Hot Springs adopts tiered water and wastewater impact fees, with reductions for small homes

The Board of Directors of the City of Hot Springs on May 5 adopted two ordinances establishing development impact fees for wastewater and for water, approving amended schedules aimed at protecting smaller and workforce housing while charging larger users more to help fund system capacity.

The change establishes a square-footage-tiered reduction that lowers or waives fees for small residences (for example, many homes 1,000 sq ft or smaller would face no wastewater fee under the adopted schedule) while preserving the meter-based scaling for larger connections. Director Karen Garcia, who led the amendment, said the intent was "to maintain an emphasis on workforce and affordable housing" while ensuring "future development should pay some of the cost, not just current ratepayers." A public commenter, Tyler Draper (District 5), urged the board to "put the burden off working families," saying a straight $2,000 base fee would "price people out of being able to build here in Hot Springs."

Why it matters: City staff and board members said the fees are intended to direct some costs of future plant expansions and capacity increases to new connections rather than shifting all costs to existing ratepayers. City Attorney Brian Albbright told the board the impact fees are designed to fund future capital needs or be applied toward debt, not day-to-day operations.

Key details
- Ordinances: O-26-07 (wastewater) and O-26-09 (water) were both adopted as amended. The adopted schedules apply meter-size multipliers but also include percentage reductions tied to house square footage so smaller homes pay little or nothing while larger meters incur higher fees. The board set an effective date in the ordinances' language (the adopted water and wastewater schedules note a July 1 effective date as amended in the meeting record).
- Public comment: Residents and builders spoke in favor of the square-footage reductions as a way to encourage affordable housing; a few speakers asked for clearer outreach about the new fees.
- Votes recorded: For O-26-09 (water), the roll call on adoption recorded votes with a 5-2 outcome in favor (Yes: Holiday, Beard, Garcia, Trusty, Mayor McCabe; No: Dob Smith, Webb). For O-26-07 (wastewater) the board adopted the ordinance as amended after a sequence of amendment votes recorded in the public minutes (amendments passed and the final motion to adopt passed as recorded).

What the ordinances do not do: The adopted impact fee funds are limited by state law to capital and debt purposes (they are not general taxes or operational revenue). The fees do not apply retroactively to existing connections unless a new, larger connection is installed.

Next steps: The city will publish fee schedules and guidance for applicants and building permit seekers, and staff will monitor early effects on permit activity and affordability. Board members agreed that the effective date and final implementation details would be communicated through the city clerk's office.

Sources and attribution: Quotes and reported votes come from the Hot Springs Board of Directors meeting transcript, May 5, 2026. "This gives a significant reduction on those impact fees and will keep those contractors and...building affordable housing," Director Garcia said during the debate. "Putting a $2,000 fee on something will price people out," resident Tyler Draper said.