TIRZ Board Recommendations Ignored by City Council

San Angelo City Council and the Tax Increment Reinvestment Zone (TIRZ) Board have been at odds recently.

In December 2022 Council approved TIRZ funds be used for streetscape maintenance after the TIRZ board declined the project.  Council specified the North TIRZ pay 80% of the annual cost and the South TIRZ 20%.  City staff recommended a 50-50 split.  TIRZ board members asked how the project got on City Council's agenda after they rejected the project.  The answer was not clear. 

In early March City Council declined the use of North TIRZ funding for a nonprofit on Martin Luther King Boulevard, Gethsemane Missionary Baptist Church.  The TIRZ board approved the project under existing criteria as nonprofits are eligible for funding in the North zone.  

Discussion at Council focused on rejecting a prior nonprofit application and the need to keep TIRZ money away from Shannon Medical Center after it formed a nonprofit corporation for its real estate holdings.  TIRZ Board Chair Jon Mark Hogg wrote a piece declaring his opposition to City Council's rejection.

This week's TIRZ board meeting approved North TIRZ funding for The Bridge, a different nonprofit project on MLK.   The board had much discussion on City Council's rejection of their recommendations and the need for clear criteria for nonprofit project funding.  During public comment Rev. Craig Meyers challenged Council's basis for rejecting the Gethsemane project in their last meeting.  He thought their reasons were not relevant to stated TIRZ criteria and plans to ask Council to reconsider their decision.

The conflict will likely increase as the TIRZ board recommended nonprofits be eligible to funding in the South zone.  Former City Manager and TIRZ board member Stephen Brown pushed for nonprofit eligibility in the South.  Brown wants there to be one TIRZ zone, with no division between North and South.  The board will consider whether to undertake a process to explore Brown's preference.  City Council made several runs at combining the two zones, as the North Zone has significantly greater funding ($1.6 million vs. $71,000 for the South).

Council recently battled with the Development Corporation over a number of issues, bylaws, the service agreement with the City for services, the Chamber of Commerce contract, and the independence of the Development Corporation board.  Council pushed out First Vice President John Bariou after one term.  Council dropped a closed session item for disciplining Bariou in an October 2022 agenda.  It did so after Bariou asked that it be moved to open session for the public to hear.

City staff resolved one issue with the TIRZ board, the payment of interest revenue on committed funds not yet expensed.  The TIRZ board learned in January that those funds earned no interest and asked for a change.  Two days ago Development Director John James indicated the Finance Department made a change so committed but not spent TIRZ funds would earn interest.

It's good one issue got resolved, but a number remain to be worked through. 

Update 7-11-23:  The TIRZ board meets today.

Update 8-28-23:   The TIRZ board discussed City Council's removal of interest funds from the two South TIRZ projects.  Members sought information from staff as to why.  Member and former City Manager Stephen Brown stated the city counts on interest revenue for a number of other funds and did not understand why TIRZ is being treated differently.  Brown indicated his interest in restoring those funds to the two projects.

Update 9-19-23:  City Council voted 5-2 for a nonprofit TIRZ project in the North zone.   The item needed six yes votes for approval so the nonprofit project was rejected.  The two "no" votes were Mayor Gunter and Councilman Thompson.  The Mayor raised the failure to streetscape North Chadbourne in her comment while Thompson raised the prospect of a flood of nonprofit applications should this one be approved.