Impact Fees FAQ

Impact fees are authorized by state law and provide a mechanism for cities and counties to charge new development for a proportionate impact of the development on the public facilities, including schools, needed to serve the development. State law requires that impact fees must be based on growth-related capacity needs. For school districts, this means that the district must demonstrate projected student enrollment growth over the six-year planning period, must identify that it needs new capacity to serve that future growth (versus capacity to serve students already in the system), and it must have a planned capacity project to meet the growth-related need. School districts do not have the legal authority to assess and collect school impact fees. As such, the Lake Washington School District (LWSD) relies on King County and the cities of Kirkland, Redmond, and Sammamish to adopt and maintain school impact fee ordinances and to collect school impact fees on behalf of the district. Impact fees are paid by developer on a per unit basis for new single-family or multi-family units. The fee is collected by each jurisdiction and is generally paid prior to receipt of the building permit.

School districts are required to complete a Capital Facilities Plan each year to establish a basis for school impact fees to be collected.  In order for impact fees to be collected in the unincorporated areas of King County, the King County Council must adopt this plan and the district’s proposed impact fees. The cities of Redmond, Kirkland and Sammamish have each adopted a school impact fee policy and ordinance similar to the King County model.  Each city must also adopt this plan and the district’s proposed impact fees.

Pursuant to the requirements of the Growth Management Act (GMA) and the local implementing ordinances, the Capital Facilities Plan is updated on an annual basis with the impact fee schedule adjusted accordingly.  

The district’s Six-Year Capital Facilities Plan is the organization’s primary facility planning document in compliance with the requirements of the State of Washington's Growth Management Act (GMA) and King County Code 21A.43. Consistent with the GMA, it is also used as a basis for requesting the collection of school impact fees. The 2020 plan was prepared using data available in the spring of 2020.

State law establishes that impact fees must be reasonably related to and proportional to growth related impacts on infrastructure. King County was the first jurisdiction in the State of Washington to adopt a GMA school impact fee ordinance in 1991 (with fee collection first becoming effective in 1992). The King County Council adopted the ordinance, including the school impact fee formula, following a stakeholder process that included representatives from school districts and the development community. The adopted formula requires that the calculated fee be reduced by fifty percent. This discount factor was negotiated as a compromise in response to the development community’s concerns with King County implementing school impact fees. Most cities in King County (and in other areas) adopted the King County school impact fee formula, including the discount factor, in whole as a part of their school impact fee ordinances.

There are multiple factors that go into calculating the impact fees.  Listed below are the major factors:

• Number and cost of growth-related facility projects;
• Student generation rate (# of students that come from single-family and multi-family developments that have been built in the last five years);
• Credits for State School Construction Funds towards planned projects; and
• Credits for taxes, based on the Bond tax rate per thousand of AV and the average assessed valuation of single-family and multi-family units.

Enrollment projections, while included in the Capital Facilities plan are not an individual factor in the calculation of the fee. The enrollment projections help to demonstrate that the district is legally eligible to collect school impact fees for growth needs but do not otherwise influence the amount of the fee. When enrollment projections decline, districts are unable to demonstrate future growth-related needs and thus are unable to base impact fees on capacity projects even where the District has an existing capacity need. Impacts fees by law must be based on projects addressing future growth needs and cannot be collected to meet existing capacity needs.  

The student generation rate is the primary driver of the school impact fee rate. The student generation rate is based on district-specific development data and measures the average number of students generated from each new dwelling unit type constructed within the district in the previous five year period. In simple terms, building permit data is matched to actual district enrollment records to determine the number of students generated from the new dwelling units. When applied to the cost of needed new capacity, the student generation rate determines the capacity cost per dwelling unit and is the measured “proportionate share” that new development must pay toward that new capacity cost. The student generation rate is updated annually. Increases or decreases in student generation can impact the final impact fee. The LWSD student generation rate for the last few years is listed below.

* Used 2020 rates due to COVID impacts.

The impact fees adopted in June 2023 and effective January 1, 2024 are:

Impact fees may only be used to fund facilities needed to address new development and cannot be used to correct existing deficiencies in capacity. Therefore, when enrollment is projected to decline, regardless of the existing capacity need, a district is unable to request the collection of impact fees. 

