Fountain Green consultant presents maximum $5,042 water impact fee; residents question timing and prepayment rules

CODY DIETER, consultant with EFG Consulting, told a packed Fountain Green public hearing that the firm’s impact-fee analysis calculated a maximum permissible water impact fee of $5,042 per equivalent residential connection. "Source and storage, collectively $5,042 would be the impact fee per connection," Dieter said, adding the council may adopt a lower fee but cannot exceed the analysis-based maximum.

Why it matters: Impact fees shift some capital costs for growth to new development rather than ratepayers. Dieter said the study measures the city’s current level of service and the projected demand over 20 years, counts excess capacity, allocates capital costs for anticipated projects and excludes grants when calculating developer-paid shares.

Details: Dieter reported Fountain Green had 554 equivalent residential connections (ERCs) in 2023 and expects roughly 118 new connections over the next 20 years. He said the analysis shows approximately 59 unused ERC-equivalents in water rights valued historically at about $135,000 and additional source/storage capacity whose replacement cost yields the $5,042 per-connection cap. A resident noted the current city water impact fee is $2,000.

Residents’ questions and council choices: Residents asked whether the city must adopt the maximum figure immediately; Dieter said the council can set any amount up to the maximum. A repeat question was how adopting a lower fee (for example, $3,000 or $4,000) would change the city’s ability to fund growth. Dieter explained conceptually that lower fees bring in proportionally less up-front revenue and the city would need to raise rates, borrow or otherwise adjust to cover capital and debt-service obligations.

Timing and appeals: Dieter told the hearing the statute requires a minimum 90-day delay between adoption and when the city can begin charging a new fee, and that there is an appeal process for impact fees. He also said collected fees must be spent or encumbered within six years; encumbrances (for example, debt repayment) can extend the effective use period.

Prepayment and permits: Council members and residents discussed whether property owners could prepay impact fees without an immediate building permit. Staff said prepayments have been accepted historically (citing a prior example on 600 West). Consultants explained that communities typically start the allowable time-to-start-construction clock when a building permit is approved, not when a property owner simply pays in advance, but code language varies and the council agreed to confirm local ordinance text.

What’s next: The hearing closed after public comment. Council directed staff to verify relevant ordinance language on prepayments and permit-timing and to post clarifications. The council may consider an ordinance adopting a fee (or a lower amount) at a forthcoming meeting; any adopted fee would not take effect for at least 90 days.

Ending: The consultant left the analysis and presentation materials available to the public and said he would be available to answer follow-up questions about alternative fee levels or rate impacts.