Chapter 15.16
SYSTEM DEVELOPMENT CHARGES
Sections:
15.16.020 System development charge established.
15.16.040 Compliance with state law.
15.16.050 Collection of system development charge.
15.16.060 Exemptions and pre-existing conditions.
15.16.090 Prohibited connections.
15.16.100 Abatement of prohibited connections.
15.16.120 Installment payments.
15.16.010 Intent and scope.
A. Pursuant to the laws of the state of Oregon, and the powers granted in the City Charter, the city council finds, declares, and affirms its intent to impose system development charges.
B. The purpose of the system development charge is to impose an equitable share of the public costs of capital improvements upon those developments that create the need for or increase the demands on existing capital improvements.
C. The system development charge as 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 system development charge is to be considered in the nature of the charge for service rendered or facilities made available, or a charge for future services to be rendered or facilities to be made available in the future. [Ord. 351 § 1, 1998].
15.16.020 System development charge established.
A. A system development charge is hereby imposed, unless otherwise exempted by the provisions of this chapter or other local or state law, on all new development within the city, and all new development outside the boundary of the city that connects to or otherwise uses the sanitary sewer system, storm drainage system, water system, street system, or street lighting system of the city.
B. System development charges for each type of capital improvement may be created by the application of the methodologies outlined in this chapter and further described in the appropriate implementing resolution. The amount of each system development charge shall be adopted initially by city council resolution. Inflationary cost impacts shall be measured and calculated annually by the city administrator and presented to the city council for consideration. These calculations will be based upon Pacific Northwest construction cost changes in the Engineering News Record Construction Cost Index (ENR Index) as represented by the city of Portland, Oregon, or Seattle, Washington, or any successor index to this measurement. All calculations shall be carried out to the hundredths place. A final product ending in 0.49 or less shall be rounded down to the nearest dollar, or 0.50 or more shall be rounded up to the next dollar. [Ord. 351 § 2, 1998].
15.16.030 Methodology.
A. The methodology used to establish a reimbursement fee shall consider the cost of then-existing facilities, prior contributions by then-existing users (including debt calculated to current value), the value of unused capacity, rate-making principles employed to finance publicly owned capital improvements, and other relevant factors. The methodology shall promote the objective that future system users shall contribute an equitable share of the cost of then-existing facilities.
B. The methodology used to establish the public improvement charge shall consider the cost of projected capital improvements needed to increase the capacity of the systems to which the fee is related and shall provide for a credit against a capital improvements charge for the construction of any qualified public improvement.
C. The methodology may also provide for a credit as authorized by this chapter.
D. The fees required by this chapter or related resolutions, except as provided in subsection (A) of this section, 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 system development charge and shall not be used as a credit against such charge.
E. The methodologies used to establish the system development charge shall be adopted by resolution of the city council. The specific system development charge may be adopted or amended concurrent with the establishment or revision of the system development charge methodology. The city administrator shall review the methodologies established under this section periodically and shall recommend amendments, if and as needed, to the city council for its action.
F. Basis for Calculations. The formulas and calculations used to compute specific SDCs are based upon averages and typical conditions. Whenever the impact of individual developments present specific or unique situations, such that the calculated fee is grossly disproportionate to the actual impact of the development, alternative fee calculations may be approved or required by the city administrator under prescribed administrative procedures. All data submitted to support alternate calculations under this subsection shall be specific to the site and development under consideration. Major or unique developments may require special analysis to determine alternatives to the standard methodology.
G. Any association, person, agency or other interest group requesting written notification of the hearing on adoption or amendment of a methodology shall be mailed such notice at least 45 days prior to the first hearing to adopt or amend a system development charge. The methodology shall be available at least 30 days prior to this hearing date. The names and addresses of associations, persons, agencies or other interest groups requesting notification shall be maintained by the city administrator on a list. [Ord. 351 § 3, 1998].
15.16.040 Compliance with state law.
A. The revenues received from a system development charge shall be budgeted and expended as provided by state law. Revenues and expenditures shall be accounted for as required by state law. The annual city audit shall contain a separate accounting of these revenues and expenditures.
B. Capital improvement plans shall be the basis for expending system development charge revenues. These plans shall contain a list of projects with estimated costs and time table for completion for each project. Projects which are a part of the capital improvement plans for any other governmental entity may be paid for from city system development charge revenues, but only to the degree a development affects the project costs and time table of the CIP for any other governmental entity. The city shall enter into an intergovernmental agreement per ORS Chapter 192 provided such CIPs of other governmental entities conform with state law, and are consistent with the city’s CIP and the city’s comprehensive plan text and map. [Ord. 351 § 4, 1998].
15.16.050 Collection of system development charge.
A. When required, the system development charge shall be paid upon, and as a condition of, issuance of:
1. A building permit for new construction;
2. A permit for the renovation, rehabilitation, alteration or modification of a structure or use; or
3. A public works permit allowing connection to the water, sanitary sewer, or storm drainage system(s).
B. If development is commenced or connection is made to the water system, sanitary sewer system, storm drainage system, or street system without an appropriate permit, the system development charge shall be increased by the amount of additional direct administrative cost incurred by the city plus an additional 25 percent indirect overhead charge. It shall be unlawful for anyone to continue with the construction or use of the development until the charge has been paid or payment secured to the satisfaction of the city administrator.
