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System Development Charges (SDCs)

System Development Charges (SDCs) are one-time charges assessed on new commercial and residential development to pay for the costs of expanding the streets, sanitary sewers, parks, and water systems. If you are applying for a building permit for development or redevelopment in Redmond, SDCs are due when the Buiding Permit is issued unless a SDC Collection Point Deferral Agreement is in place. SDCs provide a mechanism to allow new growth and protect the City’s existing utility customers from subsidizing new development through higher taxes or utility rates. If systems need to be expanded to accommodate development, it is not paid for at the expense of the existing population.

Oregon law (ORS 223.297 - 223.314) authorizes SDCs collection for development, and the City of Redmond’s authority to establish SDCs is stated in Section 4.700 of the City’s Code. 

SDC Payment Options Letter (Effective July 1, 2018-June 30, 2019)

SDC Rephasing Schedule (Resolution 2010-19 - June 8, 2010)

SDC Adoption (Council Packet - May 13, 2008)

 

How are SDCs calculated?

State law has strict provisions that require a city to develop a formula, or “methodology”, which based on the value of existing or planned capacity in the infrastructure system to serve new development. Oregon law allows that an SDC may include a reimbursement fee, an improvement fee, or a combination of the two. 

What is the difference between Reimbursement and Improvement SDCs?

The reimbursement fee is based on the value of available reserve capacity for capital improvements already constructed or under construction. The methodology must consider the cost of existing facilities, prior contributions by existing users, the value of unused capacity, grants, and other relevant factors.  Reimbursement SDCs compensate ratepayers for their prior funding of capital improvements because excess capacity in existing infrastructure is available to accommodate growth. Reimbursement SDCs help fund system repairs and replacements, and may not be tied to particular projects. Revenues from reimbursement fees may be used on any project included in the City’s Capital Improvement Plan (CIP), including major repairs, upgrades, renovations or debt service. In the City of Redmond, transportation, water, and wastewater SDC fees have a reimbursement component.

The improvement fee is designed to recover all or a portion of the costs of planned capital improvements that add system capacity to serve future development. The methodology must be designed in a manner that SDCs will not exceed the growth-related costs from the capital project list.  Improvement SDCs may only be spent on capacity increasing capital improvements identified in approved CIPs. In the City of Redmond, transportation, parks, water and wastewater SDC fees are improvement-based.

The City of Redmond’s current System Development Charges can be found in the City’s Fee Schedule

Effective July 1, 2018 to June 30, 2019:

Table 1: SDCs reflect the full rate paid at Final Inspection or Certificate of Occupancy per SDC Collection Point Deferral Agreement.

Table 2: SDCs paid at time of Building Permit are reduced by 1.92% per City SDC Interest Reduction Policy.

 

2019 Parks SDC Analysis

In 2018, the City updated its Parks Master Plan and then engaged a consultant to update the City's Parks SDC based on that new Master Plan. The draft report can be accessed through the link below:

Parks System Development Charge Update (Report - April 2019)

 

Links

SDC Frequently Asked Questions (FAQs)

City of Redmond, SDC Annual Accounting Reports

Building Permit Submittal Packets