The study developed for Price River Water Improvement District brought to light the struggle faced by similar entities across the state to comply with the impact fee formula regulation enacted by the current Utah Legislature.
Jason Burningham of the consulting firm that conducted the water and sewer impact fee study presented the results during the PRWID board meeting on March 25.
At present, PRWID charges an $800 impact fee for sewer connections. But depending on what the board decides, the study may allow the agency to hike the fee to $2,566 for new sewer connections in the county.
But residents attending the public meeting questioned the reasons for the possible change and pointed out that the district charges more for impact fees than all the cities.
“That’s why we are trying to deal with this problem,” said Keith Cox, the chairman of the PRWID board. “These figures indicated by Jason are only what we could charge, not necessarily what we will charge.”
The studies are conducted to determine the fees for individual water and sewer districts in the state. The process takes into account numerous factors, including the infrastructure and debt load of the districts. Consultants also consider how an entity compares with other districts in the state in similar areas.
What water and sewer districts can and do charge varies in Utah. Some districts charge less than $500, while the impact fee of one entity in Summit County ranges from $15,000 to $16,000.
Impact fees are often built into the cost of a new house and may not be noticeable. But when a residence or business has to hook up to a system after being constructed, people do notice the fees. The situation frequently occurs when sewer systems are extended into rural areas where houses have existed for years on septic tank systems.
At last week’s meeting, residents raised a number of questions about the difference between impact and connection fees.
Impact fees are paid by a home or business owner as a “buy in” to a water or sewer system, according to PRWID. Residents are paying a set part for infrastructure such as lines, collection systems and treatment plants.
A connection fee is the actual cost of hooking a building up to the line. Consumers pay for tee connections, meters, labor and backhoes to connect the structures to the water or sewer systems.
Following the discussion, the PRWID board voted to accept the report and decide what the district should do about the fees. The decision will come in a resolution at a later date.
In an unrelated business matter, the board decided to consider refinancing a 1996 water-sewer revenue bond. The district’s financial consultants indicated that PRWID could save significant revenues with a lower interest rate on the 13 years remaining on the bond. The board authorized the consultants to accept bids to see which financial institution can offer the lowest rate.
Preliminary engineering has been completed on proposed sewer line projects around the county, PRWID director Phil Palmer advised the board members. The district needs to obtain a couple of rights of way to begin the work.
The board authorized assistant manager Jeff Richens to advertise for bids on the projects immediately. PRWID will have a bid opening on May 6.
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