The City Council passed its first fee in April, charging developers of new projects for generating more traffic in the city. The fee was one of the highest in the region at $4,995. The city reduced it to $4,825 in June and now may drop it to $3,894, which is 22 percent lower than the original charge.

A traffic impact fee is a charge for every vehicle trip a new development creates during the busiest traffic hours.

But any traffic fee is controversial in University Place, where distrust of the long-delayed Town Center project persists. Smaller developers say they are being forced to underwrite some costs of the civic center/mixed use project.

The City Council discussed the fees again Monday night.

“Are developers paying traffic impact fees to cover Town Center? It’s been an issue ever since the start,” said Pat Lyon, who has worked in real estate for years and serves on a committee that recommended lowering the fee.

Many local governments levy these fees to help fix traffic problems caused by new shopping centers and neighborhoods. University Place didn’t impose one during its first dozen years of cityhood.

City engineer Jack Ecklund said that even without Town Center, UP has grown to the point where increased traffic will seriously delay drivers.

Wal-Mart, for example, last year backed out of a plan to build a store in Fircrest partly because of University Place’s concerns about traffic. Wal-Mart said the city wanted the retailer to spend $3.5 million to $6 million on street improvements including the nearby busy intersection of Regents Boulevard and 67th Avenue West.

UP officials have said that Town Center will require even more traffic improvements when it opens, now projected to be in 2010.

And they don’t want to put all the cost on the shoulders of current residents.

Many street improvements are planned inside a Town Center overlay zone between 35th and 44th streets West. Some of those plans may not be implemented for years.

Art Broback, a developer and former state legislator from University Place, said Monday night that the city could dislocate 18 businesses to extend 42nd Street West. He urged the city to do all work on vacant land nearby. He said he developed the business park next to the site.

Broback exceeded the time limit for speaking at the meeting, and deputy mayor Debbie Klosowski told him his time was up.

“Are you cutting me off?” Broback said. “These businesses were here before you ever got here. This is important.”

City Councilman Ken Grassi proposed rebating about 18 people, mostly small commercial and home developers, who have paid the higher traffic impact fee. That would amount to about $35,000.

“The goodwill it will create far exceeds the $35,000,” Grassi said.

A majority of the seven-member council didn’t agree.

Councilwoman Jean Brooks said it would set a bad precedent in the event the city changes the fees again.

Mayor Linda Bird said it might generate lawsuits from others who feel they should get a rebate.

The council will hold a public hearing April 7 on the proposed reduction.

Rob Tucker: 253-597-8374