Resolution No. 96-57 CITY OF TIGARD,OREGON
RESOLUTION NO 96- j>
A RESOLUTION AMENDING THE CITY OF TIGARD WATER SERVICE AREA SYSTEM
DEVELOPMENT CHARGE AND THE METHODOLOGY USED TO ESTABLISH THE CHARGES t
�l rtik�
� tf
' �5'
WHEREAS, Tigard Municipal code chapter 3.24 defines the authority process for imposing Water -
development charges(SDCs);
WHEREAS,The purpose of the Water SDC is to ensure fair and equitable financing is available to support
needed capital additions; u^ r
WHEREAS,The Intergovernmental Water Board(IWB)has recommended approval of the Tigard Waters xi
Service Area SDCs; �).s"$-V' `,n
NOW,THEREFORE,BE IT RESOLVED by the Tigard City Council that: est
Hh
SECTION 1: The water system development charge for new connections by meter size based on a 518"x
3/4"meter having a weighting factor of one equivalent dwelling unit shall be amended as , ..;...:r
follows:
Meter Size 41 O service area Bull Mountain system
5/8"x 314" $986 $1,507 2i1
, f 1" 1,972 3,014 },�
1 I/2" 4,930 7,535
j 2" 7,888 12,056 M
f 3" 15,776 24,112 r t#
., 4" 24,650 37,675 sry
6" 44,300 75,350 as
78,880 .120,560
' 10" 113,390 173,305 ¢;:
1
SECTION 2: .The methodology used to establish the above system:development charges, which is
attached as Exhibit"A",is also hereby adopted
SECTION 3 The capital improvement plan required by state law as the basis for expending SDC
revenue for water capital improvements shall be based upon the attached Exhibit`B',
which is recommended by the IWB and is also hereby adopted.
SECTION 4: The City Council determines that the amended SDC fee schedule is not a tax subject to the
property tax limitations of Article XI,Section I 1(b)of the Oregon Constitution. . -
RESOLUTION NO.96-57 `
.Pagel
.), a
f PASSED. This day of -PnY,[�L 1996.
lZ
� r-City of Tigard I�.z�?,��
,.
M
ATTEST-
ME
TTEST z "z+`
t
City Recorder-City of Tigard s�
+viJc nv.,lutL.M1 }
}
t
"}
} a
3 s,
15 �
� i
� T
RESOLUTION NO 96-D
Page 2
x r
� 3
a�sd-
tl li
EXHI61T
Section 7
System Development Charges
Introduction
One of the principal sources of revenue for financing water system expansions is a one-time '.
initial charge for connection to the system. This charge is generally referred to as a
connection fee,impact fee,capital contribution fee,and/or SDC. In some communities, i
these fees are designed to recover only the costs incurred by the utility to install the
connection and, if needed, to extend the water line to serve the new user. For other
^. communities,these fees also include recovery of all or a portion of the capital investment
made by the water system to provide sufficient capacity in the system to serve these new
users.
The City of Tigard currently assesses an SDC that is intended to reimburse current users for
the costs they have incurred to provide capacity in the system to serve future users.The
City will begin construction on 2 reservoirs and several other capital projects in the next 5
years that will change the unit costs for the capacity provided in the system to serve future "
users.In this section,the underlying assumptions and calculations of revised water SDCs ,
for the City of Tigard are discussed.Charges for installation of the connection or extension
of a water line should be assessed in addition to the SDCs calculated in this report.
System Development Charges:An Overview
Capital improvements needed to provide new capacity in a water system must generally be £3
constructed in large increments;therefore,system expansions are often constructed years in
advance of when the added capacity will be fully utilized.As a result,current system users r %'
are often forced to pay rates that are partially used to pay for a portion of the system to
serve future users.SDCs,designed to recover the water system's investment in this extra
capacity,are often assessed,either to avoid charging existing users for these extra capacity
costs or to partially compensate the existing users for the costs they have previously
incurred to provide this capacity.
