City Council Workshops

0:00 Thank you so very much. Good afternoon. Welcome to Vancouver City Council. Today is Monday, September 14th, 2026. And we're going to start off with development fee updates. City Manager?

0:27 Thank you, Mayor. This is the first of three workshops that we have scheduled for the council this afternoon, kicking off with some update on where we're sitting with development fees and then moving into a discussion about doing some cleanup and amendments to the Municipal Parking Code and finally an update on where we're heading with our board and commission recruitments for the fall. And so first up, we have Chad Eichen, Steve Wall, and Patrick Quinton. Thank you very much, City Manager. Good afternoon, Mayor, City Council. I am Patrick Quinton. I am the Director of Economic Prosperity and Housing. And as the City Manager mentioned, I'm joined by Chad Eichen, who is our Community Development Director, also Steve Wall, our Public Works Director, and Dave Perlick, our Director of Parks and Cultural Services. He got off today, but he's available for questions, and I'm sure you'll have some for Parks. So we want to bring to you what is going to be the first in a series of conversations over the next probably 18 months.

1:27 So we're going to be focusing on a review and potential updates to a range of different development fees. We were beginning work on an update to the first of those traffic impact fees, and we decided that it was better to take a step back and give you a big picture of how we stand now and, like I said, what's coming so that we can think about them in totality, in particular their potential impacts on development. So this is step one. We're going to start by giving you an overview of the current fee structure, impact fees, SDCs, as well as development review fees, what they pay for. And then we'll walk through four different development actual projects turned into generic scenarios and show you how we currently apportion the different fees. And then we're going to switch over to kind of what our current situation is and why it's now time for us.

2:26 And then we're going to review the range of fees and in particular talk about what we have lined up in terms of our capital investment programs across all of our infrastructure areas. And then we're going to do a comparison across jurisdictions, try and give you a sense for how we stack up currently and what potential increases might do to that. Then jump into discussion of impacts on development. You've obviously received a number of presentations from us. On development activity or the lack thereof. And so obviously it's a tough time to be talking about this, but so we do want to kind of begin to talk about how we balance these two different objectives. And then we'll finish off with potential ways that we can think about if changes are needed implementing these over a number of years and give you a hypothetical timeline for how we might proceed on that. So with that intro, I'm going to turn it over to Chad Eichen.

3:26 And he'll he'll kick it off. All right. Thanks, Patrick. Good afternoon. Chad Eichen, community development director. We wanted to kick us off with just an overview of all of the types of fees that the city collects on development applications. I'll get into more detail in subsequent slides, but first is impact fees. This is for parks, traffic and schools. These are collected at the time of building permit issuance in the case of schools. CDD, which is my department, calculates and collects the school impact fees, and then these are passed on through to the school district. System development charges or STC's are for impacts to the water and sewer system. Those are collected by CDD prior to a water meter being issued to the developer. The city does not currently charge STC's for stormwater system impacts. Plan review fees is the next category.

4:25 These include land use, engineering, fire and building review of development applications. The building plan review fee is based on half of what the building permit fee is. And you can think of these as a fee for service. They're collected at the time of the application being submitted. We currently do not charge a separate fee for water or sewer engineering review permit fees. Next category. So, a fee for service, these are to authorize actual construction work, including grading, building and construction in the right-of-way. The fee is collected at the time of permit issuance. The building permit fee, in this case, covers the cost to inspect the building. And then we have inspection fees, which are essentially construction inspection fees. They're collected at the time of permit issuance, and they cover inspection work that occurs in the public right-of-way.

5:25 Then we have state fees. These are really minor. State attaches a $6 fee to single-family homes and $25 fee on commercial building permits. So, not really substantial. A little more detail on impact fees and SDCs. Impact fees were authorized under the Growth Management Act in the mid-'90s. Three purpose statements in that act around impact fees, one is to ensure that adequate facilities are available to serve new growth and development. Secondly, to establish standards for new development to pay a proportionate share of the cost of new facilities needed to serve such growth. And lastly, to ensure that developments do not pay arbitrary or duplicative fees for the same impact.

6:25 Water and sewer SDCs comes from the more general municipal authority and state law, separate from the Growth Management Act. Both impact fees and SDCs cannot be used to pay for existing system deficiencies. Impact fees are based on a projected demand a new project creates and planned capital investments over the next 20 years, whereas SDCs are based on infrastructure already built to serve the development. You can think of those as a -- You can think of those as a payout fee to connect to our system. Parks and transportation fees apply within specific districts to ensure that fees paid will be used on infrastructure that is directly related to the impacts created by the development. And lastly, impact fees and system development charges are placed in restricted funds so they cannot be used for other general purposes. The next category is permit and plan review fees.

7:24 These cover the cost of processing and reviewing all types of development applications, inspecting public and private improvements once completed. Again, these include land use, engineering, fire, and building applications. Plan review and permit fees are periodically reviewed to ensure that cost recovery targets established by city council are being met. This analysis involves staff tracking their time to projects and using an average hourly rate to determine the cost of the project. determine whether the fees are appropriately calibrated proposed fee increases other than annual adjustments based on the regional cpi are brought to city council for approval we wanted to include a few actual development projects and their associated fees so you can start to see how the fees add up and also see how they have or have not changed in the last two

