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HomeMy WebLinkAbout2025.05.27 Council Special Meeting Packet AGENDA City Council Special Meeting 7:00 PM - Tuesday, May 27, 2025 Pasco City Hall, Council Chambers & Microsoft Teams Webinar Page 1. MEETING INSTRUCTIONS for REMOTE ACCESS - Individuals, who would like to provide public comment remotely, may continue to do so by filling out the online form via the City’s website (www.pasco-wa.gov/publiccomment) to obtain access information to comment. Requests to comment in meetings must be received by 4:00 p.m. on the day of this meeting. To listen to the meeting via phone, call 1-332-249-0718 and use access code 832 515 271#. City Council meetings are broadcast live on PSC-TV Channel 191 on Charter/Spectrum Cable in Pasco and Richland and streamed at www.pasco-wa.gov/psctvlive and on the City’s Facebook page at www.facebook.com/cityofPasco. Audio equipment available for the hearing impaired; contact the Clerk for assistance. Servicio de intéprete puede estar disponible con aviso. Por favor avisa la Secretaria Municipal dos dias antes para garantizar la disponiblidad. (Spanish language interpreter service may be provided upon request. Please provide two business day's notice to the City Clerk to ensure availability.) 2. CALL TO ORDER 3. ROLL CALL (a) Pledge of Allegiance 4. PUBLIC COMMENTS – The public may comment the topic(s) scheduled for final action identified the agenda for this Special Meeting. Citizen comments will normally be limited to three minutes each by the Mayor. Those with lengthy messages are invited to summarize their comments and/or submit written information for consideration by the Council outside of formal Page 1 of 96 meetings. Lastly, when called upon, please state your name and city or county residency into the microphone before providing your comments. 5. ORDINANCES AND RESOLUTIONS NOT RELATING TO HEARINGS 4 - 81 (a) Ordinance No. 4767 - Transportation Impact Fee Program (5 minutes staff presenation) MOTION: OPTION A (5 Districts): I move to adopt Ordinance No. 4767, related to Transportation Impact Fees, amending certain provisions in Chapters 3.35 and 3.40 of the Pasco Municipal Code, and providing for severability and an effective date, and, further, authorize publication by summary only. -OR- OPTION B (4 Districts): I move to adopt Ordinance No. 4767, related to Transportation Impact Fees, amending certain provisions in Chapters 3.35 and 3.40 of the Pasco Municipal Code, and providing for severability and an effective date, and, further, authorize publication by summary only. 82 - 94 (b) Joint Resolution No. 4604 - Extension of the Interlocal and Financing Lease Agreement for the HAPO Center Facility Until December 31, 2025 (5 minutes) MOTION: I move to approve Joint Resolution No. 4604, modifying the Interlocal Cooperation Agreement between the City of Pasco and Franklin County, Washington, regarding the financing, acquisition, and ownership of a multi-purpose arena and exhibition facility (HAPO Center). 6. ADJOURNMENT 7. ADDITIONAL NOTES (a) (RC) Roll Call Vote Required * Item not previously discussed Q Quasi-Judicial Matter MF# “Master File #....” 95 - 96 (b) Adopted Council Goals (Reference Only) (c) This meeting is broadcast live on PSC-TV Channel 191 on Page 2 of 96 Charter/Spectrum Cable in Pasco and Richland and streamed at www.pasco-wa.gov/psctvlive. Audio equipment available for the hearing impaired; contact the City Clerk for assistance. Servicio de intérprete puede estar disponible con aviso. Por favor avisa la Secretaria Municipal dos días antes para garantizar la disponibilidad. (Spanish language interpreter service may be provided upon request. Please provide two business day's notice to the City Clerk to ensure availability.) Page 3 of 96 AGENDA REPORT FOR: City Council May 21, 2025 TO: Dave Zabell, Interim City Manager City Council Special Meeting: 5/27/25 FROM: Maria Serra, Public Works Director Public Works SUBJECT: Ordinance No. 4767 - Transportation Impact Fee Program (5 minutes staff presenation) I. ATTACHMENT(S): Presentation Ordinance (Option A) Ordinance (Option B) Pasco Transportation Impact Fee (TIF) Rate Study - Five district Pasco Transportation Impact Fee (TIF) Rate Study - Four district II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: MOTION: OPTION A (5 Districts): I move to adopt Ordinance No. 4767, related to Transportation Impact Fees, amending certain provisions in Chapters 3.35 and 3.40 of the Pasco Municipal Code, and providing for severability and an effective date, and, further, authorize publication by summary only. -OR- OPTION B (4 Districts): I move to adopt Ordinance No. 4767, related to Transportation Impact Fees, amending certain provisions in Chapters 3.35 and 3.40 of the Pasco Municipal Code, and providing for severability and an effective date, and, further, authorize publication by summary only. III. FISCAL IMPACT: None at this time. If adopted, the program will generate revenue to support City-led Capital projects within the TIF list of projects. Page 4 of 96 IV. HISTORY AND FACTS BRIEF: The City initiated a Traffic Impact Fee Study to assess City's transportation network, identify key critical capital projects and associated costs needed to accommodate future growth, determine the impact of future growth on these key projects, account for other funding sources, determine the financial impact of growth due to the impact of new development on City’s transportation infrastructure, and develop an equitable impact to mitigate said impact. The intent of a Transportation Impact Fee (TIF) is to ensure that new growth funds its share of transportation facilities adequate to serve growth related new development, that development pays for its share, and to avoid degradation in level of service to all residents. Short of an adequate traffic impact fee, the City has historically had to rely on proportionate shares to fund critical transportation projects through SEPA which has proven to be an unreliable, inequitable, and sometimes inconsistent approach. This study is part of a long-term strategy to create a more sustainable system by which new development can be fairly and effectively mitigated. The City's current fees were implemented in March, 2005 and then updated in February, 2009 and applies to all development west of 20th Avenue. The lack of updating and calibration of this fee has created significant challenges for the City to fund the construction of adequate transportation infrastructure, and assure new growth is adequately mitigated. Current Traffic Impact Fees Residential developments $709.00 Multifamily units $435.00 Commercial $43.00 per daily vehicle trip The Traffic Impact Fee Study was accomplished with the assistance of Fehr & Peers, a transportation engineering firm in close collaboration with senior City staff from the City Manager's Office, Community & Economic Development and Public Works. V. DISCUSSION: The needs of a growing City like Pasco are significant. In the case of an analysis such as this, the project list could exceed 30 projects. City staff have worked diligently that with the consultants and community to produce a project list represents the most critical projects needed to ensure a satisfactorily functioning transportation system capable of accommodating anticipated growth. The table below lists projects included in the Traffic Impact Fee Analysis. Page 5 of 96 It is important to keep in mind that the TIF is calculated per vehicle trip generated during the PM peak hour, which is determined by (a) the use of the property, (b) the location of the property, and (c) based on trip generation data from the Institute of Transportation Engineers. Currently, a single family residential is .94 PM peak hour trip. For example, if a residence was to be built within the North District under the 5-District plan below, the TIF fee would be 94%, or 0.94X2,215.84 (the per trip rate) which would be $2,082.89 for a single family residence. As discussed with Council at a recent Workshop meeting, with above projects in mind and significant traffic modeling completed by Fehr & Peers, staff has presented options in prior discussion on this topic. At Council's direction, two TIF options are available for Council's consideration, as follows: A. Five District Program North - $2,215.84 West - $1,395.77 South - $3,862.46 Central - $2,694.78 East - $812.06 Page 6 of 96 B. Four District Program North - $2,215.84 West - $1,395.77 South - $3,572.52 East - $812.06 Per Council's guidance, staff conducted a hybrid (in-person and virtual) outreach event on May 7th and have provided online forms to receive additional feedback from the community. Feedback was limited however staff heard a common theme of increased development costs and the impact on the cost of housing, coupled with an understanding that the City cannot allow the transportation system to fail. Further, from those participating, there is full support for the projects list and even some interest in seeing additional projects added. Comments from the public included a sentiment of growth paying for growth impacts. Two ordinances have been prepared for Council's consideration, one a five-district Page 7 of 96 program, the other a four-district program. Each ordinance includes the update of the program in PMC to reflect districting and updated fees, as well as adjustment to the name of the fund where the revenues generated by the program will be held. The final report and ordinance to implement the changes are provided for Council’s consideration and potential action. Page 8 of 96 Transportation Impact Fee (TIF) Program Update May 27, 2025 Special Meeting Pa g e 9 o f 9 6 Tonight’s Presentation Background Review Program Options for Pasco 01 02 Pa g e 1 0 o f 9 6 Background Review 3 Pa g e 1 1 o f 9 6 Pasco TIF Update Schedule Milestones Develop Prelim TIF Project List January Council Updates February- March TIF Analysis February Council Meeting March 17 Draft Rate Calculation March-April Council Meeting April 28 Outreach May 7 Finalize Report May Council for Approval June Pasco TIF Update Schedule Milestones - 2025 Pa g e 1 2 o f 9 6 List of Projects Capacity Projects Portion Due to New Growth Cost Allocated to Impact Fees Eligible Cost Growth in Trips Cost Per Trip allocated to Impact fees Non-Capacity Projects (maintenance/safety- only) Portion Due to Existing Deficiency Cost Paid by City or Others TIF Project list identified from adopted TIP. Projects evaluated for impact fee eligibility. Non-capacity investments/ maintenance/ improvements are removed From remaining projects, projects or portions of project addressing existing deficiency and non city growth are removed. Remaining eligible program cost is divided by Pasco’s expected growth in PM peak hour trips for next 20 years. Development of Fee Schedule for Land Uses Development of fee schedule to associate trip rate to individual land uses either citywide or within "service areas" or districts. TIF Required Methodology: Pa g e 1 3 o f 9 6 Eligible Impact Fee Cost Calculation Project Cost* 1- Existing Deficiency Percentage Percentage of Growth within City Impact Fee Eligible Cost To ensure that impact fees have a strong nexus with development projects, the City may establish multiple geographic service areas or districts for the updated TIF program. *Project Cost can include consideration for other potential or anticipated funding sources. Pa g e 1 4 o f 9 6 Pasco’s Current TIF Program Established by Ordinance 3719 in 2005 Updated by Ordinance 3905 in 2009 PMC Chapter 3.40 & 3.35.230 Development Type Fee Residential Development (Single Family Detached) $709.00/unit Multifamily $435.00/unit Commercial $43.00/daily vehicle trip Pa g e 1 5 o f 9 6 TIF Rates in Washington In 2024 MRSC compared TIF rates of 74 cities and 5 counties in Washinton State •Citywide rates ranged from $907 - $15,427 per PM Peak Hour Trip •Average Rate was $5,717 Neighboring City Programs •Richland –$1,816 - $4,952 per PM Peak Hour Trip •Kennewick –$434 - $1,692 per PM Peak Hour Trip •West Richland – $1,935 per PM Peak Hour Trip Pa g e 1 6 o f 9 6 TIF Program Update for Pasco 9 Pa g e 1 7 o f 9 6 Proposed TIF Project List 10 Pasco TIF Project List 1 Rd 40 E Extension 2 Burns Rd Extension 3 Road 76 Overpass 4 Sandifur Pkwy/Rd 76 5 Burden Blvd/Rd 60 6 Burden Rd/Madison Ave 7 Burden Rd/Rd 44 8 Lewis St/Heritage Blvd 9 Rainier Ave/Kartchner St 10 Sandifur Pkwy/Rd 84 11 Rd 76 Improvements 12 Sandifur Pkwy/Convention Dr 13 Argent Rd Widening (Phase 4) 14 Court Street/Road 60 15 Burns Rd Extension to Glade Road 16 Harris Rd/Crescent Rd Overpass 17 I-182/Broadmoor Blvd I/C 18 Burns Rd/Rd 68 19 Court Street/Road 100 20 Harris Rd Realignment Pa g e 1 8 o f 9 6 1125% of total Project Cost Proposed TIF Project List Pa g e 1 9 o f 9 6 Five District Program 12 District TIF Rate North $2,215.84 West $1,395.77 South $3,862.46 Central $2,694.78 East $812.06 Fee per PM Peak Hour Trip Pa g e 2 0 o f 9 6 Four District Program 13 Fee per PM Peak Hour Trip District TIF Rate North $2,215.84 West $1,395.77 South $3,572.52 East $812.06 Pa g e 2 1 o f 9 6 Option A: Five District Program Option B: Four District Program District TIF Rate North $2,215.84 West $1,395.77 South $3,862.46 Central $2,694.78 East $812.06 Fee per PM Peak Hour Trip Fee per PM Peak Hour Trip District TIF Rate North $2,215.84 West $1,395.77 South $3,572.52 East $812.06 Pa g e 2 2 o f 9 6 The TIF Program and the Development Review Process TIAs still need to happen While Pasco will still require TIAs, the threshold for when developments are required to complete a TIA will be reviewed. Reduced scope of analysis Impact fees mean that development’s contribution to TIF projects is known. Analysis can be focused on other facilities not covered by TIF program. More expedited process Fewer and more focused TIAs speed up the development process. Pa g e 2 3 o f 9 6 Schedule •Final Report and Ordinance – May/Early June •Traffic Impact Analysis Process Revision – June/July - Staff will be recommending changes to current process. •Reduced scope from current process •In house review for smaller & less complex projects •Review of thresholds for types of analysis Pa g e 2 4 o f 9 6 QuestionsPa g e 2 5 o f 9 6 Ordinance – Amending PMC Related to TIF - 1 FG: 103674110.1 ORDINANCE NO. ____ AN ORDINANCE OF THE CITY OF PASCO, WASHINGTON, RELATED TO TRANSPORTATION IMPACT FEES, AMENDING CERTAIN PROVISIONS IN CHAPTERS 3.35 AND 3.40 OF THE PASCO MUNICIPAL CODE, AND PROVIDING FOR SEVERABILITY AND AN EFFECTIVE DATE. WHEREAS, the Growth Management Act, Chapter 36.70A RCW (“GMA”) requires certain Washington cities and counties to address the effects of uncoordinated and unplanned growth by engaging in comprehensive growth planning; and WHEREAS, the City of Pasco is a city required to plan under the GMA; and WHEREAS, the GMA and RCW 36.70A.040 and .070 require certain cities to adopt and periodically update a comprehensive plan and development regulations consistent with said comprehensive plan, with the comprehensive plan containing eight (8) mandatory elements including a Capital Facilities Element and Transportation Element; and WHEREAS, RCW 36.70A.070(3) requires that a Capital Facilities Element include (a) an inventory of existing capital facilities owned by public entities; (b) a forecast of capital facilities’ future needs; (c) proposed locations and capacities of expanded or new capital facilities; (d) at least a six-year plan that will finance such capital facilities within projected funding capacities and that clearly identifies sources of public money for such purposes; and (e) a requirement to reassess the land use element if probable funding falls short of meeting existing needs and to ensure that the land use element, capital facilities plan element, and capital facilities element’s financing plan are coordinated and consistent; and WHEREAS, to ensure that adequate facilities are available to serve new growth and development, and to facilitate the ability of counties, cities and towns to provide funding for, and to require that new growth and development pay a proportionate share of, the cost of new facilities needed to serve new growth and development addressed in the Capital Facilities Element of a GMA comprehensive plan, the Legislature included in the GMA express authorization for cities and counties to impose impact fees on development activity as part of the financing for public facilities; and WHEREAS, the City of Pasco has previously adopted ordinances requiring that all developers shall pay transportation impact fees in accordance with the provisions of Chapters 3.35 and 3.40 of the Pasco Municipal Code (“PMC”) at the time that an applicable development permit is available for issuance; and WHEREAS, the City of Pasco is in the process of adopting a periodic update of its Comprehensive Plan in order to comply with GMA mandates in RCW 36.70A.130; and WHEREAS, the City has updated its capital facilities planning and identified Page 26 of 96 Ordinance – Amending PMC Related to TIF - 2 FG: 103674110.1 transportation capital facilities that are needed to serve projected new growth and development; and WHEREAS, the City of Pasco has not updated its transportation impact fee since 2009; and WHEREAS, using a carefully crafted regional transportation model other engineering review, the City has analyzed the extent to which new development in different areas of the City require, and would benefit from, the transportation capital projects identified as needed to serve projected new growth and development; and WHEREAS, the results of the City’s analysis are set forth in the April, 2025 Pasco Transportation Impact Fee (TIF) Rate Study prepared by Fehr & Peers; and WHEREAS, the Pasco City Council desires to amend applicable provisions of the PMC in order to update the City’s transportation impact fee and fee schedule, in order to ensure that new growth and development pays a proportionate share of, the cost of new transportation facilities needed to serve that new growth and development; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON DO ORDAIN AS FOLLOWS: Section 1. PMC Section 3.35.230 Amended. Pasco Municipal Code Section 3.35.230 is hereby amended as set forth in Exhibit A attached to and incorporated by this reference. 