Council votes Nov. 5 on sending part of Dog's Head tax revenue to housing and parks

The City Council is set to decide on Nov. 5 how much of the tax money from Dog's Head goes to affordable housing and parks. Dog's Head is the 2,600-acre development planned in eastern Travis County, where Amazon was revealed in July as the company behind a planned robotics plant. Item 2 on the Nov. 5 draft agenda is an ordinance that would send part of the city's tax revenue from the zone to the city's Housing Trust Fund and its Parks Enhancement Fund. It would also require a yearly report on the money.

Most of the new tax growth at Dog's Head is already committed to roads, utilities and other infrastructure for the project. The city's Dog's Head documents page says the city will put 75% of new property and sales tax growth from the area into the tax increment reinvestment zone (TIRZ) for the first 20 years, and 66% for the next 15. This ordinance deals with what goes to housing and parks.

What the ordinance would do

The staff recommendation for action and the draft ordinance set out the split of the city's portion of tax revenue from TIRZ No. 21:

• Years 1 to 20: 5% of property tax and 5% of sales tax revenue, half to the Housing Trust Fund and half to the Parks Enhancement Fund.
• Years 20 to 35: 14% of property tax and 14% of sales tax revenue, split the same way.
• Reporting: The city manager would report every year on how much the zone generates for the city and how it is spent.

Staff list the item as having no fiscal impact. The Housing Trust Fund is managed by the Austin Housing Finance Corporation and pays to build, preserve and subsidize affordable and supportive housing, the memo says. The Parks Enhancement Fund supports park maintenance and improvements.

What our records add

Where the numbers came from. The ordinance carries out an amendment adopted on July 23, the night the council created the zone. Council Member Ryan Alter said he would vote yes and then offered an amendment to dedicate part of the city's revenue to affordable housing and parks. Mayor Pro Tem José "Chito" Vela said he liked the idea and that the 5% share did not give him "a lot of heartburn," but he asked how the 14% share in later years would affect the city's ability to pay for services in the area. The quick math described at the dais showed some negative balances in fiscal years 2049 through 2052. Vela also noted that "money's fungible", since dollars sent to the housing fund could free up other money. The amendment was adopted without objection, with Council Member Marc Duchen shown voting no.

How the council split on the zone. The ordinance creating TIRZ No. 21 (26-2095) then passed 7-3. Council members José Velásquez, Mike Siegel and Zo Qadri voted no. Council Member Vanessa Fuentes was absent. The preliminary project and financing plan and the Travis County participation agreement each passed 8-2, with Velásquez and Siegel voting no. In May, the 45-year development agreement passed 9-0, with Harper-Madison and Fuentes absent.

A lawsuit. On Oct. 8 the council met in closed session on a lawsuit challenging the Dog's Head tax zone.

What's next

Item 2 is on the consent agenda, so it could pass without discussion unless a council member pulls it. In July, Alter said there would be more process "between now and March", when the final project and financing plan is due. Dog's Head has also been an issue in the District 3 race. Our District 3 story shows how Velásquez voted. Election Day is Nov. 3, two days before this vote.