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ORD 93-05 RESIDENTIAL DEVELOPMENT ACTIVITY ON PUBLIC SCHOOL FACILITIESORDINANCE NO. 93-05 AN ORDINANCE of the City of Bainbridge Island, Washington, relating to the impact of residential development activity on public school facilities; establishing adequacy standards for public school facilities; establishing a school impact fee formula and program; pr viding direction to City officials regarding application of the adequacy standards and impact fees; establishing a schedule for school impact fees; establishing an interest-bearing account for the receipt and expenditure of school impact fees; adding a new Chapter to Title No. 15 of the Bainbridge Island Municipal Code; and repealing Ordinances No. 91-51 and No. 92-01. WHEREAS, by Resolution No. 91-41 adopted on December 30, 1991, the City Council adopted the Bainbridge Island School District No. 303 Interim Capital Facilities Plan dated April, 1991, as an additional element of the City's Comprehensive Plan pursuant to Chapters 35A.63, 36.70A and 82.02 RCW; and WHEREAS, pursuant to Chapter 82.02 RCW, the City Council desires to establish and impose school impact fees on development activity; and WHEREAS, the purpose of this ordinance is to combine previous ordinances addressing school impact fees and exempt low income housing projects from payment of impact fees; and WHEREAS, the City appointed a citizen advisory committee to determine appropriate exemptions; now, therefore THE CITY COUNCIL OF THE CITY OF BAINBRIDGE ISLAND, WASHINGTON, DOES ORDAIN AS FOLLOWS: Section 1. The City Council finds and declares that: A. The boundaries of Bainbridge Island School District No. 303 ("School District") and the City of Bainbridge Island ("City") are coextensive. B. The elementary student population of the School District exceeds the capacity of the elementary school facilities. The high school and middle school student populations in the School District are expected to exceed capacity by the 1995-1996 school year. The student population in the School District is expected to increase through the year 2000. C. A portion of the growth in student population is SCHOOL IMPACT FEE ORDINANCE #93-05 March 5, 1993 attributable to a rapid increase in the number of residences in the City. It is anticipated that an additional 1,000 homes may be built in the City within the next two to four years. The School District cannot complete construction of school facilities quickly enough to provide permanent space for incoming students. As a result, students will have to be housed in portable buildings and/or in overcrowded classrooms until new school sites are obtained and permanent classrooms are constructed. D. Class size is a major factor in the quality of education. E. State matching funds for school construction probably will not provide any significant funds to finance the capital facilities that are needed to accommodate growth. To raise the necessary funds, the voters of the School District will need to approve school bond issues that may increase school debt by more than 100%, using conservative estimates. Property taxes to service this debt will increase proportionately, offset by any increase in assessed valuation. F. Different and additional funding sources beyond those already in existence are needed to address the impact of residential construction on schools. G. The school District has met the criteria for imposition of impact fees under the Growth Management Act, as amended ("Growth Management Act"), which specifically authorizes the City to charge such fees. H. The Growth Management Act allows the City to address the cumulative impacts of residential construction on schools through RCW 58.17.060 and 58.17.110. I. It is the policy of the City, as stated in its Comprehensive Plan, to coordinate the development of land with the provision of public services, including schools. Under Section 16.08.140 of the Municipal Code, the City has an obligation to coordinate the development of land with the availability of public services, such as schools, in order to mitigate the impacts of development on residents, and to consider the cumulative impacts of all development. J. This ordinance implements the Growth Management Act and the City's Comprehensive Plan. It also provides the framework for the collection of school impact fees. K. The formula adopted in this ordinance accounts for existing and expected future public funding sources for schools, including state funding and local property taxes. It assumes that these sources will continue to provide funding at least at SCHOOL IMPACT FEE ORDINANCE #93-05 March 5, 1993 historical levels, and specifically provides a credit for these two funding sources against the calculated impact fee. L. The revenues obtained from application of the formula will be applied against needs that are documented in the School District's Capital Facilities Plan as being necessary to meet projected future growth in student population. Section 2.here is added to Title 15 of the Municipal Code a new chapter e titled "Development Impact on Public School Facilities and Impact Fee Schedule for Public School Facilities" containing the,provisions set out in Sections 3 through 15 of this ordinance. Ordinance No. 91-51 and No. 92-01 are repealed. Section 