wccl-rma boardmtg.notice&agenda-final (for12-15-14)€¦ · the next meeting of the wccl-rma is...

MEETING NOTICE

TO: Webb County-City of Laredo Regional Mobility Authority Board Members

FROM: Mr. Ruben Soto, Chair

SUBJECT: November Board Meeting

The next meeting of the WCCL-RMA is scheduled as follows:

DATE: Monday, December 15, 2014 TIME: 9:00 AM

PLACE: Texas Department of Transportation – Laredo District Meeting Room

1817 Bob Bullock Loop Laredo, Texas 78043

Webb County (Located at the rear of the District Headquarters Building /

Please see the attached map for best route into the TxDOT Facility)

Enclosed are the agenda and other pertinent information for your review prior to the meeting. Should you have any questions, please call me at (956) 723-9841.

WEBB COUNTY-CITY OF LAREDO REGIONAL MOBILITY AUTHORITY (WCCL-RMA) BOARD OF DIRECTORS MEETING

9:00 AM Monday, December 15, 2014 TxDOT – Laredo District Meeting Room

1817 Bob Bullock Loop Laredo, Texas 78043

Webb County

1. Welcome and Opening Remarks – Ruben Soto (RMA Presiding Officer)

2. Discussion/Approval of Past Board Meeting Minutes

3. Committee Reports

4. RMA/TRZ/TRiZ Workshop - Arturo Bujanda (Texas Transportation Institute)

5. Required RMA Reports, etc. – David Plutowski (TxDOT Statewide RMA Coordinator)

6. Comments 7. Date/Time/Location of the Next Full Board Meeting 8. Adjournment of Open Meeting into Executive Session – The Webb County-City of Laredo

Regional Mobility Authority Board may retire into Executive Session pursuant to the Texas Government Code, Sections 551.071 - 551.088 to discuss any of the following: (The items listed below are matters of the sort routinely discussed in Executive Session, but the Board may move to Executive Session to discuss any of the items on this agenda, consistent with the terms of the Open Meetings Act, as amended.)

Section 551.071 CONSULTATION WITH ATTORNEY Section 551.072 DELIBERATION REGARDING REAL PROPERTY Section 551.073 DELIBERATION REGARDING PROSPECTIVE GIFTS Section 551.074 PERSONNEL MATTERS Section 551.076 DELIBERATION REGARDING SECURITY DEVICES

COURTESY RULES Thank you for your presence. The WCCL RMA appreciates your interest. If you wish to address the RMA on any agenda item, Public Participation Forms will be available before the meeting. These forms must be filled out and turned in to the RMA Chair or Secretary prior to the time the agenda item in question is addressed by the RMA. You must be recognized by the Chair. (NOTE: Items will not necessarily be presented in the order they are posted.) OPEN COMMENT PERIOD At the conclusion of all other agenda items, the Board will allow an open comment period, not to exceed one hour, to receive public comment on any other matter that is under the jurisdiction of the Board. Public comment that does not relate to a specific agenda item must be made during the open comment period. Each speaker will be allowed a maximum of three (3) minutes. Speakers must be signed up prior to the beginning of the open comment period. For subjects that are not otherwise part of the agenda for the meeting, Board members may neither comment nor question speakers during the open comment period, but may request the Chair, or a

recognized committee, to investigate the subject further. No action will be taken on matters that are not part of the agenda for the meeting. NOTE Enumerated agenda items are assigned for ease of reference only, and will not necessarily be considered by the Board in that particular order. The Chair may rearrange the order in which agenda items are considered. Presenters with audiovisual needs are requested to contact Raul Leal at (956) 712-7416 at least two working days prior to the meeting. ACCESSIBILITY STATEMENT FOR DISABLED PERSONS This meeting site is accessible to disabled persons as follows: wheelchair ramp at the main entrance to the Meeting. If any special assistance or accommodations are needed in order to attend this RMA meeting, please contact Raul Leal at (956) 712-7416 at least two working days prior to the meeting so that appropriate arrangements can be made. Persons with disabilities who plan to attend this meeting and who may need auxiliary aids or services, such as interpreters for person who are deaf or hearing impaired, and readers of large print or Braille, are requested to contact Raul Leal at (956) 712-7416 at least two working days prior to the meeting so that appropriate arrangements can be made.

