HomeMy WebLinkAboutItem B: Proposed Modifications to the Parks Systems Development Charge Methodology and Rates
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Work Session: Proposed Modifications to the Parks Systems Development
Charge Methodology and Rates
Meeting Date: October 25, 2006 Agenda Item Number: B
Department: Public Works Staff Contact: Fred McVey
www.eugene-or.gov Contact Telephone Number: 682-5216
ISSUE STATEMENT
The purpose of this work session is to obtain City Council direction regarding proposed modifications to
the parks system development charge (SDC) methodology. The proposed modifications reflect a
comprehensive review and update to the methodology and rates. Key issues emerging from the review
include potential imposition of a non-residential charge, and the growth allocation method to be used for
neighborhood parks.
BACKGROUND
The council last adjusted the parks SDC in July 2003. The adjustment was considered an interim update
while staff and SDC consultants, with the assistance of the Public Works Rates Advisory Committee
(RAC), completed a comprehensive review of the parks SDC. This review was conducted in parallel
with the Parks Recreation and Open Space (PROS) Plan update. The interim update adjusted the SDC
rates based on costs of parks land acquisition and development, resulting in an approximate 37%
increase in the parks SDC, but did not modify the SDC methodology itself.
In reviewing interim adjustments to the parks SDC on April 28, 2003, the City Council passed a motion
directing the City Manager to pursue future imposition of park SDCs on industrial, commercial, and
office uses. Public Works staff and SDC consultants (SDC Project Team) worked with the RAC to
evaluate potential methodological approaches to respond to the council’s direction. These approaches
are described in more detail in Attachment A. Key findings of the review of available options include
the following:
Nonresidential parks SDCs are assessed by other communities; however, assessment methods
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often rely on an inferred relationship and indirect measurement of capacity demand.
A nexus between nonresidential development and park capacity demand, and a method
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distributing capacity demand between residential and nonresidential, can be established using the
results of the City of Eugene parks and recreation facilities’ user survey.
Inclusion of a non-residential SDC is a methodological choice which is revenue neutral. A
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nonresidential SDC expands the user base (i.e. equivalent population), across which park
capacity costs are divided; it does not increase the system-wide capacity need or costs, nor
provide additional SDC revenue.
A key challenge in developing a nonresidential SDC is determining assessment methods which
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provide equity amongst various types and sizes of development.
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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
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consistent with the service area basis for planning neighborhood parks. The neighborhood parks growth
allocation methods are described in more detail in Attachment B.
In addition to these key issues and options, the comprehensive review of the parks SDC resulted in a
number of proposed modifications developed by the SDC Project Team and supported by a majority of
the RAC. A summary of key elements of the proposed methodology is included in Attachment C.
Table 1 below reflects preliminary estimated charges for example development types based on the
proposed methodology and reflecting the options presented to the council. These SDC estimates are
based on underlying project cost estimates contained in the adopted PROS Project and Priority Plan
which were developed over two years ago. It is therefore recommended that the final proposed SDC
rates be developed applying adjustments based on proposed construction and land cost indexes to
provide a current level of cost recovery. The current parks SDC is $1,334.65 per dwelling unit.
Table 1
SDCs for Sample Developments – System-Wide vs. Service-Area Allocation for Neighborhood Parks
System-wide Allocation Method for Service-Area Allocation Method for
Neighborhood ParksNeighborhood Parks
No Hotel/Motel All No Hotel/Motel All
Type of Development
NonresidentialOnlyNonresidentialNonresidentialOnlyNonresidential
(units same as Table 6)
Units
Single - Family Dwelling 1DU$3,535$3,458$2,957$3,481$3,406$2,909
Apartment Building 104units$232,589$227,521$194,522$229,029$224,047$191,395
Single/Multi Tenant Office Building 67.5TGSFnana$97,524nana$95,957
Lower Turnover Restaurant 5.2TGSFnana$2,737nana$2,693
Supermarket 47.4TGSFnana$24,951nana$24,550
Hotel / motel 70roomsna$176,981$151,312na$174,279$148,880
Mayor Piercy, the council and interested persons were notified of proposed modifications to Eugene
Systems Development Charge (SDC) methodologies on October 13, 2006, providing a 90-day notice of
intent to modify the SDC as required by Oregon Revised Statutes. It is intended that a draft of the
proposed methodology, based on direction from the council, will be made available for public review on
or before November 17, 2006. A public hearing on the proposed modifications is tentatively scheduled
for January 16, 2007.
RELATED CITY POLICIES
Growth Management Policy 14 is directly related to implementation and modification of SDCs.
The council’s adoption of the PROS Project and Priority Plan provides policy-level direction on
intended parks system projects and levels of service which are key factors in the proposed modifications
of the parks SDC.
COUNCIL OPTIONS
Direct the City Manager to move forward with proposed modifications to the parks SDC to:
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a)include a charge for all nonresidential development; or,
b)include a charge for hotel/motel development as a residential category; or,
c)charge residential development only, consistent with the current methodology; and,
d)use a system-wide allocation method for costs of neighborhood parks; or,
e)use a service area-based allocation method for neighborhood parks.
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Direct the City Manager to alter proposed modifications to the parks SDC.
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Direct the City Manager not to move forward with modifications to the parks SDC at this time.
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CITY MANAGER’S RECOMMENDATION
The City Manager recommends that the Mayor and City Council direct the City Manager to move
forward with proposed modifications to the parks SDC based on inclusion of a charge for all
nonresidential development and a service area-based growth allocation method for neighborhood parks.
SUGGESTED MOTION
Move to direct the City Manager to proceed with proposed modifications to the parks SDC based on
inclusion of a charge for all nonresidential development and a service area-based growth allocation
method for neighborhood parks.
ATTACHMENTS
A.Parks SDC nonresidential assessment options
B.Neighborhood park growth allocation methods
C.Summary of proposed parks SDC methodology elements
FOR MORE INFORMATION
Staff Contact: Fred McVey, Engineering Data Services Manager
Telephone: 682-5216
Staff E-Mail: fred.mcvey@ci.eugene.or.us
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ATTACHMENT A
Public Works
Engineering
City of Eugene
MEMORANDUMMEMORANDUM
858 Pearl Street
Eugene, Oregon 97401
(541) 682-5291
(541) 682-5032 FAX
Date:
October 19, 2006
To:
Mayor Piercy and City Council
From:
Fred McVey, 682-5216
Engineering Data Services Manager
Subject:
Parks SDCNonresidential Assessment Options
This memorandum presents information to the City Council related to methodological options
for calculation of nonresidential parks system development charges (SDCs). In particular, two
nonresidential parks SDC approaches are presented for the Council’s consideration: the first
considers all nonresidential developments, and the second develops SDCs for tourist
accommodation developments only. The impact of these approaches on different types of
development is illustrated.
Background
Eugene’s current SDC methodology assesses parks SDCs to residential development only. In
reviewing interim adjustments to the current parks SDC on April 28, 2003, the City Council
passed a motion directing the City Manager to pursue future imposition of park SDCs on
industrial, commercial, and office uses. City staff and SDC consultants (SDC Project Team)
worked with the Public Works Rates Advisory Committee (RAC) to evaluate potential
methodological approaches to respond to the Council’s direction. As recapped below, this effort
included examining approaches in other communities, commissioning a City parks user survey,
and developing approaches to assessing the parks SDC on various types and sizes of
nonresidential development.
Approaches in Other Communities
The analysis began with a review and analysis of approaches used in other communities to
assess SDCs on nonresidential land uses. This effort aimed to broaden understanding of the
nexus between nonresidential land uses and parks, and to evaluate the suitability of various SDC
models to the City of Eugene. The results highlighted that an underlying rationale for charging
nonresidential SDCs is that additional park usage and demand is generated by nonresidential
development through employees and/or visitors using parks.
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The analysis identified four models for nonresidential park SDCs. These included:
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– bases the parks SDC on survey results, which provide data on the
Actual use model
proportionate use of parks by residents and employees. This approach was used in
California, Oregon, Arizona, and British Columbia, which was the widest geographic area
among approaches identified. None of the surveyed municipalities that follow the actual use
approach have been challenged legally on their parks SDC.
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– bases the SDC on the number of hours that residents and
Hours of opportunity model
employees have available during the day to use parks. It assumes that employment brings
people into the municipality and creates a demand on parks. This approach was followed in
municipalities in Oregon and California.
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– this model assumes that only residents and
Tourist accommodation development model
hotel/motel guests use parks. Municipalities that apply this model often have an economy
that relies heavily on tourism. (However, other municipalities surveyed, that also rely
significantly on tourism, have SDCs for commercial/industrial users, including
hotels/motels.) This approach was found in Oregon, Florida, and Utah.
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– in this model, the SDC is seen as providing compensation for a lost
Opportunity cost model
public good, as opposed to buying into a benefit for growth. This approach is not widely
used, and was found in Utah only.
Of the models identified, only the actual use model provided a direct nexus between
nonresidential development and park use. For this reason, the Project Team pursued a parks and
recreation facilities’ user survey, discussed below.
The communities’ surveyed also revealed that a variety of means are used to determine the
created by different land uses. These means, typically based on the
amount of capacity demand
size and type of development, included:
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Number of employees (typically based on employee density per square foot of building
space; in one case measured by number of parking spaces)
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Number of motel/hotel rooms or their related size (for communities only charging the
nonresidential fee on motels/hotels)
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Construction value
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Location / land value (a factor on top of employee density)
Each approach was evaluated and found to have shortcomings in terms of linking capacity costs
with estimated park demand of nonresidential development. The approaches inferred this nexus
and generally were not based on direct measurements or specific data, which again underlined
the value of a parks and recreation facilities’ user survey.
In addition to conducting an analysis of practices in other communities, the Project Team
reviewed available literature on this topic. A recently conducted study on non-residential parks
1
SDCs, conducted in Oregon by Don Ganer & Associates, included interviews with several
representatives of stakeholder organizations. These revealed that the most frequently identified
1
Portland Parks and Recreation: Non-Residential Parks SDC Feasibility Study
, by Don Ganer & Associates, Inc., updated May
11, 2005 (from draft of March 3, 1999), page 15.
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issue was the essential nexus between non-residential development and parks/recreation
facilities; stakeholders were skeptical that such a nexus exists. This, again, underlined the
importance of conducting a parks’ user survey to establish the nexus.
Parks and Recreation Facilities’ User Survey
In February 2004, the SDC Project Team issued a request for proposals (RFP) to conduct a City of
Eugene Parks and Recreation Facilities’ User Survey. The objectives of the survey were to
provide a more thorough understanding of park usage and data to evaluate a nexus between
residential/nonresidential development and the use of parks, open space and recreation facilities
in the City. It was expected that the consultant’s report would provide statistically sound results
that could be used as input to a revised SDC calculation method, which would include a charge
for residential and nonresidential development and potentially different types thereof.
