Oswego board signals support to raise residential water tap-on fees by $3,000; commercial rates left unchanged for now

Dan (village staff) presented Item F2 to the Committee of the Whole, outlining the village’s water tap-on fee history, purpose and recommended change. He explained that water tap-on fees are charged to new connections and go into the village water and sewer capital funds. “Water tap on fees go only to the village of Oswego. They are paid by any new connections to our water service by residential or commercial users,” Dan said.

Background and history

Dan reviewed past fee levels and rationale included in the staff memo: in 2007 Oswego’s residential tap-on fee was $5,000 per unit; an increase in 2010 raised fees to as much as $7,200 per unit; the 2015 fee structure reduced the residential fee to $2,200 per unit. Staff and consultants previously considered competitiveness against neighboring fast-growing municipalities (particularly Yorkville and Plainfield) when setting fees.

Comparative market context

Staff presented benchmarking showing current total fees for typical single-family homes in Oswego are about $24,000 (a figure that incorporates multiple fee components beyond the water tap-on fee). Yorkville’s current tap-on fees are higher (about $7,500) and Yorkville’s ordinance phases an increase to roughly $10,500 by 2028. Plainfield’s single-family/townhome tap-on fees were shown at about $3,300, with a $0 apartment tap fee in the materials reviewed by staff.

Board direction and rationale

Staff recommended a $3,000 increase to the residential tap-on fee (raising it from $2,200 to $5,200) and advised keeping the village’s single flat fee per unit (same fee for single-family, townhome and apartment units) for simplicity.

Several trustees voiced support for a residential increase while opposing change to commercial fees. Trustee discussion noted that increasing residential fees shifts cost to new homebuyers but argued new development should contribute to the capital costs of connecting to Lake Michigan water. Trustee Joan raised equity and scale issues for commercial customers and favored not increasing commercial tap-on fees at this time. Board members also emphasized the importance of staying competitive with nearby municipalities to avoid discouraging development.

Consensus and next steps

After discussion, President Coffman said, “Looking around, I'm seeing, consensus on on raising them.” The board gave staff direction to place an ordinance raising residential water tap-on fees by $3,000 (to $5,200 per unit) on the next Village Board meeting agenda for formal action; staff told the board that if the ordinance is approved it would take effect immediately for new annexations and connections.

Ending

Staff said the fee structure can be revisited every few years and that commercial tap-on fees can be evaluated separately if the board wants further analysis. The item will appear on the next Village Board agenda for a vote.