Schertz council hears detailed proposal to raise water and sewer impact fees; phase-in debated

City of Schertz staff and outside consultants presented a revised 30-year water and wastewater land-use assumptions and capital improvement plan (CIP) on March 18, outlining how the city calculated maximum allowable impact fees and asking the council for direction on a proposed phase-in schedule.

The presentation said the maximum allowable water impact fee would be $8,814 per living-unit-equivalent (LUE) and the maximum wastewater impact fee $5,556, based on impact-fee-eligible project costs, utilization factors and credits. “In our opinion … the accompanying financial statements present fairly in all material respects,” auditor Travis Rogers said earlier in the meeting when summarizing the city’s audited financial statements; Rogers later assisted in framing the city’s fiscal capacity during the impact-fee discussion.

The proposal and numbers City staff and consultant Lee Ham of LAN described how the study used the 2018 land-use plan, changes reported through April 8, 2022, and proposed developments to model growth over 30 years and to size projects. Ham said the plan assumes existing land uses will remain through the planning period and that growth pressure will be strongest along the I‑35 corridor. Eligible project costs in the 10-year horizon (the legally allowable window for inclusion in impact fees under Texas law) totaled about $64.5 million for water projects and roughly $23.5 million for wastewater projects, the presentation showed.

Ham and staff explained the methodology in more detail: they applied a contingency of 30% to class‑4 level cost estimates, used TxDOT bid data, RSMeans, local bid tabs and past city projects for unit costs, and used a median inflation rate of 3.91% to project costs forward. The impact-fee calculation also incorporated a credit (to reflect taxes and utility revenues expected from new growth) of about $3.36 million for water; after subtracting credits, the study produced an impact-fee-eligible water cost of roughly $62.5 million, which divided by projected 10-year growth produced the $8,814 number.

Phase-in debate Staff recommended an effective date of July 1, 2025, with a phase-in recommended by the Capital Improvements Advisory Committee (CIAC) of 50% of the maximum in year 1, 75% in year 2 and 100% in year 3. Staff noted a 10% reduction from the maximum would require an estimated 1% increase in utility rates to make up the difference for existing ratepayers.

Council members and outside stakeholders debated speed and fairness. Council Member Brown said the phase‑in “more aligns with inflationary adjustments than just one time big shot” and expressed support for the CIAC recommendation. Council Member Davis argued that many upgrades will benefit the whole city, not just new development, and said he “kind of like[s] the idea of the 90% option” to spread some cost to existing ratepayers. Several council members and a representative of the Schertz Economic Development Corporation (EDC) urged a faster phase-in so infrastructure can be built sooner; an EDC speaker said the board favored the maximum fee and a faster schedule so development is not delayed by a lack of water and sewer capacity.

Staff described alternatives: a shorter, two‑year phase-in (for example 66% then 100%) or keeping the three-year CIAC recommendation. Staff also reminded council that impact fees are assessed at final plat recordation, and any plat already recorded before an effective date would not be subject to the new fee.

Next steps No ordinance was adopted at the March 18 hearing; staff said the council would hold a second public hearing and take formal action on April 1 to adopt the land-use assumptions, CIP and impact fees. Cathy Woodley (staff) and Lee Ham (LAN) said they would return with ordinance language reflecting the council’s direction. Council members asked staff to obtain additional clarification from EDC about its preference for a faster phase-in and to provide the council with comparative scenarios for a two‑year versus three‑year phase-in prior to April 1.

Ending The council did not vote on the impact-fee ordinance March 18; staff will return April 1 with a formal ordinance and requested phase‑in options for council adoption.