Letter to Wilco Sun

The following letter was submitted to the Wilco Sun and published on February 28, 2016 concerning Lone Star Rail and public transportation in Georgetown.

"Kudos to Clark Thurmond on his editorial on February 24, 2016 regarding Union Pacific pulling out of Lone Star Rail. I agree completely that $50,000/year would be better spent on library books or other city services. I especially like that he would support a city bus service as it would be much more economical to start and operate and the flexibility of a bus system would allow routes to be created in future areas of high growth. He can count on my support to advocate for a economical and practical bus system as the demand grows."

Councilman Fought's View on Low-Income Housing

Councilman Steve Fought writes a newsletter for his constituents in Georgetown District 4.  Below is an excerpt from his most recent newsletter concerning Low-Income housing.

Steve Fought -- City Council District 4 Representative  Newsletter Earnest, open, informed debate   leads to good public policy. 24 February 2016 DISCLAIMER: One of my responsibilities as a member of the Georgetown City Council is to provide information to the community. This newsletter helps me fulfill that responsibility. However, this newsletter is not a publication of the City Council; the views contained in this newsletter are mine alone and should not be taken as representing the views of the City Council or other Council members. Please feel free to send me an e-mail. These last few Council Meetings have been eventful; citizen-participation has been at an all-time high. I especially like the citizen involvement and applaud those who have taken time to engage -- either at the Council Meetings themselves or via e-mail, phone calls, or direct conversations.  That's healthy. This newsletter will address the Affordable/Workforce Housing issue and offer some comments about the variables I think are important as we move ahead.  I'll also address an especially important item for us in Sun City -- road rejuvenation.   In this issue Affordable/Workforce Housing Sun City Road Rejuvenation Curious minds want to know....

