Water and Sewer System Capacity Rental Charge

UPDATE- 3/4/10

Lakehaven staff continues to work on the Capital Facility Charge rental program approved by the Board of Commissioners for implementation beginning in 2010.  Under the program, a Capacity Rental Charge applies to commercial property (including multi-family residential facilities and mobile home parks) within the District using more capacity in the water and sewer system than was acquired through the payment of Capital Facility Charges.  This payment typically occurs either at the time of connection or when a property was assessed this charge as part of the formation of a Utility Local Improvement District.

The District measures capacity in the water and sewer system in units of service, referred to as Equivalent Residential Units (ERU), that approximate the demand a single family home would place on the water and sewer systems. An ERU of capacity in the water system is measured as the consumption of an average of 255 gallons of water per day during a two-month billing period. Sewer system ERU’s represent the use of 220 gallons per day of flow to the sewer system, measured by water consumption at the property.  The current Capital Facility Charge is $3,097.00 per ERU for the water system and $2,784.00 for sewer system.

Under the rental program, property owners will be charged 1% of the current Capital Facility Charge for each ERU of capacity used in either the water or sewer system during the billing cycle above the credit level established for the property (ERU’s of capacity will be broken down into tenths of an ERU, with a corresponding percentage of the Capital Facility Charge collected as rent).  As an example, if a property has a credit of 10 ERU’s in the water system and uses an average of 12 ERU’s of water service during a billing cycle, the Capacity Rental Charge would be $61.94.  In order to allow property owners the benefit of seasonal or other periodic reduction in system use, the District uses a rolling 12 month average to determine the properties’ demand on the capacity of the system.  Additionally, the District allows contiguous parcels held by a common owner to “share” credits so that the maximum benefit may be gained from credits purchased in the respective systems.

In order to establish the credit level of each property, District staff reviewed historical payment and assessment records to determine the amount of paid capacity held in each system by all properties within the District’s service area.  This information was used to create a database that interacts with the billing system database to determine the capacity rent obligation, if any, associated with each parcel of property subject to the program.  In some cases, the information from these records is not easily extracted and additional analysis has been necessary.  For these properties, the District has contacted the property owners and suspended the capacity rental charges until the additional analysis is complete.  It is anticipated that this work will be completed in the coming weeks.  Other records have shown that certain single family residential properties may have been improperly classified as multi-family residences.  The database is being updated to remove these properties from the rental program.  Staff is working on other matters, including adjusting capacity rent calculations to reflect leak adjustments, to improve the implementation of the program.

The program was adopted by the Board to make certain that all commercial and multi-family customers are treated fairly and equitably in bearing the cost of water and sewer system capacity.  This program is new and District staff asks that you bear with us as we work to make the system function as the Board intended it to work.  Although some problems have surfaced in the initial implementation, we will make all adjustments that are necessary to correct any billing and/or credit any payment that was made on a bill that is to be adjusted.  Please continue to call Morgan Dennis, at 253-945-1615, to discuss any concerns or questions you may have.  Thanks for your patience.