Committee hears bill to condition waivers of municipal utility hookup fees on recorded affordability covenants

Senator Marcus Riccelli introduced Senate Bill 5662 to the Local Government Committee, proposing that when cities waive municipal utility connection charges for properties used as emergency shelter, transitional housing, permanent supportive housing or affordable housing, the developer must record a covenant with price restrictions and household income limits. The covenant would require repayment of waived charges if the property is converted to another use, and the covenant must be recorded with the applicable county auditor or recording officer.

The bill amends last year’s statute that allowed municipal utilities to waive connection charges for properties owned or developed by nonprofits, housing authorities or local agencies providing those housing types. Committee staff told members that current law already requires waived connection charges to be funded from general funds, grants or other identified revenues; the bill conditions the waiver on the recorded covenant and specifies minimum covenant elements.

Senator Riccelli said the bill responds to a local problem in Spokane, where he said the city increased general facility connection fees more than 500% over a two‑year period, adding “80 to 100,000 per apartment project” and raising per‑household costs for nonprofit builders. “This is just one mechanism that makes things less expensive for developers trying to help fill the need,” Riccelli said. Developers and housing advocates told the committee that recent fee increases have made small homeownership projects and smaller affordable developments financially precarious.

Local utility representatives asked implementation questions. Logan Barr, State Relations Manager for Tacoma Public Utilities, said utilities appreciate the policy goal but raised practical concerns about which government entity would track covenant status over time, how utilities would recoup waived fees from new owners, and whether interest should apply to recovered amounts. Barr said his utility had reached out to the sponsor for follow‑up on those specifics.

Remote and in‑person testimony came from nonprofit and developer representatives who described recent and concrete local impacts. Ben Stuckart of the Spokane Low Income Housing Consortium said the city’s fee increases had added $16,000 to Habitat for Humanity houses and over $100,000 to some multifamily projects. Matt Kilborn of Catholic Charities of Eastern Washington said utility connection fees were roughly $80,000 for an average Catholic Charities project and materially increase the cost to build affordable units.

Committee staff said a fiscal note had not been requested. No formal action or vote took place during the hearing.

The bill would leave cities with discretion to offer waivers under the statutory framework but would tie that discretion to recorded affordability covenants that survive property ownership changes. Supporters said the recordation requirement protects public subsidy and preserves affordability; opponents and utilities asked for clarifications about administration and collection.