ORDINANCE NO. 187150 As Amended

Accept Park System Development Charge Methodology Update Report for implementation, and amend the applicable sections of City Code (Ordinance; amend Code Chapter 17.13)

The City of Portland ordains:

Section 1. The Council finds:

1. Ordinance No. 172614, passed by the Council on August 19, 1998 authorized establishment of a Parks and Recreation System Development Charge(SDC) and created a new City Code Chapter 17.13.

2. In October 1998 the City established a Parks SDC program. City Code required that the program be updated every two years to ensure that program goals were being met. An update was implemented on July 1, 2005 pursuant to Ordinance No. 179008, as amended. The required update reviewed the Parks SDC Program to determine that sufficient money will be available to fund capacity-increasing facilities identified by the Parks SDC-CIP; to determine whether the adopted and indexed SDC rate has kept pace with inflation; to determine whether the Parks SDC-CIP should be modified; and to ensure that SDC receipts will not over-fund such facilities.

3. Ordinance No 175774, passed by the Council on July 12, 2001 adopted The Parks 2020 Vision. This report highlighted significant challenges confronting the City in regards to shoring up our ailing park facilities, eliminating inequity in underserved neighborhoods, and providing a stable source of funding to address not just our existing shortfalls, but to also meet the needs created by new development. The Park SDC is the most significant revenue opportunity available to Parks to address growth. It is imperative that this opportunity is maximized to recover reasonable costs from new development.

4. Ordinance No. 181669, passed by the Council on March 12, 2008 updated Parks and Recreation System Development Charge(SDC), increased the calculated Park SDC recovery rate to 75%, established a Non-Residential Park SDC fee, and implemented a two tiered SDC fee structure consisting of the Central City and the non-Central City areas, and created a new City Code Chapter 17.13.

5. City Code Section 17.13.130 requires that the Park System Development Charge be reviewed no later than every five years.

Exhibit 1 Page 1 of 54 18715

6. in 2011, the City had a dispute with Lewis & Clark College respecting whether the College's development of its new dormitory facility was subject to the Parks SDC. Lewis & Clark sought a writ of review to challenge the Code Hearings Officers' decision upholding the imposition of the SDC. The City and the College resolved that litigation, under the authority of PCC 3.10.070, through a settlement agreement, under which the College agreed to pay the full amount of the SDC, and the City agreed that, if the new or revised methodology resulted in a rate that would have resulted in a lower assessment for the dormitory project, the City would apply the new rate retroactively, and would refund any overpayment.

7. Pursuant to City Code Section 17.13.130, in September of 2012 Parks requested proposals for Professional, Technical and Expert(PTE) services to update the Park SDC Methodology and, through competitive evaluation, selected and awarded a contract to Henderson, Young & Company on November 15, 2012 to provide consulting services to update the Park SDC Methodology and Park SDC fee, to evaluate occupancy rates based on the size of residential development, and to evaluate the City's approach to charging Park SDCs to campus housing.

8. On December 13, 2012 with the purpose of complying with City Code Section 17.13.130, Portland Parks and Recreation (Parks) convened a Task Force representing the Home Builders Association of Metropolitan Portland, League of Women Voters, Portland Development Commission, Portland Business Alliance, Portland Parks Board, College Coalition, Development Review Advisory Committee, a Developer-at-Large, and several community members at large.

9. The Task Force, consultant team and staff met on seven occasions to evaluate the current Park SDC Program; review and discuss the impact of projected population and employment growth on existing park service levels; compare costs of land acquisition and park development throughout the City; identify and address key issues of concern, including SDCs based on the size of dwelling units, and whether Park SDCs should be charged to new campus housing development; suggest and evaluate potential program changes; and discuss and debate the desired level of Park SDC recovery related to population and employment growth impact on the park system.

10. During the third meeting the Task Force expressed concerns that the level of service methodology based on acres of park per 1,000 population would require the City to acquire an unrealistic number of acres of park land. The consultant described an alternative approach used in some other cities that is based on the dollar amount per capita of the current value of park land and improvements. The consultant and staff developed the alternative approach over a period of nearly a year, and presented it to the Task Force.

Exhibit 1 Page 2 of 54 1 8 7 1. 5 0

11. The Task Force received and discussed at subsequent meetings the alternative approach, the Park System Development Charge Methodology Update Report, ("Park SDC Report")("Exhibit A"), and the other issues listed in the preceding paragraph of this ordinance. The Task Force supported the alternative methodology, including changing the level of service to the dollar amount per capita of the current value of park land and improvements, charging residential development based on the size of the dwelling units, and exempting new campus housing on college and university campuses.

12. The Metro population and employment data for the City of Portland projects population growth of about 99,000 by the year 2035 with employment growth of about 53,000 during the same period. The Park SDC Report calculates the Park SDC rates for new residential and non-residential development that will recover 88% of the cost of the impact of the growth of population and employment in Portland.

13. Portland Parks and Recreation requests adoption of the updated Portland Parks & Recreation Park System Development Charges Methodology Update Report, (Exhibit A)dated April 15, 2015 to be implemented July 1, 2016. Per City Code Chapter 17.13.040, this adopted methodology will set Park SDC Rates on new residential and commercial development and is based on calculated service levels, population growth projections, cost of land and development, average occupancy rates, and administrative and compliance costs.

14. The Non-Residential Park SDC fee shall be assessed only on new commercial development and/or expansion in floor area. No Park SDC fees will be assessed for tenant improvements or changes of use that do not result in an expansion of floor area.

15. The adopted Park SDC will be implemented at the following rates for residential dwelling units:

Central City Rate per Non-Central Size of Residential Dwelling Dwelling City Rate per Unit Unit Dwelling Unit All Types: Less than 700 sq. ft. $ 4,648 $ 5,772 All Types: 700 to 1,199 sq. ft. 6,953 8,634 A11 Types: 1,200 to 1,699 sq. ft. 8,359 10,381 All Types: 1,700 to Z199 sq. ft. 9,491 11,787 All Types: 2,200 sq. ft. or more 10,507 13,049

3 Exhibit 1 Page 3 of 54 18 715

16. The adopted Park SDC will be implemented at the following rates for non- residential development:

Rates Per Square Foot of New Occupancy Type Construction3 General Additional uses in Occupancy Central Non-Central Occupancy Category' Group Codes2 City City Category Convalescent Hospital, Hospital 1-1, 1-2, 1-4 $2.52 $1.93 Institutional Day Care Office Bank B $2.37 $1.83 Restaurant, Retail A-2, M $2.03 $1.44 Nightclub A-1, A-3, A- 4 E,F-1 , F-2 School, Assembly, ' ' Industrial H-1, H-2, H- $1.19 $0.91 Motel/Hotel 3, H-4, H-5, R-1 Storage, Parking S-1, S-2, S-3, Warehouse $0.26 $0.20 Garage, Mausoleum U 1. Occupancy category to be verified by Bureau of Development Services during the permitting process. 2. Per occupancy code groups in Oregon Structural Specialty Code. 3. Multiple categories may be assessed in mixed use projects. Each use types will be assessed individually and totaled together to provide the aggregate Park SDC fee for that development.

17. The proposed increase in Park SDC at an 88% recovery rate is estimated to provide $552 million potential total revenue for park acquisition and development over the 20-year life of the program. The other 12% of program costs will be paid by $71 million from non-Park SDC sources'such as grants, sponsorships, urban renewal funding, and transfers from other agencies, as described in the Park SDC Report. The projected revenue from these 2 sources result in funding 100% of the growth need.

18. Portland Parks and Recreation requests modification of City Code Chapter 17.13 to accommodate establishment and implementation of a Park SDC based on the dollar amount per capita of the current value of park land and improvements for residential and non-residential development as set forth in "Exhibit B", Modification to City Code, Chapter 17.

Exhibit 1 Page 4 of 54 187150

19. After proper notice, this Ordinance was first read by title at a public hearing of the City on April 15, 2015 wherein public testimony was presented and followed by a second reading on May 27, 2015.

20. It is in the best interest of the people of the City of Portland to adopt this Ordinance.

NOW,THEREFORE, the Council directs:

a. The City of Portland adopt the updated Portland Parks & Recreation System Development Charge Methodology Update Report dated April 15, 2015 establishing both a residential and non-residential Park SDC beginning July 1, 2016; and

b. The City of Portland to adopt the Park System Development Charge Capital Improvements Plan (Park SDC-CIP)in APPENDIX A of EXHIBIT A;

c. Amendment of Portland City Code Chapter 17.13 as shown in Exhibit B, effective July 1, 2016; and

d. Portland Parks and Recreation shall issue a refund to Lewis & Clark College, from the Parks System Development Charge Fund, the amount of $439,173.00, in accordance with the terms of the Settlement Agreement.

Passed by the Council: MAY 2 7 2015 Mary Hull Caballero Commissioner Fritz Auditor of, he City of Porgy nd Prepared by: Riley Whitcomb By cc—g a,(--, -4,-c i,--t-et-c-t-v— eputy

Exhibit 1 Page 5 of 54 -543

Agenda No. 18 715 ORDINANCE NO. As Amended Title Accept Park System Development Charge Methodology Update Report for implementation" and amend the applicable sections of City Code. (Ordinance; amend Code Chapter 17.13)

INTRODUCED BY CLERK USE: DATE FILED APR 1 Z015 Commissioner/Auditor: Fritz

COMMISSIONER APPROVAL Mary Hull Caballero Auditor of the City of Portland Mayor—Finance and Administration - Hales

Position 1/Utilities - FritgA,rk c„,7.>.-1--- j __,...

Position 2A/Vorks - Fish By: — ---- Deputy Position 3/Affairs - Saltzman

Position 4/Safety - Novick ACTION TAKEN:

BUREAU APPROVAL Bureau: Parks & Recreation APR 1 5 2015 CONTINUED TO MAY 0 6 2015 9:30 A.M, Bureau Head: .k Ab 0, As 11 Amended Prepared by: Riley Whitcomb MAY 0 6 CONTINUED TO MAY 20 2015 9:30 Date Prepared: April 1, 2015 2015 A.M. Impact Statement Completed X Amends Budget 0 MAY 2 0 2015 PASSED TO SECOND READING mAy 2 7 2015 As Amnde4 Portland Policy Document 930 A.M. If "Yes" requires City Policy paragraph stated 'fiedsoctLynt. No X City Auditor Office Approval: required for Code Ordinances . City Attorney Approval: required for contract, code, easement, franchise, comp plan, charter Council Meeting Date April 15, 2015

AGENDA FOUR-FIFTHS AGENDA COMMISSIONERS VOTED AS FOLLOWS: TIME CERTAIN El YEAS NAYS Start time: 2:OOPM 1. Fritz 1. Fritz \/7 Total amount of time needed: 90 minutes (for presentation, testimony and discussion) 2. Fish 2. FiSh

CONSENT• 3. Saltzman 3. Saltzman

REGULAR III 4. Novick 4. Novick

Total amount of time needed:, Hales Hales sal (for presentation, testimony and discussion)

Exhibit 1 Page 6 of 54 187150 EXHIBIT A 7k PORTLAND PARKS & RECREATION VII1101 Healthy Parks, Healthy Portland

Park System Development Charge Methodology Update Report

As Amended April 15, 2015

For Council Hearing April 15, 2015

Exhibit 1 Page 7 of 54 187150 CONTENTS page

1.0 INTRODUCTION 1 2.0 AUTHORITY AND BACKGROUND INFORMATION 2 A. Authority 2 B. "Improvement fee and "Reimbursement fee" SDCs 2 C. Requirements and Options for Credits, Exemptions, and Discounts 2 3.0 PARK SDC METHODOLOGY 4 A. Population and Employment Growth 4 B. Persons Per Dwelling Unit 6 C. Benefit of Parks to Different Populations 6 D. Level of Service: Investment per Person 9 E. Costs for Growth 10 4.0 PARK SDC RESIDENTIAL'RATES 14 A. Formula 4a: Service Area Residential Cost Per Person 14 B. Formula 4b: Service Area Residential Cost Per Dwelling Unit 14 C Formula 4c: Total Residential Cost Per Dwelling Unit 14 D. Formula 4d: Residential Cost, Tax Credit and SDC Per Dwelling Unit 15 E. Formula 4e: Residential SDC Per Dwelling Unit 16 5.0 PARK SDC NON-RESIDENTIAL RATES 17 A. Formula 5a: Service Area Non-Residential Cost per Resident Equivalent 17 B. Formula 5b: Total Non-Residential Cost Per Resident Equivalent 17 C. Formula 5c: Non-Residential Tax Credit Per Resident Equivalent 18 D. Formula 5d: Non-Residential SDC Per Resident Equivalent 18 E. Formula 5e: Non-Residential SDC Rates By Type of Development 18

APPENDIX A: REPLACEMENT VALUE OF PARK LAND AND IMPROVEMENTS 20 APPENDIX B: SDC CAPITAL IMPROVEMENTS PLAN 22

Exhibit 1 Page 8 of 54 187150 TABLES page TABLE 3.1: Projected Population and Employment Increases 5 From New Development (2013 - 2035) TABLE 3.2: Average Number of Persons Per Dwelling Unit 6 TABLE 3.3: Estimates of Average Daily Availability 7 of Parks and Recreation Facilitie7 TABLE 3.4: Residential and Non-Residential Availability of Parks and 8 Recreation Facilities: Hours and Percentages TABLE 3.5: Equivalent Population 9 TABLE 3.6: Investment Per Person: Current Park Land and Improvements 10 TABLE 3.7: Value Needed for Growth (2015-2035) 11 TABLE 3.8: Investment Needed for Growth (2015-2035) 11 TABLE 3.9: Potential Revenue from Other Sources (2015-2035) 12 TABLE 3.10: Other Revenues Portion of Investment Needed for 12 Growth (2015-2035) TABLE 3.11: Investment to be Paid by Growth (2015-2035) 12 TABLE 3.12: Allocation Between Residential and Non-Residential 13 Development of Investment to be Paid by Growth (2015-2035) TABLE 4.1: Service Area Residential Improvements Cost Per Person and 15 Per Dwelling Unit TABLE 4.2: Cost, Tax Credit and Park SDC Residential Rates Per 16 Dwelling Unit TABLE 5.1: Service Area Non-Residential Improvements Cost Per 17 Resident Equivalent TABLE 5.2: Cost, Tax Credit and SDC Per Resident Equivalent 18 TABLE 5.3: Park SDC Non-Residential Rates By Type of Development 19 TABLE A.1: Portland Park Land and Improvements Summary of Values 20 TABLE A.2: Portland Park Land Values 20 TABLE A.3: Portland Park Improvements Values 21 TABLE B.1: SDC Capital Improvements Plan 20

FIGURE page FIGURE 3.1: Central City SDC Boundary Map 5

Exhibit 1 Page 9 of 54 187150

City of Portland Parks and Recreation

System Development Charge Methodology Update Report

1.0 INTRODUCTION

System Development Charges (SDCs) are one-time fees charged to new development to help pay a portion of the costs associated with building capital facilities to meet needs created by growth. Throughout this report the word "growth" means new development, such as residences and non-residential buildings, and the people that occupy the new development.

SDCs are authorized for five types of capital facilities including transportation, water, sewer, stormwater, and parks and recreation. The City of Portland adopted a Park SDC methodology in 1998 and updated the Park SDC methodology in 2004 and again in 2008.

City parks, facilities, and services are important community resources benefiting both existing and future City residents, businesses, non-resident employees, and visitors. This report updates the City's Park SDC methodology and rates to accommodate the needs for parks and recreation facilities generated by growth of new residential and non-residential development, and documents the calculation of the Parks and Recreation SDC rates.

In November 2012, the City Council appointed an ad hoc Task Force of representatives from community, business, development, neighborhood, and other stakeholder groups to advise the update of the Parks SDCs methodology.

This report presents the technical basis for the methodology used to calculate the updates to the Park SDCs for new residential and non-residential development within the City of Portland. The proposed fee structure differentiates between residential and non-residential developments, Central City and areas outside the Central City, and by the projected mix of park users.

Section 2.0 of this report presents authority and background information including (1) legislative authority for SDCs;(2) an explanation of "improvement fee and "reimbursement fee SDCs; and (3) requirements and options for credits, exemptions and discounts. Section 3.0 presents the methodologies used to develop the updated Park SDCs, Section 4.0 presents the calculation of residential Park SDC Rates, and Section 5.0 presents the calculation of non-residential Park SDC Rates. Appendix A summarizes the inventory of Portland's parks and recreational facilities and the replacement value of the land and improvements. Appendix B contains the SDC Capital Improvement Plan.

as amended 4/15/15 Exhibit 1 Page 10 of 54 187150

2.0 AUTHORITY AND BACKGROUND INFORMATION

A. Authority

The source of authority for the adoption of SDCs is found both in state statute and the City's own plenary authority to adopt this type of fee. While SDCs have been in use in Oregon since the mid-1970's, State legislation regarding SDCs was not adopted until 1989, when the Oregon Systems Development Act(ORS 223.297 - 223.314) was passed. The purpose of this Act was to "...provide a uniform framework for the imposition of system development charges...." Additions and modifications to the Oregon Systems Development Act have been made in 1993, 1999, 2001, and 2003. Together, these pieces of legislation require local governments that enact SDCs to:

• adopt SDCs by ordinance or resolution; • develop a methodology outlining how the SDCs were developed; • adopt a capital improvements program to designate capital improvements that can be funded with "improvement fee" SDC revenues; • provide credit against the amount of the SDC for the construction of "qualified public improvements"; • separately account for and report receipt and expenditure of SDC revenues, and develop procedures for challenging expenditures; and • use SDC revenues only for costs related to capital expenditures (operations and maintenance uses are prohibited).

B. "Improvement fee" and "Reimbursement fee" SDCs

The Oregon Systems Development Act provides for the imposition of two types of SDCs:(1) "improvement fee SDCs, and (2) "reimbursement fee" SDCs. "Improvement fee" SDCs may be charged for new capital improvements that will increase capacity. Revenues from "improvement fee" SDCs may be spent only on capacity-increasing capital improvements identified in the required Capital Improvements Plan (CIP) that lists each project, and the expected timing and cost of each project. "Reimbursement fee" SDCs may be charged for the costs of existing capital facilities if "excess capacity" is available to accommodate growth. Revenues from "reimbursement fees" may be used on any capital improvement project, including major repairs, upgrades, or renovations. Capital improvements funded with "reimbursement fee" SDCs do not need to increase capacity, but they must be included in the list of projects to be funded with SDC revenues.

Portland's Park SDC is an improvement fee, and does not include any reimbursement fees.

C. Requirements and Options for Credits, Exemptions, and Discounts

(1) Credits

A credit is a reduction in the amount of the SDC for a specific development. The Oregon SDC Act requires that credit be allowed for

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the construction of a "qualified public improvement" which (1) is required as a condition of development approval,(2) is identified in the Capital Improvement Plan, and (3) either is not located on or contiguous to property that is the subject of development approval, or is located on or contiguous to such property and is required to be built larger or with greater capacity than is necessary for the particular development project. The credit for a qualified public improvement may only be applied against an SDC for the same type of improvement (e.g., a parks and recreation improvement can only be used for a credit for a Park SDC), and may be granted only for the cost of that portion of an improvement which exceeds the minimum standard facility size or capacity needed to serve the particular project. For multi-phase projects, any excess credit may be applied against SDCs that accrue in subsequent phases of the original development project.

In addition to these required credits, the City may, if it so chooses, provide a greater credit, establish a system providing for the transferability of credits, provide a credit for a capital improvement not identified in the Capital Improvement Plan, or provide a share of the cost of an improvement by other means (i.e., partnerships, other City revenues, etc.).

(2) Exemptions

The City may exempt certain types of development, such as "affordable housing" from the requirement to pay Park SDCs. Exemptions reduce SDC revenues and, therefore, increase the amounts that must come from other sources, such as bonds and property taxes.

(3) Discounts

The City may discount the SDC rates by reducing the portion of growth-required improvements to be funded with SDCs. A discount in the SDC rates may also be applied on a pro-rata basis to any identified deficiencies, which must be funded from sources other than improvement fee SDCs. For example, the City may charge new development an SDC rate sufficient to recover only 85% of identified growth-required costs. The portion of growth-required costs to be funded with SDCs must be identified in the CIP.

Because discounts reduce SDC revenues, they increase the amounts that must come from other sources, such as bonds or general fund contributions, in order to acquire and develop growth-required facilities.

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Exhibit 1 Page 12 of 54 187150

3.0 PARK SDC METHODOLOGY

The Level of Service (LOS) Standard was calculated as the existing amount of investment in park land and improvements per person. The LOS is then applied to growth projections to determine future capital investment needs for growth.

The methodology used to update the City's Park SDCs reflects the proportionate need for investment in park land and improvements for residents and resident equivalents. These SDCs meet statutory requirements because they are based on the type of development and its growth-related impact on parks and recreation facilities.

The Park SDCs are based on population (for the residential parks SDC) and resident equivalents (for the non-residential parks SDC), and the SDC rates are calculated based on the specific impact a development is expected to have on the City's parks and recreation needs. The specific impact of residential development is measured by the number of dwelling units and the average number of persons per dwelling unit. The specific impact of non-residential development is measured by the number square feet of non-residential development and the average equivalent population per square foot of non-residential development.)

A. Population and Employment Growth

The Park SDCs are based on costs per person. Estimates of current and projected population and employment within the City were calculated using data from Metro. Metro has developed detailed estimates and projections for population and employment for each of hundreds of Transportation Analysis Zones (TAZ) within the region in order to track current and future development in small geographic areas. For Portland's Park SDC, the TAZ data was aggregated in the two SDC service areas: Central City and Non-Central City.

The 2013 population and employment estimates were prepared by Metro. The 2035 projections are an adjusted version of Metro's projections. In order to be conservative in estimating future needs for growth, Portland's Park SDC methodology reduces the 2035 projections so that the increase from 2013 to 2035 is half of the increase in Metro's estimates. This has no effect on the SDC rates per person, but it reduces the total investment needed in Portland's CIP to levels that are consistent with the City's experience. If growth is greater than the estimates in this methodology, adjustments can be made at Portland's next update of its Park SDC in approximately 5 years.

Population and employment for 2013 and 2035 and the increases are shown in Table 3.1 for each service area. Figure 3.1 is a map of the Central City service area for Park SDC. The remainder of the City is the Non-Central City service area.

4 as amended 4/15/15 Exhibit 1 Page 13 of 54 187150

TABLE 3.1

PROJECTED POPULATION AND EMPLOYMENT INCREASES FROM NEW DEVELOPMENT (2013 — 2035)

2013 2035 Increase Actual Projected (Growth) Population Central City 39,735 73,275 33,540 Non-Central City 555,358 621,270 65,912 City Total 595,093 694,545 99,452

Employment Central City 145,399 165,858 20,459 Non-Central City 254,762 287,584 32,822 City Total 400,161 453,441 53,280

FIGURE 3.1

CENTRAL CITY SERVICE AREA: PARK SDC

Ce10111 City SDC 6ou ntl at

as amended 4/15/15 Exhibit 1 Page 14 of 54 187150

B. Persons Per Dwelling Unit

The Residential Park SDCs are based on costs per person and are calculated based on the number of persons per dwelling unit. To determine the appropriate number of persons per dwelling unit, data was gathered for the City by Portland State University's Population Research Center for five ranges of dwelling unit size tabulated from the 2011 American Housing Survey. The City analyzed the data to estimate the persons per dwelling unit in the Central City and Non-Central City areas. The average number of persons per dwelling unit in the Central City was found to be approximately 65% of that for the City as a whole, and the average in the Non-Central City was approximately 104% of the City as a whole. These differences are reflected in the calculations displayed in Table 3.2.

TABLE 3.2

AVERAGE NUMBER OF PERSONS PER DWELLING UNIT

Central Non-Central Dwelling Unit Size City City Less than 700 square feet 0.765 1.235 700— 1,199 square feet 1.144 1.848 1,200 — 1,699 square feet 1.376 2.221 1,700 — 2,199 square feet 1.562 2.522 2,200 or more square feet 1.729 2.792

C. Benefit ofParks to Different Populations

Park SDCs must consider the proportionate benefit parks provide for occupants of residential property and non-residential property. Different occupants in different types of property receive different benefits from Portland's parks based on the amount of time that they have the ability to use Portland's parks during their occupancy of each type of property.

The amount of time parks and recreation facilities are available for use by occupants of non-residential property is not the same as for occupants of residential property. For example, employed persons spend about one-third of their day (±8 hours) at non-residential property (work) and the other two-thirds (±16 hours) at other locations (primarily their residence).

In order to equitably apportion benefits between occupants of residential and non- residential properties, each type of property will have a demand percentage calculated based on the relative amount time that the occupants have the ability to use Portland's parks.

For residential property, there are three different occupant groups that have different amounts of time to use Portland's parks: adults who work, adults who do not work, and kids. For non-residential property, there is one category: workers.

First, estimates were prepared for the average number of hours per day that each occupant group could use Portland parks during different seasons during weekdays and during weekends. Children's ages, adult employment status, seasonal

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Exhibit 1 Page 15 of 54 187150

variances and day-of-week variances were taken into account and are displayed in Table 3.3.

The Annual Weighted Average Hours of availability was calculated for each category of resident and non-resident using the following formula: [(Summer Hours/Day X 3 months) + (Spring/Fall Hours/Day X 6 months) + (Winter Hours/Day X 3months)J + 12 = Annual Average Weighted Hours ofDaily Availability

TABLE 3.3

ESTIMATES OF AVERAGE DAILY AVAILABILITY OF PARKS AND RECREATION FACILITIES

Residential Residential Not-Employed Residential Employed Non- Time Period Adult (18+) 5-17 Kids Adult(18+) Residential Summer (June-Sept) Weekday Before Work Meals/Breaks 1 After Work 2 Other Leisure 12 12 2 Sub-Total 12 12 2 4 Weekend Leisure 12 12 12 0 Sub-Total 12 12 12 0 Summer Hrs/Day 12.00 12.00 4.86 2.86

Spring/Fall (April-May, Oct-Nov) Weekday Before Work 0.5 Meals/Breaks 1 After Work 1 Other Leisure 10 4 2 0 Sub-Total 10 4 2 2.5 Weekend Leisure 10 10 10 0 Sub-Total 10 10 10 0 Spring/Fall Hours/Day 10.00 5.71 4.29 1.79

Winter(Dec -Mar) Weekday Before Work 0.5 Meals/Breaks 1 After Work 0.5 Other Leisure 8 2 1 0 Sub-Total 8 2 1 2 Weekend Leisure 8 8 8 0 Sub-Total 8 8 8 0 Winter Hours/Day 8.00 3.71 3.00 1.43 Annual Weighted 10.00 7.14 4.05 2.02 Average Hours

Next, the Annual Weighted Average Hours (from Table 3.3) were applied to current population and employment data for the City (2011 American Community Survey and 2010 Metro TAZ Data) to determine the Total Annual Weighted Average Hours

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Exhibit 1 Page 16 of 54 187150 for each category. The percentage of available hours were calculated for residential and non-residential properties by dividing each category's hours by the total hours. The results are displayed in Table 3.4.

TABLE 3.4

RESIDENTIAL.. AND NON-RESIDENTIAL AVAILABILITY OF PARKS AND RECREATION FACILITIES HOURS AND PERCENTAGES

Average Hours Demand per Day per Percent Person Total (% of Population & (Seasonally Hours Total Category Employment Weighted) per Day Hours) Residential Non-Employed Adults (18+) 177,663 10.00 1,776,630 5-17 Kids 79,254 7.14 566,100 Live In/Work In (Residential) 226,572 4.05 917,077 Live In/Work Out 75,012 4.05 303,620 Total Residential 3,563,427 85.53% Non-Residential Live In/Work In (Non-Residential) 226,572 2.02 458,539 Live Out/Work In 71,398 2.02 144,496 Total Non-Residential 603,035 14.47%

4,166,462 100.00%

The non-residential percentage (14.47%) will be used in the next step to calculate the equivalent residential population of employees.