14,
Revenues generated through the assessment of SDCs are generally used to directly offset. `
the costs of a system expansion or to repay any debt issued to finance thesystem expansion.
The revenues may also be held to offset the costs of future system expansions_Use of then^
".revenues to offset these debt service costs reduces the amount of revenue that needs to be
generated through the water rates assessed to existing users.In this way,the SDC revenues
can be used either to directly finance plant expansions or to reimburse existing users
(through lower rates)for the costs they have incurred to provide capacity for new users.
SDCs are typically assessed when a new user or developer connects to the water,when a
new development permit is issued,or when a user changes the usage of his or her property.
..There are a number of alternative SDC structures:a simple charge per connection,charges
k..w .that vary with the number of fixture units (water drains),new charges per equivalent
PDX16M DOC
1
residential unit,and charges that vary with the water meter size for the new connection };
(that is,5/8-by 3/flinch equivalent meters). The City currently assesses SDCs on m
equivalent dwelling unit basis for all users.
Legislative Considerations
In 1989,the State of Oregon enacted legislation that applies to any SDCs in effect on or after +} _
July 1,1991.The bill authorizes local goveamments to define and assess SDCs and places
limits on the ways revenues generated through SDCs can be used.
An SDC,as defined in this bill, is an amount charged to a new user at the time of
connection to the water system in excess of the cost of inspecting and installing the
connection.The SDC does not include fees assessed or collected through local improvement
districts. The legislation further breaks down the SDC into an improvement fee or a ,}
reimbursement fee.The improvement fee is a fee for the cost of capital expansions to be e
constructed.The reimbursement fee is a fee for the costs of capital improvements already
constructed or under construction. The SDC may consist of an improvement fee, a
i reimbursement fee,or a combination of the two. r °
The legislation specifies that the reimbursement fee most be established by an ordinance or
resolution that sets forth the methodology that will be used to calculate the charge.It
further specifies that the methodology must consider the cost of existing facilities,prior r t'fir
contributions by existing users,value of unused capacity,ratemaking principles employed
to finance the capital improvements,and other relevant factors. The objective of the
methodology must be that future system users contribute no more than an equitable share1 ..
of the cost of existing facilities. x
The improvement fee methodology most also be specified in an ordinance or resolution
that considers the cost of projected capital improvements needed to increase the rapacity of ,�;
the system.The legislation further requires that a credit be provided for the construction of + 117'
ME
qualified public,improvements (contributions).A qualified public improvement is one
required as a condition of residential development approval,.identified in the system's
capital improvement improvement program,and not located on or contiguous to the property being }
developed.
a x
g
Revenues generated through the reimbursement feesmust be spent only on capital
improvements to the.system or repayment of debt on those improvements.Revenues s
.generated through the improvement fees are dedicated to capacity-increasing capital
improvements or repayment of debt on capacity-increasing capital improvements.An
' increase in capacity is established if the improvements increase the level of performance or
service provided by existing facilities or provide new facilities. The portion of such
improvements funded by improvement fees must be related to current or projected
development.
.Other provisions of the legislation require that:
PDX16F2A.D0C
'_2
1
r4..
F
E
o A.local government implementing an SDC must develop a capital improvement
program(CIP)or comparable plan that lists the improvements that may be funded with
improvement fee revenues and the estimated timing and cost for each improvement.
+ SDC revenues must be deposited into dedicated accounts,and local government
most
n
provide aannual accounting of revenues and expenditures.
• Local government must provide for an administrative appeal procedure whereby a
citizen or other interested party may challenge an expenditure of SDC revenues.
• No legal action challenging the methodology used to calculate SDCs may be filed after
60 days from enactment of or revision to the SDC.
The provisions of the legislation are invalidated if these provisions are construed to
impair the local government's bond obligations or the ability of the local government to k
r
issue new bonds or other financing. { .
