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Home My WebLink About2014-09-11 - TDC Advisory Committee Meeting Memo MEMORANDUM DATE: September 3, 2014 TO: Transferable Development Credit (TDC) Advisory Committee FROM: Nick Lelack, Director Peter Gutowsky, Principal Planner Todd Cleveland, Environmental Health Specialist III RE: Pollution Reduction Credit / Methodology Background Deschutes County adopted a “Transferable Development Credit” (TDC) program in 2004. It was developed as the result of several years of collaboration between federal, state and local governments to address water quality issues in southern Deschutes County. The intent was to transfer rural development pressure from rural areas into a master planned community in La Pine that possessed available public water and sewer systems. A TDC is produced one of two ways: I. Restrictive Covenant A Restrictive Covenant is recorded restricting the placement of a septic system on an eligible, vacant rural property, south of Sunriver. 1 An eligible lot or parcel upon which a restrictive covenant is recorded is assigned one (1) TDC. If the eligible lot or parcel is located in the High Priority Deer Migration Corridor Area, it receives an additional one-half (1/2) TDC. Rural properties with a restrictive covenant are located in the “Sending Area.” The “Receiving Area” is the Neighborhood Planning Area (NPA) in the city of La Pine. To subdivide in the NPA, a developer must first acquire a certain number of restrictive covenants prior to final plat (subdivision) approval. The amount and sale of a TDC is between a property owner and the purchaser, not Deschutes County.2 II. Pollution Reduction Credits The other way a TDC is produced is through a Pollution Reduction Credit (PRC), a program Deschutes County established in 2006. 1 Unsewered areas from Sunriver south to the Klamath County border in Townships 19, 20, 21, 22 and Ranges 9, 10, 11, from Sunriver south to the Klamath County border are eligible to create a TDC. 2 As discussed at the August 21 meeting, a restrictive covenant is no longer viable due to the market value of south county real estate, which far exceed Deschutes County’s initial offer of a $3,000 TDC credit, $4,500 if the property is located in a high priority deer migration area. -2- A PRC is assigned when an existing onsite wastewater treatment (septic) system, located in rural southern Deschutes County is upgraded to become a nitrogen reducing system that meets the standard necessary to protect the region’s drinking water supply. Any developer working in the NPA uses PRCs as part of the subdivision process. Similar to the restrictive covenant explained earlier, a developer must first acquire a certain number of restrictive PRCs prior to final plat (subdivision) approval. In general, any owner of property in southern Deschutes County with an existing onsite wastewater treatment system that was in use on or before May 31, 2006 is eligible to create a PRC if the system is upgraded. NPA Developer Obligation PRCs are allocated across the NPA at a rate established by the Board of County Commissioners as shown in Figure 1 below. Resolution 2006-043 requires:  325 credits to develop Quadrants 1a, 1b and 1d  534 credits to develop Quadrants 2a, 2b and 2d  3,654 credits to develop Neighborhoods 3 and 4 Figure 1 – Neighborhood Planning Area According to Deschutes County Code (DCC) 11.12.020(D), PRCs are assigned to the NPA as follows: 1. The total number of required TDCs, including PRCs, applicable to a subdivision in the Receiving Area shall be established and made a condition of approval at the time of tentative plan approval. -3- 2. The tract or lot shall be located within the La Pine Neighborhood Planning Area in the La Pine Urban Unincorporated Community [city of La Pine] and be zoned Residential General or Residential Center. The Receiving Area is identified on a map prepared and maintained by the [Community Development] Department. 3. TDCs shall be assigned to a lot or tract based on the Net Developable Acres at a rate approved by Board of County Commissioner resolution. 4. PRCs shall be assigned to a tract at a rate established by Board of County Commissioner resolution [Resolution 2006-043]. 5. The Board may, by resolution, adjust the number of TDCs required per acre or alter the factors for which TDCs are required in the Receiving Area. 6. At the time of final plat approval, any remaining required PRCs for the partition or subdivision shall be divided by the number of residential lots approved for the partition or subdivision. 7. The required PRCs and their cost for each lot shall be shown on the final plat. 8. Prior to issuance of a building permit for a residential lot in the Receiving Area, the Department must have payment of the required number of PRCs for that lot. