Hunters Crossing Public Improvement District A MENDED AND R ESTATED - - PowerPoint PPT Presentation

Hunters Crossing Public Improvement District AMENDED AND RESTATED SERVICE AND ASSESSMENT PLAN

Bastrop Town Hall Meeting

1

What is a PID?

• MUD, HOA, POA, PID – Alphabet Soup!
• A PID is a contiguous AREA OF LAND for which the owners

petition a city or county to undertake public improvement projects requested by the owners and approved by the city

• r county and financed through assessments levied by the

city or county against the land based on the special benefit that the city or county determines is conferred on the land by the improvements.

• City Council performs legislative acts.
• Hunters Crossing Local Gov’t. Corp. performs

governmental function of operating the District.

2

What is a PID?

• A PID is governed exclusively by the city or county that

creates it (other forms of governance are “advisory”).

• The city or county that creates a PID has no legal

liability to pay assessments or any obligations secured by assessments.

• PIDs take no money from the general fund.

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4

PID Process - Creation

Published Notice Mailed Notice

WITHIN SIX MONTHS

Published Notice

• f Resolution

DISTRICT CREATED

(USUALLY SAME DAY)

PUBLIC HEARING ON ADVISABILITY OF THE IMPROVEMENTS

[372.009]

15 d

20-DAY PROTEST PERIOD

• the general nature of the proposed improvement
• the estimated cost of the improvement
• the proposed method of assessment
• the nature of the improvement
• the estimated cost of the improvement
• the method of assessment

RESOLUTION

Authorizing the Notices

Metes & Bounds CONTIGUOUS

LANDOWNER

Petition

[MAJORITY] [372.005] PID boundaries may be described by reference to existing streets and roads with a notation that the metes and bounds are

• n file and available for inspection.

Metes & Bounds (or less)

Resolution authorizing the PID

[372.009]

Construction can begin

• r existing improvements

can be purchased or, if begun before the 20th day, may be purchased

• n completion.

A petition is a prerequisite.

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PID Process - Levy of Assessments 372.016 Part 1

After the total cost of an improvement is determined, the governing body shall prepare an assessment roll that states the assessment against each parcel as determined by the method of assessment chosen. 372.016(a). The governing body shall file the assessment roll with the secretary for public inspection. 372.016(b). The governing body shall require the secretary to publish notice of the governing body’s intention to consider the assessments at a public hearing. 372.016(b).

Official Reports Resolution determining total cost

Proposed Assessment Roll Proposed Service & Assessment Plan

Resolution re obligations

• f the

governing body under .016 Official Reports

Proposed Assessment Roll Proposed Service & Assessment Plan

FILED WITH THE CITY SECRETARY AND MADE AVAILABLE FOR PUBLIC INSPECTION

Mailed Notice [372.016(c)] Published Notice [372.016(b)]

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PID Process - Levy of Assessments 372.016 Part 2

• Levy assessments before property becomes a “homestead.”

Final Assessment Roll Final Service & Assessment Plan

Ordinance levying assessments

Public Hearing [372.016]

Mailed Notice [372.016(c)] Published Notice [372.016(b)]

10d

Final Assessment Roll Property Code 5.014 Notice FILE IN THE DEED RECORDS

. Issue Bonds COMPLETE IMPROVEMENTS

? yrs

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What public improvement projects may be undertaken?

• Statutory “menu” – 372.003
• Limitations:
• Location
• Public purpose
• General benefit

8

• Statutory “menu” of public improvement projects

372.003 “verbs”

ERECT ACQUIRE CONSTRUCT IMPROVE WIDEN NARROW CLOSE REROUTE INSTALL ESTABLISH DEVELOP REHAB EXPAND LEVY HR STRAIGHTEN HR ENCLOSE HR DRAIN HR GRADE HR FILL HR PROTECT HR

HR = Home Rule

9

Statutory “menu” of public improvement projects 372.003 “nouns”

