SDC Sewer Surcharge Assistance Program
System Development Charges
System Development Charges (SDCs) help offset the impacts of new development on city infrastructure like sewer and water systems. When a business or property owner pays SDCs, they effectively purchase the sewer capacity needed to run their business.
Food and beverage businesses have a larger impact on city sewer and water infrastructure because of the level of use such businesses generate. To account for increased usage, applicants opening or remodeling food or beverage businesses may be required to pay a sewer surcharge in the form of additional System Development Charges.
Sewer SDCs are based on indoor seat count. For example, a café proposing 10 seats would owe approximately $2,380 in SDCs. A restaurant proposing 30 seats would owe $8,490 in SDCs. Food and beverage facilities proposing 0 seats are still subject to some SDCs.
Seat Credits May Apply
If the business that formerly occupied the space paid SDCs based on seating, seat credits may apply. For example, if SDCs for 30 seats were paid by the previous business owner and the new restaurant will have 45 seats, the new tenant will pay SDCs for 15 seats.
Sewer Surcharge Program
The City recognizes that SDCs constitute a substantial upfront cost for new business owners. In response, we have created a sewer surcharge program that allows eligible tenants to lease sewer capacity on a monthly basis, rather than purchase it up front.
Lease Payments are attached to utility bills and calculated as a percentage of the total SDC assessment. The interest amount is based on the Federal Municipal Bond Rate, which fluctuates monthly but is generally about 3%.
The surcharge program works like a lease, in that payments never go toward the original SDC total, or principal. Participants in this voluntary program must sign an agreement acknowledging the requirements of the program including the fact that they may only participate for 10 years. At the end of 10 years, the applicant must pay the current SDC amount in full. Additionally a notice may be recorded on the title indicating that SDCs have not been paid in full. Once the SDCs have been paid in full, the City will record a satisfaction document removing the notice on the title. Please note: there is a $25 application fee to participate in the program and a $200 recording fee per VMC 14.04.242. Applicant’s may opt out of the program at any time by paying the current SDC amount in full.
To access the Municipal Code text please see VMC 14.04.235(L)