HomeMy Public PortalAboutORD 293-08-23_Water System Methodology Instrument p 1753249
Bonneville County, Idaho Falls, Idaho
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Ex-Officio Recorder Deputy _____ -
Index to ORDINANCE
ORDINANCE NO. 293-08-23
AN ORDINANCE OF THE CITY OF IONA, IDAHO;
AMENDING SECTIONS 8-2-2 AND 8-2-24 OF THE IONA CITY
CODE; MODIFYING DEFINITIONS AND CLARIFYING THE
CALCULATION OF THE WATER SYSTEM CONNECTION
FEE; PROVIDING METHODOLOGY; PRESERVING PRIOR
ORDINANCES IN EACH INSTANCE; 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 8-2-24 of the Iona City Code. Section 8-2-24 of
the Iona City Code is amended as follows:
8-2-2: DEFINITIONS.
(A) Certain terms used in this Chapter shall have the meanings ascribed below:
(1) APPLICANT: Any person who owns Customer Property
and, who (with respect to such Customer
Property) desires to become a Customer
and/or a Water User.
(2) BACKFLOW: 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, negative, or
back pressure.
(3) BACKFLOW PREVENTION An apparatus that prevents Backflow that
ASSEMBLY: is on the most current list of approved
backflow prevention assemblies certified
by the University of Southern California
Foundation for Cross-Connection Control
and Hydraulic Research.
(43 CALCULATED GROSS The Gross System Value calculated by the
SYSTEM VALUE: City on any Connection Fee Calculation
Date in accordance with the methodology
set forth in Section 8 2 21 of this Code.
(--5) CCI ENR: The Construction Cost Index as published
.. • —
from time to time by the Engineering
News Record for U. S. Cities. (See
http://www.enr.com).
(46) CLASSIFICATION: The classification of a Customer Property,
as specified in Section 8-2-9 of this Code,
for purposes of determining how many
Equivalent Domestic Users(or EDUs) are
associated with such Customer Property.
(57) CONNECTION FEE The date of any calculation of the Water
CALCULATION DATE: System Connection Fee undertaken
pursuant to Section 8-2-24 of this Code.
(6S) CROSS-CONNECTION: Any physical arrangement whereby the
City water system is connected or
potentially 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, chemicals, sewage or other waste
or liquids which may be harmful to human
health or which may deleteriously affect
the City water supply.
(74) CURB STOP: The Service Line valve owned by the City
and located near the property line of the
Customer Property.
(84-9) CUSTOMER: Any person who owns Customer Property
to which Water Service is actually
provided.
(944-) CUSTOMER LINE: The water pipe,valves,and fittings laid on
the Customer Property from, but not
including, the Water Meter or (if there is
no Water Meter) the Curb Stop to the
place, location, building, structure, and/or
improvement provided with Water
Service, that is physically capable of
being provided with Water Service, or to
which an Applicant or Customer seeks to
have Water Service provided.
(102) CUSTOMER PROPERTY: The parcel of land on which is located any
place, location, building, structure, and/or
improvement provided with Water
Service, that is physically capable of
being provided with Water Service, or to
which an Applicant or Customer seeks to
have Water Service provided.
(113) EQUIVALENT DOMESTIC A hypothetical Customer Property with
USER(or EDU): needs for Water Service equivalent to one
residential unit.
(124) EQUITY BUY-IN The methodology for calculating Water
METHODOLOGY: Service Connection Fees as set forth in
this Chapter.
(133) EXISTING CUSTOMER: Any Customer whose Service Line was
connected to the Water System prior to the
relevant Collection Fee Calculation Date.
(146) FRONTAGE: The side of a parcel of land abutting on a
public street from which primary
pedestrian access to the street is made.
(157) GROSS SYSTEM VALUE: The total Net Ccost to replace duplicate all
System Assets including all design,
engineering,. and construction costs
associated therewith;; minus any accrued
depreciation on the System Assets; plus
together-with all System Cash Revenues
held in the City Water System Capital
Improvement Fund,_all as determined at
the time of any Connection Fee
Calculation Date according to generally
accepted engineering and accounting
practices.
(1-8) INITIAL GROSS SYSTEM The Gross System Value for the end of the
VALUE:
Associates, PC, Engineering Company as
set forth in that certain Engineering
Report dated July 21, 2017, a copy of
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.
(169) MONTHLY WATER SERVICE The monthly fee charged pursuant to
FEE: Section 8-2-28 of this Code for Water
Service.
(1720) MONTHLY WATER SERVICE The monthly charge per EDU for Water
RATE: Service, which shall be specified from
time to time by Resolution of the Council.
(21) NET COST: 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,
services necessary to install or otherwise
put c o ntom nto elaVlIJble
eendit-ion.
(1822) NET SYSTEM VALUE: The Gross System Value at the time of
any—Connection ee 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.
