Paradise Valley eyes 20 percent impact fee uptick

Dawn Marie Buckland and Kevin Burnett presenting town council with proposed impact fee increases. (photo by Melissa Fittro)

Dawn Marie Buckland and Kevin Burnett presenting town council with proposed impact fee increases. (photo by Melissa Fittro)

The Town of Paradise Valley is moving forward with making increases to its wastewater rates.

During a study session and regular meeting on Thursday, June 9, Paradise Valley Town council discussed two separate changes to wastewater fees: a proposed 20 percent increase to impact fees and a proposed 10 percent increase in rates.

Following previous discussions and a June 9 public hearing, town council approved the 10 percent wastewater increase for fiscal year 2017-18, by a 6-1 vote with Mayor Michael Collins dissenting. Paradise Valley Director of Administration and Government Affairs Dawn Marie Buckland suggested to council the increase be effective Aug. 1.

The increase in rates — which effects about 2,100 residents — comes as a result of years of operating at a structural deficit, according to town officials.

Depending on where you live in the Town of Paradise Valley determines what entity handles the wastewater leaving your home. Paradise Valley residents have three options: Use a septic tank, use town services if within a certain geographical area, or sign up for the city of Phoenix sewer service.

While the sewer fund costs should have been covered by its ratepayers, the amount has been coming up short for quite some time.

The town contracts wastewater service with the city of Scottsdale through an intergovernmental agreement, but it is responsible for the billing and remittance, as well as for the local infrastructure, town officials say.

The town last increased sewer rates in 2010 after supplementing the account in 2009 with money from the General Fund. In fiscal year 2014, the entirety of the sewer fund balance of $4.9 million was transferred to the General Fund to reimburse sewer-related expenditures, according to the study session discussion.

Since, costs related to the operations and debt service of the sewer system have continued to exceed revenues.

This fiscal year, Paradise Valley Town Council is scheduled to transfer $650,000 into the sewer fund to cover debt service of $9 million for bonds issued in 1998.

Members of Paradise Valley Town Council and staff during the June 9 study session. (photo by Melissa Fittro)

Members of Paradise Valley Town Council and staff during the June 9 study session. (photo by Melissa Fittro)

Impact fee increase

During the study session portion of the meeting, Kevin Burnett, senior project manager at Willdan Financial Services, presented his recommendation for increasing the impact fee.

An impact fee is a one-time fee applied when a new project — residential or commercial — within town limits is being built. The fees are designed to allow growth to pay for its proportionate share of impact on public infrastructure.

“The impact fees are specifically related to the impact brought about by growth,” said Ms. Buckland.

The funds will be used for debt service and applied to infrastructure capacity that will benefit new development, as well as make the system more robust overall, according to town staff.

Mr. Burnett recommended the town increase rates by about 20 percent; for example, a meter size of 1-inch or less, the current rate is $6,541. The proposed new rate would be $7,847.

“The purpose of our study was to review the town’s sewer impact fees, recognizing the impact new development places on your system, making sure the growth is paying its proportionate share of costs going forward, and making sure there was funding in place available for ongoing growth related costs,” said Mr. Burnett.

“In your case, you’ve got limited capacity that you’ve purchased from Scottsdale in terms of sewer treatment. So we want to recognize the capacity that’s used up when a new development comes online, and be able to purchase additional capacity in the future should that need arise.”

The number of accounts are expected to grow by 1,297 accounts between 2016-26, according to the town’s draft land use assumptions and infrastructure improvement plan. In addition, the Ritz-Carlton development is anticipated to add 164 total residential units at a rate of 32 units per year beginning in 2019. Moreover, 94 villas and 10 commercial accounts are projected to be added to the Ritz-Carlton property, according to the draft report.

Moving forward, the town has a long timeline of giving the public notice and hosting public hearings before the fees will be applied.

News Services Editor Melissa Fittro can be reached at 623-445-2746, by e-mail at mfittro@newszap.com or follow her on Twitter at www.twitter.com/MelissaFittro

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