In order to calculate the benefit of parks per person for non-residential development the employment data needs to be adjusted to an "equivalent" population. In residential development, such as houses and apartments, one person is the same as one "equivalent person", but for non-residential development employees are a fraction of one "equivalent person". The result allows business to pay its proportionate share of parks for growth based on the 14.47% the "equivalent population" that non-residential development generates.

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Exhibit 1 Page 17 of 54 187150

TABLE 3.5

EQUIVALENT POPULATION

2013 2035 Increase Actual Projected (Growth) Employment Central City 145,399 165,858 20,459 Non-Central City 254,762 287,584 32,822 City Total 400,161 453,441 53,280

Non-Resident Equivalents Equivalent Resident % 14.47% 14.47% 14.47% Central City 21,044 24,005 2,961 Non-Central City 36,873 41,624 4,750 City Total 57,917 65,629 7,712

Population Central City 39,735 73,275 33,540 Non-Central City 555,358 621,270 65,912 City Total 595,093 694,545 99,452

Total Resident Equivalents Central City 60,779 97,280 36,501 Non-Central City 592,231 662,893 70,662 City Total 653,010 760,173 107,163

The resident equivalent population will be used in the next step to calculate the current investment per person (e.g., per equivalent population).

D. Level of Service:Investment per Person

The level of service (LOS)for Portland's Park SDC is the current investment per person in park land and improvements. In a later step the LOS will be applied to growth projections to determine future capital investment needed to provide growth the same investment per person as is currently provided to existing residents and businesses.

The capacity of the existing park system has been acquired for the use and benefit of the current population. There is no existing unused capacity, nor is there any existing deficiency. The SDC will recover the true cost of providing additional parks facilities to serve the increased demands on the system created by new development. Because there is no existing unused capacity, the SDC is not recovering the costs of existing development. And because there is no existing deficiency, the SDC is not attempting to recover the cost of filling deficiencies in the existing level of service.

Using investment per person provides flexibility for the City to provide the highest priority needs in each area of the City, and avoids the constraints of older methodologies that are based on acres of park per 1,000 population.

The current investment is the replacement value of the existing inventory of parks, open space and recreation facilities, including the land value of each park and the replacement cost of each type of improvement. The sum of all of the values equals

9 as amended 4/15/15

Exhibit 1 Page 18 of 54 187150 the current investment of Portland's park and recreation system. Table 3.6 includes the total value of land and improvements, and details about these values are presented in Appendix A: Replacement Value of Park Land and Improvements.

For purposes of this methodology, parks have been grouped into categories depending on whether they primarily serve "local access" needs or "city-wide access" needs. In the Central City, Local Access Parks are considered to include Neighborhood Parks, Community Parks, Community Gardens, a portion of Regional Parks acreage that in some cases serves as Local Access Parks, and 50% of Urban Parks. In the Non-Central City, Local Access Parks are considered to include Neighborhood Parks, Community Parks, Community Gardens, and, again, a portion of Regional Parks acreage that serves as Local Access Parks. Citywide Access facilities are considered to include Regional Parks (less the portion included in Local Access Regional Parks acreage), Golf Courses, Botanical Gardens, and 50% of Urban Parks. Habitat and Trails are considered to be Citywide service facilities.

The LOS standards (i.e., current investment per equivalent person) are calculated in Table 3.6 by dividing the replacement values from Appendix A by the equivalent population from Table 3.5.

TABLE 3.6

INVESTMENT PER PERSON CURRENT PARK LAND AND IMPROVEMENTS

Current Replacement Investment Value of Current per Current Equivalent Equivalent Area Investment Population Population Citywide $2,081,040,009 653,010 $ 3,187 Central City Local Access 223,061,747 60,779 3,670 Non-Central City Local Access 1,236,057,050 592,231 2,087 Total 3,540,158,806

E. Costs for Growth

The need for additional park capacity for growth is determined by using the current level of service (investment in parks per person or equivalent population) and projections of future development. New development will receive the same investment per person in order to maintain the same ratio as existed before the new development, and total of those investments per person are the costs to serve growth.

The park investment needed for growth is calculated by multiplying the current investment per capita (from Table 3.6) times the equivalent population growth from 2015 through 2035 (from Table 3.5). Table 3.7 shows the result of these calculations for each area: Citywide, Central City, Non-Central City, and total.

10 as amended 4/15/15 Exhibit 1 Page 19 of 54 187150

TABLE 3.7

VALUE NEEDED FOR GROWTH 2015 - 2035

Current 2015-2035 Investment per Growth Equivalent Equivalent Value Needed Area Population Population For Growth Citywide $ 3,187 107,163 $ 341,511,388 Central City Local Access 3,670 36,501 133,959,288 Non-Central City Local Access 2,087 70,662 147,480,189 Total 622,950,865

As noted in section 2.0, cities can charge "reimbursement fee SDCs for any had any unused capacity ("reserve capacity") in its park system that isn't used by current population. This occasionally occurs when cities have "land banked" acreage in excess of local standards. But Portland's level of service standard is the existing ratio of capital investment to current population. By definition, the existing ratio is "used up" by the current population, so there is no unused reserve capacity value that can be used to serve future population growth.

Table 3.8 shows the calculation of the investment in parks that is needed for growth. The value of parks needed to serve growth (from Table 3.7) is reduced by any value of existing reserve capacity, in this case zero, and the result shows that Portland needs to invest an additional $622.9 million in its park system in the next 20 years in order to provide future growth the same investment per person as the current population receives now.

TABLE 3.8

INVESTMENT NEEDED FOR GROWTH 2015 - 2035

Investment Value Needed Value of Existing Needed For Area For Growth Reserve Capacity Growth Citywide $ 341,511,388 $ 0 $ 341,511,388 Central City Local Access 133,959,288 133,959,288 Non-Central City Local Access 147,480,189 0 147,480,189 Total 622,950,865 0 622,950,865

The future investment in parks that is needed for growth may be funded in part by other revenues the City invests in its parks. The City of Portland has historically received a combination of grants and some local revenues to pay for part of the cost of park and recreation capital facilities. The City expects limited amounts of these sources will be available in the future. Table 3.9 lists the sources and amounts that Portland estimates it will receive from these sources of revenue.

11 as amended 4/15/15

Exhibit 1 Page 20 of 54 187150

TABLE 3.9

POTENTIAL REVENUE FROM OTHER SOURCES 2015 - 2035

Estimated Other Revenue Annual For Parks Source Revenue 2015-2035 General Fund Contribution $ 50,000 $ 1,000,000 Federal and State Grants 372,322 7,446,432 Other Bureau & Agency Transfers 1,279,611 25,592,214 Donations & Sponsorships 826,288 16,525,754 Urban Renewal Funding 1,000,000 20,000,000 Metro Bond Measure(s) n.a. 400,000 , Total 3,528,220 70,964,400

The other revenues for parks are applied equally to all of the investment needed for growth by determining the percent that other revenues are of the total investment needed to serve growth. Table 3.10 shows that the estimated $70.9 million of other revenues is 11.39% of the total investment of $622.95 million.

TABLE 3.10

OTHER REVENUE'S PORTION OF INVESTMENT NEEDED FOR GROWTH 2015 - 2035

Investment Needed For Other Revenue Percent of Growth for Parks Investment $ 622,950,865 $ 70,964,400 11.39%

The other revenue for parks subtracted from each area's total costs. Table 3.11 shows the total investment in parks that needs to be paid by growth. The investment in parks needed to serve growth in each area is listed (from Table 3.8). The next column calculates 11.39% of the total as the amount of other revenues that will help pay for parks. The last column shows the investment needed for growth that will be paid by growth is $551.96 million (88.61% of the total).

TABLE 3.11

INVESTMENT TO BE PAID BY GROWTH 2015 - 2035

Investment to be Paid by Investment Other Revenue Growth @ Needed For for Parks @ 88.61% of Area Growth 11.39% of Total Total Citywide $ 341,511,388 $ 38,903,792 $ 302,607,596 Central City Local Access 133,959,288 15,260,177, 118,699,111 Non-Central City Local Access 147,480,189 16,800,431 130,679,758 Total 622,950,865 70,964,400 551,986,465

The total cost of the investment to be paid by growth is allocated between residential growth and non-residential growth, using the growth data from Table

12 as amended 4/15/15

Exhibit 1 Page 21 of 54 187150

3.5. For example, the Citywide population growth of 99,452 represents the residential portion of total Citywide resident equivalent growth of 107,163. Dividing the population portion by the total shows that 92.80% of Citywide resident equivalent growth is residential population (and therefore the other 7.2% is non- residential growth. Table 3.12 repeats the total investment to be paid by growth (from Table 3.11), the residential growth percentage calculated from data in Table 3.5, and allocates the total between residential and non-residential development in each area.

TABLE 3.12

ALLOCATION BETWEEN RESIDENTIAL AND NON-RESIDENTIAL DEVELOPMENT OF INVESTMENT TO BE PAID BY GROWTH 2015 - 2035

Percent of Growth Cost for Investment to from Cost for Non- be Paid by Residential Residential Residential Facility Type Growth Growth Growth Growth Citywide $ 302,607,596 92.80% $ 280,831,806 $ 21,775,790 Central City Local Access 118,699,111 91.89% 109,069,870 9,629,240 Non-Central City Local Access 130,679,758 93.28% 121,894,487 8,785,271 Total Costs 551,986,465 511,796,164 40,190,302

The cost for residential growth in Table 3.12 is used in Section 4.0 to calculate the Park SDC residential rates, and the cost for non-residential growth in Table 3.12 will be used in Section 5.0 to calculate the Park SDC non-residential rates.

13 as amended 4/15/15

Exhibit 1 Page 22 of 54 187150

4.0 PARK SDC RESIDENTIAL RATES

The City's Park SDC rates for residential development are calculated using a series of sequential formulas which, when completed, yields the total SDC rate for each type of new dwelling unit in the City.

A. Formula 4a: Service Area Residential Cost Per Person

The residential improvements cost per person for each service area is calculated by dividing the residential portion of the investment to be paid by growth (from Table 3.12) by the increase in the population (from Table 3.5).

Cost for Residential Population 4.a Residential Cost per Growth Growth Person

These calculations of the residential investment cost per person for each service area (Citywide, Central City, and Non-Central City) appear in the first three rows of data in Table 4.1.

B. Formula 4b: Service Area Residential Cost Per Dwelling Unit

The residential cost per dwelling unit for each service area is calculated by multiplying the average number of persons per dwelling unit (from Table 3.2 and repeated in the second column of Table 4.1) by the residential investment cost per person (from the third row of Table 4.1).

Persons per Residential Residential 4.b Dwelling x Cost per = Cost per Unit Person Dwelling Unit

These calculations are made for each combination of service area and size of dwelling unit. The results are listed in the third, fourth and fifth columns of Table 4.1. Note that the Citywide cost per person applies to the housing in both Central City and Non-Central City service areas, but the local access costs per person apply only to the service area for which that cost per person was calculated. Where a combination of costs and persons per dwelling unit is not applicable, "n.a." is shown in Table 4.1.

C. Formula 4c: Total Residential Cost Per Dwelling Unit

The total residential cost per dwelling unit is calculated by adding the Citywide Residential Cost Per Dwelling Unit to the Residential Cost Per Dwelling Unit for each local access parks service area.

Citywide Local Access Total Residential Residential Residential 4.c Cost per Cost per Cost per Dwelling Unit Dwelling Unit Dwelling Unit

14 as amended 4/15/15 Exhibit 1 Page 23 of 54 187150

The results of these calculations are displayed in the last column of Table 4.1.

TABLE 4.1

SERVICE AREA RESIDENTIAL COST PER PERSON AND PER DWELLING UNIT

Central City Non-Central Local City Local Description Citywide Access Access Cost for Residential Growth $280,831,806 $109,069,870 $121,894,487 Population Growth 99,452 33,540 65,912 Cost per Person $ 2,824 $ 3,252 $ 1,849

Persons per Dwelling Unit Total Central City Less than 700 square feet 0.765 $ 2,160 $ 2,488 n.a. $ 4,648 700 - 1,199 square feet 1.144 3,231 3,721 n.a. 6,953 1,200 - 1,699 square feet 1.376 3,885 4,474 n.a. 8,359 1,700 - 2,199 square feet 1.562 4,411 5,080 n.a. 9,491 2,200 or more square feet 1.729 4,883 5,624 n.a. 10,507

Non-Central City Less than 700 square feet 1.235 3,488 n.a. 2,284 5,772 700 - 1,199 square feet 1.848 5,217 n.a. 3,417 8,634 1,200 - 1,699 square feet 2.221 6,273 n.a. 4,108 10,381 1,700 - 2,199 square feet 2.522 7,123 n.a. 4,665 11,787 2,200 or more square feet 2.792 7,885 n.a. 5,164 13,049

D. Formula 4d: Residential Cost, Tax Credit and SDC Per Dwelling Unit

In previous Park SDC methodology reports there were plans for future bonds to pay for some improvements that would add capacity to the park system. A portion of those future bond repayments would be paid by growth in the form of future property tax payments, so a tax credit was calculated to account for these payments in order to avoid charging growth twice: once through the SDC, and a second time through property taxes.

The 2014 bond for parks is for renovation and repairs of the existing park system. No tax credit is calculated because the bond-funded projects to not add capacity to provide the investment per person level of service for new development. In addition, there are no plans for future park bonds to add capacity, therefore no tax credit has been calculated to account for possible future debt. In the event that the City requests, and voters approve, a future bond for park capacity projects, formulas 4d would be used, and the results would appear in Table 4.2.

Present Value Tax Credit 4.d of Property = per Dwelling Tax Payments Unit

15 as amended 4/15/15

Exhibit 1 Page 24 of 54 187150

E. Formula 4e: Residential SDC Per Dwelling Unit

The residential SDC per dwelling unit is calculated by subtracting the tax credit per dwelling unit from the cost per dwelling unit (Table 4.1).

Total Tax Credit Residential Residential 4.e per Dwelling SDC Rate per Cost per Unit Dwelling Unit Dwelling Unit

The results of these calculations are shown in Table 4.2, below.

TABLE 4.2

COST, TAX CREDIT AND PARK SDC RESIDENTIAL RATES PER DWELLING UNIT

Total Parks Tax Credit SDC per Cost per per Dwelling Dwelling Description Dwelling Unit Unit Unit Central City Less than 700 square feet $ 4,648 $ 0 $ 4,648 700 - 1,199 square feet 6,953 6,953 1,200 - 1,699 square feet 8,359 8,359 1,700 - 2,199 square feet 9,491 9,491 2,200 or more square feet 10,507 10,507

Non-Central City Less than 700 square feet 5,772 0 5,772 700- 1,199 square feet 8,634 0 8,634 1,200 - 1,699 square feet 10,381 10,391 1,700 -2,199 square feet 11,787 11,787 2,200 or more square feet 13,049 13,049

16 as amended 4/15/15 Exhibit 1 Page 25 of 54 187150

5.0 PARK SDC NON-RESIDENTIAL RATES

The City's Park SDC rates for non-residential development are calculated using a series of sequential formulas which, when completed, yield the total SDC rate for new non-residential development in the City.

A. Formula 5a: Service Area Non-Residential Cost Per Resident Equivalent

The non-residential cost per resident equivalent for each service area is calculated by dividing the non-residential portion of the investment to be paid by growth (from Table 3.12) by the increase in the non-resident equivalent population (from Table 3.5).

Cost for Non- Non-Resident Non-Residential 5.a Residential Equivalent = Cost per Resident Growth Growth Equivalent

These calculations of the non-residential investment cost per resident equivalent for each service area (Citywide, Central City, and Non-Central City) appear in the first three rows of data in Table 5.1.

B. Formula 5b: Total Non-Residential Improvements Cost Per Resident Equivalent

The total non-residential cost per resident equivalent is calculated by adding the Citywide Non-Residential Cost Per Resident Equivalent to the Non-Residential Cost Per Resident Equivalent for each local access parks service area.

Citywide Non- Local Access Total Non- Residential Non-Residential Residential 5.b Cost per + Cost per = Cost per Resident Resident Resident Equivalent Equivalent Equivalent

The results of these calculations are displayed in the last column of Table 5.1.

TABLE 5.1

SERVICE AREA NON-RESIDENTIAL COST PER RESIDENT EQUIVALENT

Non- Central Central City Local City Local Description Citywide Access Access Total Cost for Non-Residential Growth $21,775,790 $9,629,240 $8,785,271 Non-Residential Growth 53,280 20,459 32,822 Cost per Resident Equivalent $ 409 $ 471 $ 268

Central City Resident Equivalent 409 471 n.a. 879 Non-Central City Resident Equivalent 409 n.a. 268 676

17 as amended 4/15/15

Exhibit 1 Page 26 of 54 187150

C. Formula 5c: Non-Residential Tax Credit Per Resident Equivalent

The 2014 bond for parks is for renovation and repairs of the existing park system. No tax credit is calculated because the bond-funded projects to not add capacity to provide the investment per person level of service for new development. In addition, there are no plans for future park bonds to add capacity, therefore no tax credit has been calculated to account for possible future debt. In the event that the City requests, and voters approve, a future bond for park capacity projects, formulas 5c would be used, and the results would appear in Table 5.2.

Present Value Tax Credit 5.c of Property = per Resident Tax Payments Equivalent

D. Formula 5d: Non-Residential SDC Per Resident Equivalent

The non-residential SDC per resident equivalent is calculated by subtracting the tax credit per resident equivalent from the cost per resident equivalent (Table 5.1).

Total Non- Non-Residential Tax Credit Residential Cost SDC Rate per 5.d per Resident per Resident Resident Equivalent Equivalent Equivalent

The results of these calculations are shown in Table 5.2.

TABLE 5.2

COST, TAX CREDIT AND SDC PER RESIDENT EQUIVALENT

Total Parks Cost per Tax Credit SDC per Resident per Resident Resident Description Equivalent Equivalent Equivalent Central City Resident Equivalent $ 879 $ 0 $ 879 Non-Central City Resident Equivalent 676 0 676

E. Formula 5e: Non-Residential SDC Rates (per square foot) By Type of Development

The non-residential SDC for each type of non-residential development is calculated multiplying the Non-Residential SDC Rate Per Resident Equivalent (from Table

18 as amended 4/15/15

Exhibit 1 Page 27 of 54 187150

5.2) by the number of resident equivalents per square foot of each type of non- residential development.

Non-Residential Non-Residential Resident SDC Rate per SDC Rate per Equivalents 5.e x Square Foot of Resident per Square Development Equivalent Foot Type

The results of these calculations are shown in Table 5.3.

TABLE 5.3

PARK SDC NON-RESIDENTIAL. RATES BY TYPE OF DEVELOPMENT

General Residential Occupancy Equivalents per SDC Rate per Category sq. ft. sq. ft. Central City Service Area Cost per Resident Equivalent $ 879 Hospital' 0.00286 2.52 Office 2 0.00270 2.37 Retail 3 0.00231 2.03 Industrial 4 0.00135 1.19 Warehouse 5 0.00030 0.26

Non-Central City Service Area Cost per Resident Equivalent 676 Hospital 1 0.00286 1.93 Office 2 0.00270 1.83 Retail 3 0.00213 1.44 Industrial 4 0.00135 0.91 Warehouse 5 0.00030 0.20

Additional uses in this category: Convalescent Hospital, Day Care 2 Additional uses in this category: Bank 3 Additional uses in this category: Restaurant, Nightclub 4 Additional uses in this category: School, Assembly, Motel/Hotel 5 Additional uses in this category: Storage, Parking Garage, Mausoleum

19 as amended 4/15/15 Exhibit 1 Page 28 of 54 187150

APPENDIX A: REPLACEMENT VALUE OF PARK LAND AND IMPROVEMENTS

The level of service for Portland's Park SDC is the current investment per person in park land and improvements. The total investment is the replacement value of the existing inventory of parks, open space and recreation facilities, including the land value of each park and the replacement cost of each type of improvement. The sum of all of the values equals the current investment of Portland's park and recreation system. Table A.1 is a summary of the value of land and improvements.

TABLE A.1

PORTLAND PARK LAND AND IMPROVEMENTS SUMMARY OF VALUES (2013)

Improvements Area Land Value Value Total Investment Citywide $ 1,466,504,249 $ 614,535,760 $ 2,081,040,009 Central City Local Access 158,143,330 64,918,417 223,061,747 Non-Central City Local Access 602,062,144 633,994,906 1,236,057,050 Total 2,226,709,722 1,313,449,083 3,540,158,806

Table A.2 provides more information about the valuation of park land in Portland. The values of park land in this study are based on the average per acre Real Market Value of all tax parcels in Portland from Multnomah County's tax assessment data base. The values of habitat and natural areas and trailways are the average of Portland's purchases of such land in the years 2007-2013.

TABLE A.2

PORTLAND PARK LAND VALUES (2013)

Total Unit of Land Cost Inventory Facility Type Capacity per Unit (Units) Total Value Citywide Citywide Access Facilities acres $ 509,794 1,891.86 $ 964,458,877 Habitat and Natural Areas acres 65,480 7,299.02 477,939,830 Trailways miles 212,066 113.67 24,105,542 Total 1,466,504,249

Central City Local Access Parks acres 2,578,564 61.33 158,143,330

Non-Central City Local Access Local Access Parks acres 459,365 1,291.21 593,136,682 Community Gardens acres 459,365 19.43 8,925,462 Total 602,062,144

20 as amended 4/15/15

Exhibit 1 Page 29 of 54 187150

Table A.3 lists in alphabetical order the type of park improvements that make up Portland's existing park system. The values of improvements are based on the replacement value of each type of recreational facility. The data summarized in Table A.3 are derived from detailed inventories of the number of each type of improvement and the replacement value of each of improvement. Replacement value is the estimated installed cost to replace the improvement in kind, without increasing its size or changing its functionality.

TABLE A.3

PORTLAND PARK IMPROVEMENT VALUES (2013)

Citywide Central City Non-Central City Improvements Improvements Improvements Improvement Type Total Value Total Value Total Value Ball Fields $ 10,143,000 $ 2,131,500 $ 89,743,500 Basketball Courts 226,380 80,850 8,817,060 Bocce 12,863 12,863 22,050 Buildings 193,096,776 17,271,756 231,880,336 Community Gardens NA 0 2,881,200 Dock Ramps 15,178,581 10,650,628 0 Dog Off Leash Areas 504,812 108,796 1,516,554 Furnishings 3,543,938 1,380,279 13,287,384 Golf Courses 21,168,000 0 0 Horse Shoe Pits 1,470 0 389,550 Landscaping - Botanical Gardens 193,809,975 0 NA Landscaping - Community Parks 2,686,273 2,686,273 106,466,561 Landscaping - Neighborhood Parks NA 1,264,336 72,821,116 Landscaping - Regional Parks 36,031,472 823,387 1,455,875 Parks Mostly Landscaping - Urban 1,946,209 1,946,209 NA Landscaped Mostly Hard Landscaping - Urban Parks with 133,029 133,029 NA Surface Lighting 8,731,800 2,328,113 15,565,830 Paths and Walkways 4,295,930 0 10,851,126 Paved Surfaces - Neighborhood Parks NA 950,321 0 Paved Surfaces - Regional Park 6,807,763 756,418 0 Parks with Mostly Paved Surfaces - Urban 5,746,852 5,746,852 NA Hard Surface Urban Parks Mostly Paved Surfaces - 2,270,577 2,270,577 NA Landscaped Playgrounds 2,168,250 191,100 14,707,350 Roads 21,419,004 0 3,202,983 Skateparks 0 0 2,673,496 Sports Fields 8,911,140 1,764,000 13,241,760 Stadiums 3,337,841 0 0 Tennis Courts 2,789,325 1,212,750 14,593,425 Tracks 183,750 183,750 3,946,950 Trails 54,132,519 NA NA Water Features 15,258,233 11,024,633 25,930,800 Total 614,535,760 64,918,417 633,994,906

21 as amended 4/15/15

Exhibit 1 Page 30 of 54 187150

APPENDIX B: SDC CAPITAL IMPROVEMENTS PLAN

TABLE B.1

SDC CAPITAL IMPROVEMENTS PLAN 2015-2035

Service Area Annual Total 2015-2035 Citywide Costs $ 17,075,569 $ 341,511,388

Funding: Park SDCs 15,130,380 302,607,596 Funding: Other Revenue Sources 1,945,190 38,903,792

Central City Local Access Costs 6,697,964 133,959,288

Funding: Park SDCs 5,934,956 118,699,111 Funding: Other Revenue Sources 763,009 15,260,177

Non-Central City Local Access Costs 7,374,009 147,480,189

Funding: Park SDCs 6,533,988 130,679,758 Funding: Other Revenue Sources 840,022 16,800,431

Total Costs 31,147,543 622,950,865

Funding: Park SDCs 27,599,323 551,986,465 Funding: Other Revenue Sources 3,548,220 70,964,400

22 as amended 4/15/15 Exhibit 1 Page 31 of 54 87150 EXHIBIT B

Modification to City Code, Chapter 17

Chapter 17.13 Parks and Recreation System Development Charge

-Note (New Chapter added by Ordinance No. 172614, effective October 1, 1998.)

17.13.010 Scope and Purposes. (Amended by Ordinance No. 181669, effective January 1, 2009.)

A. New development within the City of Portland contributes to the need for capacity increases for parks and recreation facilities and, therefore, new development should contribute to the funding for such capacity increasing improvements. This SDC will fund a portion of the needed capacity increases for urban, neighborhood, and community parks, trails, and habitat facilities as identified in the City of Portland Parks and Recreation SDC Capital Improvement Plan (SDC- CIP).

B. ORS 223.297 through 223.314 grant the City authority to impose a SDC to equitably spread the costs of essential capacity increasing capital improvements to new development.

C. The SDC is incurred upon the application to develop property for a specific use or at a specific density. The decision regarding uses, densities, and/or intensities causes direct and proportional changes in the amount of the incurred charge. The SDC is separate from other fees provided by law or imposed as a condition of development. It is a fee- for service because it contemplates a development's receipt of parks and recreation services based upon the nature of that development.

D. The SDC imposed by this Chapter is not tax on property or on a property owner as a direct consequence of ownership of property within the meaning of Section 11.b, Article XI of the Oregon Constitution or legislation implementing that section. This. Chapter does not shift, transfer, or convert a government product or service, wholly or partially paid for by ad valorem property taxes, to be paid for by a fee, assessment or other charge, within the meaning or Section 11g, Article XI of the Oregon Constitution.

E. The funding provided by this Chapter constitutes a mandatory collection method based upon the guidelines set forth in ORS 223.297 through 223.314 to assure the provision of capacity increasing improvements for parks and recreation facilities as contemplated in Parks 2020 Vision, July 2001; Recreational Trail Strategy, June 2006; Parks Natural Area Acquisition Strategy, November 2006; andTmere

Exhibit B 1 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 32 of 54 187150 tifi-ed4ft the Parks and Recreation SDC-CIP3 to-be-funded witla-meney-e-ellected undei-tlais Chapter and incorporated as an Appendix to the most recently adopted Parks SDC Methodology Report. The Parks and Recreation SDC-CIP is not to be confused with the City of Portland Parks and R.ecreation Capital Improvement Program.

F. This Chapter is intended only to be a financing mechanism for a portion of the capacity increases needed for parks and recreation facilities associated with new d.evelopm.ent and does not represent a means to fund maintenance of existing facilities or the elimination of existing deficiencies.

