Item 2C: Approval of Local SDC Cost Adjustments

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The proposed adjustments to the local wastewater, stormwater, and transportation SDCs are based on the 20-city national average Construction Cost Index as published by the Engineering News-Record (ENR CCI) and results in an increase of 5.1 percent to these systems SDCs. 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 (LCA&T) published Certified Ratio Study is used to adjust park land acquisition costs. Use of applicable adjustment factors from the published 2011 and 2012 Certified Ratio Studies (reflecting sales in calendar years 2010 and 2011 respectively) reflects an average no-net change in costs of Eugene area vacant residential and recreational land over that 24-month adjustment period. The combined effect of applying these two indices to the parks SDC is that rates for residential development types increase approximately 2.4 percent while rates for nonresidential development types increase approximately 2.0 percent. 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 and property tax SDC credit calculation versus the gross (pre-credit) SDC calculation. The proposed local SDC cost adjustments are proposed to be effective on the same date (July 1, 2013) as cost adjustments to the regional wastewater SDCs, as requested by the Metropolitan Wastewater Management Commission (MWMC), which the City Manager intends to adopt administratively. The effect of the proposed changes to both regional and local SDC rates on a typical single-family development results in a +3.66 percent increase of total SDCs assessed, from $8,942.99 to $9,270.44 (+$327.45). A comparison of total SDCs currently assessed for a typical single-family home in other various Oregon communities is provided below. Variations with Eugene SDCs are noted:  Portland: $15,977 (water SDC collected not included);  Springfield: $15,098 (effective July 1, 2013 and includes Willamalane park SDC)  Bend: $12,465 (no stormwater SDC);  Salem: $9,285 (water SDC collected not included);  Medford: $8,189 (no stormwater SDC). Council Goals/Action Priorities This agenda item relates to the council’s goal of Fair, Stable and Adequate Financial Resources. Timing Local SDCs were last adjusted in June 2011, reflecting ENR CCI adjustments through December 2010 and LCA&T’s Certified Ratio Study data through December 2009. The proposed cost adjustments, based on the ENR CCI through December 2012 and LCA&T Certified Ratio Study data through December 2011, provides for a timely update of SDC rates. While the Eugene Code and Oregon SDC statutes do not require notice of adoption by resolution of cost adjustments based on an adopted cost index, a notice has been provided as a courtesy to S:\CMO\2013 Council Agendas\M130624\S1306242C.doc