HomeMy WebLinkAbout7 Connection Charges Agenda Item # 7
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Memorandum
To: Board of Directors
From: Peter Holameister
Date: November 26, 2001
Expiration of connection charges
The District Code of Policies contains a provision that states that connection fees paid
will be effective for one year from the date of application. If the customer is not
permanently connected within one year he or she may be subject to payment of
increased fees that might then be in effect. This provision applies to electric and water
connection fees.
The code section that applies to the electric connection change is as follows:
5.20.060 Expiration - Fees paid will be effective for a period of one year from the date
of application. Applicant may be subject to payment of increased fees if the permanent
connection has not been made within the specified time period.
This rule shall apply to those applicants who have previously paid connection fees but
have not yet received permanent service. Such applicants may be subject to payment of
increased connection fees if the permanent connection has not been made within one
year from the effective date of this rule.
The code sections that apply to the water connection charge are as follows:
5.28.015.1 Fees paid will be effective for a period of one year from the date of
application. Applicant may be subject to payment of increased fees if the permanent
connection has not been made within the specified time period.
5.28.015.2 This rule applies to those applicants who have previously paid connection
fees but have not yet received permanent service. Such applicants may be subject to
payment of increased connection fees if the permanent connection has not been made
within one year from the effective date of this rule.
This rule applies to connection fees; it does not apply to facilities fees. The idea is that
our connection fee is a fairly precise calculation of the time and material required to
connect to a customer's electric service panel or water service box. These costs
increase as wage rates increase or as the cost of material increases. After a fairly brief
time, our fee no longer adequately covers our costs. A contractor building a house is in
the same situation; he will quote a price to build a house, but will not hold that quote for
more than a year, because the costs of labor and material increase. We deal with that
same problem.
Normally our connection charges increase by modest increments, so it is not a big
problem. However, recently our water connection charge increased significantly and Mr.
Steiner is building over 100 dwelling units, so he was faced with a large cost increase
after one year.
We now have an appeal from Mr. Steiner asking for an extension beyond one year. The
Board has discussed the difficulty in completing a project within one year in Truckee
because of the weather. You have discussed amending the policy such that a
connection fee paid is valid for eighteen months or two years.
There is another related issue that may also need board consideration. How do we
define permanent connection? Permanent electric connection is easy to define; when
we have installed the service to a permanent panel and we will not need to perform any
other work. Permanent connection for water is not so clear. Our policy could define
water permanent connection as the connection of the District's water service facilities to
the customer's water service pipe within the service box. This is a matter that deserves a
bit more discussion at the board meeting on the 28th.
Recommendation
1. 1 recommend that the Board decide whether to change the policy defining the
expiration of the water and electric connection fee.
2. 1 recommend that the Board define the term "permanent connection."
gqq, �
M . A. Steiner Development, Inc .
November 5, 2001
REC'
NOV 2001
President of the Board
c/o Peter Holzmeister
Truckee Donner Public Utility District
P. O. Box 309
Truckee, CA 96160
Re: Riverview Townhomes —Truckee
Dear President of the Board and Peter Holzmeister:
On April 11, 2001, 1 received full entitlements from the Town of Truckee to
construct Riverview Townhomes. This sixty-unit housing development
incorporates a well-planned architectural theme with numerous design amenities.
Both the Town of Truckee Planning staff and our development team have worked
together to create housing that is an attribute to the community.
It was important that we pay the existing water fees by May 4, 2001, so that we
could lock in under the existing rates. In order to accomplish this goal, we moved
forward with our site improvement plans and architectural working drawings
before we even received approval on April 11th. This was very ambitious, since it
was possible that we could have not received approvals and ail of the extra effort
could have been in vain. We were extremely fortunate that we did receive
approvals and in turn submitted for a grading permit. At the same time, we
moved forward to obtain a development agreement with Truckee-Donner Public
Utility District in order to not only lock in the old fees as previously mentioned, but
start construction as soon as possible.
In order to achieve our goals, our entire team including the civil engineers and
architects have worked overtime and Saturdays and Sundays. We felt that the
deadline of May 4t" was not an insurmountable obstacle and working together
with numerous individuals at the District, we were successful; we signed the
development agreement on May 4'th and paid fees for the entire project in the
006 Sunrise 331s t., Suite 102 $ Fair Oaks, CA 95628 916) 6e-387 , Fax ,91 i 962-166-1
Truckee-Donner Public Utility District
Page 2
November 5, 2001
amount of$85,034. 1 appreciate our team's and the District staffs efforts to
accomplish this Herculean task.
On page 10 of the development agreement, the District acknowledged the effort
that we put forward, but also `condition two" stated that the entire project needed
to be completed by May 5, 2002, in order to be grandfathered in under the old
fee schedule. 1 felt compelled to protest "condition two", since it was physically
impossible to complete the project in twelve months. It also states in the
development agreement that the District does have "discretion" to increase any
and all fees and costs to equal the district's current charges.
On October 25, 2001, after a meeting with other District staff members, Mike
Connell suggested to me the possibility of just completing the water system,
installing the meters and servicing the building pads even though all of the units
are not completed. I felt this was an excellent remedy to the situation, but it is
still impossible since from November 15 to May 1, 2002, 1 am not allowed to
install any water lines or service.
My request is that the District allow me a six-month extension past May 5, 2002,
to install the water lines, meters and services to the building pads for the entire
project. I understand that I would have to pay the monthly services fees, even
though all of the buildings are not completed.
Thank you for your consideration of my request. Please feel free to call if I can
answer any questions.
Sincerely yours,
ot
Mark A. Steiner '
President
M. A. Steiner Development, Inc.
Managing Member of
Riverview Truckee, LLC