Chapter 15.16
SYSTEMS DEVELOPMENT CHARGES
Sections:
15.16.040 Systems development charge established.
15.16.060 Authorized expenditures.
15.16.070 Expenditure restrictions.
15.16.090 Collection of charge.
15.16.110 Installment payments.
15.16.150 Segregation and use of revenue.
15.16.170 Prohibited connection.
15.16.010 Purpose.
A. The city council has determined that it is reasonable and necessary to enact a systems development charge for the purpose of recovering a fair share of the cost of additional capacity street, sewer, water, storm drainage and park facilities and for providing a fair share of the city’s cost responsibility for public improvements. All projects requiring SDC funding under the fair-share provisions of this chapter must first receive prior approval of the city council.
B. The city council finds that the public would benefit from a logical long-range approach to the financing of necessary capital improvements. The systems development fund is intended as a means of providing such financing on a fair-share basis. It is also intended as a means to place the financial responsibility for additional capacity capital improvements equally on all users of the various systems.
C. The systems development charge system is designed and the fees are calculated to be of such an amount as will eventually create reasonable reserves to pay the public’s fair share of basic and essential service facilities as the need arises. (Ord. 3012 §2(part), 2011)
15.16.020 Scope.
The systems development charge system provided in this chapter is separate from and in addition to any applicable tax, assessment, charge or fee otherwise provided by law. (Ord. 3012 §2(part), 2011)
15.16.030 Definitions.
A. "Capital improvements" means facilities or assets used for:
1. Transportation;
2. Wastewater collection, transmission, treatment or disposal, or any combination;
3. Water supply, treatment or distribution, or any combination;
4. Storm drainage or flood control;
5. Parks and recreation.
B. "Development" means all improvements on a site, including buildings, other structures, parking and loading areas, landscaping, paved or graveled areas, and areas devoted to exterior display, storage or activities. Development includes redevelopment of property. Development includes improved open areas such as plazas and walkways, but does not include natural geologic forms or unimproved lands.
C. "Equivalent service unit (ESU)" means a configuration of impervious surface estimated to contribute an amount of runoff to the city’s storm drainage system which is approximately equal to that created by the average single-family residential developed parcel in the service area. For the purposes of this chapter, one ESU shall equal 2,650 square feet of impervious surface area.
D. "Improvement fee" means a fee for costs associated with capital improvements to be constructed after the date the fee is adopted pursuant to Section 15.16.040.
E. "Impervious surface" means that portion of land area covered by building roof, paved surface or other material that will not allow rainfall to percolate through.
F. "Increased capacity" means those portions of capital improvements that provide capacity for future users.
G. "Land area" means the area of a parcel of land as measured by projection of the parcel boundaries upon a horizontal plane with the exception of a portion of the parcel within a recorded right-of-way or easement subject to a servitude for a public street or scenic or preservation purpose.
H. "Owner" means the owner or owners of record title or the purchaser or purchasers under a recorded sales agreement, and other persons having an interest of record in the described real property.
I. "Parcel of land" means a lot, parcel, block or other tract of land that in accordance with city regulations is occupied or may be occupied by a structure or structures or other use, and that includes the yards and other open spaces required under the zoning, subdivision or other development ordinances.
J. "Permittee" means the person to whom a building permit, development permit, a permit or plan approval to connect to the sewer or water system, or right-of-way access permit is issued.
K. "Qualified public improvement" means a capital improvement that is:
1. Required as a condition of development approval;
2. Identified in a plan adopted pursuant to Section 15.16.080, or as otherwise identified as an improvement necessary in order to adequately serve the particular development; and either:
3. Not located on or contiguous to a parcel of land that is the subject of the development approval; or
4. Located in whole or in part on or contiguous to property that is the subject of development approval and required to be built larger or with greater capacity than is necessary for the particular development project to which the improvement fee is related.
5. For the purpose of this chapter, "contiguous" means in a public right-of-way or easement which abuts the parcel.
L. "Reimbursement fee" means a fee for costs associated with capital improvements constructed or under construction on the date the fee is adopted pursuant to Section 15.16.040 and for which the city council determines capacity to exist.