G. The City hereby adopts the report entitled "Park System Development Charges Charge Methodology Update Report" (dated . . , • e April 15, 2015), and incorporates herein by this reference the assumptions, conclusions and findings in the report which refer to the determination of anticipated costs of capital improvements required to accommodate growth, and the rates for the parks and recreation SDC to finance these capital improvements. This report is hereinafter referred to as "SDC Methodology Report" and is attached to Ordinance No. 181669 passed by Council on March 12, 2008 . The City Council may from time to time amend or adopt a new SDC Methodology Report by ordinance.

17.13.020 Definitions. (Amended by Ordinance Nos. 173386, 173565, 174617, 176511 and 181669, effective January 1, 2009.)

A. "Access-cry Dwelling Unit" means a second d.welling unit created on a single lot aufaeturefkaousing dwellnag unit. T1 - created auxiliary to, and is al ian the single family or manufaetured housing unit.

BA. "Administrator" means that person, or designee, appointed by the City Council to manage and implement this Parks and Recreation SDC program.

C. "Alternative Systom-Dff-elopment Charge2imeans-an-SDC-astal3liclaed-pursuant-to See 1: e f-this Chapter-

DB. "Applicant" means the person who applies for a building permit.

EC. "Application" means the Parks SDC Information Fonn together with other required forms and documents submitted at the time of application for a building permit.

FD. "Building Official" means that person, or designee, certified by the State and designated. as such to ad.minister the State Building Codes for the City.

Exhibit B 2 April 15, 2015 -Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 33 of 54 18 715 0

GE. "Building Permit" means that permit issued by the City Building Official pursuant to the State of Oregon Structural Specialty Code Section 301 or as amended, and the State of Oregon One and Two Family Dwelling Code Section R-109 or as amended. In addition, Building Permit shall mean the Manufactured Home Installation Permit issued by the City Building Official, relating to the placement of manufactured homes in the City.

F. "Carpus H.ousing" means dormitories and other buildings arranged and designed as living quarters on a college or university campus for students enrolled at that college or university. College or university campus is any property owned or controlled by the college or university within a Conditional Use Master Plan, Impact Mitigation Plan or other campus zone boundary.

G. • "Central City" means the area identified in the SDC Methodology Report as the Central City Service Area, and whose boundaries are included on the map in the SDC Methodology Report. This area is also referred to as the Central City sub- area.

M. "City" means the City of Portland, Oregon.

"Comprehensive Plan" means the City's generalized, coordinated land use map and policy statement that interrelated all functional and natural systems and activities relating to the use of lands, including but not limited to sewer, water and transportation systems, educational and recreation facilities and natural resources and air and water quality management programs.

KJ. "Condition of Development Approval" is any requirement imposed on an Applicant by a City land use or limited land use decision, site plan approval or Building Permit either by operation of law, including but not limited to the City Code or Rule or regulation adopted thereunder, or a condition of approval.

L.K. "Cost Index" related to construction costs means the Seattle Area Engineering News Record (ENR) Construction Cost Index and related to land acquisition costs means the change in average market value of residential and commercial land in the City, according to the records of the Multnomah County Tax Assessor.

ML. "Credit" means the amount by which an Applicant may be able to reduce the SDC fee as provided in this Chapter.

• it Care Facility" means a facility in which •the resident--eannot-perfenn any-pail-a f-da. 4-118-done-entirely-by-senicone else.

on "Development" means a building or other land construction, or making a physical change in the use of a structure or land, in a manner which increases the usage of parks and recreation capital improvements or which ma.y contribute to the need for additional or enlarged parks and recreation capital facilities.

Exhibit B 3 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 34 of 54 PN. "Director" means the Director of the Bureau of Parks and Recreation for the City of Portland.

• :• ellingunits on-a ingle-let,

RO. "Dwelling Unit" means a building or a portion of a building consisting of one or more rooms which include sleeping, cooking, and pluMbing facilities and are arranged and designed as living quarters for one family or household.

S. "Employee" means any person who received remuneration for whose services are the employee (self employed) or by another-person or organization.

• • cans a Dwelling Unit constructed for movement on the public highwa3 - ** 1es-5-that is intended for human occupan i-ng used for residential purposes and that was construeted in accordance with federal-Manufactured Housing-construction and-safety standards and regulations in eff • eof construction.

U. "Manufactured Housing-Park" means any place where four or more-Manufactured Housing Dwelling Units are-lecated-within-5-0,0-feet-ofone another on a lot, tract or parcel of land under-the c-Ermlershi rent or lease spa rgc or fee paid or to be paid for the rental or lease or use-of-facilities or to offer space free in eorinecti:e trade or patronage of such person,-15Manufactured Ile. - e leeated--within a subdivision-being rented or-leased for occupancy by no mere—than one -M-anufeetured-Housing Dwelling Unit per-let,

dard.s" for the City's park—requireilients arc—described and quantified in Parks 2020 Vision and-the" 138_1424

W.----``Multi-family-Dwelling-Unit" means a p rtion-of-a-building-consisting-of-enc-or more rooms including living, sleeping, eatin s • •„ -signed as permanent living quarters for one family-0 e•o-two or more dwelling units by one or more common vertical walls; and-with-more than one-dwelling unit on one tot,This term-includes, but is-not limited4o3--triplex;q.ua.ch,e43kx, condominium ownership, and-apattment structures eantaining three (3) or more-dwelling-units.

XP. "Non-Central City" means all portions of the City outside the Central City Service Area.

Y-Q. "Non-Residential Development" means development which does not include dwelling units.

Exhibit B 4 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 35 of 54 18 715 0

ZR. "New Development" means Development for which a Building Permit is required.

profit" means an entity that is certifted. as tax exempt—under- Section

MIS. "Occupancy Group Codes" means the use codes (A-1, B, 1-1., e.g.) in the Oregon Structural Specialty Code, "Use and Occupancy Classification."

CCT. "Occupancy Use Types" means the occupancy classifications in the Oregon Structural Specialty Code, "Use and Occupancy Classification."

MI5. "Parks and Recreation SDC Capital Improvement Plan" also called the Parks and Recreation SDC-CIP, means the City program set forth in the "SDC Methodology Report" that-identifies all of the major parks and-recreation system and faeilitie-s eapaei •- g--inaprovements—prej-ected to be funded with Parks and Recreation SDC revenues.

BV. "Permit" means a Building Permit.

FFW. "Previou.s use means the most intensive use conducted at a particular property within the past 36 months from the date of completed Application. Where the site was used simultaneously for several different uses (mixed use) then, for the purposes of this Chapter, all of the specific use categories shall be considered. Where one us of the site accounted for 70% or more of the total area used., then that dominant use will be deemed to be the sole Previous Use of the site. Where the Previous Use is composed of a primary use with one or more ancillary uses that support the primary use and are owned and operated in common, that primary use shall be deemed to be the sole Previous Use of the property for purposes of this Chapter.

X. "Proposed use" means the use proposed by the Applicant for the New Development. Where the Applicant proposes several different uses (mixed use) for the New Development then, for purposes of this Chapter, all of the specific use categories shall be considered. Where the Proposed Use is composed. of a primary use with one or more ancillary uses that support the primary Proposed Use and are owned and operated in common, that primary use shall be deemed to be the sole Proposed Use of the property for purposes of this Chapter.

1414Y. "Qualified Public Improvement" means any parks and recreation system capital facility or conveyance of an interest in real property that:

1. increases the capacity of the City's Parks and Recreation System;

2. pertains to the park categories defined in Parks 2020 or in the Park SDC/CIP: local access, city-wide access, regional, urban, neighborhood or cornrnunity parks, botanic and community gardens trails, or habitat. If the Exhibit B 5 A.pril 15, 2015 Park SDC Method.ology Update Council Hearing Date Exhibit 1 Page 36 of 54 187150

proposed donation is a habitat, it must be adjacent to a Portland Parks property, or it must be a minimum of 3 contiguous acres with at least 66% of its area covered by the City's environmental overlay zone. If the proposed donation is a trail, it must be designated as a recreational trail on the City's Comprehensive Plan;

3. is approved by the Director of Parks; and

4. is in any of the following categories:

a. Is a capital improvement listed on the City's Parks and Recreation. SDC-CIP or two year funded list of City of Portland Parks and Recreation Capital ImproveMent Program, regardless of the improvement's proximity to the Applicant's New Development site, and is not a Real Property Interest already committed by contract or other obligation to public recreational use;

b. Is a public recreational trail improvement within the Willamette River Greenway overlay zone as designated on the Official Zoning Maps within the Central City plan boundary, and that exceeds all development standards currently contained in PCC Title 33 (Chapter 33.440, 33.272, and 33.248). Credits will be given for improvements which will result. in enhancement for habitat or public recreational use on the landward side of the top of the bank. Credits will be valued at 100% of the value of Real Property Interests that ensures perpetual public access (subject to reasonable temporary closures) and/or improvements that occur on the landward side of the required 25' minimu.m Greenway setback width, if the increase of width is at least 5'. The credit transfer mechanism described in 17.13.070 E is applicable to Real Property Interests at 25 percent of its appraised value. The use of Greenway credit transfers are valid only for New Development within the Central City, and is not available to Applicants that are using the Willamette River Greenway Bonus Option described in City Code 33.510.210 C. 9. Reasonable improvements within the required 25' minimum Greenway setback shall also receive full Credit only for improvements that exceed the current basic required standards described in PCC Title 33 (Chapters 33.440, 33.272, and 33.248) or landscaping or mitigation plantings that are required as a Condition of Development Approval. The Credit transfer mechanism described in 17.13.070 E is not applicable to Greenway improvements. Greenway improvement SDC Credits may be used only on the New Development that included the • Greenway improvement, including subsequent phases of multi-phase Development.

Exhibit B 6 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 37 of 54 187150 c. Is a conveyance of Real Property Interests or capital improvements for public recreational use that is required as a condition of development approval. For purposes of this section, the phrase "required as a condition of development approval" means

(1) requirements to construct improvements or convey Real Property Interests for public recreational use that are imposed as specifically listed conditions pursuant to a Code provision authorizing such conditions, or

(2) features of a development that are specifically stated as an element of a proposal that is approved by the review body.

d. An improvement or conveyance of Real Property Interests for parks and recreational use which does not otherwise meet the requirements of this section, is not already committed by contract or other obligation to public recreational use, and in the opinion of the Director of Parks in his or her reasonable discretion the improvement or conveyance serves the City's public parks and recreation needs as well or better than the improvements or conveyance described above.

5. Conveyances of Real Property Interests or capital improvements for public recreational use specified in a development agreement between the City and a developer entered into after the effective date of this Ordinance are excluded from the definition of "qualified public improvement" unless the development agreement specifically provides otherwise. If the development agreement does include conveyances of Real Property Interests that are intended to be eligible for Parks SDC Credits, the value of the Real Property Interests must be established at the time the development agreement is finalized by the appraisal methods described in 17.13.070. The date of valuation is the, date of the final development agreement. If there are subsequent amendments to the development agreement, the date of valuation will be the date of the original development agreement unless otherwise specified in future amendments.

6. In addition to capital improvements described in section 17.13.020 HE I. through 5., the term "qualified public improvement" also includes agreements for long-term enhanced maintenance of park facilities within the City's Parks and Recreation System, provided the following requirements are met:

a. The Parks and Recreation System facilities for which enhanced maintenance is provided are located within the Central City Plan District as identified in PCC chapter 33.510;

Exhibit B 7 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 38 of 54 18 7 1 5 0

b. The long-term maintenance obligations are specifically described in a binding agreement that contains adequate financial assurances to ensure performance of the maintenance obligations for the duration of the agreement;

c. The Parks Director has determined the net present value of the maintenance obligations in order to establish the amount of SDC credits; and

d. The Parks Director has determined, in each instance where long- term maintenance obligations are accepted, that acceptance of the long-term maintenance obligations will promote the interests of the City's Parks and Recreation System as well or better than acceptance of capital improvements.

"Rate Group" means one of four rates or groups of rates, each of which has its own percentage split between land costs and development costs as follows:

Central City Non Central-City 5-5-% 71% Land Portion .5-5-% 49% Land Portion Residential 4-5-% 29% Development 4.5-% 51% Development Improvement Portion Improvement Portion

53% Land Portion 5-7-% Land-Portion Non Residential /17% Development Portion /13% Development Portion

JJAA. "Real Property Interests" means fee title, easement, or other permanent interests in real property as documented in a written conveyance.

KKBB. "Remodel" or "remodeling" means to alter, expand or replace an existing structure.

LLCC. "Resident Equivalent" means a measure of the impact on parks and recreation facility needs created by non-residential development, as compared to the impact of a resident.

INTIN/L-Row-house" neans an attaelaed single lling-Unit on a single lot.

.:::ion of a building consisting of one or here-Peons . sanitation-facilities arranged-and-designed as permanent living quarters for one family-or household; may be-attaehed to 011e or more than one other-dwelling units by one or more • ••• 1 walls. In addition to detached single family dwelling-units, this definition also includes duplex, zero lot line, townhouse, and row-house dwelling-units designed-for one family or household.

Exhibit B 8 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 39 of 54 187150

OODD. "SDC Methodology Report" means the methodology report entitled Parks • System Development Charge Methodology Update Report, dated M,areh-53-2008 April 15, 2015 and adopted as Exhibit A to Ordinance 181669

facilities for the re hotels and rooming houses.

QQEE. "Temporary use means a construction trailer or other non-permanent structure.

RR. "Town House" means an attached single-family Dwelling Unit-on-e-shared lot.

17.13.030 Rules of Construction. For the purposes of administration and enforcement of this Chapter, unless otherwise stated in this Chapter, the following rules of construction shall apply:

A. In case of any difference of meaning or implication between the text of this Chapter and any caption, illustration, summary table, or illustrative table, the text shall control.

B. The word "shall" is always mandatory and not discretionary: the word "may" is permissive.

C. Words used in the present tense shall include the future; words used in the singular number shall include the plural and the plural the singular, unless the context clearly indicates the contrary.

D. The phrase "used for includes "arranged for," "designed for," "maintained for," or "occupied for."

E. Where a regulation involves two or more connected items, conditions, provisions, or events:

1. "And" indicates that all the connected terms, conditions, provisions or events shall apply;

2. Or indicates that the connected items, conditions, or provisions or events may apply singly or in any combination.

F. The word "includes" shall not limit a term to the specific example, but is intended to extend its meaning to all other instances or circumstances of like kind or character.

17.13.040 Application. Exhibit B 9 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 40 of 54 18 71.5 0

(Amended by Ordinance No. 181669, effective January 1, 2009.) This Chapter applies to all New Development throughout the City of Portland. The amount of the Parks and. Recreation SDC shall be calculated according to this section, using the rates set forth in the SDC Methodology Report.

A, Except as otherwise provided in this Chapter, a Parks and Recreation SDC shall be imposed upon all New Development for which an Application is filed on or after the effective date of this ordinance.

red Housing shall be

GB. The Applicant shall at the time of Application provide the Administrator with the infonnation requested on an SDC application form regarding the previous and proposed use(s) of the property, including the following:

1. A description of each of the previous and proposed uses for the property for which the Permit is being sought--with sufficient detail to enable the City to calculate dwelling .units and square footage for the entire property under the previous use and for the proposed use(s) of the New Development.

2. For residential uses--the number of residential dwellings', including type • ./6 and the square footage of each dwelling unit.

3. . For non-residential uses--the square footage for each type of occupancy use type (i.e., office, retail, etc.).

DC. Except as otherwise provided in this Chapter, the amount of the SDC due shall be calculated by determining the number of dwelling units, square footage of each dwelling unit, and/or square footage of non-residential development for the previous use(s) of the property and the number of dwelling units, square footage of each dwelling unit, and/or square footage of non-residential development for all of the proposed use(s); calculating the total SDC for the previous use(s) and the proposed uses(s); and subtracting the .total SDC for the previous use(s) from the total SDC for the proposed use(s) to arrive at the net Park SDC due. If the previous use(s) were vacant for more than 50 percent of the 5 years prior to the date of the application, the SDC shall be the full amount of the SDC for the proposed use(s) and no reduction shall be made for previous use(s).

ED. Notwithstanding any other provision, the dollar amounts of the SDC set forth in the SDC Methodology Report are based on Getober-200-7 2013 values and shall be adjusted on January-2009 July 1, 2016 and thereafter annually on January July 1st to account for changes in the costs of acquiring and constructing parks facilities. The adjustment factor shall be based on:

Exhibit B 10 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 41 of 54 8 7 1 5 0

1. the percent change in average market value of residential. and conunercial land in the City, measured from October, 2007 Tax Year 2013-14, annually, to the : - to th uge most recent annual tax year report, according to the records of the Multnomah County Tax Assessor,

2. the portion of Rate Group growth costs for land identified in the SDC CP Subsection 17.13.020.11Z.

3. the percent change in average construction costs measured from 0c4obei-•, 240-7 2013, ammally, to the quarter prior to the rate change, according to the Engineering News Record (ENR) Northwest (Seattle, Washington) Construction Cost Index, and

4. the portion of Rate Group growth costs for deve-lopment improvement identified in the SDC CIP Subsection 17.13.020.112.

The adjustment factor for each Rate Group shall be determined as follows: Percent change in Land Value multiplied by the Rate Group's Land Portion (percent) Percent change in Construction Cost Index Multiplied by the Rate Group's Development Portion (percent) Park SDC Rate Group Adjustment Factor

The resulting Adjustment Factor shall be multiplied by the adopted SDC rates by Rate Group and added to the base charges.

F. Notwithstanding any other provision, the adjustment shall not exceed a total of 12 percent in any consecutive two-year period. This shall be calculated. by dividing the proposed new rate by the rate of two years prior. If the resulting change is greater than 12 percent, the rate shall be set at 12 percent variance from the rate of two years prior.

17.13.050 Application Requirements (Amended by Ordinance Nos. 176955 and 181669, effective January 1, 2009.) All Applications must meet the application completeness requirements of the Planning Bureau and Bureau of Development Services. Where construction requires a land division, the Applicant must have final plat approval prior to submitting a Building Permit Application. This Ordinance shall apply to all Building Permits for New Development not yet complete as of the effective date and those which are subsequently submitted or made complete. Fees are assessed based on the rate schedule in use on the date that the permit application is made complete. For purposes of this Section, a complete Application shall be one-th-FAA.41.ich the following documents-have-been submitted-by-the-Applicant and accepted by the City; meet all the re• uirem.ents of the Bureau of Develo pment Services.

Exhibit B 11 April 15, 2015 Park SDC Methodology Update Council Hearing Date • Exhibit 1 Page 42 of 54 8 7 0

A. For Multi Family Housing and additions, and for all non residential development and-additions, the following documents must-be-submitted:

cation-fann,

tan review and processing fees for the Site Development Permit.

3. Completed System De t Charge information fonn,

Information-sufficie ifig foundations for the proposed structure, including--c +d-structural calculations, soils report -1-0-0-pereent-c cuments4br foundation.

1 e--following documents must-be submitted:

1. A completed-Buikling Permit Application form.

2. Payment of the •icw-and p e site development permit.

3. Information sufficient to construct the Manufactured-Housing Park for the future placement of the manufactured-4149 engine • 100--percent construction documents for foundations.

C. For reside .se and alteration projects resulting--in additional re-sidcntial units, the following docurnents-must-be-subinitte-d:

ding-Permit Application-corm.

2. Paymeof -he rc-quired plan revien, and processing fees-for-4k site deve-lopment permit.

the-previious uses.

4,7—A41e e-proposed-c4aange in

5. 100 percent construe

D. For new single family, separate manufactured-home ,on oppesed-tmanufactured home park), townhouse -lreu-sesi-and---di+plei construction, the following documents must-be-submitted.:

1.. A completed Building-4-erinit-Appli3

Exhibit B 12 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 43 of 54 18 71 0

2. Ray-ment of-the—relan—review andprocessing fees for the—site development permit.

3. 100 percent construction d including any drawings.

17.13.060 Partial and Full Exemptions. (Amended by Ordinance Nos. 176511, 179008, 181669 and 183448, effective July 1, 2010.) The uses listed and described in this Section shall be exempt, either partially or fully, from payment of the Parks and Recreation SDC. Any Applicant seeking an exemption under this Section shall specifically request that exemption no later than the time of the City's completion of the final inspection. Where New Development consists of only part of one or more of the uses described in this section, only that/those portion(s) of the development which qualify under this section are eligible for an exemption. The balance of the New Development which does not qualify for any exemption under this section shall be subject to the full SDC. Should the Applicant dispute any decision by the City regarding an exemption request, the Applicant must apply for an Alternative Exemption calculation under Section 17.13.080. The Applicant has the burden of proving entitlement to any exemption so requested.

A. Temporary uses are fully exempt so long as the use or structure proposed in the New Development will be used for not more than 180 days in a single calendar year.

B. Affordable housing is exempt pursuant to Section 30.01.095.

C. Alteration permits for tenant improvements are fully exempt.

D. New construction or remodeling of Dwelling Units where no additional Dwelling Unit(s) are created and the or non re square footage of each remodeled dwelling unit does not change the range of square footage in the SDC Methodology Report are created is fully exempt.

E. New construction or remodeling of non-residential development where no additional square footage is created is fully exempt.

F. Campus Housing is fully exempt.

EG. For New Development which includes a mix of exempt and non-exempt forms of Development, the applicable exemption(s) shall apply only to that portion of the New Development to which the exemption applies.

17.13.070 SDC Credits and SDC Reimbursements. (Amended by Ordinance Nos. 172732, 172758, 173386, 174617 and 181669, effective January 1, 2009.) SDC Credits:

Exhibit B 13 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 44 of 54 18 7 15 0

A. The City shall grant a Credit against the Parks SDC, which is otherwise assessed for an New Development, for any Qualified Public Improvement(s) constructed or conveyed as part of that New Development. For purposes of this section, a Qualified Public Improvement will be considered part of a New Development when the application for a credit is made and the New Development is identified by a Building Permit Number. The Applicant bears the burden of evidence and. persuasion in establishing entitlement to an SDC Credit and to a particular value of SDC Credit.

B. To obtain an SDC Credit, the Applicant must specifically request a Credit prior to the City's completion of the final inspection for the new Development. In the request, the Applicant must identify the improvement(s) for which Credit is sought and explain how the improvement(s) meet the requirements for a Qualified Public Improvement. The Applicant shall also document, with credible evidence, the value of the improvement(s) for which Credit is sought. If, in the Administrator's opinion, the i.mprovement(s) is a Qualified Public Improvement, and the Administrator concurs with the proposed value of the improvement(s), an SDC Credit shall be granted. The value of the SDC Credits under this section shall be determined by the Administrator based on the cost of the Qualified Public Improvement, or the value of Real Property Interests, as follows:

1. For Real Property interests, the 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;

For improvements yet to be constructed, value shall be based upon the anticipated cost of construction. Any such cost estimates shall be certified by a professional architect or engineer or based on a fixed. price bid from a contractor ready and able to construct the improvement(s) for which SDC Credit is sought. The City will give immediate credits based on estimates, but it will provide for a subsequent adjustment based on actual costs: a refund to the Applicant if actual costs are higher than estimated., and an additional SDC to be paid by the Applicant if actual costs are lower than estimated. The City shall inspect all. completed Qualified Public Improvement projects before agreeing to honor any credits previously. negotiated. The City shall limit credits to reasonable costs. Credits shall be awarded only in conjunction with an application for development;

3. For improvements already constructed, value shall be based on the actual cost of construction as verified by receipts submitted by the Applicant;

C. The Administrator will respond to the Applicant's request in writing within 21 days of when the request is submitted. The Administrator shall provide a written explanation of the decision on the SDC Credit request.

Exhibit B 14 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 45 of 54 187150

1.. The "Request for Parks SDC Credit for Qualified Public Improvement" (Form PSDC-7) and accompanying information will be sent to the Parks SDC Administration Section, who will prepare a staff report and convene the SDC Credit Review Committee. The Committee shall be composed of representatives of the following organizations:

a. Metropolitan Home Builders Association

b. Coalition for a Livable Future

c. League of Women Voters

d. Developer-at-Large

e. Parks Board Member or Designee

f. Portland Business Alliance Member or Designee

If a vacancy occurs, the organization will nominate a replacement. Members of the committee will be nominated by their respective organizations and appointed by the Director

2. The Committee shall review each proposal and forward a recommendation, along with any minority viewpoints. The Director will make a decision within 60 days of the application.

3. Certified copies of the decision and the Committee recommendations will. be transmitted to the Auditor of the City of Portland, who will file them in a special record of such decisions. All such decisions of the Director shall be accessible to the public under like terms as ordinances of the City of Portland. Any decision .of the Director shall be subject to amendment, repeal, or alteration by the City Council, but any such action must take place within 30 days of the decision.

D. If the Applicant disputes the Administrator's decision with regard to an SDC Credit request, including the amount of the Credit, the Applicant may seek an alternative SDC Credit calculation under Section 17.13.080. Any request for an Alternative SDC Credit calculation must be filed with the Administrator in writing within 10 calendar days of the written decision on the initial Credit request.

E. When the construction or donation of a qualified public improvement gives rise to a credit amount greater than the improvement fee that would otherwise be levied against the project receiving development approval, the excess credit may be applied against improvement fees that accrue in subsequent phases of the original development project. For purposes of this paragraph, "subsequent phases of the original development project" means additional New Development that is Exhibit B 15 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 46 of 54 18 7 1 5 0

approved as part of the same regulatory development approval,(such as elements approved as part of the same conditional use master plan or planned unit development) or other portions of the same "site"(as defined by PCC 33.901.030) that are explicitly defined in the application for SDC credits as subsequent phases of the original development project. For multi-phased developments, the applicant must describe all subsequent phases at the time application is made for SDC credits and must document to the satisfaction of the SDC Administrator that the subsequent phases are integrally connected with the original development rather than independent projects.

F. The Applicant may request that the portion of the Park SDC credit relative to the Non-Local Access portion of the SDC fee be applied to their development anywhere within the City. The proportional breakdown of Local Access portion to Non-Local Access portion is 43 percent Local Access and 57 percent Non- Local Access. as-fellows:

Central City Non Central City

49% Local Access 3'1% 1-,ec-al-Access Residential 51% Non Local Access 6 '64-Nen-Local Access 46-94-L-ecal Access 0% Low l-_^ Nan-Residential 5d% Non Local Access 100% Non Local Access

G. Parks and Recreation SDC Credits are void and of no value if not redeemed with the City for payment of a Parks and Recreation SDC within 10 years of the date of issuance.

H. Notwithstanding any other provisions of this section, with respect to conveyances of Real Property Interests specified in development agreements adopted before June 21, 2000, the value of the credit will be 25 percent of the appraised value of the Real Property Interest.

17.13.080 Alternative Calculation for SDC Rate, Credit, or Exemption. (Amended by Ordinance No. 181669, effective January 1., 2009.)

A. Pursuant to this section, an Applicant may request an alternative Parks and Recreation SDC rate calculation, alternative SDC Credit determination, or alternative SDC exemption, but only under the following circumstances:

1. The Applicant believes that the number of persons per Dwelling Unit for residential development, or resident equivalents per 1,000 square feet for non-residential development, resulting from the New Development is, or will be, less than the number of persons per Dwelling Unit or resident equivalents per 1,000 square feet established in the SDC Methodology Exhibit B 16 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 47 of 54 Report, and for that reason, the Applicant's SDC should be lower than that calculated by the City.

2. The Applicant believes the City improperly excluded from consideration a Qualified. Public improvement that would qualify for Credit under Section 17.13.070, or the City accepted for Credit a Qualified Public Improvement, but undervalued that improvement and therefore undervalued the Credit.

3. The Applicant believes the City improperly rejected a request for an exemption under Section 17.13.060 for which the Applicant believes it is eligible.

