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EWEB closer to raising hookup fee for new homes.

Byline: Joe Harwood The Register-Guard

The Eugene Water & Electric Board Tuesday night advanced a proposal to raise by 13.5 percent the fee it charges to connect every new home to its water system.

Known as a system development charge, the fee reimburses the utility for infrastructure projects already completed, such as its existing filtration plant and pump stations. Another portion of the fee goes into a reserve fund to pay for future capital improvements needed to keep up with the increased water demand created by population growth.

The fee is levied on most new construction, from homes to factories.

Oregon law allows cities, counties and utilities to collect system development charges, also known as impact fees, for five categories of public improvements: parks; water treatment and distribution; sewage collection and treatment; transportation; and stormwater drainage infrastructure.

Many cash-strapped Oregon cities have become more aggressive in assessing the fees in the past decade to keep up with expensive infrastructure demands caused by rapid growth.

Tuesday's public hearing on the proposal was the first of two EWEB will hold before the utility's five-member Board of Commissioners decides whether to implement the increase. If approved by commissioners in October, the fee hike would add $251 to the cost of a new home, beginning Dec. 5.

The utility now assesses a fee of $1,860 on every new house added to its water system. The increase would bring the charge to $2,110. Businesses, from new restaurants to manufacturing companies, that require water meters larger than those used for single-family homes would also see hikes averaging 13.5 percent, said John Yanov, a senior financial/rate analyst for the utility.

By comparison, the Springfield Utility Board charges a $1,977 water system fee for a new home, $117 more than EWEB's current fee. The proposed 13.5 percent increase would put EWEB in the middle of the pack compared with other Oregon utilities and cities that charge the water fee, according to a 2004 study conducted by the Eugene Public Works Department.

No ratepayers or other interested parties showed up to testify on the matter. The Lane County Home Builders Association, which carefully studies - and sometimes contests - system development charge increases, supports the hike.

"I think the increase is reasonable, particularly because of the fact that they haven't taken any annual increases for five years," said Roxie Cuellar, government affairs director of the home builders group. She said EWEB officials contacted home builders early in the process and worked in a cooperative manner before taking the proposal public.

State law allows cities and utilities to increase rates to keep pace with rising construction costs. EWEB last raised its water fee in 2001 by 3.3 percent to account for inflation.

An engineering study completed last year concluded that EWEB has run out of excess water production capacity at peak periods. To make sure it can serve all new customers expected over the next decade, as well as existing ratepayers during times of heavy water demand, the utility plans to expand its ability to take in, treat and then deliver water.

EWEB projects it will need an additional 11 million gallons per day of water production capacity by 2014, and the fee hike will help the utility pay for the upgrades to create that new capacity.

Yanov said that of the $63.5 million in capital improvement projects needed for the water system between 2005 and 2014, about $13.87 million can be funded by the system development charges.

Under state law, system development charges collected to fund future improvements can only be used for upgrades specifically linked to projects that expand capacity to serve growth.
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Title Annotation:Utilities; The utility wants to increase the impact fee by 13.5 percent to help cover costs of growth
Publication:The Register-Guard (Eugene, OR)
Date:Aug 17, 2005
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