By Andra Lim
Austin American-Statesman
Originally published Feb. 10, 2016
A judge should void an affordable housing deal, in which several Austin City Council members said they unknowingly waived up to $106.3 million in city fees, because the lack of public notice violated the Texas Open Meetings Act, said a lawsuit filed Wednesday by civic activist Brian Rodgers.
Rodgers started asking questions last month about the deal, which was approved in December and negotiated by the offices of Mayor Steve Adler and Council Member Delia Garza. The deal requires the developer of Easton Park near Southeast Austin to place an amount equal to those waived fees into a fund that would help make 650 homes permanently affordable.
But the Austin Water Utility, which charges water and wastewater impact fees to developers, could lose up to $81.5 million in those fees over 20 to 30 years because of the waivers, which could force higher rates to make up the difference. The Development Services Department could forgo between $18 million to $24.8 million in various fees under the deal as well.
The council didn’t find out those numbers until this week.
The lawsuit, filed in state District Court in Travis County, alleges the city violated the Texas Open Meetings Act by not properly alerting the public — or all of the council members and key departments, for that matter — of the waivers, which were included in a zoning proposal for Easton Park, also known as Pilot Knob.
“If Council members themselves and key water utility staff members were surprised that the agenda zoning item (was) also being used to approve waivers of $81 million in growth impact fees, how was the public supposed to know that’s what the Council was doing?” the lawsuit asks. “Fortunately, the Texas Open Meetings Act does not allow the Council to get away with it this time.”
The lawsuit said that Adler and City Manager Marc Ott “have practically admitted” the agenda posting didn’t reveal the fee waiver portion of the zoning ordinance. For instance, a memo from Ott said “a review of the … agenda posting language would not indicate that a fiscal note was required,” the lawsuit said.
Bill Aleshire, the attorney representing Rodgers, said the Open Meetings Act requires the city to post the “subject” of the item. The law says the more the public is interested in the subject, the more specific that description should be, Aleshire said.
“I think this is probably one of the grossest examples of failure to give sufficient notice, when they say they’re doing zoning and buried inside is an $81 million fee transfer for a struggling utility that would be controversial,” Aleshire said.
The lawsuit also seeks to ensure the city in the future doesn’t include fee waivers in a zoning case without public notice.
The city didn’t immediately provide comment Wednesday afternoon on the lawsuit. Jason Stanford, a spokesman for Adler, took issue with the lawsuit’s opening section, which states, “The Austin City Council may have the power to give away the farm to developers; they’ve been doing it for years.”
“The developer in this case is paying many farms’ worth for affordable housing,” Stanford said. Though Adler has apologized for not better explaining the mechanics of the deal to the council and said he didn’t intend to mislead his colleagues, he has also defended the Easton Park agreement as an innovative way to create permanently affordable housing.