` pax
Overview Of Methodology
The SDCs calculated in this study were prepared in accordance with CH2M FirL
understanding of ORS223.297314. The SDCs developed for this analysis consist of a
reimbursement fee,an improvement fee,and a combined fee.The City of Tigard's SDCs
were calculated on a system-wide basis and divided into 2 separate service areas;the 410 k' +
zone main service area and the Bull Mountain service area.The City's current SDCs are =, a
based on the 2 separate service areas with different SDCs reflecting the additional costs 1,
incurred to serve the higher elevated Bull Mountain service area.
y
1 Reimbursement Fee
The methodology used in this analysis to calculate the reimbursement fee in dividing , k
the system's noncontributed depredated plant investment in the water system components s c21,
by their respective capacities. The resulting investment per mgd of.capacity is.then
"j converted into an SDC that is based on a charge per EDU for single-family residential '+
connections.The resulting SDCs are.based on the estimated requirements for capacity `
associated with new users'potential dands
emon the system.
666
The reimbursement SDCs calculated in this study result in charges that are equal to the new
Z"1111--
user's proportionate share of the depredated investment by the utility in plant and _`
equipment to serve new users.The steps taken in this study to calculate these SDCs,as
shown in Table 7-1,are as follows:
Determine historical system cost as measured by the noncontributed depreciated
original cost of the system's investment in the system plus current cash reserves less
outstanding debt on these improvements,to derive the net system investment in these
'improvements.
j"
i Divide investment in system facilities by estimated system capacity of the system ! '
components in mgd and gpd to derive charges per unit of capacity. gG
tom.
k
rnx16r2A.o0c 7-3 C,
..... . . ..w_.
K
4
K
l
07
Table 7-t
CITY OF TIGARD
WATER RATE MODEL
SDC-REIMBURSEMENT FEE }. `
Welar Reservars8 Transmrrvswn y'v
BWI Mountains nam.19.7Y Su Slua BDinntxatipn Total
Curtest Fuad Ascot Valeo-$ 50 $2]9,900 $2.254,000 $2533.900 fT
L—Currant Outs do Debt Prindpal(a) 0 O O 0 k
Pius:Cunem Crib Pasarvas(a) 0 58.900 473,800 532.700
Net System irnenmeni 50 5336.800 $2.72].900 $3.066.600
current smem Design cap=y(mgd) 0.0 4.1 3.6
N'
I—.,par mgd 50 562,600 5757'.]00
ggg Net Imes —per 9Pd 50.00 $0.08
M—m Day Water Demand(9pd)(b) 789 789 789
9 Reimbursement SDCper EDU $0 $63 SE00 $683 f K
Walar Res4rvpirs 8 Transmrswon
410 Z...-3% Su Stora 8 Distfibutian Total
Curtest Fixed Asset Valva-5 SO $1,138.800 59,170,300 $10.309.100
Lase Current Outat—n g Debt Pr=PW(a) 0
Plus Currant Cash Roservea(al 0 239.500 1.927.800 2.167,300
Net Sysiam I--- SO 51,3]8,300tt
51t,098,10D $12.476.300 p
Curtest System Design Capaaty(mgd) 0.0 16.8 14.4
Netinvestment par mgd W 302000 $770,7W
N: $0.00 $0.08 50.71
� ) Maxmum Day Wafer Damand(gpd)(b) 789 789 789 +�
Reimtwrs—.SDCper EDU 00.. $63 5608 $671
Water Reservars8 T Y
em-Witle.l00a.. Su St 80smbr wn TINaI
cu—Fund Assert Veiue-5 W S1416700 $11424300 $12843000:
UIw:Current O ding Debt Pen peri(a) 0 O O 0
R Current Cash Reservers(a) 0 298.400 2 401 700 2]00000 `
Ne System lnvespn 5D $1.717,100 $13,625.900 515.543,000 K,
A
Cu—Sy—Dangn Capaay(mgd) 0.0 20.9 18.0
N.:--per mgd w $82.200 5768.100
Net fnvestrnnnt per 9ptl 50.00 W.-
` M-I—m Day Water Domantl(9pd)(b) ..789 789 789
Raimbursemem BBC per EDU 30 S. 5608
(a)Totai is distnbutatl tom
a)or user Pmoassea us+ng same Pmpon s as arrant fixed assorts..:
?� (b)Esnmatad system total maximum day tlmnantl drvidad by tp W equrvalam meters.
