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2013 Update of Water and Wastewater Impact Fees <br />6.0 CONSIDERATION OF OTHER METHODS OF CAPITAL PAYMENT <br />For Utilities that charge an impact fee for new or expended service, the new customer generally <br />pays for capital in two ways: <br />1. the up -front impact fee that gains the new customer an "equity buy -in" to the system, and <br />2. monthly utility rate payments, where a portion of rate payments are for debt service. <br />The 77th Texas Legislature amended Chapter 395 of the Local Government Code to require <br />that either: (1) consideration of a calculated credit for rate payments be reflected in the fee <br />amount, or (2) a credit equal to 50 percent of the total projected cost of the capital <br />improvements plan be given in calculating the maximum fee amount. <br />Table 7 characterizes the present value of existing and prospective utility capital costs per LUE <br />that is projected to be supported by the utility rates and attributable to the new customers. This <br />analysis considers the full term of existing or future bonds and is calculated using the total <br />number of LUEs (existing and new) that would be present and paying rates in the year 2017, <br />mid -way through the 10 -year planning period. <br />For water and wastewater combined, the "rate credit" that is an offset to the full capital cost of <br />service, shown in Tables 5 and 6, is calculated at $670 per LUE. <br />City of San Marcos, Texas 13 <br />