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2018 Update of the Water and Wastewater <br /> Impact Fees for the City of San Marcos <br /> 6.0 Consideration of Other Methods of Capital Payment <br /> For utilities that charge an impact fee,the new customer pays for capital in two ways: (I) <br /> initially through the up-front impact fee, and (2) over the longer-term through utility rate <br /> payments,where typically some portion of customer rate payments also funds capital projects. <br /> The 77th Texas Legislature amended Chapter 395 of the Local Government Code to <br /> require either: (I) a calculated credit for rate payments be reflected in the fee amount, or (2) a <br /> credit equal to 50% of the total projected cost of the capital improvements plan be given in <br /> calculating the maximum fee amount. <br /> Table 7 indicates the estimated cost per LUE that is projected to be borne in the utility <br /> rates by the average new customer. The rate credit calculation considered: (1) existing debt, (2) <br /> future debt payments incurred in the year in which the facilities would be built and financed, and <br /> (3) the projected LUEs at the mid-point year of the weighted average life of the debt for the <br /> facilities that are part of the impact fee calculation for each utility. <br /> 7.0 Alternative Impact Fee Calculations <br /> Table 8 summarizes the unit capital cost of providing new service and the two alternative <br /> credit calculations for new customers. The alternative approach that calculates a specific rate <br /> credit (Option A) results in the maximum impact fee calculation of$3,801 per LUE for water <br /> and $2,684 per LUE for wastewater, totaling $6,485 per LUE. <br /> As shown in Table 8, the alternative 50% of capital cost method for calculating a rate <br /> credit (Option B) results in a lesser water impact fee of$2,085 per LUE and wastewater fee of <br /> $1,485 per LUE,yielding an overall fee of$3,570 per LUE. <br /> City of San Marcos 13 <br /> January 2018 <br />