System Development Charges

At the City of Philomath, we utilize System Development Charges (SDCs) to fund water, wastewater, transportation, and stromwater projects that have been identified in our master plans. SDCs are one-time charges to individuals, developers, and projects who are developing a vacant piece of property, redeveloping a property, or changing what a property is used for.

The money collected is used to build or reimburse necessary capital improvement projects needed to support an increased population or increased use caused by the new development. These charges allow some of the cost of increasing our infrastructure capacity and responding to population growth to paid for by those developing the property rather than the cost falling fully on current residents. When a property is redeveloped or changes use, we charge SDCs based on what the new infrastructure need is for the property.

Philomath’s SDCs are calculated based on established guidelines from Oregon legislation. You can find the City of Philomath SDC methodology reports for water, wastewater, stormwater, parks, and transportation and our current rates for System Development Charges below.


 What are System Development Charges?

System Development Charges or SDCs are one-time charges for those developing a vacant piece of property, someone redeveloping a property, or someone changing the use of a property (for example turning a retail store and now it’s a restaurant)

They fall into one of five categories:

  • Water
  • Wastewater
  • Stormwater
  • Transportation
  • Parks

 Why do we charge SDCs?

We charge developers SDCs because infrastructure such as pipes, roads, and pump stations are needed to provide new developments access to these fundamental services. SDCs allow developers, rather than residents, to bear the cost of projects that have either increased our existing capacity or will be needed in the future to serve a growing population. The projects funded by SDCs are identified in our Transportation, Water, Wastewater, Park and Storm Water Master Plans.

When a property is redeveloped or changes use, we charge SDCs based on what the new infrastructure need is for the property. 

 What are SDCs used for?

Basically, when SDCs are spent, they fall into three categories:

1. Reimbursement fees: Essentially, reimbursement fees reimburse the City for infrastructure projects they have already completed that helped increase the capacity. Rather than taxpayers bearing this cost on their own, SDCs “reimburse” the City for the cost of creating infrastructure with more capacity than is needed, with the knowledge that when there is new development, this capacity will be needed. Reimbursement fees essentially pay the City back for being proactive in their infrastructure development. 

2. Improvement fees: Improvement fees fund projects that have been identified in our Master Plans. These projects are meant to meet the need for population growth and allow the City to grow in the future. They also help fund replacing outdated systems that need to be improved.

3. Administration costs: Administration costs help fund the administrative cost of charging SDCs including the methodology used to calculate SDCs and the master planning involved. This ensures we are using SDC funds for their intended use and helps us determine the cost of SDCs every year.

 How are the cost of SDCs calculated?

There are different categories of development when it comes to SDCs. We charge the development of a single-family residence differently than the development of a restaurant, which we charge differently than a manufacturing facility, health/fitness club, etc.

Each component of a SDC (water, wastewater, stormwater, park, and transportation) is calculated differently. For all five components, we calculate an amount based on our list of both projects that already increased capacity and projects that will need to be provided in the future, we then use a formula to turn this amount into a dollar figure that can be used to calculate SDCs based on the following information about the development itself:

  • The water charge is based on the meter size. A manufacturing plant will likely need a larger water meter than a single-family residence.
  • The wastewater charge is also based on the meter size.
  • The stormwater charge is based on the amount of new “impervious surface” or hard surfaces created. An impervious surface is a structure like a road, sidewalks, driveways, distribution centers, etc., that are covered with water-resistant material like asphalt, concrete, or rooftops.
  • The transportation charge is calculated based on the “land use”, “units”, and trips during peak hours both in a vehicle and as a pedestrian. Land use references the type of development, from a hotel to a golf course to a library to a single-family home, and so on. Units are determined by the land use – so you might calculate based on square footage size, or on the amount of acreage, or on the number of rooms. The City uses the Institute of Transportation Engineers Manual to determine trip rates for peak hours. 
  • The park charge is based on the number of dwelling units.

 How did SDCs get established in Philomath?

The first step to establishing SDCs is to prepare a capital improvement plan, a public facilities plan, or a master plan. Our SDCs are directly related to our transportation, water, stormwater, park and wastewater master plans. Once these plans were prepared, we had to establish an ordinance/resolution to charge SDCs. How we calculate the amount charged for an SDC had to be adopted through a public process.