The purpose of the systems development charge is to impose a portion of the cost of capital improvements for water, wastewater drainage, streets, flood control and parks upon those developments that create the need for or increase the demands on capital improvements.
(Ord. 6623, 1991)
The systems development charge imposed by this article, hereinafter referred to as the "SDC Act," is separate from and in addition to any applicable tax, assessment, charge or fee otherwise provided by law or imposed as a condition of development.
(Ord. 6623, 1991)
For purposes of the SDC Act, the following mean:
Capital Improvements.
Facilities or assets used for water supply, treatment and distribution; waste water collection, transmission, treatment and disposal; drainage and flow control, transportation; or parks and recreation.
Developer.
Any person who creates or proposes to create a development whether or not the person is an owner, and including any agent of a developer.
Development.
Conducting a building operation, making a physical change in the use or appearance of a structure or land, dividing land into two or more parcels (including partitions and subdivisions), and creating or terminating a right of access.
Improvement Fee.
A fee for costs associated with capital improvements to be constructed after the date the fee is adopted pursuant to Section 3.520.
Improvement Plan.
A plan approved by the City Council in compliance with Section 3.540 that lists the City capital improvements on which SDC improvement fee revenues may be expended.
Interested Persons List.
A list identifying persons that have requested in writing to be notified about proposed adoption of, or amendment to, SDC methodologies.
Land Area.
The area of a parcel of land as measured by projection of the parcel boundaries upon a horizontal plane with the exception of a portion of the parcel within a recorded right-of-way or easement subject to a servitude for a public street or scenic or preservation purpose.
Methodology.
The description and formulas that collectively describe how development impact fees and system development charges are calculated for each system.
Parcel of Land.
A lot, parcel, block or other tract of land that is occupied or may be occupied by a structure or other use, and that includes the yards and other open spaces required under the zoning, subdivision or other development ordinances.
Qualified Public Improvements.
As defined in ORS 223.304(4) including any amendments thereto.
Reimbursement Fee.
A fee for costs associated with capital improvements constructed or under construction on the date the fee is adopted pursuant to Section 3.520.
Systems Development Charge or SDC.
A reimbursement fee, an improvement fee or a combination thereof assessed or collected at the time of increased usage of a capital improvement or issuance of a development permit, building permit or connection to the capital improvement. "Systems development charge" includes that portion of a sewer or water system connection charge that is greater than the amount necessary to reimburse the local government for its average cost of inspecting and installing connections with water and sewer facilities. SDC does not include any fees assessed or collected as part of a local improvement district or a charge in lieu of a local improvement district assessment, or the cost of complying with requirements or conditions imposed upon a land use decision, expedited land division or limited land use decision.
(Ord. 6623, 1991; Ord. 96-23, 1996; Ord. 07-06, 2007; Ord. 19-12 § 1, 2019)
A. 
Systems development charges shall be established and may be revised by resolution of the Council. The resolution shall include or reference a methodology which sets forth the basis for calculating charges and other fees and that is available for public inspection. The process for establishing or modifying a systems development charge shall comply with notice provisions required by State law, using the City's interested persons list.
B. 
Unless otherwise exempted by the provisions of this article or other local or State law, a systems development charge is hereby imposed upon all developers of land within the City, and upon all developers of lands outside the boundary of the City that choose to be connected to or otherwise use the sewer facilities, storm sewers or water facilities of the City. For development outside the boundaries of the City, SDCs shall only be imposed for those City systems to which the subject property is directly connected or for which the City is the designated service provider in an adopted urban service provider agreement.
C. 
All systems development charges established by the Council shall be adjusted on January 1st of each year based on the change in the cost of construction. Changes in the cost of construction shall be determined by multiplying the current system development charge by the yearly percentage change in the Engineering News Record Construction Cost Index for the Seattle, Washington area, 1913 = 100 (the "ENR Index") for December prior to the year of increase (as compared to December of the previous calendar year), and adding that amount of change, positive or negative, to the current systems development charges according to State law:
1. 
