City plans to refund SDC overcharges

The City of Cottage Grove is refunding overcharges in transportation system development charges (SDCs) to area businesses after a calculation error was discovered.

The error occurred on account of the exclusion of an element called “pass-by trip factor,” a component of SDC calculations which may ultimately lower fees.

“Once we realized there was an error in the calculation of transportation SDCs, we decided to go back and look at all the building permits that had been issued and what land uses had pass-by trips,” said City Engineer Ron Bradsby.

Staff looked at permits as far back as 2011, when the latest methodology for calculating SDCs was adopted, and found that three permits issued to local businesses Arby’s, Autozone, and O’Reilly’s were overcharged a total of $131,850.

“So to do the right thing, we’re refunding the money,” Bradsby said.

The error was first discovered when the developer of a proposed Subway sandwich shop off Gateway Boulevard noticed that fees were significantly different from a store he owned in Albany, Ore.

The developer shared information from his other business with the city. Staff found a discrepancy in fees and, upon further review, that pass-by trip factors were not included in transportation SDC calculation methodology.

The city uses a traffic trip rate table developed by the Institute of Transportation Engineers to determine the impact of traffic on a variety of land uses and bases transportation SDCs for new developments on these numbers.

Pass-by trip factors have significance in determining transportation SDCs in that they can offer a more accurate portrayal of transportation impact on a given area, taking into account the segment of a population which may habitually use roads next to businesses between work and home.

“If you stop by Safeway on your way home, why should that count as two trips when really you drove to Safeway, you jumped off and you jumped back on to continue your trip?” Bradsby explained. “In actuality you only had one trip. You just made a little stop on the way.”

To resolve the issue, city staff called FCS Group, a consulting firm which performed the city’s last SDC analysis, to confirm that the pass-by trip factor should be used in calculating transportation SDC fees. FCS Group confirmed the need for the factor and staff began an investigation process which resulted in the discovery of the overcharged transportation SDCs.

The refunds take into consideration interest accumulated through August 19, 2019.

“I thought it was a good thing. I’m glad the [Subway] developer was persistent,” Bradsby said. “And I’m glad there was persistence among staff to really look into it and understand things more.”

During a Sept. 23 City Council meeting to approve a supplemental budget for the refund, Councilor Mike Fleck commended the staff.

“I just really am impressed,” he said. “I don’t know that you hear from cities or counties around the area that, ‘We discovered we made a mistake,’ and then not only fix it, but refund dollars that we’ve received.”


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