Item 2D: Adoption of MWMC Regional Wastewater SDCs

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Adoption of Resolution 4943 Adopting an Inflationary Adjustment of Systems Development Charge Rates for Regional Wastewater System Meeting Date: June 9, 2008 Agenda Item Number: 2D Department: Public Works Staff Contact: Fred McVey www.eugene-or.gov Contact Telephone Number: 682-5216 ISSUE STATEMENT The proposed resolution implements an inflationary cost adjustment to the Regional Wastewater System Development Charge (SDC) rates as requested by the Metropolitan Wastewater Management Commission (MWMC). The Regional Wastewater SDC fee schedule is proposed to be modified by incorporating changes in Eugene’s SDC Methodologies document. This action is being placed on the consent calendar because the resolution adopts a standard periodic adjustment following policies and procedures previously adopted by the City Council. BACKGROUND Council Action History The SDC Methodologies were adopted by Resolution No. 4900, effective May 7, 2007. Since the adoption of Resolution No. 4900, inflationary adjustment of the SDC rates for the Regional Wastewater System were adopted by Administrative Order No. 58-07-08-F, effective August 20, 2007; inflationary adjustment of the SDC rates for the Local Wastewater, Stormwater, and Transportation Systems were adopted by Administrative Order No. 58-08-02-F, effective April 3, 2008; and inflationary adjustment of the SDC rates for Parks was adopted by Resolution No. 4929, effective April 3, 2008. Financial Considerations SDCs provide a funding mechanism to account for the costs and value of infrastructure system capacity required by new development. The SDC Methodologies adopted by the council provide for periodic adjustments to SDCs to further account for changes in construction costs to provide this capacity. The proposed adjustment to the SDC rates for the Regional Wastewater System is based on the adopted 20-city national average construction cost index as published by the Engineering News-Record; the applicable index reflects a 2.67% increase in construction costs. Section 2.4 of the SDC Methodologies requires that adjustment of fees by more than 5% within any 12-month period be implemented by resolution of the City Council. The previous 4.20% inflationary adjustment to the Regional Wastewater rate effective August 20, 2007, together with this proposed adjustment to become effective on July 1, 2008, would result in an overall fee adjustment of more than 5% within a 12-month period. The net effect of applying the proposed +2.67% index to both the rate and credit components of the adopted MWMC methodology is a range of final fee adjustments from +2.0% to +2.2% dependent upon category of assigned wastewater strength of discharge. Z:\CMO\2008 Council Agendas\M080609\S0806092D.doc