C. Any amount of a system development charge not paid shall be recovered as a lien against the development site. The lien shall be foreclosed upon as provided by the City Charter and state law.
D. The city administrator or designee shall not issue such permit or allow such connection until the charge has been paid in full, or until provision for payment has been made pursuant to DMC 15.16.120, or unless an exemption is granted pursuant to DMC 15.16.060. [Ord. 479-2009 § 1; Ord. 351 § 5, 1998].
15.16.060 Exemptions and pre-existing conditions.
A. The following are exempt from the system development charge imposed by this chapter:
1. Development which legally existed prior to the effective date of the methodology adopted by resolution of the city council. The impact of existing development will be calculated, and an allowance will be granted for such pre-existing building or use in calculating any new or additional system development charge. The calculation for pre-existing use shall establish the number of pre-existing hydraulic equivalent units for water SDCs, the number of pre-existing equivalent residential units for sanitary sewer SDCs, the number of pre-existing p.m. peak hour trip ends for transportation SDCs, and the amount of pre-existing impervious surface area for stormwater utility SDCs.
2. Any change in use, conversion, reconstruction or rehabilitation, alteration, addition or replacement that does not increase the use of the applicable public improvement facility as described in the adopted methodology are exempt from that public facility’s system development charge. Notwithstanding, if the prior building was demolished more than two years ago, the reconstruction or new construction shall not be exempt from SDCs, unless applicable utility billing fees have been continuously paid and no past due charges are owed.
3. Additions to single-family dwellings that do not constitute the addition of a dwelling unit are exempt from all portions of the system development charge.
4. A transportation facility or improvement constructed by a governmental entity or by a private entity when the transportation facility or improvement is to be transferred to a governmental unit immediately upon its completion.
5. Low and moderate income single-family housing units pursuant to the procedures and requirements adopted by resolution of the council.
6. Any public facility or improvement which is or by agreement undertaken by the city of Dundee.
B. SDCs will be imposed upon any change in use, conversion, reconstruction, rehabilitation, alteration, addition or replacement which increases the use of the applicable public improvement facility as described in the methodology. The SDC will be based upon the difference between the SDC calculated for the new use and the SDC calculated for pre-existing use under the current methodology.
C. An exemption pursuant to subsection (A) of this section shall not be approved if the water meter for the property was removed, or the sewer lateral was disconnected, at the request of the property owner to avoid payment of the monthly city utility charges. In such circumstances, new service or reconnection requires payment in full of the applicable SDC in place at the time of the new service or reconnection. Requests to remove a water meter or disconnect a sewer lateral shall be made in writing by the owner of the property on a form provided by the city. [Ord. 556-2017 § 1; Ord. 351 § 6, 1998].
15.16.070 Credits.
As used in this section, the word “contiguous” means that part of a public way which abuts the development parcel.
A. An applicant may apply for a credit against the SDC for constructing a qualified capital improvement; provided, that the qualified capital improvement portion of the facility and its corresponding costs are established by the city prior to the issuance of a building permit. A “qualified capital improvement” means that it meets all of the following requirements:
1. The improvement was required as a condition of development approval by the planning commission or city council; and
2. The improvement is identified in an adopted capital improvement plan; and
3. The improvement is:
a. Not located within or contiguous to the property or parcel that is subject to development approval; or
b. 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. For the purposes of this section, “greater capacity” shall mean an increased size or volume but shall not mean an increase in quality; and
4. The improvement reduces the development’s demand upon the city’s water, sanitary sewer, stormwater system, or transportation system or reduces the need for construction of facilities that would otherwise have to be constructed at city expense under the then-existing council policies.
B. This credit shall be only for the improvement fee charged for the type of improvement being constructed. Credit under subsection (A)(3)(b) of this section may be granted only for the cost of that portion of the improvement that exceeds the facility size or capacity needed to serve the development project.
C. 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 development project receiving approval, the excess credit may be applied against improvement fees that accrue in subsequent phases of the original development project.
D. All credit requests must be in writing and filed with the city administrator at the time of development review and approval. The applicant is responsible for presentation of all required credit justification. Improvement acceptance by the city shall be in accordance with the usual and customary practices, procedures and standards of the city of Dundee. The amount of any credit shall be determined by the city administrator and based upon the subject improvement construction contract documents, or other appropriate information, provided by the applicant for the credit. Upon a finding by the city administrator that the contract amounts exceed prevailing market rates for a similar project, the credit shall be based upon market rates. The city administrator shall provide the applicant with a credit on a form provided by the city. The credit shall state the actual dollar amount that may be applied against the improvement portion of the SDC imposed against the subject development project. The applicant has the burden of demonstrating qualification for a credit.