Affordable/Workforce Housing Two new Affordable/Workforce Housing proposals came to Council on 23 February; both were on the West side of I-35 and in the Williams Drive corridor. The Developers' were requesting a resolution of support from the City Council for their projects in order for them to compete for Federal Tax Credits.   After a protracted and sometime contentious, discussion both proposals were defeated 4-3.  I along with Council Members Hesser, Gipson and Gonzalez voted against both proposals; Council Members Eby, Brainard and Jonrowe voted in favor of both proposals. (Please click here to see the presentations -- you can scroll ahead as necessary.  They are Items "Y" and "Z".) This is in contrast to the outcome of the 9 February Council Meeting when 3 similar proposals came before the Council and were approved (I voted against all 3).*   Those latter 3 proposals now move ahead to a State-Level Board to determine which of the projects will receive the tax credits.  That Board may approve all of the projects, some of the projects, or none of the projects.  (Please click here to see a map of all 5 proposals as well as other existing similar units.)  That is personally disconcerting because we are turning this important, and impactful, aspect of Georgetown's development over to a State-Level Board, with no knowledge of the Board's inclinations or intentions, and no obvious way to have an input to their deliberations. The link to this program is  http://www.tdhca.state.tx.us/multifamily/housing-tax-credits-9pct/index.htm Now, hopefully having clarified the decisions the Council made, and the process which lies ahead, let's turn to clear up some confusion about whether these projects are "low income housing" or "Affordable/Workforce Housing" of it we should be using some other term.  This is easily resolved with the opening statement on the web site for the tax credits (references just above).  The narrative states:  "The TDHCA Housing Tax Credit (HTC) Program is one of the primary means of directing private capital toward the development and preservation of affordable rental housing for low-income households."  In other words, these are proposals for low-income housing. Further, and contrary to what some advocates have offered, and with very few exceptions, our Firefighters and Police would not qualify for these units under the income parameters.   The projects in question focus on providing rental housing for those below the Annual Median Income for the surrounding area (AMI). The categories for residents, by income, are: "X" number of units for "less than 60% AMI"  "Y" number of units for "less than 50% AMI" and "Z" number for "less than 30% AMI."  The AMI baseline used in the Housing Advisory Board's presentation are based on a family of 4 ($76,800 annually) -- making the first threshold (60% AMI) is $46,000.  In other words, in order to qualify for the income restricted units, a family of four would have to earn less than $46,000 per year.  The salary of an entry-level police officer is $51,022 ($5,000 above the 60% AMI level) and after 6 years the salary is over $60,000.  The police pay scale is at  https://civilservice.georgetown.org/police-careers/pay-scale/ The pay scale for our Fire Department personnel starts at $43,000 (slightly lower than for the Police Department) but within 3 years it is over the 60% AMI level at $47,000.  The rates can be viewed at  https://civilservice.georgetown.org/fire-careers/pay-scale/ Therefore, with the exception of entry-level Fire personnel during the first 3 years of their career, none of our Police and Fire personnel meet the criteria of 60% AMI, which is the entry-point into the Affordable/Workforce Housing realm.**  However, none of this negates the need for low income (or Affordable/Workforce Housing -- or whatever other term you might want to use.)  Low income families deserve the opportunity to have decent, safe housing -- but because they have lower incomes, it's obviously more difficult for them to achieve that objective.   In my opinion there is a legitimate role for government to play in this -- but the role of government is not to provide that housing directly.  That approach has failed, miserably, for years.  Instead, there is a role for government to play in providing incentives for the private sector to participate and make the opportunities available.  In that regard, this particular financial/business model for low-income housing is the best I have seen. The model under consideration is for a public-private partnership in which the federal government provides tax incentives to the investors, making it possible to obtain private financing at more favorable rates -- lowering the investor's and developers costs, and making it possible to offer lower rents. The arrangement also requires the developer to retain and manage the property for a considerable period of time (15 years), which hopefully assures the ongoing quality of the real property. That seems like a good arrangement -- and I would like to see us explore it more. But we also need to explore some of the collateral impacts of having more of these types of units.  Recall from the previous newsletter that we already have nearly 3 times the state average of these sorts of units while our surrounding communities have considerably less.  Here are the comparisons: Georgetown has 2.77 times the state average Pflugerville, 2.27 times Austin, 1.84 times Cedar Park, 1.80 times Leander, 1.48 times Round Rock, 0.78 times (i.e., less than the average) Hutto, 0.33 times Jarrell has no units of this type. Georgetown has nearly 3 times as many units as the state average, and considerably more than the surrounding cities, especially Round Rock and Hutto which are below the state average -- and Jarrell has none.  In the face of this, we have no idea if the residents who occupy these units work in Georgetown, or if we are providing a repository of "Affordable/Workforce Housing" for Round Rock and beyond. There is also a potential relationship between the number of these types of units and the free/reduced-price breakfast/lunch program in our public schools.  The Texas Department of Agriculture Food and Nutrition Division administers the National School Lunch (NSLP) and School Breakfast Programs (SBP) for Public Schools.  According to their website (http://www.benefits.gov/benefits/benefit-details/1990) a family of 4 with an income of less than $44,863 would qualify for the free/reduced-price breakfast/lunch program.  Thus a significant percentage of the members who qualified for the reduced rent provisions at the 60% threshold ($46,000) would also qualify for  these additional benefits. Georgetown currently has 44% of our students in these programs, Round Rock has 26%, Hutto has 46%, and Pflugerville has 52% (I did not find data for Cedar Park).  In my opinion, the impact on schools, both in terms of free/reduced-price breakfast/lunch as well as classroom loading (which can drive a requirement for more schools and facilities) has to be part of the deliberation process on Affordable/Workforce Housing.  As part of my considerations, I asked the City Staff if the any of the surrounding communities had been asked to consider proposals of this sort in the last 18 months, and if so how those City Councils voted.  The response was that: "For the projects on the current Pre-Application list that we are competing against, the projects in Cedar Park, Round Rock and Pflugerville have all dropped out.  None of them went before the respective City Councils.  All of the projects for Austin were approved".  In other words, Cedar Park, Round Rock and Pflugerville opted out even before their Councils could consider it.   As things now stand, the three proposals to which we gave our support at the 9 February Council Meeting will compete with the projects from Austin and the State-Level Board will decide their fate.   In the end, I believe this is an issue which has become far more contentious than it should have been.  The reasons for the additional animosity are:  The way the original 3 proposals were put forth (on the Consent Agenda), giving an appearance that the proposals were being advanced "under the radar"; The appearance of a "rush job" which frustrated Council's ability to absorb the information, ask questions, and make a policy determination; The fact that all 5 proposals were West of I-35 and in the Williams Drive corridor, despite the obvious difficulties with traffic and Council's clearly stated intention to concentrate public transportation on the East side of I-35. Plus, all of this is in the face of the Council having agreed, during our November visioning sessions, to tackle this specific problem.  I believe we need to slow the process down.  The Council needs to think it through and provide some solid policy guidance to the staff. We do not need a consultant to do our thinking for us.  We need to think this through ourselves.  We need to do what Dr. Ron Swain (one of the premier leaders in Georgetown) suggests and have the courage to have a conversation about this -- one dealing with the facts, people's perceptions (right or wrong), and costs, not one that is rushed to judgment along a path filled with smoke and mirrors.***   Given an opportunity, I would vote to rescind the Council's previous votes to "support" in exchange for a commitment to have a policy in place by a date in the near future.  But rather than me taking that step -- a step which would undoubtedly lead to further acrimony -- I would rather have those who voted in favor of the proposal put the offer on the table to rescind the agreements, in exchange for a commitment to put this issue forward at a special session with the expressed purpose of reaching agreement on a comprehensive, City-wide policy with regard to Affordable/Workforce Housing -- an objective we have clearly stated and to which we have agreed. I'll give it some time.  In the meantime I welcome your comments. _______________________ All three proposals had been placed on the consent agenda for the 9 Feb meeting. John Hesser and I pulled them off the consent agenda and placed them on the regular legislative agenda so they could be discussed.  All three passed -- I voted against all three for reasons explained in my previous newsletter.  **  The point about these projects not being available at the 60% AMI level for Fire/Police personnel is even more obvious if you look at AMI for a family of two, or a single-person, or if you include a second wage-earner in the family of 4. *** There are a number of fairly obvious policy frameworks that might be fleshed out. For instance, an Age-Restricted (Senior) Affordable Housing complex might be added in the vicinity of St David's hospital, on or very near the fixed-route bus system Council is currently contemplating. That would not impact our schools, nor increase traffic by any significant amount as well as increase the viability of the proposed public transportation system.

