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Portland to increase development fees to pay for parks

In a 3-2 vote, the Portland City Council voted Wednesday to approve an increase in system development charges for Portland Parks & Recreation.

The controversial ordinance had its first hearing on April 15 and was then amended after talks with critics, including the Homebuilders Association of Metro Portland.

It's now scheduled to take effect July 1, 2016, with exemptions for low-income housing; lower rates for units below 700 square feet and a refund for Lewis & Clark College's new dorms.

The new rate structure is also scaled to the size of the development, a major change since the Parks SDC program began in 1998.

Revenues will go to park developments to increase park capacity, along with some and strategic land acquisition to close gaps in the system.

The new methodology allows parks to expand service capacity of community centers, aquatic facilities and maintenance facilities, which the previous methodology didn't allow.

"We are all aware there are critics of this approach," said Commissioner Nick Fish, who voted to support the measure along with Commissioner Amanda Fritz and Mayor Charlie Hales. "I've met with I think all of the critics. … What I learned is that the increase in rates was not the primary concern, it was the methodology."

Fish said he does not expect that the new methodology set a precedence for other city bureaus.

Commissioner Dan Saltzman voted against the ordinance, along with Commissioner Steve Novick.

Saltzman said he didn't want to pass a fee like this "in such a vacuum, in a one-off fashion," and said he looked forward to the comprehensive review of fees Hales has said he the Council will soon take on.

Saltzman also said he didn't "see the crisis that warrants such a revenue increase."

"Portland Parks has been on a roll, but I also know it's bursing with SDC revenues," he said. He urged the council to "put our fees where our mouths are, and see where we can put more single-family and multi-family infrastructure. ... I think council needs to be more concerned with middle-wage earners or we do become the San Francisco or the Seattle or Denver? I don't think any of us want to go there."

Novick, meanwhile, said he saw merit in the ordinance but said he'd rather take time and see the council act after taking a larger look at city fee structures.

"It's perfectly appropriate for parks to collect SDCs; we need to build parks in East Portland and make improvements to parks," he said.

And the new system to adopt fees based on square footage makes sense, he said.

But "it makes sense to delay this decision until we take a bigger look at housing affordability," Novick said.

Fritz called it a "fiscally responsible measure," and an "important program that will help shape the future park system." "New development should pay its way — no more, no less," she said.

Hales said he believes the ordinance is sound, and developed in a thoughtful and inclusive way.

He said it tees off the work the council will do to look at affordability.

"It will be substantive, the five of us looking at the big picture together," he said. "We have a year to look at how this set of fees and others mesh together and affect the affordability of housing."

And Hales said the value of the SDC increase for parks is worth it.

"We have to balance fees and how they affect cost, also what we get for those fees," he said, citing a phenomenon called the "second paycheck," by Oregon economist Ed Whitelaw. The theory is that Oregonians get not only a first paycheck but a second one in the form of qualify of life — including access to nature, good public schools and a park system.

Starting July 1, the increase in parks SDCs at an 88-percent recovery rate is estimated to provide up to $552 million in new revenue for park acquisition and development over 20 years.

The other 12 percent of program costs will be paid by $71 million from other sources such as grants, sponsorships, urban renewal funding, and transfers from other agencies.

Projected revenue from both sources will fund all of the need.

The groups that participated in the Parks SDC task force included the League of Women Voters of Portland, Portland Business Alliance,

Portland Development Commission, Development Review Advisory Committee, Portland Parks Board, College Coalition, I-Iome Builders Association of Metropolitan Portland, and others.

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