Santa Rosa is set to sharply reduce the fees it charges new construction projects to hook up to the city’s water and sewer system after concluding that existing fees are no longer justifiable.
Slower-than-expected growth, the historic drought, and requirements for more efficient landscaping have all made the city rethink the way it collects money from developers and businesses trying to make new connections to the water and sewer system.
The proposed change to so-called “demand fees” is significant and has drawn grudging support from contractors, who have long contended the charges are too high. Under the plan heading to the City Council today, the wastewater demand fees would drop 15 to 58 percent while the water demand fees would plunge anywhere from 24 to 66 percent.
The sharp reduction is due to a combination of a drop in the number of major infrastructure projects on the immediate horizon and a change to a simpler, easier-to-justify methodology for calculating the fees, said David Guhin, director of the city’s utilities department.
“We’re trying to be as fair as possible on this,” Guhin said.
As the city looks out over the next five years, several projects that it previously assumed it would need to accommodate growth may no longer be necessary, Guhin said. This is due to a number of factors, including slower growth, the drought and improvements to the system that have increased its capacity over time, Guhin said.
“We’re in a situation where we have capacity in the system,” Guhin said.
For example, the city had a $100 million sewer trunk line expansion on the drawing board to handle peak flows from storm events.
But lower average volumes because of conservation measures combined with techniques to retain runoff in retention ponds for later treatment make that project unnecessary at this time, he said.
When the existing fees were set in 2007, the future infrastructure needs of the city looked very different than they do today, said Linda Reed, deputy director of the city’s utilities department.
“They just had an assumption that the city was going to grow a lot faster and the city was going to need a lot more infrastructure,” Reed said.
The city reviews the fees every five years, and when it initially reviewed them in 2012, a preliminary analysis proposed increasing them by 3 percent, Reed said.
But the Board of Public Utilities had a lot of questions about that conclusion and pushed for a more thorough analysis that took a hard look at the growth and infrastructure assumptions baked into the fees, Reed said.
That study combined with the change in methodology for how the fees are calculated resulted in the sharply lower fee structure now being proposed, Reed said.
“We were definitely surprised by the difference,” Reed said.
So was Tux Tuxhorn. The Santa Rosa-based developer has a 14-home subdivision off Hearn Avenue that he started in November, pulling permits for it through June. But if he had waited, he could have saved approximately $120,000 on the hook-up fees, or $8,500 per house, he said.
Now he’s steamed that no one told him a major change to the fees was in process.