Additionally, the statistical results were expected to provide input to the City’s parks, recreation,
and open space planning efforts.
Through a competitive process, the SDC Project Team selected Quantec, LLC, in association with
Bruce Appleyard, AICP, to undertake the survey. The Quantec team developed a survey of the
City’s parks and recreation “service population” (comprised of residents, employees and
visitors), and implemented it over a seven-week period beginning May 17 and ending July 7,
2004. The team undertook random intercept surveys of park users, using a detailed sampling
procedure by park, on weekdays, weekends, and holidays. The sample of parks was chosen to
represent park types used in the City’s current comprehensive park planning process. Key data
on surveys included:
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1,746 surveys were completed in 549 hours in the parks; 207 hours were spent on surveys
during the weekdays, 138 during weekends, and 204 during two holidays
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21 parks were represented
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20 percent of all surveys were with bicycle intercepts
As the raw data collected by the surveyors represented the activities and attitudes of park users
during the survey period, the results were then “weighted” to extrapolate findings to the overall
usage during the “dry season” and to the full year. The Quantec team prepared an analytical
report with their findings, and delivered a complete data file of the raw survey responses to the
City.
The SDC Project Team shared the consultant’s report with the RAC, and highlighted
implications of the results for the parks SDC. A key conclusion of the Project Team was that the
survey results could be used to calculate a percentage of parks usage which could be linked to
nonresidential uses. Several calculation approaches were reviewed with the RAC. In light of this
review, there was general consensus from the RAC to proceed in further examining a parks SDC
methodology using a proposed nonresidential share of 16.4 percent of total growth costs.
Assessment Alternatives
As the RAC had identified shortcomings with approaches used in other communities for
measuring park capacity demand by size and type of nonresidential land uses, the SDC Project
Team developed additional assessment alternatives for RAC consideration. The first such
approach was based on trip generation rates. Trip rates measure traffic activity at each type of
development and therefore include employees, customers, clients, and any other trips to the
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establishment. Though some RAC members supported the use of a nonresidential SDC
assessment based on trip rates (from an equity perspective), others indicated that employees
were a better link to park demand than trips. Other concerns with the trip generation approach
included the complexity of the methodology, ranges of trip rates within categories of
development types (tiers) and across tiers, consideration of vehicle occupancy load factors, etc.
There was general agreement of the need for a relatively simple methodology – like those based
on employment density – with a desire for greater equity (i.e., recognition of non-employee
driven park demand).
As an alternative to the trip generation approach, it was suggested that nonresidential
developments could be classified as either “High” or “Low” loading for park SDC assessment.
The park loading factor concept was designed as a means for recognizing potential park demand
above and beyond employment. It was intended to estimate additional people who visit a
nonresidential establishment and may also use the parks. However, determination of the
appropriate factors to apply to different land uses was considered problematic. The RAC raised
concerns about averaging data over tiers/classes of land uses. In addition, the concept was based
on International Building Code (IBC) data, rather than employment density data, and problems
were raised with interpreting occupancy capacity from the IBC to determine likely park use.
At the RAC’s June 2005 meeting, employment density was considered again as the basis for the
nonresidential SDC calculations, due to complications mentioned in relation to other proposed
approaches. 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 another nonresidential park SDC assessment option that
aligns with the City Council’s prior direction. These options are presented in this memo.
Nonresidential Parks SDC Assessment Options
Evaluation Criteria
The methodological approaches presented in this memorandum were developed with the
following objectives in mind:
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Equity (both among different types of nonresidential developments and different size
developments)
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Simplicity (both in terms of public understanding and administration)
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Defensibility (i.e., consistency with industry standard approaches and supportable by local
data)
A discussion of two nonresidential parks SDC approaches follows. The first considers all
nonresidential developments, and the second presents SDCs for tourist accommodation
developments only.
All Nonresidential Development
Through results of the parks survey conducted by the City in 2004, 16.4 percent of park usage
may be attributable to nonresidential development (as discussed in Parks Technical
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Memorandum #28). The remaining 83.6 percent of park usage is attributable to residential
development and is assessed based on resident population growth.
Growth in resident population during the planning period (i.e., 2005-2025) is estimated to be
43,819. If residential use is 83.6 percent of total park users, then the total population of park
users added by growth is 43,819/.836 = 52,415. The difference between total park user
population and resident population (8,596) is the ‘equivalent population’ attributable to
nonresidential development. This information may be used to develop a system-wide unit cost
of capacity for nonresidential development as follows:
Nonresidential Unit Cost = (Total Growth costs * Nonresidential share) / Equivalent Population Growth
$57.8 million * .164/8,596= $1,102 per person
While the development of the system-wide unit cost is fairly straightforward for residential and
nonresidential development alike, translating this cost into a specific charge for nonresidential
developments is more complex and requires the following additional methodological steps:
1.Determine nonresidential classes for purposes of parks SDC assessment.
2.Allocate equivalent population growth among nonresidential classes.
3.Determine equivalent population density (e.g., equivalent population per Thousand
Gross Square Feet [TGSF] of building) by class.
4.Determine SDC per TGSF by multiplying unit cost ($1,102) by equivalent population
density.
The analysis is described in more detail below.