M. "Systems development charge" means a reimbursement fee, an improvement fee or a combination thereof assessed or collected at the time of increased usage of a capital improvement, at the time of issuance of a development permit or building permit, or at the time of connection to the capital improvement. "Systems development charge" includes that portion of a sewer, water or drainage system connection charge that is greater than the amount necessary to reimburse the city for its average cost of inspecting and installing connections with sewer, water or drainage facilities. "Systems development charge" does not include fees assessed or collected as part of a local improvement district or a charge in lieu of a local improvement district assessment, or the cost of complying with requirements or conditions imposed by a land use decision.
N. "Single-family dwelling unit" means any residential unit that is designed or intended to house a separate family, group or individual. For purposes of this definition each apartment, condominium unit and other distinctly separate dwelling unit in a multifamily housing facility shall be considered a single-family dwelling. (Ord. 3012 §2(part), 2011)
15.16.040 Systems development charge established.
A. Systems development charges shall be part of the comprehensive fee schedule and shall be subject to annual revision by the city council. The resolution shall set the amount of the charge, the type of permit to which the charge applies, and, if the charge applies to a geographic area smaller than the entire city, the geographic area subject to the charge. Adjustment of systems development charges shall be effective on or about January 1st of each year and shall be adjusted by the change in the construction cost index since the date of the previously established charges. The construction cost index will be determined from figures published in Engineering News Record magazine for twenty cities.
B. Unless otherwise exempted by the provisions of this chapter or other local or state law, a systems development charge is hereby imposed upon all development within the city, upon the act of making connection to the city water or sewer system within the city and on all development outside the boundaries of the city that connect to or otherwise use or benefit from the sanitary sewer, storm drainage, water, parks or transportation systems of the city. (Ord. 3012 §2(part), 2011)
15.16.050 Methodology.
A. The methodology used to establish the reimbursement fee shall, where applicable, be based on the cost of then-existing facilities, including without limitation design, financing and construction costs, prior contributions by then-existing users, the value of unused capacity, rate-making principals employed to finance publicly owned capital improvements, and other relevant factors identified by the city council. The methodology shall promote the objective that future systems users shall contribute no more than an equitable share of the cost of then-existing facilities.
B. The methodology used to establish or modify the improvement fee shall, where applicable, demonstrate consideration of the estimated cost of projected capital improvements needed to increase the capacity of the systems to which the fee is related. The methodology shall be calculated to obtain the cost of capital improvements for the projected need for available system capacity for future system users.
C. The methodology used to establish or modify the improvement fee or the reimbursement fee, or both, is contained within Exhibit A attached to the ordinance codified in this chapter.
1. Wastewater (Sewer). Wastewater (sewer) SDC fees shall be calculated for all developments utilizing a one-and-one-half-inch meter or less by multiplying sewer fixture units by the SDC rate per sewer fixture unit. For developments utilizing a meter larger than one and one-half inches, wastewater SDC fees shall be calculated by multiplying the meter size flow factor by the SDC rate per meter equivalent.
2. Water. Water SDC fees shall be calculated for all developments utilizing a one-and-one-half-inch meter or less by multiplying water fixture units times the SDC rate per water fixture unit. For developments utilizing a meter larger than one and one-half inches, water SDC fees shall be calculated by multiplying the meter size flow factor by the SDC rate per meter equivalent.
3. Streets. Street SDC fees shall be calculated for all developments by multiplying the trips generated per weekday p.m. peak hour between four p.m. and six p.m. (as set forth in the Traffic Trip Rate Table adopted by resolution) times the SDC rate per trip generated. The council shall amend the Traffic Trip Rate Table (attached to the ordinance codified in this section) by resolution based on the Trip Generation Manual of the Institute of Transportation Engineers.
4. Parks. SDC fees shall be assessed only to residential developments. The fees shall be calculated by multiplying the number of dwelling units (SFDU) times the rate per dwelling unit.
5. Drainage. Drainage SDC fees shall be calculated for all developments as follows:
a. Single-Family Homes and Duplexes. Multiply number of dwelling units times the rate per equivalent service unit.
b. All Other Residential, Commercial and Industrial. Multiply impervious area of the development in equivalent service units times the rate per equivalent service unit.
D. In lieu of the average ITE trip generation rate and at the option of the property owner, an independent traffic study may be provided to establish the weekday p.m. peak hour trip generation. All independent traffic studies for this purpose must be completed in accordance with the following requirements in order to be considered:
1. The traffic study shall be performed, stamped and submitted by a traffic engineer currently registered with the state of Oregon and approved by the city engineer.
