Just one day after an extensive presentation alerting the Beaumont community of the need for higher fees to provide water utilities for new construction, the plan was summarily nixed.
Prompting backlash and an about-face of increasing fees, Jan. 27, a contracted analyst stood before the municipality’s Planning Commission and City Council for an informational presentation to discuss the potential of implementing water and wastewater impact fees.
Financial Analyst and Senior Project Manager Grady Reed of HDR Engineering, of Austin, provided a presentation outlining the process, as well as the potential for these fees to help manage the city’s infrastructure costs associated with new developments. The city entered into a contract with Reed for services on July 16, 2024, for $39,480 and, on Jan. 28, according to Assistant City Manager June Ellis, it was decided that the city would no longer be moving forward with implementing impact fees.
“Based on feedback, and as of today (Jan. 28) we are no longer moving forward with implementing an impact fee here in Beaumont. The firm has been notified of this as of today,” said Ellis in an email response to an inquiry by Councilman Taylor Neild.
Impact fees are one-time, upfront charges imposed on new or expanded developments, with a stated intent of offsetting capital costs of expanding water and wastewater services.
Since 2022, the number of permits issued for new home construction in Beaumont has steadily declined. In 2022, 635 permits were issued, followed by 255 in 2023, 163 in 2024, and 75 so far in 2025. The compiled data reveals an average of just over 200 new homes constructed per year in recent years.
Local developer Richard Guseman of Guseman Homes, responsible for the construction of well-known Beaumont developments like Barrington Heights, Fairfield and MontClaire, just to name a few, said he is really disappointed that Reed was so casual about the idea of adding fees to Beaumont homebuyers.
“He said it could be around $5,000 or $6,000 and said it was no real big deal because it could be put on a 30-year mortgage and they’d never notice,” said Guseman. “With interest rates the way they are now, that could be upwards of $20,000 when it’s all said and done for the homebuyer and that is a lot of money.”
According to Reed, water and wastewater impact fees are designed to ensure that growth-related infrastructure costs are not solely borne by existing ratepayers but shared by new developments and are intended to generate revenue to fund capital improvements required by new development.
Reed’s presentation indicated that the fundamental issue at hand was determining who would bear the cost of new utility capacity, whether it is existing customers or new developments through impact fees.
In October 2024, water rates increased by 4% and sewer rates by 8%. Residents also began receiving an additional monthly charge of $1.75 for solid waste. Prior to setting the increased rate, the city of Beaumont hired Reed’s firm HDR Engineering. as consultant to determine the appropriate rate. Since 2023, the city of Beaumont has paid the HDR consulting firm a total of $46,784.60 in addition to whatever bill is to follow for his services on the now moot issue of impact fees.
“This doesn’t even make sense that it’s even going to pay for the study,” said Dr. Sina Nejad, Chairman of Beaumont’s Planning and Zoning Commission, during the Jan. 27 meeting.
Reed retorted that building 20 houses would allow them to more than recoup the cost of the study.
Reed also stated that the city was not only looking at collecting impact fees from residential and commercial development, but from potential industrial development, as well.
“If they put a 10-foot meter on there, then that’s a couple million dollars (in impact fees)” said Reed, to which Nejad told him that didn’t make sense given that industry is always asking for tax abatements.
Nejad asked council if they voted on the fee for the project or how Reed’s firm was hired, to which he was told “It’s less than $50,000,” which is the threshold for which the city manager is permitted to spend without council approval.
“Is there anybody that would like to speak in favor of this,” asked Nejad before the close of the meeting, to which laughter erupted throughout the room, indicating the obvious disapproval of those present, including city council, which would have the final say.