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G-1147 - 03/26/2019 - WATER - Ordinances Supporting DocumentsBOT AGENDA Page 1 BOARD OF TRUSTEES MEETING SAMUEL E. DEAN BOARD ROOM BUTLER GOVERNMENT CENTER 1200 OAK BROOK ROAD OAK BROOK, ILLINOIS 630-368-5000 AGENDA ITEM Regular Board of Trustees Meeting of March 26, 2019 SUBJECT: Infrastructure Cost Allocation - Continued Discussion FROM: Riccardo F. Ginex, Village Manager Greg Jones, Village Attorney BUDGET SOURCE/BUDGET IMPACT: N/A RECOMMENDED MOTION: N/A Background/History: At the last Board meeting the Board asked the Village Attorney to prepare a draft ordinance regarding what type of authority the Village could possibly impose for infrastructure cost allocations on those wishing to develop within the Village through an application for a Planned Unit Development, subdivision, or with a building permit. The Village Attorney has provided the attached draft ordinance for your review. Recommendation: The Village Board provides direction to staff and the Village Attorney. ITEM 9.B ORDINANCE 2019- AN ORDINANCE AMENDING SECTION 8-5-2 OF TITLE 8 OF THE VILLAGE CODE OF THE VILLAGE OF OAK BROOK REGARDING FEES FOR UPGRADED WATER SERVICE CONNECTIONS WHEREAS, the Village of Oak Brook, Illinois ("Village") is an Illinois municipal corporation organized and existing pursuant to the Illinois Municipal Code, 65 ILCS 5/1-1-1, et seq.; and WHEREAS, Section 11-150-1 of the Illinois Municipal Code (65 ILCS 5/11-150-1) authorizes the Village to, by ordinance, collect a fair and reasonable charge for connections to the Village’s Waterworks System in addition to those charges covered by normal taxes, for the construction, expansion, and extension of the Village’s Waterworks System; and WHEREAS, pursuant to Section 8-5-2 of the Village Code of the Village of Oak Brook, the Village imposes water service connection fees based on the size of the water service extension to the property; and WHEREAS, the Village Code does not currently impose any fee for the upgrade or enlargement of an existing water service extension to a property, thereby imposing such cost on the Village and its taxpayers as a whole; and WHEREAS, the President and Board of Trustees of the Village of Oak Brook have reviewed the existing water service connection fees and determined that it is necessary to impose a fee for the cost of an upgraded or enlarged water service extension to a property in order to more properly account for the cost of constructing, expanding, and extending the Village’s Waterworks System; NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS as follows: Section 1: The foregoing recitals are adopted as though fully set forth in this Section. Section 2: Section 8-5-2 of the Village Code of the Village of Oak Brook is amended to read as follows (deletions in strikethrough, additions in bold and underline): 8-5-2: FEES AND CHARGES: * * * C. Water Service Connection and Extension Fees: * * * 2. For new water service connection made on or after July 15, 1999: This fee is assessed based on the size of the water extension and includes the fee for inspection of all lines. Ordinance 2019- Amending Water Service Connection Fees Page 2 of 3 Water Service Extension Size Connection Fee 1 inch $ 1,150.00 11/2 inch 2,760.00 2 inch 3,680.00 3 inch 7,360.00 4 inch 11,500.00 6 inch 23,000.00 8 inch 74,750.00 There shall be no water service connection or extension fee for water lines used exclusively for irrigating/sprinkling (landscape watering) on predominantly public property within the Village 3. Charges For Upgrades to Preexisting Service: Where a new building is constructed, or an existing building or structure is altered, modified, or newly occupied on a lot or tract to which water service has been previously provided, and the new construction, alteration, modification, occupancy, or addition requires a larger water service extension than the existing or previous service, no permit shall be issued for the new construction, alteration, modification, occupancy, or addition before the service applicant or customer pays the incremental difference between the connection fee required for the previous water service extension size and the connection fee required for the newly enlarged water service extension as specified in this Section. Section 3: This ordinance shall be in full force and effect from and after its passage, approval and publication as required by law. Section 4: All ordinances or parts thereof in conflict with the provisions of this ordinance are hereby repealed to the extent of such conflict. [SIGNATURE PAGE FOLLOWS] Ordinance 2019- Amending Water Service Connection Fees Page 3 of 3 APPROVED THIS 26th day of March, 2019. Gopal G. Lalmalani Village President PASSED THIS 26th day of March, 2019. Ayes: Nays: Absent: ATTEST: Charlotte K. Pruss Village Clerk 4810-8229-6940, v. 1 A Professional Corporation 140 South Dearborn Street, Suite 600 Chicago, IL 60603 www.ancelglink.com Gregory W. Jones gjones@ancelglink.com (P) 312.604.9195 (F) 312.782.0943 CHICAGO ● VERNON HILLS ● NAPERVILLE ● CRYSTAL LAKE ● BLOOMINGTON M E M O R A N D U M To: Village of Oak Brook President and Board of Trustees CC: Riccardo F. Ginex Tony Budzikowski From: Gregory W. Jones Kurt S. Asprooth Subject: Water