Council considers TIRZ #1 boundaries

Getting a jump on growth, the Navasota City Council held a Special Meeting Monday, Sept. 12, to discuss setting boundaries for creation of the Navasota Tax Increment Reinvestment Zone (TIRZ) #1. That was followed by discussion of the proposed issuance of the Combination Tax & Limited Surplus Revenue Certificates of Obligation, Series 2022 for utility capital improvement projects (CIP) in fiscal year 2022-2023.

TIRZ #1

City Manager Jason Weeks advised council that staff have been working with Hawes Hill and Associates on the creation of a TIRZ, and said, “The next step we have to take is to set the boundaries.” In an overview of what a TIRZ is and how it works, Weeks said cities are allowed to use a TIRZ as an economic development tool and there are no tax ramifications for property owners in a TIRZ. When a TIRZ is created, the city records the base tax value of the properties in the TIRZ at the time of creation. As development occurs and values increase, property taxes collected above the base value go into a TIRZ fund; however, during the creation process, city council determines what percentage of that revenue will go to the TIRZ fund with the remainder going to the General Fund. The life of a TIRZ is 30 years and any unspent funds are returned to the General Fund. Weeks stressed that TIRZ funds can only be used for capital projects and “economic development to stimulate development,” such as streets, arterials or a police or fire station. The proposed TIRZ #1 is bounded by SH 6 on the west, FM 3090 on the north, the ETJ (extraterritorial jurisdiction) on the east and roughly SH 105 and Durden on the south. Since no more than 30% of property in a TIRZ at the time of creation can be residential, the proposed area excluded the Dove Crossing subdivision, the Navasota High School complex and Austiana Hills.

Weeks said, “Everything that is outside of the city limits, all you’re doing is setting the base value. If it’s annexed in 10 years, gets developed, now it’s increased significantly. There’s a huge amount there and that has created increments.” According to Weeks, the TIRZ needs to be created by Dec. 31 and this year’s values will be the base value.

Weeks referred to the proposed area as “Phase 2 of Navasota” and speculated the city will double or triple in size in the next 5-15 years. Based on increased need for police and fire protection, he recommended no more than 50% revenue participation. After discussion, other undeveloped parcels added to TIRZ #1 are along FM 3090 area and west of SH 6 between Washington Avenue and Spur 515.

COs to be issued

Weeks also advised of the need to issue debt of $7,010,000 for utility CIP. Water Fund improvements include a new water well, water tower, plant and ground storage tank east of SH 6, fire hydrant replacement and utilities to the north end of the Navasota Municipal airport at a cost of $4,746,250. Natural Gas Fund needs of $1,615,000 include a high pressure main from the Industrial Park to a new Regulator Station closer to Pecan Lakes Estates and replacement of the aging, undersized Hollister Gas Regulator Station.

Phase 2 of the Wastewater Treatment Plant CIP will cost $395,000 and includes new rotors, a generator, electrical and professional services.

The cost of issuing the bonds is $253,759 and $1.9 million will come from ARPA (America Rescue Plan Act) funds with a possible $2 million from a CDBG Mitigation grant. Weeks provided a timeline with a competitive bid deadline and adoption/rejection of bids by council Nov. 14.

Questioned about the current Street CIP debt, Weeks said, “The idea is to have the debt paid for by our utility customers. As we keep growing, utility customers will be helping pay for the debt.”

View city council meetings in their entirety at www.navasotatx.gov/ city-council/pages/meeting- videos.