Oshkosh council workshop: rising utility special assessments, longer payment options and a June hearing

At an Oshkosh City Common Council workshop, city staff summarized why utility-related special assessments for water and sewer have risen and reviewed options — including longer payment plans, hardship deferrals and phased hookup charges — before public hearings scheduled in June.

City staff said construction and material costs have driven much of the increase. “In 2010, you would have been looking at around $5,500 each for sanitary and water. You know, now we’re closer to $15,000 each,” the presenter said while showing a hypothetical 150-foot-frontage parcel to illustrate homeowner impact. Staff attributed the rise to higher material costs, deeper installations where required and supply-price spikes that affected bids in subsequent years.

Why it matters: several large, recently annexed or formerly rural parcels face much larger upfront bills because assessments are calculated on frontage and lot depth. Councilors said those totals can be a serious burden for owners of large agricultural parcels and older lots that are only now being connected to city utilities.

Staff told the council that Oshkosh’s assessment methodology generally assumes an 8-inch main as the residential baseline and that the city absorbed upsizing costs when larger mains were required for system flows. A peer survey of seven communities showed similar approaches on the sewer side but more variation on water, where some cities use larger pipe-size bases for commercial and industrial connections and thereby shift more costs to developers.

The council discussed ways to reduce the upfront impact on owners. Options reviewed included longer installment plans, hardship deferrals, separating an upfront main cost from a later hookup or connection charge (the model used by Kenosha), and funding some work with tax-increment financing (TIF) or general-fund contributions. Staff emphasized that extending repayment terms lowers annual bills but does not reduce the total amount paid; interest on installment plans raises the ultimate cost.

Staff also reported that they asked the state Public Service Commission (PSC) about using utility rates to cover projects that primarily improve system reliability. According to staff, PSC staff said ratepayers generally may not be assessed to fund extensions that principally benefit system reliability rather than the immediate property owners, limiting the city’s ability to shift certain costs onto utility rate revenue.

Several councilors pressed for more analysis, including modeling how a Kenosha-style hookup fee would affect owners and the city, and whether TIF could cover more of the upfront cost in industrial or redevelopment areas. Staff said the council can change assessment policy before contract certification — projects will be certified next year but public hearings are set for June — giving a window for any policy changes the council might adopt.

Key details from the workshop: Oshkosh currently offers 5-, 10-, 15- and (as of last year) 20-year installment options; the city’s code also allows a 10-year deferral for qualifying residential and agricultural properties that are not connected to the utility. Common-council-set installment interest was described as 6 percent. Triggers that end a deferral include utility connection, subdivision or sale/deed transfer to anyone other than a spouse.

The workshop produced no vote; staff were asked to return with additional modeling and research, including a closer look at phased hookup charges and Kenosha’s approach. Public hearings on the projects are scheduled for the June council meeting, and staff said the council may revise the assessment policy before project certification next year.

Ending: The council agreed to further study options and asked staff to bring more analysis to a future council discussion night with fewer agenda items.