Planning and Zoning Commission - Packets

1 AGENDA FOR THE BOARD OF TRUSTEES OF THE TOWN OF BUENA VISTA, COLORADO APRIL 19, 2023 Special Meeting at 6:00 PM Joint Special Meeting with the Board of Trustees, Planning & Zoning Commission, and the Water Advisory Board The Board of Trustee meetings are held at the Community Center and are open to the public. Staff and the Public are encouraged to attend the meeting virtually. 715 E. Main Street, Buena Vista, Colorado To attend the meeting virtually or to participate in Public Comment and/or Public Hearings, you must connect to the video conference. Conferencing Access Information: https://us02web.zoom.us/j/83695774712 Password: 351540 Listen via phone at 1-301-715-8592 Meeting ID: 836 9577 4712 Password: 351540 THE BOARD OF TRUSTEES MAY TAKE ACTION ON ANY OF THE FOLLOWING AGENDA ITEMS AS PRESENTED OR MODIFIED PRIOR TO OR DURING THE MEETING AND ITEMS NECESSARY TO EFFECTUATE THE AGENDA ITEMS I. CALL TO ORDER II. ROLL CALL III. PLEDGE OF ALLEGIANCE IV. AGENDA ADOPTION The Board approves the agenda at the start of the meeting, including modifications. V. Water Dedication & Reservation Discussion The Board of Trustees, together with the Planning & Zoning Commission, members of the Water Advisory Board, and other key stakeholders will discuss desired outcomes and risk mitigation strategies related to water dedication and water capacity reservation VI. ADJOURNMENT This Agenda may be Amended Posted at Buena Vista Town Hall, Post Office and www.buenavistaco.gov on Friday, March 14, 2023  2 DATE: 4/14/2023 TO: Mayor, Board of Trustees, Planning & Zoning Commission, Water Advisory Board FROM: Staff (Administration, Planning, Legal) RE: April 19th Special Meeting regarding Water Dedication & Reservation PURPOSE The purpose of this special mee�ng is to discuss and iden�fy desired outcomes and goals related to: 1) How and when the Town will dedicate and reserve water rights and supplies for new development; 2) How to ensure construc�on on exis�ng plated lots within the Town is given the same opportunity and plays by the same rules as new subdivisions; 3) What role augmenta�on cer�ficates from the Upper Arkansas Water Conserva�on District (Upper Ark) play in sa�sfying the Town’s water dedica�on requirements. PROBLEM STATEMENT Defining the problem we are seeking to address is cri�cal to affirming, amending, or redirec�ng the recommended solu�on framework below. One iden�fied problem is a risk that someone could ‘buy-up’ (and therefore require the Town to commit) a substan�al amount of water and water infrastructure capacity for a development but then not develop, thereby tying up that water and system capacity to the possible detriment of other development or to Town. An example of detrimental impact to Town could be that Town could be required to invest in addi�onal water rights, supplies, and/or system capacity even though exis�ng capacity is unused. This problem exists in large part because Town has a finite amount of dry-year water available with which to grow, thereby making what is le� inherently more valuable and poten�ally prone to specula�ve interest. BACKGROUND For a detailed background on water alloca�on and dedica�on in general, refer to the background sec�on of the Water Alloca�on Policy adopted via Resolu�on No. 17, Series 2023. This special mee�ng and related topics stemmed from a convergence of two conversa�ons over the past six months or so. The first was an ordinance dra�ed to address the above problem statement. Referenced below, this ordinance was recommended for denial by the Planning & Zoning Commission in January 2023 due to significant concerns about lack of clarity and poten�al unintended consequences which could result. Second, numerous developers, along with Town staff, have been asking and thinking about the possibility of u�lizing the capacity of the Upper Ark’s water augmenta�on resources to provide greater reliability of the Town’s exis�ng and future water rights and supply por�olio. Culmina�ng in a work session together with Upper Ark on March 28th, this idea has shown to have significant merit. Therefore, staff has incorporated it into the recommended framework below.  3 UPPER ARK WATER There are two dis�nct avenues by which Town may choose to diversify its water por�olio by working with Upper Ark. They are not mutually exclusive. 1) Direct augmenta�on ‘deal’ with Upper Ark. At the Board’s direc�on for the beter part of the past 12 months, staff has been working with Upper Ark to cra� a dra� agreement by which Town would purchase augmenta�on for its Well #3 (and future Well #4) directly from Upper Ark. While this agreement is s�ll being dra�ed and is not yet in a form ready for Board considera�on, it is conceived that this can be a mechanism by which Upper Ark augmenta�on water could grow Town’s capacity to serve its customers (both new and exis�ng). Staff contemplates that this augmenta�on would primarily support in-town development although it need not be so limited. 