Philomath council adopts supplemental budget, approves $185,000 SDC buyback and withholds $18,000 for plan‑review balance

The Philomath City Council on Monday adopted a supplemental fiscal-year 2024–25 budget that includes a plan to purchase $185,000 in stormwater system development charge (SDC) credits from Mill Pond Crossing and to create a new SDC proprietary fund.

Finance director Mike told the council the supplemental package shifts contingency to cover several items, including $28,200 toward police vehicle outfitting and a set of water and wastewater adjustments, and noted a projected $64,000 increase for bus operations. He said the council was being asked to authorize a two-part action on the stormwater SDC issue: approve the budget amendment and, separately, consider how to address an outstanding negative plan-review balance.

“The council discussed purchasing back 185,000 storm drain SDC credits,” Mike said during his presentation, noting staff concerns about multiple outstanding liens and the administrative work involved in previous practices of transferring SDC credits among properties.

Council debate focused on the risk of advancing cash to the developer versus the operational need to get work done now. Councilor Crocker argued for tying payments to milestones, saying she preferred giving partial sums and seeing measurable progress before releasing the remainder. “I would like to encourage you to follow through on some of this before you get the second half,” Crocker said.

Staff and other councilors cautioned that delaying funds could stall critical work. Mike explained that contractors need cash in hand to schedule paving and order pipe, and that withholding a portion of the payment could push work back by several weeks.

Councilor Salsa moved to amend resolution 25-10 to add a new fund for SDC proprietary activity and to increase storm improvement capital outlay offset by contingency, and to adopt the resolution as amended. The motion, seconded by Councilor Nielsen, passed on a voice/raise vote recorded as 6 ayes and 1 nay. Mayor McMoran announced the amended resolution was adopted.

Separately, Councilor Crocker moved — and Councilor Nielsen seconded — a staff direction to withhold $18,000 from the payment to MPC to cover a negative plan-review balance. That motion passed unanimously.

The council heard staff explain that the city’s records show 12 outstanding SDC liens on seven Mill Pond Crossing properties and that the principal balance on those liens is in the hundreds of thousands of dollars; staff said one lien remained unresolved because the title company report did not include the charge at closing and the property changed hands without the city receiving payment. City attorney guidance, as relayed in the staff report, was not to release any funds tied to unresolved liens until the matter is rectified.

The council’s actions will be reflected in the adopted supplemental budget and the related administrative steps (including any journal entries and the withholding directive) will be handled by staff. The council scheduled a follow-up budget adoption meeting for June 23.

Meeting context: the purchase of SDC credits is intended to clear a path to finish phase 2 work on Mill Pond Crossing — including roadwork and a storm-pipe installation — sooner rather than waiting for home sales to generate proceeds.

The council also adopted resolution 25-11 later in the meeting, authorizing assessment of private sewer-lateral replacement costs and recording liens where property owners choose a city-contracted replacement. Staff said the liening program is structured so that, when a property sells, the sale pays principal and the administrative fee rather than accumulating unbounded interest.