3. Authority. This ordinance is adopted as an official control to implement appropriate sections of the City's comprehensive plan policies and the Growth Management Act, and is necessary to address identified impacts of residential construction on schools in order to protect the public health, safety and welfare. Section 4. Definitions. As used in this ordinance: A. "Capacity" means the number of students that a school site and its school buildings is designed to accommodate. The capacity standard for the School District is a combination of the designed size of the building, health, safety and program requirements, as established and adopted by the School District in its capital facilities plan, collective bargaining agreements and education principles to insure quality instruction. The capacity standards shall be determined by the School District and shall take into consideration the state capacity standards. B. "Construction cost per student" means the estimated cost of construction of a school in the School District for the grade level of school to be provided, divided by the School District's design capacity for that grade level of school. C. "Grade Level" means the categories into which the School District groups its grades of students, i.e., elementary, middle or junior high school and high school. D. "Public Funds" means funds allocated by the City and the School District. All required public funds shall be paid 50% by the City out of the current expense fund and 50% by the School District. E. "Site cost per student" means the estimated cost of a site in the School District for the grade level of school to be provided, divided by the School District's design capacity for that grade level of school. SCHOOL IMPACT FEE ORDINANCE #93-05 March 5, 1993 F. "Student factor" means the number derived by the City and the School District to describe the number of students of each grade level that are expected to be generated by a single family or multi -family dwelling unit. Student factors shall be based on 1991 census data as updated by occupancy permits issued since the 1991 census, and the School District records of average actual students enrolled per household, per grade level. G. "Temporary facilities cost per student" means the estimated cost of purchasing and siting a temporary facility (portable classroom) in the School District for the grade level of school to be provided, divided by the School District's design capacity for temporary facilities for that grade level of school. Section 5. School Adequacy Standards, Impact Fees - Applicability. A. The adequacy standards and impact fees set out in this ordinance shall apply to all forms of residential construction that are subject to City review and approval and that would result in the creation of new residential building lots or the construction of new dwelling units. B. For the purposes of this Ordinance, the following do not constitute forms of residential construction that would result in the creation of new residential buildings or the construction of new dwelling units for which impact fees are due: 1. Construction of new dwelling units for which impact fees have been imposed by the City prior to January 2, 1992, as mitigation under the State Environmental Policy Act; 2. Construction of new dwelling units for which a complete building permit application was filed with the City prior to January 2, 1992; 3. Construction of new dwelling units for which impact fees have been assessed or paid under voluntary agreements with the City prior to January 2, 1992. 4. Construction of multi -family housing for the exclusive use of seniors (62 years of age or older), including but not limited to nursing homes and retirement centers. If use of the housing is changed in whole or in part, the owner of the property at the date of change in use shall pay impact fees for the entire property in the amount applicable at the date of change in use. The occupancy permit for the housing must state that the housing is for the exclusive use of seniors. When the occupancy permit is issued, the Director of Finance and Administrative Services shall file with the Kitsap County Paae 4 SCHOOL IMPACT FEE ORDINANCE #93-05 March 5, 1993 Auditor a notice of the use restriction and the impact fee requirement on change of use. 5. Remodel or reconstruction of existing dwelling units. 6. Temporary placement shelters, relocation facilities and transitional housing facilities (such as transitional housing facilities for recovering alcoholics, prison and jail work release facilities, and emporary housing for homeless people) that are not exempt from impa t fees under Section 9(A)(3). Section 6. Findings, Recommendations and Decisions Regarding School Capacities. In reviewing applications for approvals related to or resulting in new dwelling units and/or in making a threshold determination pursuant to the State Environmental Policy Act, the City shall review the impacts on schools. The City, in the course of reviewing proposals for residential construction, including subdivisions, short subdivisions, planned unit developments, building permits, or any other proposal not cited herein resulting in an impact on schools, shall consider any documentation of capacity problems provided by the School District as presumptively valid but