Town of Coupeville is preparing to return nearly $70,000 in park impact fees and accumulated interest it collected over 10 years because its own code restricted the town from spending the money.

Town Council will discuss the issue Tuesday and is expected to take action to cease collecting the fees and authorize the town to refund them to developers.

Since 2005, the town has been assessing the $870 park impact fee on the construction of new single-family homes.

Under the town’s code, those impact fees could only be spent on meeting the town’s level of service requirements identified under the “Parks, Recreation and Open Spaces Element” section of its comprehensive plan, explained Town Planner Owen Dennison.

That section of Coupeville’s current comprehensive plan, which is out of date and due for revision, identifies its level of service in terms of land acquisition versus population growth through the year 2020.

A large portion of the town’s open spaces, including trails, parks and the community green, were acquired through donations or other means rather than outright purchase by the town.

“We had defined our level of service in terms of acquiring land and constructing trails,” Dennison said.

“We achieved that goal without spending the developers’ money.”

Because that was the sole basis of the “level of service” defined under the comprehensive plan, the town cannot use the money collected for such things as improvements to the park and recreation land it acquired.

“It was so narrowly defined on what that money could be used for, once we got all this land donated, there’s not a lot we could spend this money on,” said Mayor Molly Hughes.

“We feel we need to refund all the fees and start over.”

Under Washington state law, the town has a 10-year window to spend or encumber the money it collects, said Clerk-Treasurer Kelly Beech.

The town already notified 26 customers who paid the impact fee during 2005 and 2006.

Beech said letters were mailed by the town informing each person how much money is due them, including interest.

In total, 70 customers will be dividing the nearly $70,000 in refunds.

Because of the 10-year expiration stipulation, the remainder of the fees can’t currently be refunded, Beech said.

On Tuesday’s agenda, the council will be presented with an ordinance proposing to repeal the park impact fee entirely so the town can then return the remainder of the funds.

Those eligible for refunds have one year to respond and request their refund.

Dennison, who will be working on the update to the comprehensive plan due in June 2018, said the town could opt to redraft the parks portion of the plan to redefine how future impact fees are spent.

Councilwoman Pat Powell said she is disappointed the town is having to return the park fees, but added she understands it is indicative of a larger issue stemming from the town’s outdated parks and recreation plan.

This was something she’s willing to help work on, she said.