09-05-2017 Council Packet - Laserfiche WebLink

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Justification Report Utility Connection Fees City of Lino Lakes, MN WSB Project No. 2988-26 Page 1 1. EXECUTIVE SUMMARY The City of Lino Lakes’ current connection fee ordinance was passed in 2008, where the Sewer Access Charge (SAC) and Water Access Charge (WAC) are based on estimated utility usage and are collected at the time of development, connection, or building permit. The City’s current SAC and WAC fees are $3,073 and $4,069, respectively, or $7,142 total. The City Council authorized a study be conducted to evaluate the current water and sewer connection fee structure and recommend changes. Based on the City’s system costs and trunk facility needs, the justification report recommends a revised fee structure whereby the existing fees are broken into two categories: • Trunk Water and Sewer fees due at the time of platting or development, and • Water Access and Sewer Access charges due at the time of connection to the system The trunk sewer and water fees are derived from the costs associated with constructing the trunk systems needed to support the anticipated growth through 2030. Trunk facilities include trunk mains (over 8-inch diameter), as well as designated lift stations, wells, and water towers that are required to accommodate the anticipated growth. The total costs to build the 2030 trunk sanitary sewer and 2030 trunk water systems are approximately $12,400,000 and $18,704,600 respectively. The total costs to build the systems are divided by the projected number of residential equivalent units to be developed to obtain a uniform trunk fee per unit. The availability charges are derived from the value of the existing respective sewer and water systems. The present-day value of the existing sanitary sewer and water systems are approximately $23,064,159 and $22,271,449, respectively. The recommended sanitary sewer and water utility connection fees per unit are as follows: Water Trunk Fee: $2,162 per unit Water Availability Charge (WAC): $1,360 per unit Water Total: $3,522 Existing WAC Fee: $3,073 Sewer Trunk Fee: $1,505 per unit Sewer Access Charge (SAC): $1,408 per unit Sewer Total: $2,913 Existing SAC Fee: $4,069 Grand Total: $6,435 Existing Fee Total: $7,142 Difference: -$707 The difference between the existing and proposed fee marginal; the recommended changes will primarily change the way in which the fees are charged, rather than the total dollar amount. It is recommended that the fees be reevaluated every five years.