Staff reports rise in downtown transportation‑mitigation collections after policy changes; council discusses possible updates

City planning staff presented an overview of Lakewood’s downtown Transportation Mitigation Fee (TMF) at the June 8 study session, summarizing the TMF’s origin in the 2018 plan action environmental impact statement (EIS), recent policy clarifications and short‑term collection outcomes.

Staff said the plan action EIS identified roughly $29 million in downtown transportation projects and set a policy that private development should pay a proportionate 50% share of those mitigation obligations. Since policy and permit clarifications between 2019 and 2025 (including a 12‑month credit rule for prior uses and improved collection at permit issuance), staff reported collection improvements: $164,000 collected from 2019–2024; in 2025 an additional $146,000 collected; and $227,000 assessed and pending permit issuance—about $374,000 assessed or collected since the 2025 policy shift.

Planning staff explained the policy changes that increased collections: clearer rules on credits for prior uses, integrated TMF collection inside permitting workflows, a refund rule if funds are not used within statutory timeframes, and clarified roles for tracking and refunds. Staff emphasized that fees are currently set by ordinance and suggested the council consider updating the fee baseline or indexing fees to construction‑cost escalators in order to reflect current project cost estimates.

Council members acknowledged the stronger near‑term revenue picture but discussed trade‑offs. Several members urged updating the fee schedule sooner rather than later to avoid rapid escalation of project costs and large future adjustments. Others cautioned that the TMF ordinance assumes municipal matching for half the identified projects, which means raising the TMF would increase the city’s own future obligations to implement the identified projects.

Staff said they will return later in the year with options for council consideration, including revising the list of mitigation projects, updated planning‑level cost estimates, and potential fee adjustments tied to cost indices.