3.35.230 Transportation impact fees. Fee/Charge Reference Residential developments $709.00 3.40.060 Multifamily units $435.00 3.40.060 Commercial $43.00 per daily vehicle trip 3.40.060 Fee/PM Peak Hour Trip North TIF District* $2,215.84 West TIF District $1,395.77 South TIF District $3,862.46 Central TIF District $2,694.78 East TIF District $812.06 *See Figure 1 for TIF Districts map. Page 27 of 96 Ordinance – Amending PMC Related to TIF - 3 FG: 103674110.1 Beginning January 1, 2027, and annually thereafter, the transportation impact fees for all zones charged during the preceding calendar year shall be adjusted based on the year-over-year annual, positive percentage change shown in the Engineering News Record Construction Cost Index for the Seattle, Washington, area as reported for the preceding July. Such adjusted transportation impact fees shall be set forth in the City’s fee schedule, to be effective January 1 of each following year. FIGURE 1 – TIF DISTRICTS MAP [Ord. 3905, 2009; Ord. 3719, 2005; Code 1970 § 3.07.220.] Section 2. Chapter 3.40 PMC Amended. Chapter 3.40 of the Pasco Municipal Code is hereby amended as set forth in Exhibit B attached to and incorporated by this reference. Chapter 3.40 IMPACT FEES Sections: 3.40.010 Findings and purpose. 3.40.020 Applicability. 3.40.030 Geographic scope and service area. 3.40.040 Definitions. 3.40.050 Imposition of transportation impact fees. 3.40.060 Fee schedule. 3.40.070 Time of payment of impact fee. 3.40.080 Credits. 3.40.090 Permitted adjustments. Page 28 of 96 Ordinance – Amending PMC Related to TIF - 4 FG: 103674110.1 3.40.100 I-182 corridor traffic impact fund Transportation impact fee fund. 3.40.110 Refunds. 3.40.120 Appeals. 3.40.130 Enforcement. 3.40.140 Relationship to SEPA 3.40.150 Relationship to concurrency. 3.40.160 Project list. 3.40.170 Calculation of impact fees. 3.40.180 Independent fee calculation. 3.40.010 Findings and purpose. Pursuant to RCW 82.02.050 through 82.02.100, the city adopts impact fees for transportation. The City Council finds and determines that new growth and development activities within the City will create additional demand for the construction, improvement and utilization of public streets, roadways, and right-of- way improvements by bringing additional residents, visitors, businesses and customers into the City; and further finds that new growth and development activities should pay a proportionate share of the costs of such necessary transportation and circulation facilities needed to serve this new growth and development activity. It is therefore necessary to regulate property development to improve public transportation facilities in order to through mitigating mitigate the direct impacts of the development, and to by the assessment of transportation impact fees to insure ensure that system improvements to these transportation facilities are adequately funded and available to serve the increased demand resulting from this growth and development and that new growth and development pays a predictable, proportionate share of the infrastructure costs attributable to new growth. It is the intent that the provisions of this chapter shall be liberally construed to effectively carry out the purposes of the Council in establishing this transportation impact fee. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.010.] 3.40.020 Applicability. The City shall collect transportation impact fees as provided in this Chapter as provided in PMC 3.35.230 from any applicant seeking a development approval from the City for any development activity within that portion of the City identified in PMC 3.40.030 3.40.040, where such development activity requires the issuance of a building or occupancy permit. This shall include, but not be limited to, the development of residential, commercial, retail, office, and industrial land, and includes the expansion of existing uses that create an additional demand upon public transportation facilities, as well as a change in an existing use that creates an additional demand for public transportation facilities. Transportation Impact fees shall be collected prior to the issuance of development approval, unless deferred as provided in this Chapter. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.020.] Page 29 of 96 Ordinance – Amending PMC Related to TIF - 5 FG: 103674110.1 3.40.030 Geographic scope and service area. The boundaries within which the transportation impact fees shall be charged and collected are co-extensive with the corporate city limits, those areas within the I- 182 Corridor Subarea lying west of 20th Avenue bounded on the north by the northern City boundaries and on the south and west by the Columbia River, and shall include all unincorporated areas annexed to the City on or after the effective date of the ordinance codified in this chapter. For the purpose of this chapter, the entire City shall be considered one service area. and the dDevelopment activity on of unincorporated properties that may create an additional demand upon the public traffic facilities within the City service area this geographic area imposed may be addressed in pursuant to an interlocal agreement between the City and the County specifically addressing the identification identifying and mitigation mitigating of these transportation impacts. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.030.] 3.40.040 Definitions. “Applicant for impact fee deferral” means an applicant for a development approval building permit that also makes an application for impact fee deferral. “Applicant for impact fee deferral” It includes an entity that controls the applicant, is controlled by the applicant or is under common control with the applicant. "Development activity" means construction or expansion of any residential, commercial, retail, office, and industrial building, structure, or use, any change to or expansion in use of any such building or structure, or any changes in the use of land, that creates additional demand and need for public transportation facilities. Development activity" does not include: buildings or structures constructed by a regional transit authority; or buildings or structures constructed as shelters that provide emergency housing for people experiencing homelessness, or emergency shelters for victims of domestic violence, as defined in RCW 70.123.020. “Development approval” means a building or occupancy permit authorizing the commencement of a specific development activity. “TIF District” means a geographical sub-area of the City service area, in which a specific transportation impact fee rate is imposed based on the proportional share of the cost of transportation public facility improvements within the overall service area, as determined by the relative transportation service demands and needs of the estimated new growth within the TIF District. The TIF Districts are shown in Figure 1 to PMC Section 3.35.230. "Impact fee" means a payment of money imposed upon development as a condition of development approval to pay for public facilities needed to serve new growth and development, and that is reasonably related to the new development that creates additional demand and need for public facilities, that is a proportionate share of the cost of the public facilities, and that is used for facilities that reasonably benefit the Page 30 of 96 Ordinance – Amending PMC Related to TIF - 6 FG: 103674110.1 new development. "Impact fee" does not include a reasonable permit or application fee. “Project list” means system improvements set forth in PMC 3.40.160. “Service area" means a geographic area defined by the City in which a defined set of public facilities provide service to development within the area. “Transfer” means sale as defined in RCW 82.45.010, forfeiture, foreclosure, trade, gift, receivership, bankruptcy or other change in ownership or interest in real property or improvements. [Ord. 4688 § 1, 2023; Ord. 4307, 2016; Code 1970 § 3.132.035.] 3.40.050 Imposition of transportation impact fees. Transportation impact fees shall: (1) Be imposed only for system improvements that are reasonably related to the new development. (2) Not exceed a proportionate share of the costs of system improvements that are reasonably related to the new development. (3) Be used for system improvements that will reasonably benefit the new development. (4) May be collected and spent only for transportation and right-of-way system and right-of-way improvements which are addressed by the capital facilities plan element of the City of Pasco Comprehensive Land Use Plan and adopted Ssubarea Pplans addressing the following elements: (a) Deficiencies in public transportation facilities serving existing development and the means by which existing deficiencies will be eliminated within a reasonable period of time; (b) Additional demands placed on existing public facilities by new development; and (c) Additional public facility improvements required to serve new development. (5) Should not be imposed to mitigate the same off-site transportation facility impacts that are mitigated by any other assessment required by RCW 43.21C ordinance or law of for the same development. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.040.] Page 31 of 96 Ordinance – Amending PMC Related to TIF - 7 FG: 103674110.1 3.40.060 Fee schedule. The transportation impact fee shall be collected from an applicant for development approval paid according to the rate schedule as set forth in PMC 3.35.230 for the TIF District in which the development activity is proposed and calculated as provided in Section 3.40.170. The rate schedule in PMC 3.35.230, the TIF Districts and the City-wide service area have been determined based on City of the Pasco TIF Rate Study available on file with the Pasco Community & Economic Development Director and which analyzed the anticipated number and distribution of vehicle trips generated by new growth and development and their direct impact on the transportation system and benefit from system improvements needed to serve the new development. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.050.] 3.40.070 Time of payment of impact fee. (1) All developers shall pay an impact fee in accordance with the provisions of this chapter at the time of issuance of development approval, unless fee payment is deferred as provided in subsection (2) of this section. that the applicable development permit is available for issuance. The impact fee as initially calculated, after issuance of a development permit approval, may be recalculated at the time of payment if the development is modified or conditioned in such a way as to alter the trip generation rate for the development activity. No development permit approval shall be issued until the impact fee is paid, except when a developers defers payment as provided in this section until building permits are issued for the lots within the subdivision, short plat, or planned unit development for single-family detached and attached residential construction. A developer may obtain a preliminary determination of the impact fee before application for a development permit upon providing the Director of Community and Economic Development with the information necessary for processing the application. Impact fees may be paid under protest in order to obtain a permit or other approval of development activity. (2) Deferral of Impact Fees. For each development approval construction permit for which any impact fee deferral is applied for, an administrative fee set in Chapter 3.35 PMC must simultaneously be paid to the City due to the increased burden placed on City staff for processing, recording and monitoring such deferrals. (a) A separate application must be submitted for each development approval construction permit. Each applicant, in accordance with his or her contractor registration number or other unique identification number, is entitled to annually receive deferrals for 20 development approvals construction building permits. The Page 32 of 96 Ordinance – Amending PMC Related to TIF - 8 FG: 103674110.1 Community and Economic Development Director is authorized to grant additional deferrals beyond the standard entitlement of 20. If the City at any time collects impact fees on behalf of one or more school districts for which the collection of impact fees could be delayed, the City must consult with the district or districts about additional deferrals. The City must give additional weight to recommendations of each applicable school district regarding the number of deferrals. If the City disagrees with the recommendations of one or more school districts, the City must provide the district or districts with a written rationale for its decision. (b) The period of deferral expires at the earliest of: (i) The time of final inspection by the City; (ii) The time of issuance of a certificate of occupancy by the City; (iii) The time of closing or the first transfer of the property occurring after the issuance of the applicable building permit; or (iv) Eighteen months after the building permit is issued by the City. (c) Final inspection and a certificate of occupancy will not be conducted or issued until payment in full of the impact fees is made. For the first transfer of the property, the impact fees shall be paid at closing if they have not been previously paid. Unless an agreement to the contrary is reached between the buyer and the seller, the payment of impact fees due at closing of a sale must be made from the seller’s proceeds. In the absence of an agreement to the contrary, the seller bears strict liability for the payment of the impact fees. (d) The applicant for impact fee deferral must grant and record in favor of the City an impact fee lien in the amount of the deferred impact fee. The lien must be in a form signed, dated and approved by the City Attorney, and signed by all owners of the property and persons or entities holding any interest in the property, with all signatures acknowledged as required for a deed, and recorded among the appropriate land records of Franklin County. Proof of such recording shall be submitted to the City before a building permit may be issued. The lien must specify that it is binding on all successors in title after the recordation. The lien may specify that it is subordinate to one mortgage for the purpose of construction upon the same real property granted by the applicant for impact fee deferral. A mortgage, deed of trust or other financing mechanism shall be limited to the property upon which construction will occur. A lien not paid when due shall bear interest at the statutory rate. A lien shall become due at the expiration of the deferral date. (e) If impact fees are not paid in accordance with this section, the City may institute foreclosure proceedings in accordance with Chapter 61.12 RCW. If the City of Pasco does not institute foreclosure proceedings for unpaid school impact fees within 45 days after receiving notice from a school district requesting that it do so, the district may institute foreclosure proceedings with respect to the unpaid school impact fees. Page 33 of 96 Ordinance – Amending PMC Related to TIF - 9 FG: 103674110.1 (f) After full payment of impact fees, and upon written request of the person paying said fees containing the name and address of the requester together with a copy of a proposed lien release form, the City, upon approval by the City Attorney, shall sign a lien release and deliver it to the person paying said fee either in person or by first-class mail. The property owner at the time of the release, at his or her expense, is responsible for recording the lien release. (g) An annual report shall be prepared by the Department of Community and Economic Development Department evaluating and summarizing the impact(s) of the deferral program. [Ord. 4726 § 1, 2024; Ord. 4688 § 1, 2023; Ord. 4307, 2016; Ord. 3719 § 1, 2005; Code 1970 § 3.132.060.] 3.40.080 Credits. A credit, not to exceed the transportation impact fee otherwise payable, shall be provided for the actual value of any dedication of land for, improvement to, or new construction of any transportation system improvements provided by the developer to facilities that are identified in the Comprehensive Plan capital transportation facilities element plan (or other plan expressly adopted by reference therein) and required by the City as a condition of a development approvaling the development activity subject to the permit. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.070.] 3.40.090 Permitted adjustments. The Director of Community and Economic Development may adjust the standard transportation impact fee at the time the fee is imposed as may be necessary to accommodate unusual circumstances in specific cases to insure ensure that impact fees are imposed fairly. The amount of the fee to be imposed on a particular development may be adjusted by the Director of Community and Economic Development after having given consideration to studies and other data available to the Director of Community and Economic Development or submitted by the developer demonstrating to the satisfaction of the Director of Community and Economic Development that an adjustment should be made in order to carry out the purposes of this chapter. The transportation impact fee may provide for system improvement costs previously incurred by the City to the extent that new growth and development will be served by the previously constructed improvements provided such fee shall not be imposed to make up for any systems improvement deficiencies. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.080.] 