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HomeMy Public PortalAboutORD 215-08-17_Amending Water System Connection Fees_08152017instrument 11 1W:i0697 Bonneville County, Idaho Falls, Idaho 08/17/2017 12:23:50 PM No. of Pages: 10 Recorded for CITY OF IONA Penny Manning Fee: $0.00 Ex-Officio Recorder Deputy _ Index to ORDINANCE 215-08-17 ORDINANCE NO. AN ORDINANCE OF THE CITY OF IONA, IDAHO; AMENDING SECTIONS 8-2-2, 8-2-14, 8-2-15 AND 8-2-16 AND ADOPTION OF SECTION 8-2-16A OF THE IONA CITY CODE RELATIVE TO WATER SYSTEM CONNECTION FEES; ADOPTING AN "EQUITY BUY -IN" METHOD OF CALCULATING WATER SYSTEM CONNECTION FEES; PRESERVING PRIOR ORDINANCE; PROVIDING FOR METHODOLOGY; PROVIDING FOR SEVERABILITY AND ESTABLISHING AN EFFECTIVE DATE. BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF IONA, IDAHO THAT: Section 1. Amendment of Section 8-2-2 of the Iona City Code: Section 8-2-2 of the Iona City Code is amended as follows: 8-2-2: DEFINITIONS: Certain terms used in this Chapter shall have the meanings ascribed below: APARTMENT: BACKFLOW: BACKFLOW PREVENTION DEVICE: CALCULATED GROSS SYSTEM VALUE: CCI-ENR: CITY: CONNECTION FEE CALCULATION DATE: A structure in which two or more separate residential units are constructed and designed so the occupants share common dining or restroom facilities and for which the occupants pay rent or other consideration. The flow other than in the intended direction of flow, of any non -potable waters, foreign liquids, gases or harmful or offensive substances into the City water supply as a result of reduced or reversed pressure. A device which, when properly installed between the City water supply system and the terminus of the customer's water line or point of ultimate use, will prevent Backflow. The Gross System Value calculated by the City on any Connection Fee Calculation Date in accordance with the methodology set forth in section 8-2-14 of this Code. The Construction Cost Index as published from time to time by the Engineering News -Record for U. S. Cities. (See http://www.enr.com) The City of Iona, Idaho. The date of any calculation of the Water System Connection Fee undertaken pursuant to section 8-2-14 of this Code. CROSS -CONNECTION: CURB STOP: CUSTOMER LINE: EQUIVALENT DOMESTIC USER: EQUITY BUY -IN METHODOLOGY EXISTING CUSTOMER: GROSS SYSTEM VALUE: INITIAL GROSS SYSTEM VALUE: NET COST: Any physical arrangement whereby the City water system is connected with any other water supply system, sewer, drain, conduit, pool, storage reservoir or any other source of water supply which contains or may contain contaminated water, sewage or other waste or liquids which may be harmful to human health or which may deleteriously affect the City water supply. The service line valve owned by the City and located near the customer's property line. The pipe, valves and fittings leading from the curb stop into the premises served, including the water box assembly and water meter (if any) attached thereto. A hypothetical customer whose needs for water service can be reasonably and prudently served by a standard one (1.0") diameter residential water service line. The methodology for calculating Water Service Connection Fees as set forth in this chapter. Any customer of the City whose water service line was connected to the City water system prior to the effective date of the Ordinance adopting the Equity Buy -in Methodology for calculating Water System Connection Fees. The total Net Cost to replace all System Assets including all design, engineering and construction costs associated therewith, together with all System Cash Revenues held in the City Water System Capital Improvement Fund, all as determined according to generally accepted engineering and accounting practices. The Gross System Value for the end of the year 2016 as determined by Schiess & Associates, PC, Engineering Company as set forth in that certain Engineering Report dated July 24, 2017, a copy which shall be filed with the City Clerk immediately following the publication of the Ordinance adopting this chapter and which shall be there maintained for inspection by the public. An amount equal to the cost of any System Improvement less any portion of such amount paid by a state or federal grant or with in -kind donations or grants in aid of development by a private person or entity. Such amount shall include amounts expended for the design, construction or construction management services necessary to install or otherwise put such improvements into an operable condition. NET SYSTEM VALUE: NEW CUSTOMER: OPEN HOSE: OUTSTANDING SYSTEM INDEBTEDNESS: SERVICE LINE: SINGLE FAMILY DWELLING: SYSTEM ASSETS: SYSTEM CAPACITY: SYSTEM CASH RESERVES: The Gross System Value at the time of any Connection Fee Calculation Date minus any Outstanding System Indebtedness, Unfunded Depreciation and state or federal grants, all determined as of the most recent Connection Fee Calculation Date. Any customer who connects his or her water service to a City -owned water main line after the effective date of the Ordinance adopting the Equity Buy -in Methodology. The use of water through a hose without a nozzle or other pressure limiting device. The aggregate unpaid principle balance of any indebtedness attributable to any bond or loan secured, obtained or issued by the City for the purpose of constructing System Assets, or for the