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•• • <br />Connection Charges Related to the 1989 Highway 12 Water and Sewer Improvement Project <br />January 27, 2000 <br />Page 2 ____________________________________________ <br />The comparison of the revenues generated from the various properties under each connection charge <br />option is shown below. <br />Property Per Unit Charge Per Acre Charge <br />Medium Density Residential $869,000 $520,000 <br />Commercial $290,000 $221,000 <br />Orono Ice Arena $120,000 $58,500 <br />Orono Schools $595,840 $390,000 <br />Total $1,874,840 $1,189,500 <br />As the above table shows, while the Orono Schools and Orono Ice Arena connection charges would <br />be reduced significantly, the most substantial reduction is related to the medium density residential <br />property; which is the property on which the City is most interested in facilitating a quality <br />development. <br />Potential Connection Charge Credits <br />In 1967, the City installed sewer and water lines along Highway 12 to serve the Orono Schools and <br />the City’s industrial district. The project also provided water and sewer facilities to serve the area <br />north of Highway 12 between Willow Drive and Old Crystal Bay Road in the event the MUSA was <br />expanded to include that property. This property- was assessed for the water and sewer project in the <br />total amount of $44,146 based on both a cost-per-lineal-foot and a cost-per-unit. <br />Although the 1989 water and sewer project provided additional facilities to enable water and sewer <br />service to the property between Willow Drive and Old Crystal Bay Road, the property owners may <br />claim a credit against the 1989 connection charges based on the assessment paid for the 1967 project. <br />The amount of credit they could claim could be as high as 30 units since that is the number of units <br />allowed by the zoning in 1967. If they received a credit for 30 units, it would result in a loss of <br />$290,850 in connection charge revenue. The City would argue that the 1989 project provided <br />increased capacity without which the 1967 water and sewer facilities could not have been used by <br />the property. Therefore, the property owners should not receive any credit. <br />The Council may want to take into account the potential credit against the connection charges in <br />determining any changes to be made in the current connection charge amounts. <br />Staff will try to further clarify the potential for credits if the Council determines the connection <br />charge amounts should be changed.