B. Alternative SDC Rate Request

1.. If an Applicant believes that the occupancy assumptions for the class of structures that includes New Development are inaccurate, in that, for residential development, the number of persons per Dwelling Unit is, or will be, less than the number of persons per Dwelling Unit established in the SDC Methodology Report, or for non-residential development, the number of resident equivalents per 1,000 square feet is, or will be, less than the number of resid.ent equivalents per 1,000 square feet established in the SDC Methodology Report, the Applicant must request City consideration of an alternative SDC rate calculation, under this section, no later than the time the City completes the final inspection for the New Development. Alternative SDC rate calculations must be based on analysis of occupancy of classes of structures, not on the intended occupancy of a particular New Development. The City shall not entertain such a request filed after the City has completed the final inspection for the new Development. Upon the timely request for an alternative SDC rate calculation., the Administrator shall review the Applicant's calculations and supporting evidence and make a determination within 21 days of submittal as to whether the Applicant's request satisfies the requirements of this Section.

In support of the Alternative SDC Rate request, the Applicant inust provide complete and detailed documentation, including verifiable dwelling occupancy data, analyzed and certified by a suitable and competent professional. The Applicant's supporting documentation must rely upon generally accepted sampling methods, sources of information, cost analysis, demographics, growth projections, and techniques of analysis as a means of supporting the proposed. alternative SDC rate. The proposed Alternative SDC Rate calculation shall include an explanation with particularity why the rate established in the SDC Methodology Report does not accurately reflect the New Development's impact on the City's capital improvements.

Exhibit B 17 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 48 of 54 18 715 0

3. The Administrator shall apply the Alternative SDC Rate if, in the Administrator's opinion, the following are found:

a. The evidence and assumptions underlying the Alternative SDC Rate are reasonable, correct and credible and were gathered and analyzed in compliance with generally accepted principles and methodologies consistent with this Section, and

b. The calculation of the proposed Alternative SDC rate was by a generally accepted methodology, and

c. The proposed alternative SDC rate better or more realistically reflects the actual impact of the New Development than the rate set forth in the SDC Methodology Report.

4. If, in the Administrator's opinion, all of the above criteria are not met, the Administrator shall provide to the Applicant (by Certified mail, return receipt requested) a written decision explaining the basis for rejecting the proposed alternative Parks and Recreation SDC Rate.

C. Alternative SDC Credit Request

1. If an Applicant has requested an SDC Credit pursuant to Section 17.13.070, and that request has either been denied by the City or approved but at a lower value than desired, the Applicant may request an Alternative SDC Credit.calculation, under this section, no later than the time the City completes the final inspection for the New Development. The City shall not entertain such a request filed after the City has completed the final inspection for the new Development. Upon the timely request for an Alternative SDC Credit calculation, the -Administrator shall review the Applicant's calculations and supporting evidence and make a determination within 21 days of submittal as to whether the Applicant's request satisfies the requirements of this Section.

2. In support of the Alternative SDC Credit request, the Applicant must provide complete and detailed documentation, including appraisals, cost analysis or other estimates of value, analyzed and certified to by an appropriate professional, for the improvements for which the Applicant is seeking Credit. The Applicant's supporting documentation must rely upon generally accepted sources of information, cost analysis, and techniques of analysis as a means of supporting the proposed Alternative SDC Credit.

3. The Administrator shall apply the Alternative SDC Credit if, in the Admi.nistrator's opinion, the following are found:

a. The improvement(s) for which the SDC Credit is sought are Qualified Public Improvement(s), and Exhibit B 18 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 49 of 54 187150

b. The evidence and assumptions underlying the Applicant's Alternative SDC Credit request are reasonable, correct, and credible and were gathered and analyzed by an appropriate competent professional in compliance with generally• accepted principles and methodologies, and

c. The proposed Alternative SDC Credit is based on realistic, credible valuation analysis.

4. If, in the Administrator's opinion, any one or more of the above criteria is not inet, the Administrator shall deny the request and provide to the Applicant (by Certified mail, return receipt requested) a written decision explaining the basis for rejecting the proposed Alternative Parks and Recreation SDC Credit proposal.

D. Alternative SDC Exemption R.equest:

1. If an Applicant has requested a full or partial exemption under Section. 1.7.13.060 and that request has been denied, the Applicant may request an Alternative SDC Exemption under this Section, no later than the time the City completes the final inspection for the new Development. The City shall not entertain such a request filed- after the City has completed the final inspection for the New Development. Upon the timely request for an Alternative SDC Exemption, the Administrator shall review the Applicant's request and supporting evidence and make a determination within 21 days of submittal as to whether the Applicant's request satisfies the requirements of Section 17.13.060 for exemptions.

2. In support of the Alternative SDC Exemption request, the Applicant must provide complete and detailed documentation demonstrating that the Applicant is entitled to one of the exemptions described in Section 17.13.060.

3. The Administrator shall grant the exemption if, in the Administrator's opinion, the Applicant has demonstrated with credible, relevant evidence that it meets the pertinent criteria in Section 17.13.060.

4. Within 21. days of the Applicant's submission of the request, the Administrator shall provide a written decision explaining the basis for rejecting or accepting the request.

17.13.090 Payment. (Amended by Ordinance Nos. 173565, 181669 and 183447, effective july 1, 2010.)

A. The Parks and Recreation SDC required by this Chapter to be paid is due upon issuance of the Building Permit. However, in lieu of payment of the full Parks Exhibit B 19 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 50 of 54 1.87150

and Recreation SDC, the Applicant may elect to pay the SDC in installments as is authorized by ORS Chapter 223.208 and Chapter 17.14 of this Code. If the Applicant elects to pay the SDC in installments, a lien will be placed against the property that is subject to the SDC Deferral or Installment Agreement entered into by the Applicant and the City .on a form provided by the City, and which may provide for the deferral of payments as set forth in Chapter 17.14 of this Code. In any event, the Applicant shall either pay the SDC in full or enter into an SDC Deferral or Installment Agreement as provided in this Code, before the City will issue any Building Permits.

B. Upon written request of Portland Parks & Recreation, the City Auditor is authorized to cancel assessments of SDCs, without further Council action, where the New Development approved by the Building Permit is not constructed. and the Building Permit is cancelled.

C. For property that has been subject to a cancellation of assessment of SDCs, a new installment payment contract shall be subject to the code provisions applicable to SDCs and installment payment contracts on file on the date the new contract is received by the City.

17.13.100 Refunds. (Amended by Ordinance No. 181669, effective January 1, 2009.) Refunds- may be given by the Administrator upon finding that there was a clerical error in the calculation of the SDC. The City shall refund to the Applicant any SDC revenues not expended within ten (10) years of receipt. Refunds will be given, upon request by the Applicant, when a building permit application is canceled.

17.13.110 Dedicated Account and Appropriate Use of Account. (Amended by Ordinance No. 181669, effective January 1, 2009.)

A. There is created a dedicated account entitled the "Parks and Recreation SDC Account." All. monies derived from. the Parks and Recreation SDC shall be placed in the Parks and Recreation. SDC Account. Funds in the Parks and Recreation SDC Account shall be used solely for the purpose of providing capacity-increasing capital improvements as identified in the adopted Parks and Recreation SDC-CIP as it currently exists or a hereinafter amended, and eligible administrative costs. In this regard, SDC revenues may be used for purposes which include:

1. design and construction plan preparation;

2. permitting;

3. land and materials acquisition, including any costs of acquisition or condemnation;

4. construction of parks and recreation capital improvements; Exhibit B 20 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 51 of 54 187150

5. design and construction of new drainage facilities or streets required by the construction of parks and recreation capital improvements and structures;

6. relocating utilities required by the construction of improvements;

7. landscaping;

8. construction management and inspection;

9. surveying, soils and material testing;

10. acquisition of capital equipment that is an intrinsic part of a facility;

11. demolition that is part of the construction of any of the improvements on this list;

12. payment of principal and interest, necessary reserves and costs of issuance under any bonds or other indebtedness issued by the City to provide money to construct or acquire parks and recreation facilities;

13. direct costs of complying with the provisions of ORS 223.297 to 223.314, including the consulting, legal, and administrative costs required for developing and updating the system development charges methodologies and capital improvement plan; and the costs of collecting and accounting for system development charges expenditures.

B. Money on deposit in the Parks and Recreation SDC Account shall not be used for:

1. an.y expenditure that would be classified as a maintenance or repair expense; or

2. costs associated with the construction of administrative office facilities that are more than an incidental part of other capital improvements; or

3. costs associated with acquisition or maintenance of rolling stock

C. The City may priori.tize SDC-funded projects and may spend SDC revenues for growth-related projects anywhere in the City. However, during any period of twenty years, the City shall not spend less SDC revenues for local access parks within any City parks planning sub-area than the total amount of SDC revenues collected for local access parks within that sub-area..

17.13.120 Challenges and Appeals. (Amended by Ordinance No. 174617, effective July 28, 2000.)

Exhibit B 21 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 52 of 54 187150

A. Any person may challenge the expenditure of SDC revenues by filing a challenge to the expenditure with the Administrator within two years after the date of the disputed SDC revenue expenditure. The fee for filing such a challenge shall be $100.

B. Except where a different time for an Administrator's decision is provided in this Chapter, all Administrator decisions shall be in writing and shall be delivered to the Applicant within 21 days of an Application or other Applicant request for an Administrator determination. Delivery shall be deemed complete upon the earlier of actual delivery to the Applicant or upon deposit by the Administrator in the mail, first class postage prepaid, addressed to the address for notice Applicant has designated in the Application. Any person may appeal any decision of the Administrator made pursuant to this Chapter to the City Hearings Officer by filing a written request with the Administrator within fourteen (14) days after the delivery of the Administrator's written decision to the Applicant. The fee for appealing a decision to the Hearings Officer shall be $250 and shall accompany the request for appeal. An outline of these appeal procedures shall be included in the Administrator's written decision.

C. The decision of the Hearings Officer shall be reviewable solely under ORS 34.010 through 34.100.

D. The City shall withhold all Permits and other approvals applicable to the Applicant's property of the New Development pending resolution of all appeals under this Chapter unless the SDC is paid in full or Applicant provides, for the pendency of the appeal, a financial guarantee or security for the charge in a form acceptable to the City Attorney.

17.13.130 City Review of SDC. (Amended by Ordinance No. 181669, effective January 1, 2009.)

A. No later than every five (5) years as measured from initial enactment, the City shall undertake a review to determine that sufficient money will be available to help fund the Parks and Recreation SDC-CIP identified capacity increasing facilities; to determine whether the adopted SDC rate keeps pace with inflation, whether the Parks and Recreation SDC-CIP should be modified., and to ensure that such facilities will not be over-funded by the SDC receipts.

B. In the event that during the review referred to above, it is determined an adjustment to the SDC is necessary and consistent with state law, the City Council may propose and adopt appropriately adjusted SDCs.

C. The City Council may from time to ti.me amend or adopt a new SDC Methodology Report by ordinance.

17.13.140 Time Limit on Expenditure of SDCs.

Exhibit B 22 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 53 of 54 18 71 0

The City shall expend SDC revenues withi.n ten (10) years of receipt, based on the priorities in the Parks and Recreation SDC-CIP list.

17.13.150 Implementing Regulations. The Director of the Bureau of Parks and Recreation may adopt regulations to implement the provisions of this chapter.

17.13.160 Amendment of the Parks and Recreation SDC-CIP List. (Amended by Ordinance No. 181669, effective January 1, 2009.) The City Council may, by resolution, amend its Parks and recreation SDC-CIP list as set forth in the SDC Methodology Report, from time to time to add or remove projects the City deems appropriate. The Administrator may, at any time, change the timing and sequence for completion of projects included in the Parks and Recreation SDC-CIP list.

17.13.170 Severability. The provisions of this Chapter are severable, and it is the intention to confer the whole or any part of the powers herein provided for. If any clause, section or provision of this Chapter shall be declared unconstitutional or invalid for any reason. or cause, the remaining portion of this Chapter shall be in full force and effect and be valid as if such. invalid portion thereof had not been incorporated herein. It is hereby declared to be the legislative intent that this Chapter would have been adopted had. such an unconstitutional provision not been included herein.

Exhibit B 23 April 15, 2015 Park SDC Methodology Update Council Hearing Date Exhibit 1 Page 54 of 54 2015 PARK SYSTEM DEVELOPMENT CHARGE 20-YEAR CAPITAL PLAN (SUMMARY) April 2015

As nxtwred by ORS 223.309 Portland Pages and Recreation maintains a Est of capacity increasing projects intended to TYPES OF PROJECTS THAT INCREASE CAPACITY: address the need created by growth These projects are eligible to be funding with Park SDC revenue The total value of Land acquisition 8 1 1 0 projects summarized below exceeds Me potential revenue Of 5552 milion estimated by the 2015 Park SDC Methodology and Develop new penman new land the funding from noniSDC revenue targeted for growth projects Expand existing recreation facilities, trails, play areas, picnic areas, etc The project lest end worts! plan is a living" document that per ORS 223.309 (2), maybe modified at anyame 11 should be Increase playability, durability arid life of facilities noted that potential modifications to the project list will not impact the lee since the lee is not uased or. the molect list. but Develop and improve parks to withstand more intense and extended use rather the level of service established by the adopted Park SDC Melhociology Construct new or expand existing community centers, aquatic facilities, and maintenance facilities Increase capacity of masting community centers, aquatic fadlities, and maintenance facilities

ELIGIBLE PROJECTS POTENTIAL REVENUE TOTAL PARK SOC ELIGIBLE CAPACITY INCREASING PROJECTS I 20-year Total SDC REVENUE CATEGORY SDC Funds Other Revenue Total 2015-35 TOTAL Park SDC Eligible City-Wide Capadty Increasing Projects 566,640,621 City-Wide 302,607,596 38,903,792 341,511.388 TOTAL Park SDC Eligible Central City Capadty Inc/Teasing Projects 143,555,597 Central City 118,699,111 15,260,177 133,959,288 TOTAL Park SDC Eligible Non-Central City Capadty Increasing Projects 183.479.050 Non-Central Goy 130.679 758 16.800.431 147.480.189

TOTAL PARK SDC ELIGIBLE CAPACITY INCREASING PROJECTS 5893,675,267 TOTAL Alt CATEGORIES 5551,986,465 S70,964,400 5622,950,865

CITY-WIDE FACILITIES ACQUISITION & DEVELOPMENT PROJECTS

Park SDC Eligible City-Wide Capacity Increasing Projects TOTAL FY2015-16 FY2016.17 FY2017-18 FY2018-19 FY2020-25 FY2026-35 City Wide Access Parks -Land Acquisition (Opportunity and Willing Seller Based) 37,800,080 0 6,500,000 31,300,080 0 -New Park Development on New or Undeveloped Land 59,021,804 2.000,000 1,500,000 6,500,000 49,021,804 -Capacity Increasing Improvements in Existing Parks 85,517,000 0 2,739,000 9,787,000 72,991,000 Trails -Trail Acquisition (Based on Opportunity and Willing Seller) 2,114,238 0 1,057,119 1,057,119 -Trail Development 36,719,956 3,049,000 746,247 30,924,709 2,000,000 Natural Areas -Natural Area Acquisition (Based on Opportunity and Willing Seller) 26,650,792 0 13.325,396 13,325,396 -Natural Area Restoration 8,315,465 0 2,524,446 5,791,019 Maintenance Facility Expansion 23,348,327 2,398,327 10,950,000 10,000,000 Community Centers and Aquatic Facility Expansion 287,152,959 0 0 0 161,776,959 125,376,000 TOTAL Park SUC Eligible City-Wide Capacity Increasing Projects $566,640,621 52.398,327 55,049,000 511,485,247 5268,145,709 5279,562,338

CENTRAL CITY FACILITIES ACQUISITION & DEVELOPMENT PROJECTS

Park SDC Eligible Central City Capacity Increasing Projects TOTAL FY2015-16 FY2016•17 FY2017-18 FY2018-19 FY2020-25 FY2026-35 Land Acquisition (Opportunity and Willing Seller Based) 63,899,076 500,000 1,500,000 1,500,000 1,500,000 58,899,076 New Park Development on New or Undeveloped Land 79,356,521 1,000,000 1,000.000 1,000,000 4,000,000 0 72,356,521 Capacity Increasing Improvements in Existing Parks 300,000 0 0 0 o • 300,000 TOTAL Park SDC Eligible Central City Capacity Increasing Projects $143,555,597 51,500,000 52,500,000 52,500,000 55,500,000 558,899,076 $72,656,521

NON-CENTRAL CITY FACILITIES ACQUISITION & DEVELOPMENT PROJECTS

Park SOC Eligible Non-Central City Capacity Increasing Projects TOTAL FY2015-16 FY2016.17 FY2017-18 FY2018-19 FY2020-25 FY2026-35 land Acquisition (Opportunity and Willing Seller Based) 39,042,190 500,000 500,000 500,000 3,203,809 34,338,381 0 New Park Development on New or Undeveloped Land 74,563,390 2,118,627 2,500,000 4,500,000 0 33,817,585 . 29,627,179 si) 23,299,617 29,016,232 c) m Capacity Increasing Improvements in Existing Parks 69,873,469 375,000 250,000 1,000,000 15,932,621 Capacity Increasing Projects 5183,479,050 $2,993,627 53,250,000 $6,000,000 519,136,430 591,455,582 558,643,410 CD X TOTAL Park SDC Eligible Non-Central City O April Na 2015 2015 Paik SOC 20-year Capital Plan Summary 1 of 7 2015 PARK SYSTEM DEVELOPMENT CHARGE 20-YEAR CAPITAL PLAN (DETAILED) April 2015

The follemng Mt of deleted projects are pr manly developed through Portland Parks and Recreation's 20-year Capital Project Planning Process as defined in the Copitat Project Rating and Budgeting Summary. April 2. 2015 The 20-year Caplet Project list includes all antiapateo PP&R Capital projects to address growth Specific fuming of indMdual projects will vary depending on partnership or grant opponunites, However. over the file of the Park SOC program 4 is the intent that 89% of the projects mil be funded with Park SDCs and 11% from other Scurces.Caratal projects to be undertaken in the the 1-5 year firneframe ere identified in the PP&R Adopted Budget Some of the Projects are eligible for funaing vath Park SOC revenue. but due to the general uneertainty Of the amount of SOC revenue few growth prowctS are budgeted for expenditure beyond the 1-2 year timeline Timing of the projects may be adjusted as community enmities. opportunites for partnerships. and actual revenues are realized

CITY WIDE FACILITIES ACQUISMON & DEVELOPMENT PROJECTS TOTAL FY2015-16 FY2016-17 FT2017-18 FY2018-19 FY2020-25 FY2025-35 Total Estimated Park Acquisition (Opportunity & Willing Seller) 537,800,080 50 $0 $6,500,000 531.300,080 Rose Quarter/ColIsium Waterfront South Waterfront(ZRZ Yards) Northwest/Waterfront East of Forest Park Leach Garden Expansion

Total Estimated New Park Development $59,021,804 SO 52,000,000 51,500,000 56.500,000 $49,021,804 Rose Quarter/COlisium Waterfront Park Waterfront South Waterfront(ZRZ Yards 3-4 Acres) Ross Island Bridge Park Northwest Waterfront Nonh Park Block Extension (Block 511 Development) East of Forest Park

Total Estimated Capadty Increasing Improvements 585.517.003 $2,739,000 59.787,000 572,991,000 Waterfront Park Bowl to Hawthorn Bridge Waterfront Park Burnside to Steel Waterfront Park Morrison to Ash Waterfront Park Hawthorn to Salmon Waterfront Park Salmon to Morrison Delta Park Synthetic Fields convert remaining fields u lights Destination Play Area (Existing East Parks TBD) Destination Play Area !Existing Northeast Park TBD) Destination play site (Existing Southeast Park TBD) Destination May site(Existing Southwest Park TBD) Duniway Park Synthetic Soccer Field Japanese Garden Expansion teach Garden Expansion Synthetic Turf Field conversion (Existing NW Park TBD) Synthetic Turf Reld conversion (Existing East Parks TBD) Synthetic Turf Field conversion (Existing North Park T8D) Synthetic Turf Field conversion (Existing Southeast Park TBD) Synthetic Turf Field conversion (Existing Southwest Park T80)

Total Estimated Trail Land Acquisition 52.1/4,238 $0 51.057,119 51,057.119

Total Estimated Trail Development $36,719,956 $3,049,000 $746,247 530.924,709 52,000.000 Marine Drive Trail Grant Match Trait &lege over rnh.mhia Rivd Grant Match

April 2015

n.te, SOC. zn yerir Capital Plan •.,:nnma:y 2 oi7 CITY WIDE FACILITIES ACQUISITION & DEVELOPMENT PROJECTS TOTAL FV2015-16 FY2016.17 FY2017-18 FY2018-19 FY2020-25 FY2026-35 Total Estimated Trail Development Projects(continued) Bridgeton Trail Development Red Electric PBOT Trail Gram. Matds Red Electric Trail future Development Springwater Trail Trailhead SE 136th Springwater Trail Trailhead SE 82nd Springwater Trail Trathead SE Foster at Light Rail Stop Spriingwater Bridge connection to Brooklyn Neighborhood Forest Park Trailhead North Portland Greemvay(15% Match410,6PM) Segment I Segment 2 Segment 3 Segment 4 Segment Sullivan's Gulch Segment 1 Segment 2 Segment II Willamette Greenway expansion Johns Landing to Powers Marine Willamette Greenway expansion Land to Riverforum (25%)

Total Estimated Natural Area Land Acquisition 526,650,792 SO 513,325,396 513,325,396 Columbia Slough Watershed Fenno Creek Watershed Tryon Creek Watershed Johnson Creek Watershed Willamette River Watershed Buttes Natural Area

Total Estimated Natural Area Restoration 58,315,465 52,524,446 55,791,019 Ash Creek NA Master Plan Implementation Beggars-Tick Connectivity fanno Creek Natural Area Restoration Forest Park Restoration Forest Park Restoration • NIN Grant Matclr Fulton Park Forest Restoration Woods Memorial NA Trail expansion per 2000 plan Restore 30% of Habitat in Poor Condition Restore 50% of Severely Degraded Habitat

Total Maintenance FadBties Expansion 523,348,327 52,398,327 510,950,000 $10,000,000 New Community Garden Center Mt. Tabor Yard Replacement (Estimated Expansion poriton only) Urban Forestry Headquarters(partial SDC)

Total Community and Aquatic Centers Expansion 5287.5S2,959 50 5161,776,959 5125,376,000 New Feat., Development N CO m Central Oty/NW Community Center O X Northeast/Cully Community Center CA Outer East CC & Aquatics Friclisy O cr Parklane park Outdoor Aquatics Facany April 201t K) 2015 Park SOC 20-year Capital Plan Summary 3 of 7 CITY WIDE FACILITIES ACQUISITION & DEVELOPMENT PROJECTS TOTAL FY2015.16 FY2016-17 FY2017-18 FY2018-19 FY2020-25 FY2026-35 Community and Aquatic Centers Expansion (continued) Washington Monroe Community Center Capacity Increasing Factetylapansion Columbia Pool Play Features Manlovela CC Renovation and Expansion (Estimated Expansion Portion only) St. Johns CC Expansion(Gym and Game ROOM East Portland CC FAness Center Expansion

TOTAL CITY WIDE FACILITIES ACQUISITION & DEVELOPMENT PROJECTS $566,640,621

CENTRAL CITY LOCAL ACCESS PARKS ACQUISITION & DEVELOPMENT TOTAL FY2015-16 FY2016-17 FY2017-18 FY2018.19 FY2020-25 FY2026-35 Total Estimated Park Acquisition (Opportunity & Willing Seller) $63,899,076 $500,000 51,500,000 51,500,000 51,500,000 $58,899.076 S0 Uoyd District Inner Southeast ODOT Half-Blocks Downtown West End Northwest Waterfront(Central City local Access Portion) Goose Hollow University District Old Town/China Town(Moritorium) Inner Northwest Unidentified Ceram, City Acquisitions

Total Estimated New Park Development 79,356,521 1400.000 1.000,000 1,000,000 4,000,000 0 72,356.521 Lloyd District Park Inner Southeast ODOT Half-Blocks Downtown West End Goose Hollow University District South Waterfront Trail North Dist.(SWNI) 50. Waterfront Gmenway - North Reach Slab Town Park Development(Camay Property)INWNW) District Skatepark Old Town/China Town (Moritorium) Inner Northwest Unidentified Central Ow Projects

Total Estimated Capacity Increasing improvements $300,000 SO 6300,000 Downtown Park Pfay Area (Site TBO)

TOTAL CENTRAL CITY LOCAL ACCESS ACQUISITION & DEVELOPMENT PROJECTS 5143,555,597

NON-CENTRAL CITY LOCAL ACCESS ACQUISITION & DEVELOPMENT PROJECTS TOTAL FY2015-16 FY2016-17 FY2017-18 FY2018-19 P12020-25 FY2026-35 Total Estimated Park Acquisition (Opportunity & Willing Seller) 539,042,190 5500,000 5500,000 5500,000 53,203,809 534,338,381 SO Brooklyn / Hoslord • Abernethy Centennial Cherry Park Expansion

April 7.015 aLasaiik41, itrytd. CORati.4110MUnaty 4 of 7 NON-CENTRAL CITY LOCAL ACCESS ACQUISITION & DEVELOPMENT PROJECTS TOTAL FY2015-16 FY2016-17 FY2017-18 FY2018-19 FY2020-25 FY2026-35 Total Estimated Park Acquisition (Opportunity & Willing Seller)(continued) Community Garden Land • East Community Garden Land • Northeast Community Garden Land • Northwest Community Garden Land • Southeast Community Garden Land • Southwest Community Garden Land • North Gateway • South Hazelwood Hayden Island / East Hayden bland / West Hillsdale Humbolt Interstate Corridor Unmon Madison South Powellhurst.Gilbert NA South tabor Southwest Portland - General St. Johns Sumner WilEams/Vancouver • North Williams/Vancouver • South Unidentified Non-Central Oty Acquisitions

Total Estimated New Park Devel $74,563,390 $2,118,627 $2,500,000 54,500,000 533,817,585 529,627,179 Ash Creek NA Master Plan Implementation Clatsop Butte Park Phase 1- MP Implementation Clatsop Butte Park Phase 2 - MP Implementation DefuliS Property(Land Acquired) Dickinson Park Master Plan Implementation Errol Heights(Master Planned) Future Brooklyn / Hosford - Abernethy Future Centennial Future Gateway • South Hazelwood Future Hayden Island Future Hayden Island / East Future Hillsdale Future Humbolt Future. Interstate Corridor Future Linton Future Madison South Future Powellhurst-Gilbert Property Future South Tabor Future Southwest Future St. Johns Future Sumner Future WilliamsNancouver • North Future Williams/Vancouver • South Gates Property(Land Acquired) Sacajawea Park Improvements m Thomas Cully Park Development CD X CT =' Unidentified Non-Central City Development Projects O April 2015

