Hillsborough County staff cite capacity limits and $2 billion of projects as reason to sharply raise South Central water and wastewater impact fees

Hillsborough County water resources staff told commissioners in a workshop that extraordinary growth, near-term plant capacity limits and steep construction-cost increases justify large increases to water and wastewater impact fees in the South Central service area.

In a presentation at the county’s second publicly noticed workshop, consultant Justin Grant of Stantec and Water Resources Director Lisa Ray said the county faces capacity constraints at multiple plants and has roughly $2.0 billion in planned expansion needs — with roughly $1.7 billion of that concentrated in three flagship projects. Grant told the board the updated cost basis from the study would put the fee at about $13,270 per equivalent residential connection (ERC), compared with about $5,865 in the current South Central analysis.

Why it matters: impact fees are one-time charges developers pay when connecting new construction; staff said they fund capital to expand service so 'growth pays for itself.' Commissioners and staff said those fees are typically borne first by developers and may be passed on to homebuyers, which raised concerns about home affordability.

Staff highlighted three large projects driving the need: a $1.15 billion South wastewater conveyance and treatment project (a new wastewater plant, associated pipelines and a super-lift station), a roughly $500 million water treatment plant planned in the Balm area (being coordinated with Tampa Bay Water), and continued capacity work at the Falkenberg wastewater treatment plant (staff cited about $100 million to complete a 15 million gallons per day increase). Grant said more than 98% of the expansion-related spending is in the South Central service area.

Grant summarized data showing the county's demand has increased in recent years (he cited about 22% demand growth since 2020) and that unit construction costs for treatment projects and pipelines have risen dramatically — he gave an example of over 300% increases for some treatment projects since before the pandemic. He also cited recent census-based population growth figures showing substantial countywide increases, and said approximately 57,000 of that recent population increase is in the South Central area.

On fiscal risks, Grant warned that if growth-related infrastructure costs are not covered by impact fees they would have to be addressed through rates or additional borrowing, which could affect credit ratings and interest costs. He presented an upper-end estimate (as stated in the presentation) of approximately $202,150,000,000 in potential revenue shortfall over 10 years if growth-related infrastructure funding is not addressed via fees; staff did not present line-by-line backing for that figure during the workshop.

Commissioners asked detailed financial questions and asked staff and the consultant to return with clearer, simpler calculations showing how a given plant capacity translates into households served and how the per-house cost was derived. Lisa Ray explained that the county’s planning staff coordinates forecasts with planning commission staff and that the 24 MGD wastewater plant modeling ties to anticipated connections (including single-family, multifamily and commercial), and staff said they can provide the specific projected connection counts and square-footage assumptions.

The next step: Ray said the county will hold a public hearing on the proposed impact-fee rate adjustments at the Board of County Commissioners regular meeting on Dec. 17 at 10 a.m., where public comment will be taken. Pending board approval, staff said implementation preparations would begin for a 2026 effective date, with staff later referencing March 23 as a target for assessments to begin.

"Impact fees are a one-time fee paid to connect new customers or construction to help cover the costs of expanding the water and the wastewater service," Ray said during the presentation. "It's so that growth pays for itself." Justin Grant summarized the study’s capacity and cost findings, adding that the scale of expansion required is "truly extraordinary."

Staff said they will return with scenario options, including 2-, 3- and 4-year phase-in approaches and the analyses needed to show how those choices would affect financing and bondability. The adoption hearing is scheduled for Dec. 17; the board must take formal action there before any fee changes take effect.