PITTSBORO — The town’s board of commissioners is expected to significantly increase Pittsboro’s system development fees after a public hearing March 13 — a move that could raise the maximum “tap-on” fee the town imposes on new home construction up to nearly tenfold.
The rationale: the town can’t raise usage rates quickly enough to support costs needed to pay for growth in its water and wastewater utility services infrastructure.
The town’s rates and existing SDF fees have been too low for too long, officials said, so the cost of expanding capacity has to be supported by new development, according to town officials.
System development fees (SDF) are one-time payments made by developers to municipalities during construction to connect to water and sewer systems. The fees help pay for the connection, as well as to fund projects the town will need to take on to improve existing infrastructure to handle more residents using town facilities.
Pittsboro Town Engineer Kent Jackson and his staff worked with North Carolina engineering firm Freese and Nichols to create a Water and Wastewater Development Fee Update Report for Pittsboro. According to Jackson, the report is designed to determine the maximum fee the town can impose on a single tap-on unit.
“The town has had this fee since 2018,” Jackson said of the town’s existing fee schedule. “The law requires a update at least every five years, so that’s what triggered this.”
The proposed maximum SDF recommended, according to the January report, is slightly over $39,000 for both sewer and water use — the current rate is $4,200 — with current the water use rate being $5.51 per gallon for water use and $6.16 per gallon for sewer.
“The board of commissioners will take into consideration what the maximum is, and they will take into consideration public feedback, consumer feedback and they will have a range of which to set the fee up to that maximum,” Jackson said.
Commissioner Kyle Shipp told the News + Record that SDFs are a tool the town can use to ensure developers are the ones paying the price of incoming growth — not current residents. The town has two main ways of raising revenue to utilize for projects on the water and wastewater facilities in town, according to Shipp: raising usage rates for everyone, or raise the SDF for new development to tap into Pittsboro’s infrastructure.
“Everyone that’s been here using the current plant is not, in theory, who needs the additional capacity, but the development and developers need additional capacity,” Shipp said. “So the way to keep rates from increasing, and to put the cost of this on new development, is to increase the system development fee.”
Shipp said the town currently charges a maximum of $4,200 in SDFs per service unit for a new connection into the water and wastewater system. Surrounding municipalities like Apex charge between $12,000 and $15,000 in SDFs per service unit, and Shipp said the town will have to increase the SDF in order to complete a laundry list of renovations and projects costing around $530 million.
“We’re going to have to land somewhere near other municipalities in terms of SDFs,” Shipp said. “It’s an economic reality that we have to be near our neighbors, and I think we can be higher than some of our neighbors because we have more cost than them and more growth ahead.”
The SDF update report showed the projected growth for the town, with the population expected to increase from a current population of 8,566 people to over 50,000 residents by 2042. However, the Pittsboro water treatment plant and the wastewater facility are already nearing full capacity, according to Shipp.
“In a perfect world, we would’ve raised these rates five or 10 years ago,” Shipp said. “We’re just really behind that curve now ... in our situation, like, it’s not possible to go from 5,000 people to 20,000 people and have those 5,000 pay for it — it just doesn’t work.”
Jackson said residents have a unique opportunity to provide input on the SDF report through the 45-day-long public comment period and the public hearing on March 13.
“Take advantage of the opportunity to review and make comments,” Jackson said. “Take advantage of the opportunity to participate in the public hearing and to make sure they have as complete of understanding as they want or need to have.”
The SDF Update report is available online for residents to view during a 45-day-long public input period, where people can provide feedback on the report. Residents can access the report at https://pittsboronc.gov/DocumentCenter/View/2639/Pittsboro-System-Development-Fee-UpdateReport_Public-Comment?bidId=.
The public hearing on the SDF updates will be held during the board of commissioners’ March 13 meeting. Residents will be able to attend in-person or on Zoom.
Reporter Taylor Heeden can be reached at email@example.com.