I am partly posting these because this is the spot I will add more info/follow-up – the Commissioners were not given the emails I sent before their previous meeting, and it is unfortunate that the Commission’s inbox does not enable timely communication.
I hope this is also useful context for anyone who may attend the Thursday, June 11, Community Meeting about Utility Budgets and Rates, virtual, 6pm (link) – Proposed utility budget and rate updates, Infrastructure and capital improvement projects, Financial planning and affordability considerations, and Customer assistance resources. Hopefully we can get some of these questions answered then, though I can’t guarantee I’ll be able to attend myself.
The Environmental Services Commission will be considering these changes to Utility Connection Charges at their next meeting on June 18th, so I’m hoping I sent my letters in today in time to be provided to them.
Letter 1 (6/4/26):
Hello,
I noticed in the Agenda Memo for tonight’s CIP discussion that in Table 2, $60.5M and $5.3M are budgeted for water and sewer “capacity for growth” – but there is no line item for stormwater capacity for growth, even though new rules increasing density will also allow greater impervious surface percentages for new developments. Should this cost be factored in?
Also, there were some notes in the May 7th meeting materials that “Following the completion of the updates to the water and sewer utility comprehensive system plans, Utilities anticipates contracting for an independent third-party study to recommend policy options to the CRC methodology that comply with the City of Bellevue’s “growth-pays-for-growth” financial policy and achieve higher cost recovery rates relative to the historical cost recovery results of DFCCs. These policy options will likely be presented to the ESC in 2029.”
I think the above quote means that we do not expect growth to pay for growth in the near term, and I also hope you can clarify with staff whether the CRCs that will now be paid will be any higher for a development that will require system expansion. Will builders have an incentive to use lots where service is already available, since it’s expensive to expand the system?
I also hope you can clarify whether the $60.5M includes DFCCs that will be going uncollected, which I believe is about $45M. I can see from page 25 of the Details attachment that a large chunk ($9.0M) of the $60.5M will be devoted to reservoir capacity supporting the Downtown, Bel-Red, and Wilburton Neighborhoods. The sewer capacity for growth item does not appear to reflect any impending changes (page 29), so it appears that any effects of your decision next meeting on “Changes to Utility Connection Charges” will be in addition to that.
I also hope you will ask about how the change in collection of the CRCs will affect the operating budget in the future. I see that for 2027 and 2028, the RCFC revenue is projected to be $1.7M and $2.0M, and developer fees are going up from $207k annually to $841k + $691k + $695k annually, but getting that money upfront means there is less (how much less?) being paid back gradually in the future. I am not sure how much of the revenue collected previously was due to these connection fees being charged over time, but I understand we are expecting the total paid in by any new development to be much lower than before in an effort to make multifamily housing construction more affordable. I also wonder if the variability year-to-year will make it harder to offer stability to our workforce and the ratepayers.
I have reviewed the May 7th draft minutes and it does not appear that the potential impacts on ratepayers from the CRC changes were adequately discussed. If there was more detail around that discussion, I hope it can be added to the record.
Thanks,
Nicole Myers
Letter 2 (6/4/26):
Also, I see on page 5 of the BCC changes Council is considering next week that a utility developer extension agreement may include “meters and water services of any size, fire hydrant assemblies, fire protection systems, water main extensions, and/or other system components.”
https://bellevue.legistar.com/View.ashx?M=F&ID=15556896&GUID=A5AB25D0-DB6D-4E6B-8DBB-1A26B0632A1C
I hope these costs are factored in as part of the system connection costs as well.
Nicole
Letter 3 (6/10/26):
To the Environmental Services Commission:
Here is an example of how changes can be communicated to describe the impacts for various project categories. I think a similar format would be useful to understand the impacts of the fee changes on single family, small multifamily (6 units), and large multifamily (100 units) projects. It would also be nice to have an authoritative place where fees related to sewer connections, water connections, etc, are specified.
Separately, I hope there will be scenarios showing the expected annual revenues under the current CRCs, and then what we can expect as the old charges phase out, assuming growth stays constant, and also a scenario where growth is increasing.
I strongly support the idea of reducing surprises for utility customers. Changing to upfront billing would decrease the likelihood of surprise bills, but it does not solve the problem for prospective residents of existing buildings that are still in their 10 year payback window.
A more comprehensive solution would be to require transparency around foreseeable housing related costs anytime someone is signing a residential lease or about to purchase a home. For renters, Bellevue should require a disclosure form that specifically lists expenses that may be related to “valet” trash pick up, mail/package delivery, utility usage for common areas, technology/connectivity fee, doorknob/lock operation fee, keyfob issuance and replacement fees, pet fees, payment portal fees, tenant portal fees, lease renewal fees, credit bureau reporting fee, lease name change fee, and the duration and cost of the utility connection fee. I’d also talk to the Tenant Union over in Seattle and see if there are any new tricky things they’re aware of.
