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Commission directs staff to draft changes to Utility Capital Charge policy, including shifting collection to building permit stage
Summary
The commission directed staff to draft and return with revisions to the city's Utility Capital Charge (UCC) policy that would collect UCCs at building-permit issuance rather than at development, create a public GIS map of vesting, and target implementation for Jan. 1; commissioners asked staff to return with a draft for December.
Bismarck utility staff presented proposed revisions to the city's Utility Capital Charge (UCC) policy and commissioners voted to direct staff to draft the changes and return with a policy for adoption.
Michael, a utility staff member, reviewed the UCC system implemented in 2019 (an outcome of a 2018 rate study) and explained its purpose: to cover costs to expand water and sewer infrastructure where new development increases system demand. He outlined current vesting rules (residential properties vested at a 3/4-inch meter; commercial at 2-inch) and said a 3/4-inch meter currently carries a UCC of $4,637. Michael described challenges tracking lot modifications, refunds and vesting for properties platted before 2019 and explained how collecting UCCs at the time of development has sometimes required refunds or additional collections when meter choices change.
Proposed changes include shifting UCC collection to the time a building permit is issued (so charges reflect the meter size actually selected), maintaining current rates for the near term while the city completes master planning work, creating a public GIS map that shows vesting and UCC status for parcels, and establishing a 10-year window for maintaining existing vesting before refunding any paid UCCs. Michael said the city would continue to participate in water-main upsizing but would lose the administrative ability to use UCCs as developer credits, increasing near-term budget risk that staff said could be managed through early coordination with developers.
Commissioners asked about inflation and timing; staff said a broader rate update likely would follow completion of master plans and that they aimed to return a draft policy (to be placed on consent or regular agenda) with an implementation target of Jan. 1. A motion to proceed with drafting the policy carried unanimously.
Next steps: staff will draft the revised UCC policy, start work on the public GIS map and bring the proposal back to the commission for formal adoption.
