JACKSONVILLE, Fla. — JEA is looking at boosting fees paid by builders for connecting new developments to water, sewer and reclaimed water services in what would be the first jump in those fees in 15 years.
JEA could bring in an additional $65 million per year, but it might mean higher home prices if builders pass the cost on to buyers.
Greg Matovina, a land developer who is interim executive officer for the Northeast Florida Builders Association, whistled in reaction to hearing the fee amounts being discussed by JEA and said it likely would end up adding cost for home buyers.
"It’s a question of what the market would bear," he said. "Right now, the market probably would bear it."
He said it would put the price of a home beyond the reach of some prospective homebuyers. "If you drive that price up, you’re cutting out a lower rung on the market," he said.
JEA officials say the fees haven't kept pace with the cost of adding capacity at water and sewer plants and probably should have been adjusted along the way rather than going untouched for so long.
“I expect it will be controversial," JEA board Chairman John Baker said during a meeting of the utility's Finance and Audit Committee on Friday.
Board member Marty Lanahan, who was on the board in 2005 during a prior term at JEA, said it was controversial then, too.
"It was in the past when we looked at it, but I think it’s time to do it," she said.
The water and wastewater capacity fees are one-time fees the JEA charges when builders or customers connect to water and sewer service. The capacity fees do not affect the monthly bills that customers pay.
The capacity fee for a water connection hook-up now is $339.50 and could go up to $653, based on the figures being considered by JEA.
The capacity fee for connecting to reclaimed water is $339.50 and would rise to $817.
For a sewer connection, the capacity fee is $1,274 and would jump to $3,320.
“This is a capacity fee that hasn’t been increased for 15 years and it needs to be increased more regularly than that to cover our costs," JEA CEO Jay Stowe said.
Matovina said that when JEA raised the fees in 2005, the utility phased it in with two increases and also gave developers the ability to pre-pay fees at the lower rate for developments that were under way.
He said homebuilders continuously face higher costs, such as big increases in lumber prices, that end up being passed along to consumers, so "we certainly wouldn't be unreasonable" and say JEA cannot pass along its higher costs to the building community.
“Fifteen years is a long time, and I’m sure their costs have risen for building out their capacity," he said.
He said it would be better if JEA did the fee evaluations more often, and if there is an increase this year the utility should "definitely look at a way to transition like we did in 2005.”
The JEA board could vote in June to schedule a rate hearing on the capacity fees. The hearing would be in July and the rate changes could be effective Oct. 1, according to a schedule shown at the Finance and Audit Committee meeting.
JEA has not decided whether the fee increase would be done at one time or be phased in. Before having a rate hearing, the utility will have an outside consultant review the current fees and how they match up with JEA's cost of providing service.
JEA also is examining its tap and meter fees, its 10-inch meter rate, and its irrigation rate as it examines how to keep up with the growing demand for water and sewer services.
