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Min 12/16/1982 1 26 Wichita Falls, Texas Memorial Auditorium Building December 16, 1982 Item 1 The Board of Aldermen of the City of Wichita Falls, Texas, met in called session on the above date in the Board Room of the Wichita Falls Independent School District at 1104 Broad Street, at 3:00 o'clock P.M. , with the following members present. Gary D. Cook Mayor Gene Shearman Q John W. Hampton Carol G. Russell Aldermen Craig A. Wilson Howard M. Morris Horace 0. Boston Stuart Bach City Manager Wilma J. Thomas City Clerk Charles Connally Assistant City Attorney - - — — — — — — — — The Board of Aldermen met in joint session with members of the Wichita Falls Independent School District Board, and the Wichita County Commissioners' Court. The purpose of the joint meeting was to discuss the possible creation of a tax increment financing reinvestment zone. Don Wills, President of the School Board, called the meeting to order. He stated that this is a first for all elected members of the community to meet together. He introduced Senator Ray Farabee to discuss this new legislation. Senator Farabee discussed tax increment financing in the State of Texas, which was adopted by the legislature in 1981 . He stated that increment is an increase. Some have used revenue bonds to finance public improvements. They would be paid for by the increase above a base line valuation that is made after a given date. Values in the base line are frozen. Money could be used for lighting, parks, etc. You have to have an identifiable zone. You have to have hearings. A resolution has to be adopted. Certain limitations are made as far as residential areas, etc. The biggest problem we have seen in Texas is a lack of cooperation or knowledge within the governmental entities. In this zone, values are frozen as of a given time. Even though the appraisal increased, the taxable value would not increase. Money would go to pay for improvements in the area. If there is an increase in value by inflation, those increases in value will be dedicated to paying off public improvements at that time. A program was presented to the Historical Commission about a year ago which outlined this project. Don Wills asked if this is something the City has control over? Senator Farabee stated that other entities would normally go along with them, but it is a program assigned to the cities. It would require a high degree of cooperation. Mr. Wills asked if on the frozen portion of this our tax rate went down, would we get less taxes because the rate dropped? Senator Farabee stated that in 1982, they will have that same amount of money. The tax rate might have to go up when more revenue is needed. Senator Farabee stated that the values of those in the zone will continue to increase, and they will pay the same amount of taxes, so they are getting no tax break. Their portion would go to pay for improvements in that area. Alderman Shearman asked if they would be taxed on the amount as of the date they are frozen? Senator Farabee stated that it would be as of the appraised value at the time it was frozen. County Commissioner Weldon Nix asked how these values were arrived at? Senator Farabee stated that it is up to our local officials to make that determination. 27 County Judge Bacus asked about a problem in other areas? Senator Farabee stated that the problem was caused by not taking other governmental entities into consideration. Alderman Hampton asked what he is thinking about proposing to remedy those circumstances, and give us the benefit of his observations so that we may avoid those pitfalls. Senator Farabee pointed out that exchange of information between the bodies is needed, and that representatives from each body should be on the board for the zone. Mr. Wills asked if the City could set it up without school and county taxes going into it. Senator Farabee stated that it could be done. City Manager Stuart Bach noted the advantages and disadvantages of tax increment financing. He recommended that bonds not be issued, but go on a pay-as-you-go basis. He also discussed options for distribution of the tax increment. Mr. Wills asked if the City Council votes to do this, do we in fact have any choice? Alderman Hampton stated that he got the impression that they would not have any choice if the Council chose to do that, and that bothers him. Mayor Cook stated that Senator Farabee is carrying back to the legislature that portion to correct, and that they do not want to do anything without the concurrence of the City and County. We do not want to fight over tax dollars. Bill Spears, School Board Member, asked who would determine how the money was spent? It was explained that a board is set up the first year, and the second year the City Council has the option themselves. City Manager Stuart Bach suggested that the three entities set up a board. If they agree to some portion of an increment, it could be put in a contract, and also how long the zone would be in existence. Alderman Shearman asked how Mr. Bach would rate this in priority, considering all the flooding problems, etc. that we have had? Mr. Bach stated that it is a matter of how a person looks at it, and what they consider priorities. County Commissioner Weldon Nix asked about block