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City debates increasing traffic fees

MARYSVILLE The Marysville City Council heard preliminary estimates from staff this week that rates for traffic impact fees levied on new commercial and residential developments could triple.
Currently each new single-family residence built in the city pays a variety of mitigation fees for schools, parks and road impacts. The city is recalculating the fees levied for transportation projects in light of the recent annexation of 2,500 acres of land in the Sunnyside and Whiskey Ridge areas to the south of town last December.
Each new single-family home is now charged $3,175 in traffic impact fees; under the new formulation that could rise to anywhere from $7,712 to $9,576 per unit. Those fees are tacked onto the prices of new homes by builders, affecting homebuyers. Similar fees are charged for duplexes, multi-family projects and commercial buildings, with a different formula based on peak-hour trips applied to the latter.
The Council heard the range of options they must consider at a formal public hearing on the zoning and master plan for the newly annexed area scheduled for Monday, April 23, when they will take public comments on the plan and the corresponding traffic impact fees.
The April 16 meeting was a workshop, where Council members hear staff reports and debate amongst themselves, but as a rule do not vote on legislation. There was no clear consensus on the possible fees the city might charge and members looked at several other cities, whose average fees for residential and commercial buildings were higher than Marysvilles.
No one wanted to suggest an actual fee and the Council directed staff to draft legislation to consider at a future meeting. No vote was taken and it was not clear whether the panel would have to act on the matter at the April 23 hearing.
The city used the same formula to calculate the numbers as in past years. A grand total of needed road projects totaling $188 million was divided by the projected new internal car trips (12,935) to arrive at a maximum possible traffic impact fee of $14,550 per unit, explained assistant public works director Kevin Nielsen.
Previously the city calculated the rate based on a $140 million wish list, but roads needed for the new annexations added projects totaling $40 million to that number. Under the former rate, the maximum possible fee was $5,973, and by ordinance that was discounted by 78 percent for commercial projects and 47 percent for residential units, with fees of $1,300 per new peak hour trips for commercial and the $3,175 per residential unit, respectively. According to a report commissioned by engineering consultant Perteet Inc., the same discounted percentages applied to the new totals would result in commercial fees of $3,201 to $3,983 per peak hour trip and residential rates of $7,712 to $9,596.
Those numbers would add to cost of building homes and businesses in town, at a time the city has offered rebates for other mitigation fees to large, big-box retailers such as Costco and Target. The review came after builders complained about a proposed secondary traffic impact fee for developments in the Sunnyside and Whiskey Ridge areas. Projects in those areas would have faced paying much stiffer rates, but with the new plan those would now be spread over projects citywide.
Nielsen summarized the report to the council, noting Perteet sampled several other cities of different sizes, and found that Marysvilles impact fees were much less than peers around Puget Sound. Ten cities were selected, eight in Snohomish County and two in King County; but complicated formulas made three of those (and Snohomish County) difficult to compare, and so they were not considered for the review. The remaining seven cities had an average residential rate of $3,827, about $600 more than the 2006 fee Marysville charged, although Sammamish had a high of $14,706 and Everett charged a flat rate of $900 across the board for single-family, duplexes, multi-family and commercial projects. Lynnwood was not in the peer group but the council discussed that citys rate of $0. Complicating matters was the fact that some cities also levy business and occupation taxes that can fund transportation projects. The peer cities in the study also included Arlington, Bothell, Snohomish, Mukilteo and Issaquah.
There are different mechanisms for traffic improvements, Nielsen told the council. We kind of looked at the whole gamut.
There were very few people at the sparsely attended workshop. Aside from city staff only two city residents (one Sunnyside resident), and one developer were present.
Councilwoman Carmen Rasmussen noted that without the heavy Sammamish toll figured in, the average impact fee would drop to about $2,000, or two thirds of Marysvilles rate; leaving off Everett at the low end would yield an average fee of $2,236, or $1,000 less than the 2006 single family rate of $3,206.75 charged by Marysville. That number was a peak-hour equivalent used to compare Marysville to other cities for study purposes; the actual fee charged per unit is $3,175.
The prospect of raising the impact fees didnt sit well with several members, including councilman Jeff Seibert.
If we keep raising our commercial rate we will stifle out the development thats going on, Seibert said, stressing the need to stay competitive. This time weve bumped up against our neighbors.
The rising costs reflect inflation in materials and labor affecting every sector of construction, but chief administrative officer Mary Swenson said the fees are crucial to building a road grid that gets people where they need to be. The impact fee study is part of the Whiskey Ridge and Sunnyside zoning, which includes a master plans for roads, parks and other municipal features.
You need to make those connections, cause what we have now isnt working, Swenson cautioned. Other cities have luxuries Marysville doesnt, such as Lynnwood, with no fees and no B&O tax. They just have Alderwood Mall.
And that cash cow is all they need, Swenson added.

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