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

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. 

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 They also help fund replacing outdated systems that need to be improved.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.

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.