City staff present options to raise transportation impact fees; maximum allowable estimate about $10,400 per PM peak-hour trip end

Consultants and city staff presented an update to Gig Harbor's transportation impact fee study at the Jan. 30 study session, showing options for setting a new fee rate after a transportation element update and project-list refresh.

Marissa Milam, a senior transportation planner presenting for the consultant team (identified in the presentation as "Fair and Piers"), said the current indexed fee is $7,577 per PM peak-hour vehicle trip end. Using the short-term project list from the updated transportation element, the technical analysis produced a maximum allowable fee of about $10,400 per PM peak-hour trip end. Council retains discretion to set a lower fee than the maximum allowable rate.

The consultants explained the methodology: identify impact-fee-eligible projects (those that add capacity and serve new growth), remove costs tied to existing deficiencies, use travel-demand modeling to allocate growth share of costs, and divide eligible costs by projected trip growth to derive a maximum cost per trip. The consultants showed example calculations for typical residential and nonresidential developments under both the short-term project list and an option that allocates 20% of the costly "Hunt Crossing" long-term project to the impact-fee program. Adding that Hunt Crossing share raised the illustrative per-trip fee substantially.

Council discussed policy choices. Some members favored using a higher fee to show matching local investment when applying for state grants (council member Sharon said a higher local contribution could improve grant competitiveness for major projects such as Hunt Crossing). Others urged caution about placing a very large, expensive long-term project on the fee list because it increases the maximum allowable fee and thereby raises developer costs. Staff said that if council wants to reduce developer costs for certain project types, the council can set the fee below the maximum or adopt targeted reductions/exemptions for qualifying low-income housing and early-learning/childcare facilities consistent with state law.

Kendra and other staff described the ordinance mechanics: council determines the rate (at or below the maximum), and state law allows targeted reductions or up to 80% exemptions for qualifying low-income housing without payback; the city could fully exempt other uses but would need to backfill lost revenue from non-impact-fee sources. Consultant Marissa said staff would return with options and a detailed table mapping each project and the fee share for council review. The city aims to finalize code changes and have a new schedule in effect by Jan. 1, 2026, though council could adopt earlier implementation if it chooses.

No final fee rate was adopted at the study session. Staff will return with detailed project-by-project allocations, updated cost tables, and draft ordinance language for council direction.