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San Marcos council weighs permanent stormwater-fee waiver for school district, asks staff for options
Summary
San Marcos City Council discussed a request by the San Marcos Consolidated Independent School District to waive city stormwater utility fees in perpetuity. Staff described budget impacts, council members raised public-equity and precedent concerns, and council asked staff to return with legal options and scenario analyses.
San Marcos City Council held an extended discussion on March 4 after the San Marcos Consolidated Independent School District requested a permanent waiver of the city’s stormwater utility fee. The council did not vote on the request but directed staff to return with legal guidance, impact scenarios and alternative approaches.
Staff explained the role of the stormwater utility fee, which supports drainage capital projects, flood mitigation, regular maintenance and water-quality compliance. Director of Public Works Saba Savila and stormwater managers told council the fund’s projected revenue for the year is about $9.9 million and that the district’s waiver — if granted in perpetuity — would reduce the fund by about $378,000 annually (roughly 4% of projected revenue). Staff said an ongoing reduction of that size would reduce annual maintenance operations by an estimated 14% and would delay or reduce planned capital projects, including some projects currently programmed in the five-year capital-improvement plan.
Councilmembers asked about precedents and equity. Staff said several larger Central Texas cities (Austin, San Antonio and Round Rock) exempt independent school districts from similar utility fees; many smaller cities do not. Staff also noted the city exempts Texas State University because higher-education entities are treated differently under state law. Council members expressed concerns about the fiscal effect and about creating a precedent for other nonprofits or public entities.
School district officials had requested the waiver citing the district’s contributions to community services and its multimillion-dollar budget deficit. Councilmembers asked district representatives (present for parts of the conversation) for details on the district’s budget actions and alternatives. Several councilmembers suggested temporary, limited or conditional relief might be more appropriate than a permanent waiver; others said a new rate tier or a time-limited waiver could be options.
Council directed staff to prepare materials for a future council decision: legal parameters on exemptions and waivers under Texas law, a menu of options that could include limited-duration waivers or modified rate tiers, and comparative research on regional practices. Councilmembers also asked staff to model fiscal impacts of a limited-duration waiver (for example, one or two years) versus a permanent exemption and to show where CIP projects could be delayed if revenue is reduced. Several councilmembers expressed interest in a future agenda item to coordinate with nearby jurisdictions and the county about wastewater and drainage assistance for adjacent unincorporated neighborhoods.
No formal council vote occurred on the district’s request on March 4; staff said it will return with a set of options and legal guidance for formal council consideration.