7015 Park SIX 20-year Capital Plan Summary 5 of 7 NON-CENTRAL CITY LOCAL ACCESS ACQUISITION & DEVELOPMENT PROJECTS TOTAL FY2015.16 FY2016-17 FY2017-18 FY2018-19 FY2020-25 FY2026-35 Total Estimated Ca I ereasIn Improvements $69,873,469 $375,000 $250,000 $1,000,000 $15,932,621 $23,299,617 $29,016,232 3 New Community Gardens(Existing East Parks TBD) 3 New Community Gardens (Existing North Park TBD) 3 New Community Gardens (Existing Northeast Parks TI30) 3 New Community Gardens {Existing Northwest Park TBO) 3 New Community Gardens(Existing Southeast Parks 180) 3 New Community Gardens(Existing Southwest Parks TBD) Add Play Equipment(Existing North Park T80) Add Play Equipment(Existing Northeast Parks T80) Add Play Equipment (Existing Northwest Park TBD) Add Play Equipment (Existing Southeast Parks TBD) Add Play Equipment (Existing Southwest Parks T801 Add unstructured play (Existing East Parks 160) Add unstructured play (Existing Northwest Park TBD) Add unstructured play(Existing North Park TBD) Add unstructured play (Existing Northeast Park TBD) Add unstructured play (Existing Southeast Park TOD) Add unstructured play (Existing Southwest Park TBD) Alberta Neighborhood Skatepark Alberta Park Splash Pad Berkeley Park Splash Pad Berrydale Neighborhood Skatepark Bloomington Park new play area Brentwood Neighborhood Skatepark Brooklyn Park Splash Pad Brooklyn Park Splash Pad Chimney Park Trail Clinton Park Splash Pad Columbia Children's Arboretum•Circulation Improvemetns Columbia Children's Arboretum-East Recreation Zone Columbia Children's Arboretum.Wesr Recreation Zone Creston Park Splash Pad Cully Neighborhood Basketball Courts Oistriet Skatepark (Existing Northeast Park TBD) District Skatepark (Existing NW Park 180) Oistrict Skatepark (Existing Southeast Park TEIC) District Skatepark (Existing Southwest Park 180) Earl Boyles Park Irrigation Expansion East Holladay Park Basketball Court East Holladay Park General Improvements East Holladay Park Spray Feature East Lents trail connectivity Ed Benedict Park Irrigation Northern expansion Fernhill Park Pathway expansion and restroom Fernhill Park Synthetic Turf Football Field conversion. Lights Gabriel Park commuity Garden Expansion Gabriel Park Splash Pad Gabriel Park Natural Turf Conversion to Synthetic Gilbert Heights Playground expansion Gleniair • Add Park Amenities Glenfair -Synthetic Turf Sports Fields Glenhaven Park Improvements Synthetic Fields •i• Lights Glenhaven Park Splash Pad April MtS 1%.3 2015 Park Slat, 2U-year Capital Plan Summary 6 uf 7

MIS

April April

FY2026-35

FY2010-25 FY2010-25

-Le -Le

MOW

FT2017-18 FT2017-18

m/2016-17 m/2016-17

of of

7 7

FY2015-16 FY2015-16

TOTAL TOTAL

$183,479,050

PROJECTS PROJECTS

DEVELOPMENT DEVELOPMENT

& &

DEVELOPMENT DEVELOPMENT

Capacity)

& &

loontinuern

ACQUISITION ACQUISITION

Tao)

TOO)

TBD)

(Increasing (Increasing

ACCESS ACCESS

TBD)

Park Park

TOD)

•

TBD)

Park Park

Facility

ACQUISITION ACQUISITION

Park Park

Improvements Improvements

Expansion

Park Park LOCAL LOCAL

Expansion Expansion

Expansion

exeansion

North North

Northeast Northeast

Southwest Southwest

Southeast Southeast

East East

NW NW

CITY CITY

Entry Entry

Area Area

Court

Lighting Lighting

ACCESS ACCESS

Lot

connection

Trail

Fields Fields

and and

iinprOvernentS

Field

Increasing Increasing

Play Play

Match

Summary Summary

connection

area

Fields

(Existing (Existing

Tot Tot

Addition

Pad

Trail Trail

Skatepark

Pad

Implementation

Plan Plan

Trail Trail

Pad

Skatepark

Pad

turf turf

Pad

Soccer Soccer

Pathway Pathway

Play Play

Pad Expansion

Access Access

Grant Grant

Street Street

Sports Sports

LOCAL LOCAL

Skatepark

Basketball Basketball

Pad

improvements

Street Street

Plan Plan

expansion

Area

Mountain Mountain

Pad

Capacity Capacity

Greenway Greenway

NA NA

Splash Splash

Olivia Olivia

NON•CENTRAL NON•CENTRAL

Restroom/Pathway Restroom/Pathway

Restroom/Maintenance Restroom/Maintenance

new new

Park Park

Skatepark

Bowl Bowl

68th 68th

Skatepark(Existing Skatepark(Existing

Skatepark Skatepark

New New

Skatepark Skatepark

Splash Splash Capital Capital

Splash Splash

Improvements

Splash Splash

Whitaker Whitaker

Public Public

Woods Woods

District District

Splash Splash

CITY CITY

Splash Splash

Restroom Restroom

Trail Trail

Entry Entry

Development

Play Play

District District

Splash Splash

Park Park

tO tO

Synthetic Synthetic

to to

Park Park

NA NA

Master Master

East East

Splash Splash

Synthetic Synthetic

Trail/Path Trail/Path

Splash Splash

Ponds Ponds

Salmon Salmon

PknicSneitelinterpretive

Park Park

• •

Perk Perk

Area Area

Scouter Scouter

Park Park

TOTAL TOTAL

20.year 20.year

Bottom Bottom

Park Park

Estimated Estimated

Park Park

Tabor Tabor

Scott Scott

mhns mhns

SOC SOC

Woodstock Woodstock

Wilshire Wilshire

Westmoreland Westmoreland

University University Wellington Wellington

Willamette Willamette

Whitaker Whitaker

Westmoreland Westmoreland

Wallace Wallace

Terwilliger Terwilliger

Ventura Ventura

Terwilliger Terwilliger

Ventura Ventura

Riverview Riverview

Parkrose Parkrose

Neighborhood Neighborhood

-CENTRAL -CENTRAL

Richmond/Ivon Richmond/Ivon St. St.

Neighborhood Neighborhood

Oaks Oaks Neighborhood Neighborhood

Neighborhood Neighborhood

Mt. Mt.

Mt Mt

Mt. Mt.

Mt Mt

Mt. Mt.

Marshal Marshal

Lents Lents

Laurelhurst Laurelhurst

Knott Knott

Nilbdale Nilbdale

Hillsdale Hillsdale

Kenilworth Kenilworth

Hillsdale Hillsdale

Grant Grant

Glenwood Glenwood

Total Total

Park Park

NON 2015 2015 Exhibit 3 Page 1 of 5 ORT AND PARKS & REC B E ATIO

The challenge for our time is that most residents think Strategies for planning, partnership, development, that our parks system is in good shape, when in fact marketing, management, funding and governance every area of the city is underserved in basic ways. provide the details of how to accomplish these things. The average age of park buildings is 60 years, and Recommendations for immediate next steps include: most facilities have been adapted — some ill-adapted • Establish a Parks and Recreation Board to — for recreation use. Many swimming pools are old advocate for parks and ensure that the and need major renovation — some pools built in the recommendations of the Parks 2020 Vision 1920s are still in use. are carried out. ▪ Establish a Parks Foundation to bring new We expect much from our park system: contact with resources and expertise to long-term nature and contact with our neighbors, places for us to stewardship of parks and recreation. play and places for us to rest. Parks add to the vitality of the city, and provide significant economic benefits. Develop a 20-Year Capital Plan to identify Perhaps the most important functions are the intangi- park system needs. ble ones: public plazas, after-school and recreation Develop a Marketing and Communications programs, parks and buildings that create communities Plan to inform the public about the value of and bring us together as a people. parks, as well as the services available from their park and recreation system. To make the Parks 2020 Vision real, the following Develop a Comprehensive Partnership Plan actions will be necessary over the next 20 years: to coordinate activities and provide the L Acquire 1,870 acres of park land, including maximum benefits to residents. Build on 620 acres of protected habitat land. and enhance partnerships with public schools. 11 Provide 100 new sports fields. II Develop Long and Short Term Funding Plans E Build 6 new full-service community centers. to stabilize park funding and provide needed I Provide 150 additional miles of trails, and renovations, acquisitions and improvements. complete the 40-Mile Loop Trail. The challenges of maintaining and improving II Increase the urban forest on streets and in parks. Portland's parks, natural resources and recreation services are many but the rewards are priceless. • Create public plazas in each regional and town center and "green connections" along each designated main street in the city.

3 Exhibit 3 Page 2 of 5 C) R A N D A R K S RECREATION

C' ortland parks and Kecreation is a developer of people. Companies today are not only concerned about the skills workers bring to the job, but also about a healthy state of mind. They are looking for people with good social skills who are team players. rr&K helps people develop these skills from cradle to grave."

Sam Brooks, Brooks & Associates

Portland residents are passionate about parks and recreation. A good share (44%) spend time every week in a park or recreation facility, and the vast majority (76%) visit a park or facility at least once a month.' Even more (85%) view parks and recreation as an essential part of the City5.

PARK BENEFITS NOT AVAILABLE TO ALL

Unfortunately, not everyone has equal access to these benefits. Virtually every sector of the city has at least one parkland deficiency.6 In Northeast Portland, residents have little habitat parkland or access to natural resource areas. In Outer East and Southwest Portland, where there are few developed neighborhood and community parks, residents get little benefit from the community centers, and others have centers that are social and recreational programs that parks provide. housed in old, ill-adapted buildings that lack fundamental Since little land appropriate for neighborhood and elements. Sellwood Community Center (SCC), for exam- community parks is available in the city, remedying ple, was built in 1909 as a rooming house. It does not park deficiencies presents a formidable challenge. have adequate security surveillance, ADA accessibility, Although community centers provide the recreational 4 Davis & Hibbitts, 2001 programs and community gathering places that give 5 Davis & Hibbitts, 2001 appeal to urban living, those benefits are unavailable 6 See Sub-Area Section for detailed information about parks to some residents. Certain areas of the city have no in each sub-area.

Long lines at Mt. Scott Community Center demonstrate the need for eciuitable distribution of facilities and programs throughout the city.

Exhibit 3 Page 3 of 5 0 N D h ARKS K A

PORTLAND'S PARK SYSTEM: THE FUNDING DILEMMA

SDC—A MUCH-NEEDED needs. At a rate that is 30% of the legal maximum, the NEW SOURCE OF FUNDING SDC assessment only partially offsets the true costs of park development in Portland, and the fee is currently In 1998, City Council approved a residential Park only assessed for residential development. Systems Development Charge (SDC) that partially offsets the costs associated with housing development for needed services. At the current rate of about $1,500 per unit, FUNDING INADEQUATE the residential development fee generates about $1M a & UNPREDICTA I LE year for park capital improvements. The SDC has funded several major new acquisitions in Outer East in the past In fiscal year 2001/02, PP&R will spend just under $60M year-an area that is experiencing much new growth. to operate, maintain, and expand Portland's park system. As the chart below shows, about half of PP&R's financial Unfortunately, SDC funds, which are likely to decline in support ($31M) comes from the city's General Fund (i.e., an economic downturn, are restricted to land acquisition discretionary resources that the Council allocates). and capital improvements in areas of population growth and new development. SDC funds cannot be used to The city supports about three-fifths of PP&R's $50M correct existing parkland deficiencies, nor can they be operating budget (i.e., ongoing expenses), and about used to meet the equally vital operations or maintenance one-fifth of its $10M capital budget (i.e., one-time park system enhancements). A small (and unpredictable) fraction of PP&R's budget — one half of one percent — comes from grants and donations.

Discretionary General Golf Fees ($9.5M) Fund ($30.4 M) PP&R Fees & Permits ($8.6M) Parks Construction Fund ($6.0 M) Other Bureau Revenues ($3.2M) SDC Fee ($1M)

A I9-acre expansion of rarklane Park in Outer Last was made possible bg 5DC funds. — Grants &Donations ($0.38 M) PIR Fees ($1 M) Miscellaneous Revenues ($2.3 M)

19 Exhibit 3 Page 4 of 5 ) R AND PARK E E A 0 N

PORTLAND'S PARK SYSTEM: PORTLANDERS ARE PASSIONATE

PARKS ESSENTIAL PART OF CITY that more areas of the city will be underserved in the future. Portlanders view parks as part of the fabric of the city, as appealing gathering places where they carry on leisure, Most Portlanders are unprepared for the impact of cultural, and social activities. A vast majority of residents an additional half-million people in the region and do consider parks and recreation an essential city service not realize the city is not adding enough park system and they visit a Portland park or recreation facility at capacity to maintain the quality of life that we cherish. least once a month". Nearly a million and a half resi- Our city's investment in a wonderful park system is in dents last year refreshed body and mind in parks and jeopardy, and the cost of saving our park system will be recreation programs. Millions attend festivals and events much greater later. It is imperative that we act now. at Govenor Tom McCall Waterfront Park. Well over half a million rounds of golf were played on city courses. Residents strongly favor adding more recreation facilities and programs to the park system.

Access to nature is important to Portlanders who strongly favor acquiring public open space and preserving habitat within the city, as well as acquiring and developing land for Columbia and Willamette River recreation'''. you know that Community involvement in planning, management, and maintenance of public parks and facilities is at an 1T&K provides 6 to 7 million all-time high. Our parks and natural areas have never hours of recreation progriming had as many visitors as they have now, but they are each year being loved to death — and many suffer from overuse. CIL, 27,000 kids take swim lessons FEW AWARE OF THREATS TO SYSTEM annually in rr&K's nationally The vast majority of Portlanders believe we have an recognized acluatics program excellent park system with great recreation programs. Few of us understand that the city's park system is Over 3,000 people garden in peril. in Community Garden plot, Few residents are aware that many of our recreation each year facilities are old and inadequate. Most are unaware that all areas of the city lack some park services now, and

13 Davis & Hibbitts, 2001 14 Davis & Hibbitts, 2001

Exhibit 3 Page 5 of 5 REQUESTED BUDGET Fiscal Year 2015-2016

Archery Class Mt Scott Çg,fimunity Cente 2014

PORTLAND PARKS & RECREATION Healthy Parks, Healthy Portland

Exhibit 4 Page 1 of 2 Portland Parks & Recreation Capital Budget Parks, Recreation, and Cultural Service Area

Capital Budget Capital Summary

CIP Highlights PP&R has in excess of $1.3 billion (replacement value, not including land value) of assets spread over 11,656 acres of park space. The Capital Improvement Program, which builds upon City priorities, Parks 2020 Vision, and the Total Asset Management Plan, has two primary objectives: fixing the system by maintaining existing assets, and growing the system in order to provide equal recreation opportunities to all residents. PP&R does both of these as efficiently and sustainably as possible. Specifically, PP&R strives to: • Protect and maintain those existing assets that provide desired levels of service through maintenance, rehabilitation, and renewal. • Provide new service and expand capacity to accommodate growth and provide equitable levels of service through the expansion of existing facilities and the construction of new parks and facilities. • Improve efficiency, environmental quality, and energy conservation wherever possible.

Major Issues PP&R continues to face several key challenges in relation to capital investment.

Unmet Service Needs There are parts of Portland where families and residents do not have ready access to parks, recreation facilities, or open space. Along with deteriorating infrastructure, this has been a community concern that is voiced regularly and was thoroughly documented in the Parks 2020 Vision Plan. PP&R has a service level goal articulated in Vision 2020 to provide a park or natural area within a half mile of every resident in Portland. In 2014, the Bureau met that service-level goal for 80% of Portlanders, but 20% of Portlanders still cannot walk to a local park or natural area within 15 minutes (average walking time for a half mile). PP&R continues to work towards ensuring that 100% of Portlanders will be within a half mile of a park or natural area. Acquiring and developing new parks to meet this goal is challenged by finding appropriate properties for sale by willing sellers to serve as new parks, obtaining upfront costs for acquisition and development, and balancing limited operating and maintenance resources.

Funding As PP&R seeks alternative funding sources to respond to priority needs, some types of projects are more readily funded than others. The System Development Charge(SDC) and tax increment financing in urban renewal areas are effective sources of funding for land acquisition and project development where projects qualify. This is especially true where population growth and capacity-driven needs are the underlying premise to development. Since SDCs are intended to respond to increased capacity needs due to growth (housing and commercial), they are not able to be used for performing major maintenance activities on existing infrastructure. PP&R has a small allocation of major maintenance funding each year from the General Fund. With the passage of the Parks Replacement Bond in November 2014, PP&R has the opportunity to fund some of the most urgent major maintenance improvements for existing infrastructure, though the Replacement Bond (at $68 million) will not fund the majority (estimated at more than $300

Page 22 City of Portland Parks & Recreation - Requested Budget FY 2015-16 Exhibit 4 Page 2 of 2 2010 Census of Population by City and County

(source: U.S. Census, 2010 Demographic Profiles) Note: Jurisdiction geographies are based on the city limits from Census definitions CENSUS CENSUS (Estimate) CENSUS CENSUS Persons 2010 2010 Per 2010 2010 Inside UGB: Population Households Household Dwelling Units Vacancy % Beaverton 89,803 37,213 2.41 39,500 5.8% Cornelius 11,869 3,339 3.55 3,499 4.6% Damascus 10,539 3,621 2.91 3,769 3.9% Durham 1,351 545 2.48 561 2.9% Fairview 8,920 3,544 2.52 3,786 6.4% Forest Grove 21,083 7,385 2.85 7,845 5.9% Gladstone 11,497 4,540 2.53 4,779 5.0% Gresham 105,594 38,704 2.73 41,015 5.6% Happy Valley 13,903 4,408 3.15 4,708 6.4% Hillsboro 91,611 33,289 2.75 35,487 6.2% Johnson City 566 268 2.11 278 3.6% King City 3,111 1,735 1.79 1,920 9.6% Lake Oswego 36,619 15,893 2.30 16,995 6.5% Maywood Park 752 300 2.51 312 3.8% Milwaukie 20,291 8,667 2.34 9,138 5.2% Oregon City 31,859 11,973 2.66 12,900 7.2% Portland 583,776 248,546 2.35 265,439 6.4% Rivergrove 289 123 2.35 133 7.5% Sherwood 18,194 6,316 2.88 6,569 3.9% Tigard 48,035 19,157 2.51 20,068 4.5% Troutdale 15,962 5,671 2.81 5,907 4.0% Tualatin 26,054 10,000 2.61 10,528 5.0% West Linn 25,109 9,523 2.64 10,035 5.1% Wilsonville 19,509 7,859 2.48 8,487 7.4% Wood Village 3,878 1,226 3.16 1,289 4.9% Uninc. Clackamas Co.* 86,805 34,665 2.50 38,087 9.0% Uninc. Multnomah Co.* 5,991 2,029 2.95 2,263 10.3% Uninc. Washington Co.* 188,148 70,380 2.67 74,235 5.2%

Inside UGB Subtotal 1,481,118 590,919 2.51 629,532 6.1%

Outside UGB: Clackamas County 119,006 44,250 2.69 47,636 7.1% Multnomah County 10,461 4,520 2.31 4,821 6.2% Washington County 30,451 11,575 2.63 12,238 5.4% Clark County 425,363 158,099 2.69 167,413 5.6%

Outside UGB Subtotal 585,281 218,444 2.68 232,108 5.9%

Tri-County Total 1,641,036 651,264 2.52 694,227 6.2% Four-County Total 2,066,399 809,363 2.55 861,640 6.1%

(* Note: derived as proportional estimate from the total county unincorporated) (Inside / Outside UGB figures are Metro Research Center estimates) Exhibit 5 Page 1 of 3 2035 Forecast of Population by City and County

Revised Draft 1/15/2013 (source: Scen #1221) Note: Jurisdiction geographies are approximate, and based on TAZs.

(TAZ-based) (TAZ-based) 2035 PopiAlation GrOwth (TAZ 2035 2035 Persons Per 2010 to 2035 Population Households Household APR % % change change Beaverton 112,608 50,517 2.23 0.9% 25% 22,805 Cornelius 18,102 5,513 3.28 1.7% 53% 6,233 Damascus 34,570 11,916 2.90 4.9% 228% 24,031 Durham 1,436 586 2.45 0.2% 6% 85 Fairview 9,207 4,003 2.30 0.1% 3% 287 Forest Grove 27,370 10,379 2.64 1.0% 30% 6,287 Gladstone 12,308 4,876 2.52 0.3% 7% 811 Gresham 126,716 51,051 2.48 0.7% 20% 21,122 Happy Valley 32,727 10,410 3.14 3.5% 135% 18,824 Hillsboro 114,323 44,973 2.54 0.9% 25% 22,712 Johnson City 564 268 2.11 -0.0% -0% -2 King City 3,172 1,769 1.79 0.1% 2% 61 Lake Oswego 44,305 19,291 2.30 0.8% 21% 7,686 Maywood Park 767 306 2.51 0.1% 2% 15 Milwaukie 22,729 9,740 2.33 0.5% 12% 2,438 Oregon City 45,214 17,047 2.65 1.4% 42% 13,355 Portland 789,370 369,398 2.14 1.2% 35% 205,594 Rivergrove 290 124 2.34 0.0% 0% 1 Sherwood 19,342 7,269 2.66 0.2% 6% 1,148 Tigard 60,213 25,997 2.32 0.9% 25% 12,178 Troutdale 16,983 6,632 2.56 0.2% 6% 1,021 Tualatin 28,484 11,170 2.55 0.4% 9% 2,429 West Linn 31,506 11,988 2.63 0.9% 25% 6,397 Wilsonville 28,475 11,508 2.47 1.5% 46% 8,966 Wood Village 4,630 1,609 2.88 0.7% 19% 752 Uninc. Clackamas Co.* 112,506 45,074 2.50 1.0% 30% 25,701 Uninc. Multnomah Co.* 11,033 4,107 2.69 2.5% 84% 5,042 Uninc. Washington Co.* 245,766 99,526 2.47 1.1% 31% 57,618

Inside UGB Subtotal 1,954,716 837,048 2.34 1.1% 32% 473,598

Outside UGB: Clackamas County ** 192,269 66,392 2.50 1.9% 62% 73,263 Multnomah County 11,932 4,365 2.69 0.5% 14% 1,471 Washington County ** 80,686 32,770 2.47 4.0% 165% 50,235 Clark County 607,948 228,392 2.66 1.4% 43% 182,585

Outside UGB Subtotal 892,835 331,919 2.69 1.7% 53% 307,554

Tri-County Total 2,239,602 940,575 2.38 1.3% 36% 598,566 Four-County Total 2,847,551 1,168,967 2.44 1.3% 38% 781,152 Population estimates derived from the "2035 Reviewed TAZ Forecast Distribution" (MetroScope GAMMA HH Forecast) (* Note: derived as proportional estimate from the total county unincorporated) (** Note: urban reserves are tabulated with unincorp. county figures inside the UGB) Exhibit 5 Page 2 of 3 2010-35 Forecast of Occupied Housing by City and County

Revised Draft 1/15/2013 (source: Scen #1221) Note: Jurisdiction geographies are approximate, and based on TAZs.

2010 Reviewed :HH 2035 Reviewed HH 201.0-2035 Change Inside UGB: SF MF Total SF MF Total SF MF Total Beaverton 18,128 21,953 40,081 20,038 30,479 50,517 1,910 8,526 10,436 Cornelius 2,467 1,051 3,518 3,428 2,085 5,513 961 1,034 1,995 Damascus 3,322 205 3,527 11,700 217 11,916 8,378 12 8,389 Durham 550 8 558 560 26 586 10 18 28 Fairview 1,677 1,954 3,631 1,927 2,076 4,003 250 122 372 Forest Grove 4,775 2,717 7,492 6,999 3,380 10,379 2,224 663 2,887 Gladstone 2,831 1,356 4,187 3,097 1,779 4,876 266 423 689 Gresham 19,781 18,243 38,024 25,394 25,656 51,051 5,613 7,413 13,027 Happy Valley 4,162 273 4,435 9,898 512 10,410 5,736 239 5,975 Hillsboro 18,575 14,251 32,826 21,762 23,211 44,973 3,187 8,960 12,147 Johnson City 268 0 268 268 0 268 0 0 0 King City 1,172 583 1,755 1,190 579 1,769 18 -4 14 Lake Oswego 10,887 5,180 16,067 12,307 6,984 19,291 1,420 1,804 3,224 Maywood Park 282 18 300 288 18 306 6 0 6 Milwaukie 5,934 2,307 8,241 7,166 2,574 9,740 1,232 267 1,499 Oregon City 8,463 3,511 11,974 12,186 4,861 17,047 3,723 1,350 5,073 Portland 143,519 104,897 248,416 165,348 204,050 369,398 21,829 99,153 120,982 Rivergrove 123 0 123 124 0 124 1 0 1 Sherwood 4,971 1,505 6,476 5,553 1,716 7,269 582 211 793 Tigard 12,035 6,632 18,667 15,120 10,877 25,997 3,085 4,245 7,330 Troutdale 3,981 1,806 5,787 4,506 2,126 6,632 525 320 845 Tualatin 5,391 4,847 10,238 5,980 5,190 11,170 589 343 932 West Linn 7,670 2,582 10,252 9,237 2,751 11,988 1,567 169 1,736 Wilsonville 3,471 4,509 7,980 5,625 5,883 11,508 2,154 1,374 3,528 Wood Village 458 1,081 1,539 488 1,121 1,609 30 40 70 Uninc. Clackamas Co.* 21,106 13,559 34,665 28,424 16,650 45,074 7,318 3,091 10,409 Uninc. Multnomah Co.* 1,715 314 2,029 3,260 847 4,107 1,545 533 2,078 Uninc. Washington Co.* 49,376 21,004 70,380 70,948 28,578 99,526 21,572 7,574 29,146

Inside UGB Subtotal 357,090 236,346 593,436 452,823 384,225 837,048 95,733 147,879 243,612

Outside UGB: Clackamas County ** 40,749 4,202 44,951 60,792 5,600 66,392 20,043 1,398 21,441 Multnomah County 3,776 97 3,873 4,243 122 4,365 467 25 492 Washington County ** 11,259 101 11,360 27,369 5,401 32,770 16,110 5,300 21,410 Clark County 114,638 43,472 158,110 164,207 64,185 228,392 49,569 20,713 70,282

Outside UGB Subtotal 170,422 47,872 218,294 256,610 75,309 331,919 86,188 27,437 113,625

Tri-County Total 412,874 240,746 653,620 545,226 395,348 940,575 132,352 154,602 286,955 Four-County Total 527,512 284,218 811,730 709,433 459,534 1,168,967 181,921 175,316 357,237 Estimates derived from the "2035 Reviewed TAZ Forecast Distribution" (MetroScope GAMMA HH Forecast) (* Note: derived as proportional estimate from the total county unincorporated) (** Note: urban reserves are tabulated with unincorp. county figures inside the UGB) Exhibit 5 Page 3 of 3 87150 Impact Statement for Requested Council Action

IMPACT STATEMENT

Legislation title: Accept Park System Development Charge Methodology Update Report for implementation, and amend the applicable sections of City Code. (Ordinance; amend Code Chapter 17.13) Contact name: Riley Whitcomb Contact phone: 503-823-6148 Presenters' names: Mike Abbate, Randy Young (Consultant), et.al.

Purpose of proposed legislation and background information: Update the existing Park system development charge methodology to: 1) base the level of service on investment per person rather than acres per 1,000 population; 2) assess fees for residential developnient based on average occupancy of dwelling by size range rather than by dwelling type; 3)increase recovery rate from 75% to 100% and buy down the fee to 88% with non-SDC revenue projected to fund projects to mitigate the impact of growth; 4) update the existing Park SDC/CIP in response to the updated recovery rate; exempt college and university campus housing from residential SDC fee, and 5) amend City Code Chapter 17.13 to implement changes needed to implement changes described above. Financial and budgetary impacts: This legislation will potentially increase future revenue corning to the City for the Park SDC program primarily because of the extended planning horizon. The current Park SDC methodology is based on a planning horizon of 2020. When implemented in January 2009, the existing Park SDC methodology targeted potential revenue through 2020 of $304.6 million, or an average of $27.7 million per year. This proposed Park SDC methodology is based on a planning horizon of 2035 and targets potential revenue through 2035 of $552 million or $27.6 million per year. The actual performance will be based on timing of implementation, population and employment growth occurring during the life of the program, size of residential units constructed, size and type of commercial development, and total contribution to affordable housing through the exemption program.

