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City Council Meeting Minutes July 7,2026 <br /> return on August 5th for public hearings,with final adoption scheduled for <br /> September 1st. He then turned the presentation over to Director of Engineering <br /> and Capital Improvement Shaun Condor. <br /> Director Condor explained how the impact fee process fits within the broader <br /> planning framework, beginning with the comprehensive plan, followed by the <br /> water and wastewater master plans, and culminating in the impact fee study. <br /> He noted that the city updated its master plans beginning in 2022 and waited <br /> for the comprehensive plan's completion in late 2024 to ensure consistency. He <br /> described the master plans as documenting the existing system, identifying <br /> capacity issues, analyzing needs, and producing outputs that include the <br /> impact fee study, tools for developer agreements, and CIP project lists. <br /> He then reviewed how impact fees may be used, noting that they can only be <br /> applied to system expansion projects,while water and wastewater rates may be <br /> used more broadly. He explained that if a project is impact-fee eligible and <br /> funds are available, impact fees are used; otherwise rate funding is required, <br /> which staff tries to avoid. He reviewed the FY 2026 CIP and recent funding <br /> timing, as well as historical impact fee collections,which have stabilized at <br /> about$4.5 to $5 million per year. The city had collected $3.2 million so far this <br /> fiscal,year,with a projected total of$5.5 to $6 million. Using a rain-barrel <br /> analogy, he noted that impact fee revenues vary with development and that <br /> insufficient collections must be supplemented with rate funding. Looking <br /> ahead to the FY 2027-28 CIP, he noted an approximate$3 million shortfall <br /> but expressed confidence in a pending grant for the Blanco Vista Elevated <br /> Storage Tank and anticipated further collections before January. He cautioned <br /> that the scale of future projects makes the upcoming policy decisions especially <br /> important. He summarized the policy tradeoff: setting fees at the maximum <br /> allowable rate may deter some development but reduces pressure on existing <br /> ratepayers,while lower fees may encourage development but shift more costs <br /> to utility customers. <br /> Director Condor then turned the presentation over to Assistant Director <br /> Richard Reynosa,who introduced the consulting firm Freese and Nichols and <br /> reminded Council of the statutory timeline requiring action by September 1st <br /> after the August 5th public hearing. He described Council's options: adopt the <br /> maximum fee, set a lower fee,or decline adoption,which would restart the <br /> process. <br /> Assistant Director Reynosa reported that the water master plan identified $140 <br /> million in projects,with $134 million recoverable after credits. With 9,000 <br /> City of San Marcos Page 3 <br />