In November 2012, after conducting a public hearing, the Stanwood City Council approved Ordinance 1328 that formed the Stanwood Transportation Benefit District and adopted a new chapter to the Stanwood Municipal Code, entitled "Transportation Benefit District". The ordinance specifies that the boundaries for the TBD be coextensive with the City limits. Funds used to operate the District must make transportation improvements that are consistent with existing regional, state, and local transportation plans and necessitated by existing and reasonably foreseeable congestion levels as provided in Chapter 36.73 RCW.
The council further determined that it is in the public interest to provide for transportation improvements that specifically focus on reducing the risk of transportation facility failure and improving safety, decreasing travel time, increasing daily and peak period trip capacity, improving modal connectivity, and preserving and maintaining optimal performance of transportation infrastructure. The governing board of the TBD shall be the Stanwood City Council serving in an ex-officio and independent capacity as per RCW 36.73.020.
In December 2012, the Stanwood TBD Board approved the Rules and Procedures of the Stanwood Transportation Benefit District outlining the conditions by which the TBD is organized and defining its rights and privileges.