STRATEGIC PRIORITY: Economic Development
AGENDA DATE: August 14, 2024
COUNCIL DISTRICT(S): 10, 13
DEPARTMENT: Office of Economic Development
EXECUTIVE: Robin Bentley
______________________________________________________________________
SUBJECT
Title
Authorize a public hearing to be held on August 28, 2024, to receive comments concerning: (1) the proposed levy of assessment for the Midtown Improvement District (the “District”) in accordance with Chapter 372, Texas Local Government Code, for the purpose of providing supplemental public services to be funded by special assessments on property in the District; and, at the close of the public hearing (2) consider approval of an ordinance (a) levying a special assessment on property in the District for services and improvements to be provided during 2025; (b) establishing charges and liens against the property in the District and against the property owners thereof; (c) providing for the collection of the 2024 assessment; (d) requiring City staff to, not later than seven days after the City Council’s approval of the ordinance and Service Plan, file a copy of the approved Service Plan with the Dallas County Clerk; (e) authorizing amendments to the District’s adopted 2024 Service Plan in accordance with the Act; and (f) providing an effective date - Financing: This action has no cost consideration to the City (see Fiscal Information)
Body
BACKGROUND
Annually, the City Council calls and holds a public hearing to consider the proposed assessment for property in the District and authorizes the Service Plan for the District. This action calls for a public hearing to be held on August 28, 2024, during which any owner of property located within the District may speak for or against the District’s annual Service Plan and assessment, as required by the Public Improvement District Assessment Act (the “Act”), Chapter 372 of the Texas Local Government Code. After hearing and passing on objections, the City Council may consider an ordinance levying a special assessment on District property.
As the entity with which the City contracts to manage the District, Midtown Dallas Inc. provided City staff with the District’s proposed 2025 Service Plan and 2024 Assessment Plan for review. Staff found the services and improvements to be advisable and recommends approval subject to the public hearing on August 28, 2024.
A recent amendment to Section 372.013 of the Texas Local Government Code (the “Act”) requires that any amendments or updates to a Service Plan be updated by the City Council ordinance. Accordingly, Midtown Dallas Inc. has submitted a request for the City Council approval on an amended District 2024 Service Plan due to delays in Economic Impact and Mobility studies and implementation of the Southern Pacific trail (SoPac) connector project.
The proposed assessment values provided herein are preliminary. The final Service Plan presented to the City Council on August 28, 2024, will reflect the 2024 Dallas Central Appraisal District (DCAD) certified values. The adopted Service Plan will be filed with the Dallas County Clerk within seven days after the City Council’s approval pursuant to the Act.
Dallas County will collect the District’s assessments, retain a collection fee ($2.90 per account and subject to change), and transfer the remaining assessments to the City. The City will then disburse assessments to the District management entity at a frequency outlined in the District’s management contract.
The District Service Plan consists of:
(a) Nature of the Services and Improvements. The purpose of the assessments to be levied in the District is to supplement and enhance services provided to or for the District’s benefit including, but not limited to: enhanced public safety and security, neighborhood improvements, landscaping, trash/litter removal, graffiti control, beautification, cultural enhancements, Southern Pacific Trail (SoPac) improvements, Midtown Park, Shops at Park Lane, and Midtown Plaza improvements, capital improvement projects, marketing and promotional activities, lighting and signage, development, business recruitment to promote the District and related expenses incurred to establish, administer, and operate the District as authorized by the Act and the City Council.
(b) Estimated Cost of the Services and Improvements. During the next five-year period, the estimated annual cost of the improvements and services provided by the District is expected to range from a low of $2,408,402.00 in 2025 to a high of $3,401,362.00 in 2029. The total estimated net assessments to be collected during the next five-year period is approximately $12,720,617.00. The District shall incur no bonded indebtedness.
(c) Boundaries. The boundaries of the District are located wholly within the city of Dallas, Dallas County, Texas. The boundaries of the District are attached to the resolution as shown in Exhibit A.
(d) Method of Assessment. The assessment shall apportion the costs each year among the property owners on the basis of special benefits accruing to the property. The proposed method of assessment, which may specify included or excluded classes of assessable property, shall be assessed according to the value of the real property and real property improvements as determined by DCAD. The net assessment amount for the 2025 Service Plan year is proposed to be $1,808,402.00. This amount is approximately equal to $0.10 per $100.00 valuation for the premium service area in the District and $0.05 per $100.00 valuation for the standard service area as determined by DCAD. Once levied, this assessment rate shall not increase during the 2025 Service Plan year.
Future annual assessment rates, however, may be increased up to a maximum of $0.15 per $100.00 valuation subject to appropriations set forth in the petition that created the District. Any future increase in the assessment rate would also be subject to a public hearing and approval by the City Council.
