The current Water Code, revised on March 11th of 2004 contains a section which provides for payment substantially the same as the resolution that was passed in 1993. Abercrombie explained the AWA is faced with a number of major improvement projects which are necessary to provide service for both water and wastewater service to future customers. These, include but are not limited to he said, the Tanner Regional Water Treatment Plant, the Gravity Supply Line, the Regional Wastewater Treatment Plan, the Camanche Wastewater Plant, and numerous storage facilities and line extensions. The improvements Abercrombie said will likely exceed $30,000,000. According to a memo from Manger of Engineering and Planning Gene Mancebo the Water Agency staff currently is in the process of responding to Conditional Will Serve Letters for 1,523 equivalent dwelling units (EDUs) and Letters of Water Availability for an additional 2,469 EDUs for the Amador Water System and CAWP System. This does not include water needs for the existing 530 EDUs in Plymouth, over 500 EDUs for Jackson Hills, over 1,200 EDUs for Gold Rush, over 800 EDUs for Wicklow Way subdivisions, and approximately another 1,900 EDUs for other anticipated projects.

Abercrombie said that in order for the water agency to build the projects they will need to debt service the capital improvements. Given the capital financing need, staff decided to approach the board to see if they would consider passing a resolution to require the payment of participation fees at the time of the final map to minimize the amount of debt financing. Abercrombie did say that for larger developers this may be possible, but smaller developers have indicated that they could not finance the fees and may not proceed with projects if the decision is made to collect participation fees.  The collection of the fees is in part not to affect the rates of existing rate payers.  Abercrombie did add however, that for existing facilities that need upgrades or replacement the existing customers will be impacted as those replacements or upgrades are not being generated by new development. Staff believes that by obtaining participation fees at the final map state it will reduce loan or bond payments and thus minimize customer rate increases. Abercrombie said that staff still needs to review things further and are reviewing the possibility of alternative participation fee collection triggers, such as at the time of the first bond or loaned payment which may allow some developers to acquire some lot sales to aid in their payment of participation fees.

Rob Aragon of JTS Communities, currently building in Ione, wanted to remind the Board and Water agency staff that times have changed and the market isn’t what it used to be. “It is at a precarious point trying to get commitment…like to write a big check when they might not be able to offer other infrastructure.” He continued by saying, “For us to make a commitment like advancing fees at such an early point there needs to be some reciprocation.” Aragon suggested that the agency look at other creative ways to approach getting those fees from developers and work individually with them, as well as suggested that they don’t require the fees be paid at such a preliminary point.  Staff suggested that a developer could set up a Mella Roos or assessment district to recoup the funds, but Aragon pointed out that for JTS’ development, the Castle Oaks Golf Community, the project is “fully loaded” with all the assessments and Mella Roos’ the development can handle. He added that JTS has always been willing to work with local agency’s and that they will continue to do so and keep the lines of communication open.

The Developer of Ryland Homes also approached the Board of Directors and reiterated what Aragon had said about the timing of the market and said that due to the current market condition they are no longer pursuing their development in Ione. Bob Reeder of Reeder & Sutherland asked if the participation fees would be “put into one big pot” or would the agency separate the money by where it was received and use the fees to construct projects or complete upgrades in that area. Abercrombie clarified it would be “one pot.” Reeder stated “We want to make sure the improvements are there, or else we are spending our money and then sitting on our heels.” He also said using an assessment district or Mella Roos to recoup the funds is not his first choice he would rather use bonds and said that even if he did use an assessment district or Mella Roos “what happened in Ione, I guarantee you would not happen with us,” said Reeder. He concluded by saying that they would be “happy to explore methods by which something like this can be financed.” Stephanie McNair a developer who recently proposed a 300 unit cottage community in Plymouth described the situation as a catch 22. “I know you need development to further your expansion needs and we like to be here and see that infrastructure in place, and want to be able to perform those numbers into our cost scenarios.” She asked what the agency though those cost might be for developers.

 Director of Finance Mike Lee said that while it is still unknown they expect another $9-10 thousand dollars per dwelling unit. A representative of the Developer of the Wicklow Way subdivision, the Lemke Group, said that by implementing the participation fee then it “impacts the price of the house to the public…” After further discussion it was decided that Staff would meet with the Bond Committee and explore the options available to the agency to try to keep their borrowing amount low and the impact on existing rate payers limited. The Board agreed and Abercrombie expected that another discussion would appear before the Board sometime in May or April. Also Terry Strange, coordinator of the Upper Mokelumne Watershed gave a presentation to the Board of Directors on the current activities of the Council. His presentation is available on our website if your interested in more information on the council and their activities.