Bonney Lake council look to lower impact fees, but worry about loss of revenue

In Iowa, apparently, if you build it, they will come. But in Bonney Lake, the question is turning to how to get them to build in the first place.

With construction down in the city – and across the county – the Bonney Lake City Council is considering ways to try and spur construction, but were still split on whether or not the city should lower its construction impact fees as an incentive.

Bonney Lake’s impact fees are easily the highest in East Pierce County, but building in the city continues to outpace all other municipalities, though at a much lower rate than the pre-recession hey day that many came to expect as normal.

But several council members feel that the city’s impact fees are what is keeping the hammers from swinging and the homes from going up, prompting the discussion about the cost of building that began at the council’s annual retreat in February.

The combined traffic, sewer, water, and school impact fees to build a home in Bonney Lake is presently approximately $28,000. Buckley comes in second at about $20,000, followed by Puyallup at about $16,000.

The council this past week agreed to move three measures forward, but once again split over temporary decreases on sewer and water system development charges, asking for more information to continue the discussion at a later workshop.

Much of the talk centered on how to make up for the loss of revenue such a change would represent.

“Those fees are paying for things,” Deputy Mayor Dan Swatman said, calling the reductions “totally irresponsible.” “Where are we going to get that money back?”

“That’s the key. You’ve got to pay it sooner or later,” agreed Councilman Donn Lewis.

Led by new council members Katrina Minton-Davis and Tom Watson, those in support of reducing the fees said it would spur building, which would bring new residents to shop in the city’s retail establishments.

“I think it’s more important to stimulate some growth,” Minton-Davis said.

The council discussed and then moved forward to the next council meeting ordinances to extend a temporary traffic impact rebate program, a reduction of school impact fees based on a request from Sumner schools and a temporary reduction in traffic fees, that also raises the threshold of development activity on a change-of-use that would trigger a new fee.

But the council continued to be split on the water and sewer fee ordinances, which would have reduced the fees by 50 percent and 40 percent, respectively.

Bonney Lake bases its impact fees on an analysis by an outside firm and set their rates as close to a break-even point for the city as possible. The system development charges pay for future expansion of the system, which is necessary due to development.

It is part of the city’s philosophy of making development pay for development.

Swatman and other members of the council feared that reducing charges – which were developed by an independent contractor to be the amount of impact – would mean having to raise sewer or water rates.

Swatman used Sumner as an example. Though the system development fee for hooking into Sumner’s sewer system is approximately $3,500 less than that in Bonney Lake, ratepayers pay an additional $5 per month for service.

Base rates for water are also higher in Sumner.

“If it isn’t the development, it’s going to have to be the ratepayers,” Councilman Mark Hamilton agreed, adding that the reductions discussed were “pretty drastic” and he would like to see the projects that may have to be postponed due to the changes.

Hamilton also said he was not sure any changes were necessary given that Bonney Lake still issues more building permits, by far, than any of its peers in East Pierce County.

“I still feel uncomfortable in reducing any of the fees because I’m not sure it’s going to make a difference,” he said.

Swatman agreed.

“There’s still building in the city of Bonney Lake,” he said. “Somehow they’re making it work.”

If the reductions passed as proposed, it would have meant a loss of nearly $12,000 in revenue per house, an amount Swatman pointed out would take $1.6 million in retail sales to make up in the city’s general fund through sales tax revenues.

The council agreed to continue discussions of the impact fees after requesting from staff a list of projects that would need to be reduced due to a drop in revenue.