Item 1: PH on Ordinance Establishing Real Property Value-Added Charge

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The proposed ordinance is consistent with those objectives. The ordinance’s stated purpose is to recover from a property owner a portion of the increase in value of real property resulting from a zone change, plan (Metro or refinement plan) change, or UGB change. The funds raised by this real property value- added charge would be used for Measure 37 claims. The proposed value-added charge is 25% of the increase in real market value resulting from the action. Land values for the different zones and plan designations would be established by administrative order of the City Manager based on the median real market value per acre for land within the City with that zone or designation based on data maintained by Lane County Assessment and Taxation. Provision would be made for property owners who disagree with the assigned value to secure their own appraisal and to appeal a determination by the City that does not accept the valuation in that appraisal. A property owner requesting a zone change, plan change or UGB change would be required to deposit the value-added charge at the time the application is submitted. If the application is denied, the amount deposited would be returned to the applicant. If the applicant fails to deposit the charge, the amount would become a lien upon the applicant’s property and entered in the City’s lien docket. When property becomes subject to a value-added charge as a result of a zone change, plan change, or UGB change that was not requested by or on behalf of the property owner, the City would forward to the property owner a notice identifying the potential value-added charge. The charge would not become due and payable until such time as the property owner takes some action, such as submission of an application for a development permit or land use permit that relies upon and takes advantage of the City- initiated action. The value-added charge would have to be deposited at that time, and thereafter the application would be processed in the same manner as for citizen-initiated changes. In order to ensure public awareness of this potential charge, the notice would be recorded in the City’s lien docket. The resources needed to implement the value-added charge for “requested changes” are not expected to be significant. However, to implement the charge for “non-requested” changes (i.e. the prior paragraph), there may be a significant resource impact. For these non-requested changes, the City would need to keep track of all of the properties (including any new lots created by subdivisions) and the changes in zoning or plan designations, and then check those whenever the property owner submits some application to the City related to the property. Without knowing the number or magnitude of these “non-requested” changes, it is impossible to predict the amount of resources needed to implement this part of the proposed ordinance. In order to ensure that the value-added charge is paid, the ordinance would prohibit the submission of an application for a building permit or other development permit until the charge is paid. The proposed would apply to any zone change or plan amendment ordinance (section 4) also provides that it application pending at the time of adoption (for example, McKenzie-Willamette’s application). This was not an issue discussed by the council during its work sessions. It is highlighted here to ensure that the council has a chance to clarify whether or not this provision is consistent with the council’s intent. RELATED CITY POLICIES As previously indicated, creation of a fund to pay compensation for valid Measure 37 claims could help the City preserve its regulatory authority under its Land Use Code (Chapter 9). L:\CMO\2006 Council Agendas\M061016\S0610161.doc