LIBRARIES OFF-STREET PARKING FACILITIE3S MASS TRANSPORTATION FACILITIES WATER FACILITIES/IMPROVEMENTS WASTEWATER FACILITIES/IMPROVEMENTS DRAINAGE FACILITIES/IMPROVEMENTS PARKS AFFORDABLE HOUSING PROJECTS SIMILAR LANDSCAPING FOUNTAINS LIGHTING SIGNS SIDEWALKS STREETS ROADWAYS RIGHTS-OF-WAY PEDESTRIAN MALLS ART RIVER HR CREEK HR BAYOU HR STREAM HR BODY OF WATER HR ALLEY HR TERRITORY HR

O P E N S P A C E AG F IR E E Q U IP M E N T

AG

HR = Home Rule AG = AG Guidelines

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Statutory “menu” of public improvement projects Real Property, Services, and Expenses

A public improvement project may include special supplemental services for improvement and promotion of the district, including services relating to advertising, promotion, health and sanitation, water and wastewater, public safety, security, business recruitment development, recreation, and cultural enhancement. A public improvement project may include payment of expenses incurred in the establishment, administration, and operation of the district. A public improvement project may include the acquisition, by purchase or otherwise, of real property in connection with an authorized improvement.

Summer ‘17

• City and HCLGC engaged legal counsel to assist in

interpreting PID Service and Assessment documentation, due to confusion and ambiguous terms and provisions.

• Team recognized updates were necessary to the

PID Original Service and Assessment Plan as it remained without amendment, despite modifications to land use and the passage of time.

• 15 Residents sued the City, the County, the State of

Texas, the PID, the HCLGC, the Developer, Forestar USA Real Estate Group and several engineering firms alleging flood damage due to drainage design.

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Fall ‘17

• Litigation of the HCPID Residents suit ensued.
• Document collection and evaluation performed to

reconstruct timeline for PID Creation and Operation for past 15 years.

• City Team contacted Forestar (USA) Real Estate

Group, Inc. as the Developer to seek cooperation

• n a complete and comprehensive update.

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Winter ‘17

• The Developer asserted they were owed

$17,317,898, plus interest at 6%, compounded annually since 2010 and wanted the update to the plan to provide for the additional amounts.

• Protracted negotiations ensued, anticipating

litigation with Developer over asserted debt owed by the property owners.

• Negotiations reached impasse.

13

Spring ‘18

• Forestar sells PID and Developer owned property to

T.F. Hunters Crossing, who takes over as Developer.

• Update Negotiations restart, with legal counsel for

both parties involved in evaluating the impact the passage of time has had to the District and work on a method to update the PID Service and Assessment documentation, to resolve confusion and ambiguous terms and provisions.

14

Summer ‘18

• Negotiations appear nearing complete.
• City Team and Developer reach impasse on

determination of the interest owed on the Developer’s investment in the PID (both past and future)

• Financial Experts at Briggs & Vaselka, Co. are

engaged to assist in financial analysis and reconciliation and are tasked to evaluate all fiscal data.

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Summer - Fall ‘18

• Fact-Finding and PID Update Negotiations take

place between T.F. Hunters Crossing and City Team.

• Real Estate documents are negotiated and

prepared for the transfer of dozens of real property parcels and easements from Developer to City, HCLGC and for HOA Condominium of Pool Facility.

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Fall ’18 – Spring ‘19

• Construction of remaining PID Improvements.
• Parties make substantial progress on update.
• Parties reach impasse on interest accrual provisions

and other financial terms.

17

Spring – Summer ‘19

• HCLGC suspends payment of reimbursement to

Developer for the cost of capital improvements.

• Developer issues demand letter for payment.
• Parties restart negotiation and reach amicable

terms.

