Round Rock, Texas, Considers Ending Free Sewer, Water Connections.(Originated from Austin American-Statesman, Texas)

Knight Ridder/Tribune Business News August 21, 1996 | Mahoney, Jerry ROUND ROCK, Texas–Aug. 21–After more than five years of letting developers and businesses connect to water and sewer service for free, the City of Round Rock appears ready to once again charge for that privilege.

The change, which council members will vote on Thursday, would funnel hundreds of thousands of dollars to the city’s utility annually, according to estimates by the city’s finance department.

Finance director David Kautz estimated the city would have collected $600,000 to $800,000 a year if the fees had been in effect. However, the city couldn’t have counted on that because, in theory at least, some of the projects that contributed to Round Rock’s growth wouldn’t have come if the fees had been in effect.

This year the city is expecting more than $2 million in fees from new houses and apartment projects.

The fees for commercial and industrial projects were waived by the council in 1990 as one of the city’s steps to climb out of the recession that derailed the economy in the second half of the 1980s.

“Obviously, it worked,” said Mayor Charlie Culpepper, who will sponsor the ordinance to reinstate the fees. cityofroundrock.net city of round rock

But City Council Member Rod Morgan questioned whether reinstating the fees is a good idea. He said he would like more information about whether doing that would turn some projects away from Round Rock.

“The city had a good reason for doing it, and I want to make sure the reason is not still there,” he said.

Waiving the fees, which depend on the size of the project, gets less credit for Round Rock’s boom than the generous sales and property tax abatements given to some large employers.

Round Rock’s population has grown an estimated 36 percent since 1991, to nearly 44,000 this year. Retail and restaurant expansion has followed that growth.

Two dozen restaurants, including fast-food outlets, have opened in the city in the past 18 months. A Wal-Mart Supercenter opened last year, while construction has begun on a Home Depot store, and there are plans for a Target store.

That leads Culpepper and others to say commercial growth now is driven by market forces, and merchandisers and restaurateurs will come whether or not they have to pay the fees.

The water hookup fee, based on residential use of 400 gallons a day, is $1,345. The sewer hookup fee is $1,250, based on an estimated 300 gallons a day.

Fees for commercial and retail buildings are based on those estimates. As a general rule, owners of a building with an estimated water use of 1,200 gallons a day would pay three times the residential fee.

But public works director Jim Nuse says “there is a little art and a little science” to figuring fair fees for larger projects. Following that formula strictly would mean a huge fee for a major water user such as Cypress Semiconductor’s Round Rock plant. And while such a facility might require 1 million gallons a day, its consumption never varies. in our site city of round rock

That means it doesn’t contribute to the peak demand — that brief spike in usage — that occurs in the summer when business and residential lawns are watered, swimming pools are filled and cars are washed.

Cities must build expansive facilities to provide for that peak demand, and the unused capacity is a part of the utility’s fixed costs throughout the year. Impact fees are designed to help cities offset the cost of new facilities, Nuse said.

“I prefer to talk to the people designing the project and see what expected demand looks like and try to come up with a fair and accurate fee,” Nuse said.

Culpepper’s ordinance would give the City Council the flexibility to waive fees on specific projects that the city wanted to land.

Mahoney, Jerry