Item C: Systems Development Charges

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Current Status of Systems Development Charges Meeting Date: July 13, 2009 Agenda Item Number: C Department: Public Works Staff Contact: Fred McVey www.eugene-or.gov Contact Telephone Number: 682-5216 ISSUE STATEMENT The purpose of the work session is to provide the City Council with information related to the current status of Systems Development Charges (SDC) in Eugene with respect to policy framework, purpose, use of funds, financial impacts on development projects, and efforts to provide relief for development during the current economic downturn. BACKGROUND Council Action History The last major update to Eugene SDCs was in May 2007, when the council adopted the SDC Methodologies by Resolution No. 4900, updating the parks SDC methodology and rates. Resolution No. 4900 has subsequently been amended by Resolution Nos. 4929 (inflationary adjustment to Parks SDC rates effective April 3, 2008) and 4943 (inflationary adjustment to regional wastewater SDC rates effective July 1, 2008). In addition, inflationary adjustments of SDC rates for the local wastewater, stormwater, and transportation systems were adopted by Administrative Order No. 58-08-02-F, effective April 3, 2008. On May 26, 2009, the council approved Resolution No. 4977 implementing administrative fee adjustments with an amended effective date of January 1, 2010. Purpose and Uses of SDCs SDCs are intended to provide an equitable means of funding capital improvements that provide capacity in infrastructure systems needed to serve growth. SDCs collected in Eugene fund capital projects in five primary infrastructure systems: wastewater, stormwater, parks, transportation and water. The wastewater SDC consists of both a local collection system and regional treatment system SDCs; the regional wastewater SDC is collected by the City with all revenues passed through to MWMC. The water system SDC is collected directly and administered by EWEB. Similar to SDCs, a construction excise tax is imposed by the Bethel School District to help fund capital improvements for school facilities. Two forms of SDCs, reimbursement and improvement fees, recognize that capacity to meet the needs of growth is provided in two forms – new capacity-increasing capital improvements, and reimbursement for extra capacity built in the past in systems and paid for by the general community. SDCs must be expended on capital projects related to the system for which they are collected. Improvement fee SDCs may be spent only on capacity-increasing projects. Reimbursement fees may also be spent on rehabilitation projects. The City has a combination of both reimbursement and improvement fee elements in each system’s SDC. Z:\CMO\2009 Council Agendas\M090713\S090713C.doc