Infrastructure Charges Date: March 7, 2019 The Village of Oak Brook (“Village”) recently conducted an analysis of the Village’s waterworks system (the “Water System”). As a result of that analysis, questions have arisen regarding the ability of the Village to require heavy water users to pay for upgrades to the Water System. This memorandum summarizes the Village’s ability to require property owners to pay for upgrades to the Water System. Zoning Authority The Village has the power to impose impact fees and other exactions for water system upgrades or improvements under its zoning authority. The Village has the authority to impose conditions upon the approval of certain zoning applications, including special use permit applications. The Municipal Code authorizes the Village to impose “conditions reasonably necessary” to meet the special use standards. 65 ILCS 5/11-13-1.1. In pertinent part, the Village’s special use standards require that any special use must be “so designed, located, and proposed to be operated that the public health, safety and welfare be protected.” Oak Brook Code, 13-14-9(E). The Village also has the authority to impose conditions on the approval of a planned development, which is a type of special use. A condition imposed on a special use permit “must be reasonably necessary to protect the public health, safety, and welfare.” Halfway House v. City of Waukegan, 267 Ill.App.3d 112 (2nd Dist. 1994). A condition is valid if required because of “facts specifically and uniquely attributable” to the proposed special use. Board of Education of School District No.68, DuPage County v. Surety Developers, Inc., 63 Ill.2d 193 (Ill. 1975). ANCEL GLINK March 7, 2019 Page 2 CHICAGO ● VERNON HILLS ● NAPERVILLE ● CRYSTAL LAKE ● BLOOMINGTON In the case of upgrades or repairs to the water system, if the need for such upgrade or repair is specifically and uniquely attributable to a proposed development that includes a special use application, then the Village may require that the applicant/developer financially participate in the Water System upgrade or repair. With specific respect to planned developments, the Village’s Zoning Ordinance expressly contemplates the possibility of exactions or donations to the Village to offset the planned development’s impact on public resources. Section 13-15-3(B)(4) states as follows: The planned development shall be designed so that adequate utilities, road access, drainage, and other necessary facilities will be provided to serve the development. The planned development shall include such impact donations as may be reasonably determined by the corporate authorities. The required impact donations, including, without limitation, obligations under the village’s subdivision regulations, shall be calculated in reasonable proportion to the impact of the planned development on public facilities and infrastructure to the extent permitted by law. Accordingly, the Village has the authority to require planned development applicants to pay for their proportional, demonstrable, specific, and unique impact on public facilities, such as the Village’s Water System, under its zoning authority. For example, if the need to replace an existing watermain serving a planned development site is “specifically and uniquely” attributable to the development, then the Village may require the developer to financially participate in the upgrade cost as a condition of the planned development approval. A developer may contend that the watermain is simply past its useful life and would need to be replaced regardless of its proposed development. In that case, the analysis would become fact intensive. Nevertheless, even if the Village could show that the watermain needs to be replaced sooner than it otherwise would have due to the planned development, the developer could likely be required to pay for at least a portion of the replacement cost. The Village’s newly established water model may provide a helpful tool to determine what impact a development will have on the Water System. Having such a tool is significant, as it will help establish what “specific and unique” impact a development will have on the Water System, and allow the Village to impose costs for upgrades to the system accordingly. Subdivision Authority ANCEL GLINK March 7, 2019 Page 3 CHICAGO ● VERNON HILLS ● NAPERVILLE ● CRYSTAL LAKE ● BLOOMINGTON The Village can also require similar impact fees or public improvements under its Subdivision Ordinance. 65 ILCS 5/11-12-5. Under Illinois law, the test for impact fees under a subdivision ordinance is essentially the same as the test to require a dedication/exaction as a condition of zoning approval; namely, whether the impact fee is “specifically and uniquely attributable” to the proposed development. Northern Illinois Home Builders Ass’n v. County of DuPage, 165 Ill.2d 25 (Ill. 1995). The Village must be able to “demonstrate that its exaction is directly proportional to the specifically created need” in order to meet this standard. Id. The Village’s Subdivision Ordinance requires, as part of any new subdivision, that the owner/developer construct certain public improvements such as streets, sidewalks, sewer systems, and water distribution systems. Specifically, Section 14-6-3(B) of the Village’s