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Public Works Engineering Proposed Changes to Systems Development Charges (SDCs) The City of Eugene is proposing three changes to the current SDC rates and methodology. The first proposed change is the annual inflation increase, which adjusts the SDC rates based on the National Construction Cost Index, published by the Engineering News Record (ENR). The second change adjusts the Metropolitan Wastewater Management Commission (MWMC) Equalization Fees and credits through an annual cost update. The third change modifies the SDC fee computation method for large industrial users to more accurately reflect the impact created by these types of development, and allow for the adjustment of SDC charges and credits after development occurs. The new rates are scheduled to become effective July 1,1996. What Are Systems Development Charge (SDC) Fees? SDC fees have been collected by the City of Eugene since 1978, and similar types of fees have been charged by the City as far back as 1948. In compliance with Oregon Revised Statutes, the City Council adopted Ordinance #19773, effective July 1,. 1991, which revised the City's SDC methodologies and fees. SDC fees are collected when new development or expansion occurs in the city. The fees are used to fund a portion of the construction of infrastructure to support growth, such as wastewater and stormwater drainage systems, streets and bike paths, and parks facilities. SDC funds are used to help the City provide for the increased capacity needed to serve new development, and recoup a portion of the community's investment in the infrastructure that is already in place. Eugene's SDC methodology provides for periodic modifications to the methodology or rate structure to be accomplished through the administrative rate-making process as defined in Eugene Codes 2.020 and 7.710. The methodology also provides for adjustment of the fees to account for inflation. The changes proposed to become effective July 1,1996, are described below. What Changes Are Being Proposed? Annual In flation Adjustment: For FY 97 (July 1,1996-June 30, 1997) an inflationary rate adjustment of 2.15% will be applied to SDCs for stormwater, wastewater systems, pazks, and for the transportation system. No change will be made to the local wastewater SDC in the River Road /Santa Claza/Hwy 99 areas. public investment in the extra capacity at the treatment plant. The proposed annual adjustment for the MWMC Equalization Fees is shown on the table of proposed fees on the reverse side of this fact sheet. City o f Eugene's SDC Methodology: A) Large Volume User Classification: Anew unit of measurement will be created for calculating the impact of large volume users on the wastewater system. The classification of "Large Volume User' will be used for calculation of both the local and regional wastewater SDC rate for commercial and industrial development discharging more than 100,000 gallons per day. Because large volume users discharge at an even level, they have a different impact on collection systems and the treatment plant than flows that vary during the day. The proposed methodology establishes a classification that treats these users more equitably and provides a method of equating the impact of large volume users to dwelling units. B) Moclification of SDC Charges: The ability to review the impact of a development on public systems once the facility is fully operational is also proposed. This would enable the City to adjust SDC charges or credits, based on actual impact. The' ability to revise prior SDC charges would be used primarily when a development's original charge was based on estimated system usage, on an alternative measurement of impact than the standard methodology, or when a credit was based on program or site modifications not operational at the time the credit was granted. SDCs for most developments would not be subject to aater modification. What Future Changes Are Forecast? Regional variations in construction costs are not accurately reflected by the ENR's national statistics. The Eugene/ Springfield area has been experiencing higher levels of development activity, and it appears that a more comprehensive approach to looking at the local costs is warranted. Because of the potential impact of permit fees on customers, the City will be working with stakeholders in the near future to better estimate the true cost of providing infrastructure to serve new development. In the interim, the standard inflation adjustment is being implemented, and other immediate needs are being addressed. Metropolitan Wastewater Management Commission Facility Equalization Charge: The MWMC Equalization Fee, the regional component of the City of Eugene's wastewater SDC, represents the reimbursable cost of each unit of capacity at the regional Wastewater Treatment Plant. Each new connection to the regional system uses a portion of the extra capacity that was built into the treatment plant. The regional Equalization Fee is the method used to recover the existing Current and proposed fees can be found on the rate table on the back of this fact sheet. i• ~• ~• ~ ~ Call the Public Works Engineering SDC Coordinator at 687-5291.