A proposed large increase in Oro Valley's water-connection fees met with opposition from development and building representatives at a public hearing Wednesday night.
The Alternative Water Resources Development Impact Fee could increase from $300 to as much as $4,982 for the most common-sized residential water meter.
The Potable Water System Development Fee could increase from $1,774 to as much as $2,567 for the same size meter.
The first fee is the more controversial of the two because of the size of the increase.
But it is necessary to balance the costs of eventually bringing Central Arizona Project water to Oro Valley between new and existing customers, said Oro Valley Water Utility Director Philip Saletta. Existing customers pay for it through the Groundwater Preservation Fee.
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If approved at the next public hearing June 20, the combined increases would raise the cost of building an average new home in Oro Valley by $5,475.
Given the increased costs, it wouldn't make economical sense to build in Oro Valley, said Randy Agron, A.F. Sterling Homes' executive vice president and chief of operations, at the hearing.
Oro Valley already charges the second-highest home-building fees in the area, according to the Southern Arizona Home Builders Association, but the proposed increases would push Oro Valley to No. 1.
The proposed Alternative Water Resources Development Impact Fee increases for commercial development are even larger, going from $2,400 to $63,760 for a 2-inch water line connection and from $15,000 to $398,500 for a 6-inch connection.
The proposed fees would increase developer Venture West's water-connection costs from $221,000 to $591,000 on a 100,000-square-foot office development alone, said partner Fred Steiniger. The company recently broke ground on the development and, at 10 acres, it represents only 5 percent of what it has invested in Oro Valley land.
The increases have been a source of contention for months. On June 20, the council may choose to soften the Alternative Water Resources Development Impact Fee's effect by dividing the increase into three-, four- or five-year increments.
Town officials say the large increases are necessary to cover the cost of bringing a reliable water source to Oro Valley, but opponents say increasing the costs so dramatically will discourage development in Oro Valley.
If the increased impact fees are approved, they would take effect Sept. 19.
