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10-11-2022 Agenda w Backup       SCHERTZ TAX INCREMENT REINVESTMENT ZONE NUMBER TWO HAL BALDWIN MUNICIPAL COMPLEX COUNCIL CHAMBERS 1400 SCHERTZ PARKWAY, BUILDING #4 SCHERTZ, TEXAS 78154      AGENDA TUESDAY, OCTOBER 11, 2022 AT 4:00 PM          CALL TO ORDER   HEARING OF RESIDENTS This time is set aside for any person who wishes to address the Schertz Tax Increment Reinvestment Zone Number Two. Each person should fill out the speaker’s register prior to the meeting. Presentations should be limited to no more than 5 minutes. Discussion by the Board of any item not on the agenda shall be limited to statements of specific factual information given in response to any inquiry, a recitation of existing policy in response to an inquiry, and/or a proposal to place the item on a future agenda. The presiding officer, during the Hearing of Residents portion of the agenda, will call on those persons who have signed up to speak in the order they have registered.   DISCUSSION AND/OR ACTION ITEMS   1.MINUTES - Consideration and/or action regarding the approval of the minutes of the April 12, 2022, TIRZ Number Two Board Meeting.  (B. James)      2.CROSSVINE DEVELOPMENT - Overview of the Crossvine Development.     3.REPORT OF TIRZ FINANCIALS - Discussion of Finances of the TIRZ.     ADJOURNMENT   CERTIFICATION I, CYNDI SIMMONS, ADMINISTRATIVE ASSISTANT - CITY MANAGEMENT, OF THE CITY OF SCHERTZ, TEXAS, DO HEREBY CERTIFY THAT THE ABOVE AGENDA WAS PREPARED AND POSTED ON THE OFFICIAL BULLETIN BOARDS ON THIS THE 7TH DAY OF OCTOBER, 2022, AT 10:00 AM, WHICH IS A PLACE READILY ACCESSIBLE TO THE PUBLIC AT ALL TIMES AND THAT SAID NOTICE WAS POSTED IN ACCORDANCE WITH CHAPTER 551, TEXAS GOVERNMENT CODE.  Cyndi Simmons   I CERTIFY THAT THE ATTACHED NOTICE AND AGENDA OF ITEMS TO BE CONSIDERED BY THE CITY COUNCIL WAS REMOVED BY ME FROM THE OFFICIAL BULLETIN BOARD ON _____DAY OF _______________, 2022. TITLE: ________________________________ This facility is accessible in accordance with the Americans with Disabilities Act. Handicapped parking spaces are available. If you require special assistance or have a request for sign interpretative services or other services, please call 210-619-1023 at least 24 hours in advance of meeting. October 11, 2022 TIRZ NUMBER TWO BOARD                  Page 1     Schertz Tax Increment Reinvestment Zone Number Two Minutes Tuesday, April 12, 2022 4:00 PM 4-12-2022 Minutes Tax Increment Reinvestment Zone Board The Schertz Tax Increment Reinvestment Zone Number Two convened for a meeting on Tuesday, April 12, 2022 at 4:00 PM in the Council Chambers, Building #4, 1400 Schertz Parkway, Schertz, Texas 78154 TIRZ Board of Directors Present: Dahle, Michael, Chair (arrived at approximately 4:20 PM) Davis, Mark, Vice Chair McChesney, Jr., Clark Whittaker, Jill Calvert, Jr., Tommy, Bexar County Member Leal, Manuel, Bexar County Member TIRZ Board Members Absent: Inmon, Gary Trefzer, Rick, SARA Staff Present: Brian James, Assistant City Manager James Walters, Finance Director Developer Brad Pittenger CALL TO ORDER at 4:20 PM by Councilman Davis. HEARING OF RESIDENTS Brad Pittenger, Representative for The Crossvine, spoke about the passing of Chris Price on March 28, 2022. Mr. Pittenger mentioned that he has been part of the team for about a dozen years along with Bradley and Jesse and that nothing is going to change. He explained that they are going to continue with Chris’ legacy, doing exactly what he has done because we’ve been part of this along with Brian James from the very beginning. We’re really proud of The Crossvine. And Chris was prouder of The Crossvine than any real estate development than he’d ever done and nothing is changing. We’re moving forward doing things just the same way with the same attention to detail that we have. A lot of our ability to do that is because of the TIRZ – you know that and we know that and we really do appreciate everything that you’ve shown us on the TIRZ Board as well as council members. Thank you and I appreciate you being here. Tommy Calvert remarked that it be under consideration that we name a street or something in the development to name after Chris if there’s still opportunity. Brad Pittenger replied that they are looking into that. 1. Minutes: Consideration and/or action regarding the approval of the minutes of the January 11, 2022 and April 13, 2021 TIRZ Meetings. A motion was made by Clark McChesney to approve 4-12-2022 Minutes Tax Increment Reinvestment Zone Board 2 the minutes of both the January 11, 2022 and April 13, 2021 Meetings. Seconded by Jill Whittaker. Motion passed. Vote was unanimous. 