WEBVTT 00:00:00.000 --> 00:00:10.180 Good afternoon at 4 1 p.m. on February 12th 2025 I'll call this meeting of the 00:00:10.180 --> 00:00:15.640 capital improvement advisory committee to order our first order of business is 00:00:15.640 --> 00:00:24.120 the water and wastewater impact fee update so Kyle actually I think I was 00:00:24.120 --> 00:00:28.480 gonna start for just a moment so a couple of things so Tina Furgans I'm 00:00:28.480 --> 00:00:33.520 the deputy director of the services and planning director so first of all 00:00:33.520 --> 00:00:37.520 planning zoning commission members as you know from time to time you serve as 00:00:37.520 --> 00:00:40.680 the capital improvements advisory committee since we are going to be 00:00:40.680 --> 00:00:44.700 discussing water and wastewater impact fees and that applies in our ETJ area 00:00:44.700 --> 00:00:48.560 we're required to have a representative from the ETJ so hence why we have a new 00:00:48.560 --> 00:00:52.680 friendly face around our table this afternoon with Jason joining us so he 00:00:52.680 --> 00:00:58.400 is our ETJ representative I'm also wanted to just share with you what your 00:00:58.400 --> 00:01:03.800 charge is if you will or responsibility as members of the capital improvements 00:01:03.800 --> 00:01:07.520 advisory committee so that is first and foremost to advise and assist City 00:01:07.520 --> 00:01:11.360 Council in adopting their land use assumptions when we work on projects of 00:01:11.360 --> 00:01:15.520 this nature you have a responsibility to review the capital improvement plans and 00:01:15.520 --> 00:01:18.760 file written comments so your written comments are typically that will be the 00:01:18.760 --> 00:01:24.480 minutes that we prepare associated with with this meeting monitoring evaluating 00:01:24.480 --> 00:01:27.720 implementation of the capital improvements plan so I'm sure Kyle will 00:01:27.720 --> 00:01:31.200 go through that as part of his presentation with the proposed 00:01:31.200 --> 00:01:36.100 improvements that are included within that program and then it does say file 00:01:36.100 --> 00:01:39.280 semi-annual reports with respect to the progress of our capital improvements 00:01:39.280 --> 00:01:43.200 plan and report to the political subdivision IEB in our city of any 00:01:43.200 --> 00:01:47.320 perceived inequities and implementing the planner imposing the impact fee so 00:01:47.320 --> 00:01:51.400 it's again a periodically meeting from time to time just to monitor the 00:01:51.400 --> 00:01:55.560 implementation of the plan and then also advise council in the need to update or 00:01:55.560 --> 00:01:58.640 revise the land use assumptions the capital improvements plan and impact fee 00:01:58.640 --> 00:02:01.920 and I believe in Kyle's presentation he'll go over ideally that the time 00:02:01.920 --> 00:02:06.480 periods of when we make updates to the the impact fees for the the water and 00:02:06.480 --> 00:02:10.320 wastewater programs so with that I'm going to turn it over to Kyle Pedigo and 00:02:10.320 --> 00:02:14.400 allow him to be able to proceed thank you 00:02:18.200 --> 00:02:20.260 you 00:02:20.260 --> 00:02:30.600 wastewater impact the update this is updated every five years per the TAC so 00:02:30.600 --> 00:02:34.920 first are a few of our impact fee study components with this study we start with 00:02:34.920 --> 00:02:40.280 our land use and growth assumptions then we outline our service units we 00:02:40.280 --> 00:02:46.880 identify our capital improvement plan we designate our service areas and then we 00:02:46.880 --> 00:02:54.520 ultimately end up with the impact fee calculation this map shows our phasing 00:02:54.520 --> 00:02:59.640 and growth assumptions for the impact fee time period this information is 00:02:59.640 --> 00:03:04.480 drawn from the Denton 2040 comprehensive plan from our 2023 00:03:04.480 --> 00:03:10.680 wastewater master plan and from the 2024 water master plan so as you can see over 00:03:10.680 --> 00:03:16.040 the next five years we're anticipating an 8.1 percent annual growth rate in the 00:03:16.040 --> 00:03:21.040 city and then in the 5 to 10 year window we're expecting that to taper down