Wednesday, April 23, 2014

Hookup fees to rise

From page A1 | August 30, 2013 | 1 Comment

Hookup fees will be higher beginning Oct. 1, the El Dorado Irrigation District Board of Directors decided Monday on a 4-1 vote.

Total Facility Capacity Charges will increase $732 for El Dorado Hills home builders and $1,311 for home builders in the rest of the district.

New homes needing to hook up to both water and sewer service will pay $30,440 for an FCC. But homes using recycled water for landscaping will only be charged $27,379.

The individual components of that $30,000 figure are $17,578 for a water hookup, but $11,471 for a dual-plumbed house. Wastewater FCC will be $12,862. Recycled water hookup is $3,046.

Three elements of the new FCCs are 1. Recover the cost of existing district facilities that will be used by future customers (buy-in); 2. Fund expansion or additional capacity of district facilities needed to serve new customers; 3. Ensure that existing customers do not subsidize growth.

The engineering staff and the board decided to do one districtwide Facility Capacity Charge.

For water the breakdown shows $3,208 of “buy-in, $3,187 of water supply” and $11,183 for “future Capital Improvement Projects.”  Those three add up to $17,578 for a water hookup.

Additionally, the FCC figures will automatically increase each year in accordance with the Construction Cost Index.

“The automatic adjustment is a good idea. I’d like every year to have an update, because there are always changes on the board,” said Director Alan Day.

“I’m very glad for the reduction (from the original proposed FCC). It’s a huge impact to an individual who wants to build a house for grandma,” said Director George Osborne.

Included in the presentation was a comparison of hookup fees charged by neighboring jurisdictions, which had been suggested by Alan Day.

EID’s new FCC for water will be $17,578. Placer County Water Agency charges $24,666, Nevada Irrigation District charges $16,362, Amador County Water Agency charges $17,410. Two cities were lower — $6,175 in Roseville and $2,629 in Folsom.

General Manager Jim Abercrombie noted that Roseville uses Mello-Roos bonding to pay for a lot of its water infrastructure and that Folsom has eight pump stations to EID’s 34 and 200 miles of collection lines to EID’s 500, plus Folsom merely “sticks a straw in Folsom Lake.”

Scott Whyte of the North State Building Industry Association praised the district engineering staff for its “transparency” in meeting with the development community twice.

“I think it’s feasible and will work well for the district,” Whyte said about the revised FCCs that will go into effect Oct. 1.

Though Whyte thought the recycled water charge was too high, “That said, we believe this is something we can go forward with.”

“This factored in 2.5-to-1 for houses on recycled water,” Director Bill George pointed out to Whyte.

That brought Kirk Bone of Parker Development to question if 2.5:1 was district policy. “I just want to make sure that’s formalized at some point.”

“I certainly appreciate working with your staff,” Bone added.

“The custom builder is gone. And those costs just keep going up,” said Director George Wheeldon. He also added that new requirements that houses have fire sprinklers mean that some home builders have to pay for a 1-inch meter in order to get enough water pressure for the sprinkler system. And those on wells have to have a 15,000-gallon water tank.

“Costs are just devastating the county,” Wheeldon said, adding that he was voting against raising the FCCs.

Former director Harry Norris, who moved from El Dorado Hills to Camino, praised the proposed rates but said they should have been lowered before meeting with the developers. “Our county needs affordable housing. I appreciate that EID is trying to make it somewhat affordable. Most of the houses in El Dorado Hills are going to be $500,000.

“It would be nice if we can keep costs down … at the same time we have to (cover our costs),” said Day. “Our mission is to supply water. I would like to review rates.”  Day said he wanted to be sure they are reasonably related “as far as growth is concerned.” In other words, if there are more customers to spread the cost among, there would be less need for a rate increase or perhaps a reason to lower rates.

Director George Osborne later concurred: “More customers bring costs down.”

Political candidate Greg Prada got up and decried water rates going up 102 percent and FCCs only going up 8 percent. “Developers aren’t participating in debt costs. Full FCCs should include debt costs. This is a bad deal for the ratepayers.”

Abercrombie pointed out that FCCs went up 19 percent in 2005 and 36 percent in 2008.

Osborne called percentage comparisons immaterial, saying if he had one penny and then added another penny that would be 100 percent increase.

El Dorado Hills resident and retired NASA engineer Paul Raveling said, “EID’s cost increase was starting from a lower point.”

During the open forum session at the beginning of the meeting, Raveling noted that by using a Black & Veatch study of 452 water service agencies 80 percent had higher rates than EID last year and in 2013 the figure was 75 percent higher than EID.

Raveling also added that contrary to what he heard at the Tea Party forum for EID candidates, EID had no deficit in 2012 and has had no deficit in 10 years.

“As we try and protect the ratepayer we use an aggressive policy on FCC,” Abercrombie said. “Over the past 10 years the development community has paid for infrastructure. Rate increases over the last four years have customers paying their share of the debt.”

“This is not a deal for developers. People buying houses are paying for this,” Day said. “Apples and Oranges — you can’t compare rates and FCCs.”

Michael Raffety


Discussion | 1 comment

  • Daniel B.August 31, 2013 - 8:56 pm

    The hookup fees seem ridiculously high! This doesn't appear to cover annexation or installation. On the other hand, it costs 1/3 of that to drill a well. Sure there are maintenance and electricity costs, but there are also ongoing water usage costs on EID. I cannot imagine hooking up my home to EID. It seems like most people are happy to go that route. Am I crazy?

    Reply | Report abusive comment


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