Restaurateurs say SDCs make business expansions tough

Restaurateurs in Sisters are feeling pinched by what they consider high system development charges (SDC) for water and sewer service.

Sisters calculates restaurant SDCs based on an “equivalent dwelling unit” (EDU) use of 125 gallons of water per day. The water SDC is $2,895 per EDU; sewer is $2,994.

SDCs are designed to provide funds to expand water and sewer systems as new development requires increased capacity.

Because restaurants commonly use a lot of water, their overall water SDCs are high compared to other retail businesses. Since restaurants put a comparatively large amount of wastewater into the treatment facility, their sewer SDCs are expensive as well. Some restaurateurs believe they are too expensive.

With restaurant EDU calculated at .1 EDU per seat and one per toilet, a 28-seat restaurant with four toilets in Sisters would pay approximately $28,267 in SDCs.That figure does not appear to be much different from the fees charged to similar businesses in the region.

Bend and Redmond calculate their SDCs using a different methodology. However, a typical 28-seat restaurant in Bend would pay about $22,142 and the same size restaurant in Redmond would pay $30,976.

The current methodology used for calculating SDCs in Sisters was adopted in 2000 when the sewer system was being built. The sewer system was paid for with grants and loans and not by SDCs. In 2000 all of the existing restaurants were grandfathered into the sewer and water system without having to pay any SDC.

The city adopted a methodology for paying for future expansion of sewer and water infrastructure with SDCs. A voter-approved charter amendment required that SDC rates be set at the highest level justifiable under the law.

Steve Wilson was the mayor when those fees were adopted.

Wilson is now a restaurateur, as co-owner of Tea & Treasures. He believes that being charged the most that the law allows was a methodology that was meant to be adopted only temporarily.

“What we adopted in 2000 was our best guess,” Wilson told The Nugget in an interview in early May.

“We came off of about three years where the developers were savvier than we were and we kept finding ourselves on the short end of the stick and so there was this mental shift to say, ‘Let’s take an extreme position on fees and such,’” said Wilson.

Now that Wilson has paid $40,000 in SDCs and building permits to the city for his new restaurant, Tea & Treasures, he’s calling for change.

“My signature is on the bottom of the current formula. At the time I would say we didn’t know what it was going to translate into once it hit the ground,” he said.

Lisa Clausen, who owns Sisters Movie House, scheduled to open this summer, said that the SDCs in Sisters were egregious, and “The impact of SDCs to restaurants is an impediment to quality kinds of development (in Sisters).”

Numerous other restaurateurs and food service providers have told The Nugget that SDCs make it difficult to expand their seating.

As a Chamber of Commerce member, Wilson said, “The chamber is very concerned for the simple reason that they want to see Sisters become an eclectic place and with the current SDC situation, it has created a barrier for new small business.”

He also said that large corporate entities with extensive resources were the ones that could afford the charges.

According to City Manager Eileen Stein, updates of SDCs could be a year out on the city council agenda. The water and sewer master plans have to be updated prior to the SDCs being addressed (see related story, page 1).