Council starts Pilot Knob amendments

City Council voted 10-1 Thursday to start the amendment process on the affordable housing portion of the zoning ordinance that created the Pilot Knob planned unit development in Southeast Travis County. Council Member Don Zimmerman voted no.

Council initiated the amendments, which relate only to affordable housing and waiver of city development and water utility fees, after a majority of Council members said they had not understood what they were voting on last Dec. 17 when they approved the PUD ordinance and fee waivers.

Subsequently, Council members Ellen Troxclair, Leslie Pool, Ora Houston and Zimmerman sponsored a resolution to reconsider the December PUD vote. That turned into Thursday’s resolution, written by Mayor Steve Adler, with help from city legal staff and amended by Pool on Thursday.

Under the original ordinance, the water utility would not collect capital recovery fees on any of the houses or apartment complexes in the Pilot Knob project. The fees were initially estimated to total between $80 million and $100 million over 20 to 30 years. The most recent estimate is about $51.5 million from the water utility and $17.8 million from the Development Services Department.

Austin Water has estimated that waiving these fees will increase the average utility bill by $.64 per month to $.96 per month, depending on how long it takes to build out the subdivision.

Pilot Knob developer Brookfield Residential has already begun the development process, and Council’s action will not affect that process, according to the developer’s attorney, Richard Suttle.

Although Thursday’s resolution states that the Pilot Knob zoning ordinance will be amended “to clarify the City Council intent” regarding issues related to affordable housing and fee waivers, it also includes language designed to give the city more flexibility than the original ordinance in the use of those funds.

The resolution says the city has flexibility to appropriate all or part of the money “for any lawful municipal purpose, either during budget adoption or by budget amendment.” Adler argued that they already had the flexibility to do that, but his colleagues were not satisfied.

In addition, sending the matter back through the city process – first to city staff and then to the Planning Commission before it comes back to Council – will give staff and the developer time to work on the development agreement.

Under the original ordinance, that agreement would not have come back to Council. Those Council members who discovered they had approved something they didn’t really agree with will now have an opportunity to vote against the revised ordinance and the development agreement.

Suttle said that Brookfield Residential already has incurred $120,000 in waived fees and they were just waiting to find out where to direct the money.

Chief Financial Officer Elaine Hart said the money collected from the developer that would have gone to the utility or development services will be placed in a separate fund, not put into the affordable housing trust fund, as it might have been. Then Council can direct how the funds are used.

Jerry Rusthoven, development services manager in the Planning and Zoning Department, said it would take at least a month for the PUD revisions to make it back to the Planning Commission.

Affordable housing advocates from various organizations, including HousingWorks Austin, Foundation Communities and Habitat for Humanity, addressed Council on the need for more affordable housing. That question wasn’t really on the agenda on Thursday, but it will be in the months to come.

The attorney representing civic activist Brian Rodgers, who is suing the city over alleged violations of the Texas Open Meetings Act because the Dec. 17 agenda item did not mention fee waivers, said Thursday’s action would not resolve the problem cited in the lawsuit. After hearing a description of Thursday’s action, attorney Bill Aleshire said, “They have not changed the ordinance that was illegally adopted by the Council.”

Rodgers had offered to settle the lawsuit if Council would rescind its adoption of the ordinance and promise not to pass zoning ordinances that include fee waivers without notice on the agenda.

Aleshire also said, “I still have grave doubts that in their effort to do big, good things they are complying with the Local Government Code Chapter 395,” which relates to use of capital recovery fees. “I don’t think they have the authority to just decide that money that was collected for the purpose of offsetting infrastructure costs of water lines – that they can divert that money.”