HomeMy WebLinkAbout129-02 RESOLUTION•
• •
RESOLUTION NO. 129-02
A RESOLUTION APPROVING AMENDMENT #2 TO THE
PROFESSIONAL SERVICES AGREEMENT WITH DUNCAN AND
ASSOCIATES IN THE AMOUNT OF EIGHT THOUSAND ONE
HUNDRED DOLLARS ($8,100.00) TO PREPARE INITIAL AND
FINAL DRAFTS OF THE WATER AND WASTEWATER IMPACT
FEE ORDINANCES.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council hereby approves Amendment #2 to the
Professional Services Agreement with Duncan and Associates in the amount of
Eight Thousand One Hundred Dollars ($8,100.00) to prepare initial and final
drafts of the water and wastewater impact fee ordinances. A copy of the
amendment, marked Exlubit "A" is attached hereto, and made a part hereof.
PASSED and APPROVED this 20th day of August, 2002.
f �� FArfir£
i
OODRUFF, Ci rClerk
APPROVED:
By
2
3
S
NAME OF FILE:
CROSS REFERENCE:
Resolution No. 129-02
08/20/02
Resolution No. 129-02
08/26/02
Amendment No. 2 to Professional Services Agreement with Duncan and
Associates to prepare initial and final drafts of the Water and Wastewater
Impact Fee Ordinances
08/13/02
Planning Division Correspondence
08/20/02
Staff Review Form
08/21/02
Memo to Tim Conklin, Planning Division, from Heather Woodruff, City
Clerk
NOTES:
s
j
• • 4s, /29 -oz
SECOND AMENDMENT TO
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
CITY OF FAYETTEVILLE AND DUNCAN ASSOCIATES
This Second Amendment to Professional Services Agreement is made as of the date it is
executed by both parties, by and between the City of Fayetteville, a political subdivision of the
State of Arkansas (City) and James Duncan and Associates, Inc., a professional corporation
doing business as Duncan Associates located in Austin, Texas (Consultant).
WHEREAS, City has engaged Consultant to perform certain services relating to the
development of impact fee reports, studies and ordinances.
WHEREAS, the scope of services has been divided into two phases, and this amendment covers
Phase Two, which addresses the preparation of detailed impact fee studies for facilities selected
in Phase One.
WHEREAS, the scope of services for Phase Two was previously amended to add Task 2.5:
Additional Presentations and to add compensation for that task.
NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter
provided, City and Consultant agree as follows.
1. Professional Services. Consultant shall furnish amended and additional services to City
as set forth in Exhibit "A," specifically task 2.6 ordinance draft which is attached hereto
and incorporated herein by reference.
2. Compensation and Hourly Rates. For amended and additional services provided by
Consultant as described in task 2.6 ordinance draft of Exhibit "A," City shall compensate
Consultant based upon the completion of individual tasks and in accordance with the
amended fee schedule outlined in Exhibit "C". Payment of each such invoice shall be
due to Consultant within thirty (30) days of receipt by City. Payment for completion of
task 2.6 ordinance draft shall not exceed $8,100.00.
•
• •
IN WITNESS WHEREOF, City and Consultant have caused this instrument to be signed by
their respective duly authorized officers, all on the day and year first above written.
ATTEST: JAMES
efoonta
By:
AN AND ASSOCIATES, INC.
es B. Duncan, President
ate: : 02.
CORPORATE SEAL
CITY OF FAYETTEVILLE
Date: 1.-eo Qi{
2
Exhibit A
AMENDED SCOPE OF SERVICES
The project has been divided into two phases. The earlier Phase One: "Policy Directions,"
reviewed the legal framework, reviewed local data and potential fees, and determined in
conjunction with local officials the type of impact fee system that should be developed in the this
second phase.
This Phase Two will implement the policy directions provided by the City at the conclusion of
Phase One. It entails the development of impact fees for water, wastewater and roads, as well as
an update and revision of the City's existing park land dedication and fee -in -lieu requirements
PHASE TWO: IMPLEMENTATION
Task 2.1: Draft Impact Fee Study
Facilities to be included in the impact fee study include water transmission, distribution and
storage facilities; wastewater collection and treatment plant facilities; arterial and collector roads,
including City participation in the cost of state road improvements; and parks. The park
component will be limited to updating the City's park land dedication requirements, as well as
updating the fees paid in lieu of dedication.
The first task will be to prepare a preliminary draft of the impact fee study for staff review. The
impact fee study will Include all of the elements mandated by statutory and constitutional
requirements. These elements include an inventory of existing capital facilities; the cost of
improvements required to remedy any existing service deficiencies; and the cost of
improvements required to accommodate increased service demands.
The impact fee studies will calculate the cost per service unit to provide new development with
the existing or adopted level of service, as well as appropriate revenue credits to ensure that new
development is not charged more than its proportionate share of the cost of new facilities. Each
study will include a table that establishes the number of service units and amount of facility
demand associated with different land use types. Finally, the studies will include, for each of the
facility types, a net unit cost schedule that represents the maximum impact fees that could be
charged.
DELIVERABLES' DRAFT IMPACT FEE STUDIES
3
•
• •
Task 2.2: Local Review Meeting
At least two weeks after delivery of the draft Impact Fee Study, Consultant will schedule a one -
day meeting with City staff to present the draft Impact Fee Study and receive staff comments.
We will also use this opportunity to meet with developer representatives or a stakeholder
advisory committee.
DELIVERABLE: LOCAL REVIEW MEETING (1 PERSON -DAY)
Task 2.3: Final Impact Fee Study
Following the local review meeting, we will prepare the final draft of the impact fee study. The
final draft will reflect staff and advisory committee comments on the initial draft. The final draft
of the study will be delivered in both original and digital format. It will be accompanied by a
spreadsheet in Excel 97 or other format specified by the City that contains all of the impact fee
calculations and can be used by staff to easily update the study.
DELIVERABLE: FINAL IMPACT FEE STUDY
•
Task 2.4: Public Participation
In addition to the local review meeting in Task 2.2, key members of our team will be available to
attend and participate in two additional meetings with City staff, a stakeholders advisory
committee, Planning Commission, City Council, or the general public as desired by the City.
Joint meetings or multiple meetings held on the same day will count as one meeting. The
consultant team will prepare exhibits and handouts suitable for public meetings that illustrate and
summarize the results and recommendations of the Phase Two: Implementation portion of the
project. The meetings should be scheduled approximately two weeks after delivery of the
documents to provide time for local review prior to the meetings. This task is limited to a
maximum of two person -days of out-of-town consultant time. Team members will also be
available for additional meetings on a time plus expense basis.
DELIVERABLE: PUBLIC MEETINGS (Two PERSON -DAYS)
4
1
•
Task 2.5: Additional Presentations
Consultant shall attend additional meetings as requested by the City compnsing up to five (5)
additional person -days.
DELIVERABLE: PUBLIC MEETINGS (UP TO FIVE PERSON -DAYS)
Task 2.6: Ordinance Draft
Consultant shall prepare initial and final drafts of the water and wastewater impact fee ordinance.
The draft will be prepared in the standard format used by the City The ordinance will include
provisions relating to impact fee assessment, collection, credits, refunds, appeals, study updates
and other provisions necessary to ensure due process and conformance with relevant impact fee
case law. The final draft of the ordinance will be prepared and delivered to the City following
receipt of local comments. The final draft will be provided in both original and digital format.
Consultant will attend a public hearing to present the ordinance.
DELIVERABLE: STAFF REVIEW DRAFT ORDINANCE
FINAL DRAFT OF ORDINANCE
ORDINANCE PRESENTATION
5
• •
Exhibit C
CONSULTANT COMPENSATION
The total cost of the professional services described in the accompanying proposal for Phase
Two is X25 $61,325. This lump -sum budget includes all direct and indirect expenses
incurred by the consultant team in performing the services. The breakdown of project cost by
task is presented below. The City will be billed monthly based on percent completion of
individual tasks. Additional attendance at meetings under Task 2.5 will be billed only if
attendance is requested by the City, at the rate of $1,500 per person -day.
Task
Task 2.1:
Task 2.1a:
Task 2.1b:
Task 2.1c:
Task 2.1d:
Draft Impact Fee Study
Roads
Water
Wastewater
Park Land Dedication
Task 2.1 Subtotal
Task 2.2:
Task 2.3:
Task 2.4:
Task 2.5:
Task 2.6:
Local Review Meeting
Final Impact Fee Study
Public Participation
Additional Presentations (5)
Ordinance Draft
Total, Phase Two
Amount
$9,785
$9,025
$9,025
$3,655
$31,490
$1,260
$9,975
$3,000
$7,500
$8,100
$53,225 $61,325
Additional services beyond those specified in the accompanying Scope of Services may be
negotiated or billed on a time and expense basis at the hourly rates provided on the Schedule of
Professional Fees and Expenses. Extra meetings attended by one professional will be billed on a
fixed -fee basis of $1,500 each, which includes all travel expenses. Changes in scope, price or
fees to this contract shall not be allowed without a formal contract amendment approved by the
Mayor or the City Council in advance of the change in scope, cost, or fees.
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
Principal
Land Use Attorney
Senior Associates
Associates
Billable Expenses: Overnight Mail Only
6
$125
$150
$95
$75
41111 41111 1
•
45 /.2 9-0.2.
SECOND AMENDMENT TO
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
CITY OF FAYETTEVILLE AND DUNCAN ASSOCIATES
This Second Amendment to Professional Services Agreement is made as of the date it is
executed by both parties, by and between the City of Fayetteville, a political subdivision of the
State of Arkansas (City) and James Duncan and Associates, Inc., a professional corporation
doing business as Duncan Associates located in Austin, Texas (Consultant).
WHEREAS, City has engaged Consultant to perform certain services relating to the
development of impact fee reports, studies and ordinances.
WHEREAS, the scope of services has been divided into two phases, and this amendment covers
Phase Two, which addresses the preparation of detailed impact fee studies for facilities selected
in Phase One.
WHEREAS, the scope of services for Phase Two was previously amended to add Task 2.5:
Additional Presentations and to add compensation for that task.
NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter
provided, City and Consultant agree as follows.
1. Professional Services. Consultant shall furnish amended and additional services to City
as set forth in Exhibit "A," specifically task 2.6 ordinance draft which is attached hereto
and incorporated herein by reference.
