Ferndale City Council

REQUEST FOR COUNCIL ACTION Department Prepared By: CITY CLERK’S OFFICE

AGENDA BILL #17-06-005

TITLE:

Ordinance Resolution Motion Info Only Discussion Date Council Action Requested: June 5, 2017 Prepared by: Susan Duncan, City Clerk Reviewed By: Date: 5/31/2017

SUBJECT: Fee Code Amendment – Accessory Dwelling Units

Committee: P&LU PW&U F&A

Mayor X

City Administrator X

City Clerk’s Office X

Community Development Dept X

Public Works Department

City Attorney’s Office

Finance Director X

Police Department

Board/Commission

Hearings Examiner ACTION REQUESTED: VOTE NEEDED TO PASS:

SUMMARY: Please see staff report.

DISCUSSION/ANALYSIS/ISSUES: Planning & Land Use Committee members forwarded this item to the full council for further discussion. RECOMMENDATIONS: Approval of AB #17-06-005 ATTACHMENTS: Staff Reports Ordinance

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City of Ferndale

COUNCIL COMMITTEE STAFF REPORT: STAFF ADDENDUM

MEETING DATE: June 5, 2017 AGENDA BILL #__________

SUBJECT: Fee Code Amendment – Accessory Dwelling Units (ADUs) in Ferndale DATE: June 5, 2017 FROM: Haylie Miller PRESENTATION BY: Haylie Miller

Exhibit 1 – ADU Fee Ordinance On May 31, the Planning and Land Use Committee developed a draft fee structure for Accessory Dwelling Units. Staff has reviewed the proposal and has included it below. Staff recommends that the Planning and Land Use Committee’s proposal replace the original Staff proposal contained in the accompanying staff report, and that the full Council amend the Unified Fee Schedule to reflect the Committee recommendation. An ordinance reflecting the Committee recommendation and amending the Unified Fee Schedule has been prepared and is attached. Traffic: The Planning & Land Use Committee suggested ADUs (attached and detached) be assessed at 50%1 the of the traffic impact fee assigned for Single Family Residences: Planning & Land Use Committee (5/31/17) proposal:

1-bedroom - $1,500 2-bedroom - $1,500 3+-bedroom - $1,500

Park Mitigation:

1 50% of the traffic impact fee assigned for Single Family Residences assumes an ADU generates 0.5 trips

between 4-6PM daily or one trip between 4-6PM every other day.

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The Planning & Land Use Committee suggested ADUs (attached and detached) be assessed at 25% the of the Park Impact fee assigned for Single Family Residences, regardless of number of bedrooms: Planning & Land Use Committee (5/31/17) proposal:

1-bedroom - $431.59 2-bedroom - $431.59 3+-bedroom - $431.59

School Mitigation Fees: The Planning & Land Use Committee suggested ADUs (attached and detached) be assessed be charged no school impact fees for one bedroom and be assessed the multifamily rate for school fees for 2 and 3+ bedrooms: Planning & Land Use Committee (5/31/17) proposal:

1-bedroom - $0.00 2-bedroom - $650 3+-bedroom -$650

Storm: Planning & Land Use Committee (5/31/17) proposal:

1+ bedrooms $0.00 Water/Sewer Connection Fees: The Planning & Land Use Committee suggested ADUs (attached and detached) be charged no water and sewer connection fees for one bedroom and be assessed at 25% the of the water/sewer connection fees assigned for Single Family Residences for 2 bedrooms and be assessed at 50% the of the water/sewer connection fees assigned for Single Family Residences for 3+ bedrooms: Planning & Land Use Committee Water (5/31/17) proposal:

1 bedroom $0.00 2 bedrooms $1,055.77 - $1,659.62 3 bedrooms $2,111.55 - $3,319.25

Planning & Land Use Committee Sewer (5/31/17) proposal:

1 bedroom $0.00 2 bedrooms $1,319.85 - $2,074.05 3 bedrooms $2,639.70 - $4,148.10

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ADU Planning & Land Use Committee Fee Proposal Summary:

Impact/ Connection Fee

1-bedroom 2-bedrooms 3+bedrooms

Traffic $1,500 $1,500 $1,500

Park $431.59 $431.59 $431.59

School $0.00 $650.00 $650.00

Storm $0.00 $0.00 $0.00

Water $0.00 $1,055.77 - $1,659.62 $2,111.55 - $3,319.25

Sewer $0.00 $1,319.85 - $2,074.05 $2,639.70 - $4,148.10

Total*:

$1,931.00

$4,957.21 – $6,315.26

$7,332.84 - $10,048.94

*Standard building permit inspection and valuation fees are not included in this total, estimated range for an ADU is $500-$1500.

