PLACERVILLE, CALIFORNIA

Opinion

New hook-up fees outrageous

By From page A4 | June 19, 2013

The El Dorado Irrigation District has been raising rates so fast our heads are still spinning like some horror movie. Water rate hikes add up to a 37 percent increase between 2012 and 2015.

Now, EID is talking about raising hook-up fees to as high as nearly $41,000 for new water service.

That’s a figure that will make anybody throw up. It’s time for an exorcism.

We suggest EID eliminate the “buy-in” theory. EID has this theory that new customers should pay for the existing system that existing customers have been paying for. But that’s what bimonthly water billings are for.

Water rates were increased originally because of a 95 percent drop in hookup fees and to meet the bond covenant requirement of a debt-to-revenue ratio of 1.25. As General Counsel Tom Cumpston told a crowd in El Dorado Hills in January 2010, “Every 1 percentage point increase in bond payments is a $1.1 million increase in cost.”

If you buy a residential lot in El Dorado Hills and want a hookup for water and sewer service it is going to cost you $40,768 under the current staff proposal. If you get recycled water for your landscaping, your total hookup charge will be $41,093. In Cameron Park the proposed hookup fees are $34,627 and $35,973, respectively. In other sewer districts the total hookup fee is $34,627.

If you have a large enough lot to qualify for a private septic system, just buying the water hookup will cost you $24,681 in El Dorado Hills, $20,529 everywhere else.

The hookup fees are called Facility Capacity Charges. In the case of El Dorado Hills the water supply component of the hookup fee is $4,216. For everywhere else it is $2,956. The big bucks are for future capital improvement plans, presumably needed to accommodate growth in the customer base — $11,247 in El Dorado Hills and $11,108 elsewhere.

We’ll concede those two, but we object to charging new customers to “buy-in” to the system. That buy-in factor is $9,218 in El Dorado hills and $6,465 elsewhere just for water service. Just buying a water hookup will cost $24,681 in El Dorado Hills and $20,529 elsewhere.

Eliminate the “buy-in” and the price for a water hookup in El Dorado Hills becomes $15,463 and $14,064 everywhere else. That ain’t chicken feed but it’s not in the outrageous 20 grand area.

The same approach should be applied to wastewater. Take out the “buy-in” and the cost of added capacity is only $6,257 in El Dorado Hills and $7,559 everywhere else. The total for a new water and sewer hookup would be about $22,000 anywhere in the district, not counting recycled water service for landscaping.

When someone moves into the county, that family doesn’t have to “buy-in” to the road system. They just get a tax bill to pay for basic county services, such as roads, libraries and administration. They don’t have to buy-in to the public school system. But they do get charged an impact fee to pay for new road improvements and new school classrooms, even though the schools have a shrinking population, outside of El Dorado Hills. The fire departments also get in on the impact fee bonanza.

At least the El Dorado County Board of Supervisors is steadily whittling down its road impact fees. It’s time EID did the same. Appoint a citizens committee to parse through EID’s hookup fee proposals and make a recommendation. Our No. 1 recommendation is to eliminate the “buy-in” charge. What EID is charging for water and sewer rates is plenty of “buy-in.”

Mountain Democrat

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