Revised water tap-on fees: Some to pay more, some to pay less
By Jon Hawley
Thursday, April 26, 2018
Connecting to Pasquotank County's water system would cost some customers more and others less, based on a fee schedule a consultant proposed to commissioners earlier this week.
In a special meeting, Walton Burkhimer, of American Engineering Associates, reported on how Pasquotank's tap fees need to be revised to comply with a 2017 state law requiring outside engineers to review local governments' costs for providing water and sewer service, and what reasonable “system development fees” they can charge.
Commissioners previously authorized County Manager Sparty Hammett to hire a firm to complete the review, whose findings are now posted for public comment before being adopted with the county's 2018-19 budget in June.
Burkhimer explained the county needs to differentiate between tap fees and system development fees, or SDFs. While tap fees cover the simple costs of water-sewer connections, SDFs are meant to make new customers “buy in” to water and sewer systems. Those contributions are tied to the customer's demand on the system and the costs of establishing those systems, he explained.
Burkhimer said he calculated the water system's cost per unit of capacity is about $13 per gallon per day, based on the system's value of $58.7 million divided by a capacity of 4.4 million gallons per day.
The bottom line for customers: Burkhimer recommended not to increase the $2,500 tap fee Pasquotank currently charges for customers to get a three-fourths-inch water meter, though Pasquotank might be able to justify charging as much as $6,400. Three-fourths-inch meters are the ones predominantly used by residential customers, Pasquotank Water Superintendent David Smithson said.
Burkhimer wrote that not changing the cost “strikes a reasonable balance” between old and new water customers, while also protecting Pasquotank in case customers challenged the maximum allowed fee.
However, Burkhimer found Pasquotank should adjust fees for other meter sizes, based on their actual connection and buy-in costs. He also recommended Pasquotank differentiate between tap fees and SDFs when charging customers.
Overall, his proposal would:
* raise the cost of two-inch meter fees by $1,500, to $6,500;
* lower the cost of three-inch meter fees by $1,500, to $9,000;
* raise the cost of four-inch meter fees by $1,500, to $12,000;
* raise the cost of six-inch meter fees by $500, to $16,500; and
* leave the $21,000 cost for eight-inch meters, needed only for very large businesses or institutions, unchanged.
Burkhimer also recommended the county's wastewater tap fees continue to match water tap fees.
Commissioners praised Burkhimer's report, and voted unanimously to post it for public comment. Burkimer also estimated the company's work would cost $8,000.
According to Smithson and Hammett, the revised fees aren’t intended to raise more revenue, and should have little budget impact.