ORDINANCE NO: 179008 AS AMENDED

Accept Parks System Development Charges Methodology Report for implementation and amend the affordable housing exemption (Ordinance; amend Code Section 17.13.060)

The City of Portland ordains:

Section 1. The Council finds:

1.  Ordinance No. 172614, passed by the Council on August 19, 1998 authorized establishment of a Parks and Recreation System Development Charge (SDC) and created a new City Code Chapter 17.13.

2.  In October 1998 the City established a Parks SDC program. State law requires that the program be updated every two years to ensure that program goals are being met. The latest review has revealed that the program has fallen short of meeting the park needs of our increasing population. Since its inception the program has generated $12.63 million. These revenues have been directed to acquire some 227 acres of land. Based on the updated methodology this represents only 19% recovery of the projected growth impact, whereas original program goals set out to provide for 35% of park needs for new residents.

3.  The required update reviews the Parks SDC Program to determine that sufficient money will be available to help fund capacity-increasing facilities identified by the Parks and Recreation SDC-CIP; to determine whether the adopted SDC rate keeps pace with inflation; to determine whether the Parks SDC-CIP should be modified; and to ensure that SDC receipts will not over-fund such facilities.

4.  Ordinance No. 174766, passed by Council on August 23, 2000, with the purpose of complying with paragraph 17.13.130 of the City Code, authorized contracting with Don Ganer & Associates to review the Parks System Development Charge Program and provide an update of Parks SDC Methodology previously developed in 1998.

5.  In October 8, 2002, with the purpose of complying with paragraph 17.13.130, Portland Parks and Recreation (Parks) convened an Ad Hoc committee composed of citizens representing the Metropolitan Home Builders Association, League of Women Voters, Coalition for a Livable Future, Audubon Society, representatives from several neighborhood coalitions, a Parks Board member, and a representative of Parks Users.

6.  Accurate population figures and growth projections are essential to calculate growth demand and to establish SDC rates to meet that demand. The U.S. Census Bureau Population Data gathered in 2000 provided the basis for estimating current and projected

 population growth within the City of Portland. The population projections in the 1998

 Parks SDC Methodology were based on 1990 census data. The year 2000 based population projections reveal an expected 20-year increase of 112,509 more people living

 in Portland. This is an expected increase of 16,960 more than projected from the 1990 census. Our existing Parks SDC rates will not provide adequate revenue to fund capacity-increasing facilities to meet this increased demand on the City’s park system.

7.  The 2000 Census revealed that 1990 residential occupancy rates used to calculate park SDC Rates in 1998 had changed. The proposed methodology using the 2000 occupancy rates to calculate the Park SDC Rates provides a fairer distribution of costs among the housing types to fund a portion of park demand created by growth.

8.  Ordinance No 175774, passed by the Council on July 12, 2001 adopted The Parks 2020 Vision. This report highlighted significant challenges confronting the City in regards to shoring up our ailing park facilities, eliminating inequity in underserved neighborhoods, and providing a stable source of funding to address not just our existing shortfalls, but to also meet the needs created by new development. . The Park SDC is the only revenue opportunity available to parks to address growth. It is imperative that this opportunity is maximized to recover reasonable costs from new development.

9.  Program update required evaluating whether the adopted 1998 SDC rates had kept pace with inflation. The committee concluded that based on actual parkland acquisitions, current prices are higher than were forecast in 1998, so adjustments are proposed to address this need.

10.  Portland Parks and Recreation requests adoption of the updated Portland Parks & Recreation “System Development Charges Methodology Report” (EXHIBIT A) dated October 15, 2004 to be implemented July 1, 2005. Per City Code Chapter 17.13.040, this adopted methodology will set Park SDC Rates on residential development and is based on maintaining existing service level, population growth projections, cost of land and development, average occupancy rates, administrative and compliance costs, and estimated tax on future park bonds or levies. The Park SDC fee increases shall be as follows: (included in TABLE 4.7 of Exhibit A.)