Georgetown Electric No-Customer Service!

Sun City experienced a two hour electricity outage tonight and it was impossible to contact Georgetown Utility Services(GUS) to find out the scope of the outage and expected duration. Their phone number was busy over the two hours with no information forth-coming.

GUS needs a map that is accessible by cell phone that shows the extent of the outage as well as the cause and expected time of restoration of service.

Keeping the customers in the "DARK" literally for two hours is unacceptable in today's age of modern technology.

Out of the Box Thinking for Transportation

An innovative thinker from Houston has an analysis of current urban transportation solutions and new approaches using emerging technologies.(Houston Transportation Strategies)

"The first step is learning from what has and hasn't worked for other cities. Rail investments in other decentralized, Sunbelt cities, such as Los Angeles, Dallas, Denver, and Atlanta, have been disappointing. Los Angeles in particular is a cautionary case. With $9 billion spent on new rail lines in a city with twice the density of Houston and perfect walking weather year-round (unlike our summers!), they have seen overall declines in transit ridership and worsening traffic congestion. Rail is incredibly expensive — typically over $100 million per mile — and just not well suited for spread-out Sunbelt cities built around the automobile in the post-WWII era."

"The second step is understanding the ramifications of coming new technologies — specifically self-driving cars."

"Customized SUVs could be made with private individual compartments, so that passengers traveling in generally the same direction could share a ride without interacting. When vehicle pulls up, an indicator could tell you which door to enter for your compartment, then alert you again when it's time for you to get out based on the destination you put into your smart phone. A private ride combined with shared prices and efficiency: the best of both worlds."

Georgetown's transportation planners should be looking at these concepts for solving Georgetown's long term traffic problems. Wider streets with dedicated lanes for self-driving cars need to be planned far in advance of actual implementation.

Rail systems are prohibitively expensive and serve a very small segment of the population and take a long time to plan and implement. Bus systems are much more economical and quicker to establish, but, still use the existing roads. New technologies and approaches to solving transportation problems are sorely needed and Georgetown should take the initiative to lead the way.

City's Pension Investments Significantly Underperforming

As is usual for government organizations, the bad news from Texas Municipal Retirement System (TMRS) was dumped to the internet for public consumption without fanfare. TMRS earned 2.09% on its investments last quarter, and has earned 0.34% for the entire year of 2015.

