Title
Consideration of the Water Connection Fee Recommendation
Body
Key Issues:
The Water Tap Fee for FY25 for a residential equivalent unit which is identified as a 5/8" x 3/4" meter was established at $3,973. The methodology provided that: •
• Fees would be proportional to the size of the water meter.
• Costs of projects with annual review to ensure the proper allocation and cost recovery necessary to serve new development.
For the 2025 update of the Water Tap Fee Model, the following factors were updated.
• In FY24, there were 589 equivalent residential units consumed through the issuance of building permits. The number of remaining equivalent units was reduced to 41,540.
• The Water Tap Fee fund collected $2,262,043 during FY24.
• During the year, the Milton Thompson & Langsford Road upsizing project was completed at $1,177,219. This project was completed under budget by $163,000.
• The remaining projects costs in the model were updated based on the Engineering Record Construction Cost Index which was 1.6% for this year through November.
Staff recommends:
Increase the water tap fee for residential equivalent unit for the (5/8” x3/4” meter) from $3,973 to $4,080 effective data of July 1, 2025.
Increase fees proportionally to the size of the water meter.
Proposed Motion:
I move to recommend City Council approval to amend water tap fee and fee schedule effective July 1, 2025.
Background:
In December of 2022, The Water Utilities department presented new methodology for calculation of water tap fees based on the completion of master planning efforts to ensure that fees were appropriately designed. The Water Master Plan allowed the department to review the water tap fee model similar to the process that was used for the sanitary sewer connection fee methodology.
The original water tap fee methodology was developed in the mid 1990’s to address water supply demands that were in constraining development. The water tap fees were designed to recover the costs associated with development related capital projects by assigning a proportionate share of the total capital costs to each new water connection. The original tap fee ordinance became effective on March 1, 1996.
The Water Master Plan confirmed many of the projects that were in the existing water tap fee model, but additional improvements were identified to meet the demands specified in the City’s Comprehensive Plan. The Master Plan indicated that additional water supply would be necessary and recommended that the Water Utilities department move forward on the Jackson Cass Transmission Main Phase IV project for an additional 8 mgd.
The methodology utilized to establish these fees were based on current operating data, historical trends, projected demands, projected development related capital costs, current obligations and available supply. The model utilized prior Water Master planning data as the basis of the current Equivalent Residential Unit “ERU” calculation. The ERU required an estimate for the Average day per capita demand and the Max day Multiplier to calculate the proportional impact on the water system of each new connection. With the update to the Water Master Plan, these two factors needed to be updated as well.
The Average day per capita demand was adjusted from 125 gallons to 85 gallons. Staff had discussed the possibility of this reduction in daily consumption based on lower per household consumption levels thought to be the product of low-flow plumbing fixtures and more water efficient appliances. The Max day Multiplier was adjusted from 2.1 factor to 2.2 to reflect historical demands that were observed by the consultant. The ERU calculation for the 5/8” x ¾” meter was adjusted from 682.5 gallons per day to 486 gallons per day.
The Water Utility Advisory Board unanimously recommended adoption of the Water Tap Fee methodology and the adjusting the Water Tap fee to $3,760 for the equivalent residential unit (5/8” x3/4” meter) effective July 1, 2023 and to maintain proportional fees to the size of the water meter. In addition, staff presented an amendment to the water tap fee ordinance to recognize the new methodology which was approved and adopted by the City Council.
Presenter
Brent Boice, Assistant Director of Business Services, Water Utilities
Recommendation
Staff recommends approval the residential equivalent unit water tap fee and fee schedule effective July 1, 2025.