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01/08/2007-CC-Minutes-SpecialMINUTES: CITY COUNCIL - PUBLIC MEETING JANUARY 8, 2007 PRESENT: Mayor Joe Higgs, Councilman Andy Garza, Councilman Glenn Ervin, Councilman Robert Patton, Councilman Mike Walker MEMBERS ABSENT: Councilman James OTHERS PRESENT: City Manager Jack Smith, City Secretary/Assistant City Manager Rose Chavez, Engineering Coordinator Samantha Renz, City Engineer Rob Woods, Economic Development Director Cecile Carson, C.G. McNeill, Woodrow Barton, Wanda Ervin, John Springer, Jerry Jenkins, Vickie Jenkins, Liz Springer, Fred Yeatts, Bill Fuller, Joe Falls, Roger Otwell, Ann Barton, Merrie Lou Abney, Rod Zielke, Lindall Mitchell, Don Hutcheson, Everette Newland, John Pearson, Russell Martin, Barbara Martin, Bret Chance, Will Tate, Trent Petty, Rebecca Brewer, Beverly Howard 1. Mayor Joe Higgs called meeting to order. 2. Discussion Regarding Special Taxing Districts. a. Public Forum Mayor Introduced Rod Zielke Rod Zielke, Tomlin Group, indicated he put together a few quick slides on what they propose for this development and wanted to talk a little about the district they are planning. He felt it was important to know a little about the project. It is roughly a 1000 acre tract near the high school. They are modeling the project after one they have done before, and have included a lot of green belts and open spaces. In their experience one of the ways to ensure high quality development is by providing a lot of amenities and open space. He indicated that water features, green spaces, and a community center will be included. Historically a project is done in phases, but to attract the market they feel that in the DFW metroplex, the buyer doesn't buy on speculation, they want the product there first. It costs a lot of money to do that. The concept is a master planned community with a variety of housing types, highly amenitized, large green belt areas, hike and bike trails, pedestrian access through -out, and plenty of lake and water features. He indicated they will have highly regulated landscape and development codes. There will also be 20 or 30 acres of school sites and some retail. The quality of the project does require some additional financing. District financing is important to ensure the quality and sustainability of the project. There are significant up front cost for the utilities and amenities. The other significant reason a district is important is to provide the municipal infrastructure. They recognize with a project of this magnitude that someone needs to help. He explained that although the area was recently annexed, they do not expect city to provide all of the infrastructure. He continued to discuss utilities and municipal service, and indicated that to serve this project and the land around it, there could be 25 million dollars worth of infrastructure. The district concept allows the developer to fund some of these costs. Mr. Zielke showed some pictures of a project similar to the one they are proposing for Sanger. He indicated the starting home price is $160,000 in the development that he is comparing this too. Mr. ZJAW llce asked the Mayor if there was anything else he wanted him to address. The Mayor indicated he did not mention the specific type of district. Mr. Ziellce indicated there were many different types, and they have suggested a fresh water supply district. They are open to whatever type of district is best and the committee that has been formed will be discussing that. Mayor introduced Mr. Trent Petty from North Lake. Mr. Petty indicated he was asked to come share what experience he had with these type districts. He indicated that he has worked with a number of districts throughout the state. He explained there are some basic things the community should understand. It's not so important which district you get; there are many different types. That is not the focus. They are all created to do the same thing, that is to create an entity to charge the people that live there to pay for the district. It is designed not to put a burden on the City. He advises cities that the district should pay for what the district is going to need. If the district needs a million and half gallons of water a day, then the district should pay for it, not the current citizens. He indicated the City should look at what the district can finance in the community that the City cannot finance themselves. He just finished a project with the City of Argyle. There were two very large developers representing 2300 acres of land, and they were proposing two different districts, both needed City support. In those circumstances there were multiple CCN's, the water and sewer CCN is very important, the districts can't arbitrarily happen without City approval. The City has significant leverage to craft this district in a way that benefits the City. There is a lot they can do for the City that the City cannot do for themselves. The City of Argyle needed 23 and half million dollars in infrastructure and improvements. The special district became the tool they used to make that happen. When said and done the City received 23.5 million in water and sewer improvements that the city was not liable for. It's not near as scary as it seems. If the agreement is negotiated the correct way the City can be