Civic Insights: Who Pays for that Pipe, Part IV

(City council, school board, planning commission, county commissioners – these groups and several others represent us.  They do the day to day work of running our community. It is our responsibility to keep informed about their work so that we can help them represent us effectively.  “Civic Insights” by Jeffrey Vitarius is a regular feature of Act Locally Waco.  Its purpose is to help us understand decisions that shape our community so that we can participate effectively as informed, engaged residents of Waco. – ALW)   

By Jeffrey Vitarius

Back in September, we began this series with a broad look at what an impact fee policy is. A month ago, we focused on the legal process for establishing an impact fee. Two weeks ago, we took a look at pipe-related details of the report that serves as the basis for any impact fee policy in Waco. This week, we’ll take a look at the road side of things. Then we will wrap up next week, by looking at the policy the City considered on October 20th. 

As a bit of reminder, we are working our way through the following steps that were used to calculate maximum impact fees:

  1. Determine a service area
  2. Identify a way to connect demand for service to supply for service
  3. Calculate increased demand for services
  4. Review existing supply for services
  5. Determine and cost projects needed to meet increased demand
  6. Identify service unit to divide costs amongst projects
  7. Calculate maximum impact fees

1. Service Area 

As you may recall from two weeks ago, service areas are the geographic boundaries of the impact fee policy. Chapter 395 provides guidance on what these areas can be or must be. For roads, there is a unique limitation that is not applied to pipes. Service areas for roads are limited to about twelve miles across (technically a six-mile radius). The reasoning here is that one part of town should not have to pay for the roads of a different part of town. For pipes the network is considered as a united system, whereas with roads smaller service areas are required. Additionally, a service area for roads cannot extend beyond the city limits (excluding the Extra-Terratorial Jurisdiction).

How these twelve mile “areas” are drawn is left up to the city or county looking to begin impact fees. For Waco the service areas ended up as this map:

2. Connecting Demand and Supply 

We will once again need to find some measurement to connect a new house or business park (demand) to the existing system of roads and any potential expansions (supply). The measurement needs to be scalable to the variety of demands that will come from new development and be measurable for distinct projects and supply systems. For roads, that measure is vehicle-mile at the PM peak hour. That probably needs some unpacking.

In thinking about the kind of measure we need here, the first impulse might be to simply count the cars. How many vehicles use the road system at any given point in time? That would get us part of the way there, but would miss a critical question: how far are those cars going? A car going a couple miles to a local restaurant “uses” substantially less roadway than a car going ten miles to work. 

So we need to know not only how many cars are out there, but how far all of them are going. That is how we get to vehicle-miles. Ten cars going one mile has the same “vehicle miles” as one care going ten miles (10 cars x 1 mile = 10 vehicle-miles vs 1 car x 10 miles = 10 vehicle-miles).

On top of this, roadway use changes throughout the day, much like pipes (diurnal patterns). Road use peaks in the AM and the PM rush hours with less use in between. So, for the sake of impact fees the PM peak hour is used to measure vehicle-miles. 

3. Increased Demand

Projecting how much Waco will grow overall, and where that growth will occur follows the exact same pattern that was used for pipes. For roads, however, a simple breakdown between growth in residents and employees will not be enough to fully capture the impact on roadways. For roads, the kind of employment becomes important.

We can see this if we think about the differences between a small industrial center and a retail park. Both may hire the same number of employees, but they generate substantially different vehicle-miles. At the industrial center, employees arrive and leave plus the occasional shipment of goods. However, at the retail center not only do you have employees and shipments coming and going, you also have customers. 

To account for this our consultants, Freese and Nichols, broke employment growth down into basic, retail, and service categories. Each of these have a different impact on vehicle-miles. They then translated the number of new employees into anticipated square feet of use and bridged from that measure into vehicle-miles. For new residents, they looked at growth on a residences (rather than residents) basis.

Combining all this together they were able to project increased vehicle-mile demand for each of the service areas over the next ten years.  

4. Existing Supply and 5. New Projects

A factor of particular importance in looking at how the current roadways will be able to accommodate the increased pressures of growth is how much are they currently being used. Pipes are metered. Water users are billed based on how much demand they put on the current systems. So it is fairly simple to gather information about current use. Roads are different. Their use is not tracked nearly as closely. For the sake of this study, Freese and Nichols relied on traffic counts that were collected on thirty separate locations across the city in May of 2019. 

They then compared these counts to the traffic capacity of various road segments (think of these as the bits of road where the road stays the same, so the part of x drive that has four lanes is separated from the part that has two lanes). Capacity can normally be determined by looking at the design of the road. On a really rough level, you can see that I-35 has more capacity than Waco Drive which has more capacity than 10th Street. So looking at the current use and the design capacity of each roadway you can figure how many additional vehicle miles you can add in without needing to change the road (incidentally there are some roads that are already used more than their capacity, these “deficits” are ultimately taken out of the calculation of improvement cost since they are not a result of new demand). 

Much like with pipes, Freese and Nichols along with City Staff then identified a number of improvements that might be eligible for impact fee funding. Unlike pipes, these projects were assigned to specific service areas. Where a project crossed the boundary between two service areas, its costs were split between the two. These projects were then examined for the amount of vehicle-mile capacity they added to the service area. So long as this added capacity was less than the increased demand in that service area (see step 3) the entire cost of the projects for that area could be included in the impact fee calculation. Where the added capacity was more than the increased demand, only that portion of the projects that covered the increased demand could be considered. 

Combining all the allowable costs together, the report then applies the same 50% credit to the costs that we discussed with pipes. At the end of this process we have the total eligible impact fee cost – the total cost of increased capacity due to new demand after consideration of a credit for future taxes for each service area. 

6. Service Unit

Chapter 395 calls for the establishment of a service unit specifically. It defines this (in broad terms) as a standardized measure of use. Although vehicle-miles remain a good connector between supply and demand, it is difficult to determine the exact number of vehicle-miles any given development would generate. So, the study scales vehicle-miles on the basis of a single-family residence. Basically, we look at each development in terms of how it relates to the demand generated by a single-family residence. 

As was mentioned above, in general you can calculate the vehicle-miles produced by any given development based on its characteristics. We look at this in terms ultimately of trip total trip length. That is the number of vehicle-miles generated by the development. There are a number of interesting factors that go into this calculation (like trip generation, individual trip length, adjustments for diverted trips and local conditions), but we don’t have the space to get into all of these here. Instead we can go with a nice round number example. Let’s assume a single-family residence produces 4 miles of adjusted trip length and a retail store produces 12. The retail store will be scaled so that it can be measured as a multiple of a single family residence. With this example that multiple is 3 (12 divided by 4). 

Here are some of the real ratios to give you an idea of how they work in the study. A hospital is anticipated to generate 1.72 times the demand of a single-family residence for every 1,000 square feet it contains. A clinic, in contrast, generates 5.81 times the demand of a single-family residence for every 1,000 square feet.  These ratios allow for the generation of a comprehensible unit of measure to distribute the costs of the improvements. 

7. Maximum Impact Fee

Knowing our service unit and our total eligible costs, the final step can be taken. A projection is made of the total new service units anticipated by development (for roads this projection relies heavily on land use assumptions since different kinds of development vary greatly in terms of trip generation). This projection is made on the basis of the service areas we noted above. For example, service area five as zero anticipated growth in service units. Whereas, service area one anticipates 15,947 new single-family resident equivalents. The chart below completes the process. 

Here we see that after all these steps the maximum impact fee allowable by law for roads in service area one is $6 and for service area eleven is $1,169. These numbers are the final product of that could process we discussed at the very beginning of all of this. That is the process to determine what impact fees could be (as opposed to should be).  Whatever the outcome of the should process is, the impact fees cannot exceed these amounts for a single-family residence equivalent.


Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.