RMA Minutes \ Dec. 15, 2014 \ Page 1 of 7

Webb County – City of Laredo Regional Mobility Authority (RMA)

Board of Directors Meeting Monday, December 15, 2014

9:00 AM

Minutes

The Webb County – City of Laredo Regional Mobility Authority Board of Directors convened in a meeting at 9:04 a.m. on Monday, December 15, 2014 at the Texas Department of Transportation (TxDOT) Office in the Laredo District Meeting Room, 1817 Bob Bullock Loop, Laredo, TX. They discussed the following agenda:

1. Welcome and Opening Remarks 2. Discussion / Approval of Past Board Meeting Minutes 3. Committee Reports 4. RMA / TRZ / TRiZ Workshop 5. Required RMA Reports, Etc. 6. Comments 7. Date/Time/Location of the Next Full Board Meeting 8. Adjournment of Open Meeting into Executive Session 9. Adjournment

Minutes are as follows: Present: Ruben Soto, Jr., Chairman and Presiding Officer; David Arredondo, Carlos Flores, Viviana Frank, Albert Muller, Sr., Jose Murillo and Enrique S. Valdez Absent: Steve LaMantia and Board Member for Precinct 3 & 4 (Unassigned) Others: Melisa D. Montemayor, TxDOT District Administrator, Laredo District

David Plutowski, Transportation Engineer, TxDOT Austin Planning Division (Presenter) Raul Leal, Public Information Officer, TxDOT Laredo District (Photographer) Mike Graham, Environmental Coordinator, TxDOT Laredo District Marissa Montoya, Office Technician, TxDOT Laredo District (Registration, Note taker) Araceli Rangel, Staff Assistant, CPA Office of Ruben Soto, Jr., (Note taker) Arturo Bujanda, Associate Research Specialist, Texas A&M Transportation Institute (Presenter)

1. Welcome and Opening Remarks After establishing a quorum, Presiding Officer Ruben Soto, Jr., called the meeting to order at 9:04 a.m. He asked everyone to stand for the Pledge of Allegiance. Mr. Soto informed all present that the meeting was being recorded. He proceeded to thank TxDOT for hosting, and Marissa and Araceli for taking notes.


2. Discussion / Approval of Past Board Meeting Minutes Chairman Soto asked board members if they had a chance to review the meeting minutes and if they had any recommendations or revisions that needed to be made. Mr. Jose Murillo stated that he approved the minutes as such. Mr. Murillo made a motion, seconded by Albert Muller, Sr., to approve the meeting minutes for the Webb County – City of Laredo RMA meeting that took place on Monday, November, 17, 2014. Motion carried.

Mr. Soto then stated that an email was sent out to the Board Members regarding the requirements of the Texas Open Meetings Act and Public Information Act training. Mr. Soto informed the Board Members that they had to complete the trainings in 90 days from the day of appointment. After they get their certificate of completion, they can mail/email it to Mr. Soto so he can have it on file. He stated that the RMA would have to put the procurement policies on hold because they need legal representation to help them decide on the policies and procedures. Mr. Soto then asked Mrs. Melisa Montemayor, TxDOT Laredo District Administrator, to discuss Webb County funds. She stated that they’re a couple of avenues that she looked into and discussed with TxDOT Division and other RMA’s throughout the state. One avenue is through an advanced funding agreement, an inter-local agreement between Webb County and the RMA, where a legally binding document is executed for X amount of dollars to be diverted from Webb County to the RMA. That document would have the associate items that funds can be used for. Another way that it can be done is through a resolution from Webb County Commissioners Court. It would be taken to an agenda meeting, be approved, and then those funds would be diverted to the RMA, again with associated costs listed where those funds can be used. She then stated that she forwarded an example to Mr. Soto from another RMA and what they used to execute and divert money from a County to an RMA, which was in the form of an agreement. Whatever the County and the RMA feels comfortable with, whether the agreement or the resolution, that would be something that both entities can discuss further and make a decision on.

3. Committee Reports Chairman Soto asked the By-Laws Committee to discuss the recommendations and revisions on the proposed By-Laws. Mr. Carlos Flores passed out an original and a red lined copy (Attached) of the By-Laws to the Board Members. Mr. Flores stated that the By-Laws Committee met last week for an informal meeting to discuss proposed changes to a draft that had been prepared by the City of Laredo. The red lined copy is the Committee’s changes to the draft. He mentioned that changes were made to Sub Section 2: Principal Office, page 1, where there was a suggestion to change the principal office of the Authority to the ‘County of Webb,


