Agenda - Charter Commission - 04/18/1996

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CASE WATER/SEWER CONNECTION CHARGES By: Ryan R. Schroeder, City Administrator Background: At the Septembor 26, 1995 meeting, Council considered award of a petitioned-for sewer/water project in an existing rural subdivision. The project was tabled. At the meeting, staff p.toposed consideration of an amendment to the utility connection requirement polic~t. No action was taken on this proposal. On October 3, I9p5, Council held a special meeting during which the connection policy was formally in~oduced for amendment. It was tabled to the October 24 meeting. Enclosed for your~review is the policy that was proposed. With public Lrnpro. vements such as this one, there are really two separate cost areas charged by the City. Th~ f'n'st is for the public improvement itself. These costs for an 80-foot urban lot typicallJ average $8,000 to $9,000. The connection charges include SAC/WAC fees of $2,325 an~ often trunk charges of $I,539/unit in 1995. These fees total $3,864 in i995. Given the above, ~e typical costs/unit could be expected to be: (if financed over 10 years) Public Improv¢mcnt Connection $8,000 principle $3,864 1 !% interest 11% $I,358.41 annual payment $656.11 $5,584.11 total interest cost $2,697.13 The question is, should the municipal utility customer pay additional costs in order to lessen the burd4n upon the homeowner (or anyone else) who received a utility improvement wh~.h he or she was opposed to the knprovement? And if so, to what degree? First, on the public improvement itself, the only difference between an example such as Bison Street (wiffi petitioners against) and Haubrich Addition (with petitioners against) is the cost. Of course, the cost difference is created by the addition of utilities, but it is still a public improvem~.nt with all the rights to the property owners available under State Statute and City Charter. ! Simply, we cannot assess beyond the improvement to the property. If we do, the prope ~y owner has remedies through the court system. If we benefitted the property with a .n~ .ket value increase, should the municipal utility customers grant and pay for an additional~ benefit of deferred payments? Perhaps not. State Statute allows deferments for di~bility and income reasons with age restrictions but does not provide the same to the able-bbdled middle class. Perhaps a different situation exists for connection fees and requirements. While the Metropolitan Codncil and others provide two-year connection requirements, certainly a strong argument iexists that existing private systems should be allowed a reasonable amortization. Examples exist in case law for such as adult uses and billboards wherein the owner is allowed ~ reasonable amount of time within which to recover his initial investment