The proverbial check is in the mail — or at least soon will be for many Sedona residents.

The city of Sedona’s Financial Services Department has begun the process of refunding prepaid sewer capacity fees to nearly 300 property owners.

The refunds are being issued because the Sedona City Council has decided to suspend plans to expand the city sewer system in areas identified in the 2017 Wastewater Master Plan update. Some property owners in those areas prepaid sewer capacity fees with the understanding that there might be sewer availability at some point in the future.

A capacity fee, also called a sewer connection fee, helps the city recover part of the cost for installing the infrastructure needed for the connection.

“[The check] will be sent to the address of the current property owner on file with each county assessor,” City Finance Director Cherie Wright said. “There was an agreement that was signed by the property owners who prepaid that had a clause stating, ‘The property owner understand that prepayment of this capacity fee runs with the land, and is therefore valid only for the property described herein, and is not transferable to any other property.’”

Rather than retain property owners’ funds for an indefinite time period, the city will refund prepaid capacity fees and record a document with the appropriate county stating that if sewer becomes available to the property in the future the connection fee will be the amount refunded.

Citywide, there are 285 parcels that prepaid the capacity fee that still have not connected. From 1995 to 1999, homeowners were allowed to pay $2,100 with a plan that someday their area could be added to the city’s sewer system as opposed to having individual septic tanks. The cost to connect today is $10,305, which does not include the cost to homeowners to abandon their septic tanks and lay piping from their homes to the city sewer line.

The city collected roughly $600,000 when the prepayment offer was in place. That money has sat in a fund ever since. After 1999, residents who prepaid were given the option of having the $2,100 refunded with the specification that the city would keep any interest on the money made.

Under a consent decree from the Arizona Department of Environmental Quality, the city was required to construct a sewer collection system and wastewater treatment facility. When the state determined the city had met its obligation for sewer service availability, the city ceased construction of additional sewer infrastructure. Monies that were collected as prepaid capacity fees between the years 1998 and 2002 have been held by the city until now, unless a refund was requested by the property owner.

When council voted in July to move forward with the refunds, Councilman John Currivan was the lone dissenting vote, stating he felt this option was unfair to those who had prepaid the fees years ago but have since opted out and were refunded their money. In that case, those individuals would now have to pay the full $10,305 — or whatever the fee is years from now — in the event they are able to connect to the city’s system.

In May, council directed staff to suspend plans to expand the sewer system in nine of the 11 areas identified in the 2017 Wastewater Master Plan Update. Some unconnected areas were identified early on as less likely to connect in the future based on challenging topography which would require pumping the convey wastewater to the existing collection system and areas currently being served by a private collection and treatment system.

Refunds will be issued by check and will be mailed to the current property owner’s address of record as recorded by the counties. Wright said it will take about three weeks to mail out all the checks.

“We are verifying property owner information with the county assessors then each property owner needs to be set up as a vendor in our accounts payable system,” Wright said. “We are estimating that property owners will receive their refunds by Oct. 9.”

If you’re unsure whether there is a prepaid capacity fee associated with your property, or if you expect a refund and do not receive it by Oct. 9, contact the Sedona Financial Services Department at 204-7185 or billing@sedonaaz.gov.  

Ron Eland can be reached at 282-7795 ext. 122, or email reland@larsonnewspapers.com