8:21 years so this is this slide is two different projects we have a 198 mixed-use residential project and a 100-unit three-story multi-family project and then the two columns 2024 you can see what the fee actually was in 2026 using the fees that are in place today is what the fees would be the main takeaway from this slide is that while some of the fees that are in place today are the fees that are in place today are the fees that are in place today is what the fees would be the main takeaway from this slide is that while some of the fees that are in place today are the fees that are in place today are the fees that are in place some fees have increased most such as traffic impact fees and sdcs have not increased enough in the past two years to keep pace with inflation while not a city fee we included school impact fees to show the full scope of fees that a residential developer pays recognizing there's some variance in the fees between the different school districts in fact the evergreen school district impact fees are now at zero dollars due to inc declining

9:21 enrollment overall while large developments such as these pay a lot of fees fees still represent only about three percent of the total project costs and this would even in this example would even be lower if the school impact fees are backed out of the total you'll notice that several categories of fees are increased from 2024 to 2026. i'd be happy to go into more detail about what caused those increases but i can also come back to that after our presentation any direction on that would you like me to move on to the next slide and come back to the explanation would you take a look at the fire permit and review from 70 to 174. sure that yeah that is a big increase we've noticed that as well it's been influenced by a

10:19 multiplier in the cal fee calculation formula um that is being rounded up each year when adjusted by this annual cpi um we're doing some more analysis to see if that may need to be corrected because that will compound over time yeah that seems to be the outlier in those statistics counselors do you have any questions on this particular yes counselor sober go ahead um so can you help me understand what what's the key drivers in these two different project types what's you know so we have a

11:08 cost of development at 2.5 versus 3.3 or i've said he's changed through three of 2620 so help me understand differences there um yeah yeah each each fee is uh has a slightly different calculation um park impact fees are based on a fee per unit um traffic impact fees are based on the number of trips average daily trips that are generated by a project and sometimes that is dependent on whether there is steve can get into more detail on this but if there's pass-by traffic then maybe there are some adjustments that are made to to that calculation water and sewer sdcs i believe are based on the size of the water meter

12:06 and permit review fees again that's that's several subcategories of fees building permits are based on the valuation of the project so there's a calculation that uses that as the primary driver and land use fees is are based on number of units or and possibly combined with square footage so each each one has sort of a different formula but generally speaking on it per unit basis for residential larger projects will have lower per unit costs because they spread the fees over you know there's a certain got initial threshold and then they the more units you have you spread it over more units so that's that's why the percentage and the per unit the amount goes down is because it's because it's a larger project and that's going to be the case with with with fees there's a kind of a fixed starting point of fees so and and does the

13:06 the uh so one is mixed use so there's a retail component we'll call it a retail component to that does that end up diluting it as well yes it can okay thank you and the zero on project two for sewer not all projects have um have uh sees charge them that they mean they're just unique circumstances whether they have existing uses that that that are that they then get to take advantage of or they have they have credits or something so so they if as we go through this conversation we're going to try and have some you know kind of general themes but one of the things that go away is every project ends up different but within a range and comparing we're going to compare across jurisdictions in a minute

14:04 it's really hard to do that too because everybody calculates differently and and whatnot so we're trying our best to figure out how to make this apples to apples conversation but every project is going to end up being different but you're going to see that's in this range just as chad mentioned it's going to be in this kind of low two percent to four percent range across different projects yeah the next slide will be the commercial industrial it's lower do you do you want to go ahead steve i was just going to say you'll see on the next slide a couple other examples of where right every project doesn't necessarily have every fee i think um right it it could with the exception of you know in this case with the commercial and industrial the school impact fees which don't apply to the commercial and then the park impact fee which we'll get into as well doesn't apply to the commercial industrial projects but there are other scenarios and exemptions that we'll talk about in later slides as well that come into play got it okay

15:04 okay these are our third and fourth projects uh we have a forty thousand square foot commercial project and a ten thousand square foot industrial project a couple of things to point out here um project four which is smaller in size and has a valuation that's lower than seven million this is not going to mean much because i didn't explain about the building fee on the last slide but we have a building valuation cap on our building fee so if a project is um in 2024 if it was seven million dollars in valuation or more it would pay even if it was a hundred million dollar uh worth a hundred million dollars it would pay the building permit fee as if it were based on a seven million dollar valuation so that that has kept our larger projects from uh paying what we felt was or overpaying based on the service that we were able to provide

16:04 so if they were to pay if there was not a cap in place we would large projects would be paying if it were converted into an hourly rate way more than our inspection staff would be spending at their project inspecting their project so we have uh administratively capped larger projects at that fee or at that valuation rate um in 2024 we increased that to 10 million because our building fund was drawn down to be lower than where we wanted it to be to cover this is hard to explain um our the balance of work um over a period of 18 months that that's our building fund reserve is intended to uh cover uh inspection

17:04 work that if all development felt fell off the the map today uh it would cover the inspection work that was remaining i hope that makes sense so 18 months is our target we've fallen below that and so in 2024 we increased the cap uh to 10 million to slightly build back up the building fund

17:30 and that's a lot of detail that maybe i didn't need to go into but um project four is smaller in size uh and its valuation was lower than seven million so you can see there was not that um the same sort of increase in the building fees uh from 24 to 26. um

17:57 and i think that is all i wanted to cover here and you can see there's no school impact fees because that only applies to residential projects same with park impact fees and i'll turn it over to steve yeah thanks chad good evening mayor council uh again steve wall public works director um chad got us through a good background of impact fees and system development charges and review fees uh slide seven talks uh about the fee analysis that we've already started and some that will will be starting soon so i i think made it might have been mentioned earlier we're starting or have started an update to the traffic impact fees and that will actually we'll have some information coming forward to council probably in the next couple of months before the end of the year on what the traffic impact fees look like and have a good conversation there uh part of that will be in the next couple of months uh part of that will be in the next couple of months uh part of that will be in the next couple of months uh part of that will be in the next couple of months uh part of that will be in the next couple of months uh part of that will be in the next couple of months uh part of that will be in the next couple of months uh part of that will be in the next couple of months uh part of that will be in the next couple of months uh part of that will be in the next couple of months uh parks will be taking another uh parks will be taking another uh parks will be taking another look at the parks recreation cultural look at the parks recreation cultural

