Pasco reviews water and sewer rate scenarios and high connection fees; developers warn of housing cost impacts

Director Sarah briefed the council on water and sewer rate scenarios and maximum-calculated connection fees tied to capacity expansion for the Butterfield Water Treatment Plant replacement.

She said accelerated replacement scenarios would produce larger short-term rate increases (examples shown: a 20.75% first-year increase under one accelerated scenario) while a phased three-stage replacement would change the pace of those increases. Staff explained that connection charges are a one-time buy-in that pay for additional capacity and related infrastructure (pump stations, mains, treatment expansion) and that applying the maximum calculated connection charge reduces the needed annual rate increases.

Director Sarah read examples of maximum connection fees the study calculated: a typical single-family (3/4-inch meter) maximum connection fee of about $6,148 for water and $4,354 for sewer; staff also outlined a half-maximum approach that would halve those fees and increase annual rates by about 1.5 percentage points.

Council members expressed concern that higher connection fees could add roughly $10,000–$15,000 per lot and potentially slow development or make single-family housing less affordable. Developer representative John Boric told council his analysis suggested new-construction revenue will not cover the full capital program and questioned whether charging for existing infrastructure replacements was equitable; he warned of potential legal appeals if the city included infrastructure that had already been paid for. Staff replied that connection fees are legally allowable to fund new expansion capacity and that Butterfield replacement (a replacement of existing infrastructure) is handled in the rate base rather than connection fees. Staff said they would return with the packet options requested and consider a creative approach that ties rate levels to low-interest loan availability.