By: Jerry Kurtyka, Community First Coalition
I attended one of the forums held by El Paso Water Utilities this week to explain the logic of Impact (connection) Fees. These are fees charged to developers to extend water and sewer service to new projects, based on a projection of how many new meters will be installed. There are three areas affected by these fees – WEST that seems to be primarily the Hunt development west of Artcraft Road; NE that looks like TIRZ 13, the land that the city gave to Paul Foster with a 75% tax waiver in exchange for his acreage on I-10 for the Great Wolf Resort that never happened; EAST mainly from HY375 that is largely held by Hunt and Southwest Land Development Services, i.e., Doug Schwartz.
Familiar names? These are the big private landholders in the area that have benefitted from the city’s lax position on how EPWU is to pay for services extended into these developments, not including stormwater abatement.
The infrastructure costs not covered by the fees are financed by EPWU debt and end up on your water bill! The developers like this model and want it continued.
As it is, the city did establish connection fees (per meter) in 2009 for these three areas and is supposed to revisit the fees every five years per Texas state law (LOCAL GOVERNMENT CODE, TITLE 12. PLANNING AND DEVELOPMENT, CHAPTER 395) but the city has not adjusted them to reflect the cost of new services in these areas since then. EPWU is now facing a cost of nearly $1B to provide new services to these areas, the largest component being in the East of $173M for water supply and $650M for wastewater treatment infrastructure. That will end up on your water bill under the current fee regime.
The table below shows the difference by area for current (2009) impact fees versus what EPWU estimates is needed now to pay for planned water and sewer infrastructure expansion in these areas. The numbers were provided by EPWU’s CFO, Mr. Duran, at the public forums this week.
Current 2009 Connection Fees per Meter Versus Needed Fees per Meter
| Service Area | Current Fee | Needed Fee | Difference | Variance % |
| Westside | $1,586 | $3,257 | $1,671 | 105% |
| Northeast | $1,469 | $5,684 | $4,215 | 287% |
| Eastside | $1,617 | $17,981 | $4,215 | 287% |
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You can understand why this is an existential issue for developers who would prefer the current “Reverse Robin Hood” model, where the many pay for the benefit of the few, these costs being added to the water bills of the overall customer base, i.e., you and me, and not to the cost of each new incremental lot or site needing a water meter. Think about it! Almost $18,000 added to the cost of a new lot in East El Paso with fee increases also on the Westside and Northeast. There is no free lunch and the cost of new infrastructure to accommodate development in these three areas will have to be paid by someone. Who is that “someone?”
The argument you will likely hear next week (and following) as the City Council considers impact fees, is that it is necessary to spread fees over the entire EPWU customer base in order to keep housing affordable here, a kind of social welfare model. Well, housing is already affordable here. Housing affordability can be measured by the so-called Housing Affordability Index or HAI (THAI for Texas). THAI measures the ability of a household earning the median family income to qualify to purchase the median-priced home. The index is the ratio of median family income to the required income to qualify for a purchase mortgage loan at the current interest rate. A ratio of 1.00 means the median family income is exactly equal to the required income to purchase the median-priced home in the area. In El Paso County for 2023 the THAI = 0.99 which means we’re doing OK; housing is very affordable here. Contrast San Antonio at 1.13.
This is the issue of the hour in El Paso now. Do we continue doing business as usual, offloading incremental development costs onto all water rate payers, or do we require the developer to pony up the money to connect their building lots to EPWU? Let your city representative know what you think, after you take a look at your water and sewer bill.
About the Author
Jerry Kurtyka, a retired banking and IT executive, is an activist whose focus is on sustainable community and water equity. He writes here in his capacity as Moderator for the Community First Coalition, a nonpartisan network of organizations and leaders whose purpose is to empower the community to bring improvements in social, economic, ecological and political conditions in El Paso.
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Thank You Jerry Kurtyka! I wish you would post more often!