2) Augmenta�on cer�ficates. a. Developer purchases and assigns to Town: This is the concept that was discussed the most in the March 28th work session and would entail a developer purchasing cer�ficates directly from Upper Ark in an amount required by Town and then assigning those cer�ficates to Town for augmenta�on of our exis�ng (or future) wells to allow more water to be pumped from the wells to serve the addi�onal demand created by the development. This scenario is conceived by staff as a way to serve out-of-town or to-be- annexed projects, although it need not be so limited. b. Developer payment of in-lieu fee sufficient to allow Town to purchase certificates: This concept was not discussed at the March 28 work session. This may provide a simpler way to allow use of Upper Ark cer�ficates to augment addi�onal water use that a development will cause. The Town could determine the number of Upper Ark cer�ficates that will be needed, establish an appropriate in-lieu fee to cover the cost of the cer�ficates and other appropriate costs of providing water to the new project, and then simply purchase the cer�ficates itself. The augmenta�on water deliveries represented by the cer�ficates would then be added to the Town’s por�olio and could be used as the Town deems most appropriate. This concept could be implemented together with the Recommended Solu�on Framework. RECOMMENDED SOLUTION FRAMEWORK Staff has dra�ed this framework as a possible solu�on to the specula�on problem defined above. In the process of dra�ing this framework, staff also iden�fied and veted other possible solu�ons, but decided against recommending those for the reasons offered in the table at the end of this document. This recommended framework is built on an important change to the terms we use to describe water planning, both in the Code and elsewhere. These terms are defined here for clarity: Dedica�on / dedicated water – this is when someone brings an actual water right and conveys that right to Town to cover the water demands for their development. Obliga�on / obligated water – this is a fixed number of SFEs that were already approved when the dedica�on ordinance of June 2021 was adopted. Town is legally obligated to serve these SFEs, and the total number will decrease in number to zero as those projects get constructed and connect to the system.  4 Reserva�on / reserved water – a new term for Town. A “reserva�on” or “reserved water” is available to a property owner who pays the dedica�on fee-in-lieu and signs a Water Reserva�on Agreement (as referenced below, yet to be developed). At this point, and as long as the annual reserva�on fee is paid by the owner, water is reserved for that property (even if they don’t build right away). Language requiring physical connec�on within a certain period of �me (15-20 years) could be added to the Water Reserva�on Agreement to ensure that Town is not obligated in perpetuity but s�ll allow plenty of �me for owner flexibility on when to build. Alloca�on / allocated water – an SFE that has been assigned to a par�cular category or ‘bucket’ as per the Water Alloca�on Policy. It is important to note that an SFE may be allocated but, if the fee-in-lieu hasn’t been paid and the Water Reserva�on Agreement hasn’t been signed, then that SFE is not reserved. Staff suggests a framework that introduces the term, code language, and processes and procedures for reserving water for as long as the reserva�on fee is paid by the property owner. The reason staff suggests this framework is that it achieves a few things: - Introducing a Water Reserva�on Agreement, by which a property owner agrees to pay an annual reserva�on fee in exchange for Town’s commitment to serving that property water would create the same playing field for already-plated in-town lot owners and new subdivisions. Today, new subdivisions have a mechanism to have water dedicated to their development at Final Plat, prior to building permit, whereas a single lot owner who isn’t ready to build yet has no way to secure water. o The new Water Reserva�on Agreement could be executed and recorded against the subject property upon receipt of the water dedica�on fee-in-lieu. For exis�ng plated lots this could occur at any �me. For subdivisions, this could only occur at (or a�er) Final Plat approval. o The recurring reserva�on fee would be assessable, at the discre�on of Town, as a lien on the subject property to avoid a case where it was due, not paid, and may create a financial risk for Town. Staff acknowledges that pursuing a lien against the property is probably too much of an administra�ve burden to pursue in most cases of non-payment, however it is an op�on. - The introduc�on of the Water Reserva�on Agreement creates a financial mechanism for Town to cover the cost of acquiring and developing addi�onal water rights, supplies (such as Upper Ark cer�ficates) and infrastructure, and maintaining water rights, supplies and infrastructure, including, for example, needed annual storage and maintenance fees from Upper Ark. This increases the flexibility of Town to choose how best to allocate its water rights, water supplies, and infrastructure to meet current and reserved commitments. - The introduc�on of the Water Reserva�on Agreement creates addi�onal accountability from the property owner (developer or single lot owner). The moment the fee isn’t paid (a�er perhaps 60 to 90-day grace period), Town is released from the obliga�on to serve that property with water. If warranted, Town would be able to pursue collec�on of any delinquent fees via lien processes. - This framework provides both certainty and clear rules for all property owners and developers, while ensuring there is not a way for someone to ‘buy-up’ SFEs without con�nuing to contribute and be on the hook for the system capacity those SFE reserva�ons represent.  