How Wastewater Infrastructure Affects Your Pro Forma

Quick answer

On a site without sewer service, wastewater infrastructure shows up in a pro forma in five places developers often miss or understate: plant capital and its phasing, the permit schedule's carrying cost, operations, permit compliance, and contingency. Model each from engineering inputs during due diligence, not from a placeholder.

The construction number usually gets attention. The schedule and the monthly obligations that last for the life of the plant are what most often surprise a lender or an investor.

What wastewater costs do pro formas most often miss?

The ones that are not a construction contract. A complete wastewater section has five lines:

capital for the plant, the collection system, force mains, and the disposal or reuse system, phased to match demand;
carrying cost for each permitting path, from closing to the day the plant can accept flow;
operations: the licensed operator, power, maintenance, laboratory analysis and sludge disposal;
compliance: monitoring, reporting, fees, renewals and expansion planning;
contingency sized to the path you chose.

Most of these inputs come out of a utility feasibility study. Our post on what a utility feasibility study tells you covers when to get one.

How should the plant's capital line be built?

From a design flow and a phasing plan, not a per-acre allowance. TCEQ's design criteria in 30 TAC §217.32 set how design flow and peak flow are calculated. Price the plant from that capacity, with current quotes for your size and treatment level.

Keep the collection system, force main, disposal field or reuse system and plant site work as separate lines. They are easy to lose inside a single "WWTP" number.

Do not build the final capacity on day one unless the absorption schedule needs it. TCEQ's Domestic Technical Report (form TCEQ-10054) asks for design flows by phase: Interim I, Interim II and Final. Permitting the final flow while building in stages moves capital later, closer to the revenue it serves.

Put the next expansion in the model too. Under 30 TAC §305.126, at 75% of permitted flow for three consecutive months the permittee must begin engineering and financial planning for expansion. At 90% for three consecutive months, it must obtain TCEQ's authorization to build.

How does the permit schedule hit carrying cost?

Every month between closing and service carries interest, taxes and insurance with no lot sales. Model carrying cost as the monthly holding cost times the months to service, for each path you could take.

A developer in Montgomery County came to us already carrying those costs, with no firm date for the discharge permit. The treatment plant itself was manageable. The holding cost on every month of waiting was not, so we went back to the wastewater plan and redesigned it around beneficial reuse.

The paths do not run on the same clock. A TPDES permit or a TLAP goes through public notice, a comment period and the chance of a contested case hearing request, as TCEQ's guide to municipal wastewater permit participation lays out. Deficiency rounds add time too: under 30 TAC §281.18, an applicant has 30 days to answer a notice of deficiency before TCEQ may return the application.

Run a base case and a delay case for each path, and show the lender both. TCEQ does not promise a date, so neither should the model.

Where does a 210E authorization fit?

It is a different path with its own rules, and its fit depends on what is in your wastewater. Subchapter E of Chapter 210 authorizes the reuse of industrial reclaimed water. Under 30 TAC §210.56(a)(1), the waivers for industrial reclaimed water do not apply to commingled water, which §210.52 defines as industrial wastewater with any domestic wastewater in it.

Commingled water is subject to the domestic reclaimed water rules in Subchapters A to C, though a mixed stream can still be authorized at Level II (§210.53(b)(2)). Every Level II application also names the primary disposal method used instead of reuse (§210.55(b)), so budget that fallback. For a mixed-use project, confirm the path with TCEQ early. Our 210E vs. TPDES comparison covers the differences.

What goes into the operations line?

Monthly costs that start when the plant does, at any occupancy. An early phase with few homes still needs an operator, power and testing.

A licensed operator. Under 30 TAC §30.350, the permit holder employs or contracts licensed operators, the chief operator's license must equal or exceed the facility's category, and the plant is operated at least five days a week.
Power for aeration and pumping, and routine maintenance and parts.
Laboratory analysis. Under 30 TAC §25.4, data used for a TCEQ decision must come from an accredited laboratory, with limited exceptions.
Sludge hauling and disposal.

What compliance costs continue for the life of the permit?

Monitoring, reporting, fees and renewals, every year the plant runs. Permits set sampling frequencies, and TCEQ's electronic reporting page explains that monitoring results go in through NetDMR unless the permittee holds a waiver.

Under 30 TAC §21.3, TCEQ assesses an annual water quality fee on each wastewater permit, based on its authorized limits, not on what the plant actually discharges.

Permits also expire. Under 30 TAC §305.127, a TPDES permit runs no more than five years, and other wastewater permits, including those for land disposal systems, no more than ten. Budget the renewal applications, and the engineering response if effluent fails its limits. Our post on ongoing compliance after permit approval lists what to track.

Who carries the plant after the developer sells out?

Whoever owns it, so decide that before you model it. The owner may be the developer, a homeowners association, a private utility or a district.

A municipal utility district can spread the cost over the property in it. TCEQ's general guide to water districts (GI-043) explains that, with voter approval, a district may levy a maintenance tax for its water and sewer system and issue tax bonds, and that TCEQ approves district bonds.

How should contingency reflect the permitting path?

Size it to the range of outcomes for your path, not a flat percentage. A construction contingency does not cover a permit that runs months longer than modeled, or a reviewer who asks for more treatment or more disposal land.

Before the pro forma goes to a lender, check it. Every answer should be yes:

Is the plant's capacity based on a design flow for the actual program?
Are the collection, force main and disposal or reuse lines separate from the plant?
Is construction phased, with the next expansion in the model?
Does each viable permitting path have a base case and a delay case?
Do operations costs start at plant startup, not at full occupancy?
Are fees, reporting and permit renewals included?
Is it decided who owns and runs the plant after sellout?

Take any no to your engineer, and ask for the inputs behind each line.

This post is general education on TCEQ rules as published in October 2026. It gives no cost figures because they depend on your site, capacity, treatment level and market, so get current numbers from your engineer and contractors.

Frequently asked questions

How do I model the carrying cost of a TCEQ permit delay?

Multiply your monthly holding cost by the months from closing to service, for each permitting path. Then run a delay case for each, and show the effect on returns at both.

Does a 210E authorization remove the need for a discharge permit on a mixed-use project?

Do not assume it. Commingled water falls under the domestic reclaimed water rules (§210.56(a)(1)), and every Level II application names a primary disposal method. Confirm the path with TCEQ early.

I'm underwriting a subdivision outside a city in Texas that needs its own wastewater plant. Which operating costs should the lender see?

The licensed operator, power, maintenance, accredited laboratory analysis, sludge disposal, the annual water quality fee, reporting and permit renewals. They start when the plant does, not at full occupancy.

I'm a Texas land developer building our wastewater plant in phases. When do I need to budget the next expansion?

Before flow reaches 75% of the permitted flow for three consecutive months, when §305.126 requires engineering and financial planning to start. At 90% for three consecutive months, you must obtain TCEQ's authorization to build.

Who pays to operate the plant after the lots are sold?

Its owner. A district can fund operations through a voter-approved maintenance tax, while an HOA or private utility relies on dues or rates.

Related resources

Need wastewater inputs for your pro forma?

We turn a site and a development program into the flows, phasing, permitting paths and operating obligations your model needs, before you close.

We specialize in:

Site feasibility and due diligence
Wastewater flow projections and treatment plant design
TCEQ wastewater permitting, TPDES and TLAP
210E and Chapter 210 reuse authorizations
Phased wastewater infrastructure planning
Construction administration

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

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How Wastewater Infrastructure Affects Your Pro Forma: What Developers Often Miss