Council to look at fee increases

Sean C. Morgan

The Sweet Home City Council has approved a timeline for updating the city’s systems development charges, which are levied on new construction to pay for infrastructure needed to service new homes.

Murraysmith, a public infrastructure engineering firm, is in the initial stages of a study that will recommend changes to the City of Sweet Home’s system development charges.

System development charges are used to pay the cost of increased demand on city infrastructure by new development. Sweet Home has two such charges, one for its water utility and one for its sewer utility, totaling about $1,800 per house. The charges are imposed when a property owner constructs a new house or building.

The timeline decision came at the council’s regular meeting on Nov. 26. The council previously heard about SDCs during its regular meeting on Nov. 12 and at a work session prior to its regular meeting on Nov. 26.

Cities charge SDCs to pay for water, wastewater, storm water, transportation and parks. Murraysmith Principal Engineer Preston Van Meter told councilors during their regular meeting on Nov. 12 that Sweet Home’s are some of the lowest in the state. In Lebanon and other cities, SDCs run more than $10,000 per project. They can range much higher around the Portland area, reaching $40,000 in West Linn.

Some cities, like Pendleton, have very low SDCs, Van Meter said, but capture revenue for expansion through utility rates.

In general, if utility rates are high, SDCs are lower, while lower rates accompany higher SDCs, he said.

The council approved a Capital Improvement Plan during the Nov. 12 meeting, and Van Meter said the cost of the plan is part of calculating the needed SDCs.

SDCs include reimbursement fees for capacity upgrades already completed and improvement fees, to extend infrastructure to a new area, for example.

Murraysmith will look at the items in that plan and city master plans and figure out what kind of capacity upgrades are needed, to help make that determination, he said.

The city can also include a compliance fee to recover the cost of developing SDCs, Van Meter said. Essentially, Murraysmith will look at growth projections and divide the cost of projects among the number of expected new units.

The city’s sewer system has an SDC based on reimbursing capacity that has already been built, with no plans for improvements based on growth, Deborah Galardi told the council during its Nov. 26 work session.

Galardi, a principal at Galardi Rothstein Group, is a subcontractor with Murraysmith on the SDC study.

The water SDC includes components for reimbursement for existing infrastructure and for future improvements.

The real key is to decide what the growth will be, Van Meter said, and long term, the city can include an annual inflation adjustment to help keep SDCs to keep pace with rising costs.

At this point, the data collection is nearly complete, Van Meter said, and Murraysmith will establish a baseline for system capacity and calculate a value for the city’s entire system.

Changing SDCs requires specific legal processes, Galardi said. State law provides a uniform framework for equitable funding based on development and spending on capital projects.

After Murraysmith’s evaluation, the city will need to provide a 90-day notice for a public hearing and 60 days for public review of the methodology.

Going forward, the city must provide 30-day notices to increase the fees, and Van Meter recommends a public hearing on proposals to change the SDCs.

Van Meter said he expects to complete the study by March 9, with a public hearing on June 9. He said there will probably be multiple council sessions along the way to make policy decisions, such as deciding whether to use average capacity or peak capacity in the calculations or to decide how much of the city’s infrastructure is for the population it has now, for example.

The council may want to decide to give a break for low-income housing projects or how much park space is required per household, he said.

The process will require modifications to city ordinances to extend authority for new SDCs, such as transportation, parks and storm water.

“Some people believe parks are an integral part of a community’s infrastructure,” City Manager Ray Towry told the council during the Nov. 12 meeting. “Some people don’t, (so) it’s up to you to decide.”

During the meeting, the council approved a Capital Improvement Plan that outlines five years of capital projects for Sweet Home.

Department heads submitted a “wish list” of projects and equipment needs for their departments, said Finance Director Brandon Neish. The Finance Department compiled each of the requests and identified a funding source and fiscal year for most of them.

Projects for which a funding source could not be identified were included in the plan, he said. Resources can change over the five-year span, or another source of funding could be identified.

The Capital Improvement Plan gives the city staff direction for developing the city’s budget, Towry said. When funding is available, the city will move on a project. In some cases, the city will seek grant funds and other external sources of funding to pay for projects.

When grant or other funding becomes available, a project can move up the list, Towry said. Libraries and senior centers, for example, do well securing grants.

During the Nov. 12 meeting, Councilor Diane Gerson said she isn’t happy the CIP doesn’t include a park on the east end of Sweet Home.

“I totally agree with that,” said Mayor Greg Mahler.

City staff has discussed that issue, Towry said, pointing out that an east-side park is not part of the Parks Master Plan. That discussion needs to go to the Park and Tree Committee, which can recommend changes in the Parks Master Plan to the City Council, he said.

The CIP is a living document that will be reviewed and adjusted annually, Neish said. The total CIP includes 50 projects with an estimated total cost of $35 million.

Projects include a library renovation project, Police Department dispatch console upgrades, radio repeater upgrades, annual patrol vehicle replacement, improvements in city parks, a bridge between Sankey Park and the Jim Riggs Community Center, water and wastewater treatment plant improvements and equipment replacement, the design and replacement or rehabilitation of a new water reservoir, waterline replacement across the city, a new water main to serve the east end of the city, drainage improvements and several street paving projects.

City Staff Engineer Joe Graybill told the council that the city last adjusted SDCs around 2003-04.

In the timeline approved at the Nov. 26 meeting, the council will meet in work sessions in February. Murraysmith will present preliminary findings, and the city will give notice. The SDC methodology report will be available to the public on April 10, and a June 9 public hearing is set for SDC approval.

Present at the Nov. 26 meeting were Cortney Nash, Susan Coleman, Mahler, Gerson, James Goble and Dave Trask.