Commissioners approve large water and sewer impact-fee increases and advance 1 Water financing

Hillsborough County commissioners voted unanimously on Dec. 17 to adopt a phased increase to water and wastewater impact fees and to advance near-term financing and construction steps for the county's 1 Water South program.

The vote settled a contentious public hearing about how quickly to impose higher connection charges on new development. Lisa Ray, director of the county's Water Resources Department, told the board that impact fees are designed so growth pays for growth: “Impact fees are one-time fees paid to connect new customers or construction to help cover the cost of expanding the water and wastewater systems so that growth pays for itself,” she said during the public hearing.

Why it mattered: County staff and consultants said the county faces extraordinary infrastructure needs in the South Central service area — new treatment plants, pump stations and roughly 20 miles of large-diameter pipelines — tied to roughly $2 billion in near-term capital work. Andy (Stantec) summarized those drivers at the hearing: “We are talking about investing about $2,000,000,000 in additional infrastructure for growth over the near term,” he said, describing rapid growth and large cost increases for pipelines and treatment facilities.

What the board approved: The South Central combined water and wastewater impact fee was recalculated from $5,865 per ERU to $13,270 per ERU using industry-standard methodology based on planned facilities. The board adopted a phased implementation (the board selected the county staff's option 5 framework) to reduce short-term shock to developers and buyers while meeting statutory requirements for the demonstrated need finding. Commissioners emphasized protecting applicants already in the development queue; staff said existing, queued permits would continue to honor the prior rate.

Related financing and contracting moves: To allow the county to encumber contracts and purchase long-lead materials now, the board approved a short-term revolving credit agreement (B5) and two contract actions to move construction forward: a roughly $224.6 million third modification to the Garney Companies progressive design-build agreement (B6) and a modification to Corolla Engineers' professional services (B7). Kevin Brickey, director of management budget, said early borrowing and a line of credit are intended to be temporary so the county can later pursue long-term bonds when the program cash flows permit.

Board reaction and next steps: Commissioners split over pace—some argued for full cost recovery now to avoid shifting costs to existing ratepayers; others urged a phase-in for affordability and to respect projects already in the pipeline. Several members said the accelerated timeline was driven, in part, by statutory and legislative constraints. Staff said implementation would take effect on a schedule consistent with the chosen phased option and that fees would go into effect 90 days after formal adoption unless otherwise phased per the chosen option.

Votes and procedural outcome: The impact-fee ordinance and implementation approach passed with the two-thirds/board-majority requirements met; related financing (B5) and contract modifications (B6/B7) were approved in separate motions.

What to watch: The 1 Water program will move into construction of early packages and long-lead procurement; staff projected that some facilities will come online in three to five years. Commissioners asked staff to present periodic reviews of assumptions, affordability impacts and opportunities to revisit user rates if development revenues meet expectations.