7A-2, Motion to Adopt the Water Connection Fee at $300

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EHLERS LEADE.RS tN PUBLIC fINANCE To: Sue Iverson, City of Arden Hills C ::i w ::i From: Jonathan North and Liz Diaz, Ehlers Date: December 2, 2008 . Subject: 2009 SAC / WAC BACKGROUND The City is reviewing the SAC / WAC (Sewer Availability Charges and Water Availability Charges) fees for 2009. Typically, the fees are structured to cover the costs related to accessing the system (ie: capital costs associated with the installation of water reserve capacities), and are collected with the building permit fees. As TCAAP development - and its related costs - will not affect the 2009 fee structure, the 2009 fees would be applicable to: 1) lots yet to be developed, 2) redevelopment lots, and 3) expansion of existing lots. Further, as TCAAP is not expected to impact the 2009 fee structure, the basis for the fee would be based on the capital cost previously incurred and prevailing fee structures. Neighboring communities have a wide range of SAC / WAC fees, reflecting 1) the broad latitude given to cities in determining hovl they can fund their water and sewer systems, and 2) the different policy objectives of each community. For example, some communities may take an aggressive pro-development stance, in which case the SAC / WAC fees may be lower. HQwever, they would likely compensate for this with higher operating fees. RECOMMENDATION F or the non- TCAAP area (and impacting 2009), we recommend that the City look to its neighbors and maintain a competitive SAC / WAC fee structure. Therefore, we recommend the City adopt the attached rates for activity on existing lots: Ehlers & Associates Inc. 3060 Centre Pointe Drive Roseville, MN 55113-1105 Phone: (651) 697-8545 Fax: (651) 697-8555 jnorth@ehlers-inc.com