3.40.100 I-182 corridor traffic impact fund Transportation impact fee fund. The I-182 Corridor Transportation Impact Fee Fund is hereby created into which traffic impact fees shall be deposited as a special interest bearing account. All interest shall be retained in the account and expended for the purpose or purposes Page 34 of 96 Ordinance – Amending PMC Related to TIF - 10 FG: 103674110.1 for which the traffic impact fees were imposed. Annually, a report showing the source and amount of all moneys collected, earned or received to the account, and system improvements that were financed in whole or in part by the impact fees shall be prepared and presented to the City Council. Traffic impact fees for transportation system improvements shall be expended only in conformance with the City of Pasco Comprehensive Plan capital facilities plan element (and any other plan adopted by reference therein) and adopted subarea plans of the City of Pasco Comprehensive Plan , and TIF Project List adopted in PMC 3.40.160 or as hereafter amended. Traffic impact fees shall be expended or encumbered for permissible use within six ten years of receipt, unless there exists an extraordinary or compelling reason for fees to be held longer than six ten years. Such extraordinary or compelling reasons shall be identified in written findings by the City Council. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.090.] 3.40.110 Refunds. (1) The current owner of the property as reflected in the records of the Franklin County Auditor, on which an impact fee has been paid, may receive a refund of such fees if the City fails to expend or encumber the impact fees within six ten years of the date the fees were paid or longer as designated by the City Council by written findings on public transportation facilities intended to benefit the development activity for which the impact fees were paid. In determining whether traffic impact fees have been encumbered, impact fees shall be considered encumbered on a first in, first out basis. The City shall notify potential claimants by first-class mail deposited with the United States postal service at the last known address of the claimant. (2) The request for refund must be submitted to the City Council by depositing the same in the office of the City Clerk by written notice within one year of the date the right to claim the refund arises or the date that notice is given, whichever is later. Any impact fees that are not expended within these time limits, and for which no application for refund has been made within this one-year period, shall be retained and expended on the indicated capital facilities. Refunds of transportation impact fees shall include actual interest earned on the impact fees. (3) In the event the City seeks to terminate any and all impact fee requirements, all unexpended or unencumbered funds, including interest earned, shall be refunded. Upon the finding by the City Council that any and all fund requirements are to be terminated, the City shall place a notice of such termination and the availability of refunds in a newspaper of general circulation at least two times and shall notify all potential claimants by first-class mail to the last known address of the claimants. All funds available for refund shall be retained for a period of one year. At the end of one year, any remaining funds shall be retained by the City, but must be expended for the indicated public transportation facility. This notice Page 35 of 96 Ordinance – Amending PMC Related to TIF - 11 FG: 103674110.1 requirement shall not apply if there are no unexpended or unencumbered balances within the account being terminated. (4) A developer may request and shall receive a refund, including interest earned on the impact fees, when the developer does not proceed with the development activity and no impact has resulted. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.100.] 3.40.120 Appeals. (1) A developer may appeal the amount of a transportation impact fee determined by the Director of Community and Economic Development to the City Hearing Examiner under the procedures provided in Chapter 25.195 PMC. The developer shall have the burden of proving: (a) An error was committed in calculating the assessment of the impact fee or the developer’s proportionate share. (b) Such fee does not mitigate a direct impact. (c) The City based its determination on incorrect data. A developer may also submit such other information deemed relevant or appropriate for the purpose of disputing the impact fee. (d) The Director of Community and Economic Development shall meet with the developer and such other parties as are deemed necessary in order to resolve the dispute. If the dispute is not resolved by the Director, the developer may appeal the imposition of the impact fee to the Hearing Examiner. The Hearing Examiner only determines whether the fee is reasonable, but does not make any adjustment thereto. The Hearing Examiner may remand the matter to the Community and Economic Development Department for further consideration consistent with the Hearing Examiner’s decision. (2) An appeal from a decision of the Director of Community and Economic Development must be filed with the Hearing Examiner within 10 calendar days of the Director’s written decision regarding the fee amount. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.110.] 3.40.130 Enforcement. When a development has been identified as having a direct impact upon the public transportation facilities, and an impact fee has not been paid, the requested permit may be denied. A development permit issued after the effective date of the ordinance codified in this chapter shall be null and void if issued without substantial compliance with this chapter. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.120.] Page 36 of 96 Ordinance – Amending PMC Related to TIF - 12 FG: 103674110.1 3.40.140 Relationship to SEPA. Nothing in this chapter shall be construed as limiting applicable requirements for environmental review of proposed development activity pursuant to SEPA and other applicable city ordinances and regulations. Requirements to construct transportation system or project improvements and to pay mitigation fees may be imposed to mitigate adverse impact identified through SEPA or other environmental review, in addition to payment of transportation impact fees under this Chapter; provided, however, that a person required to pay a fee pursuant to SEPA environmental review for system improvements shall not be required to pay an impact fee under this Chapter for those same system improvements. Nothing in this chapter shall be construed to limit the city’s authority to deny development permits when a proposal would result in significant adverse transportation impacts identified through SEPA environmental review and reasonable mitigation measures are insufficient to mitigate the identified impact. 3.40.150 Relationship to concurrency. Neither compliance with this chapter, or the payment of any fee hereunder, shall constitute a determination of transportation concurrency under PMC Chapter 12.36. 3.40.160 Project List. The transportation system improvements included in the transportation impact fee program are: 1. Rd 40 E Extension 2. Burns Rd Extension 3. Road 76 Overpass 4. Sandifur Pkwy/Rd 76 5. Burden Blvd/Rd 60 6. Burden Rd/Madison Ave 7. Burden Rd/Rd 44 8. Lewis St/Heritage Blvd 9. Rainier Ave/Kartchner St 10. Sandifur Pkwy/Rd 84 11. Rd 76 Improvements 12. Sandifur Pkwy/Convention Dr 13. Argent Rd Widening (Phase 4) 14. Court St/Rd 60 15. Burns Rd Extension to Glade Rd 16. Harris Rd/Crescent Rd Overpass 17. I-182/Broadmoor Blvd I/C 18. Burns Rd/Rd 68 19. Court St/Rd 100 20. Harris Rd Realignment Page 37 of 96 Ordinance – Amending PMC Related to TIF - 13 FG: 103674110.1 3.40.170 Calculation of impact fees. The transportation impact fee is calculated by the net calculated vehicle PM peak trips generated by a proposed development multiplied by the current transportation impact fee per PM peak hour trip set forth in PMC 3.35.230 for the TIF District the project is located. When estimating an impact fee for a development or land use change, the following procedure should be used to estimate PM peak hour vehicle trips and associated impact fees: 1. Review the most recent version of the ITE Trip Generation Manual for the estimated number of PM peak vehicle trips, selecting the most appropriate land use for the proposed development based on sound engineering judgement and land uses available from the ITE Manual. 2. Reduce PM peak hour vehicle trips based on the pass-by rate in the most recent version of the ITE manual. a. The use of pass-by rates from the ITE Trip Generation Manual applies to select land uses from the following land use categories: i. Institutional ii. Retail iii. Services. 3. Apply internal capture rates for mixed-use developments. a. Internal capture adjustments apply to mixed-use developments only and should be based on the most recent version of the ITE manual. These calculations identify the number of internal trips (those within a mixed-use development) and external trips (those starting or ending outside of the mixed-use development). 4. Multiply the resulting estimate for new PM peak vehicle trips by the adopted cost per trip rate for the relevant TIF District. 3.40.180 Independent fee calculation. As an alternative to payment of impact fees as provided in the schedules set forth in this chapter, any person required to pay impact fees may request that such fees be calculated according to an independent fee calculation study submitted by such person and approved by the Community & Economic Development Director as provided in this section. A person required to pay impact fees may submit an independent fee calculation study for one or more impact fees and use the impact fee schedules in this chapter for one or more impact fees. All independent fee calculation studies shall be submitted to the Director for review and approval. The study shall be accompanied by the fee set by City Council resolution for the review of such studies. Page 38 of 96 Ordinance – Amending PMC Related to TIF - 14 FG: 103674110.1 The independent fee calculation study shall meet the following standards: a. The study shall follow accepted impact fee assessment practices and methodologies. b. The study shall use acceptable data sources, and the data shall be comparable with the uses and intensities proposed for the proposed development activity. c. The study shall comply with the applicable State laws governing impact fees, including but not limited to RCW 82.02.060 or its successor. d. The study, including any data collection and analysis, shall be prepared and documented by professionals qualified in their respective fields. e. The study shall show the basis upon which the independent fee calculation was made. The Director shall consider the study and documentation submitted by the person required to pay the impact fees but is not required to accept the study if the Director decides the study is not accurate or reliable. The Director may, in the alternative, require the person submitting the study to submit additional or different documentation for consideration. If the Director decides that outside experts are needed to review the study, the applicant shall be responsible for paying for the reasonable cost of a review by outside experts. If an acceptable independent fee calculation study is not presented, the person shall pay the impact fees based upon the process and schedules in this chapter If an acceptable independent fee calculation study is presented, the Director may adjust the fee to that appropriate to the particular development activity. Section 3. Severability. If any section, subsection, sentence, clause, phrase or word of this ordinance should be held to the invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality thereof shall not affect the validity or constitutionality of any other section, subsection, sentence, clause phrase or word of this ordinance. Section 4. Corrections. Upon approval by the city attorney, the city clerk or the code reviser are authorized to make necessary corrections to this ordinance, including scrivener’s errors or clerical mistakes; reference to other local, state, or federal laws, rules, or regulation s; or numbering or referencing of ordinances or their sections and subsections. Section 5. Effective Date. This ordinance shall take full force and effect five (5) days after approval, passage and publication as required by law. Page 39 of 96 Ordinance – Amending PMC Related to TIF - 15 FG: 103674110.1 PASSED by the City Council of the City of Pasco, Washington, on this ___ day of _____, 2025. _____________________________ Pete Serrano Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorneys Published: _____________________________ Page 40 of 96 Ordinance – Amending PMC Related to TIF - 1 FG: 103674110.1 ORDINANCE NO. ____ AN ORDINANCE OF THE CITY OF PASCO, WASHINGTON, RELATED TO TRANSPORTATION IMPACT FEES, AMENDING CERTAIN PROVISIONS IN CHAPTERS 3.35 AND 3.40 OF THE PASCO MUNICIPAL CODE, AND PROVIDING FOR SEVERABILITY AND AN EFFECTIVE DATE. WHEREAS, the Growth Management Act, Chapter 36.70A RCW (“GMA”) requires certain Washington cities and counties to address the effects of uncoordinated and unplanned growth by engaging in comprehensive growth planning; and WHEREAS, the City of Pasco is a city required to plan under the GMA; and WHEREAS, the GMA and RCW 36.70A.040 and .070 require certain cities to adopt and periodically update a comprehensive plan and development regulations consistent with said comprehensive plan, with the comprehensive plan containing eight (8) mandatory elements including a Capital Facilities Element and Transportation Element; and WHEREAS, RCW 36.70A.070(3) requires that a Capital Facilities Element include (a) an inventory of existing capital facilities owned by public entities; (b) a forecast of capital facilities’ future needs; (c) proposed locations and capacities of expanded or new capital facilities; (d) at least a six-year plan that will finance such capital facilities within projected funding capacities and that clearly identifies sources of public money for such purposes; and (e) a requirement to reassess the land use element if probable funding falls short of meeting existing needs and to ensure that the land use element, capital facilities plan element, and capital facilities element’s financing plan are coordinated and consistent; and WHEREAS, to ensure that adequate facilities are available to serve new growth and development, and to facilitate the ability of counties, cities and towns to provide funding for, and to require that new growth and development pay a proportionate share of, the cost of new facilities needed to serve new growth and development addressed in the Capital Facilities Element of a GMA comprehensive plan, the Legislature included in the GMA express authorization for cities and counties to impose impact fees on development activity as part of the financing for public facilities; and WHEREAS, the City of Pasco has previously adopted ordinances requiring that all developers shall pay transportation impact fees in accordance with the provisions of Chapters 3.35 and 3.40 of the Pasco Municipal Code (“PMC”) at the time that an applicable development permit is available for issuance; and WHEREAS, the City of Pasco is in the process of adopting a periodic update of its Comprehensive Plan in order to comply with GMA mandates in RCW 36.70A.130; and WHEREAS, the City has updated its capital facilities planning and identified Page 41 of 96 Ordinance – Amending PMC Related to TIF - 2 FG: 103674110.1 transportation capital facilities that are needed to serve projected new growth and development; and WHEREAS, the City of Pasco has not updated its transportation impact fee since 2009; and WHEREAS, using a carefully crafted regional transportation model other engineering review, the City has analyzed the extent to which new development in different areas of the City require, and would benefit from, the transportation capital projects identified as needed to serve projected new growth and development; and WHEREAS, the results of the City’s analysis are set forth in the April, 2025 Pasco Transportation Impact Fee (TIF) Rate Study prepared by Fehr & Peers; and WHEREAS, the Pasco City Council desires to amend applicable provisions of the PMC in order to update the City’s transportation impact fee and fee schedule, in order to ensure that new growth and development pays a proportionate share of, the cost of new transportation facilities needed to serve that new growth and development; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON DO ORDAIN AS FOLLOWS: Section 1. PMC Section 3.35.230 Amended. Pasco Municipal Code Section 3.35.230 is hereby amended as set forth in Exhibit A attached to and incorporated by this reference. 3.35.230 Transportation impact fees. Fee/Charge Reference Residential developments $709.00 3.40.060 Multifamily units $435.00 3.40.060 Commercial $43.00 per daily vehicle trip 3.40.060 Fee/PM Peak Hour Trip North TIF District* $2,215.84 West TIF District $1,395.77 South TIF District $3,372.52 East TIF District $812.06 *See Figure 1 for TIF Districts map. Page 42 of 96 Ordinance – Amending PMC Related to TIF - 3 FG: 103674110.1 Beginning January 1, 2027, and annually thereafter, the transportation impact fees for all zones charged during the preceding calendar year shall be adjusted based on the year-over-year annual, positive percentage change shown in the Engineering News Record Construction Cost Index for the Seattle, Washington, area as reported for the preceding July. Such adjusted transportation impact fees shall be set forth in the City’s fee schedule, to be effective January 1 of each following year. FIGURE 1 – TIF DISTRICTS MAP [Ord. 3905, 2009; Ord. 3719, 2005; Code 1970 § 3.07.220.] Section 2. Chapter 3.40 PMC Amended. Chapter 3.40 of the Pasco Municipal Code is hereby amended as set forth in Exhibit B attached to and incorporated by this reference. Chapter 3.40 IMPACT FEES Sections: 3.40.010 Findings and purpose. 3.40.020 Applicability. 3.40.030 Geographic scope and service area. 3.40.040 Definitions. 3.40.050 Imposition of transportation impact fees. 3.40.060 Fee schedule. 3.40.070 Time of payment of impact fee. 3.40.080 Credits. 