A. Description Of The WAC Systems:
1. The water availability charge (WAC charge) is similar to fees used by many municipalities. Since 1990 a WAC fee has been levied by the city of Baxter for new constructions, new connections, commercial users and industrial users who remodel/alter, change use or add onto their facility and have not paid a WAC fee in the past. One WAC unit equals two hundred seventy four (274) gallons of maximum potential daily domestic water usage. Single-family houses, townhouses, duplex units, apartments and multi-dwelling facilities included in each unit each equal one WAC unit per dwelling unit. Commercial buildings are levied WAC units based on maximum potential daily domestic water usage. Industrial buildings are assessed WAC units based on maximum potential daily wastewater flowage and maximum normal daily water flow volume for process areas, maximum potential water flow for commercial areas.
2. The city of Baxter is the provider of domestic water service in the WAC system. The city of Baxter collects WAC fees from property owners. Generally, the city of Baxter issues a permit (building permits, electrical permits, plumbing permits and zoning permits) which indicates that development or redevelopment is occurring. In turn, the development or redevelopment triggers a WAC determination or redetermination. The city of Baxter makes all industrial, residential and commercial determinations. General maintenance on industrial, residential and commercial buildings, not including remodeling and alterations, are exempt from WAC fees.
3. The WAC revenue collected by the city of Baxter is used to finance a portion of the water system. Capital improvement costs are initially financed by debt and involve the building and upgrading of the water system. WAC revenue finances a portion of the water system debt service annually, also called the annual WAC requirement.
4. WAC revenue is held in the WAC reserve fund until utilized for the annual WAC requirement. The balance in the fund fluctuates from year to year depending on whether current revenue plus interest earned was more or less than the annual WAC requirement. The per unit charge for each calendar year is determined and approved by the city council in conjunction with the budget process. The rate for subsequent years shall be subject to review and is dependent on factors including the annual WAC requirement and the forecasted number of WAC units to be collected. Commercial WAC rates have typically been slightly higher than residential rates to account for higher peak flow typically seen from commercial facilities.
B. History Of The WAC Program:
1. WAC fees have been levied by the city of Baxter since 1990. The city of Baxter must provide water service to a rapidly growing population, commercial base, and industrial base. The policy was further updated when this code was codified in 2002.
2. Heavy capital costs are inevitable, as the city of Baxter has and will continue to expand and improve treatment and the distribution system for the community as its population, commercial base and industrial base continues to change and grow.
3. The issue facing the city is how to fund the expansion and updates of its treatment and distribution system. Treatment regulations are becoming more stringent in recent years and will continue to be more stringent as we move into the future. Expanding the system and meeting new, more stringent, drinking water regulations require that the system be designed and built to meet these requirements for the next twenty (20) years.
4. The practice of building in capacity and treatment flexibility is based upon experience and the economy. The physical sites of distribution systems and water treatment plants seldom change, so major land acquisition occurs only once. Further economies of scale of construction make it more cost effective to provide capacity and treatment alternatives at the time that major construction occurs rather than make small frequent infrastructure changes.
5. There have been court challenges to sewer availability charge (SAC charge) in other communities. In a district court ruling, later upheld by the Minnesota supreme court, SAC systems were found consistent with state law. Based on the above court decision it is common for municipalities to implement a WAC system in the same format as a SAC system.
C. Residential And Commercial:
1. Initial Determinations (New Construction Or Initial Connection): The computation of WAC units for a given property is referred to as a determination. Determinations are generally triggered by building permits, electrical permits, plumbing permits or zoning permits. Examples include the construction of a house, a house connecting to water for the first time or construction or modification to a commercial building.
a. Residential:
(1) The following types of residential housing each comprise one WAC unit per dwelling unit:
(A) New single-family houses: A single-dwelling unit.
(B) Existing single-family houses: Houses built with a private well system and subsequently connected to the city system shall be charged at the rate used prior to 1990 due to the cost of installing the original private well system and the amount being assessed to the properties for the public improvements.
(C) Duplex units, apartments units, condominiums units and townhouse units: A multi-dwelling facility included in each unit.
b. Commercial WAC:
(1) A "commercial user" in the city of Baxter is defined as any user that is not a residence and that discharges no wastewater from an industrial process.
(2) Individual businesses occupying the same building are subject to a WAC charge. The WAC charge will be calculated for the entire building and prorated on a percentage of area occupied by each business.
(3) The WAC charge will be determined by calculating the equivalent residential connection (ERC) in accordance with appendix A.
(4) For commercial users who propose to change the use of or remodel/alter their facility and have not paid a WAC fee prior to 1990 will have a WAC fee charge based on the original use of the building. Any change in use within the original building will be charged at the current rate and the WAC fee must be paid at the time of the building permit. The WAC for commercial buildings that have a change of use or remodel/alter will be calculated based on ERCs in accordance with appendix A. The WAC calculation will be based on the entire building regardless of the area being modified.