Remember that when TMRS calculates the City's pension liability, they assume the investments earn 7% annually. When the investments earn less, the City's liability increases. At 7% return, the City's pension liability is covered at 83.3%, whereas at 5.42%, the 10 year average, the coverage is less than 60%. Thus it is easy to see the City's pension liability increases substantially when investment returns decrease.

Remember the 10 year Treasury Note interest rate, which is considered the risk free rate, is currently about 1.75%.

This bears watching as the City may need to substantially increase its annual pension contributions due to lower than expected investment returns.

Is Georgetown Liable if SunEdison Declares Bankruptcy?

Georgetown has a Purchase Power Agreement with SunEdison for electricity power to be delivered to Georgetown in late 2016 or early 2017. The solar power plant is currently under construction in West Texas. If SunEdison declares bankruptcy prior to completion of the solar plant, what are the legal entanglements that may ensnare Georgetown?

Hawaiian Electric thinks there may well be unacceptable consequences to them if their PPA is in force during a bankruptcy.(Hawaiian Electric)

"This was a pre-emptive move by Hawaiian Electric
Don't think canceling these PPAs wasn't well thought-out. Hawaiian Electric wanted to reduce the risk in its own portfolio by ridding itself of SunEdison before it was too late. If the PPAs were still outstanding and SunEdison went into bankruptcy, it could have frozen resources and space on the grid. Here is the direct quote from the utility's filing with regulators:

Hawaiian Electric must carefully evaluate each Project to ensure its success and that such Project will not languish due to incompletion or being subject to bankruptcy laws and rules. In such instance, Hawaiian Electric would have to continue to include such resources in its planning efforts until they were terminated or removed from bankruptcy court supervision and could begin work again, taking up valuable limited space on the grid in the meantime and delaying the procurement and installation of projects that would be able to be completed and provide significant benefits to Hawaiian Electric's customers and the State's Renewable Portfolio Standards goals.

That's a scathing statement showing how little confidence Hawaiian Electric has that SunEdison won't end up in bankruptcy. In fact, it's basically betting SunEdison will go bankrupt and is saying it doesn't want any part of that process."

More Low Income Housing Proposed for Georgetown

Two more low income housing projects are on the City Council agenda for Tuesday, February 23. Again, these developers are requesting a resolution of support or no objection for their projects so that they can apply for housing tax credits.

The proposed developments Mariposa at Georgetown Village and Cypress Creek at Georgetown Village are shown on the map.

Click on the map for an expanded view.

Mariposa consists of 180 units and Cypress Creek plans call for 220 units.

The city Housing Advisory Board recommend resolutions of support for both developments and the city staff recommends disapproval for both developments.

It is curious to note that all five of the recently proposed low income housing developments are several miles northwest of downtown Georgetown, where there is no public transportation, and none are proposed in and around the downtown area. These 832 units will result in much more traffic on Williams Drive as each unit will have 2+ plus automobiles. To gain an appreciation for the parking and traffic problems take a drive down Hedgewood Dr after 6pm.  Hedgewood is off Williams Drive near Serenada.

Engage your City Council person if you are concerned or want more information.

Union Pacific Dropout No Problem says Lone Star Rail Counsel

Lone Star Rail(LSR) will continue to seek funding from the New Starts Transit Program administered by the Department of Transportation. "Congress chose to set up New Starts as a competitive grant program to which transit agencies apply for available funds. Transit agencies, therefore, have the incentive to pursue overly expensive transit projects and expand their bus, transit, or streetcar service even without sufficient demand for more service." This program would fund about one-half of the start up costs with local and state government on the hook for the remainder as well as the on-going operational costs and replacement costs as the system ages.

“Taxpayers should pay attention. This is a potent taxing and borrowing authority,” said Chuck DeVore, vice president of national initiatives at the nonpartisan Texas Public Policy Foundation." (Watchdog) Lone Star Rail is executing agreements with local governments to take a large share of the future property tax increases whether or not the increase is related to the rail system. Luckily, Georgetown has not entered into such an agreement with LRS yet, although there is pressure to do so.

Following is a proposed route map with stations identified.

Notice that there is no station or rail line identified in Georgetown. Likely this is because Georgetown has not signed away its future tax revenue growth along the rail line to Lone Star Rail.

Be vigilant as LSR will return to the city council to get agreement that they be given the growth in tax revenue along the railroad for the next 30+ years.

