Developers hoping to build in San Antonio could soon face increased costs for connecting to the city’s water system.
The San Antonio Water System’s board of trustees last week approved updating the utility’s impact fee, which will make it significantly more expensive for developers to connect to San Antonio’s water and wastewater grids. The update must now get City Council approval before it can go into effect.
Impact fees are a one-time payment charged to new developments at the time of connection. SAWS uses income generated by impact fee payments for system expansions and capital improvement projects. Under state law, the municipal utility is required to update the fee every five years; it last did so in 2019.
The new impact fees would increase how much developers pay for water service and wastewater service by an average of 23%, although the exact amount will vary across the city because SAWS charges different impact fees based on where a development is being built. The farther out from the existing system or the more difficult an area is to supply water access, the more expensive the fee becomes.
Under the new structure, the most a developer can expect to pay in impact fees would be $11,528 with a minimum of $7,343. Currently, the most a developer pays is $8,548 to develop on the city’s hilly and densely populated Northwest Side, and the minimum is $5,902 on the city’s flatter and less developed Southwest Side. The increases across the system range from 21.3% to 34.9%.
These fees are calculated by a third-party contractor, said Tracey Lehmann, interim vice president of engineering. The fees are based on SAWS’ projected growth in “equivalent dwelling units” (EDUs) — the equivalent of about 290 gallons of water per day and 200 gallons of wastewater per day. Over the next decade, SAWS projects it will need to serve 161,030 new water EDUs and 148,129 new wastewater EDUs, Lehmann said. The impact fees are meant to keep SAWS’ existing customers from having to subsidize growth, he added.
“Impact fees are simply a financing mechanism to ensure that SAWS can afford and quantify the amount of system capacity and expansion that needs to be made to our system — and to have the development pay for that component,” he told the board’s trustees.
City Council is scheduled to be briefed on the new fees over the next two months and will vote on their approval shortly thereafter. The new fees would likely go into effect in June.
Developer Thad Rutherford, president of SouthStar Communities, said it’s hard to support raising fees but added SAWS’ case for why the hikes were needed was thorough.
“The group they hired [to do a third-party study] Corollo [Engineers] was phenomenal,” said Rutherford, a member of SAWS’ Capital Improvements Advisory Committee, which weighed in on raising the impact fees earlier this month. “They presented hours of data about how if we’re going to grow in these specific areas of the city we need more capital improvement projects through impact fees.
“I don’t want to float the bill for everything — it’s a hard balance to strike, if I could have criticized it, I would have, but there was no way around it.”
The impact fees will help subsidize growth projects such as growing SAWS’ Aquifer Storage Recovery projects, adding 4,000 acre-feet of additional Edwards Aquifer purchases, expanding local Carrizo Aquifer draws and expanding SAWS’ brackish Edwards desalination efforts, according to SAWS officials.
“While I don’t like increasing fees, I applaud SAWS for being fair and partial,” Rutherford said. “They could have raised them even higher or punted it down the road so the increases were even more substantial later.”