purpose of enlarging, expanding or rehabilitating such improvements as such indebtedness exists at the time of any Connection Fee Calculation Date. The water pipe, valves and fittings laid from publicly owned main line to the water meter box (if present), or the curb stop, in the absence of a water meter box. All structures, except hotels, motels, rooming houses rooming houses and apartments, which contain sleeping, restroom, cooking and dining facilities. All main lines, distribution lines, pumps, water tanks, motor vehicles, back hoes, equipment, inventory, supplies, water rights and permits and real or personal property of every kind or nature constructed or purchased at City expense and used for the purpose of providing culinary water service to the residents of the City or for the purpose of providing for the operation and maintenance of such property. The total number of Equivalent Domestic Users which may be reasonably and prudently served by the Water System at the time of a Connection Fee Calculation Date, as calculated and determined in accordance with sound and generally accepted engineering principles. All cash revenues and reserves held or controlled by the City in the City Water System Capital Improvement Fund. SYSTEM Any improvement, expansion, increase in capacity or ENHANCEMENTS: enhancement of any System Asset installed, purchased or otherwise acquired solely for the use of the Water System after the date of the Engineers Report by Schiess & Associates, PC, Engineering Company filed with the City Clerk, pursuant to this Chapter. UNFUNDED An amount of depreciation for depreciable System Assets, DEPRECIATION: calculated in accordance with generally accepted accounting principles determined as of any Connection Fee Calculation Date for which no reserve has been set aside or otherwise maintained in the Water Line Capital Improvement Fund for the purpose of repairing, replacing or rehabilitating existing System Assets. WATER MAIN: Water pipe laid in a street, road, alley or easement within the City or within an easement controlled by the City or pursuant to a permit or license issued to the City. WATER METER: A water meter and its enclosure, valve and related appurtenances. WATER SYSTEM: The Water System owned and operated by the City. WATER SYSTEM Any bonded indebtedness issued for the purpose of BOND: constructing, enlarging, rehabilitating or expanding the capacity of the Water System. WATER SYSTEM Any loan, the proceeds of which were used to construct, LOAN: enlarge or increase Water System capacity or to rehabilitate any portion of the Water System. Section 2. Repeal of Section 8-2-14 of the lona City Code: Section 8-2-14 of the lona City Code is hereby repealed. Section 3. Adoption of New Section 8-2-14 of the lona City Code: A new Section 8-2-14 entitled "Water System Connection Fees" is hereby adopted as follows: 8-2-14: WATER SYSTEM CONNECTION FEES: (A) Findings. (1) The City owns and operates a municipal Water System comprised of main lines, distribution lines, pumps, water tanks, water pumps, back hoes, maintenance equipment, water rights and permits and other real or personal property of any kind together with other appurtenances, all as necessary to provide a sanitary, efficient and satisfactory water supply system to the residents of the City. The City has also established a Water Line Capital Improvement Fund into which revenues derived from the operation of the System are deposited and from which all enterprise expenses are paid. A portion of the fund balance in such Fund is comprised of System Cash Reserves and a depreciation account sufficient to maintain the financial integrity of the System. All of the assets of the Water System were acquired with System Revenues, ad valorem tax revenues, state and federal grants and private "in lieu" grants or donations. (2) Whenever a New Customer of the Water System connects to the Water System, he or she receives the benefit of the value of all Water System Assets ("Net System Value"). The Net System Value is not considered in establishing the monthly water service rates charged to water customers pursuant to Section 8-2-36 of this Chapter, except to the extent necessary to pay debt service for indebtedness incurred to construct System Enhancements. (3) The Water System has the capacity to serve a finite number of customers in terms of cumulative capacity as well as peak demand, which capacity is a function of the limits set forth in the City's water rights permits, as well as the mechanical capacity of the City to maintain satisfactory flow and pressure, as necessary to provide for the health, safety and welfare of the City residents. Whenever a New Customer connects to the System or whenever an Existing Customer enlarges his or her water service line, such connection or enlargement diminishes the total capacity of the System to maintain adequate pressure and water supply. (4) The establishment of a System Water Connection Fee will provide a means for a "buy -in" of system equity by New Customers who connect to the Water System or by Existing Customers who enlarge their existing water service connections. (5) In Loomis v. City of Hailey, 119 Idaho 434, 807 P.2d 1272 (1991), the Idaho Supreme Court recognized that the Idaho Revenue Bond Act (the "Act") (Idaho Code § 50-1027 et seq) authorizes collection of water and sewer