Council told to schedule hearing on new school impact-fee formula as state law changes take effect

City planning staff told the Port Orchard City Council on March 18 that state law changes require the city and South Kitsap School District to revise school impact fees.

The presentation described two 2023 state law changes: Senate Bill 5258, which requires certain impact fees to be based on unit square footage, number of bedrooms or trips; and House Bill 1337, which caps impact fees for accessory dwelling units at 50% of the principal unit’s fee. Staff said the city’s interlocal agreement with South Kitsap School District requires cooperation: the district adopts the capital facilities plan and provides fee information; the city collects fees at building-permit issuance and forwards funds to the district.

Staff noted the city’s current school impact-fee rates ($1,370 for single-family detached homes and about $861 for multifamily units, rates that staff said date to 2008) and said the district’s consultant, FCS Group, recommended a square-footage method. FCS proposed a rate of $0.56 per square foot with a minimum and a maximum; staff cited a proposed maximum fee of about $2,009.27 for very large units. Under that structure, the majority of smaller units would pay less than the current flat-per-unit charge while very large homes would pay somewhat more.

Staff proposed two municipal-code changes to implement the square-foot method: a definition for ‘‘square footage’’ keyed to Department of Commerce guidance (excluding roof eaves and exterior patios, and measuring consistent with the data used in the district’s analysis) and an additional information requirement for applicants to declare unit square footage and bedrooms. Staff said the FCS Group is conducting a larger, countywide study and expects a fuller recommendation later in 2025; the interim change would take effect July 1 unless the council adopts a later schedule.

The planner recommended scheduling a public hearing for April 8, 2025, to consider a draft ordinance and provide required notice to the Department of Commerce and the public. Councilmembers did not vote on a final ordinance at the March 18 meeting; staff was directed to schedule the public hearing and circulate notice.

Ending: Staff will post hearing notices and the Department of Commerce notice; a fuller countywide study from FCS Group was expected later in 2025 and could prompt additional changes.