2. The study shall be based on a typical development similar to the one that is proposed when it is constructed to build-out.
3. A minimum of five local sites with comparable land use shall be used for the study. The sites must be pre-approved by the city engineer. If sufficient sites are not available locally, alternative sites may be proposed, and their suitability is subject to the approval of the city engineer.
4. The traffic study shall be designed in accordance with the methodology described in the Institute of Transportation Engineers Trip Generation Manual, current edition.
5. A completed traffic generation report shall be submitted in a form approved by the city engineer.
6. The results of the study are subject to the reasonable judgment of the city engineer, who will determine whether the study results are representative and acceptable. (Ord. 3137 §1, 2021; Ord. 3012 §2(part), 2011)
15.16.060 Authorized expenditures.
A. Reimbursement fees shall be applied only to capital improvements associated with the systems for which the fees are assessed, including expenditures relating to repayment of indebtedness.
B. Improvement fees shall be spent only on capacity increasing capital improvements, associated with the system for which the fees are assessed, including expenditures relating to repayment of future debt for the improvements. An increase in system capacity occurs if a capital improvement increases the level of performance or service provided by existing facilities or provides new facilities. The portion of the improvements funded by improvement fees must be related to demands created by development.
1. The portion of the capital improvements funded by improvement fees must be related to demands created by current or projected development. A capital improvement being funded wholly or in part from revenues derived from the improvement fee shall be included in the plan adopted by the city pursuant to Section 15.16.080.
C. Notwithstanding subsections A and B of this section, systems development charge revenues may be expended on the direct costs of complying with the provisions of this chapter, including the costs of developing and periodically updating systems development charge methodologies. (Ord. 3012 §2(part), 2011)
15.16.070 Expenditure restrictions.
A. Systems development charges shall not be expended for costs associated with the construction of administrative office facilities that are more than an incidental part of other capital improvements.
B. Systems development charges shall not be expended for costs of the operation or routine maintenance of capital improvements. (Ord. 3012 §2(part), 2011)
15.16.080 Improvement plan.
A. The council shall adopt a plan that includes a list of:
1. The capital improvements that the council intends to fund in whole or in part with improvement fee revenues;
2. The estimated cost and time of construction of each improvement and the percentage of that cost eligible to be funded with improvement fee revenues.
B. For the purposes of this chapter, the city council adopts the improvement plan to include the project lists incorporated into the following report, completed in 2011 by FSC GROUP: "Water, Wastewater, and Stormwater Utility Rate Study, Volume II, System Development Charges."
C. The council may modify such plan and list at any time. If a systems development charge will be increased by a proposed modification to the list to include a capacity increasing public improvement, the council will:
1. At least thirty days prior to adoption of the proposed modification, provide written notice to persons who have requested notice pursuant to Section 15.16.140.
2. Hold a public hearing if a written request for a hearing is received within seven days of the date of the proposed modification.
D. A change in the amount of a reimbursement fee or an improvement fee is not a modification of the systems development charge if the change in amount is based on the periodic application of adjustments made pursuant to Section 15.16.040(A), or a modification to any of the factors related to the rate that are incorporated in the established methodology. (Ord. 3012 §2(part), 2011)
15.16.090 Collection of charge.
A. The systems development charge is payable upon issuance of:
1. A building permit;
2. A development permit;
3. A development permit for development not requiring the issuance of a building permit; or
4. A permit or approval to connect to the city’s water system; or
5. A permit or approval to connect to the city’s sanitary sewer system; or
6. A permit to connect to or otherwise benefit from the city’s storm drainage system; or
7. A permit for right-of-way access.
B. Systems development charges shall be calculated based on the fees that are effective on the date that completed, permit-ready plans and/or applications are submitted to the city. Permits to connect to the city’s water, sanitary sewer and storm drainage systems will only be issued in conjunction with a building permit or development permit if a building permit or development permit is required.
C. If development is commenced or connection is made to the water, sewer or storm drainage systems without an appropriate permit, the systems development charge shall be calculated and immediately payable upon the earliest date that a permit was required. If connection to the water, sewer or storm drainage system is made without a required building or development permit, the city reserves the right to terminate said connection.
