THE SHORT ANSWER
An impact fee is a one-time charge on new development. Its purpose is to make growth pay a proportionate share of the additional roads, water facilities and wastewater systems needed to serve it.
Pflugerville’s fees became high because the City identified expensive infrastructure projects, estimated how much future development would use them, and divided the eligible costs among the new service units expected to arrive. Construction and financing costs also increased.
In 2023, the City Council adopted the maximum calculated water and wastewater fees. Depending on location, those utility fees could total nearly $30,000 for one standard service unit before roadway and other development costs were added.
WHY SHOULD I CARE?
Impact fees affect more than developers.
Builders generally include development costs in the price of a home, apartment, store or office. High fees can therefore contribute to higher home prices, rents and commercial costs. They may also cause a project to be reduced, delayed or built in another community.
But lowering an impact fee does not make the infrastructure cost disappear. If growth pays less, utility customers, taxpayers or another public funding source may have to pay more.
The real question is not simply whether impact fees should be high or low. It is whether the fee fairly balances growth, affordability and protection for existing residents.
MAKE IT MAKE SENSE
Pflugerville does not have one impact fee. It has separate charges for water, wastewater and roadways.
Texas law requires impact fees to be based on projected growth, a capital-improvements plan and the portion of eligible infrastructure costs attributable to new development. Existing taxpayers must receive appropriate credits, and developers may receive credits for qualifying infrastructure they construct or finance.
The calculation produces a maximum allowable fee. The City Council may collect that amount or adopt a lower rate.
In 2020, Pflugerville’s combined water and wastewater fees for one standard service unit were approximately:
- $9,796 in Service Area 1
- $16,082 in Service Area 2
In 2023, the adopted maximums became:
- Water: $14,713
- Wastewater Area 1: $1,316
- Wastewater Area 2: $15,136
That produced combined utility fees of:
- $16,029 in Wastewater Area 1
- $29,849 in Wastewater Area 2
Roadway impact fees are additional. They are calculated according to the development’s location and the traffic demand associated with its proposed use.
Why did the utility amounts rise so sharply?
Pflugerville is expanding major parts of its water and wastewater systems while the city is still growing. The plans include treatment capacity, transmission and collection lines, engineering, land and financing. When the projected cost rises, or fewer new service units are expected to divide that cost, the calculated fee per unit increases.
A 2026 recalculation illustrates how much the assumptions matter. The published proposal would reduce the water fee from $14,713 to $7,198, while increasing the two wastewater fees to $1,800 and $16,565. That does not necessarily mean the earlier calculation was improper. It means impact fees are estimates that can change when projects, costs, growth forecasts and system demands change.
Pflugerville’s fees are high even by Texas standards. Municipal studies prepared for San Marcos, Schertz and Horseshoe Bay placed Pflugerville’s $29,849 combined fee above every other utility in their comparison groups. Those studies do not rank every utility in Texas, but they provide strong evidence that Pflugerville’s fee was among the state’s highest.
High impact fees protect existing residents from carrying the entire cost of growth. But if the fees discourage development or make housing unaffordable, the City may receive fewer new residents, businesses and taxpayers to share its long-term costs.
That is the balance Council must examine whenever the fees are updated.
THE RECEIPTS
- City of Pflugerville: Impact Fees and Long-Range Planning
- City of Pflugerville Code, Chapter 152: Impact Fees
- Pflugerville Water and Wastewater Impact Fee Schedule
- 2026 Water and Wastewater Impact Fee Recalculation
- Texas Local Government Code, Chapter 395
- City of San Marcos: 2026 Water and Wastewater Impact Fee Update and Benchmarking
- City of Schertz: Water and Wastewater Impact Fee Update Report
ASK AGAIN.
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