City Council likely to revise transportation impact fees for developers

City-of-MLT-logoThe Mountlake Terrace City Council likely will be revising the discount on impact fees paid by developers for transportation improvements to serve their developments.

During Tuesday’s meeting, there was a consensus among Councilmembers that the City needs to reduce the current 50 percent discount that developers receive. Under state law, development impacts cannot be entirely born by the property owner or builder. Local governments must pay a share, recognizing that improvements needed for development will also benefit the public at large, that growth also has community benefits and that growth should be reasonably accommodated.

A 25 percent discount was enacted in 2007 to provide development incentives during a time when market conditions proved difficult to entice development under full impact fee rates. In 2011, the discount was raised to 50 percent for a three-year period and that discount was renewed in 2014.

The City’s current 50 percent discount fee will revert back to a 25 percent discount on Oct. 1, 2017. Councilmembers were inclined not to wait until 2017 to make changes. The Council is scheduled to hear additional information on discount rates of 25, 30 and 35 percent at a Sept. 16 work session. The Council then could take action, following the continuation of a Public Hearing on the issue, at its Oct. 5 meeting.

The discount fee issue was raised by Councilmember Doug McCardle, who had concerns that the City doesn’t have enough money to fund improvements included on the City’s six-year transportation project list. Councilmembers Kyoko Matsumoto Wright, Bryan Wahl and Rick Ryan also said they were concerned about the City’s ability to fund transportation/street projects.

The Growth Management Act requires that transportation improvements needed to retain adopted levels of service (LOS) be in place at the time of development or within six years of actual development if conservative sources of revenue have been identified to pay for the improvement within that time frame.

Local governments have to incorporate needed infrastructure for concurrency requirements into its budgetary process. If funding is not available to meet concurrency requirements, local government must lower adopted LOS standards to reflect the level of service resulting from a proposed development or it must deny the development proposal.

Councilmembers wanted to avoid having to turn down projects or accept lower LOS in the City.

“I don’t think we can leave it (discount rate) at status quo,” McCardle said. “We need to do something so we can ultimately maintain current levels of service and have development in the City.”

McCardle, Ryan and Matsumoto Wright all floated the idea of a 25 percent discount rate.

The potential impact on developers also concerned the Council.

“How are we going to get more money and still get developers into the City,” Matsumoto Wright asked.

“You have good incentives to bring contractors and projects to our City,” Ryan said. “Yet do we have enough money so we can guarantee safe streets, safe intersections, safe sidewalks and we can afford it?”

Wahl noted that any increase in the amount developers pay is not paid by the developers but is instead passed on to future Mountlake Terrace residents. Wahl also was concerned about the message being sent to developers.

“The economy is improving,” he said. “I’m not convinced we’re there yet.”

Developers need to be kept informed about the possible changes, Wahl added. “They need to know what kind of additional dollars they will be paying, depending on what kind of discount we end up with.”

Additional figures on the impact of the different discount rates are scheduled to be presented to the Council at the Sept. 16 work session.

“Let’s try and find that sweet spot,” Wahl said.

Mountlake Terrace’s transportation impacts fees are among the lowest in South Snohomish County with Edmonds the only other city with a lower rate, according to City staff. Lynnwood, Mill Creek, Mukilteo and unincorporated Snohomish County all have higher rates.

In other action, the Council unanimously adopted the Ballinger Park Master Plan. Recreation and Parks Director Jeff Betz noted that the plan is a pathway for the City follow in the development of the park.

“This is a long term plan. It would be phased in,”: he said. “It’s just a plan and a way to move forward.”

The plan will help the City as it looks for state and federal grants and even potentially private partners, Betz added.

The Council also heard a presentation from representatives the Historic Flight Foundation Board about the proposed Historic Aviation Campus Project at Paine Field. The goal is to create a historic aviation campus in one location at Paine Field and make the campus a tourist destination to benefit not only Paine Field but the surrounding communities. The representatives were seeking support from the Council in the form of a letter, which Councilmembers plans to consider at a subsequent meeting.

Council President Jerry Smith and Councilmember Seaun Richards were excused from Tuesday’s meeting.

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