City council considers local utility facility fees

Blaine City Council discussed changing the city’s code to allow council to create local utility facility fees when needed in the future. Builders would pay the fees to fund utility infrastructure expansions to support new development.

City council unanimously voted 6-0, with councilmember Garth Baldwin absent, during its April 11 meeting to schedule a public hearing on the fees. The hearing is scheduled for 6 p.m. Monday, April 25.

City staff brought the proposed ordinance, 22-2973, to council in anticipation of the city needing to make serious infrastructure updates for east and west Blaine in the coming years. Either the city, those developing properties or a combination of the two would pay for needed utility
improvements.

“This would enable city council to place the financial burden for large, utility projects on the local area they serve when council determines it’s appropriate to do so,” city manager Michael Jones said during the meeting. He added the local fee, which would act similar to a connection fee, would be a supplement to financial tools such as local improvement districts and latecomer agreements.

The local utility facility fee could be used for water, sewer and electric utilities, such as an electrical feeder line or a water system line. The local fees would be paid before connection.

The local fees wouldn’t be used for stormwater because the city typically makes stormwater improvements in conjunction with other projects such as roadways, Jones said.

An example of using the local facility fee is the city needs to install an electric feeder line to serve hundreds of east Blaine households. The city can either pay for the line through monthly utility rates or have the impacted homeowners pay for the additional costs through a local fee.

The ordinance would also enable the city the option to give credit to a developer who builds a large utility facility that serves more customers than just the developer’s project, as long as the project already has a local facility fee. City council would vote at the time whether to offer credit.

For the credit, Jones gave council the example of if the city built a $6 million water tower and a developer spent $3 million on a pumping facility and pipes to move the water into the reservoir. If a local facility fee area had been established, the developer would be eligible to apply for credit for the cost of what they built.

“You couldn’t use one without the other,” he said. “It wouldn’t be very fair for a property owner, who wasn’t the developer, to pay the same amount the developer is paying when the developer paid $3 million toward the overall $9 million investment. This takes that into account and makes an adjustment.”

The April 25 public hearing will be held 6 p.m. at city council chambers, 435 Martin Street, and virtually. A Zoom link will be made available on the city’s website at bit.ly/3jUCjbY. Public hearing comments, which are public record, can also be emailed to citycouncil@cityofblaine.com.

“This does not create a fee,” Jones said. “It just creates an avenue to establish a fee should the council determine it’s appropriate based on infrastructure investments in the future.”