Title
Consider/Discuss/Act on a Resolution Authorizing the City Manager to Execute a Water Impact Fee Credit Agreement with HRC WCD Partners, LP, for the Construction of Master Planned Water Lines, Serving an Approximately 477.87 Acre Development (Highland Lakes Phases 1, 2, 3, and 5), Generally Located North of Bloomdale Road and West of Ridge Road
Summary
COUNCIL GOAL: Direction for Strategic and Economic Growth
(1A: Establish regional infrastructure incentives to increase economic growth)
MEETING DATE: December 17, 2024
DEPARTMENT: Development Services
CONTACT: Gary Graham, P.E., Director of Engineering
Brandon Opiela, Business and Data Analytics Manager
RECOMMENDED CITY COUNCIL ACTION:
• Approval of the Resolution
ITEM SUMMARY:
• This item authorizes the City Manager to enter into a water impact fee credit agreement with HRC WCD Partners, LP, for the construction of oversized, master planned water lines serving an approximately 477.87 acre development (Highland Lakes Phases 1, 2, 3, and 5), generally located north of Bloomdale Road and west of Ridge Road.
• In conjunction with the development of the subject property, master planned water lines are being constructed across the subject property to serve both the subject property and the neighboring properties.
• The oversized water lines being constructed extend approximately 18,573 linear feet and ranges in diameter size from 12” to 30” and is estimated to cost approximately $7,433,186.72 to construct.
• The estimated cost difference between the required line sizes ($4,326,858.57) and the master planned line sizes ($7,433,186.72) is $3,106,328.15. This generates a water impact fee credit for 1,771 single family dwelling units using a ¾” meter ($1,754 per unit).
• Prior to acceptance of the lines, the Developer anticipates that approximately 300 single family homes will be permitted and pay water impact fees. Since credits are not be available until after all of the water lines are accepted by the City, all collected water impact fees from this initial group of lots (approximately $526,200) will be held in an escrow account and returned to the Developer upon acceptance of the lines.
• All remaining single family lots (approximately 778) permitted within the development, subsequent to the acceptance of the water lines, will utilize water impact fee credits (credit value of $1,364,612).
• This leaves an unused credit for approximately 693 lots (valued at approximately 1,215,516.15). As such, the Developer has requested the remaining balance be paid as a cash reimbursement upon construction and acceptance of the water lines.
• Utility impact fee credit agreements, following the standard template language, can be approved administratively. However, as proposed, the reimbursement structure of the agreement requires additional language be folded into the agreement, thus requiring City Council approval.
BACKGROUND INFORMATION:
• Single family homes in Highland Lakes Phases 1 and 2 are currently being constructed and Highland Lakes Phase 5 is currently being developed. The master planned water lines are needed for Highland Lakes Phase 3 to be developed.
FINANCIAL SUMMARY:
• The developer estimates the cost to construct the oversized water lines will be approximately $7.43 million and is eligible for impact fee credits.
• The estimated delta between the cost to construct all 12” diameter water lines ($4,326,858.57) and the cost to construct the master planned water lines ($7,433,186.72) ranging in size from 12” to 30” diameter is $3,106,328.15.
• Upon the construction and acceptance of the water lines, along with the actual cost sheets for the construction, the total value of the water utility impact fee credits granted shall not exceed $3,106,328.15.
• All water impact fees collected (after execution of the agreement) for single family residential lots within the development prior to acceptance of the master planned water lines shall be held in an escrow account and reimbursed to Developer upon line acceptance (approximately 300 lots, with a credit value of $526,200).
• Subsequent to the acceptance of the master planned water lines, the remaining number of single family lots within the development shall not be required to pay water impact fees (approximately 778 single family lots, with a credit value of $1,364,612).
• Additionally, a cash reimbursement shall be made to Developer not to exceed $1,215,516.15 for the remaining unused credits. Developer shall supply City with the actual cost sheets for the construction of the oversized lines. Should the oversized line costs be less than the amount provided at the time of agreement, the Developer’s cash reimbursement for the unused credits shall be reduced accordingly.
• The total amount to be reimbursed for unused credits (not to exceed $1,215,516.15) is currently available in the CIP Project WA4337 - Oversize Participation.
BOARD OR COMMISSION RECOMMENDATION:
• N/A