Water-Wastewater Impact Fees

Water/WastewaterWater/WastewaterImpact Fees Impact Fees

City Council WorkshopCity Council WorkshopSeptember 8, 2016September 8, 2016

OVERVIEWOVERVIEW

1.1. ScheduleSchedule2.2. Maximum Allowable FeesMaximum Allowable Fees3.3. Benchmark Cities’ FeesBenchmark Cities’ Fees4.4. IFACs Comments IFACs Comments 5.5. Staff Recommended FeesStaff Recommended Fees6.6. Questions/Comments from CouncilQuestions/Comments from Council

Impact Fee Impact Fee ScheduleSchedule

• Phase One - Complete• Land Use Assumption and Capital Improvement Plans

• Phase Two – In progress• Advisory Committee has reviewed the fee calculations• IFAC comments are provided this evening

• 8 Sep: W-WW Fee calculations & Staff recommendations

• 22 Sep: Consider adopting W-WW Impact Fees• With Public Hearing

• October: Workshop on Roadway Impact Fees• 10 Nov: Consider adopting Roadway Impact Fees

• With Public Hearing

Proposed W-WW Impact Fees in the ETJ

4

WW Only

Both

LUE = Living Unit Equivalent (connection for a single family home)

Eligible CIP Cost = 10-year capital cost (2016 – 2026)

Rate Credit = Chapter 395 requirements: reduce the eligible CIP cost by 50% [or] perform a credit analysis to determine the percent of utility bill used for growth CIP. We elected to calculate the Rate Credits.

Service Unit Growth = Derived from land use assumptions for 10-year growth in LUEs

Eligible CIP Cost – Rate Credit Impact Fee Per LUE = Service Unit Growth

Impact Fee Calculations

Impact Fee Equation:

Impact Fee CalculationsEligible CIP Cost

10-Year Utilization x Capital Cost = 10-Year Cost

Determine Utilization Percentages (Water)

Existing Utilization is >0% for projects meeting deficiencies and existing projects serving existing customers.

No. Bond Issue and Project(s) Funded Capital CostFunded by

Cash or CDBG

Capital Cost Financed

Project's % of overall

Bond Issue

% of project that is Impact

Fee Eligible

% of Bond Issue that is Impact

Fee Eligible

Series 2011 CO $3,064,000 0.2%B Royder/Live Oak Sewer Service - PARTIAL $1,691,256 $1,116,256 $75,000 2.4% 10.0%

Series 2012 CO $5,835,000 3.7%B Royder/Live Oak Sewer Service - PARTIAL See Series 2011 CO $500,000 8.6% 10.0%A Bee Creek Interceptor Phase 1 - PARTIAL $3,600,939 $0 $550,000 9.4% 30.0%

Series 2013 CO $2,065,000 29.1%A Bee Creek Interceptor Phase 1 - PARTIAL See Series 2012 CO $2,000,000 96.9% 30.0%

Series 2014 CO $11,094,000 18.5%A Bee Creek Interceptor Phase 1 - PARTIAL See Series 2012 CO $1,050,939 9.5% 30.0%

1 54/60-inch Bee Creek Interceptor Phase 2 - PARTIAL $7,060,400 $0 $5,799,061 52.3% 30.0%

C 2016 Impact Fee Study $50,000 $50,000 $0 100.0%


Rate Credit Calculation: A credit analysis was performed to determine the maximum

impact fee per LUE allowed by state law

Impact Fee Eligible %

Impact Fee Eligible Bond Issue %Portion of Project Funded by Cash


Water Impact Fee Calculation

Water Impact FeeTotal Eligible Capital Improvement Costs $29,244,626

Total Eligible Financing Costs $4,896,224Total Eligible Impact Fee Costs $34,140,850Growth in Service Units (LUEs) 10,618Maximum Water Impact Fee per Service Unit(1) $3,215Impact Fee Rate Credit per Service Unit -$298

Maximum Allowable Water Impact Fee(2): $2,917

(1) Total Eligible Costs divided by the Growth in LUEs(2) Maximum Allowable Water Impact Fee is Maximum Water Impact Fee minus the Impact Fee Credit per LUE.


Wastewater Impact Fee Calculation

Wastewater Impact FeeTotal Eligible Capital Improvement Costs $60,666,267

Total Eligible Financing Costs $11,619,219Total Eligible Impact Fee Costs $72,285,486Growth in Service Units (LUEs) 12,058Maximum Wastewater Impact Fee per Service Unit(1) $5,995Impact Fee Rate Credit per Service Unit -$476

Maximum Allowable Wastewater Impact Fee(2): $5,519(1) Total Eligible Costs divided by the Growth in LUEs(2) Maximum Allowable Wastewater Impact Fee is Maximum Wastewater Impact Fee minus the Impact Fee Credit per LUE.

Maximum Allowable Water Impact Fee: $2,917Maximum Allowable Wastewater Impact Fee: $5,519

Total Maximum Allowable Impact Fee with Rate Credit: $8,436

Maximum Allowable Maximum Allowable W-WW Impact FeesW-WW Impact Fees

Meter Size LUE Water Wastewater5/8” 1 $2,917 $5,519

1” 1.7 $4,959 $9,3821-1/2” 10.7 $31,212 $59,053

2” 10.7 $31,212 $59,0533” 26.7 $77,884 $147,3574” 53.3 $155,476 $294,1626” 106.7 $311,244 $588,8778” 180.0 $525,060 $993,420

10” 266.7 $777,964 $1,471,917

99%

Other Cities - NationalOther Cities - National

Duncan National Impact Fee Duncan National Impact Fee StudyStudy– 28 States with Impact Fees, 271 28 States with Impact Fees, 271

jurisdictionsjurisdictions– 2012 National Averages per Single 2012 National Averages per Single

FamilyFamily Water $3,863Water $3,863 Wastewater $3,725Wastewater $3,725

12

Texas Cities (W-WW)

$3,500

Impact Fee Advisory Impact Fee Advisory Committee’s Comments Committee’s Comments

Recently approved by the IFACRecently approved by the IFAC

Staff RecommendationStaff RecommendationW/WW Impact FeesW/WW Impact Fees

Meter Size MAX Water

Rec. Water MAX WW Rec. WW

5/8” $2,917 $500 $5,519 $3,0001” $4,959 $850 $9,382 $5,100

1-1/2” $31,212 $5,350 $59,053 $16,0502” $31,212 $5,350 $59,053 $16,0503” $77,884 $13,350 $147,357 $40,0504” $155,476 $26,650 $294,162 $79,9506” $311,244 $53,350 $588,877 $160,0508” $525,060 $90,000 $993,420 $270,000

10” $777,964 $133,350 $1,471,917 $400,050

Key Concluding PointsKey Concluding Points

1.1. Without WW Impact FeesWithout WW Impact Fees– Approximate 30% Rate Increase over 5 yearsApproximate 30% Rate Increase over 5 years

2.2. With recommended WW Impact FeesWith recommended WW Impact Fees– Approximate 11% Rate Increase over 5 yearsApproximate 11% Rate Increase over 5 years

3.3. Recommended Fees significantly less than MaximumRecommended Fees significantly less than Maximum– Leaving room for potential Roadway Impact FeesLeaving room for potential Roadway Impact Fees– Desire to not hinder developmentDesire to not hinder development

4.4. Impact Fees an important tool for Infrastructure needsImpact Fees an important tool for Infrastructure needs5.5. Potential catalyst for growth in southern ETJPotential catalyst for growth in southern ETJ

Government & Nonprofit

Water-Wastewater Impact Fees