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