Council tightens impact-fee rules, directs MUD assessment be set at final plat by default

Georgetown city council members approved second readings and related motions to update impact-fee ordinances for water, wastewater and transportation and to clarify when fees are assessed for municipal utility districts (MUDs) and public improvement districts (PIDs).

Staff said the changes respond to council direction from a July 8 transportation workshop and aim to close a loophole that can “lock in” impact fees at preliminary plat submittal and allow plats to remain dormant while preserving older fee assumptions. The changes add language addressing preliminary-plat dormancy and clarify how/when impact fees are assessed for different project types and MUDs.

What staff proposed and council approved: City staff presented two related ordinance updates. One amends Chapter 13.32 (water and wastewater impact fees) to update land-use assumptions, the capital-improvement plan and fee schedules and to add proposed language addressing dormant preliminary plats. The second amends Chapter 12.46 (transportation impact fee study) to change phased implementation dates and to adopt consistent dormancy and assessment timing language for transportation impact fees.

On timing for MUDs and PIDs: Staff said the city’s current policy assesses traditional developments at preliminary plat but typically locks MUDs at final plat; the proposed ordinance would change wording to default assessment of most MUD development at final plat recordation while preserving the ability to negotiate assessment at preliminary plat in individual consent agreements. Council members discussed distinguishing between “consent MUDs” and “non-consent MUDs” and ultimately directed staff to set the default assessment at final plat recordation while allowing negotiation by agreement. The council also directed staff to hold a comprehensive MUD policy discussion before the end of 2025.

Dormancy and phased implementation: For transportation impact fees staff clarified that a preliminary plat will lose its fee lock-in after 180 days of no subsequent action (that is, it will be treated as dormant and require a new submittal to lock fees again). Transportation implementation will proceed in phases; if the second-reading motion is approved, Phase 2 would begin August 31 and Phase 3 would begin Sept. 1, 2026.

Why it matters: Impact fees fund capital improvements for utilities and roads; the timing when a fee is assessed affects developers’ pro formas and the fees charged to new lots. The ordinance changes are intended to reduce gamesmanship where preliminary plats are filed and left dormant to preserve earlier, lower fees, and to give the council explicit authority to require assessment timing in negotiated MUD consent agreements.

Council action: Council approved the ordinances and amendments as presented. Council also directed staff to prepare a comprehensive MUD policy discussion for later in 2025. Specific votes were recorded as approvals on second reading and related motions; staff will incorporate the council’s direction into final ordinance language for adoption.