Title
Discounted General Facility Charges
Recommended Action
Move to approve the recommendation to develop a program to incentivize low-income housing by providing a discount (or exemption) on general facility charges (GFCs) at the time of development.
Report
Issue:
Receive a briefing on a proposal to incentivize low-income housing by providing a discount (or exemption) on general facility charges at the time of development. Provide a recommendation on whether staff should proceed with the proposal.
Staff Contact:
Eric Christensen, Water Resources Director, (360) 570-3741
Presenter:
Eric Christensen
Background and Analysis:
Public Works Water Resources line of business is proposing to incentivize low-income housing by providing a discount on GFCs at the time of development.
GFCs are connection charges paid by the property owner seeking to connect to the utility system - the charge includes not only the physical connection to the system, but the “equitable share of the cost of such system”. GFCs are often cited as a barrier to the development of low-income housing.
RCW 35.92.025 grants cities the authority to charge property owners seeking to connect to the water or sewerage system their equitable share of the cost of such system. RCW35.92.020 grants cities the authority to provide assistance to aid low-income persons in connection with services including GFCs.
The City of Olympia’s Comprehensive Plan encourages finding ways to support affordable housing for low-income residents.
Olympia Municipal Code Chapter 15.04.060 defines low-income housing as housing with a monthly housing expense that is no greater than thirty percent (30%) of eighty percent (80%) of the median family income adjusted for family size for Olympia, as reported by the United States Department of Housing and Urban Development.
Olympia Municipal Code 15.04.060 allows low-income housing development to be granted a partial exemption of up to eighty percent (80%) of park, transportation, and school impact fees. Water Resources is proposing to provide similar exemptions for GFCs.
Table 1 (attached) presents proposed qualifications for a GFC discount by structure type.
Table 2 (attached) presents examples of housing projects (past and present) that would have been eligible for the proposed GFC discount program. This information is being provided to identify what the potential revenue implications could be if the GFC discount program is implemented. Staff is not proposing to retroactively discount GFCs.
Tables 3 and 4 (attached) present what the revenue implications would have been if a 50 and 25 percent discount had been available for the housing projects listed in Table 2.
Note that any revenues lost to GFC discounts would need to be made up by ratepayers.
If a property is determined to have violated a low-income housing deed restriction, discounted GFCs will be collected at the rate effective at the time of the violation.
The LOTT Clean Water Alliance is currently considering a similar program to discount Capacity Development Charges.
If staff proceed with development of a GFC discount program for low-income housing, the program will be further considered during GFC rate setting at the Utility Advisory Committee meetings in September and October 2022. If adopted, the program would become effective in 2023.
Neighborhood/Community Interests (if known):
Homelessness is an existing and growing problem in Olympia. Olympians want a sustainable solution to homelessness, and broadly agree that our community must build more housing of all types for all incomes.
Options:
1. Provide a recommendation to staff to proceed with development of a GFC discount program for low-income housing. Include a recommendation for eligible housing types, qualifications for a discount, and the percentage of discount that should be considered.
2. Provide a recommendation to staff to not proceed with development of a GFC discount program for low-income housing.
Financial Impact:
Refer to Tables 3 and 4 for potential revenue implications for the Water Resources utilities.
Attachments:
Table 1: Types of Low-income Housing and Qualifications to Receive Discounted GFCs
Table 2: Examples of Eligible Housing Projects (Past and Present)
Table 3: Revenue Implications if a 50% GFC Discount Had Been Available for Past Affordable Housing Projects
Table 4: Revenue Implications if a 25% GFC Discount Had Been Available for Past Affordable Housing Projects