2. Compensation and Hourly Rates. For amended and additional services provided by
Consultant as descnbed in task 2 6 ordinance draft of Exhibit "A," City shall compensate
Consultant based upon the completion of individual tasks and in accordance with the
amended fee schedule outlined in Exhibit "C". Payment of each such invoice shall be
due to Consultant within thirty (30) days of receipt by City. Payment for completion of
task 2.6 ordinance draft shall not exceed $8,100.00.
IN WITNESS WHEREOF, City and Consultant have caused this instrument to be signed by
their respective duly authorized officers, all on the day and year first above written.
ATTEST: JAMES DUNCAN AND ASSOCIATES, INC.
By:
James B. Duncan, President
Date:
CORPORATE SEAL
ATTEST: CITY OF FAYETTEVILLE
By:
Date:
•
•
Exhibit A
AMENDED SCOPE OF SERVICES
The project has been divided into two phases. The earlier Phase One: "Policy Directions,"
reviewed the legal framework, reviewed local data and potential fees, and determined in
conjunction with local officials the type of impact fee system that should be developed in the this
second phase.
This Phase Two will implement the policy directions provided by the City at the conclusion of
Phase One. It entails the development of impact fees for water, wastewater and roads, as well as
an update and revision of the City's existing park land dedication and fee -in -lieu requirements.
PHASE TWO: IMPLEMENTATION
Task 2.1: Draft Impact Fee Study
Facilities to be included in the impact fee study include water transmission, distribution and
storage facilities; wastewater collection and treatment plant facilities; arterial and collector roads,
including City participation in the cost of state road improvements; and parks. The park
component will be limited to updating the City's park land dedication requirements, as well as
updating the fees paid in lieu of dedication.
The first task will be to prepare a preliminary draft of the impact fee study for staff review. The
impact fee study will include all of the elements mandated by statutory and constitutional
requirements. These elements include an inventory of existing capital facilities; the cost of
improvements required to remedy any existing service deficiencies; and the cost of
improvements required to accommodate increased service demands.
The impact fee studies will calculate the cost per service unit to provide new development with
the existing or adopted level of service, as well as appropriate revenue credits to ensure that new
development is not charged more than its proportionate share of the cost of new facilities. Each
study will include a table that establishes the number of service units and amount of facility
demand associated with different land use types. Finally, the studies will include, for each of the
facility types, a net unit cost schedule that represents the maximum impact fees that could be
charged.
3
•
•
DELIVERABLES: DRAFT IMPACT FEE STUDIES
Task 2.2: Local Review Meeting
At least two weeks after delivery of the draft Impact Fee Study, Consultant will schedule a one -
day meeting with City staff to present the draft Impact Fee Study and receive staff comments.
We will also use this opportunity to meet with developer representatives or a stakeholder
advisory committee.
DELIVERABLE: LOCAL REVIEW MEETING (1 PERSON -DAY)
Task 2.3: Final Impact Fee Study
Following the local review meeting, we will prepare the final draft of the impact fee study. The
final draft will reflect staff and advisory committee comments on the initial draft. The final draft
of the study will be delivered in both original and digital format. It will be accompanied by a
spreadsheet in Excel 97 or other format specified by the City that contains all of the impact fee
calculations and can be used by staff to easily update the study.
DELIVERABLE: FINAL IMPACT FEE STUDY
Task 2.4: Public Participation
In addition to the local review meeting in Task 2.2, key members of our team will be available to
attend and participate in two additional meetings with City staff, a stakeholders advisory
committee, Planning Commission, City Council,. or the general public as desired by the City.
Joint meetings or multiple meetings held on the same day will count as one meeting. The
consultant team will prepare exhibits and handouts suitable for public meetings that illustrate and
summarize the results and recommendations of the Phase Two: Implementation portion of the
project. The meetings should be scheduled approximately two weeks after delivery of the
documents to provide time for local review prior to the meetings. This task is limited to a
maximum of two person -days of out-of-town consultant time. Team members will also be
available for additional meetings on a time plus expense basis.
DELIVERABLE: PUBLIC MEETINGS (TWO PERSON -DAYS)
4
•
Task 2.5: Additional Presentations
Consultant shall attend additional meetings as requested by the City comprising up to five (5)
additional person -days.
DELIVERABLE: PUBLIC MEETINGS (UP TO FIVE PERSON -DAYS)
Task 2.6: Ordinance Draft
Consultant shall prepare initial and final drafts of the water and wastewater impact fee ordinance.
The draft will be prepared in the standard format used by the City The ordinance will include
provisions relating to impact fee assessment, collection, credits, refunds, appeals, study updates
and other provisions necessary to ensure due process and conformance with relevant impact fee
case law. The final draft of the ordinance will be prepared and delivered to the City following
receipt of local comments. The final draft will be provided in both original and digital format.
Consultant will attend a public hearing to present the ordinance.
DELIVERABLE: STAFF REVIEW DRAFT ORDINANCE
FINAL DRAFT OF ORDINANCE
ORDINANCE PRESENTATION
5
•
•
Wm
•
11111
Exhibit C
CONSULTANT COMPENSATION
The total cost of the professional services described in the accompanying proposal for Phase
Two is $53,225 $61,325. This lump -sum budget includes all direct and indirect expenses
incurred by the consultant team in performing the services The breakdown of project cost by
task is presented below. The City will be billed monthly based on percent completion of
individual tasks. Additional attendance at meetings under Task 2.5 will be billed only if
attendance is requested by the City, at the rate of $1,500 per person -day.
Task
Task 2.1:
Task 2.1a:
Task 2.1b:
Task 2.1c:
Task 2.1d:
Draft Impact Fee Study
Roads
Water
Wastewater
Park Land Dedication
Task 2.1 Subtotal
Task 2.2:
Task 2.3:
Task 2.4:
Task 2.5:
Task 2.6:
Total, Phase Two
Local Review Meeting
Final Impact Fee Study
Public Participation
Additional Presentations (5)
Ordinance Draft
Amount
$9,785
$9,025
$9,025
$3,655
$31,490
$1,260
$9,975
$3,000
$7,500
$8,100
$535 $61,325
Additional services beyond those specified in the accompanying Scope of Services may be
negotiated or billed on a time and expense basis at the hourly rates provided on the Schedule of
Professional Fees and Expenses. Extra meetings attended by one professional will be billed on a
fixed -fee basis of $1,500 each, which includes all travel expenses. Changes in scope, price or
fees to this contract shall not be allowed without a formal contract amendment approved by the
Mayor or the City Council in advance of the change in scope, cost, or fees.
SCHEDULE OF PROFESSIONAL FEES AND EXPENSES
Principal $125
Land Use Attorney
Senior Associates
Associates
Billable Expenses: Overnight Mail Only
6
$150
$95
$75
FAYETTETILLE
THE CITY OF FAYETTEVILLE, ARKANSAS
PLANNING DIVISION CORRESPONDENCE
113 W. Mountain St.
Fayetteville, AR 72701
Telephone: 479-575-8264
TO:
FROM:
DATE:
SUBJECT:
Mayor Dan Coody
Fayetteville City Council
Tim Conklin, City Planner, AICP<
August 13, 2002
Contract Amendment — Second Amendment
BACKGROUND
The Fayetteville City Council on July 30, 2002 directed staff to prepare a contract amendment
with Duncan Associates to draft an ordinance for the collection of water and wastewater impact
fees. Attached is a contract amendment for Task 2.6 Ordinance Draft in.the amount not to
exceed $8,100.
CURRENT STATUS
The Final Impact Fee Study was presented to the City Council on July 30, 2002. The City
Council will need to enact an ordinance to implement the final study's recommendation with
regard to water and wastewater impact fees.
RECOMMENDATION
Staff recommends approval of the contract amendment with Duncan Associates.
MSTAFF REVIEW FORM
X AGENDA REQUEST
_ CONTRACT REVIEW
GRANT REVIEW
For the Fayetteville City Council meeting of August 20, 2002.
FROM:
Tim Conklin
Name
Planning Urban Development
Division Department
ACTION REQUIRED: To approve the Second Amendment to Professional Services Agreement
between the City of Fayetteville and Duncan Associates and to direct the consultants
to prepare initial and final drafts of the water and wastewater impact fee ordinance.
COST TO CITY:
,t oo
Cost of this Request
474)o-44p)o-n1(t-oD
Account Number
0 000$- t
Project Number
9911 1
Category/Project Budget
211421-
Category/Project Name
Funds Used To Date Program Name
Remaining Balance Fund
BUDGET REV
Bu
W
nager
)(J Budgeted Item
CONTRACT/GRANT/LEASE REVIEW:
Budget Adjustment Attached
Administrative Services Director
Purchasififiofficer
GRANTING AGENCY:
MA/4)2— Internal
c7CCa
Date Internal ditor
Tat
Date ADA Coordinator
Date
2./13(01 --
Date
Date
Th
STAFF RECOMMENDATION: Staff
Division Head
De
rt
nt Directo
Adrtunk%
rative Services Director
Mayor
recommends approval.
