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Provo staff and consultants propose higher water impact fees, recommend phased adoption with July effective date
Summary
City consultants presented an updated water impact-fee analysis that raises the maximum allowable fee to reflect transmission and storage costs and recommended an effective date after a developer notice period; staff suggested adopting a fee schedule and returning an ordinance in January.
Zions Public Finance and city engineering staff presented Provo’s updated Water Impact Fee Analysis to the council on Dec. 17 and recommended a revised fee schedule that reflects recent project cost inflation and large transmission projects required to serve growth.
Consultants explained the methodology: identify existing plant and excess capacity that new development may buy into, estimate capital needs for the next ten years and beyond (treatment/production, storage, transmission), then allocate the proportionate cost among equivalent residential units (ERUs) and nonresidential meter sizes. Consultants said transmission pipeline upgrades and West Side growth are driving a substantial share of the increase in gross costs underlying the fees.
The presentation showed a proposed schedule of ERU-based fees stratified by lot size (small, standard, mid, large) and meter-based commercial fees; proposed fees were higher than current fees because of construction-cost inflation and planned system upgrades. Consultants and staff recommended adopting the new fees with an effective date of July 1 to give projects already in final stages time to proceed under current rates while also meeting statutory notice requirements. Staff noted Utah law allows a period for implementation and said the city would return an ordinance for council approval in January. Councilors discussed fairness across lot sizes and how the fee schedule interacts with housing policy and infill incentives.
