Chapter 15.16
SYSTEMS DEVELOPMENT CHARGE

Sections:

15.16.010    Findings.

15.16.020    Definitions.

15.16.030    Purpose.

15.16.040    Scope.

15.16.050    Systems development charge established.

15.16.060    Compliance with state law.

15.16.070    Collection of charge.

15.16.080    Repealed.

15.16.090    Credits.

15.16.100    Appeal procedures.

15.16.200    Prohibited connection.

15.16.010 Findings.

(1) The systems development charge established herein is intended to be a charge upon the act of development by whomever seeks the development. It is a fee for service because it is the development which requires essential municipal services based upon the nature of the development. The timing and the extent of the development is within the control and discretion of the developer.

(2) The systems development charge imposed by this chapter is not intended to be a tax on property or on a property owner as a direct consequence of ownership of property within the meaning of Sec. 11b, Art. XI of the Oregon Constitution or the legislation implementing that section.

(3) Even if the systems development charge herein imposed is viewed under Sec. 11b, Art. XI of the Oregon Constitution as a tax against property or against a property owner as a direct consequence of ownership of that property, it is an incurred charge within the meaning of that section and the statutes implementing it because:

(a) It allows the owner to control the quantity of the service by determining the extent of development to occur upon the property.

(b) It allows the owner to determine when the service is to be initiated or increased by controlling when the development occurs.

(c) State law and the ordinances of this City require the owner to provide certain basic utility services to the property when it is developed for human occupancy. The provision of these basic utility services are a routine obligation of the owner of the affected property and essential to the health and safety of the community.

(4) Among the basic utility services required of every property with a structure designed for human occupancy, except ancillary buildings, are water, sanitary sewer, and transportation services.

(5) The systems development charge imposed by this chapter is based upon the actual costs of providing existing or planned-for capital improvements and does not impose charges on persons not receiving a service and imposing a burden upon the City’s existing capital improvements. (Ord. 5157, 1994; Ord. 4966 § 1, 1991).

15.16.020 Definitions.

As used in this chapter, except where the context otherwise requires, the words and phrases have the following meanings:

(1) “Capital improvement(s)” means facilities or assets used for any of the following:

(a) Water supply, storage, treatment and distribution; or

(b) Sanitary sewers, including collection, transmission, treatment and disposal; or

(c) Transportation, including streets, sidewalks, bikeways, traffic signals and signage, and street drainage collection systems.

(2) “Development” means the act of making a manmade change to improved or unimproved real estate (e.g., constructing a building or conducting a mining operation) or making a physical change in the use or appearance of a structure or land which increases the usage of any capital improvements or which creates the need for additional capital improvements.

(3) “Improvement fee” means a fee for costs associated with capital improvements to be constructed after the date the ordinance codified in this chapter becomes effective.

(4) “Qualified public improvements” means a capital improvement that is required as a condition of development approval, identified in the plan adopted pursuant to AMC 15.16.060(2) and either:

(a) Not located on or contiguous to property that is the subject of development approval (as used in this definition, “contiguous” means in a public way which abuts); or

(b) Located in whole or in part on or contiguous to property that is the subject of development approval and required to be built larger or with greater capacity than is necessary for the particular development project to which the improvement fee is related.

(5) “Reimbursement fee” means a fee for costs associated with capital improvements constructed or under construction on the effective date of this chapter.

(6) “Systems development charge” means a reimbursement fee, an improvement fee, or a combination thereof, assessed or collected at any of the times specified in AMC 15.16.070. It shall also include that portion of a water, sanitary sewer, or storm drainage connection charge that is greater than the amount necessary to reimburse the City for its average cost of inspecting and installing connections with the water system, the sanitary sewer system, or storm drainage system. “Systems development charge” does not include:

(a) Any fees assessed or collected as part of a local improvement district;

(b) A charge in lieu of a local improvement district assessment; or

(c) The cost of complying with requirements or conditions imposed upon a land use decision. (Ord. 6025, 2023; Ord. 5157, 1994; Ord. 4966 § 2, 1991).

15.16.030 Purpose.

The purpose of the systems development charge is to impose a portion of the public cost of capital improvements upon those developments that create the need for, or increase, the demands on capital improvements. (Ord. 5157, 1994; Ord. 4966 § 3, 1991).

15.16.040 Scope.

The systems development charge imposed by this chapter is separate from and in addition to any applicable tax, assessment, charge, fee, in-lieu-of assessment, or fee otherwise provided by law or imposed as a condition of development. A systems development charge is to be considered in the nature of a charge for service to be rendered or a service hookup charge. (Ord. 5157, 1994; Ord. 4966 § 4, 1991).

