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City to revise SDC fee structure

Changes prompted by complaints about transportation charges


Recurring disputes over transportation system development charges has recently prompted City of Prineville staff to begin developing a new method for calculating the fees.

City manager Steve Forrester broached the topic earlier this month at a council meeting, highlighting a recent dispute associated with the remodel of the local McDonalds restaurant. Owner Paul Rodby objected to the city charging more than $30,000 in transportation system development charges (SDCs) for his renovation project.

“The SDC was specific to the square footage that he expanded for his seating area,” Forrester said. “That particular aspect of his project was about $120,000. So, we are hitting him with a project cost, as it relates to SDCs, of about 35 percent of the cost for that addition.” Forrester noted that, by contrast, had Rodby built the restaurant from scratch, an approximately $3 million expense, the SDCs would be around $120,000, or 3 percent. He considered that a much more manageable cost than the 30 percent expense associated with the remodel.

“If you are a banker and somebody came in and said they would like to borrow $100,000 to expand their restaurant operation, and by the way, need another $40,000 to pay the SDCs, that’s going to be pretty tough,” Forrester said. “I think it is time that we take a look and try to come up with a process for existing businesses in our community when do an expansion or addition.”

Forrester and City Engineer Eric Klann have enlisted the help of city councilors Steve Uffelman, Jason Carr, and Dean Noyes to revise the transportation SDC methodology. As the new committee begins developing the revised calculations, they will have to find a way to do so while maintaining the funding needed for future transportation projects. Those projects are outlined in the city’s transportation system plan (TSP).

“That TSP looks at what improvements will be needed for the next 20 years,” Klann said. “If we look at 20 years of projects there is a big cost on that. Then we have to look at how we project to grow for the next 20 years and those would be the people who would come into the city and pay system development dollars that will go to fund these projects.”

The calculation has to not only factor in the future projects, growth projections, and necessary funding, it needs to find a way to keep the fees as balanced as possible.

“That is what we need to work through, is understanding if we give remodels a discount, other people will have to pay more to offset that cost,” Klann said.

When it comes to SDCs, transportation fees tend to prompt the most complaints. Klann explained that business owners and developers are more willing to accept that water consumption dictates water SDCs. Transportation SDCs, on the other hand, are not as easy to explain to developers because impact to traffic is less tangible. The fees become even harder to explain when they are tied to a renovation project.

“Remodels are difficult because people don’t see the number of trips to their business it creates,” Klann said. “In their mind, they say I am just serving the existing customers.”

Going forward, the SDC committee will meet on a regular basis in hopes of developing more equitable transportation fees for new development and remodels alike.

“There has to be a practicality aspect to it, so it is not unmanageable,” Forrester concluded.



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