• Lake Washington’s February 2023 updated enrollment forecast from FloAnalytics reflects a declining enrollment at both the elementary and middle school grade levels through 2028. Thus we no longer can demonstrate growth-related capacity needs at the elementary and middle school level. There is still projected enrollment at the high school level over the six-year planning period and a need to plan for growth-related capacity at that level;
• Due to declining enrollment, planned construction project costs for the elementary and middle school level cannot be included in the school impact fee formula because there is not a growth-related need at these levels. Removing these projects from our school impact fee formula, significantly reducing our impact fees; and
• Student generation rates were updated showing few students are expected to result from projected housing development. 

Note: Similar situations occurred in two other King County districts in 2022:both the Kent and Federal Way School Districts were unable to request any amount of fee for 2022 due to declining enrollment. Highline School District has not requested impact fees for several years due to declining enrollment. In 2023, the Kent School District again, because of continued enrollment declines, did not request school impact fees. Each district annually reviews their enrollment projections and capacity needs to determine if they can again request the collection of impact fees on their behalf.

Despite the increase in multi-family construction, the district has not seen any notable increase in the number of students living in multi-family units on average. Per the code requirements, the district can only use the student generation statistics from units that have been built in the last five years. This means that “mature” developments are excluded from the calculation. For example, the district sees approximately 0.08 students generated from multi-family units (or about 8 students per 100 multi-family units) while the Issaquah School District receives 0.147 students from its multi-family units (about 15 students per 100 multi-family units). Both districts use the same method for purposes of determining the student generation rate. If LWSD had Issaquah’s student generation rate, our fee would calculate to be much higher. The Capital Facility Plan and the student generation rates are updated annually, therefore the district will capture in its future fees any changes in student generation resulting from more families moving into these units due to demographic shifts or the construction of multi-family units with more bedrooms.

Impact fees must be used for growth-related capacity projects included within the district’s Capital Facilities Plan.  Growth-related capacity projects can include portables, new construction, additions or other capital improvements that provide capacity.

Impact fees must be used within ten years of being collected.

No. Impact fees represent a small portion of the funds needed for new schools. State law prohibits local governments from using impact fees alone to fund new capacity improvements. Rather, the statute directs that there is a balance between impact fees and other sources of public funds. In addition, by code, the formula used to calculate the fee applies a 50% discount. The discount, which is applied after school impact fees are calculated pursuant to the school impact fee formula, is outside of the district’s control. As discussed above, the King County Council adopted the 50% discount following stakeholder input. The cities thereafter adopted this same discount.

The District does not have independent authority to assess school impact fees. Rather, it relies on local jurisdictions to adopt and maintain a school impact fee ordinance and collect impact fees on behalf of the District.  Any change to an adopted school impact fee ordinance requires legislative action by the elected council of the relevant jurisdiction. The District encourages community members to contact King County and the cities of Kirkland, Redmond, and Sammamish to provide input regarding the school impact fee ordinance and the need to ensure that new developments pay the appropriate share of the costs to provide adequate capacity for serving the new development.

The table below shows the impact fees collected the last five years. Impact fees collected through 2019-20 were used to pay for a portion of the costs of the 2016 Bond Projects located within each jurisdiction. Impact fees collected after 2020-21 are being used for 2019 and 2022 Construction Levy projects within the appropriate jurisdiction. Impact fee revenues will fluctuate each year based on building permits issued within each jurisdiction.

Each school district determines its eligibility to request school impact fees and calculates school impact fees based upon district-specific factors. There are multiple factors that go into calculating the impact fees such as student generation rates, number and costs of growth-related facility projects, eligibility for state school construction funds, and the determination of the credits for taxes (using local bond levy rates and average assessed valuation). Each district has unique inputs for the factors. Even two districts with identical growth-related facilities will generate different fee amounts using district-specific inputs for the other factors. Individual districts also may take discretionary adjustments to reduce the fee below the 50% discount based on local circumstances and board decisions.

The district is requesting the amount of school impact fees in alignment with applicable state law and local codes. Our 2022 Capital Facilities Plan proposes school impact fees that are based on capacity projects at all three grade levels.  We have worked diligently to maximize the impact fee request. 

The district along with our cities and counties regularly collaborate to plan. We have quarterly meetings with leadership and board/council members to discuss current issues. Staff meet annually with cities regarding updates on 20-year comprehensive plan and growth targets. We incorporate comprehensive plan change into our short and long-term development and enrollment projections by school. Our facilities department and cities conduct annual meetings as required by the GMA and King County Countywide Planning Policies. These are collaborative meetings where district and jurisdictions can discuss code and zoning changes, identify pending and potential development activity, and work on potential areas for school siting and understanding district needs. In addition, we have joint use agreements with our cities for joint use of facilities and fields. The cities have made capital improvements to district fields for use by both the district and city programs.