Chapter 3.20
SYSTEM DEVELOPMENT CHARGES
Sections:
3.20.050 System development charge established.
3.20.070 Authorized expenditures.
3.20.080 Expenditure restrictions.
3.20.100 Collection of charge.
3.20.150 Segregation and use of revenue.
3.20.170 Prohibited connection.
Legislative history: Ord. 728.
3.20.010 Findings.
The Oregon Legislature, through the enactment of ORS 223.297 to 223.314, has authorized local governments in Oregon to establish system development charges (SDC) on new development.
(1) The imposition of SDCs ensures that new development bears a proportionate share of the cost of providing essential capital facilities and improvements necessary to accommodate such development as determined in a methodology as outlined in ORS 223.297.
(2) SDCs established by this chapter are derived from, and based upon, and do not exceed the cost of maintaining the existing level of services necessitated by the new development for which the fee is levied. [Ord. 704 § 1, 1998].
3.20.020 Purpose.
The purpose of system development charge is to impose a portion of the 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. 704 § 2, 1998].
3.20.030 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. 704 § 3, 1998].
3.20.040 Definitions.
For the purpose of this chapter, the following definitions apply:
“Capital improvements” means public facilities or assets used for (1) water supply, treatment or distribution or any combination, (2) wastewater collection, transmission, treatment or disposal or any combination, (3) drainage and flood control, (4) transportation, or (5) parks and recreation.
“Development” means 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 cost associated with capital improvements to be constructed after the date the fee is adopted pursuant to MCMC 3.20.050.
“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 purposes.
“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.
“Qualified public improvements” means a capital improvement that is (1) required as a condition of residential development approval, (2) identified in the plan adopted pursuant to MCMC 3.20.090, and (3) located in whole or in part 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.
“Reimbursement fee” means a fee for the cost associated with capital improvements constructed or under construction on the date the fee is adopted pursuant to MCMC 3.20.050.
“System development charge” means a reimbursement fee, an improvement fee, or a combination thereof. An SDC will be collected at the time of increased usage of a capital improvement, at the time of issuance of a development permit or a building permit, or at the time of connection to the capital improvement. “System development charge” includes that portion of the 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. 704 § 4, 1998].
3.20.050 System development charge established.
(1) System development charges shall be established and may be revised by resolution of the 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.
(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 sewer facilities, storm sewers or water facilities of the city. [Ord. 704 § 5, 1998].
3.20.060 Methodology.
A methodology for establishing the improvement fee or the reimbursement fee, or both, shall be contained in a resolution adopted by the city council. Any changes or amendments to the methodology shall be made by resolution.
(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 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, rate-making principles employed to finance publicly owned capital improvements, and other relevant factors identified by the council. The methodology shall promote the objective that future system 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. [Ord. 704 § 6, 1998].
3.20.070 Authorized expenditures.
(1) Reimbursement fees shall be applied only to capital improvements associated with 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, 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 improvement funded by improvement fees must be related to demands created by current or projected development.
(3) 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 MCMC 3.20.090.
(4) Notwithstanding subsections (2) and (3) of this section, system development charge revenues may be expended on the direct cost of complying with the provisions of this chapter, including the cost of developing system development charge methodologies and providing an annual accounting of system development charge expenditures. [Ord. 704 § 7, 1998].
3.20.080 Expenditure restrictions.
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.
System development charges shall not be expended for costs of operation or routine maintenance of capital improvements. [Ord. 704 § 8, 1998].
3.20.090 Improvement plan.
Prior to the establishment of a system development charge, the council shall adopt a plan that (1) lists the capital improvements that may be funded with improvement fee revenues; (2) lists the estimated cost and time of construction of each improvement; and (3) describes the process for modifying the plan. In adopting this plan, the council may incorporate by reference all or a portion of any public facilities plan, master plan, capital improvement plan or similar plan that contains the information required by this section. The council may modify such plan and list at any time. 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 the 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. 704 § 9, 1998].
