Salt Lake City is proposing significant increases to utility impact fees in July 2026, ending a period where rates remained largely unchanged for more than 25 years. The proposal, which targets water, sewer, and stormwater infrastructure, seeks to address rising construction costs and the demands of significant urban growth.
Stagnant Fees Amid Growth
The Salt Lake City Department of Public Utilities announced that current impact fees have remained largely unchanged for over two decades. This stagnation has occurred despite significant city growth, increases in construction costs, and ongoing requirements for investments in critical water, sewer, and stormwater infrastructure. According to the department, current fees are significantly lower than those charged by many other communities within Utah and neighboring states.
Growth Pays For Growth
The proposed updates are based on the principle that "growth pays for growth," ensuring the cost of expanding utility capacity is covered by new development rather than existing customers. These fees are collected when a building permit is issued or when a property connects to the utility system through a utility permit. Under the Utah Impact Fees Act, these charges may only be used to fund public facilities required to serve new development.
Proposed Sewer Fee Options
The Salt Lake City Department of Public Utilities has developed several options for the proposed sewer impact fees. One option bases the fee on the size of the customer's water meter, while a second option proposes a charge per dwelling unit for residential users, with nonresidential users being charged based on water meter size. For residential users under the second option, the proposed fee for a single-family home is $4,300, while duplexes, triplexes, and multifamily units would be charged $3,225 per dwelling unit.
Water Fee Increases
The proposed water impact fees are calculated based on the size of the water meter. For a 3/4-inch meter, the fee would rise from $1,871 to $5,577. A 1-inch meter would see an increase from $3,830 to $11,154, while a 2-inch meter would jump from $11,776 to $35,135. For larger connections, a 6-inch meter would increase from $54,718 to $162,847, and a 10-inch meter would rise from $125,851 to $375,328.
Stormwater Cost Adjustments
Stormwater impact fees are also slated for a significant increase. The proposed fee is to be collected on a per 1/4-acre basis, which is assumed to be the size of a typical residential unit or equivalent residential unit (ERU). The existing fee of $374 per 1/4-acre would increase to $1,063 per 1/4-acre under the new proposal.
Planning and Financial Context
The legal basis for these fees is the Impact Fee Facilities Plan (IFFP), which is used to create the Impact Fee Analysis. This plan evaluates the city's water, sewer, and stormwater systems, projects growth over a six-year period, and identifies the infrastructure improvements required to maintain current service levels as the city grows. The city's financial history is documented in Annual Comprehensive Financial Reports, which include data for fiscal years dating back to 2003.
Next Steps for Council
The proposed IFFP must go before the Salt Lake City Council for consideration. The Council will hold two hearings to allow for public comment. If the Council approves the proposal, the new impact fees will take effect 90 days after the approval date. Once adopted, the fees will be added to the City's Consolidated Fee Schedule.
