Mac council raises transportation SDC
The McMinnville City Council voted Tuesday to raise the systems development charge it assesses to help cover the cost of growth-related transportation improvements. It took the action over the objection of several local builders, as well as the McMinnville Area Chamber of Commerce.
The rate hike, the first in more than a decade, will raise the total fee associated with construction of a single-family home from $1,426 to $2,288. However, McMinnville's SDC total remains below the state median of $2,421 for cities in its size range, even with the increase.
A majority of councilors felt it was time to raise the transportation fee. They said they had been holding back previously because of the recession, which struck the construction industry particularly hard.
Mayor Rick Olson said the city used to collect about 50 percent of the cost of street improvement projects through its SDC assessment, but that percentage had been dropping steadily over the years.
A series of builders, some of them joined by their wives and children, testified in opposition. They said the fee increase stood to hurt an industry that is just beginning to recover from the recession.
Brad Bassitt, a general contractor, said it was a very hard to make money in the business right now. He said builders had to assume a tremendous amount of risk when they embarked on new projects.
He also noted that many other cities have established waivers for affordable housing, so what builders are actually paying in those cities might not match listed fees.
Tarmila McKinley said she only built one house last year. She said an extra $900 might be the difference between her family being able to take a vacation or not.
"This increase is not just affecting the big builders," he said. "It's affecting small builders too."
Chamber President Nathan Knottingham lobbied the council to phase the increase in over a seven-year period. He said that would allow builders to plan ahead and gradually make allowances. He said hiking the fee in one fell swoop could scare away growth that's just beginning to return.
However, councilors were not receptive to the idea.
Councilor Remy Drabkin said the topic has been in play for a long time. She said builders knew an increase was coming.
Councilor Scott Hill said it had been put off for many years already, because of the recession.
"Not raising the SDCs prevented us from meeting our transportation goals," he said. "If we don't keep SDCs in line, we'll fall further and further behind."
Mark Davis, a regular attendee at city council meetings, offered the only testimony in favor. He said the increase would be good for the city.
"SDCs are an investment in the community," Davis said. "If the developers don't pay for the new roads, then it's the voters who will have to pay."
Simona Paepchuk spoke forcefully in opposition. He called the public hearing a "shenanigan," saying it appeared the council had already made its decision.
But the council was not swayed.
"We have not raised these fees in many years, even during the years developers and builders made profits," Councilor Kelly Menke said. "We wanted to raise them last year, but we delayed."
She said it was time.
Councilor Kevin Jeffries said the city had already reduced the potential impact of SDC increases by floating a street bond. Without bond money, the SDC increase would have to have been much higher, he said.
The council passed the increase on a 4-1 vote, with builder and developer Alan Ruden casting the sole dissenting vote. Councilors indicated they were interested in considering a waiver or reduction as an incentive for construction of more affordable housing, and would be considering that issue in the coming months.
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