Impact fees delayed but en route to PenMet Parks
“Yes, it is unfortunate,” she said in a Jan. 23 email. “The County Executive told me they just noticed it. Timing was terrible. If it had been caught even a few months ago we could have tweaked the code so that the checks could still have gone out last year as planned.”
County code states that park impact fees must be spent on properties owned or managed by the county.
State law allows the county to allocate some of the money to other park districts on a project-by-project basis if they are included in the county’s capital facilities plan. It doesn’t require it to. The code is being changed so that both county code and state law allow the funding.
“The legal issue involves the interpretation of Pierce County Code Title 4A,” County Council Communications Manager Bryan Dominique said in a Jan. 31 email. “A code amendment for the distribution of impact fees to other projects in this biennium, including the appropriation to PenMet parks, is needed, and this requires Council action. The Council is actively working on a code amendment that I anticipate being ready for Council consideration in early March. That should alleviate the concerns described by the Executive.”
It’ll take a couple months
“The Executive assured me that it’s simply a matter of County Council adjusting the language in our county code to specifically allow our park impact fees to go to entities like park districts,” Denson said. “Then the check to PenMet will be cut. I am working with staff now to get those changes made.”
The soonest the Community Development and Environment Committee can hear the code change bill is March 4, Denson said. Then it should move quickly through the full council and be signed by Dammeier.
“I don’t think there is any cause for concern,” she said. “We are working hard to make this happen.”
The county and PenMet had rushed to produce an agreement before the end of the year so the $472,000 could be allocated for 2023. The council included $400,000 in impact fees in its budget for 2024 and 2025, and penciled in $200,000 for 2026, 2027, 2028 and 2029 that will have to be confirmed by future councils.
The dollars that were originally slated for 2023 will remain in the county parks budget, reserved for PenMet, until the code is corrected, Denson said. The County Council will add them to the 2024-25 budget through an amendment.
Fee collection began in 2017
In 2017, the county began collecting an impact fee for park improvement projects from anyone applying for a home building permit in unincorporated Pierce. The fee began at $1,107, rising annually to $3,529 in 2023.
Pierce County took more than $1.4 million in park impact fees from within PenMet’s boundaries from 2017 through 2022, according to documents. The county distributed none of that money to the local district.
PenMet also receives a portion of state real estate excise taxes (REET) that are collected and distributed by the county. The tax is paid by the seller when a property is sold. It increases with the property’s price, from 1.1% to 3%. Pierce County allocated $300,000 for each of 2024 and 2025 to PenMet, with the same amount tentatively available in out years.
The county last year budgeted a total of $1.4 million in park impact fees and real estate excise taxes for PenMet in 2024 and 2025.
75% to PenMet
“Basically, the plan is to allocate to PenMet approximately 75% of the park impact fees collected in its service area based on a rolling 5-year average of park impact fees collected,” said Denson, adding it would be the same for Key Peninsula Parks. “This projected allocation of funds to our peninsula park districts is unprecedented. … I am thrilled that Pierce County is able to support the many worthy projects of the PenMet and Key Peninsula park districts. This is a huge win for District 7.”
Key Peninsula Parks also had been receiving real estate excise tax funds but no park impact fees. It was to get $328,000 in impact fees in 2023 before the code snag, followed by $300,000 in 2024 and 2025, and $125,000 in each of the ensuing four years. It’s budgeted for $125,000 in REET in 2024 and 2025 with the same amount tentatively allocated for the ensuing four years.
In 2016, PenMet provided to Pierce County a list of capital projects that would mitigate the impacts of growth. They were included in the county’s 2016 fiscal policy. Those that are eligible for park impact fees are:
- Acquisition of property for the Community Recreation Center $4.3 million (complete)
- Community Recreation Center $31.6 million (underway)
- Sehmel turf baseball infields $869,000 (complete)
- Sehmel lights at turf soccer field $200,000 (complete)
- Tacoma DeMolay master plan and Phase I park development $1.7 million (underway)
- Peninsula Gardens master plan and site development $3.9 million (planned)
- Fox Island fishing pier, picnic shelter and improved beach access for hand launches $239,000 (planned)
- Narrows Park accessibility improvements and restroom $582,000 (planned)
- McCormick Forest Park multi-use community trails $525,000 (planned)
- Cedrona Bay hand launch improvement and signage $174,000 (planned)
- Wollochet Bay Estuary Park master plan and park development $7.3 million (planned)
“PenMet Parks appreciates the steps Pierce County is taking to distribute the park impact fees collected within our district boundaries to PenMet Parks for capital projects,” spokeswoman Zemorah Murray said in a Jan. 30 email. “We will continue to work collaboratively with Pierce County to understand all of the park-related fees and taxes that are collected by Pierce County within our district and to advocate for the use of those funds to support projects and provide services to PenMet Parks’ residents.”