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Ordinance No. 18-06 CITY OF TIGARD, OREGON TIGARD CITY COUNCIL ORDINANCE NO. 18-oto AN ORDINANCE REPEALING AND REPLACING TIGARD MUNICIPAL CODE CHAP'T'ER 3.24 REGARDING SYS 1'EM DEVELOPMENT CHARGES TO CLARIFY PROGRAM ADMINISTRATION WHEREAS, in early 2015, Tigard City Council substantially amended Tigard Municipal Code Chapter 3.24 related to transportation and parks system development charges (SDCs) as well as adopted corresponding SDC methodology reports;and WHEREAS, since that time, staff from several departments with roles in the administration of the SDC program—including Finance, Public Works, Community Development, and the City Attorney—have worked to identify administrative issues with the adopted documents and developed recommendations;and WHEREAS, in August 2016, Council directed staff to incorporate additional policy direction into the City's code, specifically related to allowing additional credits beyond what is required for qualified public improvements and allowing an exemption for city transportation and park SDCs where the project meets certain criteria as a regulated affordable housing development;and WHEREAS, the adopted transportation and park SDC methodology reports state that the city "may exempt specific classes of development from the requirement to pay SDCs"as a matter of policy;and WHEREAS,there is an identified need for affordable housing in the city and the proposed exemption removes a financial barrier to the development of more affordable housing;and WHEREAS, the proposed code provides for the efficient administration of the city's SDC program and advances the city's goals for walkability,connectivity,and livability. NOW,THEREFORE,THE CITY OF TIGARD ORDAINS AS FOLLOWS: SECTION 1: Chapter 3.24 of the Tigard Municipal Code is hereby repealed,in its entirety, and replaced to read as shown on the attached Exhibit A. SECTION 2: If any provision of this ordinance or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the ordinance which can be given effect without the invalid provision or application,and to this end the provisions of this ordinance are severable. This City Council hereby declares that it would have adopted this ordinance irrespective of the invalidity of any particular portion thereof and intends that the invalid portions should be severed and the balance of the ordinance be enforced. SECTION 3: This ordinance shall be effective 30 days after its passage by the council, signature by the mayor,and posting by the city recorder. ORDINANCE No. 1810 Page 1 PASSED: By /Y14. rill.-41x vote of all council members present after being read by number and title onY'y,this CO day of fret-M-1/1 ,2018. Kelly Burgoyne,Deputy City Recorder APPROVED: By Tigard City Council this 64 day of M A( t ,2018. PAIA John. ook,Mayor Approved as to form: 4111 1110 City Attor e Date ORDINANCE No. 18-Ob Page 2 Exhibit A TIGARD MUNICIPAL CODE Chapter 3.24 SYSTEM connection to a capital improvement. The DEVELOPMENT SDCs created and imposed by this chapter are CHARGE PROGRAM separate from, and in addition to, any applicable tax, assessment, charge, fee in lieu Sections: of assessment, or fee otherwise provided by law or imposed as a condition of development. 3.24.010 Purpose The SDC Administrative Procedures Guide 3.24.020 System Development provides additional detail on implementation Charge of SDCs. 3.24.030 Definitions 3.24.040 Charge Imposed 3.24.030 Definitions 3.24.050 Methodology 3.24.060 Project List For purposes of this chapter, the following 3.24.070 Expenditures definitions apply: 3.24.080 Payment 3.24.090 Installment Payments "Administrator"means the person, or persons, 3.24.100 Exemptions appointed by the city to manage and implement 3.24.110 Credits the SDC program or portions thereof. 3.24.120 Notice 3.24.130 Accounting "Applicant" means the person who applies for 3.24.140 Appeals a land use decision or building permit. 3.24.150 Prohibited Connection 3.24.160 Penalty "Building official" means the person, or 3.24.170 Severability designee, certified by the state and designated as such to administer the state building codes 3.24.010 Purpose for the city. This chapter is intended to implement the "Building permit" means the permit issued by authority provided in ORS 223.297 through a building official, as required by the State of 223.314 by adopting and imposing system Oregon Structural Specialty Code Section development charges (SDCs) to pay for the 105.1 or the Oregon Residential Specialty installation, construction, extension, and Code Section 105.1. In addition, "building expansion of the city's water, sanitary sewer, permit" means a manufactured home stormwater, park, and transportation systems. installation permit issued by the building The purpose of SDCs is to impose a portion of official, relating to the placement of the cost of capital improvements for these manufactured homes in the city. systems upon those developments that create the need for or increase the demands on these "Capital improvements" mean facilities, real systems. (Ord. 15-08 §2) property, or assets used for the following: 3.24.020 System Development 1. Water: supply, treatment, or Charge distribution; An SDC is a reimbursement fee, an 2. Sanitary sewer: wastewater collection, improvement fee, or a combination thereof transmission,treatment, or disposal; imposed on a subject property at the time of increased usage of a capital improvement or 3-24-1 Code Update: 3/18 TIGARD MUNICIPAL CODE 3. Stormwater: water quality or quantity past 18 months prior to the date of application management, drainage, or flood control; for a building permit,or land use decision if no building permit is required. Where the subject 4. Parks: active or passive parks, open property