18

PID Boundary

19

History of the PID

• Sept. 11, 2001 – Res. R-2001-19  Created PID
• Nov. 11, 2003 – Res. R-2003-34  amended R-2001-19

to revise estimated costs of improvements and method

• f assessments
• Dec. 9, 2003 – Ord. 2003-35  levied assessments and

approved the Original Service and Assessment Plan (the “SAP”)

• Dec. 14, 2004 – Ord. 2004-42  amended Ord. 2003-

35 to revise scrivener's and mathematical errors in SAP

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Title Owner Notice

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• The rights of the District to levy taxes and issue bonds,

recorded in Volume 1405, Page 572, Official Records of Bastrop County, Texas. (283.001 acres)

• The rights of the District to levy taxes and issue bonds,

as set out in City of Bastrop Ordinance 2003-35, as shown on the following Plat Records of Bastrop County, Texas:

Plat Cabinet No. 4, Page 111B Plat Cabinet No. 4, Page 131A Plat Cabinet No. 4, Page 131B Plat Cabinet No. 4, Page 154A Plat Cabinet No. 4, Page 159B Plat Cabinet No. 4, Page 175B Plat Cabinet No. 4, Page 187A Plat Cabinet No. 5, Page 11A Plat Cabinet No. 5, Page 21A Plat Cabinet No. 5, Page 21B Plat Cabinet No. 5, Page 90B Plat Cabinet No. 5, Page 105B Plat Cabinet No. 5, Page 113A Plat Cabinet No. 5, Page 142B Plat Cabinet No. 5, Page 143A Plat Cabinet No. 5, Page 143B Plat Cabinet No. 5, Page 151A Plat Cabinet No. 5, Page 151B

Notice

• Sec. 5.014. NOTICE OF OBLIGATIONS RELATED TO PUBLIC

IMPROVEMENT DISTRICT. (a) A seller of residential real property that is located in a public improvement district established under Subchapter A, Chapter 372, Local Government Code, or Chapter 382, Local Government Code, and that consists

• f

not more than one dwelling unit located in this state shall give to the purchaser of the property a written notice that reads substantially similar to the following: NOTICE OF OBLIGATION TO PAY PUBLIC IMPROVEMENT DISTRICT ASSESSMENT TO (municipality or county levying assessment) CONCERNING THE PROPERTY AT (street address) As a purchaser of this parcel of real property you are

• bligated to pay an assessment to a municipality or county for

an improvement project undertaken by a public improvement district under Subchapter A, Chapter 372, Local Government Code,

• r Chapter

382, Local Government Code. The assessment may be due annually or in periodic installments. More information concerning the amount of the assessment and the due dates of that assessment may be obtained from the municipality or county levying the assessment. The amount of the assessments is subject to change. Your failure to pay the assessments could result in a lien on and the foreclosure of your property. Date: __________________ ________________________________ Signature of Purchaser (b) The seller shall deliver the notice required under Subsection (a) to the purchaser before the effective date of an executory contract binding the purchaser to purchase the

• property. The notice may be given separately, as part of the

contract during negotiations, or as part of any other notice the seller delivers to the purchaser. If the notice is included as part of the executory contract or another notice, the title of the notice prescribed by this section, the references to the street address and date in the notice, and the purchaser's signature on the notice may be omitted.

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NOTE: The SAP was recorded in the real county property records when approved and the amended SAP will also be recorded so all future buyers have notice.

PID Development Status

• The Developer has spent close to $18M to construct the following

Capital Improvements authorized under the SAP and the City has accepted them.

• 1. WATER

DISTRIBUTION SYSTEM IMPROVEMENTS consisting

• f

improvements necessary to provide water services to the Assessed Property.

• 2. WASTEWATER

COLLECTION SYSTEM IMPROVEMENTS consisting

• f

improvements necessary to provide wastewater services to the Assessed Property.

• 3. STORM

DRAINAGE AND DETENTION IMPROVEMENTS consisting

• f

improvements necessary to provide storm drainage to the Assessed Property.

• 4. PUBLIC STREET IMPROVEMENTS consisting of improvements necessary to

provide the Assessed Property with access within the District as well as to provide necessary access to community roads and state highways.

• 5. LANDSCAPING,

OPEN SPACE, RECREATIONAL AND PARK IMPROVEMENTS consisting of installation of landscaping in public rights-of-way and public open spaces, public signage and establishment and improvement of

• pen spaces, including dedication of land to the City for Hunters Crossing Park,

construction of Hunters Crossing Park, and construction of a hike/bike trail system.

