ORD 432-A 7/28/1992ORDINANCE # 4 3 2 - A
BY THE CITY COUNCIL OF THE
CITY OF CIBOLO, TEXAS.
ADOPTING GUIDELINES AND
CRITERIA FOR TAX ABATEMENT
AND REINVESTMENT ZONES
WHEREAS,
the Texas Property Tax Code, Section 312, effective
September 1, 1989, allows governing units and school
districts to create reinvestment zones and provide
ad valorem tax abatements in the interest of economic
development; and
WHEREAS,
the creation and retention of job opportunities
within the City of Cibolo (the City) is of high
priority; and
WHEREAS,
new jobs and investment will benefit the city by
bolstering the economy with the city, providing
employment opportunities, strengthening the real
estate market within the city, and generating tax
revenue to support city services; and
WHEREAS,
Chapter 312 requires the City to establish guidelines
and criteria governing tax abatement agreements by
the City before designating a reinvestment zone or
entering into any tax abatement agreement; and
WHEREAS,
such guildines and criteria are effective for a two
year period unless amended or repealed by a three -
fourth vote of the members of the City Council;
NOW,
THEREFORE,
Be it ordained by the City Council of the City of
Cibolo, Texas, that the City elects to participate
in tax phase-in agreements pursuant to Chapter 312
and does hereby adopt these Guidelines and Criteria
for tax abatement agreements in designated re-
investment zones.
SECTION 1
INDEX
SECTION 1 - INDEX
SECTION 2 - DEFINITIONS
SECTION 3 - CRITERIA FOR REINVESTMENT ZONES
SECTION 4 - GENERAL ABATEMENT CRITERIA
SECTION 5 - STANDARD ABATEMENT
SECTION 6 - OPTIONAL ABATEMENT ADDITIVES
SECTION 7 - VARIANCES
SECTION 8 - APPLICATION PROCEDURES
SECTION 9 - PUBLIC HEARINGS
SECTION
10 -
TAX ABATEMENT AGREEMENT
SECTION
11 -
DEFAULT AND RECAPTURE
SECTION
12 -
GENERAL ADMINISTRATION
SECTION
13 -
ASSIGNMENT
SECTION
14 -
SUNSET PROVISION
SECTION
15 -
SEVERABILITY
SECTION 2 - DEFINITIONS
A. "Abatement" means the full or partial exemption from ad valorem
taxes of certain real property in a reinvestment zone designated
for economic development purposes.
B. "Reinvestment Zone" is an area where the City has decided to
influence development patterns and attract major investments that
will contribute to the development of the City through the use of
tax abatement.
C. "Modernization" means the replacement and upgrading of existing
facilities which increases the productive input or output, updates
the technology or substantially lowers the cost of operation.
Modernization may result from the construction, alteration, or
installation of buildings, structures, fixed machinery or
equipment. It shall not be for the purpose of reconditioning,
refurbishing, or repairing.
D. "Base Year Value" means the assessed value of eligible property
January 1 preceding the execution of the agreement plus the agreed
upon value of eligible property improvements made after January 1.
E. "Other city Revenue" means City revenue from any other source
excepting ad valorem taxes.
F. "New Facility" means a property previously undeveloped which is
placed into service •by means other than or in conjunction with
expansion or modernization.
SECTION 3 - CRITERIA FOR REINVESTMENT ZONES - To be designated as a
reinvestment zones, an area must meet one of the criteria of
Subchapter B of the Texas Property Tax Code. The fundamental
criteria where creation of such a zone would be reasonably likely
to contribute to the: retention or expansion of primary employment,
attract investment into the zone, generally be of benefit to the
property, and contribute to the economic development of the City of
Cibolo.
SECTION 4 - GENERAL ABATEMENT CRITERIA
A. Creation of New Value. Abatement may be granted for the
additional value of eligible real property improvements subject to
such limitations as the City of Cibolo may impose, and;
1. Must be reasonably expected to increase the
appraised value of the improved property;
2. Must be expected to increase employment based on
the number of permanent jobs created and sustained
in each year of the abatement;
3. Should not have the effect of merely transferring
existing employment from one part .of the city to
another without demonstration of increased future
investment (dollars or jobs) or unusual circumstances
whereby without such a move, employment is likely
to be reduced.
