Water-Wastewater Impact Fees

1. Water/WastewaterWater/Wastewater
Impact FeesImpact Fees
City Council WorkshopCity Council Workshop
September 8, 2016September 8, 2016

2. OVERVIEWOVERVIEW
1.1. ScheduleSchedule
2.2. Maximum Allowable FeesMaximum Allowable Fees
3.3. Benchmark Cities’ FeesBenchmark Cities’ Fees
4.4. IFACs CommentsIFACs Comments
5.5. Staff Recommended FeesStaff Recommended Fees
6.6. Questions/Comments from CouncilQuestions/Comments from Council

3. Impact FeeImpact 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

4. Proposed W-WW Impact Fees in the ETJ
4
WW Only
Both

5. 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:

6. Impact Fee Calculations
Eligible 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.

7. No. Bond Issue and Project(s) Funded Capital Cost
Funded 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%
Impact Fee Calculations
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

8. Impact Fee Calculations
Water Impact Fee Calculation
Water Impact Fee
Total Eligible Capital Improvement Costs $29,244,626
Total Eligible Financing Costs $4,896,224
Total Eligible Impact Fee Costs $34,140,850
Growth in Service Units (LUEs) 10,618
Maximum Water Impact Fee per Service Unit(1)
$3,215
Impact 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.

9. Impact Fee Calculations
Wastewater Impact Fee Calculation
Wastewater Impact Fee
Total Eligible Capital Improvement Costs $60,666,267
Total Eligible Financing Costs $11,619,219
Total Eligible Impact Fee Costs $72,285,486
Growth in Service Units (LUEs) 12,058
Maximum Wastewater Impact Fee per Service Unit(1)
$5,995
Impact 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: $2,917
Maximum Allowable Wastewater Impact Fee: $5,519
Total Maximum Allowable Impact Fee with Rate Credit: $8,436

10. Maximum AllowableMaximum Allowable
W-WW Impact FeesW-WW Impact Fees
Meter Size LUE Water Wastewater
5/8” 1 $2,917 $5,519
1” 1.7 $4,959 $9,382
1-1/2” 10.7 $31,212 $59,053
2” 10.7 $31,212 $59,053
3” 26.7 $77,884 $147,357
4” 53.3 $155,476 $294,162
6” 106.7 $311,244 $588,877
8” 180.0 $525,060 $993,420
10” 266.7 $777,964 $1,471,917
99%

11. Other Cities - NationalOther Cities - National
 Duncan National Impact Fee StudyDuncan National Impact Fee Study
– 28 States with Impact Fees, 271 jurisdictions28 States with Impact Fees, 271 jurisdictions
– 2012 National Averages per Single Family2012 National Averages per Single Family
 Water $3,863Water $3,863
 Wastewater $3,725Wastewater $3,725

12. 12
Texas Cities (W-WW)
$3,50
0

13. Impact Fee AdvisoryImpact Fee Advisory
Committee’s CommentsCommittee’s Comments
Recently approved by the IFACRecently approved by the IFAC

14. Staff RecommendationStaff Recommendation
W/WW Impact FeesW/WW Impact Fees
Meter Size MAX
Water
Rec. Water MAX WW Rec. WW
5/8” $2,917 $500 $5,519 $3,000
1” $4,959 $850 $9,382 $5,100
1-1/2” $31,212 $5,350 $59,053 $16,050
2” $31,212 $5,350 $59,053 $16,050
3” $77,884 $13,350 $147,357 $40,050
4” $155,476 $26,650 $294,162 $79,950
6” $311,244 $53,350 $588,877 $160,050
8” $525,060 $90,000 $993,420 $270,000
10” $777,964 $133,350 $1,471,917 $400,050

15. 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
1.1. With recommended WW Impact FeesWith recommended WW Impact Fees
– Approximate 11% Rate Increase over 5 yearsApproximate 11% Rate Increase over 5 years
1.1. 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
1.1. Impact Fees an important tool for Infrastructure needsImpact Fees an important tool for Infrastructure needs
2.2. Potential catalyst for growth in southern ETJPotential catalyst for growth in southern ETJ