protected. He explained that the things to ask are things like: How much park space do we want? How much green belt? General density? How many units per acre are we comfortable with? What are the general areas we'd like to see those areas in? He expressed the need for a comprehensive plan and the need to stick by it. This will give the City the ability to work with the developer to say these are the standards and we want to work with you to meet those standards. The comprehensive plan is the main tool the city has to work with to make sure development is done the way they want. He explained that he would rather work with a developer that has 1000 acres than work with 10 developers that have a 100 acres. The City does not have to give up anything; the standards can be the same. Once you get the comprehensive plan to a standard you want you have every right to make developers adhere to that plan. The last thing the Tomlin group would want to do is put in a nice development and have something around them impact them negatively. He expressed that it is very important to have the Comprehensive Plan identify the standards of what you want the City to be. Mr. Petty continued to explain that a lot of things have happened in Austin since that first district was approved in this area. He encouraged them to approach this with an open mind. Rebecca Brewer indicated she was grateful to have the opportunity to work with Sanger. She indicated that she is working with Bob Helmberger along with Ted Christiansen (Government Capital) in assisting the City with coming up with a deal on what is good and what is not good for the City of Sanger. She explained that they have worked with other cities in this area on coming up with these agreements. The Tomlin Group has agreed to pay for consulting and legal fees for them, and it has been sent to the city for consideration by the Council. It is an difficult task that takes time and money, the city should not have to pay those fees if in the end it does not wok out. She explained that her role in this is to answer some questions from a legal, engineering and financing prospective. Ms. Brewer continued to explain that they are going to look at what the City needs, and what is best for the city. A district can be a financing mechanism for the city to gain infrastructure and gain development in a controlled manner. The Mayor and the Council want to approach this with an open mind and enter into it in good faith. She encouraged input from the community. Lindall Mitchell, citizen, addressed Ms. Brewer and indicated that he had been told that her law firm, in one of the first meetings, advised the city not to put the development in the city limits. He asked why they had recommended that. Ms. Brewer indicated that she could not support the first agreement that was submitted to the Council for this development. Discussed that it would not be a problem to have in the city limits if some things in the agreement were changed. Merrie Lou Abney had questions regarding what this development can offer the City of Sanger. Mr. Zielke indicated that a lot of development is coming to Sanger. They feel this type of quality development affords the City to plan for high quality development. They are bringing a highly amenitized, highly developed community. He explained that they are trying to bring a master -planned high quality development and when the development agreement is complete it will specify how many acres of green belt, how many of what size home, etc. All of the up -front cost is borne by the developer. They can't do anything till 25% of development is in, they will probably have 20 to 25 million dollars invested of their own money. The majority of that will become City's. Mr. Petty indicated that in no circumstances does residential growth provide enough revenue to serve that district, but when you start looking at development, you have to look at what is going to sustain our community. The answer is sales taxes. When looking at potential sales tax base, that is what is gonna have to grow to sustain the community. Discussion regarding infrastructure and services. Ms. Brewer indicated that the citizens should get involved in updating the comprehensive plan. What Mr. Zielke is proposing may not be what we want for the City. It is important that the community gets involved. They need to look at it from all aspects, including education, administration and what ever else the community needs. Woodrow Barton indicated that he is very familiar with the current development in Sanger. He expressed that Sanger is growing at a very moderate rate. There have been close to 600 or 700 homes in last three years. New schools have been built. WaI-mart Distribution center really helped Sanger. Sanger has been doing real well. He expressed that the City has a good Council and a good Planning and Zoning Commission. The City has a good development program, rules and regulations. The way our development plans are, the current developer pays for all infrastructure, the City is out no expense. When the houses are built and sold the city collects a tap fee for water and sewer. Those tap fees pay for the increased infrastructure. Sanger, over the years has developed a good plan and we are doing well. A water district would not be of any advantage to Sanger. He