03-02-2020 Council Work Session Packet

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WS – 6 WORK SESSION STAFF REPORT Work Session Item No. 6 Date: March 2, 2020 To: City Council From: Michael Grochala, Community Development Director Re: Utility Connection Fees Background Council members Ruhland and Stoesz requested a comparison of the City’s trunk utility fees with those charged by neighboring cities. A concern was expressed that the fee’s charged may be a deterrent to economic development. The City of Lino Lakes established trunk utility fees in 1988 to fund sanitary sewer and water system trunk improvements. Sanitary sewer trunk improvements include: lift stations, force mains, oversized sewer mains, and highway crossing casing pipes. Water system trunk improvements include: wells, pump houses, storage tanks, oversized water mains, treatment and highway crossing casing pipes. The utility fees are charged to new users. This method of financing trunk system improvements is a common practice for cities. In 2016 the City Council initiated a Connection Fee Study to evaluate the current fee structure and to minimize impacts to the end user, specifically when changing use. The fee structure was modified into two components, a trunk fee and an availability charge. The trunk fee is collected at the time of development. The study resulted in a total fee reduction of $707 per unit. The current fees for 2020 are: Trunk SAC/WAC Total/Unit Water 2,306 1,451 3,757 Sewer 1,606 1,502 3,108 A single dwelling unit is equivalent to one unit. Commercial, Industrial, and Institutional uses are based on a residential equivalency unit (REU) determined by Metropolitan Council Environmental Services (MCES). Staff has prepared a comparative table showing similar fees charged by other suburban communities. Fees vary by community in both amount and method. It should be noted that our fees are based on the estimated costs of developing our trunk utility system.