5 Should this framework hold merit in the eyes of the Board, addi�onal work will need to be done to 1) finalize the exact code language which would create this framework in our code; 2) calculate the exact reserva�on fee amount & write the Water Reserva�on Agreement template; 3) ar�culate the public messaging to establish the new process(es); and 4) ensure code amendments address the acceptance and use of Upper Ark augmenta�on as it pertains to sa�sfying water dedica�on requirements. ALTERNATIVE MITIGATING STRATEGIES NOT BEING RECOMMENDED The following concepts were iden�fied and veted by staff and are not being recommended in favor of the framework sketched above. The ra�onale for not recommending any of these alterna�ves rests largely in the various nega�ve considera�ons listed in the table below. Mi�ga�ng Strategy Posi�ve Considera�ons Nega�ve Considera�ons - No considera�on of the scenario in which a lot with dedicated water is sold to an individual who can’t build within 3-years - Very clear and aggressive - Would have significant 2022 dedica�on ordinance as �meline within which Town implica�ons for both dra�ed placed blunt 3-year is on the hook for providing development and expira�on on dedica�on water to construc�on financing – reserva�ons & 18-month development/construc�on, poten�ally enac�ng a de expira�on on building permit and when the Town is no facto stop to all reserva�ons longer commited to building/growth thereby providing water. making all current housing more unaffordable and encouraging sprawl in the County. - P&Z recommenda�on of denial - Nothing to keep developer New strategy A - Performance- - Provides risk mi�ga�on for from not selling the lots based dedica�on requirements. Town while providing clear and ‘si�ng’ on them other steps to keeping dedica�on than the need to pay for Developers have 3 years from reserva�ons to the the public improvements final plat & PIA approval un�l developer. - Difficult and complicated to either par�al or complete - Allows for changing fully nail down benchmarks preliminary acceptance of economic condi�ons by for ‘performance’. Could be public improvements. In the allowing incremental done, but not clear. case of par�al acceptance, progress of public - Does not create a pathway addi�onal par�al, or complete improvements if needed for current lot owners of acceptance would be required - Adds addi�onal surety to already-plated lots to within 2 years from the previous Town, above and beyond reserve water even if they preliminary acceptance, and PIA financial surety, that are not ready to build. final acceptance of all public public improvements will be improvements would be completed  6 required within 4 years of first - Protects individual lot preliminary acceptance. buyers from the risk of Once public improvements have purchasing unusable final acceptance, water is property dedicated in perpetuity to those lots. New strategy B – Extension- based dedica�on expira�on. - Provides clear and certain - Adds to the cost of rules by which developers development, which will be Developers & building permit and builders can plan and passed on in housing prices applicants can dedicate water as atain financing - Creates administra�ve allowed currently with a 7-year - Mi�gates the risk of burden to track expira�on expira�on on the dedica�on someone ‘tying up’ water dates and payments of reserva�on (3-years for building indefinitely without extension fees permits). Code would provide a financial renumera�on to - Does not create a pathway non-discre�onary process for Town for current lot owners of the applicant/developer to - Provides poten�al already-plated lots to extend that expira�on upon addi�onal funding source to reserve water even if they receipt of an addi�onal fee. keep pace with water are not ready to build. Extension could be one-�me or acquisi�on and able to be re-applied with maintenance costs payment of another fee. - May s�ll create unintended consequences and unacceptable risk to developers and financing New strategy C – Blunt which could lead to no expira�on of water dedica�on addi�onal growth in town, for major subdivisions. - Very clear �meline within thereby making all current which Town is on the hook housing more unaffordable Implement a 10-year expira�on for providing water to and encouraging sprawl of water dedica�on reserva�on development/construc�on. into the County. if a major subdivision’s public - Does not create a pathway improvements have not entered for current lot owners of full final acceptance. already-plated lots to reserve water even if they are not ready to build.