Developers Take Aim At Plan To Hike Hookup Fees 400%

March 31, 1991|By Carol L. Bowers | Carol L. Bowers,Staff writer

County Executive Eileen M. Rehrmann is considering a proposal to raise water and sewer hookup fees by more than 400 percent -- up to $8,500 from the current rate of $1,650.

The increase is needed to cover the estimated $130 million cost of several major building improvements, said James M. Jewell, the county treasurer. Among the renovations is the expansion of the county's main sewage treatment plant, Sod Run, in Perryman.

"The figure for the hookup fee is not yet finalized, but $8,500 is the high end of the range we're discussing," Jewell said Wednesday.

Some Harford developers say they'd fight a proposal for an $8,500hookup fee because it could adversely affect the housing market. Some council members also object to such a high fee.

"A 10 percent markup in the cost of an $85,000 house ($8,500) in the stroke of a pen -- that would knock a huge band of otherwise potential buyers out of the market," said George Shehan, a Harford resident who is president of the Maryland Homebuilders Association and a partner in American Landmark Homes Inc.

Shehan said the average price of a home in the county is about $110,000. He warned that if housing becomes too expensive, Harford could have a hard time attracting new industry.

"One of the first things a company considers is whether there's available housing for its workers," said Shehan.

Jewell said one reason Rehrmann is considering such a high fee is that the state and federal governments no longer provide grants to pay for water and sewer service improvements.

In previous years, the federal and state governmentshave provided grants to the county to pay 87.5 percent of the cost for improvements to sewage treatment stations, Jewell said. However, such grants are no longer available.

For example, Jewell said, the last time the Sod Run sewage treatment station was upgraded -- to handle 10 million gallons of sewage a day, up from 4 million gallons -- it cost $26 million. But, he said, 87.5 percent of the cost was paid for with state and federal grants.

"The county's share of that expansion was $3 million, so we had a low hookup fee," said Jewell.

"But we're looking at $130 million in capital improvements between nowand 2002 with no grants. If we don't construct these new capital projects, we face a building moratorium. And in essence, we'd have to shut everything down."

The Sod Run plant needs to be upgraded to handle 15 million gallons of sewage a day, up from its current capacity of 10 million gallons, he said.

If the county includes the latest technology to reduce nitrogen discharges when it improves Sod Run, the cost of the project could fall between $22.1 million and $26.1 million, Jewell said.

The county also plans to go to the bond market to raise nearly $34.5 million to pay for building a water treatment plant near Abingdon and laying a pipe from the Baltimore-owned line to county water lines, he said.

Developers agree the improvements must be made but say the question is how much the county should charge to pay for the improvements without damaging the housing industry, which they say has already slowed due to the recession.

"On the one hand, I think it's recognized in the building industry that there needs to be a contribution to produce facilities to serve the population," said Shehan. "But not at such an outrageous cost that it results ina house that will be priced out of the ballpark.

Clark Turner, ofClark Turner Enterprises, said he fears homes could soon become too expensive for the average homebuyer if the water and sewer hookup feegoes up to $8,500. Builders routinely tack certain costs onto the price of a new home, he said.

Turner said he and other developers plan to meet with Rehrmann Tuesday to discuss the fee.

"There's got to be a way to retire the debt without a sudden shock to the market place," said Turner. "I do believe that construction of the facilitiesand the fees could be phased in."

Although the hookup fee proposal will come from the administration, the County Council would make the final decision about the amount of the fee increase. A proposal is expected to be presented to the council the second week in April.

County Council President Jeffrey D. Wilson, a Republican, said he objects to setting a high fee such as $8,500.

"I think that's crazy,"said Wilson. "But she has to have four votes on the council for the bill to pass. I told her she'd have to do without my vote. There's noquestion we need to raise hookup fees, but an immediate doubling isn't the way to do it."

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