Here's a better way to help fund parks

Many other cities in the region use developer-impact fees to offset the costs of growth and keep parks open. Instead, Seattle is looking at such risky, unfair ideas as special parks and libraries districts.

The goodies: Parks included in Seattle's Proposition 2.

Seattle Parks for All

The goodies: Parks included in Seattle's Proposition 2.

City leaders understandably are wringing their hands. It’s been only six months since the council approved a $903 million budget. To make ends meet, nearly 200 hours of library service were eliminated, staff levels for most departments were cut, employees were furloughed, the rainy day fund was drained, and parking fines were raised. Despite all that and only five months into the new year, the city has discovered revenues will fall at least $10 million short of budget.

And next year the deficit is expected to be another $56 million. The year after that the projected shortfall is $53 million. Still more programs must be slashed and taxes, fees, or other new revenue sources must be found immediately.

Since the library system absorbed a huge share of the cuts in the fall, and public safety (police and fire) are always sacrosanct, it seems inevitable that this time around more will be taken from parks, transportation, and quite possibly human services. The prospect of such deep cuts has prompted an outpouring of citizens at council hearings, especially advocates representing parks and human services. Several interest groups also are forming to call for new sources of revenue.

A group of what could be characterized as upper-echelon activists with longstanding corporate ties are lobbying for creation of a Metropolitan Parks District. State legislation allows cities to create quasi-independent Metropolitan Park Districts with unique powers to use eminent domain, buy and sell parks property, and most importantly, to sell bonds and levy property taxes.

This is not a good idea, in my view, and below I outline a better approach. Also, there likely would be considerable opposition to a Metropolitan Park District, just as there was a decade ago in Seattle when the idea was first floated and then rejected by elected leaders. Grassroots parks advocates fear loss of resident control and participation if parks management is ceded to a quasi-independent body.

Another reason for opposing the idea: In bad economic times, when property values fall and the tax base shrinks, these special taxing districts lose their revenue base. And how willing will the city be to fill this financial void once authority has been handed over to another entity?

There also is talk among library supporters of creating a similar independent entity to manage and raise revenues for our libraries. City Council President Richard Conlin says he's exploring this idea.

Earlier this week, a number of light rail, bike, and sustainability groups operating under the banner of “Streets for All” also launched a new lobbying effort. They’re asking the city council and mayor, despite the budget crunch, to come up with another $30 million on top of existing commitments to guarantee increased spending for pedestrian, bike, and mass transit improvements city-wide.

The effort for the walk-bike-ride initiative has drawn support from some council members and Mayor Mike McGinn, but so far no new sources of funding have been identified. McGinn says he's considering such options as raising vehicle license fees and the possible creation of a “Transportation Benefit District” — another state-authorized tool— giving broad powers to an entity with the power to raise taxes.

These ideas for parks and transportation funding may have to wait in line since it is likely the city council will soon float another Families and Education Levy, with Conlin pushing the idea of a library-district ballot measure in 2011.

With the exception of a possible revival of the employee head tax that businesses would pay, a measure rescinded last year by the council, most efforts now being considered by both city officials and advocates take the form of ever-more-inventive ways of raising property taxes and fees that generally hit small businesses and working people disproportionately hard.

And yet there is one source of revenue going completely overlooked by most Seattle politicians — developer impact fees. Why haven't our city leaders long ago tapped this source that has a potential to raise millions not only for parks but a host of other city infrastructure needs? Many other cities do, and for many good reasons.

The Growth Management Act (GMA) explicitly allows cities, counties, and towns the option of requiring new development to cover the cost of providing infrastructure and services that their projects demand, so long as that fee "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 new development." (See RCW 82.02.090 (3).)

Further, these impact fees may be imposed to cover costs related to "(a) public streets and roads; (b) publicly owned parks, open space, and recreation facilities; (c) school facilities; and (d) fire protection facilities in jurisdictions that are not part of a fire district." (See RCW 82.02.090 (7).)