It is my understanding that changing to an upfront cost also can be addressed by offering financing on the CRC cost. We don’t want to discourage housing production by increasing the immediate costs if that doesn’t fit with the builder’s needs. It seems the workaround is to make a significant cut in the total CRC $ collected, and it is my understanding that this will increase costs paid by other utility customers, which is also unacceptable in a time of rising utility bills.
Thanks,
Nicole Myers
Bellevue resident
<An email from Kirkland to their Developers Partnership Forum on the topic of Impact Fee Changes was forwarded with this letter>
Letter 4 (6/10/26):
To the Environmental Services Commission:
It is my understanding that the city won’t try to collect on the Direct Facility Connection Costs, but we were told in the BDC meeting that these costs would still be recovered through the CRC. In retrospect, I’m not sure how that would work if one property owner builds before another. Would the CRC going to increase to cover the true connection costs for that parcel? Judging from the code update project website, there is only the mention that they’d be charged a small CRC for “affordability,” as calculated with the single family equivalent use. In combination with the quote below, it appears to be acknowledged that growth *doesn’t* pay for growth. “Following the completion of the updates to the water and sewer utility comprehensive system plans, Utilities anticipates contracting for an independent third-party study to recommend policy options to the CRC methodology that comply with the City of Bellevue’s “growth-pays-for-growth” financial policy and achieve higher cost recovery rates relative to the historical cost recovery results of DFCCs. These policy options will likely be presented to the ESC in 2029.”
It’s one thing to write off the $45M because we don’t want to incentivize new buildings to undersize their connections or scale back their ambitions for the site. I’m more concerned that it may mean a blanket policy where these will not be charged to the builders in the future (and how could it be applied fairly if the direct connection costs are not being charged to adjacent parcels that develop later?). It will unleash development on parcels that would otherwise have been “not cost effective” to build on, and I think passing this change would write them a blank check that will be drawn from ratepayers.
Here is an example of a system extension that sounds expensive. Would it be much easier for things like this to pencil out if they aren’t paying their real costs? Please keep in mind that the Planning Commission/Council dramatically weakened the Critical Areas Ordinance last December, eliminating the Development Intensity factor that previously reduced the amount that can be built on sites with steep slopes, wetlands, streams, etc., and allowing the Reasonable Use Exception to allow multifamily construction. There’s currently a proposal for a single family home to be built on a stream in Bellevue, which I’m concerned could become precedent for even more intensive uses of critical areas.
https://permitsearch.mybuildingpermit.com/PermitDetails/25%20126929%20DB/BELLEVUE
The site is located at the northeast intersection of SE 60th St and Lake Washington Blvd SE. Currently, the site is a forest vacant lot. We understand, from information provided by owner that the site has a wetland and stream at west. There are steep slopes along property west and south boundaries to the SE 60th St and Lake Washington Blvd SE according to the City of Bellevue GIS Map. The proposed project scope is to have a residential subdivision. Currently, the site does not have a sewer connection. The nearest manhole connection point is located at SE 56th Pl. Therefore, an approximately 900-foot sewer mainline extension is proposed to serve the subject subdivision project. A geotechnical exploration is proposed along the Lake Washington Blvd
Any updates to my thinking on this will be posted at https://newbellevue.com/?p=1764 – I am expecting some updates too close to the meeting for your email inbox to be a good distribution mechanism.
Thanks,
Nicole Myers
Bellevue Resident
Letter 5 (6/10/26):
To the Environmental Services Commission:
I would also like to protest the underlying assumption of the new line connection fee structure that the rate-averaging of a large building means that the costs for the system are lower. On the timescale of an electrical utility, sure, the peak usage matters a lot, but if residents in an apartment building are all taking showers at different times, does that change the amount of reservoir capacity we need to build? See Email #1 for a reference to how much we’re planning to spend on just some of the reservoir expansion.
Because the residents of a building will not all be using the water simultaneously (coincident use), the peaks will be smoothed out, and the justification being given for reducing the connection charge for such buildings is that their peaks aren’t as high. You could say the same applies to a neighborhood of homes, however. I’d expect that the cost to serve a customer depends on the usage over a day or two (as with heavy agricultural use that might occur based on the weather) rather than on an hourly basis.
Separately, I still think that there’s a good chance the winter water usage measures that determine sewer charges are fundamentally flawed depending on how hot our spring weather is, since irrigation use is not supposed to be calculated into the winter usage volume that is a proxy for the amount receiving sewer treatment. This is also one area where single family and multifamily will diverge, since I think the multifamily/commercial is more likely to have a separate meter for their irrigation uses. The system operators definitely see a jump in usage due to the change in seasons, so they know the timing is not always the same every year, but I don’t know how easy it is to have that information be used toward the calculation. We might also be able to cross-reference the sewer system depth measurements, though I don’t know if these only collect data for the upper end of the range to show where there is risk of overflows/a section filling up). Getting an accurate read on winter water use is important to ensure the right portion of the overall system costs are allocated on all users’ monthly bills.
Sincerely,
Nicole Myers
Bellevue resident
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