Tesera residents press city over public parkland, bond constraints and HOA costs

Residents of the Tesera subdivision pressed the Lago Vista City Council on June 12 over whether amenities including the pool, pavilion and trails are public parkland or HOA property and who must pay to operate them.

The issue arose after multiple residents told the council they bought homes expecting “amenities” for residents only, but later learned portions of the community’s pool, pavilion, parking and some trails were conveyed to the city and are subject to public access. Residents said disclosure during sales and marketing was misleading and asked the city to seek remedies.

At the meeting, Darlene Luke, a Hines representative, said the developer is willing to work with the city ‘‘to resolve the issue in a way that everybody would...benefit’’ but that legal and tax constraints limit quick fixes. She also asked for meetings with city counsel and staff. Homeowner Robert Donnelly outlined how operation and maintenance agreements assign significant, long-term costs to the HOA even though the majority of the amenities are city-owned public facilities.

Bond counsel and city attorneys told the council the ownership and tax status are legally complicated. Bond counsel said the pool and amenities were financed with tax-exempt bond proceeds and that federal rulings about ‘‘private use’’ of tax-exempt bond-funded property could require using sale proceeds to defease part of the outstanding bond issue before any private conveyance. That defeasance can be expensive and, he said, bonds may not be callable for several years. He also pointed out state law requires voter approval to remove dedicated city parkland from the municipal park system unless limited statutory exceptions apply.

City Attorney Brad Bullock told the council the county records show a scrivener’s error in the deed/resolution conveying the Tesera park parcels; one parcel apparently was omitted in filings even though the total acreage conveyed matched the intention. He said staff and the developer would seek a correction deed and corrected resolution to fix the record.

Several residents urged the council to pursue legal remedies and to involve the attorney general if marketing or disclosures violated consumer-protection laws. Council members asked staff to check prior disclosure documents and PID materials and to report back. Councilor Shane Som said he wants staff, bond counsel and the developer to explore solutions but cautioned the city’s hands are limited by existing financing and state law.

Council direction and next steps: Mayor and council agreed to ask staff, the city attorney and bond counsel to research whether the deed and resolution can be corrected, to assess the tax/bond implications of any conveyance or sale to the HOA, and to return to council with legal options and a timeline. Officials said they will also meet with Tesera residents and the developer and will consider whether to ask the attorney general to review consumer-disclosure complaints.

The council did not take a final vote on ownership or conveyance; members directed staff to report back at a future meeting.

Ending: The council scheduled follow-up work and asked staff to present corrected deed language, legal options on addressing the tax-exempt bond restrictions and suggested outreach to Tesera residents and the developer to attempt an amicable solution. The council also said it would place a follow-up agenda item to update the public on legal and practical options relating to the parkland.