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Agreeing to disagree: Snoqualmie holds off on instituting school impact fee hike

The city of Snoqualmie and the Snoqualmie Valley School District are agreeing to disagree over collection of a new school construction impact fee in 2011.

King County and the cities of North Bend and Sammamish have greenlighted collection of the district's new $8,139 fee, which is $5,400 higher than the amount collected this year.

But Snoqualmie is balking on approval of the new amount, which is collected during construction to offset the impact of new development on school capacity. This year's fee is predicated on the district's capital improvement plan, which calls for a new middle school and elementary school in the next six years.

Snoqualmie Mayor Larson directed staff to wait until February to forward a resolution approving the fee, contingent on passage of the district's $56 million bond. He wants to delay collection until the bond is approved by voters.

With a down housing market, the loss of the federal home purchase credit and expensive developer mitigations coming due on the Ridge, such as Quadrant's contribution to the new Snoqualme YMCA, Larson is sympathetic to builders. His city is also depending on Real Estate Excise Tax to meet its budget.

"We have to consider the impacts on the city," the mayor said.

He sees the delay as a compromise.

The impact fee "has become a blunt, unpredictable instrument," Larson said. "I would contend that it could freeze the local market."

But Ryan Stokes, the Snoqualmie district's director of business services, said the calculation is proper and accurate.

"It's in our best interest to collect those funds," he said.

Impact fee collection is unpredictable. In healthy financial times, impact fees can be used for enhancements. They're also used as bridge funds for the gap until bond construction comes online. If the February bond were to fail, the funds would become even more crucial, according to Stokes.

Stokes said the district doesn't want to create economic hardship for the city.

"But given the state budget cuts and continuous reduction of our ability to have resources, we'll take everything we can get," he said. "The impact fees are an important part of that."

On Dec. 13, Stokes approached the Snoqualmie council for a response, telling members that he was available to discuss the fee and urging its approval at the full amount.

Minutes later, Dave Dorothy, a vice president for Snoqualmie Ridge builder Quadrant, stepped to the podium to ask for a mitigation or delay of the fees. He said the increase will cripple the local building industry.

"The tripling of impact fees, that we just can't support," Dorothy said. "The industry is in dire straits. Every sale is a struggle. This increase can't come at a worse time."

For now, the decision awaits a February vote. At Monday's meeting, several councilmembers agreed with Larson's decision to delay the fee.

"I would like to wait and see," councilman Jeff MacNichols said.

The district's impact fee has averaged about $3,100 annually over the last four years. In 2009, a failed bond meant there were no new construction projects in the pipeline, so property tax offsets meant that developers paid no impact fees.

Developers in neighboring Riverview School District will pay a proposed $5,629 fee. Tahoma School District's 2011 fee is $7,791; Issaquah School District builders would pay $3,808.

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