Civic Insights – Page 2 – Act Locally Waco

Civic Insights: Who Pays for that Pipe? Part I

(City council, school board, planning commission, county commissioners – these groups and several others represent us. They do the day to day work of running our community. It is our responsibility to keep informed about their work so that we can help them represent us effectively. “Civic Insights” by Jeffrey Vitarius is a regular feature of Act Locally Waco. Its purpose is to help us understand decisions that shape our community so that we can participate effectively as informed, engaged residents of Waco. – ALW)

By Jeffrey Vitarius

What is a fair way to pay for the infrastructure improvements required for new developments? That is the question at the heart of a policy the city has been considering since January 2019: impact fees.

In 2016, the City adopted a comprehensive twenty-five year plan that noted that “the question is not whether Waco will grow, but what form will this growth take. It is important that Waco grow in a manner that is economically, environmentally, and culturally sustainable.” One of the critical challenges this plan identified was that of “increasingly dispersed development,” development occurring farther and farther away from the city’s core.

Why would this be a challenge? Let’s start with the basics. Imagine a set of new homes on a few acres of land that used to be a farm. This new development will need a few things to thrive, for example, roads to connect it to the rest of the city, and pipes to carry water in and wastewater (also known as sewage) out.

Even if there are already roads and pipes in the area, it may not just be a matter of connecting the new development to the existing network. Our new batch of homes will mean increased volume of cars, water, and wastewater in that part of the city. The roads and pipes around the development may need to be upgraded to handle the increased volume. We call these kinds of projects – to construct new roads and pipes or upgrade existing roads and pipes for more volume – “infrastructure improvements.” There are plenty of other kinds of infrastructure improvements, but for the purpose of discussing impact fees, we will focus on these.

It is one of the city’s jobs to construct these pipes and roads. The challenge comes in how to pay for these projects. The city already has a substantial inventory of roads and pipes that it needs to monitor, repair, and eventually replace.

How can the city pay for all of its current obligations much less the additional demands from new development? As the twenty-five year plan identifies “given the limited capacity and deteriorated condition of existing infrastructure, the City cannot afford to provide subsidies to encourage development at suburban densities in rural areas.” In plain English that means: our new set of suburban houses on what used to be farmland creates a financial difficulty for the city. Enter the impact fee.

The concept of the impact fee is fairly straightforward though it can get complicated in implementation and practice. The twenty-five year plan explains that impact fees serve as “a means of ensuring new development pays an equitable share of the costs associated with the construction and expansion of public infrastructure needed to service new development…Impact fees shift some of the cost of financing public facilities [roads and pipes] from the general taxpayer to the direct beneficiaries of these facilities [roads and pipes].”

In other words, impact fees move the cost of improvement from the city generally (where it is paid by existing taxpayers) to the developments that are more directly served by those improvements. If we think back to our former farm, theoretically impact fees would require that the developer pay part of the cost of the roads and pipes. The use of the phrase “equitable share” in the quote above hints at the large complicated question around this simple policy idea. At what amount is an impact fee fair?

Within that question are two considerations, the first is a matter of analysis and the second is a matter of policy. First the city has to determine how much impact fees could be to cover the cost of anticipated development. Then the much more difficult question of how much the impact fees should be can be addressed. In Waco we are in the transition from the could part of this process to the should part of this process.

In July of 2019, the city formed the Capital Improvement Advisory Committee to review the impact fee question (among other things) and make recommendations to the City Council on how to best proceed with this policy. That committee met this week to discuss the conclusion of the could part of the process (maximum fee calculations) and the start of the should part of that process (policy considerations).

Like many of the topics we take a look at in Civic Insights, this one is complicated and will take a few posts to get through. It looks like the City Council will be holding a public hearing on this question on October 6th. I will aim to get us caught up with the could part of the process by then.

Meeting notes:

Waco Capital Improvements Advisory Committee met on 09/09/20 – For the full agenda click here

Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email [email protected]for more information.

Meeting Insights: Waco City Council Meeting – 09/01/20

By Jeffrey Vitarius

(Civic meetings happen in Waco every week – city council, school board, planning commission, and countless others. Decisions from these meetings affect our lives every day. Many of us are curious about these meetings, but to be honest, it’s just too hard to decipher the jargon and figure out what’s going on and why it’s important. Act Locally Waco is trying something new in August! Jeffrey Vitarius follows civic meetings for his work and out of personal interest. Each week in August he will pick a meeting in our community and highlight one or two items from the agenda to translate from “government-ese” into language we can all understand. We’re calling the series “Meeting Insights.” Let us know what you think! If you enjoy it, we will try to keep it going! — ALW )

The Waco City Council meets every other Tuesday. The work session starts at 3:00, that is where most of the explanation and discussion happens. The business session is at 6:00, that is when the council takes action (votes). The public is invited to attend either or both of these sessions, although, for the time being due to COVID-19, that attendance is virtual through the Waco City Cable Channel (WCCC.TV/live) with public comments sent in ahead of time. Today we will highlighting Public Hearing Agenda item 2…the Downtown Waco Public Improvement District.

