City of Aledo Events

APR 2, 2024 -     

Beneficial Tax Increment Reinvestment Zone (TIRZ) or CASH GRAB for the Mayor’s Business Associates?

According to the public hearing announcement for the TIRZ, the subject matter is to amend the boundaries of reinvestment zone number one, its benefits to the city and provide a reasonable opportunity for any owner of property within the proposed zone amendment to protest the inclusion of their property within the proposed zone. With the public hearing being held immediately before the council votes, this is NOT a reasonable opportunity to protest, especially since another vehicle to protest other than attending the public hearing was not provided by the city.

 
In addition, any interested person may speak for or against the inclusion of property in the proposed zone, the amendment of the reinvestment zone, its boundaries and/or the concept of tax increment financing. Unless you are already well versed on TIRZs, the specifics of the city of Aledo’s proposed TIRZ who would know what to speak against. It would of been helpful if the city provided a link to the proposed TIRZ with the public hearing announcement. The city did not provide that. Click here for a copy of the Revised 2024 TIRZ document. 

 
After the hearing the city council will consider adoption of an ordinance amending the boundaries and other related matters. These related matters include:

 
Changing the tax allocation percent from 65/35 to 50/50.

 
Increasing the project costs from $4 million to approximately $18 million. For complete project list see Exhibits C and G on pages 16 and 20, respectively. 

 
For information on TIRZ in general click here for a example from Flower Mound. 

          1. What is Tax Increment Reinvestment Zone (TIRZ)? A vehicle to divert taxes received for property taxes from a municipality’s general fund to a TIRZ fund. (Note: General fund is a municipality’s operating fund. TIRZ is a fund to be used for identified projects identified when creating the TIRZ.)

          2. How does TIRZ work in a nutshell? 

               a. Step 1 – Define the TIRZ zone and identify the properties in the TIRZ zone.

               b. Step 2 – Determine the tax allocation percent (General vs. TIRZ Fund). i.e., 70/30,             60/40, 90/10, etc.

               c. Step 3 – Determine the TIRZ term in years.

               d. Step 4 – Identify projects in the TIRZ zone and dollar amount required to completed using TIRZ funds.

               e. Step 5 – Establish a termination clause.

                f. Step 6 - Calculate the property tax base amount for the properties identified in the TIRZ zone.

               g. Step 7 – For the properties in the TIRZ zone, calculate the increment property tax for the year following the base tax year. (Year 1 property tax – Base year property tax = increment property tax) 

               h. Step 8 – Based on the established tax allocation percent, divide the property tax into the general fund and TIRZ fund.

                i. Step 9 – Repeat steps 7 & 8 for year 2 and so on. (Year 2 property tax – Year 1 property tax = increment property tax) 

The specifics for the City of Aledo TIRZ.

          3. In December 2019 the city council created a TIRZ. However, it is questionable if it was finalized. RNS has not been able to obtain documentation supporting it was finalized.

               a. Terms: 

                    i. Tax allocation – 65% General fund, 35% TIRZ

                    ii. TIRZ term – 30 years

                    iii. Estimated project costs - $4,000,000

                    iv. Termination – upon expiration of the term, not other taxing authority is obligated to pay any shortfall.

          4. State of Texas Local Government Code; Tax Code; Title 3. Local Taxation; Subtitle B. Special Property Tax Provisions; Chapter 311. Tax Increment Financing Act

               a. Section 311.011. PROJECT AND FINANCING PLANS. 

                    i. Paragraph (e) – the board of directors (city council) of the zone at any     time may adopt an amendment to the project plan. The amendment takes effect on approval. If the amendment reduces or increases the:

                         1. geographic area of the zone, 

                         2. percentage of tax increment to be contributed, or

                           3. increases the total estimate project costs.

The approval must be by ordinance or order, as applicable, adopted after a public hearing that satisfies the procedural requirements of Section 311.003 (c) and (d) must provide reasonable opportunity of the owner of property to protest the inclusion of the property in a proposed zone.

          5. April 2024 revised TIRZ proposal requirements per code stated above. Timing is everything and the city is rushing so no one has a chance to speak against the TIRZ…

               a. City council must vote to hold a public hearing. (voted on March 28, 2024)

               b. Schedule the public hearing upon approval. (scheduled on March 22, 2024, prior to public hearing approval) 

               c. Hold the public hearing. (to be held April 4, 2024)

               d. Vote on approval of Ordinance 2024-203 – Revise zone (schedule to be voted on April 4,2024)

MAR 25, 2024 -   Tax Increment Reinvestment Zone (“TIRZ”) - legal explanation provided below. 

