Oswego to increase water tap-on fees for new residential developments

Oswego village trustees plan to increase the village’s water tap-on fees for new residential developments by $3,000 per unit in part to keep up with what surrounding communities are charging.

The increase will also help ensure that residential development is paying its fair share for improvements to the village’s water system, such as the plan to bring Lake Michigan water to Oswego by 2028. Lake Michigan water is needed because the village’s aquifers are depleting.

Staff is recommending the village increase its water tap-on fees by $3,000 to bring them to $5,200 per unit. The village’s current residential water tap-on fee is $2,200 per unit for all housing types (single-family, townhouse and apartments), regardless of bedroom count.

As Oswego Village Administrator Dan Di Santo told village trustees at the June 10 Committee of the Whole meeting, water tap-on fees allow new residential development to financially contribute their fair share to the legacy cost and future development of the village’s water system.

Oswego’s current water tap-on fees are lower than surrounding municipalities.

“These fees are low compared to Yorkville’s current fees ($6,761 - $7,555) and their recently approved fee increases out into 2028 ($9,761 - $10,555),” Di Santo said. “We want to stay competitive within the market, but we don’t want to raise them so high that people stop building in Oswego and we’re back to where we were in 2015, when we had the school district and others saying please lower your fees so we can start bringing in impact fees again.”

Di Santo said the village wants to evaluate the fees every few years to see if they need to be adjusted.

Oswego Village President Ryan Kauffman said he was comfortable with increasing the fees to $3,000.

“It keeps us competitive and I’m comfortable with that,” he said.

But he doesn’t want to increase fees on businesses.

“In my mind, we need to be doing everything we can to incentivize businesses to come and open up shop in Oswego,” Kauffman said. “And I would just hate to see us doing anything that would hinder or tap down on businesses coming to Oswego.”

Oswego Village Trustee Karin McCarthy-Lange agreed that the fees for businesses should not be increased.

“I also agree with staff that $3,000 is a good number,” she said. “It keeps us competitive. But do we think that in the long run, it will help to keep our water rates a little lower than what we’ve been looking at?”

Di Santo said that is certainly the hope.

Oswego Village Trustee Jennifer Hughes said it is a complicated issue.

“If you raise the connection fee, that goes against your affordable housing,” Hughes said. “The person that’s going to pay it is the person buying the house. You’re raising their purchase price by $3,000. On the flip side, the residents who are already here are already paying to upgrade the water system. And so they’re carrying a significant burden. And so somebody who is coming into the community should be paying a little bit more against that cost.”

In response, Di Santo agreed that the more fees you put on housing, the more expensive housing gets.

“But I think what we learned in the Homes for a Changing Region study is that if you want affordable housing, it’s not going to happen on it’s own,” he said. “You need to incentivize it, such as the state working with developers to use tax credits. Also, there’s village incentives that you can use...If you want affordable housing, it doesn’t happen on it’s own. You have to attract it.”