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ATTACHMENT 2

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fi{jiJjjJj]HOLDINGS LLC

Dave Smith, Transportation Project Engineer II

City of Olympia Public Works Department

POBox 1967Olympia, WA 98507-1967

We are writing in concern of the proposed Transportation Impact Fee Schedule

Cost Options for 2009, as proposed by City of Olympia's Public Works

Department, to be included in the 2009-2013 Capital Facilities Plan (CFP).

We received notification of the proposed 2009 Transportation Impact Fees onSeptember 24, 2008 as members of West Olympia Business Association. Otherthan possibly through WOBA and the three other business organizations on the list(Olympia Master Builders, Washington Realtors, and the Chamber of Commerce),

no private developers were notified. Many architects were notified, but they wouldnot pay the proposed Impact Fee increase, unless they chose to build a building

they designed. We know that City staff have worked or are working with a number

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increase, keeping the Cost per Trip current to today's rates, and eliminating the

necessity for an additional increase. The current cost escalator has increased thefees at a rate of 4.3% per year higher than the previous 4-year update. The

current cost escalator is more than sufficient in keeping the Transportation ImpactFees current. Second, the increase disputes Public Works comments on this

process, as it is in contrast with their claim on page 2 of the informational flyer theydistributed to stakeholders entitled, "Get the Facts: 2009 Impact Fees," where it

states, "Olympia last updated Transportation Impact Fees in 2006." If this is the

case, then the increase to Impact fees would not be 81 %, but 108.5% (27.5% from2006-2008 + 81 % proposed for 2009). Third, per the flyer, "Factors contributing to

the increase of Transportation Impact Fee's," handed out by Public Works at the

Open House on October 1, 2008, 41 % of the proposed 81 % current increase isdue to, "Re-estimated projects plus new projects." The impact fees for re-

estimated projects should've been calculated at the time those projects were

estimated and added to the 13.8% per year increase for the projects from 2006 to2008. The practice of charging future developments for past miscalculations onthe part of City staff is not only unethical, but could be legally challenged for

collecting twice for a single project.

In addition, the City of Olympia's previous and current proposed cost increases to

their Transportation Impact Fees represent an imbalance to other local jurisdictions. Currently, the City of Tumwater's transportation impact fees arebased on $928.00 Cost per New Trip Generated (per the City of Tumwater's

Resolution No. R2008-003, pg. 4. This is 103.8% less than the City of Olympia's

current Cost per Trip rate, and 269.0% less than the proposed Cost per Trip rate.

Similarly, the City of Lacey's 'rule of thumb' Cost per New PM Peak Trip generated

is approximately $1,000.00. Lacey currently does not have a set Impact Feeschedule, and instead bases its impact fees on a specific project's proximity to

capital facilities improvement projects and its specific impact, and uses the

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As you can clearly see in the example of our project above, the proposed 2009

Rate is irreconcilable with the both the City of Olympia's past rate increases, as

well as the other comparable jurisdictions in Thurston County (namely, Tumwater

and Lacey; Thurston County itself employs a different fee method (SEPA), and

therefore has not been included). To increase the Transportation Impact Fees by

the proposed 81% for this year alone would make it extremely cost-prohibitive todevelop in the City of Olympia, due to an inability in the market to re-capture the

cost increases. This will cause potential Olympia developments to re-Iocate to its

neighboring Cities, as well as unincorporated Thurston County.

We ask you to please carefully consider the disproportionate fees proposed by the

Public Works Department and vote to increase the fees by the methods currently in

place, such as the formulaic cost escalator, and not the proposed 81% (actually

102.6%) increase. Thank you for your consideration in this matter.

Donald A. Pettie, President

MPH Holdings, LLC

Cc: Dave Riker, City of Olympia Public Works

Subir Mukerjee, City of Olympia Assistant Manager

Steve Hall, City of Olympia Manager

Olympia City Council