Minneapolis/St. Paul, Minnesota

Water and Wastewater Service Availability Charge Study
   

For the Minneapolis/St. Paul Metropolitan Council, Duncan Associates redesigned its water and wastewater impact fees (service availability charges) to support regional growth objectives, such as promoting urban infill and deterring urban sprawl. The Metro Council is a state-created regional agency that provides regional planning, transit and wastewater treatment for the Twin Cities area. Since 1973, new wastewater customers had been assessed a fee to defray debt service costs for reserve capacity in the system. One major alternative was to change from a

uniform regional fee to area-specific fees that reflected actual costs associated with providing service to different geographic areas (e.g., urban core vs. developing fringe). However, participants opted against area-specific fees in deference to the Twin Cities' history of regional cost-sharing and the fact that many geographic cost differences were the result of facility siting decisions. An innovative alternative was to adjust the interceptor portion of the wastewater fee using density as a criterion. Under this approach, service availability charges were based on project density and less dense projects paid a higher fee per unit than more dense projects.