to 00:03:21.040 --> 00:03:29.400 3.4 percent for our service units for water and wastewater impact fee service 00:03:29.400 --> 00:03:33.320 units are based off of the installed meter size your installed water meter 00:03:33.320 --> 00:03:38.800 size for your home or your building so at the city of Denton our base meter 00:03:38.800 --> 00:03:44.400 size is our 5/8 by 3/4 inch meter and that provides enough water flow to serve 00:03:44.400 --> 00:03:49.880 a single-family home as a comparison a big box or a retail development may 00:03:49.880 --> 00:03:57.640 require a 2 inch water meter so that 2 inch water meter can provide up to 8 00:03:57.640 --> 00:04:02.920 times the flow of our base meter the 5/8 by 3/4 so what that means ultimately is 00:04:02.920 --> 00:04:06.360 that that retail development that receives a 2 inch meter would be 00:04:06.360 --> 00:04:16.240 responsible for 8 times the base unit impact fee here's an overview of our 00:04:16.240 --> 00:04:21.240 this map shows an overview of our water impact fee capital improvement plan so 00:04:21.240 --> 00:04:26.840 every project they're listed on in blue and outlined in blue our existing 00:04:26.840 --> 00:04:31.760 infrastructure that has available capacity to accommodate some of this 00:04:31.760 --> 00:04:35.520 future growth that we're anticipating so the way that's factored into the impact 00:04:35.520 --> 00:04:41.240 fee calculation is that available capacity is compared to the cost of 00:04:41.240 --> 00:04:44.880 installation and then that's carried forward into the impact fee update 00:04:44.880 --> 00:04:51.120 everything outlined in red is conveyance and treatment future conveyance and 00:04:51.120 --> 00:04:54.720 treatment that we have planned to accommodate the growth in these areas 00:04:54.720 --> 00:04:58.440 with the future conveyance and treatment we take a hundred percent of that cost 00:04:58.440 --> 00:05:06.440 the planned cost of installation and calculate that into the impact fee this 00:05:06.440 --> 00:05:11.000 is the basically the same map but for our wastewater impact fee capital 00:05:11.000 --> 00:05:14.680 improvement plan all of the existing infrastructure with available capacity 00:05:14.680 --> 00:05:20.640 is shown in green and all of the future infrastructure to be constructed in the 00:05:20.640 --> 00:05:31.640 10-year window is shown in red so this is an overlay of our capital improvement 00:05:31.640 --> 00:05:38.520 plan for our water utility over the top of our existing service area map for 00:05:38.520 --> 00:05:43.560 our water impact fees so our existing service areas are broken into service 00:05:43.560 --> 00:05:48.240 area 1a which is our centralized downtown portion 1b which is our loop 00:05:48.240 --> 00:05:53.360 basically the loop around the city and unit or area 2 which is out to the 00:05:53.360 --> 00:05:57.720 western portion of the city now we're not with this update we're not planning 00:05:57.720 --> 00:06:04.320 or proposing any changes to the water impact fee service areas we're planning 00:06:04.320 --> 00:06:12.640 on keeping that the same however we are proposing changes to the wastewater 00:06:12.640 --> 00:06:16.760 service area so this is a map showing our existing single wastewater service 00:06:16.760 --> 00:06:20.280 area this was established because we currently we have a single water 00:06:20.280 --> 00:06:25.960 reclamation plant which all wastewater effluent in the city flows to however 00:06:25.960 --> 00:06:31.600 with the wastewater master plan we identified the need for two additional 00:06:31.600 --> 00:06:37.600 plants to be constructed within the drainage basins so this shows an 00:06:37.600 --> 00:06:44.920 overlay of the proposed division of that single service area into three 00:06:44.920 --> 00:06:48.800 individual service areas corresponding with those drainage basins so we have 00:06:48.800 --> 00:06:52.800 Clear Creek to the north the concrete which is our centralized drainage basin 00:06:52.800 --> 00:06:59.200 and Hickory Creek which is our to the southwest its best practice with 00:06:59.200 --> 00:07:03.920 wastewater conveyance to convey it downhill use gravity downhill to your 00:07:03.920 --> 