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City of Sherman considering impact fees for developers

Published: Sep. 15, 2020 at 6:31 PM CDT
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SHERMAN, Texas (KXII) - The City of Sherman is considering charging developers fees to pay for the infrastructure needed when new homes and businesses are built.

Right now, those fees are paid for by taxpayers out of the city’s general fund.

The city gets paid back over time with the money generated by future property or sales tax revenue.

These new impact fees would be due up front to help offset the cost of any infrastructure needed once the development is built.

“Basically where we are now and what it’s going to cost for us to be able to provide for those new homes," said Councilman Shawn Teamann.

Six-thousand dollars. That’s how much future infrastructure costs anytime a new home is built in Sherman, according to an independent study over the past six months.

Teamann said it’s also the maximum amount the city can charge a developer up front for things like water, sewage and roads.

“If the developer is going to pay a portion of that, historically, the city has built infrastructure or given incentives to large developers," Teamann said.

For example, he says many times with a 300 to 400 home development, the city spends millions to pay for infrastructure.

But over time, they’re paid back through property tax revenue.

By law, the city can charge up to $6,000, but Teamann said they would most likely charge a portion up front, and the rest would be paid by taxes later on.

But for smaller developers, like a 50 home neighborhood, they won’t benefit directly since they’d be building their own roads, leading to an increase in home price.

Planning and Zoning Commissioner Paul Manley says the fees would bring the city in line with neighboring communities.

“I think it makes sense to put at least a portion of the cost of future growth on the developers who are coming here, rather than the current residents of Sherman," Manley said.

“So that future residents of Sherman are funding their own growth rather than the current residents funding the growth themselves," Manley said.

Teamann said now it’s a matter of deciding the cost, who should pay it, as well as incentive programs for retailers and small builders.

The city council expects to vote on the impact fees on at their meeting on Monday.

Copyright 2020 KXII. All rights reserved.

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