Chapter 11.12
SYSTEMS DEVELOPMENT CHARGE FOR CAPITAL IMPROVEMENTS
Sections:
11.12.040 Systems development charge established.
11.12.060 Authorized expenditures.
11.12.070 Expenditure restrictions.
11.12.090 Collection of charge.
11.12.095 Deferral of systems development charge.
11.12.120 Segregation and use of revenue.
11.12.140 Prohibited connection.
11.12.010 Purpose.
The purpose of the systems development charge is to impose an equitable share of the public cost of capital improvements for water supply, treatment and distribution; sanitary sewer collection, transmission, treatment and disposal; drainage and flood control; transportation; and parks and recreation, upon those developments that create the need for or increase the demand on capital improvements to be constructed, already constructed or under construction. (Ord. 1657 §1(part), 1991).
11.12.020 Scope.
The systems development charge imposed by this chapter is separate from and in addition to any applicable tax, assessment, charge, fee in lieu of assessment, or fee otherwise provided by law or imposed as a condition of development. A systems development charge is to be considered in the nature of a charge for service rendered, a service hookup charge or a charge for services to be rendered. (Ord. 1657 §1(part), 1991).
11.12.030 Definitions.
For purposes of this chapter, the following definitions apply:
A. “Capital improvements” means facilities or assets used for:
1. Water supply, treatment and distribution;
2. Sanitary sewer collection, transmission, treatment and disposal;
3. Drainage and flood control;
4. Transportation, including but not limited to streets, sidewalks, bike paths, street lights, street trees, mass public transportation, vehicle parking and bridges; or
5. Parks and recreation, including but not limited to mini-neighborhood parks, neighborhood parks, community parks and other recreational facilities.
B. “Development” means constructing a building or a structure, conducting a mining operation, making a physical change in the use or appearance of a structure or land, dividing land into two or more parcels (including partitions and subdivisions), and creating or terminating a right of access.
C. “Improvement fee” means a fee for costs associated with capital improvements to be constructed after the date the fee is adopted pursuant to Section 11.12.040 of this chapter.
D. “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.
E. “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.
F. “Qualified public improvements” means a capital improvement that is required as a condition of development approval, identified in the plan adopted pursuant to Section 11.12.080 of this chapter, and either:
1. Not located on or contiguous to property that is the subject of development approval; or
2. 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.
G. “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 11.12.040.
H. “Systems development charge” means a reimbursement fee, an improvement fee or a combination thereof assessed or collected at any of the times specified in Section 11.12.090. It shall also include that portion of a water or sanitary sewer system connection charge that is greater than the amount necessary to reimburse the city for its average cost of inspection and installing connections with water and sanitary sewer 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. (Ord. 1703 §1, 1994; Ord. 1657 §1(part), 1991).
11.12.040 Systems development charge established.
A. Systems development charges for each type of capital improvements may be proposed by the city manager and shall be established and may be revised by resolution of the council.
B. Unless otherwise exempted by the provisions of this chapter or other local or state law, effective July 1, 1991, a systems development charge is hereby imposed upon all development within the city, and upon all development outside the boundary of the city that connects to or otherwise uses the water, sanitary sewer, drainage and flood control, transportation or parks and recreation facilities of the city. (Ord. 1969 §1(part), 2013; Ord. 1657 §1(part), 1991).
11.12.050 Methodology.
A. The methodology used to establish the reimbursement fee shall be based on rate-making principles employed to finance publicly owned capital improvements, prior contributions by then-existing users, gifts or grants from federal or state government or private persons, the value of unused capacity available to future system users or the cost of the existing facilities, 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 and shall be available for public inspection.
B. The methodology used to establish the improvement fee shall demonstrate consideration of the projected cost of capital improvements identified in the plan and list adopted pursuant to Section 11.12.080 that are needed to increase the capacity of the systems to which the fee is related and for which the need for increased system capacity will be required to serve the demands placed on the system by future users. Improvement fees shall be calculated to obtain the cost of capital improvements for the projected need for available system capacity for future users.
C. The methodology shall also provide for a credit as authorized in Section 11.12.110.
D. Except when authorized in methodology adopted under subsection C of this section, the fees required by this code which are 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 are separate from and in addition to the systems development charge and shall not be used as a credit against such charge.
E. The methodology used to establish the improvement fee or the reimbursement fee, or both, shall be contained in a resolution adopted by the council.
F. After the effective date of the ordinance codified in this chapter, 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 establish or modify a systems development charge, and the methodology supporting the adoption or amendment shall be available at least sixty days prior to the first hearing to adopt or amend. The failure of a person on the list to receive a notice that was mailed shall not invalidate the city’s subsequent action. 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. A change in the amount of a reimbursement fee or an improvement fee is not a modification of the systems development charge methodology if the change in amount is based on a change in cost of materials, labor or real property applied to projects or project capacity as set forth on the list adopted pursuant to Section 11.12.080 or the periodic application of one or more specific cost indices published by a recognized organization or agency and is incorporated as part of the established methodology or identified and adopted in a separate ordinance, resolution, or order. (Ord. 1861(part), 2005; Ord. 1703 §2, 1994; Ord. 1657 §1(part), 1991).