– Nonresidential developments were classified
Step 1: Determination of Nonresidential Classes
into five categories (A to E), based on employee density. These classes – comparable to those
used in other communities – grouped all types of nonresidential development, including office,
industrial, retail/general services, institutional, warehousing, tourist accommodation, among
others. (The RAC had expressed interest in considering approaches that had a separate class for
tourist accommodation developments (i.e., hotel and motel), as this classification does.) These
groupings attempt to balance equity and simplicity objectives by minimizing the number of
classes, while recognizing some differences in development characteristics.
Table 1 summarizes the types of development included in each category. It should be noted that
k-12 schools are not included in these nonresidential classes. Based on park user survey results,
users associated with such schools were generally attributable to local residential uses and
related demand is accounted for in residential development categories.
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Table 1
Summary of Nonresidential SDC Classes
Class Development Types
A Hotels, motels, B&Bs, & other tourist accommodations
B Office (financial, investment, real estate, government, medical, legal & other
business/professional services), institutional, grocery, eating & drinking
establishments
C Industrial, wholesale, manufacturing, transportation, agriculture
D General retail & services, recreation
E Commercial warehousing & storage
– For purposes of SDC
Step 2: Allocation of Equivalent Population to Nonresidential Classes
assessment, the RAC has recommended that the impact of tourist accommodation rooms be
determined consistent with residential dwelling units: based on the average persons per unit,
unadjusted for occupancy rates. Table 2 shows the calculation of equivalent population (i.e.,
guests) for tourist accommodation development. Growth in guests is estimated based on the
projected growth in the number of rooms (507) and average occupancy per room (1.93). As the
table indicates, the portion of growth equivalent population attributable to tourist
accommodation development is 979.
Table 2
Calculation of Nonresidential SDC
(a) (b) (c) (d) (e) (f) (g)
Nonres. Units Persons Estimated % of Total Equiv. Equiv. SDC
Category per Unit Persons Employees Population Pop. per per
Unit Unit
Unit = Room per Room
A 507 979 na 979 $2,127
1.93 1.93
Unit = TGSF per TGSF
B 3,210 10,722 54.2% 4,130 $1,422
3.34 1.29
C 2,467 5,083 25.7% 1,958 $871
2.06 0.79
D 3,124 3,781 19.1% 1,456 $518
1.21 0.47
E 387 190 1.0% 73 $209
0.49 0.19
Subtotal 9,189 19,775 100.0% 7,618
Total 9,384 20,754 8,596
The equivalent population, net of tourist accommodation rooms, is then allocated to the other
classes of nonresidential development based on two variables: building size (i.e., TGSF) and
employment density (i.e., number of employees per TGSF). Current employment data by
standard industrial classification were analyzed along with data on existing building square
footage to determine estimated employment density by nonresidential class. Table 2 (column b)
shows the estimated number of employees per TGSF by class based on this analysis. The growth
in TGSF by class over the study period (column a) was estimated based on the current TGSF and
an assumed growth rate of 1.1 percent per year over the planning horizon (equal to estimated
population growth). From this information, the growth in employees by class was determined
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(column c), by multiplying column a by column b. The reasonableness of this approach was
verified by examining historical growth in local nonresidential TGSF.
Since there is local data on the number of employees and TGSF, but not on the number of visitors
(in total or by class – apart from tourist accommodation), employees are used to allocate
equivalent population across the nonresidential classes. An underlying assumption is that
number of visitors is generally proportionate to number of employees. So, column d calculates
the percent of total employees attributable to each nonresidential class. These percentages are
then used to distribute the growth in equivalent population (8,596) across the classes (column e).
– The equivalent population
Step 3: Determine Equivalent Population Density by Class
density (i.e., equivalent population per TGSF) by class is shown in Table 2 (column f), and is
determined by dividing the total growth in equivalent population (column e) attributable to each
class by the growth in TGSF (column a) for that class.
– The SDC is the product of the equivalent
Step 4: Determine SDC per TGSF by Class
population density (column f) and the system-wide unit cost per person ($1,102) described
previously. Based on the analysis presented in Table 2, the SDCs per TGSF range from $209 for
category E (e.g., warehousing) to $2,127 for category A (e.g., hotel).
Table 3 presents the complete SDC schedule for residential and nonresidential developments
based on the approach described above. It also projects the revenue recovery by class and the
portion of revenue to be recovered from nonresidential development: 16.4 percent.
Table 3
Preliminary SDC Schedule and Estimated Revenue Generation
Category Persons per SDC per Unit Equiv. Projected Projecte
Unit Dwelling Units d
Units/ Unit Revenue
Residential per Dwelling Unit Dwelling Units
Single-family 2.64 $2,909 1.00 10,548 $30,686,251
Duplex/TH/MH 2.14 $2,358 0.81 3,063 $7,223,744
Multifamily 1.67 $1,840 0.63 5,633 $10,367,546
Nonresidential per Room Rooms
A 1.93 $2,127 0.73 507 $1,078,318
per TGSF TGSF
B 1.29 $1,422 0.49 3,210 $4,563,554
C 0.79 $871 0.30 2,467 $2,148,130
D 0.47 $518 0.18 3,124 $1,618,301
E 0.19 $209 0.07 387 $81,081
Tota $57,766,926
l
* TH=townhouse; MH=mobile home in park Total Nonresidential Share: 16.4%
Hotel/Motel Portion: 1.9%
Parks SDC for Tourist Accommodation Development Only
The analysis to develop a parks SDC follows the
tourist accommodation development only
concept proposed by the RAC, which is to assess parks SDCs only for residential and tourist
accommodation developments, and to treat hotel/motel units the same as residential living units
(i.e., to charge the SDC to these developments based on the average number of occupants per
unit.) For this option, the system-wide unit cost of capacity is determined by dividing the
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growth costs by the growth in resident population and hotel/motel guests. As presented in
Table 2, the projected number of new guests in tourist accommodation rooms is estimated to be
979 through the study period. Therefore the system-wide unit cost is calculated as follows:
Total Growth cost /Resident Population Growth + New Hotel/Motel Guests
$57.8 million /(43,442 + 979)= $1,290 per person
The SDC per unit is the product of the persons per unit and the system-wide unit cost of $1,290
per person. Table 4 provides information on the average persons per unit for residential and
tourist accommodation development, along with the resulting SDCs .
