 34% 1.789 $4,565.96 per KSF Retail - Small 841 Automobile Sales 2.62 0% 2.620 $6,686.87 per KSF Retail - Small 843 Automobile Parts Sales 5.98 43% 3.409 $8,700.59 per KSF Retail - Small 848 Tire Store 4.15 28% 2.988 $7,626.09 per KSF Retail - Small 851 Convenience Market 52.41 61% 20.440 $52,167.79 per KSF Retail - Small 876 Apparel Store 3.83 34% 2.528 $6,452.06 per KSF Retail - Small 879 Arts and Crafts Store 6.21 34% 4.099 $10,461.63 per KSF Retail - Small 880 Pharmacy/Drug Store w/o Drive-Thru 8.40 53% 3.948 $10,076.24 per KSF Retail - Small 881 Pharmacy/Drug Store w/Drive-Thru 9.91 49% 5.054 $12,899.02 per KSF Retail - Small 890 Furniture Store 0.45 53% 0.212 $541.07 per KSF Retail - Small 896 DVDNideo Rental Store 13.60 49% 6.936 $17,702.34 per KSF Retail - Small 911 Walk-in Bank (limited data) 12.13 47% 6.429 $16,408.35 per KSF Retail - Small 912 Drive-in Bank 24.30 47% 12.879 $32,870.30 per KSF Retail - Small 925 Drinking Place 11.34 0% 11.340 $28,942.40 per KSF Retail - Small 931 Quality Restaurant 7.49 44% 4.194 $10,704.09 per KSF Retail - Small 932 High Turnover Restaurant 9.85 43% 5.615 $14,330.83 per KSF Retail - Small 933 Fast Food w/o Drive-Thru 26.15 49% 13.337 $34,039.22 per KSF Retail - Small 934 Fast Food w/Drive-Thru 32.65 50% 16.325 $41,665.32 per KSF Retail - Small 936 Coffee/Donut Shop w/o Drive-Thru 40.75 49% 20.783 $53,043.20 per KSF Retail - Small 942 Automobile Care Center 3.11 28% 2.239 $5,714.47 per KSF Services 151 Mini Warehouse 0.26 0% 0.260 $663.58 per KSF Services 310 Hotel 0.60 0% 0.600 $1,531.34 per KSF Services 320 Motel 0.47 0% 0.470 $1,199.55 per KSF Services 560 Church 0.55 0% 0.550 $1,403.73 per KSF Services 565 Day Care Center 12.34 75% 3.085 $7,873.66 per KSF Services 732 US Post Office 11.22 47% 5.947 $15,178.17 per KSF 1 Institute of Transportation Engineers, Trip Generation Manual (9th Edition) 2 Trip generation rate per development unit, for PM Peak Hour of the adjacent street traffic (4-6 pm). Note: Sq. Ft. rate expressed per 1000 SF. 3 Average Pass -by Rates, per Trip Generation Manual (9th edition) User's Guide and Handbook: an ITE Recommended Practice, 2012. Additional pass -by rate adjusted based on local conditions and engineering judgment. 4 Sq. Ft. = Square Feet, VSP = vehicle servicing position Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 Attachment 6 COMPARISON OF 2013 TIF BASE RATES IN 60 CITIES AND 5 COUNTIES IN WESTERN WASHINGTON A Comparison of 2013 TIF Base Rates in 60* Cities and S Counties in Western Washington With Whatcom County Cities and Bellingham's Urban Village TIF Reduction Highlighted for Emphasis (*City of Sommomish, WA $14,707 TIF base rate excluded from graphic] (Data compiled Oecember 2012 by Chris Comeau, AICP, Transportation Planner, Bellingham Public Works) Redmond Ken mare Lynnwood Duvall Fife Bothell Sultan Puyallup La Center Covington Sad. Wooley Cam" Buckley Kent Bonney Lake Kirkland Issaquah Newcastle Arlington Auburn Olympia University Place Maple Valley Mill Creek Bellevue Enumclaw Average WA TIF Des Moines Federal Way Woodinville Ferndale Sequlm Ridgefield Median (50%) TIF Snohomish County Thurston County Granite Falls Stanwood Washougal Man, - Gig Harbor Milton Lyndon Bellingham Mukllteo Marysville Burlington Mount Vernon Vancouver Plerce County King County Lacey . Bham Urban Villages Snohomish Yelm Tukwila Sumner Edgewood Edmonds SeaTac Burien Everett AnacorteS Renton Mount Lake Terrace Oak Harbor Knsap County 787 ��== 2,880 7,854 -�- ��� l♦ III 900 50 il• so S1,000 $2,000 $31000 $4,000 $510D0 $6,000 $7,000 $8,000 $9,000 Transportation Solutions, Inc. Appendix A Ordinance No. 023-15 Attachment C - TRAVEL DEMAND MODEL GRAPHICS 2015 Port Orchard Model Calibration 3500 y = 1.0154x + 4.2237 3000 2500 3 2000 1500 Q 1000 500 0 0 500 1000 1500 2000 2500 3000 Counted Volume 3500 Transportation Solutions, Inc. QLX) x M N O O CL O O. Z Q N U C O C L 0 4-0 0 a 3 0 L 0 3 a z -a m s u L 0 L 0 a Ln 0 N Q Lo x co N O O CL a O O_ Z O U C C Appendix B Ordinance No. 023-15 ORCHARD Appendix E: Impact Fee Calculations E.1 Introduction This study of impact fees for parks and recreational facilities for the City of Port Orchard presents the methodology, summarizes the data, and explains the calculation of the fees. The methodology is designed