The Oswego Village Board Tuesday evening will vote on an ordinance that would increase new residential development water tap-on fees in part to help pay for the village’s future Lake Michigan water connection.
Water tap-on fees are charged on new connections to the village’s water system for new residential and commercial developments.
The revenue from the fees helps fund water and sewer capital projects including the future connection to Lake Michigan water, village officials said.
“As a growing town, Oswego has always tried to strike a balance that ensures that residential developers pay their fair share of the impact they have on the village infrastructure, while at the same time basing fees on market realities as not to discourage development,” Oswego Village Administrator Dan Di Santo said in a report to trustees.
Staff is recommending the village’s residential water tap-on fees be increased from $2,200 per unit to $5,200 per unit.
The village’s residential water tap-on fees were increased in 2007 during the housing boom from $4,000 per unit to $5,000 per unit, while the commercial water tap-on fees were increased from as low as $1,500 per unit to $3,700 per unit.
The commercial component has remained unchanged since 2007. Village staff is not recommending changes to the commercial water tap-on fees at this time.
Oswego has roughly 100 to 600 new residential units per year compared to about 10 to 20 new commercial units per year, village officials said.
The village responded in 2010 from the impact of revenue loss caused by the housing crisis and increased the residential water tap-on fees to $7,200 per unit.
The village, Oswego School District 308 and other government entities commissioned a study in 2015 about the possibility of reducing development impact fees – primarily impact fees and land/cash fees – to encourage a rebound of residential development. The Village Board then reduced residential water tap-on fees to $2,200 per unit.
“At the time, that amount was determined to be the minimum needed to keep the water system fully funded, but the costs associated with switching water sources were not accounted for at that time,” Di Santo said.
A comparison of the village’s residential water tap-on fee of $2,200 for all housing types was discussed in April. Oswego’s fees were lower than those in Yorkville and Plainfield, officials said.
“Based on previous comparison with a wider range of municipalities staff believes” that a $3,000 increase in the residential tap-on fee per unit for a total of $5,200 “could be accommodated while still remaining competitive within the market,” Di Santo said.
Oswego Village President Ryan Kauffman during a recent discussion was supportive of the $3,000 increase.
“It seems reasonable and keeps us within the market and competitive,” he said.
However, he did not want to increase the commercial water-tap on fees.
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“In my mind, we need to be doing everything we can to incentivize businesses to come and open up shop in Oswego,” Kauffman said. “And I would just hate to see us doing anything that would hinder or tamp down on businesses coming to Oswego.”
Linda Girardi is a freelance reporter for The Beacon-News.