8/13/2002
Date
Cross Reference
New Item: Yes
Prev Ord/Res #: 1/-o.a 64/MWo.W /J
Orig Contract Date: 6/5i207I
Orig Contract Number: 803
76- of (al:3,.,;.1)
FAYETTEVIeLE
THE CITY OF FAYETTEVILLE, ARKANSAS
DEPARTMENTAL CORRESPONDENCE
To: Tim Conklin, Planning Division
From: Heather Woodruff, City Clerk
Date: August 21, 2002
Please find attached a copy of Resolution No.129-02 approving Amendment No. 2 to the
Professional Services Agreement with Duncan and Associates, Inc. to prepare initial and final
drafts of the Water and Wastewater Impact Fee Ordinances. The original will be microfilmed
and filed with the City Clerk
cc: Nancy Smith, Internal Audit
Note: Resolution No. 76-01
Amendment No. 1 dated 11/02
Contract #803
Original Date 06/05/01
IMPACT FEE STUDY
PART ONE: WATER AND WASTEWATER
CONTENTS
EXECUTIVE SUMMARY 1
BACKGROUND 2
WATER 7
Service Area 7
Water Demand 8
Service Unit 9
Treatment and Supply 11
Water Storage Tanks 12
Transmission Lines 15
Revenue Credits 19
Maximum Impact Fees 22
WASTEWATER 24
Service Area 24
Wastewater Demand 25
Service Unit 26
Treatment Plant 27
Collection System 28
Revenue Credits 29
Maximum Impact Fees 31
•
LIST OF TABLES AND FIGURES
•
Table 1: WATER AND WASTEWATER FEE SUMMARY 1
Table 2• CAPITAL FUNDING BY SOURCE, 2000-2004 3
Table 3: SALES TAX CAPITAL FUNDING, 2000-2004 3
Table 4: OUTSTANDING DEBT 4
Table 5: POPULATION GROWTH, 1990-2000 4
Table 6: RESIDENTIAL BUILDING PERMITS, 1996-1999 5
Table 7: HOUSING UNITS BY TYPE, 2001 5
Table 8: CURRENT WATER CUSTOMERS 7
Table 9: WATER MASTER PLAN POPULATION PROJECTIONS 8
Table 10: WATER DEMAND PROJECTIONS, 1995-2015 9
Table 11: WATER DEMAND PER SERVICE UNIT 10
Table 12: WATER SERVICE UNITS, 2001 10
Table 13: PLANNED NEW WATER SERVICE UNITS, 1995-2015 11
Table 14: WATER SUPPLY COST PER SERVICE UNIT 12
Table 15: EXISTING WATER STORAGE FACILITIES 13
Table 16: WATER STORAGE NEEDS, 1995-2015 13
Table 17: WATER STORAGE DEFICIENCY, 2001 14
Table 18: PLANNED WATER STORAGE COSTS, 1995-2015 14
Table 19: WATER STORAGE COST PER SERVICE UNIT 14
Table 20: WATER STORAGE DEFICIENCY COST PER SERVICE UNIT 15
Table 21: WATER STORAGE NET COST PER SERVICE UNIT 15
Table 22: PLANNED WATER LINE IMPROVEMENTS, 1995-2015 17
Table 23: WATER LINE COST PER SERVICE UNIT, IMPROVEMENT APPROACH 18
Table 24: WATER LINE COST PER SERVICE UNIT, BUY -IN APPROACH 19
Table 25: ELIGIBLE SHARE OF WATER SYSTEM DEBT
Table 26: WATER DEBT CREDIT PER SERVICE UNIT
Table 27: WATER SALES TAX CREDIT
Table 28: WATER NET COST PER SERVICE UNIT
Table 29: WATER MAXIMUM FEE SCHEDULE
Table 30: POTENTIAL ANNUAL WATER IMPACT FEE REVENUES
Table 31: CURRENT WASTEWATER CUSTOMERS
Table 32: WASTEWATER AVERAGE DAILY FLOW, 2020
Table 33: WASTEWATER DEMAND PER SERVICE UNIT
Table 34: WASTEWATER SERVICE UNITS
Table 35: WASTEWATER TREATMENT COST PER SERVICE UNIT
Table 36: WASTEWATER SALES TAX CREDIT
Table 37: WASTEWATER NET COST PER SERVICE UNIT
Table 38: WASTEWATER MAXIMUM FEE SCHEDULE
Table 39: POTENTIAL ANNUAL WASTEWATER IMPACT FEE REVENUES
20
21
21
22
23
23
24
25
26
26
28
30
30
31
31
Figure 1: PLANNING AREA 6
Figure 2: WATER FACILITIES 11
Figure 3: PLANNED WATER IMPROVEMENTS 18
Figure 4: WATERSHEDS AND DIRECTIONS OF FLOWS 27
EXECUTIVE SUMMARY
This first installment of the impact fee study calculates maximum impact fees:that could be
adopted by the City of Fayetteville to help fund growth -related infrastructure improvements for
water and wastewater facilities. A subsequent report will detail impact fee calculations for major
road facilities and update the City's existing park land dedication and fee -in -lieu requirements.
An impact fee is a one-time charge on new development, typically collected at time of building
permit issuance or connection to the water or wastewater system. Impact fees are designed to
ensure that new development contributes a fair share of the cost of the capital improvements
needed to serve growth.
The study was prompted by the need to find alternative sources of revenue to fund capital
improvements necessitated by the community's rapid growth. The city's population has been
growing at a rate of more than 3.2 percent annually, over twice as fast as the state as a whole.
The City has traditionally funded capital improvements primarily on a pay-as-you-go basis,
largely with sales tax and utility fee revenues. It is currently confronting the need to build a new
wastewater treatment plant and associated improvements to thecollection system, which will
cost $120 million and be the largest capital improvement ever made by the City.
This report calculates the potential maximum impact fees that could be adopted for water and
wastewater facilities. Because of the reported extent of existing deficiencies in the current
collection system, the wastewater fee is calculated solely on the cost of adding treatment capacity.
The proposed water fee is based on a conservative "buy -in" approach on the water line cost
component.
The fees are based on
the size of the water meter. For a typical single-family connection, the
proposed
fees would
be $313 for water and
$815 for wastewater. Potential annual revenues
would be
in the range
of $310,000 for water
and $650,000 for wastewater.
Table 1
WATER AND WASTEWATER FEE SUMMARY
Single-
Potential
Family
Annual
Fee
Revenue
Water $313
$310,000
Wastewater $815
$650,000
Total $1,128
$960,000
Source: Maximum single-family fees (5/8" x 3/4" meter) from Tables
29 and 38: potential annual revenues from Tables 30 and 39.
FayettevllleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 1
BACKGROUND
An impact fee is a form of "exaction," through which a developer or builder is required to
contribute to the costs of public improvements required to serve the development. Generally,
impact fees are designed to pay for the new development's proportionate share of the cost of off -
site improvements, and credit against the fees is given if the developer is required to contribute
to the system of facilities for which the fees are charged through on -site dedication, construction
or monetary payment. Typically the fee is levied on some easily measurable unit of activity,
such as the construction of one dwelling unit or of a specified number of square feet of
commercial or industrial space, and is collected at the time of building permit issuance or water
meter purchase.
The purpose of this project is to assist the City of Fayetteville in developing a system of
development impact fees to ensure that new development pays a fair share of the cost of
infrastructure needed to serve it. The project has been divided into three phases. The first phase,
termed a "feasibility study," reviewed the legal framework, local data and potential fees, and
determined in conjunction with local officials the type of impact fee system that should be
developed in the second phase.' It also included a survey of impact fees and development
exactions in comparable communities, which was provided as a separate document.'
The facilities selected to be included in the impact fee study include water transmission,
distribution and storage facilities; wastewater collection and treatment plant facilities; arterial and
collector roads and parks. The park component is limited to updating the City's park land
dedication requirements, as well as updating the fees paid in lieu of dedication. This report
presents the analysis for the water and wastewater fees. A subsequent report will address road
impact fees and will update the park dedication and in -lieu fee requirements.
A major impetus for this project is the need for a major wastewater treatment plant expansion
and associated collector system improvements. With an estimated total project cost of $120
million, the wastewater improvements could well be the most costly and extensive capital project
ever undertaken by the City.
The City finances most capital improvements on a pay-as-you-go basis. This is done utilizing
revenues from the one -percent City sales tax adopted in 1993 (of which, by City Council
resolution, at least 75 percent is used to fund capital projects), the one -percent Hotel, Motel,
Restaurant sales tax adopted in 1996 to fund park improvements, and operating revenues from
the City's enterprise funds, including water, wastewater and solid waste.
The current five-year capital improvements program (CIP), excluding bond funding, includes
almost $86 million in capital funding for the five-year period. Over half of the pay-as-you-go
funding is from the one -percent sales tax, as shown in Table 2.
'Duncan Associates, Fayetteville Impact Fee Study: Policy Directions Memorandum, April 2001.
'Cooper Consulting Company, Development Fee Survey for Fayetteville, Arkansas, April 2001.
FayattOVilleVMPACT FEESTUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Paget
I
Table 2
CAPITAL FUNDING BY SOURCE, 2000-2004
Revenue Source
Amount
Percent
Sales Tax
$45,758,000
53.3%
Water & Sewer Fund
$14,472,000
16.8%
Shop Fund
$8,690,000
10.1%
Off -Street Parking Fund
$6,564,000
7.6%
Airport Fund
$3,486,000
4.1%
Parks Development Fund
$3,457,000
4.0%
Community Dev't Block Grant Fund
$2,015,000
2.3%
Solid Waste Fund
$756,000
0.9%
General Fund
$700,000
0.8%
Source: City of Fayetteville, Five Year Capital Improvements Program,
2000-2004. November 1999 (excludes bond funding).
Three-quarters of the City's one -cent sales tax is dedicated to capital improvements. The City's
sales tax capital funding is spent on a wide variety of improvements. Foremost among these are
streets, water and wastewater and parks, as shown in Table 3.
Table 3
SALES TAX CAPITAL FUNDING, 2000-2004
Streets
$19,390,000
42.4%
Wastewater
$7,968,500
17.4%
Parks
$3,393,000
7.4%
Water.
$3,205,500
7.0%
Bridge & Drainage
$3,042,000
6.6%
Fire
$2,121,000
4.6%
Police
$1,395,000
3.0%
Library
$852,000
1.9%
Transportation
$650,000
1.4%
Other
$3,741,000
8.2%
Total
$45,758,000
99.9%
Source: City of Fayetteville, Five Year Capital Improvements
Program, 2000-2004, November 1999.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 3
The City has about $31 million in outstanding debt. Two-thirds of that is in water and sewer
revenue bonds, as shown in Table 4.
Table 4
OUTSTANDING DEBT
Bond Issue
Original Issue
Original Amount
Outstandin
Hotel & Restaurant, Series 1995 (Continuing Ed Center)
1979
$2,675,000
$1,335,000
Sales Tax, Series 1997 (Walton Arts Center)
1986
$2,610,000
$1,700,000
Water & Sewer, Series 1999 (Water Transmission Main) ••
1992
$8,365,000
$7,815,000
Water & Sewer, Series 1994 (Water Transmission Main)
1994
$5,500,000
$3,585,000
Hotel & Restaurant, Series 1998 (Town Center)
1998
$6,950,000
$6,765,000
Water & Sewer, Series 2000 (Wastewater Improvements)
2000
$10,000,000
$10,000,000
• as of December 31, 2000
•• 12% for wastewater improvements per utility rate study
Source: City of Fayetteville, Annual Budget and Work Program, 2001. December 2000.
Impact fees are most appropriate for communities that are experiencing rapid growth. The
Fayetteville -Springdale -Rogers Metropolitan Statistical Area (MSA), comprised of Washington
and Benton Counties, was the sixth fastest growing MSA in the country in the 1990s?
Washington County, of which Fayetteville is the county seat, has been growing at a compound
annual growth rate of 3.4 percent since 1990, and one-third of the population added since then
has been in Fayetteville. The city itself has been growing at 3.2 percent annually, over twice as
fast as the state as a whole. It is not surprising that this pace of growth has created problems in
terms of the City's ability to finance the capital improvements needed to accommodate new
development.
