Frequently Asked Questions: School Impact Fees

  • The City Council for the City of Lacey (City) recently enacted Ordinance No. 1507 (the Impact Fee Ordinance), authorizing the collection of school impact fees on new residential construction within the city’s boundaries for the benefit of North Thurston Public Schools (NTPS).  As of April 1, 2017, the City will withhold building permits for new residential units until school impact fees are paid to the City.

    What are impact fees?

    Impact fees are charges assessed by local governments against new development projects that attempt to recover the costs incurred by government in providing the public facilities required to serve the new development. Impact fees are only used to fund improvements, such as roads, schools, and parks, that are directly associated with the new development. These fees may be used to pay the proportionate share of the cost of public facilities that benefit the new development.  These school impact fees will be collected by the City, which will remit the funds to NTPS under the terms of an interlocal agreement.

    How do these fees differ from mitigation that NTPS has historically collected from residential developers?

    In Washington, system-wide impact fees are authorized for those jurisdictions planning under the Growth Management Act (RCW 82.02.050-.100).  These impact fees are assessed system-wide.  For decades now, the City and NTPS have obtained appropriate mitigation of school impacts on a project-specific basis through voluntary agreements under RCW 82.02.020, and as mitigation for impacts under the State Environmental Policy Act (SEPA, Ch. 43.21C RCW) and the Subdivision Act (Ch. 58.17 RCW).  The City and NTPS expect the provisions adopted by the Impact Fee Ordinance to reduce redundancies and increase efficiencies in the permitting process for developers and for the government agencies.

    How is the amount of the fee determined?

    The same tool that has been used by NTPS to establish mitigation amounts owed under voluntary mitigation agreements will be used by the City under its Impact Fee Ordinance.  Appendix A of the NTPS 2017-2022 Capital Facilities Plan(CFP) will continue to set forth the amounts owed for new single-family or multi-family residential units.

    What is the procedure for paying the fee?

    Developers should plan to make these fee payments to the City when obtaining a building permit for any single-family residence or multi-family unit.  The City will remit the funds to NTPS.

    How does this affect previously permitted projects that were approved based upon voluntary mitigation agreements?

    For projects with existing voluntary mitigation agreements with NTPS, the terms of that agreement may anticipate impact fee adoption and outline how the City’s adoption of GMA impact fees affect a developer’s continued contractual obligations to NTPS.  Generally, after April 1, 2017, developers should plan to make future impact fee payments when obtaining a building permit for any single-family residence or multi-family unit.  If you would like to discuss these matters with NTPS and clarify the Impact Fee Ordinance’s effects on existing voluntary mitigation agreements, please contact Dean Martinolich at (360) 412-4500 or at

    How will the funds be used by NTPS?

    As provided in the Impact Fee Ordinance, the school district’s CFP, and applicable state law, the fees will be used for public improvement costs that will reasonably benefit the new development.  Fees will not be used for maintenance or operation.

    Are exemptions from the fees available?

    The City approved a variety of exemptions from the payment of impact fees, including certain alterations to existing nonresidential structures, miscellaneous improvements that do not add occupants to the residence, demolitions, age-restricted housing, accessory dwellings, single-room occupancy dwellings, and some low-income housing.  See new LMC 14.25.080.

    Under what circumstances can the fee payments be deferred or adjusted?

    Deferral of impact fee payments is available for single-family residential attached or detached construction permits within certain restrictions and limitations set out in new LMC 14.25.140 and applicable state laws.  The interlocal agreement between the City and NTPS also provides for processes that will occur in the event of a deferral of impact fee payments.

    Fees can be adjusted through credits provided for certain offsetting land dedications, improvements or construction benefits provided by a feepayer.  See new LMC 14.25.090.

    Other questions?

    If you have other questions about this new GMA impact fee system, please contact the following:

    North Thurston Public Schools
    Dean Martinolich
    Director, Construction & Design
    (360) 412-4500
    City of Lacey
    Christy Osborn, AICP
    Associate Planner
    Community & Economic Development Department
    (360) 491-5642