(1923) NEW CUSTOMER: Any Applicant or Customer who connects
a Service Line (or who desires to connect
a Service Line) to the Water System after
the relevant Collection Fee Calculation
Date.
(204) OPEN HOSE: The use of water through a hose without a
nozzle or other pressure-limiting device or
assembly.
(215) OUTSTANDING SYSTEM The aggregate unpaid principle balance of
INDEBTEDNESS: 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.
(226) SERVICE CHARGE: The charge specified in Section 8-2-32(A)
of this Code.
(237) SERVICE LINE: The water pipe, valves, and fittings laid
from a Water Main to the Water Meter (if
present on the particular Customer
Property), or (if there is no Water Meter
on the particular Customer Property) the
Curb Stop.
(24S) SYSTEM ASSETS: All of the Water Mains, Service Lines,
distribution lines,water lines,water pipes,
connections, Curb Stops, Water Meters,
water tanks, water pumps, backhoes,
motor vehicles, equipment, inventory,
supplies, insurance, agreements, water
rights and permits, and other real or
personal property of any kind together
with other appurtenances owned or
operated by the City, used (in whole or in
part) for the purpose of providing
domestic or culinary water to Customer
Property or for the purpose of providing
the operation and maintenance of such
property.
(259) SYSTEM CAPACITY: The total number of Equivalent Domestic
Users (or EDUs) that 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.
(2638) SYSTEM CASH RESERVES: All cash revenues and reserves held or
controlled by the City in the City Water
System Capital Improvement Fund.
(273-l) SYSTEM ENHANCEMENTS: Any improvement, expansion, increase in
capacity, or enhancement of any System
Asset or any new System Asset added to
the Water System installed, purchased, or
otherwise acquired solely for the use of
the Water System.
(32) UNFUNDED DEPRECIATION: An amount of depreciation for depreciable
System Assets, 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. ntaine i the«Tat r System
Capital Improvement Fund for the
purpose of repairing, replacing or
rehabilitating existing System Assets.
(2833) WATER DEPARTMENT: The City's Public Works Department.
(2934) WATER MAIN: Water pipe, valves, and fittings 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.
(305) WATER METER: A water meter, i.e., the device (of
whatever configuration) that measures
water flow and/or usage, as well as its
enclosure, valve, and related
appurtenances.
(316) WATER SERVICE: The supply and provision of water from
the Water System.
(327) WATER SYSTEM: All of the System Assets necessary to
properly supply, provide, and distribute
domestic or culinary water to Customer
Property.
(33g) WATER SYSTEM BOND: Any bonded indebtedness issued for the
purpose of constructing, enlarging,
rehabilitating, or expanding the capacity
of the Water System.
(349) WATER SYSTEM LOAN: Any loan, the proceeds of which were
used to construct, enlarge or increase
Water System capacity or to rehabilitate
any portion of the Water System.
(3549) WATER USER: Any person—regardless of whether such
person is a property owner, landlord,
tenant, agent, or otherwise—who receives
Water Service or who has the ability to
receive Water Service on a Customer
Property.
Section 2. Amendment of Section 8-2-24 of the Iona City Code. Section 8-2-24 of
the Iona City Code is amended as follows:
8-2-24: WATER SYSTEM CONNECTION FEE. For purposes of furthering the Equity
Buy-In Methodology, the City establishes a Water System Connection Fee, imposed pursuant to
this Section.
(A) Findings.
(1) The City owns and operates the municipal Water System and System Assets
necessary to provide a sanitary, efficient, and satisfactory water supply system to
Customers. The City has also established a Water System 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 Water System Capital Improvement Fund is comprised of System Cash
Reserves and a depreciation account sufficient to maintain the financial integrity of
the System. All the System Assets were acquired with revenues derived from
providing Water Service, ad valorem tax revenues, state and federal grants, and
private"in lieu"grants or donations.
(2) Whenever an Applicant connects to the Water System and becomes a New
Customer, he or she receives the benefit of the Net System Value. The Net System
Value is not considered in establishing the Monthly Water Service Rate or Monthly
Water Service Fee charged to Customers pursuant to Section 8-2-28 of this Code,
except to the extent necessary to pay debt service for indebtedness incurred to
construct System Enhancements.
(3) The Water System has the capacity to provide Water Service to 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 and permits, as well as
the mechanical capacity of the City to maintain satisfactory flow and pressure in the
Water System, as necessary to provide for the health, safety, and welfare of the
Customers and City residents. Whenever a New Customer connects to the System
or whenever an Existing Customer enlarges his or her 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 (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 Idaho Revenue Bond
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) This holding in Loomis, subsequently approved of in Viking Construction, Inc. v.