Table 5
POPULATION GROWTH, 1990-2000
Fayetteville
42,249
52,976
58,047
15,798
3.23%
Springdale •
29,941
37,700
43,787
13,846
3.87%
Other Municipalities •
10,503
15,156
17,540
7,037
5.26%
Unincorporated
30,716
36,077
38,341
7,625
2.24%
Washington County
113,409
141,909
157,715
44,306
3.35%
• only the Washington County portion of Springdale and Elm Springs
Source: U.S. Census Bureau; Northwest Regional Planning Commission
I.J.S. Census Bureau, Statistics/Abstract of the United States: 2000, Table No. 34, p. 33.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 4
In recent years, the City has been issuing permits for an average of about 580 new dwelling units
annually, as shown in Table 6.
Table 6
RESIDENTIAL BUILDING PERMITS, 1996-1999
Year
Single -Family
Multi -Family
iota'
1996
445
154
599
1997
265
281
546
1998
272
40
312
1999
357
515
872
2000
279
272
551
n.,...�,.e
2A
252
576
Source: City of Fayetteville, Inspection Department.
Only limited data has been released to -date from the 2000 census. In terms of housing units,
only the total number of units has been released. However, the number of units by housing
type can be estimated from the 1990 distribution. The census count is taken as of April 1. Based
on building permit trends through July 2001, it is estimated that Fayetteville will have about
26,000 dwelling units by the end of 2001, as shown in Table 7.
Table 7
HOUSING UNITS BY TYPE, 2001
Housing Type
199O
cuue
rennras
cw
Single -Family
9,276
12,543
424
12,967
Townhouse
460
622
52
674
Duplex
1,180
1,595
78
1673
Multi -Family
6,907
9,339
369
9708
Mobile Home
859
1,161
0
1161
Other
153
207
0
207
Total
18,835
25.467
923
26,390
Source: 1990 total units and units by type f rom U.S. census; 2000 total units from
2000 U.S. census; 2000 units by type based on 1990 distribution; permits from
January 2000 through July 2001 from City of Fayetteville.
In addition to development within its incorporated limits, the City is also affected by, and has
some control over, development in unincorporated areas within its extraterritorial jurisdiction.
Within this area, which extends up to two and one-half miles from the corporate limits, the City
exercises joint subdivision authority with Washington County. The combined corporate and
extraterritorial jurisdictions are referred to as the City's planning area, which covers
approximately 86 square miles.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 5
Figure 7
PLANNING AREA
FeyettevilleVMPACT FEE STUDY. PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 6
11
WATER
The City does not currently charge new water customers an impact fee to help defray the off -site
capital costs to the utility system associated with a new customer (the City does charge a
connection fee to cover costs associated with connection to the City's water line). Such a one-
time, up -front fee, called by many names including capital recovery fee and system development
charge, is one of the most common forms of development impact fees. While cities lack explicit
statutory authority to impose water or wastewater impact fees in Arkansas, these fees have a
long history and have been litigated in Arkansas. Consequently, there appears to be adequate
legal authority for the City to impose water impact fees.
Service Area
The City sells water on a wholesale basis to four customers: the Washington Water Authority,
the Mount Olive Water Association, the City of Elkins and the City of West Fork. In addition,
the City provides retail water service, including water pipes, meters and billing, to development
in the cities of Farmington and Greenland, as well as a portion of Johnson. As shown in Table
8, 81 percent of the City's water sales are to customers within Fayetteville's city limits.
Table 8
CURRENT WATER CUSTOMERS
June 2001
Consumption
Jurisdiction
(100 gallons)
Percent
Fayetteville
2,903,568
81%
Elkins (wholesale)
46,291
1%
Farmington
95,658
3%
Greenland
28,578
1%
Growth Area
324,186
9%
Mount Olive (wholesale)
44,379
1%
West Fork (wholesale)
80,520
2%
RDA/WWA (wholesale)
0
0%
Total 3,570,591 100%
Source: Fayetteville Water and Sewer Department, "Consumption
of Water Customers, June 2001."
It is recommended that the City's entire water service area should be treated as a single impact
fee service area. A service area is an area subject to a uniform fee schedule. A single service area
can be justified from several perspectives. First, from the perspective of an individual customer,
the lay -out of the utility system and the customer's geographic relationship to components of
the system, including location of treatment plants, size and placement of lines, and so forth, are
discretionary decisions made by the utility. Moreover, water systems are designed with features
FayettevilieVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 7
to ensure system -wide reliability. This is illustrated by the fact that special mains are often
installed to allow treatment facilities to serve several areas. Also, many systems are "looped" to
provide redundant transmission facilities. These system reliability aspects make it difficult or
impossible to assign certain costs by geographic area. Additionally, there are facilities that serve
various geographic areas and therefore present geographically unallocatable costs. Finally, the
utility's entire rate revenue is pledged as security for the repayment of revenue bonds, making
it impossible to allocate debt payment costs to subgroups of customers. In summary, because
(1) many siting and design decisions are discretionary rather than locational; (2) systems are often
designed with redundant facilities for system reliability; (3) some facilities have no
geographic -specific service area; and (4) revenue bonds are backed by system -wide revenues, it
can be argued that each utility operates as a complete, integrated system. Therefore, any
customer who receives service from such a system may reasonably be considered to be receiving
sufficient benefit from the payment of an impact fee, thus meeting the benefit nexus of the
rational nexus test. '
Water Demand
The City's 1996 Water Master Planning Study was based on 20 -year population growth
projections (1995-2015) for Fayetteville and four other communities whose water is provided by
the City. The 2000 Census, however, revealed that the projections used in the master plan were
significant underestimates. As shown in Table 9, the population served with City water in 2000
was very close to the population projected to be served by the year 2005.
Table 9
WATER MASTER PLAN POPULATION PROJECTIONS
Municipality
1990
1995
2000
Projected
2000
Actual
2005
Projected
2015
Projectei
Fayetteville
42,099
49,264
54,046
58,047
60,647
76,364
Farmington
1,322
1,579
1,837
3,605
2,094
2,609
Greenland
757
858
958
907
1,059
1,260
Elkins
692
813
934
1,251
1,055
1,297
Source: All except 2000 actual from McGoodwin, Williams and Yates. Inc., Fayetteville Water Master
Planning Study, October 1996: 2000 actual from 2000 U.S. census.
The water master plan analyzed historic water usage, and noted that water usage had been
growing significantly faster than population. The plan used service population projections and
the assumption that average day demand per person would continue to increase to project future
average day demand. The per capita demand assumptions included nonresidential as well as
residential demand. However, actual demand did not increase nearly as much as was projected,
despite significantly more rapid population growth than was anticipated. In 2000, water demand
averaged only 13.04 million gallons per day (mgd), not the 13.67 mgd that had been forecast. The
reason that demand did not increase as expected is that two major water customers, Pinnacle
FayettevllleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 8
Foods and Washington Water Authority, both made significant reductions in water usage since
the master plan was prepared. For example, water purchased by Washington Water Authority
went from 17 mg in June 1996 to zero in June 2001. Thus, the lower -than -expected increase in
demand does not appear to be due to increased conservation by most customers, but to changes
in demand by a couple of major users.
The water master plan noted that the ratio of maximum to average day water demand over the
prior twenty years ranged from 1.25 in 1992 to 1.85 in 1990. It noted that "the potential
certainly exists for a maximum day of approximately 2.0 times the average day in any given
year," and used a two -to -one ratio to estimate potential maximum day demand from average day
demand, as shown in Table 10.
Table 10
WATER DEMAND PROJECTIONS, 1995-2015
2000
2000
2005
2015
1990 1995 Projected
Actual
Projected
Projectec
e Day Demand (mgd) 10.21 12.44 13.67
13.04
16.07
22.23
Daily Demand per person (gpd) 220 229 229 198 244 265
Day Demand (mgd)
10.21
12.44
13.67
13.04
16.07
22.23
n Day Demand (mod)
15.69
21.56
27.34
n/a
32.15
44.46
Source: All except 2000 actual from McGoodwin, Williams and Yates, Inc., Fayetteville Water Master Planning Study, October
1996; 2000 actual average day demand from memo from Fayetteville water/sewer maintenance superintendent. July 30, 2001;
2000 actual service population from Table 9.
Service Unit
A water utility must be able to supply water to satisfy demand that fluctuates over a wide range.
Yearly, monthly, daily and hourly variations must all be accommodated. Water demand rates
most important to the design and operation of a water system are average day, maximum day and
maximum hour. The allocation of capital costs in this analysis is based on both average and
maximum day water demand.
To calculate water impact fees, the water demand associated with different types of customers
must be expressed in a common unit of measurement, called a "service unit." Water system
components must be designed to meet peak demand. Consequently, water impact fees should
reflect maximum potential demand, which is determined by the capacity of the water meter. This
can be accomplished by developing factors that convert each meter size into multiples of a
"Single -Family Equivalent" meter, or SFE. An SFE is a common denominator that converts all
classes of customers into a common unit of expression. An SFE is the water demand associated
with the smallest water meter used in the system (5/8" by 3/4"), which is the meter typically
used by a single-family residence.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 9
In order to calculate the cost of various types of water facilities to serve a service unit, it is
necessary to determine the average amount of water consumed by a typical single-family unit.
Dividing the average day demand generated by single-family customers in Fayetteville during the
most recent 12 -month period Quly 2000 through June 2001) by the estimated number of single-
family dwelling units in Fayetteville in 2001 yields a reasonably good estimate of average day
water demand per single-family equivalent service unit. Multiplying that by the two -to -one ratio
of maximum to average day demand provides the maximum day demand per service unit. These
calculations are summarized in Table 11.
Table 11
WATER
Average Day Demand from Single -Family Customers, 2001 (gpd) 3,467,731
Average Day Demand per Single -Family Equivalent (gpd) 267 1
Maximum Day Demand Factor 2.0D
Source: City of Fayetteville, "Consumption of Water Customers," residential (single-family)
users in Fayetteville. July 2000 throughJune 2001; 2001 single-family units in Fayettevillefrom
Table 7: maximum day demand factor from Table 10.
The total number of existing service units served by the City's water system can be estimated
from recent water consumption records. Increasing year 2000 water demand by the percent
increase in dwelling units since 2000 results in the estimate of current demand. Dividing that by
the average day demand per single-family equivalent yields the number of service units in 2001.
