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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 01/07/2020 - METRO DISTRICT EVALUATION REVIEWDATE: STAFF: January 7, 2020 Josh Birks, Economic Health Director Jackie Kozak-Thiel, Chief Sustainability Officer Rachel Rogers, Senior Specialist Economic Sustainability WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Metro District Evaluation Review. EXECUTIVE SUMMARY The purpose of this item is to review and consider enhancements to the policy for Reviewing Service Plans of Metropolitan Districts that the City Council adopted by Resolution 2018-079. Based on Council interest to re- examine the policy and evaluation process for Metro Districts, City staff has engaged with members of the Urban Lab in a workshop facilitated by the Institute for the Built Environment to identify options and opportunities for reviewing Metro District Service Plans. The goal of the session was to develop options for a simple sustainable system for evaluating future metro districts. The system needs to be dynamic, provide benefit to end user and provide direction to Council and developers. The options identified by the team are: • Minimum requirements • Scorecard system • Menu of options under each outcome • Performance guided using key metrics GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Do the Councilmembers prefer one of the presented options for enhancing and ensuring the outcomes of future Metro District applications? BACKGROUND / DISCUSSION Policy Context In 2018, the City adopted a policy for reviewing proposed service plans for Title 32 Metropolitan District Service Plans by Resolution 2018-079. The Policy was intended to aid residential development, addressing escalating infrastructure costs and to make sure that Fort Collins can compete with development in adjacent communities that allow residential Metro Districts. At the time, City Council adopted a policy that established criteria, guidelines and processes to be followed by City Council and City staff in considering Metro District applications. The current Policy generally supports the formation of a District where it will deliver extraordinary public benefits that align with the goals and objectives of the City. A District, when properly structured, can enhance the quality of development in the City. The City is receptive to District formation that provides extraordinary public benefits which could not be practically provided by the City or an existing public entity, within a reasonable time and on a comparable basis. January 7, 2020 Page 2 City Council has approved five Metro Districts since the policy was revised in August 2018: # of Districts MarketAffordable Residential Commercial Description Date Description Date Montava 7 4,000 600 60.000 60.000 Council Approval 9/25/2018 Water's Edge 5 848 47 50.000 50.000 Council Approval 9/18/2018 On Council Agenda 1/7/2020 Waterfield 3 498 50 50.000 50.000 Council Approval 9/18/2018 Council Approval 4/16/2019 Mulberry Metro District 6 1,600 240 50.000 20.000 Council Approval 4/16/2019 Northfield Metro District 3 442 65 50.000 50.000 Council Approval 10/1/2019 Total Residential Units for active MDs 7,388 1,002 13.6% Name Residential Mill Levy Service Plan Development Agreement Summary of Work to Date City staff has engaged with members of the Urban Lab in a workshop facilitated by the Institute for the Built Environment to identify options and opportunities for reviewing Metro District Service Plans. The goal of the session was to develop options for a simple sustainable system for evaluating future metro districts. The system needs to provide guidance to developers, Council and staff. Evaluation System Design Assumptions Objective: Develop a straight-forward, sustainable process for evaluating metro districts • Goals - Set by community strategic plans (e.g., Climate Action Plan, the Affordable Housing Plan and City Plan) • Baseline - Current Code • Dynamic Design - Enable metro district criteria to evolve towards community goals and shift as current Code changes • Regular Review-Re-evaluate criteria and program design on a regular schedule (timed to coincide with Council’s priorities setting) Evaluation System Options 1) Minimum Requirements-Developers need to meet defined minimum requirements to get a Service Plan approved • Minimums would need to honor both the community and the end user • Minimums would be tied