15.16.050 Systems development charge established.

(1) Unless otherwise exempted by the provisions of this chapter or other local or state law, a systems development charge is hereby imposed upon all new development within the City, and all new development outside the boundary of the City that connects to or otherwise uses the water system or sanitary sewer system of the City.

(2) A systems development charge is also imposed upon all new development within the City, and all new development outside the boundary of the City that expands its usage of the water or sanitary sewer systems because of intensification of the existing development.

(3) Unless otherwise exempted by the provisions of this chapter or other local or state law, a systems development charge is also imposed upon all new development within the City that expands its usage of the transportation system or generates additional traffic because of new development or intensification of the existing development.

(4) When the Council determines to establish a systems development charge for any capital improvement it shall do so by Council resolution.

(5) Because the systems development charge and supporting calculations, including the credits established herein, are closely related to the cost of construction of the capital improvements for each of the systems, the systems development charge and calculations for each system shall be automatically adjusted on the first day of July of each calendar year. The City Engineer shall make the adjustment based upon the Seattle Construction Cost Index published by Engineering News Record (ENR) by calculating the percentage increase/decrease in the index for the period since the last adjustment and then applying that percentage to the figures used to calculate the systems development charge and any credits. (Ord. 5306, 1997; Ord. 5157, 1994; Ord. 4966 § 5, 1991).

15.16.060 Compliance with state law.

(1) The revenues received from the water system development charge shall be deposited to the water improvement fee and/or water reimbursement fee funds. The revenues from the sewer system development charge shall be deposited to the sewer improvement fee and/or reimbursement fee funds. The revenues from the transportation system development charge shall be deposited to the transportation improvement fee and/or reimbursement fee funds. The revenues from the storm drainage system development charge shall be deposited to the storm drainage improvement fee and/or reimbursement fee funds. These funds shall be budgeted and expended as provided by State law. The accounting of such revenues and expenditures required by State law shall be included in the City’s annual financial audit required by ORS Chapter 294.

(2) The capital improvement plan(s) required by state law as the basis for expending revenues from the improvement fees portion of the systems development charge shall be the project lists contained within the most recently adopted water, wastewater, stormwater, and transportation system plans or the project list referenced in the associated methodology.

(3) As provided by State law, the plan or list described in subsection (2) of this section may be modified at any time. If a system development charge will be increased by a proposed modification of the list to include a capacity increasing capital improvement:

(a) The City shall provide, at least 30 days prior to the adoption of the modification, notice of the proposed modification to the persons who have requested written notice described in AMC 15.16.100(1).

(b) The City shall hold a public hearing if the City receives a written request for a hearing on the proposed modification within seven days of the date the proposed modification is scheduled for adoption. (Ord. 6025, 2023; Ord. 5750, 2011; Ord. 5456, 2000; Ord. 5306, 1997; Ord. 5157, 1994; Ord. 4966 § 6, 1991).

15.16.070 Collection of charge.

(1) The water system development charge is payable upon issuance of a permit to connect to the water system. The sewer system development charge is payable upon issuance of a permit to connect to the sanitary sewer system. The transportation and storm drainage system development charges are payable upon issuance of a building permit for any new construction, including a building permit for a manufactured home park.

(2) If development is commenced or connection is made to the water system, sanitary sewer system, storm drainage system, or transportation system without an appropriate permit, the systems development charge is immediately payable upon the earliest date that a permit was required.

(3) The building official or the official’s designee shall collect the systems development charge from the person responsible for or receiving the benefit of the development. The building official or the official’s designee shall not issue any permit or allow connection described in subsection (1) of this section until the charge has been paid in full or until provision for installment payments has been made within the limits prescribed in subsection (5) of this section.

(4) A systems development charge paid hereunder shall apply to the particular lot or tract for which it is issued. Any changes of use which require additional connections or intensification of use to the water, sanitary sewer, storm drainage, or transportation system shall cause an additional systems development charge to be paid. The owner of the property shall be given credit only for those systems development charges theretofore paid involving the same parcel of property. Where a structure which is serviced by capital improvements is destroyed by fire, flood, wind, or act of God, no systems development charge shall be imposed for a replacement of the structure, provided the use thereof is not intensified.

(5) The obligation to pay the unpaid systems development charge and interest thereon shall be secured. Acceptable security to insure payment includes: property, bond, deposits, letter of credit, or the obligor may request a lien be placed against the property to be developed. (Ord. 6025, 2023; Ord. 5334, 1998; Ord. 5157, 1994; Ord. 4966 § 7, 1991).

15.16.080 Exemptions.

Repealed by Ord. 5730. (Ord. 5315, 1997; Ord. 5306, 1997; Ord. 5157, 1994; Ord. 4966 § 8, 1991).

