The Kyle Report

The Kyle Report

Wednesday, May 4, 2016

Kyle expands by 50 percent, Mayor wants city to take over wrecker services

According to official City figures, Kyle’s geographical footprint is 20.36 square miles. Last night, by a 5-1 vote (council member Diane Hervol dissenting and council member Becky Selbera was absent) the City Council approved on second reading an ordinance annexing 6,517 acres into the city. Using the conversation rate of 640 acres to a square mile, that’s 10.267 square miles annexed which has the effect of increasing the size of the city by a whopping 50 percent. Not only that, this is prime property, encompassing both sides of the Blanco River, that is not only ripe for development but on which major developmental projects — commercial as well as residential — are already underway, even if some are only at the conceptual stage at the moment.

The annexation was okayed following the approval, by a 4-2 vote, of two complex development agreements and, by a 5-1 vote, a third "interim" agreement. Both Hervol and council member Daphne Tenorio cast "nay" votes on the first two agreements. Tenorio voted in favor of the third one, but, she told me after the meeting, that was only because it was an "interim" agreement and she’ll have the opportunity to vote again when the final agreement is reached. Others on the council said a second vote won’t be necessary, but they seem to be mistaken, at least according to the city’s staff.

"The interim development agreement between the city and Blanco Ranch Properties LP is a binding legal development agreement which stipulates that additional terms are still being negotiated," city spokesperson Kim Hilsenbeck told me today. "In essence, it is the first of a two-part agreement, with the final agreement simply augmenting the first. Both parties will continue to negotiate in good faith and come to a final agreement, which would then come back to Kyle City Council for a vote."

Hervol and Tenorio objected to the development agreements because, they maintained, they only received the voluminous documents right before the vote and hadn’t had time to study them, which, in Hervol’s case, was a touch hypocritical because earlier in the meeting she asked the council to approve a stop sign ordinance for the Amberwood subdivision which she changed radically (by changing the location of most of the stop signs) seconds before the vote, thus denying her colleagues the opportunity to study the necessity and the ramifications of those changes.

Prior to this discussion and after hearing the owner of one particular wrecking company grousing about being deliberately excluded from a meeting she actually attended, Mayor Todd Webster surprised everyone in the chambers by suggesting the City assume control of its wrecker needs and create its own auto pound, the proceeds of which could also be used to fund an in-house small-vehicle maintenance department. After the initial shock of the suggestion wore off, the majority of the council appeared to like the idea and, as part of passing, on second reading, amendments to the current wrecker ordinance, instructed the city’s staff to look into the feasibility of such a takeover. I’m guessing there’s a good chance such an idea could be a part of the City’s FY 2016-17 budget. It makes sense because currently, to cite just one example, the City has to send its police cars out to a privately owned garage every time one of them needs a tuneup or an oil change. It would be a significant taxpayer savings if those and similar chores could be performed in-house.

Following a one-hour, 18-minute executive session during which, presumably, the city attorney briefed the council members ad nauseam about the terms of the annexation development agreements, Assistant City Manager James Earp, who led the negotiations on most of the agreements, explained them publicly.

"We have looked at preserving certain rights and privileges afforded to the property owner prior to annexation," City Manager Scott Sellers said, launching into a description of the first development agreement between the City and Blanco River Investments LTD, Miriam McCoy and Robert Scott Nance. "For example, there are certain special exemptions that this property would receive, such as hunting, firearms, burning and other grandfathered uses. The term of the annexation would be based upon development. There are certain phases of development."

Sellers then asked Earp to continue.

The first agreement, Earp said, "is a 20-year term on the agreement, with two renewal periods. The first renewal period is an additional 15 years and the second renewal period is10 years. That totals 45 years which is the amount allowed by state law. The entitlements for development standards are included in the development agreement. They are entitling a base R-1-2 zoning and specifying 70 acres specific for multi-family and 162 acres for commercial and they’ve included their variances from the development code. Those variances have been reviewed by planning staff and negotiated with them and ultimately accepted by planning staff. Included in the agreement is a five-year freeze on fees and that five-year freeze occurs at the execution date. At the end of five years the fees re-set to the prevailing rate and those rates lock in for another five years. So, for every five years, their fees lock into whatever the prevailing rates are. They’ve included park land. They will include park land dedication and they will agree to pay the park land fees that are established to date, which is $600 for park land dedication and $600 for park land improvements per lot. They have requested a partial recovery of impact fees which would be credited to them for any utilities that require over-sizing by the City’s request. In other words, they have to assume 100 percent of the costs to put in the utilities for their development, but if the City should require the oversize of that utility, they would be eligible to recover the incremental difference. They request a 380 sales tax rebate for the commercial property. Their exposure for commercial property is mostly limited to the (Highway) 150 realignment and they’ve requested that be a 10-year term on the commercial property at 90 percent rebate for years one through four, a 70 percent rebate for years five through eight, and a 50 percent rebate for years nine and 10. That is on the city’s 1 percent sales tax it would collect in the area for the commercial property and again is limited to the 162 acres of commercial that they’ve identified. They currently have several homestead residences that are on the property so they’ve asked for a 10-year window whereby they would receive 100 percent rebate of the city’s property tax on their current homesteads as if they had not been annexed. For commercial property they’re asking for 75 percent property tax rebate for 10 years as the commercial comes on-line. The development agreement also requests a 100 percent city rollback tax for a 10-year window. They have the ability to form a PID in the future. They are entitling 8,200 LUEs. Their total acreage roughly is 3,203 acres. They have included provisions for a property owners association/homeowners association. And that gives an overall density of the project of 2.56 units per acre."

