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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/20/2013 - SECOND READING OF ORDINANCE NO. 108, 2013, AMENDINDATE: August 20, 2013 STAFF: Laurie Kadrich, Lindsay Ex Dan Weinheimer AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 14 SUBJECT Second Reading of Ordinance No. 108, 2013, Amending the Land Use Code to Include Additional Regulations for Development in Close Proximity to Oil and Gas Operations. EXECUTIVE SUMMARY The purpose of this item is to establish requirements for proposed residential developments in close proximity to existing oil and gas operations. The proposed Land Use Code changes were unanimously adopted on First Reading on July 16, 2013. These changes establish a tiered approach to requirements for new residential developments in close proximity to oil and gas operations. Disclosure to future residents is required for any proposed oil and gas development within one thousand feet (1,000’) of an existing operation. If the development is proposed to be closer than five hundred feet (500’) of an existing oil and gas operation, additional screening and protection measures are required. If the subdivision is proposed to be less than three hundred fifty feet (350’) from an existing operation, a Modification of Standard would be required. BACKGROUND / DISCUSSION During First Reading on July 16, 2013, Council directed staff to consider the appropriate time and mechanism for disclosure of real estate transactions near oil and gas operations. Staff held discussions with the Board of Realtors and other Colorado municipalities. As a result of these discussions staff proposes disclosure be provided on the subdivision plat. As plats are publicly available, providing notice on the plat ensures homebuyers can easily access this information before placing an offer on a house (when disclosures are typically provided) and transparently and permanently documents the proximity of the operation for all citizens. Staff is proposing that disclosure on the plat be provided in both verbal and graphic form. A note is to be added to the plat that states the subdivision is within close proximity to an oil and gas operation and to please contact the City of Fort Collins for more information. The 1000’ radius shall also be demarcated on the plat to illustrate those lots within the subdivision that are within the disclosure area. By providing this notice verbally and graphically, it will be easier for homebuyers and interested parties to assess the areas that are in close proximity to an oil and gas operation. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary - July 16, 2013 (w/o attachments) COPY COPY COPY ATTACHMENT 1 DATE: July 16, 2013 STAFF: Laurie Kadrich, Lindsay Ex, Dan Weinheimer AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 30 SUBJECT Items Relating to Oil and Gas Operations. A. First Reading of Ordinance No. 106, 2013, Establishing a Moratorium on the Acceptance or Processing of Land Use Applications, Permit Applications, and Other Applications Seeking Approval to Conduct Oil and Gas Extraction or Related Operations Within the City of Fort Collins for a Period of Seven (7) Years. OR First Reading Ordinance No. 107, 2013, Establishing a Moratorium on the Acceptance or Processing of Land Use Applications, Permit Applications, and Other Applications Seeking Approval to Conduct Oil and Gas Extraction or Related Operations Within the City of Fort Collins until Midnight, December 31, 2013. B. First Reading of Ordinance No. 108, 2013, Amending the Land Use Code to Include Additional Regulations for Development in Close Proximity to Oil and Gas Operations. EXECUTIVE SUMMARY The purpose of this item is two-fold: first, to establish a Moratorium on the acceptance and processing of land use applications related to oil and gas until either December of 2013 or for a period of 7 years and second, to establish requirements for proposed residential developments in close proximity to existing oil and gas operations. Item #1 - Moratorium: Ordinance No. 145, 2012, established a Moratorium on the acceptance or processing of land use applications, permit applications, and other applications seeking approval to conduct Oil and Gas Extraction or related operations within the city or on City-owned lands. Council has determined that the seven (7) months established by Ordinance No. 145, 2012, as the duration of the moratorium is insufficient for City staff and City Council to determine the extent to which oil and gas uses may be locally regulated and to properly investigate, develop, and, if appropriate, adopt and implement any additional local regulations related to oil and gas uses in the City in order to protect and preserve the public’s health, safety and welfare. As the Moratorium established by Ordinance No. 145 expires on July 31, 2013, Council will determine whether to establish a moratorium until December 31, 2013 or for seven (7) years. Item #2 - Regulations for Residential Developments in close proximity to existing Oil and Gas Operations: On May 21, 2013, Council adopted the Operator Agreement with the only existing oil and gas operator, Prospect Energy, that requires stringent public health and safety measures be taken during both existing and planned operations within the City