11.12.060 Authorized expenditures.
A. Reimbursement fees shall be applied only to capital improvements (and not operating expenses) associated with the systems for which the fees are assessed, including expenditures relating to repayment of indebtedness.
B. 1. Improvement fees shall be spent only on capacity increasing capital improvements, including expenditures relating to repayment of debt for the improvements. An increase in system capacity may be established 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 the need for increased capacity to provide services for future users.
2. 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 11.12.080.
3. Notwithstanding subsections (B)(1) and (2) of this section, systems development charge revenues may be expended on the costs of complying with the provisions of this subsection B, including the costs of developing systems development charge methodologies and providing an annual accounting of systems development charge expenditures. (Ord. 1861(part), 2005; Ord. 1657 §1(part), 1991).
11.12.070 Expenditure restrictions.
Systems development charges shall not be expended for:
A. Costs associated with the construction of administrative office facilities that are more than an incidental part of other capital improvements; or
B. Costs of the operation or routine maintenance of capital improvements. (Ord. 1657 §1(part), 1991).
11.12.080 Improvement plan.
The council shall adopt a plan that:
A. Lists the capital improvements that may be funded with improvement fee revenues;
B. Lists the estimated cost, time, and percentage of costs eligible to be funded with revenues from the improvement fee for each improvement; and
C. Describes the process for modifying the plan. If a systems development charge will be increased by a proposed modification of the list to include a capacity-increasing capital improvement, the city shall provide, at least thirty days prior to the adoption of the modification, notice of the proposed modification to the persons who have requested written notice under Section 11.12.050. The city shall hold a public hearing if a written request for a hearing on the proposed modification is received within seven days of the date the proposed modification is scheduled for adoption. (Ord. 1861(part), 2005; Ord. 1657 §1(part), 1991).
11.12.090 Collection of charge.
A. Except as provided in Section 11.12.095, the systems development charge is payable upon issuance of:
1. A building or construction permit of any kind, including any permit or permits issued in connection with the set-up or installation of any trailer, mobile or manufactured home;
2. A development permit;
3. A development permit for development not requiring the issuance of a building permit;
4. A permit to connect to the water system;
5. A permit to connect to the sanitary sewer system;
6. A permit to connect to the drainage and flood control system; or
7. A permit to connect to the transportation system.
B. If development is commenced or connection is made to the water, sanitary sewer, drainage and flood control or transportation systems without an appropriate permit, the systems development charge is immediately payable upon the earliest date that a permit was required.
C. The city manager or his designee shall collect the applicable systems development charge from the person responsible for or receiving the benefit of the development in accordance with subsection A of this section. The city manager or his designee shall not issue such permit or allow such connection until the charge has been paid in full, or unless an exemption is granted pursuant to Section 11.12.100, or unless arrangements for payment of the charge, under such terms as the city manager deems reasonable, have been made, pursuant to subsection D of this section, which follows.
D. The obligation to pay the unpaid systems development charge and interest thereon shall be secured by property, bond, deposits, letter of credit or other security acceptable to the city manager. The net value of security accepted, excluding liens and encumbrances thereon, must be at least double the amount of the systems development charge secured thereby.
E. If the systems development charge is not paid upon issuance of the applicable permit, and the applicant chooses to pay the charge in installments and secure the obligation with security acceptable under subsection D of this section, then there shall be added to the amount owing the following:
1. Interest on the obligation at the prevailing state statutory rate of interest;
2. All costs associated with processing the particular form of security, such as title insurance, escrow fees, recording costs, collection escrow costs and/or any other expense associated with the city accepting such security;
3. Any and all costs, as determined by the city manager or his designee, incurred in establishing payment schedules and administering the collections process;
4. When the charge is secured by bond pursuant to ORS 223.205--223.295, any and all costs associated with administering the bond assessment program and issuing the bonds, as determined by the city manager or his designee;
5. The intent of this subsection E is to recognize that the payment of an SDC by installments increases the administrative expense to the city. It is the intent of this subsection to shift that added expense to the applicant, so that the city will not lose systems development charge revenue by accepting installment payments on such charges. Subject to the provisions of this subsection E, all costs added to the systems development charge will be determined by the city manager. (Ord. 1969 §1(part), 2013; Ord. 1928 §1, 2009; Ord. 1657 §1(part), 1991).
11.12.095 Deferral of systems development charge.
Beginning on the effective date of the ordinance codified in this section and ending on June 1, 2010, the systems development charge for a single-family dwelling may be deferred as provided in this section at the request of the property owner until final building inspection or expiration of building permit, whichever comes first.
A. Deferral Limitations. No person or legal entity shall own or have any interest in, in whole or in part, in excess of six properties on which deferrals are pending at the same time.
B. Payment upon Conveyance. In the event that the real property on which the fees have been deferred pursuant to this section is sold or conveyed, the charges deferred shall become immediately due and payable to the city. Sale or conveyance includes either actually selling, conveying or assigning any or all of the property or any or all of the owner’s interest in property.