to comply with the requirements of Washington law. This introduction describes the basis for parks and recreational impact fees, including: • Definition and Rationale of Impact Fees • Statutory Basis For Impact Fees • Methodology for Calculating Impact Fees • Need for Additional Parks and Recreational Facilities • Determining the Benefit of Parks and Recreational Facilities to Development • Methodology and Relationship to Port Orchard City Parks Plan • Level of Service and Calculations E 1.1 Definition and Rationale of Impact Fees 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 the new development. New development is synonymous with "growth." Local governments charge impact fees on either of two bases. First, as a matter of policy and legislative discretion, they may want new development to pay the full cost of its share of new public facilities because that portion of the facilities would not be needed except to serve the new development. In this case, the new development is required to pay for virtually all the cost of its share of new public facilities. Port Orchard City Parks Plan 2011 Appendix B Ordinance No. 023-15 On the other hand, local governments may use other sources of revenue to pay for the new public facilities that are required to serve new development. If, RCW 82.02.050 (2) prohibits impact fees that charge 100% of the cost, but does not specify how much less than 100%, leaving that determination to local governments. However, such revenues are not sufficient to cover the entire costs of new facilities necessitated by new development; the new development may be required to pay an impact fee in an amount equal to the difference between the total cost and the other sources of revenue. There are many kinds of "public facilities" that are needed by new development, including parks and recreational facilities, fire protection facilities, schools, roads, water and sewer plants, libraries, and other government facilities. This study covers parks and recreational facilities for the City of Port Orchard, Washington. Impact fees for parks and recreational facilities are charged to all residential development within the City of Port Orchard. E1.2 Statutory Basis for Impact Fees RCW 82.02.050 - 82.02.090 authorizes local governments in Washington to charge 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: I) 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 ability to charge small-scale development their proportionate share, whereas SEPA exempts small developments. Four types of public facilities can be the subject of impact fees: I) public streets and roads; 2) publicly owned parks, open space and recreational facilities; 3) school facilities; and 4) fire protection facilities (in jurisdictions that are not part of a fire district). RCW82.02.050 (2) and (4) and RCW82.02.090 (7) Impact fees must be limited to system improvements that are reasonably related to, and which will benefit new development. RCW 82.02.050(3) (a) 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 82.02.060(6) 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. RCW82.02.050(3)(b) and RCW82.02.060(I ) Impact fees can be charged for new public facilities (RCW 82.02.060(I)(a)) and for the unused capacity of existing public facilities (RCW 82.02.060(7)) subject to the Port Orchard City Parks Plan 2011 Appendix B Ordinance No. 023-15 proportionate share limitation described above. Additionally, the local 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. RCW82.02.070(I)-(3) E 2 Methodology for Calculating Impact Fees Prior to calculating impact fee rates, several issues must be addressed in order to determine the need for, and validity of such fees: responsibility for public facilities, the need for additional park and recreational facilities, the need for revenue for additional parks and recreational facilities, and the benefit of new parks and recreational facilities to new development. In general, local governments that are authorized to charge impact fees are responsible for specific public facilities for which they may charge such fees. The City of Port Orchard is legally and financially responsible for the parks and recreational facilities it owns and operates within its jurisdiction. In no case may a local