Meeting Basics

Work Session – 3:00 pm / Business Session – 6:00pm
To watch the live stream click here (City of Waco Cable Channel, wccc.tv)
For the full agenda click here
For the meeting packet with the documents pertinent to the meeting click here. Quick note on page numbers: the numbers I will be referring to below are the “packet page numbers” found on the bottom right corner of each page of the meeting packet. These do not always match the number of the page in the pdf. One neat aspect of the packets the city builds for city council meetings is that you can click on the agenda item on the agenda page of the packet and it will take you directly to the relevant materials.
Details on how to provide public comment are listed in the agenda

What’s in a PID? – the Downtown Waco Public Improvement District

Public Hearing Agenda Item 2 – PH-2020-584 Conduct a public hearing and consider an ordinance approving and adopting an updated Service and Assessment Plan, including the Assessment Roll, for providing improvements and/or services in Waco Public Improvement District Number One during Fiscal Year 2020-21. FIRST READING

Two weeks ago we took a look at the Waco Tourism Public Improvement District (TPID) and its service and assessment plan. This week, the service and assessment plan of an entirely different kind of Public Improvement District (PID) is on the City Council agenda.

As I explained in the previous post, a PID allows for the collection of an assessment (more on that below) in a certain geographic area to provide additional services to the property owners in that area. The downtown PID focuses on providing additional services to Downtown Waco. Let’s jump into how the PID is funded and what services it provides. (Full disclosure, I spend a substantial portion of my day job administering and managing some of the programs of the Downtown Waco PID so I may be a little biased.)

Every property within the PID (there is a handy map below) pays an extra $0.10 per $100 of property value to the PID. This is the “assessment.” These assessments are pooled together to pay for services that benefit Downtown Waco collectively. The service and assessment plan describes the services the PID will provide in a given year. The service and assessment plan for 2021 can be found on pages 47-61 of the meeting packet.

The services the PID provides to Downtown Waco fall into a few different categories. This list is not everything the PID does, but it should give you a pretty good idea:

Clean and Safe – This is the biggest one it is generally over 50% of the budget each year and basically boils down to keeping the public areas of Downtown…well…clean and safe. This can look like landscaping services, using lasers to chase birds out of trees, washing away bird droppings, and painting over graffiti. It also includes a reporting service, which is actually a person whose name is Dave. You can find him riding around Downtown in the Clean and Safe Team golf cart making sure issues are taken care of. If you happen to see him you should say “hi” (socially distant and masked of course), he is a pretty friendly guy.

Beautification – From time to time the PID funds efforts to make Downtown even more inviting than it already is. If you noticed the red bows along Austin Avenue and Elm Avenue last holiday season, those were a PID project. The banners identifying the different “districts” of Downtown are a PID project. The PID has also been one of the funders for ARTprenticeship, which has created murals on the Brotherwell building on Bridge Street and along Jackson Avenue between 2nd Street and University Parks

Marketing – The PID operates a website and social media accounts that give Downtown Waco a voice, elevate the efforts of all the folks that make up Downtown, and encourage others to visit. You can find the website (downtownwacotx.com) and you may want to follow the social media (Downtown Waco) to find out the latest about what is going on Downtown.

Programming – The PID has historically supported the Waco Wonderland event. The PID also looks for interesting and innovative ways to encourage or support other kinds of programming that make Downtown Waco an interesting place to visit time and time again.

Looking through the services, one general theme is that the offerings are for the benefit of all of Downtown. Each of the property owners benefit from Downtown being clean, beautiful, marketed and full of events. The reason for a PID like this is to provide these services that are best accomplished collectively by all the property owners together.

In terms of process, the property owners provide input on these services through the Downtown Waco Public Improvement District Advisory Board (or PID Board). This board is made up of representatives of at least 50% of the taxable area and at least 50% of the taxable value within the PID. Each year, they review and recommend the service and assessment plan that is then sent to City Council for final approval. As you now know, it’s on the agenda this week. The property owners and other stakeholders also assist the PID by sitting on a variety of committees that oversee different service areas. Most of the day-to-day work is carried out by City Center Waco (where I am employed) and its contractors. This is just one of City Center Waco’s functions, but that is a topic for a different day.