Civic Insights: Who Pays for that Pipe? Part III

(City council, school board, planning commission, county commissioners – these groups and several others represent us.  They do the day to day work of running our community. It is our responsibility to keep informed about their work so that we can help them represent us effectively.  “Civic Insights” by Jeffrey Vitarius is a regular feature of Act Locally Waco.  Its purpose is to help us understand decisions that shape our community so that we can participate effectively as informed, engaged residents of Waco. – ALW)   

By Jeffrey Vitarius

Back in September, we began this series with a broad look at what an impact fee policy is. Two weeks ago, we focused on the legal process for establishing an impact fee. This week we will be taking a look at pipe-related details of the report that serves as the basis for any impact fee policy in Waco. Next week, we’ll take a look at the roadside of things. Then we will wrap up on the 23rd, by looking at the policy the City will be considering on the 20th. 

The goal of this report (developed by Freese and Nichols, Inc) is to calculate the maximum impact fees that could be applied under Chapter 395 of the local government code. As we discussed two weeks ago this involves projecting what kind of development will occur, what the demands of that development will be, what projects will be needed to meet that demand, and how the cost of those projects can be divided up amongst the new developments (steps 2 and 4 of the legal process). How these calculations are conducted for pipes and roads are slightly different so we will take a look at each separately, but both follow a similar pattern of calculations. We will be addressing each step in detail below:

  1. Determine a service area
  2. Identify a way to connect demand for service to supply for service
  3. Calculate increased demand for services
  4. Review existing supply for services
  5. Determine and cost projects needed to meet increased demand
  6. Identify service unit to divide costs amongst projects
  7. Calculate maximum impact fees

Let’s start with the Pipes:

1. Service Area 

Service areas are the geographic boundaries of the impact fee policy. All the new demand, all the projects, and all the fees should be contained within the service areas. Chapter 395 provides guidance on what these areas can be or must be. For pipes, the service area is fairly straightforward. It includes the city limits of Waco along with Waco’s extraterritorial jurisdiction (ETJ). An ETJ can be thought of as a “buffer” around the city where the city can exercise certain kinds of authority. For Waco, the ETJ extends approximately five miles beyond the city limits unless there is another city in the way. For example, Woodway is not in the City of Waco’s ETJ since it is its own city.  

2. Connecting Demand and Supply 

Here we need to find some measurement to connect a new house or business park (demand) to the existing system and potential projects (supply). The measurement needs to be scalable to the variety of demands that will come from new development and be measurable for distinct projects and supply systems. For pipes that measure is millions of gallons per day (MGD). So, for a new housing development, MGD measures the millions of gallons of water needed each day and the millions of gallons of wastewater produced each day. 

Water systems have a unique difficulty in that they are not used consistently over days and years. This makes sense if you think through your personal use of the water system. In hot dry summers you are more likely to be watering a lawn than in cold or wet winters. You are unlikely to be using the water system at 1:00 am, but you are likely to be washing your clothes, or taking a shower, or washing your hands sometime in the early morning or afternoon (for those interested these daily patterns are also called “diurnal patterns”). 

Due to these daily and annual changes, looking at average MGD does not give a full picture of the demands placed on the water system. Instead we have to look at maximum MGD as well. That is the maximum number of millions of gallons used on any one day during the year. Interestingly, the report uses a “maximum day to average day” ratio of 1.7 meaning it anticipates that on average a maximum day consumes 1.7 times as much water as an average day. 

Finally, to calculate increased demand over time the report calculates average MGD per resident and employee (for water its 135 gallons per day per resident and 115 gallons per day per employee). There are some additional complications to the wastewater system, but the process is largely the same.

3. Increased Demand

Above we were able to tie increased demand for pipes to increases in population and employment. Now we need to figure out what that increase actually is and how it is geographically spread out (this impacts the specific projects that will need to be undertaken).

As we touched briefly on two weeks ago, we have to start with a broad look at how much Waco will grow in terms of population and employment into the future. To do that, the study begins with a look at the past. Between 1960 and 2010 Waco’s population grew on average 0.49% per year (the technical metric for those interested is compound annual growth rate). Between 2010 and 2020 the population grew by 1.11% per year. Additionally, the number of jobs in Waco was on average between 45-48% of the total population. So, for about every two people there was about one job. Due to this ratio being fairly constant, jobs can be considered to have grown at approximately the same rate as population.   

Freese and Nichols then (in consultation with the Waco Capital Improvements Advisory Committee) took a look at a number of different growth rate scenarios and ultimately determined that 1.2% seemed like the most reasonable projection of population and employment growth in Waco for 2020-2040.  Additionally, they noted growth was likely to be substantially greater in the ETJ (as there is more room for development in this area). For the ETJ they projected between 4.9% and 5% population growth and 4.06% and 5.74% employment growth. Now that we have general growth rate numbers, we need to understand how that growth is spread out geographically. 

To divide growth geographically, the report uses “traffic analysis zones” (TAZs). These are geographic units used by the Waco Metropolitan Planning Organization (a good topic for a different time) for demographic analysis due to their internal similarity (areas within TAZs are similar to each other) and traffic generation. Here is a map of some of the TAZs within Waco. This map does not come from the impact fee study,but should give some understanding to what TAZs are.

Freese and Nichols along with City Staff analyzed each TAZ. They looked at current development (what is already there), the potential for development (is there a big open field?), projected land use, and any specific projects that were known to be in the pipeline. Based on this analysis they were able to project growth in employment and population within specific TAZs. Here is an example of the result:

A quick side note, the land use assumptions used in this analysis come from Waco’s Comprehensive Plan 2040. This was the same plan that identified the impact fee policy as critical. 

Now we know: a) expected new residents and employees in each TAZ and b) expected new pipe usage based on new residents and employees. Combining the two we know how much water/wastewater will be needed and where it will be needed. 

4. Existing Supply &  5. New Projects

Now that demand is known geographically, Freese and Nichols along with City Staff were able to identify where the existing system would need to be upgraded to meet with the projected demand (this process involved a review of other recent studies focused on the subject). The result is a list of twenty-three water projects and seventeen wastewater projects. Here are some examples: a 16-inch water line at Peach Street, a 1.0 MG ground storage tank at the airport, a wastewater treatment plant in China Spring, and a lift station expansion at TSTC. Costs for each of these projects were calculated based on the rules established by Chapter 395 (which is fairly specific about what kinds of costs may or may not be included).

Since impact fees cannot be used to support existing development or development that will take place over 10-years from now, the report takes each of these projects and determines what percentage of the project’s capacity would be used right now, and what percentage would be used in 2030. For example, the 16-inch water line at Peach Street would be used at 25% capacity today and 60% capacity in 2030. That means 35% of the project cost can be considered to be the cost of new development between 2020 and 2030.

Combining all the allowable costs together, the report then applies a 50% credit to the costs. This credit is meant to represent the future tax revenues that will come from the increase in development. Essentially it represents how the new development will “pay” for these improvements through the regular tax process rather than the impact fee. 

At the end of this process we have the total eligible impact fee cost – the total cost of increased capacity due to new demand after consideration of a credit for future taxes (water – $23,013,034, wastewater – $45,587,622). But how do we divide those costs up so that individual developments pay for them as they come into existence?

6. Service Unit

Chapter 395 calls for the establishment of a “service unit.” It defines “service unit” (in broad terms) as a standardized measure of consumption. Since it would be virtually impossible to determine the exact number of residents or employees a development would have, we cannot use the same metric we used to connect demand and supply (MGD per resident and MGD per employee). 

Ultimately, for this study the connection of a single-family residence was used as the base service unit. The study then measures all other kinds of water and wastewater connections on the scale of single-family residence equivalents (on the basis of average flow). For an example a business park connection might be considered equivalent to ten single-family residences since ten times the amount of water flows through it (this is not a number used in the study, but rather a nice round one for an example). 

7. Maximum Impact Fee

Knowing our service unit and our total eligible costs, the final step can be taken. A projection is made of the total new service units anticipated by development (in much the way step 3 proceeded). In the case of water and wastewater that number is 12,753. That is, the study anticipates that 12,753 “single-family resident connection equivalents” will be added to the water and wastewater system over the next ten years. With that number in hand, it is a simple matter of division to determine the maximum impact fee. The chart below completes the process. 

Here we see that after all these steps the maximum impact fee allowable by law for water is $1,804 and for wastewater is $3,574. These numbers are the final product of that could process we discussed at the very beginning of all of this. Whatever the outcome of the should process is, the impact fees cannot exceed these amounts for a single-family residence connection equivalent.


Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.

Civic Insights: Understanding what areas of town are eligible for Community Development Block Grants (CDBG)

(City council, school board, planning commission, county commissioners – these groups and several others represent us.  They do the day to day work of running our community. It is our responsibility to keep informed about their work so that we can help them represent us effectively.  “Civic Insights” by Jeffrey Vitarius is a regular feature of Act Locally Waco.  Its purpose is to help us understand decisions that shape our community so that we can participate effectively as informed, engaged residents of Waco. – ALW)   

By Jeffrey Vitarius

Two weeks ago we tackled breaking down a sentence about the City Council’s Community Development Block Grant (CDBG) public hearing. During the course of the City Council’s review of that item, Council Member Sabio raised a question regarding this map of CDBG eligible areas:

It was noted at the meeting that the borders included above come from the federal government and are based on census information. I thought it might be interesting to find out the how and why behind this map. Let’s jump right in.

The CDBG program was created by the Housing and Community Development Act of 1974 (HCDA). Section 104(b)(3) of the act identifies the three “national objectives” of the program:

  • Benefiting low- and moderate-income persons,
  • Preventing or eliminating blight, or
  • Meeting an urgent need (this one is a little complicated)

CDBG funding has to go towards achieving one of these objectives. 

As noted in the Department of Housing and Urban Development (HUD)’s Guide to National Objectives and Eligible Activities for CDBG Entitlement Communities benefiting low- and moderate income persons “is usually spoken of as the most important national objective of the CDBG program because of the related  requirement that the vast majority of CDBG expenditures must be for activities that meet this objective.” Translation, most programs are directed towards the benefiting low- and moderate-income persons objective. Also, as an FYI, entitlement communities are local governments that develop CDBG programs and receive funding to implement them (like the City of Waco). 

The question then becomes how does an “entitlement community” establish that a particular program or project is benefiting low- and moderate-income persons. HUD has outlined four different ways to meet this goal. A program can simply serve a limited clientele. If a particular program only or mostly provides services to low- and moderate-income folks, then it can easily be said to be fulfilling the national objective.

But what if a program or project doesn’t serve specific people? What is the “clientele” of a park? This is where the “area benefit” criteria comes into play. For this method the “entitlement community” identifies the service area of a program or project. If most of the residents (defined as 51%) in that service area have a low- or moderate-income the project can be considered to fulfill the national objective.

This possibility opens up a host of other questions. What income level makes a resident a low- or moderate-income? How do you determine a service area? What data can be used to determine if an area has low- or moderate-income residents? We’ll tackle each of these questions in more detail below. But first  let’s take one quick sidestep to the remaining two criteria. Housing development and job creation programs are unique enough to warrant their own criteria. We do not have the space this week to delve into those criteria, but it’s worthwhile to know they are out there. 

Back to our questions.

What income level makes a resident a low- or moderate-income?

Section 102 of the HCDA defines low- or moderate-income as 80% of the median income in the area. So first you determine an area’s “median family income.” This is the income you would find at the exact middle of Waco’s income distribution (for the math folks, we are looking at median here rather than mean or average). If you put all the family incomes from Waco in order it would be the one at the middle of your list. HUD identifies this as $65,700 in Waco. 80% of that number is approximately $52,550. Once you scale this for family size (larger families have a higher income threshold), you can determine if any given resident is low- or moderate-income. More details on these thresholds can be found at this useful tool put together by HUD. 

How do you determine a service area?

Service area is the kind of idea that makes a lot of sense in theory and is really hard to define in practice. If you think back to our park example, you can probably imagine what the area served by that park might be, but if you had to sit down and draw it out on a street grid, it would get difficult fast. How far away is walking distance? Do we consider residents who can drive? Do busy streets separate “service areas” from one another?

As a result of this complexity HUD has placed the responsibility of determining service areas on “entitlement communities.” The guide I noted above states that “HUD will generally accept a grantee’s determination unless the nature of the activity or its location raises serious doubts about the area

claimed by the grantee.” Basically, as long as the service area doesn’t “look fishy” HUD will likely accept it as reasonable.

The range of what is or isn’t reasonable is very broad here. Based on the information in the City’s consolidated and annual plans (see this previous post for more info on what those plans are) it looks like Waco focuses on “block groups.” These are the smallest geographic units used by the census. You can think of them as literal groups of city blocks. According to the census, block groups typically have between 3,000 and 6,000 residents. The map at the beginning of this post breaks down Waco into these “block groups.”

What data can be used to determine if an area has low- or moderate-income residents?

So thinking of a “typical” block group of 5,000 residents. We now know that it is considered a low- or-moderate income service area if 2,550 (51%) of those residents reside in families (the distinction between families and households is interesting, but complicated and out of our reach here) that make less than 80% of median income for Waco. So how do we actually know if that is the case?

There are two ways HUD has endorsed for a community to accomplish this. The first is to use HUD’s own data (the Low Moderate Income Survey Data [LMISD]). The second is to conduct their own survey of residents following certain HUD guidance and minimum standards. Waco uses HUD’s data. That data can be found using this GIS application provided by HUD. On that application you can draw out service areas or just take a look at block groups and see which ones clear the 51% threshold (HUD provides a useful video introduction to the application here).  

If we look at Waco’s consolidated five-year plan we find a section focused on geographic distribution (AP-50). In that section the city notes:

The City allocates infrastructure and facility improvements (not related to special needs populations [remember our limited clientele option]) within the CDBG Target Areas — those census block groups with 51% or more low to moderate-income residents. 

This brings us back to the map at the top. There we find all of the block groups in Waco where at least 51% of the residents make less than 80% of Waco’s median income. These areas are the focus of much of Waco’s CDBG funding. Over time, as income levels move and data changes, this map will change too.


Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.

Civic Insights: Who Pays for that Pipe? Part II

(City council, school board, planning commission, county commissioners – these groups and several others represent us.  They do the day to day work of running our community. It is our responsibility to keep informed about their work so that we can help them represent us effectively.  “Civic Insights” by Jeffrey Vitarius is a regular feature of Act Locally Waco.  Its purpose is to help us understand decisions that shape our community so that we can participate effectively as informed, engaged residents of Waco. – ALW)   

By Jeffrey Vitarius

Two weeks ago, we took a broad look at impact fees as a policy. In that post, I noted that Waco is in the transition between the could part of the adoption process and the should part of the adoption process. This week, let’s dive into some of the details of the “could” work that has already been done.

The impact fee adoption process (both could and should)is governed by Local Government Code Chapter 395 – Financing Capital Improvements Required by New Development in Municipalities, Counties and Certain Other Local Governments. The local government code can be seen from a high level as “rules for cities and counties.” Different chapters of the code deal with different issues. For example Chapter 372 provides the rules around how PIDs are established and maintained, Chapter 102 deals with municipal budgets, and Chapter 309 addresses arts and entertainment districts. 

Chapter 395 lays out in detail how a City or County could go about establishing impact fees. It, for example, defines capital improvements as facilities that are expected to last at least three years, are owned and operated by a “a political subdivision” (read city or county, though there are other kinds of political subdivisions. Incidentally this is also defined in Chapter 395), and are water supply, treatment, and distribution facilities; wastewater collection and treatment facilities; storm water, drainage, and flood control facilities (pipes), or roadway facilities (roads). 

Chapter 395 identifies a six-part process in adopting impact fees (more details on these steps below):

  1. Establish an Advisory Committee 
  2. Develop a Capital Improvements Plan
  3. Hold a Public Hearing on Land Use Assumptions and Capital Improvements Plan and Potentially Approve these Items
  4. Calculate Maximum Impact Fee Per Service Unit
  5. Hold a Public Hearing on Impact Fees 
  6. Potentially Approve Adoption of Impact Fees

Right now Waco is between steps four and five. Step five is scheduled with a public hearing on October 6th and based on Chapter 395 step six would have to occur within thirty days of that public hearing. Let’s take a look at each of the steps that have already occurred in a little more detail.

