The Mesa City Council on Sept. 22 adopted a notice of intent to establish water and wastewater capacity fees intended to require new development to pay for system expansions needed to serve growth.

Christopher Hassard, the city's Water Resources director, said the capacity-fee methodology follows the American Water Works Association (AWWA) manual and Arizona statutory guidance. Staff estimated about $400 million in capacity projects identified in the city's integrated master plan — including expansion of the Signal Butte water treatment plant — and translated that need into a per-meter charge using a three-quarter-inch meter as the base unit. The presentation showed a water-and-wastewater capacity fee of roughly $9,500 for a standard three-quarter-inch meter; larger meters carry proportionally higher fees keyed to estimated flow capacity.

Staff emphasized the fee applies to new meters and to upsizes — for example, when a parcel moves from a 1-inch to a larger meter for more intensive use. The city does not currently have a broadly applied mechanism that places these capacity costs on new development; staff noted prior impact fees had sunset and that other jurisdictions use impact or capacity fees to require growth to pay for growth.

Speakers from the Home Builders Association of Central Arizona asked the city to use the development-impact-fee statute (ARS 9-463.05) rather than ARS 9-511.01, and requested additional outreach; staff and applicant representatives said stakeholder meetings are scheduled. Public commenters split: some supported a capacity fee so current ratepayers are not subsidizing new growth; the Home Builders Association said it was concerned about process and sought additional discussion on fee calculation and timing.

Council action: the council adopted the notice of intent unanimously and directed staff to continue stakeholder outreach and prepare ordinances following the statutory timeline.

Why it matters: the proposed capacity fees would shift a portion of upfront infrastructure costs for water and wastewater to developers and new customers rather than current ratepayers; the notice of intent begins a statutory process that includes stakeholder meetings and public hearings before any ordinance adoption.