grant funds for this project. Bill Spears asked what term is optimum? Mr. Bach stated that 15 years would be desirable, or they could select another option? Preliminary data is based on 3 percent growth rate. Alderman Shearman clarified that the taxes collected in that district can only be spent in that district. Mayor Cook explained that what basically could be said is that they are telling individuals and developers and outside interests that a commitment has been made to improve a specific area of the City, and they might be encouraged to make an investment in that area that otherwise might not be made. County Judge Bacus questioned the planning that needs to take place. He stated that coordinated planning and a lot of public input is needed. We are looking at several months of preparation, other than weeks. He would like to hear some comments from the other elected officials regarding the timing. Alderman Shearman stated that he would like to see some citizen input. County Commissioner Gordon Griffith asked why citizens in other cities in the county could not participate? Alderman Hampton asked if the citizens of Burkburnett would object to the money generated in a specific area of the County being spent there? Judge Bacus stated that the question is, is this the best alternative, and if so, how do you develop it in such a way that the people understand? He questions whether we are at this time ready to jump off the deep end. He realizes the potential benefit to the taxpayers in the long run. Don Wills suggested that we talk about timing. 28 County Commissioner Weldon Nix stated that they worked pretty hard on tax bonds and the tax base. If we do this by December 31 , we give up a lot of work we have already done. City Manager Stuart Bach stated that you have to make things happen. You cannot expect developers to take the lead. Mayor Cook noted that we may not have time to hear from the public on this by December 31 , but he feels we have had an opportunity to hear from the citizens through the goals program. Is this the best alternative? One alternative is to let nature take its course and deteriorate. The question is how long will it take, and are we willing to wait that long? He also mentioned a bond issue. Do we have enough time to address this issue, and give it the consideration it needs? On the other hand, however, how long do we wait to develop the Greenbelt? We have been working on it since 1920. Mr. Bach stated that December 31 is the end of the tax year. Judge Bacus stated that we are talking about a week or two until December 31 for people in the community to examine it. He feels like they need some input in this. Bill Spears asked because of the timing would it be conceivable to go ahead and enter into this type of thing to lock in the base in 1982, and make those other decisions later? Mayor Cook stated that if we don't act now we would lose $176,605 compounded for 15 years. The other thing we may lose is attraction of additional development that we are not aware of at this time. Don Wills asked if the increment can be set any way we want it? Mr. Bach stated that it could be. Alderman Wilson noted that the taxpayers are more concerned than the tax collector. There is a question of how much commitment the taxpayers are willing to make. Directors and their terms need to be considered, along with other criteria for other areas, etc. He feels it is important that we give the public the opportunity to respond to it. Alderman Shearman stated that he had received this information only three days ago. Alderman Russell asked when the constitutional amendment was passed? Mr. Bach stated in November. She mentioned a meeting with Senator Farabee several months ago in the Activities Center. Alderman Hampton was in favor of some kind of open-ended agreement, if possible, to capture the tax increment for 1982, and leave it open for all entities to do what they want to. The meeting recessed at 4:00 for about five minutes, and then reconvened. Charles Dunlap, President of Midtown Now, stated that this is not a Midtown Now project, but they have become interested in it. He stated that he hears businessmen talk about lack of growth in the city. Appearance of the city is the greatest detriment in attracting industry to the city. He stated that the top priority in attracting industry is a recreational zone. He stated that there is some feeling that we can wait in 1982, but if we wait until 1984 it will be too late. Unless an increment zone is approved, other development will not occur. The distribution we are talking about is taking money and making improvements in certain areas. He is opposed to it being distributed elsewhere. Bob Seabury stated that the taxes would be spent in the area where it is located. He would like to see an enormous tax spent in his area, but it is his understanding that they will be spent all over town. It seems that we are almost pitting one area of town against another. He stated that there are platted areas all over the city that need improvement. Why not have a bond election on various sections of the city? It seems this is a fair way to approach this problem. Gary Shorts stated that he is a newcomer to Wichita Falls. In terms of their perspective at the newspaper, the Greenbelt is a priority