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Resolution No. 2023-07 Relating to a fee payment for affordable housing development projects - Approved 101023Page 1 of 4 RESOLUTION NO. 2023-07 A RESOLUTION of the City of Bainbridge Island, Washington, to utilize the City’s Affordable Housing Fund to pay a portion of certain development related fees for residential development projects that will provide affordable housing units. WHEREAS, RCW 82.02.020 authorizes the collection of reasonable fees to cover the costs to the City for such activities; and WHEREAS, the City of Bainbridge Island updated the Fee Schedule in March, 2022, with approval of Resolution No. 2022-06, reflecting City Council actions and the actual cost to the City of various services in accordance with state law, and the purpose of planning fees is to cover the costs identified; and WHEREAS, all proposed residential development requires land use permit approval such as a site plan and design review or preliminary long subdivision prior to construction; and WHEREAS, through its discussion of Resolution No. 2022-06, the City Council subsequently expressed concern over the cost of building and planning fees for affordable housing projects and proposed further work on the matter; and WHEREAS, Section 2 of Resolution No. 2022-06 indicated that the City Manager would bring back to the City Council a proposed policy for certain building and planning fees related to affordable housing projects; and WHEREAS, reducing permit fees for affordable housing projects is identified as a “Quick Win” recommendation in 2018 Affordable Housing Task Force Final Report and Action 1.2 in the 2023 Housing Action Plan; and WHEREAS, Bainbridge Island Municipal Code Section 18.21.020 requires affordable units be designated via covenant for 50 years for rentals and 99 years for home ownership units; and WHEREAS, the City desires to utilize the Affordable Housing Fund to pay a portion of required development application fees for development projects that include designated affordable housing; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BAINBRIDGE ISLAND, WASHINGTON, DOES RESOLVE AS FOLLOWS: Section 1. The building and planning section of the City’s Fee Schedule are hereby amended as shown in attached Exhibit A, which is hereby adopted and incorporated into this resolution by reference. Page 2 of 4 Section 3. Severability. If any one or more sections, subsections, or sentences of this Resolution are held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this Resolution and the same shall remain in full force and effect. Section 4. This Resolution shall take effect and be in force five (5) days from its passage and publication as required law. PASSED by the City Council this 10th day of October, 2023. APPROVED by the Mayor this 10th day of October, 2023. Brenda Fantroy-Johnson, Mayor ATTEST/AUTHENTICATE: Christine Brown, MMC, City Clerk FILED WITH THE CITY CLERK: August 4, 2023 PASSED BY THE CITY COUNCIL: October 10, 2023 RESOLUTION NO. 2023-07 Page 3 of 4 EXHIBIT A City of Bainbridge Island Fee Schedule 9. BUILDING AND PLANNING FEES The charges in this section are in addition to any applicable charges in other sections. All fees and charges shall be paid before an application is deemed complete, and issuance of a permit or approval may be withheld until all fees and charges have been paid. Offset in applicable development related fees for affordable housing developments Land Use Permits: An applicant with a project that integrates designated affordable housing units (in compliance with BIMC 18.21.020) as described below may request that the City’s Affordable Housing Fund (AHF) pay a portion of the fee(s) for applicable land use permits, e.g. Site Plan and Design Review, Long Subdivision, and/or Conditional Use Permit. For projects that will provide affordable units to those income-qualified households at or below 80% AMI (low income of below) • Providing between 25-50% designated affordable housing units: eligible for AHF monies for 10% of land use permit fee(s).* • Providing between 51-75% designated affordable housing units: eligible for AHF monies for 25% of land use permit fee(s).* • Providing between 76-99% designated affordable housing units: eligible for AHF monies for 50% of land use permit fee(s).* • Providing 100% designated affordable housing units: eligible for AHF monies for 100% of land use permit fee(s). * These tiers of land use permit fee reduction not be available to public agencies or for-profit developers. Only private, nonprofit affordable housing developers would be eligible for the lower three tiers of fee reduction. Building Permit and Utility Fees (see Section 11): A private, nonprofit housing development applicant with a project that is building 4 or more units that are 100% designated affordable housing units at or below 80% AMI (in compliance with BIMC 18.21.020) is eligible for a City fee contribution up to $30,000 towards building permit and utility fees. An applicant can submit a request(s) for assistance from the AHF to the Director of Planning and Community Development. The request will be reviewed and approved by the City Manager. See BIMC Chapter 18.21 and 18.36.030 for specifics on affordable housing income levels. Page 4 of 4 Project changes before permit issuance Whenever an application that has received assistance from the AHF is changed during development review in a way that decreases the number of affordable units or the level of affordability on which the assistance was based, the amount of the AHF assistance shall be recalculated and the applicant shall be required to pay the difference, if any, between the assistance originally granted and the assistance for which the revised project would have been eligible. This amount shall be paid to the city by the applicant prior to issuance of the permit for which the assistance was received. Project changes after initial permit issuance BIMC 18.21.020.C requires that owners of property on which affordable housing will be built must provide the city with a duly executed covenant running with the land, binding all the assigns, heirs, and successors of the owner of the affected parcels, in a form approved by the city attorney, identifying the affordable units or parcels and acknowledging the owner’s obligations regarding affordability, prior to final approval of any permit. Whenever a project that has received an initial permit utilizing AHF assistance is subsequently changed to decrease the affordable units or the level of affordability on which the AHF assistance was based, the amount of the AHF assistance shall be recalculated and the applicant for any subsequent permit or any amendment of the covenant shall be required to pay the difference, if any, between the assistance originally granted and the assistance for which the revised project would have been eligible. This amount shall be paid to the city prior to the issuance of any subsequent permit and prior to any city approval of amendment to the covenant required by BIMC 18.21.020.C. Withdrawal of application Whenever an application that has received assistance from the AHF is withdrawn prior to issuance of the permit, any allowable refund shall, after payment of permit processing costs incurred by the city, be applied first to reimburse the AHF for the assistance provided with the application fee. Once the city’s permit processing costs are paid and the AHF is fully reimbursed, any refund amount remaining shall be returned to the applicant.