Table 12
WATER SERVICE UNITS, 2001
Average Day Water Demand, 2000 (mgd) 13.04
Percent increase in Dwelling Units, 2000-2001 2.29%
Average Day Water Demand, 2001 (mgd) 13.34
Avnraan Day Demand ner SFE (aod) 267
Source: 2000 average day demand from Table 10; average day demand per
SFE from Table 11; percent increase in dwelling units from April 2000 to end
of 2001 from Table 7.
The fact that the City's water master plan did not precisely forecast population growth in the
water service area or growth in demand during the first five years of the 20 -year planning period
does not invalidate it as a reasonable basis for the development of water impact fees. The
improvements that were identified as needed during the planning period were based on the
projected growth in demand, and the cost per increment of demand should be reasonably
accurate, regardless of whether the growth, and thus the need for the improvements, occurs over
20 years or a somewhat different time period. As shown in Table 13, the projected growth in
demand anticipated in the master plan is the equivalent of 36,667 new single-family units,
regardless of whether one looks at growth in average day or maximum day demand.
FayettevillOVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 10
Table 13
PLANNED NEW WATER SERVICE UNITS, 1995-2015
Average Day Maximum Da
Projected Water Demand, 2015 (mgd) 22.23 44.46
Water Demand, 1995 (mgd) 12.44 24.88
New Water Demand, 1995-2015 (mgd) 9.79 19.58
Water Demand Der SFE (uod) 267 534
Source:
2015 and 1995 demand from Table
10 (1995 maximum
day is 2 times average day); water
demand
per SFE from Table 11.
Treatment and Supply
The City of Fayetteville and three other cities
make up the Beaver Water District, which
operates two regional water treatment plants
located east of Lowell, Arkansas (see Figure 2).
The District pays only for the plants, with the
cities responsible for constructing the
transmission lines needed to get the water to their
distribution systems. The regional water
treatment plants were expanded about five years
ago. The City's water master plan did not
provide costs for centralized facilities, since the
City does not own the water treatment plants. It
may be difficult to charge impact fees for water
treatment capacity because the City does not
directly own the facilities. Insufficient
information is available to determine the capital
cost of the treatment plants paid by Fayetteville,
and no such costs will be included in the impact
fee calculations for the purpose of this study.
The treated water supplied by the Beaver Water
District is pumped through parallel 36 -inch and
42 -inch diameter transmission lines. The high
service pump station at the Beaver Water District
is equipped with four vertical turbine pumps,
capable of delivering about 30.6 mgd of treated
water to the City of Fayetteville each day. The pump station and the new 42 -inch line were put
into full-time operation in 1993. The lines run south from the plant, over Fitzgerald Mountain
and into the Fayetteville system east of Lake Fayetteville. A surge tank 20 feet in diameter by
100 feet tall is located on top of Fitzgerald Mountain. The surge tank has a capacity of 0.25
million gallons (mg) and functions as a buffer for the operation of the high service pumps at the
Figure 2
WATER FACILITIES
1 j ; , Treadnent Plant
LEGEND Lx it
• LANK _: i. (:. t_;;.• �..{
II�IM1111A 49' N•AIlRGIN
.i ---• :1O" OR 36" WATERLINE ' : •I }
24" WAttltl_WL 1 •r
, 11
ut c-ri. rly{ t...
t, 14
I-
I
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 11
Beaver Water District. A hydraulic model indicates that the maximum capacity of the parallel
transmission lines is approximately 46 mgd.
The 1996 water master plan determined that the capacity of the transmission lines from the
Beaver Water District would be adequate to accommodate projected growth in water demand
through 2015, but that the capacity of the pumping station would be reached shortly after the
year 2000. However, it noted that facilities are in place for adding a new pump or pumps to meet
this demand.
Although the water master plan did not provide any cost estimates for expanding the capacity
of the pumping stations or transmission lines, Fayetteville's water utility has incurred the cost
of constructing the existing facilities in order to provide capacity for its growing customer base.
In fact, the majority of the City's existing water revenue bond debt is continuing to pay for these
water supply facilities. The current replacement cost of the transmission lines and associated
facilities is estimated to be about $15.7 million. Dividing the current replacement cost by the
capacity of the lines results in the cost to new customers of 34 cents per gallon per day of
maximum day water demand, as shown in Table 14. Multiplying this by the maximum day
demand generated by a single-family unit results in the water supply cost per service unit.
Table 14
WATER SUPPLY COST PER SERVICE UNIT
Original -Cost of 36' Line and Associated Facilities
$7,332,339
Original Cost of 42" Line (in operation 1993)
$5,744,922
Total Original Cost of Supply Facilities
$13,077,261
Cost Inflation Factor, 1993-2001
_ 1.203
Current Replacement Cost of Supply Facilities
$15,731,945
Transmission Line Capacity d
46,000,000
Supply Facility Cost per Maximum Day Gallon
$0.34
Maximum Day Demand per SFE d
534
SUDDIV FacilityCost er SFE
$182
Source: Original costs from City of Fayetteville; cost inflation factor is
Engineering News -Record Construction Cost Index, ratio of August 2001 to
annual average for 1993; line capacity from McGoodwin. Williams and
Yates. Inc., Fayetteville Water Master Planning Study. October 1996, p. 3.3;
maximum day demand per SFE from Table 11,
Water Storage Tanks
The City's water distribution system is divided into five pressure planes. The primary pressure
plane, which receives all of the water delivered from the Beaver Water District, currently has six
ground storage tanks and two elevated storage tanks located at five sites with a total capacity of
27.75 mg. Because many areas of the city are above the overflow elevation of the primary
pressure plane, water must be repumped to supply four additional areas of high elevation. Two
of these have small elevated storage tanks, while adequate pressure in the other two is maintained
by the use of variable speed pump stations.
FayOttOV IIIOVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 12
Table 15
EXISTING WATER STORAGE FACILITIES
Baxter Ln at North St
1.000
Baxter Ln at North St
5.000
Rogers Dr
4.000
Rogers Dr
4.000
Kessler Mountain
6.000
Kessler Mountain
6.000
Markham Hill (elevated)
1.000
Gully Road (elevated)
0.750
Subtotal, Primary Pressure Plane
27.750
Sequoyah/Hyland Park Pressure Plane (elevated)
0.250
Township Pressure Plane (elevated)
0.075
Highway 45 E Pressure Plane (pump)
0.000
South Mountain Pressure Plane (pump)
0.000
Total System [a.u/b
Source: McGoodwin, Williams and Yates, Inc., Fayetteville Water Master
Planning Study, October 1996.
According to the water master plan, storage requirements in the water distribution system are
determined by the needs of operational storage, fire flow and emergency storage. Operational
storage should be about 20 percent of maximum day demand. Fire flow requirements are based
on judgement on the required duration of flows based on the level of risk in the community, and
were determined in cooperation with the City fire department. Emergency storage needs are
generally set at about two days of average day usage.
The water system's current needs at the time the water master plan was prepared were
determined to be over 32 mg, which is considerably higher than the existing storage capacity,
which is just over 27 mg. This deficiency has no doubt increased somewhat in the intervening
five years, as demand has grown while no additional storage capacity has been added. As can be
seen in Table 16, the capacity needs projected by the master plan show a strong relationship to
water demand, with an average of 2.63 gallons of storage capacity needed per gallon of average
day demand.
Table 16
WATER STORAGE NEEDS, 1995-2015
Storage Requirements
-ryy7
zuuu
£uU
u
Operational (mg)
4.30
5.50
6.40
8.90
Fire Flow (mg)
3.00
3.50
4.00
5.00
Emergency (mg)
24.90
27.30
32.10
44.50
Total System (mg)
32.20
36.30
42.50
58.40
Average Day Water Demand (m d)
12.44
13.67
16.07
22.23
Gallons of Storage per Gallon of Avg. Day Demand
2.59
2.66
2.64
2.63
Source: McGoodwin. Williams and Yates, Inc., Fayetteville Water Master Planning Study. October 1996.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 13
Applying the ratio of storage capacity to demand to current conditions indicates that the existing
capacity deficiency is on the order of 7 million gallons, as shown in Table 17.
Table 17
Source: 2001 average day demand from Table 12; storage capacity per
mgd of demand is average from Table 16; current capacity from Table 15.
The cost of new storage capacity varies significantly depending on whether the tanks are elevated
or ground storage. Of the improvements called for in the water master plan, the bulk of the new
capacity should be in ground storage. The average cost of new storage capacity is about $0.44
per gallon, as shown in Table 18.
Table 18
PLANNED WATER STORAGE COSTS, 1995-2015
Planned Storage Improvements
Capacity
(m)
Cost
Cost/Gallon
Hwy 45E Elevated Storage Tank
2.0
$2,800,000
$1.400
Mt. Sequoyah Elevated Storage Tank
2.0
$2,800,000
$1.400
Primary Pressure Plane Ground Storage (1-5 yrs)
6.0
$1,900,000
$0.317
Primary Pressure Plane Ground Storage (5-10 yrs)
12.0
$3,800,000
$0.317
Primary Pressure Plane Ground Storage (10-15 rs)
12.0
$3,800,000
$0.317
Total
34.0
$15,100,000
$0.444
Source: McGoodwin, Williams and Yates, Inc.. Fayetteville Water Master Planning Study, October 1996
Based on
the average
cost per gallon to
expand storage capacity derived from the water master
plan, the
storage cost
per single-family
equivalent is shown in Table 19.
Table 19
WATER STORAGE COST PER SERVICE UNIT
Average Storage Cost per Gallon $0.444
Gallons of Storage e Gallon of Average Day Demand
Cost per Gallon of Average Day Demand $1.17
Avg Day Demand perSFE d 267
Storage Cost per Single -Family Equivalent SFE $312
Source: Storage cost per mg from Table 18; ratio of storage to average day demand
from Table 16; average day demand per SFE from Table 11,
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 14
A portion of the cost of planned improvements, however, is attributable to existing customers
due to the existing storage capacity deficiency. The cost to remedy this deficiency is about $3.1
million, as shown below. Dividing this cost by the number of existing service units represents
the cost of remedying the deficiency per existing customer, which will be paid by new customers
as well.
Table 20
WATER STORAGE DEFICIENCY COST PER SERVICE UNIT
Existing Storage Capacity Deficiency (gallons) 7,005,000
Average Storage Cost per Gallon $0.444
Storage Deficiency Cost $3,110,220
Estimated 2001 SFEs 49,963
Storage Deficiency Cost per SFE $62
Source: Capacity deficiency from Table
17;
cost per gallon
from Table 18; 2001
SFEs from Table 12.
