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23 OWASA Fees for New Service Connections, As It Pertains to Affordable Housing Initiatives and Other Community Purposes March 22, 2018 Prepared by OWASA staff for the March 22, 2018 Orange County Board of County Commissioners and Chapel Hill Town Council Joint Meeting OWASA values that safe and affordable water and wastewater services are fundamental to the health of our local community, environment, and economy. We are committed to providing high-quality and reliable services in a cost-effective way for the entire community. We recognize that, in some cases, this is still not enough and the cost of connecting to OWASA’s infrastructure can be a hardship. OWASA understands the importance of affordable housing for our community. The following memo describes efforts underway that will lessen the cost to connect. We will continue to work with our community partners to identify viable strategies for the affordability of water and wastewater service. Statutes and Agreements Governing OWASA’s Rates and Fees NC Statute 162A does not provide OWASA the authority to reduce or waive rates, fees or charges for any customer or customer class based on income or public purpose. A summary of the pertinent statutes and agreements is provided in Attachment 1. NC Session Law 2017-138 Last year, the state passed N.C. Session Law 2017-138 which authorizes public water and sewer utilities to charge system development fees using one of three different methodologies. With the help of rate consultants, OWASA staff evaluated the statute’s options for calculating the fees and chose the method most appropriate for OWASA and its customers. The method chosen also resulted in lower fees than the other options. As required by the new statute: • A report on the new system development fees has been posted on OWASA’s website. • We have invited and are accepting comments on the proposed changes up to and through a public hearing scheduled for May 24, 2018. • OWASA’s Board of Directors will consider approving the new system development fees on June 14, 2018. • The new fees must be in-place by July 1, 2018. Combined 10% to 51% Reduction in System Development Fees from Last Year The new fee development methodology results in a proposed reduction of 10% to 40% of current system development fees, depending on the type of development. The proposed changes are outlined in Table 1. The proposed fees also include a new lower-tier rate for homes 800 square feet or smaller. In addition to the proposed reductions shown in Table 1, in October 2017, we also reduced system development fees, based on an updated analysis of costs and rates. In total, the reductions made in October 2017 combined with those proposed to take place July 2018, OWASA’s system development fees will be 10% to 51% less than they were prior to October 2017. Information about OWASA’s system development fees was included in a December 18, 2017 letter to Mayor Hemminger, Mayor Lavelle and Chair Dorosin (Attachment 2). System Development Fee Comparison