In fact, the majority of jurisdictions in the three-county area including King County, Bellevue, and Burien, and such "backwater" places as Carnation, Covington, Des Moines, Federal Way, Hunts Point, Issaquah, Kenmore, Kent, Kirkland, Maple Valley, North Bend, Redmond, Sammamish, SeaTac, Tukwila, and Woodinville long ago implemented impact fee systems.

Thurston County just put out an RFP asking for consultants to help create an impact fee system there. A 2008 survey by the Association of Washington City’s shows that 34 percent of the 158 cities that responded have implemented some form of impact fee system to cover at least a portion of their city’s infrastructure costs.

Most towns and cities in the area use these fees to help cover the costs associated with schools and transportation systems. Seattle has chosen, and it's a good use, to focus developer bonus-offset funds to low-income housing. But several jurisdictions, including Redmond, Woodinville, Covington, Des Moines, Kenmore, Kirkland, North Bend, and Sammamish, also use them to raise significant amounts of revenues for parks.

Let's take a closer look at Redmond's formula for calculating impact fees to help cover costs of their park system. (See page 13 of 27 especially). In Redmond, an impact fee of about $2,500 is charged per unit of new residential development (slightly lower for rental and slightly higher for single family), and $957 per 1000 gross square feet of new office space. About $400 is charged per 1000 gross square feet of new manufacture, industrial, and retail space. In addition, Redmond charges additional fees to help them cover fire and transportation expenses caused by new growth. In total about 6 percent of their budget in these areas is paid for from impact fees. Only low income housing developments are exempted from these fees in Redmond.

The methodology for coming up with specific amounts charged in each city per type of new use seems to vary depending on the infrastructure needs of each city and impacts of new growth on that infrastructure. But the methodology to calculate these fees now is pretty standard given the two decades it has taken to perfect those calculations since GMA was first enacted.

Despite the economic downturn, there were conservatively over 10,000 new residential units added to Seattle's stock, either in issued permits or built units in 2009, according to Department of Planning (DPD) sources. Using Redmond’s rate of $2,500 on average charged per new residential unit created, those 10,000 new units built here in Seattle could have raised $25 million last year for Seattle Parks. Real estate publications indicate that Seattle added about 2.6 million square feet of office space in 2009. (See page 2.) At $957 per 1000 square feet (Redmond’s formula for new office space), that would have raised another $2.5 million for Seattle parks.


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Comments:

Posted Fri, May 14, 7:33 a.m. Inappropriate

This is a truly a great idea. Too bad that it won't go anywhere as long as Seattle continues to operate as if it belongs to the developers who so successfully externalize the real costs of their operations.

Posted Fri, May 14, 7:43 a.m. Inappropriate

I tend to agree with this idea. While I generally support the goal of creating a dense, transit-friendly city, I fear that we are rushing in that direction without full consideration of the consequences. Letting public safety slide is one way in which this occurs. Another is placing too much demand on the infrastructure.

Creating special taxing districts for various services might alleviate their budget problems in the short term, but in the long term we may be creating a situation in which the city council loses the ability to manage the city budget properly, creating a "popularity contest" situation in which libraries and parks get funded, and sidewalk repair gets cut. Furthermore, I worry that these districts also diminish the ability of the city council to determine how revenue is raised by increasing reliance on property tax.

Posted Fri, May 14, 8:39 a.m. Inappropriate

Here's a concern I have, John. The addiction to growth that the leaders of Seattle have in order to bring revenue to their coffers is already extraordinary. Sometimes it seems like the density argument is a thin veil for money hungry cities who care less about people, environment & livability and more about revenue streams. You've pointed out the incomplete neighborhood problem of redevelopment without commensurate improvement of other systems necessary for healthy communities and the great abyss of deferred maintenance that won't ever be addressed by BTG or other existing revenue streams. Wouldn't the user fee become another reason to be addicted to growth since we'd be getting that money from redevelopment? Wouldn't the incentive be to encourage redevelopment at any price? It could be just another layer of disguise to obscure a continued addiction to growth just to sustain revenues.