D. The community development director shall collect the applicable systems development charge from the owner of the parcel when a permit that allows building or development of a parcel is issued or when a connection to the water, sewer or storm drainage system of the city is made.
E. The community development director shall not issue a permit or allow a connection until the systems development charge has been paid in full, until provision for installment payments has been made pursuant to Section 15.16.110 or unless an exemption is granted pursuant to Section 15.16.120. (Ord. 3012 §2(part), 2011)
15.16.110 Installment payments.
A. When a systems development charge of one hundred dollars or more is due and collectable, the owner of the parcel of land subject to the development charge may apply for payments in twenty semiannual installments, to include interest on the unpaid balance, in accordance with ORS 223.208.
B. The community development director shall provide application forms for installment payments, which shall include a waiver of all rights to contest the validity of the lien, except for the correction of computational errors.
C. An applicant for installment payments shall have the burden of demonstrating the applicant’s authority to assent to the imposition of a lien on the parcel and that the interest of the applicant in the property is adequate to secure payment of the lien.
D. The community development director shall report to the finance director the amount of the systems development charge, the dates on which the payments are due, the name(s) of the owner(s), and the description of the parcel.
E. The finance director shall docket the lien in the lien docket. From that time the city shall have a lien upon the described parcel for the amount of the systems development charge, together with interest on the unpaid balance at the rate determined by the city council for bancrofting of assessments. The lien shall be enforceable in the manner provided in ORS Chapter 223.
F. Upon written request of the planning department, the finance director is authorized to cancel assessments of SDCs, without further council action, where the new development approved by the building permit is not constructed and the building permit is cancelled.
G. For property that has been subject to a cancellation of assessment of SDCs, a new installment payment contract shall be subject to the code provisions applicable to SDCs and installment contracts on file on the date the new contract is received by the city. (Ord. 3012 §2(part), 2011)
15.16.120 Exemptions.
A. Structures and uses established and legally existing on or before the effective date of the ordinance codified in this chapter are exempt from a systems development charge, except water and sewer charges, to the extent of the structure or use then existing and to the extent of the parcel of land as it is constituted on that date. Structures and uses affected by this subsection shall pay the water or sewer charges pursuant to the terms of this chapter upon the receipt of a permit to connect to the water or sewer system.
B. Additions to single-family dwellings that do not constitute the addition of a dwelling unit, as defined by the State Uniform Building Code, are exempt from all portions of the systems development charge except for increase in the parcel’s or structure’s use of the public water or sewer system.
C. An alteration, addition, replacement or change in use that does not increase the parcel’s or structure’s use of the public improvement facility are exempt from all portions of the systems development charge. (Ord. 3012 §2(part), 2011)
15.16.130 Credits.
A. When development occurs that is subject to a systems development charge, the systems development charge for the existing use, if applicable, shall be calculated and if it is less than the systems development charge for the use that will result from the development, the difference between the systems development charge for the existing use and systems development charge for the proposed use shall be the systems development charge. If the change in the use results in the systems development charge for the proposed use being less than the systems development charge for the existing use, no systems development charge shall be required. No refund or credit shall be given unless provided for by another subsection of this section.
B. A credit shall be given to the permittee for the cost of a qualified public improvement upon acceptance by the city of the public improvement. The credit shall not exceed the improvement fee even if the cost of the capital improvement exceeds the applicable improvement fee and shall only be for the improvement fee charged for the type of improvement being constructed.
C. If as part of development approval a qualified public improvement is required to be built larger or with greater capacity than is necessary for the particular development project, a credit shall be given to the developer for the cost of the portion of the improvement that exceeds the city’s minimum standard facility size or capacity needed to serve the particular development project or property. The applicant shall have the burden of requesting and demonstrating that a particular improvement qualifies for credit under this subsection. The request for credit shall be filed in writing no later than sixty days after written conditional acceptance of the improvement was issued by the city.
1. The city may deny the credit provided for in this section if the city demonstrates that the application does not meet the requirements of this section or if the improvement for which credit is sought was not included in the improvement plan pursuant to Section 15.16.080.
D. If as part of development approval a qualified public improvement is required to be built larger or with greater capacity than is necessary for the particular development project and the credit amount is greater than the improvement fee that would otherwise be levied against the project, the credit in excess of the improvement fee for the original development project may be applied against improvement fees that accrue in subsequent phases of the original development project.
