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Council postpones Pilot Knob decision

Monday, February 15, 2016 by Jo Clifton

City Council voted 9-2 early Friday morning to postpone consideration of changes to the controversial Pilot Knob zoning and fee transfer deal. At the same time, Council directed city staff to provide a financial analysis and briefing on the impact of the fee transfer portion of the deal, which would move up to $81.4 million from the Austin Water utility into the city’s affordable housing fund.

Council postponed the item to March 3, with Council members Ellen Troxclair and Ora Houston opposed. That decision does not necessarily provide insight into whether Council will ultimately decide to undo the deal.

Council approved the Pilot Knob planned unit development, along with the fee transfers (or waivers), on Dec. 17, with the majority of members saying later that they did not understand how much money they were transferring when they voted.

Mayor Steve Adler continued to argue for the deal early Friday. “For all the good work that we have done in trying to do something about housing for a long time, we have failed,” he said. “We had housing bonds for a long time. … We are the most economically segregated city (in the country). We have to try some things that are new, and I hope that the exercise that we go through with respect to this will help us come to new things, because the old, tired things that we tried don’t work, and I am real comfortable and welcome taking a look at this.”

“If the assumptions that we made” were incorrect, “then I do think we need to fix this,” Adler added. “But to strike out as we did, to say we’re going to do something about affordability, was a bold act, an important act, and I’m proud to be part of that.”

Adler also dismissed the idea that renters and taxpayers would have to foot the bill, without explaining where the money would come from.

Troxclair responded to Adler’s assertion that Council had taken a bold action. “It’s a bold action that you and Council Member Garza and our housing staff took to address affordability – with the rest of us completely in the dark. And I think that we deserve more respect than that in the process.”

Troxclair rarely makes lengthy speeches, but she was ready to do so for this one. “I shudder to think what would have happened,” she said, “if I had done something – and the rest of the Council found out later – that would have had such a significant impact on our city … whether purposeful or not … and then turned around and asked to not give the rest of the Council the opportunity to make an informed decision.”

She concluded, “Maybe at the end of the day the Council will agree that that was the best way forward, but I just want to underscore that a lot of the difficult places this Council has found itself in the past few weeks, few months, has been because we haven’t respected a process.”

Adler has insisted that transferring the money out of the water utility and into the housing fund is not an irrevocable decision. When Mayor Pro Tem Kathie Tovo asked City Attorney Anne Morgan for her opinion on the matter, Morgan replied that she did not know but her staff would have an answer to that question this week.

Waiver of water and wastewater fees for the Pilot Knob PUD will cost the city utility an estimated $81.47 million, resulting in a rate hike for the typical residential utility customer of $1.39 per month, according to a memo from three assistant city managers and the city’s chief financial officer.

In addition to the utility fee waivers, city management estimated that the Development Services Department could waive between $18 million and nearly $25 million during the anticipated 20- to 30-year build-out of the project.

Instead of going to the departments, these fees will be put into the city’s Housing Trust Fund to fund 650 affordable housing units at the development, which will be called Easton Park. The PUD is within five Pilot Knob municipal utility districts, which will be fully annexed into the city “no later than December 31, 2047, or possibly earlier if the MUD debt is paid off and the city chooses to annex” the area.

The city also faces a lawsuit filed by civic activist Brian Rodgers last week, claiming violations of the Texas Open Meetings Act when Council voted to approve the agreement. Rodgers is asking that the court void Council’s adoption of the agreement because the agenda item did not include a fiscal note or other financial information.

Photo by Larry D. Moore, CC BY-SA 3.0,

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