'The cost of growth': Salt Lake City to raise utility impact fees for first time in 27 years

SALT LAKE CITY — The population of Utah's capital city jumped from 181,743 residents in 2000 to an estimated 218,428 in 2025, an increase of over 20%, according to the U.S. Census Bureau.

Salt Lake City has had four mayors in that time, watched its skyline rise and added an NHL team, among many other changes. What hasn't changed? The fees that developers pay for tapping into the city's aging utilities infrastructure.

That will no longer be the case soon, as the city is changing the fee structure for the first time since just before 2000.

Members of the Salt Lake City Council voted unanimously Tuesday to drastically increase the fees to adjust to rising costs and what neighboring cities charge through a phased approach starting in 2027. By mid-2028, water fees will be nearly triple the current assessments, stormwater fees will more than quintuple and sewage fees will look drastically different.

"This is the cost of growth," said Salt Lake City Councilwoman Victoria Petro before the vote.

Impact fees are one-time charges that developers pay for new development, which pay for infrastructure upgrades needed for the new development. Salt Lake City's water rate of $1,871 to $125,851, depending on the size of a meter, had not been touched since the late 1990s, before this year.

Sewer rates range from $545 for single-family homes to $409 per unit for a townhouse or an apartment building, to $27 per fixture unit for remodels or common areas. Stormwater fees are $374 per ¼-acre.

Salt Lake City's Department of Public Utilities contends that the rate doesn't reflect rising construction costs, including inflation, which have increased over the past 27 years. Thus, the department has to dip into revenue sources to cover new development.

"We're experiencing a lot of growth and change, and we want to make sure we're keeping up with the rate of change," said Laura Briefer, the department's director, during a presentation in August.

Under the change that was approved:

• Water fees will eventually range from $5,577 to $375,328.
• Sewer fees will range from $4,300 to $289,235 through a different structure than in the past.
• Stormwater fees will change to $1,963 per ¼-acre.

Developments will be charged about 70% of those rates starting in 2027. The full rate is applied by July 1, 2028, per the ordinance that was approved on Tuesday. That was part of a phased approach that city leaders approved.

The measure drew a few responses from a final public hearing just before Tuesday's vote. Dustin Holt, a Salt Lake City resident and local developer, said the change would increase costs by $1,000 to $3,000 per unit, which could impact the fundraising efforts in development.

Anthony Washburn, of Poplar Grove, on the other hand, said infrastructure needs have changed since the 1990s, along with costs, and the increase could help address those challenges. He referenced flooding in the neighborhood in August, which was caused by a burst water main after a recent bridge project in the area.

(It's) a reminder that we cannot continue to defer investment in our infrastructure," he said. "Updating the impact fee is one way we can help ensure our systems are adequately funded and better prepared to serve our growing community."

The City Council agreed.

It was swayed by findings that other cities in or around Utah have higher utility impact fees, which have not impacted growth. Even with the increase, its water fees will be much lower than Washington County while its sewer fees are lower than Provo, per a city analysis.

At the same time, its members noted that residents have been absorbing the rising costs over the past few years.

A legislative audit even explored those rising costs, recommending a few changes in September after finding that Salt Lake City's public utilities department carries more than $600 million in debt tied to massive, required infrastructure improvement projects. While the city has raised rates to pay off those projects, the report found there was "no feasible plan to pay it and future debt off."

Increasing impact fees helps in the overhaul effort.

It's "very much needed," said City Council Chairman Alejandro Puy.

"We have heard the impact that many of our neighbors are seeing in their bills and the public utilities," Puy said. "Growth has to pay for growth, and it's challenging to justify a fee that hasn't been touched in 30 years."

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