The real property of jurisdictions and entities that have obtained an exemption from the City of Dallas real property taxes pursuant to the Texas Property Code (except under the provisions of Sections 11.24 and 11.28 of the Texas Tax Code) will not be subject to an assessment on that portion of the assessed value of the property exempt from City real property taxes. Payment of assessments by other exempt jurisdictions and entities must be established by contract.
(e) Apportionment of costs between the District and the Municipality as a Whole. The assessment is levied on the real property and real property improvements in the District according to the value of such property. Levying the assessment for the services and improvements based on the appraised value of the property results in the apportionment of the costs on the basis of special benefits accruing to the property. City and railroad rights-of-way, City parks and cemeteries are not specially benefitted and therefore are not subject to assessment. The City of Dallas is not responsible for payment of assessment against exempt City property in the District.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On August 12, 2015, the City Council authorized the renewal of the Vickery Meadow Public Improvement District (the “District”), for a period of seven-years and designated the Vickery Meadow Management Corporation, as the management entity for the District by Resolution No. 15-1474.
On September 9, 2015, the City Council authorized an ordinance approving and adopting the District’s final 2016 Service Plan, the 2015 Assessment Plan and the 2015 Assessment Roll by Resolution No. 15-1706 and Ordinance No. 29871.
On September 14, 2016, the City Council authorized an ordinance approving and adopting the District’s final 2017 Service Plan, the 2016 Assessment Plan and the 2016 Assessment Roll by Resolution No. 16-1508 and Ordinance No. 30213.
On September 13, 2017, the City Council authorized an ordinance approving and adopting the District’s final 2018 Service Plan, the 2017 Assessment Plan and the 2017 Assessment Roll by Resolution No. 17-1495 and Ordinance No. 30649.
On September 12, 2018, the City Council authorized an ordinance approving and adopting the District’s final 2019 Service Plan, the 2018 Assessment Plan and the 2018 Assessment Roll by Resolution No. 18-1327 and Ordinance No. 30990.
On September 12, 2018, the City Council authorized an amended and restated management contract with Vickery Meadow Management Corporation, the non-profit corporation designated as the management entity for the District to reflect changes in the process for disbursement of assessment revenue, authorizing the City to disburse assessments to Vickery Meadow Management Corporation, and to address other amendments to the agreement by Resolution No. 18-1328.
On September 11, 2019, the City Council authorized an ordinance approving and adopting the District’s final 2020 Service Plan, the 2019 Assessment Plan and the 2019 Assessment Roll by Resolution No. 19-1447 and Ordinance No. 31328.
On September 9, 2020, the City Council authorized an ordinance approving and adopting the District’s final 2021 Service Plan, the 2020 Assessment Plan and the 2020 Assessment Roll by Resolution No. 20-1370 and Ordinance No. 31646.
On August 25, 2021, the City Council authorized an ordinance approving and adopting the District’s final 2022 Service Plan, 2021 Assessment Plan and the 2021 Assessment Roll by Resolution No. 21-1427 and Ordinance No. 31984.
On June 8, 2022, the City Council authorized the renewal of the Midtown Improvement District (the “District”), for a period of ten years and designated the Vickery Meadows Management Corporation DBA Midtown Management Corporation, as the management entity for the District by Resolution No. 22-0900.
On August 24, 2022, the City Council authorized an ordinance approving and adopting the District’s final 2023 Service Plan, 2022 Assessment Plan and the 2022 Assessment Roll by Resolution No. 22-1262 and Ordinance No. 32283.
On August 23, 2023, the City Council authorized an ordinance approving and adopting the District’s final 2024 Service Plan, 2023 Assessment Plan and the 2023 Assessment Roll by Resolution No. 23-1181 and Ordinance No. 32533.
The Economic Development Committee was briefed by memorandum regarding this matter on August 5, 2024. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=13204846&GUID=5F318A6F-FF97-4134-91BA-E46F3CFFB9C4>
FISCAL INFORMATION
This action has no cost consideration to the City. District assessment collections remitted from the Dallas County Tax Office to the City are deposited in a special revenue fund for disbursement by the City to the District’s management entity on a monthly basis. Based on the District’s proposed 2025 Service Plan budget, fund disbursements for the upcoming year are estimated at $1,808,402.00 For District property owners, the proposed assessment amount is approximately equal to $0.10 per $100.00 of appraised value for the premium service area in the District and $0.05 per $100.00 of appraised value for the standard service area as determined by DCAD (i.e., property owners within the boundaries of the District pay the assessment and after disbursement by the City, the funds are managed pursuant to the approved Service Plan and a management contract with the City by the District).