In 2011, the City had a dispute with Lewis & Clark College respecting whether the College's development of its new dormitory facility was subject to the Parks SDC. Lewis & Clark sought a writ of review to challenge the Code Hearings Officer's decision upholding the imposition of the SDC. The City and the College resolved that litigation, under the authority of PCC 3.10.070, through a settlement agreement, under which the College agreed to pay the full amount of the SDC, and the City agreed that, if the new or revised methodology resulted in a rate that would have resulted in a lower assessment for the dormitory project, the City would apply the new rate retroactively, and would refund any overpayment. Since the result of this Ordinance will be that on-campus college -dormitories will not be subject to the Parks SDC, the City will be obliged to refund to Lewis & Clark College the amount of $439,173.00 that the College paid pursuant to the settlement agreement.

DECEMBER 2014 version

' Exhibit 6 Page 1 of 2 18 7 1 5 0 Impact Statement- for Requested Council Action.

Community impacts and community involvement: The Parks SDC Task Force appointed to advise Portland Parks and the consultant on this update included representatives from the following groups: League of Women Voters of Portland, Portland Business Alliance, Portland Development Commission, Development Review Advisory Committee (DRAC), Portland Parks Board, College Coalition, Home Builders Association of Metropolitan Portland, and at-large members representing the broader community and development industry. The Methodology Report and Frequently Asked Questions were sent by email to stakeholders including Venture Portland, Building Owners & Managers Association (BOMA)Portland, Small Business Advisory Council, chamber of commerce organizations, communities of color organizations, neighborhood coalitions, and frequent permit applicants. Presentations were given to the following groups: Portland Business Alliance, DRAC,BOMA Oregon, Portland Parks Board, SWNI Parks Committee, SE Uplift Land Use Committee, NECN Board & Land Use/Parks Committees, CNN Board & Land Use/Parks Committees, and EPNO Land Use Committee. Notice was published in the Daily journal of Commerce. The Methodology Report, FAQs, and other Taskforce materials were published at www.portlandoregon.gov/parks/sde.

This will have little noticeable impact on the broader community. The Parks SDC program has been in place since 1998, and this is an update of the methodology used to calculate fees and provide structure for the Park SDC capital plan. The community will continue to see benefits from the SDC funds spent on park developments and land acquisition. Development will be focused more on capacity increasing improvements rather than expansion based on land acquisition, but it should be noted that the new methodology will not preclude strategic acquisition of land where needed to close gaps in our system. Also the proposed methodology would provide opportunity to expand service capacity of community centers, aquatic facilities and maintenance facilities which the previous methodology did not. It should be noted that community members who plan to apply for new construction permits will likely see an increase in their permit costs after implementation of this update. This will depend. on the scale of their project; some may see a slight decrease. These additional costs or reductions are likely to be passed on to the ultimate u.ser of the development but should be minimal in reality when amortized over years in leases or mortgages.

DECEMBER 2014 version

Exhibit 6 Page 2 of 2 TERRY PARKER 187150 P.O. BOX 13503 PORTLAND, OREGON 97213-0503

Subject: Testimony to the Portland City Council related to single family home system development charges April 15, 2015.

The concept of calculating the amount of system development fees being related to the square footage of a new house is on the right track. However, it should be taken a couple of steps beyond what is being proposed. When a single family home torn down and replaced by a new larger house - a one for one replacement - system development charges need to be assessed on the additional square footage of the new house.

As I have previously testified before this council; "when my neighborhood - Rose City Park - was platted over 100 years ago, the developers clearly envisioned a residential village in a park geared to the working class".

New houses that replace older homes all to frequently are almost two and one half times the size and price of the home being replaced, and they extend to the edges of the lot lines eliminating the unsurpassed backyard park for parents that want to keep tabs on a small child. This out of scale development places the basic fabric of older single family home neighborhoods at risk. Due in part to the rapid dasiipe_aiad ROWL/Ac.. demolition of older starter homes, the working class - often called the 99 percent - is systematically being priced out of the housing market.

System development charges that will be utilized to help pay for parks is a fitting venue to add incentives for promoting affordability and maintaining the park like ribbons of green that backyards and front yards provide.

The percentage of the property or lot not taken up by the footprint of a new house needs to be calculated as part of the system development charges being assessed. Bonus reductions can be given for a proportionally greater amount of open space including larger all around setbacks and yards. Penalties need to be assessed for lot line to lot line development and footprints that proportionally cover a larger amount of the square footage on the property. This needs to apply to any size house including new skinny houses that are wedged in on small lots.

In addition to the cooling affect on the atmosphere, without the green park like amenities and ambiance that surround our living quarters, the living environment is compromised and housing for everybody becomes less affordable. We need to keep neighborhoods like mine working class affordable while still maintaining the long standing values and intended vision of a residential village in a park.

Establishing system development charges that have a dual role can not only help pay for parks, but also help protect the character and quality of life in all single family home neighborhoods.

Respectfully submitted,

Terry Parker Northeast Portland Exhibit 7 Page 1 of 1 187150

To: Portland Commissioner Amanda Fritz

From: Justin Wood, Associate Director of Government Relations

Re: Portland Parks SDC Methodology

Date: March 26, 2015

Having served as a member of the Portland Parks SDC Update Taskforce as a representative of the HBA of Metro Portland, I would like to share with you some of our significant concerns regarding the proposal coming before the City Council in April. During the over yearlong task force meetings, members reached a general perception that the philosophy behind the new methodology could prove to be a better system than the current one. However, upon receiving the actual proposed fees and methodology near the end of our process, the general consensus from the wide cross section of members was that the proposed fee increase was unjustifiable and would place an inequitable burden on residential and commercial development. We were told by staff to "let the policy makers adjust the numbers if needed". This memo and the supporting documentation is intended to provide you with the required information to direct staff to revisit the methodology and the calculations contained within.

Issue # 1- Methodology Questions

Upon completion of our task force, it became apparent to the Home Builders Association that an independent 3' party expert was needed to review the SDC methodology presented. Attached to this memo, please find a report prepared by DPFG, a nationally recognized expert on infrastructure financing, calling into question seven specific items of concern which we ask be addressed prior to moving forward with the City Council hearing regarding the Parks SDC. These concerns focus largely on the costs used to develop the basis for the value of the parks system as well as deficiencies in addressing the shortfall of current facilities and land needs for the future. These flaws lead to an inflated parks system value, which drastically changes the number upon which state law requires reimbursement SDC's to be based.

Issue # 2 Scaling of SDC's

In addition to the methodology questions addressed above and in the attached report, the other big issue our task force was asked to address was one of potentially scaling the Parks SDC to the square footage of a home. To date, no jurisdictions in Oregon have tried to base Parks SDC off of a square footage of a home. One main reason for this is that SDC's must be directly related to the impact a new home has on the park system; to use any other basis for the calculation of an SDC can convert it from a fee to a tax. Just as with Transportation or Water SDC's, the impact felt on these systems by new development is a direct correlation to the basis of the fee. The inherent logic that a 2,300 sq foot home has more impact on a park than a 1,400 sq ft home or a 900 square foot condo is extremely flawed. In fact, we would submit that this

Exhibit 8 Page 1 of 12 187150

approach reverses the actual relationship between the size of the home and the lot on which it is built and the use of city parks. A homeowner on a 5,000 sq ft lot in SE Portland already has a place to let out their pet or for their kids to play in their own private yard. The owner of a small condo in the Pearl, on the other hand, has no other option but to use the park for recreation. In other words, if house and lot size is to be used to calculate the fee —which, again, we don't believe is appropriate —we believe that the relationship is the exact opposite of what the proposed methodology would require, in that smaller homes and smaller lots should in fact pay a larger fee for parks, since they would be using the parks more than those living on larger properties.

While we concede that it's permissible to assume that residents from all sizes of homes will ultimately use the parks, we do not agree that a larger home places more demand on a park and demand is the sole basis upon which a city can base a SDC. While some may feel that it is appropriate for larger homes to simply "pay more of their share", that philosophical position is irrelevant to the amount of an SDC; If the city chooses to move forward with this option for calculating SDC's, it will most likely find itself in the position of defending the legality of this option and demonstrating how it is not a tax.

Issue # 3 —Affordability

You recently stated in a Willamette Week interview that it was not the intention of the new SDC methodology to raise new revenue and that the new fees would not make homes less affordable. We disagree, and we would call your attention to the spreadsheet below which outlines the realistic development options within the given zones. You will see that only the smallest of units in the Central City will see a minimal decrease. All other types of development will see large increases. Even the smallest of units outside of the Central City will see a 20% increase above what they currently pay. This increased fee will hurt affordability across the board.

Central City Current Proposed Increase / (Decrease) MF (less than 1,000 sq ft) $ 5,528.00 $ 5,454.00 -1% MF (1,000 - 1,499 sq ft) $ 5,528.00 $ 7,649.00 38% MF (1,500 - 2,249 sq ft) $ 5,528.00 $ 9,071.00 64% MF (2,250 + sq ft) $ 5,528.00 $ 10,617.00 92%

Non Central City Current Proposed MF (less than 1,000 sq ft) $ 5,632.00 $ 6,773.00 20% SF (1,000 - 1,499 sq ft) $ 8,582.00 $ 9,499.00 11% SF (1,500 - 2,249 sq ft) $ 8,582.00 $ 11,265.00 31% SF (2,250 + sq ft) $ 8,582.00 $ 13,185.00 54%

Given the information contained within this memo and the attached report, the Home Builders Association respectfully requests that you direct Parks Bureau Staff to go back and address the issues presented and for City Council to review the impacts to affordability that an across the board increase of the SDC will have.

Exhibit 8 Page 2 of 12 187150

Review of Portland Parks and Recreation Park System System Development Charges

Prepared By: Development Planning & Financing Group,Inc.

DEVELQPIANI PLANNING 4E FINANCING GROUP

For:

Home Builder's Association of Metro Portland

February 2015

TX Orange County, CAI Sacramento, CAI Phoenix, AZ I Las Vegas,NV I Boise, D)I Denver,CO I Dallas,TX I Austin, Research Triangle, NCI Charlotte, SC I Maitland, FL I Tampa,FL

Exhibit 8 Page 3 of 12 187150

Review of Portland Parks & Recreation Park System System Development Charges

TABLE OF CONTENTS

I. INTRODUCTION 1 II. SUMMARY OF FINDINGS A. STATUTE CONFORMANCE 1 B. STUDY METHODOLOGY 3 I. Time Frame 3 2. Existing Park Improvement Deficiencies 3 3. Replacement Costs 4 4. Park Facilities Included in Study 5 6. LOS 6 7. Capital Improvement Plan 6 8. Segregation ofFunds 6 9. Persons Per Dwelling Unit 6

Exhibit 8 Page 4 of 12 187150

I. Introduction

The City of Portland, Oregon's ("City") Parks & Recreation Department("P&R") prepared a draft report for the Park System Development Charge dated December 16, 2014 and later updated on February 12, 2015 (collectively the "Study") to support proposed System Development Charges("SDC") for the City's park system.

The Home Builders Association of Metro Portland ("FIBA") engaged the Development Planning & Financing Group, Inc.("DPFG"), a firm experienced in the review of development fee studies, to review the City's proposed SDCs as documented in the Study.

The purpose of our review was to determine whether the SDCs are reasonable, properly documented, compliant with Oregon Revised Statute 223.297 et seq. (the "Statute" and/or the "Act") and in accordance with generally accepted practices for such matters. To this end, we have performed a limited review of the Study documenting statutory and methodology issues as well as other matters of concern.

Summary of Findings

The methodologies employed in the Study must be consistent with the Act and with the "dual rational nexus" test. The Act provides specific requirements that must be followed to support the proposed SDCs. Case law provides the dual rational nexus test which consists of two guiding principles that must be adhered to: i) benefit, and ii) proportionality. In plain terms the dual rational nexus test requires that new development must (i) receive a benefit from paying SDCs and (ii) the amount of the SDCs paid must be roughly proportionate to the benefit received by paying the SDCs.

Our review'identified the following significant findings. In our opinion, additional information and/or revisions are necessary to bring the Study into compliance with the Act and the dual rational nexus test.

A. Statute Conformance

The Act identifies approximately twenty-two (22) requirements that must be addressed within the Study to be in compliance with Oregon law. Based upon our review of the Study, it is our opinion that additional information is necessary to assess compliance with seven (7), or thirty- tow (32) percent of the statutory requirements due to: (i) inadequate information provided in the Study, and/or (ii) concerns identified in this report. An additional five (5) requirement were not reviewed as they were beyond the scope of this engagement. The table below identifies the requirements of the Act that must be addressed along with our opinion as to whether the Study adequately addresses the indicated requirement.

Exhibit 8 Page 5 of 12 187150

Table 1- Statutory Compliance 11,1atrix

City ofPortland Parks SD C Summary of Compliance with Oregon Revised Statutes

ORS Requirement Compliant? 223.299(1)(a) IMeets the Definition of"Capital Improvement? "Capital Improvement" means: (A)I Water supply, treatment and distribution; 1(B) Waste water collection, transmission, treatment and disposal; Yes ,1(C)Drainage and flood control; I(D) Transportation; or 1(E)Parks and recreation. 223.299(1)(b) 1"Capital improvement" does not inchide costs of the operation or routine maintenance of capital Yes (improvements. • --1 223.301(3) lAn improvement fee or a reimbursement fee shall not include or incorporate any method or system kinder which the payment of the le or the amount of the fee is determined by the number of Yes employees of au employer without regard to new construction, new development or new use of ar !existing structure by the employer. 223.304(1)(a) !System development charge methodology, when ap licable, must be established based on: l - 223.304(1)(a) (A)! Ratemaking principles employed to finance publicly owned capital improvements; _ (1) 223.304 (I)(a) (B)1 Prior contributions by existing users; l Yes 223.304 (1) (a). (C): Gills or grants from federal or state government or private persons; , Yes 223.304 (1)(a) (D)' The value ofunused capacity available to future system users or the cost ofthe existing facilities; and! (1) 1 223.304(I) (a) (EE' Other relevant factors identified by the local government finposingthe le. I - .1 223.304(I) (b) !Methodology for establishing or modifying a system development charge must: 1 Yes 223,304(1) (b) (A)i Promote the objective offuture system users contriliuting no more than an equitable share to the (1) 1 cost ofexisting facilities. —I 223.304(1) (b) (B)i Be available for public inspection. Yes j 223.304(2) (a) (A)! Methodology must demonstrate consideration ofthe projected cost ofthe capital improvements (1) 1 identified in the plan and list adopted pursuant to ORS 223.309; and 1 223.3042)(a) (B)1 Methodology must demonstrate consideration ofthe need for increased capacity in the system. ; (1) 223.304(4) 'Provide for a credit against such le for the construction ofa qualified public improvement. ("quaffed, I public improvement" means a capital improvement that is required as a condition of development! Yes ,....._ ;approval, identified in the plan and list pursuant to ORS 223.309. 223.307(1) !Reimbursement fees may only be spent on capital improvements for which the fees are assessed') Yes, 'including e ..enditures relatin to the re.a nt ofindebtedness. , 223.307(2) !Improvement fees may only bo spent on capacity increasing capital improvements including (I) I le 411 enditures rely' 10 • to the re 4 a 111. nt ofdebt for such improvements. I . . 223.309 (1) 'Shall prepare a capital improvements plan, public facilities plan, master plan or comparable plan that includes a list of the capital improvements that the local government intends to fund, in whole or in to part, and the estimated cost, timing and percentage of costs eligible to be bided with revenues from,' , the improvement fee for each improvement. 223.311 (1) System development charge revenues must be deposited in accounts designated for such moneys. I (2) 223.311 (2) The local government shall provide an annual accounting that shall include: T - 223.311 (2)(a) 1 A list ofthe amount spent on each project Raided with system development charge revenues; and 1 (2) 223.311 (2)@) The amount ofrevenuo colected_by the local government from system development charges. 1 (2) 223.313 Provisions 223.297-223.314 shall not be applicable ifthey are construed to inpair bond obligations' (2) for which SDC have been pledged. 223.314 Establishment, modification or implementation ofSAC or a plan or list adopted is not a land use (2) decision. yuotnote: (I) Acklitional information is necessary to assess compliance with Statute due to: i) inadequate information provided in the Study, and/or II) concerns raised in this report. (2)liteyond the scope of this engagement

Exhibit 8 Page 6 of 12 187150

In our opinion, the Study does not adequately address all ofthe requirements ofthe Act, and thus, it is recommended that the Study be revised tofully address all requirements ofthe Act.

B. Study Methodology

Our review of the Study found a number of issues and/or questions that require further explanation and/or support as follows:

1. Time Frame — The time frame of the Study is twenty (20) years which in our opinion is an excessively long time frame to adequately estimate population growth trends. Generally, the majority of system development fee (e.g. development fee) studies are a maximum of ten (10) years. It is suggested that the Study be revised to reflect a shorter, more realistic forecasting period.

2. Existing Park Improvement Deficiencies — A review of the Parks 2020 Vision Report (Date unknown)(the "Park Report") provides insight into the condition of the City's park system as of the date of its writing. In particular, the Park Report sheds light on a number of park related issues which were not covered in the Study and should be addressed,

a. Significant Deficiencies — The Park Report states that, "Unfortunately, not everyone has equal access to these benefits. Virtually every sector of the city has at least one deficiency. In Northeast Portland, residents have little habitat parkland or access to natural resource areas. In Outer East and Southwest Portland, where there are few developed neighborhood and community parks, residents get little benefit from the social and recreational programs the parks provide."1

At present, the Study's methodology related to the City's existing levels of service assumes that all residents have unfettered access to all of the City's parks, however; it would appear from the Park Report that this is not the case. In order to ensure that new growth. has access to all ofthe parks as currently outlined within the Study's methodology, the City would need to pan* the amount offunding required to correct the City's parks deficiency and to identify the specific funding sources necessary to pay for the retnediation of this deficiency. Alternatively, the Study's methodology would have to be revised to take into account the fact that the City's' residents do not have access to all of the City's parks and facilities and therefore do not receive theirfull benefit.

b. Potential Land Shortage — The Park Report indicates that "Since little land appropriate for neighborhood and community parks is available in the city, remedying park deficiencies presents a formidable challenge."2 Based upon the information contained with the Study, we estimate that the City will require an

1 Paxks 2020 Vision,Page 13. 2Patks 2020 Vision, Page 13. 3

Exhibit 8 Page 7 of 12 187150

additional 1,721 acres of land to accommodate additional park improvements although it was not discerned from the Study where such acreage will be found to accommodate this need. Our estimate is illustrated in Table 2 below.

Table 2: Estimated Portland Park Land Requirements N„:::,gpi-rito conditip0'pr S.Nirk Projecte 1 Growth (2) 03) (a)/(b)= (c) (d) (d)x(c)=(c) (a)+(e) New Population Total LOS(Acres Growth Per Acres Estimated Description Acres Population Per Pen on) Study Required Park Land CYOnvide Access Facilities 1,895 653,010 0.003 107,163 311 2,206 Habitat and Natural Areas 7,299 653,010 a011 107,163 1,198 8,497 Trailways 114 653,010 0.000 107,163 19 132 Total 9,308 0.014 1,527 10,835 Central City 61 60,779 0.001 36,501 37 98 Non-Central City Local Access Local Access Parks 1,291 592,231 0,002 70,662 154 1,445 Community Gardens 19 592,231 0.00003 70,662 2 22 Total 1,311 0.002 156 1,467 Totals 10,680 1,721 12,400 S ourco: Study

Ii is suggested that the Study provide more indication as to where the additional 1,721 acres ofpark land and trails will be acquired to support new growth.

c. Condition of Buildings — The Park Report indicates that, "Certain areas of the city have no community centers, and others have centers that are housed in old, ill-adapted buildings that lack fundamental elements.3 Same comment as item 2a. above.

d. Current Condition of Parks — The Park Report states, "Over many decades, park system funding has not kept up with needs. Numerous parks need major renovation and many recreational facilities are in poor condition. There is a backlog of park maintenance projects that will take $57 million to "catch up" and PP&R will need an additional $58 million to maintain existing assets at acceptable standards over the next 20 years. (These figures do not take into account the impacts of responding to new growth or existing deficiencies)."4 Same comment as 2a. above.

3. Replacement Costs — No back up or supporting information was provided related to how park land values and/or replacement costs for park facilities were determined. As such, it was not possible to determine the reasonableness of such costs. It is requested

3 Parks 2020 Vision,Page 13. 4 Parks 2020 Vision,Page 20. 4

Exhibit 8 Page 8 of 12 187150

that support be provided for both land replacement costs as well as park facilities. Additionally, the Study estimates the Park SDC based upon the "replacement cost" of the facilities which assumes that the facilities are in a "new" condition. The challenge however, is that the Park Report provides indication ofhuge deficiencies in the condition ofthe existing parkfacilities and that they arefar from being in a "new condition." If these deficiencies have been addressed, it is requested that the city provide documentation related to how the park wide deficiencies outlined in the Park Report were addressed as well as financial verification proving these deficiencies were in factfunded. Ifsuch deficiencies have not been corrected, it is requested that the city quantify the amount offunding required to correct current park deficiencies and identify the specific funding sources necessary to pay for the remediation of these deficiencies. Alternatively, the cost of correcting these deficiencies may be deductedfrom the current replacement costs to accountfor the current condition of the city's parkfacilities.

4. Park Facilities Included in Study Typically park fees only include those elements which most households will utilize and thus derive a benefit. Based upon our review of the Park facilities included in the Study, there are approximately $784 million in facility costs which one could argue are not the type typically funded through development fees. A listing of some of the more questionable facilities included in the Study are shown below.

Table 3: Non-typical Park Facilities

De6iption Community Gardens $ 2,881,200 Buildisgs(1) 442,248,868 Dock Ramps $ 25,829,209 Furnishings(1) 18,211,601 Golf Courses 21,168,000 Botanical Gardens 193,809,975 Roads $ 24,621,987 Stadiums $ 3,337,841 Water Features $ 52,213)566 Total 784,322„347 Source: Table A3 Footnotes (1)Further description required.

5. Other Park Users — The Park Report states that, "Many city parks are visitor attractions that contribute significantly to the $232M in tax revenues collected from Oregon's' $5.9B tourism industry"5 .

5Patics 2020 Vision, Page 9. 5

Exhibit 8 Page 9 of 12 187150

It is not readily apparent from the Study whether the tourism industry or the commercial uses which benefit from the tourism trade are being properly allocated their fair share of the costs of park facilities for which they receive benefit. It is suggested that the Study be revised to allocate additional park systern costs to the commercial sector which benefitfrom the City's park system. Additionally, a portion ofthe City's tax revenue which is generated from tourism should be considered for funding additional construction of the park system thereby providing an additional credit to the costs ofpark facilities.

6. LOS — While the Study indicates that there is no further capacity within the City's park system, no empirical data is provided to support this claim. It is recommended that this information be included within the body ofthe Study.

7. Capital Improvement Plan — A cursory review of the City's Park & Recreation Capital Improvement Plan related to the future construction of park facilities provided no detailed descriptions related to where the new proposed parks would be located, the cost to acquire the land or other information which would allow the reader to ascertain the viability of such an acquisition. Additionally it was noted that the degree of confidence associated with park acquisitions was "moderate. This again brings us back to the points discussed in the "Land Shortage section of this report as to whether such land acquisitions will actually occur and if they do occur, at what locations?

It is suggested that the Study be updated to address the viability of acquiring additional park lands.

8. Segregation of Funds — Subject to the comments contained within this report, as the City has broken out replacement costs of park land and park facility costs, it is suggested that when SDC charges are received, they be segregated into a Land Account and a Facility Account to ensure that such moneys are expendedfor their intended use.

9. Persons Per Dwelling Unit - The February 12, 2014 Study replaced the way that persons per dwelling unit are quantified switching the methodology from an estimated number of residents per residential dwelling type (e.g. single family, multifamily, manufactured housing, etc.) utilized in the December 16,.2014 Study to an estimated number of residents per size of dwelling unit regardless of dwelling unit type.

Although this modification may appear logical, the effect of this change is to allocate more park costs from the more urban multifamily uses which tend to be smaller in size, to the larger single family residential units. The methodological challenge with this approach is that it assumes that just because a unit is larger it will contain more persons and that these additional persons will consume the park system capacity therefore they should be charged more. The flaw with this thinking is twofold. First, it assumes that just because a home is larger, that more persons will reside in the home. This is not necessarily the case; just because a home is larger does not mean that more people reside in the home. The home could have many bedrooms but they may be utilized as offices, media rooms, art & crafts rooms, and/or play rooms. They also may contain- rooms which are vacant for the majority of the year with the exception of the holiday

Exhibit 8 Page 10 of 12 187150

season. Secondly, the typically single family home has front and rear yards as well as related homeowner's association community centers and parks for the use and enjoyment of the residents. Therefore the idea that single family home residents will pack everyone into the car to go visit the local City park when they have more convenient recreational options available to them does not make logical sense.

In fact, it is more reasonable to assume that the smaller urban multifamily units will use the City's parks in greater numbers than the single family home residents as they do not have the option of recreating in the front or rear yards or using local HOA parks. To graphically illustrate the aforementioned point we have included an aerial photo of a typical Portland area single family home development and its recreational options as well as that of a Portland multifamily project.

040 Nl4i:(! iiR47124

Typical SFR development with community center (13316 NW Manzoni Street, Portland, OR)

Exhibit 8 Page 11 of 12 187150

Multifamily Project - 1179 NW Marshall Street, Portland, OR

Multifamily Project - 1470 NW Marshall Street, Portland, OR

As one will note, the single family units appear to have much less need for City parks than the multifamily projects.

As allocating park costs on the size of dwelling unit does not appropriately address the demand placed on park resources, it is suggested that the SDC methodology be switched back to the dwelling type unit methodology employed in the December 14, 2014 Study.

Exhibit 8 Page 12 of 12 Home Builders Association of Metropolitan Portland

May 5, 2015

Portland City Council City of Portland 1221 SW 4th Avenue, Rm. 140 Portland, OR 97204

Re: Parks SDC Methodology

Mayor Hales and Honorable Commissioners: l understand that the Parks SDC methodology and ordinance is up for approval again this Wednesday. We have not been contacted by anyone in the Parks Department or on City staff regarding our concerns, but we have been working to address some of the issues raised by the Council at your April 15th meeting. We also have done further work on some of the issues we raised previously.

While we understand the challenge the City has in using a methodology based on acres per 1,000 residents, we still strongly believe that the new methodology and fee increases before you will have severe impacts on housing affordability, violate State Statute, and are at their core unfair and inequitable.

Housing Affordability The Council asked the consultants hired by the Parks Bureau what impact these new fees would have had on SDCs based on last year's permits. The consultants said they didn't know and hadn't looked into these numbers but believed there were some who would pay less and some who would pay more.

We've run the numbers and are providing the following analysis (copy attached and made part of the record) based on city permit data for calendar year 2014: • Citywide, Multi-Family(MF) residential would have paid over 31% higher SDCs based on the proposed rates. That includes a 17% increase for the Central City and a 47% increase in the non-central City. All MF units in the non-central City would have an increase, including the smallest units. The average increase would have been over $1,700.

• Citywide, Single-Family(SF) residential would have paid over 42% higher SDCs based on the proposed rates. 99% of all SF was built in the non-central City. The average increase would have been over $3,500.

• Overall, SF and MF combined, over 83% of all new residential units would have seen an increased SDC. 100% of new SF residential units would have seen an increase.

