Council holds lengthy public hearing and approves first reading of sewer capacity impact fee ordinance
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Summary
City staff proposed an ordinance to impose sewer capacity impact fees that pass through sharply higher wastewater treatment capacity costs from the PSA; staff and the council discussed fee timing, grandfathering, 5,000-gallon purchase increments, and tracking of available capacity (staff cited 410,000 gallons available); first reading was approved and staff will return with implementation details.
City staff presented a first-reading ordinance and public hearing on proposed sewer capacity impact fees to recover the sharply increased cost of wastewater-treatment capacity charged by the Public Service Authority (PSA). Staff said the PSA rate for new capacity rose from $0.48 per unit to $10.89 per unit (an increase staff described as substantial) and recommended an ordinance to allow the city to calculate, collect and administer impact fees for new development and changes that increase wastewater flow.
Key features explained by staff included: (1) a pass-through approach aligning the city fee with the PSA capacity purchase cost; (2) different treatment for projects inside city limits (fee collected at building permit stage) and outside-city projects (capacity purchase and payment upfront); (3) capacity-letter issuance tied to plan approvals and engineering analysis; and (4) a 12-month time window for capacity reservation and a three-year period (after permit issuance) for utilization before capacity can be rescinded if unused. Staff said the city has approximately 410,000 gallons of available capacity and that the city requested an additional 2.5 million gallons from the county.
Public commenters including Kevin Pethek (local business owner/developer) said the ordinance appeared well-crafted and urged the council to examine the county's 5,000-gallon increment purchase practice for potential exaction concerns and fairness for non-contiguous projects. Councilmembers pressed staff on measurement, project pipelines, permitting expirations, commercial vs. residential forecast difficulties, and the implementation mechanics of collecting fees at building-permit issuance. Staff and council agreed to provide better reporting on pending projects and capacity allocations as implementation proceeds.
Council moved, seconded and approved first reading by voice vote. Staff said additional work-sessions and quarterly updates on capacity forecasts are planned to refine implementation and reporting.