Bend Metro Parks District Looks To Double SDC
Agency Has No Regard For Housing Affordability
The model the BMPD (Bend Metro Park District) used to reach the proposed inflated SDC ignores the facts, uses manipulation of land sales prices, a flawed district survey, and failure to acknowledge existing recreation lands, among other issues to achieve their means.
We’ve all heard the saying “timing is everything.” Well BMPD has picked the absolute worst time to propose a 100% tax increase that will escalate even more in the coming years and can’t be supported with realistic data. Why the BMPD would attempt a major tax increase in an economic slowdown with affordability of housing still an issue shows callous disregard and cruelty to those trying to afford a home and stay in business.
The BMPD surveyed district residents asking what they want in their parks system without telling them that they will eventually be paying for it is fundamentally flawed. No doubt residents unhindered by the responsibility to pay will tell you that they want more than the BMPD can afford, or than they will eventually be willing to pay in operating levy taxes.
The BMPD was imprudent in their quest for land, paying top dollar instead of waiting to buy when prices stabilized at lower levels. This is after there was clear evidence that land prices would come down. In the 2008 BMPD Fall mailing it states that “despite the recent downturn in the economy, both land and construction costs have risen dramatically in Bend during the last five-year period”. The mailing is false because it fails to tell recipients that they both rose dramatically and have now fallen dramatically, and are now closer to 2003 levels than the inflated numbers the BMPD purports to use. Residential lots are being sold for $40,000 per lot which is 60-70% lower than just two years ago, yet the BMPD clings to inflated land sales prices of the past. These land prices are unlikely to increase to those levels again soon but BMPD still clings to the unrealistic numbers to set their so-called accurate SDC.
The BMPD model fails to account for the open space land which includes thousands of acres, in and contiguous to, the BMPD boundaries that are owned and used by taxpayers. These properties, Bureau of Land management (BLM) and National Forest Service lands, are a big reason why Bend is different than Portland, Corvallis, Salem, or most cities in the country.
The BMPD has used several years of operating surpluses to build the taxpayers the best park district headquarters money can buy, in one of the most expensive and valuable properties in Bend. This decision will likely defeat any future effort to raise additional operating funds needed to expand the parks system operations to the level they desire.
The BMPD’s plan will overbuild the BMPD’s ability to financially maintain the parks system, without a major tax increase for district residents. An operating tax levy increase request is no doubt in Bend’s near future and will be difficult pass.
Several Bend parks have been developed by those in the construction industry through donations of time and materials. By raising SDC’s which impact their donor’s ability to sell new homes, BMPD are attacking the very people that have been the most generous in developing new parks.
If adopted, the Park’s SDC will be more than Bend’s water and sewer SDC combined. The park’s SDC would also be substantially more than the transportation SDC to build the roads to bring people to the parks.
Unlike SDCs for sewer or water, which include a causal relationship to the act of connecting to a public infrastructure system and the incidence of increased demand upon the system, the district has no way to measure actual demand for park infrastructure generated by new development.
Rather than using actual measurements of demand, the district relies upon Level of Service (LOS) planning standards and assigns costs to new homes based upon population estimates. This is not a measure of demand, and therefore is not an appropriate tool for assigning costs to users.
SDCs are intended by law to be user fees. In order to justify an SDC, a jurisdiction is required to measure an actual impact that is created by new growth. In this case, the district isn’t using a measure of actual impacts. Instead, the district assigns planning figures for parks per resident. Levels of service estimates are useful as planning tools only. They are not a substitute for an actual measure of demand created by the construction of a new residence.
In crafting the SDC methodology, the district relies upon two misconceptions: A) that residency has any relation to how park facilities are funded, and B) that existing residents have more equity in the existing park system than new residents do.
Because park and recreation districts are funded primarily through property taxes, all properties within the district’s boundaries have contributed equitably to the funding of the park and recreation system that residents currently enjoy. All property, whether developed or not, has paid property taxes, construction bonds (if any), and other fees that have been used to provide the existing park and recreation system at the same tax rate, regardless of whether or not the property holds any residents who may potentially use the park system.
All property owners, whether residents of the district or not, have all contributed equitably to the construction of the existing park system. To then impose a fee upon “new residents” or property owners when they wish to develop their property fails to recognize the equity that all property owners have in the existing park and recreation system. The failure to account for this in the district’s methodology is, we believe, a fatal flaw.
The district’s methodology proposes that “existing residents” have provided an existing level of service expressed in acres per thousand of population. In reality, all property owners, whether the property is developed or not, have contributed equitably to the attainment of these existing level of service measures. The district then uses these existing level of service measurements to determine the “bill” that new residents must match.
As it turns out, however, even though property owners—not residents—have attained these levels of service, property owners have paid very little to acquire the existing system. The vast majority of our existing parks have been donated, granted and/or given to the district.
By using existing level of service measurements as a level that new resident must match, the district assumes that these donated parks were only donated to those people who live within the district on January 1st, 2009, the date the SDC is proposed to take effect. At the same time, the district assigns “credit” for these donated parks to existing residents only, and requires new residents to match a level of service that existing residents never paid for—essentially saying that all parks acreage donated to the district, and therefore donated to all property owners who have been helping to pay for the construction of the existing system--must also be matched by new residents as they purchase a new home.
The result of this assumption is an enormous inequity to those who will move to the district in the future. It essentially discriminates against anyone who buys a new home after the new SDC is adopted. Those who are here before that date will reap the windfall benefits from those who have donated land to the park district throughout Bend’s history, and those who are here after that date will have to pay to match a level of service that most residents never paid for.
Although the existing and proposed park SDC are only one of many factors that contribute to Bend’s lack of affordable housing, it is particularly damaging to housing affordability in that it requires new homeowners to pay for services that they may or may not ever choose to use. This results in a situation where new homebuyers’ mortgages are burdened with cross subsidies that have nothing to do with shelter costs.
Even more damaging to housing affordability is the fact that the payment of a park SDC does not directly benefit the value of the residence that a person purchases. Unlike a water SDC, in which the cost of connecting to the water system is realized by a direct increase in the value of the property, a park SDC does not provide a direct benefit. Some studies have shown some relation to increased property value as a result of proximity to a park, but it is an indirect relationship that does not affect all properties equally. For most properties, the cost of the park SDC has a negative net-gain on property value. This exaggerates the problem of housing affordability.
The real truth is the BMPD got used to millions of dollars in SDC’s in the form of increased building permits during the good times and doesn’t want the good times to end so they have proposed doubling fees to keep things rolling along while citizens suffer job losses, reduced incomes, and closed businesses. It really makes you wonder if BMPD executives and Board members took lessons from Wall Street when they put this financial tax plan together they call “accurate.”