Waco street maintenance fees on hold for now

The city has withdrawn a letter that contained faulty information about the levy and its role in reducing long-term infrastructure debt, and City Manager Bradley Ford said in an email he has pushed back implementing the fees until spring, after the Waco City Council gets another look.

But some receiving the letter already have acted. The local real estate office of Coldwell Banker Commercial informed clients it became aware of the fees and has “immediately been seeking clarification on your behalf.”

“The fee implementation was delayed because the City Manager’s Office became concerned about the billing methodology for non-residential customers,” Ford said in by email. “The concerns originated after I received a copy of a letter that was sent out by our Public Works Department to the proposed Top 175 payers of the street fee. Several inconsistencies and issues were present, which caused me to re-group. Unfortunately, the letter had already gone out to large businesses and property owners.”

Billing was scheduled to begin in January, “but I anticipate the delay will be until at least the Summer of 2024,” Ford said. The Waco City Council will receive an update at its Dec. 5 meeting.

At issue is the condition of Waco streets and the city’s mechanisms for funding their maintenance and repair. The fees would free up more of the city’s tax-funded general budget for use on other things, including construction of new streets or capacity additions to existing streets.

“The fee was meant to bring additional resources so that we could expand our Better Streets Waco campaign, which as you know is responsible for more street work than Waco has ever seen,” Ford wrote. “Even with the street work, our Pavement Condition Index is still in the low 50s, significantly below the Better Streets Waco stated goal of 70.”

Waco’s pavement condition index score, a means of assessing roadways, increased from 50 in 2015 to 53 as of this spring.

According to surveys conducted by the company Fugro, in which a van drives each street, takes photos and collects measurements on roughness and ride, the percentage of streets rated poor decreased from 41% to 32% between a 2015 survey and this spring. Streets rated as good increased from 18% to 39%. The system classifies streets as poor, fair or good.

City officials in recent years have increased general fund spending on street maintenance, saying the needs had gone underfunded for decades and left a backlog of work.

“To combat the low PCI (pavement condition index) and address the backlog of $2 billion in street maintenance/street replacement needs, the City Council has prioritized funding for streets, increasing from $3 million a few years ago to more than $25 million most recently,” Ford said. “At our current level of funding, it would take more than 100 years to address the street maintenance needs in Waco. That is why we pursued the street fee method, something other cities in Texas have also adopted.”

He said Corpus Christi, College Station and Killeen are among the cities that have implemented street maintenance fees.

Ford said in his email the fee would be applied to existing land uses, not developing properties. The delayed proposal would have implemented a $10 per month fee for existing single-family residences. Non-residential properties would pay a fee based on the traffic generated at a particular location.

“The street fee was preferred over a property tax increase because its methodology would equitably distribute the funding burden across the heavier traffic generators in the City,” Ford said. “The approach presumes that a property with high trip generation rates leads to higher wear and tear on streets. The street fee would be a pay-for-use approach similar to how the city charges for water treatment/distribution and drainage maintenance.”

Local custom homebuilder Scott Bland said the Heart of Texas Builders Association has taken part in discussions with the city of Waco, and generally views the proposed street fee as something it could support.

“I think they are on the right track,” Bland said. “It’s been done by other cities around the state, and may be an effective way to maintain older areas instead of all that burden being put on new development in the form of impact fees. Waco’s just getting big, and its infrastructure is not going to maintain this type growth. We need to act before it becomes a crisis.”

Waco in 2020 approved a plan to start assessing impact fees on new development, with some exceptions.

The impact fees are added to the cost of building permits, Bland said.

“My last permit was double what I was paying for a permit a couple of years ago,” Bland said. “It’s not an insignificant amount, probably $3,000 to $4,000. Permit fees are impacting those buying a new house.”

Coldwell Banker Commercial, in its letter to clients, mentioned the city had decided on “an indefinite pause” in enacting the street maintenance fees.

“Through our conversations with City Leaders we do believe that Waco is a pro-business city, and we at Coldwell Banker Commercial will continue to monitor this situation with your best interest in mind,” the letter says.

Gregg Glime and Bland Cromwell, both members of Coldwell Banker Commercial, released a statement to the Tribune-Herald saying, “Ultimately the issue at hand is the premature sending of letters regarding fees in our growing city. … It is important to note that these letters were not reviewed or analyzed by city leadership, and therefore it would be unfair to comment on the specifics of the fees mentioned.

“We have engaged in multiple conversations with various levels of city leadership and continue to support the talented leaders who serve our city. It is crucial that we engage in meaningful conversations about this subject as our city continues to grow. We must address the challenges that come with growth and work together to find fair and effective solutions.”

A retraction letter dated Nov. 14, signed by Assistant City Manager Paul Cain, says a letter dated Nov. 8 regarding the street maintenance fee contained “errors in our methodology that resulted in incorrect calculations of your monthly street maintenance fee. The amounts shown in this letter are not accurate.”

Cain issued an apology “for this error and the frustration and distress it has caused. It does not reflect our standard of professionalism and commitment to a high-performing government for the City of Waco.”