government charge impact fees for private facilities, but it may charge impact fees for some public facilities that it does not administer if such facilities are "owned or operated by government entities" (RCW 82.82.090(7). E 2.1 Need for Additional Park and Recreational Facilities The need for additional parks and recreational facilities is determined by using standards for levels of service for park and recreational facilities to calculate the quantity of facilities that are required. For the purpose of quantifying the need for parks and recreational facilities, this study uses the City's value of investment in parks and recreational facilities per capita. As greater growth occurs, more investment is required, therefore more parks and recreational facilities are needed to maintain standards. E 2.2 Determining the Benefit to Development The Washington State law regarding Impact Fees imposes three provisions of the benefit provided to development by impact fees: 1) proportionate share, 2) reasonably related to need, and 3) reasonably related to expenditure (RCW 80.20.050(3)). First, the "proportionate share" requirement means that impact fees can be charged only for the portion of the cost of public facilities that is "reasonably related" to new development. Second, fulfilling the requirement that impact fees be "reasonably related" to the development's need for public facilities, including personal use and use by others in the family (direct benefit), use by persons or organizations who provide goods or services to the fee -paying property (indirect benefit), and geographical proximity (presumed benefit). Impact fees for park and recreational facilities, however, are only charged to Port Orchard City Parks Plan 2011 Appendix B Ordinance No. 023-15 residential development in the City because the majority of benefits are to the occupants and owners of dwelling units. As a matter of policy, the City of Port Orchard elects not to charge parks and recreational impact fees to non-residential properties because there is insufficient data to document the proportionate share of parks reasonably needed by non-residential development. Lastly, the requirement that expenditures be "reasonably related" to the development that paid the impact fee includes that fee revenue must be earmarked for specific uses related to public facilities ensures that expenditures are on identifiable projects, the benefit of which can be demonstrated and that impact fee revenue must be expended within 6 years, thus requiring a timeliness to the benefit to the fee -payer. E 2.3 Methodology and Relationship to the Port Orchard City Parks Plan Impact fees for parks and recreational facilities in the City of Port Orchard are based on the value per capita of the City's existing investment in parks and recreational facilities for the population of the City. New development will be provided the same investment per capita, to be funded by a combination of general and capital improvement fund revenue and impact fees. The amount of the impact fee is determined by charging each new development for the average number of persons per dwelling unit multiplied times the amount of the investment per capita that is to be paid by growth. E3. Level of Service Standard Calculations The level of service, as defines as the capital investment per person, is calculated by multiplying the capacity of parks and recreational facilities times the average costs of those items. Within this calculation, there are two variables that benefit from further definition explanation: The value of parks and recreational inventory, and the Service population. E 3.1 Value of Parks and Recreational Inventory The value of the existing inventory of parks and recreational facilities is calculated by determining the value of each park as well as each recreational facility. The sum of all of the values equal the current value of the City's parks and recreational system E 3.2 Service Population The service population is the number of persons served by the inventory of parks and recreational facilities. Port Orchard's service population consists of the City's current 2011 population of 1 1,144 as provided by the Washington State of Financial Management. The forecast population for 2030 of is the