To avoid double -charging new customers by charging them the full cost of the storage capacity
they will require, while also charging them, through their rate payments, to remedy existing
capacity deficiencies, the deficiency cost per service unit calculated above is deducted from the
cost of new growth -related storage capacity to determine the net cost per service unit, as shown
in Table 21.
Table 21
TER STORAGE NET COST PER SERVICE UNIT
Storage Cost per Single -Family Equivalent (SFE) $312
Source: Cost per SFE from Table 19; deficiency cost per SFE from Table 20.
Transmission Lines
The costs per service unit for the other components of the water system have been calculated
by determining an average cost per unit of capacity. This approach is not feasible for water
transmission and distribution lines, since we do not have detailed demand and capacity data for
all existing lines. There are two reasonable methodologies for determining line costs: the
improvements -driven approach and the buy -in approach.
The improvements -driven approach divides the cost of planned improvements by projected
growth in service units over the planning period. The concept here is that while the planned
improvements may create some excess capacity beyond what is needed by projected growth, it
is likely that the existing system also has some excess capacity that will be used by new
customers, and that over the long term these tend to balance out.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 15
The City's 1996 water master plan identifies the major water transmission lines, ranging in size
from 12 to 24 inches in diameter, that will be needed to accommodate projected growth in the
planning area over the 20 -year planning horizon covered by the master plan (1995 to 2015).
These line improvements are summarized in Table 22 and illustrated in Figure 3. The costs
shown in Table 22 represent the portion of the cost typically paid by the City. When a line
needs to be extended to piovide service to a new development, developers pay the cost of the
line needed to serve the subdivision, which in most cases is an eight -inch line (six-inch water lines
are acceptable under some situations). If the line needs to be oversized to serve other
developments, the City pays for the cost of the oversizing. In a few cases, the City has required
a developer to front the entire cost of a water line, and used a pro rata agreement to recoup some
of line cost from subsequent developers benefitting from the line, which is then remitted to the
original developer. Consequently, the line costs shown are the total costs, less the cost of
installing the same length of eight -inch line.
FeyetteV III OVMPACT FEE STUDY, PART ON£: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 16
Table 22
PLANNED WATER LINE IMPROVEMENTS, 1995-2015
Line Description
Size (in.)
Linear Feet
Cost/Foot
Cost
Mall Weston Joyce, S on Gregg to Sycamore
18
20,000
$54
$1,080,000
Phillip East on 6th to Lewis
18
1,500
$54
$81,000
Appleby & Gregg W to Old Wire Rd
12
12,000
$14
$168,000
Millsap Son College to Rolling Hills
12
5,000
$14
$70,000
DeaneSon on Sang to Lawson
12
1,000
$14
$14,000
6th and Ellis S to Cato Springs and Vale
12
8,000
$14
$112,000
Oakland Zion Won Hwy 45 to Crossover
12
6,000
$14
$84,000
Crossover W to Prop Hwy 45E Pump Station
24
10,000
$66
$660,000
Prop Hwy 45E Pump Station to Prop Hwy 45E Tank
18
15,000
$54
$810,000
Rebecca Son Washington to Spring
12
3,000
$14
$42,000
Fiesta Square S to Township
12
4,000
$14
$56,000
Gregg Eon Township to College
12
3,000
$14
$42,000
Township S on Green Acres to Sycamore
12
4,000
$14
$56,000
Joyce Son Old Missouri to Rolling Hills
12
6,000
$14
$84,000
Garland Eon Maple to Whitham
12
2,000
$14
$28,000
Bypass W along Hwy 16
18
14,000
$54
$756,000
Bypass W along Hwy 62
24
15,000
$66
$990,000
Zion Son Old Missouri to Joyce
12
3,500
$14
$49,000
Old Wire Son Crossover to 15th St
24
32,000
$66
$2,112,000
Old Wire Eon Township to Crossover
12
5,000
$14
$70,000
Mt. Sequoyah Tank to Hyland Park
16
16,000
$27
$432,000
Rodgers Pump Station to Mt Sequoyah Tank
12
2,400
$14
$33,600
Bypass W along Salem Rd
18
22,000
$54
$1,188,000
Kessler Tanks to Greenland
18
27,000
$54
$1,458,000
15th St W to Bypass
12
4,000
$14
$56,000
Crossover E to Goshen IN Loop)
18
20,000
$54
$1,080,000
Wyman Son Harvey Owl to Elkins
12
15,000
$14
$210,000
Crossover E to White River System (S Loop)
18
20,000
$54
$1,080,000
Farminaton N to Wheeler
18
26,000
$54
$1,404,000
Source: McGoodwin, Williams and Yates, Inc.. Fayetteville Water Master Planning Study, October 1996. Tables 10.1 and 10.2
(excludes line required to connect to White River Rural Water System);.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 17
Figure 3
PLANNED WATER IMPROVEMENTS
lal'. YeH"4
Dividing the line improvement cost over the 20 -year planning horizon from the water master
plan by the growth in service units implicit in the plan's projections of water demand results in
the water line cost per single-family equivalent, shown in Table 23. This amount is warranted
if the improvement -driven approach is used to calculate water line costs.
Table 23
%AIATCR I iAIC rnQT PCR SERVICE I WIT IMPRnVFMFNT APPRAACH
Planned Line Improvements, 1995-2015 . $14,305,600
New Sinle-Famil E uivalents SFEs 1995.2015 36667
Water Line Cost per SFE $390
Source: Planned line improvement costs from Table 22; new SFEs from Table 13.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 18
0
The alternative to the improvements -driven approach for calculating line costs is the buy -in
approach. In this approach, the total replacement value of the City share of costs for existing
lines is calculated and divided by existing service units. The concept here is that the existing ratio
of line costs to customers is a reasonable guide to future costs to accommodate new customers.
In other words, the system of transmission and distribution lines will need to be expanded
proportionately to accommodate future growth. At current replacement costs, the City share
of existing line costs is about $8.5 million. Dividing this by current single-family equivalents
yields a line cost of $170 per SFE, using the buy -in approach. This is less than one-half of the
cost per service unit derived using the improvements -driven approach, and is the method
recommended in this study. Besides being more conservative, it has the advantage that it is not
tied to a specific list of improvements.
Table 24
WATER LINE COST PER SERVICE UNIT, BUY -IN APPROACH
Size
Length
City Cost
Replacement
fiches)
(Feet)
per Foot
City Cost
10
16,421
$7
$115,000
12
152,698
$14
$2,138,000
14
9,451
$20
$189,000
16
11,722
$26
$305,000
18
5,280
$53
$280,000
20
11,722
$60
$703,000
24
62,568
$66
$4,129,000
Total City Replacement Cost $8,509,000
Estimated 2001 SFEs 49,963
Line Cost Der SFE $170
Source: Water line lengths by size from City of Fayetteville, October 8, 2001
memorandum; costs per foot excluding cost for an 8' line from Table 23 or
interpolated; 2001 SFEs from Table 12.
Revenue Credits
New water customers connecting to Fayetteville's water system will pay an impact fee to cover
the cost of providing the capacity needed to serve them. They will also pay through their rate
payments to retire the outstanding debt from past improvements. In some cases, a credit against
the impact fees for debt retirement may be warranted. Finally, new development pays sales tax
on construction materials, a portion of which is earmarked for capital improvements and spent
on water system improvements, and a credit should be provided for this contribution.
When a credit should be given for debt service payments can be illuminated with an example.
Imagine that impact fees are being imposed just prior to the issuance of bonds to pay for a
treatment plant expansion to serve growth. The impact fees could be used to repay all of the
debt, in which case new customers would not be paying any of the debt service through their
FayettevilleVMPACT FEE STUDY, PART ONE: WA TER AND WASTEWA TER October 22, 2001 DRAFT, Page 19
rates, and are obviously not deserving of a credit. To the extent that the impact fees are not
sufficient to retire the debt, because, for example, they are insufficient to cover the interest, here
again no credit is due, since the impact fees were not designed to pay for the interest. Similarly,
if the impact fees are used to pay for other growth -related costs and cannot also cover the debt
service on the treatment plant expansion, some of new customers rate payments are being used
to retire the debt, but again this only points to the fact that the impact fees were not high enough
to cover the full costs of growth.
When credit is due is when new customers are helping to retire debt for capacity that is being
used by existing customers. Most of the water utility's outstanding debt was incurred to pay for
the parallel transmission lines and associated facilities used to convey water from the Beaver
Water District. The capacity of these lines has been determined to be 46 mgd. Current
maximum day demand from existing customers can be estimated to be about 27 mgd. However,
existing customers have already retired about 18% of the debt, and that percentage of the lines'
capacity is about 8 mgd. Of the remaining unpaid -for capacity in the lines, existing development
is using about one-half (see Table 25). This percentage of the debt should not be paid for by new
customers.
Table 25
ELIGIBLE SHARE OF WATER SYSTEM DEBT
Transmission Line Capacity (mgd) 46.00
Capacity Not Paid For (mgd) 37.81
Current Maximum Day Water Demand, 2001 (mgd) 26.68
Used Capacity Not Paid For (mgd) 18.49
Source: Transmission line capacity from McGoodwin. Williams and Yates, Inc.,
Fayetteville Water Master Planning Study, October 1996; percent of original debt
outstanding from City of Fayetteville, Annual Budget and Work Program, 2001,
December 2000; current maximum day demand is two times average day
demand from Table 12; used capacity paid for is difference between total
capacity and capacity not paid for.
Applying the percentage calculated above to the outstanding debt yields the portion of the debt
that is attributable to capacity already consumed by existing customers. All customers, existing
and new, will retire this portion of the debt. Dividing the eligible debt portion by the number
of current single-family equivalent customers results in the debt credit per service unit, as
summarized in Table 26.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 20
Table 26
WATER DEBT CREDIT PER SERVICE UNIT
Outstanding Water System Debt $10,462,200
Portion of Debt Eligible for Credit 48.9%
Eligible Outstanding Water System Debt $5,116,016
Water Single -Family Equivalents (SFEs), 2001 49,963
Water Debt Credit oer SFE _ _ $102
Source: Outstanding debt from City of Fayetteville, Annual Budget and
Work Program, 2001. December 2000; 2001 SFEs from Table 12.
