Kent City Council denies steep impact fee hike by Federal Way Public Schools

Rare step stops high jump per multifamily unit for new developments on Kent’s West Hill

The Kent City Council took a rare step when it denied next year’s school impact fee hike request by Federal Way Public Schools.

An unusually high increase request to be charged to developers of new multifamily residential complexes caused the council on Dec. 12 to leave the impact fee at the 2017 rate despite testimony from a Federal Way school finance official to approve the jump. Two Federal Way elementary schools and one middle school are on Kent’s West Hill.

“I think this is the first time the city has not approved such a request,” said Charlene Anderson, city planning manager, in an email.

Impact fees are one-time charges assessed by a local government against a new development project to help pay for new or expanded public facilities (schools, roads, fire services, etc.) created by that development, according to the Municipal Research and Services Center (MRSC), which provides legal and policy guidance to local governments in the state.

School districts are responsible for expending the impact fees but are not authorized to collect the fees, according to the MRSC. As a result, school impact fees require cooperation between school districts and the cities administering the impact fee program. School boards initially approve the fees.

Kent’s council typically signs off on the impact fee requests after school district staff present their annual reports. The council approved requests by Kent, Auburn and Highline schools, none of which had high increases.

But the Federal Way impact fee jump to $20,086 per multifamily unit from $8,386 per unit turned out to be too much for the seven-member council as well as Mayor Suzette Cooke. Kent charges the fees to a developer when a building permit is issued.

Cooke called the request an “astronomically jump” when Federal Way first proposed the hike at an October council meeting.

“I think the council deserves more information and be given a better reason why since it appears on the surface it’s city of Kent’s multifamily units that will bear the brunt of the costs,” Cooke said. “We do have some projects being considered in the pipeline in the Federal Way district on Kent’s West Hill.”

Council members agreed with the mayor as Tina Budell said she was “shocked” by the amount and Council President Bill Boyce said, “it seems like a lot.”

No apartment projects are currently in the application or permit process for Kent’s West Hill, according to city planners. Bellevue-based DevCo Inc., announced plans in 2016 to build a 246-unit apartment complex in Midway, just south of the Lowe’s store along Pacific Highway South, but withdrew that project in September, city planners said. Dick’s Drive-In submitted a building permit for a portion of the property south of Lowe’s.

Sally McLean, chief finance and operations officer for Federal Way Public Schools, spoke in front of the council in October and December to explain the large increase.

“We realize that our multifamily school impact fees – as calculated by the mutually agreed upon formula – are an outlier,” McLean said at the Dec. 12 council meeting. “However, we have real impacts that are generating these fees. These two impacts are the number of students from multifamily housing and the cost of increasing capacity.”

Almost 1.2 students come from each apartment unit built, McLean said. She said the district is more than 1,000 students over capacity at its elementary schools. Three of the most-crowded schools are in Kent – Totem Middle School, Sunnycrest Elementary and Star Lake Elementary.

“With the recent completion of a fourth large multifamily community, we are seeing the same impacts,” McLean said. “We have 800 units and 925 students in those new communities.”

The Federal Way City Council unanimously approved the higher impact fee in early December.

Kent’s council members approved further discussion between city and school district staff to try to determine an “appropriate” impact fee, but no timeline has been set for if or when a new fee might be approved. The council’s Operations Committee on Dec. 5 voted 3-0 to recommend that the full council keep Federal Way’s fees the same in 2018 as in 2017.

McLean said Federal Way schools collected $1.3 million in impact fees over the last three years which did not cover the cost of adding capacity either temporarily or permanently.

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