to current code, requiring maintenance on policy as code changes Pros:  Clarity of outcomes  Predictability of outcomes  Consistency across projects Cons:  Pressure to approve a service plan that just meets minimum requirements  May not achieve as many benefits to the community  Lack of flexibility / creativity in development 2) Scorecard - develop a ranking system for each outcome area (e.g., Good/Better/Best) • Rankings would have clear criteria (weighted) • No category minimums but an average score could be used • Ranking standards can change over time based on Council and community priorities January 7, 2020 Page 3 Pros:  Clarity of evaluation for Council and developer  Flexibility for differing site conditions  Adaptable to changing priorities Cons:  Not all outcomes delivered 3) Menu of Options - a menu of options/benefits developed for each outcome area • Each option within an outcome is assigned a point value • Minimum points required in each outcome to avoid all low point actions • Point values can change based on priorities and needs Pros:  Priority driven (point values)  Adaptable to changing standards  Easily maintained; change menu as priorities change Cons:  Potentially less flexible due to minimums  Not all outcomes delivered 4) Performance Guided - specific key metrics identified and all actions measured against these metrics • Chosen metrics emphasize Council and community priorities • Minimum impacts could be set for each or key metrics • Automatically adjusts (metric impact separate from baseline code) Pros:  Clear and measurable impact  Tied to priority outcomes  Flexibility of delivery Cons:  Technical evaluation needed  Some actions may be hard to quantify 5) Rollback Residential - revert to pre-August 2018 policy, which limits residential metro districts • Preference for commercial development • Focus on infrastructure investment • Exception based decision making Pros:  Fewer applications to consider Cons:  Lose opportunity to encourage community benefits  Lack of clarity to developers Current Evaluation Framework/Criteria • Public Benefit Assessment and Triple Bottom Line Scan: To comprehensively and consistently evaluate District proposals, an interdisciplinary staff team, inclusive of representatives from Planning, Economic Health, Sustainability, and other Departments as appropriate, was formed. This team relies on the City’s Triple Bottom Line evaluation approach, and other means, to assess a District proposal consistent with this Policy and City Goals and Objectives more broadly. Staff will consider using a Net Carbon analysis, when appropriate and data is available, in assessing environmental aspects of the Triple Bottom Line evaluation. • Financial Assessment: All District proposals are required to submit a Financial Plan to the City for review. Utilizing the District Financial Plan, and other supporting information which may be necessary, the City will evaluate a District’s debt capacity and servicing ability. Additionally, should a District desire to utilize District funding for basic improvements, as determined by the City in its sole discretion, staff will assess the value of this benefit against the public benefits received in exchange. January 7, 2020 Page 4 • Policy Evaluation: All proposals will be evaluated against the Policy and the City’s Model Service Plan, with any areas of difference being evaluated and reported on. Financial Impact The development of a new policy and/or evaluation structure for Metro District review will require staff time and may impact timelines for other Economic Health Office priorities. Outreach to Boards and Commissions The proposed evaluation strategies were presented to the Natural Resources Advisory Board, the Energy Board, the Economic Advisory Committee and the Affordable Housing Board in December 2019 and January 2020. In addition, staff met with a representative from Partners in Climate Action (PiCA) on December 9, 2019. Next Steps Additional outreach will follow once staff receives direction from Council on which policy/evaluation options it would like to explore. Outreach will again include boards and commissions, as well as local community organizations. ATTACHMENTS 1. Denver Post Metro District follow-up (PDF) 2. Powerpoint presentation (PDF) ATTACHMENT 1 Metro District Service Plan Evaluation Policy Josh Birks & Rachel Rogers ATTACHMENT 2 Direction Sought: § Do the councilmembers prefer