Item 4: Resolution on Systems Development Charges

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provisions. The City of Eugene has implemented an administrative fee to account for SDC administrative revenues and expenditures separate from SDC capital project expenditures. Administrative costs funded through the administrative fee include: ? Costs of developing and modifying SDC methodologies through a system of periodic review and regular update to ensure accurate cost recovery. This work helps ensure compliance with the council’s Growth Management Policy and adequate funding for planned capital projects. ? Determining the amount and administering use of required credits and exemptions, including public improvement credit, credits for prior payment and existing uses, and exemptions for qualified affordable housing projects. ? Determination of the amount of SDCs associated with proposed development and administration of SDCs associated with building permits. ? Accounting and fund management for SDC revenues and expenditures as required by law. Over the last several years, SDC administrative expenditures have out-paced revenues. This is primarily due to reduced revenues resulting from declining development activities. While administrative costs have also been reduced during this period, a severe imbalance in the SDC administrative fund has resulted. The fund’s six-year forecast projects ongoing deficits in future years without additional decreases in costs and increased revenues over the forecast period. A rate of 9% is proposed as the minimum rate, when combined with cost reductions, adequate to continue provision of basic SDC administrative services. This rate is consistent with existing administrative fee rates charged locally for building permit administration. The effect of the proposed rate increase of 4% translates to adding approximately $280 in total City of Eugene SDCs for a typical new single-family residence, from a current total of $7,325 to a proposed total of $7,604. Other development types would experience similar proportionate increases in total SDCs of approximately 4%. The minimum administrative fee is proposed to be adjusted to more accurately capture a fixed level of costs associated with building permits that are charged a relatively small net SDC; typically these permits involve the calculation and administration of SDC credits. No change in the maximum administrative fee of $30,000 is proposed at this time. Council Goals/Action Priorities This agenda item relates to one of the council’s current goals, the Transportation Initiative, in that transportation SDC revenues help fund a portion of the transportation system capital needs, including preservation and rehabilitation of the existing system. The SDC administrative fee helps fund the development, collection and administration of transportation as well as other SDCs. Timing Local SDC rates were last updated in April 2008, reflecting costs and rate factors current through December 2007. Recognizing the current difficult economic conditions, annual inflationary adjustments to SDCs which would normally have become effective in April 2009, have been postponed through the remainder of the calendar year. The proposed SDC administrative fee increase was also temporarily postponed; originally scheduled, if approved by the council, to become effective May 11, the increase is now proposed to become effective July 1, 2009. While these delays in fee increases will have an effect on SDC funding available to cover the costs of administering SDCs and on planned capital projects, staff wishes to mitigate potential impacts of fee increases on the local economy and have delayed Z:\CMO\2009 Council Agendas\M090526\S0905264.doc