Developer asks that connection-fee hike wait
November 27, 2007
A self-described “small” developer said a slow housing market is not the time for Lyon County to raise water and sewage connection fees.
Randy Butler, who owns a small development near Reynen and Bardis’ Riverpark project called Riverpark Dunes, said he is staying afloat right now, but contractors are facing little or no profit and he is concerned about the county wanting to raise fees.
“The cost of building homes exceeds the market value,” he said. “As much as I’d like to have a wonderful water system, the market has stopped, and you want to raise rates on us.”
Butler spoke at a public hearing Tuesday on a plan to raise water and sewer connection fees. He asked the commissioners to consider postponing the fee increase “to give builders a chance to breathe.”
If approved, the connection fees for water service would nearly double, from $2,021 to $4,303. The connection fees for sewer service would rise by $433, from $9,183 to $9,616.
Butler said many development projects were doomed when banks lost hundreds of millions of dollars encouraging people to build too many homes, and those homes are now being foreclosed on.
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Commissioner Bob Milz responded that the county built infrastructure based on developers’ projections, and the county still had to pay on the bonds.
“We don’t have a choice,” he said. “We have to pay our bills.”
Butler said the county could choose to spread the cost out among users and developers, but acknowledged it was not a good choice politically.
“Whatever problems you have, I don’t think you can pay that through developers,” he said, noting that prices for some homes have dropped more than $100,000. “We are not out of the woods, not by a long shot.”
Lyon County Utilities director Mike Workman said that when the water and wastewater master plan was approved in 2005, the department and the county were aware they would have to look at connection fees from time to time.
He said the master plan included components needed to meet the expected growth. The county built the Rolling A Wastewater Treatment Plant, which can handle a million gallons of wastewater per day, as well as more lift stations, sewer and water lines under the Carson River, monitoring wells and infiltration wells.
When that growth slowed, he said, the department scaled back its infrastructure planning by closing the South Wastewater Treatment Plant and cutting back on the number of wells coming online. But some things had to be completed to keep up with the growth that is continuing and the growth that will come when the housing market improves.
Those items include distribution mains, monitoring wells, storage tanks and lift station upsizing, he said.
“This is greatly scaled back,” he said. “In addition, in operations, we scaled back everything as well.”
Workman said the master plans were very comprehensive and included about $130 million worth of improvements, many of which have been postponed.
He said the county had the capacity to service about 4,000 connections in areas where major infrastructure already exists, but had to rely on developers to build infrastructure in areas the utility had not yet reached.
Tuesday’s hearing was the first on the subject and designed to gain public input. The commission will schedule a second public hearing, during which the commissioners will vote on the issue.
• Contact reporter Karen Woodmansee at email@example.com or 882-2111, ext. 351.
By the numbers
2007 and proposed 2008 connection fees for residential homes:
Fees 2007 Proposed 2008
Water $2,021 $4,303
Sewer $9,183 $9,616