Impact fees roil wastewater-rate panel

With members divided over what to do, the Little Rock Wastewater Utility’s rate advisory committee argued to a stalemate Wednesday evening on whether to continue supporting a recommendation to the city Board of Directors for impact fees on new sewer lines.

In August, the Board of Directors asked the committee to reconvene to answer questions about the fee proposal, leading to Wednesday’s meeting and one held in September. After Wednesday’s meeting, Reggie Corbitt, the utility’s chief executive officer, said he didn’t propose that the committee meet again.

“The ordinance will be on the table” for the city board to consider impact fees, Corbitt told the group, whether or not the committee changes its recommendation. “If they want to turn it down, they’ll turn it down.”

Earlier in the meeting, during a discussion that spiraled into name-calling and raised voices, Corbitt told committee members that they “needed to say yes or no,” because if there no longer was support for the fees, there wasn’t a need to answer the questions submitted to the board. Eventually committee members decided against taking a vote.

Impact fees are charged to developers who build new commercial or residential buildings, although those fees are often passed on to the purchasers of those properties. The rationale for impact fees is to make developers pay the cost of new infrastructure rather than a utility’s existing customers.

The committee did agree, 7-1, to revert to its original recommendation for collecting any fee at the point of closing instead of when a sewer permit is issued. That change will only go into effect if city directors approve the impact fees.

The committee recommended in 2009 that the city collect impact fees on new sewer connections, part of five rate or fee increases meant to help pay for wastewater system expansion and repairs. City directors approved two of the proposals, changed one and eliminated another, with only the issue of impact fees left undecided.

Keith Wingfield, representing homebuilders, said the committee’s recommendations were meant to be considered collectively, and that if the proposed impact fee was going to be separated from the other four then “we don’t believe an impact fee is necessary.”

But Jim Lynch, representing city neighborhoods, said the city board didn’t ask the committee if it still supported impact fees but only wanted clarifications on the issue.

“We were not asked the question, ‘do we still like this?’” Lynch said.

Nell Matthews Mock, representing civic groups, asked how the utility would replace the revenue that impact fees were intended to provide if those fees aren’t implemented. Corbitt replied that the utility would need to raise rates.

City directors agreed to increase the utility’s rates last year through 2016 to help cover increasing costs. The utility also intends to seek four more rate increases through 2019, staff members said in September.

Arkansas, Pages 11 on 10/24/2013

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