Earp said because the total commercial was only 162 acres, the potential sales tax loss to the city would be "fairly negligible." Earp also added "I am aware that the ESD has mentioned here in public session that they are looking to petition for the additional sales tax that’s available. If the properties don’t annex, then the city would never collect any sales tax on that property from now on without a separate agreement with the ESD. So this is a 10-year rebate to them for commercial development which is line with our other economic development incentives."

The terms of the second agreement, between the City and Robert Scott Nance, Jason Bradshaw and Joel Bradshaw, Earp said, were almost identical to the previously outlined one "because both the McCoy and the Nance family from the very beginning came with a unified front and a unified vision for what they wanted their properties to look like. And they did a lot of the planning together. They did use different attorneys and (thus) have different agreements."

One of the differences, Earp said, is the owners involved in the second agreement did not specify the acreage "that would be set aside for the different commercial and multi-family portions." They did, however, designate a specific area to be developed into a park, a 15-acre tract along the Blanco River, plus an additional 30-acre park as well as hike-and-bike trails that would connect the two parks. The 380 agreement was slightly different as well — 75 percent rebate for years one through five and a 25 percent rebate years six through 10.

"Their property has the potential for a bridge to be built across the Blanco River that would serve the west side of the Blanco River," Earp said. "That’s a huge capital expenditure for any individual developer to try to tackle. So they’ve asked for the potential for government participation in that expenditure, the vision being the bridge would then serve as a regional asset to those folks living on the other side of the river that don’t have a way out whenever the river floods."

They have also asked the City to provide a utility plan "and that the owner reserves the right to build the infrastructure for that utility plan should the City fail to perform," Earp said. If that happens, then the City would be required to reimburse the owner for those expenses.

Sellers led the discussion on the third proposed agreement, one between the City and Blanco River Ranch Properties, that Sellers described as "a little different" from the previously outlined pacts. The developer involved in this agreement "is much closer to development," Sellers said, "has a plan that’s already been put in place and is seeking for very quick turnaround from the Council. As such there were certain financial mechanisms the developer was looking for to assist in the ultimate construction and development of the property. Several options were discussed and it was finally determined that the City would enter into an out-of-city PID arrangement with the developer with the ability to finance certain rough proportional infrastructure improvements back to the City as part of each PID bond issue, These issues would take up to 10 percent of the total PID allotment of the total project — not necessarily 10 percent per issue, but at the end of the day, it could not exceed 10 percent of the PID bonds. Their property is not going to be annexed like the other properties, but rather the City will annex all the commercial portions of the property first. This will allow the residential areas to remain out of the city and be part of the residential PID."

Although Sellers acknowledged this was an interim agreement, he added "The developer has held out if we cannot come to an agreement as we negotiate this final development agreement, then the developer will have the ability to petition for disannexation and the City Council would proceed, in good faith, with disannexation."

On another subject discussed previously during the Council session, Mayor Webster, after listening to wrecker service owners grumble they were not aware of meetings they actually attended and did not have a large enough role in the drafting of the wrecker ordinance amendments, plus hearing one council member fret that the changes to the existing ordinance might cause at least one wrecker company to lose income (a subject I plan to deal with quite forcibly in a separate article), appeared to be fed up with the overall tenor of the debate.

"This entire conversation is backwards." he said. "The longer it has taken place, the less supportive I have become. I want to end this. I don’t understand why we just don’t go into this business for ourselves if all these people are just going to claw each other’s eyes out over whether this person has screwed that company. It feels really dirty to me. All of it. I’m just going to say it. This is the worst example since I’ve been mayor of underhanded, behind-the-scenes lobbying going on.

"This is wrong, what’s going on here," the mayor stated. "On all sides. What this started out two weeks ago was just a cleanup to correct a few problems with (the original ordinance) and now it has been turned into ‘Let’s see how my company can get leverage over another company. Let’s see who we can screw out of the business, who we can keep out of Kyle and who we can keep in.’

"The problem here is we’re not focused on the people that need the service," the mayor said. "We’re not focused on that. Instead, we’re focusing on the people who will be providing the service. And that’s wrong. So, from where I sit, at this point I feel we need to do our own impound lot, get our own tow truck and put ‘em all out of business."

Frankly, his idea has a lot of merit, although it would not put the other wrecker companies out of business because they would still be able to contract with private businesses, apartment complexes, etc., to handle specific needs. They simply would be excluded from dealing with vehicles involved in accidents on public roadways or vehicles impounded at the reuest of the City for other reasons.

One thing that was not mentioned, but I’m positive Police Chief Jeff Barnett would agree with me, that a city-operated impound lot could also help police criminal investigators who need to quickly examine automobiles seized for their possible involvement in criminal activities.

There was a lot of affirmative head-nodding taking place among the Council members to convince me that, at least right at this moment, they are looking favorably at this idea of a City-operated wrecker service and impound lot, the proceeds of which could be used to fund an in-house fleet maintenance department; i.e., the proverbial two birds with one budget item.
 

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