project. We are starting to see the beginning of something happening in that area. He 29 feels the elected officials are charged with making these kinds of decisions. He would also support a bond issue. He stated that he knows by coming from St. Louis what can happen when the community gets behind it. He would urge all to consider that timing is important. George Adams stated that he feels both groups are united in what's good for Wichita Falls. He feels that he has been as loyal to Wichita Falls as anyone else has been as far as investments are concerned. He stated that he was the first institution to offer to finance a commercial project in Wichita Falls. He is opposed to this project for the reason that it favors one area of Wichita Falls over another. If we gave that same opportunity to others we could have a first class hotel if the same conditions were given as were given to Kiva Inn. We could make this available to the entire town. What we are talking about doing is trying to force a trend of where people should shop in Wichita Falls. Why should we not let commercial property go to any part of town if that is where the development is. There are needs for downtown, but that does not mean we should force the downtown for things that are not needed. If you give any other place that kind of advantage they will spend dollars there. He stated that when you are talking about freezing taxes , you are talking about the rest of the city paying for it. It will be spent in that area, and public improvements are limited to the immediate area. Bill Spears stated that taxes would be the same. They will be paying the same amount. There will be no tax benefit to the Kiva Inn. George Adams stated that rent is lower in this part of town than anywhere else. Sometimes deterioration has to occur before improvements can be made. He is opposed to us favoring only a few. J. C. Boyd stated that one difference between downtown and the shopping centers is that downtown is owned by the citizens. They have the responsibility to take care of the property. Judge Bacus stated that essentially this is a City of Wichita Falls originated project. He would like to hear from them. Mayor Cook stated that it is his opinion that we have a situation of deterioration, and we might be able to make a commitment to attract some industry outside Wichita Falls. Perhaps we, as elected City officials, need to step forward and take the leadership, but it should not be moved too quickly. Perhaps we could set a freeze as of December 31 , 1982, but set forth in a contract that each of the bodies would set their percentage of participation. At least we would have taken the position that something needs to be done, and have captured that increase as of December 31 . It could be made renewable every five years. This would show that they are interested and commited, but they are not locking themselves into it. Alderman Wilson feels we should ante-up and say what each of the bodies will go on. Bill Spears stated he believes if they can preserve their options by acting on it before December 31 , we haven't lost anything. Alderman Wilson stated that we are talking about a 15-year commitment, and we are making a decision on a bond program that will not be submitted to the people. Bill Spears suggested that we just freeze the base and make a decision later on. Mayor Cook stated that we have to establish a percentage of at least one percent, which could be later amended. Alderman Shearman stated that we need to establish our priorities. He stated that he did not ask for any help in his business except on his own. What will happen in this area will happen naturally. If we are going to do it for one area, let' s do it for all . Alderman Russell stated that she favors the plan. Since about 1887 the midtown area has carried the leadership of the town in sewers laid, the tax base, etc. She stated this tax increment return is only a fair thing for what the midtown has furnished. She stated that the Greenbelt area improvement would benefit more than a few people. She mentioned several other cities which have improved because of their river improvements. She believes it takes something 30 to make something. The development that is there now did not just happen. It was carefully nurtured and developed. Alderman Boston noted that some of the arguments are justifiable. Alderman Morris stated that he does not necessarily believe that this decision would favor one side of town over another. The primary decision we need to make is do we want to enter into some kind of contract, and later negotiate a percentage contract? Ruth Terry, School Board member, stated that she feels the plan is very worthy. She stated that she does not put much faith in the Goals for Wichita Falls. They did not support the hospital and zoning. She feels if citizens ' input was received, the citizens would place a low priority on it. She fails to see how this would benefit the school district. She stated that she cannot commit money to this plan which is set aside to educate our children. Sue McAlister stated that deterioration breeds more crime. She agrees with the fact that money designated for education should be spent in that area, but she does not want to roadblock the plan by putting a "no" stamp on it if there is