Ord 2018-009/amending the Water and Wastewater impact fees to be charged by the City in connection with new land development under Chapter 86, Article 5, Division 4 of the San Marcos City Code and associated land use assumptions

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2018 Update of the Water and Wastewater Impact Fees for the City of San Marcos 1.0 Introduction and Summary The City of San Marcos (City) is in the process of updating its water and wastewater impact fees to keep the fee current with its service area and updated CIP information. This report presents HDR Engineering, Inc.'s (HDR) maximum impact fee determination for consideration by the City's Capital Improvements Advisory Committee and the San Marcos City Council. The methodology to determine the maximum fee amount considers two options. Consistent with State law, each fee component is calculated with either: (1) consideration of a credit for other methods of payments for utility capital by a new customer, such as through utility rates or taxes, or alternatively, (2) a reduction of the maximum fee amount equal to 50% of the unit capital cost of providing new service. By maximum amounts, this means that the determined fee amount was calculated as the highest that can be lawfully levied by the City, given the prospective land uses and capital improvements plan, the cost of existing and new utility capacity, and consideration of a credit to new customers for capital contributions made through rate payments. The City Council can decide to enact fees less than the maximum amounts shown in this report. As detailed later in this report, the maximum impact fees were developed in component pieces. For instance, the overall water fee is comprised of separate amounts for water supply, treatment, pumping, elevated storage, ground storage, and transmission. This will facilitate the consideration of offsets or credits from the applicable fee if a developer builds and dedicates eligible facilities to the City or the City provides wholesale service to a neighboring utility and wishes to charge only certain portions of the fee. The maximum fee amounts do not include capital costs for facilities required to be provided by developers at their own expense. Planning, service demand, and design factor assumptions used in the water and wastewater facility sizing and costing were provided by the City. Data on current utility demand, existing utility assets, needed future facilities, outstanding utility debt, and prospective cash versus debt financing were obtained from or coordinated with the City of San Marcos staff. HDR combined these elements into the maximum impact fee calculations presented in this report. City of San Marcos 01 January 2018