Item 2C: Adoption of Resolution 4964 on SDCs

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The proposed adjustment to the parks SDC is based on two adopted cost indices: 1) as with other local systems, the ENR CCI is used to adjust park development costs; and, 2) the Lane County Assessment & Taxation Office’s published Sales Ratio Report is used to adjust park land acquisition costs. Application of the 2008 Sales Ratio Report reflects a 23.2% increase in average costs of vacant residential and recreational land over that used in the current parks SDC rate. The combined effect of applying these two indices to the parks SDC is that rates for residential development types increase by approximately 16.0% while rates for nonresidential development types will increase by 22.0%. The difference in parks SDC rate adjustments between residential and nonresidential categories is related to the different effect of the inflationary adjustments on the park bond debt service SDC credit calculation versus the gross SDC calculation. This is a result of how construction and land costs impact the various projects in the PROS Project Plan; the SDC rate is based on a different mix of construction and land acquisition project costs than the mix of these project costs anticipated to rely on property tax or bond funding which form the basis of the SDC credit. Due to these differences, the gross SDC per unit increases more than the credit. Because the nonresidential SDC has a higher credit against the gross SDC per unit to begin with, it results in the net SDC increasing more for nonresidential than residential development types. The proposed adjustments across all four local systems translate to an approximate 9.6 % increase of $700 in City of Eugene SDCs (including the current regional wastewater SDC) for a typical new single family residence, from a current total of $7,325 to a proposed total of $8,025. Other development types would experience similar proportionate increases in total SDCs, typically ranging from approximately 9% to 12% over current totals. Council Goals/Action Priorities This agenda item relates to one of the council’s current goals, the Transportation Initiative, in that a portion of transportation SDC revenues are dedicated to preservation and rehabilitation of the existing system. Timing Local SDC rates were last updated in April 2008, reflecting costs and rate factors current through December 2007. The proposed adjustment to rates based on construction cost inflation for the prior 12- month period ending in December 2008, provides for timely update of rates. While the Eugene Code and Oregon SDC statutes do not require notice of adoption by resolution of inflationary adjustments based on a cost index, a notice has been provided as a courtesy to interested persons. The notice was published in The Register-Guard on February 6, 2009, and posted, along with the draft resolution and exhibit, at Eugene City Hall and the Public Works Engineering offices lobby. This information has also been made available at the City’s web site at www.eugene-or.gov/SDC. The adjusted rates are proposed to go into effect on April 3, 2009. RELATED CITY POLICIES The council has adopted by resolution Growth Management Policy #14 which provides that development shall be required to pay the full cost of extending infrastructure and services. Chapter 223 of the Oregon Revised Statutes prescribes the rights and responsibilities of local governments in developing and imposing SDCs, providing for adoption of a cost index as an Z:\CMO\2009 Council Agendas\M090223\S0902232C.doc