HomeMy WebLinkAboutItem 02 Proposed Annexation Incentives Project AGENDA ITEM SUMMARY Meeting Date: 6/16/2014
Meeting Type: Work Session
Staff Contact/Dept.: Greg Mott Staff Phone No: 726-3774
Estimated Time: 15 Minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Provide Financially
Responsible and
Innovative Government Services ITEM TITLE: PROPOSED ANNEXATION INCENTIVES PROJECT
ACTION
REQUESTED:
Discuss and approve, modify or not approve information to be distributed during
Phase 1 of this project.
ISSUE STATEMENT: The annexation incentives project is divided into three phases; 1. Information gathering; 2. Incentives program development; 3. Incentives program
implementation. The value of Phase 1 is directly enhanced by Council endorsement of the materials used in this phase, including a survey of incentives options and a facts sheet showing tax differentials, city services, and fees and assessments related
to city sewer service.
ATTACHMENTS: 1. Council Briefing Memorandum
2. Map of regions to be surveyed.
3. Proposed Survey 4. Fact Sheet on property tax differential, fees, and assessments upon annexation
DISCUSSION/ FINANCIAL IMPACT:
The principal objectives of Phase 1 of this project are to identify the level of interest in annexation; identify the reasons why people have not annexed; and identify the priority of city-only services received upon annexation. A fact sheet will be
distributed that includes information on the difference between city – county property taxes; and the fees, charges and assessments for a typical home annexing and connecting to city sewer.
Much of this information focuses on costs and most of these costs involve sewer.
An important element related to sewer costs is when a home with a functioning
septic system must connect. The Springfield Municipal Code requires connection when sewer is available within 300 feet regardless of the condition of the septic
system. State law requires connection when the septic system needs repair and
sewer is available within 300 feet. This difference in standards is a local choice that can be amended at the Council’s option. However, unless the Council indicates
this is something they would consider as a potential incentive, such possibility
cannot be included in the fact sheet provided in Phase 1. On February 4, 2013 the Council conducted a work session discussion follow-up of the December 10, 2012
Council Goal setting session and identified the following action as a short term goal: “Develop incentives for those developed areas just beyond the city limits to annex to the city.” This topic was briefly discussed, but no decisions were made
other than to revisit at a later work session. Tonight’s work session materials were prepared in support of this broader discussion identified by the Council on February 4th and includes a briefing memorandum that cites some annexation options
available for Council consideration, and a map that displays the different tax assessment rates residents of the urban transition area pay. The map uses different shading to represent the difference in rates, from a low of $8.25 per thousand to a
high of $14.75 per thousand.
M E M O R A N D U M City of Springfield
Date: 6/16/2014
COUNCIL
BRIEFING
MEMORANDUM
To: Gino Grimaldi
From: Len Goodwin, DPW Director
Greg Mott, Current Development Manager
Subject: Discuss options or incentives for annexation
ISSUE:
The Annexation Incentives project is divided into three phases: 1. Information Gathering; 2. Incentives Program Development; and 3. Incentives Program
Implementation. The information gathered during Phase 1 will inform the number and
variety of incentives the Council will consider during Phase 2 and will include in Phase
3. The effectiveness of Phase 1 is largely dependent upon the variety of incentives that
are identified and the responses these potential incentives generate.
COUNCIL GOALS/
MANDATE:
Provide Financially Responsible and Innovative Government Services
BACKGROUND:
The annexation incentives project is being undertaken to: 1. Determine the level of
support or opposition to annexation and the reasons why people feel the way they do; 2.
Determine the types of things the Council can do to interest people in annexation; and 3.
Establish by policy, funding or other direct action a program that incentivizes annexation. The combined efforts and outcomes of each of these activities comprise the
three phases of the program’s strategy: Phase 1 Information Gathering; Phase 2
Incentives Program Development; and Phase 3. Incentives Program Implementation.
This memorandum provides the Council with a brief description of each of these phases
and specifically focuses on the content of Phase 1 to confirm the Council’s agreement with or instruction to amend the information included in this Phase.
Phase 1: Information Gathering
This phase is intended to reveal attitudes, perceptions and beliefs about annexation,
including establishing a baseline of understanding regarding the barriers, both real and perceived, to annexation. An objective of this element is to identify the prevalence of
opposition based on factors other than cost; and the level of opposition based solely on
costs. This phase will be area-specific, rather than the entire urban transition area, to
determine if there are different regional issues (AIS Attachment 2). This phase will
include an introductory letter; a summary fact sheet; a hard copy survey; and a link to an on-line survey site. There will be contact information for a number of city staff in event
recipients of these letters want additional information or confirmation of the legitimacy
of the survey.
