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Council adopts scalable water and wastewater impact fees, updates raw-water dedication rules
Summary
Council approved a new method to calculate water, raw-water and wastewater impact fees that scales fees by house building square footage and lot size; it also approved revised raw-water dedication amounts tied to predicted drought-year usage. The resolution and accompanying ordinance passed 8-0 on first reading.
The Loveland City Council on Sept. 16 approved updates to how the city calculates water, raw-water and wastewater impact fees for new residential construction and set scaled raw-water dedication amounts based on home and lot size.
Why it matters: The change replaces a flat, one-size-fits-all fee for single-family homes with a scalable model using building square footage and gross parcel area to better align fees with expected indoor and outdoor water use. Councilors said the change aims to encourage smaller, more affordable homes and distribute system costs more equitably.
What staff proposed: Utility staff and consultants (FCS Group) analyzed approximately 14,000 matched residential accounts and found indoor water use correlated most closely with building square footage while outdoor use correlated with gross lot size. Using those relationships, the new fee methodology divides current fees into indoor and outdoor components and assigns per-square-foot rates for both building size and parcel size.
Examples shown to council: Under the proposed formulas, an average property (about 1,700 sq. ft. home on an 8,750 sq. ft. lot) would pay approximately the same total in system impact fees as under the current structure; smaller homes would pay less and larger homes would pay more. FCS reported that the new approach would modestly increase overall collections in recent years' data but would better align charges with expected usage. For raw-water dedication, staff recommended increasing the average dedication slightly (from 0.22 acre-feet to about 0.255 acre-feet for the average home) with lot-size scaling for larger parcels.
Public comment and support: Developers, members of the affordable-housing task force and the Loveland Utility Commission supported the approach as a market-aligned way to encourage smaller homes. Jamie Sabin (Aspen Homes), speaking by phone, told the council she was "100% behind this" and said it would not request direct subsidy but would make fees more equitable.
Votes: Council approved on first reading the resolution to amend the schedule of rates, charges and fees (R 69 20 25) by roll call vote, 8-0. Council then approved on first reading the corresponding ordinance to amend section 19.04.02 of the Loveland Municipal Code (ordinance number 67 89) by roll call, 8-0.
Ending: Staff and the consultant said the changes are intended to improve equity and help the council's goal of encouraging more affordable and missing-middle housing by lowering barriers for smaller-lot, smaller-home projects; staff will implement the new fee methodology and return with follow-up details as needed.