Texas,’ but the committee decided to keep ‘City of Laredo’ because it is the largest municipality within Webb County. Section 4: Initial Board, page 1; the Committee proposed that the Board Members who drew a short term should have a two year term, and those that drew a long term should have a four year term. The reason behind this is because they have several projects that are already on board that they are going to be working on, and the timeframe for those projects can go for several years, so they wanted to make sure that the people that are appointed are here to see these projects through in their entirety, or close to their entirety. He stated that they made that change to both the members appointed by the Webb County Commissioners Court and those appointed by the City of Laredo. Section 4: Initial Board, C, page 2, they added a statement that no Board Members should be able to serve more than eight consecutive years. On Section 4, when the Commissioners Court or the City of Laredo appoints a Board Member in the future, they are requiring that the Board Member resides in the precinct or district from where they’ve been appointed. The reasoning behind that is if a Board Member resides in Pct. 1, they might have particular insight into what the needs are in that area. Also, when the petition to form the RMA was sent, that was a requirement. Mr. Flores then asked if anyone had questions. No response followed. Section 5: Subsequent Directors, B., page 2, he stated that anyone who is appointed after them will also serve a four year term. Mr. Jose Murillo then mentioned to Mr. Flores, regarding Section 5, E., page 3, it stated that the Directors can only serve for eight years, but in letter E. there is no limitation on the number of years. (That proposed change will be added to the action item list and will be changed prior to voting on the By-Laws.) Section 5, D., page 3, Mr. Flores stated that if a new entity is added to the Authority that the Director of that new entity would be appointed by the Governor. Mr. Soto stated that that portion was an example from another RMA’s By-laws. Mr. Flores then recommended that the new entity appoint their own Director. Mr. Soto then added that they would have to look into and abide by the Transportation Code. Section 6: Qualifications of Directors, H. (1 & 2), page 4, based on their review of the Transportation Code, they eliminated the local governmental agencies, the City of Laredo and Webb County. Section 6, H., 1 & 2, will only include TxDOT and/or the Authority. Section 8: Resignation and Removal, page 5, Mr. Flores stated that the main change was on the last sentence of Section 8, B., where it states, “Additionally, the Webb County Commissioners Court (or the Commissioners Court of another county appointing a Director) or the Laredo City Council, may respectively remove a Director appointed by that entity for just cause pursuant of state law.” The reason why they included “pursuant of state law,” is because the Transportation Code has that stated as a specific reason why someone would be removed. It allows for any changes in state law to be applicable to the By-Laws. Section 11: Additional Obligations of Directors, page 7, the Committee added a letter E., which states, “Adopt policies and procedures governing the procurement of goods and services on behalf of the RMA.” They also added letter F., which states, “Adopt resolutions necessary for conducting the business of the RMA and providing the Executive Director directives.” Mr. Flores stated that it is within their authority, but it was not stated. For example, when they are


seeking an Executive Director, he stated that they may want to lay out the criteria, or if they want to give them policy direction. Section 17: Notice of Meetings, page 10, the Committee added a statement that says “Notice of each meeting of the Board shall be posted in accordance with the Texas Open Meetings Act.” Section 23: Chairman, page 11, they added a statement under the duties of the chairman to include “The Chairman will be the sole spokesperson on behalf of the WCCL-RMA and any other director(s) as authorized by the Chairman.” This means that whenever the RMA is going to take an official position on something, like the RMA projects for this calendar year, then he is the sole person to speak on behalf of the RMA. Section 29: Interim Executive Director, page 14, Mr. Flores stated that this was constructed by the City of Laredo to provide us with an interim or outsourced Executive Director until the RMA has approved one. The Committee did not find it in the other RMA By-Laws, so they are rejecting it. They are not looking to outsource, they would just select an interim Director internally until they have an Executive Director to replace them. Section 30: Indemnification by the Authority, page 14, this section is regarding indemnification of the Authority and individual Directors. The Committee questioned who would pay for the indemnification. Mr. Flores said that he spoke to Chairman Soto and he stated that the RMA would be getting insurance, so that the indemnification provision can be insured through an insurance policy. He said more information will follow. Mr. Carlos Flores stated that these are the proposed changes to the original draft, and if anyone had other changes or comments please email him and he will incorporate them for the next meeting. Chairman Soto stated that if everyone was in agreement of the proposed revisions, then they would adopt the By-Laws at the next meeting. Additional information can be found on the attached red lined By-Laws.

Actions:

By-Law Committee will edit By-Laws Section 5, E., to include Director term limit.

By-Law Committee will check Section 5, D., with the Transportation Code.