Over the last five weeks we have touched on a number of topics and board/committees/councils. I thought it might be a good idea to tie them all together with a single example. Let’s say you think it would be a good idea to build a hotel in Downtown Waco. The property you are looking at has recently become much more attractive now that trains will no longer be blaring their horns thanks to the TIF. Perhaps the property is not zoned to allow for a hotel, so you file for a zoning change that ends up before the plan commission. Perhaps you seek TIF funding for some portion of your project. If all goes right, a handful of years down the line you end up with a properly zoned, mostly quiet, fully functional hotel. Each year your guests pay 2% of their room charges to fund the TPID that markets Waco’s hotels across the United States. Meanwhile, you, the property owner, pay $0.10 per $100 towards keeping your part of town clean, safe, beautiful, marketed and programmed. All the while, some portion of the taxes you pay to the City, County, Community College, and School District end up back in the TIF paying for further improvements and developments.

Thanks for coming along with me over the last month. I have appreciated the opportunity to take a closer look at the beautiful, complicated, and ever developing world that is Waco and its public meetings. I hope this has been helpful to you and encourages you to zoom in on whatever local topic sparks your interest. I plan to keep this going as long as I can and I have a few additions (hopefully) taking form in the back of mind. See you again next week.

Other Interesting (to me) Items From the Agenda

A presentation on the Bridge Street project is scheduled for the work session. This is another project CIty Center Waco has been working on and should be interesting.
Budget Watch – we are nearing the end of the budget process. Here is a brief review of how we got here:
- July 21st – city staff talked through preliminary budget projections with City Council
- August 4th – City Council discussed the tax rate and set the public hearing for this week (we talked about the tax rates here)
- August 25th – City Council voted on a resolution to establish when they would take a final vote on the tax rate
- September 1st – there is a public hearing on the budget followed by two votes. The first will approve the budget and the second will authorize City Manager to spend (formerly expend) certain portions of that budget. This allows City management to pursue certain standard expenses (think payroll and benefits) without having to come back to City Council.
There are two resolutions and one ordinance related to the movement of Texas Meter and Device Company from Downtown Waco to a site to be purchased from the Waco Industrial Foundation. This is related to that potential high rise development that might be under consideration for the former Texas Meter and Device Company location. This is an interesting look at the various tools in the City’s economic development tool kit.

Meeting Insights: Plan Commission – 08/25/20

By Jeffrey Vitarius

(Civic meetings happen in Waco every week – city council, school board, planning commission, and countless others. Decisions from these meetings affect our lives every day. Many of us are curious about these meetings, but to be honest, it’s just too hard to decipher the jargon and figure out what’s going on and why it’s important. Act Locally Waco is trying something new in August! Jeffrey Vitarius follows civic meetings for his work and out of personal interest. Each week in August he will pick a meeting in our community and highlight one or two items from the agenda to translate from “government-ese” into language we can all understand. We’re calling the series “Meeting Insights.” Let us know what you think! If you enjoy it, we will try to keep it going! — ALW )

The City of Waco Plan Commission meets three times each month. They hold work sessions on the 3rd Wednesday of each month at noon and the 4th Tuesday of each month at 6:00 pm, that is where a lot of the explanation and discussion happens. They hold one business session each month on the 4th Tuesday at 7:00 pm, that is when the commission takes action (votes) and where the public can provide comments. Due to COVID-19, attendance at the business session is virtual through the Waco City Cable Channel (WCCC.TV/live) with public comments sent in or scheduled ahead of time. Today we will be highlighting Zoning Application Agenda item 6…a short-term rental special permit.

Meeting Basics

Work Session – 6:00 pm / Business Session – 7:00pm
To watch the live stream click here (City of Waco Cable Channel, wccc.tv)
For the full agenda click here
For the agenda item details with the documents pertinent to the meeting click here.
Details on how to provide public comment are listed in the agenda

The Language of Short-Term Rentals

Zoning Applications Item 6 – Z-20-55 – Enrique and Laura Najera – 3601 Orchard Lane – Special Permit for a Short Term Rental Type II in an R-1B District.

Let’s start with some history. In 2016, the “tourism boom” generated by Magnolia Market at the Silos (a project at least partially funded by the TIF) met with the expansion of online short-term rental services like Airbnb and VRBO to create a unique boomlet of “vacation rentals” in Waco. At the time, there was a permitting process around these kinds of rentals (identifying them as either “temporary residential rental units” or “bed-and-breakfast homestays”). The city began actively pursuing units lacking a permit in September of 2016, and there were a number of controversies and disputes around these permits in late 2016 and early 2017.