Table 4 also presents the projected revenue recovery by class. As the table indicates, SDCs per
unit range from $2,154 for multifamily to $3,406 for single-family dwellings. Under this
approach, 2.2 percent of total revenue would be recovered from nonresidential (tourist
accommodation) development.
Table 4
Preliminary SDC Schedule and Estimated Revenue Generation – Tourist Accommodation Dev. Only
Equiv.
Persons Dwelling Projected Projected
Categoryper UnitSDC per UnitUnits/ UnitUnitsRevenue
per Dwelling UnitDwelling Units
Single-family 2.64$3,406 1.0010,548$35,921,292
Duplex/TH/MH 2.14$2,761 0.813,063$8,456,107
Multifamily 1.67$2,154 0.635,633$12,136,239
Tourist Accommodation
per RoomRooms
(Nonresidential cat. A) 1.93$2,490 0.73507$1,262,278
Total Revenue$57,775,916
Sample SDCs
Table 5 presents SDCs under the two methods described above for sample developments
(consistent with sample developments used in the City’s SDC survey of Oregon communities)
and for a methodology which would assess only residential development. These sample SDCs
represent estimated SDCs to illustrate the potential relative differences of the SDCs for various
development types.
As shown in Table 5, the SDC for residential development (single-family and apartments) is
highest in the approach and lowest in the approach – which
no nonresidentialall nonresidential
has the largest equivalent population across which growth costs are shared. The hotel/motel
SDC is lower in the approach. As the table indicates, in the
all nonresidentialall nonresidential
approach, SDCs would range from a low of $2,693 for a lower turnover restaurant, to a high of
$191,395 for a 104 unit apartment building – among the development types presented.
Table 5
Calculations of SDCs for Sample Developments
Type of Development Units No Hotel/Motel All
Nonresidential Only Nonresidential
Single - Family Dwelling 1 DU $3,481 $3,406 $2,909
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Apartment Building 104 units $229,029 $224,047 $191,395
Single/Multi Tenant Office 67.5 TGSF na na $95,957
Building
Lower Turnover Restaurant 5.2 TGSF na na $2,693
Supermarket 47.4 TGSF na na $24,550
Hotel / motel 70 rooms na $174,279 $148,880
The calculations presented in this memorandum are based on several underlying approaches.
Among these, the $57.8 million in total growth costs (noted on page 5) reflect a
system-wide
as the basis for allocating costs associated with the Parks
capacity analysis by park type
Recreation and Open Space (PROS) Project and Priorities List (project list),
with the exception of
. This exception is in response to concerns raised during City Council and
neighborhood parks
RAC deliberations by the Homebuilders Association of Lane County (HBA). The HBA
questioned the equity and legality of a system-wide approach for allocation of neighborhood
parks that are planned for individual service areas within the overall park system. In response,
City staff worked with the Lane Council of Governments (LCOG) to conduct a capacity analysis
for individual neighborhood park service areas, and used the results to derive a service-area
based cost-allocation for neighborhood parks, which is incorporated in the $57.8 million and
reflected in all tables above.
Table 6 shows the implications on sample SDCs of this approach versus a
system-wide capacity
. The system-wide approach was endorsed by a majority
analysis by park type for all park types
of the RAC for reasons including consistency with the City’s other SDC methodologies (i.e.,
stormwater, local wastewater, and transportation), technical and administrative feasibility, and
equity. It includes $58.7 million in total growth costs, which is approximately $0.9 million – or 1.6
percent – more than the above approach with a service-area allocation method for neighborhood
parks. The SDCs for each sample development, likewise, are 1.6 percent more in the system-wide
approach.
Table 6
SDCs for Sample Developments – System-Wide vs. Service-Area Allocation for Neighborhood Parks
System-wide Allocation Method for Service-Area Allocation Method for
Neighborhood ParksNeighborhood Parks
No Hotel/Motel All No Hotel/Motel All
Type of Development
NonresidentialOnlyNonresidentialNonresidentialOnlyNonresidential
(units same as Table 6)
Units
Single - Family Dwelling 1DU$3,535$3,458$2,957$3,481$3,406$2,909
Apartment Building 104units$232,589$227,521$194,522$229,029$224,047$191,395
Single/Multi Tenant Office Building 67.5TGSFnana$97,524nana$95,957
Lower Turnover Restaurant 5.2TGSFnana$2,737nana$2,693
Supermarket 47.4TGSFnana$24,951nana$24,550
Hotel / motel 70roomsna$176,981$151,312na$174,279$148,880
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Summary
Several options are available to consider nonresidential development in the parks SDC
methodology and rates. Key findings of the review of available options include:
Nonresidential parks SDCs are assessed by other communities; however, assessment
?
methods often rely on an inferred relationship and indirect measurement of capacity
demand.