3.40.090 Permitted adjustments. 3.40.100 I-182 corridor traffic impact fund Transportation impact fee fund. Page 43 of 96 Ordinance – Amending PMC Related to TIF - 4 FG: 103674110.1 3.40.110 Refunds. 3.40.120 Appeals. 3.40.130 Enforcement. 3.40.140 Relationship to SEPA 3.40.150 Relationship to concurrency. 3.40.160 Project list. 3.40.170 Calculation of impact fees. 3.40.180 Independent fee calculation. 3.40.010 Findings and purpose. Pursuant to RCW 82.02.050 through 82.02.100, the city adopts impact fees for transportation. The City Council finds and determines that new growth and development activities within the City will create additional demand for the construction, improvement and utilization of public streets, roadways, and right-of- way improvements by bringing additional residents, visitors, businesses and customers into the City; and further finds that new growth and development activities should pay a proportionate share of the costs of such necessary transportation and circulation facilities needed to serve this new growth and development activity. It is therefore necessary to regulate property development to improve public transportation facilities in order to through mitigating mitigate the direct impacts of the development, and to by the assessment of transportation impact fees to insure ensure that system improvements to these transportation facilities are adequately funded and available to serve the increased demand resulting from this growth and development and that new growth and development pays a predictable, proportionate share of the infrastructure costs attributable to new growth. It is the intent that the provisions of this chapter shall be liberally construed to effectively carry out the purposes of the Council in establishing this transportation impact fee. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.010.] 3.40.020 Applicability. The City shall collect transportation impact fees as provided in this Chapter as provided in PMC 3.35.230 from any applicant seeking a development approval from the City for any development activity within that portion of the City identified in PMC 3.40.030 3.40.040, where such development activity requires the issuance of a building or occupancy permit. This shall include, but not be limited to, the development of residential, commercial, retail, office, and industrial land, and includes the expansion of existing uses that create an additional demand upon public transportation facilities, as well as a change in an existing use that creates an additional demand for public transportation facilities. Transportation Impact fees shall be collected prior to the issuance of development approval, unless deferred as provided in this Chapter. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.020.] Page 44 of 96 Ordinance – Amending PMC Related to TIF - 5 FG: 103674110.1 3.40.030 Geographic scope and service area. The boundaries within which the transportation impact fees shall be charged and collected are co-extensive with the corporate city limits, those areas within the I- 182 Corridor Subarea lying west of 20th Avenue bounded on the north by the northern City boundaries and on the south and west by the Columbia River, and shall include all unincorporated areas annexed to the City on or after the effective date of the ordinance codified in this chapter. For the purpose of this chapter, the entire City shall be considered one service area. and the dDevelopment activity on of unincorporated properties that may create an additional demand upon the public traffic facilities within the City service area this geographic area imposed may be addressed in pursuant to an interlocal agreement between the City and the County specifically addressing the identification identifying and mitigation mitigating of these transportation impacts. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.030.] 3.40.040 Definitions. “Applicant for impact fee deferral” means an applicant for a development approval building permit that also makes an application for impact fee deferral. “Applicant for impact fee deferral” It includes an entity that controls the applicant, is controlled by the applicant or is under common control with the applicant. "Development activity" means construction or expansion of any residential, commercial, retail, office, and industrial building, structure, or use, any change to or expansion in use of any such building or structure, or any changes in the use of land, that creates additional demand and need for public transportation facilities. Development activity" does not include: buildings or structures constructed by a regional transit authority; or buildings or structures constructed as shelters that provide emergency housing for people experiencing homelessness, or emergency shelters for victims of domestic violence, as defined in RCW 70.123.020. “Development approval” means a building or occupancy permit authorizing the commencement of a specific development activity. “TIF District” means a geographical sub-area of the City service area, in which a specific transportation impact fee rate is imposed based on the proportional share of the cost of transportation public facility improvements within the overall service area, as determined by the relative transportation service demands and needs of the estimated new growth within the TIF District. The TIF Districts are shown in Figure 1 to PMC Section 3.35.230. "Impact fee" means a payment of money imposed upon development as a condition of development approval to pay for public facilities needed to serve new growth and development, and that is reasonably related to the new development that creates additional demand and need for public facilities, that is a proportionate share of the cost of the public facilities, and that is used for facilities that reasonably benefit the Page 45 of 96 Ordinance – Amending PMC Related to TIF - 6 FG: 103674110.1 new development. "Impact fee" does not include a reasonable permit or application fee. “Project list” means system improvements set forth in PMC 3.40.160. “Service area" means a geographic area defined by the City in which a defined set of public facilities provide service to development within the area. “Transfer” means sale as defined in RCW 82.45.010, forfeiture, foreclosure, trade, gift, receivership, bankruptcy or other change in ownership or interest in real property or improvements. [Ord. 4688 § 1, 2023; Ord. 4307, 2016; Code 1970 § 3.132.035.] 3.40.050 Imposition of transportation impact fees. Transportation impact fees shall: (1) Be imposed only for system improvements that are reasonably related to the new development. (2) Not exceed a proportionate share of the costs of system improvements that are reasonably related to the new development. (3) Be used for system improvements that will reasonably benefit the new development. (4) May be collected and spent only for transportation and right-of-way system and right-of-way improvements which are addressed by the capital facilities plan element of the City of Pasco Comprehensive Land Use Plan and adopted Ssubarea Pplans addressing the following elements: (a) Deficiencies in public transportation facilities serving existing development and the means by which existing deficiencies will be eliminated within a reasonable period of time; (b) Additional demands placed on existing public facilities by new development; and (c) Additional public facility improvements required to serve new development. (5) Should not be imposed to mitigate the same off-site transportation facility impacts that are mitigated by any other assessment required by RCW 43.21C ordinance or law of for the same development. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.040.] Page 46 of 96 Ordinance – Amending PMC Related to TIF - 7 FG: 103674110.1 3.40.060 Fee schedule. The transportation impact fee shall be collected from an applicant for development approval paid according to the rate schedule as set forth in PMC 3.35.230 for the TIF District in which the development activity is proposed and calculated as provided in Section 3.40.170. The rate schedule in PMC 3.35.230, the TIF Districts and the City-wide service area have been determined based on City of the Pasco TIF Rate Study available on file with the Pasco Community & Economic Development Director and which analyzed the anticipated number and distribution of vehicle trips generated by new growth and development and their direct impact on the transportation system and benefit from system improvements needed to serve the new development. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.050.] 3.40.070 Time of payment of impact fee. (1) All developers shall pay an impact fee in accordance with the provisions of this chapter at the time of issuance of development approval, unless fee payment is deferred as provided in subsection (2) of this section. that the applicable development permit is available for issuance. The impact fee as initially calculated, after issuance of a development permit approval, may be recalculated at the time of payment if the development is modified or conditioned in such a way as to alter the trip generation rate for the development activity. No development permit approval shall be issued until the impact fee is paid, except when a developers defers payment as provided in this section until building permits are issued for the lots within the subdivision, short plat, or planned unit development for single-family detached and attached residential construction. A developer may obtain a preliminary determination of the impact fee before application for a development permit upon providing the Director of Community and Economic Development with the information necessary for processing the application. Impact fees may be paid under protest in order to obtain a permit or other approval of development activity. (2) Deferral of Impact Fees. For each development approval construction permit for which any impact fee deferral is applied for, an administrative fee set in Chapter 3.35 PMC must simultaneously be paid to the City due to the increased burden placed on City staff for processing, recording and monitoring such deferrals. (a) A separate application must be submitted for each development approval construction permit. Each applicant, in accordance with his or her contractor registration number or other unique identification number, is entitled to annually receive deferrals for 20 development approvals construction building permits. The Page 47 of 96 Ordinance – Amending PMC Related to TIF - 8 FG: 103674110.1 Community and Economic Development Director is authorized to grant additional deferrals beyond the standard entitlement of 20. If the City at any time collects impact fees on behalf of one or more school districts for which the collection of impact fees could be delayed, the City must consult with the district or districts about additional deferrals. The City must give additional weight to recommendations of each applicable school district regarding the number of deferrals. If the City disagrees with the recommendations of one or more school districts, the City must provide the district or districts with a written rationale for its decision. (b) The period of deferral expires at the earliest of: (i) The time of final inspection by the City; (ii) The time of issuance of a certificate of occupancy by the City; (iii) The time of closing or the first transfer of the property occurring after the issuance of the applicable building permit; or (iv) Eighteen months after the building permit is issued by the City. (c) Final inspection and a certificate of occupancy will not be conducted or issued until payment in full of the impact fees is made. For the first transfer of the property, the impact fees shall be paid at closing if they have not been previously paid. Unless an agreement to the contrary is reached between the buyer and the seller, the payment of impact fees due at closing of a sale must be made from the seller’s proceeds. In the absence of an agreement to the contrary, the seller bears strict liability for the payment of the impact fees. (d) The applicant for impact fee deferral must grant and record in favor of the City an impact fee lien in the amount of the deferred impact fee. The lien must be in a form signed, dated and approved by the City Attorney, and signed by all owners of the property and persons or entities holding any interest in the property, with all signatures acknowledged as required for a deed, and recorded among the appropriate land records of Franklin County. Proof of such recording shall be submitted to the City before a building permit may be issued. The lien must specify that it is binding on all successors in title after the recordation. The lien may specify that it is subordinate to one mortgage for the purpose of construction upon the same real property granted by the applicant for impact fee deferral. A mortgage, deed of trust or other financing mechanism shall be limited to the property upon which construction will occur. A lien not paid when due shall bear interest at the statutory rate. A lien shall become due at the expiration of the deferral date. (e) If impact fees are not paid in accordance with this section, the City may institute foreclosure proceedings in accordance with Chapter 61.12 RCW. If the City of Pasco does not institute foreclosure proceedings for unpaid school impact fees within 45 days after receiving notice from a school district requesting that it do so, the district may institute foreclosure proceedings with respect to the unpaid school impact fees. Page 48 of 96 Ordinance – Amending PMC Related to TIF - 9 FG: 103674110.1 (f) After full payment of impact fees, and upon written request of the person paying said fees containing the name and address of the requester together with a copy of a proposed lien release form, the City, upon approval by the City Attorney, shall sign a lien release and deliver it to the person paying said fee either in person or by first-class mail. The property owner at the time of the release, at his or her expense, is responsible for recording the lien release. (g) An annual report shall be prepared by the Department of Community and Economic Development Department evaluating and summarizing the impact(s) of the deferral program. [Ord. 4726 § 1, 2024; Ord. 4688 § 1, 2023; Ord. 4307, 2016; Ord. 3719 § 1, 2005; Code 1970 § 3.132.060.] 3.40.080 Credits. A credit, not to exceed the transportation impact fee otherwise payable, shall be provided for the actual value of any dedication of land for, improvement to, or new construction of any transportation system improvements provided by the developer to facilities that are identified in the Comprehensive Plan capital transportation facilities element plan (or other plan expressly adopted by reference therein) and required by the City as a condition of a development approvaling the development activity subject to the permit. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.070.] 3.40.090 Permitted adjustments. The Director of Community and Economic Development may adjust the standard transportation impact fee at the time the fee is imposed as may be necessary to accommodate unusual circumstances in specific cases to insure ensure that impact fees are imposed fairly. The amount of the fee to be imposed on a particular development may be adjusted by the Director of Community and Economic Development after having given consideration to studies and other data available to the Director of Community and Economic Development or submitted by the developer demonstrating to the satisfaction of the Director of Community and Economic Development that an adjustment should be made in order to carry out the purposes of this chapter. The transportation impact fee may provide for system improvement costs previously incurred by the City to the extent that new growth and development will be served by the previously constructed improvements provided such fee shall not be imposed to make up for any systems improvement deficiencies. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.080.] 3.40.100 I-182 corridor traffic impact fund Transportation impact fee fund. The I-182 Corridor Transportation Impact Fee Fund is hereby created into which traffic impact fees shall be deposited as a special interest bearing account. All interest shall be retained in the account and expended for the purpose or purposes Page 49 of 96 Ordinance – Amending PMC Related to TIF - 10 FG: 103674110.1 for which the traffic impact fees were imposed. Annually, a report showing the source and amount of all moneys collected, earned or received to the account, and system improvements that were financed in whole or in part by the impact fees shall be prepared and presented to the City Council. Traffic impact fees for transportation system improvements shall be expended only in conformance with the City of Pasco Comprehensive Plan capital facilities plan element (and any other plan adopted by reference therein) and adopted subarea plans of the City of Pasco Comprehensive Plan , and TIF Project List adopted in PMC 3.40.160 or as hereafter amended. Traffic impact fees shall be expended or encumbered for permissible use within six ten years of receipt, unless there exists an extraordinary or compelling reason for fees to be held longer than six ten years. Such extraordinary or compelling reasons shall be identified in written findings by the City Council. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.090.] 