As a result, a task force was called together to review the existing permitting process and propose changes to streamline the process and address neighborhood concerns. The resulting ordinance was passed by city council in July of 2017. Earlier this year, changes to the ordinance (mostly focused on higher density areas) were approved by council.

The process around short-term rentals can be a bit complicated so this may take a few meeting insights to tackle. For today, we’ll focus on breaking down the agenda item as it is listed and understanding what this tells us about the permit up for discussion and review.

“Enrique and Laura Najera – 3601 Orchard Lane” – this portion of the item identifies who is seeking the special permit and the address that the permit would apply to. Pretty straight forward to start.

“Special Permit” – permits are the way the city manages certain kinds of activity within its boundaries (here is a list from the city’s website). These activities range from community gardens and farmer’s markets to short-term rentals. The activity is not allowed unless one has gone through the process of obtaining a permit. Each permit has its own process and different permits require different approvals. Short-term rental permits require a City Council vote to be granted.

“for a Short-Term Rental” – this is the kind of permit pursued. In case you were wondering, short-term renting is defined as renting for less than thirty consecutive days.

“Type II” – this is the kind of short-term rental permit pursued. This is where things get complicated. The ordinance passed back in 2017 created five different categories of “short-term rental permits.” In a basic sense they can be understood based on four conditions:

Is there “onsite” management? – meaning is there a property owner or representative of the property owner at the location when it is being rented
Are multiple groups allowed? – can the location be rented out to different groups of people at the same time
Is the location part of a multi-family property? – is the location located on a property with three or more residential units (think apartment or condo complexes as opposed to stand-alone houses)
How many guest rooms are permitted? – this identifies what kind of bed and breakfast the location would be considered

The table below shows how these four conditions create the five categories.

Category	“Onsite” management?	Multiple Groups?	Part of multi-family property?	Guest Rooms Permitted
Bed and Breakfast Homestay Establishment (BBHE)	Yes	Yes	No	No more than 5
Bed and Breakfast Inn (B&B Inn)	Yes	Yes	No	No more than 15
Short Term Rental Type I (STR Type I)	Yes	No	No	Not applicable
Short Term Rental Type II (STR Type II)	No	No	No	Not applicable
Short Term Rental Type III (STR Type III)	No	No	Yes	Not applicable

Looking through these conditions you can see why they were considered when creating the different categories. It probably matters to neighbors whether there is someone there to keep an eye on renters and if the location is going to be rented out to multiple groups.

Each category has different restrictions and limits (a good topic for another time). The category under consideration here is STR Type II meaning there may not be onsite supervision, there will not be multiple groups allowed, and the location is not a multi-family property.

“in an R-1B District” – this indicates the zoning of the property being considered for the permit. Zoning is its own huge complicated topic, but in a basic sense zoning indicates what kinds of buildings and uses can occur in a particular area. In this case R-1B zoning is generally meant for stand-alone homes with moderate density. A good deal of this zoning can be found in North and West Waco.

So putting all this together – Enrique and Laura Najera are seeking a permit for 3601 Orchard Lane that would allow them to rent that location out for less than thirty days to one group of people without onsite supervision in a part of town where stand-alone homes of moderate density are the norm.

Other Interesting (to me) Items from the Agenda

There is another STR Type II in an R-1B District permit up this week at 2701 Herring Avenue. What makes this one interesting is that there is already a permit in place for that location, but permits cannot be transferred from one owner to another. So it is back at plan commission for review under a new potential owner
There are three rezones up for this week’s meeting, one from R-2 to O-3, one from R-1B (the one we touched on above) to R-2, and one from M-2 to O-2. I am hoping over time we can work our way through the different zones and what they mean for Wacoans

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email [email protected]for more information.

Meeting Insights: Waco City Council Meeting – 08/18/20

By Jeffrey Vitarius

(Civic meetings happen in Waco every week – city council, school board, planning commission, and countless others. Decisions from these meetings affect our lives every day. Many of us are curious about these meetings, but to be honest, it’s just too hard to decipher the jargon and figure out what’s going on and why it’s important. Act Locally Waco is trying something new in August! Jeffrey Vitarius follows civic meetings for his work and out of personal interest. Each week in August he will pick a meeting in our community and highlight one or two items from the agenda to translate from “government-ese” into language we can all understand. We’re calling the series “Meeting Insights.” Let us know what you think! If you enjoy it, we will try to keep it going! — ALW )

The Waco City Council meets every other Tuesday. The work session starts at 3:00, that is where most of the explanation and discussion happens. The business session is at 6:00, that is when the council takes action (votes). The public is invited to attend either or both of these sessions, although, for the time being due to COVID-19, that attendance is virtual through the Waco City Cable Channel (WCCC.TV/live) with public comments sent in ahead of time. Today we will highlighting Ordinance Agenda item 2…the Waco Tourism Public Improvement District (TPID).

