At their Aug. 26 meeting, Prosper Town Council members approved an ordinance increasing development impact fees for water, wastewater and roadway utilities.
Some context
Impact fees are one-time costs paid by developers to help municipalities offset infrastructure costs and services increased by new development projects.
In 2023, Prosper Town Council approved a contract with Freese and Nichols for an impact fee study, according to town documents. At their Aug. 12 meeting, council members held a public hearing and received a presentation on the proposed increases identified by the study.
Edmund Haas, senior planner for Freese and Nichols, said the fees would be used to support Prosper’s growth and ensure that new development helps pay for additional infrastructure costs.
“There’s an impact that [new] development puts on the infrastructure network,” Haas said. “The higher the impact, the higher the fee.”
Haas said council members also needed to consider Senate Bill 1883, which went into effect Sept. 1, as it restricts municipalities from increasing impact fees until three years after the fee was last adopted or increased.
Texas Local Government Code requires political subdivisions that implement development impact fees to review those fees at least every five years, according to town documents.
Zooming in
The increased fees include:
- Water and wastewater impact fee: $6,643 to $14,390 per service unit
- Roadway impact fee:
- West of BNSF railroad: $1,258 to $1,347 per vehicle-mile
- East of BNSF railroad: $940 to $1,397 per vehicle-mile
What it means
Town Manager Mario Canizares said officials can choose to waive or discount impact fees as an economic incentive for new development.
Mayor Pro Tem Amy Bartley said that in the cities surrounding Prosper, such as Celina and McKinney, higher impact fees have not stopped development, even with some of those projects having their fees waived or discounted.
“I don’t understand why we would give any kind of discount because it certainly hasn’t stopped [development],” Bartley said. “I still think even with no discount, we’re very competitive.”
Haas said that since the fees were last updated in 2017, the cost of construction has significantly increased along with Prosper’s population.
“Just like you have a pizza party, you have more folks coming to the party, reducing the cost per service unit of pizza,” Haas said.
One more thing
The Capital Improvements Advisory Committee, which includes Prosper planning and zoning commissioners and an extraterritorial jurisdiction representative, recommended June 30 council adopt the maximum allowed fee determined in the impact fee study.
The committee noted in their recommendation that Prosper taxpayers will still contribute at least 50% of the cost of future infrastructure, even with the impact fee program.