3.40.110 Refunds. (1) The current owner of the property as reflected in the records of the Franklin County Auditor, on which an impact fee has been paid, may receive a refund of such fees if the City fails to expend or encumber the impact fees within six ten years of the date the fees were paid or longer as designated by the City Council by written findings on public transportation facilities intended to benefit the development activity for which the impact fees were paid. In determining whether traffic impact fees have been encumbered, impact fees shall be considered encumbered on a first in, first out basis. The City shall notify potential claimants by first-class mail deposited with the United States postal service at the last known address of the claimant. (2) The request for refund must be submitted to the City Council by depositing the same in the office of the City Clerk by written notice within one year of the date the right to claim the refund arises or the date that notice is given, whichever is later. Any impact fees that are not expended within these time limits, and for which no application for refund has been made within this one-year period, shall be retained and expended on the indicated capital facilities. Refunds of transportation impact fees shall include actual interest earned on the impact fees. (3) In the event the City seeks to terminate any and all impact fee requirements, all unexpended or unencumbered funds, including interest earned, shall be refunded. Upon the finding by the City Council that any and all fund requirements are to be terminated, the City shall place a notice of such termination and the availability of refunds in a newspaper of general circulation at least two times and shall notify all potential claimants by first-class mail to the last known address of the claimants. All funds available for refund shall be retained for a period of one year. At the end of one year, any remaining funds shall be retained by the City, but must be expended for the indicated public transportation facility. This notice Page 50 of 96 Ordinance – Amending PMC Related to TIF - 11 FG: 103674110.1 requirement shall not apply if there are no unexpended or unencumbered balances within the account being terminated. (4) A developer may request and shall receive a refund, including interest earned on the impact fees, when the developer does not proceed with the development activity and no impact has resulted. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.100.] 3.40.120 Appeals. (1) A developer may appeal the amount of a transportation impact fee determined by the Director of Community and Economic Development to the City Hearing Examiner under the procedures provided in Chapter 25.195 PMC. The developer shall have the burden of proving: (a) An error was committed in calculating the assessment of the impact fee or the developer’s proportionate share. (b) Such fee does not mitigate a direct impact. (c) The City based its determination on incorrect data. A developer may also submit such other information deemed relevant or appropriate for the purpose of disputing the impact fee. (d) The Director of Community and Economic Development shall meet with the developer and such other parties as are deemed necessary in order to resolve the dispute. If the dispute is not resolved by the Director, the developer may appeal the imposition of the impact fee to the Hearing Examiner. The Hearing Examiner only determines whether the fee is reasonable, but does not make any adjustment thereto. The Hearing Examiner may remand the matter to the Community and Economic Development Department for further consideration consistent with the Hearing Examiner’s decision. (2) An appeal from a decision of the Director of Community and Economic Development must be filed with the Hearing Examiner within 10 calendar days of the Director’s written decision regarding the fee amount. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.110.] 3.40.130 Enforcement. When a development has been identified as having a direct impact upon the public transportation facilities, and an impact fee has not been paid, the requested permit may be denied. A development permit issued after the effective date of the ordinance codified in this chapter shall be null and void if issued without substantial compliance with this chapter. [Ord. 4688 § 1, 2023; Ord. 3719 § 1, 2005; Code 1970 § 3.132.120.] Page 51 of 96 Ordinance – Amending PMC Related to TIF - 12 FG: 103674110.1 3.40.140 Relationship to SEPA. Nothing in this chapter shall be construed as limiting applicable requirements for environmental review of proposed development activity pursuant to SEPA and other applicable city ordinances and regulations. Requirements to construct transportation system or project improvements and to pay mitigation fees may be imposed to mitigate adverse impact identified through SEPA or other environmental review, in addition to payment of transportation impact fees under this Chapter; provided, however, that a person required to pay a fee pursuant to SEPA environmental review for system improvements shall not be required to pay an impact fee under this Chapter for those same system improvements. Nothing in this chapter shall be construed to limit the city’s authority to deny development permits when a proposal would result in significant adverse transportation impacts identified through SEPA environmental review and reasonable mitigation measures are insufficient to mitigate the identified impact. 3.40.150 Relationship to concurrency. Neither compliance with this chapter, or the payment of any fee hereunder, shall constitute a determination of transportation concurrency under PMC Chapter 12.36. 3.40.160 Project List. The transportation system improvements included in the transportation impact fee program are: 1. Rd 40 E Extension 2. Burns Rd Extension 3. Road 76 Overpass 4. Sandifur Pkwy/Rd 76 5. Burden Blvd/Rd 60 6. Burden Rd/Madison Ave 7. Burden Rd/Rd 44 8. Lewis St/Heritage Blvd 9. Rainier Ave/Kartchner St 10. Sandifur Pkwy/Rd 84 11. Rd 76 Improvements 12. Sandifur Pkwy/Convention Dr 13. Argent Rd Widening (Phase 4) 14. Court St/Rd 60 15. Burns Rd Extension to Glade Rd 16. Harris Rd/Crescent Rd Overpass 17. I-182/Broadmoor Blvd I/C 18. Burns Rd/Rd 68 19. Court St/Rd 100 20. Harris Rd Realignment Page 52 of 96 Ordinance – Amending PMC Related to TIF - 13 FG: 103674110.1 3.40.170 Calculation of impact fees. The transportation impact fee is calculated by the net calculated vehicle PM peak trips generated by a proposed development multiplied by the current transportation impact fee per PM peak hour trip set forth in PMC 3.35.230 for the TIF District the project is located. When estimating an impact fee for a development or land use change, the following procedure should be used to estimate PM peak hour vehicle trips and associated impact fees: 1. Review the most recent version of the ITE Trip Generation Manual for the estimated number of PM peak vehicle trips, selecting the most appropriate land use for the proposed development based on sound engineering judgement and land uses available from the ITE Manual. 2. Reduce PM peak hour vehicle trips based on the pass-by rate in the most recent version of the ITE manual. a. The use of pass-by rates from the ITE Trip Generation Manual applies to select land uses from the following land use categories: i. Institutional ii. Retail iii. Services. 3. Apply internal capture rates for mixed-use developments. a. Internal capture adjustments apply to mixed-use developments only and should be based on the most recent version of the ITE manual. These calculations identify the number of internal trips (those within a mixed-use development) and external trips (those starting or ending outside of the mixed-use development). 4. Multiply the resulting estimate for new PM peak vehicle trips by the adopted cost per trip rate for the relevant TIF District. 3.40.180 Independent fee calculation. As an alternative to payment of impact fees as provided in the schedules set forth in this chapter, any person required to pay impact fees may request that such fees be calculated according to an independent fee calculation study submitted by such person and approved by the Community & Economic Development Director as provided in this section. A person required to pay impact fees may submit an independent fee calculation study for one or more impact fees and use the impact fee schedules in this chapter for one or more impact fees. All independent fee calculation studies shall be submitted to the Director for review and approval. The study shall be accompanied by the fee set by City Council resolution for the review of such studies. Page 53 of 96 Ordinance – Amending PMC Related to TIF - 14 FG: 103674110.1 The independent fee calculation study shall meet the following standards: a. The study shall follow accepted impact fee assessment practices and methodologies. b. The study shall use acceptable data sources, and the data shall be comparable with the uses and intensities proposed for the proposed development activity. c. The study shall comply with the applicable State laws governing impact fees, including but not limited to RCW 82.02.060 or its successor. d. The study, including any data collection and analysis, shall be prepared and documented by professionals qualified in their respective fields. e. The study shall show the basis upon which the independent fee calculation was made. The Director shall consider the study and documentation submitted by the person required to pay the impact fees but is not required to accept the study if the Director decides the study is not accurate or reliable. The Director may, in the alternative, require the person submitting the study to submit additional or different documentation for consideration. If the Director decides that outside experts are needed to review the study, the applicant shall be responsible for paying for the reasonable cost of a review by outside experts. If an acceptable independent fee calculation study is not presented, the person shall pay the impact fees based upon the process and schedules in this chapter If an acceptable independent fee calculation study is presented, the Director may adjust the fee to that appropriate to the particular development activity. Section 3. Severability. If any section, subsection, sentence, clause, phrase or word of this ordinance should be held to the invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality thereof shall not affect the validity or constitutionality of any other section, subsection, sentence, clause phrase or word of this ordinance. Section 4. Corrections. Upon approval by the city attorney, the city clerk or the code reviser are authorized to make necessary corrections to this ordinance, including scrivener’s errors or clerical mistakes; reference to other local, state, or federal laws, rules, or regulation s; or numbering or referencing of ordinances or their sections and subsections. Section 5. Effective Date. This ordinance shall take full force and effect five (5) days after approval, passage and publication as required by law. Page 54 of 96 Ordinance – Amending PMC Related to TIF - 15 FG: 103674110.1 PASSED by the City Council of the City of Pasco, Washington, on this ___ day of _____, 2025. _____________________________ Pete Serrano Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorneys Published: _____________________________ Page 55 of 96 Pasco Transportation Impact Fee (TIF) Rate Study Five District Program Prepared for: Submitted on: City of Pasco May 22, 2025 Page 56 of 96 P Table of Contents Introduction ..................................................................................................................................... 1 Methodology .................................................................................................................................. 2 Project List ..................................................................................................................................... 3 Impact Fee Eligible Costs ............................................................................................................. 5 TIF Districts .....................................................................................................................................7 Trip Growth and Distribution ........................................................................................................ 8 TIF Rate Calculation ...................................................................................................................... 8 How to Develop an Impact Fee Estimate .................................................................................... 9 Future Updates and Adjustments ................................................................................................ 9 List of Figures Figure 1. Impact Fee Structure ...................................................................................................................................... 2 Figure 2. TIF Program Project List and Map ............................................................................................................. 4 Figure 3. Equation for Calculating the Eligible Impact Fee Cost ........................................................................ 5 Figure 4. TIF District Map with Project Locations ................................................................................................... 7 List of Tables Table 1. TIF Program Cost Calculation ........................................................................................................................ 6 Table 2. TIF Rate per District ......................................................................................................................................... 8 Appendices Appendix A. Pasco District Rate Calculation Page 57 of 96 City of Pasco, Transportation Impact Fee Rate Study | 1 Introduction Since 1990, Washington State law (RCW 82.02.050) has allowed jurisdictions to establish transportation impact fee (TIF) programs to fund capacity projects needed to support growth. The City of Pasco adopted a TIF program in 2005.1 In 2009, the City updated the fees of the TIF program2. The current TIF rates are unchanged from the 2009 update and are defined in Pasco Municipal Code (PMC) 3.35.230 as follows: PMC 3.35.230 Transportation impact fees. Fee/Charge Residential developments $709.00 per unit Multifamily units $435.00 per unit Commercial $43.00 per daily vehicle trip PMC 3.40 further outlines Pasco’s current transportation impact fee program. In the current program transportation impact fees shall be charged and collected for developments inside city limits, but west of 20th Avenue. State law requires jurisdictions to allow independent fee calculations, enabling any development to submit justification for a reduced fee based on trip data specific to its proposal. The remaining sections of the report describe the impact fee program methodology, the analyses performed, and the resulting recommendations. 1 City of Pasco Ordinance No 3719, March 21st 2005. 2 City of Pasco Ordinance No 3905, February 2nd 2009. Page 58 of 96 City of Pasco, Transportation Impact Fee Rate Study | 2 Methodology The transportation impact fee structure for the City of Pasco was designed to determine the fair share of transportation improvement costs that may be charged to new development. The following key points summarize the impact fee structure (see Figure 1):  A TIF project list was developed from eligible projects identified in the adopted Transportation Improvement Plan  These projects were evaluated for impact fee eligibility. Non-capacity investments, primarily maintenance, and safety improvement projects were eliminated.  Of the remaining eligible projects, the portion of those projects addressing existing deficiencies or carrying non-city growth were subtracted from eligible costs.  The remaining eligible program costs were divided by Pasco’s expected growth in PM peak hour trips over the next 20 years. The City has chosen to develop a multi- district program in which distinct geographical areas of Pasco are assessed different impact fee rates based on the proportionate share of the cost of transportation improvements projects related to service demands and needs of the estimated growth in PM peak hour trips of the district. The Ben Franklin Council of Governments (BFCOG) Travel Demand Models for the years 2025 and 2045 were used to estimate growth in PM peak hour trips in each TIF District, and to determine proportionate share of costs for each project based on travel patterns in Pasco. The City reviewed each transportation improvement project in the TIF program to account for other potential or anticipated funding sources. This further reduced the proportion of the cost of transportation improvement projects that are included in the proposed TIF program. This program assesses fees based on a cost per PM peak hour vehicle trip. Figure 1. Impact Fee Structure Page 59 of 96 City of Pasco, Transportation Impact Fee Rate Study | 3 Project List Washington State law (RCW 82.02.050) allows jurisdictions to establish TIF programs to fund “transportation system improvements” included in the capital facilities element of a jurisdiction’s comprehensive plan. TIF funds must be spent or encumbered within 10 years of collection and are assessed based on a development’s proportionate share of transportation system improvements on the TIF project list. Transportation system improvements can include physical or operational changes to existing transportation facilities, as well as new transportation connections that are built in one location to benefit projected needs at another location. Projects funded by a TIF program must add new capacity to accommodate future growth in the City. The types of investments typically funded by a TIF program in Washington State include new travel lanes, bike lanes, planting strips, sidewalks, crosswalks, midblock crossings, traffic signals, roundabouts, overhead signage, lighting, etc. In 2023, the Washington State Legislature passed Senate Bill 5452, which broadens the type of infrastructure that can be funded by TIF fees to include “bicycle and pedestrian facilities that were designed with multimodal commuting as an intended use.” With this bill now signed into law, transportation- oriented trails projects outside of the right of way have been added alongside streets and roads as public facilities on which impact fees can be spent. TIF funds cannot be spent on non-capacity activities, like maintenance, and must be related to growth within the City–they cannot be spent addressing existing deficiencies or capacity needs driven by growth outside of the jurisdiction. The City of Pasco is updating its TIF program to help fund high-priority transportation projects identified in its most recent Six-Year Transportation Improvement Plan3 which is consistent with Pasco’s Comprehensive Plan. Twenty transportation projects are included in the proposed TIF Program. Figure 2 shows the projects included in the program and their locations. 