4. RMA / TRZ / TRiZ Workshop Mrs. Melisa Montemayor then introduced Arturo Bujanda, a Texas Transportation Institute Assistant Research Scientist and Project Manager, who was instrumental in developing a workshop that took place several months ago for the City and County staff and elected officials in preparation of forming the RMA. This helped inform the local public and elected officials of the benefits of the RMA, how the RMA works, how the Transportation Reinvestment Zone works, and how it could be implemented here in Laredo. For additional information, please view the attached PowerPoint that was presented by Mr. Arturo Bujanda.


Mrs. Montemayor stated this was one of the financing tools available to the City and the County, and clarified that it’s the City and the County that have the authority to establish the Transportation Reinvestment Zone. Once a decision is made, then they divert a percentage of that TRZ to transportation projects, in this case to the RMA priority projects. She informed the Board that time is of the essence when it comes to a TRZ. When it comes to the priority projects, I-69 and Loop 20, they are looking to start the development as soon as possible. The longer they wait, the more development occurs along Loop 20, and the smaller the delta is between post-development and pre-development, which is a difference of monies that would go to the tax increment account. They want to be able to catch the TRZ at the time when development has not occurred, so they have the largest delta that goes into the tax increment account. She reiterated that if a TRZ is going to be implemented, sooner rather than later is best so that more chance of monies will be diverted to the tax increment account and then hopefully diverted to the RMA so they can use it towards priority projects. Mrs. Montemayor then stated that regarding pass through tolls, which was mentioned in Mr. Bujanda’s presentation, there were several slides that mentioned innovative financing options. Texas Department of Transportation is currently not accepting applications for pass through tolls. For those not familiar with pass through tolls, the Laredo District built one in Del Rio, Texas, SL 79. The County came together with a private entity, who built the roadway, which is a loop around Del Rio. The State is paying them back based on traffic taking that relief route in Del Rio every year. They are secured the minimum amount per year regardless of traffic, but if the traffic gets higher, there is an increment towards the maximum amount that can be reimbursed from the State to the developer. Webb County has obtained a State Infrastructure Bank (SIB) Loan from the State in the past. Those are very low interest rate loans that can be applied for by the City or the County through Texas Department of Transportation. She stated that the SIB loan is very lucrative and for the RMA priority projects, that loan could be something that the Board might want consider.

5. Required RMA Reports, Etc. Chairman Soto then introduced Mr. David Plutowski, TxDOT Statewide RMA Coordinator. Mr. Plutowski stated that the reporting and audits is basically what the Texas Transportation Code states in the statute or law. In TxDOT, the Texas Administrative Code (TAC) rules show that TxDOT has limited oversight of the RMA. The RMA in general has more power to do more effective projects than TxDOT. He mentioned that the rules have changed and expanded the definition of transportation projects for the RMA. He then proceeded to discuss what was needed from the RMA in regards to reporting and auditing. For additional information, please view the attached RMA Reporting and Audits handout that was presented by Mr. David Plutowski.

6. Comments No public comments.


7. Date/Time/Location of the Next Full Board Meeting Chairman Soto stated that everyone should have received a tentative schedule of meetings for the rest of the year. He proposed the next meeting be held on Wednesday, January 21, 2015, at 9 a.m. at the TxDOT facilities. He asked if anyone had any comments or conflicts with the schedule to email him. Attached is the tentative schedule of meetings for the year.

8. Adjournment of Open Meeting into Executive Session

Chairman Soto then closed the Webb County – City of Laredo RMA meeting at 10:21 a.m. for the Executive Session. He thanked everyone for coming and asked for the general public to step out during the Executive Session. [The Webb County-City of Laredo Regional Mobility Authority Board may retire into Executive Session pursuant of the Texas Government Code, Sections 551.071 – 551.088 to discuss any of the following: (The items listed below are matters of the sort routinely discussed in Executive Session, but the Board may move to Executive Session to discuss any of the items on this agenda, consistent with the terms of the Open Meetings Act, as Amended.)] Section 551.071 Consultation with Attorney Section 551.072 Deliberation Regarding Real Property Section 551.073 Deliberation Regarding Prospective Gifts Section 551.074 Personnel Matters Section 551.076 Deliberation Regarding Security Devices Mr. Soto adjourned the Executive Session at 11:07 a.m. to return to the Webb County – City of Laredo RMA meeting. He then asked the general public to join the Board Members.

9. Adjournment

Jose Murillo made a motion, seconded by Albert Muller, Sr. to adjourn the Webb County – City of Laredo RMA meeting at 11:08 a.m. Motion carried.


Action Items Previously Discussed

Date Action Item Date Completed

11/17/14 Board members will decide the term limits. 12/15/2014 11/17/14 Board members will decide on the RMA Mission Statement 11/17/14 Legal Responsibilities:

Surety Bonds

Conflict of Interest Policy forms

Procurement Policy (Samples will be discussed at the next board meeting. A RMA standard must be used.)