one of the presented options for enhancing and ensuring the outcomes of future Metro District applications? § Minimum Requirements § Scorecard § Menu of Options § Performance Guided § Rollback Support for Residential Development 2 STRATEGIC ALIGNMENT Neighborhood Livability • 1.1 Affordable Housing Economic Health • 3.4 Development that Enhances the Community Environmental Health • 4.1 Achieve CAP Goals BUDGET • EHO 2019-20 Enhancement Offer $88k Why We Are Here 3 COUNCIL PRIORITY Alignment with City Community Goals such as: • Affordable Housing Plan • Energy Efficiency & CAP • Smart Growth Management 4 Metro District Basics Metro District Basics What is a Metro District… § A special district financing tool intended to fund Public Infrastructure § Authorized by Colorado Revised Statutes § Can fund a wide array of public infrastructure: • Street infrastructure • Non-potable water systems • Extend utility infrastructure • Parks/Recreation facilities • Parking structures • Operations and maintenance 5 Standard Metro District Process I’m Just a Service Plan… § Starts as a development idea (Project) § Property owner (Developer) then determines infrastructure funding is needed and requests formation of a Metro District § City Council considers the proposed Service Plan (District Charter) § If Council approves, then the District Court certifies the Metro District and authorizes a formation election § The District holds an election and formally becomes a quasi-governmental entity …A Metro District 6 Comparative Use in Colorado 7 BASELINE: § Complies w/ Statute ENHANCED STANDARDS: § Community Benefits § Increased Transparency § Encouraged End User Control § Debt Term Maximums COMMON STANDARDS: § Mill Levy Caps § Debt Maximums § Limited Tax Obligations City of Fort Collins Metro District Policy Ø The Policy establishes the criteria, guidelines and processes followed by City Council and City staff in considering service plans for the organization of metropolitan districts Ø The Policy encourages the formation of a District that delivers extraordinary public benefits that align with the goals and objectives of the City Ø The approval of a District Service Plan is at the sole discretion of City Council 8 Public Benefits Environmental Sustainability GHG Reduction Water/Energy Conservation Multimodal Transportation Enhance Resiliency Increased Renewable Capacity Critical Public Infrastructure Existing significant infrastructure challenges On-site Off-site Smart Growth Management Increase density Walkability/Pedestrian Infrastructure Availability of Transit Public Spaces Mixed-Use Strategic Priorities Affordable Housing Infill/Redevelopment Economic Health Outcomes 9 10 Enhancement & Evaluation System Options System Design Guiding Assumptions: • Goals – Set by community strategic plans (e.g., Climate Action Plan and City Plan) • Baseline – Current code, which may not always achieve the stated community goals • Dynamic Design – Enable metro district criteria to evolve towards community goals and shift as current code changes • Regular Review – Re-evaluate criteria and program design on a regular schedule (timed to coincide with Council’s priorities setting) 11 OBJECTIVE: Develop a simple, sustainable process for evaluating metro districts System Design Delivering Value: 12 OBJECTIVE: Develop a simple, sustainable system for evaluating metro districts End User Benefit Community Goals Ideal Outcomes System Design Goals: Multiple Polarities • Predictability – Of the process and expectations; VS. • Flexibility – Allowing creativity and site-specific conditions • Adaptive – Evaluation customized to specific site and actions VS. • Standardized – All evaluations use a consistent set of metrics 13 OBJECTIVE: Develop a simple, sustainable process for evaluating metro districts System Design 14 OBJECTIVE: Develop a simple, sustainable process for evaluating metro districts Predictable Flexible Adaptive Standardized Creativity Focus Process Focus Outcome Focus Metric Focus System Options (1) Minimum Requirements (2) Scorecard (3) Menu of Options (4) Performance Guided (5) Roll Back support for Residential Use 15 Structure: § Minimum Requirements established for desired outcome areas § Minimums would need to honor community vs. end user tension § Minimums would be tied to current code (requiring maintenance) Option 1: Minimum Standards 16 Pros: § Clarity of Outcome § Predictability § Consistency