Chapter 3.10
System Development Charges
Sections:
3.10.040 System development charge established.
3.10.060 Authorized expenditures.
3.10.070 Expenditure restrictions.
3.10.080 Collection of charge.
3.10.100 Delinquent charges – Hearing.
3.10.130 Segregation and use of revenue.
3.10.150 Prohibited connection.
3.10.010 Purpose.
The purpose of the system development charge is to impose an equitable share of the public cost of capital improvements for water, wastewater, drainage, streets, flood control, and parks upon those developments that create the need for or increase the demands on capital improvements. [Ord. 670 § 1, 2000; 1981 Compilation § 3-3.1.]
3.10.020 Scope.
The system development charge imposed by this chapter is separate from and in addition to any applicable tax, assessment, charge or fee otherwise provided by law or imposed as a condition of development. A system development charge is to be considered in the nature of a charge for services rendered or to be rendered, a service hookup charge, or a charge for facilities provided or to be provided. [Ord. 670 § 2, 2000; 1981 Compilation § 3-3.2.]
3.10.030 Definitions.
As used in this chapter:
“Capital improvements” means facilities or assets used for:
1. Water supply, treatment and distribution;
2. Waste water collection, transmission, treatment and disposal;
3. Drainage and flood control;
4. Transportation; or
5. Parks and recreation.
“Capital improvements” does not include costs of the operation or routine maintenance of capital improvements.
Development. For the purposes of this chapter, residential development pertains to construction of new housing facilities, not additions or renovations to existing housing structures, replacement of existing dwelling units, nor appurtenances such as barns, shops, sheds, etc., which do not increase the need for services. Commercial and industrial development includes construction of new separate facilities, but does not include replacement or rehabilitation of existing structures or additions which do not increase the need for services.
“Improvement fee” means a fee for costs associated with capital improvements to be constructed after the date the fee is adopted pursuant to BMC 3.10.040.
“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.
“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.
“Parcel of land” means a lot, parcel, block or other tract of land that 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.
“Permittee” means the person to whom a building permit, water or sanitary sewer connection permit, or right-of-way access permit is issued.
“Qualified public improvements” means a capital improvement that is:
1. Required as a condition of residential development approval;
2. Identified in the City’s adopted capital improvement plan; and
3. Not located on or contiguous to a parcel of land that is the subject of the residential development approval.
“Reimbursement fee” means a fee for costs associated with capital improvements constructed or under construction on the date the fee is adopted pursuant to BMC 3.10.040.
“System 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 building permit, or at the time of connection to the capital improvement. “System development charge” includes that portion of a sewer or water system connection charge that is greater than the amount necessary to reimburse the City for its average cost of inspecting and installing connections with water and sewer facilities. “System 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. [Ord. 670 § 3, 2000; 1981 Compilation § 3-3.3.]
3.10.040 System development charge established.
A. Unless otherwise exempted by the provisions of this chapter or other local or state law, a system development charge, effective April 19, 2000, is hereby imposed upon all new development within the City and upon any structure inside or outside the boundary of the City that connects to or otherwise uses the sanitary sewer system, storm sewer system, or the potable water system of the City. The system development charge is imposed only to the extent a methodology has been adopted for a capital improvement system.
B. The systems development charge may be adjusted in accordance with the Engineering News Record Construction Cost Index, which adjusts the cost figures contained in the capital improvement plan. [Ord. 670 § 4, 2000; 1981 Compilation § 3-3.4.]
3.10.050 Methodology.
A. The methodology shall be adopted by, and may be amended by, resolution of the Council.
B. The methodology used to establish a reimbursement fee shall consider the cost of then-existing facilities, prior contributions by then-existing users, the value of unused capacity, rate-making principles 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.
C. The methodology used to establish an improvement fee shall consider the cost of projected capital improvements needed to increase the capacity of the systems to which the fee is related. [Ord. 670 § 5, 2000; 1981 Compilation § 3-3.5.]
3.10.060 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, 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 capital improvements funded by improvement fees must be related to demands created by development. A capital improvement being funded wholly or in part from revenues derived from the improvement fee shall be included in the City’s capital improvement plan.
C. Notwithstanding subsections (A) and (B) of this section, system development charge revenues may be expended on the direct costs of complying with the provisions of this chapter, including the costs of developing system development charge methodologies and providing an annual accounting of system development charge expenditures. [Ord. 670 § 6, 2000; 1981 Compilation § 3-3.6.]
3.10.070 Expenditure restrictions.
A. System 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. System development charges shall not be expended for costs of the operation or routine maintenance of capital improvements. [Ord. 670 § 7, 2000; 1981 Compilation § 3-3.7.]
3.10.080 Collection of charge.
A. After adoption of the applicable methodology, the system development charge, for a particular development or activity upon which such a charge is imposed, is payable upon issuance of the first of any of the following permits or approvals:
1. A building permit;
2. A permit or approval to connect to the water system; or
3. A permit or approval to connect to the sewer system.
B. If no building or connection permit or approval is required for a particular development upon which a system development charge is imposed, the system development charge is payable at the time the usage of the capital improvement is increased.
C. If development is commenced or connection is made to the water or sewer systems without an appropriate permit, the system development charge is immediately payable upon the earliest date that a permit was required.
D. The City Administrator shall not issue such permit or allow such connection until the charge has been paid in full, or until provision for installment payments has been made pursuant to BMC 3.10.090 or unless an exemption is granted pursuant to BMC 3.10.110.
