Tigard council approves ordinance closing temporary-certificate loophole for system development charges

The City Council on a unanimous vote adopted Ordinance 25-02, amending Tigard Municipal Code Chapter 3.24 to require collection of deferred system development charges (SDCs) prior to issuance of a temporary certificate of occupancy (TCO).

Senior Planner Agnes Lindor, who presented the staff report, told the council the amendment responds to a code gap that allowed SDCs to be deferred without addressing TCOs. “The proposed change would require the collection of deferred SDCs prior to the issuance of a temporary certificate of occupancy, which is at the same time that the impact from the development would occur,” Lindor said. Staff recommended adopting the change because TCOs were not previously addressed in the code and could create a loophole for deferred payments.

Lindor explained that SDCs reimburse the city for infrastructure impacts from development; residential SDCs are charged per unit while commercial SDCs are based on square footage. She told councilors that collecting SDCs at a later date reduces their present value and that making SDCs payable at permit issuance, rather than at occupancy, could increase financing costs for developers because construction loans carry higher interest.

Council members asked whether any active projects would be surprised by the change; Lindor said staff was not aware of specific projects requesting TCOs. Councilor Hu proposed language to clarify the ordinance’s subsections so the timing of payment was easier to read; the council adopted an amendment to place the requirement clearly prior to issuance of a TCO or prior to final inspection/permanent certificate of occupancy, with city attorney review of punctuation.

Councilor Hu moved to approve Ordinance 25-02 as amended; Councilor Shaw seconded. The city recorder read the ordinance title before the council voted by roll call. Youth Councilor Maimini and all seven council voting members recorded “yes,” and the motion adopted by unanimous vote.

The ordinance will be effective following the city’s standard ordinance schedule (no emergency clause was appended) and will return for a second reading on April 1 as required by council policy on two readings unless council acts sooner.