Agenda - 02-15-2005-7b - Laserfiche WebLink

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Memorandum Reimbttrsement Policy June .3, 2004 Page 2 ~O Under the previous policy reimbursements were made to the applicanUdevelopers over a 10 year period. Reimbursements were derived and paid from the footage and acreage charges levied against properties or customers connecting to the oversized water and/or sewer mains, An original Reimbursement Policy was adopted by the Board in 1977 and subsequently revised in 1992. Since 1980 there has been approximately $190,000 reimbursed to developers under the two reimbursement policies. OWASA's current fee structure does not include a provision for applying and collecting front footage or acreage fees as these fees were eliminated, due to the administrative effort and minimal benefit of the reimbursement policy, when the connection fee structure was modified in the 1999 to implement a tiered availability fee structure.. Staff believes there are several alternatives to address the request for reimbursement on water and sewer mains sized in excess of the applicant's needs to provide for the orderly development of the system,. These options include: 1) No reimbursements (current policy) -The full cost of extending water and sewer mains including any excess capacity to support the orderly development of the system is borne by the applicant. PROS: - Easy to administer and requires no tracking by staff - No impact on OWASA budget - Growth pays for growth CONS: - First applicant in area beazs the full cost of'the extension that others can then utilize for their development 2) Reimbursement to the applicant over a period of time (previous policy)- Under this option the applicant would be reimbursed a portion of the water and sewer extension cost based on the construction cost difference between an 8" main extension and the oversized main that supports future growth of the system, Reimbursement would be paid over a 10 year period from funds received as customers connect to the oversized water and/or sewer mains, Since there is no mechanism within the current OWASA Rates & Fees Schedule to fund reimbursements, our existing availability fee structure would need to be modified to insure full recovery of costs associated with this program, PROS: - Limited impact on OWASA budget (assuming front footage and acreage fees are reinstituted) - Growth pays for growth CONS: - Difficult to administer and requires considerable staff time to track - First applicant in area bears the full cost of the extensions - No guarantee that applicant will receive any or all of the cost incurred with the extension - Reimbursements to private developers could result in a bonus to the developer as the cost for' the oversized extension has already been accounted for in the land price or sale price to others - Can result in high water and/or sewer connection fees for small lots with minimal system demand