"Purchasers would receive notice that wastewater service may be provided by pump and haul until permanent service is available." That sentence comes from a staff report written for the Dripping Springs City Council's July 7, 2026 meeting. It describes a proposed agreement with Tri Pointe Homes Texas, Inc. covering about 14 acres of the Cypress Fork Ranch property. Under pump and haul, household wastewater goes into a storage tank, and a truck periodically empties it and hauls it elsewhere for treatment.
That clause explains the Dripping Springs new-construction market better than any median price does. The city's main treatment plant is nearly full. For the next few years, wastewater capacity, not land or buyer demand, decides which subdivisions can be built and on what terms. A buyer of new construction here inherits whichever workaround the developer used.
A plant that has been full for months
The South Regional Wastewater Reclamation Facility is the city's main treatment plant. Community Impact reported on August 28, 2026 that it has been near capacity for several months and can't accept most new large connections. The same report says the number of city wastewater customers has grown about 600% since 2015.
The city saw the need for more capacity more than a decade ago. It applied for a Texas Pollutant Discharge Elimination System permit in 2015 and received it in 2019. The Save Our Springs Alliance then sued the Texas Commission on Environmental Quality, and the case ran until the Texas Supreme Court ruled for the agency and the city in 2025. On July 23, 2026, the Texas Water Development Board approved $51,496,303 for the expansion, made up of $48,580,000 in financing and $2,916,303 in principal forgiveness.
Sources describe the plant's current size differently. The state's release calls the project an expansion from 0.31 to 0.82 million gallons per day. Community Impact puts current treatment capacity at about 162,500 gallons per day, rising to 822,500. Both put the finished plant at roughly 0.82 million gallons per day. Neither suggests that relief will arrive soon. The city plans to issue a notice to proceed to its contractor by December 2026, with construction starting in 2027 and phase one expected to finish in 2029.
What "near capacity" means for a subdivision
The city hasn't stopped all new connections. Deputy City Administrator Shawn Cox told Community Impact, "It hasn't stopped developments from being able to tie in. It's just we're not going to tie in a large subdivision to it because it can't handle that."
So any developer planning a large project has to find wastewater service somewhere else for now. Community Impact counts more than 3,800 lots or units in ongoing and upcoming developments that use alternative wastewater solutions, such as temporary treatment plants or pump and haul. The city has approved only three pump-and-haul plans in recent years. The city's own development tracker shows what that looks like project by project.
| Project | Planned size, per the city's January 2026 State of the City | Wastewater status in city records |
|---|---|---|
| Double L | 2,231 lots | SUB2025-007, a proposed "Reclaimed Water Production Facility and Pump and Haul," waiting on resubmittal |
| Wild Ridge / Wild Range | 863 lots listed as Wild Range | Filings for a wastewater-plant lot and a separate phase-one temporary plant |
| Village Grove | 511 units | Proposed treatment plant, waiting on resubmittal; inside Dripping Springs MUD No. 1 |
| New Growth | 245 lots, or 240 units in the city tracker | Waiting for added city plant capacity |
| Cypress Fork / Fellers tract | About 14 acres | Proposed 18 city connections, with temporary pump and haul as an option |
The January list calls one project Wild Range, while city wastewater filings refer to Wild Ridge. The records reviewed don't confirm that the two names describe the same development, so a buyer should check the name on the plat itself.
The Cypress Fork agreement as a template
The Tri Pointe staff report is useful because it spells out exactly how a temporary arrangement works. The city would allocate up to 18 residential wastewater connections, known as LUEs, taken from an 80-LUE reservation originally given to the landowner in exchange for an easement for the West Interceptor sewer line. City service would not begin until the facilities built under the discharge permit are operating. The builder would have to design, pay for, and build the onsite and offsite wastewater facilities. Impact fees for all 18 connections would be due when the builder applies for a final plat.
