The city of Oak Harbor is raising the fees for new developers for the first time in over 25 years.
Last September, the city council voted to lower utility rates by an average of $4.41 a month due to a decrease in the sewer rate. Lowering the rate was based on a study done by Financial Consulting Solutions Group, a utility management consulting firm based in Redmond.
Along with lowering the utility rate, Chris Gonzalez of the Financial Consulting Solutions Group recommended the city raise system development charges — fees on new developments to recover an equitable share of costs.
At an August meeting, Public Works Director Steve Schuller said that the calculations that determine what fees developers in Oak Harbor pay haven’t been updated since 1996.
Gonzalez said that Oak Harbor paid the most in utility rates compared to eight nearby cities, while having the lowest system development charges. He believed those concepts were related.
During the August meeting, council members expressed concerns about charging developers the full cost of sewer system development charges and the impact it could have on affordable housing.
Gonzalez said charging less than the full cost of system development charges would shift the cost to ratepayers.
At a meeting earlier this month, Gonzalez presented a plan that will phase in the charges over the course of five years. The current charge for an average single family home is $1,680 per equivalent residential unit, which would increase to $2,917 in 2023, then $4,153 in 2024 and so forth, until the maximum rate is reached at year five. The system development charge for water will also be phased in over the course of five years.
Councilmember Dan Evans was concerned about the increase affecting existing projects and said he thought the charges should exclusively go to repairing leaking sewer lines.
Finance Director David Goldman replied that while the city has American Rescue Plan Act funding, eventually that money will run out. Raising system development charges is a way to provide the city with a stream of revenue for water, sewer and storm drain capital projects.
Councilmember Bryan Stucky said that even with the update, he thought the charges were still too low.
“Why do we have the newest (sewage) treatment plant but still, by a long shot, the lowest system development charges?” he asked.
Evans said cities with higher charges, such as Anacortes, Mount Vernon and Bonney Lake were very different from Oak Harbor.
“All these places have easy access, they’re right off the highway,” he said. “We do need people to build houses here.”
Councilmembers Jim Woessner, Shane Hoffmire, Eric Marshall and Tara Hizon voted to approve the motion to increase charges. Evans and Stucky opposed it.