projected population Port Orchard City Parks Plan 2011 Appendix B Ordinance No. 023-15 estimated for Comprehensive Planning efforts and adopted by all Kitsap County jurisdictions, through the County Wide Planning Policies. This figure is provided to estimate future population growth within the existing City boundaries and is utilized in calculating the annual portion of that growth rate for the Impact Fee calculations. E 3.3 Calculation of Park and Recreational Capital Investment per Person The City of Port Orchard's capital value per person is the standard the City uses to ensure that each resident receives an equitable amount of parks and recreational facilities. The City provides this value by investment in parks and recreational facilities that are most appropriate for each site and which respond to changing needs and priorities as the City grows and the demographics and needs of the population changes. Attachment E I (at the end of this Appendix) lists the types of land and recreational facilities that make up the City of Port Orchard's existing park system. Each component is listed in the first column, along with the capital value of each type of park land or recreational facility in the final column. The capital value for all City owned parks & recreational facilities in the inventory comes to a total of $7,228,929. This total value is divided by the service population of 1 1,144 for the City determines the current capital value per person of $649. (Please reference Attachment E2: Figure E 1) E 4 PARKS AND RECREATIONAL FACILITY NEEDS This section calculates the value of parks and recreational facilities that are needed to serve growth, reduced by the typical proportion of project values that are grant or otherwise funded. Impact fees are related to the needs of growth through calculating the total value of parks and recreational facilities that are needed for growth. The calculation is accomplished by multiplying the capital investment per person times the number of new persons that are forecast for the City's growth. (Please reference Attachment E2: Figure E2) E 4.1 Calculation of Total Value Needed For Growth The calculations for the total value of Parks and Recreation Facilities needed to accommodate the forecasted growth is a tabulation of the level of service standard for capital investment per person from Figure E I times the total amount of population growth forecast for the six year Impact Fee planning period. The resulting calculation shows the total value of parks and recreational facilities that are needed to serve the growth that is forecast for Port Orchard (Please reference Attachment E2: Figure E2). The result of Figure E2 illustrates that Port Orchard needs parks and recreational facilities valued at $1,928,434 in order to serve the growth of 2,973 additional people (forecast at an annual growth rate of 495 per year) who are expected to be added to the City's population during the six year Impact Fee planning period. i Port Orchard City Parks Plan 2011 Appendix B Ordinance No. 023-15 E 4.2 Total Investment to be Paid by Growth The investment to be paid by growth is calculated by subtracting the amount of any revenues the City invests in infrastructure for growth from the total investment in parks and recreational facilities needed to serve growth. The previous calculation showed the total amount that is needed to invest in additional parks and recreation facilities in order to serve future growth. The proportionate share of that investment to be paid by growth is dependent upon the historic share of improvements provided by the City of Port Orchard through grants or other revenue streams. The proportionate share for development to pay for new facilities includes the City of Port Orchard historical use of local sources, such as real estate excise tax, grant funding, and other revenues to pay for part of the cost of parks and recreational facility capital costs. Revenues that are used for repair, maintenance or operating costs are not used to reduce impact fees because they are not used, earmarked or prorated for the system improvements that are the basis of the impact fees. The City's investment has averaged 50% of the cost of capital improvement projects for parks and recreational facilities (Please reference Attachment E2: Figure E3). The result of Figure E3 illustrates that Port Orchard expects to use $964,217 in grants and other revenues to serve the total needs of additional parks and recreational facilities to maintain the City's standards for future growth, with the remaining $964,217 to be paid by growth as a proportionate share. E5 IMPACT FEE PER UNIT OF DEVELOPMENT In this section the investment in additional parks and recreational facilities to be paid by growth is used to calculate the park and recreational facilities growth cost per person which is then used to calculate the impact fee per dwelling unit. E 5.1 Growth Cost Per Person The growth cost per person is calculated by dividing the investment in parks and recreational facilities that is to be paid by growth by the amount of population growth during the six year Impact Fee planning period (Please reference Attachment E2: Figure E4). The result of Figure E4 illustrates the calculation of the cost per person of parks and recreational facilities that needs to be paid by growth is $324 per person. The amount to be paid by each new dwelling unit depends on the number of persons per dwelling unit. E 5.2 Impact Fee per Dwelling Unit The impact fee per dwelling unit is calculated by multiplying the growth cost per person by the number of persons per dwelling unit. The number of persons per dwelling unit is the factor used to convert the growth cost of parks and recreational facilities per Port Orchard City Parks Plan 2011 Appendix B Ordinance No. 023-15 person into impact fees per dwelling unit. The number of persons per dwelling unit data is based on the adopted 2008 Port Orchard Comprehensive Plan, Chapter 3. Housing; which sets an population household size of 2.5 persons per single family unit and a calculation of 1.8 persons per Multi -family housing unit within the City of Port Orchard (Please reference Attachment E2: Figure E5 and E6 respectively). The resulting calculations of Figure E5 shows the calculation of the parks and recreational facilities impact fee of $81 1 per single family dwelling unit. The resulting calculations of Figure E6 show the calculation of the parks and recreational facilities impact fee of $584 per multi -family dwelling unit. Impact Fee amounts, upon adoption by City Council, are to be implemented and collected subject to the provisions of Port Orchard Municipal Code Section 16.70. E6. Summary This study of impact fees for parks and recreational facilities for the City of Port Orchard summarizes the methodology, presents the data, and explains the calculation of the fees that result in the recommended amounts. Similar sized Cities within Kitsap County have chosen to utilize much higher impact fee amounts, for example the City of Poulsbo recently raised their Park Impact Fee from $500 to $1,195 per unit. The proposed Park Impact Fees for the City of Port Orchard of $81 1 per single family dwelling unit and $584 per multi -family dwelling unit, although consistent with the City of Port Orchard level of service, still are well below the Washington State average of $ 2,849 per single family dwelling unit and $2,147 per multi -family dwelling unit respectively. (Sourced from the National Impact Fee Survey 2009, prepared by Clancy Mullen, Duncan Associates, Austin, TX on December 20, 2009) The methodology utilized for arriving at the City of Port Orchard impact fee amounts has been a statewide standard incorporated for numerous Washington State cities and is designed to comply with the requirements of Washington law. Port Orchard City Parks Plan 2011 Appendix B Ordinance No. 023-15 INTENTIONAL BLANK PAGE CITY OF PORT ORCHARD COMPREHENSIVE PARKS PLAN Appendix C Ordinance No. 023-15 South Kitsap School District 2015 Capital Facilities Plan VII. DISTRICT FINANCE PLAN The principal funding mechanism for school facility construction and modernization has traditionally been voter approved bonds. More recently, school districts have been turning to capital levies to support modernizations and elementary school new construction projects. Other funding sources can include state funding assistance and development impact (mitigation) fees. General Obligation Bonds Bonds are typically used to fund construction of new schools and