18:56 look at the parks recreation cultural services comprehensive plan and the services comprehensive plan and the services comprehensive plan and the associated park impact fee associated park impact fee associated park impact fee specifically as you see on the slide specifically as you see on the slide specifically as you see on the slide here is it notes a here is it notes a here is it notes a commercial park impact fee option so commercial park impact fee option so commercial park impact fee option so that's something that we'll be that's something that we'll be that's something that we'll be considering uh coming up in the next 18 considering uh coming up in the next 18 considering uh coming up in the next 18 months or so months or so months or so and then public works has a kind of a and then public works has a kind of a and then public works has a kind of a slate of slate of slate of analysis that are planned so we're just analysis that are planned so we're just analysis that are planned so we're just starting to kick off our utility rate starting to kick off our utility rate starting to kick off our utility rate analysis comprehensive analysis that's analysis comprehensive analysis that's analysis comprehensive analysis that's done done done every few years as part of that we'll do every few years as part of that we'll do every few years as part of that we'll do our system development charge review as our system development charge review as our system development charge review as well on both the water and sewer side well on both the water and sewer side well on both the water and sewer side and then the other thing that was and then the other thing that was and then the other thing that was mentioned earlier a couple of nuances mentioned earlier a couple of nuances mentioned earlier a couple of nuances here the engineering reviews we do have here the engineering reviews we do have here the engineering reviews we do have fees for engineering reviews right now fees for engineering reviews right now fees for engineering reviews right now for development projects however we for development projects however we for development projects however we don't have don't have don't have fees associated with the water and sewer fees associated with the water and sewer fees associated with the water and sewer engineering reviews so that's something engineering reviews so that's something engineering reviews so that's something that over time that over time that over time uh decision was made that you know i uh decision was made that you know i uh decision was made that you know i think we want to take another look at think we want to take another look at

19:55 think we want to take another look at that as we think about the impacts of that as we think about the impacts of that as we think about the impacts of you know the time and effort it takes to you know the time and effort it takes to you know the time and effort it takes to review those plans on the water and review those plans on the water and review those plans on the water and sewer utilities sewer utilities sewer utilities and then similarly on the inspection and then similarly on the inspection and then similarly on the inspection reviews so this would be construction reviews so this would be construction reviews so this would be construction inspection out in the field inspection out in the field inspection out in the field except for fire we actually don't collect except for fire we actually don't collect except for fire we actually don't collect any fees to recoup our costs for any fees to recoup our costs for any fees to recoup our costs for construction inspection review either construction inspection review either construction inspection review either and so there's a lot of time that goes and so there's a lot of time that goes and so there's a lot of time that goes into into into those activities in the field and so those activities in the field and so those activities in the field and so we're not currently capturing those we're not currently capturing those we're not currently capturing those costs as well so we want to take a look costs as well so we want to take a look costs as well so we want to take a look at that and understand at that and understand at that and understand what our costs are right and then have what our costs are right and then have what our costs are right and then have that conversation as well as we look at that conversation as well as we look at that conversation as well as we look at our utility rates and fees our utility rates and fees our utility rates and fees and then just a general note here most and then just a general note here most and then just a general note here most of our fees that you've seen that we're of our fees that you've seen that we're of our fees that you've seen that we're talking about are adjusted annually talking about are adjusted annually talking about are adjusted annually based on a cpi based on a cpi based on a cpi and one thing that we'll talk about a and one thing that we'll talk about a and one thing that we'll talk about a little bit more is just that i think little bit more is just that i think little bit more is just that i think it's important that we it's important that we it's important that we review that and understand review that and understand review that and understand what inflationary factor we're using what inflationary factor we're using what inflationary factor we're using and how that relates to the market and and how that relates to the market and

20:53 and how that relates to the market and how it relates to other factors that how it relates to other factors that how it relates to other factors that can affect these fees and that's can affect these fees and that's can affect these fees and that's generally what we'll talk about here generally what we'll talk about here generally what we'll talk about here coming up coming up coming up steve before you go on to the next slide steve before you go on to the next slide steve before you go on to the next slide i think i know commercial park but i think i know commercial park but i think i know commercial park but define it for me uh actually it's a define it for me uh actually it's a define it for me uh actually it's a review of review of review of the park impact fee as it relates to the the park impact fee as it relates to the the park impact fee as it relates to the impact of commercial and industrial impact of commercial and industrial impact of commercial and industrial development on parks and trails development on parks and trails development on parks and trails so currently the city just collects an so currently the city just collects an so currently the city just collects an impact fee based on residential uses impact fee based on residential uses impact fee based on residential uses and so when you build a new home or a and so when you build a new home or a and so when you build a new home or a multi-family residential you pay those multi-family residential you pay those multi-family residential you pay those fees fees fees for parks but if you come in and you for parks but if you come in and you for parks but if you come in and you build a commercial or an industrial build a commercial or an industrial build a commercial or an industrial facility you don't pay any park impact facility you don't pay any park impact facility you don't pay any park impact fees currently fees currently fees currently uh and i think the recognition kind of uh and i think the recognition kind of uh and i think the recognition kind of over the throughout the state over time over the throughout the state over time over the throughout the state over time is that hey our commercial and is that hey our commercial and is that hey our commercial and industrial businesses industrial businesses industrial businesses yes they bring a lot of value to the yes they bring a lot of value to the yes they bring a lot of value to the city and jobs but they also benefit from city and jobs but they also benefit from city and jobs but they also benefit from our parks and our parks and

