Fresno council delays vote on water fee that would add over $4,000 to cost of new home

A proposal to establish a new set of water fees that would impose a charge of $4,246 for every new home has been pushed off for two weeks by the Fresno City Council.

The charges are intended to go toward meeting water needs for future growth, particularly expanding Fresno’s ability to treat surface water, infrastructure to distribute water to new development, and to dig new wells and increase the capacity to recharge a depleted groundwater basin.

Representatives of the development community presented objections to at least a portion of the fees, reiterating some of the arguments they made when the proposal was raised in December. Among the concerns is a provision for collecting money from developers for additional treatment capacity for groundwater, potentially through expanding the city’s Northeast Surface Water Treatment Plant.

“What we would like is to request that the council direct its staff to remove the northeast facility from this decision and convene with the industry to work out some of the remaining concerns,” said Tim Taylor, a representative of Granville Homes and Wathen Castanos Homes.

The “water capacity fee,” as it is called, would replace a tangle of more than two dozen different fees now charged for water connections, water pipelines and well treatment.

The change in the water-fee structure is necessary, according to the city’s Public Utilities Department, because the current system of charges – last revised about 10 years ago – cannot keep up with what it takes for Fresno to provide the pipeline and infrastructure capacity to deliver water to new developments, or for the necessary water supplies to keep up with demand. The city also faces problems with the underground water table as well as the state’s Sustainable Groundwater Management Act, a set of laws requiring cities and counties to reduce their reliance on pumping groundwater.

The fees recommended Thursday by Public Utilities Director Thomas Esqueda are considerably lower than those proposed in December. For a typical single-family home with a one-inch water meter connection, the connection fee would be $4,246. In December, the proposal was $6,373. For commercial and industrial properties with larger water meter connections, the proposed fees now are also significantly lower than a few months ago.

The fees would only be charged for new development, not existing homes and businesses, because they are intended only to accommodate the demands created by future growth. That includes $143.9 million in new water wells, recharge basins and distribution pipelines.

At a 1.8 percent annual growth rate in the coming years, Esqueda said he estimates the city will need to develop the capacity to provide 30 million more gallons per day from surface water supplies. He added that the $4,246-per-home figure is based on that anticipated demand, whether it comes from doubling the capacity of the Northeast Surface Water Treatment Plant or providing that treatment capacity elsewhere.

“We’re going to need another 30 million gallons a day – somewhere,” Esqueda said. And the costs to do that, and to build the water mains needed to get the water to different parts of the city, are estimated at about $161 million.

But developers said that because the city staff identified the northeast plant, the proposal should trigger a detailed analysis under the California Environmental Quality Act before that portion of the fees can be charged.

“We want to make sure that new home buyers pay their fair share. But we want to make sure it’s fair and equitable,” Granville Homes’ Darius Assemi told the council Thursday. “We’re simply going to pass it through. … We want to make sure an appropriate fee is put together with the correct amounts.”

Assemi concurred with representatives of the Building Industry Association of Fresno and Madera Counties and other developers to “adopt the fee, except anything related to the northeast plant.”

But putting off the collection of fees until the need for the future water capacity is demonstrated is simply asking for trouble, City Manager Bruce Rudd said.

“People need to understand at some point in time that we’re going to need to do this,” Rudd told the council. “If you do it later, the cost is going to be higher.”

Rudd and Esqueda both described the dispute between the city’s staff and the developers as a policy decision that ultimately needs to be made by the council. “You’re either going to call the ball at what the staff is suggesting, or you’re going to come in at something less,” Rudd said.

This story was originally published March 23, 2017 at 4:47 PM with the headline "Fresno council delays vote on water fee that would add over $4,000 to cost of new home."