City reinstituting water, sewer connection fees

Published on Wed, Apr 25, 2012 by Jeremy Schwartz

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Citing slow economic growth, Blaine City Council has voted to re-establish water and sewer hook-up fees for new development in the city.

City council members did away with the fees for new development within the city limits in 2009 in hopes of attracting developers. The zero-fee plan was proposed to last for five years, but city officials have determined not enough revenue has been raised through development to make up the revenue brought in by the fees.

“It was determined [in 2009] that there was enough revenue from customer rates to pay for [water and sewer] debt service, operation and maintenance,” Blaine Public Works director Ravyn Whitewolf wrote in a request for city council action. “Because the intended growth incentive has not been as successful as hoped, our utility customers are facing even higher rates to pay down the debt.”

City council members discussed re-instating the fees over two council work sessions and ultimately decided to return the fees to their 2009 levels. At Monday’s council meeting, city council members voted 5-1, with council member Bonnie Onyon opposed and council member Ken Oplinger absent, to reinstate the fees, effective January 1, 2013.

The fees for connecting to the city’s water system within city limits will return to $8,119 for new water and sewer connections combined per equivalent residential unit (ERU). ERUs outside the city will be charged $12,178. The fees are charged per equivalent residential unit, which translates to, for example, one single family home or half a motel or hotel room.

In comparison, the Birch Bay Water and Sewer District charges $5,555 for new water and sewer hook ups. While water connections cost roughly the same, Blaine’s sewer charges are significantly higher. Blaine city officials have said the city’s higher sewer connection charges are necessary to pay for the Lighthouse Point Water Reclamation Facility, which opened in August 2010.

Blaine staff has estimated the fees will bring $200,000 in additional revenue per year. Whitewolf assured city council members the fees will keep sewer bills for Blaine residents below $100 per month. In a later interview, Whitewolf said city officials based the $200,000 figure on the average of three years of uncollected water and sewer connection fees.

Last December, council approved a 10-percent increase in sewer rates, pushing the average bill from $90 per month to $99. Water rates were not increased.

In an earlier interview, city manager Gary Tomsic said any developers applying for building permits between now and the first of the year would not have to pay the fees.

If they have a building permit [now], they’re fine,” Tomsic said.

Tomsic said council members had been discussing bringing back the connection fees for months but only recently directed staff to propose possible various scenarios. During  council work sessions, staff members presented connection-fee alternatives: not doing anything, bringing them back immediately, setting a delayed start or phasing them in over a few years.
“It was a way to get these options out in an interesting and clear way,” Tomsic said.

Council member opinions on the fees have have covered the board since they were set at zero in 2009.

“There were some council members who thought we shouldn’t have set them at zero in the first place,” Tomsic said.