A nexus between nonresidential development and park capacity demand, and a method
?
distributing capacity demand between residential and nonresidential, can be established
using the results of the City of Eugene parks and recreation facilities’ user survey.
Inclusion of a non-residential SDC is a methodological choice which is revenue neutral.
?
A nonresidential SDC expands the user base (i.e., equivalent population), across which
park capacity costs are divided; it does not increase the system-wide capacity need or
costs, nor provide additional SDC revenue.
A key challenge in developing a nonresidential SDC is determining assessment methods
?
which provide equity amongst various types and sizes of development.
These options and findings will be reviewed with City Council to establish policy direction for
treatment of nonresidential development in the proposed modification of the parks SDC.
PSDCNOA P1010
ARKS ONRESIDENTIAL PTIONS ATTACHMENT AGE OF
ATTACHMENT B
Public Works
Engineering
City of Eugene
MEMORANDUMMEMORANDUM
858 Pearl Street
Eugene, Oregon 97401
(541) 682-5291
(541) 682-5032 FAX
Date:
October 19, 2006
To:
Mayor Piercy and City Council
From:
Fred McVey, 682-5216
Engineering Data Services Manager
Subject:
Neighborhood Park Growth Allocation Methods
This memorandum presents information to the City Council related to methodological options
for determination of the growth allocation percentage for the neighborhood parks element of the
proposed parks system development charges (SDCs). In particular, two growth allocation
methods associated with neighborhood park projects are presented for the Council’s
consideration: the first considers allocation of capacity-related project costs based on a system-
wide level of service analysis, and the second develops a growth allocation based on analysis of
estimated future population served within localized neighborhood park service areas.
Background
The preliminary SDC methodology as reviewed by the Public Works Rates Advisory Committee
(RAC) uses a system-wide capacity analysis as the basis for allocating costs associated with the
Parks Recreation and Open Space (PROS) Project and Priorities Plan (project list). Under this
1
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
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 equity. However, during City Council and RAC deliberations, the
1
The planned level of service is equal to the planned total future acres divided by the total future population served.
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Homebuilders 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, City staff worked with the Lane Council of Governments
(LCOG) to conduct 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.
Neighborhood Park Service Area Capacity Analysis
General Approach
The following general approach was used in performing an analysis of existing and future
population served at the individual park service area level:
1.
Establish future neighborhood park service areas resulting from implementation of the
This required
PROS Project and Priorities Plan projects related to neighborhood parks.
making assumptions about the locations of future parks and service areas and the extent
of revised park service areas due to access improvement projects in the adopted project
list. Generally, the assumption of a neighborhood park service area boundary is that it
includes areas within a ½-mile safe walking distance of a neighborhood park. Three types
of neighborhood park service areas were delineated: existing park service areas;
expanded park service areas due to access improvements; and, future park project service
areas.
2.
Estimate existing population within existing and future neighborhood park service
Parks service for the existing (2005) population was estimated using address data
areas.
from the Regional GIS. Existing dwelling unit types were identified by land use code and
were multiplied by an average household size factor for that dwelling type. Average
household size factors used in the analysis were consistent with the City’s SDC
methodology.
3.
Estimate future population within existing and future neighborhood park service areas.
Future population (2025) growth within park service areas was estimated by applying
dwelling-unit-density and household size assumptions to potentially buildable residential
lands inside the Eugene UGB.
4.
Determine percentage of total population served within neighborhood park service
areas attributable to existing (2005) population versus future (2025) growth population.
This is a simple calculation using the results of steps 2 and 3.
Summary of Results
Existing Population
Estimated existing population served by neighborhood parks service areas, based on existing
dwelling units, dwelling unit types and average household size factors are shown in Table 1.
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Table 1: Existing Population Served by Service Area Type
Populatio
Service Area Type n
Existing Park Service Areas 86,415
Expanded Service Areas - Access
Improvements 7,400
Future Park Project Service Areas 16,269
Total 110,084
Growth Population
Estimated growth population served by neighborhood parks service areas was estimated by
applying dwelling-unit-density assumptions to potentially buildable residential lands. As with
existing population, estimated growth population served is based on projected number of
dwelling units, dwelling unit types and average household size factors. The results are shown in
Table 2.
Table 2: Growth Population Served by Service Area Type
Populatio
Service Area Type n
Existing Park Service Areas 19,764
Expanded Service Areas - Access
Improvements 11,093
Future Park Project Service Areas 11,435
Total 42,292
Existing vs. Growth Population Served
Percentage of existing versus growth population served within neighborhood park service areas
is derived to determine allocation of future projects to growth (improvement fee) and existing
park capacity to growth (reimbursement fee). Table 3 shows existing and growth population
served by existing neighborhood park service areas. These allocation percentages are used to
allocate existing neighborhood park acreage and development costs to growth through the
reimbursement fee. In addition, the percentages in Table 3 are used to determine growth’s share
of costs related to future development of existing park land, which are then recovered through
the improvement fee.