Sample fee code language would read: ADU Fees:

Traffic Impact: 50% of Single Family Residence

Park Mitigation: 25% of Single Family Residence

Water & Sewer

Connection Fees:

1-bedroom

none

2-bedroom

25% of Single Family Residence

3+bedroom

50% of Single Family Residence

Storm/Sewer

Mitigation Fee:

none

School

Mitigation:

1-bedroom

none

2+ bedroom

Multifamily Residence Rate

All other fees: 100% of Single Family Residence

CONCLUSIONS: Staff recommends Council chose an appropriate rate for ADUs.

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ORDINANCE # ___________________________________________________________________________

AN ORDINANCE OF THE CITY OF FERNDALE AMENDING THE MUNICIPAL FEE CODE ADDING A PERMIT FEE FOR ACCESSORY DWELLING UNITS (ADUs)

___________________________________________________________________________ WHEREAS, from time to time staff recommends changes to the Fee Code to reflect a need for modified fees; and WHEREAS, Ordinance #1995 was adopted on June 20, 2017 allowing accessory dwelling units in single family residential zones; NOW THEREFORE, the City Council of the City of Ferndale do ordain as follows: Section 1. The City’s Municipal Fee Code is amended to reflect fees related to permits for shipping containers used as temporary storage facilities per the attached “Exhibit A.”

Passed by the Council of the City of Ferndale, Washington, on this 5th day of June, 2017

ATTEST:

_______________________________ ___________________________________ Jon Mutchler, MAYOR Susan Duncan, CMC, CITY CLERK

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EXHIBIT A

ACCESSORY DWELLING UNIT FEES

Traffic Impact: 50% of Single Family Residence

Park Mitigation: 25% of Single Family Residence

Water & Sewer

Connection Fees:

1-bedroom

none

2-bedroom

25% of Single Family Residence

3+bedroom

50% of Single Family Residence

Storm/Sewer

Mitigation Fee:

none

School

Mitigation:

1-bedroom

none

2+ bedroom

Multifamily Residence Rate

All other fees: 100% of Single Family Residence

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City of Ferndale

COUNCIL COMMITTEE STAFF REPORT

MEETING DATE: June 5, 2017 AGENDA BILL #__________

SUBJECT: Fee Code Amendment – Accessory Dwelling Units (ADUs) in Ferndale DATE: June 5, 2017 FROM: Haylie Miller PRESENTATION BY: Haylie Miller

Exhibit 1 – ADU Fee Comparison Chart Exhibit 2 – ADU Ordinance #1995 (effective June 20, 2017) Exhibit 3 - ADU Fee Code Amendment Ordinance RECOMMENDATIONS: Staff recommends City Council determine a fee rate for ADUs. Staff has provided options for discussion below. City Council may wish to place this item on the June 5th consent or regulation agenda for consideration. City Council may adopt an ADU fee during the June 5th or June 19th City Council meeting. If the Council does not believe a fee resolution is possible on either of those dates, the council may wish to revise the ADU ordinance to a later date to reserve more time to discuss ADU fees. BACKGROUND: The City Council adopted the ADU Ordinance to take effect on June 20, 2017, to allow up to 10 accessory dwelling units (attached and/or detached) in Ferndale single family residential zoning districts before a mandatory review of the code to determine its effectiveness. City Council has had many discussions related to ADU fees. During the last Council Committee meeting, City Council directed staff to provide fee examples from surrounding jurisdictions related to ADUs as well as to have staff provide a recommendation for ADU fees. DISCUSSION: In general, Cities typically charge impact and connection fees related to traffic, park, school, stormwater, and water/sewer connection fees. Staff has researched surrounding jurisdictions policies and fee rates associated with ADUs. The attached table (Exhibit 1) shows the types of fees and what each jurisdiction charges (or doesn’t charge) followed by a very general estimate of total fees owed for an ADU permit within each particular jurisdiction. The ADU fees for surrounding areas varies greatly based on fee structures and how fees are assigned.

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Staff would like to note that not every local jurisdiction (such as the City of Lynden) has an ADU ordinance; in some cases, cities that allow ADU’s do so as a matter of policy or past practice. Staff encourages Council not to assume that each jurisdiction has actually had a robust ADU conversation. Likely few if any jurisdictions would say that they have a perfect ADU regulation. The Council is also likely aware of the fact that there is no such thing as a fee structure that is universally beloved. Further, a broader review of ADU fees across the Pacific Northwest and throughout the country shows that there are examples of nearly every type of fee structure for ADU’s, from no fees to very high fees. Because of this, Staff believes that Council should consider what they want their fee structure to do: 1. Does the Council wish to encourage ADU’s? Or, does the Council want to

restrict ADU’s? This will greatly inform where Ferndale lands with regard to fees. Staff suggests that this issue be discussed first, and would point out that adopting an ADU ordinance does not necessarily suggest favor or opposition to ADU’s, but rather the realization that ADU’s must be regulated.