21:53 our parks and trail systems and so you know the trail systems and so you know the trail systems and so you know the question then becomes should they also question then becomes should they also question then becomes should they also participate in funding participate in funding participate in funding of our parks and trail systems through of our parks and trail systems through of our parks and trail systems through payment of park impact fees payment of park impact fees payment of park impact fees okay thank you so why consider updates now so why consider updates now there's been actually a couple of good there's been actually a couple of good there's been actually a couple of good conversations already conversations already conversations already uh on this but both slide eight and uh on this but both slide eight and uh on this but both slide eight and slide nine slide nine slide nine talk to this um you know i think the talk to this um you know i think the talk to this um you know i think the first thing i would mention first thing i would mention first thing i would mention uh that's more generic is that uh that's more generic is that uh that's more generic is that this conversation shouldn't really be a this conversation shouldn't really be a this conversation shouldn't really be a static or a single point in time right static or a single point in time right static or a single point in time right this is uh ever evolving and revolving this is uh ever evolving and revolving this is uh ever evolving and revolving conversation and as we get towards the conversation and as we get towards the conversation and as we get towards the end end end we can talk about that a little bit more we can talk about that a little bit more we can talk about that a little bit more but i mean we are at a good point in but i mean we are at a good point in but i mean we are at a good point in time to review this we just finished the time to review this we just finished the time to review this we just finished the comprehensive plan comprehensive plan comprehensive plan we finished the we finished the we finished the transportation plans we're transportation plans we're transportation plans we're getting ready to finish the water getting ready to finish the water

22:53 getting ready to finish the water system plan right and so we have all the system plan right and so we have all the system plan right and so we have all the information and the data and it seems to information and the data and it seems to information and the data and it seems to be a good point to to look at all of be a good point to to look at all of be a good point to to look at all of this as a whole as patrick mentioned this as a whole as patrick mentioned this as a whole as patrick mentioned earlier earlier earlier but there are a number of reasons right but there are a number of reasons right but there are a number of reasons right of why why we want to look at this of why why we want to look at this of why why we want to look at this and i think one is you know we don't and i think one is you know we don't and i think one is you know we don't infrastructure is expensive and we don't infrastructure is expensive and we don't infrastructure is expensive and we don't ever want to ever want to ever want to short ourselves on that if we can help short ourselves on that if we can help short ourselves on that if we can help it right and that just means finding a it right and that just means finding a it right and that just means finding a balance and we'll talk about that as balance and we'll talk about that as balance and we'll talk about that as well here in a couple of slides but well here in a couple of slides but well here in a couple of slides but i think as an example of you know why we i think as an example of you know why we i think as an example of you know why we want to look at it i think as we went want to look at it i think as we went want to look at it i think as we went through the transportation uh impact fee through the transportation uh impact fee through the transportation uh impact fee analysis here recently and again analysis here recently and again analysis here recently and again you'll see that you'll see that you'll see that it had been a long time since we had it had been a long time since we had it had been a long time since we had reviewed those fees reviewed those fees reviewed those fees and primarily it was not necessarily the and primarily it was not necessarily the and primarily it was not necessarily the projects and stuff that were in there projects and stuff that were in there projects and stuff that were in there was i think my understanding is a lot of was i think my understanding is a lot of was i think my understanding is a lot of it was based on it was based on it was based on the construction cost estimates that the construction cost estimates that the construction cost estimates that were included and if those get outdated were included and if those get outdated were included and if those get outdated and they're not increased over time for and they're not increased over time for

23:51 and they're not increased over time for inflation right then your costs and your inflation right then your costs and your inflation right then your costs and your fees can get fees can get fees can get out of whack basically and not aligned out of whack basically and not aligned out of whack basically and not aligned and so i think that was a good example and so i think that was a good example and so i think that was a good example um i think as we're looking at our um i think as we're looking at our um i think as we're looking at our system development charges for water and system development charges for water and system development charges for water and sewer that's going to be another sewer that's going to be another sewer that's going to be another scenario where we haven't looked at them scenario where we haven't looked at them for you know i think six or seven years for you know i think six or seven years for you know i think six or seven years at this point at this point at this point and done a detailed analysis and a lot and done a detailed analysis and a lot and done a detailed analysis and a lot of things have changed during that time of things have changed during that time of things have changed during that time and and and that's going to be a big impact and that's going to be a big impact and that's going to be a big impact and then i think you know a big one is then i think you know a big one is then i think you know a big one is state law state law state law and that can mean various things uh and that can mean various things uh and that can mean various things uh different legislation that comes up over different legislation that comes up over different legislation that comes up over time time time but part of that is big pictures so i but part of that is big pictures so i but part of that is big pictures so i just mentioned we just mentioned we just mentioned we completed our comprehensive plan that is completed our comprehensive plan that is completed our comprehensive plan that is a fresh look right 20-year planning a fresh look right 20-year planning a fresh look right 20-year planning horizon of all of the infrastructure horizon of all of the infrastructure horizon of all of the infrastructure needs and all of the development needs needs and all of the development needs needs and all of the development needs that we have and so that by itself is that we have and so that by itself is that we have and so that by itself is going to be a change right it's meant to going to be a change right it's meant to