The City of Aledo has posted a NOTICE OF PUBLIC HEARING ON AMENDMENT OF REINVESTMENT ZONE (TIRZ) scheduled for April 4, 2024 @ 6:00 PM at the Aledo Community Center. They have included only one page, of the packet. The page showing the notice. Page 5. 

As a comparison, the notice from the DEC 12, 2019, included all relevant documentation along with maps, R000 numbers, expected revenue etc. It can be found here. 

Why is there such a lack of transparency with this administration? 

It seems that Mayor Nick Stanley  and city Manager Noah Simon want to redraw the TIRZ to include the properties which the mayor's business partners/employers own. Map can be found here.

It also seems that in the opinion of Noah Simon and Mayor Nick Stanley our historic downtown has a substantial number of substandard, slum, deteriorated, or deteriorating structures;  this is one of the test for an area to qualify for TIRZ. This would also be consistent with their Master Plan to level downtown and replace with muti-story red brick buildings and a parking garage. We also know from the Master Plan post the mayor's business partners/employers are in constant communication with City Manager Noah Simon via email. Some of those emails can be found here. 

Are we going to destroy our rich heritage and legacy with muti-story red brick buildings and then have the tax payers pay for it? It seems so.....

Additionally we find it odd the official notice published by the City of Aledo contradicts the map which they are providing for public view. It could also be a error.

TIRZ should meet the following criteria to qualify:

Be unproductive, underdeveloped, or blighted (See Article 8, Section 1-g, Texas Constitution); and  (A full explanation is provided below, source - Texas Legislature Online)

About a week ago Troy Austin (who seems to be the leader of CULTivate Aledo) planted a seed on the ADB (Aledo Daily Buzz) promoting public funds for private projects. We now see why, if the City of Aledo redraws the TIRZ they will do just that. Go into a private partnership with public funds.  It seems that 1882 Partners, LP. and the CULTivate Aledo members will financially benefit from tax payer funds.

What is a TIRZ? 

Detailed legal explanation from the Texas Comptrollers office is here.

The cliff notes: 

A Tax Increment Reinvestment Zone (TIRZ) is an economic development tool that captures the projected increase in tax revenue that is created by development within a defined area and reinvests those funds into public improvements and development projects that benefit the zone.

A great explanation can be found here at cobbjohns.com. 

Definition and Creation of a TIRZ (source Texas Legislature Online)

Definition and Creation of a TIRZ (the criteria)

A municipality may designate a contiguous or noncontiguous defined area of land within the municipality or extraterritorial jurisdiction as a Tax Increment Reinvestment Zone (“TIRZ”) under Chapter 311, Texas Tax Code. Chapter 311, Texas Tax Code, also authorizes a county to designate a contiguous defined area of land as a TIRZ. 

To be designated as a TIRZ, an area must: 

•  Be unproductive, underdeveloped, or blighted (See Article 8, Section 1-g, Texas Constitution); and
•  Substantially arrest or impair the sound growth of the municipality creating the zone, retard the provision of housing accommodations, or constitute an economic or social liability and be a menace to the public health, safety, morals,      or welfare in its present condition and use because of the presence of:
• a substantial number of substandard, slum, deteriorated, or deteriorating  structures;
• the predominance of defective or inadequate sidewalk or street layout; 
• faulty lot layout in relation to size, adequacy, accessibility, or usefulness; 
• unsanitary or unsafe conditions; 
• the deterioration of site or other improvements; 
• tax or special assessment delinquency exceeding the fair value of the land; 
• defective or unusual conditions of title; or 
• conditions that endanger life or property by fire or other cause; 
• Be predominantly open and, because of obsolete platting, deterioration of structures or site improvements, or other factors, substantially impair or arrest the sound growth of the municipality; or 
• Be an area that is in a federally assisted new community located in the municipality or in an area adjacent to a federally assisted new community. 

Taxing entities may participate in the TIRZ by dedicating the portion of their taxes collected on new development and redevelopment (“Tax Increment”), or portions thereof, to the TIRZ's “Tax Increment Fund.” The municipality (or county) enters into a contract with each participating governmental entity      (“Participant”) establishing the terms of the participation. During the creation process the various Participants will work with the municipality to cooperatively plan for the TIRZ and the TIRZ Improvements.

Due to the complexities of the state's current public school funding system, most school districts would suffer adverse consequences for participation in a new TIRZ. School district participation in TIRZs created prior to September 1, 1999 has been grandfathered and does not adversely affect the participating school district's level of state funding. 

#DefendAledo #RulesForTheeAndNotForMe #RecallNickStanley