V
i
g
t
i
:t 7-4
r
$ L
>� .. • Multiply resulting total charge per unit of capacity by the estimated capacity
requirements of a typical single-family residentiat user or equivalent dwelling unit
(EDU).The charges for all other users are based on their meter size relative to a 5/8"x
a ,t 3/4"EDUmeter.
! .These steps result in reimbursement SDCs that distribute system capital costs equitably
between current and future users.In addition,these charges will equitably recover those `
costs allocable to future users in proportion to their estimated potential demands for water s h.
service. }g
Improvement Fee
The improvement fee methodology used in this analysis to calculate the SDCs is to divide
the expansion capital project costs(inflated)from the CIP by the new capacity being added ,y
to the water system.The resulting unit cost of new capacity per mgd and gpd is then
converted into an SDC that is based on a charge per EDU.The.resulting SDCs are based on
the estimated requirements for capacity associated with new users'potential demands on
the system and the unit costs per mgd of additional capacity.
the improvement SDCs calculated in this study result in charges that are equal to the s
utility's costs to provide additional capacity for new users.The steps taken in this study to
calculate these SDCs,as shown in Table 7-2,are as follows:
ti • Determine the inflated value of CIP expansion projects to be allocated to new users(see
Table 3-2).
+ Divide the CIP expansion project costs by the additional water system capacity,being
added by the CII'expansion projects.
• Multiply the resulting charge per unit of capacity by the estimated capacity
" requirements of an EDU or typical single-family residential user.The charges for other
.user classes are based on their meter size relative to a 5/8"x 3/4"EDU meter. ''
Subtract a debt setvice credit,if any,for the expansion-related CIP costs that will be
debt financed.This is needed to ensure that new customers are not double-charged
.through debt service payments included in the rates.
j These steps result in SDCs that distribute additional system capacity costs equitably to
future users.In addition these charges will equitably recover those expansion capital costs
allocated to future uses in proportion to their estimated potential demands for water
service_.
Combined Fee
The combined fee methodology for calculating SDCs is the addition of the reimbursement '
fee and the improvement fee.The resulting combined SDC,as shown in Table 7-3,is based '
on the estimated requirements for capacity associated with new users,.the potential
demands on the system,and the unit investment per mgd of existing system capacity plus
} ~ the unit costs per mgd of additional system capacity.
( PDX76F'.A.[XX 7-5
i
a Table 7.2
y CITY OFTIGARO
WATER RATE MODEL
`3 SDC-IMPROVEMENT FEE:
,Em i�+ii
9
Water Reservoirs& Transmission
Bull Mountain S SamStora e &Distribuaon To.. rch 't
CIP Value Allocated to New Users $0 $406,800 $658,700 $1,065.500 k x
Additional System Design Capacity(mgd) 0.0 1.0 1.0
Unit Cost of New Capacity per mgd $0 $406.800 $658,700 ny.
Una Cost of Naw Capacity per Sptl $0.00 50.41 50.66 'rj1t^"^.?
� �
Maximum Day Water Demand(gpd)(a) 789 789 7898 xg{;
Improvement SDC per EDU $0 $323 $521 r `1
a
Debt Seri,Creditper EDU $a SO $D SO xSu
Net Improvement SDC per EDU $0 $323 $521 $844 ,5
`4.
