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Council ponders details on pair of southeast Travis MUDs

Monday, February 13, 2012 by Elizabeth Pagano

With important details still remaining to be hammered out, Council members will soon be asked to make a decision on two huge Municipal Utility Districts, or MUDs, proposed in southeast Travis County.


In February 2011, Council adopted a MUD policy, designed to exact some measure of control over a process that has circumvented the city in the past. Then in April, City Council passed resolutions that supported the legislative creation of the Southeast Travis County and Pilot Knob MUDs.


Currently, one of the main points being negotiated is about affordable housing – whether that requirement can be satisfied with a fee-in-lieu and the amount of the fee.


“The affordable housing piece is not a requirement, and it’s an optional benefit,” explained Betsy Spencer, director of Neighborhood Housing and Community Development in a briefing to City Council. “There have been suggestions of utilizing the PUD (Planned Unit Development) math, and the way we’ve calculated it, that would be a very high fee. So we’ve been having some conversations internally about what would be an alternative incentive to encourage the developer to provide affordable housing or the fee in lieu… We’ve come up with a fee-in-lieu of $1,000 per unit.”


The difference between the PUD fee-in-lieu math and the proposed $1000 per unit fee-in-lieu is striking. Given current estimations, PUD requirements (which do not apply to MUDs) would allot about $33 million to affordable housing, and the proposed per-unit fees would amount to an estimated $5.7 million.


Council Member Laura Morrison said she was “curious” about why the proposed MUDs would be held to different standards than, for example, Whisper Valley.


“I would be uncomfortable moving forward and acting on the consent agreement until we get this solidified… If the goal is to get it done on March 1, we need to have some pretty intense conversations,” said Morrison.


Last month, in a presentation to the Planning Commission, attorney Richard Suttle of Ambrust & Brown explained that his clients preferred to pay a fee-in-lieu in order to satisfy the affordable housing term that is under negotiation.


“On the affordable housing issue, which we have talked about, we ran up against the situation where in this part of our community, there is an abundance of affordable housing, and as far as we got into discussions of dispersion in our community and there was actually some thought that, ‘Maybe we shouldn’t be loading these areas up with even more affordable housing,'” said Suttle.


Council also had questions about proposed water policies for the MUDs, something Jennings explained was still being developed.


“Policy-wise, we haven’t made an actual decision in terms of reclaimed water going to actual residential lots,” said Bart Jennings, Austin Water Utility Business Strategy manager. “We haven’t had time to look at that. I understand that is a direction of policy that you’re wanting to move towards, to optimize that use, to reduce our potable demand for irrigation purposes. And that is something we’ll have to take a look at.”


It is now up to Council to decide whether the proposed MUDs provide enough value, in terms of what might be gained. If the consensus is “yes,” then the city plans to approve a consent agreement on March 1, and enter into a strategic partnership agreement on April 12. If City Council fails to approve a consent agreement by September 1, the MUDs will dissolve.


This does not necessarily mean that the developments will not be built, however.


“The bottom line is that MUDs can be created without the city’s consent and result in very little oversight of the MUD,” said Jennings. In the past, this is exactly what has happened, with MUDs created through the state legislature not having to abide by the safeguards created by Council last February.


The particulars of these safeguards are still being negotiated, but they allow the city to set terms for things such as watershed protection, affordable housing, transportation, water and wastewater development, and green energy standards.


“The developer wants to say, ‘all that can be taken care of at the PUD zoning stage. All you need is to get us a blank little consent agreement over here’,” Assistant City Attorney Sharon Smith told In Fact Daily. Smith explained that the likelihood of denying PUD zoning after the consent agreement and strategic partnership are in place was slim.


“We’re in a tension with them about how much detail goes into that consent agreement. We’re trying to set a floor for what they then take forward and so the basic expectations of what they are going to be looking at when they get to PUD are set out,” said Smith.


Both MUDs are expected to be massive. The smaller of the two, Southeast Travis County, is projected to cover 1,600 acres and have a population of about 13,489. Developers additionally plan 560,000 square feet of commercial space.


Pilot Knob will be about 2,200 acres, and could house a population of 39,131 people. Additionally, developers plan to allot 3,843,000 square feet for commercial space, and 405,000 square feet for civic space.


The approximately $102 million of debt for Southeast Travis County and $482 million of debt to build Pilot Knob will be paid for through bonds, and repaid through the residents’ property taxes.

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