League City City Council on June 13 voted 6-1 to raise most impact fees for water and wastewater infrastructure 93%. The first reading passed May 23.
Council Member John Bowen was the sole dissenting vote.
The increase was originally set to begin Sept. 1, but after Council Member Tommy Cones objected to changing things so fast, council agreed to a later start date of Dec. 1. Cones said giving developers until only Sept. 1 to finish their projects before the new fees take effect would be unfair as it could affect their business plans.
“I think giving the developers a little bit more time to discuss and having their business plans put together would be helpful,” Cones said.
Council Member Chad Tressler pointed out this would delay the city’s ability to recover some of the developments’ associated costs.
“The impact to the city is a loss of some of the recovery, and the impact to the builder is they get an extended window to maximize their profit,” he said.
Cones said he didn’t think pushing the start date back would lead to an influx of new developers trying to start and finish projects before the new fees take effect because there wouldn’t be enough time for them to finish. Mayor Nick Long agreed.
“I’m not too worried about people jumping in to take advantage of the extra three months,” he said.
A closer look
Impact fees are one-time fees charged to developers to offset the cost of new infrastructure made necessary by the development. By charging the developers impact fees, less of the burden of growth falls on the existing tax base.
For instance, if a developer decides to build 500 houses, there are associated costs to the city to connect water lines to the houses and expand water plants to be able to service additional homes. Impact fees take those costs from the city, which is funded by taxpayers, and puts them on the developer.