2017 Transportation SDC Update

The City of Oregon City is undertaking an update of its transportation system development charge (TSDC). A system development charge is a one-time fee imposed on new development at the time of development. The charge is intended to recover a fair share of the cost of system capacity needed to serve growth. System development charges provide a means for "growth to pay for growth."

Oregon Revised Statutes (ORS) 223.297 to 223.314 provides "a uniform framework for the imposition of system development charges by governmental units" and establishes "that the charges may be used only for capital improvements." An SDC can be constructed to include one or both of the following components:

• A reimbursement fee, intended to recover an equitable share of the cost of facilities already constructed or under construction
• An improvement fee, intended to recover a fair share of future, planned, capital improvements needed to increase the capacity of the system

The City last updated its TSDC methodology and rates in 2009, and has increased it annually to keep pace with inflation. However, these inflationary increases have not kept up with the cost of infrastructure improvements and the list of projects has not been updated since the 2013 Transportation System Plan was adopted.

2013 Guiding Document Update

In 2013, the City updated our guiding document, the Transportation System Plan (TSP), which included an updated list of roadway, bicycle, pedestrian, and shared-use paths and family friendly projects. That list of projects was never adopted as the Transportation Capital Improvement Plan. Additionally, various ancillary transportation documents have been completed since then which are also included in this update including the South End Concept Plan; the Willamette Falls Legacy Project; the Linn Avenue, Leland Road and Meyers Road Corridor Plan; and the Meyers Road Extension Plan. With this effort, the City aims to bring current its charges and "determine, using industry standard analyses, a fair and equitable TSDC methodology."

To meet this objective, the City took the following general approach:

Technical Analysis: The technical analysis included the creation of a comprehensive SDC project list using the 2013 Transportation System Plan, and the above listed documents. The list was carefully examined to determine the portion of each project that will add system capacity to serve growth. Only those costs are includable in the SDC improvement fee calculation. The SDC reimbursement fee is based on the unused capacity of assets available for future users. Both the reimbursement fee and improvement fee are proposed to be updated. The charge was then calculated to incorporate both the data inputs and guidance from our consultant.

Documentation: The law requires that a methodology report be provided describing the recommended policies and resulting charges. As per that statute, the methodology will be made available for review at least sixty days in advance of the first public hearing to consider the TSDC.

Public Process: The project team completed various outreach items as part of their work. This included holding an SDC Forum in September, 2015, and a Transportation SDC Roundtable in April, 2017.

TSDC Items

The Transportation System Development Charge items will be implemented in 3 components: the 2017 Project List, Oregon City Municipal Code Changes, and a Public Hearing on Methodology Changes and Rates.

2017 Project List

On November 15, 2017, the City Commission adopted Resolution 17-25 updating the Transportation Projects Eligible for Transportation System Development Charge Funding.

Oregon City Municipal Code (OCMC) Changes

Staff has evaluated the changes requested by the Oregon City Chamber of Commerce and a thorough review of OCMC Section 13.20 System Development Charge for Capital Improvements, and proposes the following:

• Clarification to one definition (OCMC 13.20.020):
  • "Most recent structure or use" from 10 years to the following:
    • Residential Structures: any residential structure documented to exist using the City's record of historic aerial photos for year 1994 and after
    • Non-Residential Structures: the most recent legally approved use conducted on the subject property after January 1, 2000
• Amendments to the SDC Credit (OCMC 13.20.040):
  • Clarification to the acceptable methods of determining value for qualified public improvements
  • ORS 223.304.5.d states SDC credits can be allowed to be used no later than ten years from the date the credit was given. Staff proposes to extend our timeframe from five years to 10 years, the most legally allowed.
  • OCMC 13.20.050.A SDC Reduction or Reimbursement is proposed to be amended from 10 years in association with the most recent structure or use definition

On December 6, 2017, City Commission heard the first reading and on December 20, 2017 heard the second reading, and approved the ordinance to update the Oregon City Municipal Code Chapter 13.20 System Development Charge. Ordinance 17-013 is effective January 19, 2018.

Public Hearing on Methodology Changes & Rate

On November 20, 2017, the City issued a 90-day Notice of Public Hearing for Changes to the Transportation System Development Charge, and its intent to amend the Transportation System Development Charge (TSDC) Methodology and Rates. The public hearing occurred on February 21, 2018.

The Final Report for Transportation System Development Charge, a technical report addressing the methodology and calculation of the proposed charges, by FCS Group will be available for review after December 21, 2017, and is available in the Supporting Documents section on this page.

Update February 22, 2018
At the Public Hearing, City Commission adopted as presented the Transportation System Development Charge methodology and calculation of the proposed charges. Staff will work to provide outreach to those impacted by the changes.

Update March 22, 2018
The City has posted a Notice of TSDC Rate Change (PDF), effective July 1, 2018.