Options to fund sewer work weighed

Options to fund sewer work weighed

URBANA – A new fee hike is in store for water users, builders, developers or all three.

The Urbana & Champaign Sanitary District is seeking approval from its board to boost its fees to pay for the extension of sewer mains to open up thousands of acres to new development south and west of Champaign.

If the plan supported by staff prevails, a higher interceptor cost recovery fee typically paid by developers will add an estimated $562 to the cost of a new home, according to a sanitary district memo distributed to trustees Tuesday.

District Executive Director Dennis Schmidt said several options are being considered and that the district is gathering more information that will be brought back to the board in October. Public hearings will be scheduled to encourage input from the developers and the public.

At least one member of the development community said he was aware the increases were coming, though he isn't happy about it.

"They need the money to expand and if you can't expand, you can't develop and you can't build. Do I like the increase? No. Do we have to have it? You bet," said Shawn Luesse, development director for Champaign's Devonshire Group and president of the Illinois Homebuilders Association.

More irksome to Luesse is the trend of fee increases and regulation that continually adds costs to construction while government officials wonder why there isn't more affordable housing.

"They continue to talk about the need for affordable housing," he said. "At the same time, it's 'Oh, by the way, were going to impose this requirement and this development fee and increase this cost,' all of which makes building more expensive and you just cut those buyers out of the market."

On the other hand, district board member Don Flessner said the development community in this area enjoyed unrealistically low costs in past years as the sanitary district wasn't planning for the future and wasn't assessing realistic fees.

"I know we've been raising fees on a lot of different things. We've had to because they didn't keep up in the past, then we didn't have the money to deal with anything when it came up," Flessner said. "Developers knew it was a real bargain. It should've been raised in increments and wasn't, but we can't change that.

"Most people don't get concerned about this stuff until their toilets don't flush. But we're not going to rush any decision. We'll get input from developers and more information before we do anything," Flessner said.

Other options for raising revenue include allowing developers or municipalities to organize the expansion projects on their own; raising connection fees now imposed on builders; raising user fees paid by existing residents; and spending down cash investments to pay off existing loans and ultimately reduce the amount of the fee increase required.

The district has obtained state approval for a low-interest loan, in the neighborhood of 2.5 percent, to pay for the $4.1 million Windsor Road interceptor project. That's the project for which the district recently obtained all the required easements to allow it to begin construction yet this year. Bids are due by the end of the month.

The project involves burying a 48-to-54-inch diameter interceptor sewer from the district's southwest plant on Windsor and Rising Road over to the east side of Interstate 57. The sewer will open up some 650 acres of farmland to development.

In January of 2002 the district began imposing a fee to pay for new interceptors, but that revenue, some $175,000 a year, is being used to pay off loans from the so-called northwest interceptor project in the late 1990s that laid new sewer across an industrial tract north of Interstate 74.

Schmidt said that before the northwest interceptor project, the district hadn't made any provisions for future expansion, partly because state and federal grants tended to be available for most expansion projects.

Under the recommendation offered by Schmidt, the cost recovery fee would increase from the current $120 per population equivalent – which means 3.5 people for most single-family homes, or $420 due from developers – to $280 by 2006.

That would also help finance the second phase of the southwest interceptor extension – the Curtis Road interceptor – from the east side of I-57 to the southeast corner of Rolling Acres Subdivision. That extension is scheduled for fall 2004.

The third phase of the extension involves extending a smaller interceptor from the Lake Park Pump Station on South First Street to the Ross Pump Station on U.S. 45 South. The service area for the last two phases covers 4,318 acres.

The district imposes two other fees in addition to the interceptor fee. One is a connection fee of $230 per population equivalent. The other is the residential user fee averaging $110 a year, to increase to about $130 a year next year.

Schmidt said current policy is for developers to pay for development, whether the developers be government entities or the private sector, a policy that would spare existing users from contributing to the cost of the new extensions.

You can reach Phil Bloomer at (217) 351-5371 or via e-mail at bloomer@news-gazette.com.

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