File an annual Personal Financial Statement

Training on responsibilities under the Open Meetings Act and Publication Information Act

Nepotism laws

Ethics and Compliance Program

11/17/14 Future Services / Facilities Required:

Lease facilities for staff

Banking services (Finance Committee will need to draw up agreement with county to agree how much the $10 fee will go to RMA and then set up an account.)

Legal council

Financial advisory services

Accounting and auditing services

Public informational material

Branding, web site design & maintenance

Inter-local Agreements- TRZ, Toll Equity Bonds, Tolling

Executive Director (job description to be developed and posted when needed with experience in business, management, state policy and TxDOT)

Staffing (Receptionist, secretary (preferably paralegal), executive director and support staff.)

MINUTES FOR THE WEBB COUNTY – CITY OF LAREDO REGIONAL MOBILITY AUTHORITY BOARD OF DIRECTORS MEETING HELD ON DECEMBER 15, 2014 WERE COMPLETED ON THIS THE 4th DAY OF FEBRUARY 2015. Submitted by: Marissa J. Montoya Office Technician TxDOT Laredo Dist.

A. Developed for WCCLRMA by TxDOT – TPP Division in Austin, TX on 12-2-2014. B. For more detailed information on RMAs, see the Texas Administrative Code, Title

43, Part 1, Chapter 26 website: www.sos.state.tx.us and Texas Transportation Code, Chapter 370 website: http://www.statutes.legis.state.tx.us/

Regional Mobility Authority (RMA) Reporting & Audits

1. Items that need TX Transportation Commission/TxDOT approval: a. Approval of a transportation project (TAC §26.32) b. Highway designation to be On-the-state-system (TAC §26.35) c. Allocating maintenance or operation responsibilities to TxDOT

(TAC §26.35) d. Annual Compliance Report (TAC §26.65(a)) e. Annual Project Report (TAC §26.65(b)) f. TxDOT to have access to all operating and financial reports.

2. Other Reports (approved by RMA board and certified by chief

administrative officer of RMA) (TAC §26.61) a. Annual operating & capital budgets, surplus revenue report

i. Submit to city and county within 90 days after beginning of FY or adoption of amended budget

b. Financial reports & Investment reports/independent auditor’s review

i. Submit to city and county within 30 days after disclosure or approval of independent auditors’ report

3. Annual Audit (TAC §26.62) a. Submit to city and county within 120 days after end of FY b. Must be completed by an independent CPA c. Minimum 4 year retention period of all work paper and

reports

1

Regional Mobility Authorities and

Transportation Reinvestment Zones

TxDOT Laredo District Office

December 15, 2014

RMAs and TRZs concepts and applications

Agenda

� RMA—background and next steps

� TRZ—concepts and implementation steps

– Value capture for transportation funding

– Texas TRZs

– TRZ implementation steps

– TRZ analysis

� Case examples

� TRZ implementation in an RMA context

� Conclusion and questions

Workshop on RMA and TRZ Concepts 2


2

What’s in the Notebook

• TxDOT RMA Guidebook

• RMA “Getting Started” Flowchart

• RMA Enabling Legislation and Related Statutes

• RMA Sample Documents and Location Listing

• TRZ Case Examples

• Workshop Participant CD-ROM

3Workshop on RMA and TRZ Concepts

RMAs in Texas


3

The Basics – Powers of an RMA


• Develop transportation

projects.

• Issue revenue bonds.

• Establish tolls.

• Acquire property for

transportation projects.

• Use surplus revenue to

finance local projects.

• Enter into Comprehensive

Development Agreements.

• Apply for federal highway

and rail funds.

• Contract with governmental

entities and Mexico.

• Apply for State Infrastructure

Bank loans.

• Maintain a feasibility fund.

• Set speed and weight limits.

• Enter into agreements with

other entities on behalf of

that entity.

Where Does the Money Come From?

To support operations, revenue can be generated

from:

• Tolls, fares, or other charges from transportation

projects.

• Proceeds from the sale or lease of a transportation

project.

• Proceeds from the sale or lease of property adjoining a

transportation project.


4

Responsibilities of the Texas

Transportation Commission

• Authorize creation of the RMA.

• Approve connections to the state highway or TxDOT rail networks.

• Establish design and construction standards.

• Introduce auditing, reporting requirements, and ethical standards.

• Authorize agreements with Mexico.

• Approve applications for federal highway and rail funds.


What Can an RMA Do?

