Tacoma presents proposed wastewater and stormwater system development charges to pay growth-related capacity costs

Environmental Services staff briefed a Tacoma City Council committee on proposed wastewater and stormwater system development charges (SDCs), a one-time charge assessed when new connections are added or existing connections are upsized to recover a proportionate share of system capacity costs.

Haley Fulk, business services manager for Environmental Services, said SDCs are intended to separate the cost of adding new capacity for growth from the ratepayer burden of maintaining the existing system and paying for deferred maintenance. "System development charges are the method that we are proposing to pay for this system growth," Fulk said.

Analyst Nathan Crane explained the standard SDC methodology: take system cost (original cost paid by the city for assets in service, minus donated or grant-funded components) and divide by system capacity (for wastewater, treatment-plant capacity in gallons per day; for stormwater, total impervious square footage). That result yields a unit charge — dollars per gallon per day for wastewater or dollars per impervious square foot for stormwater — that is multiplied by the amount of additional capacity created by a given development.

Staff said Tacoma Water has charged SDCs since 1997 and that the proposed wastewater/stormwater SDCs would place Tacoma in the lower third of comparable Puget Sound jurisdictions based on the staff comparison. Fulk and Crane said one reason Tacoma’s modeled SDCs are lower is the city’s older system: the SDC formula uses historic system costs rather than replacing assets at current prices, which can lower the per-unit charge when historic costs are lower.

Examples and credits: staff provided model figures for common development types (accessory dwelling unit, fourplex, eightplex) and then combined the proposed SDCs with the proposed transportation impact fees to show a combined per-unit estimate. Staff emphasized that many site-specific on-site mitigation requirements remain distinct from SDCs: developers are still required to meet on-site stormwater controls and off-site connections, but some on-site or frontage work can create credits against charges where code allows.

Council questions focused on the mechanisms to reduce or offset charges for particular projects and on whether regional stormwater facilities could serve as alternatives to on-site detention. Fulk said SDC revenue could be used to build or buy into regional facilities, but the regional facility must exist or be funded first; in-lieu or buy‑in arrangements are possible where capacity exists. She also said the state has programs with set-aside funding to help cover SDCs for affordable housing and nonprofits; staff are not proposing additional city-funded exemptions at this time.

Timing and limits: staff said the SDCs would be brought forward with related code and fee schedules after additional outreach this fall, with potential council consideration in September–October and an ordinance effective in the first or second quarter after adoption. Staff noted legal limits and practice related to timing: fees or the revenue generated by fees must be spent or encumbered within statutory windows (staff cited a 10‑year spend/encumbrance expectation) and the city expects periodic reevaluation of charges every five to ten years.

Ending: Environmental Services and Public Works staff said they will continue joint outreach with commissions and stakeholder groups, incorporate feedback and return to full council with proposed ordinances and accompanying code language, fee schedules and worked examples requested by council.