Marble Falls considers raising impact fees for developments
Developers are asking Marble Falls city councilors to spread out proposed impact fee increases, which one developer said would cost his company $10 million if implemented in full on Jan. 1, 2024, as suggested.
The council discussed Marble Falls’ impact fees in a public hearing on Tuesday, Nov. 7, as cities are required to do every five years. The proposed increases are expected to be voted on by the full council at its Dec. 5 meeting. Councilors Karlee Cauble, Dee Haddock, and Bryan Walker were absent on Nov. 7.
“It’s a challenge,” Marble Falls Mayor Dave Rhodes told DailyTrib.com after the meeting. “If there is a compromise with the builders/developers, I’d like to find out what that is. We’re going to flesh it out pretty quick because we need to ratify this.”
An impact fee is assessed to pay for infrastructure improvements needed to accommodate new development. The cost is determined by the size of the need.
Currently, the impact fee to connect water and wastewater lines to three-quarter-inch meters is $6,054 per living unit equivalent (LUE). An LUE represents a typical single-family residence for 3.5 people. The potential fee hike would bring the cost for that same meter to $16,923 — a 179 percent increase.
The fee for 2-inch meters, which serve five LUEs, would also increase 179 percent from $32,264 to $90,199 to connect both water and wastewater lines.
At the Nov. 7 public hearing, representatives from consulting firms Miller Gray and Willdan explained how and why the proposed impact fee figures were generated.
“The city doesn’t want to burden existing residents with the cost to extend water and wastewater (lines) for new developments,” said Sam Shorter of Miller Gray.
Raising the fees would help Marble Falls prepare its water and wastewater systems for substantial future growth, he continued.
“One key thing with impact fees is they can’t be used for personnel or operating expenses or maintenance,” Shorter said. “They can only be used for new developments.”
Consultants used a flat 7 percent population growth rate inside city limits and a flat 2 percent growth rate outside the city’s extra-territorial jurisdiction to generate the new costs. The growth rate projected about 15,624 total residents in Marble Falls by 2033, which is more than double the city’s current population of 7,227.
“Some might think (the growth rate) is aggressive, some might think it’s not enough,” Shorter said. “We heard detailed presentations that looked at the number of master-planned communities and large developments around the city and the ETJ, and that was the growth rate that was selected.”
Financial consultant Dan Lanning of Willdan compared Marble Falls’ water line and meter fees to other cities in the state.
“The city of Marble Falls’ current maximum impact fee (for only water lines) is $2,761,” he said. “That’s actually at the low end of the cities in this region that charge impact fees. The vast majority of cities charge a higher fee than you, and many cities charge a significantly higher fee than you. New Braunfels, for example, charges a fee of almost $20,000, and that’s just for water.”
Fees for connecting to sewer lines paint a slightly different picture, Lanning said.
“You’re kind of at the middle of the pack right now, according to the comparative charts,” he said. “Some fees are smaller, some fees are larger. There’s a wide variety for what cities are charging.”
Legacy Crossing developer Darrell Sargent asked the Marble Falls City Council to consider a staged implementation of the new fees over the next calendar year to lessen the impact on projects currently in development.
“We should try to ratethis out over a period of time instead of saying we’re going to start this and go from $6,054 for an impact fee to $16,923 on Jan. 1,” he said. “If this went into effect on Jan. 1, it would have a $10 million effect on all our numbers.”
The city’s growth projections were another concern.
“I think the projections are aggressive, and these reports — by their nature — are full of assumptions,” said Ryan Nash of Nash Builders LTD, who is a also director on the Marble Falls Economic Development Corp. board.
“These studies have five or six very impactful assumptions that go into them,” he continued. “When you add in the possibility of error to compound, I would suggest the council use a measured approach. This doesn’t have to be all at once.”
Mayor Rhodes hopes to strike a compromise to protect the city’s infrastructure without hampering relationships with developers currently working with the city.
“We know that you need us and we need you,” he said to the two developers. “We’re all in the cycle together.”