By JASON STARR
A nearly 400 percent increase in water hookup fees in Colchester Fire District No. 2 has changed the equation for local homebuilders.
According to the district’s governing board chairman, Mike Whalen, one prominent developer has threatened a lawsuit over the board’s December decision to go from a flat $1,000 hookup fee for water service to a series of fees that total a minimum of $4,755 for new homes.
Depending on the number of bedrooms in the home and whether a new hydrant is needed to serve it, the hookup fee could top $7,000.
“A 400 percent increase overnight is an unexpected and excessive increase,” said Tom Sheppard, who declined to comment on Whalen’s assertion that he has threatened to sue the district. “There was no talk or negotiation. It was just, ‘Here’s the new fee.’”
The water district is an independent municipality that provides residential water service and fire protection in Colchester’s Malletts Bay neighborhoods. Sheppard received Development Review Board approval in May to build 45 new homes off Malletts Bay Avenue on land under contract for purchase from Cosimo Brigante. The project is currently under Act 250 review by the District Environmental Commission for Chittenden County.
The new fees will raise the total cost of construction by at least $169,000, said Sheppard, whose company will absorb the increase instead of passing it on to homebuyers.
“I could put it into the home price, but all that would do is slow sales,” he said.
Sheppard also owns a 10-unit condominium development on Marble Island Road that is in the middle of construction. He bought the property last year, before the water district board set the new fees. Sheppard said he would not have purchased the project had he known about the impending fee increase.
“The district should have brought the developers in Colchester in and worked with us, or at least kept us better informed,” he said. “The way we got informed was in the form of a bill. I don’t think that’s very good practice.”
Whalen said the water district board cleared the new fees with its attorney, Colin McNeil, before setting them. The board modeled the fees on those of municipal water systems in Williston, Milton, South Burlington and Winooski, he said. It was the first fee increase in Whalen’s six-year tenure on the board.
“I ran into [Sheppard], and he made it clear he wasn’t happy,” Whalen said. “We take it seriously, but we don’t think there is any [legal] liability.”
The Brigante development is one of the largest new home proposals in Colchester in the last decade, planning and zoning director Sarah Hadd said.
The DRB has considered several smaller subdivision applications in recent months, including an 11-home neighborhood on 60 acres off Bay Road, four homes on 34 acres off Red Rock Road, six homes on four acres on Hazen Lyon Road and nine homes on 68 acres off Route 2A.
Some of the developments are in the service area of Colchester Fire District No. 2; others are in Colchester Fire District No. 3, whose governing board doubled its new hookup fees in May.
The cost was $1,000 plus a water storage fee set at 53 cents per daily gallon usage. The new fee is $2,000 plus $1 per daily gallon usage, according to district clerk/treasurer Marianne Terrien.
The new fees project increased revenue for both districts if and when the developments hook up to water. But Whalen noted DRB approvals don’t always lead to construction.