Bastrop Approves Hunters Crossing PID Plan, Debates District's Future

The Bastrop City Council on Tuesday unanimously approved the Hunters Crossing Public Improvement District’s updated annual service plan, which outlines its planned activities and spending in the coming year, as state law requires.

The city created the Hunters Crossing district in 2001, allowing it to levy special assessments against properties there to fund specific improvements, such as road construction or recreational opportunities, according to documents in the City Council’s agenda packet.

City Manager Sylvia Carrillo said the Hunters Crossing improvement district was the first of its kind in the state, so the state laws governing the district were "messy" at its inception. Carrillo said state law has since "caught up" to better match the intention of public improvement districts.

The capital portion of the district, typically consisting of a limited number of assessments, paid for the construction of new infrastructure. Carrillo said the city acts as a "cosigner" in capital public improvement districts because the money for the capital improvements is borrowed on the city’s credit and ultimately repaid by the assessments the city collects.

However, the Hunters Crossing district includes operation and maintenance in addition to the capital component, Carrillo said. The operations and maintenance portion funds ongoing maintenance within the district, creating an indefinite amount of assessments.

Carrillo said the operations and maintenance portion caps the city at a $5 million budget within the improvement district. She said the operations and maintenance portion of this improvement district places responsibilities onto the city that should belong to the Hunters Crossing homeowners association, forcing property owners to pay more in assessment to the city.

"Up until my arrival, (the city was) acting as if the goal was to get to that ceiling, when that is not the case," Carrillo said. "There are a lot of things in this PID in the (operations and maintenance) section that belong to the HOA, but instead, the property owners are paying it. There’s a disproportionate assessment among the residents versus the businesses."

Carrillo added that the city continues to pay the original developer $338,000 annually for its portions of the capital assessments. She said the City Council needed to act on this updated annual service plan before the county tax assessor-collector’s deadline to collect taxes in order to repay the debt the city owes for the public improvement district.

However, the conversation around the public improvement district shifted to the assessments that business owners pay within the district and property restrictions imposed on landowners in the district.

Carlos Liriano, the owner of Lost Pines Toyota, said he has paid $1.5 million for his dealership to the improvement district in addition to his property taxes. Liriano contrasted his assessment rate to Home Depot’s $15,000 annual rate, which the store negotiated when the improvement district was created, Liriano said.

"I don’t see where I have gotten that value back," Liriano said.

Liriano said he also owns a 38-acre lot immediately west of his dealership, upon which the public improvement district places deed restrictions, preventing the land from being used for a big box store.

"I purchased the property, and I deal with these restrictions as developers are coming into town trying to bring one of these stores in," Liriano said, urging the council to eliminate the public improvement district entirely. "Are these restrictions the best for Bastrop? I believe they're not."

Mayor Pro Tem John Kirkland said the 53-year property-use restrictions within the district could be eliminated if 100% of the property owners agreed to eliminate them.

Council Member Kevin Plunkett said the council had expressed interest in getting rid of the public improvement district multiple times and asked Carrillo how the city could eventually dissolve the district.

City Attorney Charles Zech said dissolving a public improvement district depends on the terms in the district’s creation documents.

"That usually entails paying off all debt associated with it," Zech said. "There is a provision in the code for a certain number of property owners to file a petition for dissolution. You would still have to continue to collect the assessments in order to pay off the debt."

Carrillo reiterated the importance of approving the updated annual service plan before diving into dissolving the improvement district, so the city could repay its debts on the district the way state law intends.

"The remaining debt, we could put it to a vote, dissolve (the district), the property owners are going to say, ‘Great, I don’t have an assessment anymore. Do away with it,’" Carrillo said. "But then that debt is spread among 14,000 residents."