Hoquiam has slashed its water and sewer hookup fees for new construction — known as capital facilities charges — a move that its supporters believe will spur more new development in the city.

Effective March 1, the cost for new sewer hookups for a 5/8- to ¾-inch meter will drop from $2,950 to $750. For water, it drops from $3,140 to $750.

At this week’s council meeting, Finance Director Corri Schmid said the city public utilities committee “wanted to have capital facilities charges, but not extreme like they were. They were wanting them to be lower than neighboring cities, so we came up with the $750” for the 5/8- to ¾-inch hookups, the typical size for a single-family dwelling.

For larger meter sizes, the city has adopted standards from the American Water Works Association, which uses a multiplier to determine the fees associated with the larger meters.

City Administrator Brian Shay said a recent utilities rate study undertaken by the city recommended adopting the standard base fee and using the American Water Works Association multiplier for larger meter sizes.

The charges will now be uniform for both water and sewer hookups. For example, the rate for a 1-inch meter will be $1,875 for water and sewer each. Previously, the charges were $7,850 for water and $7,380 for sewer. Mayor Ben Winkelman said he believes the new structure puts Hoquiam’s fees more in line with those in other cities.

The discussion over the capital facilities charges has been going on for a few years. In 2018, the council voted 8-2 to a reduced rate fee, but then-Mayor Jasmine Dickhoff vetoed the ordinance, a rare move in municipal governments.

An ordinance to do away with the fees altogether came before the council last November, the same meeting where the council voted “reluctantly” to raise water, sewer and stormwater rates as recommended by a rate study. Those rate increases were necessary to cover the cost of annual operations and maintenance of the system, according to the study.

About the capital facilities charges, Winkelman said in November, “At least my perspective on it is it’s so much better to have a large utility user back on the rolls,” and the elimination of the capital facilities charges would spur such development. The council discussion that followed led to the compromise ordinance passed this week.

The ordinance to change the fee structure also added a new requirement: A utility service will be deemed abandoned after five years without usage. “Upon a request for new utilities (even if the old lines still exist and can be used) the applicant would pay the capital facilities charges prior to occupancy,” read a committee report to the council.

“It used to be if you ever had water service on the property then you didn’t have to pay the charge,” said Winkelman. “This kind of balances out the reduction in fees. It makes them applicable to property that hasn’t been paying for water and sewer service to have to apply after five years, but at the lesser amount.” Later, he said he believed this new requirement would be more beneficial financially to the city than keeping the capital facilities fees high.

City Councilwoman Tracey Ushman agreed with the five-year requirement, saying it would “give people incentive to use their property within five years rather than just let it set there. We don’t want it to just set there.”

The council unanimously approved the ordinance, which goes into effect March 1. The complete list of the new capital facilities charges and the related ordinance can be viewed online by going to https://cityofhoquiam.com/government/minutes-and-agendas/ and clicking on “Feb. 22, 2021” under the agendas heading.