From permit fees to lease agreements to equipment purchases, many costs accompany the launch of a new business. And while a rookie entrepreneur might not calculate water and sewer fees among them, in Jackson County businesses can find themselves forking over thousands of dollars to hook in.
Those costs can be intimidating, if not prohibitive, to an aspiring business owner. A new policy from the Tuckaseigee Water and Sewer Authority, which runs water and sewer operations in Jackson County, aims to make things easier.
“One of the discussions we’ve been having is, ‘Yeah, we’re not an economic engine for the community, but we control a resource that is an economic engine, so how do we play nice with our communities?’” said Dan Harbaugh, TWSA’s executive director.
Enacted in July, the new policy gives business owners the chance to rent water and sewer capacity rather than buying it upfront. For example, a business that would otherwise have to pay a $7,000 fee in order to have the water and sewer access it needed could instead opt to pay a $50 monthly fee — a much easier sum for a young enterprise to cough up.
“The rental option may encourage a new business to open or relocate here,” said Julie Spiro, executive director of the Jackson County Chamber of Commerce. “It could potentially be helpful to a restaurant, or another similar type of business that utilizes more capacity than a basic business.”
“That is ultra-significant because those impact fees can be very expensive and in some cases can be and have been cost prohibitive to a new business starting up,” agreed Rich Price, economic development director for Jackson County.
The rental option is analogous to leasing a home. Rather than forking over a huge sum to buy, the business pays a smaller price per month but isn’t actually paying toward ownership. The business could decide at any time to buy their allocation, but they wouldn’t get any discount for the time they’d spent paying rent. Likewise, if the business moved to a different location, no additional allocation would travel with them.
But the option does give new businesses a chance to get their feet on the ground, to pay a per-month fee that’s easy to build into their operating expenses rather than taking on yet another huge purchase in the quest to become profitable. In Price’s view, that’s a huge advantage.
“It’s much more advantageous and economical now for them to start that business up and allows them to grow their revenues and really feed their bottom line without tremendous concern that the upfront impact fee will put them behind the eight ball before they even start,” Price said.
That’s especially important for entrepreneurs who rent their buildings instead of owning — a status that’s true of the bulk of new business owners. It can be intimidating to pay thousands of dollars in impact fees for a property that is, after all, occupied only by lease. If the business moves to a different location, that would just be money down the drain and the business would be hit with another impact fee for its new location. If there’s a possibility of moving in the near future, it’s probably a better idea to pay the rental fee and save the up-front impact purchase for a time when the business is more stable and the location more long-term.
“We now have another tool in our toolbox for helping these businesses to grow in their existing location or inviting new businesses to come in and start,” Harbaugh said.
The move is just one part of an overall push to make TWSA more attuned to the economic needs of the county and its influence on them.
“This is certainly a win for Jackson County and I think for the authority because it really demonstrates that they do want to be an active part and partner in the advancement of small business,” Price said.
Perhaps it helps that the chairman of TWSA’s board, Mike Fitzgerald, is a small business owner himself. Also the mayor of neighboring Dillsboro, Fitzgerald owns Fitzgerald Shoe Shop in downtown Sylva. He said the rental versus allocation purchase discussion wouldn’t affect businesses like his that much, because the only water and sewer he uses is for the single restroom at the back of the store. But he’s got sympathy for the complexity of starting a new business and the hardship that having to pay thousands of dollars more being getting started can cause.
“A greenhorn who’s just got an idea wouldn’t know all these things,” Fitzgerald said. “They have to research it, so we’re trying to be as helpful as we can on the TWSA side of things.”
More economy-friendly changes at TWSA
While the allocation rental is the most significant policy change TWSA has made recently, it’s just one of a handful of policy revisions the authority has finished to encourage economic development.
For instance, TWSA now has a fund available to help defray the impact fees of projects that qualify as economic development or community outreach. Basically, the policy creates a way for people spearheading these types of projects to ask TWSA to waive some of the impact fee, with the waiver capped at $2,000 or 25 percent of the money the TWSA board has appropriated for the purpose in that year — though the board has discretion to go higher. The board will appropriate a pool of money each year, with the intent that some of it will roll over to the next year, eventually creating a fund large enough to help with a big project down the road. Currently, the fund holds $30,0000.
“We just felt like it was important for us to do what we could within our policies,” Harbaugh said of TWSA’s role in economic development.
A third new policy is specific to the Cashiers area. When the housing market went crazy in the 2000s, investors bought up acres and acres of land with the intent to build high-end housing and turn a hefty profit. With the land, they bought sewer allocation. But when the recession hit, much of the land was left undeveloped and the allocation unused. However, because it had been purchased, the allocation wasn’t available for people who actually had an immediate need. That put a squeeze on economic growth.
This summer TWSA enacted a policy to create an allocation bank of sorts, a way for people holding allocation they’re not using to sell it to people who need it. The money won’t pass through TWSA directly, but the authority will be able to monitor its flow to ensure that nobody is charging more than TWSA would. Meanwhile, the authority is working to expand capacity in the Cashiers area and hopes to have a new discharge plant online in the next couple years.
“I think the board has done a really good job of trying to do the best they could to address the areas that are in their control,” Harbaugh said.
The policies passed unanimously, the next phase is education — reaching out to the people who might be affected to let them know what opportunities are available. So far, interest in the allocation rental, for example, has been limited, with only one business owner signing on and three more discussing the option with TWSA.
“We’ll see how it works out,” Harbaugh said. “The next two years are going to be interesting.”
What is TWSA?
The Tuckaseigee Water and Sewer Authority is part business and part government entity, tasked with providing water and sewer to the citizens of Jackson County without relying on government funds to do so.
Formed in 1992, TWSA resulted from the consolidation of water and sewer utilities in Dillsboro, Sylva, Webster and Jackson County. North Carolina contains more than 400 entities that operate water and wastewater facilities — though most of those cover a smaller area than TWSA — and about 40 percent use the business model TWSA does. Namely, the authority tries to keep its rates low for existing customers but funds expansion of services by charging impact fees when a new user comes online.