City Council

Agenda Request

Agenda Of:

11/6/07

Agenda Request No:

VIII B

Initiated By:

Jessie Li, Assistant Utilities Director

Responsible Department:

Utilities

Presented By:

SuEllen Staggs, Director of Utilities

 

Department Head:

SuEllen Staggs

 

 

Additional Department. Head (s):

 

Subject / Proceeding:

Review and Discuss the  Utility Connection Fee Increase

Exhibits:

n/a

Clearances

Approval

Legal:

n/a

Executive Director:

N/A

Purchasing:

N/A

Asst. City Manager:

Karen H. Glynn

Budget:

n/a

City Manager:

Allen Bogard/for AB

Budget

Expenditure Required:  $

0

Amount Budgeted/Reallocation:  $

0

Additional Appropriation:  $

0

Recommended Action

Review and discuss the recommended increase in connection fees.

Executive Summary

The purpose of connection fees is to pay for the expansion of new regional water and wastewater systems to accommodate new development so that existing customers will not be required to pay for the infrastructure needs of new developments. Part of the utility rates in Section 5 of the City of Sugar Land’s Code of Ordinances includes the collection of connection fees for Utility Districts outside the City but served by the City’s water and wastewater systems. The connection fee is also charged to Districts inside the City when it is specifically included in Development and Utility Agreements. The fee is calculated and imposed to pay for the capital costs of providing water and wastewater services to the districts that contract with the City for those services. The fee is calculated assuming one fee for all non-developed areas including TxDOT Tract 2, Southern Land Development (Tract 3 and the Imperial Redevelopment) along with Telfair and the Riverstone developments.

 

The first step in determining the fee was to ascertain the number of connections each area will serve. Through the Water and Wastewater Master Plans and additional engineering analysis, the regional infrastructure to serve those connections is determined along with the associated costs. The connection fee is then a simple calculation dividing the cost for the infrastructure by the total equivalent single-family connections or ESFC. The Utility Agreements with Telfair, Southern Land and Riverstone call for the developer to engineer and construct the necessary improvements except for water plant and wastewater plant expansions, which the City will engineer, construct and finance.

 

As indicated by the ordinance, the City will review and if necessary adjust the connection fee annually to ensure the fees will cover the cost.   Timely evaluation and adjustment of the connection fee reduces the potential for under recovery of the costs of capacity-enhancing infrastructure needs. The current connection fee was recalculated and approved in 2005 based on engineering estimates developed at that time. Significant increases in construction costs over the last few years has resulted in the actual construction costs being higher than the engineering estimates used in the connection fee calculation. Therefore, a connection fee revision is necessary to reflect the actual construction cost increases realized.

 

Staff will present the proposed connection fee increase and receive Council feedback to continue the approval process.  This increase was discussed with the Finance Committee with a recommendation to bring to the City Council.

 

Exhibits

N/A