Pension Problems Across the U.S.

Under funding of retiree pensions is surfacing all across the country.  Chicago and Illinois are particularly vulnerable to defaulting on their pension promises.

The latest pension fund struggling with finding a path forward is the Central States Pension Fund(Central States Pension). They are looking at 50%+ cuts in pension checks.

There are two major reasons pension funds are underfunded: First, they assume unrealistic investment returns of 7%-9%; Second, they assume the number of workers paying into the fund will continue to grow faster than the number of retirees receiving benefits.

The Central States Pension has 400,000 participants with 220,000 retirees. In other words, 180,000 people are paying in to the fund so that 220,000 people can receive benefits. The fund is projected to run out of money in 10 years at the current rate!

Some analysts compare pension funds to "Ponzi" schemes in that in the beginning many people contribute and few receive payments, however, as the participants age, fewer people are contributing to the fund than those receiving benefits. It is simple math to determine that such a scheme will ultimately run out of money.

Georgetown participates in the Texas Municipal Retirement System(TMRS) and the number of participants will likely continue to increase as long as the population of Texas continues to increase. However, in their latest official publication, TMRS assumes a 7% investment return, which in today's environment of the Federal Reserve's suppressed interest rates, is completely unrealistic. With a more realistic investment rate assumption, Georgetown will find that TMRS is underfunded and increased funds from tax receipts will have to be allocated for pension contributions.

The City needs to be aware of what is happening in the pension fund universe and develop a strategy to cope with the coming issues.

More on Lone Star Rail from Texas Public Radio

Union Pacific Withdraws From Lone Star Rail Project

By STEVE SHORT • FEB 11, 2016

Plans to develop passenger rail service between San Antonio and Austin and then up to Georgetown has come to a grinding halt.  The Lone Star Rail District’s line, called LSTAR, would use Union Pacific tracks that run parallel to I-35.

While Union Pacific had a memorandum of understanding, they determined it wouldn’t be feasible for them.

“Anytime you attempt to run passenger trains on the same lines as freight traffic it causes a lot of problems,” said UP spokesman Jeff DeGraff. “There are scheduling issues, there are capacity issues, and it is not something that is very easily done. And given the infrastructure that’s in place and the proposed infrastructure, we just didn’t feel they were coming up with solutions that really co-mingled the two.”

Austin attorney Bill Bingham represents the Lone Star Rail District. “We’ve planned pretty extensively how to take care of their capacity needs and free up some of their existing rail right-of-way to operate passenger service and construct for them some new freight lines that they can move their through-freight trains to,” said Bingham.

Lone Star Rail District officials plan to meet with UP officials in the next few weeks to try and work out their differences.(Link)

Saga of SunEdison Continues

SunEdison stock opened today at about $1.41 per share amid reports of serious issues with the continued viability of the company. The company has announced a new "asset light" strategy which involves selling off silicon wafer production facilities and reducing R&D and technology demonstration capability.

"Sunedison said it plans on: 1) selling its Kuching, Malaysia silicon wafer production facility, 2) close its Pasadena, Texas polysilicon production facility, 3) refocus its Portland, Oregon operations into a cost effective R&D and technology demonstration center." SunEdison Analysis

"With the changes, SunEdison expects to report $266 million in total non-cash impairment charges and a total of $171 million in other restructuring charges in its fiscal 2015 fourth quarter, and about $10 million to $13 million in other restructuring charges in fiscal 2016.

The Maryland Heights-based company plans to permanently close its Pasadena, Texas, polysilicon manufacturing plant, blaming the move in part on Chinese tariffs on U.S.-produced polysilicon. SunEdison had idled the plant in December as a result of Chinese trade actions, officials said. The plant, which SunEdison said it has operated for over 20 years, will shutter for good by the end of the third quarter, affecting about 180 workers, subject to collective bargaining obligations, the company said." Bizjournal

UBS(Link) has cut it's target for SunEdison's stock price to $0.75 per share.  This is penny stock territory and will ultimately result in the stock being delisted from the New York Stock Exchange.

Cutting jobs, selling facilities, falling share price, multiple law suits, and Hawaii Electric Company's(Link) termination of the power purchase agreement with SunEdison are all strong indicators of a company in trouble.