The fact sheet (AIS Attachment 4) identifies a number of costs, some very precise, others are examples of “typical” situations, and others are likely consequences of
annexation. This information is provided so that there won’t be any surprises or
misunderstandings about taxes, fees or charges that will accrue as a result of annexation.
Attachment 1, Page 1 of 4
6/11/2014 Page 2
Phase 2: Incentives Program Development
The information gathered during Phase 1 will directly inform the content of Phase 2, as
directed by Council. For example, if a clear majority of respondents indicated that cost
was the reason they opposed annexation, the Council could consider a number of possible cost reductions as incentives. This could include a graduated property tax rate;
a waiver of the annexation fee; or changing sewer connection requirements by allowing
homes with functioning septic systems to delay connection until the septic system needs
repair. Certainly if the options available to Council in this regard are not consistent with
the Council’s goals or with budget consideration then the Council could choose to conclude this project and continue to implement current annexation policies. If the
Council chooses this option Phase 3 will be unnecessary.
Phase 3: Incentives Program Implementation
Based on the Council’s decision to proceed with an incentives program, staff would prepare all of the documentation, ordinances and amendments needed to enact the
selected incentives. The timing of this activity would be as directed by Council.
Costs Follow-On to Annexation
The costs that are a direct cause and accrue specifically because of annexation are as
follows:
Property Taxes – Although there may be costs that apply only outside the city limits the
figures below represent an example from the West Centennial neighborhood of the taxes outside the city limits, inside the city limits and the difference between the two.
Outside Inside Total Added
For $100,000 assessed value property: $1,478.94
$1,833.92
$354.98
City property taxes are assessed beginning on July 1st if effective date occurs before
March 31st, otherwise on July 1st of the following year; the effective date can be delayed
for a period not to exceed 10 years. An annexation of an “island” of residential property not initiated by the property owners must have a minimum delayed effective date of 3
years.
Systems Development Charges – Wastewater
A one-time fee of $6,500 that is assessed upon connection to the sanitary sewer system.
(Connection is required if the property is within 300 feet of an available sewer line; state
law does not require this connection until the septic system is in need of repair; City
Code requires this connection regardless of the functionality of the septic system.)
Sewer-in-lieu-of Assessment – Wastewater
A one-time charge of approximately $6,400 that is assessed upon connection if the
infrastructure is already constructed and available for connection. A 10-year payment
plan is available
Attachment 1, Page 2 of 4
6/11/2014 Page 3
Sewer Construction Assessment – Wastewater
A one-time charge based on the proportional share of the cost of constructing the
infrastructure. No estimate is provided because the conditions that may be present from
site to site are too variable to reasonably estimate a “typical” example. A 10-year
payment plan is available.
Annexation Application Fees – single home on lot not further divisible
A one-time fee of $1,050 that is payable upon submittal of the annexation application.
Council Options for Adjusting Fees, Charges and Assessments
The Council, in consideration of incentives, may adjust these fees, charges and
assessments as follows:
Property Tax –
Graduated rate at consistent ratios for up to 10 years; property is “within the city” upon
effective date of the annexation. This is done as part of the Annexation Ordinance for
the property. (See ORS 222.111(3) and OAR 150-222.111)
Delayed effect date postpones taxes until the predetermined effective date, not to exceed 10 years; the property is not “within the city” for purposes of residency, voting, etc. until
the effective date. This is done as part of the Annexation Ordinance for the property.
(See ORS 222.180(2))
Systems Development Charges – Wastewater
The Council may change this charge through resolution following one of two paths:
Path 1: Reduced SDC without ability to capture the lost revenue from other SDC payers
– adopt a resolution with a reduced rate. This is the same path the Council used for the
downtown area for several years or when new rates were applied incrementally over
several years.
Path 2: Reduced SDC with ability to capture the lost revenue – adopt a revised SDC
Methodology for wastewater. This process will require a longer, statute-driven process
and is subject to appeal under both the statute and the Municipal Code.
Additionally, the Council can amend the Municipal Code requirement to connect to
sewer when available within 300 feet if the septic system requires repairs. This amendment is independent of an annexation and may occur at the Council’s discretion.
Sewer-in-lieu-of Assessment – Wastewater
Ordinance and Resolution: Because the formula for this fee is in the Municipal Code,
the Council would need to adopt an ordinance to amend the Code to authorize a new formula for the incentive. Upon adoption of this ordinance, the Council could then
adopt a resolution to amend the Master Fee Schedule to establish the unit rates to
charge. This process was recently completed to establish a special rate for properties
along McVay Highway.
