Feb 12, 2025 Planning and Zoning Commission on 2025-02-12 4:00 PM (Capital Improvement Advisory Committee)

Good afternoon at 4 1 p.m. on February 12th 2025 I'll call this meeting of the capital improvement advisory committee to order our first order of business is the water and wastewater impact fee update so Kyle actually I think I was gonna start for just a moment so a couple of things so Tina Furgans I'm the deputy director of the services and planning director so first of all planning zoning commission members as you know from time to time you serve as the capital improvements advisory committee since we are going to be discussing water and wastewater impact fees and that applies in our ETJ area we're required to have a representative from the ETJ so hence why we have a new friendly face around our table this afternoon with Jason joining us so he is our ETJ representative I'm also wanted to just share with you what your charge is if you will or responsibility as members of the capital improvements advisory committee so that is first and foremost to advise and assist City Council in adopting their land use assumptions when we work on projects of this nature you have a responsibility to review the capital improvement plans and file written comments so your written comments are typically that will be the minutes that we prepare associated with with this meeting monitoring evaluating implementation of the capital improvements plan so I'm sure Kyle will go through that as part of his presentation with the proposed improvements that are included within that program and then it does say file semi-annual reports with respect to the progress of our capital improvements plan and report to the political subdivision IEB in our city of any perceived inequities and implementing the planner imposing the impact fee so it's again a periodically meeting from time to time just to monitor the implementation of the plan and then also advise council in the need to update or revise the land use assumptions the capital improvements plan and impact fee and I believe in Kyle's presentation he'll go over ideally that the time periods of when we make updates to the the impact fees for the the water and wastewater programs so with that I'm going to turn it over to Kyle Pedigo and allow him to be able to proceed thank you you wastewater impact the update this is updated every five years per the TAC so first are a few of our impact fee study components with this study we start with our land use and growth assumptions then we outline our service units we identify our capital improvement plan we designate our service areas and then we ultimately end up with the impact fee calculation this map shows our phasing and growth assumptions for the impact fee time period this information is drawn from the Denton 2040 comprehensive plan from our 2023 wastewater master plan and from the 2024 water master plan so as you can see over the next five years we're anticipating an 8.1 percent annual growth rate in the city and then in the 5 to 10 year window we're expecting that to taper down to 3.4 percent for our service units for water and wastewater impact fee service units are based off of the installed meter size your installed water meter size for your home or your building so at the city of Denton our base meter size is our 5/8 by 3/4 inch meter and that provides enough water flow to serve a single-family home as a comparison a big box or a retail development may require a 2 inch water meter so that 2 inch water meter can provide up to 8 times the flow of our base meter the 5/8 by 3/4 so what that means ultimately is that that retail development that receives a 2 inch meter would be responsible for 8 times the base unit impact fee here's an overview of our this map shows an overview of our water impact fee capital improvement plan so every project they're listed on in blue and outlined in blue our existing infrastructure that has available capacity to accommodate some of this future growth that we're anticipating so the way that's factored into the impact fee calculation is that available capacity is compared to the cost of installation and then that's carried forward into the impact fee update everything outlined in red is conveyance and treatment future conveyance and treatment that we have planned to accommodate the growth in these areas with the future conveyance and treatment we take a hundred percent of that cost the planned cost of installation and calculate that into the impact fee this is the basically the same map but for our wastewater impact fee capital improvement plan all of the existing infrastructure with available capacity is shown in green and all of the future infrastructure to be constructed in the 10-year window is shown in red so this is an overlay of our capital improvement plan for our water utility over the top of our existing service area map for our water impact fees so our existing service areas are broken into service area 1a which is our centralized downtown portion 1b which is our loop basically the loop around the city and unit or area 2 which is out to the western portion of the city now we're not with this update we're not planning or proposing any changes to the water impact fee service areas we're planning on keeping that the same however we are proposing changes to the wastewater service area so this is a map showing our existing single wastewater service area this was established because we currently we have a single water reclamation plant which all wastewater effluent in the city flows to however with the wastewater master plan we identified the need for two additional plants to be constructed within the drainage basins so this shows an overlay of the proposed division of that single service area into three individual service areas corresponding with those drainage basins so we have Clear Creek to the north the concrete which is our centralized drainage basin and Hickory Creek which is our to the southwest its best practice with wastewater