Council considers TIRZ % and Portable buildings

During its regular Dec. 04, 2018 meeting, the Forney City Council met and in summary:

  • Public Comment - Mr. Cecil Stewart spoke about the Forney Ministries item - he has concerns because is adjacent property owner. If the organizations move on, the buildings will remain. The city would not allow building 3 homes on 1/2 acre. All the churches listed as members have property that could be used. He requests they deny the request, as there are too many unknowns, and there are alternatives.
  • Approved as one consent item:
    • acceptance of public improvements for Overland Grove, Phase 1A development.
    • authorization to allow staff to seek bids for the improvements on sanitary sewer services along Aimee Street.
    • authorization to allow staff to seek bids for the maintenance and improvements to a City-owned detention pond.

  • Held Public Hearings -
    • Postponed action an Ordinance amending Ordinance 08-1290 to amend the percentage of the tax increment to be contributed by the City to the Reinvestment Zone Number One, City of Forney from 100% to 85%.
          Mr. Thatcher said this was to amend city's participation rate, from 100% to 85%, a public hearing is required before adopting an ordinance. Mr. Hawes (the TIF administrator) said this was recommended by TIF board. When he arrived, the zone was created in 2008, in 2010 entered an agreement. One step was not taken: adopting a project and finance plan. TIF board approved plans in Nov. City does not have a finance or project plan, but does not affect the legitimacy of the TIF or the developer agreement. The APU report was approved. He said if council wants to do other that 85%, that could affect the plan. Concern has been expressed about citizens outside the zone subsidizing the area. Therefore they analyzed various rates, arrived at 85% to cover costs of municipal services, right-of-way maintenance. In the plan presented in 2008, $54 million was projected. To date, 28.1 million spent, plus interest based on developer agreement is $44.3 million. Plus bridge cost of $4 million = total $48.3 million. Non-project costs are $9 million. Current appraised value is 80 million, projecting in 2038 $790 million, the projection includes two downturns. At 100% participation they would not be able to pay the developer with 12% rate, so it comes to striking a balance to pay costs; total developer costs could reach $70 million. At 85% the city would retain 9.1 million over the 20 years, county would retain $18.7 million. If accept the 85%, if annex property in the zone, would have to amend the development agreement. All portions of the project can be renegotiated in the future.
          Mr. Alan Bain spoke to ask either not approve the plan or postpone, because they are in middle of negotiations w/ city to change a lot of things. Started 2 yrs ago w/ James Fisher & Mayor Wilson. They presented the city proposals, heard nothing from city. Spoke with Tony and Wendel 2 months ago to restart. They have submitted, on Nov. 1, what they would be willing to change. Counter proposals ensued, they have a meeting tomorrow with Tony and Wendel, they need a little time, about a month or two, he asked them to not unilaterally change this.
          Mr. Mike Thomas spoke, stating there is discussion around town that the money owed to developer comes from the city. He asks Mr. Hawes where the money comes from, and what happens if the city doesn't have enough money. Mr. Hawes said that question been going around since he got here - money only comes from 1 source - TIRZ revenue, not from general fund. If developer does not perform, at the term of the zone, that's it. The developer risked his dollars. If the TIF is short, the developer is short. Mr. Thomas asked if city retains first 5 million - Mr. Hawes said the developer agreement says the city gets 4 million for the bridge.
          Mayor Wilson said mixing words here - he stressed it is still city tax that goes into a fund. He verified this is so other residents don't subsidize the TIF area. Mr. Hawes said that's why the TIF board recommended 85%. Mayor Wilson asked how the 15% came about, should there be an annual study? Mr Hawes said the looked at 75 - 95 %, probably should look at it every 5 years. Mayor Wilson said could be 19000 residents in the area, and would only get $9 million. Mr. Hawes stressed striking a balance, nothing's been done wrong, Mayor is right, should look at it every 5 years. He wants to make sure project and finance plans are viable. He said council could wait couple months to approve it, or now.
          Ms. Penn wants to ask legal questions in executive session. Mr. Hawes said statute is clear - can amend participation at any time. Mr. Moon asked how the 85% came about - Hawes said they felt that was reasonable, based on the value projections.
          Mr. Thomas returned - asking about the $9 million, verified still getting money over the $9 million. Mr. Thomas asked if any possibility of bankruptcy from this - Mr. Haws said absolutely not.
          Ms. Powers asked Mr. Carson if should wait - Mayor Wilson suggested discussing in executive session.
          Public hearing was closed, Action moved to the second-next item.
    • Denied a request to move buildings into Forney city limits in accordance with Section 3.05 of the Code of Ordinances.
