Two Waco City Council members now are barred from voting or deliberating on decisions involving Waco’s downtown tax districts.
John Kinnaird and Toni Herbert must declare a conflict of interest and sit out of decisions involving the Tax Increment Finance Zone No. 1 and Public Improvement District No. 1.
City Attorney Jennifer Richie told them to recuse themselves from several important decisions Tuesday because they work for downtown businesses that own property in both zones.
Kinnaird is a vice president at Community Bank and Trust, which owns one downtown parking lot. Herbert is the director and sole employee of the Business Resource Center, which owns a vacant building in the 800 block of Austin Avenue.
Remaining council members Tuesday voted to prolong the life of the PID by 15 years, or to 2027, and the life of the TIF Zone by 10 years to 2032. The council also voted to revise the incentive package of TIF Zone No. 1 funds offered to the Franklin Place development.
None of the cases was related to the employers of Herbert or Kinnaird.
After the meeting, Herbert said she is upset she won’t be able to participate in important decisions involving downtown Waco, which her district encompasses. The TIF Zone also includes the new Baylor University stadium, which recently won a record $35 million in pledged TIF funds in a unanimous council vote that included Kinnaird and Herbert.
Kinnaird said Richie had no choice but to warn him and Herbert to disqualify themselves.
“It was surprising and unfortunate, but we want to comply with existing laws,” he said. “I do respect the city attorney for keeping on top of these things.”
Herbert also didn’t blame the city attorney, who she said is just heeding recent state case law on conflicts of interest in municipal government.
In November 2011, a city commissioner in Harlingen was convicted of a Class A misdemeanor, fined $500 and sentenced to 30 days in jail for failing to file a conflict of interest form in a similar situation.
Commissioner Kori Marra, who owned a real estate business in a downtown tax district, voiced her opinion during a council meeting about a project, unrelated to her business, that was seeking incentives.
That discussion launched an ethics complaint and investigation that led to the criminal charges.
Richie acknowledged the Harlingen case was a factor in the council members’ conflict-of-interest declarations.
Herbert and other downtown-connected council members for years have discussed and voted on TIF and PID matters.
Herbert’s nonprofit group received $186,000 in TIF funds to help with the renovation of the Stratton Building on Eighth Street, but Herbert was not on the council at the time.
The loss of Herbert and Kinnaird could have made a difference in the outcome of the vote Tuesday to prolong the life of the Public Improvement District.
With Councilman Wilbert Austin absent from the meeting, only three council members were left to vote, and under the city charter, their votes had to be unanimous to pass.
The PID collects a small surtax from downtown and Elm Avenue property owners, revenue that then is plowed back into the district in the form of private security, landscaping, special events and extra garbage collection.
The PID Advisory Board, which consists of downtown property owners, collected 455 signatures from other property owners to petition for a 25-year extension of the PID.
District chairman Tom Chase told the council the extension would give the PID the ability to bond larger improvement projects such as a parking facility across many years.
Councilwoman Alice Rodriguez said she felt uncomfortable making such a long-term commitment, and she killed the 25-year proposal with her lone vote. She made a motion for a 15-year renewal, which passed 3-0.
Also Tuesday, the council revised the TIF incentives offered to the developers of Franklin Place, a proposed mixed-use complex at Sixth Street and Franklin Avenue.
The developers will get $1.38 million for the first phase of the project — slightly less than the council had approved on a preliminary vote, but with the concession that the developers will not have to build sidewalks on the second phase of the project until that phase is completed.
Also, the council approved $564,550 in TIF incentives for new sports facilities at Indian Spring Middle School.