Title
Referral Item #020017 - Utility Connection Charges for Affordable Housing (B)
Explanation
In 1982, the City of Gainesville adopted connection charges to recover the capital impacts of new customers as they connect to the water or wastewater system. While these connection charges cover the capital impact of new customers, they do add to the cost of constructing new homes. Since connection charges are uniform, connection charges are a larger portion of the cost of affordable housing than of higher priced housing. The City Commission referred the issue of Utility Connection Charges for Affordable Housing to the Regional Utilities Committee on May 28, 2002.
In an effort to determine how other municipal utilities deal with connection charges or impact fees for affordable housing, GRU conducted a telephone survey of fourteen comparable municipal utilities. Results of the survey are presented in Table 1 (provided in backup). The Survey can be summarized as follows: 1) 5 of 14 utilities offer full or partial waiver of connection charges or impact fees; 2) Of these 5 utilities, 2 are fully reimbursed from the City's General Fund, 1 is partially reimbursed, and 2 are unreimbursed and thus are a service provided by the utility with no associated revenue; and 3) 9 of the 14 utilities do not offer any waiver or fee reduction for affordable housing.
In addition to the waiver or reduction of connection charges, another important consideration is the cost of connection charges or impact fees assessed by individual utilities. GRU charges $660 for a water connection charge and meter charge and $926 for total wastewater connection charges. Total charges to connect to GRU's water and wastewater system are $1,586. GRUs connection charges represent approximately 2.2 percent of the cost of a $70,000 home. So while connection charges add to the cost to construct affordable housing, these charges are a relatively small part of the overall cost.
GRU has connect...
Click here for full text