The yearly change in the systems development charges provided for in this subsection is not a change in the systems development charge methodologies; and
2. 
Council may, by duly adopted resolution, change the cost index used to determine changes in the cost of construction.
D. 
The City will establish and maintain a systems development charge list of interested persons. Requests to be placed on the list need to be in writing. The City may purge names from the list once a year after notifying persons on the list that they need to submit a request in writing that their name be retained on the list. Persons will have 30 days to reply to this notice.
(Ord. 6623, 1991; Ord. 07-06, 2007; Ord. 19-12 § 1, 2019)
A. 
The methodology used to establish the reimbursement fee shall consider the cost of then-existing facilities, prior contributions by then-existing users, gifts or grants from Federal or State government or private persons, the value of unused capacity, rate-making principals employed to finance publicly owned capital improvements, and other relevant factors identified by the Council. The methodology shall promote the objective that future systems users shall contribute no more than an equitable share of the cost of then-existing facilities.
B. 
The methodology used to establish the improvement fee shall consider the costs of projected capital improvements set forth in an adopted improvement plan that are needed to increase the capacity of the systems to which the fee is related and for the benefit of future users.
C. 
The methodology used to establish the improvement fee or the reimbursement fee, or both, shall be contained in a resolution adopted by Council.
D. 
The methodology for all City water, wastewater, street and storm water system development charges shall be kept on file with the Public Works Director and made available for public inspection.
E. 
The methodology used to establish or modify a systems development charge shall be available for public inspection at least 60 days prior to the first adoption hearing. Notice to individuals or groups on the interested persons list will be provided at least 90 days prior to the first adoption hearing.
(Ord. 6623, 1991; Ord. 07-06, 2007; Ord. 19-12 § 1, 2019)
A. 
Reimbursement fees shall be applied only to capital improvements associated with the systems for which the fees are assessed, including expenditures relating to repayment of indebtedness.
B. 
1. 
Improvement fees shall be spent only on capacity increasing capital improvements, including expenditures relating to repayment of future debt for the improvements. An increase in system capacity occurs if a capital improvement increases the level of performance or service provided by existing facilities or provides new facilities. The portion of the improvements funded by improvement fees must be related to demands created by development.
2. 
Capital improvement being funded wholly or in part from revenues derived from the improvement fee shall be included in the plan adopted by the City pursuant to Section 3.540.
C. 
Notwithstanding subsections A and B, systems development charge revenues may be expended on the direct costs of complying with the provisions of this SDC Act, including the costs of developing systems development charge methodologies and providing an annual accounting of systems development charge expenditures.
(Ord. 6623, 1991)
A. 
Systems development charges shall not be expended for costs associated with the construction of administrative office facilities that are more than an incidental part of other capital improvements.
B. 
Systems development charges shall not be expended for costs of the operation of routine maintenance of capital improvements.
(Ord. 6623, 1991)
The Council shall adopt a plan that:
A. 
Lists the capital improvements that may be funded with improvement fee revenues;
B. 
Lists the estimated cost and time of construction of each improvement; and
C. 
Describes the process for modifying the plan.
(Ord. 6623, 1991)
A. 
For properties located inside the City, all applicable systems development charges are payable upon issuance of:
1. 
A permit to connect to the water system or the sewer system.
2. 
A development permit or a residential review permit, if the development does not connect to the water or sewer systems.
B. 
For properties located outside the City but within a designated City service area, the systems development charges are payable as follows:
1. 
Issuance of a permit to connect to the water system; or
2. 
Issuance of a permit to connect to the sewer system;
3. 
If the development does not connect to the water or sewer systems, upon issuance of a County building permit, or other County development document for any development not requiring the issuance of a building permit.
C. 
If development is commenced or connection is made to the water or sewer systems without an appropriate permit, the systems development charge is immediately payable upon the earliest date that a permit was required.
