HAYDEN - The fee to hook up a new home to the sewer system in the city of Hayden has increased by $1,800.

Some home builders say they continue to be frustrated by the sewer capitalization fee in the city.

Before the increase, "It was already a significant sewer cap fee," said Larry Jeffres, executive director of the North Idaho Building Contractors Association.

Starting Jan. 1 it will cost $10,650 to hook a home up in Hayden.

A decade ago it was approximately $3,000, Jeffres said.

The contractors association is suing the city of Hayden over the sewer capitalization fee.

Jeffres said a homeowner could save $7,000 buy having their new home built in Coeur d'Alene versus Hayden. Post Falls and Rathdrum also have lower fees than Hayden, he said.

Mike Ragusa, owner of Termac Construction in Coeur d'Alene, said the increase will have to be passed on to homebuyers.

"I'm afraid that pass-through fee won't be accepted by the market," Ragusa said.

The Hayden Area Regional Sewer Board and the city of Hayden hired a consulting firm to complete a sewer capitalization fee analysis and determine how much should be paid.

The city of Hayden's portion - for sewer collection - went down slightly. The regional sewer board's portion - for wastewater treatment - went up by nearly $1,900.

Hayden City Administrator Stefan Chatwin said the city's portion will go down to $2,239 from $2,280. The consulting firm recommended an increase to $2,431.

"I think the city council feels pretty good that the city's portion went down a little bit," Chatwin said.

The Hayden City Council elected to adopt only the portion of the fee recommended by the consultant that was directly related to the collection system capital improvement plan, Chatwin said.

Ken Windram, administrator at the regional sewer board's wastewater treatment facility, said the regional sewer board's portion will go up to $8,411 from $6,515.

New customers - whether a new home or commercial building - pay a fee amount based on the cost to expand the sewer system's collection and treatment capacity, replacing capacity they use up.

"Capacity replacement is what (the fee) pays for," Windram said.

He said it's more expensive in Hayden than Coeur d'Alene because there are fewer people in Hayden to share the cost.

Leaders for both the city and regional sewer board believe new users of the sewer collection and treatment system should pay for its capacity growth.

"New growth should pay for itself, which means that they should pay to replace the capacity they use," Chatwin said.

The regional sewer board operates a wastewater treatment plant at 10789 N. Atlas Road in Hayden.

That plant needs improvements to meet higher water-quality treatment standards set by the U.S. Environmental Protection Agency.

The improvements to the plant will be funded through user fees. New capacity in the plant that meets the water-quality treatment standards will be funded by regional sewer board capitalization fees.