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PID Development Status

• Developer has already paid $545,558 to construct Bear Hunter Drive
• Developer will pay $256,443 to construct remaining portion of Bear Hunter Drive

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PID Assessments and Lien

• Consistent with the PID Act, Ord. 2003-35 properly

levied assessments in lump sum by lot type.

• PID assessments created a lien against each property
• Owners purchased property subject to that lien
• Lien is released when assessment is paid in full—either

in lump sum or on a certain date through annual installment payments

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Assessments v. Annual Installments

• Assessments – levied in lump sum

and may decrease, but not increase

• Annual Installments – assessments

may be collected in annual installments

• Calculated annually by PID “administrator”

and can vary year to year

• Approved annually by governing body as part
• f the annual update to the SAP

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Issues with Original Collection Mechanism

• Planned for collection over 25-year period
• But deferred collection of assessments until

development beginning in 2004

• 

created administration hurdles and disparate payment plans

•  Properties burdened with lien even after 25-year

period expires

• Current Risk to Owners: without revised

payment plan, assessments owed in lump sum at end of 25-year period.

• If not paid, incur penalty and interest like taxes, but

can’t be collected until property is sold.

27

Collection Changes to Remedy Current Issues

• Updated payment plan to allow commercial and multi-family to

take advantage of 25-year payment plan.

• Assessments will continue to be collected in the amount set

forth in the SAP and will end with a final payment in January 2030 for Single-Family, in January 2034 for Commercial, and in January 2041 for Multi-Family and the Undeveloped Lot.

Lot Type Collected Through FY1 Paid January 31 Capital Assessment Rate2 Single-Family Residential 2029 2030 $380 / lot NOW FIXED RATE! Commercial 2033 2034 .071 / sq. ft. Multi-Family 2040 2041 .068 / sq. ft. Undeveloped Lot 2040 2041 .068 / sq. ft.

1 Assessments due by January 31st following the fiscal year. 2 Same assessment rates as 2018. Future assessments fixed at 2018 rates.

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Collection Changes Benefit Owners

• Certainty of payment plan and end of collection
• Amounts owed are confirmed and transparent.
• Even and consistent cost allocation until PID obligations are

reduced to zero.

• All owners are paying PID assessments from 2018 until the lien is

reduced to zero as described in this presentation and the SAP.

• All owners can choose to:
• Pay unpaid capital assessment balance at any time, or
• Take advantage of the offered annual payment plan
• For

each

• wner

that timely makes annual installment payments, unpaid lien on:

• Residential property will be released Feb. 1, 2030
• Commercial property will be released Feb. 1, 2034
• Multi-Family property will be released Feb. 1, 2041
• Undeveloped property will be released Feb. 1, 2041

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• NO Interest
• Reimbursed to Developer, even though interest was anticipated on PID Project Costs
• On PID Bond payments, if bonds are issued.
• PID balanced using collections from Undeveloped Lot
• wned

by Developer and reductions in Developer reimbursements.

• Residential payment amounts reduced in the aggregate by

$1,124,321

• Commercial payment amounts reduced in the aggregate by

$472,919

• Multi-Family payment amounts reduced in the aggregate by

$292,036

• Undeveloped Lot will now pay $2,564,916.92

30

Collection Changes Benefit Owners

Collection Changes Burden Developer

• Developer

will receive less reimbursement for PID improvements than originally provided because:

• Certain property changed in use and rendered it non-benefitted

 reduced assessment to $0 (e.g., drainage lot, City lot for possible fire station)

• All residential assessments will end January 2030 if timely paid.
• Developer agreed to waive certain reimbursements, including all

interest.

• Developer has incurred $18,128,899 in PID Improvement

costs

• Includes $17,317,898 through June 30, 2010 and an additional

$545,558 for the constructed portion, and $265,443 for the to-be- constructed portion of Bear Hunter Drive.