00:07:10.680 treatment locations so this overlay shows how that conveyance infrastructure 00:07:10.680 --> 00:07:17.060 is also pretty cleanly divided between these drainage basins for your Clear 00:07:17.060 --> 00:07:26.000 Creek Hickory Creek and Pecan Creek basins that brings us to the estimated 00:07:26.000 --> 00:07:29.440 maximum assessable impact fee calculation so to calculate this amount 00:07:29.440 --> 00:07:35.120 we take our 10-year recoverable cost of impact fee capital improvement plan and 00:07:35.120 --> 00:07:40.400 we divide that by our projected our 10-year service unit projection 00:07:40.400 --> 00:07:45.800 number so as you can see for water we're anticipating our 10-year capital 00:07:45.800 --> 00:07:54.280 improvement investment to be 582 million divided by our 52,774 projected service 00:07:54.280 --> 00:08:02.200 units which brings us to our maximum assessable fee of $11,046 similarly for 00:08:02.200 --> 00:08:05.840 wastewater we have slightly higher investment due to the addition of those 00:08:05.840 --> 00:08:10.480 the requirement of those two new treatment plants so that brings us to 00:08:10.480 --> 00:08:16.160 760 million dollars divided by our 52,276 service units for our maximum 00:08:16.160 --> 00:08:21.040 assessable fee of $14,551 00:08:21.040 --> 00:08:26.600 once we get that number we divide it among our service areas based on the 00:08:26.600 --> 00:08:32.440 infrastructure that's located within those areas so for our water the in blue 00:08:32.440 --> 00:08:40.440 the chart showing our 2018 update versus our 2024 proposed rates service area 1a 00:08:40.440 --> 00:08:43.400 which is that centralized downtown portion actually sees a reduction in 00:08:43.400 --> 00:08:47.120 impact fee because it's mostly if you look at it the infrastructure there is 00:08:47.120 --> 00:08:50.400 mostly built out there's not very much needed to accommodate growth in that 00:08:50.400 --> 00:08:55.400 area versus service area 1b and 2 where we have their largest larger service 00:08:55.400 --> 00:09:00.760 areas and more infrastructure is required in those areas so both 1b and 00:09:00.760 --> 00:09:06.200 2c a significant significant increase now our wastewater impact fee comparison 00:09:06.200 --> 00:09:11.880 in 2018 we had that single service area so in the entire service area it was 00:09:11.880 --> 00:09:18.080 four thousand seven hundred sixteen dollars for a base impact fee amount and 00:09:18.080 --> 00:09:23.840 you can see that we divided that into the three separate drainage basins again 00:09:23.840 --> 00:09:29.040 corresponding to the infrastructure within those basins we have reviewed 00:09:29.040 --> 00:09:33.680 these numbers with developers in the area so with the larger developers known 00:09:33.680 --> 00:09:41.000 developments the hunter ranch coal ranch and the TCCI mud and we've integrated 00:09:41.000 --> 00:09:52.080 their comments and feedback into the study so next steps water utilities is 00:09:52.080 --> 00:10:00.320 proposing that we seek a hundred percent adoption of our of our impact fee rate 00:10:00.320 --> 00:10:06.080 a hundred percent recovery so pending the results of today's meeting we could 00:10:06.080 --> 00:10:10.560 begin advertisement after today's meeting for our City Council public 00:10:10.560 --> 00:10:14.240 hearing the next date for our City Council public hearing would be March 00:10:14.240 --> 00:10:21.440 25th and then for the City Council ordinance adoption would be April 1st any 00:10:21.440 --> 00:10:28.920 questions thank you Kyle just because this is I think the first time for a 00:10:28.920 --> 00:10:34.200 CIAC meeting for all the four members here I'm gonna ask a couple of sort of 00:10:34.200 --> 00:10:38.920 general level setting questions and then I want to hear other questions from from 00:10:38.920 --> 00:10:47.840 the committee within this process I believe there's an option of assuming a 00:10:47.840 --> 00:10:52.600 50% utilization and recovery rate or doing a cost of service with financing 00:10:52.600 --> 00:10:59.720 study can can you explain one which one we chose and what the goals of that 00:10:59.720 --> 00:11:05.200 study is our our and the reason I