B. The City shall not enter into an abatement agreement if:
1. It finds that the Application of Tax Abatement
was filed after the commencement of construction
expansion or modernization or:
2. It finds that the City was not officially notified
that construction, expansion, or modernization
would commence on a given date.
C. By policy, no standard abatement will be approved that exceeds
90% of new value or that will reduce current ad valorem revenues.
If the computed percentage from a standard abatement in Table 1,
and any additive percentage as defined below, exceeds 90%, an
extension of the abatement term beyond six years may be considered,
up to a maximum of ten years.
SECTION 5 - STANDARD ABATEMENT
A. The standard tax abatement is for a period of six years and is
based solely on capital improvements to real property. Table 1
below establishes the level of capital improvements and the
percentages to be allowed.
TABLE 1
STANDARD SIX-YEAR ABATEMENT
Percent Abatement Capital Cost of the
Projected Improvements
0% 0 - Less than double the
assessed value
5% Double the assessed value
10% $50,001 to $100,000
1% For each additional $40,000
increment of Capital
Improvements Thereafter
B. No abatements under this table will exceed 90%. To accommodate
larger investment or optional additives outlines below, abatement
terms may be extended an additional one to four years, but no
longer than a total of ten years.
SECTION 6 - OPTIONAL ABATEMENT ADDITIVES
A. Optional Criteria. The following optional abatements may also
be considered with each abatement request. These optional
abatements are to be considered separate and apart from the
standard abatement above, and may be added by taxing entities at
their discretion.
B. In all cases, the period of the abatement of each of the
following optional additives will run concurrently with the
approved rate from the standard criteria in Table 1.
C. Jobs. Job creation has always been an underlying goal of
economic development activity. The impact of jobs however, varies
from community to community. The City of Cibolo also considers
jobs to be an important part of this program and will consider
lower dollar value assessments in recognition of new employment
growth. For each $25,000.00 of additional payroll in facilities
based in Cibolo, 1% will be added to the standard abatement as
derived from Table 1. A maximum of 25% may be based on this
criteria.
D. Other Revenues. Other revenues, as defined above, that inure
to a taxing entity should also be considered during the incentive
process. These include; Sales taxes, hotel/motel taxes, and any
other source of revenue apart from ad valorem. Those businesses
that make a substantial contribution to the "other revenue" stream
may also request additive abatement percentages based on those
revenues. For each $1,000 of added "other revenues", an additional
2% will be added to the percentage established by the standard
abatement in Table 1, up to a maximum of 20%.
E. Business Retention. Current Business Retention and Growth is a
key to the continued stability of the commercial tax base. Some
provision to acknowledge the contribution of existing businesses
should also be considered. An additional 5% will be applied to the
percentage established by the standard abatement in Table 1, will
be included for those businesses currently based in the City of
Cibolo.
SECTION 7 - VARIANCES
A. As with the creation of any definitive document, all possible
circumstances are not likely to be addressed. The General Criteria
established throughout this document establishes minimum criteria.
If the requested abatement deviates in any substantive way from the
criteria established herein, a variance is required.
B. A variance is requested by adding a letter to the basic
application, justifying the adjustments requested. Approval of a
variance request requires a three-fourths vote of City Council. In
no cases shall variances be approved that exceed an abatement of
90%, or the term exceed ten years.
SECTION 8 - APPLICATION PROCEDURES
A. Applicability and Eligibility. These abatement guidelines and
criteria apply to any present or potential owner of taxable
residential or commercial property in the City of Cibolo. In the
case of residential applications, an abatement will only be
considered if the owner or potential owner will reside on the
property, or the property is currently the primary residence.
B. These guidelines and criteria do not apply to residential
contractors.
