Developers protest city’s timing of new utility connection fees
The De Soto City Council delayed implementing higher fees for new sewer and water connections last Thursday after two developers said the added cost would undermine ongoing projects.
City attorney Patrick Reavey and city engineer Mike Brungardt presented the council with an ordinance creating a system development fee on new water and sewer connections. The fee will be dedicated to funds set aside for future improvements to the utilities.
Mayor Dave Anderson called attention to the disparity in De Soto connection fees compared to those of surrounding jurisdictions during his campaign last spring. Staff was directed to create the higher fees last month.
The ordinance shared with the council last week would implement the fees in two stages. Half the increase would go into effect Jan. 1, 2002, and the remainder would be effective July 1, 2002.
Still, developers Don Parr and Steve Brady objected to the timing of the proposed system development fees, if not their motivation. The fees would increase the development costs on units already planned, the two men said.
Parr is developing the 80-home Timber Trails subdivision off 87th Street. Brady is a partner in that development, but his more immediate concern was the 200-unit apartment complex he is seeking to develop north of the Seldom Rest subdivision.
Brady is developing the complex under terms of a 1999 legal settlement with the city requiring the complex receive final approval by the end of the year. Final architectural plans should be finished this week, and he is arranging financing for the apartments, Brady said.
The $300,000 added by the system development fee would obviously affect financing and the deadline, Brady's attorney Jeff Zimmerman said.
"That puts the viability of the project at risk," he said. "We have a tight schedule. We would like to see the city council interpret the settlement agreement to exclude this project from the system development fees so that we can proceed with planning and financing."
Parr said the proposed fee would put him in a similar position because he would have no way to recoup the costs on the 20 lots he has already sold in Timber Trails.
"What I agreed to, I have to stick with," he said. "You're changing the rules in the middle of the game."
Parr presented the council with figures showing Timber Trails will earn the city as much revenue as development in nearby cities, despite De Soto's lower sewer and water connection fees. The reason, he explained, is that De Soto new home buyers demand larger lots, which means more money in excise taxes for the city.
Still, Parr agreed with Anderson that a system development was needed to make the city's water and sewer utilities more self-sufficient. Anderson, likewise, agreed that the system development fees put Parr and Brady in a difficult situation.
"I was the one out there calling for this," the mayor said. "I didn't even think of Don and Steve's situation."
Councilmen Tim Maniez suggested the city delay the system development fees' implementation so that Parr and Brady's developments wouldn't be affected. Anything else would involve the city in the kind of development agreements it is trying to avoid, he said.
When the city council approved the excise tax in 1999, it excluded those developments that had already received final platting, Reavey said. But council members objected to such an open-ended commitment that might allow inactive lots platted in De Meadows and the K-10 Industrial corridor to escape the new fees.
The council directed staff to amend the ordinance to excuse projects from the system development fee if:
They receive final platting before Dec. 31, 2001.
They connect to the water and/or sewer within three years.
Developers make a direct appeal for the exception to the city council.
The fee schedules Brungardt developed contain different rates for residential and non-residential rates. Residential rates have different schedules for single-family homes and multi-family units. The non-residential schedule has a category of commercial and institutional users and another for industrial customers.