SEQUIM — After receiving a letter from real estate broker Mike McAleer and the Sequim Association of Realtors, Sequim will seek a Superior Court judge’s ruling on how to pay for a pair of studies.
At issue are two impact-fee reports to be done by consultants who, by the time they’re finished, will charge some $135,000.
With their reports, the consultants will determine how much the city can charge developers in impact fees, which help pay for expanded facilities and roads as Sequim grows.
The City Council has budgeted for the pair of reports — one for a “transportation impact fee” to fund street improvements and the other a “capital facilities impact fee” for construction of municipal buildings — in 2009. The plan was to use real estate excise tax — referred to as REET — revenue to pay for the studies — until McAleer’s letter came.
“The initial intent of REET was to pay for bricks and mortars for schools. To use REET for studies is way beyond that,” McAleer said in an interview after the City Council got the letter.
During its June 8 meeting, the council discussed using general fund and capital facilities fund monies instead of REET dollars, even if that means both a considerable drain on the general fund balance and a reduction of the fund earmarked for construction of a new City Hall and Police Department.
Then the council voted 6-1 to go ahead with funding the consultants’ studies, though the members didn’t know whether the funding source would be REET or the general and capital facilities money.
Member Paul McHugh, a real estate broker, was the dissenter.
Over the past year, he has repeatedly questioned the wisdom of impact fees, asserting that they drive up home prices and could make Sequim a more expensive, exclusive community.
He’s also pointed out that the number of building permits issued in the city has plummeted this year.
Seek judge’s ruling
Next the council took a second vote on the fee-study issue. The members were unanimously in favor of having City Attorney Craig Ritchie petition for a declaratory judgment, which must come from a Superior Court judge, on whether Sequim can tap into REET dollars for the impact-fee studies instead of turning to the strained general fund.
Ritchie said Wednesday that he’ll go to Thurston County Superior Court in Olympia, because its judges are familiar with such petitions.
“They have a fast track for declaratory judgments,” he said, though Ritchie, for his part, said he’s in no rush to file his petition.
“I’m pulling together all of the legislative history” on REET funds and their legal uses, he said, predicting that he’ll get around to filing the petition in the fall.
Meantime, McAleer feels certain that real estate taxes should not pay for studies of impact fees that, after all, would raise real estate prices.
Using REET dollars for these studies “is not going to create jobs in the building trades,” he added.
The Sequim Realtors “believe that is not an appropriate use, so the letter asks for the city attorney to take a look at it,” McAleer said.
Instead of Ritchie’s opinion, however, the Realtors and the City Council will have to wait for the final word from a judge.
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Sequim-Dungeness Valley reporter Diane Urbani de la Paz can be reached at 360-681-2391 or at diane.urbani@peninsuladaily news.com.
