Title
An Ordinance to Amend Sections 1:272, 1:274, 1:277, and 1:278 of Chapter 12 (Financing Local Public Improvements) of Title I of the Code of the City of Ann Arbor (Ordinance No. ORD-13-06)
Memorandum
The proposed amendments to Chapter 12 would amend the calculation of the water and sanitary improvement charges for properties connecting to City water mains or sanitary sewer improvements during the period July 1, 2013, through June 30, 2015. This period of time coincides with two City fiscal years. This two year period also allows time for the City to retain a consultant to review the City’s water and sanitary sewer fees and charges and make recommendations for revision.
The desire to implement the proposed changes for this two year period stemmed from concern over the improvement charges currently charged under Chapter 12 for new connections to the water and sanitary sewer systems. Although the principle underlying the calculation of those charges, to make sure appropriate costs are recovered from new customers so that current rate payers are not improperly burdened, appears to be sound, the formula in effect has raised concerns about the dollar amounts calculated for these improvement charges.
As background and to explain the need to retain a consultant, when making future changes to Chapter 12, specifically improvement charges and to some degree connection fees, it is important that various competing elements are satisfied. The fees must be easy to explain and easy to understand in order to be accepted by the users. The fees must recover costs equitably. The fees must not result either in an undue burden on existing rate payers of the systems or an undue burden on new customers connecting to the systems. In other words, the fees must be easily understood, neither over recover costs nor under recover costs. Any under recovery of costs would place undue and inequitable financial burdens on current rate payers. In order to meet these goals and ga...
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