1. Establish an Advisory Committee

Chapter 395 requires that the “governing body of the political subdivision” (in this case the City Council of Waco) establish a committee to weigh in throughout the impact fee adoption process. The code makes it clear that this committee needs to include at least one voice from the real estate, development, or building industries to speak into the impact fee process. These are the industries most likely to bear the cost of an impact fee. The code also tasks this committee with providing advice on the adoption of land use assumptions, file written comments on the capital improvements plan (more on that below), and reviewing the progress of the capital improvements plan over time. 

The City Council created such a committee on July 16th 2019 and it held its first meeting on July 23rd, 2019. Since that time it has met regularly to review and provide input to this process.

2. Develop a Capital Improvements Plan

The development of the Capital Improvements Plan is likely the most complicated part of the entire impact fee process. If you remember back to the post two weeks ago, I used the simple example of a new set of homes on what used to be a farm. Under those conditions it is easy to trace certain infrastructure improvements to that specific development. However, in reality, the city needs to be able to project (theoretically) all of the developments that are going to take place over the next ten years andthe capital improvements that go along with those developments. That difficult projection work (which we will take a closer look at another time) is compiled into a Capital Improvements Plan. For right now we will just take a summary view.

From a high level you can think through the process of developing this plan in the following way. First, you need to make some assumptions about land use. You need to know how it is anticipated that land not currently developed will be used if developed. There is a big difference between a farm turning into the Central Texas Marketplace and the same farm becoming a set of one-story single-family homes. These assumptions are so critical to the process that they are explicitly listed as being part of the Capital Improvements Plan public hearing.

Once you identify how land is likely to be used, you can work on projecting how much different parts of town will grow. You combine the amount of growth and the land use assumptions together to figure out what kind of growth will occur (once again the Central Texas Marketplace and single-family suburbs are very different). Knowing what kind of growth is projected to occur, lets you know how much increased demand for water, wastewater, and roadways there will be. 

Next, you compare projected need against the capacity of the current system to see what projects will be needed by the anticipated demand. Where will you need to increase the size of a pipe or lay down a new road? Finally, you establish projected budgets for the needed projects. The result (of this and some additional analysis noted below) is a two-hundred and thirty-four page study. In Waco, this work was conducted by Freese and Nichols, Inc with input from the advisory committee and various City Departments. Once this analysis is complete it is ready to be reviewed by the public and potentially approved by City Council. 

3. Hold a Public Hearing on Land Use Assumptions and Capital Improvements Plan and Potentially Approve these Items

The City held a public hearing on the Land Use Assumptions and Capital Improvements Plan on March 17th, 2020.  At that time there were no public comments. The City Council passed RES-2020-237 approving the Land Use Assumptions and Capital Improvements Plan at its next regular meeting on  April 7th, 2020

4. Calculate Maximum Impact Fee Per Service Unit 

Once the Land Use Assumptions and Capital Improvements Plan are approved a calculation can be done that (in the broadest sense) divides the cost of the capital improvements needed by the number of new “service units” (think individual houses) generated by new developments. The result is the maximum impact fee that can be imposed per service unit. There are some details regarding this analysis that we won’t get into this week, but this provides a high-level overview. This analysis is also included in the lengthy study linked to above. 

This calculation was presented to City Council on August 18th, 2020. At that time the council discussed the process. Concerns were expressed on both sides of the policy (that implementation might discourage development or that not implementing would burden resident taxpayers with the cost of these improvements). It was noted that peer cities had implemented impact fees. 

That gets us caught up with the process so far. I hope to be back to with a more detailed look at that Freese and Nichols study around the time of the public hearing on the subject.

Meeting Basics – Waco Capital Improvements Advisory Committee – 09/23/20

  • Regular Meeting – 12:00 pm
  • For the full agenda click here

Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.

Civic Insights: Community Development Block Grants

(City council, school board, planning commission, county commissioners – these groups and several others represent us.  They do the day to day work of running our community. It is our responsibility to keep informed about their work so that we can help them represent us effectively.  “Civic Insights” by Jeffrey Vitarius is a regular feature of Act Locally Waco.  Its purpose is to help us understand decisions that shape our community so that we can participate effectively as informed, engaged residents of Waco. – ALW)   

By Jeffrey Vitarius

This week we are going to try to unpack the following sentence: “The City Council held a public hearing as part of a series of public hearings and eventually action regarding the 2020-2021 Annual Action Plan for Community Development Block Grant (CDBG) and HOME Investment Partnership Program (HOME) funding.” Let’s jump right in.

What is Community Development Block Grant (CDBG) and HOME Investment Partnership Program funding?

In the broadest sense, these two programs are funding sources from the federal government to local governments, like the City of Waco, to accomplish certain federal priorities. It is theoretically a way for the federal government to pay for services and projects that advance federal goals without directly managing the programs themselves. 

The City’s Consolidated Plan (more on that later) provides a good summary of the goals of each of these programs. The CDBG program is aimed at developing urban communities with decent housing, suitable living environments and economic opportunities for low and moderate-income folks. The HOME program has a more focused mission and is aimed at developing affordable housing (both to rent and to own) for low and moderate-income folks. 

In Waco this funding has gone to:

  • Rehabilitation of owner-occupied housing (including items like roof repairs)
  • Code compliance inspections (making sure that housing is “in code” with the standards the city uses to assess livability)
  • Job training
  • Emergency Housing
  • Down Payment Assistance
  • Rental Assistance
  • Park Improvements (including at Wilbert Austin Sr. Park, Kendrick Park, Dewey Park, Oscar DuConge Park, South Waco Park, North Waco Park, and Bell’s Hill Park)

For the 2020-2021 fiscal year the Annual Action Plan is anticipating funding of $2,082,261. This is less than 0.5% of the City’s overall budget, but the programs funded in this way are critical to some of Waco’s most challenging problems. 

The Consolidated Plan notes that the greatest of these challenges is housing affordability. Generally speaking, housing is considered affordable if housing costs are less than 30% of income. In Waco, 39.1% of households spend more than 30% of their income on housing and 21.06% of households spending over 50% of their income on housing.

What is a Consolidated Plan?

The Consolidated Plan is a long-term (five years) look at how the City will use funding from the CDBG and HOME programs to pursue the goals of those programs. The plan breaks down how it was developed, what needs it identifies, how it anticipates meeting those needs, and what resources and partners will be needed in pursuing the programs it lays out. 

The development of a Consolidated Plan is a requirement for pursuing this kind of funding, as is the development of Annual Action Plans.

What is an Annual Action Plan?

An Annual Action Plan takes the five-year nature of the Consolidated Plan and looks at what will occur over the next year. This week, the public hearing was focused on the 2020-2021 Annual Action Plan which is the second such plan under the 2019-2023 Consolidated Plan. 

Why did the City Council hold a public hearing on the Annual Action Plan?

Given that the services and projects funded by the CDBG and HOME programs are meant to serve the needs of the public, the development of both Consolidated Plans and Annual Action Plans require a good deal of public input. The need for “citizen participation” is so great in these programs that generating this participation gets a plan of its own

As Raynesha Hundell, Interim Director of Community Services, presented to City Council this week, the City has pursued citizen input through a number of different routes. While preparing the annual action plan they met with neighborhood associations and gathered approximately one-hundred and sixty surveys on the matter.  They used this input to identify priorities for this year’s action plan. 

Now that an annual action plan has been drafted, the citizen participation plan requires that there be a thirty-day period where the public may review and comment on the Annual Action Plan. That thirty-day period began on the 10th of this month and will conclude on the 9th of October. The participation plan also requires that a public hearing occur during the thirty-day window for public input. The hearing this week was that hearing.

So, let’s go back to our initial sentence: “The City Council held a public hearing as part of a series of public hearings and eventually action regarding the 2020-2021 Annual Action Plan for Community Development Block Grant (CDBG) and HOME Investment Partnership Program (HOME) funding.” I hope that is a little clearer now. As I feel like I keep saying, there is a lot more to unpack in this topic. The presentation that was made to council this week serves as a great introduction. 

What happened at City Council?

City Council was broadly supportive of the draft Annual Action Plan and its program-based approach to distributing funding. Additionally, Council Member Sabido asked follow-up questions regarding the map determining where CDBG and HOME funds could be spent (another interesting topic for a different day). 