2. Crossvine Development: Overview of the Crossvine Development. Brian James reported that the development continues to move forward. A few items that have been pending with the city that we’re trying to work through – two of those go to City Council tonight. The first is the Garden Home Project. They have built the infrastructure and ready to file the plat, except the city has a requirement that says those landscaped common areas have to be landscaped prior to filing the plat for a variety of reasons (stormwater runoff is one of those). In this case, because it’s the Garden Home Project, it is more challenging. Also, the way they plan to put in the houses, some of the common areas between lots becomes problematic. What they have is a subdivision improvement agreement and Council sees that more with commercial development plus often with residential, but essentially lets them file the plat after putting up a surety and then they have a certain timeframe within the agreement by which they have to install the infrastructure. We do this fairly often with commercial (those don’t even have to go to Council). We don’t do residential as often generally because we don’t want a future lot buyer to be calling in and asking why they can’t move forward. The second thing is for their future phase that is further down south off Ware Seguin Road, one of the issues that they had is that ties onto Ware Seguin Road into a section what we’re calling the Ware Seguin Road bypass that serves part of Schertz Forest and staff expressed concerns about the development funneling traffic into that. As we worked up a plan, the applicant purchased a lot to ultimately be dedicated as right-of-way. Their new phase would have a road tying into the bypass. As the community grows it’s going to be problematic and will funnel all the traffic in front of those residential homes which is not a good idea. The applicant purchased the lot and transferring the ownership tonight to the City and will retain an easement over the property so that on the sides of the road they have the ability to install landscaping, signage, etc. From the City’s perspective, we appreciate their willingness to work with us because we think it’s much better to have that road come in, tie in appropriately, and we’ll close off a section once that road is built so that the residents will have two ways in from the new road and Ware Seguin, but they won’t have all that traffic coming across in front of their houses. Those are both moving forward tonight. The other one we have is a cautionary agreement with some of the utility relocation in conjunction with the FM 1518 project. As Council knows, we’re having to relocate our utilities out of the right-of-way of 1518 and out of the way of the 1518 project. The developer is having to install some infrastructure there. Rather than each of us work parallel, it makes sense to work together. We’re trying to refine the agreement in terms of who pays for what and why. They can probably get it done cheaper than we can and with the TIRZ they have to go out and publicly bid. They are also working on getting the plat information we need fully submitted for the shooting range property. With the amended agreements, they’re dedicating approximately one acre next to the fire station. The City lacks a shooting range for our police department and the idea is to build an indoor facility there. We can partner with other government entities for its use – JBSA Randolph and the County – to maximize it for our taxpayers. Tommy Calvert asked if this is an area that has broadband internet or do we still need to work to get it? Brad Pittenger answered that broadband is provided by AT&T and Spectrum. In the region, tommy Calvert indicated he has had calls about a lack of broadband and he just had a meeting with the president and vice-president of AT&T of Texas and they will be doing a tour of some of the areas that don’t have internet. 