Prior to Rainbow Municipal Water District’s enactment of a sewer moratorium, some property owners purchased equivalent dwelling units in advance of developing their properties since they might not have been able to obtain such EDU capacity had they waited. They signed standard contracts which gave them two years to hook up to the system with an option for two one-year renewal periods.
Not all of those properties were developed immediately. “In the past quite a few sewer connection fees had been paid and projects had not come forward,” said Rainbow general manager Brian Brady. “Many of these sewer contracts had expired.”
The Rainbow board of directors, along with district staff, felt that a policy should be added to cover those expired contracts. On Aug. 27, the board voted 4-0, with Bob Lucy absent, to amend the district’s Administrative Code to address those expired contracts.
“This was just a change in the Administrative Code on how to bring these contracts current,” Brady said. “It was an administrative solution to a number of expired contracts.”
The situation involves 32 customers who purchased a total of 558 EDUs. Many of them continued to pay charges on the EDUs they purchased even though they were not connected to the sewer system.
The Administrative Code previously stated that if no connection was made and a permit was not renewed the permit expires and all rights of the permit holder resulting from the issuance of the permit are terminated. The additional language states that all fees on a granted permit are non-refundable and shall remain with the district but that an owner of an expired permit may apply previously-paid fees towards the purchase of new EDUs provided that the purchase is made by the owner of the expired permit and that the owner of the expired permit had continued to pay the unconnected charges without interruption. The new language also states that expired permits are not transferrable and that if there is any change of ownership (including but not limited to foreclosure, bankruptcy, or sale of land) all fees previously paid on the permit are non-refundable and may not be applied by the new owner towards the purchase of new EDUs.
“It’s just a matter of bringing those contracts up to date,” Brady said.