As the Village of Oregon’s population continues to grow, its water system will need more improvements.
That’s the basis for an adjustment in the village’s water impact fee, which is charged to all new homes and commercial properties.
The village began charging the existing fee of $1,800 in 2005, and a new report recommends reducing it to $1,202 for another 15 years to cover the expected $3.6 million cost for upgrades.
The Village Board is expected to vote on this amendment and any ordinance changes at its Monday, Aug. 3, meeting. The fee went to a public hearing at the board’s Monday, July 20, meeting, and there were no public comments.
Village administrator Mike Gracz told the Observer the former $1,800 fee amount helped cover the cost of a new water tower the village constructed on Lincoln Road. With the project “done and paid off,” the time had come for the village to revise its fee amount, fulfilling requirements set in state statutes (Wis. Stat. 66.0617).
By 2035, the village’s population is expected to reach 15,000, a 44% increase from 2018, according to a Stafford Rosenbaum, LLP, February 2020 revised water impact fee needs assessment. That assessment points to a “West Side Water Study” prepared for the village by Ruekert and Mielke, stating the utility needs three major improvements to two water system components – a sixth well, a 400,000 gallon water tower and a new booster station.
“These three capital improvements merit an update (to) the 2004 needs assessment and water impact fee to calculate a new (fee) under Section 13.11 of the Oregon Municipal Code,” the assessment states.
The village uses impact fees to provide a way for it to pay for portions of public water infrastructure projects, Gracz said. But first, the Village Board needed to revise the needs assessment that was originally published in 2004.
According to the assessment, the revised $1,202 impact fee accounts for a water meter size of a 5/8 or 3/4 inches. A water meter measures the quantity or volume of water that passses through a pipe or another outlet. A one-inch meter would mean a $3,006 impact fee, 1.25 inch a $4,505 cost and so on. A 12-inch meter would mean an impact fee of $192,397, according to the assessment.
The fee is calculated by first determining the capital costs of the three planned improvement projects, the assessment states. Then, those costs are increased by 10%. The next few steps involve reducing the capital costs of two improvements and determining future water demand, the assessment states. Then, staff divide the adjusted total costs of improvements by that water demand generated by future development to derive a “per-gallon” measurement.
After that, the per gallon cost is multiplied by future per day water demand to come up with the impact fee, according to the assessment. A “debt credit” is calculated for the contribution of user charges to the cost of the new user water facilities.
Gracz said the village will likely revise water impact fees again in three years after the new Oregon Public Library is built.
The fee was originally expected to be considered in April, but it was postponed because of the COVID-19 pandemic.