AGENDA CAPTION:
Title
Consider approval of Ordinance 2018-38, on the second of two readings, approving an update to the service and assessment plan for the Trace Public Improvement District; making a finding of special benefit to the property in the district; levying additional special assessments against property within the district; establishing a lien on such property; approving an updated assessment roll for the district; providing for payment of the additional special assessments in accordance with Chapter 372, Texas Local Government Code; providing for the method of assessment and the payment of the additional special assessments; providing for penalties and interest on delinquent assessments; providing for a severability clause; providing an effective date; and providing for related matters.
Body
Meeting date: October 16, 2018
Department: City Manager Office
Amount & Source of Funding
Funds Required: N/A
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Fiscal Note:
Prior Council Action: The City Council approved the Amended Trace Public Improvement District Financing agreement and the Acquisition and Reimbursement agreement on September 18, 2018 and they also amended the Trace Public Improvement District Term Sheet on August 7, 2018. The first reading was held at the October 1, 2018 City Council meeting.
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Background Information:
Highpointe Communities has approximately 420 acres of land, generally located on the east side of IH-35, south of Posey Road, and also bordered by Old Bastrop Highway, at the
southern edge of the City of San Marcos. The property is primarily for residential housing along with a component of multi-family along with a business park and community commercial.
On September 1, 2015, the City of San Marcos approved a term sheet that designated the parameters for which a Public Improvement District for the Trace Subdivision would be created. The key terms of this term included the following:
Maximum Total Indebtedness $19,500,000
Total Construction Dollars for which the developer can be reimbursed $15,500,000
The Maximum Total Equivalent Tax Rate could not exceed $0.50
In October 2016, the City Council adopted a Service and Assessment Plan for the Trace Public Improvement District. Periodic updates to this document are required by the San Marcos City Council usually on an annual basis. The Trace Development is to the point in its project where an update to the Service and Assessment Plan needs to be brought before the City Council. During the update of those documents, a request was made by the developer to amend the deal terms of the Public Improvement District so that the overall Business Park and Commercial equivalent tax rates could be reduced thus making the commercial property more competitive. This does slightly increase the overall residential equivalent tax but the total tax rate is still below the originally approved $0.50 tax rate.
Projected Tax Rate Equivalents
Residential and Multifamily $0.3387 per $100 of evaluation
Retail and Business Park $0.1900 per $100 of evaluation
Initial projections for all phases was approximately $0.46 per $100 of evaluation
This increases the overall maximum assessment to $22.1M up from $19.5M but it should be noted that this does not increase the overall maximum debt to be issued for this project ($19.5M) nor the amount that the developer will be reimbursed for construction improvements ($15.5M)
The adoption of the Service and Assessment Plan was approved via a resolution by the City Council on August 7, 2018. It was later discovered that the assessments should have been adopted via Ordinance. The first reading of this was done at the October 1, 2018 City Council meeting. After the first reading was approved by the City Council, City staff was contacted by the developer’s attorney who was requesting some very minor wording edits to the Service and Assessment Plan. City staff is fine with these recommended changes. They are attached as a redline to this agenda item. The changes can be found on pages 2, 6, 10 and 14. City staff is asking the City Council to replace the Service and Assessment Plan that was attached to the October 1, 2018 agenda with the redline that is attached.
Council Committee, Board/Commission Action:
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Recommendation:
City staff recommends approval of the Tax Assessment Ordinance, but also recommends the replacement of the amended redlined service and assessment plan.