D. 
Persons subject to a systems development charge shall be notified of appeal procedures when they are required to pay the charge.
E. 
A development permit or residential review permit shall not be issued nor shall a City utility connection be allowed until all applicable SDC charges have been paid in full, unless provisions for installment payments have been made pursuant to Section 3.555, or an exemption or deferral has been granted pursuant to Section 3.560 or subsection F of this section.
F. 
The Council may, by resolution, defer imposition and collection of the systems development charge in order to facilitate the development and expansion of low-income housing opportunities by Klamath Housing Authority.
(Ord. 6623, 1991; Ord. 00-25, 2000; Ord. 07-06, 2007; Ord. 19-12 § 1, 2019)
A. 
When, for any reason, the systems development charge has not been paid, the Public Works Director shall report to the Council the amount of the uncollected charge, the description of the real property to which the charge is attributable, the date upon which the charge was due and the name of the developer.
B. 
The City Council shall, by motion, schedule a public hearing on the matter and direct that notice of the hearing be given to each developer and the owner with a copy of the Public Works Director's report concerning the unpaid charge. Notice of the hearing shall be given either personally or by certified mail, return receipt requested, or by both personal and mailed notice, and by posting notice on the parcel at least 10 days before the date set for the hearing.
C. 
At the hearing, the Council may accept, reject or modify the determination of the Public Works Director as set forth in the report. If the Council finds that a systems development charge is unpaid and uncollected, it shall, by motion, direct the discontinuance of system services to the property.
(Ord. 6623, 1991; Ord. 96-23, 1996)
A. 
When an eligible systems development charge is due and collectible, the owner of the parcel of land subject to the SDC may apply for payment in 20 semi-annual installments, to include interest on the unpaid balance. The application shall provide that the owner agrees to pay a billing charge to be added to each installment. The billing charge shall be a pro-rated share of the actual cost of billing and keeping records of installment payment accounts. The amount of the billing charge may be set and modified by the City Manager in accordance with the requirements of Section 1.075.
B. 
The Finance Division shall provide application forms for installment payments, which shall include a waiver of all rights to contest the validity of the lien, except for the correction of computational errors.
C. 
An applicant for installment payments shall have the burden of demonstrating the applicant's authority to assent to the imposition of a lien on the parcel and that the interest of the applicant is adequate to secure payment of the lien.
D. 
The Public Works Director shall report to the Finance Division the amount of the systems development charge, the dates on which the payments are due, the name of the owner and the description of the parcel.
E. 
The Finance Division shall docket the lien in the lien docket. From that time the City shall have a lien upon the described parcel for the amount of the systems development charge, together with interest on the unpaid balance at the rate established by the Council. The lien shall be enforceable in the manner provided in ORS Chapter 223.
F. 
Only the following systems development charges are eligible for payment in installments as permitted:
1. 
Those designed to finance the purchase or development of a public park or recreational facility, or the construction, extension or enlargement of a street, storm sewer, community water supply, storm or sewerage or disposal system imposed by the City as a condition to issuance of any occupancy permit or imposed at some other time as determined by City ordinance;
2. 
Those imposed on properties where the property is part of a low-income housing development constructed by Klamath Housing Authority; or
3. 
Those imposed on properties where, in the discretion of the City Manager, the property owner has established that immediate payment of the SDC will cause an extreme financial hardship on the property owner and no alternative finance arrangements are available to the property owner.
(Ord. 6623, 1991; Ord. 07-12, 2007; Ord. 19-12 § 1, 2019)
A. 
That portion of a structure's water line/meter devoted solely to the supply of the structure's fire protection system shall not be subject to the systems development charge.
B. 
Any parcel which has used service at any time since June 1, 2002 is exempt from paying parks, wastewater or water systems development charges to the extent that modifications to the lot do not result in an increased water meter size, number of meters, or an increase to the equivalent residential unit calculation. Such additional systems development charges shall be calculated based on current rates.