Home Builders Association of Metro Portland 15555 SW Bangy Rd., Ste. 301 Lake Oswego, OR97035 503-684-1880• Fax 503-684-0588

Exhibit 9 Page 1 of 4 • The National Association of Home Builders calculates how many median family income homebuyers in each major metropolitan market are priced out of being able to afford a median priced home with every $1,000 increase in home price (copy attached and made part of the record). Based on their analysis of the Portland Metro market, and the average SDC increases shown above, these SDC increases will prevent more than 4,100 homebuyers/families from being able to afford a home.

• The new SDC is said to encourage smaller units, including ADUs, by creating a new sub 700 sq. ft. category. However, this new category has an SDC that is actually higher than the previous SDC category for ADUs. In addition, almost 50% of ADUs permitted in 2014 were in the 700-1200 sq. ft. category. These would see an 85% increase in SDCs. Overall, ADUs permitted in the City would see a 54% increase in fees on 'average, so this methodology does nothing to increase affordability of smaller units. In fact, given that the City has waived SDCs the last few years for ADUs, the bottom line is that ADUs will now have a huge increase in fees. This will not encourage smaller development.

• It is impossible for us to predict with certainty how much rental rates might increase as a direct result of this SDC, but the cost will be passed on to the renter, together with all of the builders' costs of interest and financing, along with a mark-up. Rents are increasing rapidly in the Portland market, and this will exacerbate the problems of affordability.

The bottom line is these increases are significant, they will affect a high percentage of housing units, they will be especially burdensome on non-central city housing, and they will have a huge impact on affordability.

Compliance with State Statute We have previously laid out some of our concerns regarding the new methodology and its compliance with State Statute. After further review, we are even more convinced that this new methodology violates State Statute in at least three areas.

The Consultants used by the City claim there are no deficiencies in the current Parks system. This is a direct contradiction to the Parks 20/20 Vision Plan and subsequent Park 20/20 Plan reports that have discussed deficiencies in the current parks system. Those documents are incorporated by reference into this letter, and made part of the record. Failure to acknowledge these deficiencies shifts all the costs to make up for the deficiencies that will serve the existing population to new development, and away from existing residents. Since no amount of correcting the deficiency is being allocated to existing development, the full cost of both parks system improvements and backfilling existing deficiencies is put on the backs of new homeowners, renters and businesses. This is a clear violation of State Statute.

This also points out another serious flaw in the proposed methodology approach. According to the consultant's own words, its approach cannot assess either deficiency or excess capacity. It can only assume that the current parks system is sufficient for current residents because it has no standard level of service, unlike the City's methodology up to this time, which uses acres per 1,000 people. All SDCs currently use an approach that demonstrates use, or impact, of

Home Builders Association of Metro Portland pg. 2

Exhibit 9 Page 2 of 4 development on infrastructure. This novel new approach does not — it simply assigns a "price tag" that each person must pay without there being a nexus to use or impact. This price tag is not based on the Parks CIP, but on a "market valuation" approach that is not supported by Statute. This is basically a tax, not an SDC because it does not allocate the costs to those who will benefit from the facilities in any meaningful way.

There is also no way of evaluating how much "capacity" any of the supposed improvements in the Portland CIP add — the only evaluation is whether the City spends a certain amount per person. In other words, the City could spend $10,000,000 on some new feature of a Park, and there would be no correlation between how much increased capacity that feature provides to the Parks system. It could benefit 5 people, or 500, but that nexus is no longer made. This failure to even estimate the future capacity that will be created by spending SDCs fails to allocate costs to the projected need.

Finally, we also believe the scaling of the SDC to house or apartment size needs further work to prove that the approach creates a direct connection between impact and fee. The Consultants used by the Parks Bureau claimed their original scale was based on U.S. Census Data. This information, if included in the record, has not been made available for inspection at a meaningful time. In addition, the amended scale creates five brand new categories, so if the original was based on Census data, what is the new one based on? Nothing in the record was made available to any persons desiring to comment at a meaningful time. We still also find flaws in assuming apartments have less of an impact on the Parks system than houses with yards. There is nothing in the record to support this bold assertion, and it runs counter to common sense that residents with their own yards would make more use of public open space than those with none. In fact, experience in dense American and European cities shows that apartment dwellers make up the bulk of the people who use public open spaces and parks frequently."

Fairness/Equity

There is no fairness in this system at all — current residents benefit from a significantly lower cost that the City used to put together the current parks system, and new residents will pay an inflated number that has nothing to do with what capacity is needed in the parks system. Deficiencies in the current system aren't accounted for. It will add significant costs to housing, ultimately paid by new homeowners and renters, at a time when the City acknowledges it has an affordability crisis. And it does so without a nexus between the supposed dollars paid and the benefit/use they are paying for.

In fact, to show how these SDCs would play out if done across all five categories, we also did an analysis (copy attached and made part of the record) of what the SDCs would be if every SDC used this ''fair market value" approach to the methodology. Total SDCs would be between $38,000 and $136,000, with a basic starter home of 1,300 sq.ft. being charged $108,000. This doesn't work because simple fair market value does not correlate to use or impact or cost of increased capacity.

To use the Parks Bureau consultant's analogy about eating at a restaurant, this isn't about the new person sitting down to eat and paying a fair price for a comparable meal to someone

Home Builders Association of Metro Portland pg. 3

Exhibit 9 Page 3 of 4 already eating. This is analogous to letting a certain class of people eat for free or at a significant discount, charging someone else significantly more for their meal (but whether it's actually the same, less or more food is not disclosed or even known), and building in to that new person's price a cost for the first person's meal.

Respectfully,

David Nielsen Chief Executive Officer

Attached for the City's record: • Portland Parks 2020 Vision Plan • Parks 2020 Vision 2009 Progress Report • Portland Parks Strategic Plan 2012-2015 • NAHB's "Households Priced out of a Market by a $1,000 Price Increase, 2014 • Analysis of proposed Parks SDC methodology if used by other SDC categories • Residential comparison of Portland Parks SDCs(impact of new fees vs existing fees applied to 2014 permits)

Home Builders Association of Metro Portland pg. 4

Exhibit 9 Page 4 of 4 187150

NAIOP Officers COMMERCIAL REAL ESTATE President, Klrk Olsen DEVELOPMENT ASSOCIATION Trammell Crow OREGON CHAPTER • Pres.-Elect, Steve Barragar • Harsch investment Properties April 15, 2015 Treasurer, Eric Castle Shorenstein Really Sorvices, LP

Secretary, Brad Miller The Hon. Charlie Hales Ball Janik LLP Portland City Council Past-Pres., Benjamin Chesser 1221 SW 4th Avenue, Room 340 PacTrust Portland, OR 97204 Board of Directors

Mike Bematz Re: Park System Development Charge Methodology Update Report Meriwother Partners LLC

Evan Bernstein Dear Mayor Hales and Commissioners: Pacific NW Properties LP Breht Hedberg NAIOP,the Commercial Real Estate Development Association, is one of the Specht Development

leading organizations for developers, investors, owners & operators, brokers, Blake Hering, Jr. and related professionals in office, industrial and mixed-use real estate Norris Beggs & Simpson throughout the United States, Canada, and Mexico. The Oregon Chapter's Sue Kerns members represent a broad and diverse range of companies involved with ZGF Architects LLP commercial real estate activities in the Portland metropolitan area, including Eddie La Berge Tumor Construction developers, owners, brokers, and managers, along with other professionals MK Long providing legal, finance, title, engineering, architectural, construction, and (IS Bank other services. Jody Patton Lawyers Title After reviewing the Park SDC Methodology Update Report before you Joe Mollusky today, we have found it seriously flawed and urge you to direct the Bureau Port of Portland

of Parks & Recreation and the Park SDC Task Force to conduct additional Jim Rodrigues work to correct the problems identified in the Daniel Heffernan Company Prologis (DHC)memorandum of April 10, 2015. Stuart Skaug CBRE, Inc,

Parks Commissioner Amanda Fritz was recently quoted in The Oregonian Dietrich Wieland (4/7/15) as saying,"New development needs to pay its way. No more, no Mackervio less." We completely agree with Commissioner Fritz, but believe strongly that implementation of the proposed Methodology Update Report would Executive Director result in development—especially commercial development—paying far Kelly Ross more than its way with park SDC rates doubling within the Central City and nearly quadrupling within the Non-Central City area.

As someone who was deeply involved in the 1998 and 2004 park SDC methodology updates, and to a lesser extent in the 2008 update, I can't express strongly enough what a huge departure the current update represents in approach, assumptions, and level of detail for future improvements to the City's park system.

6745 SW Hampton, Suite 101 Portland, OR 97223 Tel:(503) 223-1766 Fax:(503) 597-3668

Exhibit 10 Page 1 of 25 187150

Significant differences between this update and previous efforts include:

• Level of service methodology — We actually agree with one of the main departure points in this update—the move from a strict acreage based level of service approach. Such a change is long overdue in a very constrained land supply environment, and recognizes the reality that Portland and most other cities within the regional urban growth boundary will find it impossible to continue historical trends of park land acquisition while also meeting targets for development densities projected by Metro. While we do support this move, the new "investment per person" presents a number of serious problems that are discussed in great detail by the DHC memorandum.

• SDC Capital Improvements Plan — Directing the Council's attention to page 22 of the Methodology Update Report (attached), the obvious question is how can anyone consider these twelve lines of text and numbers to be a valid 20-year capital improvement plan for a parks system that strives to be one of the nation's best. This falls far, far short of not only statutory requirements in ORS 223.309(1) , but also the much more detailed capital improvement plans in previous methodology updates (2004 and 2008 attached).

• Current Park Deficiencies — The proposed Methodology Update Report takes the position that the current parks system is at 100% capacity, "there is no unused reserve capacity value that can be used to serve future population growth." As the DHC memorandum notes, this definition of LOS is not supported by the City's own long-range park system plans and internal reviews. More importantly, the proposed Methodology Update, unlike past updates, makes no mention of current deficiencies within the park system and the capital improvements plan doesn't include any expenditures to correct such deficiencies. The 2008 methodology update, for example, included $75.6 million in the capital improvement plan for non-SDC expenditures to correct existing deficiencies in Non-Central City local access park improvements (this amount doesn't include an additional $23 million for land acquisition to correct deficiencies). The 2004 methodology update included $54.2 million in the capital improvement plan for non-SDC expenditures to correct existing deficiencies.

Does the absence of any mention of existing park deficiencies in the current capital improvement plan mean that the City is no longer planning to upgrade park facilities in areas where they are lacking?

Additional concerns that we have with the proposed methodology update are:

• Effective Date — According to the draft ordinance before you, the drastic fee increases being proposed would become effective in less than three months, on July 1st. We believe strongly that any increase should have a longer lead time and be phased in so that

* Prior to the establishment of a system development charge by ordinance or resolution, a local government shall prepare a capital improvement plan, public facilities plan, master plan or comparable plan that includes a list of the capital improvements that the local government intends to fund, in whole or in part, with revenues from an improvement fee and the estimated cost, timing and percentage of costs eligible to be funded with revenues from the improvement fee for each improvement. (emphasis added)

April 15, 2015 Letter to Portland City Council re Park SDC Methodology Report Update - Page 2

Exhibit 10 Page 2 of 25 187150

development projects currently in process to begin the permitting process won't be unnecessarily burdened by additional costs that could not have been foreseen when pro forma analyses and financing were finalized.

• Impact on Commercial Redevelopment of Non-Central Areas — There has been extensive discussion of redevelopment goals for areas along 82nd Avenue, farther east, and elsewhere. A quadrupling of park SDCs for these areas will certainly make them less competitive for siting of new commercial development.

Thank you for the opportunity to comment on the park SDC methodology update report. We hope to have the opportunity for involvement in a continuing process to further refine this crucial component in plans to ensure that the Portland parks system has capacity to accommodate future growth within the city.

Sincerely,

Kelly Ross Executive Director

April 15, 2015 Letter to Portland City Council re Park SDC Methodology Report Update - Page 3

Exhibit 10 Page 3 of 25 187150 2015 SDC Capital Improvement Plan APPENDIX B: SDC CAPITAL IMPROVEMENTS PLAN

TABLE B.1

SDC CAPITAL IMPROVEMENTS PLAN 2015 - 2035

Service Area Annual Total 2015-2035 Citywide COsts '$ i7.,075,569 $ 341, 11,388

Funding: Park SDCs 15,130,380 302,607,596 Funding: Other Revenue Sources 1,945,190 38,903,792

Central City Local Access Costs 6,697,964 133,959,288

Funding: Park SDCs 5,934,956 118,699,111 Funding: Other Revenue Sources 763,009 15,260,177

Non-Central City Local Access Costs 7,,374,009 147,480,189

Funding: Park SDCs 6,533,988 130,679,758 Funding: Other Revenue Sources 840,022 16,800,431

Total Costs '81,147,543' : 022,950,865

Funding: Park SDCs 27,599,323 551,986,465 Funding: Other Revenue Sources 3,548,220 70,964,400

22 published 2/12/15 Exhibit 10 Page 4 of 25 187150 2008 Park SDC Capital Improvement Plan APPENDIX A

PORTLAND PARKS AND RECREATION Page 1

SDC CAPITAL IMPROVEMENTS PLAN 2/22/08 A. CENTRAL CRY LOCAL.ACCESS PARKS Estimated Growth- SDC-Eligible Deficiency Estimated Project Project Cost Required Timing Facility ($) Portion (%) Growth Share (8) Repair Share ($)

LOCAL ACCESS PARK LAND ACQMISMON

CENTRAL CITY

2008 - 2014 Acquire land for local access perks to serve growth needs.

total acres: 4.21 Acquisition $16,854,000

SDC acres: 4.21 Development $0

recovery % = 58.55% Total Cost $16,854,000 100.00% $16,854,000 $0

LOCAL ACCESS PARK LAND ACQP1SMON cENTRALcrry

2015 - 2020 Acquire land for local access parks to serve growth needs.

total acres: 4.21 Acquisition $16,854,000

SDC acres: 9.2i Development $0

recovery % = 58.55% Total Cost $16,854,000 100.00% $16,854,000 $0

LOCAL ACCESS PARK DEVELOPMENT CENTRAL my

2008 - 2014 Develop local access parks to serve growth needs.

total acres: 5.33 Acquisition $0

SDC acres: 5.33 Development $15,982,500

recovely % = S0% Total Cost $15,982,500 100.00% $15,982,500 $0

LOCAL ACCESS PARK DEVELOPMENT

CENTRAL CITY

2015 - 2020 Develop local access parks to serve growth needs.

total acres: 5.33 Acquisition $0 SDC acres: 5.33 Development $15,982,500

recovery %= 50% Total Cost $15,982,500 100.00% $15,982,500 $0

TOTAL $65,678,000 100.00% $65.678,000 $0

Land $33,708,000 100.00% $33,708,000 $0 Development 531,965,000 100.00% $31,965,000 $0

Exhibit 10 Page 5 of 25 187150

APPENDIX A

PORTLAND PARKS AND RECREATION Page 2 SDC CAPITAL IMPROVEMENTS PLAN 2/22/08 B. NON-CENTRAL CDT LOCAL.ACCESS PARKS Estimated Growth- SDC-Eligible Deficiency Estimated Project Cost Required Growth Share Project Timing Facility_ ($L Portion (%) gE) Repair Share ($1

LOCAL ACCESS PARK LAND ACQJASINON NON-CENMAL CITY Acquire land for local access parks to repair deficiencies and 2008 - 2011 serve growth.

total acres: 36.50 Acquisition $16,425,000 SDC acres: 20.12 Development $0 recovery %= 10096 Total Cost $16,428 000 55.1296 $9 054 000 $7 371.000

LOCAL ACCESS PARK LAND ACE6ASITION NON-CENTRAL CITY

Acquire land for local access parks to repair deficiencies and 2012 - 201 5 serve growth.

total acres: 36.50 Acquisition $16,425,000 SDC acres: 20.12 Development $0 recovery %= 100% Total Cost $16,425,a20 55.12% $9_054,000 $7,371,000

LOCAL ACCESS PARK LAND AaSISMON NON-CENTRAL CITY Acquire land for local access parks to repair deficiencies and 2016 - 2020 serve growth. total acres: 36.60 Acquisition $16,470,000 SDC acres: 20.13 Development $0 recovery%= 100% Total Cost $16,470000 55.00% 89.056,500 $7,411,500

LOCAL ACCESS PARK DEVELOPMENT NON-CORRAL CITY Develop local access parks to repair deficiencies and serve 2008 - 2011 growth.

total acres: 67.89 Acquisition $0 SDC acres: 17.51 Development $33,946,250 recovery %= 75% Total Cost 833 946250 25.79% $8,755,000 $25,191,250

LOCAL.ACCESS PARK DEVFJ-OPMENT NON-CONRAL CRY Develop local access parks to repair deficiencies and serve 2012 - 201 5 growth.

total acres: 67.89 Acquisition $0 SDC acres: 17.51 Development $33,945,000

recovery %• 75% Total Cost 833,945,000 25.79% $8,_,755 000 $25,190,000

LOCAL ACCESS PARK DEVELDPMENT NON-CENTRAL CTIY Develop local access parks to repair deficiencies and serve 2016 - 2020 growth.

total acres: 67.90 Acquisition $0 SDC acres: 17.51 Development $33,950,000 recovery %= 75% Total Cost $33,950,900 25.79% $8.755,000 $25,195,000

TOTAL $151.161.250 35.35% $53,191.500 $97.729.750 Land 109.60 $49,320,000 55.08% $27,166,500 $22,153,500 Development 203.68 $101,841,250 25.79% $26,265,000 $75,576,250

Exhibit 10 Page 6 of 25 187150

APPENDIX A

PORTLAND PARKS AND RECREATION Page 3

SDC CAPITAL IMPROVEMENTS PLAN 2/22/08 C. CITY-WIDE SERVICE FACES Estimated Growth- SDC-Eligible Deficiency Estimated Project Cost Required Project Timing Facility ($) Portion (%) Growth Share ($) Repair Share ($) SERVICE AREA: CITY-WIDE

HABITAT ACQUISMON Acquire habitat acres to serve growth and non-growth 2008 - 201 1 needs.

total acres: 331.00 Acquisition $26,480,000 $18,832,576 $7,647,424

SDC acres: 235.00 Restoration $0 $0

recovery %, 70% Total Cost $26,480 000 71.12% $ 1 8,832,5 76 $7,647,424 SERVICE AREA: CITY-WIDE

HABITAT ACQUISIHON Acquire habitat acres to serve growth and non-growth 2012 - 2015 needs.

total acres: 337.00 Acquisition $26,480,000 $18,832,576 $7,647,424 SDC acres: 235.00 Restoration $0 $0

recovery %: 70% Total Cost $26,480,000 71.12% $18,832,576 $7,647,424 SERVICE AREA: CITY-WIDE

HABITAT AM/1,5=N Acquire habitat acres to serve growth and non-growth 2016 - 2020 needs.

total acres: 332.63 Acquisition $26,610,400 $18,925,316 $7,685,084

SDC acres: 237.39 Restoration $0 $0

recovery %: 70% Total Cost $26,610,400 71.12% $18,925,316 $7 685,084 SERVICE AREA: CITY-WIDE

HABITAT RESTORATION Restore habitat acres to serve growth. 2008 - 2020

total acres: 100.00 Acquisition $0 $0

SDC acres: 100.00 Restoration $1,064,000 $1,064,000 $0

recovery % 50% Total Cost $1,064,000 100.00% $1,064,000 $0 SERVICE AREA: CITY-WIDE

CITY-WDE ACCESS PARK LAND Acquire land for City-Wide Access Parks such as regional 2008 - 201 1 parks, urban parks, botanical gardens, etc. to serve growth.

total acres: 42.01 Acquisition $16,804,000 $16,804,000 2 SDC acres: 42.01 Development $0 $0

recovery % , 100% Total Cost $16,804,000 100.00% $16,804,000 $0 SERVICE AREA: CITY-WIDE

CITY-WDE ACCESS PARK LAND Acquire land for City-Wide Access Parks such as regional 2012 - 201 5 parks, urban parks, botanical gardens, etc. to serve growth.

total acres: 42.01 Acquisition $16,804,000 $16,804,000 SDC acres: 42.01 Development $0 $0

recovery % J 100% Total Cost $16,804,000 100.00% $16,804,000 $0

Exhibit 10 Page 7 of 25 187150 APPENDIX A

PORTLAID PARKS AND RECREATION Page 4 SC CAPITAL IMPROVEMENTS PLAN 2/22/08 a my-Wm SERVICE FACILITIES Estimated Growth- SDC-Eligible Deficiency Estimated Project Cost Required Project Timing Facility ($) Portion (%) Growth Share ($) Repair ShareA_ SERVICE AREA: CITY-WIDE

OTY-WIDE ACCESS PARK LAND Acquire land for City-Wide Access Parks such as regional 201 6 - 2020 parks, urban parks, botanical gardens, etc. to serve growth.

total acres: 42.01 Acquisition $16,804,000 $16,804,000

SDC acres: 42.01 Development $0 $0 recovery %. 100% Total Cost $16,804,000 100.00% $16 804 000 $0 SERVICE AREA: CITY-WIDE

CITY-INDE ACCESS PARK DEVELOPMENT Develop City-Wide Access Parks such as regional parks, 2008 - 201 1 urban parks, botanical gardens, etc. to serve growth.

total acres: 42.82 Acquisition $0 $0

SDC acres: 42.82 Development $21,410,000 $21,410,000

recovery % i 100% Total Cost $21,410,000 100.00% $21,410,000 $0 SERVICE AREA: CITY-WIDE ary-wiDE ACCESS PARK DEVIR.OPMENT Develop City-Wide Access Parks such as regional parks, 2012 - 201 5 urban parks, botanical gardens, etc. to serve growth.

total acres: 42.82 Acquisition $0 $0 SDC acres: 42.82 Development $21,410,000 $21,410,000

recovery %. 100% Total Cost $21,410,000 100.00% $21,410,000 $0 SERVICE AREA: CITY-WIDE

CITY-WIDE ACCESS PARK DEVELOPMENT Develop City-Wide Access Parks such as regional parks, 201 6 - 2020 urban parks, botanical gardens, etc. to serve growth.

total acres: 42.82 Acquisition $0 $0

SDC acres: 42.82 Development $21,410,000 $21,410,000

recovery %: 100% Total Cost $21,410,000 100.00% $21,410,000 $0 SERVICE AREA: CITY-WIDE

TRAILS LAND ACQUISITION Acquire land for trails to serve growth. 2008 - 2020

total acres: 45.46 Acquisition $5,682,500 $5,682,500

SDC acres: 45.46 Development $0 $0

recovery %. 100% Total Cost $5,682,500 100.00% $5,682,500 $0 SERVICE AREA: CITY-WIDE

TAMS DEVELOPMENT Develop trails to serve growth. 2008 - 2020

total acres: 45.46 Acquisition $0 $0 SDC acres: 45.46 Development $18,138,404 $18,138,404

recovery %i 100% Total Cost $18,138,404 100.00% $18,138,404 $0

MAL$219.097,504I 89.5196 $196,117.572. $22,979.932 Land $135,664,900 $112,684,968 $22,979,932 Development $83,432,404 $83,432,404 $0

Exhibit 10 Page 8 of 25 2004 Park SDC Capital ImprovAMR Plan PORTLAND APPENDIX PARKS AND RECREATION page 1 SDC CAPITAL IMPROVEMENTS PLAN (SDC-CIP) A. NEIGHBORHOOD PARKS Estimated Growth- SDC-Eligible Deficiency Potential Estimated Project Project Required Funding Timing Facility Cost ($) Portion (%) Growth Share ($) Repair Share ($) Sources

NEIGHBORHOOD PARK LAND ACQUISITION . CENTRAL CITY/NORTHWEST Acquire land for neighborhood 2005 - 2020 parks to repair deficiencies and serve growth needs.

total acres: 10.52 Acquisition $4,208,000 SDC acres: 5.90 Development $0

recovery % = 100% Total Cost $4,208,000 56.08% $2,360,000 $1,848,000

NEIGHBORHOOD PARK LAND ACQUISITION NORTHEAST Acquire land for 2005 - 2020 neighborhood parks to repair deficiencies and serve growth needs.

total acres: 21.92 Acquisition $8,768,000 SDC acres: 10.42 Development $0 recovery %. 100% Total Cost $8,768,000 47.54% $4,168,000 $4,600,000

NEIGHBORHOOD PARK LAND ACQUISITION SOUTHEAST Acquire land for 2005 - 2020 neighborhood parks to repair deficiencies and serve growth needs.

total acres: 3.09 Acquisition $1,236,000 SDC acres: 3.09 Development $0

recovery % = 100% Total Cost $1,236,000 100.00% $1,236,000 $0

NEIGHBORHOOD PARK DEVELOPMENT CENTRAL CITY/NORTHWEST Develop neighborhood 2005 - 2020 parks to repair deficiencies and serve growth needs.

total acres: 11.75 Acquisition $0 SDC acres: 5.9 Development $3,172,500

recovery %= 100% Total Cost $3,172,500 50.21 % $1,593,000 $1,579,500

NEIGHBORHOOD PARK DEVELOPMENT OUTER EAST

2005 - 2020 Develop neighborhood parks to serve growth needs.

total acres: 26.22 Acquisition $0 SDC acres: 10.65 Development $7,079,400

recovery % = 100% Total Cost $7,079,400 40.62% $2,875,500 $4,203,900

NEIGHBORHOOD PARK DEVELOPMENT NORTHEAST Develop neighborhood parks to repair deficiencies 2005 - 2020 and serve growth needs.

total acres: 23.81 Acquisition $0 SDC acres: 10.42 Development $6,428,700

recovery %= 100% Total Cost $6,428,700 43.76% $2,813,400 $3,615,300

Exhibit 10 Page 9 of 25 187150

APPENDIX

PORTLAND PARKS AND RECREATION page 2 SDC CAPITAL IMPROVEMENTS PLAN (SDC-CIPL_ A. NEIGHBORHOOD PARKS Estimated Growth- SDC-Eligible Deficiency Potential Estimated Project Project Required Funding Timing Facility Cost($) Portion (%) Growth Share ($) Repair Share ($) Sources

NEIGHBORHOOD PARK DEVELOPMENT SOUTHEAST Develop neighborhood parks to repair deficiencies and serve growth 2005 - 2020 needs.

total acres: 17.43 Acquisition $0 SDC acres: 9,71 Development $4,706,100 recoveiy %. 100% Total Cost $4,706,100 55.71% $2,621,700 $2,084,400

TOTAL $35,598,700 49.63% $17,667,600 $17,931,100 Land $14,212,000 54.63% $7,764,000 $6,448,000 Development $21,386,700 46.31% $9,903,600 $11,483,100 SERVICE AREA Central City/NW: $7,380,500 53.56% $3,953,000 $3,427,500 Ourter East: $7,079,400 40.62% 32,875,500 $4,203,900 North: , $0 n/a to to Northeast: $15,196,700 45.94% $6,981,400 $8,215,300 Southeast: $S,942,100 64.92% $3,857,700 $2,084,400 Southwest: $0 n/a $0 $0

Exhibit 10 Page 10 of 25 187150

PORTLAND PARKS AND RECREATION APPENDIX page 3 SDC CAPITAL IMPROVEMENTS PLAN (SDC-CIP) B. COMMUNITY PARKS Estimated Growth- SDC-Eligible Deficiency Potential Estimated Project Required Growth Share Project Timing Facility Funding Cost ($) Portion (%) ($) Repair Share ($) Sources

COMMUNITY PARK LAND ACQUISITION CENTRAL CITY/NORTHWEST Acquire 2005 - 2020 land for 1 to 2 community parks to repair deficiencies and serve growth.

total acres: 59.20 Acquisition $11,840,000

SDC acres: 14.46 Development $0 recovery % = 100% Total Cost $1 1,840,000 24.43% $2,892,000 $8,948,000

