Hurry up and wait.
That was the mixed message to the Bainbridge Island City Council Tuesday as council members considered adopting new fees that would make developers pay, in part, for transportation improvements needed to handle growth.
The idea of hitting developers in the wallet to help avoid future traffic clogs caused by their new projects — via “transportation impact fees” that can accordion with the size of the development — is a legacy of the state’s Growth Management Act, the sweeping law passed more than two decades ago to prevent sprawling growth.
Impact fees can be levied to pay for everything from new roads to parks to schools, and Bainbridge endorsed the idea of traffic impact fees back in 2004 with the adoption of its transportation plan.
At this week’s council meeting, city officials heard from both ends of the spectrum; from residents who want the new fees put in place as soon as possible, to those who worry that launching the new fees in October as planned will hit developers who already have approved site plans but are awaiting building permits from the city.
Councilwoman Sarah Blossom was concerned about the size of some of the fees.
The fees range from $1,012 for the development of a new single apartment unit to $5,036 for a 1,000-square-foot daycare building.
The fees are assessed on projects ranging from new homes and stores, to new public and private schools, clinics and parks.
Blossom noted the high fee for someone wanting to develop a new convenience market ($33,367 per 1,000 square feet of space) or a new coffee shop ($37,252 per 1,000 square feet of space).
Too expensive to build?
The costs were surprising, she said.
“I’m looking at this and I’m saying to myself, ‘I’m never going to open a coffee shop. I’m never going to open a convenience market,’” Blossom said. “That’s a lot of money.”
Blossom also said those costs could impede another goal of the city: to attract local merchants rather than national retailers or chain stores.
“On this island, we talk about how we want the Mom-and-Pops, we don’t want the chains.
“Well, who has the money to come in and start up and pay $37,000 … to start a coffee shop? It’s not your Mom-and-Pop,” she said.
City officials have also suggested an October start on collecting the fees.
Fees would be due at the time a developer is granted a building permit.
But Blossom also said it can take months to get a permit approved, and some builders may get hit with the new fees because of the pace of permit approvals at city hall.
Blossom asked if that should really be the case.
“If you’ve applied months ago — and because the city can be very, very slow — so through no fault of your own, you now have to pay a traffic impact fee?”
When told yes, Blossom shook her head no and then looked skyward.
Developing concerns
Some in the development community also share those concerns.
Dennis Reynolds, a Bainbridge attorney who represents Visconsi, the Ohio-based developer that is building a new shopping center on High School Road, said the new fees should take effect Sept. 1, 2016, and not Oct. 1, 2015.
Visconsi’s new shopping development is being done in pieces, and building permits have already been obtained — and work is underway — on a new bank and pharmacy.
But with other building permits yet to come, Reynolds said the developer would now be on the hook to pay new fees it never anticipated when it got the city’s OK for the development.
“Visconsi is similar to other developers who came in and developed without anticipating an impact fee ordinance. And now, as a phased development, is in the middle of it,” Reynolds said.
Reynolds offered another suggestion that would help builders who already have the city’s approval for their projects.
“The other way is to just bite the bullet,” Reynolds said, and in fairness, exempt previously approved, phased projects from the new fees.
Visconsi officials were planning to meet with the city this week, he added, to discuss credits that could be applied to their project that could help reduce the size of any traffic impact fees.
The developer is building an expensive trail system through the shopping center property as part of its city-approved plan, Reynolds noted.
Developers already cover the costs of streets, sidewalks and other transportation improvements that are made within the boundaries of their projects. Traffic impact fees are used to help finance road expansions and other transportation infrastructure improvements that are needed outside the property lines of new development but prompted by the new traffic that is generated by the development.
At Tuesday’s meeting, others suggested that the new fee structure was nearly good enough, as-is, to adopt.
Ross Hathaway, president of Squeaky Wheels, a bicycle advocacy organization, encouraged the council to speedily put the fees in place.
“We believe growth should pay for growth, and keeping up with our infrastructure is really important,” Hathaway said. “We have to pay for it somehow.”
“I know it’s going to be rough on people who are coming in for building permits,” he added.
“I know it won’t be perfect, and we’ll struggle through the years to make it more so over time,” Hathaway said.
Not nearly enough
Former city councilwoman Debbi Lester said the city should take a longer look at what transportation projects should be funded by the fees.
Under the city’s current scenario, the new fees are based on the $10.1 million that’s needed for roadway projects, and the $8.2 million needed for trails and other non-motorized projects, over the next six years.
Lester said the city should look out over the next 20 years for potential projects.
The city should also increase it’s “growth share,” she said, so developers are picking up more of the overall cost of transportation improvements.
The city’s current proposal has traffic fees covering 19.8 percent of the cost for road projects, she noted, and 12.2 percent for non-motorized improvements.
Poulsbo’s growth share is 51 percent, while it’s 42.3 percent in Port Orchard and 97 percent in Shoreline.
Victor Salemann of Transportation Solutions, Inc., the Redmond-based consultant firm that prepared the city’s impact fee rate study, said their calculation for traffic growth was based on regional growth forecasts and the limits of city zoning.
And he also said the city would have to justify the rate schedule it would eventually adopt.
Poulsbo has significant and very expensive road projects planned, Salemann said, and Poulsbo’s calculation of fees was “not as supportable” as Bainbridge Island’s.
Traffic fees in Poulsbo are geared toward filling an identified funding shortfall for transportation projects, and not based on road capacity improvements, he said.
Why not pay for all?
Councilman Val Tollefson asked why the city was considering charging fees based on a developer’s proportional share of the cost of improvements.
“Why shouldn’t they pay for the costs, period?” Tollefson asked.
The limits are set in the law, Salemann said.
“That language is in the Growth Management Act. They pay their proportionate share of the capacity they’re using,” he explained.
“You can’t build a seven-lane road and growth is only going to use two lanes and say, ‘Oh, we’ve decided we wanted a seven-lane road, so you have to pay for all seven,’” Salemann said.
Fees must be proportional and reasonably related to the impacts caused by the development.
“We have to balance how much of the transportation system they are going to use. That’s what you can charge them,” he said. “We can’t charge them everything.”
Fees based on study
As part of the fee study, the consultant created a forecast for the year 2035 and island road demand, based on the expectation of 2,723 new homes being built on Bainbridge over the next two decades, plus another 2,808 jobs being added to the island economy.
The 20-year figures for traffic were then boiled down to a six-year forecast that would fit with the city’s six-year capital improvement plan for upcoming transportation projects.
Non-motorized projects in the city’s six-year plan — which include portions of the Sound to Olympic Trail, improvements on Miller, Eagle Harbor and Bucklin Hill roads — total $8.2 million.
The city’s consultant noted that $2.2 million in impact fees could be collected to help pay that cost.
Road projects that could be funded with the new fees total more than $10 million, including reconstruction efforts on Fort Ward Hill, Valley Road, Wing Point Way, Wardwell Road, Wyatt Way and Sportsman Club and New Brooklyn roads. The consultant estimated that $3.9 million of the costs could be covered by impact fees.
