Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Utility Rates topic
No spam. Unsubscribe anytime.
Council directs staff to review water/wastewater capacity fee study as officials weigh raising recovery toward full cost
Summary
After discussion about a 2021 nexus study and new legal standards, council directed staff to evaluate whether the existing study supports raising capacity fee recovery above 75% (staff suggested up to 90% for defensibility) and to return with cost/time estimates for a new study if required.
Public Works Director Danielle Bonham briefed the council on water and wastewater capacity fees and asked for direction on whether to pursue higher cost recovery than the current 75% level. Bonham and staff noted a 2021 nexus study underpins present fees but that legal and regulatory changes since 2021 may require further review or a new study before raising recovery to 100%.
"We would still have to investigate whether the prior nexus study meets the current regulatory requirements," Bonham said, and staff noted a recent Supreme Court decision (discussed in the meeting as the Sheetz case) raises the standard for fee justification and nexus to the charged project.
Staff explained consultants previously recommended 90% as a defensible maximum because conservative assumptions guard against legal challenge; staff said a focused new nexus study for utilities would likely cost in the low tens of thousands (past utility-only work ~ $35,000) while a full, citywide study ran higher. Councilmembers said they favored pursuing full-cost recovery for new development and directed staff to first test whether the 2021 study remains sufficient and, if not, to come back with cost and schedule estimates to do a focused study to support higher recovery percentages.
Why it matters: capacity fees affect development costs and utility enterprise funds' ability to finance capital projects; changing recovery levels can shift costs between new development and existing ratepayers.
