Utility impact fees: Practices and challenges

Abstract

Impact fees and other growth-related fees have become an important part of the comprehensive financing plans of many utilities. This article explores required and recommended impact fee practices that consider current laws and accepted standards in the areas of water, wastewater, and reclaimed water impact fee design, accounting, implementation, and use, including techniques for improving the accuracy of impact fee calculations. The authors also present strategies for demonstrating the reasonableness of these fees as well as a recommendation that all utilities establish a formal procedure for applicants to submit alternative impact fee calculations. Utility managers should consider the topics discussed in this article to develop-and to have regulators approve-a comprehensive impact fee policy that shows a commitment and an intent by a utility to fully comply with all impact fee laws, rules, regulations, and accepted practices.