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Home My WebLink AboutItem 02 Housing and Infrastructure AGENDA ITEM SUMMARY Meeting Date: 10/26/2020 Meeting Type: Work Session Staff Contact/Dept.: Jeff Paschall/DPW Sandy Belson/DPW Staff Phone No: 541-726-1674 541-736-7135 Estimated Time: 30 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: Maintain and Improve Infrastructure and Facilities ITEM TITLE: HOUSING AND INFRASTRUCTURE DISCUSSION ACTION REQUESTED: Provide direction to staff concerning Council’s desire to explore the potential of expanding public systems to unserved areas within the urban growth boundary (UGB) to encourage residential development with the use of public funds to construct public infrastructure. ISSUE STATEMENT: Springfield continues to lack sufficient housing to meet community needs. Developable land is a key component to the construction of new housing. Extending infrastructure to serve residential land is one strategy the city could use to facilitate additional residential development. ATTACHMENTS: 1.Council Briefing Memorandum 2.Map showing “Unserved Vacant Residential Land” DISCUSSION/ FINANCIAL IMPACT: Typically when development is proposed on properties within the urban growth boundary (UGB), the necessary infrastructure (e.g. streets and utilities) are provided by the developer or property owner. This includes construction of new facilities, and extension or upgrades of existing public facilities per the Springfield Development Code and Engineering Design Standards and Procedures Manual. The cost to extend necessary public improvements can be an impediment for many developments. Staff has heard anecdotally from developers within our community that there are currently few options for developers to directly pay for or finance the costs of extending public facilities to their property. Staff is seeking direction from the City Council on the idea of utilizing user fee capital reserve funds to extend public services (e.g., wastewater) to unserved areas within the City limits or UGB to allow for future development connections. If Council is supportive, in a future work session staff will bring forward options for including one or more projects in this year’s update to the city’s Capital Improvement Program. M E M O R A N D U M City of Springfield Date: 10/26/2020 To: Nancy Newton COUNCIL From: Sandy Belson, Comprehensive Planning Jeff Paschall, City Engineer BRIEFING Subject: Housing and Infrastructure MEMORANDUM ISSUE: Springfield continues to lack sufficient housing to meet community needs. Developable land is a key component to the construction of new housing. Extending infrastructure to serve residential land is one strategy the city could use to facilitate additional residential development. COUNCIL GOALS/ MANDATE: Maintain and Improve Infrastructure and Facilities BACKGROUND: The attached map, Attachment 2 - Unserved Vacant Residential Lands, shows in a general manner the land that was determined to be vacant, partially vacant, or master planned in the Springfield Residential Land and Housing and Housing Needs Analysis (April 2011) that remains vacant or partially vacant in 2020[1]. In other words, the previously vacant or partially vacant properties that have been developed over the past decade are not shown on this map. While there are still some vacant and partially vacant properties within the city limits that are adjacent to wastewater and stormwater mains, several areas outside the city limits would require an extension of these city systems to support urban development. In order for these properties to be developed to urban densities, the City would need to annex the property and the developer typically would be expected to construct these necessary public improvements to support the new homes. The City is responsible for ensuring that public infrastructure is constructed, updated, and maintained in accordance with the Springfield Development Code (SDC) and current engineering design standards as adopted by the City Council. This not only includes City initiated projects identified through the Capital Improvement Program, but also required public infrastructure improvements triggered through private development. The capital investment required for construction and on-site roads and utilities is significant. Taking on the extension of public infrastructure adds to the upfront capital necessary for a project. There are a few options for developers to directly pay for or finance the costs of extending public infrastructure to their property. •Self-funding – The property owner/developer pays for all costs associated with necessary public facilities. They may be eligible for system development charges (SDC) credits for projects identified on the approved project list, or some City participation for [1] The Residential Land Inventory is based on land that has a plan designation of residential as well as the Glenwood Residential Mixed-Use Plan District. This map is not an official update of the buildable lands inventory, but rather a generalized representation of the previously inventoried land that remains vacant or partially vacant. Attachment 1, Page 1 of 2 MEMORANDUM Page 2 oversizing facilities that would benefit additional properties. •Reimbursement District – In 2008 the City Council adopted an ordinance allowing prospective developers/property owners to set-up a reimbursement district. This allows the City to collect fees from future benefitting developments and use those funds to reimburse the original developer. •Local Improvement District (LID) – The property owner may petition to form a LID enlisting abutting property owners in paying their fair share of the necessary public facilities. There are downsides to the developer for each of these approaches. Self-funding requires significant cash or favorable financing. It does not allow the developer to recoup costs as other properties tap into the newly constructed wastewater or stormwater facilities. A developer with sufficient capital or financing options has the option of setting up a reimbursement district, but not all developers want to or are able to take on that up-front cost, particularly since there is no guarantee that s/he will be fully reimbursed over the 20-year timeframe allowed through a reimbursement district. Forming an LID requires that other property owners are willing and able to pay for the improvements at the same time as the developer. Not all property owners are on the same schedule and may not choose to participate in an LID. Currently, the City has built up significant capital reserve funds for wastewater ($9.3 million) and stormwater ($7.1 million). This financial position is such that the city could finance one or more extensions of sewer main to bring sanitary sewer and/or stormwater service to currently unserved vacant land. As property owners/developers decide to develop, they would pay for their share of the costs that the city paid to extend those services. As such, the ratepayers would be extending a “loan” that would be repaid upon development. This development would also result in an increase in the number of ratepayers supporting the utility as a whole. This pro-active approach to service delivery on the part of the city would involve annexation of rights-of-way and possibly other property based on the alignment of the sewer main. Depending on the status of the county road, annexation could result in the city automatically assuming jurisdiction of the existing street. In other cases, Lane County may formally seek to transfer jurisdiction of the street to the City. In keeping with the city’s policy of “no forced annexation”, abutting properties would not be annexed unless the property owner(s) requested annexation. It should be noted that the Oregon Department of Environmental Quality does not allow any new septic systems or replacement septic systems for a single-family home within 300 feet of an available wastewater line. In some cases, extending a wastewater line could provide benefit to nearby developed properties. Should an on-site septic system come to the end of its life, then a property owner would be able to annex and connect to the extended wastewater. A decision to invest in the extension of infrastructure to facilitate residential development will depend on the particulars in each case. At this time, staff is seeking Council questions and thoughts on whether or not to consider utilizing this strategy to address the housing needs in our community. If there is interest, staff will return to Council in a future work session as part of the process for preparing this year’s update to the Capital Improvement Program and discuss locations, priorities and timing. RECOMMENDED ACTION: Discuss the idea of utilizing user fee capital reserve funds to extend public service (e.g., wastewater) to unserved areas within the city limits or urban growth boundary for future connections. If supported, staff will expand the discussion with Council through the upcoming Capital Improvement Program update. Attachment 1, Page 2 of 2 å å å å å å å å ååå å å å å å å å åå å ÆP ÆP ÆP !"#$5 126 Unserved Vacant Residential Lands 0 0.5 10.25 Mi. å School City Limits UGB Storm Water Mains Waste Water Mains Highways 10/15/2020o There are no warranties that accompany this product. Usersassume all responsibility for anyloss or damage arising from anyerror, omission, or positional inaccuracy of this product. Not currently served by City waste water and storm water mains Residential Land Inventory Master Planned Partially Vacant Vacant Not currently served by City waste water and storm water mains Attachment 2, Page 1 of 1