Fulshear starts its five-year update of water and sewer impact fees

Fulshear has started the work of resetting the one-time fees that new homes and businesses pay toward the city's water and sewer system. The city's Capital Improvements Advisory Committee met on Oct. 5 to choose a chair and vice chair, and the main item was an "Impact Fees 101" presentation from the engineering firm Freese & Nichols on updating the water and wastewater fees.

Texas law requires cities that charge these fees to update them every five years. Fulshear's current fees were adopted in September 2022.

What the fees pay for

The presentation describes an impact fee as a one-time charge on new development for part of the cost of specific capital projects. The question it poses is simple: who pays for the infrastructure that serves growth? With impact fees, new development shares the cost. Without them, existing and future ratepayers cover all of it.

The fees can go toward:

• Construction of projects in the city's 10-year capital improvements plan
• Recently built projects that have extra capacity for growth over the next 10 years
• Survey, engineering and land costs for those projects
• Debt payments on those projects, and the cost of the fee study itself

They can't pay for repairs, operations or maintenance, upgrades that only serve existing customers, or the city's cost of running the program.

What new construction pays today

The current fees are based on water meter size. The packet lists these totals for water plus wastewater:

• 3/4-inch meter, which the study counts as one single-family connection: $28,881.65 ($7,202.97 water and $21,678.68 wastewater)
• 1-inch meter: $49,098.81
• 2-inch meter: $144,408.25

The presentation lists impact-fee capital costs of about $50.7 million for water and $78.1 million for wastewater. The fee formula takes the eligible 10-year project cost, subtracts a credit for the share of utility bills that already goes toward those projects, and divides by the expected growth in home-equivalent connections between 2026 and 2036.

What happens next

The timeline in the packet runs about 12 months. The steps are new 10-year land use assumptions, a water model update, a draft capital plan, a financial audit expected to be finished and on display by the end of April 2027, and then the fee calculations. The timeline marks Sept. 20, 2027, for adoption.

The committee's job is to guide the study, comment on the growth assumptions and project list, and send written comments on the recommended fees to City Council at least five business days before a public hearing. Council sets the final fees. After adoption, the committee files reports twice a year on how the plan is going.

The committee members listed on the agenda are Tajana Surlan, Patrick Dodd, Scott Israelson, William Dampier and Satya Yalamanchili. Minutes from the Oct. 5 meeting haven't been posted yet. The agenda and the full presentation are in the city's Oct. 5 committee packet.