Discussion of tap fees for electric, gas, and water utilities took center stage at Iola City Council’s Monday meeting. Utility tap fees are charges for connecting an electric, gas or water line to a property. In total, the City of Iola saw a loss of $27,625 in 2024 for utility taps.
“These numbers speak louder than anything I can say,” said City Administrator Matt Rehder. “Every time we do a utility tap, we’re losing money. In some cases, we are losing a really significant amount.”
The current utility tap fees and losses are as follows:
Electric 100 AMP fees are $100, but are $907 in time and material cost to complete. Total loss: $807 per tap. Seven were completed for 2024.
Electric 200 AMP (Loop) fees are $150, but are $1,082 in time and material cost to complete. Total loss: $932 per tap. Seventeen were completed.
Gas (Poly) fees are $200, but are $1,733 in time and material cost to complete. Total loss: $1,533 per tap. Four were completed.
Rehder added that city staff’s recommendation is to change the utility tap fee from a fixed dollar amount to time and material costs.
“It’s my understanding that a lot of these fees were waived in an effort to encourage more construction in the City of Iola,” said council member Nicholas Lohman. Rehder noted that he has never personally waived the utility tap fees. “I’ve been asked the question a couple times and I’ve told people that if they want them waived, they have to talk to the council,” he said. “My answer is always going to be no.”
Assistant Administrator Corey Schinstock added that requests for waived fees would have to come before the council.
“PrairieLand is a good example,” noted Schinstock. “I think we waived the labor and equipment costs.”
Council member Jon Wells agreed with the concern pertaining to the low fees.
“I keep being told that people want the city to be run like a business,” he said. “If we’re going to run it like a business, we’re not going to lose money on utility taps. A $150 fee when you’re losing $900 on it? It doesn’t make sense.”
Schinstock pointed out that some of the fees wouldn’t apply to a majority of the housing in Iola since most already have the infrastructure in place. “In most cases, it’s not going to be very much,” he said. “It’s mostly going to be a meter connection fee or something like that.” He added that the biggest concern is losing the time, material and equipment cost on bigger buildouts, giving the new Cedarbrook housing addition as an example.
Council member Joelle Shallah said she believes the city needs to recoup their costs on the materials for the taps. She is hesitant on the labor costs portion, though. “We charge utility fees and this should be one of the things that is included in the cost of goods,” she explained. Wells agreed that the city should at least be recouping the material costs and not be losing money on a physical asset.
Shallah, Wells, and council member Joel Wicoff all stated that they are interested in learning what surrounding communities are doing in regards to their fees. No further action was made on the subject.
IN OTHER NEWS, council members considered bids for the purchase of a ¾ ton pickup. The truck will replace a 2008 model that had been used in the electric distribution department. Funds for the purchase have been reserved in the electric department’s equipment reserve during previous budget cycles.