C. The application shall consist of a form (provided by the city)
requesting a tax abatement accompanied by:
1. a general description of the new improvements
to be undertaken;
2. a descriptive list of the improvement for which
an abatement is requested;
3. a map or plat with a property description;
4. a copy of the most recent appraisal or the
prior year tax receipt which includes the tax
number of the property. (A copy of the prior
year tax assessment is available from the
city tax assessor.)
5. if a variance is requested, a letter providing
full justification of the variance will also
be attached.
D. Upon receipt of a completed application, the City shall notify
in writing the presiding officer of the governing body of each
taxing jurisdiction.
E. The application will be forwarded to appropriate City
departments (Planning and Zoning, Building Inspections, Fire,
Public Works, Police, and the Volunteer Fire Department) for review
and comments.
F. After review, the City Staff will review the application for
policy implications, and make a recommendation to the City Council'
to approve or disapprove.
G. One major policy function during this review is the creation of
new reinvestment zones and the size of such a zone as a result of
the application, unless the property is already in a reinvestment
zone.
H. The City Administrator will forward the application to City
Council with comments and/or recommendations.
I. City Council will consider the application and all comments and
recommendations. If the application has merit, the City Council
will approve the application for abatement by ordinance and
authorize the Mayor to enter into an abatement agreement within the
guidelines established within the ordinance. If a variance was
requested, council must pass the ordinance by a three-fourths vote.
J. In order to enter into a tax abatement agreement, the City of
Cibolo must find that the terms of the proposed agreement meet
these Guidelines and Criteria and that:
1. there will be no substantial long-term adverse
affect on the provision of the City's service
or tax base; and
the planned use of the property will be constitute
a hazard to public safety, health or morals.
K. If City Council does not believe the application has merit, a
motion to disapprove the application shall be considered and acted
upon.
(As a matter of policy, the City Council explicitly states that tax
abatement is not applicable to.projects wherein the primary purpose
of the business is serving alcoholic beverages or where nudity is
.involved.)
fyK"W• :M1ZIEY
A. By State law, the governing body of a city may not adopt an
ordinance designating a reinvestment zone until it has held a
public hearing at which interested persons are entitled to speak
and present evidence for or against the designation. Notice of
such hearing shall be published in a local newspaper having general
circulation within the City of Cibolo, at least seven days prior to
the public hearing. The presiding officers of other taxing
jurisdictions shall be notified in writing at least seven days
prior to the public hearing.
B. After the public hearing, City Council may pass an Ordinance
approving the Re -Investment Zone, or, pass a motion to disapprove.
A. After approval of an ordinance by City Council, the Mayor may
enter into an agreement with the applicant which shall include:
1. Estimated value to be abated and the base year value;
2. the commencement date and the termination date
of abatement;
3. the proposed use of the facility, time schedule,
map, property description;
4. contractual obligations in the event of default,
violation of terms or conditions, delinquent
taxes, recapture, administration and assignment,
or other provisions that may be required for
uniformity or state law;
5. amount of investment and average number of jobs
involved;
6. percent to be abated as provided by paragraphs
five and six.
7. City Council may approve the Tax Abatement and
the abatement agreement in a single ordinance
if all other statutory and evaluation requirements
have been met.
(Such agreement shall normally be executed within 60 days after the
applicant has forwarded all necessary information and documentation
to the City of Cibolo.)
SECTION 11 - DEFAULT AND RECAPTURE
A. In the event that the facility is completed and begins
producing product or service, but subsequently discontinues
producing product or service for any reason excepting fire,
explosion or other casualty or accident or natural disaster for a
period of one year during the abatement period, then the agreement
shall terminate and so shall the abatement of taxes for the
calendar year during which the facility no longer produces.
B. Should the City of Cibolo determine that the company or
individuals are in default according to the terms and conditions of
it's agreement, the City of Cibolo may terminate the agreement.
Taxes will be due in full. for the year in which the agreement is
terminated.
C. In the event that the company or individuals:
1. allows it's ad valorem taxes owed the City
of Cibolo to become delinquent and fails
to timely and properly follow the legal
procedures for their protest and/or contest;
or,
2. violates any of the terms and conditions of
the abatement; or
3. is in default with any other City sponsored
program, the agreement then may be terminated.
