12.10.130 Credits.
A. Credit at Time of Change in Use or Redevelopment. When redevelopment or change in use occurs, the amount of SDCs payable shall be determined by the following rules:
1. SDCs Previously Paid on Property. If SDCs had been previously paid for the property, a credit in the amount of the SDCs that would be payable for the existing structure and use under the current rate schedule shall be provided. For purposes of this section, existing structure and use means the structure and use for which SDCs have been paid. At the time of redevelopment, if the SDCs payable for the new structure and/or use exceed the amount of the credit, the difference shall be paid to the City. This rule applies regardless of the length of time between the end of the prior use and the redevelopment. Redevelopment to a use that results in a lower SDC amount does not reduce the amount of credit to be provided at the time of any future redevelopments. Any credits provided under subsection (C) of this section shall be deducted from the credits authorized by this section.
Examples:
a. SDCs had been paid for three dwelling units on a property and the property is redeveloped with five dwelling units. A credit for three dwelling units’ worth of SDCs will be provided, so the amount payable would be the amount for two dwelling units.
b. SDCs had been paid for two dwelling units and the property is redeveloped with a large retail use, with both residential units eliminated. The SDCs would be the difference between the SDCs payable for the new commercial structure and use and the SDCs that would be charged for two dwelling units.
c. SDCs were paid based on restaurant use, but then the property was converted to another retail use with lower SDCs. The property is then reconverted back to restaurant use, using exactly the same configuration as the original restaurant. At the time of the conversion to retail use, no SDCs are payable, because the amount payable is less than the credit. The credit for restaurant use remains with the property, so at the time of reconversion to restaurant use, no additional SDCs are payable because the credit remained in effect and the credit for the original use is exactly the same as the amount that is owed. Thus, no payment is required, even if the SDC rates have increased in the interim.
2. SDCs Not Previously Paid.
a. Vacant Land. If SDCs have not been previously paid for the property, a credit in the amount of the SDC charges under the current rate schedule shall be provided for any structure on the property during the 10 years immediately prior to the filing of the building permit application. No SDC credit shall be provided under this subsection if there has been no structure on the property for 10 years or more. The credits shall be based on the predominant use of the structure in the last 10 years, or if there has been no use in the last 10 years, on the last use of the structure.
b. No Prior Water Connection. Even if there is or has been a structure on the property, no water SDC credit shall be provided if the property has never been connected to the City water system.
c. No Prior Sewer Connection. Even if there is or has been a structure on the property, no sewer SDC credit shall be provided if the property has never been connected to the City sewer system.
d. Burden of Proof. The property owner shall have the burden to establish the facts to support the granting of a credit.
e. No Refund. No refund or credit shall be given if the change in use or redevelopment results in a lower SDC.
f. Implementation. The 10-year time period referred to in subsection (A)(2)(a) of this section starts on the date that a property is demolished or July 1, 2011, whichever occurs later.
B. Credit of Cost of Qualified Public Improvement.
1. A credit for the improvement fee portion of the SDC shall be given to a developer for the cost of a qualified public improvement on acceptance by the City of the qualified public improvement and compliance with this section. For transportation improvements, the credit shall be the full cost of the improvements as determined by the City. For water, sewer and other nontransportation improvements, the amount of the credit shall be the cost of the portion of the qualified public improvement that exceeds the improvements needed to serve the development as determined by the City. An application for credit for the cost of a qualified public improvement must be submitted and approved prior to the start of construction of the qualified public improvement. The City shall deny the credit if the City determines that the application does not meet the requirements of this section or if the improvement for which credit is sought is not included in the SDC project list. No interest shall accrue on a credit for a qualified public improvement.
2. The person seeking a credit based on providing a qualified public improvement has the burden of proving the cost of the qualified public improvement. Only immediate acquisition, construction, design and engineering costs may be included in the cost of a qualified public improvement. Immediate acquisition costs include only the cost of acquiring rights-of-way or easements required as a condition of development approval and do not include property already owned by the applicant. Engineering and design costs shall not exceed 15 percent of actual construction costs. When the cost is the incremental cost of providing excess capacity, engineering and design costs shall be allocated in the same percentage as the qualified construction cost as a portion of the total construction costs. The City Engineer’s determination of the cost of a qualified public improvement shall be final.
3. Credits for the cost of qualified public improvements shall not be transferable from one property to another but may be used for future phases of development, redevelopment or change in use of the property. For property owned by the Bend LaPine School District, property includes all properties owned by the Bend LaPine School District within the same high school attendance boundary.
