SEQUIM — The debate over development impact fees to finance city facilities — whether to raise, lower or hold them — has divided the Sequim City Council.
The council discussed Monday the issue destined for consultant master plan and fee studies while economically distressed developers and real estate representatives asked for a break in the fees that go toward streets, water, sewer and parks services.
“I think we’re losing revenues by overcharging,” said Councilman Bill Huizinga, a longtime real estate agent who has been on the council since 2001.
He urged the council to cut development fees in half and “at least try it for a year.”
Councilman Don Hall joined Huizinga in his position.
On the other side of the issue, Mayor Pro Tem Ted Miller, a retired attorney, supports a slight increase in fees.
He compared Sequim with neighboring Port Angeles.
“Port Angeles does not have impact fees and charges less for water and sewer,” he said, adding that Port Angeles building permit fees were also lower than those in Sequim.
Yet Sequim, with a population of about 5,000, had 13 homes built in 2011, and Port Angeles, at about 18,000 in population, built only one more home than Sequim, he said.
Mike McAleer, one of the real estate representatives who testified at the council work session on development fees and funding city capital facilities, said in the mid-2000s that “42 percent of employment was connected to the building trades in Clallam County.
“Now, it is by far the bigger amount of the unemployed,” said McAleer, Clallam County Economic Development Council board past president and a longtime Sequim real estate broker.
Meanwhile, McAleer said, the price of installing a septic system or drilling a well outside the city is down 25 percent.
Terry Peterson, a Sequim and SunLand real estate agent, said he understood that the city was suffering from a lack of tax revenues, but he agreed with Huizinga and Hall, urging that the city fee study look at how lower fees would affect development.
“I believe you will see an increase in building permits and fee revenues,” Peterson said.
He and others pointed out concerns among developers and Realtors that the city’s existing debt burden would be shifted to taxpayers.
Councilwoman Laura Dubois said she wanted to see the results of the city studies and believed that just cutting fees by half was arbitrary.
Mayor Ken Hays agreed.
“I’m not convinced that simply cutting fees is going to make a difference,” Hays said.
Impact fees are charges assessed by local governments against new development projects that attempt to recover the cost incurred by government in providing the public facilities required to serve the new development.
Impact fees are used only to fund facilities — such as roads, schools and parks — directly associated with the new development.
City fees detailed
The city of Sequim collects impact fees for transportation and parks, and general facilities charges for water and sewer services:
■ The transportation impact fee is $2,893 for a single-family dwelling and less for high-density development.
■ The current single-family home water general facilities charge is $5,822.
■ The current single-family home general facilities charge for sewer is $7,800.
■ The parks and recreation impact fee is $1,975 per single-family dwelling.
“If you don’t have impact fees, you are going to have to find the revenue somewhere,” City Public Works Director Paul Haines said.
“They are attached to real costs of the system.”
“Both user rates and [general facilities charge] rates are to be evaluated as part of the current water and sewer master plan updates,” he said.
Those studies are either under way or are about to begin after consultants are hired, he said.
The studies, once completed, will be brought back to the council this fall in time for discussion of fee adjustments as part of the 2013 city budget.
City Manager Steve Burkett said the council will decide if rates and general facilities charges will need to be increased not only for required capital capacity improvements, but additionally for the operation, maintenance and renovation of city systems.
“These decisions will be implemented as a part of the 2013 annual budget decisions,” Burkett said.
“Staff further recommends that the council identify any issues, problems or opportunities for improvement with the current impact fees that would require evaluation by staff and council.”
________Sequim-Dungeness Valley Editor Jeff Chew can be reached at 360-681-2391 or at [email protected]