Table 3: Existing Park Service Areas - Population Served
Existing Park Service Areas Population Served
Existing Growth
Population Population Total
Population 86,415 19,764 106,179
Percentage of total population
served 81% 19% 100%
Table 4 shows additional existing and growth population served as a result of future projects, i.e.
within expanded neighborhood park service areas resulting from access improvement projects
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ATTACHMENT EIGHBORHOOD ARK ROWTH LLOCATION AGE OF
and future park service areas related to park acquisition projects. These allocation percentages
are used to allocate all costs on the project list associated with neighborhood parks, with the
exception of development costs for existing parks (as described above).
Table 4: Growth Population Served by Service Area Type
Expanded & Future Service Areas Population Served
Existing Growth
Population Population Total
Population 23,669 22,528 46,198
Percentage of total population
served 51% 49% 100%
Revised SDC Analysis
Using an alternate growth allocation method for neighborhood parks affects the SDC calculation
in several ways. Capacity in both existing and future parks is allocated to both existing and
future users based on estimated population served at the park service area level. Existing
system-wide inventory is no longer allocated to the needs of existing users first. This results in a
different mix of reimbursement and improvement fee in the SDC calculation.
Using a system-wide capacity analysis for purposes of cost allocation results in a nominal
reimbursement fee component for neighborhood park land acquisition because planned system-
wide neighborhood park LOS (acres of developed neighborhood park per 1000 population)
declines to a minor degree in the future. However, using a park service area approach results in
a much more significant reimbursement component because a percentage of population served
within existing individual park service areas is associated with development of new housing
units (growth).
Conversely, the improvement fee is lower using the alternate method because a percentage of
population served within future park service areas and expanded park service areas related
future access improvement projects is associated with existing housing units and population.
Estimated SDC rates reflecting these effects are provided in Table 5.
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Table 5
Revised Gross SDC per Single Family Dwelling (SFD) by
Park and Facility Type
Preliminary Residential Unit Cost Estimated SDC Estimated
Growth Cost Share ($/New per SFD (1) SDC per
Person) SFD (2)
New Parks and Open Improvement Fee
Space
Neighborhood Parks
$6,498,676 $5,432,893 $124 $327 $392
Community Parks $8,868,229 $7,413,840 $169 $447 $534
Urban Plaza $412,681 $345,001 $8 $21 $25
Linear Parks $494,246 $413,190 $9 $25 $30
Natural Area Parks $4,767,958 $3,986,013 $91 $240 $287
Metropolitan Parks $900,000 $752,400 $17 $45 $54
Special Use Facilities $35,529 $29,702 $1 $2 $2
Sub-total
$21,977,319 $18,373,038 $419 $1,107 $1,324
New Recreation $18,780,213 $15,700,258 $358 $946 $1,131
Facilities
Improving Existing $4,149,295 $3,468,811 $79 $209 $250
Facilities
Access Improvements $911,429 $761,955 $17 $46 $55
TOTAL IMPROVEMENT
$45,818,256 $38,304,062 $874 $2,308 $2,760
Existing Parks and Reimbursement Fee
Facilities
Neighborhood Parks $3,449,836 $2,884,063 $66 $174 $208
Community Parks $0 $0 $0 $0 $0
Urban Plaza $0 $0 $0 $0 $0
Linear Parks $1,085,844 $907,766 $21 $55 $65
Natural Area Parks $64,744 $54,126 $1 $3 $4
Metropolitan Parks $7,309,248 $6,110,531 $139 $368 $440
Special Use Facilities $55,483 $46,384 $1 $3 $3
TOTAL $11,965,154 $10,002,869 $228 $603 $721
REIMBURSEMENT
Combined SDC
$57,783,410 $48,306,931 $1,102 $2,910 $3,481
(1) Based on 83.6% Residential Share (All nonresidential SDC component)
(2) Based on 100% Residential Share (No nonresidential SDC component)
Table 6 provides a comparison of the allocated growth costs for neighborhood parks and access
improvements, and SDCs for a single family dwelling unit, under the two allocation methods.
As shown in the table, the allocation of future neighborhood park land acquisition and
development costs is significantly lower (about $4.2 million) under the service area method.
However, the allocation of existing neighborhood park costs through the reimbursement fee
increases by about $3.3 million. Therefore, the net effect on the SDC of using the service area
method is a decrease of only $46-$54 per SFD.
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Table 6
Summary of SDC Impacts of Allocation Methods
System-Wide Service Area
Method Method
Improvement Fee
Growth Cost -- Neighborhood Parks $10,715,016 $6,498,676
Growth Cost -- Access Improvements $889,463 $911,429
Gross SDC per SFD (1) $2,519 $2,308
Gross SDC per SFD (2) $3,013 $2,760
Reimbursement Fee
Growth Cost -- Neighborhood Parks $154,021 $3,449,836
Growth Cost -- Access Improvements na na
Gross SDC per SFD (1) $437 $603
Gross SDC per SFD (2) $522 $721
Combined
Growth Cost -- Neighborhood Parks $10,869,037 $9,948,512
Growth Cost -- Access Improvements
$889,463 $911,429
Gross SDC per SFD (1) $2,956 $2,910
Gross SDC per SFD (2) $3,535 $3,481
(1) Based on 83.6% Residential Share (All nonresidential SDC component)
(2) Based on 100% Residential Share (No nonresidential SDC component)
Summary
SDC methodologies in general, and system capacity allocations in particular by their nature rely
on assumptions to establish SDC rates to ensure that growth pays an equitable cost of the system
capacity it consumes. A number of methodological assumptions and approaches are technically
and legally feasible. Along with equity considerations, consistency, complexity and
administrative cost are factors to consider when selecting methodological approach and
assumptions.
