Chapter 4.20
SYSTEM DEVELOPMENT CHARGES
Sections:
4.20.040 System development charge established.
4.20.060 Authorized expenditures.
4.20.070 Expenditure restrictions.
4.20.090 Collection of charge.
4.20.140 Segregation and use of revenue.
4.20.160 Implementing regulations – Amendments.
4.20.180 Prohibited connection.
4.20.010 Purpose.
The purpose of the system development charge is to impose a portion of the cost of capital improvements for the city’s water, sewer, streets, flood control, and parks upon those developments and redevelopments that create the need for or increase the demands on the city buildings and facilities, water system, sewer system, transportation system, storm water system, and parks system. [Ord. 385 § 1, 2010.]
4.20.020 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. [Ord. 385 § 2, 2010.]
4.20.030 Definitions.
For purposes of this chapter the following terms shall mean:
“Capital improvements” means public facilities or assets used for the city’s:
(a) Buildings and facilities;
(b) Water system including supply, storage, distribution, or treatment, or any combination;
(c) Wastewater system including collection, transmission, treatment or disposal or any combination;
(d) Drainage or flood control;
(e) Transportation; or
(f) Parks and recreation.
“City” means the city of Halsey, Linn County, Oregon.
“Council” or “city council” means the governing legislative body for the city of Halsey.
“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 or walkways, but does not include natural geologic forms or unimproved lands. “Development” includes conducting a building or 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.
“Improvement fee” means a fee for costs associated with capital improvements to be constructed or assets to be added after the date the fee is adopted pursuant to HMC 4.20.040.
“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 for a public scenic or preservation purpose.
“Owner” means the owner or owners of record title or the purchasers under a recorded land 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 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.
“Permittee” means the person to whom a building permit, development permit, a permit or plan approval to connect to the water or sewer system or right-of-way access permit is issued.
“Qualified public improvements” means a capital improvement that is:
(a) Required as a condition of development approval;
(b) Identified in the plan adopted pursuant to HMC 4.20.080; and either
(c) Not located on or contiguous to a parcel of land that is the subject of the development approval; or
(d) 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.
(e) For purposes of this definition, “contiguous” means in a public way which abuts the parcel.
“Reimbursement fee” means a fee for costs associated with capital improvements constructed or under construction on the date the fee is adopted pursuant to HMC 4.20.040.
“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 to the water, sewer, storm water, parks, or streets at the time of issuance of a development permit or building permit, or at the time of connection to the capital improvement to the water, sewer, storm water, parks or streets.
(a) A “system development charge” includes that portion of a water or sewer system connection charge that is greater than the amount necessary to reimburse the city for its average cost of inspecting and installing connections to water or sewer facilities.
(b) A “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. 385 § 3, 2010.]
4.20.040 System development charge established.
(1) System development charges shall be established and may be revised by resolution of 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 change.
(2) Unless otherwise exempted by the provisions of this chapter or other local or state law, a system development charge is hereby imposed upon all development within the city, upon the act of making a connection to the city water or sewer system within the city, and upon all development outside the boundary of the city that connects to or otherwise uses the city water or sewer facilities or storm sewers of the city. [Ord. 385 § 4, 2010.]
4.20.050 Methodology.
(1) The methodology used to establish or modify the reimbursement fee shall consider the cost of then existing facilities including without limitation design, financing and construction costs, prior contribution 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, 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.
(2) The methodology used to establish or modify the improvement fee shall consider 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.
(3) The methodology used to establish or modify the improvement fee or the reimbursement fee, or both, shall be contained in a resolution adopted by the city council. [Ord. 385 § 5, 2010.]
4.20.060 Authorized expenditures.
(1) 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.
(2) Improvement fees shall be spent only on capacity increasing capital improvements associated with the system for which the fee is 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.
(a) 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 HMC 4.20.080.
(3) Notwithstanding subsections (1) and (2) 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. 385 § 6, 2010.]
4.20.070 Expenditure restrictions.
(1) 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.
(2) System development charges shall not be expended for costs of the operation or routine maintenance of capital improvements. [Ord. 385 § 7, 2010.]
4.20.080 Improvement plan.
(1) Prior to the establishment of a system development charge, the city council shall adopt a plan that includes a list of:
(a) The capital improvements that may be funded with improvement fee revenues;
(b) The estimated cost and time of construction of each improvement; and
(c) A description of the process for modifying the plan.
(2) In adopting this plan, the city council may incorporate by reference all or a portion of any public facilities plan, master plan, capital improvements plan, or similar plan that contains the information required by this section. The city council may modify such plan and list at any time.