• Greatly exceeds the $11M levied and amount to be reimbursed

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Collection Changes Burdens Developer

• City negotiated waiver
• f Developer

costs valued at $6,167,639 in enforcing the

• riginal

levy cap

• f

$11,961,260!

• $8,015,253
• f

improvement costs will remain unreimbursed!

• In 2017, the total payment capacity for the District was only

$5,564,964.67, which left an aggregate deficit

• f

$4,514,697.63 in outstanding liens on the property subject to interest and penalties which are avoided by extending the annual installment payment option

32

Collection Changes Burdens Developer

• City enforced T.F. Hunters Crossing’s obligation to pay

$2,564,916.92 assessment amount based

• n

their February 2018 acquisition of the Undeveloped Lot.

• City Team further negotiated a Developer reimbursement

reduction of $1,847,614

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PID Development Cost Summary

• $18,128,899: Developer incurred Capital Improvement Costs
• $-6,167,639: Developer unreimbursed Capital Improvement

Costs

• $11,961,260: Capital Improvement Costs SAP levied and

Developer’s Maximum Reimbursement Amount under Original SAP

• $-2,205,098: Developer reimbursed from Capital Assessment

collections to date

• $-433,774:

2018 HCPID Capital Cost Reimbursement Payment to Developer Scheduled Oct. 2019

• $9,322,388: Unadjusted amount remaining for Developer

Reimbursement

34

PID Development Cost Summary

• $9,322,388: Unadjusted amount remaining for Developer

Reimbursement

• $-1,889,276: City Negotiated reduction in Lien Amounts by

Developer waiver ending PID.

• $7,433,112:

Adjusted amount remaining for Developer Reimbursement

• If

Paid by issuing bonds developer projected reimbursement is $4,456,185 after payment of bond issuance costs and interest on the bonds.

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PID Development Costs

• In Summary:
• The Developer paid close to $18 million in PID project

costs

• Developer recovers money immediately if bonds are

issued, or over time if no bonds are issued.

• The public benefit is the same with or without bonds

NO INTEREST EVER! $8,015,253 IN SAVINGS

36

Maintenance & Operation Costs

• SAP levied $5,400,000 in Maintenance and Operation Costs
• To date, the City has collected and invested $1,258,900 in

Maintenance and Operation Costs

• $4,141,100

remains unchanged and available to invest in maintenance and operations through 2040

• Maintenance and Operation Costs are levied annually based on

amount budgeted and determined by HCLGC and approved by City

Lot Type FY 2019 Rate Single-Family Residential $23.16 / lot Commercial $0.0317 / sq. ft. Multi-Family $0.0317 / sq. ft. Undeveloped Lot $0.0317 / sq. ft.

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Q&A Session

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Timeline and Next Steps

• August 20 - 31st – Public Input & Collaboration
• August 31st - Publication of notice in the Bastrop Advertiser of the

September 10th Hearing on the 2019 Amended and Restated SAP

• September 10th – City Council Meeting with:
• PID Public hearing and consideration of Ordinance approving the 2019 amended

and restated SAP by City Council.

• Read

and approve Resolution approving Amended Development and Reimbursement Agreement including:

• authorizing Special Warranty Deed transferring
• Easements, ROW, park, trails to HCLGC.
• Real Property Corner Lot next to Pool to City.
• Condo Declaration transferring pool facilities to the HOA.

39

Timeline and Next Steps

• September 24th – City Council Meeting
• Read and adopt second reading of Ordinance approving the 2019 Amended and

Restated SAP and Assessment Rolls.

• October 1st – Beginning of City’s 2019-2020 Fiscal Year. Work with

Texas Attorney General Public Finance Division to pre-clear issuance of PID Bonds.

• October 8th – City disburses to Developer 2018 Fiscal Year

reimbursement payment.

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Timeline and Next Steps

• December 9th – Estimated date to proceed with construction of

remaining portion of Bear Hunter Drive (60 Days after 2018 disbursement to Developer. Developer will complete construction 180 days after construction beings.

• December 24th – Estimated date for the City to consider issuing PID

bonds secured solely by the PID assessments (and not by the full faith and credit of the City).

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