was used simultaneously for several space, or recreational trails; or different uses (mixed-use) then all of the specific use categories will be considered for 5. Transportation. purposes of this chapter. Where the previous use was composed of a primary use with one or "City"means the City of Tigard, Oregon. more ancillary uses that supported the primary use and were owned and operated in common, "Condition of development approval" means the primary use will be deemed to be the sole any requirement imposed on an applicant by previous use of the subject property for the city or county as part of a land use decision purposes of this chapter. or building permit approval. "Project list"means the list adopted by the city "County"means Washington County, Oregon. pursuant to Section 3.24.060. "Credit" means the amount by which an "Proposed use"means the use proposed by the applicant may be able to reduce an SDC as applicant for the subject property. Where the provided in this chapter. applicant proposes several different uses (mixed-use) then all of the specific use "Development"means a building or other land categories will be considered for purposes of construction, including a physical change in this chapter. Where the proposed use is the use of a structure or land, in a manner composed of a primary use with one or more which increases the demand on or creates the ancillary uses that support the primary need for new or enlarged capital proposed use and are owned and operated in improvements. common,the primary use will be deemed to be the sole proposed use of the subject property "Duplex" means two attached single-family for purposes of this chapter. residential dwelling units on a single lot. "Qualified public improvement" means any "Improvement fee" means the SDC for costs capital improvement that increases the capacity associated with capital improvements to be of the city's system and is: constructed. 1. Required as a condition of "Multifamily housing" means three or more development approval; attached residential dwelling units located on a single lot. 2. Identified as a need and included on the project list; and "Over-capacity"means that portion of a capital improvement that is built larger or with greater 3. Not located on or contiguous to the capacity than is necessary to serve the subject property; or development or to mitigate for system impacts attributable to the development. 4. Located contiguous to or in whole or in part on the subject property and, in the "Previous use" means the most intensive use opinion of the administrator, is required to conducted at the subject property within the be built larger or with greater capacity 3-24-2 Code Update: 3/18 TIGARD MUNICIPAL CODE (over-capacity) than is necessary to serve "SDC Administrative Procedures Guide" the development of the subject property or means the administrative rules adopted by the to mitigate for system impacts attributable city for the implementation of this chapter. to the development of the subject property. There is a rebuttable presumption that "Single-family dwelling unit" means one improvements built to the city's minimum detached residential dwelling unit, or one-half standards are required to serve the of a duplex, or one row house. development and to mitigate for system impacts attributable to the development. 3.24.040 Charge Imposed "Regulated affordable housing" means A. SDCs may be established and revised by housing that is made affordable through public resolution of the city council. The resolution subsidies or statutory regulations that restrict must include the amount of the charge;the type or limit resident income levels or rents. To be of permit to which the charge applies; the considered regulated affordable housing, units methodology used to set the amount of the must: charge; and, if the charge applies to a geographic area smaller than the entire city,the 1. Have a local, state, or federal geographic area subject to the charge. compliance agreement or contract; B. Unless otherwise exempted by the 2. Be affordable to households at or provisions of this chapter or any other below 80% Median Family Income as applicable local or state law, an SDC is hereby defined annually by Housing and Urban imposed upon all development within the city Development (HUD) for the Portland- or outside the city boundaries pursuant to an Vancouver Metropolitan Statistical Area intergovernmental agreement. SDCs are (MSA); and imposed where development makes a connection to the city's systems or where 3. Remain regulated affordable housing development increases the demand on the units for a minimum of 20 years from the city's systems. date of occupancy. C. Any fee imposed or required to be paid, "Reimbursement fee"means the SDC for costs assessed, or collected as part of a local associated with capital improvements already improvement district or in lieu of a local constructed,or under construction when the fee improvement district assessment,or the cost of is established, for which the city determines complying with requirements or conditions that capacity exists. imposed by a building permit or land use decision, are separate from and in addition to "Residential dwelling unit" means a building SDCs and may not be used as a credit against or a portion of a building consisting of one or any SDC. more rooms that includes sleeping, cooking, and plumbing facilities and are arranged and 3.24.050 Methodology designed as permanent living quarters for one family or household. A. The city will adopt an SDC methodology by resolution of the city council for each SDC "Row house"means an attached single-family imposed. The methodology establishes the residential dwelling unit on a single lot. improvement fee or reimbursement fee and the method for