24:48 going to be a change right it's meant to be a change over the next 20 years be a change over the next 20 years be a change over the next 20 years and then you have more specific and then you have more specific and then you have more specific legislation legislation legislation like the fees that are you know based on like the fees that are you know based on like the fees that are you know based on a method that reflects the proportionate a method that reflects the proportionate a method that reflects the proportionate impact of new housing units so you'll impact of new housing units so you'll impact of new housing units so you'll hear more about that as we talk about hear more about that as we talk about hear more about that as we talk about uh particularly traffic impact fees and uh particularly traffic impact fees and uh particularly traffic impact fees and um um um more park impact fees actually where more park impact fees actually where more park impact fees actually where different size units different size units different size units right have a different impact right have a different impact right have a different impact potentially on the system and you kind potentially on the system and you kind potentially on the system and you kind of have this scaled version of of this scaled version of of this scaled version of proportionate impact fees based on the proportionate impact fees based on the proportionate impact fees based on the type and number of housing units and type and number of housing units and type and number of housing units and then pfas is a good example right state then pfas is a good example right state then pfas is a good example right state federal mandate didn't necessarily know about it forever didn't necessarily know about it forever right we're just right we're just right we're just still learning more and trying to figure still learning more and trying to figure still learning more and trying to figure out uh or understanding what that means out uh or understanding what that means out uh or understanding what that means to our system so these are all things to our system so these are all things to our system so these are all things that that come up of why we want to you that that come up of why we want to you that that come up of why we want to you know make sure we're looking at these know make sure we're looking at these know make sure we're looking at these fees fees fees and then we talked about the the parks and then we talked about the the parks

25:48 and then we talked about the the parks piece before is there's just a large piece before is there's just a large piece before is there's just a large uh uh uh amount of infrastructure on the park amount of infrastructure on the park amount of infrastructure on the park side between land and development side between land and development side between land and development activity that we're trying to support activity that we're trying to support activity that we're trying to support through our parks plan and so through our parks plan and so through our parks plan and so right that's right that's right that's the conversation that we need to have is the conversation that we need to have is the conversation that we need to have is how do we fund that and how do we fund that and how do we fund that and does that include again commercial does that include again commercial does that include again commercial industrial does it just include industrial does it just include industrial does it just include residential and so those are all things residential and so those are all things residential and so those are all things that we want to be looking at as we look that we want to be looking at as we look that we want to be looking at as we look at these fees so what projects are we trying to fund so what projects are we trying to fund slide nine has a slide nine has a slide nine has a table here that you know and it has some table here that you know and it has some table here that you know and it has some great examples this is not comprehensive great examples this is not comprehensive great examples this is not comprehensive by any means but we wanted to just give by any means but we wanted to just give by any means but we wanted to just give an a quick snapshot of some ideas here an a quick snapshot of some ideas here an a quick snapshot of some ideas here that that that provide or or show an impact on our provide or or show an impact on our fees in the upper left is just an fees in the upper left is just an fees in the upper left is just an example of our water system so the last example of our water system so the last example of our water system so the last time we looked at our system time we looked at our system time we looked at our system development charges for the water system development charges for the water system

26:48 development charges for the water system and our fees in general and our fees in general and our fees in general the 20-year cip was you know a little bit the 20-year cip was you know a little bit the 20-year cip was you know a little bit less than the 400 million that's shown less than the 400 million that's shown less than the 400 million that's shown but what's new since then is about 300 but what's new since then is about 300 but what's new since then is about 300 million dollars in pfas projects that million dollars in pfas projects that million dollars in pfas projects that was not included the last time that we was not included the last time that we was not included the last time that we reviewed our system development charges reviewed our system development charges reviewed our system development charges obviously a very large piece of it right obviously a very large piece of it right obviously a very large piece of it right at a 700 million dollar total program at a 700 million dollar total program at a 700 million dollar total program now quite different than it was now quite different than it was now quite different than it was six or eight years ago six or eight years ago six or eight years ago the bottom left very similar actually on the bottom left very similar actually on the bottom left very similar actually on the sewer side you have the sewer side you have the sewer side you have the incinerator replacement which has the incinerator replacement which has the incinerator replacement which has kind of become known or kind of become known or kind of become known or called the solids renewal program called the solids renewal program called the solids renewal program council's seen information about that council's seen information about that council's seen information about that over the last couple of years and yes over the last couple of years and yes over the last couple of years and yes that's going to be a phased program that's going to be a phased program that's going to be a phased program similar to pfas but even over a longer similar to pfas but even over a longer similar to pfas but even over a longer time period time period time period but that's roughly you know another 250 but that's roughly you know another 250 but that's roughly you know another 250 to 300 million dollars that's included to 300 million dollars that's included to 300 million dollars that's included in that in that in that that was also not fully baked into the that was also not fully baked into the

27:46 that was also not fully baked into the cake the last time we reviewed fees cake the last time we reviewed fees cake the last time we reviewed fees uh as far as system development charges uh as far as system development charges uh as far as system development charges and a comprehensive rate analysis and a comprehensive rate analysis and a comprehensive rate analysis um top right is transportation um top right is transportation um top right is transportation there's a number of projects listed there's a number of projects listed there's a number of projects listed here like i said here like i said here like i said i think one of the bigger impacts on the i think one of the bigger impacts on the i think one of the bigger impacts on the transportation is just transportation is just transportation is just not having the ability to open up the not having the ability to open up the not having the ability to open up the traffic impact fee analysis and traffic impact fee analysis and traffic impact fee analysis and and really update cost estimates and and really update cost estimates and and really update cost estimates and those types of things but when you think those types of things but when you think those types of things but when you think about transportation there are about transportation there are about transportation there are large projects on here as well large projects on here as well large projects on here as well 32nd avenue should be fruit valley 32nd avenue should be fruit valley 32nd avenue should be fruit valley area area area i think actually our estimate is quite a i think actually our estimate is quite a

