Wednesday, August 12, 2009
MONMOUTH -- Construction on Western Oregon University's new $20 million "live-learn" facility resumed on Aug. 5, following a dispute with the city of Monmouth over system development charges.
University and city leaders recently learned that they were $642,700 apart in their calculations for SDC estimates on the building.
Western appealed the amount at the Aug. 4 City Council meeting, noting the difference could kill the project, which was halted two weeks ago in light of the fee issue.
The four-story structure, which will sleep 300 students and feature classrooms and offices, is scheduled for completion in September 2010.
Ultimately, the City Council agreed to cap WOU's SDC expense at $350,000, but expressed frustration when it was learned that the conflicting costs originated with the university tallying SDC costs without conferring with city staff.
"I'm flabbergasted that with as much planning has gone into this project there's questions like this left a few weeks before this is supposed to break ground," Councilor Ben Meyer said.
SDCs are one-time fees charged to builders to cover future capacity for public infrastructure to accommodate new development.
Western officials estimated the SDCs in February based on a city document detailing fees based on intended use, said Tom Neal, WOU physical plant director.
The city has no dormitory classification for applying costs, so Western opined that dorm rooms fit under a commercial designation -- self-contained dwellings, akin to a hotel room. The city categorized the project as multifamily housing.
The latter scenario translates to higher SDCs; the city's projections was $789,300, while Western's was $146,500.
It wasn't until a mid-July meeting between WOU and the city that the difference was brought to light.
"We made the mistake of assuming a classification for this project that was different from the city," Neal said. "We failed to follow up ... we know now that was a mistake."
At last week's council meeting, the university asked for fee revisions, arguing that two residence halls used for overflow housing will be razed by 2010 when the complex opens, offsetting the strain of living units on Monmouth's water, electrical and transportation systems.
Monmouth staff acknowledged that the practice is used in other cities, and had been done here in 2002, when Western built its Arbor Park residences and demolished Campus Estates.
Mark Weiss, WOU executive vice president, said continuing work on the complex hinged on a council decision that evening to recalculate the SDCs.
The university needs to collect room-and-board fees from students beginning in fall term 2010 to pay off state bonds that funded the complex on schedule, Weiss said.
Continued delays and the high cost of SDCs would force Western to abandon the project, and the bonds would then go to another higher education institution, he added.
Councilor Steve Milligan said he resented being put on the spot to resolve last-minute fee issues.
"Tonight we're the ones held to the fire," he said. "For however many years and months it's taken for Western to make (its) decision (on the building), I get an hour."
The council eventually agreed with the "net-housing" methodology, cited the importance of the residence hall to the community, and capped the SDCs at $350,000, pending a legal review.