County reduces tax breaks offered for energy projects

Editor: Shannon Cottongame

April 20, 2022

The Hill County Commissioners Court amended its tax abatement guidelines for green energy projects, approved a contract for renovations to the county’s Covington Street annex and heard a presentation from the Prairielands Groundwater Conservation District (PGCD) during a meeting held Tuesday, April 12.

During open forum, two Hill County residents who live near Penelope told the court that they were concerned about the number of solar projects in their area.

One speaker said that the expansion of the projects is seemingly uncontrolled, stating, “We believe these panels cause harm through destruction of the land, glare, unsightly appearance as well as environmental issues.”

He said that in recent months, more and more individuals have been approached around Penelope about the installation of panels on their property. He stated that around his own property there are wind turbines on one side, power lines on one side and solar panels on another side. He said that he would like development to be suspended until more research and community input is allowed.

Another resident said that he has only been given general answers when he asks developers for information about the projects and said that there have been no community forums to explain the plans to residents. He said that he has been pressured for a year to sign easements and he believes that these projects waste precious farmland in the state. He also expressed concerns about fire departments having the capability to put out fires if they occur in the project area.

Doreen Strickland of Abbott Volunteer Fire Department, who was participating in the meeting virtually, then spoke up, adding that the possibility of a fire has been local departments’ biggest concern about solar projects and wind projects.

“We have asked numerous times for an education class to know how to put fires out and we’ve been totally ignored and put on the back burner,” she said. “We are totally clueless and out of our realm of training on what to do in this situation.”

While the court cannot address items brought up by speakers in the public forum, the issue came up again as commissioners discussed a related agenda item later in the meeting.

The court reviewed its tax abatement guidelines related to green energy projects and ultimately voted to reduce the potential tax break that could be offered to companies.

County Judge Justin Lewis emphasized that the purpose of the tax abatement program is not to attract energy companies to the area but to create some regulatory control over their activities, as the state does not provide any method for the county to regulate the projects.

Lewis said that by bringing the companies to the table and creating a contract, it ensures that they will at least have to abide by some rules set by the county.

Presenting the proposed amendment to the tax abatement guidelines, Lewis said that he believes the county is giving away too much, and commissioners discussed the importance of providing the smallest tax break possible while still bringing the companies to the table.

Previously, the abatement guidelines provided an average abatement of 52 percent over a 10-year period on a project with an investment of over $200 million. The amount and length of the abatement then dropped based on the company’s investment. For example, the possible abatement dropped to about 40 percent over a six-year period for a project with a capital investment of between $20 million and $50 million.

Any tax break the county provides to a company does not apply to the FM lateral portion of the tax rate, which is never on the table for negotiation. This means that the projects add the full amount of expected tax revenue into the county’s road and bridge fund.

Precinct 3 Commissioner Scotty Hawkins, whose precinct has seen rapid expansion of energy projects, questioned whether the court should offer abatements at all. “I’m wondering why we need to give these folks anything if they come in and mess up our roads,” he said. “I’m not sure I want to give them anything.”

Commissioners agreed that the companies are coming whether the county enters into agreements with them or not. The county’s rural landscape, lower costs and location will continue to attract energy projects, and the judge said that balancing the property rights of private landowners to enter into lease agreements while protecting the public from the strain on infrastructure is the challenge.

“We’re not doing this to attract them, but knowing that they are coming, what tools do we have in our toolbox? We have to do something to have some regulatory effect,” Lewis said, “but I don’t want to give a dollar more away than we have to.”

After discussing a proposal to drop the tax abatement percentages by 10 percent, Hawkins made a motion to drop them another 10 percent, and the court voted in favor of the change. The highest investment bracket will now drop from a 52 percent abatement over a 10-year period to 32 percent over the same period.

Any project coming before the court will still be considered on a case-by-case basis.

Commissioners also accepted a proposal from McKinstry to act as the construction manager at risk for the rehabilitation of the county’s Covington Street annex.

The project will create a secure building for county offices and eliminate the need to operate the Franklin Street annex, reducing the county’s overall maintenance budget.

McKinstry specializes in reducing costs with efficient facilities and has been working with the county to create savings throughout utility and maintenance budgets. The company estimated that the county’s maintenance costs on the building will drop by about $10,000 per year after the project.

The project includes renovating the 17,000 square-foot space, constructing an additional 2,000 square feet of office and restroom space, re-topping and striping of the entire existing parking lot and new Americans with Disabilities Act compliant pedestrian access points.