28:32 i think actually our estimate is quite a few projects and costs have continued to few projects and costs have continued to few projects and costs have continued to escalate over time escalate over time escalate over time on those projects and then parks again i on those projects and then parks again i on those projects and then parks again i mentioned on the prior slide mentioned on the prior slide mentioned on the prior slide acquisitions and development you know acquisitions and development you know acquisitions and development you know 800 plus acres i think based on our 800 plus acres i think based on our 800 plus acres i think based on our current current current levels of service and the the current uh levels of service and the the current uh levels of service and the the current uh parks comprehensive plan parks comprehensive plan parks comprehensive plan uh very expensive right to to buy and be uh very expensive right to to buy and be uh very expensive right to to buy and be able to provide that level of service able to provide that level of service able to provide that level of service and so and so and so you know how we fund that and those you know how we fund that and those you know how we fund that and those investments we need to pay attention to investments we need to pay attention to investments we need to pay attention to definitely that i think yeah patrick gets this all that i think yeah patrick gets this all right thank you steve so uh patrick right thank you steve so uh patrick right thank you steve so uh patrick quinton director of economic prosperity quinton director of economic prosperity quinton director of economic prosperity and housing again so and housing again so and housing again so the primary way that we think about how the primary way that we think about how

29:24 the primary way that we think about how this is really hard to do without this is really hard to do without this is really hard to do without commissioning a full study and and so commissioning a full study and and so commissioning a full study and and so there is there's going to be more work there is there's going to be more work there is there's going to be more work done done done on this so we've pulled some different on this so we've pulled some different on this so we've pulled some different data sources this first slide here data sources this first slide here data sources this first slide here is is um just for impact fees the next is is um just for impact fees the next is is um just for impact fees the next slide is sdc's slide is sdc's slide is sdc's so on the impact fee side what we have so on the impact fee side what we have here is is a bar graph the first here is is a bar graph the first here is is a bar graph the first set of bars is is uh the weighted state set of bars is is uh the weighted state set of bars is is uh the weighted state average so just consider that to be average so just consider that to be average so just consider that to be that's the average that's the average that's the average across the state and if you look at across the state and if you look at across the state and if you look at the three impact fee categories parks the three impact fee categories parks the three impact fee categories parks schools and transportation schools and transportation schools and transportation they're shown in the green purple blue they're shown in the green purple blue they're shown in the green purple blue and then black is the combined number and then black is the combined number and then black is the combined number per unit this is on a multi-family per unit this is on a multi-family per unit this is on a multi-family residential project residential project residential project so the weighted state average is just so the weighted state average is just so the weighted state average is just under 11 000 per unit for impact fees under 11 000 per unit for impact fees under 11 000 per unit for impact fees the next three are relate to us the the next three are relate to us the the next three are relate to us the the next one over where it says current the next one over where it says current the next one over where it says current fees that's where we currently sit so we fees that's where we currently sit so we

30:23 fees that's where we currently sit so we are below are below are below on impact fees the weighted average in on impact fees the weighted average in on impact fees the weighted average in the state um so you know i think we we the state um so you know i think we we the state um so you know i think we we want to be in that general area want to be in that general area want to be in that general area certainly to be competitive from a certainly to be competitive from a certainly to be competitive from a development standpoint development standpoint development standpoint the challenge though is if you look in the challenge though is if you look in the challenge though is if you look in within our overall number and you look within our overall number and you look within our overall number and you look at the blue line at the blue line at the blue line that's our traffic impact fee number so that's our traffic impact fee number so that's our traffic impact fee number so our traffic impact fees are our traffic impact fees are our traffic impact fees are well below the state average this is well below the state average this is well below the state average this is why the traffic impact fee why the traffic impact fee why the traffic impact fee conversation has started is because we conversation has started is because we conversation has started is because we steve and his team know well like we're steve and his team know well like we're steve and his team know well like we're we're way behind so we're way behind so we're way behind so so uh uh so if you start to so uh uh so if you start to so uh uh so if you start to to adjust these then you start bumping to adjust these then you start bumping to adjust these then you start bumping up our average up our average up our average we didn't get into specific increases we we didn't get into specific increases we we didn't get into specific increases we just then said what if we increased just then said what if we increased just then said what if we increased all of our impact fees by 25 all of our impact fees by 25 all of our impact fees by 25 what if we increased them by 50 what if we increased them by 50 what if we increased them by 50 just a 25 across the board increase just a 25 across the board increase just a 25 across the board increase bumps us above the weightest the state bumps us above the weightest the state bumps us above the weightest the state average and then 50 obviously puts us average and then 50 obviously puts us