subject to rebuttal, and shall require or recommend phasing or provision of the needed facilities and sites as appropriate to address the deficiency or deny or condition approval as required by this ordinance and as necessary to remedy the deficiency, or recommend such denial or conditional approval, as provided for in Section 7 of this ordinance. The School District shall annually, by March 1, update its documentation of the adequacy of school facilities. This documentation shall be presumed to apply to any application made in the School District and shall be incorporated into the record of every application without requiring the School District to offer it. Section 7. School Adequacy Standards. A. School facilities shall be deemed to have adequate capacity for purposes of approval of any residential construction proposal if all of the following circumstances exist: 1. The School District has permanent facilities to house the students, by appropriate grade level groupings, projected to result from the residential construction proposal without exceeding School District class size capacity standards. Any facilities that have been closed for more than two years due to lack of demand for the facilities shall not be treated as available for permanent facilities until any needed remodeling can be provided. 2. The School District has the land to accommodate the permanent and portable facilities needed to serve the students SCHOOL IMPACT FEE ORDINANCE #93-05 March 5, 1993 projected to result from the residential construction proposal. 3. The applicant has paid any school mitigation fee required by ordinance, or payment of such fee is scheduled for payment and is adequately secured. B. If the capacity standards established by the School District are or�would be exceeded with the construction of the proposed residences, the school facilities available to serve the residences shall, be deemed inadequate, and the residences shall not be approved unless they are phased to meet the standards, and the impact fee authorized by this ordinance is paid in a manner timely to the needs of the School District, or the needed land or facilities are provided before or concurrently with the construction of the residences. An offer of payment of an applicable impact fee shall not be deemed sufficient if the fee cannot be used in a timely fashion to actually provide needed school facilities, and the payment shall be delayed until such time as it can be used, but shall not be forgiven unless a facility of equal value is provided. C. School adequacy standards should refer to the capital facilities plan. Section 8. Fee Schedule. A. When authorized by this Ordinance, impact fees for the impact of development activity on public school facilities shall be paid in accordance with the City's Fee Resolution and shall be calculated in accordance with Exhibit A attached hereto and incorporated herein. Mobile homes shall be considered single family residences for the purposes of this ordinance. Accessory dwelling units as defined by Section No. 18.06.010 of the Bainbridge Island Municipal Code and duplexes shall be considered multi -family dwellings for the purpose of this Ordinance. B. When the City approves residential construction on the condition that the applicant provide a school facility or site that is acceptable to the School District, the applicant shall be entitled to a credit against impact fees, calculated in accordance with subsection (A) above, in the amount of the actual cost of providing the school facility or site. Upon approval of the residential construction, the applicant shall file with the City and supply to the school district an estimate of the cost of the school facility or site. Upon transfer of the site to the school district and/or construction of the school facility, the applicant shall file with the City and provide to the school district a statement of costs, together with any supporting documentation that is requested by the City and the school district. The cost statement and documentation shall be reviewed by the School Paste 6 SCHOOL IMPACT FEE ORDINANCE #93-05 March 5, 1993 District and the City after transfer and/or construction to assure an accurate credit amount. The City and the school district shall determine the actual cost of the school facility or site for purposes of determining the amount of the credit. If the actual cost as determined by the City and the school district is less than the impact fee that would have been imposed under subsection (A) above, the applicant shall pay the difference as an impact fee. Section 9. Exemptions. A. No impact fees shall be imposed for the following: 1. Low-income housing projects that are constructed by public housing agencies or private non-profit housing developers. 2. Low-income residential units, rented or purchased, that are dedicated and constructed by private developers. 