Wilsonville passes water fee hike for development
In evaluating what to do about its out-of-date fees for water system development charges, the City of Wilsonville considered partially subsidizing the charges through higher water rates or phasing in the approach to allow developers time to acclimate to the hike.
Instead, the City chose an option that might cause builders to wince and ratepayers to sigh in relief.
During a meeting Thursday, Feb. 21, the Wilsonville City Council voted 3-0 to increase water system development charges, one time fees paid for new development, by nearly 40 percent. Councilor Ben West abstained from the vote while Councilor Susie Stevens was absent.
The SDCs are based on water-related infrastructure improvements needed to handle growth and the new fees were passed partially in response to Wilsonville's plan to increase the capacity of its Willamette River Water Treatment Plant from 15 to 30 million gallons per day in the coming decades.
According to a staff report, the City last assessed its water SDCs in 2000, when it decided to charge $3,699 per water capacity equivalent of a single family home. The number has increased to $5,995 over the years due to inflation but the City's current water SDC fee is based on an outdated assessment of the City's infrastructure needs. For instance, the development of Villebois was not included in the assessment that went into the current fee.
City staff also gave the council options to maintain the current rate, increase the rate but not as significantly or add a three-year phase-in to the maximum rate, but the council ultimately chose the highest rate of $9,600.
According to a report produced by City consultants FCS Group, the City's water SDCs will be the second most expensive out of the 11 cities in the Portland metro area it analyzed once the adjustment goes into effect.
"If we had done a review 12 years ago and then another review six years ago we would have been looking at some modest increases, more modest increases at those times," Wilsonville Mayor Tim Knapp said. "The fact that we are now looking at significant increases is a tough nut to handle but it's reflective of the reality we're at and the fact that we have not been collecting what we need to collect to enable us to continue to be a reliable provider of water services to all of our people."
In previous meetings, the council had discussed subsidizing water SDCs but the City ultimately felt that doing so wouldn't be fair to ratepayers, who would likely see rate increases as a result.
"I'm convinced we need to bite the bullet and ask people to pay the full system development charge that the analysis says is needed," Knapp said. "I don't see how we subsidize that in any other way but rates and that makes no sense to me."
Before the resolution was approved, Wilsonville Chamber of Commerce CEO Kevin O'Malley asked the council in the public hearing to phase in the rate increase and warned the council that increasing the SDCs so significantly could lead developers to not want to build in Wilsonville for a period of time.
"Another 50 percent increase could mean a lot of things," O'Malley said. "It could mean the window of opportunity for development slips by. There's a limited amount of dirt so in the long term it all works out but in the meantime what does that (the increased fees) mean for development here in the
West criticized the City for not adjusting its water SDC fees more gradually over time and considered calling for an amendment to the council's resolution to add the phase in approach. However, he opted to abstain from the vote instead and didn't offer an explanation why — though the other councilors had already made it clear they preferred not to phase in the increase.
Councilor Charlotte Lehan felt that keeping rates down as best as the City can would mean keeping the promises the City made to taxpayers when it originally developed the water treatment plant.
"Part of what we said to them at the time was the advantage of going to Bull Run or the Willamette River is we would have control over our water rates and our future," she said.
She also was squeamish about the possibility of ratepayers subsidizing water SDCs for the benefit of developers in the nascent Frog Pond West residential area and she surmised taking that action wouldn't sit well with most Wilsonville residents.
"I don't think you would find people if you asked 'Would you like to subsidize some of those $500,000 houses in Frog Pond?' You'd find no one who will say yes," Lehan said.