ask is that sometimes we talk about hundred 00:11:05.200 --> 00:11:11.080 percent and then we say well we want it to be a fair split but my understanding 00:11:11.080 --> 00:11:17.200 is that that study looks at how much of this infrastructure will be used or 00:11:17.200 --> 00:11:21.920 necessary because of the new development versus because of existing developed 00:11:21.920 --> 00:11:26.680 properties correct and so we chose to go with the financial study and that's if 00:11:26.680 --> 00:11:31.080 you if you look in the report that's where we break down basically the 00:11:31.080 --> 00:11:35.160 utilization percentage of the existing infrastructure in the ground to carry 00:11:35.160 --> 00:11:39.760 forward versus to carry forward for that's that would accommodate the new 00:11:39.760 --> 00:11:45.880 development versus the brand new infrastructure for conveyance there so 00:11:45.880 --> 00:11:51.640 that's that's why we perform that study and are recommending 100% cost of 00:11:51.640 --> 00:12:00.200 recovery on this okay thank you questions it's a lot of information so 00:12:00.200 --> 00:12:05.080 do you mind going back to the slide that compared the the rates from before to 00:12:05.080 --> 00:12:10.480 now so the the wastewater is going up quite a bit and you said you you talked 00:12:10.480 --> 00:12:15.040 to the developers yes we've had several update meetings with developers on this 00:12:15.040 --> 00:12:21.200 and we've presented them with the same information and explained showed the 00:12:21.200 --> 00:12:26.280 maps that are outlined our capital improvement plan showed the need for 00:12:26.280 --> 00:12:36.400 those separate treatment locations to get their feedback they're not happy 00:12:36.400 --> 00:12:40.000 with the increase but at the same time they understand with the amount of 00:12:40.000 --> 00:12:43.960 infrastructure involved to bring service to that area that an increase is 00:12:43.960 --> 00:12:47.800 necessary yeah because particularly with the Hickory Creek and Clear Creek you 00:12:47.800 --> 00:12:52.960 don't have the treatment plants and that's a big expense right so yeah shown 00:12:52.960 --> 00:12:56.160 on that map you can see you hit the Hickory Creek and Clear Creek have the 00:12:56.160 --> 00:13:00.640 largest number of new build projects 00:13:00.640 --> 00:13:10.680 other questions 00:13:14.000 --> 00:13:19.560 I have a couple on the I guess can you go all the way back to the growth 00:13:19.560 --> 00:13:26.160 assumptions and then I've got a couple on the the wastewater projects so you 00:13:26.160 --> 00:13:31.120 said that these this came from a combination of the comprehensive plan 00:13:31.120 --> 00:13:36.920 and a couple of the the water and wastewater studies going forward I don't 00:13:36.920 --> 00:13:44.320 recall seeing a map like this with the pink and blue areas outlined as places 00:13:44.320 --> 00:13:48.260 we think are gonna grow in the next five or ten years can you let us know where 00:13:48.260 --> 00:13:52.320 specifically you got that data from that comes from our wastewater master plan 00:13:52.320 --> 00:13:56.200 which was adopted last year and the water master plan which we plan on 00:13:56.200 --> 00:14:01.560 adopting quarter one of this year so with that we took the land use 00:14:01.560 --> 00:14:08.080 assumptions from the 2040 comprehensive master or comprehensive plan and then we 00:14:08.080 --> 00:14:12.900 combined it with outreach with development services with outlining the 00:14:12.900 --> 00:14:17.340 boundaries of known developments and basically the pink and blue show are 00:14:17.340 --> 00:14:24.000 different expected infill rates within those boundaries so each each of these 00:14:24.000 --> 00:14:29.780 outlined areas are planned developments known developments or where where the 00:14:29.780 --> 00:14:39.320 study shows that development is likely within that tenure window okay just 00:14:39.320 --> 00:14:44.820 looking at the map this may be more of a question to planning but you know I see 00:14:44.820 --> 00:14:50.480 a large northeast in an area on there and and that plan is kind of on hiatus 00:14:50.480 --> 00:14:59.040 until we do something else