Item 2E: Resolution Adopting Adjustments to Parks SDC

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Adoption of Resolution 4929 Adopting Amended Systems Development Charge Methodology for Parks System and Amending Resolution No. 4900 Meeting Date: February 25, 2008 Agenda Item Number: 2E Department: Public Works Staff Contact: Fred McVey www.eugene-or.gov Contact Telephone Number: 682-5216 ISSUE STATEMENT The City Council is asked to approve a resolution adopting an inflationary increase in Systems Development Charges (SDCs) for the parks system. The proposed adjustment follows adopted policy for implementing periodic adjustments to SDCs based on adopted cost indices. BACKGROUND Council Action History On April 9, 2007, the council adopted the System Development Charges (SDC) Methodologies by Resolution No. 4900 which updated the parks SDC methodology and rates. Since the adoption of Resolution 4900, inflationary adjustments of SDC rates for the Regional Wastewater System were adopted by Administrative Order No. 58-07-08-F, effective August 20, 2007. This action is being placed on the Consent Calendar because the resolution adopts a standard periodic adjustment following policies and procedures previously adopted by the council. Financial Considerations SDCs provide a funding mechanism to account for the costs and value of infrastructure system capacity required by new development. The SDC Methodologies adopted by the council provide for periodic adjustments to SDCs to further account for changes in construction and land costs. Periodic adjustments allow SDCs to more closely reflect current costs of providing system capacity to new development. The proposed adjustment to the parks SDC is based on two adopted cost indices: 1) the 20-city national average construction cost index as published by the Engineering News-Record (ENR) is used to adjust park development costs; and, 2) the Lane County Assessment & Taxation Office’s published 2007 Sales Ratio Report is used to adjust park land acquisition costs. The ENR for the period of October 2006 through December 2007 reflects an increase in average construction costs of 2.6%. The 2007 Sales Ratio Report reflects a 28% increase in average costs of vacant residential and recreational land categories within the areas best representing the Eugene urban area. The combined effect of applying these two indices to the parks SDC is that rates for residential development types are proposed to increase by approximately 9.9% while rates for nonresidential development types will increase by about 14.3%. The difference in rate adjustments between residential F:\CMO\2008 Council Agendas\M080225\S0802252E.doc