Hayden Lake Irrigation District, 149 Idaho 187, 233 P.3d 118 (2010) and North
Idaho Building Contractors Association v. City of Hayden, 158 Idaho 79, 343 P.3d
1086 (2015), forms the basis for the Equity Buy-In Methodology employed by the
City. As explained there, for cities,"the cost approach is the most feasible method
for valuation [of a municipal utility system]. Under that method, value is based
upon the estimated cost of duplicating the improvements to the real property,minus
accrued depreciation, plus the value of the land, if any." North Idaho Building
Contractors Association, 158 Idaho at 82,n. 2, 343 P.3d at 1089, n. 2.
(7) 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 Applicant or New Customer shall
connect to a City-owned Water Main, Service Line, Curb Stop, or Water Meter, nor shall
an Existing Customer enlarge an existing Customer Line or Service Line connected to a
Water Main, Curb Stop, or Water Meter, unless he or she has first paid a Water System
Connection Fee, as established pursuant to this Section, in relation to each Customer
Property to be connected or the Service Line of which is to be enlarged. Such Water
System 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 8-2-13 of this Code. 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 protection capacity.
(C) Methodology. The amount of the base Water Service Connection Fee at any applicable
Connection Fee Calculation Date shall be calculated by dividing the Net System Value by
the System Capacity (expressed in a number of EDUs) as calculated at the time of any
Connection Fee Calculation Date and the resulting amount shall be the base Water Service
Con ection Fee fora >C„sterr er Prope ty that : ected to the City Water System fo_
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the first time after the relevant Connection Fee Calculation Date. This base Water Service
Connection Fee shall be adjusted as set forth in Subsection (D) of this Section, as
applicable to the particular Customer Property of the New Customer, or adjusted as set
forth in Subsection (E) of this Section, as applicable to an Existing Customer making any
changes to their Service Line. In the ev nt a: Existing C„stomer d sires t„ enl
Water Service Connectiert-Fee-shathbe-equal-te-t.he-base-Water-S-erviee-C—ortneetien-FeeTas
Service Connection Fee calculated with respect to the Customer's existing Service Line or
a one inch Service Line, whichever is greater. Once the amount of the base 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) Fee Adjustments based on Service Line for New Customers. For purposes of calculating
the Water Service Connection Fee for each Customer Property of a New Customer, the
relevant fee shall be adjusted as specified in this subsection.
(1) If the desired Service Line is one inch (or less) in diameter, no adjustment is
necessary.
(2) If the desired Service Line is more than one inch in diameter,but less than or equal
to two inches in diameter, the Water Service Connection Fee shall be increased by
the increase in cost to the City from the cost of a one-inch Service Line, as
estimated in a fair and equitable manner by the Water Department as of the date of
the request.
(3) If the desired Service Line is greater than two inches in diameter,the Water Service
Connection Fee shall be increased by an amount determined by the Water
Department,with the written agreement of the Council.
(E) Fee Adjustments for Existing Customers changing their Service Line. For purposes of
calculating the Water Service Connection Fee for the Customer Property of an Existing
Customer who desires to enlarge or expand the size of his or her existing Service Line
Connection,the relevant fee shall be adjusted as specified in this subsection.
(1) The base Water Service Connection Fee for the Existing Customer's current
Service Line is calculated in accordance with Subsection(D), above.
(2) Then, the base Water Service Connection Fee for the proposed enlarged or
expanded Service Line is calculated in accordance with Subsection(D), above.
(3) The adjusted fee is the result of the fee calculated in paragraph(E)(2),minus the fee
calculated in paragraph (E)(1), above.
Periodic Adjustment of Net System Value. Not less than once every five years, the
Council shall review and adjust the base Net System Value as provided in this Subsection.
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 2017. The Net Cost of any
System Enhancements (after adjustment by the CCI ENR index) made to the Water
System 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 pened. The-Net System Value shall then be determined
by the deducting from such Calculated Gross System Value any and all Outstanding
of the then current Connection Fee Calculation Date. Using this newly calculated Net
System Value, the amount of the base Water Service Connection Fee shall then be
determined in accordance with the methodology set forth in Subsection(C) hereof.
Section 3. 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,being stricken through in its prior position.
Section 4. Preservation of Prior Ordinance. The sections of the Iona City Code
repealed and/or amended by this Ordinance shall be preserved to the extent necessary to allow the
arrest, prosecution, punishment, and indebtedness of any person who violates such provisions
prior to the effective date hereof.
Section 5. 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 6. 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 I 5—day of
, 2023.
Dan Gubler
Mayor
ATTEST:
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Keri West ' `: `• . A.) ;;; ,
City Clerk (SEAL) s �4,"
STATE OF IDAHO )
)ss.
County of Bonneville )
I, KERI WEST, 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 AND
8-2-24 OF THE IONA CITY CODE; MODIFYING DEFINITIONS AND CLARIFYING THE
CALCULATION OF THE WATER SYSTEM CONNECTION FEE; PROVIDING
METHODOLOGY; PRESERVING PRIOR ORDINANCES IN EACH INSTANCE;
PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE."
Keri est
City Clerk
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