In addition to paying off outstanding debt for facilities used by existing customers, new
customers will pay sales tax on construction materials that will be used to fund some water
capital improvements. They will also pay sales tax on taxable purchases in Fayetteville, a portion
of which will be used to pay for capital improvements to the water system. In the City's current
Capital Improvements Program, almost one -quarter of planned water improvements are to be
funded from sales tax revenues. Since six percent of sales tax revenue comes from the sale of
construction materials, the water impact fee should be reduced by about one and one-half
percent to account for new customers' contribution through sales tax paid on construction
materials. In addition, new water customers, along with existing development, will be paying
sales tax on other purchases over the next 25 years, a time period often used as the useful life of
capital improvements. The portion of this future stream of tax payments that would be used for
water system improvements has an equivalent present value of $178 per service unit, as shown
in Table 27.
Table 27
WATER SALES TAX CREDIT
Sales Tax Funding for Planned Water Projects, 2000- 2004
$3,205,500
Total Water Projects, 2000-2004 CIP
$13,043,000
Percent of Water/Sewer Improvements Funded by Sales Tax
24.6%
Percent of Sales Tax from Construction Materials
6.0%
Percent Credit for Construction Sales Tax
1.5%
Sales Tax Funding, Excluding Construction Tax, 2000-2004
$3,157,418
Annual Non -Construction Sales Tax Funding
$631,484
Water Single -Family Equivalents (SFEs), 2001
49,963
Annual Non -Construction Sales Tax Funding per SFE
$12.64
Net Present Value Factor (25 Years at 5% Discount Rate)
14.09
Non -Construction Sales Tax Credit per SFE
$178
Source: Total water/sewer project costs and sales tax funding for water sewer projects
form City of Fayetteville, Five Year Capital Improvements Program, 2000- 2004; percent of
sales tax from construction materials for 1996-2000 from City Budget Office, October 8,
2001 memorandum; 2001 water SFEs from Table 12.
FayetteViIIeVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 21
Maximum Impact Fees
The net cost per service unit is the capital cost to serve new customers, less any credits to
account for existing capacity deficiencies orLother revenues that will be generated by new
development to pay for facilities benefitting existing customers. A credit was provided in the
calculation of the cost of water storage facilities to account for existing capacity deficiencies in
that component of the water system. Adding the costs per service unit of transmission lines,
storage tanks and major distribution lines results in the total cost per service unit. Deducting the
credit for debt payments attributable to facilities serving existing development and sales tax that
will be generated by new development and used for water system capital improvements results
in the net cost per service unit. This represents the maximum impact fee that can be charged to
new customers of Fayetteville's water system.
Table 28
WATER NET COST PER SERVICE UNIT
Water Supply Cost per SFE
$182
Net Storage Cost per SFE (After Deficiency Credit)
$250
Line Cost per SFE (Buy -In Approach)
$170
Total Cost per SFE
$602
Debt Credit per SFE
$102
Construction Sales Tax Credit per SFE (1.5%)
$9
Non -Construction Sales Tax Credit per SFE
$178
Net os er SFE
Source: Water supply cost from Table 14; storage cost from Table 21;
distribution line cost from Table 24; debt credit from Table 26; construction
sales tax credit is total cost times percent credit from Table 27; non -
construction sales tax credit from Table 27.
As described earlier, a water service unit represents the water demand of a typical single-family
connection, which is a 5/8" x 3/4" meter. The number of service units associated with larger
meters are based on the relative hydraulic capacity of the meter compared to the smallest meter
size. The meter capacity ratios are based on safe maximum continuous duty flow standards
promulgated by the American Water Works Association. These ratios, which represent the
number of service units, or SFEs, associated with a meter of a given size, are shown in Table 29.
FayettevilloVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 22
Table 29
WATER MAXIMUM FEE SCHEDULE
Meter Net Net
Meter Capacity SFEs/ Cost/ Cost/
Size (
pm)
Meter
SFE
Meter
5/8"x3/4
10
1.0
$313
$313
1"
25
2.5
$313
$783
1-1/2"
50
5.0
$313
$1,565
2"
80
8.0
$313
$2,504
3"
160
16.0
$313
$5,008
4"
250
25.0
$313
$7,825
6"
500
50.0
$313
$15,650
8"
800
80.0
$313
$25,040
10"
1,150
115.0
$313
$35,995
Source: Meter capacities are maximum safe continuous duty
flows in gallons per minute from the American Water Works
Association; net cost per SFE from Table 28.
The annual revenue that could be generated if the water impact fees are adopted at the maximum
amount is estimated to be about $300,000, as shown in Table 30.
Table 30
POTENTIAL ANNUAL WATER IMPACT FEE REVENUES
Net Cost per Single -Family Equivalent. $313
Average Annual New Single -Family Units in Fayetteville, 1996-2000 324
Potential Annual Revenue from Fayetteville's Single -Family Growth $100,000
Source: Net cost per SFE from Table 28; average new single-family units from Table 6;
Fayetteville single-family customersshare of total water usage from Fayetteville Water and
Sewer Department, "Consumption of Water Customers (Usage in 100 Gallons)." July 2000
through June 2001.
Fayettev111eVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 23
WASTEWATER
The City does not currently charge new wastewater customers an impact fee to help defray the
off -site capital costs to the utility system associated with a new customer (the City does have a
connection fee to cover costs associated with connecting to the system). Such a one-time, up-
front fee, called by many names including capital recovery fee and system development charge,
is one of the most common forms of development impact fees. While cities lack explicit
statutory authority to impose water or wastewater impact fees in Arkansas, these fees have a
long history and have been litigated in Arkansas. Consequently, there appears to be adequate
legal authority for the City to impose wastewater impact fees.
Service Area
The City's wastewater treatment plant processes wastewater for the cities of Fayetteville, Elkins,
Farmington, Greenland and parts of Johnson. The City also maintains the sewer collection
systems for the cities of Farmington and Greenland, although the cities own the pipes. Over 90
percent of the City's wastewater customers, however, are located within the city limits, as shown
in Table 31.
Table 31
CURRENT WASTEWATER CUSTOMERS
June 2001
age (100 gal) Percent
2,552,797 95%
(wholesale) 15,591 1%
ipton 84,961 3%
22,656 1%
Total 2,683,518 100%
Source: Fayetteville Water and Sewer Department, "Consumption of
Sewer Customers, June 2001."
As with the water system, it is recommended that the City's entire wastewater service area should
be treated as a single impact fee service area. The arguments in favor of a single service area, laid
out in detail in the water section, can be summarized as follows: (1) many siting and design
decisions are discretionary rather than locational; (2) systems are often designed with redundant
facilities for system reliability; (3) some facilities have no geographic -specific service area; and (4)
revenue bonds are backed by system -wide revenues. The decision to implement a wastewater
system improvement project with a split watershed concept, discussed in detail below, is an
excellent illustration of the first point cited above. The City could expand the existing treatment
plant and continue to use lift stations to transport sewage from the Illinois River basin, but
instead has decided to construct a second plant on the west side of town. While this decision will
result in two largely separate wastewater collection and treatment systems, the new plant to the
FayetteV IIIeVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 24
west will create capacity for additional growth in the east by diverting flows from the existing
plant. In these ways, it can be seen that the wastewater utility operates as a complete, integrated
system. Therefore, a new customer who receives service from this system may reasonably be
considered to be receiving sufficient benefit from the payment of an impact fee, thus meeting the
benefit nexus of the rational nexus test.
Wastewater Demand
Two of the most significant measures of wastewater demand are average daily flow and average
daily flow during the peak month (usually calculated as a 30 -day moving average). Peak daily and
hourly flows are also important for some components of the collection system. The 1997
Fayetteville Wastewater Facility Plan conducted an analysis of historic water usage from 1992
through 1995. From this analysis, the plan determined that peak month flows would be
estimated based on a factor of 1.56 times average daily flows. Current annual average flow to the
plant is estimated to be 11.8 mgd.'
Future flow projections for the year 2020 were prepared based on projected population growth
in the service area and other factors. The projections of average daily flows for 2020 were based
on a number of factors. Residential flows from Fayetteville were projected based on 1995-2020
population growth projections from the Northwest Arkansas Regional Planning Commission
and a residential generation rate of 68 gallons per capita per day (gpcd). Flows from outlying
areas were estimated based on projected population growth and historic flows. Most of the
existing industrial flows are generated by the four largest industries —Pinnacle Foods, Tyson
Foods, Mexican Original and Hiland Dairy (1.5 of 2.2 mgd). An additional two mgd was added
to current industrial usage to allow for anticipated industrial growth. Future dry weather
infiltration was projected using the existing ratio of 30 gpcd. The components of projected
average daily wastewater flows are summarized in Table 32.
Table 32
WASTEWATER AVERAGE DAILY FLOW, 2020
City Population
85,090
Residential Flow per Capita (gpd)
68
City Residential Flow (mgd)
5.8
City Commercial Flow (mgd)
2.2
City Industrial Flow (mgd)
4.2
Elkins/Farmington/Greenland (mgd)
0.7
Dry Weather Infiltration (mgd)
2.6
Subtotal, Dry Weather Flow (mgd)
15.5
Wet Weather Inflow (mqd)
6.0
Total Average Daily Flow (mgd
21.5
Source:
CH2M-Hill,
Fayetteville
Wastewater Facility Plan,
February
1997.
4City of Fayetteville, Wastewater System ImprovementProject, Overview of Project FacilityP/an and Environmental
Information Document, RLFProjectNo. 05 -CS -050760-03, September 20, 2001.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 25
0
Service Unit
To calculate wastewater impact fees, the wastewater demand associated with different types of
customers must be expressed in a common unit of measurement, called a "service unit." As with
the water impact fee, the service unit for the wastewater impact fee is the "Single -Family
Equivalent" customer, or SFE. An SFE is a common denominator that converts all classes of
customers into a common unit of expression. As with the water impact fee, the wastewater
impact fee will be based on the size of the water meter (or on an individual analysis of wastewater
demand if no water meter is used). A wastewater SFE is the wastewater demand associated with
the smallest water meter used in the system (5/8" by 3/4"), which is the meter typically used by
a single-family residence.
In order to calculate the cost of various types of wastewater facilities to serve a service unit, it is
necessary to determine the average amount of wastewater generated by a typical single-family
unit. Dividing the average daily flows generated by single-family customers in Fayetteville during
the most recent 12 -month period (July 2000 through June 2001) by the estimated number of
single-family dwelling units in Fayetteville in 2001 yields a reasonably good estimate of average
daily wastewater demand per single-family equivalent service unit. Multiplying that by the 1.56
ratio of peak month to average daily demand provides the peak month demand per service unit.
These calculations are summarized in Table 33.
