Overview

System Development Charges (SDCs) are one-time charges assessed to offset the cost of infrastructure needed to serve new development, redevelopment, or changes of use that increase the number of residents, customers, or employees. SDCs are a funding mechanism that ensures growth pays for its fair share of infrastructure costs. Without SDCs, the cost of enlarging existing infrastructure or building new infrastructure to serve growth would be paid for by existing taxpayers or utility ratepayers.

SDCs may be charged for:

• New development
• Additional residential square footage or commercial floor area
• Change of use or occupancy
• Creation of an accessory dwelling unit (ADU)
• Additional plumbing fixtures that require a larger water meter
• New stormwater or sewer connections
• New or additional impervious area

Legal Framework

State law defines SDCs and specifies how they must be charged, spent, and tracked by local governments. See ORS 223.297 – 223.316 for more detail. The City of Tigard has charged one or more SDCs since 1977. The city’s adopted SDC policies are contained in Chapter 3.24 of the Tigard Municipal Code.

State law also requires cities to undertake an analysis, called an SDC Methodology, to determine the reimbursement (SDC-R) and improvement (SDC-I) portions of an SDC for each infrastructure system. Methodologies are periodically updated and factor in the cost of existing facilities, prior contributions by existing users, the value of unused system capacity, and the costs of planned capital improvements that add system capacity to serve future users.

SDC revenue may only be spent on capital improvements or land acquisitions associated with the system for which the fee was assessed, including repayment of indebtedness.

Tigard SDC Rates & Methodologies

The city publishes an annual SDC Rate Sheet of all the SDCs it collects for ease of reference.

Tigard charges SDCs for development that impacts roads, parks, and the water system, and updates SDC rates annually. Rates for sewer and stormwater SDCs are set by Clean Water Services (CWS) and calculated and collected by the city. Rates for county road Transportation Development Tax (TDT) are set by Washington County and calculated and collected by the city, in addition to Tigard Transportation SDCs.

• City of Tigard Transportation SDC Methodology (2015)
• City of Tigard Parks SDC Methodology (2015)
• City of Tigard Water SDC Methodology (2022)
• Clean Water Services (Sewer & Stormwater) SDCs
• Washington County Transportation Development Tax (TDT)

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SDC Expenditures

Tigard’s Capital Improvement Plan (CIP) identifies all projects and property that are planned to be constructed or acquired with SDC revenue over the next six years. The CIP is evaluated, updated, and adopted each year by Tigard City Council at a public hearing.

In order for a project to be in the CIP and receive SDC funding, it must be eligible under state law and identified in an SDC Methodology or SDC Project List derived from an SDC Methodology. A Tigard SDC Project List may be amended more frequently than its related SDC Methodology in order to respond to dynamic market forces and unanticipated infrastructure needs.

SDC Payments & Exemptions

All SDCs are calculated on the date the relevant permit application (building or plumbing) is submitted. Water SDCs are payable at purchase of a water meter. All other SDCs are due prior to final inspection or issuance of an occupancy permit, whichever is the city’s final action. If requested, applicants can arrange to make installment payments with acceptable security, typically a lien placed on the property.

Certain accessory dwelling units (ADUs) and regulated affordable housing developments may be eligible for exemption from transportation and/or parks SDCs.

SDC Accounting Reports

• Fiscal Year 2023