The dates in the agreement matter for buyers. The pump-and-haul terms would cover up to 12 connections through April 30, 2028, then up to 18 connections "until the City facilities are operational and available." With phase one targeted for 2029, the agreement assumes temporary service could continue well past spring 2028. Staff described pump and haul as "a policy-sensitive issue" and asked Council to decide whether to keep those provisions. If Council removed them, the builder could not get wastewater-dependent building permits or certificates of occupancy under this agreement until permanent city service is available. The materials reviewed don't show how Council voted, so treat these terms as proposed.
For buyers, the effect is straightforward. In Dripping Springs, the earliest homes in a new section may be the ones most likely to come with a temporary wastewater arrangement, and the disclosure about it can be part of the contract.
Who pays for the workaround
Someone has to pay for wastewater infrastructure built ahead of the city plant, and in new subdivisions that is often a special district. A city attorney's memo from July 2026 says Dripping Springs MUD No. 1 already includes Village Grove and proposes adding Gateway Village. It describes the district's authority to finance water, wastewater, drainage, and road improvements.
Two current figures show what this financing looks like on an owner's annual bills:
- Headwaters MUD: On September 17, 2026, the board adopted a 2026 debt service tax of $0.90 per $100 of taxable value and a maintenance tax of $0.00. The order says the district has issued unlimited tax bonds. As simple arithmetic, a home with an $800,000 taxable value would owe $7,200 a year to this district alone, on top of city, county, and school taxes.
- Heritage PID: The district's 2026 annual plan, dated August 18, 2026, shows installments due January 31, 2027 of $3,446.83 for an example Lot Type 2 parcel and $3,746.56 for Lot Type 3. Outstanding assessments on those parcels are $41,925.15 and $45,570.81.
A PID assessment is a fixed balance tied to the lot, paid off in installments. A MUD tax is a rate applied to assessed value. Two homes listed at the same price can carry very different annual costs depending on which district, if any, they sit in. The listing price doesn't show this. The parcel's tax record does, and the Hays County tax estimator lets you look up special districts such as Headwaters MUD, Dripping Springs MUD 1, Wild Ridge MUD, Reunion Ranch WCID, and Heritage PID.
City sewer customers pay more too
Homes already on city sewer still feel the capacity crunch. In May 2026, Council approved the first wastewater rate increase since 2022. The residential base fee went from $28.88 to $43.32, and the usage rate went from $4.05 to $5.67 per 1,000 gallons. For an average customer using 6,578 gallons a month, the bill goes from $55.52 to $80.62, an increase of more than 45%, starting with September bills. The city is also raising its general fund contribution to wastewater from $980,000 to $2.5 million through 2030 to help hold down customer fees.
Whether you buy a resale home or new construction, wastewater now shows up in what you pay to own the home. What differs is the form the cost takes.
Questions to settle before you commit
- Who provides wastewater service to this lot today? The city, a district plant, a temporary package plant, or pump and haul.
- If the service is temporary, what document says when it ends? Look for a dated condition, like the "until the City facilities are operational" language in the Cypress Fork draft.
- Which special districts does the parcel belong to? Check the tax record rather than the subdivision name.
- For a PID, what is the outstanding assessment balance? Ask for the current annual installment as well.
- For a MUD, what rate did the board adopt this year? Ask whether the rate covers bonds, operations, or both.
None of this is tax or legal advice. These are the documents to ask for while the contract is still open for negotiation.
A few direct questions
Does the capacity limit affect resale homes already connected to city sewer? The city says it is still accepting some connections and is mainly declining large new subdivisions. Connected homes do pay the higher rates that took effect with September 2026 bills.
When will the plant have more capacity? The city's stated plan is a notice to proceed by December 2026, construction in 2027, and phase-one completion expected in 2029. Those are targets, not completed milestones.
Is the Onion Creek discharge permit going to be used routinely? Utilities Director Gray Lahrman told Community Impact the city has no intention of discharging into Onion Creek except in an emergency.
What happens to the city's existing temporary treatment plant? The state's funding release says the city plans to decommission it as part of the expansion.
If you're weighing new construction in Dripping Springs, Camille Casper can help you get each property's wastewater agreements, district tax orders, and assessment balances before your option period ends, so you know a home's full carrying cost while you can still negotiate. Let's Connect.