Regional Mobility Authority and

Transportation Reinvestment Zones:

Concepts and Applications

8

• Tolled and non-tolled

roadways

• Passenger/freight rail

• Ferries

• Airports

• Transit systems

• Bridges

• Pedestrian/bicycle

facilities

• Intermodal hubs

• Border crossing stations

• Freight conveyor belts

• Air quality initiatives

• Public utility facilities

• Parking facilities

5

So You’ve Got an RMA – Now What?

9

Bonds & Insurance

• Secure surety bonds for directors and liability insurance coverage.

Bank Accounts

Staff

• Begin hiring staff & consultants

• Executive director

• General engineering consultant

• Legal counsel

• Financial advisors

• Accountants

• Investment bankers/underwriters

• CPAs/auditor

Policies

• Bylaws

• Procurement

• Environmental review.

• Conflict of interest.

• Employee drug and alcohol.

• Use of transportation project (tolls, speed limits, weight limits).

• Public access policy.

• Strategic plan.

MeetingBoard of Directors

• Laredo City Council appoints 4 members.

• Webb County Commissioners Court appoints 4 members.

• Governor appoints Presiding Officer.

• Serve 2 years and may be reappointed at the discretion of the appointing entity.

Workshop on RMA and TRZ Concepts

Successful Strategies


Transparency

Not elected governing entities must

operate with absolute transparency.

Creating, making available, and reporting

on clear, thorough policies.

Partnerships

Local, regional and national partnerships

(public and private) help to strengthen

regional cohesiveness and needs.

Project diversity

Different project types can:

• provide capacity

• increase multimodal connectivity

• promote safety

Non-traditional funding &

financial stewardship

Consider non-traditional funding options

for transportation is crucial since

traditional state transportation funding is

proving unreliable.

6

Agenda




– Texas TRZs


– TRZ analysis

� Case examples





Value Capture leverages real estate

potential of infrastructure

• Innovative financing method that leverages the

real estate potential brought by infrastructure

improvements.

• Allows the public sector recovering increments

in real property values attributed to public

improvements rather than landowner actions.

• Used to finance transit investments in the U.S.

but its application to finance roadways is sparse.


7

Texas TRZs are one of the first U.S.

roadway-specific applications of VC

• Enabled by legislation

passed in 2007 (amended in

2011 and 2013).

• Allow local governments to

leverage multiple funding

sources.

• Local entities sell bonds

secured by incremental tax

revenues.

Local TRZ Funds

State

Shadow Tolls

User Tolls

Traditional

Construction

Funds


TRZ Legal Framework—the Basics

• A Texas TRZ definition:– A designated contiguous zone around a planned transportation

improvement.

– Necessary institutional/legal arrangement to facilitate VC via the property tax mechanism.

– Two types of TRZs allowed under the law: Municipal and County.

• Legislation first approved in 2007 -amended in 2011 & 2013– Senate Bill 1266 (2007)—authorizes the creation of County and

Municipal TRZs.

– House Bill 563 (2011) and SB 1110 (2013)—introduced significant changes that increased implementation flexibility.

– SB 971 (2013)—authorizes Port Authority TRZs, and SB 1746 (2013) authorizes County Energy TRZs.


8

15

Value Capture Mechanism in a TRZ:

How it works

General Fund

Tax Increment

Account, RUD,

or third party

Tax Rate

(or County tax

abatement)

n

Tax Rate

(or County

abated tax rate)

n

Tax Increment Base = Appraised Value in Base Year

TRZ Life (yrs)

Appraised Property

Value Captured

Appraised

Value

Tax Increment

Base


9

Legislative Changes Introduced in 2011

Facilitated Implementation

17

Original Legislation ProvisionsSB 1266 (passed in 2007)

New Legislation ProvisionsHB 563 (passed in 2011)

County

TRZs

�Tax increment to be set aside only

through a tax abatement and the

creation of a Road Utility District

(RUD)

�Tax increment can be set aside through a

tax abatement or other form of tax relief

�County can pledge all or part of the

increment to a public or private entity to

pay for project, or create a RUD

Applicable to Applicable to

any TRZ type

�Only real property tax increments

�Required a pass-through

agreement with TxDOT

�Only roadways projects eligible

�TRZ boundaries could not be

modified after designation

�Real property tax increments and

optionally, sales tax increments

�Pass-through agreement is only required

in cases involving sales tax increments

�Any transportation project eligible,

including aesthetic & transit.