Attachment 1, Page 3 of 4
6/11/2014 Page 4
Sewer Construction Assessment – Wastewater
LID: If the Council is establishing an LID for sewer construction, they have the option
on how much of the cost is assessed to the benefitted properties, provided the
assessment does not exceed the value of the benefit and the assessments are equitably
determined for all benefitted properties. Council could assess up to the full cost of the project or, like the Cherokee Drive Sewer LID a few years ago, Council agreed to pay a
portion of the cost to ensure that each property owner had a guaranteed maximum
assessment amount.
PIP: If another property owner is building a sewer extension under a PIP project that
would benefit another property, this second benefitted property is not obligated to participate in the cost of the PIP project, although they would be obligated under the
current Municipal Code to connect to the public sewer and then pay the Sewer-in-Lieu
of Assessment.
Annexation Application Fees – single home on lot not further divisible
The City’s annexation fee is part of the Master Fees Schedule; the Council may amend
this fee or waive this fee by resolution. This action is independent of an annexation and
may occur at the Council’s discretion
RECOMMENDED ACTION
Staff recommends Council consider each of these costs and potential cost adjustments and direct staff to include or exclude each, by consensus, during the Phase 1 process of
this project.
Attachment 1, Page 4 of 4
2
3 5
1
4
6
Annexation
Incentives Plan
Target Areas
1
2
3
4
5
6
North Springeld
West Centennial
Glenwood
Dorris Ranch
South Springeld
East Springeld
Approximately 352 property
owners & 404 properties
Approximately 200 property
owners & 318 properties
Approximately 1,887 property
owners & 2,060 properties
Approximately 199 property
owners & 195 properties
Approximately 338 property
owners & 344 properties
Approximately 115 property
owners & 111 properties
Attachment 2, Page 1 of 1
Attachment 3, Page 1 of 2
Attachment 3, Page 2 of 2
Joining the City of SpringfieldJoining the City of Springfield
Annexation
Annexation is the means by which property owners in unincorporated
areas can join the City of Springfield, receive city services and vote in city
elections. Usually, access to one or more major urban services is the
reason residents and property owners consider annexation.
What would change and what would stay the same?
Police Services: Currently your police services are provided by the Lane County Sheriff’s Office. After annexation, the
Springfield Police Department would provide services to your property.
Fire and Emergency Medical Service: Your emergency medical service provider would remain Springfield Fire & Life
Safety, and the fire protection service would transfer from Rainbow Water & Fire District to the City of Springfield.
Rainbow Water & Fire District currently contracts with the City for fire protection services.
Potable Water: Your water utility would change from Rainbow Water District to Springfield Utility Board.
Wastewater (sanitary sewer) Service: If sewer is available, you would be able to hook up to the regional wastewater
treatment system, but so long as your septic system is in good repair you would not be required to do so. Annexation
does not mean that wastewater services will be immediately available. In many neighborhoods the infrastructure is not
currently in place. Please contact the Development & Public Works Dept. if you woud like more information regarding
the availability of, and costs associated with, wastewater services for your property.
Street maintenance and stormwater management: Planning and maintenance of the streets system and stormwater
management facilities would transfer from Lane County to the City of Springfield. A monthly stormwater fee, currently
$12.62, applies to all residential properties within city limits
Parks & Recreation Services: You would stay within the Willamalane Park & Recreation District.
K-12 Education: Annexation does not affect school district boundaries in any way.
General Governance: Residents would retain their County Commissioner representative on regional issues, and gain
the Springfield City Council as their elected representatives on most local municipal service issues. You would be able
to vote in local elections, and serve on City committee and boards.
West Centennial Area
Annexation application fees: $1,050
Wastewater System Development Charges: $6,500
Sewer-in-lieu of Assessment Fees: $6,400*
Property Tax Rate per $1,000
This is an estimate only for general information purposes. Actual tax change for a specific property
may be different. Property Tax Rates can change
each year due to voter approval of new levies and
bonds, expiration of levies and bonds, and urban renewal calculations. For specific property tax account information, please contact the Lane County
Assessor's office at 541.682.4321.
Fees (for single family home)
*This is an estimate for the typical subdivision lot and only applies if
the sewer infrastructure is already in place and available for connection. If the sewer needs to be constructed, direct assessment would apply.
School Taxes:
Government Taxes:
Total:
For $100,000 assessed
value property:
West In
Centennial SpringfieldDifference
6.72376.6813-0.0424
8.065711.65793.5922
14.7894$ 18.3392$ 3.5498$
1,478.94$ 1,833.92$ 354.98$ Definitions
System Development Charges (SDCs): SDCs
are one-time fees assessed to cover a portion of the cost of providing specific types of public infrastructure. They are charged for
new or increased demand of the public sewer
system.
Sewer-in-lieu of Assessment: If the public
infrastructure is already in place at the time of connection, the property owner pays an in-lieu of assessment fee to cover the
construction costs that extended the public
system to the specific property.
Attachment 4, Page 1 of 1