CPRD board delays decision on sharply increasing SDCs
After hearing pushback from developers on a proposed steep increase to its system development charges (SDCs) at its June 22 meeting, the Chehalem Park and Recreation board of directors elected to reconvene at 6 p.m. Wednesday to make a decision on the matter.
All seven people who spoke during public testimony at the hearing voiced opposition to the proposed 667 percent raise from $2,017 to $13,459 for a single family home, citing that it would inhibit development of new housing and inflate prices, among other criticisms.
Even though three of the four board members present expressed a disinclination to approve that figure, the board voted unanimously to keep the meeting open so that president Pete Siderius, who underwent back surgery that morning, could participate.
"It gives us a chance to think things over and gives us a chance for Pete to be back with us," director Mike McBride said.
The timing also addressed concerns from colleagues that McBride, who is set to step down at the end of the month after 36 years on the board, would still have a chance to vote on the issue considering his service to the district, for which he was also given honorary lifetime membership on the board at the end of the meeting.
Lisa Rogers, who along with board member Mike Ragsdale was voted to join or rejoin the board in May, testified during the public hearing and expressed concern about the proposed fee and its potential effects on housing in the area. She also said the board needed to consider how such a steep hike would be perceived by members of the public, accurately or not, because it could erode their support in the community.
Rogers was one of several who requested the board take more time to consider the issue and that because she would likely be scrutinized on the issue, she would appreciate the opportunity to cast a vote.
Longtime board member Don Loving, especially, recognized that as an issue, but ultimately, the board fell in favor of McBride for having earned the opportunity to vote and approved the short delay.
Loving pushed back hard on one of the criticisms levied during public testimony, specifically that CPRD had not done enough outreach both in giving notice of the hearing and in engaging various stakeholders in the decision-making process. He noted several times that the board has been discussing the issue at its open meetings, including the presentation of the methodology report by consultant FCS Group, since January.
"I think we did our due diligence to notify the people that we thought were on the list, with the knowledge that within 60 days they're going to tell other people," Loving said. "That's the way the law is set up. That's why it's a 60-day notification process rather than 30, which is standard for most things."
There was also testimony voicing concern that the list of future projects upon which the calculations for the proposed fee of $13,459 were based using a Realized Level of Service model was not only exorbitant at $136 million, but unclear in terms of how it was determined and what specifically those projects would entail. Steve Abel, an attorney representing Springbrook Properties, went as far as to say that CPRD had not met the statutory requirements of a capital improvement plan.
FCS Group consultant John Gilarducci later stated that the list did meet requirements and addressed a specific concern from Dundee City Manager Rob Daykin about funding future parks that will be involved in upcoming planning work, noting that those projects can be added to the list in the future and still be eligible to receive funding through SDCs. Loving added that the project list had been given clearance by CPRD's own attorney, so he was comfortable moving forward without initiating a process to formulate new capital improvement or master plans, as was suggested.
The main concern expressed during public testimony seemed to be the likely negative impact that a $13,459 increase would have on housing development in general and in terms of affordable housing.
That included Austin Industries President Brett Baker testifying that his company -- which is an umbrella over A-Dec Inc., Springbrook Properties and the philanthropic arms of the Austin family -- is trying to sell a large piece of its Springbrook property so that it can be developed into new residential housing, including multi-family, attached and other forms of affordable housing. He said that the plan is to redistribute proceeds from that sale to the community through philanthropic channels, but that the deal would likely fall through if the proposed SDC fee was approved.
Newberg developer Mike Gougler drew praise from Ragsdale for translating the new fee into increased rents, which he did using a land deal he recently completed and plans to develop with at least 45 apartments. If the fee were to pass, it would cost him an extra $468,000, which would translate to $75 per month, per apartment, over 20 years, and noted that it would likely be higher for other projects because his business has ways to reduce the amount of money it borrows and therefore has to pass the costs on to renters.
"There is a certain amount of air in the room that the market will bear," Gougler said. "When you bump up against that and you need to build additional infrastructure to actually provide residences, you have no way to do that except through SDCs. If you've already sucked all of the SDC cushion out of the room, it's very difficult, if not impossible, to add the infrastructure you need to build houses."
Several people giving testimony, including Baker, called on CPRD to delay their decision as much as 90 days and also to convene a working group to examine the broad factors in play to ensure an outcome that will benefit all parties.
In discussing the motion to put off making the decision until this week, Ragsdale, Loving and Rierson expressed, to varying degrees, that they were not supportive of the of the $13,459 fee, with Ragsdale characterizing his feelings as a "hard no" and Rierson saying that it didn't pass "the smell test."
Ragsdale was the only one to state a specific preference, as he prefers the Current Level of Service methodology and corresponding fee of $6,866, but could be persuaded to vote for the Adopted Level of Service approach and its $7,450 fee. He did strongly dismiss, however, the notion that a new working group or committee is needed to fully inform the board.
"I thoroughly understand these issues and that's because of the skill of the people who prepared this," Ragsdale said. "I understand the objections that the people have. I get it."
After the meeting, Gougler said he wasn't confident that the board won't adopt the $13,459 fee, but hopes that is the case.
"The reason I get frustrated is that I get held, as a developer, to that kind of scrutiny and it's not that easy to implement that kind of change as a developer or builder," Gougler said.
Loving added that he understands why people are reacting poorly to the size of the increase and that CPRD itself has played a role in that by not acting sooner.
"Our biggest downfall is we should have been jumping this up piecemeal over the years and now we're sort of in catch up mode," Loving said. "That's on us. That's our fault."
As far as his decision to recommend that the board adopt the Realized Level of Service approach and the highest fee, CPRD Superintendent Don Clements said it was his role to determine what the community wanted and needed in terms of projects and to let the board decide what was appropriate in the broader context of the priorities and impacts. Clements also said he intends to provide more details about the projects included
Clements added that while public testimony for the fee hearing has been closed, people will be allowed to comment at Wednesday's meeting as part of normal public participation and can have it included in the record, noting that none of the letters submitted prior to the hearing met the deadline but were still accepted.
"In my book, you want the public input," Clement said.