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HomeMy WebLinkAboutReport - Read Before Packet - 4/26/2022 - Updated Power Point Presentation For East Mulberry Work Session ItemEast Mulberry Potential Annexation Lenses & Phasing April 26, 2022 City Council Work Session Rebecca Everette / Travis Storin 2Agenda 1.Overview and Background on: •Growth Management Area •Larimer County Intergovernmental Agreement •Annexation Background •History of East Mulberry Enclave 2.Review decision points and potential next steps Pause for questions and discussion 4.Potential Annexation Lenses & Phasing 3Plan Alignment STRATEGIC PLAN •NLSH 1.7: Advance planning efforts in the Growth Management Area, including holistic considerations for potential annexations. •NLSH 1.6: Transform regulations and revise procedures to increase clarity and predictability to ensure new development advances adopted City plans and policies. CITY PLAN •LIV 1.1 Growth Management Area •LIV 1.4 Intergovernmental Agreements •LIV 1.6 Adequate Public Facilities •HI 1.5 Cost-Recovery Model •HI 1.7 Regional Collaboration EAST MULBERRY CORRIDOR PLAN •Vision, Principles & Policies •GFM Principle 2 -Growth & Fiscal Management 4 •Created in 1980 as the “Urban Growth Area” •Boundary established through a Service Area Analysis •Supports urban development and services within boundary, and community separators and rural development outside GMA •Has been an effective tool for intentional, orderly, and responsible growth •Establishes boundary for City Plan and other long-range community plans Current GMA and City Limits Growth Management Area Intergovernmental Agreement for Cooperative Growth Management IGA Background •Initially executed in 1980 with creation of GMA •Provides specific guidance to both City and County on: •GMA •Annexation •Development regulations •Public facility improvements and maintenance •Impact fees Annexation Guidance •Assures that “that urban development that occurs in the unincorporated portion of Larimer County in the vicinity of the City of Fort Collins is annexed to the City as soon as possible;” •“Unincorporated land within the Fort Collins Growth Management Area (GMA) boundary be annexed expeditiously by the City when such parcels meet eligibility requirements;” and •“The City agrees to pursue involuntary annexation of any parcel that becomes eligible for involuntary annexation.” 5 Annexation Background Annexation of land into the City of Fort Collins can occur in three ways: 1.Landowner petition (voluntary) 2.Annexation election (voluntary) 3.An enclave (involuntary) Purpose of Annexation •Clear delineation between service provisions of “urban” vs. “rural” standards •Creates a more consistent urban framework within the established Growth Management Area •Ensure efficiency and contiguity of City programs, services, infrastructure and utilities •Gain regulatory control over signage, lighting, site design, building code, and natural feature protection to align with community goals •Grow responsibly, protecting rural and agricultural lands outside of urban development areas •Ensure service levels match expectations in City Plan and other adopted plans 6 Annexation can happen both reactively in response to development activity and proactively in response to identified needs, goals and plans 7History of East Mulberry Enclave 1980: Urban Growth Area Established, E Mulberry included in original “UGA” 2000-2002: East Mulberry Corridor Plan Creation and Adoption 2017: Community Engagement Survey Ahead of Enclave Creation July 2018: Council Action to create the E Mulberry Enclave August 2021: Enclave eligible for annexation August 2020: Business- owner Focus Groups April 2021: Annexation Analysis & Plan Update Kick-Off Fall –Winter 2021-2022: Ongoing Community Engagement We are Here: Potential Next Steps Current context in Mulberry 8 •Socially and physically interconnected with City of Fort Collins •Recent annexations in response to development •If no action taken, will “naturally” annex in pieces as development occurs East Mulberry Enclave Decision Points / Potential Next Steps 9 1)Proceed with the East Mulberry Vision and Annexation Implementation Plan •Refine financial model to reflect Council priorities and corresponding financial assumptions •Identify range of potential phasing options, thresholds and timelines 2)Proceed with Plan Update (Re-Scoped) and Pause the Annexation Implementation Plan •Limited update that reflects changed conditions and priorities for the area, rather than the major plan update •Emphasis on aligning future land use framework with City Plan •Would require a joint process with Larimer County and revisiting community engagement •Could be paired with further guidance from Council to create a clearer policy foundation to evaluate East Mulberry and other future annexations (voluntary and involuntary) 3)Pause Plan Update and Annexation Implementation Plan and Review the IGA & Growth Management Area •Evaluate overall GMA boundary, including potential adjustments in other areas •Explore annexation policy, conduct “peer cities” research, and facilitate Council discussion and creation of an annexation policy framework to evaluate East Mulberry and other future annexations •Continue conversations with Larimer County staff and Commissioners about minor or major updates to the Intergovernmental Agreement Pause –Questions for Council 1.What feedback or questions do Councilmembers have on the current growth management and annexation policies? 