Poulsbo staff propose 50% impact‑fee discount for ADUs, contingent rules for utilities and external units

City engineering and planning staff presented a package of fee recommendations for accessory dwelling units (ADUs) at a Poulsbo council workshop on July 2 designed to align with recent state law while protecting the city’s utility finances.

Why it matters: The Washington Legislature limited how local governments may charge for ADUs. Poulsbo staff said their proposal aims to encourage ADU construction as a form of middle housing while ensuring utility general facility charges (GFCs) and stormwater fees remain adequate to support infrastructure.

Staff proposal (summary): - Charge up to 50% of transportation and parks impact fees for ADUs where state law caps apply; this mirrors nearby jurisdictions. - General facilities charges for water and sewer would usually not apply when an ADU can be served off an existing meter; if a separate service or meter upsizing is required, the ADU would pay GFCs (staff proposed a discounted ERU factor similar to duplex/triplex discounts, e.g., 0.85 ERU). - Stormwater GFCs would apply to external ADUs (new impervious surface); internal ADUs that do not increase impervious surface would not trigger stormwater charges. - Building permit plan‑review fees for “permit‑ready” ADU sets would be reduced by 50%; engineering review time would be reduced from an estimated three hours to one hour for these standardized plans.

Staff emphasized the policy choices: a fully separate meter or an ADU sized and sited such that the property’s meter must be upsized should pay full or near‑full facility charges. For smaller, internal ADUs served from an existing meter, staff recommended limited or no additional GFCs because the physical meter and ERU allocation are unchanged.

Council discussion and concerns: Council members repeatedly framed the policy as balancing encouragement of ADUs with the need to avoid shifting costs to existing utility ratepayers. Councilmember Newell and others asked whether the council could choose to absorb some costs (effectively subsidize ADUs) by spreading them across the utility rate base; staff confirmed that is a policy choice but warned it could require higher rates in future utility financial planning. Councilmembers also asked how cottage courts, unit‑lot subdivisions and potential condo conversions (up to 12 units under recent condominium law changes) would be handled; staff said multi‑unit configurations would be considered case‑by‑case and by separate code changes where needed.

Quantified examples provided by staff: using the staff table shown in the workshop, a hypothetical single‑family home’s total impact fees would be roughly $30,000; an internal ADU (served off the existing meter) would have a much smaller fee (staff example ≈ $3,300); an external ADU adding stormwater and new services would be about $4,200; if the ADU required separate utilities (meter, upsized service and associated charges), the fee could approach $23,000 in the staff example.

Next steps: Staff said code changes implementing the recommended fees and the permit‑ready plan pathway will be prepared for council consideration on the business agenda (tentatively July 16). Councilmembers asked staff to continue refining the approach, to ensure transparency about when a meter upgrade (and resulting GFC) is required, and to confirm legal compliance with state limits.

Quote: Michael Bateman (Engineering/Public Works) summarized the staff position: “We encourage ADUs as middle‑housing while making sure our utilities stay solvent.”