of Fort Collins. Neither this agreement nor state regulations address how proposed residential development must respond to existing oil and gas operations. The Land Use Code (LUC) currently contains buffer standards for proposed residential developments within fifty feet (50’) of existing industrial land uses. In order to better buffer proposed residential developments from existing oil and gas operations, the proposed LUC amendments establish a tiered approach to requirements for new residential developments in close proximity to oil and gas operations. Disclosure to future residents is required for any proposed oil and gas development within one thousand feet (1,000’) of an existing operation. If the development is proposed to be closer than five hundred feet (500’) of an existing oil and gas operation, additional screening and protection measures are required. If the subdivision is proposed to be less than three hundred fifty feet (350’) from an existing operation, a Modification of Standard would be required. COPY COPY COPY July 16, 2013 -2- ITEM 30 BACKGROUND / DISCUSSION Item #1 – Moratorium Local governments have considered the use of moratoriums to postpone new oil and gas operations within their jurisdictions, citing the need to craft and adopt local land use regulations. Council adopted such a moratorium on December 18, 2012. While much work was completed during the first seven (7) months of the moratorium, Council requested that staff prepare an extension of Ordinance No. 145, 2012. Staff suggests the following two options be considered: Option #1 Impose a new seven-year moratorium in order to better determine the potential health impacts of various aspects of oil and gas operations and incorporate any findings into local regulations. The moratorium would apply to Prospect Energy as well as all other operators. City-owned lands outside the city limits would be excluded. Option #2 Impose a moratorium until December 31, 2013 in order to re-evaluate Land Use Code (LUC) changes, engage the community in the LUC options, and codify any recommendations. City-owned lands outside the City limits would be excluded, and Prospect Energy would be exempt from the moratorium as long as it operates in accordance with the Operator Agreement approved by the Council by resolution on May 21, 2013. Note: The current moratorium, established by Ordinance No. 145, 2012, will expire July 31, 2013 at midnight. However, the City Code prohibiting hydraulic fracturing would still be in place so any new drilling activity (except for Prospect Energy) would need to secure an operator agreement with the City due to the likelihood that hydraulic fracturing would be used in the drilling process. As highlighted during the June 25, 2013 Work Session (Attachment 1), a great deal of work was completed in developing appropriate regulations to minimize any adverse impacts that oil and gas exploration and extraction may have on the health, safety, and welfare of the City and its citizens including the following: • Staff testimony was given to the Colorado Oil and Gas Conservation Commission (COGCC) rule-making process resulting in greater set-backs from residential areas and water quality monitoring and sampling requirements. While the water quality rules went into effect in May, the setback rules are effective August 1, 2013 and can now be incorporated into Land Use Code amendments. • Local regulations were adopted by Council to prohibit the use hydraulic fracturing in the City limits and the permanent storage of waste products associated with hydraulic fracturing. • Extensive research into best management practices were incorporated into an operator agreement with the only local operator (Prospect Energy) resulting in greater health and safety protections for the residents of Fort Collins. • Staff is addressing citizen concerns by preparing a draft Ordinance for Council consideration scheduled for the July 2, 2013 meeting to enact reciprocal set-backs and buffering requirements for proposed residential developments in close proximity to existing oil and gas operation. The proposed Ordinance also contains disclosure, fencing and screening requirements. • Additional work is needed to incorporate the best management practices, updated COGCC regulations and other research into zoning and land use regulations. Attachment 2 provides a more detailed update of the work requested by Council during the time of the moratorium and the work completed. COPY COPY COPY July 16, 2013 -3- ITEM 30 Oil and Gas and Property Values While the state has proposed to study the health effects of oil and gas development, a few studies have also examined the effects of oil and gas development on property values. Staff is aware of a few studies related to oil and gas development and property values: • In one study, negative effects on rural residential property values in Alberta, Canada were found at up to 4 km from the gas development based on presence of sour gas wells and flaring (Boxall et al. 2005, available at http://www.sciencedirect.com/science/article/pii/S0928765505000084). • A second, unpublished Canadian study examined the effect of sour gas activity on rural residential properties (between 1 and 40 acres in size) using econometric models and found that as the density of oil and gas wells