ising costs for water and sewer infrastructure and the need to help pay for the impact that new customers will have on the overall Newcastle water systems were cited as reasons for increasing impact fees in the city.
Newcastle’s City Council unanimously approved raising the impact fees based on size of connection on new water and sewer lines.
Mayor Karl Nail said the cost for municipalities to supply water and sewer needs to their residents have gone through the roof. The mayor said he hates to go up on rates on anybody, and noted that the Council members have to pay these rates, as well, “but something has to give.”
Nail said, “The increase in these fees will help mitigate the impact the new customers will have on the overall system.”
At the September City Council meeting, council member Gene Reid reiterated, “This only affects those new businesses that locate here.”
A resolution passed by the Council said it this way: “Impact fees are one of the preferred methods of ensuring that additional users and new development bear a proportionate share of the cost of water facilities necessary to accommodate such development. This must be done in order to promote and protect the public health, safety and welfare.
“Additional connections to the Authority’s (NPWA) water system will create a need for the construction, equipping, or expansion of water facilities.”
This includes new housing developments since most of the houses connect onto city water and sewer with either a 3/4” or 5/8” line. These fees went from $1,500 to $2,500. One inch connections went from $1,500 to $3,000, and two inch connections went from $2,000 to $3,500.
These rates were determined after the Council approved a rate study to be done by NewGen Strategies and Solutions. Their analysis showed that in order for Newcastle to break even in the next six years, the Council needed to move to $6,000 on fees ($3,000 on water and $3,000 on sewer for total of $6,000).
Nail said the revenue from impact fees can only be used for capital items to improve or upgrade the water and sewer system.
“These fees are used to help, in a small way, to pay for these items,” Nail said. “They will help us to make the upgrades but spread the cost across more users.”
The City’s most pressing upgrade is a new sewer system. Construction on a new plant is expected to begin next fall. The new plant will be located near a dead end on Walker Drive.
Nail said by the time the new plant goes online, the old plant will be at capacity so a new plant will be very timely. He said the City has had complaints about the odor coming from the old plant for as long as he’s been in Newcastle.
Odor will decrease significantly with the new technology to be used in the new plant.
Because of COVID-19 and inflation, the cost of the plant has gone from a projected cost of about $25 million to $51,819 million.
“Prices have more than doubled to build this plant mainly because of a global pandemic and inflation we haven’t seen in 30 years,” Nail said. “No one could have foreseen this. We had good numbers, but it’s very unfortunate that they have increased drastically.”
The mayor added that the City is building the plant now as it has the cash flow to do so.
He also wants the citizens to know that the Council is being as judicious with their money as they can.
The Council continues to work on other impactful ways to bring up City revenue including increasing sales tax revenues by creating a business- friendly City, working towards economic development issues, and providing citizens and potential citizens with quality of life.
Other impact fees approved by the Council were the following: 3” lines, $4,500; 4” lines, $5,500; 6” lines, $6,500; and 8” lines, $7,500.
