MBA Helps Fend Off a Near 500% Transportation Impact Fee Increase in Gig Harbor

On Monday November 26th, Gig Harbor had the second reading of their Transportation Impact Fee (TIF) Proposal Ordinance. The MBA first learned of this TIF proposal in mid-September, as some of the City Councilmembers considered raising their Single Family TIF rates from $2,124 to over $13,000. After the Transportation Impact Fee Project List was modestly whittled down, the potential fee became $10,379.

Several projects on the list had little to no nexus to potential development in Gig Harbor and were only on the list in attempts to stop growth, a mandate by many on the Council. MBA met with the Mayor and several councilmembers in the weeks before the Public Hearing and eventual Second Reading. We made a point to scrutinize the project list at every one of these meetings. Phillips Burgess PLLC submitted a letter to the Council on behalf of the MBA further addressing these points. Regardless, City Staff maintained that the near 500% increased fee was legal and defensible.

At the City Council meeting this week, several amendments were proposed and rejected by the Council on a 4-3 margin. The first amendment sought to remove a $40 million project from the TIF list, which would have cut the proposed rate in half. The amendment and discussion afterwards resumed like an auction as some Council members sought to find a random and arbitrary number to set the fee limit at. This debate continued for about an hour.

Eventually, Councilmember Perrow made an amendment to remove four projects from the TIP list. The fee amounted to only $2,896. This project list amendment and ordinance ultimately passed. As a result, the TIF rate increase was only $772, not the anticipated $8,255 increase, more than the current fee; new homebuyers were saved from paying an extra $7,510 per home. This is an incredible victory for future homebuyers and builders who should not be paying arbitrary and unnecessary costs imposed by a jurisdiction whose intention is to slow growth.


The following week, the Mayor vetoed the Ordinance (it was the first veto issued since 1991). The Mayor’s amended ordinance adjusted the fee to be around $5,017, removing only two projects instead of four. This amended ordinance passed last night and the increase is now $2,915 on top of the existing fee. New homeowners were still saved from having to assume an extra $5,362 despite the unfortunate action the Mayor took.