Staff has prepared two approaches and related sets of assumptions for allocating the capacity-
related costs of neighborhood parks. The system-wide allocation method relies on system-wide
service level assumptions which result in a generalized distribution of capacity demand and has
consistency and relative simplicity advantages. 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 and has the advantage of addressing potential equity
concerns unique to the neighborhood park category.
Staff had recommended, and a majority of the RAC supported, the use of a system-wide capacity
analysis for purposes of cost allocation for a number of reasons including consistency with the
City’s other SDC methodologies. HBA has expressed equity concerns and questioned the
legality of a resulting 100% growth allocation of neighborhood park land acquisition, prompting
development of an alternate growth allocation method for neighborhood park projects. The two
methods are presented for the City Council’s consideration and direction in development of
proposed modifications to the parks SDC.
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ATTACHMENT C
SPPSDCME
UMMARY OF ROPOSED ARKS ETHODOLOGY LEMENTS
Methodological Issue Approach Used RAC Response
Cost Basis
General capacity analysis Base relative system capacity needs for growth and existing Majority support
users on the planned Level of Service (LOS) as opposed to
exiting LOS
Type(s) of parks to include in SDC Include all park types in the SDC cost basis Majority support
UGB analysis Include projects outside the UGB in the SDC cost basis Majority support
Project list and LOS approach Base the SDC analysis for each park and improvement type on Majority support*
the entire project list (with the exception of priority 5 projects)
Park acreage capacity analysis and
cost allocation
- System-wide vs. individual park Base project list cost allocations on a system-wide LOS Majority support
service area analysis analysis (as opposed to a park-by-park basis) to determine
relative park capacity needs
- Park type analysis Base project list cost allocations on a capacity analysis by park Majority support
type
- Land acquisition and development Analyze land acquisition and development costs separately for Majority support
analysis purposes of project cost allocations
Facilities capacity analysis and cost
allocation
- Type(s) of facilities to include in - Include outdoor recreation facilities standard to the selected Majority support
SDC park types, unless funded primarily through user fees (e.g.,
golf courses)
- Include standard natural area amenities, unless funded
through other sources (e.g., off-street bike paths)
- Allocation basis Allocate outdoor recreation facilities based on an individual LOS Majority support
analysis for each specific facility type
- Special use facilities analysis Allocate land development and acquisition costs based on Majority support
growth’s share of total future population; this differs from LOS
approach for all other park types
Cost basis adjustments
- Exclude projects or portions of projects that are (a) identified as Required by
Improvement fee
“renovation” in the CIP, and/or (b) estimated to be funded statutes
through other city or non-city funds
- Adjust the SDC cost basis to account for historical grants and Required by
Reimbursement fee
contributions statutes
Fee Structure
Reimbursement and/or improvement Include both improvement and reimbursement components Majority support
fee analysis
Fee Assessment
Residential SDC assessment - Differentiate between residential dwelling types based on Majority support
available census data on number of persons per dwelling unit
- Aggregate dwelling unit types into three groups
- Include accessory dwelling units in the same category as
attached one-unit dwellings and two-unit dwellings
*While not a direct SDC issue, members of the RAC expressed concern with the impact of neighborhood park land
acquisition, as reflected in the entire project list, on residential land supply.
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A1()
TTACHMENT CONTINUED
Methodological Issue Approach Used RAC Response
Fee Assessment (cont.)
Nonresidential SDC assessment
- Policy direction Pursue imposition of park SDCs on industrial, commercial, and N/A
office uses, in accordance with the City Council’s unanimous
support (on April 28, 2003) of a motion that directs the City
Manager to do so
- Cost allocation Develop an SDC for nonresidential development using a 16.4% Majority support**
allocation of SDC costs to nonresidential land uses, based on
park survey data
- Fee assessment - Establish “equivalent population” as the basis of system-wide Majority support
unit costs to include
hotel/motel in
- Establish four nonresidential classes
residential
- Use survey data to allocate a percent of park usage to tourist
category
accommodation rooms
- Use employment density to assign costs to other
nonresidential developments
Revenue Offsets/Credits
Include an existing deficiency credit to recognize potential future Majority support
Existing deficiency credit
contributions by newly developed properties through property
taxes used to fund capital projects to increase the LOS for
existing park users
Implementation/Updating
Annual land and construction cost - Continue to apply ENR 20-City National average CCI to Majority support
construction cost component of proposed improvements
update
- Use index produced yearly by Lane County Assessment &
Taxation office to measure changes in price of land
- Within the Sales Ratio Report, use the residential lands
category of the area best representing the Eugene UGB to
determine the land index value
- Word the adopted land cost index in a manner to recognize
that the County Assessor may change geographic boundaries
used for tax assessment analysis purposes
Project list updates Conduct ongoing review of the Project List, with the CIP Majority support
process, to determine whether project expenditures are on
track, and update Project List and/or SDC accordingly
SDC methodology review process Include a review process; if review yields a material change in Majority support
the SDC, then update the SDC outside of the comprehensive
methodology review
** RAC support for this allocation method was for purposes of further evaluation of a nonresidential component; a
majority of the RAC disagreed with the inclusion a nonresidential SDC, with the exception of including hotel/motel in
the residential category.
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