3. Temporary placement shelters, relocation facilities and transitional housing facilities (such as transitional housing facilities for recovering alcoholics, prison or jail work release facilities, and temporary housing for homeless persons), that in the determination of the Director of Planning and Community Development have the potential for accommodating children who will attend public schools on a consistent basis. The decision of the Director may be appealed pursuant to this ordinance. B. For purposes of this subsection, a low-income housing project unit or a low-income residential rental unit is one that has a maximum rent and a maximum income level for tenants equal to or less that 50% of the average of the median income, adjusted for family size, between the Seattle Metropolitan Statistical Area and the Bremerton Metropolitan Statistical Area as of the date of the application for construction of the unit. A low-income residential purchased unit is one that has a sales price of $130,000 or less for single family houses, and $95,000 or less for multi -family units. These maximum sale prices shall be adjusted by the Seattle CPI -U consumer price index each year, with 1992 being the base year. The purchaser's family income cannot exceed 80% of the average median income, adjusted for family size, between the Seattle Metropolitan Statistical Area and the Bremerton Metropolitan Statistical Area as of the date of application for construction of the house or unit. C. Impact fees for the projects and units exempted by this section shall be paid from Public Funds. D. The Department of Planning and Community Development shall review requests for exemptions from impact fees under subsection (A)(1) of this section pursuant to criteria and procedures adopted by administrative rule, and shall advise the developer in writing of the granting or denial of the request. In Page 7 SCHOOL IMPACT FEE ORDINANCE #93-05 March 5, 1993 addition, the Department shall notify the school district of all applications for exemptions when they are received and shall notify the school district when such requests are granted or denied. E. When a low-income purchased unit is sold or rented to a person who does not qualify as a low-income purchaser or tenant, an amount equal to the impact fee on the date of the sale or rental shall be paid by the seller or the property owner to the City. F. When a low-income purchased unit has received a certificate of, occupancy, the Director of Finance and Administrative Services shall record a notice of the exemption and the income qualification requirements for such unit with the Kitsap County Auditor. Section 10. Appeals; Adjustments; Payment Under Protest. A. An applicant for residential construction may provide studies and data to demonstrate that any particular factor used by the School District may not be appropriately applied to the residential construction proposal. The School District's data shall be presumed valid unless clearly demonstrated to be otherwise by the applicant. B. Any appeal of school adequacy determinations or fee amounts shall follow the appeal process for the underlying permit or approval and shall not be subject to a separate appeal process. Where no other administrative appeal process is available, an appeal may be taken to the Hearing Examiner using the appeal procedures for variances. C. Any error in the formula identified as a result of an appeal should be referred to the City Council for possible modification of the fees and/or impact fee formula after notice to and comment from the School District. D. Impact fees may be paid under protest. If an impact fee is protested, the City shall make construction pursuant to the issuance of a building permit conditional upon final resolution of the protest, if failure to collect the fee payment would otherwise require a denial or deferral of the project to meet School District adequacy standard requirements. Section 11. Payment of Fees. A. Impact fees shall be collected as follows: 1. For subdivisions, the full fee shall be assessed at preliminary approval, and 50% of the assessed fee shall be paid at final approval. The balance of the assessed fee shall be allocated to the lots in the subdivision and shall be paid SCHOOL IMPACT FEE ORDINANCE #93-05 March 5, 1993 upon issuance of building permits. 2. For planned unit developments, the full fee shall be assessed at preliminary or final approval, whichever comes first under current ordinance, and 50% of the assessed fee shall be paid at final approval. The balance of the assessed fee shall be allocated to the dwelling units in the project and shall be paid upon issuance of building permits. 3. 1'or developments that are completed in phases, 50% of the fee,attributable to each phase shall be assessed and paid at final approval of each phase. The balance of the assessed fee shall be allocated to the dwelling units in the project and shall be paid upon issuance of building permits. 