4-12-2022 Minutes Tax Increment Reinvestment Zone Board 3 The second question is in terms of the shooting range, he wants to know if it crosses into any of the APZ 1 or 2. Brian James indicated that it does not. Brad Pittenger also noted that we no longer own everything that Schertz 1518 had that was within the APZ. We weren’t going to develop it and transferred it to an adjacent landowner who has put a conservation easement on it. Anything that was APZ-related or was in the accident potential zone will not have any development. Brian James showed a map with the different zones. Brad Pittenger reports that they have 77 garden home lots. The plat should be filed this week and the builders are ready to go. On the other side of Woman Hollering Creek, we have 138 single-family lots under construction and should be done May-June. After those are completed, they are moving to the next section so there is a continuous supply of lots for the builders. The second section will have a second amenity center. Tommy Calvert asked if they are finding a lot of out-of-town folks who are purchasing or in-town. Brad Pittenger answered that most are in- town with a civil service/military connection of some type. There are some people who’ve been stationed here, move, but keep a home here because this is where they want to come back to. 3. Board Membership Regulations: Discuss and Review the Board Membership Regulations. Brian James reported that at the last meeting there was discussion regarding the seats that no one attends for and those are the members of the state senate and state house. The local government code, we are required to have those positions. It’s the member who is actually a member of the board except they may designate another individual to serve in their place at their pleasure. We can certainly see if we can get an appointment for those members, however, it’s hard to fill in those spots. With Chris Price’s passing, that is a city-appointed position. Mr. Pittenger indicated he was going to apply. There’s a provision that if you’re a representative or owner of a certain amount of the property you can sit on the board. That will be coming through the normal city process for that reappointment. 4. Veteran Exemption: Discussion of the Veteran Exemption in the TIRZ. Brian James reports that we are still working to finalize this. We are working to gather all the information. (Councilman Dahle arrived at this point.) The idea was to cover the veterans homestead exemptions. The city has a very high amount of veteran’s homestead exemptions at the various level. San Antonio prides itself on being Military City U.S.A. with a welcoming environment and level of services provided for veterans and folks want to locate here. The discussions that have occurred at the city level we certainly think it’s a great program and think folks deserve that benefit for what they’ve sacrificed for the country. The caveat that we add is that we really think the entire state should help pay for that in part because we want to provide those services that those folks may need that may be different or higher in other places given their particular needs, so having the whole state help pay for that would be beneficial for all of the communities. While the state does have a mechanism to recoup some of this, there are a lot of cities competing for it and then the other thing that we’re empathetic to is that there are certainly communities who are next to a base and are not eligible to participate in that program. For example, Cibolo probably has a high number of veterans as well but they don’t get the ability to apply for that exemption going forward and you have some cities that have a much higher level, more significant impact like Killeen. We’ve applied for funding again this year with the state, but what it means is that it’s a significant number of full exemptions and a fair number of partial exemptions. Brian presented a graphic showing the areas with the most exemptions – Laura Heights area. We’re still working with other counties to gather data to show what it will look like. The city and county were generous with their last amendments in terms of the length of the extension, adding areas, and the maximum reimbursable amount. From the staff perspective, we felt like we had gone fairly far but don’t want to close the door entirely. Once we finalize numbers, we will send them to SCUCISD look at it just for awareness. Tommy Calvert mentioned infrastructure funding options, particularly with regard to water and roads, and asked if we had thought about 4-12-2022 Minutes Tax Increment Reinvestment Zone Board 4 applying for Federal ARPA funds. Brian James reports that we applied earlier this year for $3.5 in federal funds for the Corbett ground storage tank that was awarded in the appropriations budget. The City of Schertz has been particularly blessed with regard to Federal funding, TxDOT funding, and County partnerships and funding as well. We’ve really benefited quite a bit from those. There was one grant that came through the other day we thought would be appropriate for the shooting range project. James Walters reported on the certified tax roles of Bexar County (presentation). There is $154 million and with exemptions of $37,600,000, the collectable