Perry City staff recommend phased sewer connection fee; developers warn higher charges will slow building

PERRY CITY — At a Dec. 1, 2025 work session, Perry City officials and members of the development community debated a proposed sewer connection charge designed to recover part of the cost of a new wastewater treatment plant.

Staff from the finance department presented a rate‑study calculation that ties the charge to the plant’s capacity. The city’s consultant calculated a principal construction cost of about $74 million, allocated 61.8% of the new plant’s 2.5 million gallons‑per‑day capacity for new customers (1.545 million gpd), and used an equivalent residential unit (ERU) of 285 gpd to determine 5,421 ERUs available to be sold to new connections. That math produced a per‑ERU connection charge of roughly $8,435. To ease the transition, staff proposed a three‑phase schedule: $2,500 per ERU on Jan. 1, 2026; $5,450 on Jan. 1, 2027; and a full charge of $8,400 on Jan. 1, 2028. Staff said collected fees would be placed in a restricted account, reported annually, and charged only until the city has sold the 5,421 ERUs tied to the plant’s reserved capacity.

Why it matters: staff and the consultant say the fee equitably allocates the capital cost of a major utility project to growth that creates demand for new capacity. Builders and development interests countered that higher or fast‑ramped fees will raise per‑unit costs that cannot always be passed to buyers, risk projects becoming financially unviable, and could send construction to neighboring jurisdictions.

Developers and builders who spoke during the public‑comment period urged the council to adopt a lower, phased, or grandfathered approach. Jerry Whitley, who identified himself as vice president of operations (Atlanta division) for Lenar Holmes, said Lenar supports a $2,500 connection fee for 2026 but that higher fees would force builders to add costly usable square footage or leave the city. ‘‘If we add $8,400 back out of the price, we are literally going to lower that margin to where it doesn't make sense to build within the city of Perry,’’ Whitley said.

Troy Cington, an attorney representing Lenar Homebuilders, advised council to be cautious and noted legal constraints: OCGA 36‑71‑13C allows municipalities that provide water and sewer to collect proportionate connection charges without adopting a full impact‑fee ordinance, but if the city has an impact‑fee program it must credit embedded system improvements. Cington recommended limiting immediate consideration to a $2,500 charge in January 2026 and discussing longer‑term policy with the development community.

Local builders and real‑estate professionals offered similar warnings. Clay Smith, a site and utility contractor, presented spreadsheet estimates showing that a flat $2,500 fee could preserve higher long‑term development volumes and tax revenue compared with a graduated, higher fee that might reduce building activity. Scott Free, a Perry broker of 38 years, said residential growth is the primary driver of commercial development and cautioned that ‘‘if you slow down that rooftop, you’re going to stop commercial growth.’’ Another speaker, who identified themself as a local attorney (name in transcript: Kendall), said unpredictably high fees could invite litigation and urged fairness and predictability.

Staff response and legal view: Finance staff said the model is grounded in the consultant’s rate‑study methodology and stressed that the fee is tied to allocated capacity rather than an open‑ended charge. Staff noted the trade‑off with a flat lower fee: while $2,500 might cover annual debt service for about 13½ years if development meets assumed connection volumes, selling capacity at a lower price exhausts the pool of ERUs more quickly and would shift remaining debt service to existing ratepayers once the sellable capacity is used.

City attorney Miss Newbie summarized the legal framework, citing OCGA 36‑71‑13C and the Griffin v. McDaniel case. She told council that state law permits a municipality that provides water or sewer to recoup a proportionate share of capital costs via hookup or connection fees without adopting a full impact‑fee ordinance; she also cautioned that if the city does adopt an impact‑fee ordinance any embedded hookup charges would require credits.

Next steps: Council members and staff discussed alternatives and asked staff to bring refined numbers and analyses to follow‑up meetings; staff recommended taking action on the proposal at the council’s next meeting. No final vote was recorded at the work session.

Quotes (selected): "That $2,500 works in 2026. That is a fair and reasonable offer. But if we go any deeper than that, it's going to have a negative impact on the home building business in general," said Jerry Whitley, vice president of operations for Lenar Holmes.

"If you collect an impact fee, your impact fee ordinance has to provide a credit or an offset for any system improvement charges embedded in a hookup or connection fee," said city attorney Miss Newbie, citing state statute and case law.

"A flat rate of $2,500 and steady development will keep builders here; if we push it up to $8,400 they'll build septic in the county or go to different towns," said broker Scott Free.

What the record shows and limits: The staff model uses a 285‑gpd ERU assumption and a 2.5 million gpd plant capacity; the consultant’s original figure was $8,435 per ERU and staff rounded to $8,400 for modeling simplicity. Speakers from the development community provided project and revenue estimates and legal interpretations; where transcript comments referenced other agencies or case law, the article reports those references without adopting outside conclusions.

Background: The proposal stems from a consultant‑led rate study for the new wastewater plant. Staff emphasized annual reviews of fees and said they would stop collecting the connection charge once the allocated 5,421 ERUs are sold.

The council scheduled further consideration and staff said it would place the recommendation on the next meeting agenda for action.