'N0[ar ReSI=& Transmission .;
410 Zone=SO-3%
S Stora e &DrstnbuLon Total a,�
i
CIP Value Allocated to New Users $0 $264,400 $1,105.400 $1,369.800 .k s......
Additional System Design Capacity(mgd) 0.0 3.5 3.5
UnitCpstot New Capacitypermgbi s0 $75,600 $315,800 '
Unit Cast of New Capacity per gptl $0.00 $0.08 $0.32 'q
Maximum Day Water Demand(gpd)(a) 789 789 789A vs-
3
Imp.. aM SDC per EDU $0 $63 $252 5315 `
I Debt Sarv.e Credd per EDU 50 SO SO $0 ,LT
Net improvement SDC per EDU $0 $83 5252 $315 "
1 �
P
Water Res rvo rs& Transmis3iOn �av'*
System-Wide=100% $ Stora'a &DLstnbutlon Total
CIP Value Allocated to New Users $0 $671,300 $1,764,100 $2,435,400 i r"
'.i Additional System Design Capacity,(mgd) 00 4.5 4S"
y
.Unit Cost of New Capmcity per mgd $0 $149.200 $392,0006;, F"qu.
Una Coal.f New Capacity per gptl $0.00 50.15 $0.39 t=
Maximum Day Water Demand(smd)(a) 789 789789 I�'
improvement SDC per EDU $0 $118 $308 $126
Debt SemneCredftper EDU $0 $0 $0 $0
Net Improvement SDC per EDU $0 $118 5308 5426
(
(a)Estimated system total nlammurn day demand divided by total equivalent maters.
( 1
7-6 w '.
v
x:
s xi
f
fr i° �t
Table 7-3 - r t'^
CITYOFTIGARD $
c WATER RATE MODEL
SOC-COMBINED FEES
x Item S stem-Wide 41O Zone Bull Mtn S stem
Reimbursement SDC per EDU $671 $671 $663
Net Improvement SDC per EDU 5426 $315 5844
Combined SDC per EDU 57,097 $986 $1,507 a `
Current SDC per EDU N.A. $845 $1,000
z3
M` .:
x�f
aye
t t
xf I
E� $
7-7
S4
t
i'
��`
x i. The combined system-wide SDC for a single-family connection is$1,097.The SDCs for the 2 I..
s " separate service areas are 8986 for the 410 zone and$1,507 for Bull Mountain-These SDCs
compare with the current SDCs of 5845 and$1,000,respectively,as shovm ort-Fable 7-3. t„!
t
� SDC Recommendations
We recommend that the City implement the 2 new SDCs for the 410 zone and Bull
�. Mountain service areas as shown in Table 7-3.This SDC methodology is easy to administer,
j is simple to understand, provides a reasonable approximation of the relative water
demands of various new customers,and does not require the City to monitor changes in a{
other user activities.
4 Y
<,
We also recommend that the City:
Establish or continue to maintain an account for the SDC revenues and are accounting 'x s
• system to track the receipt and expenditure of these funds. tAt
tx m,
Establish or continue to maintain an administrative procedure whereby a citizen or t`,
`. • other interested party may challerega m expenditure of SDC revenues.
• Identify in the City's capital improvement program which capital improvements may be x'� °,
financed from revenues generated through SDCs.
xa
• Incorporate the SDC calculation methodology used in this report into the SDC Vis?
ordinance.
a4$
t
PDXI6Fl.A OC '$
i
r� $1_ „ - H
m „ s
lay
MEN
Mg
pan
I «,
» -Pg�g,�cag � sU�22 _ 3
NOW-
}
y
" � �r
y v
CAPITIAL IMPROVEMENT PROJECTS
(a�
' 1996197
$300,000 Land and Improvements to begin construction of 3.5 million gallon
' reservoir at the Mentor site. Reservoir to have an overflow
elevation of 410 feet(41 O zone). t g."ke.
