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Muskego and New Berlin hope developments don't go down drain

Retroactive sewer charges by MMSD raise concerns

April 9, 2012

Will retroactive sewer charges hinder development?

That's what area city planners would like to know, after the Milwaukee Metropolitan Sewerage District recently imposed retroactive sewer charges on new developments applying for sewer service.

In New Berlin, officials are afraid the new MMSD charges will jeopardize three major projects - the Mill Valley Business Park, development of the Giepel Sod Farm, and the TI Investors/Beloit Road property.

New Berlin protested the MMSD plan before the Sewer Commission approved it unanimously. The retroactive charges go back to 2008.

In Muskego, David Simpson, public works director and city engineer, said, "It has the potential to hinder growth."

Weighing the fees

But MMSD officials don't agree.

The total of five years of retroactive charges would come to only $677 for a tract of land worth $100,000 in 2008, MMSD controller Mark Kaminski calculated.

While that doesn't sound like much, Simpson noted that the five-year total charge would be more like $6,770 for land worth $1 million. Although that doesn't seem insurmountable, either, "you never know what the tipping point will be," on whether a project is deemed to be profitable, he said.

Naturally, growing communities such as Muskego and New Berlin are the ones the retroactive charge impact the most.

But MMSD has been mindful of communities' development concerns, Kaminski said, by making the retroactive charge only apply to land. "So it isn't anti-development," he added.

Sewer district officials see the retroactive charge as less burdensome than the sewer hookup fees many other communities charge for basically the same purpose - to make newcomers help pay for capital expenses. A sampling of such fees showed one as high as $4,730 for new homes in a county in Virginia and a fee as low as $255 in a community in Alaska. But fees of $1,000 and $2,000 appeared common.

Playing legitimate catchup

MMSD officials say they are trying to recoup money they think the MMSD should have received over the years from developable land anyway.

The retroactive charges will be levied only when communities ask MMSD to expand its sewer service area to include new developments. Theoretically, the land those future developments occupy should have been inside the MMSD's sewer service area all along, said Tim Bate, MMSD director of planning, research and sustainability.

Communities should have declared those areas as likely to be developed when the MMSD was planning for the year 2020 with the communities' help, Bate said. By underestimating the area that would eventually be served by the MMSD, communities did not have to pay so much toward helping the MMSD buy equipment and upgrade to get ready for the higher demands of 2020.

But that has now changed, as the retroactive charge recoups the payments the MMSD calculates it would have received since 2008, the first year it collected taxes based on its 2020 plan, MMSD officials said.

If developments can wait for 2017, they can get into the MMSD sewer service area for free. That's when the MMSD will probably adopt its 2030 plan, which will have redrawn sewer service boundaries, Bate said.

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