In MRSC’s opinion, no. The building permit is unconnected to the delinquent utility account and the city cannot precondition issuance of a building permit on payment of a utility bill.
There are two reasons why this type of procedure is legally suspect. The first is that the statutory provisions that relate to collection of delinquent utility bills do not provide for this type of collection method. So, it is not clear that agencies have the authority to link the issuance of a building permit to payment of delinquent accounts.
Second, this type of requirement likely would violate the provisions of RCW 82.02.020. That statute prohibits local governments from imposing any tax, fee, or charge, directly or indirectly, on the development, subdivision, classification, or reclassification of land except as specifically authorized by statute. A city can recover its actual costs of processing applications, inspections, and reviewing plans, however collection of delinquent utility payments is unrelated to the costs to the city of processing the application.
One case involving allowable charges that may be imposed on the issuance of building permits is Home Builders Association of Kitsap County v. Bainbridge Island (2007). The court in that case invalidated some charges that were being imposed by the city based on RCW 82.02.020. The charges in that case were related more closely to the building permit issuance than trying to recover delinquent utility bills.
Again, our conclusion is that this type of charge would be prohibited by RCW 82.02.020.