This article was co-authored by Jeff Haeber, PE, CFM

The cost of developing in the City of Austin has skyrocketed over the years – causing the Watershed Protection Department (WPD) to conduct a study to determine how it could update the Regional Stormwater Management Program (RSMP) so it accurately reflects the city’s construction costs and land values.

The RSMP is a City of Austin program that provides funding for the planning, design and construction of drainage improvements to help reduce flooding risks in specific watersheds across the city. Developers can participate by making a payment instead of constructing detention structures or they may by constructing approved off-site drainage improvements.

Based on the results of the WPD’s study, the department recommended changes to the RSMP, several of which were adopted earlier this year and took effect on October 1, 2020. The update brings significant changes to the program’s Construction Cost Component (CCC) and the Land Cost Component (LCC) and will impact how the program calculates the cost of constructing stormwater control features across the city.

Major Take-Aways from the October Update:

New Discount for Single-Family Developments

The study, which was the program’s first evaluation since 2002, determined the RSMP’s CCC lagged the actual cost of constructing on-site detention features – even after applying an annual adjustment. However, the WPD’s proposed combined rate structure for the CCC caused an unreasonably large increase in cost for constructing small single-family residential developments.

To compensate for this, the rate for the first acre of impervious cover under the combined rate structure was decreased to provide a discount for single-family development construction. Though the first-acre rate adjustment was primarily implemented to provide relief for small single-family developments, it also offers a small discount for single-family developments of all sizes.

No More Static Per Acre Caps in the RSMP’s Land Cost Component

Following the WPD’s 2002 study, static dollar per acre caps were placed on land values used to calculate the RSMP’s LCC. But as land values began rising across the city, the static caps caused the payment structure to produce payment amounts that were deeply discounted compared to the actual land and construction costs for stormwater control facilities – resulting in insufficient payments for the WPD to construct or implement these features.

The most significant change to the program’s payment structure is the elimination of the dollar per acre cap. The update modifies LCC calculations to use a site’s appraised land value rather than a static capped value – helping make the calculation more site-specific. Per the city’s summary changes, the appraised land value will be discounted “down to 80% of the appraised value.”

Addition of an Impervious Cover Adjustment Factor and Caps on Payments Per Acre

Another notable change to the RSMP’s LCC is the addition of an impervious cover adjustment factor (ICAF), which will be applied when the proposed impervious cover is less than the city’s average (52.3%) – reducing the participation fee for developments with the proposed impervious cover below the city average. For developments with more than 52.3% of proposed impervious cover, the ICAF will be replaced by a value of one (1) in the calculation to ensure developments with greater coverage are not discouraged from participating in the program.

Lastly, the LCC now includes a $440K per acre cap on calculated payments for detention construction. The new cap will help prevent high-land appraisal value from overestimating detention construction costs. The cap is intended to reflect the cost of subsurface on-site detention typically required in dense, high-value urban areas.

The RSMP updates bring big changes to how the program determines the cost of constructing stormwater control measures in Austin. You can find more information on the changes by visiting the RSMP’s website or reading their summary of the changes.  You can also contact our Site Civil or Hydrology & Hydraulics experts to find out how these changes may affect your next project. Our team makes it a point to keep up with regulatory changes that affect developers across Texas to ensure their projects go as smoothly as possible.