COMMUNITY PARK LAND ACQUISITION OUTER EAST

Acquire 2005 - 2020 land for 5 to 6 community parks to repair deficiencies and serve growth.

total acres: 99.24 Acquisition $19,848,000 SDC acres: 26.08 Development $0 recovery % = 100% Total Cost $19,848,000 26.28% $5,216,000 $14,632,000

COMMUNITY PARK LAND ACQUISITION NORTHEAST

2005 - 2020 Acquire land for 1 community park to serve growth.

total acres: 0.93 Acquisition $1 86,000 SDC acres: 0.93 Development $0 recovery % = 100% Total Cost $186,000 100.00% $186,000 $0

COMMUNITY PARK LAND ACQUISITION SOUTHEAST

2005 - 2020 Acquire land for 1 community park to serve growth.

total acres: 13.55 Acquisition $2,710,000 SDC acres: 13.55 Development $0 recovery % = 100% Total Cost $2,71 0,000 100.00% $2,71 0,000 $0

COMMUNITY PARK DEVELOPMENT CENTRAL CITY/NORTHWEST Develop 2005 - 2020 1 to 2 community parks to repair deficiencies and serve growth.

total acres: 23.68 Acquisition $0 SDC acres: 5.78 Development $14,800,000 recovery % = 40% Total Cost $14,800,000 24.41% $3,612,500 $11,187,500

Exhibit 10 Page 11 of 25 187150

PORTLAND PARKS AND RECREATION NTENDDS page 4 SDC CAPITAL IMPROVEMENTS PLAN (SDC-CIP) B. COMMUNITY_PARKS Estimated Growth- SDC-Eligible Deficiency Potential Estimated Project Required Growth Share Funding Project Timing Facility Cost ($) Portion (%) ($) Repair Share ($) Sources

COMMUNITY PARK DEVELOPMENT OUTER EAST

Develop 5 to 6 community parks to repair deficiencies and 2005 - 2020 serve growth.

total acres: 60.17 Acquisition $0 SDC acres: 10.43 Development $37,606,250

recovery % = 40% Total Cost $37,606,250 17.33% $6,518,750 $31,087,500

COMMUNITY PARK DEVELOPMENT NORTHEAST

Develop 1 to 2 community parks to repair deficiencies and 2005 - 2020 serve growth.

total acres: 10.36 Acquisition $0 SDC acres: 10.22 Development $6,475,000

recovery %= 40% Total Cost $6,475,000 98.65% $6,387,500 $87,500

COMMUNITY PARK DEVELOPMENT

SOUTF1EAST

2005 - 2020 Develop additional community park acres to serve growth.

total acres: 5.42 Acquisition $0

SDC acres: 5.42 Development $3,387,500

recovery % = 40% Total Cost $3,387,500 100.00% $3,387,500 $0

TOTAL $96,852,750 31.91% $30,910,250 $65,942,500

Land $34,584,000 31.82% $11,004,000 $23,580,000

Development $62,268,750 31.97% $19,906,250 $42,362,500

SERVICE AREA Central City/NW: $26,640,000 24.42% $6,504,500 $20,135,500 Ourter East: $57,454,250 20.42% $11,734,750 $45,719,500

Northeast: $6,661,000 98.69% $6,573,500 $87,500 Southeast: $6,097,500 100.00% $6,097,500 $0

Exhibit 10 Page 12 of 25 187150

APPENDIX PORTLAND PARKS AND RECREATION page 5 SDC CAPITAL IMPROVEMENTS PLAN (SDC-CIP) C. COMMUNITY GARDENS Estimated Growth- SDC-Eligible Deficiency Potential Estimated Project Required Growth Share Funding Project Timing Facility Cost ($) Portion (%) ($) Repair Share ($) Sources

COMMUNITY GARDEN LAND ACQUISITION CENTRAL CITY/NORTHWEST Acquire land for community 2005 - 2020 gardens to repair deficiencies and serve growth.

total acres: 0.86 Acquisition $129,000 SDC acres: 0.15 Development $0 recovery % = 100% Total Cost $129,000 17.44% $22,500 $106,500

COMMUNITY GARDEN LAND ACQUISITION OUTER EAST

Acquire community 2005 - 2020 land for gardens to repair deficiencies and serve growth.

total acres: 1.84 Acquisition $276,000 SDC acres: 0.27 Development $0

recovery %= 100% Total Cost $276,000 14.67% $40,500 $235,500

COMMUNITY GARDEN LAND ACQUISITION NORTHEAST

2005 - 2020 Acquire land for community gardens to serve growth.

total acres: 0.16 Acquisition $24,000 SDC acres: 0.16 Development $0

recovery % = 100% Total Cost $24,000 100.00% $24,000 $0

COMMUNITY GARDEN LAND ACQUISITION SOUTHWEST

Acquire land for community gardens 2005 - 2020 to repair deficiencies and serve growth.

total acres: 0.42 Acquisition $63,000 SDC acres: 0.10 Development $0 recovery % = 100% Total Cost $63,000 23.81% $15,000 $48,000

TOTAL $492,000 20.73% $102,000 $390,000

SERVICE AREA Central City/NW: $129,000 17.44% $22,500 $106,500 Ourter East: $276,000 14.67% $40,500 $235,500 Northeast: $24,000 100.00% $24,000 $0 Southwest: $63,000 23.81% $15,000 $48,000

Exhibit 10 Page 13 of 25 187150

A PP Fifa

PORTLAND PARKS AND RECREATION page 6 SDC CAPITAL IMPROVEMENTS PLAN (SDC-CIP) D. CITY-WIDE SERVICE FACILITIES Estimated Growth- MC-Eligible Deficiency Potential Estimated Project Project Cost Required Repair Share Funding Timing Facility ($) Portion (%) Growth Share($) ($) Sources

SERVICE AREA: CITY-WIDE

HABITAT ACQUISITION Acquire habitat acres to serve growth. 2005 - 2020

total acres: 310.00 Acquisition $17,050,000 $17,050,000

SDC acres: 310.00 Restoration $0 $0

recovery % i 50% Total Cost $17,050,000 100.00% $17,050,000 $0 SERVICE AREA: CITY-WIDE

HABITAT RESTORATION Restore habitat acres to serve growth. 2005 - 2020

total acres: 100,00 Acquisition $0 $0

SDC acres: 100.00 Restoration $1,000,000 $1,000,000

recovery % i 50% Total Cost $1,000,000 100.00% $1,000,000 $0

SERVICE AREA: CITY-WIDE

URBAN PARKS Acquire and develop urban parks to serve growth. 2005 - 2020

total acres: 2.12 Acquisition $3,816,000 $3,816,000

SDC acres: 2.12 Development $5,300,000 $5,300,000

recovery %, 50% Total Cost $9,116,000 100.00% $9,116,000 $0

SERVICE AREA: CITY-WIDE

REGIONAL PARKS Acquire and develop urban parks to serve growth. 2005 - 2020

total acres: 39.14 Acquisition $8,806,500 $8,806,500

SDC acres: 39.14 Development $24,462,500 $24,462,500

recovery % i 20% Total Cost $33,269,000 100.00% $33,269,000 $0

SERVICE AREA: CITY-WIDE

BOTANICAL GARDENS Acquire and develop botanical gardens to serve growth. 2005 - 2020

total acres: 7.79 Acquisition $779,000 $779,000

SDC acres: 7.79 Development $233,700 $233,700

recovery % i 20% Total Cost $1,012,700 100.00% $1,012,700 $0

SERVICE AREA: CITY-WIDE

TRAILS Acquire and develop trails to serve growth. 2005 - 2020

total acres: 32.46 Acquisition $3,246,000 $3,246,000

SDC acres: 32.46 Development $12,172,500 $12,172,500 recovery % : 100% Total Cost $15,418,500 100.00% $15,418,500 $0

TOTAL $76,866,200 100.00% $76,866,200 $0 Land $33,697,500 $33,697,500 $0 Development $43,168,700 $43,168,700 $0

Exhibit 10 Page 14 of 25 187150

MEMORANDUM. Daniel Heffernan Company 2525 NE Halsey Street Portland. OR 97232

DATE: April 10, 2015 TO: Kelly Ross, Exec. Director NAIOP FROM: DJ Heffernan, DHC SUBJECT: City of Portland SDC Methodology Review

Background The City of Portland's Parks & Recreation Department (City Parks) is proposing to update it systems development charge(SDC) methodology and fees for the Portland Park System. The Oregon Chapter of NAIOP: the Commercial Real Estate Development Association, in conjunction with the Commercial Association ofBrokers and the Building Owners and Managers Association of Oregon, asked DHC to prepare an analysis of the draft park SDC methodology for its conformance with ORS 223.297, et seq, and with generally accepted practices for calculating park SDC fees in Oregon. This memorandum summarizes the conclusions and concerns. Analysis Overview The analysis was conducted relying on readily available Park System information on the City of Portland web-site, and information provided by Parks Bureau staff.1 Our focus was limited to the specific requirements of ORS 223.297 and whether or not the proposed methodology meets the rate-setting requirements in the statute. We did not independently verify any of the data presented in City Park's draft methodology or other city documents. We also did not question or review any city documents for compliance with administrative and monitoring requirements in ORS 223.302,such as its SDC credit program, notifications lists, budget and accounting procedures, administrative appeal procedures, etc. Other parties have raised a number of concerns about the draft methodology and we tried to limit our review to issues not already raised. In several instances, however, we offer additional comments on issues raised by others. Conclusions and Concerns We find the proposed methodology flawed in several respects. At its core, the draft methodology fails to meet the tests for an SDC fee. The methodology does not meet

Documents reviewed include the Portland Parks 2020 Vision Plan, 2009 Assessment of the 2020 Vision Plan, the 2012 Strategic Plan, the proposed methodology, and 2006 Memo re: Non- residential Parks Impact Allocation, Don Gainer and Associates

Exhibit 10 Page 15 of 25 187150 MEMORANDUM

essential requirements to qualify as a SDC fee under ORS 223.297,2 223.304(2)3 and 223.309(1).4 As written, the proposal constitutes a tax on development rather than a fee. In essence it uses a balance-sheet derived revenue target as the basis for the capital improvement need. The revenue target was not prepared consistent with legal requirements that the fee be based on an analysis of project-specific capital improvement needs that are set forth in a master plan. The methodology does not meet well-defined tests that ensure the fee is necessary to sustain existing levels of service for the benefit of new growth. It significantly overestimates the cost and value of the park system's land base, underestimates contributions to the park system from outside sources, and capitalizes the land and improvement value of park assets that always have been self-supported.

In short, the City should start over, It should keep its existing Parks SDC rate structure, which by statute cannot be challenged, and initiate a process to update Park SDC fees following the statutory requirements in ORS 223.297. Other Portland SDC programs are grounded, at their core, in system master plans that establish levels of service and that spell out the capital investments necessary to sustain service levels. P-DOT's SDC program is derived from the Transportation System Plan. The Water Bureau and Bureau of Environmental Services SDC programs likewise are based on master plans that analyze capital improvement needs to sustain well defined levels of service. Parks needs to adhere to this same framework.

City Parks needs to start the process of setting SDC fees by developing a master plan. The SDC fee basis then needs to be developed from the list of improvement projects that are eligible for SDC funding. Metro published a good primer for SDC fee

2 223.297 Policy. The purpose of ORS 223,297 to 223.314 is to provide a uniform framework for the imposition of system development charges by local governments, to provide equitable funding for orderly growth and development in Oregon's communities and to establish that the charges may be used only for capital improvements.

3 223.304(2) - Improvement fees must:(a) Be established or modified by ordinance or resolution setting forth a methodology that is available for public inspection and demonstrates consideration of: (A) The projected cost of the capital improvements identified in the plan and list adopted pursuant to ORS 223.309 that are needed to increase the capacity of the systems to which the fee is related; and (B) The need for increased capacity in the system to which the fee is related that will be required to serve the demands placed on the system by future users. (b) Be calculated to obtain the cost of capital improvements for the projected need for available system capacity fo'r future users.

4 223.309 - (1) Prior to the establishment of a system development charge by ordinance or resolution, a local government shall prepare a capital improvement plan, public facilities plan, master plan or comparable plan that includes a list of the capital improvements that the local government intends to fund, in whole or in part, with revenues from an improvement fee and the estimated cost, timing and percentage of costs eligible to be funded with revenues from the improvement fee for each improvement.(emphasis added)

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programs in 2007 that may be helpful. See: http://www.oregonmetro.govisites/default/files/sdc report.pdf

Specific problems with the proposed methodology are outlined below.

1. Flawed Level of Service Analysis - The methodology is not based on a level of service (LOS) analysis per ORS 223.309(1)[ibid]. The LOS was not based on an analysis of the service levels associated with various asset classes that make up the park system and makes no reference to "a capital improvement plan, public facility plan, master plan, or comparable plan" that typically is used to document existing level of service and to forecast future service demands and related capital improvement needs. The methodology is crafted in a way that asserts itself as the master plan for determining the system's current LOS and as the basis for the capital program. This approach does not meet the intent of the statute.

2. Capital Improvement Cost Basis - There are a number of problems with the approach used to estimate the future cost of system improvements. The methodology does not meet the requirement in ORS 223.309(1),that the charge be based on a capital improvement plan (CIP) project list. The methodology asserts the city will need to invest the same per capita "value" in the park system that the current system provides. This is an adequate mechanism to set a revenue target for a "capital fund", but it does not meet the project driven aggregate-cost basis for establishing an SDC fee proscribed by the statute.

3. Current Value of Park Assets - The methodology asserts that the cost of system improvements that are needed to maintain the existing level of service is equal to the per capita value of the current park system. Several factors are used to establish that value based on estimates for replacement cost for existing land and improvements. This does not meet the intent in ORS 223.309(1) as a basis for establishing the cost basis for needed improvements. The approach used is more commonly followed to establish the historic cost basis for calculating a reimbursement fee.

This concern notwithstanding, the basis for determining the value of the park system's land base ignores its actual cost. For example, the methodology assigns a value of —$327 million for the acreage in Forest Park; that land was largely acquired for next to nothing through foreclosures related to tax delinquency. Other public and private contributions underwrote the acquisition and development of other significant park assets, including Waterfront Park, the Eastside Esplanade, the Springwater Trail, and Washington Park. These contributions are not factored into the analysis. City Park's impressive history developing partnerships and collaborative funding for park assets should be accounted for in estimating the future cost of park land. The proposed approach uses a "balance sheer valuation as the basis for setting the fee. This is inconsistent with ORS 223.309(1).

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4. Contributions from Other Sources - For reasons outlined in item #3 above, we believe the assumptions in Table 3.9 - Revenue from Other Sources under represent the contributions that the city is likely to receive from outside sources. The approach ignores the significant contributions to the park system that have come from outside sources. As a corollary example, imagine the increase in the SDC fees for sanitary sewer if that SDC methodology were to capitalize the replacement value for the entire Columbia Boulevard Treatment Plan, much of which was financed with federal EPA grants. The sanitary sewer SDC methodology rightly includes the cost to expand the capacity of clarifiers and treatment systems but it does not capitalize the land beneath the plant nor declare out of hand that the treatment plant and the entire conveyance system perfectly balances all existing demand and has no capacity to meet future demand. That in effect is the approach taken by City Parks.

S. Specialty Use Facilities - The methodology calculates replacement costs for an array of special purpose facilities that typically are not financed using SDC funds. These include the city's award-winning public golf courses, which were acquired and developed with user fees. Also included are marine parks and boat launching facilities, stadiums, and other special use venues. These elements of the park system have access to special grants and public-private partnerships; they generate significant operating revenue that provide alternative financing options that are not available to help finance a typical neighborhood or community park. These special use facilities should be treated as enterprise assets and removed from the SDC program altogether.

6. Lack of Documentation for Replacement Costs - Table A3 in the methodology lists costs for constructing various types of park improvement but it does not indicate the source of this information. The City should not act on the proposed methodology until it makes these sources available for public review.

7. Lack of Support for Demand and Benefits Claimed - The proposed methodology represents a sea change in the way park system benefits are calculated and are used to allocate costs to system users. The change shifts future capital costs from residential uses to non-residential uses. The methodology asserts that by being present in the city at various times of the day people have access to city parks and this proximity alone benefits various classes of city residents and non-residents in a measurable way. There is, however, no supporting evidence to back up the benefits that are attributed to the classes of park users. The framework for "measuring" system benefit is based on a series of time-based suppositions (see Section 3.0 in tables 3.3 and 3.4) that are intended to serve as a proxy for the direct and indirect benefits that accrue to park system users. Asserting this benefit schema without any data to back up the claim fails to meet the intent of ORS 223.304(2)(a)(B), which calls for an analysis of demands placed on the system by system users.

8. Central City Need - The methodology calculates park needs using Metro population and employment growth forecasts and then by calling for replicating the

Page 4 Exhibit 10 Page 18 of 25 187150 MEMORANDUM current level of park investment on a per-capita basis. The table below shows, however,that growth impacts and park system needs in the Central City are very different from elsewhere,largely because of the large increase in residential population there compared to other parts of the city.

Portland Population and Em lo ment Growth Forecast

Population Percent Employment Percent Increase Growth Increase Growth

Central City 33,340 84.0% 20,460 14%

Non-Central City 65,910 11.8% 32,820 12.8%

City Wide 99450 16.7% 53,280 13.3% Source: Portland Parks SDC Methodology, Table 3,1

There is no better demonstration than this table of the need to prepare a system master plan that uses a differentiated planning and project development framework for Portland's park system. The proposed methodology makes no distinction in needs or the type system improvements in the Central City from the rest of the city. This is further demonstration that the proposed methodology is not based on a project-based planning and development program but rather is an exercise designed to generate as much revenue as possible without regard for where or how it will be used. This "tail wagging the dog" approach does not meet the intent of the statute.

9. City Parks' SDC Methodology and Current Conventions — The League of Oregon Cities most recent survey of SDC rates and methodologies across the state reveals that Portland is in rare company applying an SDC to non-residential uses. Less than a third of cities that responded to the survey assess a non-residential park SDC fee. Many of those that do include discounts in their rate for costs related to neighborhood parks and natural areas. We also found the descriptions for many non-residential fee methodologies would not meet ORS 223.297 ratemaking requirements. We also could find no references to other cities that use the time- based access methodology that Portland proposes to use to allocate costs to non- residential uses. This approach has been abandoned by several cities that formerly used it. See lattp://www.orcities.org/Portals/1.7/Premium/SDC Survey Report 201.3.pdf Supplemental Observations and Questions

Level ofService (LOS)Analysis The methodology states on page 4 that the LOS standard is the per capita value of investment in parkland and improvements. On page 9, the methodology asserts that the existing level of service per person is the service level being provided by the

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existing park system. "There is no existing unused capacity nor is there any existing deficiency"

This definition of LOS is not supported by the City's own long-range park system plans and internal reviews. The 2020 Vision Plan and the 2009 Progress Report for the Parks 2020 Vision Plan cite the need to establish and refine levels of service by asset class. The 2009 assessment noted that the city had not made sufficient progress building athletic fields, building accessible community centers for all neighborhoods, nor providing parks within Y2 mile walk of all city residents. This assessment implies the system has asset deficiencies for certain asset classes. The continuing importance of these goals was recently reinforced in Appendix B of the 2012 Strategic Plan, which highlights how the Strategic Plan is consistent with the 2020 Vision by acknowledging the need to establish levels of service for each asset class, and for lowering the system-wide risk for certain assets' failure to deliver established levels of service. These higher-order city park system plans recognize both the geographic disparities in levels of park service and the significant variances in acceptable service delivery for different types of park assets.

The most obvious disparity in this regard is Forest Park, whose 5000+ acres of open space and wildlife habitat, and hundreds of miles of trails, and local neighborhood park improvements provide an extraordinary level of service not only for its nearby residents but also to the region. It is an asset that is virtually unrivaled in any major metropolitan city in the United States. There is no mention in the 2020 Vision of the need to acquire another Forest Park in order to serve Portland's future residents. It may need some hardening of heavily used trails and further enhancements to pocket parks to meet local neighborhood park needs; but Forest Park, by any reasonable standard, has ample capacity to serve additional city residents.

Other asset classes that have capacity to serve additional residents include regional trails (e.g. Springwater Corridor, the Esplanade, etc.), Portland's Public Golf courses, where use has been declining, and the city's other nature parks. The blanket statement that the park system has no unused capacity or unmet needs is simply not true. The City's own long-range park plans contradict this assertion. There are system asset classes that have capacity to serve additional growth and for these assets, the city should collect a reimbursement fee, not an improvement fee.

The fact that the city has failed to implement the 2020 Vison Plan's call to establish specific level of service standards for the various classes of park assets, or to develop area specific capital improvement programs, which should be used as the base for the SDC fee program, does not absolve the city from the required tests for designing and collecting park SDCs. The fact that the current methodology, which also has flaws in the way SDC fees are calculated, has not been overturned may only be true because the methodology was not challenged for pragmatic reasons, or because the statute limits challenges to 60-days after adoption. This is hardly a basis for not

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meeting the intent of the statute, which is to base the fee on a master plan, not to develop the master plan based on the fee.

Lack ofEvidence for Access-based Benefit Analysis There is insufficient evidence to back the assertion that access to parks at certain hours of the day translates into measurable benefits for various classes of system users. The benefit distribution asserted in Table 3.3 (page 7) is an interesting schema but based on the research we conducted, which included reading the consultant's report from which this table was gleaned, it is not backed by any empirical observation.

In virtually every other SDC methodology that we've encountered, there is a direct empirically measured relation between system use and the calculation of system benefits. For the water system the benefit measure is the amount of water consumed by meter size. That consumptive distribution is then used to allocate the cost of improvements for water treatment, storage, and distribution to serve growth. Metered water use in winter months and sampled nutrient loads are used in sanitary sewer SDCs to allocate the cost to serve demand that new development will impose the sanitary sewer system. The amount of new impervious surface area and runoff association with a "system design storm" provides the basis for allocating the cost to build stormwater conveyance and treatment facilities. Monitored traffic generation and flow patterns along with design standards for amenities that are not capacity constrained are used to allocate costs for future transportation improvements.

The assertion that time in the city provides a reliable basis for estimating system benefits and for allocating costs to future development is especially bothersome when there are no data to support the hourly utilization factors for the various user groups. There also are no data to support the seasonal adjustments used to compute the weighted average hours for the various classes of users. The assertions for how differing classes of park users benefit from and impose demands on the system is a fabrication that is not based on any empirical observation of actual use or adopted capacity standards for different classes of park assets.

It is difficult to imagine, for example, that park use surveys would align with the proxy-benefit claim in the methodology that resident and non-resident employed persons benefit equally from the park system before and after work hours. This may be true for passive use of near-by parks during the lunch hour, but non-residents are unlikely to take a lunch hour yoga class at a community center, or lap swim, or enroll in a program for which they must pay a non-resident fee.

City Park's proposal to use guesswork about amount of time per day that people can use parks is not a reasonable or rational basis for allocating costs to future system users when there are other empirically based measures available. The city has records for visitors to its community centers and survey information for visitors to

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city parks. An analysis of these data would provide a more reliable and defensible approach for allocating costs between residential and non-residential development.

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ANC,CJ. 1)ANI AN, :ziummus-

EDUCATION: Mr. Heffernan has more than thirty years of professional Willamette University Graduate experience advising clients on infrastructure planning and School of Management - MBA finance, permitting, and environmental analysis. His consulting clients include cities, counties, state and federal government University of Wisconsin BS - agencies, and private interests. His expertise includes utility Geography rates and fee analysis, capital budgeting, land development planning and permitting, economic development, MEMBER: and environmental analysis. He received the Distinguished Service Award from the Mid Willamette Valley Council of Governments American Planning Association and twice has received the Professional Achievement in Past Oregon Chapter Treasurer Planning Award from the American Planning Association Oregon Chapter. North/Northeast Portland Business Association Selected Experience Pacific NW Rugby Referees Society, City of Forest Past Chairman Grove Park System Development Fee, 2014 - Working on behalf of MIG Consultants, Inc to help the city Conferences/ Publications: update its Park System Master Plan and to develop a funding strategy for the capital improvement program. The work includes analyzing the current SDC methodology, and rate structure Financing Industrial Land for residential developments. Infrastructure OR/WA APA Conference, 2011 Bend Metro Park and Recreation District SDC and Capital improvement A Tale of Three Districts Programs, 2005, 2010, 20.11 - Updated the District's OAPA Mobile Workshop System Development Charge methodology to meet state law and Spring Conference, 2010 prepared subsequent updates to the fee in light of cost and capital program changes. Managed development of a capital Hillsboro's Transportation Utility improvement planning process that identified the Fee Program, APWA, 2009 District's capacity to issue bonds for non-SDC funded capital projects. Also prepared administrative procedures for indexing SDC fees and procedures for appealing fee calculations.

2525 NE Halsey Street— Portland — OR - 97232 Phone: 503.310.2306 Fax: to e-mail E-Mail: [email protected] Web: under development Exhibit 10 Page 23 of 25 187150

City of Oakridge Park System Master Plan, transportation and utility infrastructure to serve a 20.10 - Developed the city's first park system regional industrial development area. Strategies master plan and financing program. The project included urban renewal, late-comer fees, LIDs, included involvement by the University of Oregon and transfer of development rights in addition to Landscape Architecture Design Studio, which traditional SDC fees to pay for infrastructure and resulted in teams of students preparing concept protecting sensitive resource areas. plans for improving the city's park properties and trails. The plan determined that grants, private City of Hillsboro Transportation Utility Fee donations, and local bond measures provided (TUF), 2009 - Manage the consulting team that more reliable funding for system development. developed and implemented a transportation The project was funded through a planning grant utility fee. The utility revenue is financing from Oregon State Parks. deferred maintenance and safety improvements. The team analyzed revenue requirements and cost recovery options, developed the utility rate City of Hillsboro Park System Development structure, billing processes, and appeal Charge Fee Methodology, 2010 - Managed a procedures. The project included extensive work consulting team that updated Hillsboro's Park with a stakeholder advisory committee. System Capital Improvement Program and SDC fee program. The project raised park SDC fees Atfality Recreation District Feasibility and amended City codes to meet state Analysis, 2004 - Analyzed program and regulations. Meetings with business and governance solutions for a proposed recreation development stakeholders were used to outline district serving residents of Tigard, Tualatin, the need for the update and secure their support. Sherwood and unincorporated urban areas. The team worked extensively with local staff and City of Vernonia Master Capital Plan, 2013 - elected officials to identify service gaps, estimate Developed a six-year capital budget for the cost of service delivery, and develop an Vernonia's parks, water, sewer, roads, drainage, innovative governance structure for the district. and special projects. The analysis used operating The team also prepared findings to support the pro-forma analysis and established capital proposed property tax rate and wrote ballot resources to define the level of available funding measure titles and supporting materials for capital projects. for This gave decision makers elections in two counties. programming targets for each system. Capital Improvement Planning - Prepared 1-84 Interchange Area Management Plan integrated capital facility improvement plans for and Supplemental Transportation SDC, The cities in Oregon and Washington. Developed an DaIles, OR, 2010 - Developed an innovative innovative method for coordinating plans with the supplemental impact fee program to preserve annual budget process and integrating it with transportation capacity near an interchange for a master plan updates. large industrial redevelopment area. The solution included a trip allocation and exchange program Utility Rate Studies and Impact Fees - with variable pricing for non-industrial uses. Prepared cost of service and recovery rate studies for water, sewer, storm water and South Newberg Infrastructure Financing transportation utilities. Prepared development and Development Strategy, 201.0 - Prepared impact fee methodologies related to water, an analysis of alternative financing for vital

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sewer, storm water, parks, transportation and school facilities.

Exhibit 10 Page 25 of 25