15.16.090 Credits.

(1) When development occurs that must pay a systems development charge under AMC 15.16.050, the systems development charge for the existing use shall be calculated and if it is less than the systems development charge for the proposed use, the difference between the systems development charge for the existing use and the systems development charge for the proposed use shall be the systems development charge required under AMC 15.16.050. If the change in use results in the systems development charge for the proposed use being less than the systems development charge for the existing use, no systems development charge shall be required; however, no refund or credit shall be given.

(2) A credit against the improvement fee portion of the systems development charge shall be given for the cost of a qualified public improvement associated with development.

(a) The credit provided for in this section shall be only for the improvement fee charged for the type of improvement being constructed, and credit for qualified public improvements under AMC 15.16.020(4)(b) may be granted only for the cost of that portion of such improvement that exceeds the government units minimum standard facility size or capacity needed to serve the particular development project or property. The applicant shall have the burden of demonstrating that a particular improvement qualifies for credit under AMC 15.16.020(4)(b).

(b) When the construction of a qualified public improvement gives rise to a credit amount greater than the improvement fee that would otherwise be levied against the project receiving development approval, the excess credit may be applied against improvement fees that accrue in subsequent phases of the original development project.

(c) Credits shall be used not later than 10 years from the date the credit is given.

(d) Credits shall be established using the method outlined in the transportation system development charge fee resolution or, in the case of water, sewer, and storm drainage systems development charges, by council policy, and shall be included in an agreement signed by the applicant and the city engineer that states the amount of the credit and the effective date of the agreement.

(3) The finance director shall be responsible for all recording and accounting associated with the distribution of credits. (Ord. 6025, 2023; Ord. 5306, 1997; Ord. 5157, 1994; Ord. 4966 § 9, 1991).

15.16.100 Appeal procedures.

(1) The Finance Director will maintain a list of persons who have made a written request for notification prior to adoption or amendment of a methodology for any systems development charge. The Finance Director will mail written notice to persons on the list at least 45 days prior to the first hearing to adopt or amend a systems development charge, and the methodology supporting the adoption or amendment will be available 30 days prior to the first hearing to adopt or amend. The failure of a person on the list to receive a notice that was mailed will not invalidate the action of the City. The City may periodically delete names from the list, but, at least 30 days prior to removing a name from the list, will notify the person whose name is to be deleted that a new written request for notification is required if the person wishes to remain on the notification list.

(2) Parties challenging the methodology for establishing the systems development charge may appeal the methodology by filing a written appeal with the Finance Director within 60 days of passage of the ordinance codified in this chapter. Such appeals shall describe with particularity the portion of the methodology, calculations, or assumptions which are being asked for reconsideration. All appeal requests shall comply with subsection (6) of this section. A person shall contest the methodology used for calculating a systems development charge only as provided in ORS 34.010 to 34.100, and not otherwise.

(3) Parties aggrieved by the imposition of a systems development charge which has been calculated by the City Engineer or the City Engineer’s designee under AMC 15.16.050 through 15.16.090 or a party challenging the propriety of an expenditure of systems development charge revenues may appeal the decision or the expenditure by filing a written request with the City Public Works Director for consideration. Such appeal shall describe with particularity the decision or the expenditure from which the person appeals and shall comply with subsection (6) of this section.

(4) An appeal of an expenditure must be filed within two years of the date of alleged improper expenditure. Appeals of any other decision must be filed within 15 days of the date of the decision.

(5) An appeal fee, established by Council resolution, shall accompany all systems development charge appeal requests.

(6) The appeal shall state:

(a) The name and address of the appellant;

(b) If applicable, the address or tax lot of the property to which the charge is being applied;

(c) The nature of the determination being appealed;

(d) The reason the determination is incorrect; and

(e) What the correct determination of the appeal should be.

An appellant who fails to file such a statement within the time permitted waives his/her objections, and his/her appeal shall be dismissed.

(7) Unless the appellant and the City agree to a longer period, an appeal shall be heard within 60 days of the receipt of the notice of intent to appeal. At least seven days prior to the hearing, the City shall mail notice of the time and location thereof to the appellant.

(8) The City Council shall hear and determine the appeal on the basis of the appellant’s written statement and any additional evidence the City Council deems appropriate. At the hearing the appellant may present testimony and oral argument personally or by counsel. The rules of evidence as used by courts of law do not apply.

(9) The appellant shall carry the burden of proving that the determination being appealed is incorrect and what the correct determination should be.

(10) The City Council shall issue a written decision within 30 days after the hearing date and that decision shall be final. (Ord. 5306, 1997; Ord. 5157, 1994; Ord. 4966 § 10, 1991).

15.16.200 Prohibited connection.

No connections or intensification of use may be made to the sanitary sewer, water, storm drainage, or transportation system of the City unless the appropriate systems development charge has been paid or the installment payment method has been applied for and approved. (Ord. 6025, 2023; Ord. 5157, 1994; Ord. 4966 § 11, 1991).