4. For residential construction on existing lots or parcels and all other residential construction not covered by Subsections 1, 2, and 3 above, the full fee shall be assessed and paid upon issuance of building permits. B. Following payment of 50% of the assessed fee, the Director of Finance and Administrative Services shall file with the Kitsap County Auditor a notice of the amount of the assessed fee, the amount of the fee already paid, and the amount of the fee to be paid upon issuance of building permits. C. Arrangement may be made for later payment, with the approval of the School District, only if the School District determines that it will be unable to use or will not need the payment until a later time; provided, that sufficient security shall be provided to assure payment. Section 12. Impact Fee Account; Reporting. A. There is created and established in the office of the Director of Finance and Administrative Services a special interest- bearing account for the receipt and payment of impact fees imposed pursuant to this Ordinance. All interest earned through investment of funds in the account shall be retained in the account and expended in the same manner as impact fees. B. The Director of Finance and Administrative Services shall prepare an annual report for the account showing the source and amount of funds received and earned and the school facilities that were financed in whole or in part by impact fees. C. Commencing on March 1 of each year, the Director of Finance and Administrative Services, in consultation with the School District Business Manager or other School District designee, shall review information necessary to update the actual amounts - Page 9 SCHOOL IMPACT FEE ORDINANCE #93-05 March 5, 1993 associated with the six Impact Fee Components utilized in the calculation under the formula set out in Exhibit A, and shall, within 45 days, forward a recommended revised fee schedule, as necessary, to the City Council. Section 13. Expenditure. A. The School District shall expend the impact fees for facilities approved by the school capital facilities element of the City's Comprehensive Plan. B. The School District shall expend or encumber impact fees within six years of receipt by the City; provided, that the School District may expend or encumber impact fees more than six years after receipt where the City determines, pursuant to written finding entered within the six-year period, and based on evidence provided by the School District, that there is an extraordinary and compelling reason for the impact fees to be expended or encumbered more than six years after receipt. Section 14. Refunds. A. The current owner of property for which an impact fee has been paid may receive a refund of the impact fee where the development activity has not occurred within 6 years of payment; or where the fee has not been expended or encumbered within the six- year period or extension thereof provided for in Section 13 and there has been no impact on School District facilities. Impact fees shall be considered encumbered on a first in, first out basis. B. The City shall notify potential claimants of their right to file an application for a refund and the deadline for filing such an application. The notices shall be sent by first class mail deposited with the United State Postal Service at the addresses shown on the records of the County Auditor. The request for a refund must be filed with the City Clerk in writing within one year of the date on which the right to a refund arises or the postmark date of the notice, whichever is later. C. Any impact fees that are not expended or encumbered within the six-year period or extension thereof, and for which no application for a refund has been filed within the one-year period, shall be retained and expended in conformance with the school capital facilities element of the City's Comprehensive Plan. D. Refunds of impact fees shall include interest, the rate of which shall be the average rate received by the City on funds in the impact fee account during the deposit of the impact fees. Section 15. This ordinance shall take effect and be in force Page 10 SCHOOL IMPACT FEE ORDINANCE #93-05 March 5, 1993 five days from and after its passage, approval, publication and posting as required by law. PASSED by the City Council this 4th day of March , 1993. APPROVED by the Mayor this day of 1993. Sam J. Granato, Mayor ATTEST/AUTHENTICATE: APPROVED AS TO FORM: Rod P. Kaseguma, City Attorney FILED WITH THE CITY CLERK: 3-4-93 PASSED BY THE CITY COUNCIL: 3-4-93 PUBLISHED: 3-10-93 POSTED: 3-10-93 EFFECTIVE DATE: 3-15-93 ORDINANCE NO.: 93-05 ref: c:\ord\schoo'_7.imp SCHOOL IMPACT FEE ORDINANCE #93-05 March 5, 1993 I EXHIBIT A SAMPLE CALCULATION OF SCHOOL IMPACT FEES I. Factors A. School impact fees are based on the following factors: 1. Cost per seat by grade: K-5, 6-8, 9-12 2. Housing type: Single-family or multi -family 3. Student enrollment factor by housing type and by grade 4. Credit for future taxes for existing school debt II. Cost Per Seat by Grade A. The cost per seat by grade is based on the following factors: 1. Site cost 2. Permanent facility cost 3. Temporary facility cost 4. State matching funds 5. Direct contributions 6. Design capacity per facility (per School District data) K - 5 $12,995 6 - 8 $18,825 9 - 12 $19,465 B. The average cost of a new seat for K - 12 is $17,031.00 cab/1723R 12/30/91 I - 1 - III. Student Enrollment Factor by Housina TvDe by Grade Single Family Multi Family Total Residences 5,913 1,048 Less: Vacancies 447 66 Occupied Residences 5,466 982 School Aged Children (Per Winslow Annexation Census of January, 1991) Student Enrollment as of January, 1991 K - 5 48.80 6 - 8 23.70 9 - 12 27.5% (Per School District data) Student Enrollment Factor by Grade (K - 5) 1,356 divided by 5,466 = .2501 (6 - 8) 664 divided by 5,466 = .1215 (9 - 12) 770 divided by 5,466 = .1409 3,078 183 2,801 167 1,367 81 664 40 770 46 81 divided by 982 = .0825 40 divided by 982 = .0407 46 divided by 982 = .0468 Student enrollment data combined with census data demonstrates that as of January, 