3 City of Pasco Resolution No. 4597, 2025-2030 TIP Revision, May 5 th 2025 Page 60 of 96 City of Pasco, Transportation Impact Fee Rate Study | 4 Figure 2. TIF Program Project List and Map Pa g e 6 1 o f 9 6 P City of Pasco, Transportation Impact Fee Rate Study | 5 Impact Fee Eligible Costs Figure 3 shows the calculation steps for determining the total impact fee eligible cost for each project included in the TIF Program. Figure 3. Equation for Calculating the Eligible Impact Fee Cost The City reviewed each transportation improvement project in the TIF program to account for other potential or anticipated funding sources. Two projects are anticipated to only be partially completed by 2045, so the costs of those projects were reduced to only include the portion of the project expected to be completed in the TIF program’s timeframe. Each project was evaluated to determine if any portion of the project would be needed to address deficiencies, based on the City’s adopted level of service (LOS) standards. Four projects on the proposed TIF list would be constructed, in part, to address current LOS deficiencies. For those projects, the portion of the project addressing the deficiency was calculated and that portion was removed from the eligible TIF project cost. Then travel patterns were analyzed at each project location using the BFCOG regional travel model to determine what proportion of estimated growth is from surrounding jurisdictions. Pasco does not have the authority to charge neighboring jurisdictions for their contribution to the need for projects on the TIF list. To account for this statutory limitation, adjustments were made for trips that pass- through Pasco or only have one end of the trip starting or ending in Pasco. For each project, the portion of growth within the City, including half of all trips that begin or end outside of Pasco, was calculated to range from 54-100% based on the project.4 The twenty projects included in the TIF program have an estimated combined total capital cost of $175.3 million. After accounting for other funding sources, anticipated project completion by 2045, existing deficiencies, and the percentage of growth within the City, the total eligible impact fee cost comes to $44.2 million, approximately 25% of the total estimated capital cost of the project list. Table 1 shows the TIF program cost calculation for each project. 4 This analysis examines the travel patterns of estimated new trips related to anticipated growth. In the case of four projects, 100% of the growth in traffic would come from uses in Pasco, which means the portion of new trips using this facility from outside of Pasco is either staying the same or decreasing compared to current travel patterns. Project costs were adjusted to account for other potential and anticipated funding sources and whether they are anticipated to be fully complete by 2045. Project Cost (1 - Existing Deficiency Percentage) Percentage of Growth within City Impact Fee Eligible Cost Page 62 of 96 P City of Pasco, Transportation Impact Fee Rate Study | 6 Table 1. TIF Program Cost Calculation Page 63 of 96 P City of Pasco, Transportation Impact Fee Rate Study | 7 TIF Districts A TIF district is a defined subarea of the city that is assessed a specific impact fee based on the estimated growth of a subarea and the contribution of that growth to the need for projects on the TIF list. Because people typically travel across district boundaries, growth within a district contributes to the need for projects citywide. District boundaries should be logical considering the relative impact of estimated growth in regions of Pasco. For this program, district boundaries were designated based on features like highways, major roads, and railroads. Figure 4 shows a map of the TIF Districts. Figure 4. TIF District Map with Project Locations Page 64 of 96 P City of Pasco, Transportation Impact Fee Rate Study | 8 Trip Growth and Distribution Determining the growth in travel demand caused by new development is a key requirement for a TIF program. The regional BFCOG travel model was used to estimate the expected development in each TIF district over the next 20 years. The ITE Trip Generation Manual, 11th Edition was used to estimate the PM peak hour trips generated by each district’s expected development. The BFCOG travel model was used to analyze travel patterns to determine the proportion share of each district’s expected growth on the need for each project in the TIF program. This proportionate share was used to calculate the eligible TIF program costs and resulting TIF rate for each district. TIF Rate Calculation To arrive at a recommended TIF rate per district, the total TIF program cost per district is divided by the total growth in PM peak hour trips per district based on development expected over the next 20 years. Table 2 shows the calculated PM peak hour vehicle trip TIF Rate for each district. 𝑇𝐼𝐹 𝑅𝑎𝑡𝑒 𝑝𝑒𝑟 𝑃𝑀 𝑃𝑒𝑎𝑘 𝐻𝑜𝑢𝑟 𝑉𝑒ℎ𝑖𝑐𝑙𝑒 𝑇𝑟𝑖𝑝 =𝑇𝐼𝐹 𝑃𝑟𝑜𝑔𝑟𝑎𝑚 𝐶𝑜𝑠𝑡 𝐺𝑟𝑜𝑤𝑡ℎ 𝑖𝑛 𝑉𝑒ℎ𝑖𝑐𝑙𝑒 𝑇𝑟𝑖𝑝𝑠 2025 𝑡𝑜 2045 Table 2. TIF Rate per District TIF District TIF Program Cost Growth in PM Peak Hour Vehicle Trips TIF Rate per PM Peak Hour Trip North $18,703,893 8,441 $2,215.84 West $9,625,217 6,896 $1,395.77 South $9,401,222 2,434 $3,862.46 Central $2,166,600 804 $2,694.78 East $4,305,526 5,302 $812.06 Total $44,202,458 23,877 Page 65 of 96 P City of Pasco, Transportation Impact Fee Rate Study | 9 How to Develop an Impact Fee Estimate The transportation impact fee is calculated by the net estimated vehicle PM peak trips generated by a proposed development multiplied by the current transportation impact fee per PM peak hour trip for the TIF District where the project is located. When estimating an impact fee for a development or land use change, the following procedure should be used to estimate PM peak hour vehicle trips and associated impact fees: 1. Review the most recent version of the ITE Trip Generation Manual for the estimated number of PM peak vehicle trips, selecting the most appropriate land use for the proposed development based on sound engineering judgement and land uses available from the ITE Manual. 2. Reduce PM peak hour vehicle trips based on the pass-by rate, if applicable, in the most recent version of the ITE manual. a. The use of pass-by rates from the ITE Trip Generation Manual applies to select land uses from the following land use categories: i. Institutional ii. Retail iii. Services. 3. Apply internal capture rates for mixed-use developments. a. Internal capture adjustments apply to mixed-use developments only and should be based on the most recent version of the ITE manual. These calculations identify the number of internal trips (those within a mixed-use development) and external trips (those starting or ending outside of the mixed-use development). 4. Multiply the resulting estimate for new PM peak vehicle trips by the adopted cost per trip rate for the relevant TIF District. Future Updates and Adjustments To ensure that the impact fee program remains relevant to funding projects that are important to the community and support growth needs, Fehr š Peers recommends considering whether an update to the impact fee program is necessary every two-to-five years to reflect potential changes to the project list, funding, and growth assumptions. The City should consider adopting an annual TIF rate inflation adjustment based on a relevant cost index data source. Page 66 of 96 P City of Pasco, Transportation Impact Fee Rate Study | 10 Appendix A. Pasco District Rate Calculation Page 67 of 96 ID Project Name Project Cost Estimate Estimated Project Delivery by 2045 Estimated TIF Funding % TIF Project Cost Estimate Non- Deficiency (% Eligible) Portion of Trips from Pasco Cost Included in TIF Program % West % North % South % Central % East West North South Central East 1 Rd 40 E Extension 1,900,000$ 100%30%570,000$ 100%100%570,000$ 21%21%10%0%48%119,700$ 119,700$ 57,000$ -$ 273,600$ 2 Burns Rd Extension 6,000,000$ 100%75%4,500,000$ 100%86%3,870,000$ 31%45%8%2%0%1,395,000$ 2,025,000$ 360,000$ 90,000$ -$ 3 Road 76 Overpass 30,759,000$ 100%40%12,303,600$ 100%74%9,104,664$ 0%42%31%1%0%-$ 5,167,512$ 3,814,116$ 123,036$ -$ 4 Sandifur Pkwy/Rd 76 2,031,000$ 100%80%1,624,800$ 9%94%137,458$ 25%48%20%0%1%36,558$ 70,191$ 29,246$ -$ 1,462$ 5 Burden Blvd/Rd 60 2,170,000$ 100%80%1,736,000$ 100%100%1,736,000$ 15%54%29%2%0%260,400$ 937,440$ 503,440$ 34,720$ -$ 6 Burden Rd/Madison Ave 2,170,000$ 100%80%1,736,000$ 30%100%520,800$ 11%53%30%2%4%57,288$ 276,024$ 156,240$ 10,416$ 20,832$ 7 Burden Rd/Rd 44 2,170,000$ 100%80%1,736,000$ 100%66%1,145,760$ 8%57%0%1%0%138,880$ 989,520$ -$ 17,360$ -$ 8 Lewis St/Heritage Blvd 2,400,000$ 100%70%1,680,000$ 100%88%1,478,400$ 10%14%5%0%59%168,000$ 235,200$ 84,000$ -$ 991,200$ 9 Rainier Ave/Kartchner St 2,400,000$ 100%70%1,680,000$ 22%83%306,768$ 3%0%5%8%67%11,088$ -$ 18,480$ 29,568$ 247,632$ 10 Sandifur Pkwy/Rd 84 2,250,000$ 100%70%1,575,000$ 100%100%1,575,000$ 45%53%0%1%1%708,750$ 834,750$ -$ 15,750$ 15,750$ 11 Rd 76 Improvements 2,000,000$ 100%50%1,000,000$ 100%88%880,000$ 12%44%32%0%0%120,000$ 440,000$ 320,000$ -$ -$ 12 Sandifur Pkwy/Convention Dr 2,310,000$ 100%90%2,079,000$ 19%81%319,958$ 28%53%0%0%0%110,603$ 209,355$ -$ -$ -$ 13 Argent Rd Widening (Phase 4)5,900,000$ 100%90%5,310,000$ 100%60%3,186,000$ 3%38%6%0%13%159,300$ 2,017,800$ 318,600$ -$ 690,300$ 14 Court Street/Road 60 2,950,000$ 100%80%2,360,000$ 100%78%1,840,800$ 17%7%40%13%1%401,200$ 165,200$ 944,000$ 306,800$ 23,600$ 15 Burns Rd Extension to Glade Road 28,000,000$ 50%70%9,800,000$ 100%75%7,350,000$ 4%43%3%9%16%392,000$ 4,214,000$ 294,000$ 882,000$ 1,568,000$ 16 Harris Rd/Crescent Rd Overpass 54,000,000$ 10%40%2,160,000$ 100%76%1,641,600$ 42%6%28%0%0%907,200$ 129,600$ 604,800$ -$ -$ 17 I-182/Broadmoor Blvd I/C 5,600,000$ 100%80%4,480,000$ 100%65%2,912,000$ 50%2%1%4%8%2,240,000$ 89,600$ 44,800$ 179,200$ 358,400$ 18 Burns Rd/Rd 68 2,000,000$ 100%75%1,500,000$ 100%54%810,000$ 8%41%3%1%1%120,000$ 615,000$ 45,000$ 15,000$ 15,000$ 19 Court Street/Road 100 6,000,000$ 100%70%4,200,000$ 100%94%3,948,000$ 39%4%41%10%0%1,638,000$ 168,000$ 1,722,000$ 420,000$ -$ 20 Harris Rd Realignment 1,900,000$ 100%75%1,425,000$ 100%61%869,250$ 45%0%6%3%7%641,250$ -$ 85,500$ 42,750$ 99,750$ Total Project Cost 175,885,000$ Total TIF Program 44,202,458$ Total TIF Program per District 9,625,217$ 18,703,893$ 9,401,222$ 2,166,600$ 4,305,526$ Program Cost Calculation District Distribution District Proportional Program CostTIF Projects Pa g e 6 8 o f 9 6 Pasco Transportation Impact Fee (TIF) Rate Study Four District Program Prepared for: Submitted on: City of Pasco May 22, 2025 Page 69 of 96 P Table of Contents Introduction ..................................................................................................................................... 1 Methodology .................................................................................................................................. 2 Project List ..................................................................................................................................... 3 Impact Fee Eligible Costs ............................................................................................................. 5 TIF Districts .....................................................................................................................................7 Trip Growth and Distribution ........................................................................................................ 8 TIF Rate Calculation ...................................................................................................................... 8 How to Develop an Impact Fee Estimate .................................................................................... 9 Future Updates and Adjustments ................................................................................................ 9 List of Figures Figure 1. Impact Fee Structure ...................................................................................................................................... 2 Figure 2. TIF Program Project List and Map ............................................................................................................. 4 Figure 3. Equation for Calculating the Eligible Impact Fee Cost ........................................................................ 5 Figure 4. TIF District Map with Project Locations ................................................................................................... 7 List of Tables Table 1. TIF Program Cost Calculation ........................................................................................................................ 6 Table 2. TIF Rate per District ......................................................................................................................................... 8 Appendices Appendix A. Pasco District Rate Calculation Page 70 of 96 City of Pasco, Transportation Impact Fee Rate Study | 1 Introduction Since 1990, Washington State law (RCW 82.02.050) has allowed jurisdictions to establish transportation impact fee (TIF) programs to fund capacity projects needed to support growth. The City of Pasco adopted a TIF program in 2005.1 In 2009, the City updated the fees of the TIF program2. The current TIF rates are unchanged from the 2009 update and are defined in Pasco Municipal Code (PMC) 3.35.230 as follows: PMC 3.35.230 Transportation impact fees. Fee/Charge Residential developments $709.00 per unit Multifamily units $435.00 per unit Commercial $43.00 per daily vehicle trip PMC 3.40 further outlines Pasco’s current transportation impact fee program. In the current program transportation impact fees shall be charged and collected for developments inside city limits, but west of 20th Avenue. State law requires jurisdictions to allow independent fee calculations, enabling any development to submit justification for a reduced fee based on trip data specific to its proposal. The remaining sections of the report describe the impact fee program methodology, the analyses performed, and the resulting recommendations. 1 City of Pasco Ordinance No 3719, March 21st 2005. 2 City of Pasco Ordinance No 3905, February 2nd 2009. Page 71 of 96 City of Pasco, Transportation Impact Fee Rate Study | 2 Methodology The transportation impact fee structure for the City of Pasco was designed to determine the fair share of transportation improvement costs that may be charged to new development. The following key points summarize the impact fee structure (see Figure 1):  A TIF project list was developed from eligible projects identified in the adopted Transportation Improvement Plan  These projects were evaluated for impact fee eligibility. Non-capacity investments, primarily maintenance, and safety improvement projects were eliminated.  Of the remaining eligible projects, the portion of those projects addressing existing deficiencies or carrying non-city growth were subtracted from eligible costs.  The remaining eligible program costs were divided by Pasco’s expected growth in PM peak hour trips over the next 20 years. The City has chosen to develop a multi- district program in which distinct geographical areas of Pasco are assessed different impact fee rates based on the proportionate share of the cost of transportation improvements projects related to service demands and needs of the estimated growth in PM peak hour trips of the district. The Ben Franklin Council of Governments (BFCOG) Travel Demand Models for the years 2025 and 2045 were used to estimate growth in PM peak hour trips in each TIF District, and to determine proportionate share of costs for each project based on travel patterns in Pasco. The City reviewed each transportation improvement project in the TIF program to account for other potential or anticipated funding sources. This further reduced the proportion of the cost of transportation improvement projects that are included in the proposed TIF program. This program assesses fees based on a cost per PM peak hour vehicle trip. Figure 1. Impact Fee Structure Page 72 of 96 City of Pasco, Transportation Impact Fee Rate Study | 3 Project List Washington State law (RCW 82.02.050) allows jurisdictions to establish TIF programs to fund “transportation system improvements” included in the capital facilities element of a jurisdiction’s comprehensive plan. TIF funds must be spent or encumbered within 10 years of collection and are assessed based on a development’s proportionate share of transportation system improvements on the TIF project list. Transportation system improvements can include physical or operational changes to existing transportation facilities, as well as new transportation connections that are built in one location to benefit projected needs at another location. Projects funded by a TIF program must add new capacity to accommodate future growth in the City. The types of investments typically funded by a TIF program in Washington State include new travel lanes, bike lanes, planting strips, sidewalks, crosswalks, midblock crossings, traffic signals, roundabouts, overhead signage, lighting, etc. In 2023, the Washington State Legislature passed Senate Bill 5452, which broadens the type of infrastructure that can be funded by TIF fees to include “bicycle and pedestrian facilities that were designed with multimodal commuting as an intended use.” With this bill now signed into law, transportation- oriented trails projects outside of the right of way have been added alongside streets and roads as public facilities on which impact fees can be spent. TIF funds cannot be spent on non-capacity activities, like maintenance, and must be related to growth within the City–they cannot be spent addressing existing deficiencies or capacity needs driven by growth outside of the jurisdiction. The City of Pasco is updating its TIF program to help fund high-priority transportation projects identified in its most recent Six-Year Transportation Improvement Plan3 which is consistent with Pasco’s Comprehensive Plan. Twenty transportation projects are included in the proposed TIF Program. Figure 2 shows the projects included in the program and their locations. 