An unexpected flood of building permit applications, triggered by a proposal to raise water and sewer hook-up fees, has prompted the county executive to seek an earlier date for putting the fees into effect.
Developers aren't happy with the proposal and the County Councilis working on an alternative.
County Executive Eileen M. Rehrmann proposed Tuesday to bump up the "grandfather" deadline in her bill to raise the fees from Sept. 30to July 31. Building permits granted before the cutoff date would beexempt from the proposed higher fees, which together would amount to$2,517.
Rehrmann's measure is designed to block developers from escaping the charge by stocking up on building permits before the deadline, and to ensure the county can raise enough money to pay off an anticipated bond debt.
The executive is seeking County Council approval for the fees so the county can raise money to expand capacity inthe sewer and water systems, which have not kept pace with development.
Public works director Robert Williamson has told the council that a rush in building permit applications since just before the billwas introduced May 21 has undermined assumptions that the higher fees would support borrowing money this fall to pay for water and sewer system projects.
Financial planners had anticipated raising between $2.3 million and $2.8 million from the higher connection fees in the 1992 fiscal year, which runs July 1 to June 30. The money would be used to begin paying back $22 million Rehrmann wants to borrow in thebond market for the water and sewer projects.
That projection relied on the assumption that 900 permits would be approved under the current $1,650 in connection fees new customers must pay and another 900 permit applicants would be subject to the higher fees.
But during May and June there have been 715 building permit applications submitted -- more than double the expected number for that time period. Williamson said a continuation of the trend "would be fatal" to raise enough money needed to pay off the $22 million bond debt.
"It cuts half our money out," county treasurer James Jewell said. "If they're stockpiling now, they're not going to buy any permits next spring."
Williamson said that the only explanation for the flood of permit requests is that builders want to avoid the fee hikes. He noted applications between October 1990 and this May lagged well behind the previous three-year average.
But developers say they are just trying toprotect their project investments.
"The purpose of the grandfather clause was and always has been to protect a builder who goes under contract," said George Shehan, president of the Maryland Home Builders Association. "The issue is to protect the builder and his buyer andnot
those 900 permits."
He favors an alternative amendment to the Rehrmann bill, drafted by council members, which would discouragestockpiling permits by requiring builders to pass inspection for foundation plumbing construction by Feb. 28, 1992.
The amendment, introduced by Council President Jeffrey D. Wilson, R-At Large, and members Joanne S. Parrott, R-District B, and Barry T. Glassman, R-DistrictD, would preserve the original grandfather deadline.
But county administrators argue that builders would still be able to save up permits for speculative purposes.
Without the tighter exemption deadline, Williamson warned that as many as 2,100 building permits would beexempt from the higher fees. That would cost the county almost $5.3 million in lost revenue.
Said Shehan, "That's the estimate of an engineer who knows little or nothing about building houses."
He noted that before a dwelling is ready for a foundation plumbing inspection, a builder must make about a $24,000 investment in the property, installing the roof, walls and other steps. "No builder in his right mind is going to speculate at that level."
The council amendment would also preserve a Dec. 31 plumbing permit deadline as a second steprequired for exemption.
Glassman argued that the council should not be bound to preserve the 900-permit assumption in the administration's financial planning model because it could be as unreliable as "predicting next week's weather."
There appears to be a majority supporting the council amendment, with Councilman Robert S. Wagner, R-District E, sharing the opinion of its three sponsors.
"I'm concerned about the (county's) mathematical model but I don't know if we should be jumping in and changing course," he said.
Builders have a legal right to apply for permits to save money, Wagner said, and the council should not be limiting the business process.
In addition to creating water and sewer development fees, the bill before the council would raise an annual user assessment fee from $70 to $140. New customers would pay that fee each year for 25 years.
The council put off action on both the amendments and the bill until Tuesday night's council meeting at the earliest.