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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/24/2020 - RESIDENTIAL METRO DISTRICT EVALUATION SYSTEMDATE: STAFF: November 24, 2020 Cameron Gloss, Planning Manager Paul Sizemore, Interim Director, Comm. Devt. & Neighborhood Serv. WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Residential Metro District Evaluation System. EXECUTIVE SUMMARY The purpose of this item is to review and consider an evaluation system for Residential Metropolitan (Metro) District Service Plans. Staff proposes a system that provides both minimum requirements and a performance points system, including a menu of options, applied to Energy and Water Efficiency, Housing Attainability and Community Livability attributes. The proposed system is intended to provide metrics that f urther define ‘extraordinary public benefits’ as found in the adopted Metro District policy. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Do the councilmembers support an evaluation system for residential Metro District Service Plans th at provides both minimum requirements and a performance points system? 2. Are there other evaluation systems that should be considered? BACKGROUND / DISCUSSION On June 16th, the City Council approved a six -month moratorium on new metro district applications and directed staff to develop possible changes to the Metro District policy that address es issues raised by Council and citizens, and that fulfill established City goals. The moratorium remains in place until January 31, 2020 , and applies to the consideration of new Service Plans, but not to the amendment of Metropolitan District Service Plans previously approved by Council or to the consideration of agreements with the City as contemplated in the Service Plans. Policy Direction The current Policy generally supports the formation of a Metro District where it will deliver ‘extraordinary public benefits’ that align with the goals and objectives of the City. These aspirational goals are embodied in several adopted long-range plans, including City Plan (Comprehensive Plan), Climate Action Plan, Transit and Transportation Master Plans, Housing Plan, Arts and Culture Master Plan, and others covering multiple City and community programs. Since ‘extraordinary public benefits’ are difficult to define, one of the primary objectives in creating a residential Metro District evaluation system is to develop metrics that capture those community benefits in a clear, measurable and predictable way. Residential Mill Levy Service Plan Development Agreement Peer Cities Review With Colorado Front Range communities making up the bulk of the state’s 1,800 metro districts, City staff interviewed developers and fellow staff within 10 other jurisdictions (Boulder, Colorado Springs, Denver, Greeley, Jefferson County, Lakewood, Larimer County, Loveland, Timnath, and Windsor) to get a better understanding of regulatory options employed elsewhere and their potential applicability to Fort Collins’ approach. A summary table comparing Front Range Metro District standards have been provided on slide 8 of the attached presentation (Attachment 1). November 24, 2020 Page 2 General Trends • All surveyed jurisdictions provide similar requirements intended to increase transparency with consumers through property purchase disclosure statements. • Residential Mill Levy caps range from a low of 30 mills in Colorado Springs to no specified limits in Jefferson and Larimer Counties. An additional Operations and Maintenance mill levy is provided in several jurisdictions. Fort Collins, with a cap of 50 mills matches limits found in Denver, Lakewood and Timnath. • Three communities prohibit a District’s use of eminent domain, including Fort Collins, while the balance of jurisdictions either allow those powers to be exercised as a basic right or allowed under certain conditions and considered on a case-by-case basis. • No other community surveyed includes a performance-based system to evaluate residential Metro District Service Plans as is being suggested by staff. Only Windsor has an adopted policy giving preference to certain types of development, e.g. up-market residential or mixed-use projects. Denver includes one criterion that all metro districts integrate a public art program. Evaluation System Based Upon Reduced Cost of Ownership and Increased Community Benefits At its Work Session on January 7th, the City Council provided general direction on several evaluation system methodologies presented by staff. Council cited the “need to maintain integrity in the intersection between resident benefit (who pays higher taxes) and community benefits delivered by a specific metro district/project”, and that any system needs to have quantifiable elements when they can be integrated into the evaluation while still providing flexibility as new priorities arise. A more detailed summary of C ouncil’s Work Session discussion is provided in Attachment 1. The proposed evaluation system considers the impact of Metro Districts on the residential consumer, who pays District property taxes in addition to other taxes, fees, and monthly utility bills. The resulting system is designed to help reduce costs to Metro District residents primarily through savings from reduced energy and water consumption. Another underlying principle is the increase in community benefits addressing high priority needs for increased affordable and attainable housing options and providing elements that increase livability and address community goals and aspirations expressed through: • City Plan • Transportation and Transit Master Plans • Climate Action Plan • Arts and Culture Master Plan • Nature in the City Under the proposed evaluation system concept, all