Meeting Basics

Work Session – 3:00 pm / Business Session – 6:00pm
To watch the live stream click here (City of Waco Cable Channel, wccc.tv)
For the full agenda click here
For the meeting packet with the documents pertinent to the meeting click here. Quick note on page numbers: the numbers I will be referring to below are the “packet page numbers” found on the bottom right corner of each page of the meeting packet. These do not always match the number of the page in the pdf. One neat aspect of the packets the city builds for city council meetings is that you can click on the agenda item on the agenda page of the packet and it will take you directly to the relevant materials.
Details on how to provide public comment are listed in the agenda

A Waco Tourism Public Improvement District (TPID) – A Whole New Kind of District

Ordinance Agenda Item 2 – ORD-2020-576 – Consider an ordinance approving and adopting the final service plan for the Waco Tourism Public Improvement District (“TPID”) for Fiscal Year 2020-21, levying special assessments on properties in the TPID to pay for the costs of services provided in accordance with the final service plan, setting charges and liens against property in the district and against the owners thereof, and providing for the collection of the special assessments. SECOND READING

You may notice that certain items on City Council agendas are labeled “first reading” or “second reading.” This indicates that the item under consideration needs to come to council twice before it can receive a final vote. That is how the Waco Tourism Public Improvement District (TPID) has found itself on two consecutive City Council agendas.

For some of you the “PID” acronym may ring a bell. PID stands for “Public Improvement District.” Waco already has two other Public Improvement Districts. The one you have most likely heard of is the Downtown Waco PID. In really broad terms, a PID is a special district created by a city or county. It allows for the collection of an assessment from properties within a certain geographic area. An “assessment” is kind of like a tax – it’s not exactly the same thing, but that’s an easy way to think of it. The money from the assessment is used to provide services to the property owners in the district. These services supplement what the city or county is already providing. For example, the Downtown Waco PID uses some of its assessment to pay for additional cleaning (grackle poop!) and security downtown.

Similar to the way the Downtown Waco PID supports Downtown, the proposed Waco Tourism Public Improvement District (TPID) would support tourism and visitors across Waco.

The city council endorsed the idea of creating a TPID back in November of 2018 (Trib articles here and here). In June of 2019, a bill allowing for the creation of such a district was filed by the Texas legislature (HB1474).

The next step for the organizers of the TPID was to acquire signatures from property owners representing both 60% of the value of the hotels that would be within the district and 60% of the area of the hotels that would be within the district. That hurdle was cleared in June 2020 (receiving endorsements from 85% of the value, and 79% of the area). Now the city council is considering the TPID’s service and assessment plan – basically the plan that explains what they intend to do with the money collected by the TPID.

I spoke with Carla Pendergraft, the Director of Marketing, at the Waco Convention and Visitors Bureau, about the fine points of what the TPID could do for Waco and am indebted to her expertise for the explanation that follows.

What is a Tourism Public Improvement District (TPID)? And why would we want one? In the broadest sense, it is a way for local hotels to pool resources and encourage folks to visit Waco. The proposed TPID will be made up of all Waco hotels with more than seventy-five rooms. This includes some of the anticipated hotels along that quiet zone corridor we talked about last week. At the moment, there are twenty-seven hotels that have or will have at least seventy-five rooms (there is a full list on page 314 of the meeting packet). The TPID will collect a 2% assessment on each night stay at one of these hotels and then use those assessments to fulfill its service plan. (Note: Technically the City collects the assessment and then provides it to the TPID).

So, let’s say a family member is visiting from out of town and their hotel room costs $100 per night (for a nice round number). At the end of their stay, they will also be contributing $2 per night to the TPID (2% of $100). Ultimately, there should be no direct cost to the hotels in the district.

The TPID is projecting to collect $1,576,067 in funding next year, though this projection is based upon pre-COVID data so it may change in a substantial way.

So how will the TPID contribute to Waco’s visitor and tourism economy? The service and assessment plan breaks it down into four areas (you can find a more details on pages 311-313 of the meeting packet):