and I don't see very much from a downtown 00:14:59.040 --> 00:15:03.960 perspective and we just did the downtown plan so I'm just trying to understand do 00:15:03.960 --> 00:15:09.120 we expect the downtown plan growth to happen after that 10-year window help me 00:15:09.120 --> 00:15:14.680 understand Scott McDonald director of development services so what you see 00:15:14.680 --> 00:15:18.920 here which is different than the comprehensive plan is when we crafted 00:15:18.920 --> 00:15:23.820 and drafted the the comprehensive plan we didn't expect the growth that we've 00:15:23.820 --> 00:15:30.320 experienced to date and so what you're seeing to the west to the southwest and 00:15:30.320 --> 00:15:34.760 to the north is just incredible growth that's actual development on the ground 00:15:34.760 --> 00:15:39.920 and development that's in review so when they were going through the wastewater 00:15:39.920 --> 00:15:45.600 master plan they worked with planning to just to see what those unit counts were 00:15:45.600 --> 00:15:51.560 and ultimately came up with what this is so this is truth to facts on the ground 00:15:51.560 --> 00:15:58.560 what you see in the Northeast area is reflective of what has been proposed at 00:15:58.560 --> 00:16:04.400 the time that we were doing that and recognizing that that is paused doesn't 00:16:04.400 --> 00:16:08.720 change the fact that that wastewater facility will be going in and that 00:16:08.720 --> 00:16:12.940 interceptor line is going all the way over to 35 to accommodate for that basin 00:16:12.940 --> 00:16:18.120 so it's a much grander area than just what's shaded and then I think for the 00:16:18.120 --> 00:16:22.920 downtown the infill components of it will really be treated as a result of 00:16:22.920 --> 00:16:28.280 when these other facilities are put into into service that will have less impact 00:16:28.280 --> 00:16:34.280 on the Clear Creek or the a concrete thank you facility which will be able to 00:16:34.280 --> 00:16:39.520 accommodate so if that helps yeah thank you no it does make sense just in 00:16:39.520 --> 00:16:43.600 general that you know utilization rates I think on I think this was the water 00:16:43.600 --> 00:16:48.480 instead of the wastewater for some of the mains underneath Locust Street were 00:16:48.480 --> 00:16:56.240 under 20% so we've got a large amount of capacity remaining can you go to the map 00:16:56.240 --> 00:17:04.360 with all the pipes and projects for me for water or wastewater wastewater I 00:17:04.360 --> 00:17:10.080 noticed that the pecan Creek reclamation plant is slated for an increase in 00:17:10.080 --> 00:17:15.240 capacity as well as the other two new plants from I think like six million 00:17:15.240 --> 00:17:19.840 gallons per day up to 24 or something like that so our current treatment 00:17:19.840 --> 00:17:24.440 capacity at pecan Creek is 21 million gallons per day we're okay we're 00:17:24.440 --> 00:17:28.320 upgrading it to 26 million yeah okay I must have read that wrong because it it 00:17:28.320 --> 00:17:39.800 struck me as a much larger increase at that time okay and then I guess I'm 00:17:39.800 --> 00:17:46.200 trying to understand if you want to go back or go forward to the the 00:17:46.200 --> 00:17:56.960 recommended in impact fee tables there you know the service area 1a is not 00:17:56.960 --> 00:18:03.040 exactly the same as pecan Creek but it you know it's similar in that sense can 00:18:03.040 --> 00:18:09.160 you speak to what is driving that larger impact fee for the wastewater in that 00:18:09.160 --> 00:18:16.360 area versus the water so the biggest driver in the pecan Creek Basin is the 00:18:16.360 --> 00:18:21.400 reconstruction of the pecan Creek water reclamation facility so that the 00:18:21.400 --> 00:18:26.840 facility again we're expanding we're adding 5 million gallons per day 00:18:26.840 --> 00:18:33.760 capacity but we're also reconstructing facility I think it's 50 years old yeah 00:18:33.760 --> 00:18:36.760 50 it's a 50 year old wastewater facility that's nearing the end of its 00:18:36.760 --> 00:18:43.000 life so this it's not just conveyance it's it's the reconstruction of the 00:18:43.000 --> 00:18:48.160 plant