Residential Metro Districts would need to satisfy a series of minimum requirements addressing Energy and Water Efficiency, Housing Attainability and Community Livability, as well as meet an additional number of optional ‘points’, in order to receive Service Plan approval. All elements satisfying the approval requirements are intended to exceed standards described in the City’s adopted Land Use Code, Energy Code, and other related provisions of the City Code. Essentially, the performance requirements are intended to bridge the gap between existing codes and the more aspirational aspects of City policy plans. Performance requirements within each category include: November 24, 2020 Page 3 Energy Water Affordable/Attainab le Housing Livability Minimum Requirements Enhanced energy efficiency measures Use WaterSense fixtures & irrigation controllers 5% Affordable (60% AMI) Rental Housing - Either Developer Built or Land Donation At least X number of points from the menu of options below: • High quality transit stop • Shared transportation options • Bike & walk friendly streets • Essential neighborhood services • Exceptional gathering spaces • Community workspaces • Common areas food production • Universal 10 min walk to nature • Public trails connectivity • Enhanced pollinator habitat • Meet Indoor airPLUS standard • Universal design standards • 1% for arts & culture • Sustained educational programming • Excellence in public engagement Solar & Electric Vehicle ready Water efficient common areas *20% Attainable Housing -half at 80% AMI, half at 80- 120% AMI *Attainable units could be 1. Deed Restricted, 2. Provided through Smaller Units or 3. Community Land Trust Additional Points from a Menu of Options Zero energy homes Deed restrictions for water friendly and plant positive landscapes Additional affordable and/or attainable housing units Build to Passive House standard Additional water efficiency in common areas Options for Accessory Dwelling Units Zero energy homes Non-potable irrigation supply Build all electric homes Stormwater innovation Install solar [50/75/100]% of annual use Smart storage and grid interactivity November 24, 2020 Page 4 Financial Impact A new evaluation structure for Residential Metro District review will require additional staff time to evaluate each application for compliance. Outreach to Boards and Commissions The proposed evaluation strategies will be presented to the Natural Resources Advisory Board, the Energy Board, the Economic Advisory Committee and the Affordable Housing Board, as well as the Chamber of Commerce Local Legislative Affairs Committee and other community organizations, for their comments prior to returning to City Council for its official consideration of a potential Metro District policy change. Next Steps Following direction from Council, staff will conduct additional stakeholder workshop(s), facilitated by members of the Institute for the Built Environment, to refine metrics used in the residential Metro District Service Plans evaluations system. Future workshop participants will include those from the most recent session in October and will be expanded to include additional stakeholders and subject matter experts in the fie lds of energy and water conservation, and housing. ATTACHMENTS 1. Work Session Summary, January 7, 2020 (PDF) 2. Powerpoint Presentation (PDF) ATTACHMENT 1 ATTACHMENT 1 November 24, 2020 Residential Metro Districts Evaluation System Cameron Gloss ATTACHMENT 2 Direction Sought: §Do the councilmembers support an evaluation system for residential Metro District Service Plans that provides minimum requirements and a performance points system? §Are there other evaluation systems that should be considered? 2 ATTACHMENT 2 Metro District Basics •Quasi-governmental entity with tax-exempt bonding and taxing authority; used to finance Public infrastructure and services •Authorized under Colorado's Special District Act, Colorado Revised Statutes Ti tle 32 •Examples of infrastructure needs: o Street infrastructure o Non-potable water systems o Extend utility infrastructure o Parks/Recreation facilities o Parking structures o Operations and maintenance 3 ATTACHMENT 2 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 wi th the goals and objectives of the City Ø The approval of a District Service Plan is at the sole discretion of City Council 4 ATTACHMENT 2 Why Metro Districts? •Public infrastructure can be financed over time •Public infrastructure can be financed at tax-exempt interest rates •Property owners can deduct taxes paid to the district on their federal income tax returns •New infrastructure is funded by those who will benefit (Constituents within the District) and not all City residents •Permanent operation and maintenance of certain public improvements that are not dedicated to the City 5 ATTACHMENT 2 Our Region 6 ATTACHMENT 2 7 Mill L evy Cap 50 Mills Maximum O&M Levy Cap 10 Mills Re gional Improvements Levy Cap 5 Mills (in ad ditio nl ro the 50 Mills limit) Basic Infrastructure To enab le public benefit Eminent Domain Prohibite d Debt Limita tio n 100%of Capacity Minimum Debt Au th orizatio n $7 millio n Debt Term Limit 40 years unless Metro Distric t B oard decides othe rwis e Citiz en Control As early as possible Multip le Districts Projected over an e xte nd ed perio d Dissolutio n Distric ts shall have no more than thre e years from ap proval o f the Servic e Plan to secure City Counc il ap proval b y re solutio n Commercial/ Residential Ratio N/A City of Fort Collins Metro District Policy ATTACHMENT 2 Front Range Metro District Comparison 8 ATTACHMENT 2 Appropriate Parameters How do we define parameters for residential Metro Districts in a way that addresses know n issues? •Tr ansparency for buyers •Cost burden to residents •Fairness & community benefit •Process and governance -minimum thresholds (i.e. size of project, public infrastructure needs) -timing and approval process -developer accountability -policy updates and changes 9 ATTACHMENT 2 10 To tal Cost of Ownership Mortgage Ta xes and Fees: §County Property Ta x §Metro District Property Tax §Homeowner ’s Association Fees Insurance Utilities: §Wa ter, Wastewater, Stormwater, Electricity, Natural Gas §Internet & Cable TV §Solid Waste/Recycling ATTACHMENT 2 Data: Larimer County Treasurer Graphic: Denver Post A P roperty Tax Comparison Johnstown: Thompson River Ranch (metro district) Vs. Thompson Crossing (no metro district) ATTACHMENT 2 Fort Collins Avg Residential Utility Bills 12 ATTACHMENT 2 Require Extraordinary Community Benefit Recognizing that current code does not necessarily result in developments that meet our community aspirations, how might Metro Districts help realize the kind of residential development that we desire as a community as defined by adopted City policies? Relevant Plans Include: •City Plan •Climate Action Plan •Housing Plan (update in progress) •Wa ter Efficiency Plan •Energy Policy •Others 13 ATTACHMENT 2 Proposed Evaluation System All projects meet minimum requirements by category PLUS a minimum number of additional points are required and achieved from a menu of options Exceptional circumstances and innovation allowed as alternative compliance Revisit every two years Energy Water Housing Livability Public Infrastructure Needs Metro District Minimum Requirements Menu Options (points)Code Code Code Code Plan Plan Plan Plan ATTACHMENT 2 Energy 15 Additional Points •Zero energy homes •Build to Passive House standard •Build all electric homes •Install solar [50/75/100]% of annual use •Smart storage and grid interactivity •Other energy saving technologies Required •Enhanced efficiency measures •Solar & Electric Vehicle ready ENERGY Minimum Requirements Additional PointsATTACHMENT 2 Wa ter 16 Additional Points •Deed restrictions for water friendly and plant positive landscapes •Additional water efficiency in common areas • Non-potable irrigation supply •Stormwater innovation Required •Use WaterSense fixtures & irrigation controllers •Wa ter efficient common areas WATERMinimum Requirements Additional PointsATTACHMENT 2 17 Housing Affordability Along the Income Spectrum AMI 0% Below 80% AMI is City’s Definition of Affordable Housing 80% $69.7K/yr 200%100% $87.2K/yr 120% $105K/yr $415K Market Housing $320KPurchase Price Goal is defined by AHSP (188-228 units/year) Fewer attainable options are available to Middle Income Earners Goal is harder to define & City influence may be outweighed by market forces ATTACHMENT 2 Affordable & Attainable Housing 18 Additional Points •Additional affordable and/or attainable housing •Options for Accessory Dwelling Units Required -Example •5% Affordable Housing (60% AMI) •Developer Built or Land Donation •20% Attainable Housing •half at 80% AMI, half at 80-120% AMI •Deed Restricted or Smaller Unit Sizes or Community Land Trust HOUSINGMinimum Requirements Additional PointsATTACHMENT 2 City Plan Report Card 19 ATTACHMENT 2 Livability 20 Point Options 1.High quality transit stop 2.Shared transportation options 3.Bike & walk friendly streets 4.Essential neighborhood services 5.Exceptional gathering spaces 6.Community workspaces 7.Common areas food production 8.Universal 10m walk to nature 9.Public trails connectivity 10.Enhanced pollinator habitat 11.Meet Indoor airPLUS standard 12.Universal design standards 13.1% for arts & culture 14.Sustained educational programming 15.Excellence in public engagement Required •Achieve at least X points from above LIVABILITYPoint OptionsATTACHMENT 2 Public Infrastructure 21 Points •Considerations made for disproportionate costs Base Assumption •Assumes significant public infrastructure needs and cost Public Infrastructure Exceptional Costs Base Assumption ATTACHMENT 2 Next Steps •Confirm direction on Residential Metro District methodology •Focus Group evaluation and production of refined metrics •Review evaluation system with Boards and Commissions 22 ATTACHMENT 2 Direction Sought: §Do the councilmembers support an evaluation system for residential Metro District Service Plans that provides minimum requirements and a performance points system? §Are there other evaluation systems that should be considered? 23 ATTACHMENT 2 24 Backup Slides ATTACHMENT 2 25 Fort Collins HOA Tr ends Observations: §HOA fees for SFHs are typical in subdivisions constructed after 1985 §Due to age of development fees are most likely in S/SE and NE Fort Collins §Av erage annual HOA fee: $602 §To wn home and condo fees typical regardless of age of development §HOA fees 3-5x higher than single family homes but may also include certain utilities/insurance §Av erage annual HOA fee (attached): $2,710 ATTACHMENT 2 26 Units w/o HOA Fees (Typically SFH built before 1985) Units with HOA fees (Typically SFH built after 1985)To wnhomes & condos (Highest observed HOA fees)Listing PriceAnnual HOA Fee ATTACHMENT 2 27 Housing Data / Comparisons Local Data: §Colorado average housing unit size –2,162 sf (2nd highest in US) §Colorado average lot size –8,076 sf (6th smallest in US) §Fort Collins median unit size –2,269 sf §Median of 3 bed / 2.5 baths §Persons per household –2.56 (Colorado) , 2.46 (Fort Collins), 2.52 (National) ATTACHMENT 2 28 Housing Trends §New single-family and multifamily unit sizes are decreasing slightly after years of increase. §Fort Collins singe-family and multifamily unit sizes are stable §Fewer households contain children under 18 (15% in Fort Collins, 2016) Size of New Single-Family Homes (US) Source: National Association Home Builders ATTACHMENT 2