Fairhope staff outline proposed water/sewer SDC increases and zoning amendments; public hearing set for July 13, 2026

City staff briefed the Fairhope City Council on proposed changes to system development charges (SDCs) for water and sewer and a package of zoning amendments that would be split into multiple ordinances and go to a public hearing tentatively scheduled for July 13, 2026.

On SDCs, staff said the town commissioned a cost‑of‑service and capacity‑fee analysis (consultant: Jackson Thornton) that bases charges on flow and meter size rather than a simple doubling by meter diameter. Noah, the presenter introduced by staff, described the methodology and cited consultant planning numbers — phrased in the presentation as "about $376,000,000 for our water and then about 50 for our wastewater" — based on projected growth over a multi‑year horizon. Staff emphasized SDCs are distinct from impact fees: SDC revenues for water and sewer would be separately accounted and used only for capital investment in those systems.

Staff proposed standardizing residential service connections toward a 1‑inch meter (instead of the current 3/4" in some specifications), which would change the SDC basis. Councilmembers were shown example figures that indicated a significant per‑service increase: one staff example contrasted a current combined tap/SDC baseline around $3,500 per residential connection to proposed SDC‑related charges that could bring the combined near $8,000 per new residential tap under the new methodology; staff clarified actual tap fees would not change in this proposal and that final numbers would be refined.

Staff also presented maps showing an intended sewer territory and discussed the possibility of defining a formal service territory (with a 70% infill assumption for planning) to provide developers clarity on where the city will provide sewer and how SDCs would apply. The council discussed options such as a grace period or incentive for septic households to connect, and staff said territory and rates are related but procedurally distinct and that a separate ordinance on sewer services outside city limits will follow.

On zoning, staff said they plan to split a previously redlined comprehensive zoning amendment into seven smaller ordinances to avoid blocking the entire package if one item is contested. Major topics presented included mixed‑use rules (allowing certain residential units in the Central Business District and setting a ground‑floor commercial minimum that staff proposed lowering to about 75%), a proposed maximum impervious surface of 45% for certain R‑1 lots (intended to be comparable to neighboring jurisdictions), and changes to Planned Unit Development (PUD) rules: a retained 3‑acre minimum, and a proposal that PUDs over 10 acres include a commercial component — language staff warned could conflict with the long‑range plan in some residential areas.

Councilmembers debated tradeoffs between predictability and flexibility for PUDs, discussed possible maximum gross density triggers to screen out extreme proposals, and explored numeric alternatives. The conversation moved toward a practical gatekeeping threshold near 3 units per acre as a workshop‑level compromise to prevent high‑density projects from reaching the application stage while still leaving council discretion at review.

Staff confirmed procedural timing: advertising and a public hearing are required before adoption, and the council could extend the current pause on applications if desired. The council recessed for a short break and staff said they will return with refined draft ordinances, maps and pricing tables ahead of the hearing.