February brings $1,500 bump in charges for homebuilders in city
The cost of building a new house in Cornelius will increase by more than $1,500 next month, as the city changes how it charges for water services.
Come Feb. 1, the cost of new residential water, sewer and storm-drain hookups (so-called 'service development charges') will increase from $2,032 to $3,570 in Cornelius.
The increase follows last year's hike in water rates meant to plug a swelling deficit in the city's water-system budget.
The shortage was discovered last year when the city completed a study of its water, sewer and stormwater systems. The study showed that the city is losing about $73,266 a year on storm-water charges imposed by Clean Water Services, the county agency that manages sewer and storm-water services.
Without the rate hike, the study showed, the deficit would increase to $217,782 next year.
The increase in development charges should dovetail with the new water rates to allow the city to improve its aging water system.
City Manager Dave Waffle said that the new charges make sure that builders are paying for the cost of the services instead of ratepayers.
But Hillsboro developer Gene Zurbrugg said that Cornelius and other cities are squeezing an already tight housing market by financing municipal services with fees instead of tax-supported bond measures.
'It's not just Cornelius, it's pretty much everybody,' he said. 'They've found that that's the way to fund government. They're just going to force development elsewhere.'
But Richard Meyer, Cornelius director of development and operations, says other cities that have enacted such fees haven't seen a corresponding drop in development activity and he doesn't expect it to be the case in Cornelius.
Still, Meyer said the city is concerned about the downturn in the housing market.
'We are anxious that the housing market is in a depression,' Meyer said, noting the Cornelius also has little room left to expand inside the Urban Growth Boundary.
Even so, Meyer said the city has little choice but to hike development costs, since the price of putting in new pipes and lines increases each year.
'We can't overemphasize enough that these are real costs,' Meyer said. 'These are the costs of doing business.'
The study, which cost $105,000, was conducted by FCS Group, a research group that focuses on utility rates.