(A) A system development charge shall be imposed when a change of use of a parcel or structure occurs, but credit shall be given for the computed system development charge to the extent that prior structures existed and services were established on or after the effective date of the ordinance. The credit so computed shall not exceed the calculated system development charge. No refund shall be made on account of such credit.
(B) The city will grant to an applicant a credit against any improvement fee assessed when the applicant, or the developer from whom the applicant purchased a lot, constructs, or dedicates a qualified public improvement as part of the development. The initial determination on all credit requests shall be a decision by the City Recorder, and the applicant bears the burden of evidence and persuasion in establishing entitlement to a system development charge credit and the amount of credit in accordance with the requirements of this section. The city may deny the credit provided for in this section if the city demonstrates that the application does not meet the requirements of this section or if the improvement for which credit is sought was not included in the improvement plan.
(C) To obtain a system development charge credit, the applicant must make the request, in writing, prior to the city’s issuance of the first building permit for the development in question. In the request, the applicant must state the following:
(1) Identify the improvement for which the credit is sought;
(2) Explain how the improvement is a qualified public improvement; and
(3) Document, with credible evidence, the value of the improvement for which credit is sought.
(D) The system development charge credit shall be an amount equal to the fair market value of the improvement. Fair market value shall be determined by the City Recorder based on credible evidence of the following:
(1) For dedicated lands, value shall be based upon a written appraisal of fair market value by a qualified, professional appraiser based upon comparable sales of similar property between unrelated parties in an arms-length transaction;
(2) For a qualified public improvement yet to be constructed, value shall be based upon the anticipated cost of construction. Any such cost estimates shall be certified by a registered professional architect or engineer or based on a fixed price bid from a contractor ready and able to construct the improvement(s) for which the system development charge credit is sought;
(3) For a qualified public improvement already constructed, value shall be based on the actual cost of construction as verified by receipts submitted by the applicant; or
(4) For a qualified public improvement located on, or contiguous to, the site of the development, only the over-capacity portion as described in the definition of qualified public improvement is eligible for a system development charge credit. There is a rebuttable presumption that the over-capacity portion of such a qualified public improvement is limited to the portion constructed larger, or of greater capacity, than the city’s minimum standard facility capacity or size needed to serve the particular development.
(E) When given, system development charge credits will be for a particular dollar value as a credit against a system development charge assessed on a development. Credits may only be used to defray or pay the system development charge for the particular capital improvement system to which the qualified public improvement is related (e.g., credit from a qualified public improvement for sewers may only be used to pay or defray a sewer system development charge).
(F) Where the amount of a system development charge credit approved under this section exceeds the amount of a system development charge assessed on a development for a particular capital improvement system, the excess credit may be carried forward pursuant to the following rules.
(1) A system development charge credit carry-forward will be issued by the City Recorder for a particular dollar value to the developer who earned the system development charge credit, and may be used by the developer to satisfy system development charge requirements for any other development applied for by the developer within the city. System development charge credit carry-forwards are not negotiable or transferable to any party other than the one to whom they are issued.
(2) The city will accept a system development charge credit carry-forward presented by a developer as full or partial payment for the system development charge due on any of the developer’s developments.
(3) System development charge credit carry-forwards are void and of no value if not redeemed with the city for payment of a system development charge of the same type of capital improvement system for which the credit was issued within five years of the date of issuance.
(4) System development charge credits cannot be indexed for inflation or redeemed for cash.
(G) For all other system development charge credits not carried forward, the applicant must formally request the system development charge credit to the City Recorder no later than 60 days after the later of the following two conditions occurs:
(1) Acceptance of the applicable improvement by the city; and
(2) The applicant paying sufficient system development charges for the development to cover the approved system development charge credit.
(Ord. 2021-02, passed 3-22-2021)