Taxes will be due in full for the year in
which the agreement was terminated.
D. In the event that the company, during the abatement period,
decides to relocate the company to a location outside of the
designated reinvestment zone, or the City of Cibolo, and remains in
business, the City of Cibolo by an Ordinance adopted by City
Council shall have the right to recapture taxes abated in all
previous years.
SECTION 12 - GENERAL ADMINISTRATION
A. The Chief Appraiser of the Guadalupe Appraisal District shall
annually determine an assessment of the real and personal property
comprising the reinvestment zone. Each year, the company or
individual receiving abatement shall furnish the Chief Appraiser
with such information as may be necessary. Once value has been
established, the Chief Appraiser shall notify the affected
jurisdiction in the normal fashion.
B. The agreement shall stipulate the employees and/or designated
representatives of the City of Cibolo will have access to the
reinvestment zone during the term of the abatement to inspect the
facility to determine if the terms and conditions of the agreement
are being met. All inspections will be made only after giving of
twenty-four (24) hours prior notice and will only be conducted in
such manner as to not unreasonably interfere with the construction
and/or operation of the facility.
C. Each year the City Tax Assessor will review all approved
abatements and determine the adjustment to ad valorem taxes based
on the abatement agreement.
SECTION 13 - ASSIGNMENT
Tax abatement agreements may be assignable to a new owner only
with City Council approval.
SECTION 14 - SUNSET PROVISION
These Guildines and Criteria are effective upon the date of
their adoption and will remain in force for two years, at which
time all reinvestment zones and tax abatement contracts pursuant to
it's provisions will be reviewed by the City of Cibolo to determine
whether the goals of Guidelines and Criteria have been achieved and
Guidelines and Criteria have been followed. Based on that review,
the Guidelines will be modified, renewed or eliminated as
necessary.
During the two year period, the Guidelines and Criteria may be
amended or repealed only by a vote of three-fourths of the City
Council.
SECTION 15 - SEVERABILITY
If any section, paragraph, subdivision, clause, or phrase of
this ordinance shall be adjudged invalid or held unconstitutional;
the same shall not affect the validity of this ordinance as a whole
or any part of any provision thereof other than the part so decided
to be .invalid or unconstitutional.
7
Passed and Adopted the Day of 1992.
r,'Mayor-
City
ayorCity of Cibolo, Texas
ATTEST:
,4�
Ann Smith, City Secretary
MINUTES OF CIBOLO CITY COUNCIL MEETING
R
TUESDAY, AUGUST 11, 1992
THE CIBOLO CITY COUNCIL CONVENED IN A REGULARLY SCHEDULED
COUNCIL MEETING ON TUESDAY, JULY 28, 1992 AT THE CIBOLO
MUNICIPAL BUILDING, 109 SOUTH MAIN STREET, CIBOLO, TEXAS. THE
"tel FOLLOWING WAS THE ORDER OF BUSINESS:
1. CALL TO ORDER.
Mayor Sam Bauder called the meeting to order at 7:00 P.M.
2. ROLL CALL.
Members present: Jeff Miller, Claude Smith, Mark Buell, Tex
Farnsworth and Mayor Bauder. Mr. Delgado came in a few minutes
after roll call. Staff present: David Walker 8 Ann Smith.
3. INVOCATION.
Tex Farnsworth gave the invocation.
4. PLEDGE OF ALLEGIANCE.
Mayor Bauder lead those present in the pledge.
S. CITIZENS TO HE HEARD. (Limit 3 Minutes Each)
Mr. Jim Johnson, 2007 Town Creek Road, came to address the
Council on the location of city boundaries of his property and
to clarify maintenance responsibility of easements and drainage
ditches. Mr. Johnson has property bordered by County and City
boundaries.
6. CONSENSUS ITEMS:
A. MINUTES OF REGULAR MEETING, JULY 28, 1992.
B. CHECK REGISTER THRU JULY, 1992.
Tex Farnsworth (Mark Buell seconded) motioned to approve the
consensus items with one addition to the minutes of July 28th.