50%existing 50%future.
$90,000 Replace approximately pproximately 300 feet of 24-inch transmission main and
replace approximately 300 feet of 10-inch distribution main on
Tiedeman St.@ Fanno Creek(410 zone). 4ay .
100%existing. ",:; �t
$87,000 Install 1,450 feet of 12-inch transmission main on SW North ? `gym
Dakota between 115th and 121 st Avenue(410 zone).
60%existing 40%future.
$14,400 Install 240 feet of 12-inch distribution main on SW 130th Avenue � �
,r{ between Winterlake and Hawks Beard(410 zone). . '"'`
80%existing 20%future. ,
s gg
$36,000 Install 900 feet of 8-inch distribution main on SW 130th Avenue ;r n
north of Hawks Beard to Scholls Ferry Road(410 zone). MV
100%future. �DO„ . ;,
$20,000 Construction of Pressure Relief Valve station in Bull Mountain il
Meadows subdivision(Bull Mountain System). >-
80%existing 20%future.
n.
$20,000 Construction of Pressure Reducing Station on Bull Mountain(Bull q
Mountain system).
100%future.
$18,000 Upgrade pumps at High Tor:1 to provide additional capacity(Bu
Mountain Meadows).
10%existing 90%future.
$585,400 `"'
x
4_
5t
.6 a
E
}
Yw4� s Jrc
* 1997/98
$260,000 Construction of 3.5 million gallon reservoir at Menlor site.
r l Reservoir to have an overflow elevation of 410 feet. Total cost
$2,960,000. $2,000,000 to be paid by current SDC fund and
s 5700,000 from the reservoir reserve fund.
50%existing 50%future.
$672,000 Install 5,600 feet of 24-inch transmission main along SW Walnut o-
Street from 121st&Fonner to SVV 1.35th,,.cnue(41 n_one). s
20%existing 80%future, 1'r"
$932,000
1998199 kg
" .
$680,000 Install 4,000 feet of 24-inch transmission main on SW Greenburg �L
Road,from Hwy 217 to Bradley Corner. This would include a bore e,x
under Hwy 217($100,000)and a PRV station and new meter vault
($100,000). This is within the 410 zone.
20%existing 80%future. r�
P
$81,000 Install 1,350 feet of 12-inch distribution main on SW 150th Avenue
from Bull Mountain Road to Hawks Ridge,phase 1(Bull Mountain
system). ,;
40%existing 60%future. ap
$20,000 Construction of Pressure Reducing Station on Bull Mountain(Bull
-Mountain system). $ �
100%future.
rte.
$781,000
1
1999/00
$81,000 Install 1,350 feet of 12-inch distribution main on SW 150th Avenue' t
from Bull Mountain Road to Hawks Ridge,phase 2(Bull Mountain
system)..End of project.
40%existing 60%future.
$352,000 Install 4,400 feet of 16-inch transmission main from SW 135th
`Avenue and Walnut to Scholls Ferry Road(410 zone).
100%future.
$256,000 Install 3,200 feet of 16-inch transmission main on SW Beef Bend
road from SW 146th Avenue to SL^f 150th Avenue north to future
reservoir(410 zone).
1001%future. ;
c
$111,000 Reserve fund fora reservoir with either an overflow elevation of a
550 feet or 470 feet on the northern flank of Bull Mountain(Bull
tai Mountain system).
fi
80%existing 20%future.
$800,000 r :
2000/01
$1,100,000 Construction of 1 million gallon reservoir on the northern flank of
Bull Mountain with an overflow elevation of 470 or 550 feet. Also
included is a pumping station($120.000)to transfer water from the 1
410 zone to the new reservoir. This is within the Bull Mountain
," system. ���
°5
80%existing 20%future.
.$1,100,000
e
r
Z
a............. ' t�
`.;
' Ir
CD
VA
t
YY 1
3
S
S 4 '
MPW