3.20.100 Collection of charge.
(1) Applicable system development charges are payable upon issuance of (a) a building permit or a development permit, (b) a land use permit or action not requiring the issuance of a building permit, (c) a development permit for development not requiring the issuance of a building permit, (d) a permit or approval to connect to the water system, (e) permit or approval to connect to the sewer system, or (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.
(3) If development is commenced or connection is made to the water and sewer system without an appropriate permit, the system development charge is immediately due and payable.
(4) The city 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 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 MCMC 3.20.110, or unless an exemption is granted pursuant to MCMC 3.20.120. [Ord. 704 § 10, 1998].
3.20.110 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 semi-annual installments, to include interest on the unpaid balance, in accordance with ORS 223.208.
(2) The city 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 computation errors.
(3) An application 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.
(4) The city shall record 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 shall docket the lien in the lien docket and record the installment payment contract in the county lien records. 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 council. The lien shall be enforceable in the manner provided in Chapter 223 ORS. [Ord. 704 § 11, 1998].
3.20.120 Exemptions.
Structures and uses established and existing on or before the effective date of the ordinance codified in this chapter 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 and sewer charges pursuant to the terms of this chapter upon the receipt of a permit to connect to the water or sewer system.
(1) 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 system development charge.
(2) 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.
(3) A project financed by city revenues is exempt from all portions of the system development charge. [Ord. 704 § 12, 1998].
3.20.130 Credits.
When 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, a credit shall be issued.
(1) A credit shall be given for the cost of a qualified public improvement associated with a residential development. If a qualified public improvement is located partially on and partially off the parcel that is subject to developmental approval, the credit shall be given only to the portion of the improvement required as a condition of development.
(2) Credit provided for under this subsection shall be limited to the improvement fee. No credit shall exceed the improvement fee even if the cost of the capital improvement exceeds the applicable improvement fee.
(3) Credit shall not be transferable from one development to another.
(4) Credit shall not be transferred from one type of capital improvement to another. [Ord. 704 § 13, 1998].
3.20.140 Notice.
(1) 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 system development charge. Written notice shall be mailed to persons on the list at least 90 days prior to the final hearing to adopt or amend a system development charge. The methodology supporting the adoption or amendment 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 shall 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.
(3) The city shall advise a person who makes a written objection to the calculation of a system development charge of the right to petition for review pursuant to ORS 34.010 to 34.100. [Ord. 704 § 13A, 1998].
3.20.150 Segregation and use of revenue.
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. Use of system development charge revenues shall be in strict accordance with MCMC 3.20.070.
The city recorder shall provide an annual accounting by January 1st of each year, for system development charges showing the total amount of the 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. 704 § 14, 1998].
3.20.160 Appeal procedure.
A person aggrieved by a decision required or the action of the city recorder under this chapter, or a person challenging a specific use of system development charge revenues, may appeal to the city council by filing a written request with the city recorder describing their complaint and requesting an appeal.
(1) Appeal of a specific revenue use must be filed within two years of the date of the alleged improper use. Appeals on any other decision must be filed within 10 days of the date of the decision.
(2) The council shall decide all appeals made pursuant to this section. If the council determines that there has been an improper expenditure of system development charge revenue, 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 to replace the misspent money. The decision of the council shall be judicially reviewed only as provided in ORS 34.010 to 34.100.
(3) A legal action challenging the methodology adopted by the council pursuant to MCMC 3.20.050 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 34.100, and not otherwise. [Ord. 704 § 15, 1998].
3.20.170 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. 704 § 16, 1998].
3.20.180 Penalty.
Violation of this chapter is punishable by a fine not to exceed $250.00. Each day a violation continues shall be a separate violation punishable by a separate fine for each day. [Ord. 704 § 17, 1998].
3.20.190 Construction.
The rules of statutory construction contained in Chapter 174 ORS are hereby adopted, and by this reference made a part of this chapter. [Ord. 704 § 18, 1998].
3.20.200 Classification.
The council determines that any fees, rates or charges imposed by this chapter or resolution pursuant to this chapter are not taxes subject to limitations of Article XI, Section 11 or 11(b) of the Oregon Constitution. [Ord. 704 § 20, 1998].