�TRZ boundaries can be expanded but not

reduced, after designation

Municipal

TRZs�Required 100% of annual tax

increment to be set aside

�% of annual tax increment to be set aside

is flexible (e.g. 20%, 50%)



Expand TRZ Options

• SB 1110 – Municipal/County TRZs– Allows creating a TRZ in an adjacent jurisdiction to support a

project located outside of TRZ boundaries.

– De-couple sales tax TRZs from pass-through program.

– Clarify that a TRZ may be formed for “one or more” projects” within a zone.

• SB 971 – Port Authority TRZs– Authorizes port authorities and navigation districts to create TRZs.

– TRZ area must be unproductive/underdeveloped.

– TRZ should “improve the security, movement, and intermodal transportation of cargo or passengers in commerce and trade”.


10


Expand TRZ Options

• SB 1747 and HB 2300– County Energy TRZs– Creates Transportation Infrastructure Fund (TIF) administered by

TxDOT ($225 million)• Grants for projects in areas affected by oil and gas production;

– Eligibility to receive TIF grant contingent on:• Establishing a County Energy TRZ (CETRZ)

• Creating a CETRZ advisory board

• County providing matching fund

– Allocation is formula-based• Well completions, weight tolerance limits, oil and gas production taxes, oil

and gas waste

– 100% of tax increment must be pledged and cannot be bonded against – must be transferred to Road Utility Dist.


Design &

construction

costs

Engineer/

construction

contractor

Facility

manager/

operator

Maintenance

& operation

costs

Financial

institutions/

markets

Debt Repayments

% Tax

increment

payments

Tax Increment Account,

Road Utility District, or

Third Party

City and/or County

Transportation

Reinvestment Zone

Flow of Funds in a TRZ

Pass-through

Payments

TxDOT

Public Entity

(City, County, RMA)

or Agent

• Pass-through

Agreement

• Issue Bonds

Surplus

S.R. Vadali, R.M. Aldrete, A. Bujanda. Transportation Reinvestment Zone

Handbook. 0-6538-P1. Texas Transportation Institute, College Station, TX.

September 2012.


11

Sequential Implementation

Process for City/County TRZ’s

21

Initiation

1

Zone Formulation

2

Adoption

3

Implementation

4

Evaluation and Termination

5


1 - Initiation Stage

• Project identification and need:

– Specific economic benefit from projects

– Area eligibility

– Preliminary feasibility analysis

• Developing stakeholder relations and champions.

Initiation

1

Zone Formulation

2

Adoption

3

Implementation

4

Evaluation and

Termination

5


12

Initiation Analysis Framework follows

3 steps

23

Data Collection

1

Definition of TRZ

Boundaries

2

Value Capture

(financial)

Analysis

3

• Central Appraisal District – Appraisal and Geographic Data.

• State Comptroller – # of parcels and taxable values.

• Texas A&M Real Estate Center.

• Dataset analysis on GIS.

• TRZ scenarios based on parcel distance from centerline of

roadway: 1-mile, ½ mile, and ¼ mile.

• Each property is indivisible, so properties with a centroid

inside the buffers are included in TRZ.

• Forecast value and development trends for five categories of

real property: 1.Commercial, 2.Industrial, 3.Residential,

4.Agricultural, and 5.Totally Exempt.

• Estimate value capture cash flows.


2. Formulation Stage

• Define boundaries, zones, parcels.

• Establish base year for tax increment collection.

• 60 day notice.

• Refine feasibility analysis.

Initiation

1

Zone Formulation

2

Adoption

3

Implementation

4

Evaluation and

Termination

5


13

TRZ Boundaries

• Must be contiguous

• Unproductive/underdeveloped region

• Practical considerations drive boundaries but

not beyond 1 mile radii.

– Political will and revenue

• Boundaries may be established prior to

knowing exact project limits.


14

Steps to Operationalize Increment

Capture1. Establish Base Year and Base Year Appraised Value.

a. Year the TRZ is established.

b. Total appraised value of all real property taxable in the TRZ is defined as the base year

appraised value (tax increment base).

c. If applicable, the total amount subject to sales tax revenues in the TRZ.

2. Determine Final Captured Appraised Value and/or Sales Tax Increments.

a. Captured Appraised real property value.

b. Captured Sales Tax Increment.

3. Determine Total Tax Increment.

a. Amount of ad valorem and sales taxes levied and collected by the municipality or County

for the year.

b. Use the appropriate tax rates.

4. Determine Tax-Increment Set Aside

a. Use % of Tax Increment to determine revenue share (0-100%).

5. Recognize Pre-Existing Value Capture Arrangements.

a. Reduce revenue that may be payable to pre-existing active value capture agreements in

the boundary (through TIF/TIRZ or other value capture arrangements).


