Water-Wastewater Impact Fees

1. Water/WastewaterWater/Wastewater
Impact FeesImpact Fees
City CouncilCity Council
September 22, 2016September 22, 2016

2. OVERVIEWOVERVIEW
1.1. ScheduleSchedule
2.2. Key PointsKey Points
3.3. Maximum Impact FeesMaximum Impact Fees
4.4. Staff RecommendationStaff Recommendation
5.5. Public HearingPublic Hearing
6.6. Action on Impact Fee OrdinanceAction on Impact Fee Ordinance

3. Impact FeeImpact Fee
ScheduleSchedule
• Phase One - Complete
• Land Use Assumption and Capital Improvement Plans
• Phase Two – Complete (for Water-WW)
• Advisory Committee has reviewed the fee calculations
• IFAC comments have been provided
• 22 Sep: Consider adopting W-WW Impact Fees
• With Public Hearing
• 13 Oct: Workshop on Roadway Impact Fees
• 10 Nov: Consider adopting Roadway Impact Fees
• With Public Hearing

4. Key PointsKey Points
1.1. Capital needs over 10 years approx. $200 millionCapital needs over 10 years approx. $200 million
1.1. Water and Wastewater are Enterprise FundsWater and Wastewater are Enterprise Funds
– Utility Rate revenue only. No property or sales tax revenue.Utility Rate revenue only. No property or sales tax revenue.
1.1. Impact Fees are one-time feesImpact Fees are one-time fees
– Apply only to NEW connections to the Water/WW systemsApply only to NEW connections to the Water/WW systems
– Will keep rate increases lower (Approx. 11% vice 30% over 5 years)Will keep rate increases lower (Approx. 11% vice 30% over 5 years)
1.1. Recommended Fees significantly less than MaximumsRecommended Fees significantly less than Maximums
– Generate approx. $32.4 million revenue over 10 yearsGenerate approx. $32.4 million revenue over 10 years
1.1. Potential catalyst for growth in southern ETJPotential catalyst for growth in southern ETJ

5. Proposed W-WW Impact Fees in the ETJ
Note: WW Service Policy remains in effect, expect Annexation
5
WW Only
Both

6. 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%

7. 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

8. 8
Texas Cities (W-WW)
$3,50
0

9. Phasing RecommendationPhasing Recommendation
Water Meter
Size
Water Impact Fee per
meter
Eff. 1 Dec 2016
Water Impact Fee
per meter
Eff. 1 Dec 2017
5/8” $250 $500
1” $425 $850
1-1/2” $2,675 $5,350
2” $2,675 $5,350
3” $6,675 $13,350
4” $13,325 $26,650
6” $26,675 $53,350
8” $45,000 $90,000
10” $66,675 $133,350
Water
Meter
Size
Wastewater Impact
Fee – per meter
Eff. 1 Dec 2016
Wastewater Impact Fee
– per meter
Eff. 1 Dec 2017
5/8” $1,500 $3,000
1” $2,550 $5,100
1-1/2” $8,025 $16,050
2” $8,025 $16,050
3” $20,025 $40,050
4” $39,975 $79,950
6” $80,025 $160,050
8” $135,000 $270,000
10” $200,025 $400,050

10. ACTIONS REQUESTED
•Hold Public Hearing
•Act on Proposed Ordinance
10

11. • BACKUP SLIDES, if needed
11

12. Alternate Phasing Option
12
Water Meter
Size
Water Impact Fee
per meter
Eff. 1 Dec 2016
Water Impact Fee
per meter
Eff. 1 Dec 2017
Water Impact
Fee per meter
Eff. 1 Dec 2018
5/8” $167 $333 $500
1” $283 $567 $850
1-1/2” $1,783 $3,567 $5,350
2” $1,783 $3,567 $5,350
3” $4,450 $8,900 $13,350
4” $8,833 $17,767 $26,650
6” $17,783 $35,367 $53,350
8” $30,000 $60,000 $90,000
10” $44,450 $88,900 $133,350
Water
Meter Size
Wastewater Impact
Fee – per meter
Eff. 1 Dec 2016
Wastewater Impact
Fee – per meter
Eff. 1 Dec 2017
Wastewater Impact
Fee – per meter
Eff. 1 Dec 2018
5/8” $1,000 $2,000 $3,000
1” $1,700 $3,400 $5,100
1-1/2” $5,350 $10,700 $16,050
2” $5,350 $10,700 $16,050
3” $13,350 $26,700 $40,050
4” $26,650 $53,300 $79,950
6” $53,350 $106,700 $160,050
8” $90,000 $180,000 $270,000
10” $133,350 $266,700 $400,050

13. 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
Eligible CIP Cost – Rate Credit
Impact Fee Per LUE =
Service Unit Growth
Impact Fee Calculations
Impact Fee Equation:

14. 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.

15. 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

16. 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.

17. 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

18. 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