City Council Approves SAWS Impact Fee Increase

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In an 9-2 vote, City Council approved plans to increase San Antonio Water System water supply “impact fees”— a one-time charge that covers the cost of water systems for new development and, according to SAWS, a way to prevent existing ratepayers from subsidizing new customers. As a result of input from the Mayor and Council, rather than implement the full 116 percent increase, SAWS has agreed to ‘phase-in’ the cost until a year from now, temporarily relieving the cost burden to developers.

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Concerns over whether the fee hike could stifle current development, expressed by Mayor Julián Castro, city staff recommended the 116 percent increase— the highest allotted by state law—would take place in a year, an approach largely seen as a compromise. In the meantime, developers would pay a lower amount proposed by the Capital Improvements Advisory Committee, community members appointed by Council to review the rates. The 11-member committee recommended the fee should be $1,590 (a 23 percent increase) instead of the $2,796 proposed.

“This is a reasonable approach and makes sense,” said Castro of the new, staggered plan.

Council members Joe Krier (District 9) and Mike Gallagher (District 10) hoped to shift a final decision on the full increase until next year, with a new council make-up, but Krier’s motion failed. (Gallagher and Krier were the two dissenting votes.)

The increase—which only applies to new development— is meant to finance capital costs associated with new projects, like subsidizing portions of the new brackish desalination pipeline that collects water from the Wilcox Aquifer. That plan reduces dependency on water generation from the Edwards Aquifer, where SAWS has historically derived more than 90 percent of its water.

The issue saw pushback earlier this month from the development community, who argued the cost increase could inhibit new projects and from some council members who worried the rate hike would disincentive low-cost housing development and force prices to fall on homeowners and renters, as the Current previously reported.

Those concerns were echoed during Thursday’s council meeting by real estate community members Scott Farrimond, president of the Responsible Growth Alliance and Cynthia Stevens, who said the impact fee may reduce the opportunities for affordable housing. Council members, like District 5’s Shirley Gonzales, again voiced concern over the creation of affordable housing. In response, SAWS say they have increased impact fee waivers for inner-city infill development, which can include affordable housing projects and non-profits, by $12 million over six years, to encourage downtown development.

On the other end, environmental and justice groups say the maximum fee increase is necessary to ensure the cost burden doesn’t fall on ratepayers and is an essential measure to protect the Edwards Aquifer.

“Building growth should not expect to get subsidized by ratepayers,” said Margaret Day of the local chapter of the Sierra Club, also representing the stance of the coalition of environmental groups that are part of the Greater Edwards Aquifer Alliance.

Similarly, Mike Phillips of Communities Organized for Public Service (COPS)/Metro Alliance said the fee increase is needed to prevent low-income residents from shouldering growth. Phillips traced the history of the fight to implement fair and realistic impact fees, starting in the 1970s. Phillips says that while the fee is, indeed, the maximum allowed by state statute, the law itself was heavily influenced by developers, and still does not fairly reflect actual costs. The Council should not allow inner city and low-income ratepayers to subsidize growth and thus, should support the maximum increase, said Philips, who called the issue a matter of “fairness and justice.”

The water supply impact fee starts June 9, and applies to new development. The full fee will hit developers in June 2015.

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