Tacoma: System Development Charges for Wastewater and Stormwater Utilities to Take Effect on July 1

~ Tacoma, WA - The City Council of Tacoma has officially adopted an ordinance to implement System Development Charges (SDCs) for its wastewater and stormwater utilities, effective July 1, 2026. This decision comes as the city experiences a period of rapid population growth and aims to address the capital costs associated with new development.

The SDCs will be one-time fees that apply to both new and redevelopment projects. These charges will serve as a dedicated funding mechanism to finance capital projects aimed at increasing the city's wastewater and stormwater capacities. This approach, known as "growth pays for growth," received strong support from the community, with 78% of respondents in a demographic-weighted survey indicating that developers should share the capital costs of upgrading the wastewater system.

The implementation of SDCs for Tacoma's wastewater and stormwater utilities is in line with current practices across the Pacific Northwest region and meets legal requirements. Many other mid-to-large-sized jurisdictions in the area, including Everett, Bellingham, Federal Way, Sumner, Puyallup, Gig Harbor, Pierce County, have already implemented SDCs for either their wastewater or stormwater utilities. Additionally, Tacoma's SDCs are generally lower than those implemented by other jurisdictions in the region.

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Under RCW 35.92.025, all SDC revenues must be strictly used for capital projects or debt service by the collecting utility. Initial forecasts show that these charges will bring in $2 million to $8 million annually depending on development activity in Tacoma.

With the adoption of this ordinance on February 24th, 2026, the older Connection Charge-in-Lieu-of-Assessment program will no longer be in effect starting July 1st of that year. This change ensures that developers do not have to pay both SDCs and connection charges simultaneously. Furthermore, past Connection-Charge-in-Lieu-of-Assessment revenues will not be included in the wastewater SDC cost basis to avoid any overlap between the two programs. However, Stormwater Payment In-Lieu-Of Construction fees will continue to be collected, with the regional stormwater facilities they fund being deducted from the stormwater SDC cost basis.

The stormwater SDC will be $0.53 per square foot of new impervious surface, while the wastewater SDC will vary based on the number of units and size of water meters. To ease the financial burden on developers, stormwater SDCs must be paid before a site development permit is issued, and wastewater SDC payments can be deferred until just before a building's Certificate of Occupancy is issued.

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Despite these changes, the City remains committed to supporting housing affordability. City staff are currently reviewing potential exemptions and reductions for affordable housing projects and plan to present these alternatives to the City Council in the third quarter of 2026.

To ensure transparency, a report detailing the revenues raised and projects funded with those revenues will be made publicly available after the first year of SDC implementation. Additionally, no additional full-time staff will be hired to manage this program.

More information about SDCs for Tacoma's wastewater and stormwater utilities can be found on the city's website. As Tacoma continues to grow, these charges will play a crucial role in funding necessary infrastructure improvements and ensuring sustainable development for years to come.

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