What are Impact Fees?
Impact Fees are a funding mechanism that allows entities to recover the costs associated with new facilities or facility expansions to serve future development. These fees are utilized to assist in reducing the cost of needed infrastructure paid by existing customers through water and wastewater rates.
This procedure is established by the Texas Local Government Code Chapter 395 and sets forth the mandated requirements that the Impact Fees be based on a specific list of improvements and that they are re-evaluated every five years. These fees are based upon the value of the improvements divided by the growth attributed to new development.
Capital Improvements Advisory Committee (CIAC)
The entire Impact Fee process is overseen by the Capital Improvements Advisory Committee (CIAC). The committees’ involvement is intended to ensure that the Impact Fees are conducted legally and reflect existing and projected conditions. The CIAC is made up of three JCSUD Board Members and two developer representatives.
The role of the CIAC is to:
- Advise and assist JCSUD in adopting the Land Use Assumptions.
- Review the Water and Wastewater Capital Improvements Plan and file written comments with the Board.
- Monitor and evaluate the implementation of the District's Capital Improvements Plan.
- Advise the Board of the need to update or revise the Land Use Assumptions, Capital Improvements Plan, and Impact Fees.
Why Does JCSUD Need to Collect Impact Fees?
Currently, the costs associated with expanding JCSUD water and wastewater facilities are borne by all of the District’s customers. Now, through the use of Impact Fees, the developers who create the additional demand are paying a portion of the cost of meeting that demand. This helps reduce rate increases that all customers must pay and ensures that those who place additional demand on the water and wastewater systems help pay the costs required.
How are Water and Wastewater Impact Fees Determined?
The development of water and wastewater Impact Fees is conducted as required by Chapter 395 of the Texas Local Government Code. This includes analyzing forecasts of how population and land use throughout the water and wastewater service areas are expected to change. The Land Use Assumptions take into account historical growth trends within the District, growth potential for undeveloped areas within the service area, and ten-year growth projections by pressure plane. Next, Capital Improvements Plans for five, ten, fifteen, and twenty-five years are drafted that identify the improvements that will be needed to meet projected demand. Finally, the maximum Impact Fees are calculated by dividing the cost of capital improvements that will be required for future growth by the number of service units, or meters, projected in the Land Use Assumptions.
State law requires that a public meeting be held before the Board adopts the Impact Fees. The Board has the authority to adopt any fee rate that does not exceed the maximum allowable rate determined by the Impact Fee Study. Following a Public Hearing in October 2023, the Board adopted the following Impact Fees for a standard 5/8" x 3/4" meter. For any meter larger than 5/8" x 3/4", please coordinate with the District.
What Projects Will Be Funded by Impact Fees?
The Impact Fee CIP list provides the District with a logical strategy for upgrading and expanding its water distribution system to accommodate future growth and for addressing improvements. These projects are also necessary to continue providing affordable, reliable, and safe water to JCSUD customers.
Major Projects Include:
- The JCSUD RO Water Treatment Plant
- The Plant 8 -1 MG Elevated Storage Tank
- The Pressure Plane 8 - 20” & 24” waterlines
- Pressure Plane 13 - 1.5 MG Elevated Storage Tank
- Pressure Plane 13 - 1 MG Ground Storage Tank
- Pressure Plane 13 – Plant 11 Pump Improvements and New Pump Station
- Pressure Plane 01 – 1.5 MG Elevated Storage Tank
- Over 10 12” and 16” waterline projects
Who Will be Required to Pay Impact Fees?
Impact Fees will be required by any person requesting new water and/or sewer service for more than two meters or having to follow the non-standard process after January 1, 2024. This could be an individual or a development company. In a development, developers and home builders will have their own agreement in place on which party pays the Impact Fees to cover their impact on the system.
Impact fees will not apply to persons moving to a property where a meter exists today as long as the meter is of equal size. If a meter is upsized, the person will pay for the upsized cost.
When will Impact Fees be Assessed and Collected?
The process for assessing and collecting Impact Fees begins when the non-standard application is received. At this time, JCSUD will perform the first hydraulic analysis. After the developer submits plans to JCSUD, a second hydraulic analysis is performed. The assessment, or final calculation, of Impact Fees, will be dependent on Plan Approval from JCSUD. At that time, the development will be held in the hydraulic model.
The Impact Fees will be collected from the developer at the time of substantial construction completion. After the acceptance of final construction completion, the meter application, as well as a deposit and required Connection Fees, will be submitted to JCSUD by the developer to have the meter installed.