31:21 average and then 50 obviously puts us well above that so this is the kind of well above that so this is the kind of well above that so this is the kind of almost a sensitivity analysis for us almost a sensitivity analysis for us almost a sensitivity analysis for us like how much room do we have like how much room do we have like how much room do we have to increase fees to cover the the to increase fees to cover the the to increase fees to cover the the investments we need to make without investments we need to make without investments we need to make without putting us out of really out of putting us out of really out of putting us out of really out of alignment with the rest of the market alignment with the rest of the market alignment with the rest of the market and so and so and so where you can see there's sensitivity where you can see there's sensitivity where you can see there's sensitivity there on that so that's there on that so that's there on that so that's just impact fees and the next slide is just impact fees and the next slide is just impact fees and the next slide is going to be sdc's i don't know if yeah going to be sdc's i don't know if yeah going to be sdc's i don't know if yeah counselor fox yeah yes counselor go counselor fox yeah yes counselor go counselor fox yeah yes counselor go ahead ahead ahead um so i sent this question to staff so um so i sent this question to staff so um so i sent this question to staff so perhaps you're ready to answer this perhaps you're ready to answer this perhaps you're ready to answer this particular question but on this slide particular question but on this slide particular question but on this slide my question was around showing the my question was around showing the my question was around showing the school impact fees increasing along with school impact fees increasing along with school impact fees increasing along with the fees that we have control over and i the fees that we have control over and i the fees that we have control over and i wasn't sure how realistic that would be wasn't sure how realistic that would be wasn't sure how realistic that would be over over over any time frame that school impact fees any time frame that school impact fees any time frame that school impact fees would be would be would be increasing you know at a level to match increasing you know at a level to match increasing you know at a level to match ours ours ours they tend to kind of run in their own they tend to kind of run in their own they tend to kind of run in their own you know trajectory when they bring you know trajectory when they bring

32:20 you know trajectory when they bring forward that the analysis of what type of forward that the analysis of what type of forward that the analysis of what type of funding they need for their funding they need for their

32:37 funding they need for their students to understand what the effect of students to understand what the effect of students to understand what the effect of any decisions we make any decisions we make any decisions we make are on our total uh fees does that make are on our total uh fees does that make are on our total uh fees does that make sense sense sense yeah i mean of course yeah this yeah i mean of course yeah this yeah i mean of course yeah this school impact fees are decided separately school impact fees are decided separately school impact fees are decided separately we kind of live with with whatever is we kind of live with with whatever is we kind of live with with whatever is decided decided decided um but it does um but it does um but it does from a developer standpoint right it's from a developer standpoint right it's from a developer standpoint right it's it's it goes into the overall cost it's it goes into the overall cost um you're right i don't know that that um you're right i don't know that that um you're right i don't know that that doing the 25 doing the 25 doing the 25 across the board really makes sense for across the board really makes sense for across the board really makes sense for all these so but we didn't want to get all these so but we didn't want to get all these so but we didn't want to get into this in this workshop into this in this workshop into this in this workshop kind of proposing specific increases so kind of proposing specific increases so kind of proposing specific increases so that we were now diving into specific that we were now diving into specific that we were now diving into specific because that's what's to come because that's what's to come because that's what's to come but you're right i don't think we would but you're right i don't think we would we would analyze it this way for we would analyze it this way for we would analyze it this way for subsequent conversations i think we'd subsequent conversations i think we'd subsequent conversations i think we'd either leave it flat or either leave it flat or either leave it flat or set it aside but once again we still set it aside but once again we still set it aside but once again we still need to need to need to uh keep it in mind and in a second i'm uh keep it in mind and in a second i'm uh keep it in mind and in a second i'm going to going to going to mention some other analysis that mention some other analysis that mention some other analysis that literally just came in from eco northwest literally just came in from eco northwest

33:37 literally just came in from eco northwest on friday on friday on friday which compares us across which compares us across which compares us across some oregon communities uh portland and some oregon communities uh portland and some oregon communities uh portland and beaverton those the school impact fees beaverton those the school impact fees beaverton those the school impact fees in washington state are in washington state are in washington state are significantly higher than oregon uh significantly higher than oregon uh significantly higher than oregon uh we're trying to figure out why that is we're trying to figure out why that is we're trying to figure out why that is so it does affect our competitiveness as so it does affect our competitiveness as so it does affect our competitiveness as a a a place for development so and perhaps we place for development so and perhaps we place for development so and perhaps we do need to have a discussion at some do need to have a discussion at some point about our level of point about our level of point about our level of control over accepting those fee control over accepting those fee control over accepting those fee increases that are proposed to us by increases that are proposed to us by increases that are proposed to us by school districts too but i know a school districts too but i know a school districts too but i know a different conversation but that purple different conversation but that purple different conversation but that purple line is a huge contributor to that total line is a huge contributor to that total line is a huge contributor to that total black line that's why i wanted to just black line that's why i wanted to just black line that's why i wanted to just say you know for me this chart is a say you know for me this chart is a say you know for me this chart is a little bit little bit little bit maybe doesn't represent the things that maybe doesn't represent the things that maybe doesn't represent the things that we can control we can control we can control entirely okay thank you so on the sdcs um so on the sdcs um once again this is not the same data set once again this is not the same data set once again this is not the same data set you can see the list of communities here you can see the list of communities here

34:35 you can see the list of communities here uh uh uh we're i think we're the biggest we're i think we're the biggest we're i think we're the biggest community so so but this is the data we community so so but this is the data we community so so but this is the data we have available like i said we have you have available like i said we have you You can see the last bullet there, full SDC analysis with benchmark is underway. We really want to get a more representative sample of communities. But you can see here that on the SDC side, we actually stack up really well right now compared to the communities shown on this. Smaller communities a lot of times end up having to charge more on a per-unit basis just because the developments are smaller and there's kind of a fixed operating cost and different functions. We also don't charge stormwater SDCs, so there's other communities that do so. So there's room within this comparison for us to add on the SDC side,

