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Marble Falls hikes development fees

Thunder Rock housing development in Marble Falls, Texas

Impact fees for three-quarter-inch water meters in new developments such as Thunder Rock in south Marble Falls will shoot up 140 percent by May 2025. Staff photo by Nathan Bush

Development impact fees in Marble Falls will rise 140 percent by May 2025 for standard single-family homes connected to three-quarter-inch water meters. The City Council unanimously approved the increase at its regular meeting on Dec. 5.

“Our city bet the farm a long time ago on growth,” Mayor Dave Rhodes said during the meeting. “We decided that’s where we were going to go. It’s very difficult to stop rowing the ship in the middle of the ocean. We’re in the middle, and we’ve got to get on the other side of the bell curve with growth.”

Developers pay the one-time fee to the city for the construction of public facilities such as water and wastewater treatment needed to accommodate new growth.

“They can only be imposed and spent on capital projects that are necessitated and attributable to new development,” said Kim Foutz, director of the city’s Development Services.  

The cost is determined by the size of the need. Currently, the impact fee to connect water and wastewater lines to a three-quarter-inch meter, a standard size for a single-family home, is $6,054.

That number will increase by 100 percent of the current rate to $12,108 on May 1, 2024. Exactly one year later, the fee will go up by 20 percent of the May 2024 rate to $14,529.60.

“We want to do right by the citizens,” Mayor Pro-tem Dee Haddock said. “We want to do right by the developers. We’re trying to split the baby, so to speak.”

Officials based their decision on an impact fee study by engineering firm Miller Gray and financial consultant Wildan. The study used a flat, 7-percent growth rate inside Marble Falls city limits to predict future infrastructure needs. Based on that rate, the city will have over 15,000 residents by 2033, which is more than double its current population of 7,227.

“Some might think (the growth rate) is aggressive; some might think it’s not enough,” Miller Gray representative Sam Shorter told the council at its Nov. 7 meeting. “We heard detailed presentations that looked at the number of master-planned communities and large developments around the city and the ETJ (extra-territorial jurisdiction), and that was the growth rate that was selected.”

Councilor Bryan Walker tried to delay the decision by making a motion to move the item to a future meeting, citing fears that Marble Falls was mirroring its rate after cities that have already experienced much higher growth rates, including Hutto, Kyle, and New Braunfels.

“I feel like this would be us jumping the gun to try to put ourselves in a pot that we’re not quite in yet,” he said.

Councilor Griff Morris seconded the motion, but it failed 2-4 with Rhodes, Haddock, and councilors Lauren Haltom and Karlee Cauble voting against it.

“We’ve been looking at this for 17 or 18 months,” Haddock said. “It’s time to make a decision.”

A back-and-forth negotiation between Haddock and Haltom resulted in a compromise from the dais to increase the rate across an 18-month timetable as opposed to upping the fees in a swift, one-time increase.

“I think a stepped approach has some wisdom,” Rhodes said. “It allows time for projects to get in and done.”

Councilor Craig Magerkurth was absent from the meeting.