Fair Oaks Ranch council approves first reading to raise maximum water and wastewater impact fees

Fair Oaks Ranch council approved the first reading of an ordinance July 17 to update the city's land-use assumptions, capital improvement plans and water and wastewater impact fees, following a public hearing and a presentation from the city's consultant team.

The ordinance, as drafted for first reading, reflects the maximum allowable water impact fee calculation in the consultant's report; the consultant reported an eligible capital cost for water of about $32 million and said state law requires a 50 percent credit, leaving a legal maximum the council may adopt of $21,013 per single-family-equivalent living unit. On the wastewater side, the report shows a maximum allowable fee of $9,943 per equivalent living unit.

Why it matters: impact fees are charged to new development to pay for the portion of system capacity needed for growth. Raising the fee shifts more of future capital cost to developers and future residents and reduces the portion funded by existing ratepayers.

Friese and Nichols consultant Jessica Vassar walked council through the calculations used to convert meters and other connections to living-unit equivalents, and to allocate capital projects between existing customers and growth over a 10-year planning period. "Our eligible cost for water is $32,000,000," Vassar told the council, and she explained that the city's calculation converts projected growth into 758 additional living-unit equivalents for water and 412 for wastewater over the 10-year window.

Public hearing and comment: No members of the public signed up to speak on the impact-fee update at the hearing. Several council members then asked staff and the consultant about how the fee would apply to previously recorded plats and to recent development agreements. Public Works Director Grant Watanabe clarified that a lot is tied to the plat recording date: "That lot, once it builds, would pay the fee at the time that plat was recorded," he said, adding that the city maintains records so applicants and staff can determine the applicable fee at permit stage.

Council action: Councilmember Scott moved and Councilmember Reuben seconded a motion to approve the first reading of the ordinance amending City Code chapter 13 (utilities), article 13.08 (water and wastewater impact fees). The motion passed on a voice vote; the council did not record a roll-call tally.

What remains: State law (Texas Local Government Code Chapter 395) requires a public hearing and specific crediting steps before adoption; the consultant's report and the capital improvements advisory committee's recommendations were included in the council packet. Council may adopt any fee from $0 up to the identified legal maximum; adopting an amount lower than the maximum spreads a larger share of capital costs onto current ratepayers.

Forward steps: The ordinance was approved on first reading; a second reading and final adoption will be scheduled per council rules. Staff and the consultant will provide the impact-fee ordinance language and supporting analysis as required by statute for the final vote.

Ending: The council moved on to related agenda items after the vote, including a separate financing resolution for utility projects.