Hutto debates drastic water fee hikes amid housing concerns

In a recent government meeting, the Hutto City Council discussed significant amendments to water and wastewater impact fees, with a proposed increase of 40% for wastewater fees, translating to an additional $8,000 for single-family homes. David Glenn, Senior Director of Government Relations for the Home Builders Association, voiced strong opposition to the increase, citing concerns about its potential impact on the already declining housing market in Central Texas, particularly in Hutto, where construction starts have decreased by 33%.

Glenn highlighted that many developers are opting to create their own package plants, which could cost significantly less than the proposed city fees. He urged the council to consider a more gradual increase, suggesting a rate of 70% to 75% of the proposed fees instead of the full increase. This, he argued, would help maintain the viability of housing development in the area.

The council also heard from Kenan Wilson, representing a developer, who requested that the impact fee schedule for an ongoing multifamily project remain at the previously established rates, along with a 90-day grace period before the new fees take effect. Wilson emphasized that the project had been under review for over two years, and sudden fee increases could jeopardize its financial viability.

The council deliberated on the implications of the proposed fee structure, which would shift from a variable Living Unit Equivalent (LUE) method to a fixed service unit method. This change is expected to result in higher fees for residential developments while reducing costs for commercial projects like warehouses and offices. The council acknowledged the potential for increased costs to drive developers to build outside city limits, thereby avoiding city fees altogether.

After extensive discussion, the council voted to set the water fee at $6,808 and the residential wastewater fee at $7,600, while maintaining the commercial fee at $12,670. The new fee structure is set to take effect for plats approved after February 3, 2025. The council's decision reflects a balancing act between generating necessary revenue for infrastructure and maintaining a competitive environment for development within the city.