3 City of Pasco Resolution No. 4597, 2025-2030 TIP Revision, May 5 th 2025 Page 73 of 96 City of Pasco, Transportation Impact Fee Rate Study | 4 Figure 2. TIF Program Project List and Map Pa g e 7 4 o f 9 6 P City of Pasco, Transportation Impact Fee Rate Study | 5 Impact Fee Eligible Costs Figure 3 shows the calculation steps for determining the total impact fee eligible cost for each project included in the TIF Program. Figure 3. Equation for Calculating the Eligible Impact Fee Cost The City reviewed each transportation improvement project in the TIF program to account for other potential or anticipated funding sources. Two projects are anticipated to only be partially completed by 2045, so the costs of those projects were reduced to only include the portion of the project expected to be completed in the TIF program’s timeframe. Each project was evaluated to determine if any portion of the project would be needed to address deficiencies, based on the City’s adopted level of service (LOS) standards. Four projects on the proposed TIF list would be constructed, in part, to address current LOS deficiencies. For those projects, the portion of the project addressing the deficiency was calculated and that portion was removed from the eligible TIF project cost. Then travel patterns were analyzed at each project location using the BFCOG regional travel model to determine what proportion of estimated growth is from surrounding jurisdictions. Pasco does not have the authority to charge neighboring jurisdictions for their contribution to the need for projects on the TIF list. To account for this statutory limitation, adjustments were made for trips that pass- through Pasco or only have one end of the trip starting or ending in Pasco. For each project, the portion of growth within the City, including half of all trips that begin or end outside of Pasco, was calculated to range from 54-100% based on the project.4 The twenty projects included in the TIF program have an estimated combined total capital cost of $175.3 million. After accounting for other funding sources, anticipated project completion by 2045, existing deficiencies, and the percentage of growth within the City, the total eligible impact fee cost comes to $44.2 million, approximately 25% of the total estimated capital cost of the project list. Table 1 shows the TIF program cost calculation for each project. 4 This analysis examines the travel patterns of estimated new trips related to anticipated growth. In the case of four projects, 100% of the growth in traffic would come from uses in Pasco, which means the portion of new trips using this facility from outside of Pasco is either staying the same or decreasing compared to current travel patterns. Project costs were adjusted to account for other potential and anticipated funding sources and whether they are anticipated to be fully complete by 2045. Project Cost (1 - Existing Deficiency Percentage) Percentage of Growth within City Impact Fee Eligible Cost Page 75 of 96 P City of Pasco, Transportation Impact Fee Rate Study | 6 Table 1. TIF Program Cost Calculation Page 76 of 96 P City of Pasco, Transportation Impact Fee Rate Study | 7 TIF Districts A TIF district is a defined subarea of the city that is assessed a specific impact fee based on the estimated growth of a subarea and the contribution of that growth to the need for projects on the TIF list. Because people typically travel across district boundaries, growth within a district contributes to the need for projects citywide. District boundaries should be logical considering the relative impact of estimated growth in regions of Pasco. For this program, district boundaries were designated based on features like highways, major roads, and railroads. Figure 4 shows a map of the TIF Districts. Figure 4. TIF District Map with Project Locations Page 77 of 96 P City of Pasco, Transportation Impact Fee Rate Study | 8 Trip Growth and Distribution Determining the growth in travel demand caused by new development is a key requirement for a TIF program. The regional BFCOG travel model was used to estimate the expected development in each TIF district over the next 20 years. The ITE Trip Generation Manual, 11th Edition was used to estimate the PM peak hour trips generated by each district’s expected development. The BFCOG travel model was used to analyze travel patterns to determine the proportion share of each district’s expected growth on the need for each project in the TIF program. This proportionate share was used to calculate the eligible TIF program costs and resulting TIF rate for each district. TIF Rate Calculation To arrive at a recommended TIF rate per district, the total TIF program cost per district is divided by the total growth in PM peak hour trips per district based on development expected over the next 20 years. Table 2 shows the calculated PM peak hour vehicle trip TIF Rate for each district. 𝑇𝐼𝐹 𝑅𝑎𝑡𝑒 𝑝𝑒𝑟 𝑃𝑀 𝑃𝑒𝑎𝑘 𝐻𝑜𝑢𝑟 𝑉𝑒ℎ𝑖𝑐𝑙𝑒 𝑇𝑟𝑖𝑝 =𝑇𝐼𝐹 𝑃𝑟𝑜𝑔𝑟𝑎𝑚 𝐶𝑜𝑠𝑡 𝐺𝑟𝑜𝑤𝑡ℎ 𝑖𝑛 𝑉𝑒ℎ𝑖𝑐𝑙𝑒 𝑇𝑟𝑖𝑝𝑠 2025 𝑡𝑜 2045 Table 2. TIF Rate per District TIF District TIF Program Cost Growth in PM Peak Hour Vehicle Trips TIF Rate per PM Peak Hour Trip North $18,703,893 8,441 $2,215.84 West $9,625,217 6,896 $1,395.77 South $11,567,822 3,238 $3,572.52 East $4,305,526 5,302 $812.06 Total $44,202,458 23,877 Page 78 of 96 P City of Pasco, Transportation Impact Fee Rate Study | 9 How to Develop an Impact Fee Estimate The transportation impact fee is calculated by the net estimated vehicle PM peak trips generated by a proposed development multiplied by the current transportation impact fee per PM peak hour trip for the TIF District where the project is located. When estimating an impact fee for a development or land use change, the following procedure should be used to estimate PM peak hour vehicle trips and associated impact fees: 1. Review the most recent version of the ITE Trip Generation Manual for the estimated number of PM peak vehicle trips, selecting the most appropriate land use for the proposed development based on sound engineering judgement and land uses available from the ITE Manual. 2. Reduce PM peak hour vehicle trips based on the pass-by rate, if applicable, in the most recent version of the ITE manual. a. The use of pass-by rates from the ITE Trip Generation Manual applies to select land uses from the following land use categories: i. Institutional ii. Retail iii. Services. 3. Apply internal capture rates for mixed-use developments. a. Internal capture adjustments apply to mixed-use developments only and should be based on the most recent version of the ITE manual. These calculations identify the number of internal trips (those within a mixed-use development) and external trips (those starting or ending outside of the mixed-use development). 4. Multiply the resulting estimate for new PM peak vehicle trips by the adopted cost per trip rate for the relevant TIF District. Future Updates and Adjustments To ensure that the impact fee program remains relevant to funding projects that are important to the community and support growth needs, Fehr š Peers recommends considering whether an update to the impact fee program is necessary every two-to-five years to reflect potential changes to the project list, funding, and growth assumptions. The City should consider adopting an annual TIF rate inflation adjustment based on a relevant cost index data source. Page 79 of 96 P City of Pasco, Transportation Impact Fee Rate Study | 10 Appendix A. Pasco District Rate Calculation Page 80 of 96 ID Project Name Project Cost Estimate Estimated Project Delivery by 2045 Estimated TIF Funding % TIF Project Cost Estimate Non- Deficiency (% Eligible) Portion of Trips from Pasco Cost Included in TIF Program % West % North % South % East West North South East 1 Rd 40 E Extension 1,330,000$ 100% 43% 570,000$ 100% 100% 570,000$ 21% 21% 10% 48% 119,700$ 119,700$ 57,000$ 273,600$ 2 Burns Rd Extension 6,000,000$ 100% 75% 4,500,000$ 100% 86% 3,870,000$ 31% 45% 10% 0% 1,395,000$ 2,025,000$ 450,000$ -$ 3 Road 76 Overpass 30,759,000$ 100% 40% 12,303,600$ 100% 74% 9,104,664$ 0% 42% 32% 0% -$ 5,167,512$ 3,937,152$ -$ 4 Sandifur Pkwy/Rd 76 2,031,000$ 100% 80% 1,624,800$ 9% 94% 137,458$ 25% 48% 20% 1% 36,558$ 70,191$ 29,246$ 1,462$ 5 Burden Blvd/Rd 60 2,170,000$ 100% 80% 1,736,000$ 100% 100% 1,736,000$ 15% 54% 31% 0% 260,400$ 937,440$ 538,160$ -$ 6 Burden Rd/Madison Ave 2,170,000$ 100% 80% 1,736,000$ 30% 100% 520,800$ 11% 53% 32% 4% 57,288$ 276,024$ 166,656$ 20,832$ 7 Burden Rd/Rd 44 2,170,000$ 100% 80% 1,736,000$ 100% 66% 1,145,760$ 8% 57% 1% 0% 138,880$ 989,520$ 17,360$ -$ 8 Lewis St/Heritage Blvd 2,400,000$ 100% 70% 1,680,000$ 100% 88% 1,478,400$ 10% 14% 5% 59% 168,000$ 235,200$ 84,000$ 991,200$ 9 Rainier Ave/Kartchner St 2,400,000$ 100% 70% 1,680,000$ 22% 83% 306,768$ 3% 0% 13% 67% 11,088$ -$ 48,048$ 247,632$ 10 Sandifur Pkwy/Rd 84 2,250,000$ 100% 70% 1,575,000$ 100% 100% 1,575,000$ 45% 53% 1% 1% 708,750$ 834,750$ 15,750$ 15,750$ 11 Rd 76 Improvements 2,000,000$ 100% 50% 1,000,000$ 100% 88% 880,000$ 12% 44% 32% 0% 120,000$ 440,000$ 320,000$ -$ 12 Sandifur Pkwy/Convention Dr 2,310,000$ 100% 90% 2,079,000$ 19% 81% 319,958$ 28% 53% 0% 0% 110,603$ 209,355$ -$ -$ 13 Argent Rd Widening (Phase 4) 5,900,000$ 100% 90% 5,310,000$ 100% 60% 3,186,000$ 3% 38% 6% 13% 159,300$ 2,017,800$ 318,600$ 690,300$ 14 Court Street/Road 60 2,950,000$ 100% 80% 2,360,000$ 100% 78% 1,840,800$ 17% 7% 53% 1% 401,200$ 165,200$ 1,250,800$ 23,600$ 15 Burns Rd Extension to Glade Road 28,000,000$ 50% 70% 9,800,000$ 100% 75% 7,350,000$ 4% 43% 12% 16% 392,000$ 4,214,000$ 1,176,000$ 1,568,000$ 16 Harris Rd/Crescent Rd Overpass 54,000,000$ 10% 40% 2,160,000$ 100% 76% 1,641,600$ 42% 6% 28% 0% 907,200$ 129,600$ 604,800$ -$ 17 I-182/Broadmoor Blvd I/C 5,600,000$ 100% 80% 4,480,000$ 100% 65% 2,912,000$ 50% 2% 5% 8% 2,240,000$ 89,600$ 224,000$ 358,400$ 18 Burns Rd/Rd 68 2,000,000$ 100% 75% 1,500,000$ 100% 54% 810,000$ 8% 41% 4% 1% 120,000$ 615,000$ 60,000$ 15,000$ 19 Court Street/Road 100 6,000,000$ 100% 70% 4,200,000$ 100% 94% 3,948,000$ 39% 4% 51% 0% 1,638,000$ 168,000$ 2,142,000$ -$ 20 Harris Rd Realignment 1,900,000$ 100% 75% 1,425,000$ 100% 61% 869,250$ 45% 0% 9% 7% 641,250$ -$ 128,250$ 99,750$ Total Project Cost 175,315,000$ Total TIF Program 44,202,458$ Total TIF Program per District 9,625,217$ 18,703,893$ 11,567,822$ 4,305,526$ TIF Projects Program Cost Calculation District Distribution District Proportional Program Cost Pa g e 8 1 o f 9 6 AGENDA REPORT FOR: City Council May 21, 2025 TO: Dave Zabell, Interim City Manager City Council Special Meeting: 5/27/25 FROM: Dave Zabell, Interim City Manager City Manager SUBJECT: Joint Resolution No. 4604 - Extension of the Interlocal and Financing Lease Agreement for the HAPO Center Facility Until December 31, 2025 (5 minutes) I. ATTACHMENT(S): Joint Resolution HAPO White Paper II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: MOTION: the modifying 4604, No. Resolution approve to move I Joint Interlocal Cooperation Agreement between the City of Pasco and Franklin County, Washington, regarding the financing, acquisition, and ownership of a multi-purpose arena and exhibition facility (HAPO Center). III. FISCAL IMPACT: Expenses - Approximately $200,000 annually IV. HISTORY AND FACTS BRIEF: The HAPO Center, managed by Franklin County and jointly funded with the City of Pasco (City), operates under a 1994 interlocal agreement and financing lease. Since then, Pasco has invested approximately $7.7 million, with $5.6 million covering operational subsidies over 30 years and $2.1 million for 20 years of loan payments toward development of the facility, which was fully paid off in 2014. In 2014, the City and Franklin County amended the agreement to include operating reserve contributions. The original agreement was set to expire on May 24, 2024, and the Council passed Resolution No. 4448 extending the interlocal agreement until December 31, 2024. Page 82 of 96 Since the initial extension was approved, Franklin County and City staff have been collaborating on a master planning effort. A draft of the plan was anticipated to be completed in early 2025. To allow sufficient time for review, feedback, and discussions on the path forward, City Council and County Commissioners extended the agreement through May 31, 2025, via a joint Resolution No. 4546 & 2024-325 in mid December 2024. The extension included, at the request of the State Auditor's Office, additional language to address financial reporting requirements by Franklin County. Since the second extension of the Interlocal Agreement, both Franklin County and the City have undergone changes in leadership. Despite these transitions, the Parties have remained engaged in ongoing discussions regarding the Interlocal Agreement. In alignment with City Council’s direction, the Interim City Manager submitted the City’s proposal for negotiating an amended or successor Interlocal Agreement in late April 2025. Recognizing the need for continued dialogue, the Parties have agreed to further extend the termination date of the original 1994 Interlocal Agreement to December 31, 2025. This extension provides additional time and opportunity for thoughtful discussion, consideration, and negotiation on matters of mutual interest, including the future operation, maintenance, improvement, financing, and governance of the HAPO Center. V. DISCUSSION: It is anticipated that Franklin County will take formal action on the extension at their regularly scheduled May 27, 2025, meeting, staff recommends approval of the attached joint resolution which incorporates the City's proposal from April 2025. Page 83 of 96 Jt Resolution – Modifying HAPO Center ILA - 1 JOINT RESOLUTION FRANKLIN COUNTY RESOLUTION NO. _______ CITY OF PASCO RESOLUTION NO. _______ BEFORE THE BOARD OF COMMISSIONERS, FRANKLIN COUNTY, WASHINGTON, AND THE COUNCIL OF CITY OF PASCO, WASHINGTON, REGARDING MODIFYING THE INTERLOCAL COOPERATION AGREEMENT BETWEEN THE CITY OF PASCO AND FRANKLIN COUNTY, WASHINGTON, REGARDING THE FINANCING, ACQUISITION AND OWNERSHIP OF A MULTI-PURPOSE ARENA AND EXHIBITION FACILITY (HAPO CENTER). WHEREAS, on May 25, 1994, pursuant to RCW 39.34, Franklin County, Washington (the “County”), and the City of Pasco, Washington (the “City”) (together, the “Parties”), entered into the “Interlocal Cooperation Agreement Regarding Financing, Acquisition and Ownership of a Multi-Purpose Arena and Exhibition Facility with the City of Pasco” (the “1994 Interlocal Agreement”); and WHEREAS, on May 25, 1994, in conjunction with the Parties’ entry into the 1994 Interlocal Agreement, the County, as Landlord, and the City, as Tenant, entered into a Ground Lease under which the County leased to the City approximately 31 acres of land adjacent to the HAPO Center for the purpose of the City’s development, construction and operation of Sportsfields on such land, the term of which Ground Lease initially extended to November 6, 2020, and which has been extended to November 6, 2025, pursuant to Resolution No. 2020-261 of the Board of County Commissioners; and WHEREAS, on December 6, 2014, pursuant to Resolution No. 2014-484 of the Board of County Commissioners, the Parties entered into Addendum No. 1 to the 1994 Interlocal Agreement amending Section 8.4 pertaining to payment of operating costs of the HAPO Center; and WHEREAS, pursuant to Joint Resolution No. 2024-112 of the Board of County Commissioners and Resolution No. 4448 of the City Council, the Parties amended Section 11.2 of the 1994 Interlocal Agreement to extend its termination date to December 31, 2024, to allow time for the development of a Master Plan for the HAPO Center and surrounding area to determine best use of the facility; and WHEREAS, pursuant to Joint Resolution No. 2024-325 of the Board of County Commissioners and Resolution No. 4546 of the City Council, the Parties further amended Section 11.2 of the 1994 Interlocal Agreement to extend its termination date to May 31, 2025, and to further amend Section 8.4 pertaining to payment of operating costs of the HAPO Center; and Page 84 of 96 Jt Resolution – Modifying HAPO Center ILA - 2 WHEREAS, the Parties value their continuing relationship as established under the 1994 Interlocal Agreement as previously extended and amended as described in the foregoing recitals; and WHEREAS, the Parties have identified a need to further extend the termination date of the 1994 Interlocal Agreement to December 31, 2025, for the purpose of allowing additional time and opportunities for the Parties to engage in thoughtful discussion, consideration and negotiation with respect to matters of mutual interest concerning the future operation, maintenance, improvement, financing, and governance of the HAPO Center; and WHEREAS, the Board of Commissioners constitutes the legislative authority of Franklin County and deems this to be in the best interest of Franklin County; and WHEREAS, the Council for the City of Pasco constitutes the legislative authority for the City of Pasco and deems this to be in the best interest of the City to extend the Interlocal Agreement for the HAPO Center facility to the end of May 2025; and NOW, THEREFORE, BE IT RESOLVED the Parties hereby agree to remove and replace in full Section 11.2 of the 1994 Interlocal Agreement, as previously amended as described in the foregoing recitals, with the following language: Section 11.2 Duration and Termination of this Agreement This agreement shall automatically terminate on December 31, 2025. This