Pecan Creek Reclamation Facility expansion drives higher wastewater impact fees

The Denton Planning and Zoning Commission meeting on February 12, 2025, focused on critical discussions regarding impact fees and funding strategies for local water utilities. A significant topic was the higher impact fees associated with wastewater services in the Pecan Creek Basin, primarily driven by the reconstruction of the aging Pecan Creek Water Reclamation Facility. This facility, which is 50 years old, is undergoing a major upgrade to increase its capacity by 5 million gallons per day, despite only a 20% increase in overall capacity. The reconstruction is essential not only for capacity but also for modernizing infrastructure that is nearing the end of its operational life.

Commission members sought clarity on the financial implications of these impact fees, particularly in relation to the funding model for water utility projects. Historically, the city aimed for a 100% revenue replacement model for infrastructure funding, but recent budgets have shown a shift to a reliance on revenue bonds, with only 30% of funding coming from direct revenue.

Stephen, the General Manager of Water Utilities and Street Operations, addressed these concerns by explaining that the department is currently reevaluating its financial strategies. He highlighted the use of the Water Infrastructure Finance and Innovation Act (WIFIA), a federal program that allows for deferred loan repayments, enabling the city to generate revenue from new customers before starting to pay off debt. This approach aims to restore the balance towards cash funding for projects, ensuring long-term financial sustainability.

The discussions underscored the city's commitment to improving its water infrastructure while adapting its funding strategies to meet future demands. The commission's focus on these issues reflects the ongoing efforts to enhance the reliability and efficiency of Denton's water services.