City, builders discuss development cost

The city budget for fiscal 2007, which passed Sept. 18, originally included an increase in electrical connection fees for home builders whose projects involve extending the city’s power grid.

The Columbia City Council, however, tabled the bill at its past two meetings because developers complained that placing the burden of expansion on new development would adversely affect home buyers.

That’s why Water and Light Director Dan Dasho met Tuesday morning with representatives of the Central Missouri Development Council and the Home Builders Association of Columbia to discuss alternatives to the city’s proposal.

As it stands, the city absorbs the cost of electrical connections, passing them on to all utility customers through their electric bills. The city’s proposal would instead call for a one-time $250 connection fee at the time of initial service hook-up, which would be paid by the home builder.

Also, the developer would be responsible for the extension of underground power lines at a cost of $28 per foot for a 200-amp line or $40 per foot for a 600-amp line.

“To extend the line one mile would cost a builder nearly $250,000,” said Annie Pope, executive officer for the Home Builders Association. “That would cost a 25-house development $10,000 per house.”

Pope said her organization has been negotiating with the city for nearly 18 months. The association holds a monthly meeting with officials from the Columbia Public Works Department. Dasho brought the proposal to one of those meetings, and the talks began.

When the bill appeared on the council’s agenda as part of the package of budget-related ordinances, members of the Home Builders Association were caught off-guard.

“We were blind-sided when it hit the council agenda,” Pope said. “We understood we were in a dialogue.”

Dasho said the bill appeared on the agenda after his department filed a report and the legal department approved it.

He conceded, however, he should have maintained better communication with the developers.

Pope said discussions with Dasho were going well. But she felt the introduction of Don Stamper, executive director of the Central Missouri Development Council, to the talks muddied the water. She said last week that she wasn’t sure how much longer the talks would continue.

Dasho, however, said Stamper’s presence at the meeting will not delay talks any further.

Stamper said he is trying to protect home buyers from escalating fees the city is imposing on developers. He cited increases in water and sewer fees that already have passed.

“City development fees are increasing 22.4 percent a year,” Stamper said, citing a study commissioned by the development council. “The city budget is increasing faster than housing starts.”

Stamper also represents developer Billy Sapp, who is in the midst of developing a golf course community that will feature hundreds of homes on the east side of Columbia.

The home builders contend all residents of Columbia should equally share the cost of extending the power grid, while the city’s proposal would place that burden on those who are developing property and requiring that the grid be extended. Additional charges on new construction will price working families out of the housing market, Pope said.

“They think that they are assessing the builder, but they are assessing the home buyer,” Pope said. “The builder doesn’t have room to absorb that cost.”

Stamper agreed, saying it is inaccurate to assume that the city is charging developers through these fees because builders would pass the cost to the buyer.

Pope said the builder already incurs a large enough cost of infrastructure to endanger profits.

“These builders have families to feed,” Pope said.

Dasho said he, Pope and Stamper have discussed a number of options, including maintaining the current system and allowing developers to install the connection on their own schedule under city supervision.

The latter option would be similar to the current system the city and developers use to establish new water connections.

Dasho defended the practice of holding talks with Pope and Stamper, saying “stakeholders have the right to respond.” He said the builders weren‘t forced to take their concerns to the council because the material being discussed is quite technical.

The two sides agreed to meet again Oct. 17.