2.Which potential next steps do Councilmembers support and would Council like to further explore annexation lenses and phasing tonight? Annexation Lenses & Phasing Safety •I-25 and East Mulberry consistently noted as an area where business success is partially impeded by safety issues not adequately addressed by current law enforcement efforts •actively requested to be annexed early to mitigate law enforcement deficiencies Aesthetics/Transportation •Aesthetic improvements along the East Mulberry frontage •Hwy is dangerous to access by all transportation modes Stormwater Improvements •The service-area/Industrial park southwest of the old airport and directly east of Home Depot and Walmart is severely affected by stormwater infrastructure deficiencies and flooding related to Dry Creek Housing and Transit •Mechanisms for affordable housing preservation can be utilized in these neighborhoods •Investments in transportation mobility on key corridors (e.g., Summit View) Priorities by Subareas Phasing Based on precedent from previous annexations, a phased approach is recommended. •Allows for allocation of resources over time •Allows time for revenue generation ahead of other phases •Allows for better community engagement ahead of each phase 14Phasing Lenses Phasing Lenses Each lens focuses on one priority area. Other priority areas are still present but might be delayed or resourced differently. Emphasizes fiscal impact to City of annexation, including existing priorities, risks, and timing Fiscal Health for City Emphasizes environmental buffers, flood mitigation Environmental & Hazard Protection Emphasizes economic development and vitality in the area Economic Opportunity Emphasizes connectivity, utilities, and other social priorities Residential Enhancement The Gateway Community Emphasizes improvements and reinvestment potential for the Mulberry Corridor, including the highway and frontage roads Fiscal Impact Model 15 Annexation Area Jobs Households =Persons Served + Revenues Expenses Net Fiscal Impacts Operating: Governmental Property Tax Sales/Use Tax Fees/Permits/Charges for Services Utilities Rate/fee revenue Capital: Governmental CEF TCEF Utilities: PIFs Operating: Governmental Full suite of governmental services Utilities L&P, Stormwater and Broadband Capital: Governmental Specific identified projects (Parks) Utilities: L&P –connectivity including acquisition costs from existing providers (PVREA/Xcel) Broadband -Buildout Stormwater –specific identified projects Operating: Governmental Annual Net Fiscal Impacts Total Net Fiscal Impacts Utilities Annual Net Fiscal Impacts Total Net Fiscal Impacts Capital: Governmental Total Net Fiscal Impacts Utilities Total Net Fiscal Impacts 16Financial Analysis Framework •Separate analysis is provided for Governmental and Utilities •Expenses and revenues are calculated within the subarea designations •Constant $ assumed (no rate, revenue or cost inflation) •20-year timeframe •Summarized into 5-yr increments: •Immediate, Short Term, Medium Term and Long Term •Depending on assumptions around timing of sub-area annexations, additional capital (and continuing operating costs) will be incurred past the 20-year horizon that is presented Economically-Focused Phasing Option •Prioritize the annexation of properties with potential for new industrial and service commercial uses Phasing Assumptions •Prioritizes the annexation of undeveloped industrial land •Prioritizes stormwater improvements to benefit subareas 1, 4, and 5 to create potential for new or renewed development. Considerations •Maximizes potential for new business attraction through undeveloped land at the I- 25/Mulberry interchange and at the airpark •Prioritizes support opportunities for existing businesses from city programs and through improvements to support existing areas Economic Opportunity 18Scenario 1 (Economic Opportunity): Governmental Fiscal Impacts Operating: •Quicker ramp up of services in established areas leads to quicker expense build-up (police, streets/traffic, other) •Revenues build up from existing residents & businesses •Large negative margin Capital: •Includes investments in new parks keyed to resident increases over time •Revenue increases delayed with later residential development timeframe Revenue $73 Expense $162 Margin ($89) Totals - 20 yrs. ($M) Revenue $38 Expense $16 Margin $22 Totals - 20 yrs. ($M) 19Scenario 1 (Economic Opportunity): Utilities Fiscal Impacts Operating: •Assumes current rate structure applied to all customers •Assumes similar operating cost structure to current averages Capital: •Front loads capital investment by bringing L&P & broadband