increased, property values could be negatively impacted by up to 10 percent within 4 km of the development (Molik et al. 2003, available at http://www.ekcbm.org/files/Property_Value_Study_0.pdf). • A working paper prepared by BBC Research and Consulting in La Plata County presents results of a modelling effort to evaluate how property values are impacted by proximity to coalbed methane wells. The study indicated that the overall area studied had a less than 1% decrease in sales price (2001, available at http://tinyurl.com/n7nh93u). • Finally, a recent article in KUNC suggested that agricultural property values in Weld County have increased 18 percent from the prior year (http://tinyurl.com/led535j). Note: the Canadian studies and the property values from Weld County were focused on gas development and the La Plata study was focused on coalbed methane. Staff could find no studies that discussed the impacts of oil development on property values, which is what is produced in the Fort Collins Field. Item #2 – Regulations for Residential Developments in close proximity to existing Oil and Gas Operation Oil and gas production is currently limited to the Fort Collins Field (Attachment 3), located in the northeast portion of the city. The Fort Collins Field is regulated by the Colorado Oil and Gas Conservation Commission (COGCC) and the recently adopted Operator Agreement between the City and Prospect Energy. The Fort Collins Field has been in production since about 1924. Initially, the Field existed outside Fort Collins city limits and portions of the Field were annexed into city limits, beginning in 1984 (County Club North Annexation). Prospect Energy has been the owner and operator of the Fort Collins Field since approximately 2009. As the city has developed within the boundaries of its Growth Management Area, residential development has occurred around the field. The Land Use Code, the City’s adopted set of standards for regulating land development, contains provisions for residential developments adjacent to existing industrial land uses (Section 3.8.26 of the Land Use Code). These standards are designed to minimize impacts of industrial uses on future residents by providing landscaping, fencing, or other screening options to better separate these land uses. Many citizens have expressed concerns about oil and gas activity in Fort Collins. Some of the concerns expressed reflect a concern about living near oil and gas operations. Currently, the buffer requirements for oil and gas operations are contained within the definition for resource extraction. These standards require screening between the residential development and the operation to separate the land uses. The closer the development is proposed to the industrial use, the more screening is required. The proposed Land Use Code amendments create separate definitions for resource extraction and oil and gas operations. The proposed buffer standards for oil and gas operations (Buffer Yard D) would include the following requirements: • If the subdivision is proposed within one thousand feet (500-1,000') of an existing operation: N Disclosure shall be provided to future residents of the subdivision. The purpose of the disclosure is to inform future residents of the existing operation, the potential hazards associated with the operation, and contact information for the oil and gas operator. COPY COPY COPY July 16, 2013 -4- ITEM 30 • If the subdivision is proposed within three hundred fifty to five hundred feet (350-500') of an existing operation: N If it does not already exist, fencing must be erected between the development and the operation to restrict public access, and N Landscaping, berming, or installation of a wall to aesthetically screen the operation from the future residents shall be provided. • If the subdivision is proposed to be less than three hundred fifty feet (350') from an existing operation: N A Modification of Standard would be required. The applicant would need to demonstrate that the proposed residential development is not detrimental to the public good and that, for example, it is equal to or better than a proposed plan that would comply with the standard (for additional criteria, see Section 2.8.2(H) of the Land Use Code). A map of the areas in the city that could be affected by these proposed changes is attached to this agenda item summary (see Attachment 4). FINANCIAL / ECONOMIC IMPACTS Item #1 – Moratorium: The financial and economic impacts of an oil and gas moratorium were outlined in previous Council Agenda Item Summaries, e.g., the AIS from the December 4 and December 18, 2012 meetings. Item #2 – Regulations for Residential Developments in close proximity to existing Oil and Gas Operation: Increasing the setbacks between proposed residential developments and existing oil and gas operations further minimizes the potential risks of these two land uses in close proximity. However, the financial impacts of amending the Land Use Code include the potential for reduced developable land on property owners. The disclosure requirements are consistent with other City requirements, e.g., radon disclosure, and would not have significant financial ramifications. The aesthetic and fencing improvements could add cost to the project’s development; however, these improvements may also