System Development Charges (SDC)
What is a System Development Charge (SDC)?
SDCs are fee scheduled charges applied to new development to help offset the impact of development, redevelopment or an intensification of use. The fee is intended to recover a fair share of the costs of existing and planned infrastructure that provide capacity to serve new growth.
SDCs are charged for increased impacts to the following systems: Water, Wastewater, Transportation, Storm, and Parks (only residential development pays Parks SDCs).
What Triggers SDCs?
Any activity that increases a property's impacts on a Capital System, for example the following often cause increased system impacts: New Development, Change of Use, Increased Water Meter Size, Additional Dwelling Units, Increased Floor Space or Living Area, Addition of Impervious Area.
What Rules Regulate SDCs?
SDCs are heavily regulated by the State of Oregon in ORS 223 and the City of Molalla in MMC 13.14.
About SDC Fees...
The SDC Fee for each Capital System is comprised of three components:
1. Reimbursement Fee - Is the portion of the specific system SDC charged to recoup the communities investment in extra capacity in anticipation of future growth. The reimbursement fee shall promote the objective that the future system user contribute no more than an equitable share to the cost of reserve capacity in the existing facilities.
2. Improvement Fee - Is the portion of the system-specific SDC charged to cover an equitable share of the capital improvements required to increase capacity of the system to accommodate new development and to protect the health, safety and well being of the community.
3. Administrative Fee - Is a charge equal to 2% of the sum total of the Reimbursement and Improvement components of the SDC fee.
Basis for SDC Charge
SDCs are collected on all new and increased impacts to a Capital System and are used to fund that portion of the construction of infrastructure required to support new developments. These SDCs help the city provide increased capacity needs and recoup a portion of the community’s investment in specific infrastructure reserve capacity that is already in place.
SDC Charges
SDC charges are determined by the Engineering Section and become payable at the time of permit issuance, or if no permit is required, at the time of increased impact to the Capital System (e.g. Water Meter Upsize).
Questions regarding SDCs applied to a specific site or construction should be directed to the Engineering Section. SDC estimates are subject to change without notice, and will not be provided until the time of pre-application.
