Round Rock, we have a problem.
The City’s current methods of funding the transportation infrastructure needed to keep Round Rock moving do not provide enough capital to meet the increasing traffic demands we face. The Transportation Master Plan adopted by the City Council in October 2017 determined $1.2 billion in new infrastructure is needed to accommodate Round Rock’s ultimate population of 250,000. Property tax and sales tax revenues, along with state and federal funds, are our present funding sources. But those aren’t enough. So, beginning in January 2018, the City of Round Rock began the process to explore Roadway Impact Fees as an additional source of funds.
Impact fees are a mechanism for funding the public infrastructure necessitated by new development. When a new residential subdivision or business park is proposed, we can determine how much new traffic those projects will create based on their size and use and charge a fee to the developer to help pay for improvements needed to accommodate that increased demand on our roadway system.
In short, impact fees help growth pay for itself.
City staff and consultant Kimley-Horn have had several meetings with developers over the past 10 months to discuss the fee. A primary concern we heard was the new fee would render projects unaffordable, and drive development to neighboring communities. We understand that concern. We have researched other Texas cities that have implemented roadway impact fees and there has not been any conclusive impact on the pace of development.
In Round Rock, we’ve had utility impact fees since 1989, and the City certainly hasn’t seen any discernable negative impacts on development. Utility impact fees have helped Round Rock build one of the strongest utility systems in the state – it is one of only 10 cities in Texas with an AAA utility credit rating, the highest possible – and our water and wastewater rates are among the lowest in the region.
Proposal
Our current plan is to phase in the Roadway Impact Fee, to give developers ample lead time to plan financing for their projects while still providing a critical funding source for the City to help pay for much-needed road improvements.
According to our capital needs study, the maximum fee the City could impose is $2,511 per base service unit. Our proposal would assess 30 percent of that maximum for residential development and 20 percent of that maximum for non-residential development in 2019. The fee would ramp up to 60 percent for residential and 30 percent for non-residential by 2022.
The City Council, which has held multiple public hearings on the issue, will discuss roadway impact fees at a workshop on Dec. 6. The plan going forward is to adopt an ordinance this spring, with an effective date of Oct. 1, 2019. To provide input to the City Council, send an email to impactfee@roundrocktexas.gov.
