Item B: Proposed Modifications to the Parks Systems Development Charge Methodology and Rates

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The SDC Project Team recommended an approach to implementing a nonresidential component using a 16.4 percent allocation of total growth costs to nonresidential development, with employment density as a primary factor in establishing a nonresidential rate structure. However, the RAC disagreed with this recommended approach. The RAC’s feedback was that nonresidential SDCs in general, and this approach in particular, were a complicated matter that would be difficult to explain, defend, and administer. The committee therefore recommended adding only one commercial park SDC element, a hotel/motel fee, to be included as part of the proposed residential SDC. Staff committed to present to City Council the RAC’s recommendation in addition to a nonresidential park SDC assessment option that aligns with the council’s prior direction. An additional option available to the council is to continue the current methodology approach to charge only residential development the parks SDC. Example effects of the three methodology options for treatment of nonresidential development are reflected in Table 1 of the AIS. Another key issue which emerged from the parks SDC review relates to growth allocation methods for neighborhood parks. The preliminary SDC methodology as developed by the SDC Project Team and reviewed by the RAC, and as used in developing preliminary growth allocations in the PROS Project and Priorities Plan (project list), utilizes a system-wide capacity analysis as the basis for allocating costs. Under this approach, the planned system-wide level of service (LOS) by park type is used to determine the capacity needs of existing park users and growth. The capacity needs of existing park users are then compared to the existing parks inventory in relation to the planned LOS to determine if there are existing system deficiencies that would warrant an allocation of future park capacity improvements to existing users. Based on the adopted project list, the planned LOS for neighborhood park acquisition is slightly lower than the current LOS, meaning there is no existing deficiency from an overall or system-wide perspective. In this case, 100% of new neighborhood park land acquisition cost in the project list is allocated to future development, since the existing inventory is assumed to satisfy the needs of existing park users. The use of a system-wide capacity analysis for purposes of cost allocation was endorsed by a majority of the RAC for a number of reasons including consistency with the City’s other SDC methodologies (i.e., stormwater, local wastewater, and transportation), technical and administrative feasibility, and general equity. However, during City Council and RAC deliberations, the Home Builders Association of Lane County (HBA) raised concerns over this approach. The concerns related primarily to issues of equity, and whether a system-wide approach is appropriate for allocation of neighborhood parks which are planned for individual service areas within the overall park system. As a response to the HBA’s concern, the SDC Project Team conducted a capacity analysis for individual neighborhood park service areas. The results of this analysis were then used to develop an alternate allocation of existing and future neighborhood parks between existing park users (existing population) and future users (growth population), and a resulting estimated SDC was derived. The resulting SDC would be applied uniformly to all development irrespective of geographic location. The service area-based allocation method relies on more complex assumptions about the location, size and nature of future park service areas and the specific development characteristics within service areas to derive a more specific area-based allocation of capacity demand. While more complex than the system-wide allocation method used for other park types, the service area method has the advantage of addressing potential equity concerns specific to the neighborhood park category in that it is more L:\CMO\2006 Council Agendas\M061025\S061025B.doc