Posted Fri, May 14, 10:26 a.m. Inappropriate

There is one critical factor missing here. Impact fees can only be used to add capacity to the system (whether it be new or improved roads, schools or park facilities). Impact fees cannot be used for ongoing maintenance and repair of any of those facilities.

olydave

Posted Fri, May 14, 12:04 p.m. Inappropriate

Mulling that one over myself, olydave. In theory, maintenance would be possible with the increased property taxes paid based on the increase in value.

In practice, this would require both the developers' new construction to have long term appeal (not lose value) and the planners of new parks, etc. to design wisely with future maintenance in mind and using set aside funds similar to the way the City now "self insures." Also the City would have to budget wisely—continue into the future what they are about it (hopefully) learn. And all the rest of us would have to arrive with good humor at the economy after the current one that if practiced worldwide requires six planets to feed, clothe, and entertain.

Are we up for it? May not have much choice.

afreeman

Posted Fri, May 14, 12:13 p.m. Inappropriate

From the article:
"Obviously, a system of impact fees applied not just to parks but our backlog of road, bridge, and sidewalk repairs, could very well offset the need for any cuts at all to our city’s budget not to mention pre-empting the call for new tax sources."

This is simply wrong. Impact fees cannot be used for the maintanance and repair backlog.

olydave

Posted Fri, May 14, 4:32 p.m. Inappropriate

Developers are universally disliked, except by the people who want to buy or rent their product (and, sometimes, not even by them). Nevertheless we all live in dwellings that were produced by developers. It's compromise we make I guess.

I sometimes wonder where (the uncompromising) Mr. Fox lives. I imagine him living in his handbuilt house somewhere thinking of who we could tax (other than ourselves, of course) to maintain our parks. I think there are other identifiable groups that could be singled out; meter maids? boom boxes (well, they are kind of obsolete)? taxing tobacco seems a bit grabby since you can't smoke in a Seattle park but there's always financial advisers, they gave up their untouchable status some time ago.

kieth

Posted Fri, May 14, 5:44 p.m. Inappropriate

Impact fees are a great idea for new development. As pointed out, they're not much use in addressing existing needs, which is where the real challenge is: How do you properly collect revenue for operation and maintenance of public commons such as parks?

In general, parks almost always get shafted in budget downturns. Look at what's happened to King County, where they're just about out of the park business unless there's a revenue stream attached. For example, they've done a good job of being entrepreneureal at Marymoor Park, where they hold concerts and special events, and charge a reasonable rate for use of lights and the artificial-grass fields. For smaller parks, that's much harder to do.

What might make more sense than impact fees is rolling parks and athletic fields in with hospitals, so that we address our health needs in one place. The so-called obesity epidemic is largely the result of lack of exercise by non-athlete adults and children. Parks and school athletic spaces proactively provide facilities that promote exercise and good health. In contrast, hospitals reactively address treatment of ill health. The two modes of health care naturally go together. So that might be one good way of getting Parks properly funded.

Another combination that might make sense is Parks with Police. Unfortunately, the reason we don't have any money for parks is too often because they're the runt of the municipal litter, and don't have huge staffs lobbying for their status. Personally, I think rethinking police and fire is a very good idea. Since 9-11, Police and Fire have ridden a wave of good will and resulting public funding. This doesn't necessarily mean that they can't be more efficient or more productive. In fact, the rule in government is that increased productivity and efficiency can always be found. The criminal justice system in particular, as has been discussed in other Crosscut articles, would arguably benefit from putting fewer people in prison and educating and rehabbing more of them. That's a change I want to vote for, but how do I do it? Typically, government is so well silo-ed that systemic changes across silos are impossible, unless there's a crisis or there's financial motivation for the existing silos. Good luck attacking just the police silo. Maybe you throw Parks into the Police silo, and they can make Parks safe places where Police get to promote positive behavior instead of wallowing in a constant churn of human depravity. If I were the SPD or an individual police officer, this would actually be pretty appealing.

