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Leaders decry water-fee hike

Business community asks officials to delay imposing developer fees

Posted: April 7, 2011 1:55 a.m.
Updated: April 7, 2011 1:55 a.m.

The local Economic Development Corp. wants the Santa Clarita Valley’s water wholesaler to wait a year before it raises fees charged to land developers.

Directors on the Santa Clarita Valley Economic Development Corp. board were expected Wednesday to review and rule on a letter drafted by its president and CEO Jonas Peterson asking the Castaic Lake Water Agency to hold off on raising facility capacity fees charged to developers.

Doing so would stimulate the local economy, Peterson said.

Money collected from developers pays for the agency’s capital projects, such as pipelines and pumping stations.

In the letter, expected to be approved and mailed today, Peterson wants the agency to “defer fee increases for a minimum of one year.”

The Construction Industry Research Board reported development figures dropped to $266.5 million in 2010, down from more than $624.3 million reported in 2007.

“As you know, the sharp decline of the housing market has had sweeping effects on the overall economy in Los Angeles County and the Santa Clarita Valley,” Peterson wrote in the letter. “We believe a postponement of fee increases, combined with a change in the timing of fee collection will help stimulate the economy, enable builders to move forward with key projects and enable CLWA to continue to collect the fees currently in place.”

No new houses built in the Santa Clarita Valley means no new fees collected from developers.

No facility capacity fees means the money could end up — although it’s highly unlikely — coming out of the pockets of ratepayers, agency General Manager Dan Masnada said.

“The (agency) board is committed to not doing that,” he said.

The alternative to not raising water rates is to not build any of the capital projects.

Masnada points out that the agency’s proposed fee increase for developers has already been delayed. They were
initially intended to take effect in January 2011.

If the corporation wants the fees delayed to January 2013, then the water agency will definitely feel the money pinch, he said.

“If we did that, the increase that would take effect in 2013 would be 30 to 40 percent higher,” he said.

Facility-capacity fees were set up in 1987 to allow the agency to offset some costs for capital projects needed to bring safe, clean drinking water to a growing population in the Santa Clarita Valley.

The agency issued 22 new certificates to developers asking for 31 total acre-feet of water in 1987. For that water, the developers paid $319,303 in fees.

Last fiscal year, developers paid $1.17 million in Facility Capacity Fees for a total of 142 new certificates for 106 acre-feet of water, or about 618,550 bathtubs of water.



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