2. Ongoing Determinations:
a. Anytime there is a change in use, a WAC determination must take place. Sometimes, this is referred to as a redetermination; simply meaning this is not the first WAC determination to take place on the site. Most redeterminations are triggered by city issued building permits, electrical permits, plumbing permits and zoning permits. A redetermination is necessary when the use of the property has changed or when a physical change in the facility occurs.
b. If it is determined, at the sole discretion of the city, that there have been prior building permits issued by the city in which the WAC should have been recalculated, then the city shall charge the applicant at the rates in place when that prior permit was pulled for any charge that should have been allocated at that time. If no permit has been issued since 1990 the fee shall be calculated based on the 1990 rate. This credit shall not apply to charges due for additional ERCs due for proposed improvements.
3. WAC Credits:
a. Credit for WAC previously paid on a site is allowed when there is a new use established on a property. The credit is stated in units and is used to offset the WAC unit determination of the new use. The purpose of WAC credits is to avoid double payment of WAC on a specific parcel of land. The WAC credits stay with the specific parcel and may not be transferred to another parcel.
4. Demolitions:
a. A demolition is when a structure or building is destroyed. WAC credit will be allowed at the time the new use is established for WAC fees previously paid into the system. The WAC credits must be used on the same parcel in which the demolition took place.
5. Rules Governing The Use Of Credits:
a. WAC credits can only be used when there is a new use established on the property. Credits cannot be taken at the time of demolition or at the time a business discontinues operations. The WAC credits stay with the specific parcel and may not be transferred to another parcel.
D. Industrial WAC:
1. Initial Determinations (New Construction Or Initial Connection):
a. The computation of WAC units for a given property is referred to as a determination. Determinations are generally triggered by building permits, electrical permits, plumbing permits or zoning permits.
b. The WAC charge will be determined by calculating the equivalent residential connection (ERC) in accordance with appendix A.
2. Definition Of Industrial User:
a. "Industrial user" has a particular, special definition for WAC purposes. It does not include all industries. "Industrial user" for WAC purposes is an industry producing water from an industrial process. Many businesses commonly referred to as industries are not "industries" for WAC purposes and would be subject to commercial criteria for SAC purposes. Because the definition of industrial user for the purpose of WAC is somewhat ambiguous, the city of Baxter will make final decision on whether an "industry" will follow industrial criteria for WAC purposes.
3. WAC Determination For Industrial Users:
a. WAC is determined on a different basis for industrial users, compared to commercial and residential users. For commercial and residential users, a WAC determination is based on the estimated maximum potential daily volume of water capable of being for the facility. In contrast, industrial WAC determinations are derived by adding two (2) components: commercial criteria for nonprocess areas and the sum of maximum domestic water flow plus the normal maximum industrial process water flow for process areas.
b. For industrial users who propose a change in use, choose to remodel or expand their facility and have not paid a WAC prior to 1990, the WAC must be paid at the time of the building permit. If no permit has been issued since 1990 the fee shall be calculated based on the 1990 rate. The WAC will be calculated as outlined above.
4. Three Year Review:
a. Because industrial determinations involve both commercial and industrial criteria, redeterminations can be triggered by changes in either the commercial or industry component. Similar to commercial, building permits or changes in use can trigger redeterminations subject to additional WAC charges. In addition, industrial users may increase water flow and consumption without remodeling, simply by expanding the workday or the rate of activity. In these cases, no building or plumbing permit need be issued; however, a redetermination is needed.
b. Because of the above reasons, the city of Baxter may complete a redetermination on a three (3) year review of total potential maximum water flow and consumption from industrial facilities. If it is determined that additional WAC fees are required, the city of Baxter will contact the industrial user to meet and review the data. After review of the data, the city of Baxter will invoice the industrial user for the additional WAC fees.
5. WAC Credits:
a. Credit for WAC previously paid on a site is allowed when there is a new use established on a property. The credit is stated in units and is used to offset the WAC determination of the new use. The purpose of WAC credits is to avoid double payment of WAC on a specific parcel of land. The WAC credits stay with the specific parcel and may not be transferred to another parcel.
6. Demolitions:
a. A demolition is when a structure or building is destroyed. WAC credit will be allowed at the time the new use is established for WAC fees previously paid into the system. The WAC credits must be used on the same parcel in which the demolition took place.
7. Rules Governing The Use Of Credits:
a. WAC credits can only be used when there is a new use established on the property. Credits cannot be taken at the time of demolition or at the time a business discontinues operations. The WAC credits stay with the specific parcel and may not be transferred to another parcel.
8. Special Credit Situations:
a. A different type of credit situation is an industrial user that permanently changes its industrial process to less water. When a change permanently reduces water usage, the city of Baxter recognizes this as a change in use and will allow credit to the WAC. The city of Baxter must approve all such credits to ensure the process change is permanent. (Ord. 2013-12, 10-15-2013)
E. Appendix A:
1. Tables set forth in the city of Baxter "appendix A: SAC criteria for commercial properties" most current edition plus any amendments. (Ord. 2014-11, 5-6-2014)