Increasing Pierce County’s Park Impact Fee

You may have seen recent news coverage of my bill to dramatically increase Pierce County’s Park Impact Fee. It will be heard in committee on October 3rd with a final before the Council on a date yet to be determined. Given the large increase, a lot of folks have asked what this is all about.

Here’s PCTV’s recent story on the subject.

What is an impact fee?

The easiest explanation is that it’s a charge to new development to cover part of the cost to government services generated by growth. The State Legislature allowed local governments to charge them under the Growth Management Act. While there are a ton of details that must be met, here are the basics:

(3) The impact fees:

(a) Shall only be imposed for system improvements that are reasonably related to the new development;

(b) Shall not exceed a proportionate share of the costs of system improvements that are reasonably related to the new development; and

(c) Shall be used for system improvements that will reasonably benefit the new development.

In plain English, the impact is calculated by figuring out the cost to serve new development on a per unit basis. You can see the details of the calculation for this proposal here.

Impact fees can be charged on a number of different services but you’ll typically see them for schools, roads, and parks. Sometimes they are confused with connection fees that water and sewer utilities charge because they’re also up front costs intended to pay for the cost of construction to the utility.

What’s the new fee?

The proposal is to increase the fee from $385 to $2,552 phased in increments over the next year and a half. I actually think the phasing is ridiculous since this a one-time fee, not something that would cause rate shock. But that’s the recommendation from staff.

Here is the full recommendation from the work group.

That’s a big increase.

It is. But that’s because the fee was set artificially low after they were first authorized two decades ago, and haven’t budged ever since save for adjustments for inflation. As a result, they don’t reflect in any way the cost of development’s impact.

Unfortunately, that also means we’ve had two decades of development in unincorporated Pierce County without benefit of a meaningful park impact fee.

How does our park system compare to others?

Poorly.

But what if I don’t like taxes?

Then you’re going to love impact fees. The truth is that the costs we’re talking about don’t go away if we didn’t charge for them. In economics these impacts are called “externalities.” Externalities are costs of a market decision that are socialized. Common examples are the costs pollution, traffic, or health hazards caused by consumption of a product that the rest of us bear. If the true cost of a product isn’t factored in, then the market can’t do its job.

There are really three ways to deal with an externality:

1. Ignore the costs and deal with the repercussions. That’s essentially been Pierce County’s approach for decades and also the reason we have far fewer park resources per capita than our peers.

2. Tax everyone equally and subsidize the cost with public funds. This has proven politically unpopular (see #1) and economists would argue that it distorts the market making new construction comparatively less expensive than existing housing stock.

3. Internalize the cost of new construction through an impact fee so the market reflects the true and full cost, using those funds to build park resources demanded by new construction and keeping service levels up to today’s standard.

In other words, failing to support impact fees is a tax on everyone to subsidize new growth through higher taxes or an erosion of services. That’s why I sponsored the bill.

How would the proposal compare to other jurisdictions?

It would put Pierce County in the middle of the pack.

What will it pay for?

New parks, trails, ball fields, capital improvements to extend the use of existing facilities (like turf, lights, etc).

Who is supporting it?

A large coalition of environment, trails, and park advocates as well as the Realtor Assocation.

What about the peninsulas?

Friend, of course I thought of you. For those that aren’t aware, the unincorporated portions of my district on the peninsulas created Metropolitan Park Districts years ago and have taken over park services from the County in those areas.

Key Pen Parks (obviously serving the Key Peninsula) and PenMet Parks (serving the Gig Harbor Peninsula outside the City) will receive 100% of the park impact dollars generated by new development outside the City on our side of the bridge.

I won’t let you down (cue music interlude).

What about schools?

Again, I hear you peninsula people (same for you Bethel). I know this has been a difficult subject in rapidly growing areas that have seen school construction bonds fail at least in part because growth isn’t helping pay enough.

The County Council has also had a very low cap placed on school impact fees and my next project is to work out some of the issues surrounding them in order to lift that cap. This would necessarily involve planning and discussions with the school district and City since their boundaries cross our respective jurisdictions, as well as the Master Builders Association.

How can we give input?

You can see the bill in its entirety and comment directly here.

There will be a public hearing in Community Development Committee which I chair. That will be on October 3rd at 1:30 in the Council Chambers on the 10th floor at the County City Building.

Of course, as always, you are free to call me directly at (253) 798–7776.