Georgetown staff outline higher water and wastewater impact fees, present phased increase and rate changes

City of Georgetown staff on Tuesday briefed the City Council on revised water and wastewater impact-fee calculations and recommended fee schedules tied to a large capital program that includes water supply from the East and two major wastewater plants.

The update summarized work by the council-appointed impact-fee committee and consultants, outlined a proposed step-in approach to raising fees over multiple years and explained how projected growth, capital projects and financing assumptions determine the maximum assessable fee. "First item on your workshop is a discussion on water and wastewater impact fees," said Wesley, a city utilities staff member who led the presentation.

The presentation said the city's combined impact-fee collections have been roughly $38 million this year (water is the larger share), and that the city is projecting substantial capital needs: nearly $1 billion in water improvements tied primarily to an "East" water supply and hundreds of millions for wastewater, including the proposed 3 Forks and Northlands wastewater treatment plants. Wesley said many of the East‑water costs remain speculative and "nothing's been bid out. So they're high level engineering estimates at this point." He also noted impact fees may be recalculated if project costs change.

Why it matters: impact fees are charged to new development to pay a portion of system expansion; higher fees shift a larger share of capital costs to new development and can affect developer decisions about whether to connect to municipal systems or build private package plants. City staff and committee members repeatedly warned that raising wastewater impact fees too high "would start to get into" the territory where some developers might choose private package plants, while lower fees shift costs to existing ratepayers.

Key numbers and committee recommendations: the staff memo said the current maximum assessable water fee is $12,215 per service unit and the city is currently collecting $11,000 per service unit; the new calculated maximum is $13,835. The committee recommended holding the $11,000 fee for one year, then increasing it $1,000 the next year and stepping to $13,000 afterward. For wastewater, the current maximum was listed as $6,129 (the city is charging that max); the new calculated maximum is $13,577. The committee recommended a stepped approach for wastewater: immediately set a $7,000 fee, raise to $8,500 the following year and to $10,000 in 2027, stopping short of the new maximum. The committee's recommendation was approved 5–2.

Council timetable and state-law constraint: staff reminded council that state law sets timing and procedural requirements for impact-fee updates and, under recently passed legislation, after Sept. 1 a jurisdiction would be barred from increasing impact fees for three years. Council earlier set a public hearing for July 22; staff asked for consensus so an ordinance could have first reading at the July 22 meeting, second reading on Aug. 12 and an effective date before Sept. 1. Wesley summarized that while the new law prevents increasing fees for three years after Sept. 1, "you can bring them down" and the committee's step-up plan was intended to provide flexibility while establishing a new maximum.

Debate and concerns: council members discussed trade-offs between recovering more capital cost from new development and the risk of motivating developers to install private package plants, which could reduce future connection counts and shrink the denominator used to set per-connection fees. Councilmember Jake said he "would step it up higher, especially on the wastewater," arguing for a schedule that reaches a larger portion of the recoverable cost sooner. Other councilmembers said they favored a more gradual approach to avoid sticker shock to developers and recommended revisiting the schedule in August 2026 before implementing later steps. Several members emphasized that lowering impact-fee collections shifts the burden to existing ratepayers.

How the fees were calculated: staff and consultants described the calculation steps: (1) project growth and service units (56,000 new water service units and 30,000 wastewater service units were used in the 10‑year denominator projections), (2) identify capital projects the city realistically expects to construct in the next 10 years and apportion the growth‑related share of those projects, (3) subtract the future contribution of ratepayers (a rate credit) from the total recoverable capital and finance charges, and (4) divide the remaining recoverable amount by the number of expected new service units to compute a maximum assessable fee. Wesley explained an alternate statutory method — dividing by 50% — would produce a different maximum; the staff used the rate‑credit method and estimated a maximum recoverable water cost of about $783 million after crediting future ratepayer contributions.

Other clarifications: staff explained impact fees do not pay for ongoing maintenance (that is funded from water and wastewater rates), that some developer-built regional lift stations can receive credits if they are on the city's eligible project list, and that the city can create geographic fee zones but doing so is complex. Staff also described how service units are assigned (a standard service unit is a 3/4‑inch meter; apartments are counted as a fraction of a unit, typically 67–70 percent).

Next steps: staff sought council feedback and said the council must hold the public hearing on July 22 as already scheduled. The council voiced support for adopting an updated maximum and a step‑up schedule that can be adjusted downward if circumstances change, with a plan to revisit the step to be taken in August 2026 before implementing additional increases.

Ending: council members signaled differing preferences on pace and size of increases but generally endorsed moving forward with the process to adopt updated fees and bring the ordinance back for readings this summer, with staff directed to incorporate council feedback and return on the schedule described.