conveyance to convey it downhill use gravity downhill to your treatment locations so this overlay shows how that conveyance infrastructure is also pretty cleanly divided between these drainage basins for your Clear Creek Hickory Creek and Pecan Creek basins that brings us to the estimated maximum assessable impact fee calculation so to calculate this amount we take our 10-year recoverable cost of impact fee capital improvement plan and we divide that by our projected our 10-year service unit projection number so as you can see for water we're anticipating our 10-year capital improvement investment to be 582 million divided by our 52,774 projected service units which brings us to our maximum assessable fee of $11,046 similarly for wastewater we have slightly higher investment due to the addition of those the requirement of those two new treatment plants so that brings us to 760 million dollars divided by our 52,276 service units for our maximum assessable fee of $14,551 once we get that number we divide it among our service areas based on the infrastructure that's located within those areas so for our water the in blue the chart showing our 2018 update versus our 2024 proposed rates service area 1a which is that centralized downtown portion actually sees a reduction in impact fee because it's mostly if you look at it the infrastructure there is mostly built out there's not very much needed to accommodate growth in that area versus service area 1b and 2 where we have their largest larger service areas and more infrastructure is required in those areas so both 1b and 2c a significant significant increase now our wastewater impact fee comparison in 2018 we had that single service area so in the entire service area it was four thousand seven hundred sixteen dollars for a base impact fee amount and you can see that we divided that into the three separate drainage basins again corresponding to the infrastructure within those basins we have reviewed these numbers with developers in the area so with the larger developers known developments the hunter ranch coal ranch and the TCCI mud and we've integrated their comments and feedback into the study so next steps water utilities is proposing that we seek a hundred percent adoption of our of our impact fee rate a hundred percent recovery so pending the results of today's meeting we could begin advertisement after today's meeting for our City Council public hearing the next date for our City Council public hearing would be March 25th and then for the City Council ordinance adoption would be April 1st any questions thank you Kyle just because this is I think the first time for a CIAC meeting for all the four members here I'm gonna ask a couple of sort of general level setting questions and then I want to hear other questions from from the committee within this process I believe there's an option of assuming a 50% utilization and recovery rate or doing a cost of service with financing study can can you explain one which one we chose and what the goals of that study is our our and the reason I ask is that sometimes we talk about hundred percent and then we say well we want it to be a fair split but my understanding is that that study looks at how much of this infrastructure will be used or necessary because of the new development versus because of existing developed properties correct and so we chose to go with the financial study and that's if you if you look in the report that's where we break down basically the utilization percentage of the existing infrastructure in the ground to carry forward versus to carry forward for that's that would accommodate the new development versus the brand new infrastructure for conveyance there so that's that's why we perform that study and are recommending 100% cost of recovery on this okay thank you questions it's a lot of information so do you mind going back to the slide that compared the the rates from before to now so the the wastewater is going up quite a bit and you said you you talked to the developers yes we've had several update meetings with developers on this and we've presented them with the same information and explained showed the maps that are outlined our capital improvement plan showed the need for those separate treatment locations to get their feedback they're not happy with the increase but at the same time they understand with the amount of infrastructure involved to bring service to that area that an increase is necessary yeah because particularly with the Hickory Creek and Clear Creek you don't have the treatment plants and that's a big expense right so yeah shown on that map you can see you hit the Hickory Creek and Clear Creek have the largest number of new build projects other questions I have a couple on the I guess can you go all the way back to the growth assumptions and then I've got a couple on the the wastewater projects so you said that these this came from a combination of the comprehensive plan and a couple of the the water and wastewater studies going forward I don't recall seeing a map like this with the pink and blue areas outlined as places we think are gonna grow in the next five or ten years can you let us know where specifically you got that data from that comes from our wastewater master plan which was adopted last year and the water master plan which we plan on adopting quarter one of this year so with that we took the land use assumptions from the 2040 comprehensive master or comprehensive plan and then we combined it with outreach with development services with outlining the boundaries of known developments and basically the pink and blue show are different expected infill rates within those boundaries so each each of these outlined areas are planned developments known developments or where where the study shows that development is likely within that tenure window okay just looking at the map this may be more of a question to planning but you know I see a large northeast in an area on there and and that plan is kind of on hiatus until