What comes next?

  • To October 9th – Public Comment Period Continues
  • September 15th – Draft Annual Action Plan Public Hearing
  • October 6th – Draft Annual Action Plan Public Hearing
  • October 20th- Annual Action Plan will return to City Council for approval
  • October 23rd – Annual Action Plan will be submitted to the Department of Housing and Urban Development (HUD) that oversees the CDBG and HOME programs

Other Interesting (to me) Items From the Agenda

  • The planning items that  were reviewed by the Plan Commission back in August have now made it to the City Council for their review. 
  • Now that the budget has been passed, there are a number of resolutions concerning contracts the City will need as it pursues the priorities of that budget. These range from procurement of Microsoft 365 to repairing the elevator at the Zoo’s administration building. As City Manager Bradley Ford noted during the City Council Meeting this week, “This agenda is a great one, as well as the first one in October, to read in order to get an understanding of the breadth and depth of municipal operations.”
  • The Downtown PID Service and Assessment Plan we discussed two weeks ago has returned for final approval. 

Meeting Basics 

  • Work Session – 3:00 pm / Business Session – 6:00pm
  • To watch the recorded session click here (City of Waco Cable Channel, wccc.tv)
  • For the full agenda click here
  • For the meeting packet with the documents pertinent to the meeting click here

Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.

Civic Insights: Who Pays for that Pipe? Part I

(City council, school board, planning commission, county commissioners – these groups and several others represent us.  They do the day to day work of running our community. It is our responsibility to keep informed about their work so that we can help them represent us effectively.  “Civic Insights” by Jeffrey Vitarius is a regular feature of Act Locally Waco.  Its purpose is to help us understand decisions that shape our community so that we can participate effectively as informed, engaged residents of Waco. – ALW)   

By Jeffrey Vitarius

What is a fair way to pay for the infrastructure improvements required for new developments? That is the question at the heart of a policy the city has been considering since January 2019: impact fees.

In 2016, the City adopted a comprehensive twenty-five year plan that noted that “the question is not whether Waco will grow, but what form will this growth take. It is important that Waco grow in a manner that is economically, environmentally, and culturally sustainable.” One of the critical challenges this plan identified was that of “increasingly dispersed development,” development occurring farther and farther away from the city’s core. 

Why would this be a challenge? Let’s start with the basics. Imagine a set of new homes on a few acres of land that used to be a farm. This new development will need a few things to thrive, for example, roads to connect it to the rest of the city, and pipes to carry water in and wastewater (also known as sewage) out.

Even if there are already roads and pipes in the area, it may not just be a matter of connecting the new development to the existing network. Our new batch of homes will mean increased volume of cars, water, and wastewater in that part of the city. The roads and pipes around the development may need to be upgraded to handle the increased volume. We call these kinds of projects –  to construct new roads and pipes or upgrade existing roads and pipes for more volume –  “infrastructure improvements.” There are plenty of other kinds of infrastructure improvements, but for the purpose of discussing impact fees, we will focus on these.

It is one of the city’s jobs to construct these pipes and roads. The challenge comes in how to pay for these projects. The city already has a substantial inventory of roads and pipes that it needs to monitor, repair, and eventually replace.

How can the city pay for all of its current obligations much less the additional demands from new development? As the twenty-five year plan identifies “given the limited capacity and deteriorated condition of existing infrastructure, the City cannot afford to provide subsidies to encourage development at suburban densities in rural areas.” In plain English that means: our new set of suburban houses on what used to be farmland creates a financial difficulty for the city. Enter the impact fee.

The concept of the impact fee is fairly straightforward though it can get complicated in implementation and practice. The twenty-five year plan explains that impact fees serve as “a means of ensuring new development pays an equitable share of the costs associated with the construction and expansion of public infrastructure needed to service new development…Impact fees shift some of the cost of financing public facilities [roads and pipes] from the general taxpayer to the direct beneficiaries of these facilities [roads and pipes].”

In other words, impact fees move the cost of improvement from the city generally (where it is paid by existing taxpayers) to the developments that are more directly served by those improvements. If we think back to our former farm, theoretically impact fees would require that the developer pay part of  the cost of the roads and pipes. The use of the phrase “equitable share” in the quote above hints at the large complicated question around this simple policy idea. At what amount is an impact fee fair?

Within that question are two considerations, the first is a matter of analysis and the second is a matter of policy. First the city has to determine how much impact fees could be to cover the cost of anticipated development. Then the much more difficult question of how much the impact fees should be can be addressed. In Waco we are in the transition from the could part of this process to the should part of this process. 

In July of 2019, the city formed the Capital Improvement Advisory Committee to review the impact fee question (among other things) and make recommendations to the City Council on how to best proceed with this policy.  That committee met this week to discuss the conclusion of the could part of the process (maximum fee calculations) and the start of the should part of that process (policy considerations). 

Like many of the topics we take a look at in Civic Insights, this one is complicated and will take a few posts to get through. It looks like the City Council will be holding a public hearing on this question on October 6th. I will aim to get us caught up with the could part of the process by then. 


Meeting notes:

  • Waco Capital Improvements Advisory Committee met on 09/09/20 – For the full agenda click here  

Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.

Meeting Insights: Waco City Council Meeting – 09/01/20

By Jeffrey Vitarius

(Civic meetings happen in Waco every week – city council, school board, planning commission, and countless others.  Decisions from these meetings affect our lives every day.  Many of us are curious about these meetings, but to be honest, it’s just too hard to decipher the jargon and figure out what’s going on and why it’s important.  Act Locally Waco is trying something new in August! Jeffrey Vitarius follows civic meetings for his work and out of personal interest.  Each week in August he will pick a meeting in our community and highlight one or two items from the agenda to translate from “government-ese” into language we can all understand.  We’re calling the series “Meeting Insights.” Let us know what you think! If you enjoy it, we will try to keep it going!  — ALW )

The Waco City Council meets every other Tuesday. The work session starts at 3:00, that is where most of the explanation and discussion happens.  The business session is at 6:00, that is when the council takes action (votes).  The public is invited to attend either or both of these sessions, although, for the time being due to COVID-19, that attendance is virtual through the Waco City Cable Channel (WCCC.TV/live) with public comments sent in ahead of time. Today we will highlighting Public Hearing Agenda item 2…the Downtown Waco Public Improvement District.

Meeting Basics 

  • Work Session – 3:00 pm / Business Session – 6:00pm
  • To watch the live stream click here (City of Waco Cable Channel, wccc.tv)
  • For the full agenda click here
  • For the meeting packet with the documents pertinent to the meeting click here. Quick note on page numbers: the numbers I will be referring to below are the “packet page numbers” found on the bottom right corner of each page of the meeting packet. These do not always match the number of the page in the pdf. One neat aspect of the packets the city builds for city council meetings is that you can click on the agenda item on the agenda page of the packet and it will take you directly to the relevant materials. 
  • Details on how to provide public comment are listed in the agenda

What’s in a PID? – the Downtown Waco Public Improvement District

Public Hearing Agenda Item 2 – PH-2020-584 Conduct a public hearing and consider an ordinance approving and adopting an updated Service and Assessment Plan, including the Assessment Roll, for providing improvements and/or services in Waco Public Improvement District Number One during Fiscal Year 2020-21. FIRST READING

Two weeks ago we took a look at the Waco Tourism Public Improvement District (TPID) and its service and assessment plan. This week, the service and assessment plan of an entirely different kind of Public Improvement District (PID) is on the City Council agenda.

As I explained in the previous post, a PID allows for the collection of an assessment (more on that below) in a certain geographic area to provide additional services to the property owners in that area. The downtown PID focuses on providing additional services to Downtown Waco. Let’s jump into how the PID is funded and what services it provides. (Full disclosure, I spend a substantial portion of my day job administering and managing some of the programs of the Downtown Waco PID so I may be a little biased.) 

Every property within the PID (there is a handy map below) pays an extra $0.10 per $100 of property value to the PID. This is the “assessment.” These assessments are pooled together to pay for services that benefit Downtown Waco collectively. The service and assessment plan describes the services the PID will provide in a given year. The service and assessment plan for 2021 can be found on pages 47-61 of the meeting packet.