taxes are $116,800,000. That reflects over 20%. This includes ALL types of exemptions, including school districts. This information comes from the appraisal districts. The majority of the portion of the $37,600,000 in exemptions in the TIRZ area is from the veteran’s homestead exemption with $600,000 from the disabled veteran exemption. Jill Whittaker asked how that is affecting the numbers we wanted to see versus what we’re saying because of the reduction in taxable value. James Walters replied that with the full tax rate for the City of Schertz, it amounts to approximately $200,000 in taxes that the city is not collecting. She asked if that was anticipated when we created the TIRZ. Brian James answered that it was not anticipated when we created the TIRZ. That’s one of the reasons why we recommended support in extending support for the term of the TIRZ and increasing the maximum assessable fee to help offset this amount. It affects the quality and direction of the development. From a staff perspective, barring a significant change there, we think we have a good plan going forward that everyone understands. What it means is that they will get paid back more slowly and may not achieve as much in the end than they would have otherwise. If you look at the Laura Heights area, as folks age and they look to downsize, are we going to have people that are able to afford those houses without that exemption. Clark McChesney advised that we’ve have about five homes in the last six months that have turned over in Laura Heights and half of those are DV eligible folks that have moved in and bought resales. Jill Whittaker asked as long as there continues to be disabled veterans and they are handing out 100% disability, she thinks there shouldn’t be a shortage of exemptions. She expects to see a similar turnover, but that’s why they can afford to buy in there. She’s worked with a lot of families and if weren’t for the exemption, they couldn’t afford to live there. Tommy Calvert also affirmed the projections but noted that at that price point, it’s a pretty small number of people that qualify in Bexar County. It becomes even less when you look at the competition county-wide with where someone wants to live. Long-term, it’s something communities have to think about. It's a misnomer to call it the Bexar County Appraisal District – it should be called the Texas Appraisal District of Bexar County. This a real problem long-term. James Walters added that if about 20% taxable value is lost in this particular area in the TIRZ, the original projections are now about 20% off which causes us to adjust and change and this group has taken some of those changes. Jill Whittaker asked if the developer feels this is sufficient and feels it necessary to ask the question. Brad Pittenger replied that the amendments that were made to the TIRZ are what has made it viable, particularly extending the term that’s associated with it. We do an evaluation very similar to what James does and we break it down into City, County, and SARA and the relative valuations for each one of them because it’s adjusted to a certain extent by the increase in value. They had assumed a 2-2.5% growth rate, but last year it was 4.5-5%. What that did was offset a little bit what the increase in waivers were from the various 100% to whatever the reduced rates are for veterans. We’re tracking based upon what our projections are and that we’re going to get fully reimbursed for everything. They did everything in a very conservative fashion. When we did our TIRZ monetization recently, they did so based upon actual income that was being received in the prior year. We continued to add houses which means we continued to add debt 4-12-2022 Minutes Tax Increment Reinvestment Zone Board 5 service coverage ratio as a result of increasing what the tax revenue coming in is. We may look at doing another one, but frankly we did so well with the last one and it’s helped capitalize us to be able to do garden homes as well as additional single-family lots at the same time. This is an expensive business building roads and services. He’ll do a summary for the next TIRZ meeting that will be helpful. We had an increase in veteran waivers last year and his projections were almost perfectly on point because we had an increase in appreciation at the same time. Adjournment: Motion made by Michael Dahle to adjourn the meeting. Seconded by Jill Whittaker. Motion passed. Vote was unanimous. Meeting adjourned at 4:56 PM. Attest: ________________________________ ________________________________ Mark Davis, Vice-Chairperson Brian James, Recording Secretary