we do something else and I don't see very much from a downtown perspective and we just did the downtown plan so I'm just trying to understand do we expect the downtown plan growth to happen after that 10-year window help me understand Scott McDonald director of development services so what you see here which is different than the comprehensive plan is when we crafted and drafted the the comprehensive plan we didn't expect the growth that we've experienced to date and so what you're seeing to the west to the southwest and to the north is just incredible growth that's actual development on the ground and development that's in review so when they were going through the wastewater master plan they worked with planning to just to see what those unit counts were and ultimately came up with what this is so this is truth to facts on the ground what you see in the Northeast area is reflective of what has been proposed at the time that we were doing that and recognizing that that is paused doesn't change the fact that that wastewater facility will be going in and that interceptor line is going all the way over to 35 to accommodate for that basin so it's a much grander area than just what's shaded and then I think for the downtown the infill components of it will really be treated as a result of when these other facilities are put into into service that will have less impact on the Clear Creek or the a concrete thank you facility which will be able to accommodate so if that helps yeah thank you no it does make sense just in general that you know utilization rates I think on I think this was the water instead of the wastewater for some of the mains underneath Locust Street were under 20% so we've got a large amount of capacity remaining can you go to the map with all the pipes and projects for me for water or wastewater wastewater I noticed that the pecan Creek reclamation plant is slated for an increase in capacity as well as the other two new plants from I think like six million gallons per day up to 24 or something like that so our current treatment capacity at pecan Creek is 21 million gallons per day we're okay we're upgrading it to 26 million yeah okay I must have read that wrong because it it struck me as a much larger increase at that time okay and then I guess I'm trying to understand if you want to go back or go forward to the the recommended in impact fee tables there you know the service area 1a is not exactly the same as pecan Creek but it you know it's similar in that sense can you speak to what is driving that larger impact fee for the wastewater in that area versus the water so the biggest driver in the pecan Creek Basin is the reconstruction of the pecan Creek water reclamation facility so that the facility again we're expanding we're adding 5 million gallons per day capacity but we're also reconstructing facility I think it's 50 years old yeah 50 it's a 50 year old wastewater facility that's nearing the end of its life so this it's not just conveyance it's it's the reconstruction of the plant okay so even though it's only an increase in capacity of something like 20% it's it's really a rebuild so it's a hundred and twenty percent of the existing capacity being constructed if you will okay that helps and then last question and and this may be a longer term question so I'm not sure who was here this long ago I remember seeing an ISR way back around 2013-2014 time frame where the the water utilities services were were seeking to move toward a hundred percent revenue replacement model for at least the pipe infrastructure and then I noticed in this last year's budget that had drifted down to 30% from revenue and 70% from revenue bonds can you speak to that at all and and help explain what how that impacts this impact fee calculation that's a little beyond my time frame but Stephen should be able to speak that thank you good afternoon Stephen Gage general manager water utilities and street operations it's actually before my time as well I got here in 2021 but what I can tell you is that we are we are reevaluating our financial models and diversifying our the way that we fund projects historically we would issue debt and then we would have to either put that debt right to use or start paying on it and you may hear a term called WIFIA so it's a water infrastructure innovate funding Innovation Act which is a federal program and so we have an application moving forward for those funds and those dollars allow us to actually defer the repayment of the loan so we take out WIFIA funds once we finish the project we get about a substantial completion there's a five year window before we have to begin debt services so what that allows us to do is basically you know I guess fortify the generational equity piece of the equation and and it's actually moving us closer to that that cash funding because we're able to add customers generate revenue and then cash fund the majority of it so I can't speak to the memo that you're referring to but I can tell you that we are even if we've slipped a bit we're gonna get back on track okay thank you that's all I had any more questions now that we've talked through more of this okay well we'll see if if any come up in discussion thank you Kyle okay yeah oh yeah we're looking for formal recommendation from the Commission so I would recommend a motion okay so yeah if you can leave the proposed impact fee update their slide up there so this is what staff is recommending is that correct correct okay so thoughts of direction or concerns or everything looks okay that's good to me I'll make a motion feel free to can I just say to recommend to as a as presented okay a motion by Commissioner Riggs is there a second okay second by member Kalachek thank you I guess I will call for a vote all those in favor raise your hands that we can get a count and that passes unanimously five with one absence thank you Kyle thank you without objection I will adjourn this meeting of the capital impact advisory committee of Denton thank you 424 you