The City of Tacoma will implement System Development Charges (SDCs) for its wastewater and stormwater utilities starting July 1, 2026, following the City Council’s adoption of the SDC ordinance on February 24, 2026.
With Tacoma undergoing an accelerated period of population growth, this is a funding mechanism designed to address capital costs associated with new development. As one-time fees, SDCs apply to new and redevelopment projects and serve as a dedicated funding mechanism to finance capital projects aimed to increase the City’s wastewater and stormwater capacities.
A demographic-weighted community survey showed strong support for this “growth pays for growth” approach. Specifically, 78 percent of respondents indicated that developers should share the capital costs of upgrading the wastewater system to accommodate new growth.
Tacoma’s implementation of SDCs for its wastewater and stormwater utilities reflects current practices across the Pacific Northwest region and is consistent with legal requirements.
Everett, Bellingham, Federal Way, Sumner, Puyallup, Gig Harbor, Pierce County and most other mid-to large-sized jurisdictions in the region have already implemented SDCs for either their wastewater or stormwater utilities. Tacoma’s SDCs are generally lower than those implemented by other jurisdictions in the region.
According to RCW 35.92.025, the collecting utility must spend all SDC revenues strictly on capital projects or debt service. Initial forecasts show that SDCs will bring in $2 million to $8 million annually, depending on development activity in Tacoma.
With the City Council’s adoption of the SDC ordinance on February 24, 2026, the older Connection Charge-in-Lieu-of-Assessment program will no longer be in effect starting July 1, 2026. This ensures that developers do not have to pay SDCs and connection charges simultaneously. Past Connection-Charge-in-Lieu-of-Assessment revenues are excluded from the wastewater SDC cost basis to ensure there is no overlap between the two programs. Stormwater Payment In-Lieu-Of Construction fees will continue to be collected, but the regional stormwater facilities these fees fund are deducted from the stormwater SDC cost basis.
The stormwater SDC is $0.53 per square foot of new impervious surface. The wastewater SDC will depend on the number of units and size of water meters. To reduce the financial burden on developers, stormwater SDCs are payable prior to the issuance of a site development permit, and wastewater SDC payments are deferred until immediately before the building Certificate of Occupancy is issued.
Supporting housing affordability remains a top priority. City staff are actively reviewing SDC exemptions and reductions for affordable housing projects. These alternatives will be presented to the City Council during the third quarter of 2026.
A report that accounts for revenues raised and projects funded with those revenues will be publicly available after the first year of SDC implementation.
The City will not be hiring additional full-time staff to manage the SDC program.
Additional details regarding SDCs for the City’s wastewater and stormwater utilities are available here.