C. Assessments. The owner shall be required to execute a request for and a consent to assessment of the amount of the fees or charges deferred on each real property for which a deferral is requested. The request and consent shall be made on a form prepared by the city manager or designee. The city manager or designee shall enter the assessment in the docket of city liens and record it in Jackson County deeds and records if the assessment is not paid at final building inspection or expiration of building permit or if the property is sold or conveyed as described in subsection B of this section. Upon the entry and recordation being made, the assessments shall constitute a lien upon the property which received the deferred charge. (Ord. 1969 §1(part), 2013; Ord. 1928 §2, 2009).
11.12.100 Exemptions.
A. The following are exempt from systems development charges:
1. Additions to single-family dwellings that do not constitute the addition of a dwelling unit. “Dwelling unit” means any building or portion thereof which contains living facilities, including provisions for sleeping, eating, cooking and sanitation;
2. An alteration, addition, replacement or change in use that does not increase the parcel’s or structure’s use of the system to which the systems development charge applies;
3. Water line connections which are:
(a) Made solely and exclusively for the purpose of providing fire protection, and which are not to be used for any nonfire protection purposes, and
(b) On a line which is separate from any line used for nonfire protection purposes.
These exclusively-fire protection connections must have detective-check meters installed. If it is found that water is being used for nonfire protection purposes, including leakage in the line on the owner’s property, the city may revoke the exemption, install a full-flow water meter at the owner’s expense, and collect the appropriate systems development charge.
B. Any enlargement or change and any new connection or utilization of the system to which a systems development charge applies shall not be exempt. (Ord. 1718 §1, 1995; Ord. 1657 §1(part), 1991).
11.12.110 Credits.
A. A systems development charge shall be imposed when a change of use of a parcel or structure occurs, but credit shall be given in an amount equal to the existing systems development charge as applied to the pre-existing use. The credit so computed shall not exceed the calculated systems development charge. No refund shall be made on account of such credit. Credits for change of use of a parcel shall be used within ten years from the date the credit is given or will be forfeited for all. For existing change of use credits, they will expire upon ten years of the revising of this section by Ordinance 1968.
B. An improvement fee credit shall be given for the cost of a qualified public improvement associated with a development, subject to the following:
1. Such credit shall be only for the improvement fee charged for the type of improvement being constructed, and credit for qualified public improvements under Section 11.12.030(F)(2) may be granted only for the cost of that portion of such improvement that exceeds the city’s minimum standard facility size or capacity needed to serve the particular development property or project. The applicant shall have the burden of demonstrating that a particular improvement qualifies as a Section 11.12.030(F)(2) qualified public improvement.
2. When the construction of a qualified public improvement gives rise to a credit amount greater than the improvement fee that would otherwise be levied against the project receiving development approval, the excess credit may be applied against improvement fees that accrue in subsequent phases of the original development project, if any.
3. Credits shall be used within ten years from the date the credit is given.
4. Credit shall not be transferable from one development to another or from one type of capital improvement to another.
C. A credit may be established if a developer/builder pays for a permit then elects to not build on that site and does not take a refund. The cash credits may be used towards another building project. However, the cash credits shall be used within ten years from the date the credit is given or be forfeited. For existing cash credits, they will expire upon ten years of the revising of this section by Ordinance 1968. (Ord. 1968 §1, 2012; Ord. 1861(part), 2005; Ord. 1703 §3, 1994; Ord. 1657 §1(part), 1991).
11.12.120 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 11.12.060.
B. The city manager or his designee 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. 1969 §1(part), 2013; Ord. 1657 §1(part), 1991).
11.12.130 Appeal procedure.
A. A person aggrieved by a decision required or permitted to be made by the city manager or his designee under this chapter or 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 decision of the city manager or his designee or the expenditure from which the person appeals.
B. An appeal of an expenditure must be filed within two years of the date of the alleged improper expenditure. Appeals of any other decision must be filed within ten days of the date of the decision.
C. 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 decision. 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.
D. A legal action challenging the methodology adopted by the council pursuant to Section 11.12.050 shall not be filed later than sixty days after adoption, and shall be contested according to the procedure set forth in ORS 34.010 to 34.100, and not otherwise. (Ord. 1969 §1(part), 2013; Ord. 1703 §4, 1993; Ord. 1657 §1(part), 1991).
11.12.140 Prohibited connection.
No person may connect to the water, or sanitary sewer, storm drainage or street systems of the city unless the appropriate systems development charge has been paid or a written agreement, signed by the city manager or his designee, providing for payment on terms agreed to by the parties and consistent with Section 11.12.090(D) and (E) has been entered into. (Ord. 1969 §1(part), 2013; Ord. 1657 §1(part), 1991).
11.12.150 Penalties.
Any person violating any provision of this chapter shall be punished upon conviction under the general penalty ordinance of the city as found in Central Point Municipal Code Section 1.16.010. (Ord. 1657 §1(part), 1991).
11.12.160 Construction.
The rules of statutory construction contained in ORS Chapter 174 are adopted and by this reference made a part of this chapter. (Ord. 1657 §1(part), 1991).
11.12.170 Severability.
The invalidity of a section or subsection of this chapter shall not affect the validity of the remaining sections or subsections. (Ord. 1657 §1(part), 1991).