a way we can support it. She is not at this time ready to name a percent, but she is not ready to say forget the whole thing. Bill Spears stated that he is not sure how he is ready to go, but as a businessmen he wants to retain an option. If we can do that, it will benefit us all . A very large part of educating our children is being able to finance the education. He has no objection to spending his money in an area where there is a great need, such as Holliday Creek or even this area. He would like to retain his options. I Al Flack stated that the concept is good. It has some disadvantages, but you have to make things happen. He stated that we are talking about a certain zone today, but additional zones may also be formed which need additional stimulus. He is not sure he could justify allocating 100 percent of the taxes generated into this project. He would be in favor of allocating a certain percent of the increments. I Don Wills stated that he sees some problems with it, such as timing and the inability to answer technical questions. Is there enough money, if the Council chooses this plan, to really impact this area sufficiently to do the Greenbelt? The main difficulty he sees is assigning ad valorem taxes used to educate children for this purpose. If it is successful then in the long run they may receive more than they spend. The other question which he has is that the City Council can do this project if they want to without tax increment financing. Just assign the dollars to it. He is vitally interested in seeing a project of this type happen. He would support and lead an effort to have a bond election to fix up downtown, and make it more presentable. The school board has done this in the school campuses. They have spent $917,000 on one school building this year. Weldon Nix stated that he has a lot of mixed emotions. He stated that it is the responsibility of the City of Wichita Falls to do it, and the way they want to raise the money for it is their business. He feels ad valorem taxes will have to be raised next year. If we had not got rid of some of our tax base we may not have to raise taxes. He would be in favor of helping in any way except supporting it financially. Bud Greer stated that he has trouble when you talk about freezing values. When you go outside this zone and raise other properties, then he has a problem there. He mentioned the City' s help on the Burnett Street bridge. He is not opposed to the City doing it. He needs time to look at values. Gordon Griffith stated that it is a real good project for the City of Wichita Falls. He has trouble with freezing taxes in one area. It is hard to commit the total county to some specific area, which he has no doubt it is needed, but he has a hard time commiting a percent to it. Dod Wiley stated that things have changed. The whole county has an interest in this. The timing seems to be a problem. He would want to cooperate with the City, but it seems the area that needs it worse in the Greenbelt area has been cut out. Timing is kind of an impossible thing. 31 Judge Bacus asked how many families would be relocated? Stuart Bach did not know, but stated that it has to comply with the federal relocation act. Roger McKinney, Director of Planning, stated that a project plan would be approved by the Board of Directors. Judge Bacus asked if we would have to build housing? How detailed is the contract with the different entities? Stuart Bach stated that depends on how deep they want to go into it right now. Judge Bacus stated that this is not intended personally, but what is to prevent some City Council from using the funds from this area to offset or subsidize the general fund of the City? Stuart Bach stated that the statute prohibits it. What if they stopped the general fund monies and use only the money generated from that area? Mayor Cook stated there would be really nothing to prohibit that. It could be put in the contract. Judge Bacus stated that we need to establish some priority items for that area, and he would like to see it be in the contract what the goals are. Judge Bacus stated that the contract itself is a very important document, and he does not see how we can arrive at that kind of commitment in two weeks. Greenbelt improvements are needed. He is concerned that we do it right. Don Wills stated that the two doctors unable to be here today wanted to be on record as being opposed to it. Alderman Hampton stated that he does not think that the City Council has any business voting the funds of the school and county. He does not know that we would have enough funds by ourselves. He would request that it be done timewise and see if we can capture the 1982 tax base, if that is the desire of the majority of the Council . Call a special meeting, or whatever is necessary. Mayor Cook stated that they would publicize this, and call a special meeting. Judge Bacus stated that he appreciated Alderman Hampton's comments. Mayor Cook noted that a majority of the Council feels this way. Don Wills again stated that this meeting is unprecendented. This is very healthy. Let's get together on any other issue which we may need to do. The joint meeting adjourned at 5:30 P.M. PASSED AND APPROVED this ( � day of 1983. Horace 0. Boston, Mayor Pro tem ATTEST: Wilma J. Thomas, City Clerk