increase property values for the future residents and therefore make the lots or homes more desirable. ENVIRONMENTAL IMPACTS Item #1 – Moratorium: The financial and economic impacts of an oil and gas moratorium were outlined in previous Council Agenda Item Summaries, e.g., the AIS from the December 4 and December 18, 2012 meetings. Item #2 – Regulations for Residential Developments in close proximity to existing Oil and Gas Operation: Increasing the setbacks between proposed residential developments and existing oil and gas operations reduces the risks for future residents living in close proximity to oil and gas operations. The disclosure requirement ensures future residents are informed of the potential risks association with the oil and gas operation. STAFF RECOMMENDATION Item #1 – Moratorium: If Council extends the moratorium, Staff recommends Option #2 to extend the moratorium until December 31, 2013. Item #2 – Regulations for Residential Developments in close proximity to existing Oil and Gas Operation: Staff recommends adoption of the Ordinance on First Reading. BOARD / COMMISSION RECOMMENDATION The Planning and Zoning Board unanimously (5-0) recommended approval of the Land Use Code amendments regarding reciprocal setbacks and buffering requirements during its November 1, 2012 meeting (Attachment 5). These amendments were discussed within the broader context of Land Use Code regulations for oil and gas. COPY COPY COPY July 16, 2013 -5- ITEM 30 PUBLIC OUTREACH Staff has facilitated public discussion of the proposed amendments within the broader oil and gas issue since 2012. For a specific outline of these outreach efforts, please see the Agenda Item Summary from the December 4, 2012 Regular Meeting. Three pending residential developments would be affected by the proposed regulations. Staff has discussed the proposed regulations with all three developers. Staff has also contacted the Chamber of Commerce and the Board of Realtors to discuss the proposed changes. A meeting is scheduled with the Chamber’s Legislative Affairs Committee on July 19 to discuss the proposed regulations and to provide an overall update on oil and gas issues within the city. ATTACHMENTS 1. Work Session Summary – June 25, 2013 2. Work Session AIS – June 25, 2013 (without attachments) 3. Vicinity Map 4. Potentially Affected Areas by the Proposed Standards 5. Planning and Zoning Board – November 1, 2012 Meeting Minutes 6. Powerpoint Presentation 1 ORDINANCE NO. 108, 2013 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING THE CITY OF FORT COLLINS LAND USE CODE TO INCLUDE ADDITIONAL REGULATIONS FOR DEVELOPMENT IN CLOSE PROXIMITY TO OIL AND GAS OPERATIONS WHEREAS, oil and gas operations have existed within City limits for many years; and WHEREAS, the Land Use Code contains residential setback requirements from existing oil and gas operations that are inconsistent with statewide setback regulations; and WHEREAS, the City Council has determined that the Land Use Code should be amended to increase residential setbacks from existing oil and gas operations to comport with the setback requirements promulgated by the Colorado Oil and Gas Conservation Commission in order to better protect the public health and safety of residents in close proximity to oil and gas operations; and WHEREAS, the proposed regulations require that notice be given to residents and potential buyers of existing oil and gas operations, that fencing to restrict access to the existing operation be provided, and that aesthetic improvements including trees, shrubs, berms, and walls be made so as to further enhance the public health, safety and welfare; and WHEREAS, after extensive public input has been received and upon the favorable recommendation of the Planning and Zoning Board, the City Council has determined that it is in the best interest of the City that these proposed amendments be adopted. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That Section 3.8.26(C)(2) of the Land Use Code is hereby amended to read as follows: (2) There are four (4) types of buffer yards which are established according to land use intensity as described in Chart 1 below. Buffer yard distances are established in Chart 2 below and specify deciduous or coniferous plants required per one hundred (100) linear feet along the affected property line, on an average basis. Section 2. That Section 3.8.26(C) of the Land Use Code is hereby amended by the addition of a new subparagraph (4) which reads in its entirety as follows: (4) Additional Standards Applicable to Buffer Yard D. The following requirements shall also apply to development located in Buffer Yard D: (a) Measured. For purposes of Buffer Yard D standards, the buffer yard shall be measured as the distance from the outer edge of an existing oil and gas operation site to the nearest wall or corner of 2 any occupied building proposed in the residential development. The term “existing oil and gas operation site” shall include the impact area of any well that has received all required permits prior to submission of the residential development plan, even if drilling has yet to occur on the site. Buffer Yard D areas may include paved areas, notwithstanding subsection (1) above. (b) Disclosure. If any residential development is proposed to be located within one thousand (1,000) feet of an existing oil and gas operation, then at such time as the developer or any subsequent interest holder in the de=velopment transfers any proprietary or possessory interest in all or any portion of the development, the person or entity transferring such interest shall provide to the transferee a disclosure statement on a form provided by the City, which statement shall provide information about the potential emission of any hazardous, toxic, or carcinogenic air pollutants associated with oil and gas operations and the health effects associated with such emissions; including, but not limited to, hydrogen sulfide, sulfur dioxide, nitrogen oxides, volatile organic compounds, benzene, toluene, xylenes, and formaldehyde. The disclosure statement shall also include contact information for the oil and gas operatorproperty to be developed is platted or replatted, the plat shall show the one thousand (1,000) foot radius from such well and shall contain a note informing subsequent property owners that certain lots shown on the plat are in close proximity to an existing oil and gas operation. (c) Fencing. If any residential development is proposed to be located within five hundred (500) feet of an existing oil and gas operation, and if an existing fence does not surround the oil and gas operation, a fence must be erected by the developer along the property boundary between the oil and gas operation and the development that restricts public access to the oil and gas operation. Section 3. That Chart 1 contained in Section 3.8.26 of the Land Use Code is hereby amended to read as follows: 3 Chart 1 Land Use Intensity Categories Land Use Intensity Category Buffer Yard Airports/airstrips Very High C Composting facilities High B Dry cleaning plants Very High C Feedlots Very High C Heavy industrial uses Very High C Light industrial uses High B Junkyards High B Outdoor storage facilities High B Recreation vehicle, boat, truck storage Medium A Recycling facilities High B Agricultural research laboratories High B Resource extraction Very High C Oil and gas operations, including plugged and abandoned wells Very High D Transportation terminals (truck, container storage) High B Warehouse & distribution facilities High B Workshops and custom small industry Medium A Section 4. That Chart 2 contained in Section 3.8.26 of the Land Use Code is hereby amended to read as follows: 4 Chart 2 Buffer Yard Types Type – Base Standard (plants per 100 linear feet along affected property line)* Option Width Plant Multiplier** Option: Add 6' Wall Option: Add 3' Berm or 6' Fence Buffer Yard A: 3 Shade Trees 2 Ornamental Trees or Type 2 Shrubs*** 3 Evergreen Trees 15 Shrubs (33% Type 1, 67% Type 2) 15 feet 20 feet 25 feet 30 feet 35 feet 40 feet 1.00 .90 .80 .70 .60 .50 .65 .80 Buffer Yard B: 4 Shade Trees 4 Ornamental Trees or Type 2 Shrubs*** 3 Evergreen Trees 25 Shrubs (Type 2) 15 feet 20 feet 25 feet 30 feet 35 feet 40 feet 45 feet 1.25 1.00 .90 .80 .70 .60 .50 .75 .85 Buffer Yard C: 5 Shade Trees 6 Ornamental Trees or Type 2 Shrubs *** 4 Evergreen Trees 30 Shrubs (Type 2) 5 Section 6. That the definition “Resource extraction, process and sales” contained in Section 5.1.2 of the Land Use Code is hereby amended to read as follows: Resource extraction, processes and sales shall mean removal or recovery by any means whatsoever of sand, gravel, soil, rock, minerals, mineral substances or organic substances other than vegetation, from water or land on or beneath the surface thereof, exposed or submerged, but does not include oil and gas operations. Introduced, considered favorably on first reading, and ordered published this 16th day of July, A.D. 2013, and to be presented for final passage on the 20th day of August, A.D. 2013. _________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on the 20th day of August, A.D. 2013. _________________________________ Mayor ATTEST: _____________________________ City Clerk 20 feet 25 feet 30 feet 35 feet 40 feet 45 feet 50 feet 1.25 1.00 .90 .80 .70 .60 .50 .75 .85 Buffer Yard D: 6 Shade Trees 7 Ornamental Trees or Type 2 Shrubs*** 5 Evergreen Trees 35 Shrubs (Type 2) 350 feet 375feet 400 feet 425 feet 450 feet 475 feet 500 feet 1.25 1.00 .90 .80 .70 .60 .50 .75 .85 * "Base standard" for each type of buffer yard is that width which has a plant multiplier. ** "Plant multipliers" are used to increase or decrease the amount of required plants based on providing a buffer yard of reduced or greater width or by the addition of a wall, berm or fence. *** Shrub types: Type 1: 4' - 8' High Type 2: Over 8' High Section 5. That Section 5.1.2 of the Land Use Code is hereby amended by the addition of following new definitions which read in their entirety as follows: Oil and gas operation shall mean exploration for oil and gas, including the conduct of seismic operations and the drilling of test bores; the siting, drilling, deepening, recompletion, reworking, or abandonment of an oil and gas well, underground injection well, or gas storage well; production operations related to any such well including the installation of flow lines and gathering systems; the generation, transportation, storage, treatment, or disposal of exploration and production wastes; and any construction, site preparation, or reclamation activities associated with such operations.