(3) A change in the amount of a reimbursement fee or an improvement fee is not a modification of the system development charge if the change in amount is based on the periodic application of an adopted specific cost index or a modification to any of the factors related to the rate that are incorporated in the established methodology. [Ord. 385 § 8, 2010.]
4.20.090 Collection of charge.
(1) The system development charge is payable upon issuance of:
(a) A building permit;
(b) A development permit;
(c) A development permit for development not requiring the issuance of a building permit;
(d) A permit or approval to connect to the sewer system;
(e) A permit or approval to connect to the water system;
(f) A right-of-way access permit.
(2) If no building, development, or connection permit is required, the system development charge is payable at the time the usage of the capital improvement is increased based on changes in the use of the property unrelated to seasonal or ordinary fluctuations in usage.
(3) 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.
(4) The city recorder shall collect the applicable system development charge from the permittee when a permit that allows building or development of a parcel is issued or when a connection to the water or sewer system of the city is made.
(5) The city recorder 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 HMC 4.20.100, or unless an exemption is granted, pursuant to HMC 4.20.110. [Ord. 385 § 9, 2010.]
4.20.100 Installment payment.
(1) When a system development charge of $25.00 or more is due and collectible, the owner of the parcel of land subject to the development charge may apply for payment in 20 semiannual installments, to include interest on the unpaid balance, in accordance with ORS 223.208.
(2) The city recorder 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.
(3) 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 property interest of the applicant is adequate to secure payment of the lien.
(4) The city recorder shall report to the applicant the amount of the system development charge, the dates on which the payments are due, the name of the owner, and the description of the parcel.
(5) The city recorder 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.
(6) Upon written request the city recorder is authorized to cancel assessments of SDCs, without further city council action, where the new development approved by the building permit is not constructed and the building permit is cancelled.
(7) 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 payment contracts on file on the date the new contract is received by the city. [Ord. 385 § 10, 2010.]
4.20.110 Exemptions.
(1) Structures and uses established and legally existing on or before February 12, 2010, are exempt from a system 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.
(2) Additions to single-family dwelling that do not constitute the addition of a dwelling unit, as defined by the state Residential Specialty Code, are exempt from all portions of the system development charge.
(3) An alteration, addition, replacement or change in use that does not increase the parcel’s or structure’s use of the public improvement facility is exempt from all portions of the system development charge.
(4) A project financed by the city of Halsey revenues is exempt from all portions of the system development charge. [Ord. 411 § 11, 2015; Ord. 385 § 11, 2010.]
4.20.120 Credits.
(1) When a development occurs that is subject to a system development charge, the system development charge for the existing use, if applicable, shall be calculated and if it is less than the system development charge for the use that will result from the development, 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. If the change in the use results in the system development charge for the proposed use being less than the system development charge for the existing use, no system development charge shall be required. No refund or credit shall be given unless provided for by another subsection of the section.
(2) 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.
(3) If a qualified public improvement is located in whole or in part on or contiguous to the property that is the subject of development approval and is required to be built larger or with greater capacity than is necessary for the particular development project, a credit shall be given 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 demonstrating that a particular improvement qualifies for credit under this subsection. The request for credit shall be filed in writing no later than 60 days after acceptance of the improvement by the city.
(4) When the construction of a qualified public improvement located in whole or in part or contiguous to the property that is the subject of development approval gives rise to a credit amount 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.
(5) Notwithstanding subsections (1) through (4) of this section, when establishing a methodology for a system 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 another rationale the city council finds reasonable.
(6) Credits shall not be transferable from one development to another.
(7) Credits shall not be transferable from one type of system development charge to another.
(8) Credits shall be used with seven years from the date the credit is given. [Ord. 385 § 12, 2010.]
4.20.130 Notice.
(1) The city shall maintain a list of persons who have made a written request for notification prior to adoption or modification of a methodology for any system development charge. Written notice shall be mailed to persons on the list at least 90 days prior to the first hearing to establish or modify a system development charge. The methodology supporting the system development charge shall be available at least 60 days prior to the first hearing to adopt or amend a system development charge. The failure of a person on the list to receive a notice that was mailed does not invalidate the action of the city.
(2) The city may periodically delete names from the list, but at least 30 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. 385 § 13, 2010.]
4.20.140 Segregation and use of revenue.
(1) 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 HMC 4.20.060.
