City directs staff to draft code change after developercredits exceed needs for Coyote Ridge storm project

The Estacada City Council instructed staff to draft an ordinance to allow greater flexibility in the city—s system development charge (SDC) credit rules after engineers reported that the Coyote Ridge subdivision built an oversized 30-inch storm line that produced more credits than the development can use.

City staff said the issue matters because state law allows a local government to provide credits, transfer them or reimburse developers for oversize infrastructure, but Estacada—s current code restricts credits to the subject property. Carrie Richter, a city staff member who explained the legal framework to the council, said, "the code right now says that these credits are not transferable." The council voted to have staff return with an ordinance to add case-by-case flexibility and require council approval for any exception.

The council heard that Coyote Ridge built a storm line larger than the standard 15-inch line the city typically requires; staff described the pipe as a 30-inch storm line. Consultants told the council that Coyote Ridge comprises about 220 lots but accrued roughly 700 equivalent dwelling unit credits because of the oversize line. Staff estimated this produced a substantial credit overage (staff described the oversize cost as roughly nine hundred thousand dollars in one example during the discussion). City staff and outside consultants warned that doing nothing could risk a legal challenge under the Dolan rough-proportionality test.

City engineer Kurt McLeod and legal staff laid out options at the meeting: let developers sell credits to other projects, reimburse developers from city funds, or use inter-fund loans so one SDC fund can temporarily support another. Carrie Richter emphasized that state law permits several approaches but implementation requires a local code amendment and local policy decisions.

Council members pressed staff on the trade-offs. Supporters of a flexible approach said it could speed privately built infrastructure (private construction can be materially cheaper than public procurement) and help keep home costs down; opponents urged safeguards to avoid an open-ended city subsidy or undesirable precedent. The council emphasized that any change would be case-by-case and return to the council for final approval.

The motion directing staff to prepare the SDC-code amendment passed in a roll-call vote: Councilors Blevins, Dozall, Hill, Tenbush, Metcalfe and Mayor Drinkwine voted yes; Councilor McElroy did not vote.

Staff will return with proposed ordinance language and an analysis of implementation options, including whether the city would allow transfers, partial reimbursements, or intergovernmental loans, and how to protect the city—s SDC revenue stream while avoiding disproportionate requirements on individual developers.