E. Notwithstanding subsections C and D of this section, when establishing a methodology for a systems development charge, the city may provide for a credit against the improvement fee, the reimbursement fee, or both, for capital improvements constructed as part of the development which reduce the development’s demand upon existing capital improvements and/or the need for future capital improvements, or a credit based upon any other rationale the council finds reasonable.
F. Credits shall not be transferable from one development to another.
G. Credits shall not be transferable from one type of systems development charge to another.
H. Credits shall be used within ten years from the date the credit is given. (Ord. 3012 §2(part), 2011)
15.16.140 Notice.
A. The city shall maintain a list of persons who have made a written request for notification prior to adoption or amendment of a methodology for any systems development charge. Written notice shall be mailed to persons on the list at least ninety days prior to the first hearing to adopt or amend a systems development charge. The methodology supporting the adoption or amendment shall be available at least sixty days prior to the first hearing to adopt or amend a systems development charge. The failure of a person on the list to receive a notice that was mailed shall not invalidate the action of the city.
B. The city may periodically delete names from the list, but at least thirty days prior to removing a name from the list, the city must notify the person whose name is to be deleted that a new written request for notification is required if the person wishes to remain on the notification list. (Ord. 3012 §2(part), 2011)
15.16.150 Segregation and use of revenue.
A. All funds derived from a particular type of systems development charge are to be segregated by accounting practices from all other funds of the city. That portion of the systems development charge calculated and collected on account of a specific facility system shall be used for no purpose other than those set forth in Section 15.16.060.
B. The city’s budget officer shall provide the city council with an annual accounting, based on the city’s fiscal year, for systems development charges showing the total amount of systems development charge revenues collected for each type of facility and the projects funded from each account. (Ord. 3012 §2(part), 2011)
15.16.160 Appeal procedure.
A. A person challenging the propriety of an expenditure of systems development charge revenues may appeal the decision or the expenditure to the city council by filing a written request with the city manager describing with particularity the expenditure which the person appeals. An appeal of an expenditure must be filed within two years of the date of the alleged improper expenditure.
B. Appeals of any other decision required or permitted to be made by the city manager under this chapter must be filed within ten days of the date of the decision.
C. After providing notice to the appellant, the council shall determine whether the city manager’s decision or the expenditure is in accordance with this chapter and the provisions of ORS 223.297 to 223.314 and may affirm, modify or overrule the decisions. If the council determines that there has been an improper expenditure of systems development charge revenues, the council shall direct that a sum equal to the misspent amount shall be deposited within one year to the credit of the account or fund from which it was spent. The decision of the council shall be reviewed only as provided in ORS 34.010 to 34.100, and not otherwise.
D. A legal action challenging the methodology adopted by the council pursuant to Section 15.16.050 shall not be filed later than sixty days after the adoption. A person shall contest the methodology used for calculating a systems development charge only as provided in ORS 34.010 to 34.100, and not otherwise. (Ord. 3012 §2(part), 2011)
15.16.170 Prohibited connection.
No person may connect to the water or sewer systems nor may they drain storm runoff to the public drainage system or take access to a public street of the city unless the appropriate systems development charge has been paid or the lien or installment payment method has been applied for and approved. (Ord. 3012 §2(part), 2011)
15.16.180 Penalty.
Violation of Section 15.16.160 is punishable by a fine not to exceed five hundred dollars. Payment of penalties shall not relieve any person from the obligation to pay the appropriate system development fees. (Ord. 3012 §2(part), 2011)
15.16.190 Construction.
The rules of statutory construction contained in ORS Chapter 174 are adopted and by this reference made a part of this chapter. (Ord. 3012 §2(part), 2011)
15.16.200 Severability.
The invalidity of a section or subsection of this chapter for any reason shall not affect the validity of the remaining sections or subsections. It is hereby declared to be the council’s intent that the ordinance codified in this chapter would have been adopted had such an unconstitutional provision not been included herein. (Ord. 3012 §2(part), 2011)
15.16.210 Classification.
The city council determines that any fee, rates or charges imposed by this chapter are not a tax subject to the property tax limitations of Article XI, Section 11(b) of the Oregon Constitution. (Ord. 3012 §2(part), 2011)