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The City’s capital program is funded by a variety of revenue sources ranging from largely unrestricted, discretionary sources like General Funds and REET 1 to very restricted sources like fuel taxes and grants. Listed below is a description of the major capital funding sources used by the City.

General Fund Revenues - Revenues from property, sales and utility taxes as well as licenses and permit fees, other user fees, and state shared revenues. Funds can be used for any municipal purpose and are generally dedicated to the operation of the City’s (non-utility) departments and technology and equipment upgrades.

Real Estate Excise Taxes (1 & 2) - Taxes imposed on the seller in real estate transactions. Both REET 1 & 2 taxes are levied at 1/4 of 1% of the sale price of the property. Revenues must be used on the following types of projects:

REET 1 - only to projects identified in the City’s Capital Facilities Element. Funds can be used for planning, acquisition, construction and repair of streets, roads, sidewalks, streets and road lighting, traffic signals, bridges, water systems storm and sanitary sewer systems, parks, recreational facilities, trails and public buildings.

REET 2 - planning, acquisition, construction and repair of streets, roads, sidewalks, streets and road lighting systems, traffic signals, bridges, water systems, storm and sanitary sewer systems, parks, and planning, construction, repair or improvement of parks.

Fuel Taxes - City’s share of fuel taxes imposed and collected by the state. Revenues must be used for maintenance and construction of the City’s arterial and residential streets.

Voted Debt - General Obligation bonds issued by the City and paid for by a voter-approved increase in property taxes.

User Fees - Utilities Fee for the purchase of a City-provided service or commodity (e.g. water, storm and sanitary sewage collection/treatment). Fees usually based on quantity of service or commodity consumed. Revenues (rates) can be used for any operating or capital project related to the delivery of the utility service or commodity.

Impact Fees – The Growth Management Act (GMA) authorizes cities to impose certain types of impact fees on new development. These fees should pay for the development’s proportionate share of the cost of providing the public facilities needed to serve the development. Impact fees can be collected for schools, streets, parks and open space, and fire protection.