calculating a development's 3-24-3 Code Update: 3/18 TIGARD MUNICIPAL CODE proportional share of the city's capital 3.24.060 Project List improvement costs. A. The project list adopted by city council B. The methodology used to establish the must: reimbursement fee must be based on ratemaking principles employed to finance 1. List the capital improvement projects publicly-owned capital improvements; prior that may be funded with improvement contributions by existing system users; gifts or fees; and grants from federal or state government or private persons; the value of unused capacity 2. List the estimated cost, percentage of available to future system users; the cost of costs eligible for improvement fee funding, existing capital improvements; or other and timing of construction for each capital relevant factors identified by the city council. improvement project. Future system users will contribute an equitable share of the cost of existing capital B. The administrator may,at any time,amend improvements. the project list, including adding or removing projects or changing the estimated cost, C. The methodology used to establish the percentage of cost eligible for improvement fee improvement fee must be based on the funding, or timing of construction for each projected cost of capital improvements capital improvement project on the list. identified in the project list adopted pursuant to Amendments must be consistent with the city's Section 3.24.060 that are needed to increase the adopted goals, policies, and system master capacity of the system to which the fee is plans or as otherwise determined by the related and for which the need for increased administrator to be necessary for the public's system capacity will be required to serve the health, safety, and welfare. demands placed on the system by future system users. C. If an SDC will be increased by a proposed project list amendment to include a capacity- D. The methodology may also provide for increasing capital improvement, the city must periodic indexing of system development provide notice of the proposed amendment to charges for inflation, as long as the index is: the persons who have requested written notice under Section 3.24.120 at least 30 days prior to 1. A relevant measurement of the average the adoption of the proposed amendment. The change in prices or costs over an identified city will hold a public hearing if a written time period for materials, labor, real request for a hearing on the proposed property or a combination of the three; amendment is received at least 7 days prior to the date the proposed amendment is scheduled 2. Published by a recognized for adoption. organization or agency that produces the index or data source for reasons that are 3.24.070 Expenditures independent of the system development charge methodology; and A. Reimbursement Fees.Reimbursement fees may be spent only on capital improvements to 3. Incorporated as part of the established which the fees are related, including methodology or identified and adopted in a expenditures relating to repayment of separate ordinance,resolution or order. indebtedness. 3-24-4 Code Update: 3/18 TIGARD MUNICIPAL CODE B. Improvement Fees. 1. Calculation. SDCs are calculated based on the fees in effect at the time of 1. Improvement fees may be spent only submittal of the complete building or on capacity-increasing capital plumbing permit application to which the improvements to which the fees are fees relate. If a building or plumbing related, including expenditures relating to permit is not required and a land use repayment of indebtedness. A capital decision is required, SDCs are calculated improvement increases capacity when it based on the fees in effect at the time of increases the level of performance or submittal of the complete land use service provided by an existing facility or application to which the fees relate. provides a new facility. The portion of the improvement funded by the improvement 2. Due and payable. Water SDCs are due fee must be related to the need for and payable upon purchase of a water increased capacity to provide service for meter.All other SDCs are due and payable future users. upon issuance of the building or plumbing permit to which the fees relate. If a 2. A capital improvement funded in building or plumbing permit is not required whole or in part by an improvement fee and a land use decision is required, all must be included on the project list other SDCs are due and payable upon adopted by the city pursuant to Section issuance of the land use decision to which 3.24.060. the fees relate. 3. Notwithstanding Subsections B.1 and B. The city may not issue a required building B.2 of this section, SDCs may be spent on permit or allow a connection to the city's the costs of complying with the provisions systems until all applicable SDCs have been of this chapter, including the costs of paid in full; deferral has been approved developing SDC methodologies and pursuant to Section 3.24.080.D; exemption has providing an annual accounting of SDC been granted pursuant to Section 3.24.100; or funds. installment payment arrangements have been made pursuant to Section 3.24.090. C. SDCs may not be spent on the following: C. If development commences or a 1. Costs associated with the construction connection is made to the city's water,sanitary of administrative office facilities that are sewer, or stormwater systems without the more than an incidental part of a capital required building permit or land use approval, improvement; or all applicable SDCs will be immediately due and payable. 