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Item No. 20 Memorandum TO: Mayor, Mayor Pro Tem, and Members of the City Council Rose Beverly, City Manager FROM: Stephanie H. Harris, City Attorney SUBJECT: Waiver of penalties and interest related to 1 " assessment for Forestbrook Public Improvement District No. 1 DATE: March 23, 2026 BACKGROUND: City Council created Forestbrook Public Improvement District No. I (the "PID") in September of 2024. Thereafter, on July 14, 2025, Council approved a service and assessment plan for a portion of the property within the PID (Public Improvement Area No. 1) and levied assessments on that property. Revenues from the assessments are to be used to repay PID bonds that Council authorized on October 27, 2025. For the first year of the PID, Lone Star Planned Developments, LLC ("Owner") was the sole owner of the properties within PIA No. I . The City engaged a third parry contractor, TXGovSolutions ("Contractor"), to mail notice of the assessment to the owner. STATUS OF ISSUE: Owner failed to make the PID assessment payment in a timely manner. There is some question as to delivery of the notice. Contractor maintains that it mailed out the notice to owner as required; Owner asserts that it never received the notice, resulting in the missed deadline. Penalties and interest on the assessment payment began accruing upon the missed deadline. The PID administrator, P3, contacted me on February 23rd because it was concerned that the PID would not receive the assessment payment prior to the March 1 deadline for the PID to make its first debt service payment on the bond. I agreed that if Owner immediately paid the assessment (in an approximate amount of $35,000.00), I would bring the issue of waiving the penalties and interest to Council for your consideration. Owner agreed and made the payment. Consequently, the PID was able to pay the bond debt service as scheduled, and any potential adverse consequences have been mitigated. Owner now requests that you waive penalties and interest in the amount of $13,585.17. In the event that Council declines to do so, the penalties and interest would go into the PID bond fund, not into the city's general fund. BUDGET: None.