Hearing Examiner issues a mixed ruling on Transportation Impact Fees SEPA review

This afternoon the Seattle Hearing Examiner issued a long-awaited ruling on an appeal of the city’s SEPA Determination of Non-significance (DNS) for its first step in establishing Transportation Impact Fees (TIFs). He found that the city had impermissibly left a section of the SEPA checklist blank, and remanded it back to the city to at least partially complete it.

The “land use action” in question is actually a fairly simple one: in order to establish Transportation Impact Fees in Seattle, the city’s Comprehensive Plan needs to be amended to include a list of projects that are eligible for funding through TIFs. Changes to the Comprehensive Plan require a SEPA review, in which the lead agency proposing the change fills out the SEPA checklist and then makes a determination as to whether the changes are significant and thus require a full SEPA analysis. In this case, the city declared the change to the Comprehensive Plan to be non-significant.

The appeal involved several issues, but there were three main ones:

1. Whether adding the list of qualifying projects to the Comprehensive Plan also required SEPA analysis of each of the individual plans. The plaintiffs argued that it does; the city argued that it didn’t given that there is no commitment to completing any of the projects, and because each would be separately subject to SEPA analsyis at the point the city decided to move forward with them.  The Hearing Examiner agreed with the city.
2. The plaintiffs argued that the city was “piecemealing” the SEPA analysis by not evaluating the individual projects. The Hearing Examiner rejected that argument too.
3. The city took a shortcut in filling out the SEPA checklist: it didn’t fill out Section B, the list of environmental factors and the expected impacts on each of them. State law gives an agency the flexibility to skip individual questions for “non-project” actions for which the question doesn’t apply, but it doesn’t state that the agency can skip the entire section.
   The Hearing Examiner ruled for the plaintiffs on this issue, noting that a DNS must be based on “actual analysis and disclosure of the environmental impacts of a proposal,” and so the city can’t just say “this is a non-project action and thus we’re not answering any of these questions. Rather, it must explain why the questions are not relevant to the analysis of impacts.

So the good news for the city is that it doesn’t need to do a SEPA analysis at this time on every project it wants to list as eligible for TIFs; it can wait and do that on a project-by-project basis as it decides to move forward on them.  Doing them all now would have pushed out the timeline for implementing TIFs for several months, if not a year or more.

The bad news is that it needs to go back and say something in Section B to show that it did even a basic level of analysis. That should be a pretty quick effort for the city to turn around. However, when it’s done, the city must submit it back to the Hearing Examiner and the Plaintiff, and the plaintiff will have an opportunity to file a rebuttal. Then the Hearing Examiner will make a new ruling on the adequacy of the SEPA DNS.

Here’s the catch: the primary sponsor of the TIF legislation is Council member Mike O’Brien, who leaves office at the end of the year. Next week the Council begins its work on the 2020 budget, and sets aside everything else until the end of November. Then it has two weeks of legislative time in early December, followed by a recess for the rest of the year. If today’s ruling had gone in the city’s favor, then the Council could incorporate the implementation of TIFs into the 2020 budget process. But now it’s almost certainly going to miss the budget process, and it’s looking increasingly likely that O’Brien won’t have enough time remaining in office to pass it into law once the Hearing Examiner makes a final ruling.  That responsibility will now fall on the member of next year’s Council who oversees transportation — assuming that person supports TIFs.

So even though today’s ruling went mostly in favor of the city, it lost just enough to (probably) push the effort to establish Transportation Impact Fees out beyond the end of this year and add doubt to its ultimate fate.

The Hearing Examiner will be scheduling a conference with the parties to determine the schedule for the city to revise its SEPA checklist, and for the plaintiffs to file their rebuttal. We will know more about when to expect the next Hearing Examiner ruling once that schedule is set.

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