Agenda Date: 12/03/2024
Subject:
Title
Resolution 124-2024: Adopting the 2025 Fee Schedule, specifically for Wastewater, Stormwater, and Affordable Housing Purposes
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by: |
Kevin Orton, Budget Manager |
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Presentations: |
Kevin Orton, Budget Manager Tiffany Hooten, Finance Director |
PURPOSE:
Does city council support adoption of the 2025 fee schedule for wastewater, stormwater, and affordable housing?
LONG-TERM OUTCOME(S) SERVED:
High-Quality Governance
DISCUSSION:
Fees are charged to customers, citizens, and other parties for certain city services. The purpose of a fee is to help defray the cost of the city providing those services and not to raise revenue for general services. Fees must be evaluated to ensure that the fee is commensurate with the service provided. City Council adopts a fee schedule that details the fees that will be charged for the fiscal year period of January 1 through December 31. The fee schedule, however, does not encompass all city-wide fees such as library and museum fees or license fees such as liquor and medical/retail marijuana.
Last year, council requested study sessions in future years to consider fee-setting policies and approaches. Staff is currently completing a cost of services study to evaluate development services fees. The results of that study, along with information on all other fees, will be presented at the January 14th study session with recommendations to adjust the 2025 Fee Schedule based on the results of the study.
At this time, staff is recommending adjustments only to the wastewater and stormwater utility fees based on analysis from 202 internal rate studies for 2025. These fees generate critical revenue for their corresponding utility systems, and having them in place for January 1, 2025, is an important revenue practice.
In 2022, council passed the Inclusionary Housing Ordinance. This ordinance includes a fee-in-lieu that developers may pay the city in-lieu of providing minimum affordable units as outlined in the ordinance. Section 4-2-4 of the Inclusionary Housing Ordinance says that the fee-in-lieu paid by developers into the Affordable Housing Fund be adjusted annually by CPI. For this reason, the IHO fee-in-lieu is also recommended for adjustment with this resolution
BACKGROUND:
The current 2024 fee schedule was adopted by resolution on December 5, 2023.
FISCAL IMPACTS:
The following are the proposed fee changes for 2025:
Wastewater and Stormwater Utilities Fees
Annual sewer utility fees are proposed to increase by 5% for operational and capital needs of the sewer utility system. Annual stormwater utility fees are proposed to increase by 5% for operational and capital needs of the stormwater drainage system. The total impact to a single-family residence for both sewer and stormwater fee increases in 2025 is $22.00 annually, or approximately $1.84 per month.
Affordable Housing Fee-in-lieu
Section 4-2-4 of the Inclusionary Housing Ordinance says that the fee-in-lieu paid by developers into the Affordable Housing Fund be adjusted annually by CPI. The ordinance defines CPI as “United States Department of Labor 150 Statistics (Bureau of Labor Statistics) Consumer Price Index for All Urban 151 Consumers, All items, for the Denver-Aurora-Lakewood Colorado area.” The 2023 CPI for the Denver-Aurora-Lakewood Colorado area is 5.22%. This ordinance would increase the fee-in-lieu by 5.22%.
A red-lined version of the 2025 Proposed Fee Schedule is attached as reference for comparison purposes.
STAFF RECOMMENDATION:
Staff recommends approval of the resolution adopting the 2025 fee schedule.
ALTERNATIVES:
1. Adopt fees as proposed.
2. Adopt differing fees, understanding the impact to current and future projects.
3. Maintain fees at the 2024 level, understanding the impact to current and future projects.
PROPOSED MOTION:
Proposed Motion
I move to approve Resolution 124-2024 adopting the 2025 Fee Schedule, specifically for Wastewater, Stormwater, and Affordable Housing Purposes.