2. Costs associated with the operation or routine maintenance of capital D. Notwithstanding Subsection A.2 of this improvements. section, the applicant may apply for a deferral of payment of transportation or park SDCs to 3.24.080 Payment occupancy.The administrator may only grant a deferral in cases where the amount due exceeds A. SDCs are calculated and are due and the amount of a transportation or park SDC on payable as follows: a single-family dwelling unit.The request must be made in writing to the administrator no later 3-24-5 Code Update: 3/18 TIGARD MUNICIPAL CODE than the time of building permit application or, 3.24.100 Exemptions if no building permit is required, then upon land use application. Any deferred SDC must The following types of development are be paid in full prior to the issuance of an exempt from payment of SDCs: occupancy permit. The amount of transportation or park SDC due on deferred A. Structures and uses existing on or before obligation will be the amount in effect at the the effective date of the resolution that sets the time of issuance of the building permit. amount of an SDC, except for connections to the city's water or sanitary sewer systems made 3.24.090 Installment Payments after such date. A. When an SDC is due and payable, the B. Additions to single-family dwelling units applicant may apply for payment in 20 semi- that do not constitute the addition of a dwelling annual installments, secured by a lien on the unit, as defined by the building code adopted property upon which the development is to pursuant to TMC 14.04. occur or to which the utility connection is to be made, to include the SDC along with the C. Alterations, additions, replacements or following: changes in use that do not increase the development's use of a capital improvement. 1. Interest on the obligation at the rate stated in the city's master fees and charges. D. Regulated affordable housing, from city If no rate is set, then the interest on the transportation and park SDCs only. obligation will default to prime rate as published by the Wall Street Journal the 3.24.110 Credits day of application plus four percent; and A. Reimbursement fee credits.No credits may 2. Any and all costs,as determined by the be given for reimbursement fees. administrator, incurred by the city in establishing payment schedules and B. Improvement fee credits. The following administering the collections process. activities are eligible for improvement fee credits: B. An applicant requesting installment payments has the burden of demonstrating the 1. Change of use. Credits will be issued applicant's authority to assent to the imposition in an amount equal to the existing SDC of a lien on the property and that the property attributable to the previous use when a interest of the applicant is adequate to secure change of use occurs. The credit so payment of the lien. computed may not exceed the calculated SDC. The applicant is not entitled to a C. The administrator will record the lien with refund if an SDC for the proposed use is the county as a lien on the property for the less than the same SDC attributable to the amount of the SDC together with the costs in previous use. Previous use credits will be Subsections A.1 and A.2 of this section. The automatically calculated and applied by lien is enforceable in the manner provided in the administrator. ORS Chapter 223 and is superior to all other liens pursuant to ORS 223.230. 2. Property donation. Credits will be issued in an amount up to the county market value of real property donated to 3-24-6 Code Update: 3/18 TIGARD MUNICIPAL CODE the city for a future park improvement that needs or agreements associated with the is on the project list. In lieu of county improvement. market value, the city may require a written appraisal as the basis for 2. Credit requests must be filed in writing determining value at the discretion of the with the administrator on forms provided administrator. Real property donations by the city no later than 60 days after become eligible for credits upon recording acceptance of the improvement by the city, of the signed deed with the county. with the exception of change of use credits as described in Subsection 3.24.110.B.1 3. Capital improvement construction. above. Credits will be issued for certain capital improvements as described in Subsection 3. When construction of a capital 3.24.110.E below. improvement gives rise to a credit amount greater than the improvement fee that C. General provisions for improvement fee would otherwise be levied against the credits. Improvement fee credits are subject to development, the excess credit may be the following: applied against improvement fees that accrue in subsequent phases of the 1. Credits must be used within 10 years development, if any. from the date the credit is issued. Credits expire after 10 years without the need for E. Eligible capital improvements. The any further action by the city. following types of capital improvements are eligible for improvement fee credits: 2. Credits may be transferable from one development to another. 1. Qualified public improvement.Credits for a qualified public improvement, other 3. Credits may only be used for than a park improvement,will be issued for obligations relating to the specific SDC for the actual cost of the improvement as which the credit was issued. approved by the administrator. Credits for a qualified public improvement will be D. Improvement fee credits for capital issued only for the cost of that portion of improvements. In addition to the provisions in the improvement that exceeds the city's Subsection 3.24.110.0 above, improvement minimum standard facility size or capacity fee credits for capital improvements are subject needed to serve the development. The to the following: applicant has the burden of demonstrating that a particular improvement is a qualified 1. Credits will only be issued for an public improvement. eligible bonded or completed capital improvement, or for a fee paid in lieu of 2. Park improvement. Credits for a park construction of an eligible capital improvement on the project list,regardless improvement, for the specific SDC to of whether the improvement is considered which the improvement relates. A a qualified public improvement, will be completed capital improvement becomes issued for up to the full cost of the eligible for credits upon final inspection improvement. Credits are limited to costs and conditional acceptance by the city, approved by the administrator based on regardless of any ongoing maintenance park size and features. 