Canby council hears proposal that would sharply raise system development charges; consultants urge phasing

Todd Chase, a consultant with FCS, told Canby city elected officials at a Feb. 11 work session that a draft SDC methodology produces much higher potential charges than the city currently collects and that the city should consider phasing to reduce near‑term impacts.

Chase said SDCs are a one‑time charge collected at building‑permit approval to pay for growth‑driven capital projects. His team modeled separate fee components and said the consultants’ preliminary calculations would raise combined fees (including water) in some scenarios to about $58,000 per dwelling unit if fully adopted as proposed. Chase said sanitary and storm increases are modest — about $4,400 per single‑family home — while transportation and parks account for the largest proposed increases.

The consultant gave specifics: transportation modeling used a 20‑year forecast that produced roughly 7,100 net new peak‑hour vehicle trips; after excluding non‑eligible projects and the city’s current fund balance, that produced a transportation cost base equivalent to about $20,000 per net new trip, which Chase said converts to roughly $18,800 per detached single‑family home and about $10,200 per multifamily unit if adopted at full strength. For parks, a draft project list the consultant reviewed produced a parks improvement/reimbursement basis that initially translated to about $23,800 per dwelling unit (Chase said trimming or reprioritizing big items could reduce that to about $16,200 in an alternate example).

“These are big jumps,” the city administrator told councilors; Chase and staff repeatedly urged that the numbers represent a starting point, not a locked‑in final levy, and recommended a phased increase (the consultants showed 3‑year and 5‑year phasing options) and refinement of the parks project list before public hearings.

Councilors pressed for more detail. Councilor Waterman asked whether the city’s projected tax revenue and operating budgets would keep pace with the expanded capital program, noting that SDCs do not cover operating costs. Councilor Patton and others said they wanted per‑project SDC‑eligibility percentages added to the project list so the council and Parks Committee can see what portion of each project could reasonably be funded with SDCs.

Several councilors also raised concerns about housing impacts. “This is a staggering increase,” one councilor said, arguing that very large SDCs could raise development costs and influence what housing types get built. Staff and the consultant said the draft methodology includes options to scale fees by home size (five cohorts) and to provide waivers or reductions for deed‑restricted affordable housing, but that those details would be addressed later in the housing‑strategy and code‑update processes.

Next steps: staff said the city issued the required 90‑day SDC notice on Jan. 29, the consultants will issue a March 6 public‑review draft of the methodology report, and the first adoption hearing is tentatively scheduled for May 6. The council scheduled additional discussion of parks project priorities for a Feb. 18 work session and asked staff to include per‑project eligibility percentages in the materials distributed in advance.

Why it matters: if adopted as modeled, the new methodology would meaningfully increase developer costs in Canby and could affect the local housing market and development decisions. Staff and the consultant emphasized council direction on priorities (project list and phasing) will materially change the final recommended rates.