   Existing    July 1, 2005

 Residential Category  Rates    Rates

 Single Family  $1,705    $2,961

 Duplex  $3,410    $5,922

 Multi-Family  $1,099    $1,926

 Manufacturer Home  $1,159    $3,125

 Accessory Dwelling Unit  $852    $1,683

 Single Room Occupancy  $658    $1,398

11.  When the Parks SDC was established in 1998 Council directed Parks to provide a 100% exemption for qualified non-profit affordable housing projects. To date, the Park SDC Affordable Housing exemption has provided a total of $2.46 Million in exemptions.

12.  On December 9, 1998 in accordance with Section 17.13.070, an agreement between the Portland Development Commission (PDC) and Portland Parks and Recreation was executed. This agreement provided for a credit pool funded by PDC investments in Qualified Public Improvements (such as Jamison Square) and available to pay Park SDCs due from for-profit affordable housing developers. To date, the Park/PDC SDC Credit Pool Program has provided a total of $1.6 Million in exemptions.

13.  The total Parks SDC exemptions given to both affordable housing programs has been $4.08 Million in the first 6 years of the program. When projected out over 20 years this is in effect an $11.62 Million contribution to the City’s affordable housing program.

14.  Parks is now proposing to provide a 100% Parks SDC affordable housing exemption for all providers of affordable housing and eliminate the need for the PDC Credit Pool available to for-profit affordable housing developers.

15.  The proposed increase in Park SDC is calculated to provide $125 million revenue over the remaining16-year life of the program for park acquisition and development. If the existing affordable housing and credit pool programs are retained the estimated Park SDC

exemptions for affordable housing would be $25 million. If the proposed 100% Parks SDC affordable housing exemption is implemented that Park SDC contribution for affordable housing would be increased to $31.4 Million.

16.  This is a $5.8 million increase in Park’s commitment to support affordable housing. This affordable housing contribution will effectively reduce our Park SDC recovery rate from 37% to 28%.

17.  The benefit of expanding the Park SDC affordable housing exemption to include for-profit affordable housing developers is related to providing a consistent program for all affordable housing developers. It will also help streamline the administration of both the Park SDC and PDC affordable housing programs.

18.  Portland Parks and Recreation requests modification of City Code Chapter 17.13.060 to provide Parks SDC affordable housing exemptions for all developers of affordable housing provided they meet all requirements of the program. The proposed code change will eliminate the PDC affordable housing credit pool program available to for-profit affordable housing developers and replaces it with the Parks SDC affordable housing exemption as set forth in “Exhibit B”, Modification to City Code, Chapter 17.

19.  In comparison with 11 neighboring jurisdictions, after this proposed Park SDC rate increase Portland’s overall SDC’s rank 10^th and Portland’s Park SDC’s rank 4^th.

20.  After proper notice, this Ordinance was read by title at public hearing of the City on December 15, 2004 and December 22, 2004 wherein testimony was presented.

21.  It is in the best interest of the people of the City of Portland to adopt this Ordinance.

NOW, THEREFORE, the Council directs:

a.  The City of Portland adopt the updated Portland Parks & Recreation “System Development Charges Methodology Report & Residential SDC Study” dated October 15, 2004 and authorize its implementation including:

i.  Parks SDC rate increases on July 1, 2005 per the proposed schedule in TABLE 4.2 of EXHIBIT A.

ii.  System Development Charges Capital Improvements Plan (SDC-CIP) in APPENDIX of EXHIBIT A.

b.  Portland City Code Section 17.13.060 is amended as shown in exhibit B, effective July 1, 2005

Passed by the Council, December 22, 2004    GARY BLACKMER

Auditor of the City of Portland

Commissioner Jim Francesconi  By /S/ Susan Parsons

Prepared by: Riley Whitcomb    Deputy

December 8, 2004

BACKING SHEET INFORMATION

AGENDA NO. 1437 1511-2004

ACTION TAKEN: DECEMBER 15, 2004 PASSED TO SECOND READING AS AMENDED DECEMBER 22, 2004 9:30AM

ORDINANCE/RESOLUTION/COUNCIL DOCUMENT NO. 179008 AS AMENDED