1991, there were 0.5125 students enrolled in public school per single-family dwelling unit and 0.17 students enrolled in public school per multi -family dwelling unit. Therefore, on average, two single family swelling units produce one student and six multi -family dwelling units produce one student. cab/1723R 12/30/91 I - 2 - IV. School Impact Fee Formula Average Cost for a Seat Student Enrollment Factor Seat Cost Multiplied by Student Enrollment Factor Credit for Future Taxes for Existing School Debt SUB TOTAL: 32/68 Share Between Housing Type and Community TOTAL ROUNDED•OFF: - 3 - cab/1723R 12/30/91 Single Family $17,031 0.5125 $ 8,728 ($1,726) $ 7,Q02 $ 2,240 $ 2,240 Multi Familv $17,031 0.1700 $ 2,8.95 ($ 732) $ 2,163 $ 692 $ 700 SCHOOL IMPACT FEE FORMULA I. Impact Fee Components A. Site Cost B. Permanent Facility Cost C. Temporary Facility -Cost D. Credit for State Maich ng Funds E. Credit for Future Tax on Existing School Debt F. Credit for Direct Contributions II. Site Cost A. "Site Cost Per Student" means the estimated cost of a site in the School District for the grade level of school to be provided, divided by the School District's` -design capacity for that grade level of school. Site cost shall include purchase price of the land, applicable taxes, fees, permits, and site preparation costs. Site cost per school divided by capacity = site cost per student III. Temporary Facility Cost A. "Temporary Facilities Cost Per Student" means the estimated cost of purchasing, equipping, furnishing and siting a temporary facility (portable classroom) in the School District for the grade level of school to be provided, divided by the School District's design capacity for temporary facilities for that grade level of school. Temporary facility cost shall include: purchase price of temporary facilities, additional cost necessary to transport the temporary facility to the site, furnishings and equipment, applicable taxes, fees, and permits, and other costs associated with the installation of temporary facilities for occupancy and use. Temporary facility cost divided by capacity = temporary facility cost per student IV. Permanent Facility Cost A. "Permanent Facility Cost Per Student" means the estimated cost of construction ..of a school in the School District for the grade.level of school to be provided, divided by the School District'.s design_ capacity for that grade level of school. Permanent facility cost shall include: construction - 1 - lh/cab/1T25R 12/24/91 costs, furnishings and equipment, applicable taxes, fees, h permits, and other necessary costs associated with scool construction. 1. Credit for State matching funds. a. When state construction matching funds are based on -a percentage of local public funding and impact fee revenues, and when such funds are assured to the School District, they shall be computed as a reduction in the permanent facilities cost calculation. Permanent facility cost less State matching funds divided by capacity = permanent facility cost per student V. Total Per Student Cost Elementary site cost plus elementary temporary facility cost plus elementary permanent facility cost = elementary cost per student Middle school site cost plus middle school temporary facility cost plus middle school permanent facility cost = middle school cost per student High school site cost plus high school temporary facility cost plus high school permanent facility cost = high school cost pet student VI. Cost Per Unit A. "Student Factor" means the number of students of each grade level that are expected to be generated by a dwelling unit, single-family or multi -family. Student factors shall be calculated based on the number of occupied residences, single and multi -family, established in the 1991 Winslow Census, and the number of students enrolled in the School District, by grade group and housing type, in October, 1991. Student factor numbers shall be reviewed and revised annually, based on a determination of occupied residences made by the City, and student enrollment numbers from the School District on a comparable date. Elementary cost per student times elementary student factor = elementary cost per unit Middle school cost per student times middle school. factor middle school cost per unit - 2 - Lh/cab/1725R 12/26/91 High school cost per student times high school factor = high school cost per unit Elementary cost per unit plus middle school cost per unit plus high school cost per unit = fee per unit. VII. Credit for Future Tax on Existing School Debt Present value of School District non -growth school bond debt for the tax year in which the proposed project will be placed on the tax rolls as a completed product, times the project of (current average assessed valuation per single or multi -family unit, as applicable) divided by current assessed valuation for school district bond tax collection = per residence credit for future tax payment A. Credit: direct contributions. 1. The value of the direct contributions of sites, facilities or other agreed upon services shall be credited as payment toward the fee obligations of the contributor. Total fee obligation less value of contributions = net fee obligation VIII. Summary Per unit fee obligation less tax credit less direct contribution credit times 35.7% = full fee 3 lh/cab/1725R 12/24/41