Builders seeking to raze fee increases.

Byline: Joe Harwood The Register-Guard

Home builders in Lane County want to flush away recently approved increases in sewer and wastewater development fees - and they've filed two lawsuits and a slew of appeals in hopes of sending the new charges down the drain.

Alleging that Springfield, Eugene and the county violated state law and land-use policies when the three jurisdictions raised fees earlier this year, the Home Builders Association of Lane County has taken its case to the state Land Use Board of Appeals and Lane County Circuit Court.

The increased charges - if they're upheld - will finance a $144 million, 20-year capital improvement program to expand treatment capacity for the area's aging sewage treatment facilities. Part of the money will go toward upgrading sewage equipment to comply with more stringent federal Clean Water Act rules.

The new fees are a relatively minor pain for homeowners, but a big cost for home builders or for people who buy newly constructed homes.

Effective July 1, Springfield raised its sewer fees $2.67, to $22.46 a month, for an average household using about 500 gallons of water a month. In Eugene, rates went up $2.75, to $16.59 a month.

What appears to really rankle the contractors is the 79 percent increase in the regional wastewater systems development charge - the fee levied on developers of new homes.

In June, the builder of a single-family home paid $529 for the regional portion of the wastewater fee, which goes to the Metropolitan Wastewater Management Commission - made up of the three jurisdictions. Starting in July, that fee jumped to $947 per home.

Throw in a separate wastewater fee that Eugene charges, and the total wastewater systems development charge increases to almost $1,400 for a new home. In Springfield, the combined regional and city fees add up to just less than $1,700.

However, some Oregon cities charge much more. Salem, Hillsboro, Ashland and Albany all have their sewer development charges set at $2,100 to $2,500 per home. Corvallis charges more than $4,000 for each new home in sewer fees.

Builders typically pass those costs along to home buyers.

Cities figure that because new homes generate new sewage for treatment, and thereby force expansion of sewage treatment facilities, it's fair to charge high systems development fees.

But just what size of increase is fair and legal is a complex matter.

The contractors allege that in coming up with the development charge increases, the metro wastewater commission, and hence Eugene and Springfield, unfairly saddled developers with more than their share of the costs.

"We aren't really opposed to systems development charges, because they help provide infrastructure for new homes," said Roxie Cueller, director of government affairs for the Home Builders Association. "What we object to is paying a larger portion of the cost than state statute requires."

Cuellar maintains the cities can only assess builders for the development charges needed to increase capacity in order to serve growth - such as new homes, stores and factories. The development fees cannot be used to pay for maintenance, replacement of old equipment or machinery needed to comply with regulatory requirements, she said.

Also, Andrew Stamp, a Portland land-use attorney working for the home builders, who has filed petitions with Lane County Circuit Court asking for a review of charges adopted by Eugene and Springfield, said the $144 million in projects would create more capacity than is actually needed and use expensive equipment that may not be necessary.

"They can't gold-plate it and then say we have to pay for it," Stamp said. "And they can't use (systems development charges) to pay for (fixing) existing deficiencies in their system."

Dave Jewett, a Springfield attorney representing the wastewater commission, said more than $900,000 was paid to engineering firm CH2M Hill to come up with a system that "complies with statutes, is fair and equitable, and generates adequate revenue" for upgrades.

Jewett said that the complex formula used to calculate the development charges takes into account a dozen variables to equally distribute costs assessed to mitigate the impacts of growth and those assessed to handle existing users.

"They are wrong" to say they are being overcharged, Jewett said. "The reason this is so complicated is it attempts to be fair to everybody."

The home builders are also arguing about process.

In one of the string of complaints they filed with the Land Use Board of Appeals, the home builders said that the cities and county should have treated the adoption of the facilities upgrade and 20-year project list, which includes the $144 million worth of sewerage upgrade and expansion projects, as a land-use matter.

That means the list of projects and why those projects are necessary should have first gone to the planning commissions of each jurisdiction before adoption by each city council and the county commissioners, Cuellar said.

"Our position is they are mixing apples with oranges," responded Jewett, adding that state law says that such sewerage projects do not belong in the land-use arena.

Jewett, along with city and county attorneys, has filed motions with the LUBA to dismiss the home builders' appeal.

The home builders have been complaining since early this year that the fee-increase process has not included enough public review.

"Most people interested in growth issues follow the planning commission," Cuellar said. "When you avoid the planning commission, a lot of people don't know what's going on."

Cuellar said the public notices for hearings on the upgrades - held at 7:30 a.m. by the wastewater commission - did not give citizens enough chance to review the proposals.

Jewett, however, pointed out that in addition to the wastewater panel meetings, the three jurisdictions held a joint hearing, and each also held an individual hearing.

The wastewater panel spent two years setting the new development charges, Jewett added. "We formed a citizens advisory committee, and one of the members was hand-picked by the home builders," he said.

"There were various stakeholders invited to be part of the process, of which they were one."

Another complaint by the home builders is that the area's treatment plant needs upgrades partly because old sewage lines around the metro area are cracked and allow groundwater to leach in. This infiltration during wet months adds tremendous volume to the sewage that must be treated, Stamp said.

"I think they've figured out that its cheaper to build a bigger sewer plant than it is to dig up streets and replace old concrete pipes," Stamp said.

Jewett denied that leaking pipes are much of a problem, noting both cities have programs for ongoing maintenance and rehabilitation of their sewer lines.

The land-use board has not yet ruled on the motion to dismiss the home builder appeals, and Eugene and Springfield have not yet filed formal answers to the complaints in circuit court.