          Mr. Morgan said moving buildings is regulated, a permit must be approved by P&Z. Three buildings 38x28x16 are proposed, one building would be occupied by uniform program, one by hunger relief ministries, one for Sharing the Love Foundation. P&Z had concerns: applicant requested to be classified as a church, but could not be classified as a church. Second item was masonite siding, applicant is requesting alternative materials, P&Z was concerned about durability. Third was: no parking. The location is adjacent to FISD, which provided a letter stating interest once approved by city. The portable buildings were purchased and must be moved by end of year. P&Z voted 6-1 to deny.
          Mayor Wilson said ordinances said P&Z could decide this, council has to decide if want to consider this appeal. Ms. Powers said as the applicant has come before council, Sharing the Love has been instrumental in community, be a good idea to hear it. Mr. Thatcher said this is unique situation, the decision to move buildings into city has been granted to P&Z, there is no express means for an appeal. Site plan denial does allow for appeals.
          Mr. Mike Lewis spoke, said Forney Ministries involves many people and organizations, it's not a church or an organization trying to grow itself, it is to help other organizations. An early project was by Pastor Mr. Ivie at Presbyterian, FISD asked them to take over the uniform program; they are trying to find property not on existing church property, as some can be territorial. Mr. Lewis said it was a raquetball court full of uniforms. Ms. Marion Stewart spoke: they just want to provide services to community. It's not just a building, but an opportunity for the community to come together. Mr. Lewis showed a map of the area. There was a house there they tore down, was being used in an unfriendly way. Electricity and sewer are present. The buildings have been inspected, they will be permanent when moved here.
          Ms. Penn asked about members of the organization, who owns the the property - Mr. Lewis does and will lease it for $1 per year. She asked who inspected the buildings; Mr. Morgan said building inspector, as required. Mayor Wilson asked if they would be meeting the codes; Mr. Lewis said they would add sticky-brick facing on the buildings, and want to keep this very nice, to respect people coming there.
          Mayor Wilson asked what they expect with FISD - Mr Lewis said they have had discussions, FISD is amenable - Mr. Ivie said working on MOU. Mayor Wilson asked Mr. Morgan if ordinance allows offsite parking - Mr. Morgan said no, any agreement would have to be recorded by the county. Mr. Moon asked if the proposal meets 90% - Mr. Morgan said no, they are asking for variance, drawing shows they plan to make improvements.
          Mr. Myers asked about the thoroughfare plan, which has a road going thru this. Mr. Lewis said college st is possibly still there, but is part of the parking lot. Mr. Myers mentioned the plan shows a road going through there - Mr. Morgan said currently no approved plans for that, up to council if want to keep it on plan. Mr. Myers said is a noble cause, but this puts them in a pickle, spent money on thoroughfare plan, would hate for portables to ruin that plan. Also puts FISD in a pickle, people opposed to FISD having portables. Having to share the parking is also a problem. Mr. Lewis again stated they would not be portable after moved, he has "problems all over the place" about thoroughfare plan.
          Ms. Powers said there is a need for this, there are some who need help, she praised the Sharing the Love, she also understands what Cecil spoke about, but would love for this to come to community. Ms. Penn agrees with the need, and they support Sharing the Love, but it has too many variables in this location. She thinks the plan B will be better. Mr. Moon thanked them for coming, great presentation.
          moved to approve, vote was 3-3 so it failed.
    • Due to prior motion failure, did not consider a site plan for Forney Community Ministries, located at 202 W. College Avenue.
    • City Manager’s report - toy drive underway until Dec. 22; citizen police academy; xmad in park 15-18k attended; ice open until jan 6; crosswalks installed downtown; new pub works dir. Mr. McGee said xwalks look good, asked if other areas could benefit. Mr. Carson said will be looking at other areas, must be city streets. Might put a city seal at main & bdarc. Mr. Moon asked about aimee & area streets - Ms. McQuiston said are replacing some clay pipes and doing repaving, which will start Dec. 10 ending in Feb. Mr. Myers asked if removed debris near htg hill. Ms. Powers asked if anything to make individual contractors to clean up during/after construction - Mr. Morgan said that is one item on building inspection checklist. Mr. McGee asked about CR212 - Mr. Carson said will have to do analysis for full reconstruction, will take substantial investment. Mr. McGee suggesting acquiring a machine like the county has that can re-lay the asphalt. Mr. Moon about about developer agmts where heavy trucks use the streets, do they have to pay for repairs - Mr. Morgan said they are required to pay for damage. In pre-construction meetings, they lay out allowed routes. Ms. Penn asked if the curfew had any impact - Sherwin said not yet. Mr. Myers said on 212 heavy trucks to through a lot - should get some enforcement there. City trimmed trees and destroyed them, left limbs hanging. Mayor Wilson asked about downtown lighting - Mr. Carson said some agreements have yet to b executed.
    • Council Comments - Ms. Penn