What is Georgetown's backup plan to provide electricity to its citizens next year?  Does Georgetown have any financial liability because of SunEdisons problems?

Is Lone Star Rail Crippled or Dead?

It was reported, KLBJ Radio, that Union Pacific Railroad is pulling out of discussions with Lone Star Rail to construct a new freight rail line between San Antonio and Taylor which would free up the existing Union Pacific rails for use by Lone Star Rail for commuter trains.

Since effectively commuter trains and freight trains cannot share the same tracks, this Union Pacific action means the end of Lone Star Rail.

Stay tuned to see if the City of Georgetown has effectively wasted $300,000 by paying Lone Star Rail to maintain its ability to participate in the rail project.

WOW!!! SunEdison at $1.55 per Share

How long before this company's value goes to ZERO?  Market cap at $500 million!

Georgetown, what is your plan B for electricity next year?  The city may want to get Plan B ready!

SunEdison Stock Closed Today at $2.04

SunEdison, the company that Georgetown has contracted with for 50% of Georgetown's electricity needs starting next year continues to struggle financially.

A New York judge Thursday issued a temporary restraining order barring troubled solar developer SunEdison Inc. from making any unusual moves with its assets pending a showdown with unhappy investors in a Latin America venture. This is the result of a failed acquisition of a South American company.  This temporary restraining order is in effect through February 25.

Another lawsuit has been filed against SunEdison, this time the plaintiffs are employees alleging the company kept SunEdison stock in its 401(k) plan even though company officials knew it was performing poorly.

The suit, filed Tuesday in federal court follows the same storyline as previous lawsuits filed against SunEdison: that the company’s executives continued to retain SunEdison stock in its retirement plan even though they knew it was overinflated and the company’s business model was “built on a house of cards.”

At a stock price of $2.04, the company value or market cap is $646M while company debt is approximately $11.5 Billion.

City Council Votes on Low Income Housing

The Georgetown City Council voted to approve a resolution of support for the Kia Pointe, LLC for their application for Housing Tax Credits.  The votes was 4 to 3 in favor with councilmen Hesser, Fought and Gipson voting against.

A video of the public input, council discussion and vote can be found at this Link. Click on agenda items "N" for the videos.

Watch For Fees to Increase in Amount and Scope

When the Government, Local, State, or Federal wants additional revenue, but, is afraid to raise taxes, they start increasing existing fees and creating new fees.

Chuck DeVore of the Texas Public Policy Foundation has a Special to the American-Statesman Link describing the negative effects that occupational and other business licensing have on the creation of new enterprises and jobs. "Occupational licensing red tape acts as a barrier to entry for Americans seeking to improve their lives while artificially restricting the supply of services, jacking up the cost of those services to consumers."

Another area where governments impose costs on the consumer is through their utility bills. My cable bill has a Broadcast Station surcharge - $8.95, a Sports Programming surcharge - $5.15, and a State Cost Recovery Fee - $1.03. The bogus charges total $15.13 each and every month and are enabled by our legislators!

The City of Georgetown has many fees embedded in the budget that are not readily visible.  There are building permit fees, inspection fees, application fees and many others too numerous to list.

The City enacted an ordinance last year concerning ambulances. The requirement for any person or business to engage in the non-emergency ambulance transfer service within the City of Georgetown or its ETJ is a mechanism for controlling private enterprise, aggregating additional power to the City, and another method of acquiring funds for the City. A franchise or license granted by the City is a barrier to entry for persons or businesses to engage in a legitimate business.

A typical ordinance requires that a non-emergency ambulance service provides for "public convenience". In addition, the burden of proof shall be upon any applicant to show clear, cogent and convincing evidence that the public convenience will be served by granting a non-emergency ambulance transfer service franchise.

Typical requirements are:

1. Provide liability insurance with the City named as an additional insured.

2. Establish a performance bond.

3. Pay a franchise fee to the City - 3% to 5% of revenues.

4. Inspection of books and records at any reasonable time.

5. Standards for vehicles, equipment and personnel.

6. Maintain a 24 hour dispatch service for non-emergency ambulance transfer service.

7. City may fix and regulate rates for non-emergency ambulance transfer service.

It may be time for a rigorous accounting of all the fees embedded in the Georgetown budget. 

