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In an attempt to receive a more accurate compensation of services, the San Diego City Council approved a new water charge on the construction of new structures. Developers will pay an extra $1,260 per unit to hook up each new residential project to the city's water and sewer infrastructure, the San Diego Daily Transcript reported.
According to a city staff report, as residential growth continues throughout the city, San Diego wants to ensure that development "pays its own way."
Effective as of July 1, the new capacity charge will go up $50 from $2,500installed in 1996per equivalent dwelling unit. All homes currently under construction or those that have permits under review at the city will be exempt from the new fee for one year.
According Jerry Livingston, counsel for the San Diego Building Industry Association (BIA), it would be unfair to add the fee to contractors that have completed bids and have all of the paperwork submitted.
The city expects to increase capacity charge revenue by $350,000 annually. Affordable housing units that are brought onto the market are charged $1,500 per dwelling unit, reported the San Diego Daily Transcript.
Black & Veatch, commissioned by the city, performed a study to find if ratepayers were being charged adequately. Study results showed that the capacity should be increased, said Dennis Kahlie, utilities finance administrator for the City Treasurer.
The new fee comes at a time when the city is levying a series of new charges and rate restructuring with higher costs falling on businesses and developers of commercial and residential projects.
Recently, the City Council passed a new $3,710 service charge on hooking up sewer pipes to existing infrastructure in the street, a $1,210 increase over the current rates. According to the San Diego Daily Transcript, that the new water and capacity charges could cost as much as $6,260 per unit, compared to the $5,000 they pay now.