The services the PID provides to Downtown Waco fall into a few different categories. This list is not everything the PID does, but it should give you a pretty good idea:

Clean and Safe – This is the biggest one it is generally over 50% of the budget each year and basically boils down to keeping the public areas of Downtown…well…clean and safe. This can look like landscaping services, using lasers to chase birds out of trees, washing away bird droppings, and painting over graffiti. It also includes a reporting service, which is actually a person whose name is Dave. You can find him riding around Downtown in the Clean and Safe Team golf cart making sure issues are taken care of. If you happen to see him you should say “hi” (socially distant and masked of course), he is a pretty friendly guy. 

Beautification – From time to time the PID funds efforts to make Downtown even more inviting than it already is. If you noticed the red bows along Austin Avenue and Elm Avenue last holiday season, those were a PID project.  The banners identifying the different “districts” of Downtown are a PID project. The PID has also been one of the funders for ARTprenticeship, which has created murals on the Brotherwell building on Bridge Street and along Jackson Avenue between 2nd Street and University Parks

Marketing – The PID operates a website and social media accounts that give Downtown Waco a voice, elevate the efforts of all the folks that make up Downtown, and encourage others to visit. You can find the website (downtownwacotx.com) and you may want to follow the social media (Downtown Waco) to find out the latest about what is going on Downtown.

Programming – The PID has historically supported the Waco Wonderland event. The PID also looks for interesting and innovative ways to encourage or support other kinds of programming that make Downtown Waco an interesting place to visit time and time again. 

Looking through the services, one general theme is that the offerings are for the benefit of all of Downtown. Each of the property owners benefit from Downtown being clean, beautiful, marketed and full of events. The reason for a PID like this is to provide these services that are best accomplished collectively by all the property owners together. 

In terms of process, the property owners provide input on these services through the Downtown Waco Public Improvement District Advisory Board (or PID Board). This board is made up of representatives of at least 50% of the taxable area and at least 50% of the taxable value within the PID. Each year, they review and recommend the service and assessment plan that is then sent to City Council for final approval. As you now know, it’s on the agenda this week. The property owners and other stakeholders also assist the PID by sitting on a variety of committees that oversee different service areas. Most of the day-to-day work is carried out by City Center Waco (where I am employed) and its contractors. This is just one of City Center Waco’s functions, but that is a topic for a different day. 

Over the last five weeks we have touched on a number of topics and board/committees/councils. I thought it might be a good idea to tie them all together with a single example. Let’s say you think it would be a good idea to build a hotel in Downtown Waco. The property you are looking at has recently become much more attractive now that trains will no longer be blaring their horns thanks to the TIF. Perhaps the property is not zoned to allow for a hotel, so you file for a zoning change that ends up before the plan commission. Perhaps you seek TIF funding for some portion of your project. If all goes right, a handful of years down the line you end up with a properly zoned, mostly quiet, fully functional hotel. Each year your guests pay 2% of their room charges to fund the TPID that markets Waco’s hotels across the United States. Meanwhile, you, the property owner, pay $0.10 per $100 towards keeping your part of town clean, safe, beautiful, marketed and programmed. All the while, some portion of the taxes you pay to the City, County, Community College, and School District end up back in the TIF paying for further improvements and developments.

Thanks for coming along with me over the last month. I have appreciated the opportunity to take a closer look at the beautiful, complicated, and ever developing world that is Waco and its public meetings. I hope this has been helpful to you and encourages you to zoom in on whatever local topic sparks your interest. I plan to keep this going as long as I can and I have a few additions (hopefully) taking form in the back of mind. See you again next week. 

Other Interesting (to me) Items From the Agenda

  • A presentation on the Bridge Street project is scheduled for the work session. This is another project CIty Center Waco has been working on and should be interesting.  
  • Budget Watch – we are nearing the end of the budget process. Here is a brief review of how we got here:
    • July 21st – city staff talked through preliminary budget projections with City Council
    • August 4th – City Council discussed the tax rate and set the public hearing for this week (we talked about the tax rates here)
    • August 25th – City Council voted on a resolution to establish when they would take a final vote on the tax rate
    • September 1st – there is a public hearing on the budget followed by two votes. The first will approve the budget and the second will authorize City Manager to spend (formerly expend) certain portions of that budget. This allows City management to pursue certain standard expenses (think payroll and benefits) without having to come back to City Council.
  • There are two resolutions and one ordinance related to the movement of Texas Meter and Device Company from Downtown Waco to a site to be purchased from the Waco Industrial Foundation. This is related to that potential high rise development that might be under consideration for the former Texas Meter and Device Company location. This is an interesting look at the various tools in the City’s economic development tool kit. 

Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.

Meeting Insights: Plan Commission – 08/25/20

By Jeffrey Vitarius

(Civic meetings happen in Waco every week – city council, school board, planning commission, and countless others.  Decisions from these meetings affect our lives every day.  Many of us are curious about these meetings, but to be honest, it’s just too hard to decipher the jargon and figure out what’s going on and why it’s important.  Act Locally Waco is trying something new in August! Jeffrey Vitarius follows civic meetings for his work and out of personal interest.  Each week in August he will pick a meeting in our community and highlight one or two items from the agenda to translate from “government-ese” into language we can all understand.  We’re calling the series “Meeting Insights.” Let us know what you think! If you enjoy it, we will try to keep it going!  — ALW )

The City of Waco Plan Commission meets three times each month. They hold work sessions on the 3rd Wednesday of each month at noon and the 4th Tuesday of each month at 6:00 pm, that is where a lot of the explanation and discussion happens.  They hold one business session each month on the 4th Tuesday at 7:00 pm, that is when the commission takes action (votes) and where the public can provide comments.  Due to COVID-19, attendance at the business session is virtual through the Waco City Cable Channel (WCCC.TV/live) with public comments sent in or scheduled ahead of time. Today we will be highlighting Zoning Application Agenda item 6…a short-term rental special permit.

Meeting Basics 

  • Work Session – 6:00 pm / Business Session – 7:00pm
  • To watch the live stream click here (City of Waco Cable Channel, wccc.tv)
  • For the full agenda click here
  • For the agenda item details with the documents pertinent to the meeting click here
  • Details on how to provide public comment are listed in the agenda

The Language of Short-Term Rentals

Zoning Applications Item 6 – Z-20-55 – Enrique and Laura Najera – 3601 Orchard Lane – Special Permit for a Short Term Rental Type II in an R-1B District. 

Let’s start with some history. In 2016, the “tourism boom” generated by Magnolia Market at the Silos (a project at least partially funded by the TIF) met with the expansion of online short-term rental services like Airbnb and VRBO to create a unique boomlet of “vacation rentals” in Waco. At the time, there was a permitting process around these kinds of rentals (identifying them as either “temporary residential rental units” or “bed-and-breakfast homestays”). The city began actively pursuing units lacking a permit in September of 2016, and there were a number of controversies and disputes around these permits in late 2016 and early 2017.

As a result, a task force was called together to review the existing permitting process and propose changes to streamline the process and address neighborhood concerns. The resulting ordinance was passed by city council in July of 2017. Earlier this year, changes to the ordinance (mostly focused on higher density areas) were approved by council

The process around short-term rentals can be a bit complicated so this may take a few meeting insights to tackle. For today, we’ll focus on breaking down the agenda item as it is listed and understanding what this tells us about the permit up for discussion and review.

“Enrique and Laura Najera – 3601 Orchard Lane” – this portion of the item identifies who is seeking the special permit and the address that the permit would apply to. Pretty straight forward to start.

“Special Permit” – permits are the way the city manages certain kinds of activity within its boundaries (here is a list from the city’s website). These activities range from community gardens and farmer’s markets to short-term rentals.  The activity is not allowed unless one has gone through the process of obtaining a permit. Each permit has its own process and different permits require different approvals. Short-term rental permits require a City Council vote to be granted.    

“for a Short-Term Rental” – this is the kind of permit pursued. In case you were wondering, short-term renting is defined as renting for less than thirty consecutive days. 