Agreement may be terminated, in whole or in part, through adoption of a joint resolution to that effect by the Parties. This agreement shall be effective if signed in separate documents as if all parties signed the same document. BE IT FURTHER RESOLVED, the Parties hereby agree that, during the remaining term of the 1994 Interlocal Agreement as extended to December 31, 2025, by this Joint Resolution, they shall engage in thoughtful discussions, consideration and negotiation with respect to the following matters of mutual interest in connection with the HAPO Center with a view toward developing more comprehensive amendments of or a successor agreement to the 1994 Interlocal Agreement: Page 85 of 96 Jt Resolution – Modifying HAPO Center ILA - 3 a. Other potential models for the governance that may provide greater accountability for both the County and the City; b. Other potential models and/or avenues by which financial accounting and oversight of the HAPO Center may be accomplished with greater accessibility between the County and the City and for the State Auditor’s Office; c. A review of cost centers, cost allocation methods, and operating revenues and expenses with a view toward making a fresh determination as to whether the historical 50/50 sharing between the County and the City of operating losses of the HAPO Center remains appropriate; d. Identification of emergency capital needs and methods of financing those needs; e. Identification of long-term capital needs and methods of financing those needs; f. Improvements related to the competitiveness of the facility and methods of financing those improvements; g. Potential disposition to the City of the land leased by the County to the City under the Ground Lease used for Sportsfields; h. Potential inclusion of the ice rink under the umbrella of the 1994 Interlocal Agreement; and i. A process for joint completion and implementation of the Master Plan for the HAPO Center. The Parties acknowledge that not all of the foregoing items may be resolved and incorporated in additional comprehensive amendments to the 1994 Interlocal Agreement or in a successor interlocal agreement, and some items may be better addressed by other mechanisms, but the Parties agree to engage in good faith discussions and negotiations toward that end for the mutual best interests of the County, the City, and the greater citizenry of the County and the City. - THIS SPACE WAS INTENTIONALLY LEFT BLANK IN ORDER FOR ALL SIGNATURES TO BE PLACED ON ONE PAGE – Page 86 of 96 Jt Resolution – Modifying HAPO Center ILA - 4 APPROVED this __ day of May, 2025 APPROVED this __ day of May, 2025. CITY: CITY OF PASCO, a Municipal Corporation of the State of Washington __________________________ Pete Serrano, Mayor COUNTY: FRANKLIN COUNTY, a Political Subdivision of the State of Washington __________________________ Rocky Mullen, Chair ATTEST BY: __________________________ City Clerk __________________________ Clint Didier, Commissioner __________________________ Stephen Bauman, Commissioner ATTEST BY: __________________________ Clerk of the Board APPROVED AS TO FORM: By: __________________________ Eric W. Ferguson, City Attorney APPROVED AS TO FORM: Shawn Sant, Prosecuting Attorney for Franklin County By: __________________________ Deputy Prosecuting Attorney Page 87 of 96 RICHA SIGDEL 1 Optimizing Community Resource: HAPO Facility's Current ILA and Path Forward Overview The HAPO Center is a facility managed by Franklin County, and jointly funded by the County and the City of Pasco. Since 1994, City of Pasco has invested a substantial amount, totaling $7.7 million, into the facility. Of the $7.7 million, $5.6 million was for operational subsidies over 30 years and $2.1 million was for loan (debt service) payments over 20 years of loan period. Debt acquired in 1994 was fully paid off in 2014. City of Pasco was not included in the issuance of debt due to City’s lack of bonding capacity that the time. City has paid an operational deficit subsidy for every year the facility has been in operations. Some years, funds have been requested of the City to build operational reserves due to cash flow issues during adverse periods. In 2014, City and County revised the interlocal agreement for operation of the facility to add operating reserve contributions to manage cash flow for the facility. The current agreement expires on May 25, 2024. On May 25, 1994, City of Pasco and Franklin County also entered into a ground lease agreement for the purpose of developing sports fields, the Pasco Sporting Complex. The ground lease was provided to the City for a nominal amount with expectation that the City will develop the then raw land into a sports field. The most recent lease was signed on November 6, 2020 with the agreement expiring on November 6, 2025. Initial Facility Investment Franklin County issued $6.3 in debt for the facility. $2.4 million of that debt was limited tax general obligation (LTGO) that are paid directly via general funds without additional tax obligations to residents. City of Pasco and Franklin County shared in payment of the general tax obligation bond debt service. This debt accounts for the debt service contributions referred above in the Overview section. $3.9 million in unlimited tax general obligation (UTGO) bond was also approved by residents of City of Pasco and Franklin County for the construction of the facility; a UTGO bond provides additional taxes from the residents to cover proposed capital expenditures. Debt service for $3.9 million was collected via increased taxes on City and County residents. It is important to note that the current contract governing the HAPO Center does not grant the City of Pasco any decision-making authority over the facility. Instead, the power to make decisions regarding the HAPO Center lies solely with the Franklin County Page 88 of 96 RICHA SIGDEL 2 Commissioners. This arrangement has been in place since the inception of the facility, and the City of Pasco has operated within the parameters defined by this agreement. As mentioned before, County and the City also signed a ground lease for the City to construct and operate sport fields. This area is currently the softball fields. This softball field was fully developed by the City and at the time of the lease was seen as a good complement to the planned TRAC facility and facilitating the economic development desired in the Road 68 area. It is difficult to pinpoint the exact dollars in investment the City has made to make this land to the current facility, however, conservative estimates are greater than $4 million. State law authorizes the collection of the 2% local tax on lodging facilities (hotels and motels). The funds originally could be used for stadiums and for tourism promotion activities. In 1993, like several cities prior to that time, Pasco was granted by State law authority to assess an additional 2% lodging tax fund specifically the City's share of TRAC, currently known as HAPO Center. The legislature subsequently increased the base lodging Page 89 of 96 RICHA SIGDEL 3 tax to 4% and eliminated the individual taxing authorizations. The amendment also required the establishment of a Lodging Tax Advisory Committee (LTAC) to review and recommend proposed uses of the lodging tax annually. County can implement its own basic and additional lodging tax totaling up to 4%. The LTAC taxes for County would be collected from facilities residing in unincorporated areas of the County. The guiding principle for the use of lodging taxes is that they must be used for activities, operations and expenditures designed to increase tourism. Specifically, lodging taxes can be used for: • Tourism marketing; • Marketing and operations of special events and festivals designed to attract tourists; • Operations and capital expenditures of tourism-related facilities owned or operated by a municipality or a public facilities district; or • Operations of tourism-related facilities owned or operated by nonprofit organizations (RCW 67.28.1816). City has requested and received lodging tax assistance to service the debt for HAPO center. Historically, City has also relied on general fund to support operational deficits of the center. Facility Improvements The interlocal agreement outlines the process for additional facility improvement to the facility; the process set forth is for County Commissioners to propose any facility improvements to the City and the participation terms will be determined by subsequent interlocal agreement. From staff research, no significant facility improvement has been performed through this framework. Over the years, operational decisions to revise the services provided within the facility like ice rink, RV Park etc. have been made by the County. Most recently, County invested $6 million of its ARPA funds to update the facilities HVAC infrastructure. Similarly, it is considering another $5-6 million investment in additional HVAC infrastructure with .09 Fund (Rural counties with a population of less than 100 people per square mile or a county smaller than 225 square miles may impose a 0.09% sales tax credit against the state sales tax. These funds — commonly called .09 Funds — can be used to pay for public facilities including public infrastructure serving economic development purposes – MRSC). An additional $3 million has been earmarked by Washington State Senate in the 2024 supplemental capital budget, but not gone through all the steps for allocation yet. County has not requested the City to contribute to the capital improvements which would have included discussion on cost and a new interlocal agreement to share the improvement costs per the existing interlocal agreement between the agencies. Page 90 of 96 RICHA SIGDEL 4 City, in collaboration with Franklin County, hired ALSC to perform the facility audit for the purpose of assessing the condition of basic building systems and site improvements. The facility audit work included, but not be limited to, assessment of HVAC, electrical, security, telecommunications systems, and data management. Interim Public Works Director Maria Serra has made necessary adjustments to the estimated project costs to meet the City’s standard. Overall, it has been determined that $4.8 million in further investments are recommended for this facility. Of the $4.8 million, $3.2 million are necessary to preserve the condition of the facility, whereas the remainder are recommended at improvements. *NOTE: Costs are adjusted from construction estimated ALSC provided to account for project soft costs. Funding Mechanism As mentioned before, City has utilized internal and external (LTAC) funds to service the capital and operational obligations for the HAPO Center. With City of Pasco’s population representing a significant portion of Franklin County’s residents, we share a close COMPONENT ESTIMATED COMPLETE PROJECT COST COMMENT Repair damaged items or replacement of items in poor condition/ end of useful life $1,200,000 NECESSARY Parking lot pavement repairs and overlay $ 2,000,000 NECESSARY Access Control/Video Security System $1,000,000* RECOMMENDED Voice Fire Alarm $ 600,000* RECOMMENDED (may become necessary if triggered by expansion or other improvements at the facility takes place) TOTAL $4,800,000 Page 91 of 96 RICHA SIGDEL 5 economic and operational relationship with the County. County significantly benefits from the economic and quality of life improvements made by the City, whereas the City depends on services like the Court that the County operates. To show the close economic relationship, below are some but not all funding sources that the City residents and businesses generate for the County. The revenues are estimates and not exact figures. Revenue Sources (Annual) City County Regular Sales Tax City receives .85% of the sales tax collected, whereas County receives .15%. $ 20,400,000 $ 3,600,000 Public Safety Sales Tax County receives 60% of this tax collected in the City whereas the City receives 40% of the revenue $ 2,600,000 $ 3,400,000 Criminal Justice Sales Tax County receives 10% of this tax collected in the City, remainder is allocated between unincorporated areas and City based on population. $ 1,950,000 $ 216,667 Mental Health and Chemical Dependency Sales Tax City does not receive any of this tax revenue. $ - $ 2,200,000 .09 Fund City does not receive any of this tax revenue. $ - $1,800,000 Total Estimated Revenue $ 24,950,000 $ 11,216,667 The list above represents significant revenue sources for the County that residents within Pasco generate, but it is not an exhaustive list. These funds are crucial for serving both the residents of the City of Pasco and the wider County community, given that all City residents are also County residents. All funding investment in HAPO for either the City or the County would be most appropriate from their General Fund, LTAC, federal or state grants, or .09 Funds. General fund receives sales and .09 Fund taxes that the economic development from HAPO facility has generated, whereas LTAC funds are also generated due to increased tourism generated by the facility. Receiving grants are ideal, but there are limited opportunities for facilities like HAPO. If the $3 million in Senate earmark passes the House, it is a significant but uncommon allocation for the facility. If a decision to increase City’s investment in the facility is made, it is high likelihood that City would be expending its General Fund reserves/revenues to make such investment. Page 92 of 96 RICHA SIGDEL 6 Next Steps The interlocal agreement governing the HAPO Center is set to expire in May 2024. As this expiration date approaches, it is essential for us to consider the various scenarios that may unfold. Below, we have outlined some key scenarios for your consideration: Renewal of the Existing Agreement: One option is to seek a renewal of the current interlocal agreement between the City of Pasco and Franklin County Commissioners. This would maintain the status quo, with the City's financial contributions continuing without any additional decision-making authority. This renewal could be short term in nature to find better long-term arrangement. This option would also allow for a Master Plan to be created to identify the best uses for the facility; an effort that will be led by the County. Renegotiation of the Agreement: Another option is to enter into negotiations with Franklin County to potentially modify the terms of the interlocal agreement. This could involve discussions regarding the City's level of financial commitment, as well as the possibility of gaining more influence over decision-making processes related to the HAPO Center. Exploration of Alternative Funding Models: The County and City could explore alternative funding models for the HAPO Center that reduce the financial burden on Pasco taxpayers. This might involve seeking partnerships with private entities, Public Facilities District, or pursuing grants and sponsorships to offset costs. Withdrawal from the Agreement: The City could consider withdrawing from the interlocal agreement altogether. This would involve discontinuing financial support for the HAPO Center and potentially exploring other uses for the funds previously allocated to it. Acquisition of the Property: The City has the option to acquire the facility from the County and undertake enhancements to maintain the current service model or adapt the facility's purpose according to the community's and Council's preferences. Acquisition of the facility would require likely nominal amount of purchasing price however at least $4.8 million in improvement costs. Historical Challenges Below are some challenges that the facility and the partnership has faced that might need to be addressed depending 1. Decision making authority for the City of Pasco 2. Definition of HAPO facility (includes RV Park, Ice Facility?) 3. Maintenance plan for the facility Page 93 of 96 RICHA SIGDEL 7 Conclusion As we approach the expiration of the interlocal agreement in 2024, it is imperative that we engage in a thoughtful and collaborative discussion with Franklin County to determine the best course of action for the City of Pasco regarding the HAPO Center. We are looking to Council for input and guidance on these scenarios as they will be invaluable as we navigate this important decision-making process. We have initiated conversations with Franklin County staff in advance of the agreement's expiration to ensure a smooth transition and to explore the possibilities outlined above. Your feedback and insights will be instrumental in shaping our approach moving forward. Page 94 of 96 Promote a high-quality of life through quality programs, services and appropriate investment and re- investment in community infrastructure. City Council Goals QUALITY OF LIFE 2024-2025 Enhance the long-term viability, value, and service levels of services and programs. FINANCIAL SUSTAINABILITY Promote a highly functional multi-modal transportation system. COMMUNITY TRANSPORTATION NETWORK Implement targeted strategies to reduce crime through strategic investments in infrastructure, staffing, and equipment. COMMUNITY SAFETY Promote and encourage economic vitality. ECONOMIC VITALITY Identify opportunities to enhance City of Pasco identity, cohesion, and image. CITY IDENTITY Page 95 of 96 METAS DEL CONCEJO MUNICIPAL 2024-2025 Promover una alta calidad de vida a través de programas, servicios y inversion apropiada y reinversión en la comunidad infraestructura comunitaria. CALIDAD DE VIDA Promover viabilidad financiera a largo plazo, valor, y niveles de calidad de los servicios y programas. SOSTENIBIILIDAD FINANCIERA Promover un sistema de transporte multimodal altamente funcional. RED DE TRANSPORTE DE LA COMUNIDAD Implementar estrategias específicas para reducir la delincuencia por medios de inversiones estratégicas en infraestructura, personal y equipo. SEGURIDAD DE NUESTRA COMUNIDAD Promover y fomentar vitalidad económica. VITALIDAD ECONOMICA Identificar oportunidades para mejorar la identidad comunitaria, la cohesión, y la imagen. IDENTIDAD COMUNITARIA Page 96 of 96