HOUSE BILL REPORT

SSB 6013

As Amended by the House

BYSenate Committee on Governmental Operations (originally sponsored by Senators Bluechel, Talmadge, Fleming, Conner and McDonald)

Regulating capacity charges imposed by a metropolitan municipal corporation.

House Committe on Local Government

Majority Report:  Do pass with amendments.  (13)

      Signed by Representatives Haugen, Chair; Ferguson, Ranking Republican Member; Horn, Nealey, Nelson, Nutley, Phillips, Raiter, Rayburn, Todd, Wolfe, Wood and Zellinsky.

House Staff:Steve Lundin (786-7127)

AS PASSED HOUSE APRIL 14, 1989

BACKGROUND:

Cities, towns, counties, sewer districts, and water districts are granted the authority to impose connection charges for any connections to their sewer lines.  City and town statutes limit the extent of these charges.  The supreme court has held that inferentially, a public utility district possesses the authority to impose connection charges.

Water districts and sewer districts are permitted to allow payment of a connection charge with interest in installments over a period of not to exceed 15 years.

SUMMARY:

Metropolitan municipal corporations are authorized to impose capacity charges on users of their sewage system when the user connects, reconnects, or establishes a new service.  The capacity charges must be based upon the cost of the sewage facilities' excess capacity that is necessary to provide sewerage treatment for new users of the system.  The metropolitan council must approve the level of such capacity charges annually, but the capacity charges may not exceed the following:

(1)  Seven dollars per month per residential customer equivalent for connections and reconnections occurring prior to January 1, 1996;

(2)  Ten dollars and fifty cents per month per residential customer equivalent for connections and reconnections occurring after January 1, 1996, and prior to January 1, 2001; and

(3)  Not to exceed 50 percent of the basic sewer rate per residential customer equivalent established by the metropolitan municipal corporation at the time of the connection or reconnection after January 1, 2001.

Capacity charges for buildings other than single family residences shall be based upon the number of residential customer equivalents.

Failure to pay the charges gives rise to a lien in the same manner as failure to pay periodic sewer rates or charges.

Criteria are provided for sewer districts and water districts to calculate their connection charges, which include the pro rata share of the cost of existing facilities and new facilities planned to be constructed in the next 10 years and other costs borne by the district that are attributable directly to the improvements required by property owners seeking to connect to the system.  The connection charges may include interest charges, but not to exceed a rate commensurate with the rate of interest applicable to the district at the time of constructing the system, and such interest charge may not be permitted for a period in excess of 10 years.  Revenues from connection charges, excluding permit fees, are to be considered payments in aid of construction.

The general comprehensive plans of sewer districts and water districts must include a long-term capital improvement plan if an area is annexed to the district.

Standards are provided for the contract between a sewer district or water district and a private party, concerning the construction of a sewer line or water line by the private party that is connected to the district's system.  Under this contract, any party who connects a line with the privately built sewer line or water line, over a period of up to 15 years, must pay a pro rata share of the cost of the privately built sewer line or water line to the party that constructed the line.

Water districts and sewer districts are permitted to join private persons in financing sewer or water systems that are connected to the district's system, and the water or sewer districts may be reimbursed in the same manner as the private persons are reimbursed.  When someone connects to this sewer or water system extension for 15 years after such facilities are constructed.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Kevin Clark, City of Seattle; Chuck Henderson and Jim Williams, Seattle Master Builders; Mark Triplett, Building Industry of Washington; Jan Tesuge, Olympia Master Builders.

House Committee - Testified Against:      Joe Daniels, Washington State Association of Water/Wastewater Districts (Con: Secs. 2-16); Jim Miller, Federal Way Water Sewer District (Con: Secs. 2-16); Jim Henry, Des Moines Sewer District (Con: Secs. 2-16).

House Committee - Testimony For:    (Original Bill:)  This is a fair way to spread sewer or water facility costs among the users of such facilities.  This is a compromise bill.  Linkage of the metro portion of the bill and the sewer and water district portion is essential.  Some districts are not reasonable.

House Committee - Testimony Against:      (Original Bill:)  This is too limiting on sewer or water districts.  This is a major policy change.  We want to be sure existing ratepayers do not subsidize new growth.  The wrong criteria were listed.  Many of the terms are not defined. Mandatory extensions could overburden an existing system.  With whom is this a compromise?