C. 
A project financed by City revenues may be exempted by the Council from all portions of the systems development charge.
D. 
No systems development charge shall be imposed upon qualified new homes in a designated distressed housing area.
(Ord. 6623, 1991; Ord. 6636, 1992; Ord. 6649, 1993; Ord. 96-23, 1996; Ord. 17-07, 2017)
A. 
A systems development charge shall be imposed when an increased water meter size or an increase to the equivalent residential unit calculation occurs, but credit shall be given for the computed systems development charge to the extent that prior service was used on or after June 1, 2002. The credit so computed shall not exceed the calculated systems development charge and shall be computed at the current rate. No refund shall be made on account of such credit.
B. 
A credit shall be given for the cost of a qualified public improvement constructed as part of an approved development. If a qualified public improvement is located partially on and partially off the parcel that is the subject of a development approval, credit shall be given only for the improvement fee portion of the SDC, not for the reimbursement fee portion, and shall not exceed the amount of the improvement fee even if the cost of the capital improvement exceeds the fee.
C. 
A systems development charge credit for the cost of a qualified public improvement shall be calculated as follows:
1. 
The credit must be applied for by an applicant entitled to the credit. The applicant must specifically request the credit prior to the date when the applicable SDC is payable as provided in Section 3.545. The applicant bears the burden of evidence for establishing entitlement to a credit and for establishing the value of the credit.
2. 
The value of the SDC credit shall be approved by the department director responsible for the applicable public system based on the cost of the qualified public improvement or the value of land dedicated for the improvement as follows:
a. 
For dedicated land, value shall be based on a written appraisal of fair market value by a qualified professional appraiser.
b. 
For constructed improvements, the value shall be based on the actual cost of construction verified by receipts submitted by the applicant.
c. 
For improvements pledged but not yet constructed, value shall be based on the anticipated cost of construction using estimates prepared and certified by a registered engineer or architect, or based on a fixed price bid from a contractor qualified to build the improvement. The department director may revise the amount of the credit if actual construction costs deviate from cost estimates or bids by more than five percent.
3. 
The appropriate department director shall respond to a request for SDC credit within 21 days of the date when the request is submitted, not including time requested by the director to clarify or complete an application. Requests for clarification shall be in writing.
4. 
If an applicant disputes a director's decision regarding an SDC credit, an appeal may be filed in accordance with provisions in Section 3.575.
D. 
Credit shall not be transferable from one development to another. Credit shall not be transferable from one type of capital improvement to another.
E. 
In determining park systems development charge credits the following criteria shall be applied:
1. 
Required Areas. No credit will be allowed for required landscaping, for yard areas, or for unbuildable, undeveloped "open space."
2. 
Non-Public Areas. No credit will be allowed for areas not open to and easily accessible by the general public. To be accessible, public parking should be available and/or there should be immediate access to an established public bikeway.
3. 
Landscaped Areas. A credit of 50% of the cost of fully landscaped areas in excess of that required by the CDO will be allowed, provided it is adjacent to an exterior public street and at least two acres in size (uninterrupted by driveways or streets). There must be an unrestricted view to the street. This provision applies where no developed recreation facilities are provided. "Cost" is defined as the assessed value of the land plus the costs of the initial improvements. To be eligible for this credit, the developer must provide for perpetual maintenance of the improvements.
4. 
Recreation Facilities. Credit will be given for the cost of recreation features added to designated open space (e.g., trails) provided they are easily accessible to the general public (such as having parking available or being connected to an existing trail system). "Cost" is defined as the costs of the improvement only, not the land value.
a. 
Credit will be 100% if the criteria in subsection (E)(5)(a) are met.
b. 
Credit will be 125% if provision for perpetual maintenance is made under subsection (E)(5)(b).
5. 
Public Parks.
a. 
