The City desires to update its capital recovery fees, or impact fees, in order to appropriately fund construction of new facilities and expand existing facilities to serve future development.  The fees consider and apply to water and wastewater projects identified on the City's Water and Wastewater Impact Fee CIP necessary to support growth and development.  To formulate the fees to be assessed, land use assumptions that project growth over a planning period must be established.  Additionally, Capital Improvement Plans that address the needs of that growth must be prepared and approved.

The purpose of the impact fee is to provide a funding mechanism for the implementation of the water and wastewater capital improvements over a planning period.  The impact fee program facilitates the funding participation of new development at a fair rate based on the demand placed on the City's water transmission and distribution and wastewater collection and conveyance systems by the development.

An initial step in the update of the impact fee is the establishment of land use assumptions including population and employment projections over the 30-year planning period (2020-2050).  The assumptions include the type, location, quantity, and timing of land uses.  The Land Use Assumptions report (LUA) includes a description of the methodology used in preparation, explanation of the data considered, and presentation of historical and projected growth trends.

The other major step in the update of the impact fee is the preparation of Water and Wastewater Capital Improvement Plans (CIPs).  The proposed CIP for water was developed based on a hydraulic model of the existing water system, application of growth projections to that model, and identification of improvement projects needed to meet TCEQ minimum requirements for water service.  The proposed CIP for wastewater was developed based on a hydraulic model of the existing collection and conveyance system, application of growth projections to that model, and identification of improvement projects needed to provide required capacity within the sewer system.  Individual projects are identified and are spread as appropriate over the planning period into the categories of near term, 2030, and 2050 projects for planning purposes.  Projects may shift in time based on actual patterns of development and the plan should be reviewed and updated as needed in five years.  The projects that make up the Capital Improvement Plans have also been configured in such a way to serve as updated Water and Wastewater Master Plans for development.

After the summation of CIP costs, the totals are reduced by the amount of utility service revenues expected to be generated by development over the program period and used to pay for improvement costs.  Once growth rates have been established and CIP costs minus the calculated revenue credit determined, those values are used in the calculation of a cost per service unit (land use equivalent or LUE) for both water and wastewater.  Those resultant amounts are the updated maximum assessable water and wastewater impact fees.

During its meeting on January 8, 2025, the Capital Improvement Advisory Committee held a workshop that included presentation and discussion of the LUAs and CIPs.  This Public Hearing includes a recap of those plan elements, presentation of the determination of maximum assessable fees calculated, and a discussion of recommendation to City Council regarding adopting the Update to the Water and Wastewater Impact Fees.

Staff has presented the Capital Improvement Advisory Committee (CIAC) and Planning and Zoning Commission (P&Z) with the proposed Water and Wastewater Master Plan Updates, updated Land Use Assumptions, and Capital Improvement Plans that establish the basis for calculation of updated maximum assessable water and wastewater impact fees.

After the public hearing and Committee discussion, Staff is prepared to guide the CIAC through the process of generating a recommendation to City Council regarding adoption of the updated Water and Wastewater Impact Fee documents, rates, and phase-in schedule.