Old beliefs die hard - especially the dumb ones. Despite all the evidence, some Central Oregon public officials still cling to the faith that they can pump life into the moribund local construction industry by giving builders a break on Systems Development Charges.
SDCs are fees levied on new construction projects to help cover the costs of things like new roads, sewers and water systems. For the past three years the City of Bend has offered builders a special deal under which, instead of paying their SDCs up front, they can delay payment for nine months or until their project gets a certificate of occupancy, whichever comes first. (It's essentially an interest-free loan to the builder.) City Finance Director Sonia Andrews reports that more than $900,000 worth of fees has been deferred so far, and builders still owe the city $285,000.
We hardly need to belabor the point that the SDC deferral program has failed to generate a tsunami of new construction activity in Bend. In 2008, the first year of the program, the city issued 276 building permits for new single-family home construction. In 2010, it issued 204. (During the bygone bubble years the annual number was well over 1,000.)
Undaunted by reality - or perhaps oblivious to it - Deschutes County Commissioner Tony DeBone has now come forth with the brilliant idea of stimulating the economy by suspending the SDC that the county levies for road construction.
The SDC generates about $290,000 a year. Even if the county's road construction coffers were overflowing, it would be stupid to throw that money away. With the county's finances in the sorry shape they're in, it's just crazy.
The county's fund for repairing and maintaining roads faces a $3 million shortfall, when you factor in the impending loss of $1 million in federal timber payments next year. State money for road work also has been dropping off. The commissioners already have been talking about letting some rural county roads go back to gravel because the county can no longer afford to keep them paved.
DeBone apparently came up with the SDC suspension idea after a couple of county residents griped to him about having to pay the fee. One complained that I just spent a quarter-million dollars building this house, and it was my own savings and economic development, and I found out I can't get my certificate of occupancy until I get this $3,000 thing, DeBone told a reporter.
We can sympathize; none of us like to pay taxes or fees to the government. But most of us like to drive on paved roads and have water come out of the tap when we turn it on and have the toilet flush when we push the handle. And SDCs are one way that local governments make sure those things happen.
DeBone is presenting his idea as sort of a trial balloon and says he wants to get the reaction of residents before he goes ahead with it. For what it's worth, Tony, here's our reaction: We're giving it THE BOOT.