infrastructure through the E Mulberry corridor •Allows City to collect PIFs for new development •Acquisition costs (loss of revenues or stranded investments) to be recouped through rate adjustments Revenue $110 Expense $94 Margin $16 Totals - 20 yrs. ($M) Revenue $9 Expense $138 Margin ($129) Totals - 20 yrs. ($M) Socially/Residential-Focused Scenario •Prioritizes the annexation of existing residential neighborhoods and improving their quality of services and infrastructure. Phasing Assumptions •Prioritizes annexation from the south (Subarea 2) and north (Subarea 5) with Subarea 3 annexation to improve access. •Prioritizes utilities’ investments to existing and new residential areas Considerations •Addresses the interests and concerns of the largest number of potential residents •Could trigger the need for additional investments in stormwater and road improvements. •May choose to address inequities in service levels and quality of infrastructure Residential Enhancement 21Scenario 2 (Residential Enhancement): Governmental Fiscal Impacts Revenue $62 Expense $111 Margin ($49) Totals - 20 yrs. ($M) Revenue $60 Expense $16 Margin $44 Totals - 20 yrs. ($M) Operating: •Slower ramp up of services in established areas leads to slower expense build-up (police, streets/traffic, other) •Revenues build up slower from existing residents & businesses •Relatively smaller negative margin Capital: •Accelerated new residential development provides highest level of capital revenue from subarea 5 22Scenario 2 (Residential Enhancement): Utilities Fiscal Impacts Operating •Similar annual operating margins as in Scenario 1 Capital •Assumes moderate upfront investment for acquisition of existing electrical infrastructure •Assumes little new development in existing residential areas •Assumes large investment in L&P and broadband internet in last phase (subareas 1 and 4) •Development PIFs increase with earlier residential buildout Revenue $111 Expense $92 Margin $18 Totals - 20 yrs. ($M) Revenue $10 Expense $138 Margin ($128) Totals - 20 yrs. ($M) •Prioritize the annexation of areas that need improvements to address environmental and hazard concerns. Phasing Assumptions •Prioritize annexation of Subareas 1, 2, and 4 to address stormwater issues •Assumes faster business development activity in Subareas 1 and 4. Considerations •Addresses hazard concerns and liabilities •Greater upfront investment and doesn’t maximize potential for new residential development to support improvement costs Environment & Hazard Protection 24Scenario 3 (Environment & Hazard Protection): Governmental Fiscal Impacts Capital •Similar to Scenario 1, quicker ramp up of services in established areas leads to quicker expense build-up (police, streets/traffic, other) •Revenues build up from existing residents & businesses •Large negative margin Capital •Accelerated park development •Similar development profile to Scenario 1 provides delayed revenue increase Revenue $76 Expense $164 Margin ($89) Totals - 20 yrs. ($M) Revenue $42 Expense $16 Margin $26 Totals - 20 yrs. ($M) 25Scenario 3 (Environmental & Hazard Protection): Utilities Fiscal Impacts Operating •Highest total operating margins from bringing on existing business customers early Capital •Assumes significant upfront investment in infrastructure to get new L&P and broadband service out to businesses within the I-25 gateway area •New development revenues spurred by these upfront investments Revenue $120 Expense $102 Margin $19 Totals - 20 yrs. ($M) Revenue $11 Expense $138 Margin ($128) Totals - 20 yrs. ($M) •Prioritize the annexation of property/subareas that will generate revenues for capital and/or on-going improvements in near term Phasing Assumptions •Prioritize annexation of Subarea 3 and 1 to maximize utility service and tax revenue •Light and Power (along with Broadband) built on schedule that maximizes leverage with other potential service extensions Considerations •increases property tax and sales tax growth (indirect from new residents) •Increases opportunity to recoup capital expenditures •City fiscal constraints may contribute to longer timeframes in addressing interests and concerns of area residents Fiscal Health for City 27Scenario 4 (Fiscal Health for City): Governmental Fiscal Impacts Revenue $52 Expense $100 Margin ($48) Totals - 20 yrs. ($M) Revenue $30 Expense $16 Margin $14 Totals - 20 yrs. ($M) Operating: •Lowest level expense levels, with slower ramp up of services in established areas, leads to slower expense build-up (police, streets/traffic, other). Revenues build up slower from existing residents & businesses •Relatively smaller negative margin (similar to Scenario 2) Capital: •Lowest level of capital revenue from extended development timeframes 28Scenario 4 (Fiscal Health for City): Utilities Fiscal Impacts Revenue $70 Expense $61 Margin $9 Totals - 20 yrs. ($M) Revenue $7 Expense $138 Margin ($131) Totals - 20 yrs. ($M) Operating •Lowest total operating margin from bringing on customers slowly Capital •Initial Infrastructure focused along the E Mulberry corridor •Similar capital profile to Scenario 2 Phasing Assumptions •Prioritizes annexation of Subarea 3 and focus on central portion of Subarea 1 Considerations •Could lead to improvements along major city gateway due to L&P & Broadband investments upfront •Provides more control over the Mulberry Street in the short term, including sign code and other Land Use Code standards •Is likely to stimulate commercial infill and redevelopment of underutilized sites •Addresses health and safety concerns in the Subareas 1 and 3. •Could require some upfront stormwater investment •May address some of area resident concerns over time, especially related to multi-modal access along E Mulberry •Improved residential neighborhood access to the E Mulberry travel corridor is delayed Gateway Community 30Scenario 5 (Gateway Community): Governmental Fiscal Impacts Revenue $44 Expense $16 Margin $28 Totals - 20 yrs. ($M) Revenue $64 Expense $126 Margin ($63) Totals - 20 yrs. ($M) Operating: •Average operating revenue, expense and margin compared to the other scenarios •Residential areas delayed with the focus on E. Mulberry business corridor Capital: •Average level of capital revenue from extended residential development timeframes 31Scenario 5 (Gateway Community): Utilities Fiscal Impacts Utilities Operating Assumptions •Includes operating costs of infrastructure after takeover from PVREA to Light & Power •Cost recovery through rate adjustments within the area Utilities Capital Assumptions •Assumes moderate upfront investment in electrical infrastructure and moves that to the second phase of annexation •Assumes new development attraction due to upfront electrical infrastructure investments Revenue $10 Expense $138 Margin ($129) Totals - 20 yrs. ($M) Revenue $92 Expense $79 Margin $13 Totals - 20 yrs. ($M) 32Scenario Comparison: Governmental Fiscal Impacts Operating Margin ($M) Immediate Short Term Medium Term Long Term Total –20 Yrs. Scenario 1 –Economic Opportunity ($13)($20)($23)($32)($89) Scenario 2 –Residential Enhancement ($4)($10)($11)($24)($49) Scenario 3 –Env. & Hazard Protection ($12)($20)($24)($32)($89) Scenario 4 –Fiscal Health for City ($4)($7)($10)($27)($48) Scenario 5 –Gateway Community ($4)($7)($21)($31)($63) Capital Margin ($M) Immediate Short Term Medium Term Long Term Total –20 Yrs. Scenario 1 –Economic Opportunity $3 ($0)$8 $11 $22 Scenario 2 –Residential Enhancement $3 $15 $15 $12 $44 Scenario 3 –Env. & Hazard Protection ($3)$1 $9 $19 $26 Scenario 4 –Fiscal Health for City $1 ($3)$6 $10 $14 Scenario 5 –Gateway Community $1 ($3)$17 $13 $28 33Scenario Comparison: Utilities Fiscal Impacts Operating Margin ($M) Immediate Short Term Medium Term Long Term Total –20 Yrs. Scenario 1 –Economic Opportunity $1 $3 $5 $7 $16 Scenario 2 –Residential Enhancement $1 $3 $5 $8 $18 Scenario 3 –Env. & Hazard Protection $1 $4 $6 $8 $19 Scenario 4 –Fiscal Health for City $0 $1 $3 $6 $9 Scenario 5 –Gateway Community $0 $1 $4 $8 $13 Capital Margin ($M) Immediate Short Term Medium Term Long Term Total –20 Yrs. Scenario 1 –Economic Opportunity ($68)($42)$2 ($22)($129) Scenario 2 –Residential Enhancement ($36)($15)$2 ($80)($128) Scenario 3 –Env. & Hazard Protection ($94)($18)$3 ($19)($128) Scenario 4 –Fiscal Health for City ($29)($43)$2 ($61)($131) Scenario 5 –Gateway Community ($29)($43)($42)($16)($129) 34Questions for Council 1.What aspects of each scenario would Council like to prioritize to further refine toward a potential future annexation scenario? 2.What questions remain for Council regarding potential annexation phasing? 36Timeline and Work Plan Update March 8th Review Goals and Big Ideas for East Mulberry Plan Review Annexation Scenario Framework April 26th Review financial assumptions Review Draft Potential Annexation Phasing Scenarios Winter Review Draft of the East Mulberry Plan Discuss final potential annexation scenarios Summer Consider refined financial assumptions, timeline and scenarios for potential annexation Current Timeline (2022): 37Annexation Decision Tree When should annexation occur?How should annexation occur? Should the City annex the Mulberry Enclave? Decision to Annex In Multiple Phases 1-5 years 5-10 years 10-20 years All at Once Short Timeframe Long Timeframe Potential Annexation Approaches 38 1 -Limit all annexation within enclave •Would require an IGA update 2 -Annex individual properties as they develop •Status quo, reactive approach 3 -Annex portions of enclave in phases •Manage timing and sequencing of smaller annexations 4 -Annex entire enclave 39Regional Growth Management Areas 402000 Growth Management Area 411982 Growth Management Area Advisory Group Meeting Key Takeaways and Perspectives •Support for thoughtful and careful approach to annexation in hopes of eventually benefitting from increased resources and attention toward transportation, policing, stormwater, and other topics •Concerns and surprise that annexation was in question •Desire for greater connectivity, continuity, and safety for different modes of transportation. •Preference to start with Mulberry Corridor and the I-25 Gateway. 42