2023/04/19 Council Agenda Packet

EVERETT City Council Agenda Item Cover Sheet An ORDINANCE AMENDING the Everett Municipal Code regarding an exemption for Special Connection Charges Project title: for Low -Income Housing Projects, amending EMC chapter 14.08 Water and Sewers. Council Bill # interoffice use CB 2304 — 26 Agenda dates requested: Briefing 4/19/2023 Proposed action 4/26/2023 Consent Action Ordinance 5/3/2023 Public hearing 5/3/2023 X Yes No Budget amendment: Yes X No PowerPoint presentation: X Yes No Attachments: Ordinance Housing Development Incentives Report Department(s) involved: Planning Contact person: Becky McCrary Yorik Stevens-Wajda Jennifer Gregerson Dan Eernissee Phone number: X7133 Email: ramccrary@everettwa.gov Initialed by: Department head Administration Council President Project: Housing Development Incentives Program (HDIP)—Special Connection Charges exemption for low-income housing projects Partner/Supplier : NA Location: Citywide Preceding action: Housing Development Incentives Program WA State Department of Commerce Housing Action Plan Implementation Grant approval Fund: Fiscal summary statement: The exemption of special connection charges is a reduction in fee revenue to applicable enterprise funds. These charges contribute to capital facility improvement project funding associated with the relevant utility. The previous program exempted $1.4M over a four-year period yielding 355 affordable housing units at $4,000 subsidy per unit. The total exempted during this time is considered a relatively small contribution to the enterprise capital facility fund compared to the overall collection of charges and other revenue sources. If needed, the reduction in fees can be recalibrated when updating special connection charges. The staff recommendation is to cap connection charge reductions at $500,000 per year. Project summary statement: To implement several actions in the city's housing action plan ("Rethink Housing"), the city secured a grant from the Dept. of Commerce for housing action plan implementation. The work program included a study and report on housing incentives currently in use by the city and potential new ones. This ordinance implements recommendations from Rethink Housing and the Housing Development Incentive Program (HDIP) report. The proposal reinstates administrative authority to reduce Special Connection Charges for development of low-income housing, similar to a previous exemption, established by Ordinance 3632-18, which supported the development of 355 affordable housing units within in the city prior to sunsetting in 2021. The proposed ordinance, like the previous ordinance, authorizes a reduction of up to eighty percent of the charges for units affordable to household earning sixty percent and below of area median for the area and requires the unit remain affordable until the property changes use, at which time the charges would be due to the city. Although the previous ordinance did not limit a citywide total amount available for exemption, the recommendation is to administratively set a cumulative exemption cap per year at $500,000, which would yield about 125 housing units annually. See Chapter 4.0 of the HDIP report for more details and analysis. Recommendation (exact action requested of Council): Adopt an ordinance amending the Everett Municipal Code regarding an exemption for Special Connection Charges for Low -Income Housing Projects, amending EMC chapter 14.08 Water and Sewers.