other major capital improvement projects. A 60% voter approval is required for passage. Bonds are then retired over time through the collection of property taxes. The South Kitsap School District had an assessed valuation of $6,123,112,269 as of August 31, 2014. The limit for all outstanding bonds for SKSD is 5% of assessed value or $306,155,613. The District had $5,645,481 of debt as of August 31, 2014, and therefore has a current bonding capacity of $300,510,132. State Funding Assistance The source of State Funding Assistance, formerly State Match Funds, is the Common School Construction Fund. Bonds are sold on behalf of the fund then retired with revenues accruing predominantly from the sale of renewable resources (i.e., timber) from state school lands set aside by the Enabling Act of 1889. If these sources are insufficient to meet the needs of the program, the Legislature can appropriate additional funding, or the State Board of Education can ration project funding on a priority basis. School districts may qualify for state funding assistance for specific capital projects based on an eligibility system. Eligible projects are prioritized using seven different criteria. Funds are then disbursed to districts on a percentage basis that is based on a formula that compares each district's assessed valuation per pupil relative to the entire state assessed valuation per pupil. This percentage is known as the Funding Assistance Percentage, formerly State Match Ratio. The base to which this percentage is applied is the cost of construction as determined by the "Construction Cost Allocation" multiplied by the "Eligible Area". The Construction Cost Allocation (CCA) is used by OSPI to help define or limit its level of financial support for school construction. It is a budget driven value that is not intended to fully reflect the actual cost of school construction in Washington State. The Eligible Area portrays either the square footage of new space required to address unhoused students for an enrollment project, or the building square footage approved for upgrade or replacement for a modernization project. State funding assistance is available to assist districts with construction costs for enrollment and modernization related school construction projects but cannot be used for site acquisition, the purchase of portables or for normal building maintenance. Because the availability of state assistance funds may not always keep pace with the enrollment growth or modernization needs of all of Washington's school districts, assistance funds from the state may not be received by a school district until two or three years after a school project has begun. In such cases, a district may be required to "front fund" meaning it must be prepared to finance the entire project with local funds. The State's share of the project funding is then provided to the district later in the form of a reimbursement. In some cases projects may not receive any state assistance at all. State funding assistance is not guaranteed. 39 Appendix C Ordinance No. 023-15 South Kitsap School District 2015 Capital Facilities Plan New Development Mitigation/Impact Fees The authority for local jurisdictions to condition new development on the mitigation of school impacts is provided for under the State Subdivision Act, Chapter 58.17 RCW, the State Environmental Policy Act, Chapter 43.21C RCW, and the Growth Management Act, Chapter 36.70A RCW. These state statutes seek to ensure that adequate public facilities are available to meet the demands of new growth by authorizing permitting jurisdictions to condition development approval on the implementation of mitigation measures that enable local jurisdictions to meet the infrastructure demands of new development. Subdivision Act Mitigation RCW 58.17.110 requires the permitting jurisdiction to find that proposed plats adequately provide for schools and school grounds. The proposed development must provide land sufficient to ensure that such facilities are provided for potential new students. SEPA Mitigation. SEPA provides that local jurisdictions may condition the approval of a new development to the mitigation of specific adverse environmental impacts which are identified in SEPA environmental documents. See RCW 