4. Credit for qualified public improvements shall be only for the type of improvement provided and shall not be transferable from one type of capital improvement to another.
5. Credits for qualified public improvements may be used only within 10 years from the date the qualified public improvement was accepted by the City.
6. The extent of the property to be considered in computing and allocating credit for construction of a qualified public improvement shall be stated in the application for the credit, which will be accepted only if authorized in writing by the property owner(s). If properties under different ownership are developed together, the City may require specification where any credits for the provision of capital improvements may be used and under which circumstances. Two or more contiguous properties may pool existing SDC credit rights as part of a common scheme for development of the contiguous properties. Noncontiguous property may not be included as a property for determining where the credit may be issued or used.
7. At the time of application for the credit for a qualified public improvement, the applicant shall indicate which option for using the credit is to be used. Once an option is chosen, the option cannot be changed and will be applied to all SDC credits for qualified public improvements of all types for all phases of development on the property. The two options are:
a. A credit usable at the time SDCs become payable within the property to reduce the amount of the improvement fee payable; and
b. A credit personal to the person providing the qualified public improvement to be paid from improvement fees collected for development on the property. If this option is chosen, payment amounts shall be payable annually by the City on or before January 31 for SDC improvement fees collected in the previous calendar year. If this option is chosen, the 10-year expiration applies to the date the SDC is paid to the City, not the date the City passes on the payment. No interest shall accrue on any amounts received by the City.
The following example is provided as an illustration of how the credit for qualified public improvements under subsection (B)(7)(a) of this section is applied. A developer plans to build an off-site qualified public transportation improvement. The developer must apply for the credit before starting the improvement. If the City approves the credit and the developer completes the project and proves that the qualified costs total $400,000 for the qualified transportation public improvement that is 100 percent SDC eligible under the SDC project list, the developer would be entitled to a credit of $400,000 on acceptance of the completed capital improvement. If the amount of transportation improvement fees payable is less than $400,000, no transportation improvement fees would be paid and a credit for the difference would be provided to be usable for future development of the property. If the amount of transportation improvement fees is more than $400,000, the developer would pay the difference between $400,000 and the amount of the credit.
8. The credit for the cost of qualified public improvements is in addition to other methods of financing public improvements and may be combined with other means of financing public improvement agreements, including reimbursement agreements under this chapter or developer agreements; provided, that the total amount of credit under a reimbursement agreement and a credit for qualified public improvements shall not exceed the approved cost of the public improvement.
9. If a developer has applied for a credit for qualified public improvements, the developer may defer payment of the improvement fee for the type of improvement provided in an amount reasonably estimated to not exceed the amount of anticipated credit. Payment shall not be deferred more than one year unless an extension is provided and may not be deferred beyond the date of occupancy. An extension of the one-year deadline may be provided if satisfactory progress is being made towards completion of the qualified public improvement. Deferral under this section is available only if the development does not involve a land division.
C. Advance Credit for Qualified Public Improvement. The City, by a development agreement approved by Council, may provide a credit for construction of a public improvement on the SDC project list. The credit shall be a credit only towards improvement fees of the same type of SDC. The locations where the credit may be used and transferability of the credits shall be established in the development agreement. The credit provided by this section shall be used only as a credit and the credit recipient shall not be provided the right to payment from SDCs collected by the City. The credit provided by this section may be used only within 10 years of the date the improvement was accepted by the City.
D. On termination of a use for which SDCs have been paid, a credit certificate shall be issued on written request of the property owner.
1. The credit shall be for water, sewer and transportation SDC improvement fees only.
2. The credit shall be based on a “unit” basis, not on a “dollar” basis. The credit shall be for a specific number of trips, square footage, dwelling units or other units on which the SDC amount is calculated.
3. The amount of the credit issued in the certificate shall be deducted from the credit authorized by subsection (A)(1) of this section for the property where the use was terminated. The deduction may not remove all credit from the property unless all structures are removed from the property. A credit in the lowest reasonable amount for any remaining structure must be maintained on the property. The credit in the certificate shall be the difference between the total amount of credit authorized by subsection (A)(1) of this section and the amount to be retained on the property.
4. The credit certificate may be transferred and used anywhere in the City within five years of the date of issuance. If the credit is not used within five years, it shall be automatically applied to the property where the use was terminated.
E. For all credits, the applicant has the burden of proof to justify the credit. For credits based on the cost of a qualified public improvement, the applicant shall provide receipts, cancelled checks or other written proof of actual costs incurred. [Ord. NS-2161, 2011]