FINAL BILL REPORT
SSB 6013
C 389 L 89
BYSenate Committee on Governmental Operations (originally sponsored by Senators Bluechel, Talmadge, Fleming, Conner and McDonald)
Regulating capacity charges imposed by a metropolitan municipal corporation.
Senate Committee on Governmental Operations
House Committe on Local Government
SYNOPSIS AS ENACTED
BACKGROUND:
There is currently only one operating metropolitan municipal corporation in the state, the Municipality of Metropolitan Seattle (METRO). METRO operates sewage collection and treatment facilities under its statutory water pollution abatement authority. METRO does not have the authority to impose connection charges upon new users of its sewage facilities in addition to the uniform rates that all customers pay. Other entities of local government--cities, counties, sewer districts and water districts--have such authority. Connection charges are imposed to ensure that new customers pay a proportionate share of the capital costs of facilities to match the sum already paid by existing customers through regularly imposed rates. The charges are usually used to retire debt incurred to finance construction.
Sewer districts have the authority to impose liens against real property to enforce collection of delinquent connection and sewage disposal charges. If charges are delinquent for more than 60 days, a lien may be foreclosed.
Sewer and water district connection charges may include the costs of connection and an equitable share of the cost of the entire system. This latter charge is required to be reasonable; there are no other specified standards.
Sewer and water districts have the option to enter into "latecomer contracts" with property owners who finance the construction of sewer and water facilities. The contracts provide for reimbursement to property owners by other owners who later connect to the facilities. Reimbursement payments consist of a pro rata share of the cost of construction.
SUMMARY:
A metropolitan municipal corporation engaged in the transmission, treatment, and disposal of sewage may impose a capacity charge when a user connects, reconnects or establishes a new service. The charge will be based upon excess capacity built into capital projects identified in the metropolitan municipal corporation's comprehensive water pollution abatement plan from January 1, 1982 to the effective date of the act.
The capacity charge must be approved by the metropolitan municipal corporation's governing council and reviewed and reapproved annually. It cannot exceed $7.00 per month collected over 15 years for connections and reconnections occurring prior to January 1, 1996. For connections and reconnections occurring after January 1, 1996 and prior to January 1, 2001, the monthly capacity charge cannot exceed $10.50 per month collected over 15 years. For connections and reconnections occurring after January 1, 2001, the capacity charge collected over 15 years cannot exceed 50 percent of the basic sewer rate established at the time of the connection or reconnection.
The capacity charge for a building other than a single-family residence will be based on the projected number of residential customer equivalents represented by the building, considering its intended use.
Collection of the capacity charge will be enforced in the same manner provided for enforcement of sewer district charges. The metropolitan municipal corporation must notify a mortgage or deed of trust holder prior to foreclosing a lien for delinquent charge payments.
A sewer or water district board of commissioners must base charges for connection to a district's sewer or water system on a pro rata share of specified costs. These costs include the cost of existing facilities, the cost of facilities planned for construction within the next ten years according to a district's adopted comprehensive plan, and other costs borne by the district which are directly attributable to the improvements required by property owners seeking to connect to the sewer or water system. A connection charge can include accrued interest applied from the date of the construction of the sewer or water system until the connection or ten years, whichever is shorter. The accrued interest will be based upon the rate applicable to the district at the time of the construction or major rehabilitation of the sewer or water system, or at the time of installation of the sewer or water lines to which the property owner is seeking to connect.
Revenue from connection charges (excluding permit fees) are to be considered payments in aid of construction as defined by Department of Revenue administrative rule.
In some circumstances, sewer and water districts must prepare a long-term plan for financing additions to and betterments of sewer and water systems.
If a sewer or water district approves sewer or water system extensions that will be financed by property owners, the district must, upon an owner's request, enter into latecomer contracts for reimbursement of the owners. Construction of an owner-financed extension is contingent upon comprehensive plan approval. Connection of the owner-financed extension is conditioned upon construction according to plans approved by the district and adherence to other district requirements. Property owners who paid for the original construction costs are relieved of any further charges if they connect other property to the facilities. Districts may finance a project and be reimbursed in the same manner, if the district board of commissioners specifies the conditions of district participation in the project in a resolution. Latecomer contracts must be recorded in the county auditor's office.
VOTES ON FINAL PASSAGE:
Senate 36 11
House 94 1 (House amended)
Senate 37 6 (Senate concurred)
EFFECTIVE:July 23, 1989