    • Held a 30-minute executive session re:

        a. Reinvestment Zone #1, City of Forney

    • Approved Public Hearing item # 1 - Approved an Ordinance amending Ordinance 08-1290 to amend the percentage of the tax increment to be contributed by the City to the Reinvestment Zone Number One, City of Forney from 100% to 85%.
          Mayor Wilson asked Mr. Hawes about reducing the rate, and the prior question about bankruptcy - he (Mr. Hawes) is not the financial consultant - correct. Mr. Hawes said the developer agreement does not require more payment than the TIRZ creates. Mayor Wilson said would be difficult for city if paying 100%. Mr. Hawes said typically set rates at 100% / 10 years, 90% / next 10, 80% / last 10.
          Moved to approve the 85 % rate - 5-1 (Mayor Wilson)
    • Approved Action #1: an Ordinance approving the Final Project Plan and Reinvestment Zone Financing Plan for Reinvestment Zone Number One, City of Forney.
          Mr. Thatcher said the presentation by Mr. Hawes was about reducing the rate, this proposed project and finance plan reflects the new rate, specifies project costs, can be amended, this is required by law to be in place for the TIRZ
          Mayor Wilson said he is still concerned if the amount is large enough to cover expenses. Mr. Myers said that's why the would reassess in 5 years. Mayor Wilson said would like a study done - Mr. Myers said hired a TIF administrator. There was a heated exchange between Mr. Myers and Mayor Wilson. Ms. Powers said the administrator did assessment, 85% is on schedule with normal operation, council should move forward. Mayor Wilson said there is no debt structure in the plan. The debt at 12% is $5 million / year, TIRZ only produces $1 million / year. It will compound, in 20 years will be $130 million in interest alone. They should make sure developer moves forward. He's not here to allow rest of community to subsidize this area. Mr. Myers said he was tired of the Mayor fighting this.
          Mr. Hawes said they went through 12 scenarios, the 12% is almost not important any more, they will never get that much. They ran all those schedules - if not going to extend the plan, to protect the city, need to reduce the amount. He struggled with this, it should be reduced to protect the city. Mr. Moon said reducing the rate is a good first step - Mr. Hawes said yes. Mayor Wilson said he's trying to decide if 15% is enough, this is their first discussion about it, not old news. Mr. Moon said rely on directors, chiefs and others, is why hired an administrator. Ms. Powers agreed want to see city protected. Mr. Moon said this is a good first step, they hired a reputable person, need to take action. Mr. McGee said important to get a plan in place to get started, haven't had one for 10 years.
          Mr. Bain said been a CPA most of life, but to say rest of city is subsidizing them by building roads and bridges, how about older neighborhoods that don't provide fees? You need to look at the big picture, it's very misleading to say rest of city subsidizing the TIRZ. The money isn't being wasted, it built roads and bridges. They had an agreement, they are willing to compromise, but council has now removed that option. They will check with their attorneys, but this is not how you treat a partner.
          Ms. Powers thanked Mr. Bain, want people and developers to know Forney open for business. Not trying to be difficult, but want to protect the city. Realized needed to bring someone in to manage this after 10 years, this is a great place to start. Mr. Bain said they have agreed to reduce the 100% & interest, which are huge compromises on their part. This puts a bad taste in their mouth that city decided on their own to change it, and it hurts. Mayor Wilson said is why hired an expert.
          Approved 5-1, Mayor Wilson nay.
    • Adjourned at 2057
Tuesday, 2018, December 4