Developers hit with increased utility fees amid rapid growth

Cost of water and sewer connections set to rise by 23%

San Antonio Increases Developer Utility Fees Amid Rapid Growth
(Getty)

Development will soon become a little more expensive in the Alamo City, compounding broader challenges such as high interest rates and tight lending standards. 

San Antonio City Council passed an ordinance that will increase the cost of connecting new developments to utilities, effective in July, the San Antonio Business Journal reported

The impact fees, which govern the costs for developments to access the city’s water and sewer services, are meant to offset rising expenses stemming from San Antonio’s rapid growth.

The current fees range from a minimum of $5,902 to a maximum of $8,548 for an average home. They will increase to a minimum of $7,343 and a maximum of $11,528, marking an average increase of 23 percent.

These fees, reassessed every five years as mandated by Texas law, are crucial for helping utilities manage the capital improvements necessary to support new developments. Such improvements are based on metrics like population growth projections.

Originally set to take effect in June, the fee increase was postponed a month to give developers more time to plan for the changes, said Ben Gorzell, San Antonio’s Chief Financial Officer. The fee restructuring was recommended by the San Antonio Water System, the city’s municipal water and sewer provider, following advice from the Capital Improvement Advisory Committee. 

That committee, with assistance from California-based water engineering firm Carollo Engineers, determined the new fee schedule. Carollo Engineers projects a 25 percent population increase in the SAWS service area by 2033, growing from 2 million to 2.5 million residents. Growth of that scale would necessitate water services for 161,030 more dwellings and wastewater services for 148,129.

To accommodate the anticipated growth, San Antonio will require $2.3 billion in capital improvements to its water and wastewater systems. Of that, $465 million can be recouped through impact fee collections from developments, the outlet reported. 

Other fast-growing areas in the San Antonio metro, such as New Braunfels, are also experiencing surges in impact fees due to the rapid exhaustion of infrastructure.

—Quinn Donoghue 

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