43.21C.060. Under SEPA, the "built environment" includes public schools. See WAC 197-11-444(2) (d) (iii). GNU Miti!ation. Development impact fees have been adopted by Kitsap County and the City of Port Orchard as a means of supplementing traditional funding sources for the construction of public facilities needed to accommodate new development. The City of Bremerton does not impose an impact fee on new development. The District participates in the permit review processes of jurisdictions within its boundaries to ensure that its interests are considered when new developments are proposed that will generate additional students. Six -Year Finance Plans The Six -Year Capital Finance Plan (Table 12) portrays how South Kitsap School District intends to fund improvements to school facilities for the years 2015 through 2020. 40 Appendix C Ordinance No. 023-15 South Kitsap School District 2015 Capital Facilities Plan Table 12 Capital Finance Plan (2015-2020) Sources: CFP Balance/Impact Funds (Aug 2014) $ 1,000,164 Impact Fee Collections 2015-2020 (est.) $ 1,438,680 Transfer from General Funds $ 0 State Matching Funds (est.) $ 0 Sale of General Obligation Bonds $ 0 Improvements to Existing Facilities $ 4,750,000 $7,188,844 Uses: CFP Balance/Impact Funds (Aug 2020 est.) $ 378,769 Improvements to Existing Facilities $ 4,750,000 Construction for Enrollment Growth $ 0 Site Acquisition $ 1,760,075 Construction of Support Facilities $ 0 Interim Classroom Space $ 300,000 Program Changes $ 0 $ 7,188,844 Balance: $ 0 41 Appendix C Ordinance No. 023-15 South Kitsap School District 2015 Capital Facilities Plan VIIL UNFUNDED NEED CALCULATION The calculation of the South Kitsap School District unfunded need in support of jurisdictional school impact fee collection is provided on the spreadsheets that follow. This calculation recognizes projected costs anticipated over the life of the six -year plan including acquisition costs for interim housing and debt service payments on a 56 acre school site that was purchased in 2005. The "Unfunded Need Total" on the last line of the SKSD Impact Fee Calculation document portrays the cost of addressing new home construction related enrollment growth identified within the six -year capital construction plan. This value is greater than the actual school impact fees specified and collected under respective Kitsap County and City of Port Orchard impact fee ordinances. 42 Appendix C Ordinance No. 023-15 South Kitsap School District 2015 Capital Facilities Plan Description Grade Span Value Units Comments Student Generation Factor-SFH Elementary 0.32 Students/Residence 2007 Kendrick Demographic Study Student Generation Factor-SFH Jr, High 0.10 Students/Residence 2007 Kendrick Demographic Study Student Generation Factor-SFH Sr. High 0.10 Students/Residence 2007 Kendrick Demographic Study Student Generation Factor-MFH Elementary 0.18 Students/Residence 2007 Kendrick Demographic Study Student Generation Factor-MFH Jr, High 0.09 Students/Residence 2007 Kendrick Demographic Study Student Generation Factor-MFH Sr, High 0.09 Students/Residence 2007 Kendrick Demographic Study Facility Acreage Elementary 14.00 Acres District Average Facility Acreage Jr. High 22.00 Acres District Average Facility Acreage Sr. High 42.00 Acres Plan for New High School Cost per Acre All $115,000 Cost/Acre Market Estimate Facility Size - New Construction Elementary 550 Students/School District Standard Facility Size - New Construction Jr, High 900 Students/School District Standard Facility Size - New Construction Sr. High 1800 Students/School Plan for New High School Facility Size - Temporary Construction Elementary 24 Student/Classroom District LOS Facility Size - Temporary Construction Jr. High 26 Student/Classroom District LOS Facility Size - Temporary Construction Sr. High 26 Student/Classroom District LOS Permanent Sq, Footage (Total) Elementary 507894 Square Feet State Study & Survey Permanent Sq. Footage (Total) Jr. High 286193 Square Feet State Study & Survey Permanent Sq. Footage (Total) Sr. High 345474 Square Feet State Study & Survey Portable Sq, Footage (Total) Elementary 45900 Square Feet Portables Inventory Portable Sq, Footage (Total) Jr. High 18900 Square Feet Portables Inventory Portable Sq, Footage (Total) Sr. High 10800 