How are impact fees determined?


The process is set out in state law (Texas Local Government Code Ch. 395).

                          0.5 * Total Cost of capital improvements required to serve new development in the service area
Impact Fee =   ___________________________________________________________________________________________
                             Total number of new service units expected in the service area over the next 10 year period

Determining The Total Cost of Capital Improvements:

  • Land use assumptions must be prepared in order to determine the number of new service units as well as capital improvements needed to serve those units in the service area. 
  • Land use assumptions forecast what the population and land uses (residential, office, retail) will be throughout the service area.
  • The capital improvements identifies the facilities needed to meet the project demand from new development and an estimate of the cost of construction of those needed facilities.
  • Service units are a standardize measure of consumption of water or discharge of wastewater.  For example, one single family residence may be considered one service unit, where commercial properties or an apartment complex may be considered two or more service units.

Show All Answers

1. What are impact fees?
2. Why charge an impact fee?
3. What do impact fees pay for?
4. How are impact fees determined?
5. How is the impact fee updated?
6. Who is charged an impact fee?