Dallas Water Utilities Impact Fee Structure for Infill Redevelopment: What Changes When You’re Rebuilding Inside the Loop

Does Dallas charge water and wastewater impact fees on infill?

Not under that name in its water code, so ask for every charge in writing. Texas Local Government Code §395.001(4) defines an impact fee broadly, as a charge on new development to fund capital improvements it makes necessary, including capital recovery fees and contributions in aid of construction.

The water and wastewater chapter of the Dallas City Code, Chapter 49, lists its charges by section: retail rates, service connection charges (§49-18.7), special assessment rates and lot and acreage fees (§49-18.10), evaluated cost tables for oversize and off-site facilities (§49-18.11) and development review rates (§49-18.14). Article V then governs development and system extensions. None of these sections is titled an impact fee.

Whether a particular charge works like one under the state definition is a legal question. For underwriting, the practical move is to send the city your program and ask for every water and wastewater charge and required improvement in writing.

What does an existing connection actually give you?

A service and meter sized for the old use, and nothing more. The city's building permit water and wastewater checklist (Rev. 1/18) requires a utility plan for a commercial building permit showing existing and proposed connections. Its sizing rules matter on a tight infill lot:

• large water connections, 3 inches and up, need a concrete meter vault;
• a fire meter vault needs at least a 10 by 15 foot unobstructed area, and large domestic and combination vaults need at least 15 by 30 feet, inside city right-of-way or a DWU easement;
• a meter the same size as the main needs a written size-on-size request with the demand in gpm and psi;
• the minimum wastewater connection to a city main is a 6-inch lateral.

Under §49-18.7, a water service over 2 inches or a non-residential wastewater connection is either built by the city at the applicant's cost or built by the applicant's contractor when the director requires it, with the applicant bearing all construction costs.

When does an infill project need a full engineering review?

When it hits any one of the checklist's triggers. For commercial wastewater and large water services, the same checklist requires a full engineering plan review and a private development contract (P-Contract) if any of these apply:

• the project is in the Central Business District;
• a water or wastewater main extension is required;
• the service is longer than 60 feet from the main to the meter vault centerline, or longer than 25 feet in a highway or arterial street;
• the main is reinforced concrete pipe, larger than 16 inches or more than 20 feet deep;
• a railroad easement, a new wastewater manhole, a fire hydrant or a suspended meter vault in a basement is required.

Skipping a plat does not skip the rules. Section 49-60(i) applies the extension requirements to property developed without a plat or replat, and charges under §49-62 are due before or with the service connection permit.

Who pays when the existing main is too small or too old?

Usually the developer, with city participation in set cases. Under §49-62:

• a developer may use an existing main only if the director finds it is not substandard in size or condition and can adequately serve the development (§49-62(d));
• the developer replaces every existing substandard main serving the development, subject to city participation (§49-62(f));
• the city buys the excess capacity of a main it requires to be oversized, and the director's sizing call is final (§49-62(a));
• the developer builds needed off-site extensions, which the city purchases at evaluated cost, paid as new connections are made (§49-62(c));
• a developer who uses an existing main that an earlier developer built with city participation pays an acreage fee under §49-18.10(d), which goes to reimburse developers (§49-62(e));
• city payments are offset against your charges, and no city payment may exceed 30 percent of the private development contract price unless the director bids the work competitively (§49-62(i)).

State law caps the developer's share. Local Government Code §212.904 limits a developer's required share of municipal infrastructure costs to what is roughly proportionate to the development, as determined by a licensed engineer retained by the city, with an appeal to the city council and then to court.

How do you confirm capacity before closing?

Use the city's own tests, early. The Water/Wastewater Availability Application Guide (Rev. 6/19) sets out the requests:

• a water flow and pressure test, using a static hydrant and a residual hydrant in the same pressure plane;
• a wastewater capacity analysis by the city, whose flow monitoring takes an average of 6 to 8 weeks minimum;
• or third-party flow monitoring with a DWU inspector on site before the manhole lid comes off, with results going to your engineer for a formal capacity report;
• a third-party CCTV condition check of the main.

Capacity can stop a project. Under §49-60(b)(2), the city is not obligated to release a plat if the proposed mains exceed the existing or immediate future capacity of the system. Run the fire flow check for the new building too: the requirement follows the new use, not the old one.

Is your infill site's utility picture ready for underwriting?

Answer yes or no. Any no is a cost or schedule risk you have not priced yet.

1. Do you know the size, material and condition of the water and sewer mains serving the site?
2. Do you have a current flow and pressure test, and a fire flow check for the new building?
3. Has sewer capacity been confirmed by city analysis or third-party flow monitoring?
4. Have you checked the P-Contract triggers against your utility plan?
5. Does the site have room for the meter vaults the new services need?
6. Has the city told you in writing which mains it considers substandard?
7. Do you have every water and wastewater charge and required improvement in writing?

Questions for your team: Which main will we connect to, and will the city accept it? What off-site work is ours? Is any of it oversize the city should participate in?

Limits: this is general education on Dallas water and wastewater rules for redevelopment. Codes, checklists and fee schedules change, and the city's forms cited here date from 2018 and 2019, so confirm current requirements with the City of Dallas and your engineer and counsel.

Frequently asked questions

Does Dallas have water or wastewater impact fees?

Its water and wastewater chapter has no section by that name. It has service connection charges, lot and acreage fees, special assessments and developer extension rules. Ask the city to list every charge for your program.

Can we keep the existing meter for a larger building?

Only if it is sized for the new demand. A bigger building usually needs a larger service, possibly a vault and, if the meter matches the main, a size-on-size request.

I'm redeveloping an older strip center in Dallas into a five-story apartment building with structured parking. What usually pushes a project into a P-Contract?

Check the checklist's triggers: a main extension, a long service, a deep or large main, a new hydrant or manhole, or a meter vault suspended in a basement. Any one of them means full engineering review.

The water main in front of our infill lot is old cast iron. Will the city make us replace it?

If the director finds it substandard in size or condition for your development, §49-62 requires the developer to replace it, subject to any city participation. Get the city's position in writing during due diligence.

Can the city require us to pay for upgrades bigger than our project needs?

Section 212.904 limits your share to what is roughly proportionate to your development. Separately, the city buys the extra capacity in a main it requires to be oversized.

Related resources

• PD Overlay Districts and Utility Extension Approval: Navigating Dallas Planned Development Zoning Alongside Utility Permitting
• Sanitary Sewer Overflow Risk in Dallas’s Older Watersheds: What White Rock and Turtle Creek I&I History Means for Infill Developers
• What a Utility Feasibility Study Actually Tells You, and When to Get One
• Water and wastewater engineering in Dallas, Texas

Pricing the utilities on a Dallas infill deal?

We check the mains, the capacity and the city's triggers before you close, so the utility costs in your pro forma come from the city's rules, not guesses.

We specialize in:

• Utility due diligence for infill sites
• Water and sewer capacity analysis
• Fire flow analysis
• Utility plans and private development contract plans
• Water and sewer main design
• Site civil design for redevelopment

Modern Engineering Solutions, McKinney, Texas. Contact: (214) 833-6748 or mod-eng.com