Credit of 100% of the cost of a fully developed park or similar recreation facility is allowed provided it: is in excess of two acres in size; is consistent with the City's parks master plan or receives approval of the Parks and Recreation Advisory Board; is fully landscaped; has two or more recreation facilities or features consistent with a neighborhood park and has been approved of by the Board; and is easily accessible to the general public (e.g., has public parking available). The park must be dedicated to the City after development by the developer. "Cost" is defined as the assessed value of the land plus the cost of landscaping and recreational improvements.
b. 
Credit of 125% of the above cost is allowed if provision for perpetual maintenance by the developer or homeowner association is provided.
6. 
Dedicated Park Land. A credit of 100% of the assessed value of unimproved land donated to the City for park development is allowed, provided it is at least three acres in size, suitable for park development, no closer than two miles to an existing park, not in conflict with the City's parks master plan and has been approved by the Parks and Recreation Advisory Board and the City Council.
7. 
Excess Credits. There shall be no payment by City in the event the value of the credit exceeds the SDC due, but the owner may carry over excess credits for five years.
(Ord. 6623, 1991; Resolution 97-28, 1997; Ord. 02-07, 2002; Ord. 07-12, 2007; Ord. 17-07, 2017)
A. 
All funds derived from a particular type of systems development charge are to be segregated by accounting practices from all other funds of the City. That portion of the systems development charge calculated and collected on account of a specific facility system shall be used for no purpose other than those set forth in Section 3.530.
B. 
The Finance Division shall provide the City Council with an annual accounting, based on the City's fiscal year, for systems development charges showing the total amount of systems development charge revenues collected for each type of facility and the projects funded from each account.
(Ord. 6623, 1991; Ord. 19-12 § 1, 2019)
A. 
Appeals regarding the calculation of a systems development charge shall be made in writing to the department director responsible for administering the particular system in question within 10 days of the date that the charge is payable. Appeals must set forth the basis for appeal outlining the specific computational or methodological errors that are the basis for the appeal. Responses to director appeals shall be issued in writing within 45 days. An appeal of the director decision may then be made to the City Council by written request to the City Recorder within 10 days of the director's decision. If requested in writing, petitioners will be afforded reasonable opportunity to appear before the Council to present the basis for their appeal. Responses to Council appeals will be issued within 45 days after receipt by the City Recorder or, if an appearance before the Council is granted, within 30 days after the appearance. The Council's appeal decision will be in writing and will include an advisory reference of the petitioner's right to State Court review pursuant to writ of review.
B. 
An appeal of an expenditure of systems development charge revenue must be filed within two years of the date of the alleged improper expenditure. With the exception of the extended timeline for filing the initial appeal, the review process for expenditure appeals is the same process as outlined in subsection A.
C. 
The Council shall determine whether the appropriate director's decision is in accordance with this article and State law and may affirm, modify or overrule the decision. If the Council determines that there has been an improper expenditure of systems development charge revenues, the Council shall provide in an approved budget and direct that a sum equal to the misspent amount shall be deposited within one year to the credit of the account or fund from which it was spent.
D. 
A legal action challenging the methodology adopted by the Council pursuant to Section 3.525 shall be subject to the State statutory requirements of writ of review and shall be filed not later than 60 days after the adopted methodology is final.
(Ord. 6623, 1991; Ord. 07-06, 2007; Ord. 19-12 § 1, 2019)
No person may connect to the water or sewer systems of the City unless the appropriate systems development charge has been paid or the lien or installment payment method has been applied for and approved.
(Ord. 6623, 1991)
Violation of Section 3.580 of this article is punishable by a fine not to exceed $500.00.
(Ord. 6623, 1991)
A. 
The rules of statutory construction contained in ORS Chapter 174 are adopted and by this reference made a part of this article.
B. 
The invalidity of a section or subsection of this Act shall not affect the validity of the remaining sections or subsections.
(Ord. 6623, 1991)