3-24-7 Code Update: 3/18 TIGARD MUNICIPAL CODE 3. Bicycle and pedestrian improvement. least 60 days prior to the first hearing on the Credits for a bicycle or pedestrian proposal. The failure of a person on the list to improvement on the project list,regardless receive a notice that was mailed does not of whether the improvement is considered invalidate the city's subsequent action. a qualified public improvement, will be issued for up to the full cost of the B. The city may periodically remove persons improvement. Credits are limited to costs from the notification list.At least 30 days prior approved by the administrator based on to removing a person from the list, the city facility size and materials. must notify the person that a new written request for notification is required if the person F. Relationship between Transportation wishes to remain on the notification list. Development Tax and SDC credits. For any transportation capital improvement that is C. A change in the amount of a eligible for credits from both county reimbursement fee or improvement fee is not Transportation Development Tax (TDT) and an amendment of the SDC or SDC city transportation SDC, the amount of SDC methodology if the change in amount is based credit issued will be reduced by the amount of on a change in cost of materials, labor or real TDT credit issued. property as set forth on the project list adopted pursuant to Section 3.24.060 or the periodic G. Relationship between citywide and application of one or more specific cost indices overlay SDC credits. For any transportation published by a recognized organization or capital improvement that is eligible for credits agency and is incorporated as part of the from both a citywide and overlay SDC, the established methodology or identified and amount of overlay SDC credit issued will be adopted in a separate ordinance, resolution, or reduced by the amount of citywide SDC credit order. issued. 3.24.130 Accounting H. In addition to Subsection 3.24.110.E.1 above, credits will be issued in an amount of A. The city will utilize standard accounting up to half the cost of any non-qualified public practices to segregate all SDCs into separate improvement street elements of River Terrace capital improvement system funds, and keep Boulevard. Credits are limited to costs such funds separate from all other city funds. approved by the administrator based on the adopted River Terrace Boulevard cross B. The city will provide an annual accounting section. of all SDCs funds showing the total amount of all SDC revenues collected for each type of 3.24.120 Notice system and expended for each capital improvement or other costs allowed by this A. The city will maintain a list of persons who chapter. have made a written request for notification prior to adoption or amendment of any SDC or 3.24.140 Appeals SDC methodology. Written notice will be mailed to persons on the list at least 90 days A person may file an appeal in writing for the prior to the first hearing to establish or modify following actions or decisions: an SDC or SDC methodology. The methodology supporting the adoption or A. Appeal of an expenditure. Appeal of an amendment of an SDC must be available at SDC expenditure must be filed with the city 3-24-8 Code Update:3/18 TIGARD MUNICIPAL CODE within two years of the date of the alleged been incorporated herein. It is hereby declared improper expenditure. The city council will to be the city council's intent that this chapter determine whether the expenditure was in would have been adopted had such an accordance with this chapter and the provisions unconstitutional provision not been included of ORS 223.297 to 223.314. If the city council herein. • determines that there was an improper SDC expenditure, the city council will direct that a sum equal to the misspent amount be deposited to the account or fund from which it was spent within one year of council's decision. B. Appeal of an SDC methodology.Appeal of an SDC methodology adopted by the city council pursuant to Section 3.24.050 must be filed no later than 60 days after the date of adoption and must be contested according to the procedure set forth in ORS 34.010 to 34.100. C. Appeal of other decisions. Appeals of other decisions, including calculation of an SDC charge or credit,must be filed with the city within 30 days of the administrator's decision that is being contested. The city council decides all such appeals. 3.24.150 Prohibited Connection No person may connect to the water, sanitary sewer,or stormwater systems of the city unless the applicable SDC has been paid. 3.24.160 Penalty Violation of this chapter is a Class A infraction punishable by a fine not to exceed $500.00. 3.24.170 Severability The provisions of this chapter are severable, and it is the intention to confer the whole or any part of the powers herein provided for. If any clause, section, or provision of this chapter is declared unconstitutional or invalid for any reason or cause, the remaining portion of this chapter will be in full force and effect and be valid as if such invalid portion thereof had not 3-24-9 Code Update: 3/18