Subdivision Ordinance requires, as part of a subdivision, that a water distribution system designed and constructed in accordance with Village standards and requirements be installed to serve all properties within the subdivision, and that the system that is installed “conform with the long range water plans of the village of oak brook.” As was the case with the Village’s zoning authority, the Village may impose impact fees on a developer to construct or upgrade the Water System, so long as that construction or upgrade is specifically and uniquely attributable to the proposed subdivision. The Village can use its subdivision authority to ensure that any future developments that include a subdivision approval install adequate water systems. The Village may wish to review the existing requirements under the Subdivision Ordinance to determine if additional requirements (such as larger mains) should be mandated and that the existing requirements “conform with the long range water plans” of the Village. Given the recent analysis of the Water System, the Village’s long range plans may have changed. Water System Connection Fees While the Village has the broadest authority to require a property owner to pay for upgrades or repairs to the Water System under its zoning and subdivision authority, the Village can still impose certain connection fees to recoup the cost of construction and expansion of the Water System. Section 11-150-1 of the Municipal Code provides as follows: ANCEL GLINK March 7, 2019 Page 4 CHICAGO ● VERNON HILLS ● NAPERVILLE ● CRYSTAL LAKE ● BLOOMINGTON The corporate authorities of any municipality operating a waterworks, sewerage or combined waterworks and sewerage system have the power by ordinance to collect a fair and reasonable charge for connection to any such system in addition to those charges covered by normal taxes, for the construction, expansion and extension of the works of the system, the charge to be assessed against new or additional users of the system and to be known as a connection charge, except that no connection or water usage charge shall exceed the actual cost required for the installation or usage of an automatic sprinkler system. The funds thus collected shall be used by the municipality for its general corporate purposes with primary application thereof being made by the necessary expansion of the works of the system to meet the requirements of the new users thereof. This provision allows the Village to impose connection fees when “new or additional uses” connect to the Village’s Water System. Section 8-5-2(C)(2) of the Village Code currently imposes connection fees based on the size of the connection. The connection fees range from $1,150 for a 1-inch connection, up to $74,750 for an 8-inch connection. The current issue confronting the Village involves properties where a connection to the Water System currently exists, but due to a change in use, a larger connection is required. The current Village Code does not expressly impose any additional fee for an increased connection size. In order to account for this additional cost, some communities require the existing user to pay for the upgraded connection. Essentially, the upgraded connection is treated as a “new or additional user” of the system, and the upgraded connection is classified as an “expansion” of the system under Section 11-150-1. For example, the Village of Downers Grove’s Code requires that “replacement of water service pipes for the purpose of upgrading or increasing in size is the responsibility of the owner of the premises.” The City of Evanston’s Code states that “the fee for upgrading to a larger connection shall equal the difference between the costs of the new, larger connection and the original connection.” The City of Naperville’s Code provides the following regarding upgraded connections: Charges For Preexisting Service: Where a new building is constructed or an existing building or structure is altered or modified on a lot or tract to which water or wastewater service has been previously provided, and the new construction, alteration, or addition requires a larger water or wastewater service connection than the existing or previous service, no building permit shall be issued for the new construction, alteration, or addition before the service applicant or customer pays the incremental ANCEL GLINK March 7, 2019 Page 5 CHICAGO ● VERNON HILLS ● NAPERVILLE ● CRYSTAL LAKE ● BLOOMINGTON difference between the system development charge required for the previous connection and the infrastructure availability charge for the newly required connection as specified in this Section. If the Village desires to recoup the costs of installing these upgraded connections to existing users, the Village could amend the Village Code to include similar language. The Village could require applicants for building permits to provide estimated water usage, and that estimate could be run through the Village’s water model to determine what impact the increased usage will have and what size connection is required. Finally, the Village could review its water connection fee schedule to ensure that it is up to date and consistent with the Village’s full legal authority. We are happy to discuss this memorandum at your convenience.