Low Income Housing in Georgetown

According to http://affordablehousingonline.com/  the total number of renter households in Georgetown is 5,118, which is 27.2% of all households in the city. There are 740 units financed through a variety of Federal programs, including Section 8 and Low Income Housing Tax Credits.

The average number of units per property for affordable rentals in Georgetown is 92.50. The largest Federally assisted affordable rental community in the city is Oaks At Georgetown L.p. at 192 units and the smallest is Georgetown at 20 unit(s). One apartment property provides housing for seniors containing 100 units. Of the 740 units, 281 units include some form of rental assistance (like Section 8) to make rent more affordable for very low income families.

Rental assistance is a type of housing subsidy that pays for a portion of a renter’s monthly housing costs, including rent and tenant paid utilities. This housing assistance can come in the form of Section 8 Housing Choice Vouchers, project-based Section 8 contracts, public housing, USDA Rental Assistance (in Section 515 properties) as well as HUD Section 202 and 811 properties.

In Georgetown, there are 4 affordable housing properties providing rental assistance to 281 very low income households. In addition, Georgetown Housing Authority provides 100 Section 8 rental vouchers in Georgetown and the surrounding area.

The Area Median Income (AMI) for the Georgetown/Williamson county Metropolitan Statistical Area is $76,800 for a family of four. Rental assistance can be provided for those earning 50% or less of AMI, or $38,400 for a family of four.

Five projects consisting of 601 units have been built in Georgetown using Tax Credits. The proposals before the City Council would build an additional 104 units (Kaia Pointe), 220 units (Merritt Heritage Apartments), or 108 units at Live Oak Apartments.  Potentially there will be built 432 low income units along Williams Drive using a variety of Federal funding sources if the City Councils approves these additional developments.

Affordable Housing Meeting Held by Developer

Ms. Lisa Stephens, the Owner and President of Saigebrook Development, LLC, a WBE/Texas HUB certified real estate development firm, presented her plans to develop 104 apartments 1/2 mile Southeast of the intersection of Del Webb Blvd and Williams Drive. There was an overflow crowd of about 500 semi-hostile people, primarily residents of Sun City.

Ms Stephens had to remind the crowd several times that she was hosting the information meeting voluntarily and if people were not respectful, she would terminate the meeting.

Ms Stephens provided several pieces of useful information.  First, the property in question had been zoned and approved by the city council for single family, commercial and multi-family residential in 2012. The proposed development, called Kaia Pointe Apartments, uses only 5 acres of the 40+ acre property that had been approved in 2012.  She has no idea what the owners of the remaining property plan to build. As part of the re-zoning in 2012 a traffic study was conducted with recommended roadway changes.  Ms Stephens indicated that traffic study was available from the city.  Items she indicated would be constructed would be stop lights and dedicated left and right turn lanes on Williams Drive into the development.

Ms Stephens presentation focused on describing the high quality development she planned to build and operate. Her company will maintain ownership of the property and manage it to assure it is profitable and well maintained.  She described the apartments, amenities and the screening processes they used for the tenants.

As a profit making company they will pay property taxes based on the value of the property as do other private property owners.

She indicated that only one of the three proposed apartment complexes along Williams Drive will receive the Housing Tax Credit.  If her company does not win the Tax Credit, they will look at other Government assistance programs, not Section 8, and whether it is economical to build "market rate" apartments with no assistance.

The issues that concerned the crowd were traffic, congestion, crime, property values and similar issues not under the control of the developer.  Conspicuous by their absence were any representatives from the city or city council members or the mayor.  The items that concerned the attendees are properly addressed by the city and city council.  It was reported that all three developments identified in a previous blog will be on the council agenda, Tuesday, February 9 at the regular time.

More Senior/Low Income Housing on Williams Drive?

The city is considering the first step in allowing additional senior/low income apartments to be built along Williams Drive.  Here is a map of the proposed developments. They are indicated by the cross-hatched areas on the map.

Kaia Pointe is near the entrance to Sun City and consists of 104 units on 5 acres.  Merritt Heritage Senior Apartments would be in the center of the map near Ford elementary school and would have 220 units on 13 acres. Finally, Live Oak apartments are proposed near Estrella and would consist of 108 apartments on 7.36 acres.

The things that all three proposed developments have in common are they all have ingress/egress on Williams Drive and they are all partially financed using low income housing tax credits.