35:27 but the ultimate analysis is to bring these two together and look at it, the full impact of impact fees, SDCs, and compare it against a representative group, and that's what we'd like to do. As I mentioned, and we can send this around to you and make this available, but we did get numbers from EcoNorthwest just at the end of last week, and this one looked at primarily Oregon communities, Beaverton, Gresham, Hillsboro, and Portland, and it also added Camas and Olympia, and once again, looking at multifamily development across two different development scenarios. So we ended up with 1.12 unit, 1.50 unit, we ended up with the lowest total fees. So that's everything, impact fees, SDCs, and other fees, substantially lower than communities like Beaverton,

36:24 Hillsboro, and Camas, they're on the high end, but substantially lower than Portland as well. So when, you know, I think, once again, I think this is meant to show that we are in a competitive position right now, but probably given the full scope of investment needs we made, probably on the low side, and there's room for us to add to our fees, but we want to end up in a place that is, however we want to, and we want your feedback on this, whatever we want to aim for, whether it's to be right in the average or to keep it as a percentage of development cost or some metric, we want to aim to be in that middle ground so that we can still have an attractive, development environment here. And so I'm happy to come back to this as part of the conversation. I've kind of covered the next slide, which is, you know, the impacts of new development,

37:23 but it's really kind of the other part to this conversation, which is any increase in fees, even if from our low state, will impact development negatively. It'll just add costs to new development, and given the current environment, it makes fewer projects pencil, or it makes projects harder to pencil, particularly in an environment that we've shared with you in previous presentations, where, you know, rents are relatively flat from an absolute perspective, and material costs are going up, cost, you know, interest rates. So it really will have an impact on that. As we've shown you, smaller projects are impacted more by increases, than larger projects. And so as we enter a period with our adoption of our comp plan, where we believe there's a big opportunity now for middle housing,

38:21 any increase in fees will hit middle housing harder than our bigger projects. Bigger projects that just have -- they can spread the cost out over more units. So something for us to be cognizant of, and then, you know, the ultimate thing is, we want to -- if we're trying to add more, we want to increase the cost. So we want to increase the cost. So if we're trying to add -- trying to collect more revenue to fund more infrastructure investment, we want to obviously have -- we want to grow revenue. So if development slows down because of this, then we're obviously not increasing investment. So this is really the conversation we want to have with you. Steve's going to take it from here, but, you know, we have these two objectives that in some respects can be in conflict with each other, and we have to figure out how to balance that. We have to figure out how to balance these two. Thanks, Patrick. Steve Walligan, Public Works Director.

39:18 And the good part is that we do have a number of tools available to us. And so, you know, we've just lined out a few on slide 13 here. You know, I think the one thing to understand maybe as we look at this is that impact fees and system development charges, their calculations are fairly complicated, but ultimately, what we determine when we do the calculation is typically called a maximum defensible amount, which is really, you know, a fancy way to say follow the state legislation, right, the RCWs. And, oh, by the way, there's some case law out there through the years that actually provides a lot of guidance on this topic as well. And so stay within those bounds, and you come up with this maximum number. The good part is we don't need to adopt the maximum number. We don't need to adopt the maximum defensible number, right, that's just given the top end of our limit.

40:16 And there isn't anything that says that, you know, we can't -- as this slide says, that you can't have an overall cap or that you can't increase or phase increases in fees over time or that you can't, you know, hit the pause button and say, hmm, man, the market conditions are just not right, we don't feel comfortable, we're going to hit the pause button for a year, and we're going to pick it back up next year, or we'll reevaluate the year after and see what happens. So those are the types of tools as far as the implementation side that are actually available for council, and this is, you know, very good policy discussion for all councils in general, just trying to find the right balance, and the other thing that is available to us are, you know, discounts and exemptions, and, again, those allowed by statute, so there are types of developments.

41:11 There's some more recent specific legislation that talks about affordable housing, childcare, transit-oriented development, you know, if you're in the transit-oriented development, if you're near, you know, mass transit areas, that can allow for exemptions or require exemptions depending on the scenario. Same thing with childcare. So there are those discounts and exemptions, and I think Patrick mentioned earlier there's also credits and other things that we can get creative with a little bit if there are more participation by the development community at the right level. But overall, this, you know, really the key, like we've mentioned probably two or three times already, is just ideally finding a balance between the potential impacts that development has on the system and not totally stalling development and still being able to fund the necessary infrastructure projects. So again, it's, you know, can we get enough development?

42:10 Can we get enough development in the door to keep things rolling and not charge them too much, but charge them enough that we can fund all the infrastructure that we have? And as we talked, right, that can be tricky sometimes, but again, we do have tools available. And then just briefly, we've talked about most of this I think already as far as the timelines and what we're working on. You know, this is, I think hypothetical is probably a good word for this, you know, some of these conversations even after we're done with the analysis and we bring them to council can take a little bit of time. Because they can be challenging. So I think recognizing that. And then the fact that we, right, we're just now kicking off for water and sewer system development charge analysis and the discussion on the review and inspection fees. And so, you know, ideally third quarter next year or so we might be ready. But sometimes those take some time to get through. We have the commercial park impact fee review and the parks plan discussion that Dave's team is leading.

43:10 And also thinking maybe that's the end of 2027. And so, we're doing our best to tie all of these together, right, and keep this broader conversation in mind as we're bringing it to council and, you know, suggest or make council aware of the various tools that are out there to be able to have a good conversation and understand that this is really revolving, I think, in a quick conversation with council members. And so, you know, I think we have a lot of work to do.

43:42 And I think we have a lot of work to do.