ADU Fees, Failing Infrastructure Top of Discussion at City Council

The City Council held a robust discussion regarding system development fees for accessory dwelling units during its March 12 meeting.

The topic revealed why there is a need for what some may consider over-priced fees, but also brought out questions that needed to be considered when it comes to homelessness, affordability, and the city’s faltering wastewater treatment plant.

Community and Economic Development Director Blair Larsen brought the discussion to the table by recalling how a resident approached the council last month about the possibility of waiving system development charges (SDC) on accessory dwelling units (ADU). The resident reasoned that since water and wastewater lines were already installed on the property, no more lines would need to be placed. Larsen said, however, that city code requires every residential unit (except apartments) have its own utility service, meaning any ADU must have its own water meter, and water and wastewater connections to the city’s main lines.

Developers pay SDC fees when constructing new development, including added units on a homeowner’s property. The fees are based on the type of housing unit (single family home, townhouse, apartment, etc.) and not only allows the developer to connect to the city’s systems, but it also helps pay for the increased demand on the infrastructure systems of water, wastewater, stormwater, transportation and parks. While ADUs can be integrated into an existing home (an addition to the home or basement apartment), they can also be built separately from the house, but the SDC charges fall under the single family home category, which is a $15,000 fee.

In a report to the council, Larsen noted that while smaller homes (in this case, ADUs) theoretically have a smaller impact on the city’s systems, they do still have an impact. If the city wanted to promote the construction of more ADUs in the city given the state of the economy and need for more housing, then it makes sense to exempt or discount the fees on ADUs, he said. Larsen went on to point out that when the state required cities to allow duplexes in residential zones, the city saw an “explosion” of development for duplexes, which means an exemption or deep discount on ADU fees might promote a similar increase on those types of developments.

Councilor Greg Mahler stated he was concerned that changing the fee structure to accommodate more ADUs might set a precedent that would “come back and bite us in the end.” 

Councilor Lisa Gourley said she believes the council should revisit the matter.

“It seems to be an undue burden on being able to put a mother-in-law’s cottage or a canning kitchen off the house,” she said. 

Councilor Angelita Sanchez expressed her stance on the matter by bringing up hurdles that high fees might create.

“I’ve always been opposed to outrageous SDCs,” Sanchez said. “I think they’re a barrier to job creation and home ownership.”

She also said that, since the city has declared a state of emergency for homelessness, then the city should reduce barriers that would be preventing people from obtaining housing.

Mayor Susan Coleman pointed out that if the SDC rates were to be changed to benefit ADUs, then the burden to cover increased infrastructure costs would fall on city taxpayers.

“Especially regarding our wastewater facility, our water distribution plant, those things that need to be covered,” Coleman said. “The purpose of SDCs is to cover the expenses of all of those things that are impacted by new additions and new homes.”

City Manager Kelcey Young rebutted with a clarification that SDCs for housing developments for low income or homeless residents are typically “wiped.” Larsen agreed the city has an ordinance that allows an exemption for low income housing.

“One of the tasks of city government and the city council is to make sure that we have infrastructure that’s working,” Coleman said. “I’m not against the possibility of discussing if we need to revisit SDCs, but we just need to keep in mind that because we didn’t have SDCs established in the past – or very reasonable ones – a lot of our infrastructure is in bad disrepair, and that is why we increased them.”

She further noted that when people add buildings to the community, they are adding “weight” and usage on the city’s infrastructure.

Sanchez responded that if the city has a lack of affordable housing, then the city needs to make it affordable to build affordable housing. If the costs are too high to build, then people won’t purchase the permits to build and, thus, those fees to support infrastructure won’t be there, she said.

“For the ADUs, I would at least like to have an exemption for a temporary amount of time or until we get out of the homelessness state of emergency and see what else we can do about the other things,” Sanchez said. “The ADUs are critical to making sure that people can have somewhere with a roof over their head on their own family’s property.”

Discussion continued among the councilors and staff as they honed in a little more on the difference between dwellings that would be used as non-rentals and property owners who would add more units to use as rentals.

Gourley said she’d be interested in further looking into the possibility of adjusting SDC fees for ADUs if they were more specifically applied to owner-use units.

“What can we do to help people out, because we have an aging population and we really do need to make this affordable,” Gourley said.

A consensus was reached for staff to return to a future city council meeting with different options on discounts to SDC fees for ADUs that are specific to non-rental dwellings.

Approval of Goals

Following a goal setting workshop between city council and staff on Feb. 27, City Manager Kelcey Young presented at the city council meeting the outcome of said workshop and asked for approval of a resolution stating the goals for the 2024-25 fiscal year.

Young reported that infrastructure was among the most important requests and goals at the workshop. Among those projects were: an emergency generator for the water treatment plant (through grants), funding for a water main replacement on 8th Avenue (through grants), an investigation with ODOT into traffic concerns on Pleasant Valley Road for the possibility of a light (presumably at Highway 20), construction of City Hall Park (through a donor), construction of emergency family housing and a park at Osage Street and 42nd Avenue, improvements at Sankey Park (through grants), and improvements of Weddle Bridge.

Other identified goals include: updates on council rules, updates on the emergency management plan, looking into downtown vacancy reduction and design standards, acquisition of land, increasing grant applications and acquisitions, a city marketing plan and construction of a new library.

“We are hoping to be able to identify and purchase a property to eventually start the new library construction,” she said.

Regarding city marketing, Young said staff and council expressed interest in being able to start sharing within and outside the community “what a beautiful place this is.”

The council unanimously approved the resolution.

In other business:

The council heard a presentation from Sean Tate, a lobbyist representing the newly-formed Advocating for Small Municipalities Advocacy Coalition (SMAC), a membership-based coalition of rural municipalities throughout the state that will work together to effect change in the state’s decisions. Tate invited the City of Sweet Home to join SMAC.

While staff and council agreed rural cities need more of a voice in political movements, the $6,000 annual membership fee presented a stumbling block for some. The council ultimately decided to give SMAC time to prove itself before revisiting the idea to join.

The council denied an easement request from Alyrica Networks, Inc., which wanted to install equipment in a 20’ x 20’ area of the site where the old City Hall sits. Alyrica representatives said the location provides the best line of site for connectivity and signal strength, but Councilor Lisa Gourley expressed concern about the future of the building, should it ever be redeveloped.

Mayor Susan Coleman asked Police Chief Jason Ogden why his report indicated total juveniles in custody for February rose by 76%. He told her he didn’t know exactly why that was, but could only determine it may be related to the fact that a student resource officer position at the schools has been reinstated, providing more contact with the city’s juveniles.

City Attorney Robert Snyder announced his retirement will be on May 11 after serving the city for 43 years.