expressed that he felt it was an advantage to the developer, it's a means of getting some of there money back, and they make more profit. Discussion regarding different types of districts, and the areas they are limited to. Discussed infrastructure. Ted Christiansen indicated that he is here for financial help. He wants to help make sure the City gets the best deal financially. If this development fails, there could be a moral obligation by the City to look after those citizens living in that community. They want to protect the City as much as can possibly be done. The will make sure the City only issue debt they can afford to pay back. They have to be very careful and his job is to guide the City and make sure this is done in a conservative manner. He indicated that if this is done correctly, they can mitigate and make sure it's done in the best way for the City. Discussion regarding the City's Master Plan and the fact that it is in the process of being prepared. Discussion continued regarding districts, fire protection and other services. Barbara Martin indicated that she has worked with the School Board and we really need to find a way to raise the price point of homes in Sanger. Currently, Sanger is 36% financially disadvantaged. The only way to offer things other districts offer is to raise the price point. All of the rental properties and foreclosures affect the school district. Small lots and small homes will not help the school district. She indicated that she wants to see our kids afforded every opportunity that other students in other cities are afforded. Mayor indicated that residential growth alone will not do the trick, we need industry and commercial growth. John Pearson indicated that the City must have roof tops to create commercial growth, to get taxes. The City cannot bring modern day retailers if they don't have density, or the household income to bring quality retail. He expressed the need to create the bases to bring in increased taxes, the housing just makes us break even, and without housing we cannot get commercial development. Lindall Mitchell indicated that he recently chaired a facility committee, and that it was very eye opening. He expressed that Sanger has a very good school board that manages finances very well. He indicated that the school has hired a demographics company, they say that our school system is taxed very heavily. The number of students per home is above average, and we are not bringing in tax revenue to sustain our school system. He expressed that increased taxes will increase the level of education, and that new development will bring the increased taxes. Discussion regarding the bonds and the debt. Bob Helmberger indicated that there is a deal that be reached. They are trying to find one that is best for the City and one that works for the developer. There is a way to do this where it is beneficial for both. It can be a win -win situation for the City and the developer. Discussion followed. Mr. Helmberger indicated that the committee and consultants will take a look at the City ordinances and make sure developer pays what our ordinances require. The only thing that the bonds pay for is what is above and beyond. There is a deal to be reached in here somewhere. Discussion continued regarding the bonds and TCEQ requirements. Ms. Brewer indicated from a legal perspective the goal for her is to make sure the City and the developer are equal partners. She indicated that she wants to make sure there are significant motivating factors, and factors that will motivate the developer to see it through. The developer wants to turn a profit, that does not mean it is bad for the city. It is their goal to make sure there are a significant amount of personal dollars put into it as a motivating factor. Russell Martin asked that as the bonds are paid, do the taxes go down? Ms. Brewer indicated they did. Discussion regarding the finance district and how taxes in the district are affected. Mr. Zielke indicated that at some point the district may become profitable and the City may want to take over it at that point. Jerry Jenkins asked if the Tomlin Group said they would build a new city hall, are there any rules that says they cannot pay for that city hall. Ms. Brewer indicated they could not pay for it with the bonds. It is not assumable debt. Mr. Petty indicated the District cannot recover it through bonds, but they can pay for it. Discussion regarding that the City is currently wang on the comprehensive plan and the development agreement. Vickie Jenkins expressed concerns about growth and planning. She did not feel they should be considering this without a thoroughfare and master plan in place. The reason our housing tax base is low is poor planning, and we don't want to be guilty of poor planning again. She indicated there are currently $250,000.00 homes being built in Sanger, and they are being sold. Ms. Brewer indicate that this is not an overnight project. She felt we could simultaneously work with the committee and work on the master plan. The developer and the City should be able to come to an agreement. Discussion regarding the current land use plan and that it will be used in developing the new master plan for the City. 3. Meeting Adjourned. ATTEST: Rosalie Chavez, City ti �r 40 f,XAS "'/Jinnn%100 AV'A �oe Higgs, M40r