okay so even though it's only an increase in capacity of something like 00:18:48.160 --> 00:18:52.360 20% it's it's really a rebuild so it's a hundred and twenty percent of the 00:18:52.360 --> 00:18:58.280 existing capacity being constructed if you will okay that helps and then last 00:18:58.280 --> 00:19:03.880 question and and this may be a longer term question so I'm not sure who was 00:19:03.880 --> 00:19:10.200 here this long ago I remember seeing an ISR way back around 2013-2014 time frame 00:19:10.200 --> 00:19:19.040 where the the water utilities services were were seeking to move toward a 00:19:19.040 --> 00:19:23.160 hundred percent revenue replacement model for at least the pipe 00:19:23.160 --> 00:19:28.360 infrastructure and then I noticed in this last year's budget that had drifted 00:19:28.360 --> 00:19:35.680 down to 30% from revenue and 70% from revenue bonds can you speak to that at 00:19:35.680 --> 00:19:42.720 all and and help explain what how that impacts this impact fee calculation 00:19:42.720 --> 00:19:46.400 that's a little beyond my time frame but Stephen should be able to speak that 00:19:46.400 --> 00:19:52.880 thank you good afternoon Stephen Gage general manager water utilities and 00:19:52.880 --> 00:19:58.560 street operations it's actually before my time as well I got here in 2021 but 00:19:58.560 --> 00:20:03.640 what I can tell you is that we are we are reevaluating our financial models 00:20:03.640 --> 00:20:08.760 and diversifying our the way that we fund projects historically we would issue 00:20:08.760 --> 00:20:13.800 debt and then we would have to either put that debt right to use or start 00:20:13.800 --> 00:20:17.920 paying on it and you may hear a term called WIFIA so it's a water 00:20:17.920 --> 00:20:23.360 infrastructure innovate funding Innovation Act which is a federal program and so we 00:20:23.360 --> 00:20:27.320 have an application moving forward for those funds and those dollars allow us 00:20:27.320 --> 00:20:34.360 to actually defer the repayment of the loan so we take out WIFIA funds once we 00:20:34.360 --> 00:20:39.040 finish the project we get about a substantial completion there's a five 00:20:39.040 --> 00:20:44.080 year window before we have to begin debt services so what that allows us to do is 00:20:44.080 --> 00:20:48.200 basically you know I guess fortify the generational equity piece of the 00:20:48.200 --> 00:20:54.160 equation and and it's actually moving us closer to that that cash funding 00:20:54.160 --> 00:20:58.880 because we're able to add customers generate revenue and then cash fund the 00:20:58.880 --> 00:21:03.280 majority of it so I can't speak to the memo that you're referring to but I can 00:21:03.280 --> 00:21:07.000 tell you that we are even if we've slipped a bit we're gonna get back on 00:21:07.000 --> 00:21:12.920 track okay thank you that's all I had any more questions now that we've talked 00:21:12.920 --> 00:21:19.480 through more of this okay well we'll see if if any come up in discussion thank 00:21:19.480 --> 00:21:22.240 you Kyle okay 00:21:22.240 --> 00:21:35.680 yeah oh yeah we're looking for formal recommendation from the Commission so I 00:21:35.680 --> 00:21:44.680 would recommend a motion okay so yeah if you can leave the proposed impact fee 00:21:44.680 --> 00:21:48.880 update their slide up there so this is what staff is recommending is that 00:21:48.880 --> 00:21:55.280 correct correct okay so thoughts of direction or concerns or everything 00:21:55.280 --> 00:22:03.640 looks okay that's good to me I'll make a motion feel free to can I just say to 00:22:03.640 --> 00:22:13.120 recommend to as a as presented okay a motion by Commissioner Riggs is there a 00:22:13.120 --> 00:22:27.280 second okay second by member Kalachek thank you I guess I will call for a vote 00:22:27.280 --> 00:22:34.320 all those in favor raise your hands that we can get a count and that passes 00:22:34.320 --> 00:22:42.600 unanimously five with one absence thank you Kyle thank you 00:22:42.600 --> 00:22:50.400 without objection I will adjourn this meeting of the capital impact advisory 00:22:50.400 --> 00:22:56.720 committee of Denton thank you 424 00:22:57.280 --> 00:22:59.340 you