Dade City staff to negotiate contingent utility service agreements to reserve wastewater capacity for small infill housing

City staff asked the Dade City Commission for direction on Sept. 23 about reserving future wastewater-treatment capacity for new residential development while the city’s wastewater plant is being designed and funded.

Staff recommended allowing small market-rate infill projects of four units or fewer and small-to-medium affordable infill projects of up to 12 units to proceed in the city’s utility service area, with the negotiation of contingent Utility Service Agreements (USAs). Under the proposed contingent USAs, developers could reserve capacity that would become effective once the city executes a construction contract for the wastewater-treatment plant and the developer pays required fees within an agreed timeframe.

Staff and consultants said many previously approved residential developments already have executed USAs; additional developers have expressed interest but do not yet have executed agreements. Staff presented an inventory showing a limited number of reserved equivalent residential units (ERUs) remaining from earlier commitments; one staff table cited 26 remaining ERUs reserved by developers that are not available for general allocation. Staff also noted that affordable projects and single-family infill were treated differently in the overall capacity analysis and that certain affordable projects would be exempt from the 26-unit count used in the table.

Commissioners questioned how “affordable” would be defined and expressed concern that private transfers of reserved ERUs between developers (a private agreement between two parties) could result in higher costs passed to homebuyers. Commissioners asked staff whether the city could reclaim unused reserved ERUs or otherwise prioritize public projects. Staff said that, in some cases, a developer had previously paid for ERUs and that the city was not a party to private transfer agreements between developers; staff suggested that refunds of previously paid ERU costs could revert capacity to the city if the original purchaser agreed to refund the fees.

Commissioners discussed conservation and retrofit options as a potential way to increase available capacity and asked staff to pursue options that could free capacity without immediate plant expansion.

Outcome: commissioners gave staff consensus direction to proceed with negotiating contingent USAs for small market-rate infill (four units or fewer) and small-to-medium affordable projects (proposed up to 12 units) and to bring contingent agreements to the commission for approval as they are negotiated. Commissioners also asked staff to return with clearer definitions of “affordable,” and to present any legal or policy options for addressing private ERU transfers and for prioritizing capacity for city goals.