Impact Fee Analysis (IFA) & Facility Plan (IFFP)

Updated: 09/2025

 

A small rural culinary water company, like the LDWA, serves as a lifeline to its community, providing safe and reliable drinking water to residents, businesses, and future developments. In rapidly changing rural environments, maintaining up-to-date planning and fiscal tools such as a Capacity Study, Impact Fee Analysis, and Impact Fee Plan are essential for the company’s long-term success and the well-being of its customers.

Pursuant to the requirements of Utah Code Section 11-36a, the Leeds Domestic Waterusers Association gives notice of the intent to implement an Impact Fee Analysis/Facilities Plan for culinary water development in accordance to the requirements of the State of Utah. For information, please use this QR Code or visit the LDWAcorp.org website.

LDWA 2025 CAPACITY STUDY
Prepared By: Jones & DeMille Engineering

LDWA 2025 IMPACT FEE ANALYSIS
Prepared By: Bowen Collins & Associates, Inc

LDWA 2025 IMPACT FEE ANALYSIS FACILITY PLAN
Prepared By: Bowen Collins & Associates, Inc

What is a Capicity Study?

A capacity study for a culinary water company, also known as a potable water company, is an in-depth analysis of its ability to meet current and future water demands. This assessment ensures the system has the technical, managerial, and financial capabilities to provide safe, reliable drinking water for the long term.

What is a Impact Fee Analysis?

An Impact Fee Analysis (IFA) for a culinary water company determines the cost new development must pay to fund necessary public water system infrastructure expansion. The analysis calculates the cost of new water facilities and infrastructure upgrades needed to serve future growth by identifying the capacity of the existing system and projecting future demand, ensuring new connections pay their “proportionate share” of the costs. The resulting impact fee is then charged to new customers or developments as a condition of service approval.

What is a Impact Fee Facility Plan?

A Culinary Water Impact Fee Facility Plan (IFFP) is a document, often required by law, that details the capital improvements needed for a water system to accommodate new development, outlines how these improvements will be funded, and establishes the impact fees new connections must pay. The plan identifies existing system capacity, projects future demands based on growth, calculates the costs of new or upgraded facilities to maintain a specific level of service,  and then allocates a proportionate share of those costs to new development through impact fees.

Purpose of a Capacity Study

  • Ensures system sustainability: Helps the water company maintain and improve its infrastructure, financial stability, and operational capabilities.
  • Supports capital improvements: Provides the data necessary to plan for future infrastructure projects, such as source development, treatment plant upgrades, and distribution system expansions.
  • Enables long-term planning: Aids in setting budgets, adjusting water rates, and making sound decisions for future growth and development.
  • Ensures regulatory compliance: Helps the company meet federal and state Safe Drinking Water Act (SDWA) requirements.
  • Justifies impact fees: Some municipalities use a capacity analysis to justify impact fees charged to new developments for the expansion of water infrastructure.

 

Key Elements of a Impact Fee Analysis

  • Equivalent Residential Connection (ERC): This is the standard unit of measurement for water demand. The analysis determines the existing number of ERCs, the projected number of future ERCs, and allocates the costs of new infrastructure to serve these future ERCs.
  • Projected Growth: The IFA identifies the anticipated new development within the water company’s service area over a defined period (e.g., 10 years).
  • System Improvements: The analysis details the planned infrastructure improvements required to meet future demand, including construction costs, land acquisition, planning, surveying, and engineering services.
  • Proportionate Share: A critical principle is that the impact fee must only cover the portion of infrastructure costs that is attributable to new growth, not improvements that solely benefit existing customers. Costs for “excess capacity” that increases the level of service for existing users are excluded.
  • Debt Service Charges: If bonds or other obligations were used to finance the construction of new system improvements, the cost of principal and interest on that debt can be included in the fee calculation.
  • Cost Allocation:The total allocable cost is divided by the total number of future ERCs that will be served by the new infrastructure to arrive at the impact fee per ERC. 

Purpose of an Impact Fee Facility Plan

  • Identify Future Needs: The primary goal is to determine the system improvements (e.g., bigger pipes, new wells, storage tanks) required to serve future growth and maintain service levels.
  • Determine Funding Sources: The IFFP evaluates how these necessary improvements will be funded, including impact fees, grants, bonds, and other revenue sources.
  • Establish Impact Fees: It provides the basis for setting impact fees that new development must pay to cover its proportional share of the costs of expanding the water infrastructure.
  • Ensure Compliance: For jurisdictions in states like Utah, an IFFP ensures compliance with state law, such as the Utah Impact Fees Act, which has specific requirements for preparing these plans.