The apartment rents are not subsidized, but, the developer receives tax credits to apply against his income.  Accepting these tax credits allows the developer to charge lower rents, but, he is committed to maintaining the below market rents for 30 years and there are income limits for tenants to qualify.

There are many questions to be raised about these proposed developments.

1. Does Georgetown want Williams Drive to be the senior/retirement mecca for central Texas?

2. What is the long-term impact of building apartments facing Williams Drive vis-a-vi other kinds of commercial or residential development?

3. What is the long-term impact on the Williams Drive traffic and how do these developments integrate with the Williams Drive "Centers Plan" to be undertaken in the near future?

4. Does Georgetown have a plan for public transportation along Williams Drive that will meet the needs of these new residents?

These proposed plans will be coming back to the council likely at the next meeting as the developers have to apply for the tax credits by March 1, 2016.

Contact your council person if you have questions or concerns.

Lt Governor Dan Patrick Says Reduce Local Government Revenue Cap

The Texas Lt Governor gets it!  Property taxes are too high and are increasing at an accelerating rate. Georgetown's property tax revenues are growing at a 9.75% while population is growing at 3.68% with less than 2.3% inflation. When school and county taxes are added to the city taxes, the financial burden becomes very large for small businesses, low income people and the elderly that rent.  Our local governments are borrowing excessively and locking in debt payments for many years.

The city council better learn to live within property tax revenue growth of population plus inflation growth as it appears the state leadership is committed to passing legislation that will reduce the cap on revenue growth.

Here is the Lt Governor's Op Ed:

Op-Ed: Time to reduce local government revenue cap

By: Dan Patrick
February 1, 2016

Texans are frustrated with the unsustainable disconnect between constantly increasing local property taxes and household incomes.

That’s why in 2015, 86 percent of voters approved a constitutional amendment to increase their homestead exemption for the first time in nearly 20 years.

But more must be done to prevent Texans from being taxed out of their homes, and that’s why I appointed a Senate Select Committee on Property Tax Reform and Relief to identify the scope of this problem and propose solutions to the next Legislature.

The facts are troubling and indisputable. Since 2005, city and property tax levies have increased several times faster than median household incomes. Across the state, city tax levies have increased 60 percent and county tax levies 70 percent, while median household incomes are up 26 percent.

In San Antonio, where the select committee held its first field hearing last week, city tax levies have increased 55 percent and county tax levies have increased 62 percent, compared to a median household income increase of 22 percent.

This disparity is the result of a property tax system that allows local governments to establish tax rates resulting in an 8 percent increase in revenue every year. (For comparison, the current two-year state budget increased spending by 3.6 percent, or 1.8 percent a year.)

Local property taxes must not be allowed to continue to increase at several multiples of the income of taxpayers. Inflation requires additional revenue to provide the same level of services, but the 8 percent revenue cap is simply too high and must be reduced.

The mere suggestion of reducing the flow of revenue to local governments predictably elicits warnings of reduced civil services, such as police and fire protection, trash collection and road maintenance, but potential reforms would only require cities and counties to make their case to voters before dramatically increasing their revenues. Pending voter approval, cities and counties retain total control over where to set their tax rates. In addition, automatic rollback elections should be required for any government entity seeking to exceed its revenue cap.

While school districts are required to hold rollback elections when they exceed the 8 percent revenue cap, cities and counties further challenge taxpayers through a burdensome process that requires signatures from 7 percent of registered voters before holding a rollback election to overturn the proposed increased tax rate and return to the current rate. Signatures must be submitted within 90 days of the adoption of the higher tax rate. (In smaller jurisdictions, the threshold increases to 10 percent of registered voters.)

According to the Texas secretary of state, there are 884,830 registered voters in San Antonio, and 975,415 registered voters in Bexar County. That means San Antonio residents seeking to overturn excessive tax increases by the city must collect 61,938 signatures, or 68,279 signatures to stop excessive county tax hikes, in just 90 days.

Treating cities, counties and schools the same will eliminate this unequal standard and further protect taxpayers.

Over the next several months, the Senate Select Committee on Property Tax Reform and Relief will continue holding hearings across the state, with its next hearing Feb. 11 in Harlingen.

I look forward to the committee’s recommendations, but make no mistake: Preserving the status quo is unacceptable, and the Texas Senate will act on this problem during the 2017 legislative session.