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Council members OK two MUD agreements on first reading only

Thursday, March 15, 2012 by Elizabeth Pagano

The City Council was not quite ready to grant final approval on consent agreements with two proposed Municipal Utility Districts last week, electing to pass both on first reading instead. The vote was unanimous in favor of for Pilot Knob but Council Member Chris Riley cast his vote against entering into a consent agreement with the SE Travis County MUD.


A spokesperson for Riley’s office told In Fact Daily that he voted no primarily due to concerns about connectivity within the development. In addition, he said that although the MUD is in the desired development zone, it is not within the city’s preferred growth area as defined by the Imagine Austin Plan.


Though the city has a bit of a checkered past with MUDs, last year the City Council voted to approve a new MUD policy in an attempt to alleviate those problems. The first two MUDs that have been proposed under the new policy are currently seeking a consent agreement with the city that will allow them to form and seat board members prior to the next step of securing a strategic partnership with the city.


“We actually applied for the provisions that were in this new MUD legislation to cure the problems in the old one. So, in a way, this is kind of what we asked for… to be able to have some measure of control, outside of the city limits in the ETJ, and have a way to finance the infrastructure at the same time,” said Mayor Lee Leffingwell. “This is not your mother’s MUD.”


Ambrust & Brown attorney Richard Suttle, who is representing both MUDs, agreed. “These are not standard MUDs by any means . . . these are ‘Austinized MUDs.’


Historically, opposition to MUDs has resulted in their construction without city input, and the new policy allows for some control in their development, in matters such as environmental provisions, tax rates, and zoning, he said. Suttle reminded Council members that their approval would not necessarily stop development on the site.


“It doesn’t turn down the development, all it turns down is the ability to finance the infrastructure. What would happen if it got turned down is you would just end up with just regular old ETJ subdivisions, which by their very nature would or could end up just being standard county subdivisions without all of the amenities that are loaded into the consent agreement,” said Suttle.


Since the last time Council discussed the MUDs, some questions have been resolved. Perhaps most notably, 10 percent of properties for sale will be offered at 80 percent of median family income, or MFI. Another 10 percent of multifamily rental units will be offered at 60 percent MFI. In addition, the MUDs will contribute 2 percent of construction costs, with a cap of $1.8 million for SE Travis County and a cap of $8 million for Pilot Knob.


Staff and developers have also added a provision for reclaimed water for the Pilot Knob development, with the city to pay for construction of facilities that will provide reclaimed water to the district and the developer to assume the responsibility of infrastructure design and distribution facilities.


Still, there are a number of issues that Council members still have with the MUDs. Council Member Kathie Tovo revisited the notion that parks and pools within the MUDs be open to the public, but was met with resistance by Suttle.


“There is no way to figure out how you would size those park facilities and anticipate what the demand might be,” said Suttle. “We could have an overburden on a pool that is funded and paid for by the homeowners that live around it.”


“There is a value to the applicant of having a MUD. And that value can be held in a bucket. And as you come through each department, and each department reaches into the bucket and starts pulling stuff out, at some point it gets to a tipping point where you decided it’s not worth it,” said Suttle.


Riley expressed concern that the MUDs were not fulfilling the tenets of being “well-connected and compact” developments, as is required of the Consent Agreement. He first questioned  the reservation of open space for a future transit center as an actual boon to transportation, then wondering about the ratio of commercial to residential structures within the MUDs.


“Based on the numbers that we saw last week, I just did a quick calculation and Pilot Knob, which is the denser of the two projects… when you look at that ratio you come up with about 98.2 commercial square feet per capita. Almost 100 square feet per capita, of commercial space, per person. When I do that same calculation for SE Travis County, I get 41.5 commercial feet per capita. So I wonder if we think that ratio is important, how we can say that both of those are superior, because there is a pretty stark disparity between them,” said Riley.


Suttle said, “What we find is that everybody always manages to find more and more questions, and more and more to things to talk about, and eventually we need to decide: is this good for our city or not and move on.”

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