E. Credits shall be apportioned against the property which was subject to the requirement to construct an improvement eligible for a credit.
F. Any credits shall be assignable; however, they shall apply only to that property subject to the original condition for land use approval upon which that credit is based or any partitioned or subdivided parcels or lots of such property to which the credit has been apportioned. Credits shall only apply against system development charges, are limited to the amount of the fee attributable to the development of the specific lot or parcel for which the credit is sought and shall not be a basis for any refund. Credits shall be used not later than 10 years from the date when the credit was issued by the city.
G. Sewer reservations purchased under previously imposed ordinances by the city will be recognized under their original terms and conditions. Owners of property who have sewer reservations may transfer them to other properties which they currently own by submitting a written request to the city administrator; provided, that such transfer may not result in the gaining property acquiring more reservations than the property may utilize in accordance with current zoning standards. [Ord. 409-2002 §§ 1, 2; Ord. 351 § 7, 1998].
15.16.080 Appeal procedures.
The following relief is provided to any interested party in a dispute concerning any provisions of this chapter related to system development charges.
A. As used in this section, “working day” means a day when the general offices of the city are open to transact business with the public.
B. A person aggrieved by a decision required or permitted to be made by the city administrator or their designee under this chapter or a person challenging the propriety of an expenditure of system development charge revenues may appeal the decision or the expenditure by filing a written request with the city attorney’s office for consideration by the city council. Such appeal shall describe with particularity the decision or expenditure from which the person appeals and shall comply with subsection (D) of this section.
C. An appeal of an expenditure must be filed within one year of the date of alleged improper expenditure. Appeals of any other decision must be filed within 10 working days of the date of the decision.
D. The appeal shall state:
1. The name and address of the appellant; and
2. The nature of the determination being appealed; and
3. The reason the determination is incorrect; and
4. What the correct determination should be.
An appellant who fails to file such a statement within the time permitted waives their objections, and their appeal shall be dismissed.
E. The city council shall order an investigation and direct that within 60 days of receipt of the petition a written report be filed with the city administrator recommending appropriate action. Within 30 days of receipt of said report, the city council shall conduct a hearing to determine whether the expenditure was proper. At least 10 working days’ advance notice of the hearing, including a copy of the report, shall be mailed to the petitioner. Petitioners shall have a reasonable opportunity to present their position at the hearing.
F. The petitioner shall have the burden of proof to prove their claim. Evidence and argument shall be limited to grounds specified in the petition. The council shall issue a written decision stating the basis for its conclusion and directing appropriate action to be taken.
G. Review of the city council’s decision shall be provided as in ORS 34.010.
H. The city council shall render its decision within 15 days after the hearing date and the written council decision shall be final. The decision shall be in writing, but written findings shall not be made or required unless the council, in its discretion, elects to make findings for precedential purposes. Any legal action contesting the council’s decision on the appeal shall be filed within 60 days of the city council’s decision. [Ord. 351 § 8, 1998].
15.16.090 Prohibited connections.
It shall be unlawful for any person to connect any premises for service, or cause the same to be connected, to any sanitary sewer, water system, stormwater system, or street system of the city unless the appropriate system development charge has been paid or payment has been secured as provided in this chapter. [Ord. 351 § 9, 1998].
15.16.100 Abatement of prohibited connections.
The city administrator may direct the disconnection of any prohibited connection. If such disconnection disrupts the operations of a previously provided utility service, it shall be the responsibility of the person making the prohibited connection to return service to its previous condition before operations may continue. [Ord. 351 § 10, 1998].
15.16.110 Penalties.
A person found guilty in the appropriate court of violating provisions of this chapter shall pay a fine of not less than $250.00 or more than $1,000. Each day a violation is determined to exist shall constitute a separate violation. [Ord. 351 § 11, 1998].
15.16.120 Installment payments.
A. Upon payment of at least 20 percent of the system development charge, the owner of a parcel of land subject to a system development charge for commercial or industrial development of over $20,000 may apply for payment of the balance of the charge in 24 equal monthly installments, to include interest on the unpaid balance at the prime rate published in the Wall Street Journal plus six percent per annum and in accordance with such other terms as set by the city.
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, provided by subsection (C) of this section, except for the correction of computational errors. The applicant shall pay a nonrefundable administrative fee in cash at the time of application in an amount to be determined by resolution of the city council. An applicant for installment payments shall have the burden of demonstrating in the application 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.
C. Upon acceptance of the application and execution of an installment payment agreement, the lien shall be entered in the city lien docket. From that time, and except as provided in ORS 223.208(2), the city shall have a first lien upon the described parcel for the amount of the system development charge, together with interest on the unpaid balance. The lien shall be enforceable in the manner provided in ORS Chapter 223.
D. The provisions of this section shall expire and be of no further force and effect after June 30, 2011, except that such provisions shall continue to apply to approved installment applicants and their subject property until receipt by the city of their final installment plus accrued interest. [Ord. 479-2009 § 2].