SPUC quoted the city $211K for splash pad water connection fees

Shakopee Public Utilities Commission’s water connection fees are threatening to crash yet another highly anticipated party in town — the splash pad at Lions Park.

Shakopee City Council approved the splash pad at its May 21 meeting, with the exciting caveat that most of the project is funded by donations. The play features, water system, labor and construction materials are all being donated, meaning no cost to the city (or to us, the taxpayers). The Lions Club, which is contributing $20,000 to the project, has asked the city to consider paying for water to the tune of approximately $3,000 a year.

But according to a letter sent Friday from City Administrator Bill Reynolds to SPUC members and Shakopee Utilities Manager John Crooks, SPUC is quoting the city $211,000 for water connection fees for the splash pad. That’s almost triple the estimated cost of the splash pad materials and construction itself (estimated at $70,000).

This is why we can’t have nice things.

Some of you might remember these same water connection fees throwing a wrench in the plans for a Willy McCoy’s restaurant in Southbridge when the developer and restaurant owner found out they would have to pay water connection charges totaling about $250,000, of which 67% went to SPUC. (In the end, they paid the fees, and Shakopee Valley News is reporting Willy McCoy’s will open this summer).

According to Reynolds’s letter, city staff contacted SPU staff and “received the determination that the (water connection charge) for the project would be $211,365.”

This doesn’t mean the splash pad is cancelled, but it does make the project a lot less affordable, so the future could be unclear if SPUC doesn’t waive or reduce the fee.

Reynolds goes on in his letter: “I fully expect that SPUC will waive that fee at some point in the future. …We are talking about an area the size of a small putting green that will be operational only about 2.5 months of the year and in order to have the water flowing you need to operate a button — which will allow flowage from 30 seconds to 2 minutes. And this under your formula equates to $211,365. No one but SPUC believes that is appropriate.”

The splash pad isn’t the only issue Reynolds’s addresses in his letter, though. The 6-page letter (plus several pages of attachments) takes SPUC to task regarding its fee increases and allocation of funds in general, specifically from 2002 to the present time.

Reynolds points out that “essentially every major developer currently at work in the city has complained to city staff regarding SPUC fees.” According to Reynolds, city staff couldn’t find another metro area city with a water connection charge as steep as SPUC’s.

Reynolds also raises questions about two water treatment facilities that were the motivating factor behind a quadruple fee hike approved by SPUC in 2003. According to the letter, the facilities are not even included in SPUC’s capital improvement plan, despite SPUC having justified a trunk water charge increase of $567 to $2,035 per unit 16 years ago for the purpose of funding the facilities.

Though the entire letter is definitely worth a read (especially since I’m not covering every facet of it here), another curious concern Reynolds’s raises is the lack of a recent water rate study conducted by SPUC. The most recent study was done in 2009, and the authors themselves note the projections are unreliable past 2015.

The water rate study has been outdated for four years, yet SPUC has not commissioned an update, nor did it heed the recommendations of the 2009 study, which recommended a 10% increase in water rates per year from 2009-2015 to fund future capital improvements. SPUC only implemented an increase in 2009, which led Reynolds to ask the question: “Is SPUC using WCC/WTC (water connection charge/trunk water charge) to in any way subsidize water rates?”

Put me down as one of the people who wants an answer to that question and several others raised in this letter, which you should read for yourself here.

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