The city of Waco is weighing new $4,500 fees for every new home built outside the core of the city and even more for homes just outside city limits.
After a public hearing this week, the city council is set to vote Oct. 20 on the proposed flat-rate impact fees for new single-family residences, and on proposed impact fees for new businesses and multi-family developments, which could vary widely depending on the type and location of development.
The city expects to spend $160 million in the next five years on infrastructure to support new development, and both the residential fees and commercial fees are intended to minimize how much current residents have to pay for that new infrastructure. Without the impact fees, property taxes and utility rates likely would be forced higher.
“When you don’t have impact fees, essentially all of that cost is paid by your rate and taxpayers. They’re paying for everything,” Assistant City Manager Paul Cain said during a city council meeting Tuesday. “When you have impact fees, you’re able to shift some of that cost into the attributable growth that happens in your community.”
Under the proposed fee structure, new single-family homes would be exempt from the fees in much of the city where there has already been extensive development and where existing infrastructure has excess capacity, generally north of Valley Mills Drive and extending to Loop 340 or Business 77 to the south and east and almost to Lake Shore Drive to the north and west.
Elsewhere inside city limits, the fees would increase annually for five years, landing at $4,500 for each single-family home. Outside city limits, in the city’s extraterritorial jurisdiction, the fees would wind up at $5,378 for each single-family home.
Freese and Nichols, a consultant for the city, in July pegged the maximum single-family residential fees allowed under state law at $5,380 to $7,609, depending on the area of town and each area’s projected infrastructure needs, with the totals split between fees for streets, water and wastewater. An advisory committee the city assembled to study the issue, which includes representatives of local builders and Plan Commission members, recommended the large exemption area and the flat-rate fees, which fall well below any area’s maximum.
If the council approves the fees on two readings, scheduled for Oct. 20 and Nov. 3, they would take effect in June.
The fee structure proposal for new commercial building is more complex but is proceeding on the same timeline.
Builders on the advisory committee recommended the city council delay a vote on the commercial fee proposal until as late as December of next year, Cain said. City staff members recommended the council proceed with both fee proposals on the same timeline, he said.
“We believe the fee structure is sized for Waco.” Cain said of the commercial fee structure. “It’s very flexible, very adaptable to different kinds of businesses, different exemptions.”
For one, new business development in area referred to as the “traditional commercial corridor and core area” would be charged at half the rate of an identical development outside that area. It is generally bounded by 26th Street, Herring Avenue, South Loop Drive and La Salle Avenue, with extensions covering the former Floyd Casey Stadium area, a stretch of Bosque Boulevard, the 18th-19th Street corridor in North Waco and part of Robinson Drive.
Schools would be exempt from the fees, as would multi-family developments that include at least 25% affordable units. In some cases, new construction would be exempt for an established Waco business relocating within the city.
Larry Jackson, a broker, spoke in opposition to the impact fees during a public hearing at the council’s Tuesday meeting. He said the proposed fees are too high on top of the inspection fees already charged by the city of residential developments.
“Now we’re talking about me giving you multi-millions of dollars’ worth of construction and y’all not being able to maintain and take care of it without coming back to the taxpayers for more money,” Jackson said. “And the burden on this is getting to a point that there will be no affordable housing in Waco, Texas.”
During Tuesday’s meeting, city council members said they generally support the proposals but still have questions about potential variations in the fees.
“We’re all in this together and work together to make sure that at the end of the day the growth happens, but not on the backs of people who may have nothing to do with that growth and are already burdened … as equity is the point of our vision and mission going forward,” Council Member Andrea Barefield said.
Councilman Jim Holmes was among those requesting more specific examples and also asked for more information about what qualifies as a “traditional commercial corridor” under the proposal.
“I’d just like to get a better handle on the metrics,” Holmes said. “It seems like we’re at the 1- or 2-yard line, though.”
Edmund Haas, a Freese and Nichols engineer working on the project, said the firm is developing an calculator for the commercial fees that would allow a business to enter information about their project and receive a fee estimate.
“It will tell you to pick your meter size, pick your plat date, pick your permit date, and it will calculate all these various scenarios,” Haas said. “Right now, we’re almost dealing with infinite variables until we get further direction from council.”
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