The Waco City Council voted Tuesday to create a new stormwater utility likely to add a new monthly charge for all homes and businesses, and separately, in a split vote, decided to move forward with a proposal for upfront “impact fees” on new development.
Council Member Jim Holmes cast the sole vote against the proposal for impact fees, which are intended over the next five years to reduce the burden on current property taxpayers and utility ratepayers to fund an estimated $160 million in water, wastewater and road infrastructure needed to support expected new development. The proposed fees would vary based on the area of town, with new homes in most long-established areas of the city completely exempt.
Holmes’ District 5 includes the Highway 84 corridor on the western end of town, an area that would be subject to fees on the higher end, and where new development is planned and expected to continue. During Tuesday’s council meeting, he said he wanted more information about the fees and more time to develop the fees for commercial development, which are more complex to calculate than fees for new single-family residences.
The fee on single-family homes inside city limits but outside the exemption area would be $4,500. City Manager Bradley Ford said an online calculator for commercial fees, accounting for development type, size and location, will be ready in about three months. The current proposal would increase the fees incrementally up to the full proposed amount over five years, when the fees would be due to be recalculated.
If the council approves the proposal in a second vote Nov. 3, it would take effect in June.
Shane Turner with Turner Behringer Real Estate submitted questions about how the fees would be implemented. Meredith Hatch, corporate counsel for Turner Behringer Real Estate, submitted questions about why the council had chosen impact fees instead of another strategy to cover costs.
During a public hearing before the council vote, local builder and developer Ken Cooper said the city should take more time to consider the commercial fees. Cooper was part of an advisory committee that helped develop the fee proposal and offered recommendations to the city council. During a discussion earlier this month, city staff members recommended the council move forward on the current timeline, while noting builders on the advisory committee had expressed a desire to delay the commercial fee vote.
District 4 Council Member Darius Ewing said he supports the impact fees but asked to see a projection for eventual property tax relief.
“I just think it’s really important to know the purpose of these fees is that we grow in a way that’s fair and equitable to citizens and to businesses so they can have that buy-in,” Ewing said.
While the impact fees would be limited to new development as it happens, the council’s vote Tuesday to form a new city stormwater utility would have a much broader effect.
The utility would charge monthly stormwater fees, expected to create a dedicated annual revenue stream of about $6.2 million for maintenance and new construction on the city’s drainage systems. Work toward the new utility, which allows for the dedicated revenue source, started about two years ago when the city hired civil engineering firm Walker Partners to conduct a stormwater study, Ford, the city manager, said. The city has identified an estimated $124 million in needed stormwater infrastructure work.
“The ordinance in front of you today establishes the utility, it doesn’t charge a fee,” Ford told the council Tuesday. “If the ordinance is approved, the amounts to be charged will be considered Nov. 3, 2020, following a public hearing.”
The proposal includes an average single-family residential fee of $5.35 per month, with wider variation for commercial properties depending largely on size.
If approved, the stormwater utility fees would start in October of next year.
Get Government & Politics updates in your inbox!
Stay up-to-date on the latest in local and national government and political topics with our newsletter.