In item @ 12 - Commments by Council, Tex Farnsworth commented
that we should add his comments in reference to the proposed
Loop 539 and the highway department. Mr. Farnsworth stated that
he did not want to see any monies spent to relocate utilities
until we had a guarantee from the state that the project was
starting and the date. Minutes were amended to reflect these
comments. All approved. Motion carried.
7. _ DISCUSSION/ACTION ON THE 1993 GUADALUPE COUNTY APPRAISAL
DISTRICT PROPOSED BUDGET b BRIEFING FROM PAT FOX, CHIEF
APPRAISER.
Mrs. Fox presented a balanced budget of $609,265 for 1993. Mrs.
Fox discussed items of increases/decreases with the council.
Most significant was the decrease in capital improvements,
decrease in appraisal review board expenses and a salary
contingency. Mrs. Fox stated that the appraisal district would
not be in the collection business after September, 1992. The
Seguin ISD taxes will now be collected by the County. Mrs. Fox
stated that 1993 was a re -appraisal year for the county.
Page -2-
8. PRESENTATION ON PROGRESS OF THE PROPOSED REVISIONS OF THE
ZONING ORDINANCE AND DISCUSSION ON A MAPPING SYSTEM -
GERALD GARRISON, CHAIRMAN OF THE CIBOLO PLANNING & ZONING
COMMISSION.
Gerald Garrison addressed the Council on the progress of the P&Z
r!� in the revision of our Zoning Ordinance. The P&Z has working
� for six months reviewing and revising the ordinance and Changing
some of the zoning classifications. The commission has the
revisions complete with the exception of a zoning map. Mr.
Garrison came before the Council requesting funding of a CAD
mapping system for the city, first starting with a base and
zoning map and future increasing to utilities and etc. Mr.
Garrison had visited some of the area cities zoning commissions
as well as visiting with Ford Engineering on the type of mapping
system for Cibolo. David Walker had received a quote from City
Engineer, W.H. Mullins, for a base map and zoning on a CAD
system and stated that the cost would be $1000-$1200. The
consensus of the Council was to verify this with Mullins and
authorize him to complete this phase. Mullins had quoted 30-45
days for delivery.
9. APPROVE/DISAPPROVAL OF THE 1993 PROPOSED BEXAR METRO
9-1-1 OPERATING BUDGET.
Jeff Miller (Tex Farnsworth seconded) motioned to approve the
proposed budget. All approved. Motion carried. Councilmember
Farnsworth noted his compliments to Bexar Metro 9-1-1- and Jerry
Marshall for their "fine job".
-:, 10. APPROVE/DISAPPROVE PROPOSED ORDINANCE ESTABLISHING
GUIDELINES FOR TAX ABATEMENTS AND REINVESTMENT ZONES.
After the review of the proposed ordinance at the July 28th
meeting, discussion centered around the necessity of abatement
guidelines. Mayor Bauder called for a motion. Jeff Miller
(Mark Buell seconded) motioned to approve the ordinance. Voting
"aye": Jeff Miller, Mark Buell and Tino Delgado. Opposed:
Claude Smith and Tex Farnsworth. Vote carried 3-2.
11. COMMENTS BY COUNCIL MEMBERS.
Tex Farnsworth briefed the Council on the Randolph Chamber
Luncheon, Randolph EMS Regional Meetings. Mr. Farnsworth
discussed the recent airplane crash of the Stearman Bi -plane,
police doing a good job monitoring the new stop sign at FM 1103
& Main, ask about repair of a pothole by the post office street
and FM 1103 and about the repair estimates for Indian Circle and
Tomahawk.
12. COMMENTS BY STAFF..
None
_ 13. COMMENTS BY MAYOR.
1
None
14. ADJOURNMENT.
Tex Farnsworth motioned to adjourn at 9:15 P.M.
PASSED AND ADOPTED THE 25TH DAY OF AUGUST, 1992.
Sam Bauder, Mayor
ATTEST:
Ann Smith, City Secretary