connection fees as long as such fees are allocated and budgeted in conformity with the Act and are not established primarily for the purpose of raising revenue. Specifically, the Court recognized that a city ordinance authorizing the collection of "equity buy -in" water and sewer service connection fees from new users based upon a formula which defines the current value of the system and fairly apportions a share of such value to the new user, was reasonable and did not require a new user to pay an excessive amount such as would constitute an unlawful tax. (6) Customers who connect to a City -owned water main located immediately adjacent to their property receive a direct benefit from such Water Mains and such benefit is directly proportional to the length of the frontage of the Water Main along their property. Whenever such water mains are constructed at private expense or are donated to the City, the City may enter into reimbursement agreements with such private donors in order to allow such donors to recover a proportionate share of the costs of construction of such water mains, proportional to the length of frontage owned by such subsequent customer along such water mains. However, the costs of such privately funded water mains is not included in the methodology used to calculate the Water System Connection Fee contemplated by this chapter. (B) Imposition of Water System Connection Fee. No New Customer of the City Water System shall connect to a City -owned Water Main or Meter nor shall an Existing Customer enlarge an existing water service line connected to a City -owned Water Main or Meter, unless he or she has first paid a Water System Connection Fee as established pursuant to this section. Such connection fee shall be collected by the City Clerk at the time a building permit is issued for any structure utilizing such connection or, if no building permit is required, then prior to the issuance of a permit under section 8-2-22 of this chapter. The amount of such Water Service Connection Fee shall be calculated in accordance with the methodology set forth in this chapter. Notwithstanding the foregoing, no Water System Connection Fee shall be required if the connection is made or required solely for the purpose of providing fire flow protection capacity. (C) Methodology. The amount of the Water Service Connection Fee shall be calculated by dividing the Net System Value by the System Capacity (as expressed in EDUs) as calculated at the time of any Connection Fee Calculation Date and the resulting amount shall be the base water service connection fee for all customers who thereafter connect to the City water system for the first time after the date of the initial Connection Fee Calculation Date. If an Existing Customer requests a service line greater than one inch in diameter, then the base amount of the Water Service Connection Fee shall be adjusted by the multiplication factors set forth in subsection (D) of this Section. In the event an Existing Customer desires to enlarge or expand the size of his or her existing service connection, then the amount of the connection fee shall be equal to the base water connection fee, as adjusted by the multiplication factors set forth in such table, less the base water connection fee so calculated with respect to the customer's existing water service line or a one inch service line, whichever is greater. Once the amount of the Water Service Connection Fee has been determined by using such methodology, the City shall adopt a Resolution setting forth the amount of such base Water Service Connection Fee to be charged until a new connection fee is calculated on the next Connection Fee Calculation Date. (D) Multiplication Factors. The Water Service Connection Fee for each customer shall be equal to the Water Service Connection Fee then in effect, adjusted by the multiplication factors stated in the following table, dependent upon the diameter of the customer's desired water service line. Such multiplication factors are as follows: Water Service Size Multiplication Factor 1" 1.0 1 1/2" 2.0 2" 3.2 (E) In the event a customer requests a water service line greater than two (2) inches in diameter, then the multiplication factor shall be determined by the water superintendent in a fair and equitable manner, consistent with the principles set forth in this chapter and proportional to the amount of System Capacity reasonably estimated to be consumed by such customer. (F) Periodic Adjustment of Water Connection Fee. Not less than once every five years, the City shall review and adjust the base water service connection fee as provided in this subsection. Such adjustment shall be made by multiplying the Initial Gross System Value by a fraction, the numerator of which is the CCI-ENR for the year such adjustment is made and the denominator of which shall be the CCI-ENR for the year in which the Ordinance adopting this Chapter was passed. The Net Cost of any System Assets (after adjustment by the CCI-ENR index) made since the last Connection Fee Calculation Date shall then be added to such adjusted Gross System Value and the resulting amount shall be considered as the Calculated Gross System Value for the following five year period. The Net System Value shall then be determined by the deducting from such Calculated Gross System Value any and all Outstanding System