2. Consider fees based on the true impacts on the City. Can Council say with certainty that the introduction of an ADU (attached or detached may or may not have different attributes) will add school age kids (school impact fees), will add more people who may utilize parks and trails (park impact fees), will generate more traffic (traffic impact fees), will use more water and sewer (water and sewer connection fees)? If Council believes that an ADU will have an impact on these services, the Council should then consider whether the ADU is likely (within its lifespan) to have the same or lesser impact than the existing single family residence. Then, the Council should determine whether the interests of the City are better served by the ADU paying its equivalent share of impacts, or if the greater good is served by the City itself picking up the slack.

3. Staff wishes to remind that if Council concludes that ADU’s will have an

impact, but that the full mitigation of that impact would make ADU’s unaffordable, that the impacts do not then go away – ultimately the City will need to mitigate for these impacts through other funding sources.

4. Staff does not believe that any one impact fee type (school, parks, etc.)

should be waived for the primary purpose of reducing fees to a point that may be palatable1. The City’s fee structure is not established based on an overall target number – it is based upon the need of each individual type of service to be maintained or expanded. By waiving one fee to hit a price point, the Council would be working from the opposite end of the equation.

ANALYSIS: Based on these principles, Staff does not believe that it is reasonable to assume that an ADU will have no impact, though an argument could be made that an attached ADU might have a lesser impact (particularly on water and sewer use) than a detached ADU.

1 Nor should fees be artificially increased for the primary purpose of making them cost-prohibitive.

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Conversely, Staff believes that because of the size limitations placed on ADU’s, it is not realistic to assume that an ADU would have the same impact as a single family residence. In other words, ADU’s should be required to pay impact and connection fees, but perhaps at a lower level than a single family residence. Staff believes that an ADU is most similar in nature to either a duplex or a multifamily unit (especially when Council considers the fact that the existing single family residence will have paid full impact and connection fees) – and Staff recommends that Council consider starting their conversation based either on the duplex or multifamily fees. As requested by City Council, Staff has presented a recommendation shown on the last row of the fee chart attached as (Exhibit 1). Provided below is an explanation for each fee recommendation, followed by alternatives City Council may wish to consider: The proposed fees are generally similar to residential multifamily rates. Traffic: Staff recommends traffic fees be assessed at the same rate as Single Family Residences (SFRs). Traffic Impact fees are based on trips generated between the evening Peak traffic hours between 4-6PM. Staff believes at least one trip will be generated on average by ADUs during the PM peak hour. Alternatively, City Council may wish to charge 50% of SFR based on the fact the ADU size as approved can be up to 800 sf in size or 50% of the size of the SFR, whichever is less. The 50% traffic fee represents 0.5 PM Peak hour trips which would essentially assume that a PM peak hour trip is generated once every 3 ½ days during the pm peak hour. Fee: $3,000 Park Mitigation: Staff recommends park impact fees be assessed at 50% of the rate as Single Family Residences. The Park Mitigation fee ordinance is set up to assess two rates City-wide: a single family residence rate and a multifamily unit rate which is half of the single family rate. Alternatively, City Council may wish to reduce or eliminate this fee for ADUs. Fee: $863.18 School Mitigation Fees: Staff believes, if there was one fee that could in theory be waived entirely it could be the school impact fee, based on the relative unlikelihood that a school-aged child that would not otherwise be living on the property would live in a one-bedroom ADU. However, Staff recommends the multifamily rate be assessed for ADUs. Fee: $650.00 Storm: A storm mitigation fee is charged at a flat rate for all single family residences, totaling $500.00. This fee is generally used to remain in compliance with the City’s stormwater permit Citywide, and funds such programs as stormwater outreach, capital projects to improve stormwater, stormwater-related

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maintenance projects, and more. The fee is not based upon direct stormwater impacts to the parcel in question. Given this fee is not based on impervious surface additions and is a flat rate per lot, staff recommends no additional storm mitigation fees be owed for ADUs placed on residential single family lots. Alternatively, City Council may want to establish a rate for storm mitigation. Fee $0.00 Water/Sewer Connection Fees: Water and Sewer Connection fees are based on units referred to as Equivalent Residential Units (ERUs). One ERU equals 210-gallons of water used per day. Single Family Residences are charged for one ERU on the building permit. Staff recommends water and sewer connection fees be assessed at 50% of the rate as Single Family Residences. This recommendation is based on the fact the ADU size as approved can be up to 800 sf in size or 50% of the size of the SFR, whichever is less. The fee below represents water and sewer connection fees combined and the fee varies based on proximity the City water and sewer treatment plants. Alternatively, City Council may wish to charge a more reduced rate to incentivize ADUs or assess a rate similar to multifamily rates City-wide. Fee $4,756.20 - $7,467.10 Total Fee for ADUS (including building permit valuation/inspection estimates): $9,850- $12,880.00 Sample fee code language would read: “Fees shall be assessed at 50% of the single family residence rates for, Park, Water and Sewer Connection fees within the geographic area. All other fees shall reflect single family residence fees.”

“All other fees” refers to traffic impact, school impact, storm impact and building permit fees. CONCLUSIONS: Staff recommends Council chose an appropriate rate for ADUs.

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