City explores utility‑reimbursement approach for Lower Terrace sewer lift station to speed infill housing

City staff told the Finance & Administration Committee they are working with a local developer on a plan to build a regional wastewater lift station to serve an area in the Lower Terrace/7‑Mile corridor and to pair that construction with a proposed utility reimbursement area that would repay city costs through fees on benefited properties.

"What makes sense to us is to work with, a well respected known developer in this area to see if we can get this accomplished," a city staff presenter said, describing a project estimated at "probably around a $16,000,000 project." The developer would build the project in one option and the city would ultimately be responsible for about three quarters of the cost; those city costs would be recovered by fees from properties located within the utility reimbursement area, the presenter said.

Staff described the lift station as necessary to serve roughly 230 acres opened for development in a 2007 study and to replace multiple smaller stations that currently lack capacity. Committee members asked what triggers the need for a lift station; staff replied that the current smaller stations cannot serve higher volumes and that the lift station is required to lift flows up the hill to reach existing conveyance.

Separately, city attorneys and staff discussed proposed code language to authorize "utility reimbursement areas" (a city‑led alternative to traditional private latecomer agreements). Staff said the ordinance would allow the city to fund and construct infrastructure (water, wastewater, transportation) and then collect reimbursement fees from properties that benefit, rather than requiring a private developer to front the full cost and recoup it from subsequent property owners.

City staff said the change would add a tool commonly used by other Washington cities, and that state law allows for such latecomer or reimbursement mechanisms; the transportation reimbursement version would run on a similar framework. The administration suggested a mix of funding sources — grants, impact fees and area charges — could be used for larger projects.

Committee members discussed timing, risk and payback. Staff said the city can absorb longer repayment horizons than private developers and that some projects could be bondable revenue streams if upfront funding is required. City legal staff noted statutory repayment windows — for example, 20 years for some utility reimbursements — and that specifics would be established when a benefit area and project are defined.

Staff said the Lower Terrace lift station is a likely candidate for a first such utility reimbursement area and that, if adopted, the city would return to the council with project‑specific ordinances identifying the benefit area and repayment terms.