Marketing – Increased marketing through a wide variety of means to promote the hotels in the district. In particular, the ability of the TPID to pool resources should allow for access to larger digital media markets. (45% of funding)
Sales Initiatives – One of the key takeaways from my discussion with Ms. Pendergraft is that the visitor and tourism market is made up of several different groups. There are leisure tourists (those traveling just for fun), the convention crowd, business travelers, bus trips, etc. Each of these different groups requires a little bit of a different strategy. Groups (conventions, bus trips, etc.) that bring more people per trip, and therefore more economic impact per trip, are particularly interested in sales incentives. These incentives may look like discounted rates at local hotels or the convention center. They might also include assistance with transportation, or even event sponsorship. The ability to pool resources through the TPID would make it possible for Waco to use a wide variety of tools to reach out to these kinds of “bulk” visitors. (40% of funding)
Tourism Research – Research would help improve the effectiveness of the marketing and sales initiatives noted above. Research might mean gathering information about what specific markets to target for marketing or how particular events impact the Waco’s economy. (8% of funding)
Administration – This would include things like an annual audit and bookkeeping. (7% of funding)

So, if the City Council approves the creation of the TPID and the service and assessment plan, what happens next? The hotels included the district will most likely to form a non-profit organization that would be charged with directing the services of the TPID and preparing the annual service and assessment plan. This non-profit would enter into a contract with the City to receive the funding and staff support from the hard-working folks at the Convention and Visitors Bureau. The board of this to-be-formed non-profit would be made of a diverse group of hotel representatives with Mr. Todd Bertka (Director of the Waco Convention and Visitors Bureau) representing the City in a non-voting role.

If all works out as it is intended, the TPID could provide significant support to a critical part of Waco’s economy just as it faces a particularly daunting crisis.

Other Interesting (to me) items from the Agenda:

There are a number of public hearings related to planning at Council this week, things like zoning, subdivisions, short-term rentals. These kinds of items go through a separate group, the Plan Commission, first before making their way to council for final approval. The next scheduled Plan Commission meeting is on August 25th, so be on the lookout for post focused on that meeting soon.
The city is aiming to reallocate $21,000 in unspent community development block grants towards assisting homeless folks in self-quarantining, a critical health protection for this community during COVID-19. The city had already allocated $10,500 to this program, but that funding is nearly spent.
The tax rates we touched on two weeks ago have returned for a resolution establishing when the City Council will take their final vote to establish them (September 8th)

Meeting Insights: TIF Board Meeting – 08/13/20

By Jeffrey Vitarius

(Civic meetings happen in Waco every week – city council, school board, planning commission, and countless others. Decisions from these meetings affect our lives every day. Many of us are curious about these meetings, but to be honest, it’s just too hard to decipher the jargon and figure out what’s going on and why it’s important. Act Locally Waco is trying something new in August! Jeffrey Vitarius follows civic meetings for his work and out of personal interest. Each week in August he will pick a meeting in our community and highlight one or two items from the agenda to translate from “government-ese” into language we can all understand. We’re calling the series “Meeting Insights.” Let us know what you think! If you enjoy it, we will try to keep it going! — ALW )

The Board of Directors for Reinvestment Zone Number One For Tax Increment Financing (TIF Board) meets every other month on the second Thursday of the month. These are the folks that make recommendations to City Council about how TIF dollars should be spent. Before COVID-19 they would go on a tour of potential projects some time in the morning and then conduct their regular meeting at noon. The public is invited to the regular meetings, although, for the time being due to COVID-19, that attendance is virtual through the Waco City Cable Channel’s YouTube channel (WCCC.TV – YouTube) with public comments sent in ahead of time. There are a few interesting projects on the agenda this week, but we are going to dive into some background and look at how the TIF encourages development in a way you may not expect…silencing train horns in Downtown Waco.

Meeting Basics

Regular Meeting – 12:00pm
To watch the live stream click here (City of Waco Cable Channel YouTube channel)
For the full agenda click here
For the meeting packet with the documents pertinent to the meeting click here. I will refer to page numbers from this packet in the notes below.
Details on how to provide public comment are listed in the agenda

A Study in TIF – the Downtown Waco Quiet Zone

Mention of the TIF invites questions. What is the “TIF”? How is it funded? Who allocates the funding and to what? Luckily, Waco 101 has already tackled a number of those topics here. Today we are going to zoom in on one example of a TIF funded project, and follow how that example has had an impact on the direction of downtown development, and potentially even the skyline of Waco.

It all starts with trains and their horns. The locomotives that make their way through Downtown Waco along Jackson Avenue are required to sound their horns as they approach any train track crossing. This is to alert folks that they are coming so they can make sure they are well out of the way. As any Wacoan who lives or works near the tracks can tell you, they certainly accomplish this goal. Everyone knows when the train is coming!

However, all this alerting makes it somewhat difficult to invite investment in the properties next to the tracks. An early morning horn makes these properties a hard sell to anyone looking to place hotel rooms or residences in Downtown Waco, and midday horns interrupt workflow in office spaces.

Enter “the quiet zone.”

