Utility Committee Agenda and Packet 2017 10 27

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The existing City code is consistent with surrounding communities. While no system is perfect, there are occasions when a small percentage of proposed developments do not have as clear of a determination. City Staff need clarity from applicants to be able to provide accurate tap fee determinations. Staff has observed applicants that will purposely provide vague plans that are misleading or change terminology between plan set submittals that impact previous tap fee determinations. This makes clearly determining tap fees challenging. Staff is not aware of any ongoing or consistent problems related to tap fee determinations. Non -Utility Related Citywide Initiatives The City operates and maintains a Water, Wastewater, and Stormwater Utility. The Utility as an Enterprise Fund is required by law to only charge for those services or programs that are directly related to the service being provided. Due to these requirements the Utility may not subsidize goals or programs such as Economic Development or Historical Preservation. There are existing programs within the City that can provide assistance to an applicant. These programs include the Business Assistance Program (BAP) and the Historical Preservation Program (HPP). Business Assistance Program A commercial business may apply for a BAP to offset other City costs. BAP's provide aid to companies looking to locate to the City in support of the overall economic development objectives. While tap fees are not considered specific criteria for a BAP, the surrounding circumstance or situation could be sufficient to qualify for the program. Historical Preservation Program Old Town and Downtown property owners are eligible for financial assistance for the voluntary preservation, restoration or rehabilitation of historical structures through the HPP. One of the goals of this financial assistance is to directly cover the added costs, both construction and otherwise, associated with preserving historical structures. In a letter dated July 17, 2017, the Historical Preservation Commission (HPC) has further recommended that funds be made available to specifically cover the cost of tap fees for separate commercial buildings on a landmarked site. HPC further recommend that tap fees be waived for new residential buildings that are separated from existing historical structure. Staff are unable to agree with the waiving of tap fees for units that cannot be categorized within the accessory use. The major advantage of both of these financial options is maintaining the integrity of the Utility Enterprise funds. The Enterprise funds were established to conduct water and wastewater activities including the diversion, storage, carriage, delivery, distribution, collection, treatment, use, reuse augmentation, exchange, discharge and acquisition. The ability to justify subsidizing non-utility activities is difficult and can present significant legal challenges. As a result the City has sustained the position that waiving of tap fees for goals unrelated to utility service is not a defensible use of enterprise funds.