TRANSCRIPTION EXCERPT:
November 9, 2006 Hearing re Increase in Sewer Connection Fees
Public Works Director Connie Dunn presentation:
Tonight I'm asking the council to consider increasing the facility connection charge for the sewer to $9,106. When Katy Isakson, as part of our General Sewer Plan, did a rate study in 2003/2004, the council selected to increase the rate from $4,496 to $7,183. Based – that was based on his—historic—historical costs after grants with interest. This was considered Scenario D-Lite (sic), which the council decided was the--was the right choice and the right step for the City of Sul—Sultan at that time. The increase, from nine-thousand – er, to nine-thousand one-hundred and six -- excuse me – the increase to $9,106, from the existing $7,983 is an increase of $1,123 per residential equivalent. This was one of the recommendations in the 2003 rate study that was completed.
The 2007 budget is calculated on seven – 70 building permits in 2007, which, this rate increase, by a thousand dollars and one-hundred and twenty-three -- $1,023 – would net an increase of $78,610 in sewer connection fees in next year's budget.
Developments that are in process someplace in the line in 2006 with putting in sewer lines, pavement, asphalt and getting ready for ready for our building permits, totals 168 units. In recommending the increase – this increase as a step of—to help with future increases may be approved, our ordinance would be submitted September of – November 21st on First Reading to the council, and on Second Reading would be December 14th, with the effective date of January 15, 2007.
The effective date was pushed out to allow time for the developers that chose to, to pay—prepay for sewer connection charges prior to the new rate going into effect. I did a small calculation here on my presentation paper, and it shows at 100% of the ones that are now ready to be….starting with their building permit shortly, 100% buy-out would net us $1.3 million, with part of it—nine—nine-hundred thousand ($900,000) going to debt service and $4,000 going to -- $400,000 going to capital improvement program—uh—fund. At 50%....uh, $469,000 would go to debt service, $201,000 would go to capital improvements projects.
We also – you also need to know that additional pending developments or connections to our system, right now there's 378 sewer availability letters out that are not in the mix that have completed construction or that have not—really not been constructed in 2005/2006, or paid for. There's also 1,169 waiting for a [sounds like, "bill in order to"]…to sewer. This is totaling 1,699 ERUs [Equivalent Residential Units] that are out waiting for us in some stage of the process; waiting for us to get the sewer plant improvements made so they have—we have the capacity, or they're in the process of preliminary development where they're moving forward with their construction plans.
And this—this 1,699 does not include any mixed-use or commercial or industrial uses—development along the highway or anyplace else in town.
So tonight I come to – come to you tonight to ask you to consider increasing the sewer connection fee from $7,983 to nine-thousand--$9,106 per residential equivalent.
Following public testimony (from L. Storm only):
Mayor Tolson: How have the developers – obviously you've been in contact with the developers, Connie. What is their feeling? Are they anticipating a prepayment on all of these, from your contacts with them?
PW Director Dunn: They have not said that they would do 100% [sounds like either, "volume" or "value"] of 168 connections. They are patiently waiting for the City to move forward with the improvements that we need to do. And they have asked me – I've had two of the developers go, Why isn't the city already requiring us to prepay before we get to the point, once they're at—proven their approval, they're expecting to start prepaying on their sewer connections and water connections.
Mayor Tolson: Probably be based on the fact there will be larger developers than the City has encountered before.