Round 2 on Carson City utility hookup fee hike plan

An approximate tenfold increase in utility connection fees over the next six years in Carson City could continue after that period based on an index, but the rise then would be capped at 3 percent.

That would be the result of recommended action by the city’s Utility Financial Oversight Committee, which Tuesday night reaffirmed its earlier recommendation to the Board of Supervisors on the fee hikes and phase-in period, but also clarified how resultant revenues should be used and added the indexing feature. The hikes would take the fees back to their pre-recession levels for sewer and water hookups, and zeroed in on commercial development.

Panel member Michael Bennett advocated moving up the start of the five-year phasing period, making it six months from now rather than in a year, but his motion failed on a 2-3 tally. Then the committee returned to the five-year phase-in starting a year from now, retained the same fee structure recommendation, but added revenue use restrictions and indexing.

Revenues raised by utility hookup fees could only be used for capital equipment or projects, not for utility operations or to service debt. After the half dozen years, when the fees are fully implemented, the indexing would be keyed to the Engineering News Record’s Construction Cost Index unless it exceeds the 3 percent cap suggested in a motion by member Bruce Scott.

Aaron West, Builders Alliance Nevada CEO, initially testified the indexing might best be left until later but changed his tune when the cap was added to the mix.

“With the 3 percent cap,” West said, “we’re very supportive of the motion.”

West, whose industry organization represents builders across Nevada, also was on hand to support sticking with the phase-in beginning a year hence rather than in January 2016, as were other development and construction company representatives. Among them were Mark Turner, a developer, Bill Miles of Miles Construction, and Rob Hooper, the Carson City-based Northern Nevada Development Authority’s executive director.

They all raised the spectre of implementing the fees too quickly dampening potential industrial or other commercial development in the community.

Bennett and other panel members understood the development community’s position, yet also spoke about city staff’s concern for revenue needs tied to capital projects. As Bennett put it, sewer and water ratepayers are now handling most of that burden. Scott initially also talked about moving up the phase-in as well.

Ande Engleman, the chairperson, was concerned that would hurt the residential development community’s finances if included, yet she wasn’t opposed wholly to a commercial time frame change. At one point she told city staff she was pleased they had included a possible alternative of a three-year schedule for phasing in the rates.

After the meeting, Public Works Director Darren Schulz said the estimated increase in fees, if approved by the city’s governing board, would be tenfold over the five years.

He and Utility Manager David Bruketta said the recommendations may reach the board at the Aug. 20 meeting. The board previously had discussed the panel’s first recommendations but sent them back to panel members for clarification as development spokesmen sought more information over time from staff.