The quiet zone amounts to improvements the City and railroad can make to the track crossings that provide sufficient safety so that the horns are no longer required (outside of certain specific circumstances, like construction). Unfortunately, the process of figuring out what improvements are needed and then constructing them can be costly. This is where the TIF makes the difference.

In the summer of 2017, city staff presented first to the TIF board and then to the City Council on the potential benefits of a quiet zone in Downtown Waco. Then City Manager Dale Fisseler noted that increased density of development in the area was an important potential benefit of the quiet zone. He pointed out that the quiet zone could “open up other sites along the railroad track for redevelopment.” That summer the TIF board recommended and City Council approved $450,000 in TIF funding towards the study of a quiet zone. The project essential broke down into three phases:

Phase 1 – Feasibility – this is checking to make sure that creating a quiet zone is reasonable to do or “feasible”
Phase 2 – Design – putting together the specific improvement designs
Phase 3 – Construction

The $450,000 in TIF funding was intended to cover phases 1 and 2 of the potential project. Phase 1 was completed in December 2017 (per later presentations by city staff).

In the summer of 2018, staff produced a summary of the improvements that would be necessary for a quiet zone. Most of these improvements involve installing new crossing gates, efforts to make sure folks don’t drive around those gates (something called “channelization”), changes to Jackson Avenue (that runs parallel with the tracks), and pedestrian safety improvements.

In the fall of 2019, the project was ready to seek funding for phase 3. The TIF Board recommended and the City Council approved $1,528,807 in TIF funding for the construction of the improvements noted above. At the time, the project was estimated to be completed sometime in the fall of 2020 (it is possible COVID-19 has had an impact on this process).

The project has some benefits that do not involve any other development: improved safety at crossing, improved pedestrian connections, and decreased downtown disturbance from the horns.

But perhaps, the biggest impact of the quite zone has been in making sites near the railroad track more appealing for development, just like City Manager Fisseler noted back in 2017. Since staff presented the improvements in the summer of 2018, seven projects have sought TIF funding (two this month) for developments right next to the tracks (see map below, the quiet zone in blue and the projects in green).

Before we move on, here are some critical caveats to keep in mind with TIF projects:

A project being funded may not ultimately be completed. Lots of changes can happen between funding and completion (like a pandemic, for example)
Sometimes completed projects can look different from their initial renderings.
The information I have gathered here is from what I could find in the meeting packets from past meetings of the TIF board and City Council. It is possible that some details of these projects have changed since those packets were put together.

That being said, these seven projects represent a combined total private investment (not counting any TIF funding) of $93.9 million. They include 22,000 square feet of retail space, at least 709 new parking spaces (not all public), space for six new restaurants, and nearly 500 new hotel rooms. On top of all of this, a developer announced in June of this year intentions to build a set of office towers next to the tracks that might grow higher than the ALICO Building (site in yellow above). We can’t say for certain that these projects have come about because of the quiet zone, but the logic of less noise, more development and the timing of these projects is convincing for me.

Be on the lookout for more TIF-funded public projects like this that encourage economic development in particular parts of downtown.

Other Interesting (to me) Items From the Agenda

This month’s agenda includes the annual board report for the TIF board. Each city board or commission produces one of these reports each year, and they can be a pretty good starting place for getting to know what that group has been doing and will do in the future.
One of the best parts of any TIF board packet are the renderings. Below are those for the projects consider this month.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email [email protected]for more information.

Meeting Insights: Waco City Council Meeting – 08/04/20

By Jeffrey Vitarius

(Civic meetings happen in Waco every week – city council, school board, planning commission, and countless others. Decisions from these meetings affect our lives every day. Many of us are curious about these meetings, but to be honest, it’s just too hard to decipher the jargon and figure out what’s going on and why it’s important. Act Locally Waco is trying something new in August! Jeffrey Vitarius follows civic meetings for his work and out of personal interest. Each week in August he will pick a meeting in our community and highlight one or two items from the agenda to translate from “government-ese” into language we can all understand. We’re calling the series “Meeting Insights.” Let us know what you think! If you enjoy it, we will try to keep it going! — ALW )

Meeting Basics

Work Session – 3:00 pm / Business Session – 6:00pm
To watch the live stream click here (City of Waco Cable Channel, wccc.tv)
For the full agenda click here
For the meeting packet with the documents pertinent to the meeting click here. I will refer to page numbers from this packet in the notes below.
Details on how to provide public comment are listed in the agenda

Work Session Agenda item 3 – WS-2020-508 – Discussion of the Property Tax Certified Appraisal Roll and Certified Estimate of taxable value, as well as information on the No-new-revenue Tax Rate, the Voter-approval Tax Rate, and the Tax Collection Rate.

