A. The city manager is authorized to execute, on behalf of the city, an interlocal agreement for the collection, expenditure, and reporting of school impact fees; provided that such interlocal agreement complies with the provisions of this section.

B. As a condition of the interlocal agreement, a school district impact fund will be established with the finance department of the city of Lacey, who will serve as the treasurer for the school district funds. The fund shall be an interest-bearing fund invested in a manner consistent with the investment policies of the city and the school district.

C. Funds withdrawn from the school impact fund for the school district must be used in accordance with the provisions of LMC 14.25.150. The interest earned shall be retained in this fund and expended for the purposes for which the school impact fees were collected.

D. On an annual basis, pursuant to the interlocal agreement, the school district shall provide a report to the city council on the school impact account, showing the source and amount of all monies collected, earned, or received, and the public improvements that were financed in whole or part by impact fees.

E. School impact fees shall be expended or encumbered within ten years of receipt, unless the council identifies in written findings an extraordinary and compelling reason or reasons for the school district to hold the fees beyond the ten-year period. Under such circumstances, the council shall establish the period of time within which the fees shall be expended or encumbered, after consultation with the school district. (Ord. 1507 §7 (part), 2017).