(2) The city recorder shall provide the city council with an annual accounting by January 1st of each year 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 in the previous fiscal year. A list of the amount spent on each project funded in whole or in part with system development charge revenues shall be included in the annual accounting. [Ord. 385 § 14, 2010.]
4.20.150 Refunds.
(1) Refunds may be given by the city recorder upon finding that there was a clerical error in the calculation of the SDC.
(2) Refunds shall not be allowed for failure to timely claim credit or for failure to timely seek an alternative SDC rate calculation at the time of submission of an application for a building permit.
(3) The city shall refund to the applicant any SDC revenues not expended within 10 years of receipt. [Ord. 385 § 15, 2010.]
4.20.160 Implementing regulations – Amendments.
The city council delegates authority to the city recorder to adopt necessary procedures to implement provisions of this chapter including the administration of the program. All rules pursuant to this delegated authority shall be filed at City Hall and be available for public inspection. [Ord. 385 § 16, 2010.]
4.20.170 Appeal procedure.
(1) 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 recorder describing with particularity the decision of the city 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.
(2) Appeals of any other decision required or permitted to be made by the city recorder under this chapter must be filed in writing with the city recorder within 15 days of the date of the decision.
(3) After providing notice to the appellant, the city council shall determine whether the city recorder’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 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. The decision of the city council shall be reviewed only as provided in ORS 34.010 to 34.100, and not otherwise.
(4) A legal action challenging the methodology adopted by the city council pursuant to HMC 4.20.050 shall not be filed later than 60 days after the adoption. A person shall contest the methodology used for calculating a system development charge only as provided in ORS 34.010 to ORS 34.100, and not otherwise.
(5) A person who wishes to challenge the calculation of a system development charge must make a written challenge to the calculation of the system development charge and file the challenge with the city recorder within 10 days of receiving the calculation. The written challenge must describe with particularity the calculation which the person appeals.
(a) The written challenge shall state:
(i) The name and address of the appellant;
(ii) The nature of the calculation being appealed;
(iii) The reason the calculation is incorrect; and
(iv) What the correct determination of the appeal should be or how the correct calculation should be derived.
A person who fails to file such a written challenge within the time permitted waives his/her objections, and his/her objections shall be dismissed.
(b) After providing timely notice to the challenger, the city recorder shall determine whether the calculation is in accordance with the resolution containing the methodology used to establish or modify the system development charge adopted by the city council; and/or
(c) Unless the challenger and the city agree to a longer period, a written challenge to the calculation of the system development charge shall be heard at a public hearing within 45 days of the receipt of the written challenge. At least 14 days prior to the hearing, the city shall mail notice of the time and location thereof to the person who made the written challenge.
(d) The city council shall hear and determine the challenge on the basis of the person’s written challenge and any additional evidence he/she deems appropriate. At the public hearing the challenger may present testimony and oral argument personally or by counsel. The rules of evidence as used by courts of law do not apply.
(e) The person challenging the calculation shall carry the burden of proving that the calculation being appealed is incorrect and what the correct calculation should be or how a correct calculation should be derived.
(6) The city council shall issue a written decision within 20 days after the hearing and that decision shall be final. [Ord. 385 § 17, 2010.]
4.20.180 Prohibited connection.
No person may connect to the water or sewer systems of the city unless the appropriate system development charges have been paid or the lien or installment payment method has been applied for and approved. [Ord. 385 § 18, 2010.]
4.20.190 Penalty.
Violation of HMC 4.20.180 is punishable by a fine not to exceed $1,000 per day for each day that the connection exists without approval of the SDC application. [Ord. 385 § 19, 2010.]
4.20.200 Construction.
For the purposes of administration and enforcement of this chapter, unless otherwise stated in this chapter, the following rules of construction shall apply:
(1) In case of any difference of meaning or implication between the text of this chapter and any caption, illustration, summary table, or illustrative table, the text shall control.
(2) The word “shall” is always mandatory and not discretionary; the word “may” is permissive.
(3) Words used in the present tense shall include the future; and words used in the singular number shall include the plural and the plural the singular, unless the context clearly indicates the contrary.
(4) The phrase “used for” includes “arranged for,” “designed for,” “maintained for,” or “occupied for.”
(5) Where a regulation involves two or more connected items, conditions, provisions or events:
(a) “And” indicates that all the connected terms, conditions, provisions or events shall apply;
(b) “Or” indicates that the connected items, conditions, provisions or events may apply singly or in any combination.
(6) The word “includes” shall not limit a term to the specific example, but is intended to extend its meaning to all other instances of like kind or character. [Ord. 385 § 20, 2010.]