The overall cost of the Covington Street project will be $6.79 million, and $3 million of that will be funded through American Rescue Plan Act funds. Another $2 million will come from the county’s budgeted reserves, and the final $1.79 million will be financed by the county.

“We’re embarking on a huge journey here, but it’s been well thought out, well planned and I think we have partners we can trust in this,” Lewis said.

PGCD General Manager Kathy Turner Jones went over highlights of the district’s annual report with commissioners.

PGCD develops rules to protect existing wells, preserve groundwater for future generations, protect the quality of the groundwater and ensure that residents of Ellis, Hill, Johnson and Somervell counties maintain local control over their groundwater.

Jones said that as of December 31, there had been 2,295 wells registered within the district’s four counties. That includes 259 wells drilled in Hill County.

She said that PGCD knows that there are more wells than this, but there was not a requirement to register wells prior to the district’s creation, and older wells continue to be entered into the system as they are reworked and registered.

Most wells registered in Hill County—139— are domestic household wells, which are exempt from reporting and permitting requirements. The second largest group belongs to municipal water systems, which have 71 registered wells and must have permits, meters, report usage and pay annual fees. The remaining wells in the county are used for livestock.

Jones said that some of the district’s goals this year include working with county leaders to encourage implementation of subdivision rules that require a groundwater study for developments relying on single-family domestic wells.

She said that as the population increases, more of these properties are being reported. She explained that the district requires a two-acre lot for a well and requires it to be 50 feet from the property line. Some homes being built in clusters are not complying with this requirement.

Lewis said that the county wants to work with the district to get input on its subdivision rules.

Jones said that she expects to see a big jump in well registrations for the coming year.

The court also voted to close a portion of Giant Cedar Trail off of Farm Road 1713 in Whitney. During a public hearing, residents who own property on both sides of the county road said that it has become a dumping ground for trash and drug paraphernalia has been found in the area. They said that they have tried to clean it up but the dumping has continued, items have been stolen and plants they used to create a barrier have been pulled up. Another resident who lives near the area said that he had mixed feelings about the road closure, saying it is a common pedestrian path, but he acknowledged that it is a problem area.

The county will close, abandon and vacate the road with the court’s action.
An agreement was approved with Hill County Precinct 1 that will formalize the agreement previously made regarding the county’s new annex in Huron. With the commissioner’s operations moving to the new facility, it was agreed that he will pay $200,000 of the cost out of his budget, which will be repaid over a two-year period.

Commissioners also took action to comply with Senate Bill 6, the bail reform bill passed by the Texas Legislature last session.

The bill created new rules for setting bail and requires a magistrate to review the defendant’s criminal history, review citizenship status and other factors. Additional reporting to the state is also required.

Judge Lewis explained that the state also allowed counties to create a bond office but said that would not be a wise use of county funds.

Precinct 2 Justice of the Peace Shane Brassell, who handles the majority of magistration at the county jail, volunteered to handle the reporting. He said that the state’s system, which was supposed to be used as of April 1, is currently not operational, but his office will handle the new requirements when it is up and running.

Lewis said that he wants to keep track of the workload that the new state requirements put on Brassell’s office to see if adjustments need to be made in the future.

The court took the following additional action at the meeting:
• Lindsay Kimbrell was appointed to the Hill County Child Protective Services Board.
• Ninety-two filing cabinets were declared surplus material and will be advertised for sale.
• The pay for election workers was increased to $12 per hour.
• A replat of a property in White Bluff to combine two lots was approved.
• A minor plat for just over an acre off of HCR 2415 was approved.
• Surplus outdated or damaged emergency equipment from the Hill County Sheriff’s Office maintenance barn was declared salvage and will be offered to fire departments or sold.
• Eighteen tasers from the sheriff’s office were declared salvage and will be sent to Taser International for destruction.
• A proposal from Nextlink was approved to upgrade radio communication links in the county.
• A proposal from Kofile, Inc. for the scanning and preservation of historical plat records was approved.
• A proposal for county budgeting and lease management software was approved.
• A change order for the new Extension Office was approved that will allow McKinstry to install a more efficient HVAC system.
• The court approved posting notice of a public hearing to close a portion of Anaprako Road in Precinct 1 near Lake Whitney. The road is at the back of two properties and has a drop-off that creates issues for delivery drivers and those unfamiliar with the area. The hearing will be held Tuesday, May 10, at 8:30 a.m.