Square Feet Portables Inventory Facility Cost - New Construction Elementary Cost/School Facility Cost - New Construction Jr. High Cost/School Facility Cost - New Construction Sr. High Cost/School Facility Cost - Temporary Construction Elementary $300,000 CostlPortable Standard Dbl Portable including Site Costs Facility Cost - Temporary Construction Jr, High $300,000 CostlPortable Standard Dbl Portable including Site Costs Facility Cost - Temporary Construction Sr. High $300,000 CostlPortable Standard Dbl Portable including Site Costs Boeckh Index Area Cost Allowance All $206.70 Costlsq, ft, OSPI .2015 SPI Footage Elementary 90.0 Sq. Ft./Student OSPI - 2015 SPI Footage Jr. High 121.3 Sq. Ft./Student OSPI - 2015 SPI Footage Sr. High 130.0 Sq, FUStudent OSPI .2015 State Match Ratio All 59,98% Percent OSPI .2015 Average Assessed Value - SFH All $201,260 Cost/Unit Kitsap County Assessor SFH 2O15 Average Assessed Value - MFH All $100,630 Cost/Unit Kitsap County Assessor SFH 2O15 @ 50% Capital Bond Interest Rate All 0.00% Percent Years Amortized All 10 Years Property Tax Levy Rate - Capital Construction All $0.00 Costl$1000 A.V. 43 Appendix C Ordinance No. 023-15 South Kitsap School District 2015 Capital Facilities Plan School Site Acquisition Cost: CALCULATIONS ((Acres X Cost per Acre)/Facility Capacity) X Student Generation Factor Facility Cost per Facility SGF SGF Cost per Cost per Acreage Acre Capacity SFH MFH SFH MFH Elementary 14 $115,000.00 550 0.32 0.18 $936.73 $526.91 Jr. High 22 900 0.10 0.09 $0.00 $0.00 Sr. High 42 $115,000.00 1800 0.10 0.09 $268.33 $241.50 $1,205.06 $768.41 School Construction Cost: ((Facility Cost/Facility Capacity) X Student Generation Fa(ctor) X Pei manent/Total Sq. Ft.) % Perm/ Facility Facility SGF SGF Cost per Total Sq. Ft. Cost Size SFH MFH SFH Elementary 92% 550 0.32 0.18 $0.00 Jr. High 94% 900 0.10 0.09 $0.00 Sr. High 97% 1800 0.10 0.09 $0.00 Temporary Facility Cost: ((Facility Cost/Facility Capacity) X Student Generation Factor) X (Temporary/Sq. Ft) % Temp/ Facility Facility SGF SGF Total Sq. Ft. Cost Size SFH MFH Elementary 8% $300,000.00 48 0.32 0.18 Jr. High 6% 52 0.10 0.09 Sr. High 3% 52 0.10 0.09 State Match Credit Area Cost Allowance X SPI Sq. Ft X State Match X Student Generation Factor Boeckh SPI State SGF SGF Index Footage Match % SFH MFH Elementary $206.70 90.00 0.32 0.18 Jr. High $206.70 121.30 0.10 0.09 Sr. High $206.70 130.00 0.10 0.09 Tax Pavment Credit Average Assessed Value Capital Bond Interest Rate Net Present Value of Average Dwelling Years Amortized Property Tax Levy Rate Present Value of Revenue Stream NEED SUMMARY School Site Acquisition Cost Permanent Facility Cost Temporary Facility Cost State Match Credit Tax Payment Credit UNFUNDED NEED TOTAL Cost per SFH $165.77 $0.00 $0.00 $165.77 Cost per SFH $0.00 $0.00 $0.00 SFH Cost per MFH $0.00 $0.00 $0.00 Cost per MFH $93.24 $0.00 $0.00 $93.24 Cost per MFH $0.00 $0.00 MFH $0.00 0.00% 0.00% 10 10 $0.00 $0.00 $0.00 $0.00 SINGLE FAMILY MULTI FAMILY $1,205.06 $768.41 $0.00 $0.00 $165.77 $93.24 $0.00 $0.00 $0.00 $0.00 $1,370.83 $861.65 44 NOTICE OF CITY OF PORT ORCHARD ORDINANCE The following is a summary of an Ordinance approved by the Port Orchard City Council at their regular Council meeting held November 10, 2015. ORDINANCE NO.023-15 AN ORDINANCE OF THE CITY COUNCIL OF PORT ORCHARD, WASHINGTON, RELATING TO IMPACT FEES FOR NEW DEVELOPMENT, REPEALING THE CURRENT IMPACT FEE CHAPTER 16.70 POMC AND ADOPTING A NEW CHAPTER IDENTIFYING A SERVICE AREA, DESCRIBING THE MANNER IN WHICH TRANSPORTATION, SCHOOL AND PARK IMPACT FEES ARE CALCULATED, THE PROCEDURE FOR OBTAINING CREDITS, VARIATIONS FROM THE IMPACT FEE SCHEDULES, EXPLAINING THE PURPOSE OF THE PROJECT LIST, ESTABLISHING AN APPEAL PROCESS AND ADOPTING THE TRANSPORTATION AND PARKS IMPACT FEE SCHEDULES, ADOPTING A NEW CHAPTER 16.70 TO THE PORT ORCHARD MUNICIPAL CODE. Copies of Ordinance No. 023-15 are available for review at the office of the City Clerk of the City of Port Orchard. Upon written request a statement of the full text of the Ordinance will be mailed to any interested person without charge. Thirty days after publication, copies of Ordinance No. 023-15 will be provided at a nominal charge. City of Port Orchard Brandy Rinearson City Clerk Published: November 20, 2015