Now let's take a look at the notion of creating a Metropolitan Parks District (MPD). An MPD is in some ways a ponderous vehicle for addressing park needs, but it does address how we can tie a dedicated revenue stream to parks. However, the current mishmash of overlapping taxing districts, over time, brings about a pernicious unproductive ineffective inertia to government and to its perception by the public. Often, where there can be economies of scale or elimination of useless bureaucracy, no efficiency can be had because of the entrenched special financial interests of a given fiefdom or monopoly -- say schools or Parks or Libraries or Sound Transit or Metro. Also, there can be no clear, coherent, integrated government for a City or County because of these many petit-bourgeois bureaucracies. Thus you get governmental flailing and thrashing, and ridiculous cost that passes for actual action.

Given this jaded analysis, my recommnedation for Parks is that each park be made an MPD and that we use the current revolution in geomapping and GPS systems to tax homeowners near parks in direct-GPS-calculated-proportion to park proximity from a home (with those directly abutting a park--and thus buffering a park from other neighbors--being taxed less). This sort of taxation would get directly at 1) the health value of a given park to its users, and 2) its perceived value to citizens nearby (where obviously the value should be highest, unless, unfortunately, a given park is actually a haven for criminal and gang activity).

This same sort of inidividualized GPS-based taxation could be applied to a lot of other government services including policing and libraries and especially boondoggles like Sound Transit where the individual benefit to a citizen or property owner can vary astronomically and has virtually nothing to with the assessed value of a particular home.

Ultimately, a City should consolidate as many special-taxing districts as possible into a comprehensive scheme with a voting occur on one ballot about the overall taxation level and the relative balance of services. The current piecemeal approach leads to a corrupting, gaming of the system, where bureaucracies are too often rewarded for self-perpetuation and for inefficient service that sustains a self-serving employment base. Public employee unions come to mind here, although they are not to be condemned for their advocacy of their members and their rights, which is the proper role of a union. Rather, public employee unions need to be condemned for their role as a huge obstacle to efficiency, productivity and innovation within government silos, and thus as huge obstacles to efficient, productive and innovative government.

Oh, where was I? Parks! Yes, they're a great public good! Funding for their acquisition, operation and maintenance should be sure, sufficient and sustainable. We have none of those now. Micro-MPDs with individualized proximity-based taxation could do the trick.


Stuka

Posted Mon, May 17, 11 a.m. Inappropriate

In your friendly neighbour to the north we've been using development fees for years. We trade a bit more density to the developer for sweet neighbourhood amenities. We also have hard targets based on population density and proximity to libraries, community centres, pools, rinks, parks. So we collect fees in an area and then when it's dense enough we build the new amenities. Doesn't always work perfect, sometimes your neighbourhood is at the end of the line. Lucky for me mine has been at the top for the last 5 years and the two new community centres within 2.5 miles sure look good from here!

AdamO

Posted Tue, May 18, 10:52 a.m. Inappropriate

Developer impact fees are justifiable and fair. It is negligent not to use this available revenue source as a mechanism for paying for the higher demands put on infrastructure because of increased development . Seattle citizens have continually paid for increase in infrastructure demands via higher taxes spread across the community. Use of impact fees would bring Seattle into the twenty-first century.
Public parks and open space include environmental and ecological as well as human ‘health’ or ‘safety’ benefits. This is not a one-to-one fee; developers would pay a proportionate share of cost of public facilities [defined by the city] that benefit the new development.
Kate Martin may be correct in saying that impact fees would give elected officials another revenue stream to sustain growth. However impact fees could also put breaks on development in some areas. For instance, impact fees demand more knowledge of the surrounding area for planned development projects. Appropriate questions would arise as to the impact on parks, open space, recreation, schools, and transportation. With that we would have the tools—and revenue—to make more knowledgeable decisions.

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