E. The City Administrator shall determine the amount of and collect the applicable system development charge. [Ord. 670 § 8, 2000; 1981 Compilation § 3-3.8.]
3.10.090 Installment payment.
A. When a system development charge of $250.00 or more is due and collectible, the owner of the parcel of land subject to the development charge may apply for payment in 20 semi-annual installments, to include interest on the unpaid balance, in accordance with ORS 223.208.
B. The City Administrator 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 is adequate to secure payment of the lien.
D. The City Administrator 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 system development charge, together with interest on the unpaid balance at the rate established by the City Council. The lien shall be enforceable in the manner provided in ORS chapter 223. [Ord. 670 § 9, 2000; 1981 Compilation § 3-3.9.]
3.10.100 Delinquent charges – Hearing.
A. When, for any reason, the systems development charge has not been paid, the City Administrator shall report to the Council the amount of the uncollected charge, the description of the real property to which the charge is attributable, the date upon which the charge was due, and the name of the owner.
B. The City Council shall schedule a hearing on the matter and direct that notice of the hearing be given to each owner with a copy of the City Administrator’s report concerning the unpaid charge. Notice of the hearing shall be given either personally or by certified mail, return receipt requested, and by posting notice on the parcel at least 10 days before the date set for the hearing.
C. At the hearing, the Council may accept, reject, or modify the determination of the City Administrator as set forth in the report. If the Council finds that a systems development charge is unpaid and uncollected, it shall direct the City Administrator to docket the unpaid and uncollected systems development charge in the lien docket. Upon completion of the docketing, the City shall have a lien against the described land for the full amount of the unpaid charge, together with interest at the legal rate of 10 percent and the City’s actual cost of serving notice of the hearing on the owners. The lien shall be enforceable in the manner provided in ORS chapter 223. [Ord. 670 § 10, 2000; 1981 Compilation § 3-3.10.]
3.10.110 Exemptions.
The following are exempt from system development charges imposed in BMC 3.10.040:
A. Except for the system development charge attributable to the water system, sanitary or storm sewer system, all development which existed or for which the City had received a completed building permit application on or before April 19, 2000, or for which a building permit was issued before 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. Except for the initial connection to the sanitary sewer by an existing single-family dwelling, any modification to a single-family dwelling that does not increase the number of dwelling units, as defined by the State Uniform Building Code, is exempt from all portions of the system development charge.
C. An alteration, addition, replacement or change in use that does not increase the structure’s use of the public improvement facility is exempt from all portions of the system development charge. [Ord. 670 § 11, 2000; 1981 Compilation § 3-3.11.]
3.10.120 Credits.
A. When development or other activity occurs that creates an obligation to pay a system development charge under BMC 3.10.040, the system development charge for the existing use shall be calculated and if it is less than the system development charge for the proposed use, the difference between the system development charge for the existing use and the system development charge for the proposed use shall be the system development charge required under BMC 3.10.040. If the change in use results in the system development charge for the proposed use being less that the system development charge for the existing use, no system development charge shall be required; however, no refund or credit shall be given.
B. A credit shall be given for the cost of a qualified public improvement associated with a development. If a qualified public improvement is located partially on and partially off the parcel that is the subject of the development approval, the credit shall be given only for the cost of the portion of the improvement not located on or wholly contiguous to the property. The credit provided for by this subsection shall be only for the improvement fee charged for the type of improvement being constructed and shall not exceed the improvement fee even if the cost of the capital improvement exceeds the applicable improvement fee.
C. Credit shall not be transferable from one development to another except in compliance with standards adopted by the City Council.
D. Credit shall not be transferable from one type of capital improvement to another. [Ord. 670 § 12, 2000; 1981 Compilation § 3-3.12.]
3.10.130 Segregation and use of revenue.
A. All funds derived from a particular type of system development charge are to be segregated by accounting practices from all other funds of the City. That portion of the system development charge calculated and collected on account of a specific facility system shall be used for no purpose other than those set forth in BMC 3.10.060.
B. The City Administrator shall provide the City Council with an annual, fiscal year accounting for system development charges, showing the total amount of system development charge revenues collected for each type of facility and the projects funded from each account. [Ord. 670 § 13, 2000; 1981 Compilation § 3-3.13.]
3.10.140 Appeal procedure.
A. A person challenging the propriety of an expenditure of system development charge revenues may appeal the decision or the expenditure to the City Council by filing a written request with the City Administrator describing with particularity the decision of the City Administrator and the expenditure from which the person appeals. An appeal of an expenditure must be filed within two years of the date of the alleged improper expenditure.
B. After providing notice to the appellant, the City Council shall determine whether the City Administrator’s decision or the expenditure is in accordance with this chapter and the provisions of ORS 223.297 through 223.314 and may affirm, modify or overrule the decision. If the City Council determines that there has been an improper expenditure of system development charge revenues, the City 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.
C. A legal action challenging the methodology adopted by the City Council pursuant to BMC 3.10.050 shall be filed no later than 60 days after the adoption. [Ord. 670 § 14, 2000; 1981 Compilation § 3-3.14.]
3.10.150 Prohibited connection.
No person may connect to the water or sewer systems of the City unless the appropriate system development charge has been paid or the lien or installment payment method has been applied for and approved. [Ord. 670 § 15, 2000; 1981 Compilation § 3-3.15.]
3.10.160 Penalty.
Violation of BCM 3.10.150 is punishable by a fine not to exceed $500.00. [Ord. 670 § 16, 2000; 1981 Compilation § 3-3.16.]