VERGENNES — With a complete overhaul of its sewer system scheduled over the next few years, what should Vergennes charge homeowners and developers to connect to the system?

Vergennes City councilors are still working that out.

The Council continued preliminary discussions on the issue at its Dec. 10 meeting.

They met with John Jackman, a former Vergennes resident and asset manager. In his first meeting with the council on Oct. 22, Jackman had recommended a connection fee of $11,814.60 per 210 gallons of daily usage, an amount that applies to a single-family home or apartment. On Dec. 10 his final recommendation was $1,943.

The current sewer connection fee is $1,340 per unit.

Last week, councilors said they were receptive to a lower number or a sliding scale after listening to developer Peter Kahn discuss the question. In a later interview, City Manager Ron Redmond told the Independent the decision on the connection fee question would not be settled until sometime next year, and said at the meeting no decision will be made until city officials get input from an analyst it will hire to study the larger sewer rate question.

“We are going to have a rate analyst look at fees in general,” he said at the meeting. “We are going to have a strategy and a policy.”

At the meeting, Jackman said he lowered his recommendation substantially after a series of meetings with former city manager Mel Hawley. Jackman said Hawley’s knowledge of how the construction of the wastewater collection system was funded allowed him to revise his figures downward.

Specifically, Jackman said, Hawley was able to pinpoint many sewer lines that were funded by grants and developers, and not by city ratepayers, thus the cost of the sewer collection system upon which he based his recommendation was less than his original estimates.

Jackman said he also used cost estimates that he said were not artificially inflated by COVID-era construction prices in estimating per-foot construction pricing for new lines.

Kahn, who is working with a partner on a proposal to build 74 units of mostly workforce housing on land behind the city police station on Main Street (a project that could eventually add 50 more units), said he was happy with the lower price point. But he still had suggestions for further concessions for his project and for other developers.

First, he suggested making no cost distinction between a one-bedroom unit projected to use 210 gallons a day and a three-bedroom unit that would use three times that much capacity. He said the higher cost for service for units that could house families “is a little counterproductive to this goal of creating more housing. That’s an upfront gateway to enter … That’s an $800 per unit change from what it is now.”

Kahn also talked about other upfront infrastructure expenses involved in installing water and sewer lines to buildings, citing his Claybrook housing development off West Main Street as an example. Adding higher connection fees would make it harder for developers to break ground, he said.

“I have hundreds of thousands of dollars going to the city of Vergennes for Claybrook,” he said.

Kahn and Deputy Mayor Dickie Austin discussed the issues. Kahn suggested basing the connection fee on what the city has actually spent in the past 30 years on the sewer system instead of a less accurate estimate of a replacement cost.

Austin said he understood that point, but that, “What’s been spent on the sewer system in the last 30 years is not nearly enough.”

“But that’s what we’re buying,” Kahn said. “And the infrastructure that’s about to be built.”

Austin said that was the point, that Kahn and others would be “buying into a system that the city will guarantee will exist.”

But Kahn said connection fees are the wrong place to look for the city pay for that guarantee.

“You can’t possibly charge enough with a hook-on fee to pay for the system,” he said. “It’s got to be user fees.”

Later, Kahn expanded on that point. He pointed out that companies like Green Mountain Power and Vermont Gas Co. do not charge hook-up fees, but rather rely on their customers’ regular payments to fund their operations and/or make profits. He suggested low or even no connection fees as way to attract more development and ratepayers and thus more funding.

“It is the ratepayers that keep the system going,” he said. “Adding more ratepayers has got to be a good thing. Making a prohibitive hook-on fee and getting less ratepayers seems counterproductive.”

Some councilors said they were receptive to considering new approaches. Councilor Cheryl Brinkman said, for example, looking at a sliding scale for different size units and developments was worth discussing, and Councilor Sue Rakowski agreed.

“I like including developers in this discussion, and maybe approaching this in a tiered fashion,” Brinkman said.

Hawley also weighed in with a letter to the council, which read in part: “The City needs housing. David Shlansky, Peter Kahn and Cornerstone are providing the lion’s share of new residential development in the City. Let’s not hit them with unwarranted fees. We need them.”