“Type II” – this is the kind of short-term rental permit pursued. This is where things get complicated. The ordinance passed back in 2017 created five different categories of “short-term rental permits.” In a basic sense they can be understood based on four conditions:

  • Is there “onsite” management? – meaning is there a property owner or representative of the property owner at the location when it is being rented
  • Are multiple groups allowed? – can the location be rented out to different groups of people at the same time
  • Is the location part of a multi-family property? – is the location located on a property with three or more residential units (think apartment or condo complexes as opposed to stand-alone houses)
  • How many guest rooms are permitted? – this identifies what kind of bed and breakfast the location would be considered

The table below shows how these four conditions create the five categories.

Category“Onsite” management?Multiple Groups?Part of multi-family property?Guest Rooms Permitted
Bed and Breakfast Homestay Establishment (BBHE)YesYesNoNo more than 5
Bed and Breakfast Inn (B&B Inn)YesYesNoNo more than 15
Short Term Rental Type I (STR Type I)YesNoNoNot applicable
Short Term Rental Type II (STR Type II)NoNoNoNot applicable
Short Term Rental Type III (STR Type III)NoNoYesNot applicable

Looking through these conditions you can see why they were considered when creating the different categories. It probably matters to neighbors whether there is someone there to keep an eye on renters and if the location is going to be rented out to multiple groups. 

Each category has different restrictions and limits (a good topic for another time). The category under consideration here is STR Type II meaning there may not be onsite supervision, there will not be multiple groups allowed, and the location is not a multi-family property.

“in an R-1B District” – this indicates the zoning of the property being considered for the permit. Zoning is its own huge complicated topic, but in a basic sense zoning indicates what kinds of buildings and uses can occur in a particular area. In this case R-1B zoning is generally meant for stand-alone homes with moderate density. A good deal of this zoning can be found in North and West Waco. 

So putting all this together – Enrique and Laura Najera are seeking a permit for 3601 Orchard Lane that would allow them to rent that location out for less than thirty days to one group of people without onsite supervision in a part of town where stand-alone homes of moderate density are the norm. 

More on short-term rentals

As I noted earlier, this is big topic so I wanted to make sure and note some resources I have come across in taking a look at this:

Other Interesting (to me) Items from the Agenda

  • There is another STR Type II in an R-1B District permit up this week at 2701 Herring Avenue. What makes this one interesting is that there is already a permit in place for that location, but permits cannot be transferred from one owner to another. So it is back at plan commission for review under a new potential owner
  • There are three rezones up for this week’s meeting, one from R-2 to O-3, one from R-1B (the one we touched on above) to R-2, and one from M-2 to O-2. I am hoping over time we can work our way through the different zones and what they mean for Wacoans 

Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.

Meeting Insights: Waco City Council Meeting – 08/18/20

By Jeffrey Vitarius

(Civic meetings happen in Waco every week – city council, school board, planning commission, and countless others.  Decisions from these meetings affect our lives every day.  Many of us are curious about these meetings, but to be honest, it’s just too hard to decipher the jargon and figure out what’s going on and why it’s important.  Act Locally Waco is trying something new in August! Jeffrey Vitarius follows civic meetings for his work and out of personal interest.  Each week in August he will pick a meeting in our community and highlight one or two items from the agenda to translate from “government-ese” into language we can all understand.  We’re calling the series “Meeting Insights.” Let us know what you think! If you enjoy it, we will try to keep it going!  — ALW )

The Waco City Council meets every other Tuesday. The work session starts at 3:00, that is where most of the explanation and discussion happens.  The business session is at 6:00, that is when the council takes action (votes).  The public is invited to attend either or both of these sessions, although, for the time being due to COVID-19, that attendance is virtual through the Waco City Cable Channel (WCCC.TV/live) with public comments sent in ahead of time. Today we will highlighting Ordinance Agenda item 2…the Waco Tourism Public Improvement District (TPID).

Meeting Basics 

  • Work Session – 3:00 pm / Business Session – 6:00pm
  • To watch the live stream click here (City of Waco Cable Channel, wccc.tv)
  • For the full agenda click here
  • For the meeting packet with the documents pertinent to the meeting click here. Quick note on page numbers: the numbers I will be referring to below are the “packet page numbers” found on the bottom right corner of each page of the meeting packet. These do not always match the number of the page in the pdf. One neat aspect of the packets the city builds for city council meetings is that you can click on the agenda item on the agenda page of the packet and it will take you directly to the relevant materials. 
  • Details on how to provide public comment are listed in the agenda

A Waco Tourism Public Improvement District (TPID) – A Whole New Kind of District

Ordinance Agenda Item 2 – ORD-2020-576 – Consider an ordinance approving and adopting the final service plan for the Waco Tourism Public Improvement District (“TPID”) for Fiscal Year 2020-21, levying special assessments on properties in the TPID to pay for the costs of services provided in accordance with the final service plan, setting charges and liens against property in the district and against the owners thereof, and providing for the collection of the special assessments. SECOND READING

You may notice that certain items on City Council agendas are labeled “first reading” or “second reading.” This indicates that the item under consideration needs to come to council twice before it can receive a final vote. That is how the Waco Tourism Public Improvement District (TPID) has found itself on two consecutive City Council agendas. 

For some of you the “PID” acronym may ring a bell. PID stands for “Public Improvement District.” Waco already has two other Public Improvement Districts. The one you have most likely heard of is the Downtown Waco PID. In really broad terms, a PID is a special district created by a city or county. It allows for the collection of an assessment from properties within a certain geographic area.  An “assessment” is kind of like a tax – it’s not exactly the same thing, but that’s an easy way to think of it.  The money from the assessment is used to provide services to the property owners in the district. These services supplement what the city or county is already providing. For example, the Downtown Waco PID uses some of its assessment to pay for additional cleaning (grackle poop!) and security downtown.

Similar to the way the Downtown Waco PID supports Downtown, the proposed Waco Tourism Public Improvement District (TPID) would support tourism and visitors across Waco. 

The city council endorsed the idea of creating a TPID back in November of 2018 (Trib articles here and here). In June of 2019, a bill allowing for the creation of such a district was filed by the Texas legislature (HB1474).

The next step for the organizers of the TPID was to acquire signatures from property owners representing both 60% of the value of the hotels that would be within the district and 60% of the area of the hotels that would be within the district. That hurdle was cleared in June 2020 (receiving endorsements from 85% of the value, and 79% of the area). Now the city council is considering the TPID’s service and assessment plan – basically the plan that explains what they intend to do with the money collected by the TPID.

I spoke with Carla Pendergraft, the Director of Marketing, at the Waco Convention and Visitors Bureau, about the fine points of what the TPID could do for Waco and am indebted to her expertise for the explanation that follows.

What is a Tourism Public Improvement District (TPID)? And why would we want one? In the broadest sense, it is a way for local hotels to pool resources and encourage folks to visit Waco. The proposed TPID will be made up of all Waco hotels with more than seventy-five rooms. This includes some of the anticipated hotels along that quiet zone corridor we talked about  last week. At the moment, there are twenty-seven hotels that have or will have at least seventy-five rooms (there is a full list on page 314 of the meeting packet). The TPID will collect a 2% assessment on each night stay at one of these hotels and then use those assessments to fulfill its service plan. (Note: Technically the City collects the assessment and then provides it to the TPID).

So, let’s say a family member is visiting from out of town and their hotel room costs $100 per night (for a nice round number). At the end of their stay, they will also be contributing $2 per night to the TPID (2% of $100). Ultimately, there should be no direct cost to the hotels in the district.

The TPID is projecting to collect $1,576,067 in funding next year, though this projection is based upon pre-COVID data so it may change in a substantial way. 

