Eagle Pass City Council Approves Resolution to Hold Public Hearing for Creation of a Tax Increment Reinvestment Zone, Hearing is Dec. 19
The City of Eagle Pass, Texas Municipal Shield Logo. Photo Copyright 2023 Eagle Pass Business Journal, Inc.
By: Ricardo E. Calderon, Eagle Pass Business Journal, Inc., Copyright 2023
The City of Eagle Pass, Texas City Council approved a resolution setting a public hearing as provided by the Texas Tax Code for the creation of a Tax Increment Reinvestment Zone (TIRZ) at their Tuesday, December 5, 2023 regular meeting, authorizing the City Secretary to issue a notice regarding the public hearing on December 19, 2023 to prepare a preliminary Reinvestment Zone Financing Plan and providing an effective date.
According to the Notice of Public Hearing on the Creation of a Reinvestment Zone published in a local newspaper on Sunday, December 10, 2023 by City Secretary Imelda B. Rodriguez, it states “The City Council of Eagle Pass will hold a public hearing on Tuesday, December 19, 2023 on or after 5:30 p.m. at City Hall, Council Chambers, 100 South Monroe Street, Eagle Pass, Texas 78852, on the creation of a Reinvestment Zone and its benefits to the City of Eagle Pass and to provide a reasonable opportunity for any owner of property within the proposed Reinvestment Zone to protest the inclusion of their property within the proposed Reinvestment Zone, which proposed zone consists of approximately 2,300 acres of property generally located South of El Indio Highway inside Loop, as more particularly described by a metes and bounds description available at Eagle Pass City Hall (City Secretary’s Office) and available for public inspection. At the public hearing, any interested person may speak for or against the inclusion of property within the zone, the creation of the Reinvestment Zone, its boundaries, or the concept of tax increment financing. Following the public hearing, the City Council of Eagle Pass will consider adoption of an ordinance creating the Reinvestment Zone.”
City Finance and Business Director Jesse Rodriguez made the presentation before the City Council at the December 5, 2023 meeting, keeping his presentation comments minimal stating the City had received a request to establish a “Tax Increment Reinvestment Zone” (TIRZ) for over 2,200 acres and as we have discussed in previous meetings this public hearing is designed for the City of Eagle Pass to set in motion the process of creating the Tax Reinvestment Zone.
Rodriguez’s presentation lacked transparency and provided little notice to the public at the meeting and those following the meeting through the Facebook livestream on specifically what is a Tax Reinvestment Zone, what are the benefits and disadvantages of a Tax Increment Reinvestment Zone, what are the legal obligations and liabilities of the City of Eagle Pass, failed to elaborate on whether the City had established a committee of City officials, representatives, and citizens to entertain the creation of the Tax Increment Reinvestment Zone, and failed to elaborate whether community town halls and public meetings will be held for taxpayers to learn of the Tax Increment Reinvestment Zone and express their support or opposition to it.
The proposed real property consisting of over 2,300 acres is the Empire Industrial Park owned by Beyer and Sonia Junfin and Sergio and Linda Zamora, which previously is being considered for the establishment of a City of Eagle Pass Public Utility Improvement District No. 1 that will create a new City legal entity that may issue up to $75 million in certificates of obligation (bonds) for financing of all improvements and utilities to 460 acres of these 2,300 acres.
The City of Eagle Pass 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 of the Texas Tax Code. To be designated as a TIRZ, an area must be unproductive, underdeveloped, or blighted; and substantially arrest or impair the sound growth of the City, retard the provision of housing accomodations 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.
The City of Eagle Pass 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 City would have to enter into a contract with each participating governmental entity (“Participant”) establishing the terms of the participation. During the creation process the various “participants” (tax entities) will work with the City to cooperatively plan for the TIRZ and TIRZ improvements. Participants (tax entities) in a TIRZ dedicate the Tax Incement to finance TIRZ improvements to the property.
The process will have to create a new City of Eagle Pass legal entity with a Board of Directors and the City may directly issue Tax Increment Bonds, or, alternatively, create a Local Government Corporation (“LGC”) under Chapter 431 of the Texas Transportation Code to issue bonds on behalf of the City and manage the affairs of the TIRZ.
This TIRZ proposal is another legal mechanism for the City of Eagle Pass to create another City-owned legal entity that will allow the issuance of bonds to finance the improvements to the real property of more than 2,300 acres.
There are many legal, economic, and social issues involved in creating the TIRZ that require extensive review and study by the City and its taxpayers before rushing into creating one without fully providing transparency to the City taxpayers. For instance, if a TIRZ is created for the benefit of these 2,300 acres, the City will be responsible for providing all City services such as fire and police protection, ambulance services, water and sewer services, trash collection, public parks, maintenance, and other city-provided services without the benefit of the Tax Increment on the real property. Thus, the City will have to provide and pay for these services out of its general fund without the benefit of the increased tax values on the subject property.
Currently, due to the complexities of the state’s public school funding system, most schools districts would suffer adverse consequences for participation in a new TIRZ, according to one legal expert.
At the previous City Council meeting on November 7, 2023 that approved a resolution for the establishment of a Municipal Public Utility Improvement District No. 1 for the benefit of 460 acres of the Empire Industrial Park, City Councilwoman Monica J. Cruz stated that “we do not say ‘No’ to Developers….I promise to be more transparent and open” with taxpayers, acknowledging that the City Council had not been fully transparent with taxpayers on the establishment of a City Public Utility Improvement District No. 1.
City taxpayers request and demand more transparency from the City Council and proponents of the Tax Increment Reinvestment Zone, as well as on all City-projects involving taxpayers monies.
Eagle Pass citizens are cordially invited to attend the December 19, 2023 City Council public meeting to express their concerns, support or opposition at the public hearing to the creation of Tax Increment Reinvestment Zone, and learn more about the proposed TIRZ and its affect on taxpayers.