across projects Cons: § May feel pressure to approve § May not achieve as much * § Lack of flexibility / creativity * Some projects may stop at a minimum requirement when they could achieve more for a specific desired outcome Structure: § Develop a ranking system for each outcome area (e.g., Good, Better, Best) § Rankings would have clear criteria (weighted) § No category minimums but an average score could be used § Ranking standards can change over time § Other Outcomes Option 2: Scorecard 17 Pros: § Clarity of evaluation § Flexibility for site conditions § Adaptable to changing priorities Cons: § Not all outcomes delivered Structure: § A menu of options developed for each outcome area § Each option assigned a point value § Minimum points required designed to avoid all low point actions § Point values can change based on priorities and needs § Other Outcomes Option 3: Menu of Options 18 Pros: § Priority driven (point values) § Adaptable to changing standards § Easily maintained; change menu Cons: § Potentially less flexible * § Not all outcomes delivered * e.g., Assigning point values for items off the menu Structure: § Specific key metrics identified and all actions measured against these metrics § Chosen metrics emphasize priorities § Minimum impacts could be set for each or key metrics § Automatically adjusts (metric impact separate from baseline code) § Other Outcomes Option 4: Performance Guided 19 Pros: § Clear and measurable impact § Tied to priority outcomes § Flexibility of delivery Cons: § Technical evaluation needed § Some actions may be hard to quantify Structure: § Revert to pre-August 2018 policy § Preference for commercial development § Focus on infrastructure investment § Exception based decision making Option 5: Rollback Residential 20 Pros: § Fewer applications to consider Cons: § Lose opportunity to encourage community benefits § Lack of clarity to developers Next Steps Brainstorm Options • Institute for Built Environment; & Urban Lab • B&C Updates City Council Direction • January 7, 2020 Work Session • Council Preferred Direction • Potential Hybrid Development and Outreach • Develop system • Engage Stakeholders & Experts • B&C Review and Feedback Council Review 21 WE ARE HERE JAN. 2020 JAN. to APR. 20 MAY 2020 Direction Sought: § Do the councilmembers prefer one of the presented options for enhancing and ensuring the outcomes of future Metro District applications? § Minimum requirements § Scorecard § Menu of Options § Performance Guided § Rollback Support for Residential Development 22 23 Backup Slides Prevalence of Metro District use in Colorado • Most common Title 32 special district in Colorado (over 1,800 total metro districts). • Used for either: • advancing the normal course of development, or • achieving enhanced development outcomes. 24 % of Municipal Land Area # of Metro Districts Regional Fort Collins 1.4% 11 Loveland 13% 26 Greeley 2% 3 Johnstown 22% 18 Timnath 50% 18 Windsor 42% 52 State Aurora 27% 205 Denver 10% 45 Littleton 8% 6 Longmont 1% 3 Metro Districts in Fort Collins 25 * Adopted since 2018 Metro District policy change. # of Districts Residential Commercial Description Date Description Date Foothills Metro District 1 60.000 60.000 Council Approved 5/7/2013 Block 23 2 --- --- Council Approved 9/27/2016 Harmony I-25 3 --- --- Council Approved 9/27/2016 Gateway at Prospect 7 70.000 70.000 Council Approval 3/6/2018 SW Prospect I-25 7 70.000 70.000 Council Approval 3/6/2018 Rudolph Farms 6 70.000 70.000 Council Approval 3/6/2018 Montava * 7 60.000 60.000 Council Approval 9/25/2018 On Council Agenda 1/7/2020 Water's Edge * 5 50.000 50.000 Council Approval 9/18/2018 Waterfield * 3 50.000 50.000 Council Approval 9/18/2018 Council Approval 4/16/2019 Mulberry Metro District * 6 50.000 20.000 Council Approval 4/16/2019 Northfield Metro District * 3 50.000 50.000 Council Approval 10/1/2019 Name Mill Levy Service Plan Development Agreement Option 5 & 6: Other Options Option 5: Collaborative § Early council engagement § Custom to each site § Maximizes influence § Requires significant Council time commitment Option 6: Revenue Share § City receives funds § City uses funds to deliver community goals § Maximizes city control § Could feel like a TABOR end-around 26 Take-Away: Both options have significant downsides; neither is predictable Progressive System to Move toward Goals 27 Time 100% Future Goals Code Today 100% 45% 50% 25% 35% 65%