So how will the TPID contribute to Waco’s visitor and tourism economy? The service and assessment plan breaks it down into four areas (you can find a more details on pages 311-313 of the meeting packet):

  • Marketing – Increased marketing through a wide variety of means to promote the hotels in the district. In particular, the ability of the TPID to pool resources should allow for access to larger digital media markets. (45% of funding) 
  • Sales Initiatives – One of the key takeaways from my discussion with Ms. Pendergraft is that the visitor and tourism market is made up of several different groups. There are leisure tourists (those traveling just for fun), the convention crowd, business travelers, bus trips, etc. Each of these different groups requires a little bit of a different strategy. Groups (conventions, bus trips, etc.) that bring more people per trip, and therefore more economic impact per trip, are particularly interested in sales incentives. These incentives may look like discounted rates at local hotels or the convention center. They might also include assistance with transportation, or even event sponsorship. The ability to pool resources through the TPID would make it possible for Waco to use a wide variety of tools to reach out to these kinds of “bulk” visitors.  (40% of funding)
  • Tourism Research – Research would help improve the effectiveness of the marketing and sales initiatives noted above. Research might mean gathering information about what specific markets to target for marketing or how particular events impact the Waco’s economy. (8% of funding) 
  • Administration – This would include things like an annual audit and bookkeeping. (7% of funding)

So, if the City Council approves the creation of the TPID and the service and assessment plan, what happens next?  The hotels included the district will most likely to form a non-profit organization that would be charged with directing the services of the TPID and preparing the annual service and assessment plan. This non-profit would enter into a contract with the City to receive the funding and staff support from the hard-working folks at the Convention and Visitors Bureau. The board of this to-be-formed non-profit would be made of a diverse group of hotel representatives with Mr. Todd Bertka (Director of the Waco Convention and Visitors Bureau) representing the City in a non-voting role. 

If all works out as it is intended, the TPID could provide significant support to a critical part of Waco’s economy just as it faces a particularly daunting crisis. 

Other Interesting (to me) items from the Agenda:

  • There are a number of public hearings related to planning at Council this week, things like zoning, subdivisions, short-term rentals. These kinds of items go through a separate group, the Plan Commission, first before making their way to council for final approval. The next scheduled Plan Commission meeting is on August 25th, so be on the lookout for post focused on that meeting soon.
  • The city is aiming to reallocate $21,000 in unspent community development block grants towards assisting homeless folks in self-quarantining, a critical health protection for this community during COVID-19. The city had already allocated $10,500 to this program, but that funding is nearly spent. 
  • The tax rates we touched on two weeks ago have returned for a resolution establishing when the City Council will take their final vote to establish them (September 8th)

Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.

Meeting Insights: TIF Board Meeting – 08/13/20

By Jeffrey Vitarius

(Civic meetings happen in Waco every week – city council, school board, planning commission, and countless others.  Decisions from these meetings affect our lives every day.  Many of us are curious about these meetings, but to be honest, it’s just too hard to decipher the jargon and figure out what’s going on and why it’s important.  Act Locally Waco is trying something new in August! Jeffrey Vitarius follows civic meetings for his work and out of personal interest.  Each week in August he will pick a meeting in our community and highlight one or two items from the agenda to translate from “government-ese” into language we can all understand.  We’re calling the series “Meeting Insights.” Let us know what you think! If you enjoy it, we will try to keep it going!  — ALW )

The Board of Directors for Reinvestment Zone Number One For Tax Increment Financing (TIF Board) meets every other month on the second Thursday of the month. These are the folks that make recommendations to City Council about how TIF dollars should be spent. Before COVID-19 they would go on a tour of potential projects some time in the morning and then conduct their regular meeting at noon. The public is invited to the regular meetings, although, for the time being due to COVID-19, that attendance is virtual through the Waco City Cable Channel’s YouTube channel (WCCC.TV – YouTube) with public comments sent in ahead of time. There are a few interesting projects on the agenda this week, but we are going to dive into some background and look at how the TIF encourages development in a way you may not expect…silencing train horns in Downtown Waco. 

Meeting Basics 

  • Regular Meeting – 12:00pm
  • To watch the live stream click here (City of Waco Cable Channel YouTube channel)
  • For the full agenda click here
  • For the meeting packet with the documents pertinent to the meeting click here. I will refer to page numbers from this packet in the notes below. 
  • Details on how to provide public comment are listed in the agenda

A Study in TIF – the Downtown Waco Quiet Zone 

Mention of the TIF invites questions. What is the “TIF”? How is it funded? Who allocates the funding and to what? Luckily, Waco 101 has already tackled a number of those topics here. Today we are going to zoom in on one example of a TIF funded project, and follow how that example has had an impact on the direction of downtown development, and potentially even the skyline of Waco.

It all starts with trains and their horns. The locomotives that make their way through Downtown Waco along Jackson Avenue are required to sound their horns as they approach any train track crossing. This is to alert folks that they are coming so they can make sure they are well out of the way. As any Wacoan who lives or works near the tracks can tell you, they certainly accomplish this goal. Everyone knows when the train is coming!

However, all this alerting makes it somewhat difficult to invite investment in the properties next to the tracks. An early morning horn makes these properties a hard sell to anyone looking to place hotel rooms or residences in Downtown Waco, and midday horns interrupt workflow in office spaces.

Enter “the quiet zone.”

The quiet zone amounts to  improvements the City and railroad can make to the track crossings that provide sufficient safety so that the horns are no longer required (outside of certain specific circumstances, like construction). Unfortunately, the process of figuring out what improvements are needed and then constructing them can be costly. This is where the TIF makes the difference.

In the summer of 2017, city staff presented first to the TIF board and then to the City Council on the potential benefits of a quiet zone in Downtown Waco. Then City Manager Dale Fisseler noted that increased density of development in the area was an important potential benefit of the quiet zone. He pointed out that the quiet zone could “open up other sites along the railroad track for redevelopment.” That summer the TIF board recommended and City Council approved $450,000 in TIF funding towards the study of a quiet zone. The project essential broke down into three phases:

  • Phase 1 – Feasibility – this is checking to make sure that creating a quiet zone is reasonable to do or “feasible”
  • Phase 2 – Design – putting together the specific improvement designs
  • Phase 3 – Construction

The $450,000 in TIF funding was intended to cover phases 1 and 2 of the potential project. Phase 1 was completed in December 2017 (per later presentations by city staff). 

In the summer of 2018, staff produced a summary of the improvements that would be necessary for a quiet zone. Most of these improvements involve installing new crossing gates, efforts to make sure folks don’t drive around those gates (something called “channelization”), changes to Jackson Avenue (that runs parallel with the tracks), and pedestrian safety improvements.  

In the fall of 2019, the project was ready to seek funding for phase 3. The TIF Board recommended and the City Council approved $1,528,807 in TIF funding for the construction of the improvements noted above. At the time, the project was estimated to be completed sometime in the fall of 2020 (it is possible COVID-19 has had an impact on this process).

The project has some benefits that do not involve any other development: improved safety at crossing, improved pedestrian connections, and decreased downtown disturbance from the horns.

But perhaps, the biggest impact of the quite zone has been in making sites near the railroad track more appealing for development, just like City Manager Fisseler noted back in 2017. Since staff presented the improvements in the summer of 2018, seven projects have sought TIF funding (two this month) for developments right next to the tracks (see map below, the quiet zone in blue and the projects in green).

Before we move on, here are some critical caveats to keep in mind with TIF projects:

  • A project being funded may not ultimately be completed. Lots of changes can happen between funding and completion (like a pandemic, for example)
  • Sometimes  completed projects can look different from their initial renderings.
  • The information I have gathered here is from what I could find in the meeting packets from past meetings of the TIF board and City Council. It is possible that some details of these projects have changed since those packets were put together.

That being said, these seven projects represent a combined total private investment (not counting any TIF funding) of $93.9 million. They include 22,000 square feet of retail space, at least 709 new parking spaces (not all public), space for six new restaurants, and nearly 500 new hotel rooms. On top of all of this, a developer announced in June of this year intentions to build a set of office towers next to the tracks that might grow higher than the ALICO Building (site in yellow above). We can’t say for certain that these projects have come about because of the quiet zone, but the logic of less noise, more development and the timing of these projects is convincing for me.

Be on the lookout for more TIF-funded public projects like this that encourage economic development in particular parts of downtown.   

Other Interesting (to me) Items From the Agenda

  • This month’s agenda includes the annual board report for the TIF board. Each city board or commission produces one of these reports each year, and they can be a pretty good starting place for getting to know what that group has been doing and will do in the future. 
  • One of the best parts of any TIF board packet are the renderings. Below are those for the projects consider this month.

8th Street Market

Heritage on Webster

Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.