Explanation
BACKGROUND: Systems Capacity Charges are charged to each new customer of the Water and Sanitary Sewer systems. Capacity charges are calculated to recover the new customer's fair share of the investment made by existing customers in the infrastructure of the system or to accurately reflect the new customer's share of growth planned in the system. The methodology adopted for calculation of capacity charges for the water distribution system is the incremental cost system which determines the cost of growth projects within the Capital Improvements Budget for 2006 and establishes a charge based on calculation of equivalent residential water meter taps. Since the capital improvements program for the Division of Water is well defined and is necessitated primarily by growth of the system this methodology accurately reflects an appropriate systems capacity charge. Capacity charges for the sanitary sewer enterprise fund are established based on the buy-in methodology. This method establishes rates based on the replacement cost of system infrastructure less depreciation and is appropriate when the capital investment is not principally driven by growth. As the capital needs in sewers are defined primarily by the wet weather management plan and by rehabilitation and replacement of the existing system, the buy-in methodology is appropriate for sewers. This methodology results in sewer capacity charges that are fair and equitable.
FISCAL IMPACT: Capacity charges recommended will result in a reduction in revenue of $2.8 million within the water enterprise fund and an increase in revenue of $2.5 million within the sanitary enterprise fund.
Title
To amend Sections 1105.17 and 1147.17 of the Columbus City Codes, 1959, by modifying the Systems Capacity Charges for the Division of Water and the Division of Sewerage and Drainage; and to repeal the existing sections being amended.
Body
WHEREAS, it is necessary to modify the capacity fees for new premises; and
WHEREAS, the City is committed to using cost of service to determine appropriate capacity fees. For capacity fees, cost of service may be accurately calculated using one of two methods: the Incremental Method and the Buy-in Approach; and
WHEREAS, the Incremental Method is used to assess the cost of new capital projects to the new users only; it is most appropriate when future capital projects are well-defined and required to support growth. The preponderance of future capital improvement needs for the Division of Water is well-defined and a direct result of growth as described in the Water Beyond 2000 plan, and therefore the Incremental Method is better suited for the water capital increases; and
WHEREAS, the Buy-in Approach produces the fee necessary to place the new user on equal footing with existing owners with regard to their equity or ownership of the system's assets; it is most appropriate when future capital projects are either not well-defined or not driven by growth. The preponderance of future capital improvement needs for the Division of Sewers is well-defined but a direct result of court ordered system improvements required to resolve wet weather capacity issues, and therefore the Buy-in Approach is therefore better suited for the sewer capital increases; and
WHEREAS, City Council finds the capacity fees established herein are reasonable and equitable to all customers; now, therefore,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That Section 1105.17 of the Columbus City Codes, 1959, shall be and is hereby amended to read as follows:
1105.17 Water system capacity charge.
(A) No person shall make a service connection or any part thereof, unless a permit has been issued by the director of public utilities or appointed designee. The following charges shall be levied for each service connection made to any property and shall be paid at the time a permit is issued for the service connection. A separate payment shall be submitted for each permit requested.
If an existing tap is replaced with a new tap, the system capacity charge for the new tap shall be reduced by the system capacity rate for each tap replaced. Should the sum total of the credits exceed the system capacity rate for the new tap, the system capacity charge shall be zero (0.00). Replacement tap credits will be determined by current system capacity rates. No credit refunds will be issued.
For all taps used to supply fire protection only, the charge shall be one-half (1/2) the amount specified in this section. SEE ATTACHMENT
Section 2. That Section 1147.17 of the Columbus City Codes, 1959, shall be and is hereby amended to read as follows:
1147.17 Sewerage system capacity charge.
For the purposes of this section the following terms shall be defined as follows:
(1) "Domestic water service line" shall mean the line extending from the tap at the water main to the meter and shall include all the necessary appurtenances and shall be dedicated to solely providing domestic potable water.
(2) "Fire suppression service line" shall mean the line extending from the tap at the water main to the meter and shall include all the necessary appurtenances and shall be dedicated to solely providing water for any necessary fire suppression system.
(3) "Combined domestic water/fire suppression line" shall mean the line extending from the tap at the water main to the meter and shall include all the necessary appurtenances and shall provide water simultaneously to the domestic water system and the fire suppression system.
For the purposes of providing revenue to help finance and to more equitably distribute the cost of construction of necessary additions to both the sewer system and the sewage treatment facilities, it is hereby determined and declared necessary to provide for the establishment, exaction, and regulation of a sanitary sewer-capacity charge as hereinafter determined with such charge to be in addition to any and all other fees which may be imposed with respect to said sewer system.
The funds received from the collection of such charge, as it is herein authorized, shall be deposited daily with the city treasurer who shall credit them to a special fund from which the council of the city may take appropriations for the payment of the cost and expense of the construction, operation, maintenance, management and repair of the sanitary sewerage systems, regulator chambers, storm standby tanks, pumping stations and sewerage treatment works and for the payment of the cost and expense of replacement, extensions to or the enlargement of the same and for the payment ofthe principal and interest on any debt incurred for the construction of such sewerage system, regulator chambers, storm standby tanks, pumping stations, and sewerage treatment works and for the creation of a sinking fund for the payment of such debt.
The director of public utilities shall be and is hereby authorized and directed to exact a sanitary system-capacity charge whenever: (1) Application is made for the issuance of a sewer permit to provide sanitary sewer service to a new structure; (2) At the time an existing structure is enlarged or its use changes; and (3) When an existing structure is removed and a new structure built and reuse is made of an existing sanitary sewer service or new sanitary sewer service is constructed, wherever such property is or will be tributary, directly or indirectly, to any trunk sanitary sewer built by the city, either inside or outside the corporate limits of said city and as provided elsewhere in the Columbus City Code, 1959.
The charge so exacted shall be determined in accordance with the following: SEE ATTACHMENT
There shall be no sewer system-capacity charge for a fire suppression system service line. The fee for a
combined domestic service/fire suppression service line shall be determined by the public utilities director.
Credit. If a domestic water service line is replaced, the sewer system capacity charge shall be reduced by the sewer system capacity rate for each domestic water service line which is replaced. Should the sum total of the credits exceed the system capacity rate, the sewer system capacity charge shall be zero (0.00). Replacement credits will be determined by current sewer system capacity rates. No credit refunds will be issued.
Section 3. That existing Sections 1105.17 and 1147.17 of the Columbus City Codes, 1959, are hereby repealed.
Section 4. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.