Agenda item 3 is just one part of an ongoing budget process. So, let’s start with a bit of a timeline. Two weeks ago, city staff talked through preliminary budget projections with City Council (minutes and video). Since then city staff has received a certified estimate of tax value (more on that below) and developed a proposed budget and tax rate. This week the council will discuss these proposed items and set a public hearing on the budget (tentatively – 9/1) and the tax rate (tentatively 9/1 with vote on 9/8). In today’s “Meeting Insights” we’ll zero in on the tax rates.

The image above comes from this week’s meeting packet and lists three kinds of tax rates: the Proposed Tax Rate, the No New Revenue Tax Rate, and the Voter-Approval Tax Rate.

Most of us are familiar with the Proposed Tax Rate – that’s the rate we would pay should it pass. The city applies this rate to the values it receives from the McLennan County Appraisal (MCAD) to calculate its property tax revenues for the year.

The “No New Revenue Tax Rate” is the rate that would generate the same revenues as the last year, taking into account changes in appraised values. In other words, if property values went UP last year, the No New Revenue Tax Rate would go DOWN – because a lower rate would get the city the same amount of revenue. If property values went DOWN last year, the No New Revenue Tax Rate would go UP – because the city would have to charge a higher rate to get the same amount of revenue. As the name implies, it is the rate that would result in “No New Revenue.”

(Note: The No New Revenue Tax Rate does not take into account new property. It looks at the property from last year’s appraisal roll, and the revenues from those properties, not new properties that may have come on the roll since.)

This year provides an interesting example. The value of taxable property from last year went DOWN compared to the year before. On net, properties last year declined in value. So, the No New Revenue Tax Rate this year is higher than the Property Tax Rate from last year. If there were no new properties, the city would expect to collect less in property taxes than it had the previous year if the Property Tax Rate remains the same.

Why does the city calculate the No New Revenue Tax Rate? Because you need that rate to be able to calculate the Voter Approval Tax Rate. The “Voter Approval Tax Rate” is the maximum rate allowed by law without voter approval. These two rates are connected by a multiplier that is decided by the Texas Legislature. The multiplier changes from time to time, but currently the Voter Approval Tax Rate is basically the No New Revenue Tax Rate X 3.5%. (I say “basically” because some adjustments are made to take into account debt service.) In other words, the city may not impose a Property Tax Rate more than 3.5% times the rate needed to collect the same tax revenues as the previous year. (The language around tax rates can be somewhat confusing. If you are interested, here is an explainer from the Texas Municipal League with much, much, much more information.)

For the past six years, the city’s tax rate for property taxes has been “0.776232/$100” or about 78 cents for every $100 of property value. The city’s income from property taxes has steadily increased over the last six years because the value of taxable property within the city limits (and the addition of new property this year) has been steadily on the rise, not because the city has increased its tax rate. In the 2019-2020 budget property taxes made up a little less than a third (29%) of the city’s operating budget.

For this fiscal year, the city is projecting to continue the $0.776232 per $100 tax rate from previous years. Since this rate is less than both the “No New Revenue Tax Rate” and the “Voter-Approval Tax Rate,” no tax-rate election will be necessary. If all proceeds as proposed, the average homeowner would pay $1,276.63 in city property taxes next year.

Here is another interesting point: the chart above shows a number called “ARB Pending Discount.” What is that? COVID-19 has slowed the tax assessment and protest process. As a result, the city has received an ESTIMATE of property values rather than a certified VALUE like they usually get. The city has accordingly subtracted about 3% of the estimated values. This is the amount the city anticipates property value protests will drive down appraised values – that is the “ARB Pending Discount.”

The budgeting process continues!

Other Interesting (to me) Items From the Agenda:

The city is looking at purchasing a boat slip at Ridgewood Marina. This should reduce the response time of the Fire Department’s new rescue boat from 10-12 minutes to 8 minutes or less
The J.H. Hines Elementary Sidewalk Project is proceeding. This week the council plans to approve an Advance Funding Agreement with the state of Texas. The project requires no local match and the City would be responsible solely for non-reimbursable costs and any overruns.

Civic Insights: Who Pays for that Pipe? Part I

Meeting Insights: Waco City Council Meeting – 09/01/20

Meeting Basics

What’s in a PID? – the Downtown Waco Public Improvement District

Other Interesting (to me) Items From the Agenda

Meeting Insights: Plan Commission – 08/25/20

Meeting Basics

The Language of Short-Term Rentals

More on short-term rentals

Other Interesting (to me) Items from the Agenda

Meeting Insights: Waco City Council Meeting – 08/18/20

Meeting Insights: TIF Board Meeting – 08/13/20

Meeting Insights: Waco City Council Meeting – 08/04/20

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