2026 Impact Fee Update
What are Impact Fees?
Impact fees are one-time charges assessed by a local government against a new development project to help pay for new or expanded public capital facilities that will directly address the increased demand for services created by that development.
RCW 82.02.050–.110 and WAC 365-196-850 authorize counties, cities, and towns planning under the Growth Management Act (GMA) to impose impact fees for:
- Public streets and roads, as well as bicycle and pedestrian facilities that were designed with multimodal commuting as an intended use;
- Publicly owned parks, open space, and recreation facilities;
- School facilities; and
- Fire protection facilities.
These impact fees may only be imposed for “system improvements” which are defined as public capital facilities in a local government’s capital facilities plan that provides service to the community at large (not private facilities), are reasonably related to the new development, and will benefit the new development (WAC 365-196-850). Impact fees also cannot exceed a proportionate share of the cost of the system improvements: Municipalities must have additional funding sources and may not rely solely on impact fees to fund the system improvements (RCW 82.02.050).
Impact fees must be based on adopted plans, including the Comprehensive Plan and the Capital Facilities Plan. This ensures that fees are tied to clearly identified projects and levels of service. The law also requires that impact fees be only one part of a broader funding strategy, meaning they cannot fully fund a project on their own. Finally, impact fees must generally be expended or encumbered within ten years of collection, or they must be refunded to the property owner, which reinforces the expectation that fees will be used in a timely and transparent manner.
In 2023, the Legislature adopted Engrossed Substitute Senate Bill 5258, which amended RCW 82.02.060 to further refine proportionality requirements. This legislation requires that impact fees for residential development be structured to reflect the relative impact of different housing unit types, resulting in lower fees for smaller housing units. Jurisdictions must now calculate impact fees using a metric such as square footage, number of bedrooms, or trips generated to ensure that smaller units are not charged the same rate as larger units when their impacts are demonstrably lower. This represents a shift from flat fee structures toward more scaled and proportional fee schedules.
2026 Impact Fee Update
April 15, 2026: City Council Workshop – General Overview
May 13, 2026: City Council Workshop – Rate Study Overview
All documents coming soon
- Draft Parks Iimpact Fee Rate Study
- Draft Parks Impact Fee Ordinance
- Draft Transportation Iimpact Fee Rate Study
- Draft Transportation Impact Fee Ordinance
- Draft Fire Iimpact Fee Rate Study
- Draft Fire Impact Fee Ordinance
June 3, 2026: City Council Adoption (or 2nd Workshop – TBD after May 13)
Transportation Impact Fees
Transportation impact fees must be used for “public streets, roads, and bicycle and pedestrian facilities that were designed with multimodal commuting as an intended use” that are addressed by a capital facilities plan element of a comprehensive plan adopted under the GMA, per RCW 82.02.050(4) and RCW 82.02.090(7).
The City’s transportation impact fee program was adopted in 2011 and has been periodically updated to reflect changes in costs and infrastructure needs. The program is codified in Poulsbo Municipal Code (PMC) Chapter 3.86 and is based on a cost-per-trip methodology, which ties fees directly to the number of vehicle trips generated by development. The current transportation impact fee rate is approximately $5,126.75 for a single-family residential unit, $3,801.36 for a multi-family unit, and $2,563.30 for an accessory dwelling unit.
Parks Impact Fees
Park impact fees must be used for “publicly owned parks, open space, and recreation facilities” that are addressed by a capital facilities plan element of a comprehensive plan adopted under the GMA. See RCW 82.02.050(4) and RCW 82.02.090(7).
The City’s park impact fee program, codified in Chapter 3.84 of the PMC, was adopted in 2011. Park impact fees are based on a cost-per-capita methodology, which reflects the relationship between population growth and demand for park land and facilities. The City’s adopted level of service establishes a target amount of park acreage per 1,000 residents, and this standard is used to calculate the total amount of park land needed to serve future growth. The cost of acquiring and developing that land is then estimated based on local market conditions and recent project experience. The current park impact fee is $1,316.33 per residential unit.
Fire Impact Fees
Fire impact fees must be used for “fire protection facilities” that are addressed by a capital facilities plan element of a comprehensive plan adopted under the GMA, per RCW 82.02.050(4) and RCW 82.02.090(7).
The City is evaluating the potential adoption of a fire impact fee. Unlike transportation and parks, Poulsbo does not currently impose impact fees for fire protection facilities. However, state law explicitly authorizes such fees, and many jurisdictions have implemented them as a way to fund growth-related capital improvements for fire and emergency services. Fire impact fees are typically based on a cost-per-service-demand methodology, which reflects the relationship between development and emergency response needs. This approach begins with identifying the capital facilities required to maintain adopted response times and service levels, such as new fire stations, apparatus, and facility expansions. These costs are then allocated to new development based on historical incident data, which helps establish the relative demand generated by different land use types.
School Impact Fees
School impact fees must be used for “school facilities” that are addressed by a capital facilities plan element of a comprehensive plan adopted under the GMA (RCW 82.02.050(4) and RCW 82.02.090(7)). Typically, school impact fees apply only to residential construction or the residential portion of a mixed-use building or development.
School impact fees are also authorized under state law but differ from other impact fees in that they must be implemented in coordination with the local school district through an interlocal agreement. The North Kitsap School District has indicated that enrollment has declined and that additional school capacity is not currently needed to serve new development. As a result, the City no longer collects SEPA-based school mitigation fees, and the District has not requested that the City establish a formal school impact fee program. Accordingly, school impact fees are not included in the current scope of work or Council consideration.
Contact the Planning and Economic Development Department:
Phone: 360-394-9882
Fax: 360-697-8269
Email: EMAIL
Mail: 200 NE Moe Street, Poulsbo, WA 98370
Physical Address: 200 NE Moe Street, Poulsbo — 2nd floor