System Development Charges (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

Stormwater

Parks
Residential only

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

The reimbursement fee is the portion of the system-specific SDC charged to recoup the community’s investment in extra capacity in anticipation of future growth. This fee ensures that future system users contribute no more than an equitable share toward the cost of reserve capacity in existing infrastructure.

2. Improvement Fee

The improvement fee is the portion of the system-specific SDC charged to cover an equitable share of the capital improvements required to increase system capacity for new development. These improvements help accommodate growth and protect the health, safety, and well-being of the community.

3. Administrative Fee

The administrative fee covers the cost of administering the City’s System Development Charge program.

This fee equals 2% of the total 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 (for example, a 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 are typically not provided until the time of pre-application.

Proposed 2026 System Development Charge Report

The City of Molalla periodically reviews and updates System Development Charges (SDCs) to ensure that infrastructure costs are fairly distributed as the community grows.

The Proposed 2026 Park SDC Methodology Report(PDF, 1MB) evaluates infrastructure needs and recommended fee adjustments for the City’s capital systems.