Table 33
WASTEWATER DEMAND PER SERVICE UNIT
Daily Flows from Single -Family Customers, 2001 (gpd) 3,335,717
Estimated Single -Family Units in
Daily Flow per Single -Family Equivalent (gpd) 257
Source: City of Fayetteville. "Consumption of Sewer Customers," residential (single-family)
users in Fayetteville, July 2000 through June 2001; 2001 single-family units in Fayetteville from
Table7; peak month factor from CH2M-Hill,Fayetteville Waste waterFaci/ity P/an, February 1997.
The total number of existing service units served by the City's wastewater system can be
estimated from current daily flow. Dividing that by the average daily flow per single-family
equivalent yields the number of existing service units.
Table 34
rER SERVICE UNITS
Average Daily Wastewater Flow (mgd) 11.80
Average Daily Flow per SFE (gpd) 257
Sinale-Familv Eauivalents 45,914
Source: Average daily flow City of Fayetteville, Wastewater System Improvement
Project Overview of Project Facility Plan and Environmental Information Document
RLF Project No. 05 -CS -050760-03, September 20. 2001; average daily flow per SFE
from Table 33.
FayettevillOVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 26
0 •
Treatment Plant
The current Paul Noland Wastewater Treatment Plant was built in 1988, with a biological
treatment capacity of 12.6 mgd. The City's Wastewater Facility Plan, originally completed in
1997 and updated this year, evaluated the alternatives of expanding the existing treatment plant
versus building a second plant in the Illinois River basin. About half of the city is in the Illinois
River basin, and currently wastewater from that basin is transferred by lift stations and force
mains to the White River basin, where the Noland treatment plant is located. Locating a second
treatment plant in the Illinois River basin would eliminate the need for several costly, high
maintenance lift stations and allow most of the collection system to convert to gravity mains.
While expanding the existing plant would be more cost-effective in terms of treatment costs, the
second plant alternative would have offsetting savings in terms of lower collection system costs.
In the recommended two -plant option, construction of the new treatment plant would establish
a clear distinction Between the flows from the two watersheds. Nine lift stations would be
abandoned.
The new plant will add 10 mgd to the City's current treatment capacity, which will provide about
the amount of new capacity required by the year 2020. The new treatment plant and its outfall
line are currently estimated to cost $42.5 million. Dividing the capital cost by the new average
day capacity yields the cost per gallon per day. Finally, dividing that by the average daily flow
per service unit results in the treatment plant cost per single-family equivalent (see Table 35).
Figure 4
WATERSHEDS AND DIRECTIONS OF FLOWS
i6
I
TI I
r+w�w-" •
..
C ® ,I +.•
��•��•IS. ry .; MobntlWWP
�tTl�
IliruriY fli•., eRi�l • 10 .'
/ rM►� wwro
wpm„ �.• �.
6
71
S.
Fayetteville\/MPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 27
r
Table 35
WASTEWATER TREATMENT COST PER SERVICE UNIT
New Treatment Plant and Outfall Line $42,500,000
Cost per Gallon per Day
$4.25
Source: Treatment plant cost and new capacity from CH2M-Hill. Fayetteville
Wastewater Facility Plan, February 1997 and 2001 update; flow per SFE from
Table 33.
Collection System
Fayetteville's existing wastewater collection system consists of more than 400 miles of gravity
sewers, 25 lift stations and 40 miles of force mains. The Wastewater Collection System Master Plan,
which was prepared by RJN Group in April 1997, identifies new sewer lines and lift stations
needed to serve the City's wastewater customers at the ultimate build -out of the City -defined
service area. However, for the purposes of the wastewater facility plan, RJN Group provided
additional analysis to define the year 2020 collection system improvement needs. The year 2020
improvements were further refined to reflect converting the Fayetteville system to a two -
treatment plant configuration.
The reanalysis performed by RJN Group for the Wastewater Facility Plan reduced the total
collection system cost from $77.9 million for the ultimate build -out of the service area to $39.2
million for 2020 conditions. However, some of the improvements to existing gravity mains are
needed to address existing deficiencies in line capacity to reduce the incidence of sewer overflows.
The City's current policies on line extensions and developer cost participation can be briefly
described as follows. When a line needs to be extended to provide service to a new development,
developers pay only the cost of the line needed to serve the subdivision, which in most cases is
an eight -inch line. If the line needs to be oversized to serve other developments, the City pays
for the cost of the oversizing. In a few cases, the City has required subdivisions in an area to pay
at the time of final plat to upgrade an overloaded lift station or to build parallel force main. If the
projects are not built, the City will refund the money. For example, the City collected $200 per
lot from new subdivisions platted within one-half mile on either side of the Salem Road line to
pay for the eight -inch parallel force main. If the City adopts wastewater impact fees that include
the collection system costs, developers who participate in the cost of improvements identified
in the City's collection system master plan should receive credit for such contributions against
their impact fees.
Given the rather extensive deficiencies in the existing collection system that will be remedied by
the planned improvements, it is recommended that the wastewater impact fees be limited to
treatment plant costs. No credits would be due against this fee for developer improvements to
the collection system.
Feyettevf lleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 28
0
Revenue Credits
There is very little outstanding revenue bond debt on past wastewater system improvements, and
none of this is related to the existing wastewater treatment plant. Consequently, no revenue
credits are due to account for retiring debt on the existing plant.
The City is exploring options for financing the new treatment plant and needed collection system
improvements. The planned improvements totals $120 million. Current funding options being
explored include a 3/4 cent sales tax and an increase in wastewater rates. The 3/4 cent sales tax
would be used to repay a state revolving loan fund over a ten-year period. A referendum on the
sales tax will be held on November 6, 2001, and would not go into effect until after the one -cent
sales tax for the library ends in April 2002.
Assuming that the November referendum is approved, the sales tax supported state revolving
loan would be enough to finance the City's entire $120 million capital program. The wastewater
impact fees would be earmarked exclusively to be used to help defray growth -related
improvements to expand the City's wastewater treatment capacity. One alternative would be
to use the impact fee revenues to retire the state revolving loan, which would allow the sales tax
to expire earlier than would be the case without the impact fee.
As noted earlier in the water section, approximately six percent of all sales tax receipts are derived
from the sale of construction materials, much of it for new construction. Consequently, the cost
will be reduced by that percentage to account for the fact that new development will be paying
a portion of the cost of expanded treatment capacity through payment of sales tax on
construction materials.
In addition to paying sales tax on construction materials, new development will also generate a
portion of the non -construction sales tax. During the 1990s, Fayetteville's population grew at
an average rate of 3.23 percent annually. Assuming that development continues at this pace over
the next 14 years that the sales tax to fund the wastewater improvements is in place, new
development would generate approximately 19 percent of the non -construction sales tax
revenue, as shown in Table 36.
FayetteviiieVMPACT FEESTvDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 29
I
Table 36
WASTEWATER SALES TAX CREDIT
Growth
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Average Growth Share
3.13%
6.16%
9.10%
11.94%
14.70%
17.36%
19.95%
22.46%
24.88%
27.23%
29.51%
31.71%
33.85%
20.56%
of Sales Tax 94.00%
Source: Growth share of total development based on Fayetteville
growth rate from Table 5.
Reducing the treatment plant cost per service unit by 6 percent to account for the construction
sales tax and by another 19 percent to account for non -construction sales tax revenues that will
be generated by new development during the period when the 3/4 cent sales tax will be in effect
yields the net cost per service unit, as shown in Table 37.
Table 37
WASTEWATER NET COST PER SERVICE UNIT
Treatment Plant Cost per SFE $1,092
Credit for Construction Materials Sales Tax (6%) $66
Credit for Non -Construction Sales Tax (19.33%) $211
Total Net Cost oer SFE $815
Source: Treatment plant cost from Table 35; credit based on percent of
sales tax revenues received by Fayetteville from 1996-2000from building
construction, City Budget Office, October 8, 2001 memorandum.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 30
r
Maximum Impact Fees
The net cost per service unit is the capital cost to serve new customers, less any credits to
account for existing capacity deficiencies or other revenues that will be generated by new
development to pay for facilities benefitting existing customers. The analysis presented in this
study excluded line costs and based the proposed fees solely on treatment plant costs. No
significant capacity deficiencies or outstanding debt were identified for the existing treatment
plant.
As described earlier, a wastewater service unit represents the wastewater demand of a typical
single-family connection, which is a 5/8" x 3/4" meter. The number of service units associated
with larger meters are based on the relative hydraulic capacity of the meter compared to the
smallest meter size. The number of SFEs per meter is multiplied by the net capital cost per SFE
to determine the maximum impact fee per meter, are shown in Table 38.
Table 38
WASTEWATER MAXIMUM FEE SCHEDULE
Meter
Net
Net
Meter
Capacity
SFEs/
Cost/
Cost/
Size
(gpm)
Meter
SFE
Meter
8",x.3/4"
10
1.0
$815
$815
1"
25
2.5
$815
$2,038
1-1/2"
50
5.0
$815
$4,075
2"
80
8.0
$815
$6,520
3"
160
16.0
$815
$13,040
4"
250
25.0
$815
$20,375
6"
500
50.0
$815
$40,750
8"
800
80.0
$815
$65,200
Source: Meter capacities are maximum safe continuous duty
flows in gallons per minute from the American Water Works
Association; net cost per SFE from Table 35.
The annual revenue
that could
be generated if the wastewater
impact fees are
adopted at the
maximum amount is
estimated
to be about $650,000, as shown
in Table 39.
Table 39
Net Cost per Single -Family Equivalent
UES
$815
I Potential Annual Revenue from Fayetteville's Single -Family Growth $260,000
Fayetteville Single -Family Customers as Share of Total System Usaae 39.8%
Source: Net cost per SFE from Table 37; average new single-family units from Table 6;
Fayetteville single-family customersshare of total wastewater usage from Fayetteville Water
and Sewer Department. "Consumption of Sewer Customers (Usage in 100 Gallons)." July 2000
through June 2001.
FayettevilleVMPACT FEE STUDY, PART ONE: WATER AND WASTEWATER October 22, 2001 DRAFT, Page 31
010 03 City of.. Fayetteville 8/26/2002
update cJex Maintenance • 10:22:01
Document Item Action
Reference Date Ref. Taken Brief Description
RES 8202002 129 FINAL DRAFTS/WASTEWATER IMPACT FEE
Enter Keywords........: RES. 129-02
AMENDMENT #2
PROFESSIONAL SERVICE AGREEMENT
DUNCAN & ASSOCIATES
$8.100.00
FINAL DRAFTS
WATER AND WASTEWATER
IMPACT FEE
ORDINANCES
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