COLUMBIA, Mo. - A Columbia city councilman claims the local Board of Realtors argument against an electric connection fee is flawed.
Ian Thomas wrote to the board on Thursday in response to their opposition to charging new construction a fee for connecting the city's electric system.
Thomas has said that the brunt of paying for the city's growing electric needs falls on current utility customers, and that new development doesn't pay a fair share in that growth. New development does have to pay a connecting fee for things like sewer and water, and must sometimes build those utilities to connect to the city's pipes. In the case of electricity, though, the city pays for the new lines and power poles.
"And even though we are continuing to expand the capacity of that electric system, the new development is not paying their share of that cost," Thomas said.
The Columbia Board of Realtors wrote in November that the electric connection fee would further hurt home builders' ability to create new, affordable housing. Permitting and connecting costs have gone up substantially in the last decade, board president James Meyer wrote. The city increased its sewer connection fee from $800 to $2,400, Meyer used as an example, and said the permitting costs exacerbate the problem of building homes under $200,000.
"Adding another fee to overall building cost with potential for more increases in the coming years makes it more difficult for families to live in Columbia, and forces many families to live outside the city limits while continuing to use Columbia's infrastructure while they work, shop and play in this city," Meyer wrote.
Thomas said that low-income people looking for a home are often not seeking a newly built home. Builders in Columbia also aren't constructing affordable housing, Thomas said, leaving the affordable housing stock to existing homes.
The city spends millions of dollars to expand its electric system, sometimes paying for it through bonds. City voters approved a multimillion dollar bond issue in 2015 for new transmission capacity, including a new substation in south Columbia. Columbia Water & Light planned on paying back that borrowed money through incremental rate increases.
Thomas said this system puts a burden on current customers to pay for the expansion caused by a growing city.
"At the moment, you're going to be paying well over the odds because a big chunk of your utility payments are going to subsidize new development," Thomas said.
Thomas added that he would support waiving or discounting the connection fee for homes that sold for an affordable price.