Indebtedness, Unfunded Depreciation and state or federal grants, as may exist as of the Connection Fee Calculation Date. The amount of the base water connection fee shall then be determined in accordance with the methodology set forth in subsection (C) hereof. Section 4. Amendment of Section 8-2-15 of the lona City Code: Section 8-2- 15 of the lona City Code is repealed and re -adopted as follows: 8-2-15: WATER SYSTEM CAPITAL IMPROVEMENT FUND: A Water System Capital Improvement Fund is hereby established into which all revenues derived from Water System Connection Fees collected pursuant to section 8-2-14 of this Chapter shall be deposited. Expenditures from this Fund shall be made only for the purposes set forth in Section 8-2-16 of this Chapter, when authorized by the City Council. In no event shall any of the revenues so collected be used for General Fund purposes, operational expenses of the Water System (e.g. utility costs, labor costs or administrative expense) or for any purpose unrelated to the maintenance of the Water System or the development, expansion or rehabilitation thereof. Section 5. Amendment of Section 8-2-16 of the lona City Code: Section 8-2-16 of the lona City Code is amended as follows: 8-2-16: DISBURSEMENTS OF FUNDS: Disbursements may be made from the Water System Capital Improvement Fund for the following purposes only: (A) Construction and installation of City water wells, water tanks, pumps, electrical panels and lines and appurtenances. (B) Construction, installation and extension of City water mains, service lines, including costs of construction of mains with excess capacity. (C) Payment of principal and interest on any revenue bond or bonds issued by the City to defray the cost of construction, extension or betterment of the City Water System. (D) Reimbursement of front footage connection fees to any developer or owner who has constructed that portion of a water main for which a front footage connection fee has been charged by the City, provided a reimbursement agreement has been approved by the Council and executed by the developer or owner. (E) Repair, maintenance, rehabilitation and enlargement of any capital improvement of the City Water System. (F) Purchase of motor vehicles, backhoes and other mechanical equipment used primarily for the maintenance, repair, enlargement or improvement of the Water System or System Assets. Section 6. Adoption of Section 8-2-16A of the lona City Code: Section 8-2- 16A of the lona City Code is adopted as follows: 8-2-16A: FRONT FOOTAGE CONNECTION FEES: Before connecting to any portion of a public water main constructed at the sole expense of a private person or entity, any person desiring such connection shall pay, in addition to the Water System Connection Fee, a Front Footage Connection Fee of thirty dollars ($30) per front foot of property to be served by such water main. Notwithstanding the foregoing, no front footage connection fee shall be charged to the private person who constructed such portion of the water main. If any person constructs a water main entirely at his or her expense and dedicates it to the City, the City may, by written agreement, pay over to such person all front footage connection fees collected by the City with respect to such water main from any other person who subsequently connects to such water main. In no event shall such agreement extend over a period of greater than ten (10) years nor shall such agreement be assignable to any other party or successor in interest. Section 7. Methodology. Text that is underlined in the preceding sections means new text added to the former Ordinance or City Code Section, and text that is stricken through means text that is being deleted from the former Ordinance or Code Section. Text that is moved from one location in the former Ordinance or Code Section to another location is similarly shown as underlined text. Section 8. Severability. The sections and subsections of this Ordinance are severable. The invalidity of any section or subsection shall not affect the validity of the remaining sections or subsections. Section 9. Preservation of Prior Ordinance. The sections of the City Code repealed or amended by this Ordinance shall be preserved to the extent necessary to allow the arrest, prosecution and punishment of any person who violates such provisions prior to the effective date hereof. Section 10. Effective Date. This Ordinance shall become effective upon its passage, execution and publication in the manner provided by law. PASSED BY THE COUNCIL AND APPROVED BY THE MAYOR this day of August, 2017. Brad Andersen Mayor ATTEST: .City Clerk t • p (rrT. STATE OF IDAHO )ss. County of Bonneville I, SHARA ROBERTS, CITY CLERK OF THE CITY OF IONA, IDAHO, DO HEREBY CERTIFY: That the above and foregoing is a full, true and correct copy of the Ordinance entitled, "AN ORDINANCE OF THE CITY OF IONA, IDAHO; AMENDING SECTIONS 8-2- 2, 8-2-14, 8-2-15 AND 8-2-16 AND ADOPTION OF SECTION 8-2-16A OF THE IONA CITY CODE RELATIVE TO WATER SYSTEM CONNECTION FEES; ADOPTING AN "EQUITY BUY -IN" METHOD OF CALCULATING WATER SYSTEM CONNECTION FEES; PRESERVING PRIOR ORDINANCE; PROVIDING FOR METHODOLOGY; PROVIDING FOR SEVERABILITY AND ESTABLISHING AN EFFECTIVE DATE." Shara Roberts City Clerk GaWPDATA\DWSL708 City of Iona\Public Works`.Water Department\Connection Fees \Connection Fee ORD.O.wpd:sm