3. Adoption Stage

• Public hearings

• Ordinance (Municipal TRZ)

• Decree of the County Commissioner’s Court

(County TRZ)

Initiation

1

Zone Formulation

2

Adoption

3

Implementation

4

Evaluation and

Termination

5


15

Final Steps for Implementation

• After

1) analyzing new project costs,

2) considering joint funding agreements among jurisdictions, and

3) deciding the % of annual revenue dedicated to TRZ account.

• Conduct a final revision and assess the impact, if any, on expected revenues and general revenue fund.

• Finally, extract and document parcels to be included in the approval of the final TRZs—list of parcels for:

– City Ordinances

– County Commissioners' Court Orders


4. Implementation

• Develop a project queue for payout purposes.

• Financing aspects

• Inter-local agreement (RMA, inter-

jurisdictional).

Initiation

1

Zone Formulation

2

Adoption

3

Implementation

4

Evaluation and

Termination

5


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5. Monitor/Evaluation

• Project monitoring and evaluation

• Dissolution of TRZ : – December 31 of the year of compliance with

contractual requirement OR

– December 31 of the 10th year after establishment if not used for the purpose

31

Initiation

1

Zone Formulation

2

Adoption

3

Implementation

4

Evaluation and Termination

5


TRZs vs. Tax Increment Financing

• TRZs are similar to Tax-Increment-Finance (TIF)

and both are based on value capture principles.

• However, TRZs are Different from TIF because:

– TRZs cannot be established by petition, while TIF can

be established by landowners

– Revenues not portable across TRZs, but often

portable across TIFs in same jurisdiction


17

Agenda




– Texas TRZs


– TRZ analysis

� Case examples




� Case examples

Recent TRZ Case Examples

Location Project Type RMA Participation

City of El Paso•Road projects

•Single jurisdictionYes

Hidalgo County•Road project (Hidalgo Loop)

•Single jurisdiction Yes

City of Forney•Road project

•Single jurisdictionNo

El Paso County, Cities of

Socorro and Horizon

•Road project

•Multiple jurisdictionsYes

Port of Corpus / Counties

of Nueces & San Patricio

•Bridge project

•Multiple jurisdictionsNo


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Case Example Lessons Learned

• Local governments in Texas have successfully used TRZs to fund transportation projects.

• Diverse case examples provide a cross-section of TRZ applications:

– Roadway and bridge projects

– Geographic location

– Project purpose

• Location, location, location … and project purpose are key considerations:

– Locality-specific factors, land use, development, property values and local tax rates.

– How does the project promote development?


Agenda




– Texas TRZs


– TRZ analysis

� Case examples





19

TRZs encourage inter-agency

coordination

• Institutional Coordination:– Multiple public partners

– Private sector

– Project scope

• Financing Coordination:– Local entities sell bonds

secured by incremental tax revenues

– Local/state agencies and private sector coordinate financing package

Project

Financing

Package

TR

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RMAs facilitate coordination and TRZ

project implementation

RMAs provide local agencies with valuable flexibility for project implementation

• Financial—issue/acquire own debt (eg. SIB loans, bonds) and use multiple sources of funds (eg. TRZ revenue, tolls, traditional funds)

• Jurisdictional—can implement projects across jurisdictions and outside their jurisdiction

• Contractual—can use complex contractual agreements with private contractors/developers (Traditional, Design-Build, P3s, etc.)


20

RMA Participation Examples

• City of El Paso TRZ – Camino Real RMA– Acquired SIB loan secured by City of El Paso TRZ Revenue

– Multiple sources of funding (TRZ, pass-through, other funds)

• Hidalgo County TRZ – Hidalgo County RMA– Issue/acquire debt secured by County TRZ revenue

• El Paso County, Horizon City and Town of Socorro

Multi-jurisdiction TRZs – Camino Real RMA– Coordinate project implementation across multiple jurisdictions

and outside its own jurisdiction

– Issue/acquire debt secured by TRZ revenue from all three partner local governments


Agenda




– Texas TRZs


– TRZ analysis

� Case examples





21

Presenter

Arturo Bujanda

– Associate Research Scientist

– (915) 532-3759 Ext. 14116,

– [email protected]

Coauthors

Rafael Aldrete

– Senior Research Scientist

– (915) 532-3759 Ext. 14101


Tina Geiselbrecht

– Associate Research Scientist

– (512) 407-1116 Ext. 12116,


Regional Mobility Authority and

Transportation Reinvestment Zones:

Concepts and Applications

41

Contact information