This study session covered three major items: water and wastewater capacity fees and utility rate adjustments, an update on American Rescue Plan Act (ARPA) funds, and a comprehensive presentation on the city's response to homelessness. The council also heard current events and conference reports.
Water and Wastewater Capacity Fee Update (1A)
Utility Rate Adjustments (1A continued)
ARPA Fund Update (1B)
Homelessness Response Overview (1C)
Current Events and Conferences
Welcome to the Mesa City Council study session for November 6, 2025. Councilmember Duff will be joining us later. Otherwise, all council members are present. So with that, we'll begin with a presentation on what water and wastewater capacity fees, recommended utility rate adjustments. So that's one A. Ryan and Chris. All right, good morning, Mayor and Council. We just wanted to give a a brief update uh on the capacity fee and the utility rates before they are uh introduced on uh November 17th. So my name is Brian Richel. I'm the Office of Management and Budget Director, and along with me uh who's gonna talk about the capacity fees is Chris Hassart, who is the water resources director. And what we'll do is we'll start off with the uh water and wastewater capacity fee update. Okay, thanks, Brian. Good morning, Mayor, Vice Mayor Council. Um, so as Brian mentioned, I want to give a quick overview on the capacity fee. We've talked about this in in great detail already um on various occasions, but there's a couple updates we want to bring forth to you this morning. Um first a quick overview um of of why we developed this fee. Um it's to really raise 400 million dollars over the next decade or so, and this is to fund all growth, water and wastewater growth infrastructure that's needed. Uh as we've talked about before, um, as we stand today, all of our systems are sized appropriately for our existing customer base. So if we weren't expanding um anymore in the city, if we weren't developing any vacant parcels, we wouldn't have the need to build any new pipelines, expand plants, anything like that. So this 400 million dollars uh developed through our integrated master plan is really focused on new infrastructure for for growth. Um also again, this is a one-time charge. So as a new development comes in, it would pay a one-time charge, which is the capacity fee, and it would be for their portion of this future growth. So what we really want to get into today is some of the developments we've had over the last several weeks, and it's really outreach to the development community, those stakeholders, and having in-depth discussions with them, um, answering their questions and so forth. So you can see from these bullets, this is a representation of the different development community representative stakeholders that we met with. We had a couple in-person meetings. Um, there was also other communications. But we what we talked about is really the intent of the fee with them. We went over in detail the methodology we use for the capacity fee, and then of course, we answered any questions uh in order to try to address their concerns. So with that. So in those discussions, it it really became apparent that the development community stakeholders, they were they were holding pretty firmly to uh a process different than the capacity fee. So there's a separate statute that that speaks to development impact fees. It's similar, it's uh I would say it's in the same family, but it's a different process. Uh it's not the process that best fits our objectives here in Mesa. Um, so they they stuck pretty firmly to that, didn't offer too much in the way of compromise, but there was an exception. There's a single family home builder that does a lot of work here in Mesa. They're pretty pop prominent home builder. And they did offer um constructive feedback. They did um feel that Mesa is justified in the in the path that we're taking with the capacity fee, they understood it. And they also offered some some middle ground solutions that we could work with. Uh so in the spirit of that, uh, we're here today to offer two modifications to the draft ordinance. So Chris, before you start, maybe you can explain the difference between I know we're moving forward with the capacity growth fee, but the impact fee. How what's the timelines on the two and and how one maybe supersedes the other? Is there some sure mayor and council? Let me first say that they don't they're they're they're different but similar at a conceptual level, they're very similar in that it's to have uh future development uh pay for itself um as it impacts the um infrastructure for for the utilities. So at that l at that sort of very high level, they're conceptually the same. They're just a way to do the fee under two different statutes. Um the impact fee statute has a more I would describe it as a more rigid process, and it has a very long grandfathering process in which um it's it's basically a two-year oversimplification, it's a two-year grandfathering process. And right now, since the city has no impact fee, it would grandfather in zero for for two years for many people. And so um most cities obviously have an existing impact fee, so when they grandfather in for two years, that you're really grandfathering in an old impact fee in amount, not zero. And so that obviously means for if we were to go that route for two years, development wouldn't be paying for um their impact on the infrastructure, and so uh that obviously was one a factor, one of the factors, and looking at what what was the appropriate route to bring to council.