The City Council approved unanimously on second and final reading Thursday, Feb. 28, a roadway impact fee ordinance that will take effect on Jan. 1, 2020. The fees collected would be spent on roadway improvements included in a transportation capital improvement plan.

Here is a copy of the ordinance.

What are impact fees?

Impact fees are a mechanism for funding public infrastructure that is necessitated by new development. Impact fees are meant to recover the incremental cost of the impact of each new unit of development that creates new infrastructure needs. Water and wastewater impact fees have been successfully used to fund public water and wastewater improvements in the City of Round Rock since 1989.

In short, impact fees are a proven method to help growth pay for itself. More than 50 percent of cities in the Dallas-Fort Worth area have implemented a roadway impact fee. The cities of Taylor, Schertz, Cibolo, New Braunfels and Hutto have implemented a roadway impact fee in Central Texas, and Austin and Buda are currently conducting studies to potentially implement this fee.

Why is a roadway impact fee needed?

Round Rock needs more funding sources to meet increasing traffic demands. The Transportation Master Plan adopted in October 2017 estimates $1.2 billion in new infrastructure is needed to accommodate Round Rock’s ultimate population of 250,000. Impact fees will help address the need for increased capacity on arterial and collector roadways that serve the overall transportation system as Round Rock continues to grow.

The City held a pair of stakeholder meetings in summer 2018, and also answered a series of questions from a homebuilder group. We’ve compiled a Stakeholder Q&A from that engagement process.

About the proposal

Council is currently considering a plan that would phase in the Roadway Impact Fee. Fees will be assessed at the date of platting and charged at the building permit application date.

The maximum fee the City could impose is $2,511 per base service unit. The proposal would assess 30 percent of that maximum for residential development and 20 percent of that maximum for non-residential development with a final plat issued before Jan. 1, 2022. The fee would increase to 60 percent for residential and 30 percent for non-residential for final plat dates after Jan. 1, 2024.

A service unit is based on a formula that includes the number of cars that pass along a road during peak-traffic hour, the road’s length in miles and other factors. Service units for each type of development are predetermined and based on national standards for calculating traffic impacts. By multiplying the rate by the service units for a proposed development, the developer is left with a total fee that must be paid to recover some of the cost of road work their development will necessitate. The impact fee for a single family residence would be $3,209 at the 30 percent rate. The fee would be different for a commercial businesses, depending on their traffic generation and service units.

No impact fees would be charged for building permits issued before Jan. 1, 2021. This essentially provides a two-year grace period for projects currently in the development pipeline.

The fee is proposed to be phased in over time according to when the project’s final plat is issued by City of Round Rock:

Phase 1: Final plat issued before Jan. 1, 2022

For all property with a final plat issued before Jan. 1, 2022, roadway impact fees will be assessed as follows, with the fee due on the building permit application date:

• Residential land uses  — $753 per service unit 
• Non-residential land uses — $502 per service unit 

Phase 2: Final plat issued between Jan. 1, 2022 and Dec. 31, 2023

For all property with a final plat issued on or after Jan. 1, 2022 and before Dec. 31, 2023, roadway impact fees will be assessed as follows, with the fee due on the building permit application date:

• Residential land uses  — $1,130 per service unit 
• Non-residential land uses — $628 per service unit   

Phase 3: Final plat issued after Jan. 1, 2024

For all property with a recorded plat dated after Jan. 1, 2024, roadway impact fees will be assessed as follows, with the fee due on the building permit application date:

• Residential land uses  —  $1,507 per service unit 
• Non-residential land uses — $753 per service unit 

Note: A service unit is different than a Living Unit Equivalent (LUE), the basis for utility impact fees. A single family home is roughly four service units. 

Process timeline

• Dec. 6, 2018 — City Council approval of resolution to set a Public Hearing for Jan. 24, 2019, to consider the Land Use Assumptions and Capital Improvements Plan (CIP) related to Roadway Impact Fees
• Jan. 9, 2019 — Capital Improvements Advisory Committee (CIAC) review of Land Use Assumptions and CIP used in calculating the maximum fee. Presentation file
• Jan. 17, 2019 — CIAC comments due to City Council
• Jan. 24, 2019 — City Council holds public hearing and votes on acceptance of Land Use Assumptions and Capital Improvements Plan
• Feb. 6, 2019 — CIAC meeting to review proposed Roadway Impact Fees and Study
• Feb. 12, 2019 — City Council work session discussion. Presentation file
• Feb. 15, 2019 — CIAC comments due to City Council
• Feb. 28, 2019 — City Council holds Public Hearing and First Reading vote on Roadway Impact Fee ordinance
• March 14, 2019 — City Council vote on Second Reading of Roadway Impact Fee ordinance