Committee weighs impact fees versus connection fees and developer financing options
Summary
Staff described why impact fees are hard to equitably apply and outlined alternative approaches (connection fees, district charges, bonding). Committee discussed thresholds and directed staff to draft expansion-fee language that triggers only for substantial system expansions.
Staff told the committee that while impact fees can, in theory, allocate costs to new development, they are difficult to make fair in practice. Chris Perrove explained the mechanics using a hypothetical: a developer whose work represents only 0.07% of a $1,000,000 project would pay an amount too small to fund a pipeline upgrade. "In their case, it's point 07% on 1000000 dollar project. Not enough money to make the pipeline," Perrove said.
Committee members discussed alternatives, including using the connection fee as an impact measure or setting up a district charge or bond to spread costs among the properties that benefit. The committee asked staff to include language allowing an expansion fee to be considered when a development would significantly increase system demand and to avoid formulaic calculations that could preclude large economic opportunities. Staff noted implementation will likely be project‑by‑project and that the draft ordinance should permit staff and council flexibility.
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