City considers traffic impact fees

RITZVILLE – The City Council discussed charging developers a proposed traffic impact during its May 2 meeting.

The fees would generate revenue to help pay for expenses with constructing state-mandated traffic mitigation measures.

The measures would likely include two roundabouts at the Division Street exits at Interstate 90, city officials said. One would be located at the Division Street-Weber Avenue intersection; the other at Weber Road-state Highway 261 intersection.

The cost to construct two roundabouts — approximately $7.5 million, city officials said.

The city would calculate traffic impact fees based on anticipated traffic growth during peak hours, and developers would generate forecasts based on metrics such as those found in the Highway Capacity Manual.

For example, if the cost of constructing a single roundabout totaled $3.75 million and the number of estimated peak-hour trips was 1,022, the per-trip traffic impact fee would equal approximately $3,670.

The city would apportion that charge based on each developer’s contribution to the total traffic increase, city officials said.

Development of a convenience store with a gas station might generate more traffic than a small retail plaza, officials said, noting some businesses would be charged more and others less.

Councilman Scott Yeager gave another example.

Les Schwab’s new facility on the south side of Interstate 90 is expected to generate an additional 29 peak-hour trips, he said. If the per-trip cost was set at $7,700, the city would charge Les Schwab $223,300 ($7,700 x 29).

A letter from Derek Schafer, the owner of Grainland Acres — a multi-use project on the south side of Interstate 90 — suggested a proposed fee of $7,700 per trip might not drive business elsewhere.

“The idea behind the [traffic impact] fee is so that no individual business would have to pay for mitigating a broken traffic threshold, i.e. building a roundabout on their own,” he said.

To reduce per-trip costs, Yeager outlined alternatives.

Under one option, the city would cover a portion of the traffic mitigation costs.

Because residents and local businesses already use the intersections, “existing trips” totaling 920 peak hours could be added to the calculation, he said. That option would reduce the traffic impact fee to $5,250 per trip.

“That’s not a great option because, as taxpayers, we’re already paying our fair share to cover traffic costs,” he said. “Why should those of us who live here pay for these $7.5 million roundabouts? That’s the dilemma.”

As an alternative, the city could apply for a grant to build a roundabout at the end of the westbound off-ramp.

To take advantage of that option, the city would be required to pay a 20% match, which could cost up to $750,000 in addition to the full cost of the eastbound off-ramp, he said.

The total cost to the city would be about $4.5 million ($750,000 + $3,750,000), he said. That option would reduce projected fees to $4,485 per trip, but would depend on the vagaries and risks of grant funding.

Yaeger noted another possible downside.

“If the city doesn’t build these projects within six years, we’ll be required to repay the developers,” he said. “We have only six years to collect the funds and build the projects.

“Also, if peak-hour numbers don’t meet forecasts, we might run into problems,” he said. “Let’s say the city only collects fees of $500,000 because the expected peak-hour traffic is lower than anticipated. The city wouldn’t have enough funds to even start building a roundabout.

“That’s another risk.”

Eric Johnston, engineer with SJC Alliance, discussed the traffic impact fee in the context of the city’s projected growth. He agreed with the concerns expressed in Schafer’s letter and noted that the proposed fee of $7,700 is high when compared to other area municipalities.

“Ritzville isn’t that big and you have a couple of really expensive [proposed] projects,” he said.

He also noted that certain state regulations aren’t negotiable.

“When additional traffic is added to a transportation network, improvements are required to mitigate any adverse impacts,” he said, outlining five options.

First, the city could require developers to build the improvements themselves. That might lower costs for a particular project, but would likely prohibit costs from being spread over several projects and businesses.

“A single developer that constructed only one or two houses wouldn’t want to cover the full cost of a roundabout,” he said. “That option isn’t fair or feasible.”

Second, the city could establish a traffic impact fund.

Businesses would contribute to the fund based on their actual share of costs. That option would be expensive because a limited number of businesses would be required to shoulder the cost burden.

Third, the city and/or developer might try to demonstrate the adverse traffic impact wasn’t generated by their projects.

They could argue that higher volumes resulted from more regional traffic increases. But that option would rely on a timetable set by the state, which might delay actual construction for decades.

“In the meantime, nobody could build anything impacting those intersections,” Johnston said.

Fourth, the city could build the roundabouts and pass the costs to taxpayers.

“Sometimes that’s the best choice if you want more growth,” he said.

Finally, he said the city could seek grant funds to pay for the roundabouts.

“Under the first two options, growth pays for growth. Under the last two options, growth doesn’t cover the full cost,” he said.

Johnston noted that a hybrid of these options — such as those outlined by Yeager — might make sense.

“We have to generate revenue sooner or later, if we want development,” he said. “We need to decide whether the city is willing to pay anything for these two roundabouts.”

When pressed for his opinion, Public Works Director Dave Breazeale rejected the idea the city should charge traffic impact fees of $7,700 to cover the full cost of two roundabouts.

“If the threshold is set that high, we won’t have to worry about development because no developer will come here,” he said, adding that Yeager’s option of adding existing trips to the calculation seemed the best alternative.

At the May 16 council meeting, Schafer shared additional concerns.

He provided a letter that stated, in part, “A fee as punitive as the one being proposed would stop our project completely. I cannot speak for other landowners or businesses, but my guess is that it would stop all development of any kind in Ritzville.”

“If we don’t consider current development options, in 10 years we’ll be in the same spot,” he said. “We must be proactive without burdening the city. There has to be a way to make it happen.”