Title
Approval of Recommended Park Impact Fee Methodology, as Required by State law
Recommended Action
Committee Recommendation:
At their May 18, 2026 meeting, the Finance Committee recommended approval of the New Park Impact Fee Methodology, as required by State law.
City Manager Recommendation:
Move to approve the Finance Committee’s recommendation of the New Park Impact Fee Methodology, as required by State law.
Report
Issue:
Whether to approve the Finance Committee’s recommendation of the New Park Impact Fee Methodology, as required by State law.
Staff Contact:
Laura Keehan, Director of Parks Planning & Maintenance, Parks Arts and Recreation, 360.570.5855
Tammy LeDoux, Finance & Policy Coordinator, Parks Arts and Recreation, 360.753.8053
Presenter(s):
John Ghilarducci, Principal, FCS Group
Laura Keehan, Director of Parks Planning & Maintenance
Tammy LeDoux, Finance & Policy Coordinator
Background and Analysis:
In 2023, the Washington State Legislature adopted Senate Bill 5258, amending RCW 82.02.060 to require impact fee schedules to reflect the proportionate impact of different housing unit types. The law requires lower impact fees for smaller housing units based on square footage, number of bedrooms, or trips generated. The City must adopt a compliant methodology within six months of adoption of the Comprehensive Plan, requiring implementation by June 30, 2026.
The City hired FCS Group to scale the current park impact fees to comply with this recent change in State law. An update of the fees is not included as a part of this study as this change is only to the methodology and is intended to be revenue-neutral. The next park impact fee rate study will be completed in the Fall of 2028 after the next Parks Plan is adopted.
Staff recommends using livable square footage as the basis for scaling park impact fees. This approach is commonly used by jurisdictions across Washington and is supported by reliable data correlating housing size with occupancy levels. It is also the most straightforward methodology to administer and avoids ambiguity associated with determining bedroom counts. Trip generation is used for transportation impact fees.
Once direction from Council has been received, staff will prepare the ordinance for approval on June 16, 2026.
An impact fee is:
• A payment of money imposed upon the development as a condition of development approval
• Pays for public facilities needed to serve new growth and development, and that are reasonably related to the new development that creates additional demand and need for public facilities
• Is a proportionate share of the cost of the public facilities, and that is used for facilities that reasonably benefit the new development
• “Expended only in conformance with the capital facilities plan element of the comprehensive plan”
• Ten-year limit on spending
The City began collecting park impact fees in 1992 and the current fees are based on a Park Impact Fee Rate Study completed in 2022. The calculation of fees is based on the Capital Investment Strategy project list and level of service standards in the 2022-2028 Parks, Arts & Recreation Plan. The Parks, Arts and Recreation Department updates the Parks Plan every 6 years and will update the park impact fee rates after the adoption of a new plan. Annually, the Department also evaluates the fee for inflationary increases.
The collection of park impact fees is a critical piece to the success of the Olympia Parks system. As described in the 2022 Parks, Arts and Recreation Plan, Parks began shifting from acquisition to development, and this revenue is our primary source of match funding for grants. Recent projects that were funded with impact fees include:
• Grass Lake Nature Park trail construction;
• Spraygrounds at Woodruff and Lions Parks;
• Jolene Unsoeld (Yelm Highway) Community Park Design and upcoming construction;
• 3 Off-leash Dog Parks constructed;
• West Bay Park Master Plan;
• Rebecca Howard Development Plan and upcoming design; and
• Marj Yung (Kaiser Woods) Park design and upcoming construction.
Climate Analysis:
Park impact fees pay for park facilities to serve new residential development at urban densities and infill, which is consistent with the City's Comprehensive Plan and is a key climate mitigation strategy.
Equity Analysis:
This new methodology is designed to fairly fund park infrastructure while reducing the cost burden on smaller-sized dwelling units, to support community needs and housing affordability. Also, dwelling units that meet affordable housing criteria are given an 80% discount on their park impact fees in Olympia.
Parks play an important role in the community as places that are free and accessible to the public for social connection and gathering, physical and mental health, and preservation and connection with nature.
Neighborhood/Community Interests (if known):
Olympians have shown a strong level of community support for Parks, Arts and Recreation services, as demonstrated by two voted funding measures and strong participation in the development of the Parks Plan. The YES Olympia Parks Coalition was heavily involved in the formation of the Olympia Metropolitan Park District and members continue to take a strong interest in the parks system.
The Olympia Master Builders (OMB) and housing community may have interest in this proposed methodology change for park impact fees. Staff has informed the OMB about the proposed park impact fee methodology change.
Financial Impact:
Annual park impact fee revenue varies with development activity. Collections totaled approximately $778,877 in 2023, $461,990 in 2024, and $988,134 in 2025. The proposed scaling methodology is intended to be revenue-neutral overall.
While the Department has other dedicated funding sources, those revenues primarily support operations, land acquisition, or debt service. Park impact fees remain an important funding source for development of new parks and park amenities needed to serve growth.
Options:
1. Move to approve the recommended New Park Impact Fee Methodology, as required by State law.
2. Modify the New Park Impact Fee Methodology, based on a different basis, such as the dwelling unit’s number of bedrooms or trip generation. This will require additional time to prepare and will require developing a process to gather necessary information in order for staff to administer at time of building permit.
3. Do not approve the New Park Impact Fee Methodology. This will delay compliance with State law and if not approved by June 30, 2026, park impact fees will no longer be collected.
Attachments:
Residential Scaling for Park Impact Fees Memo
Presentation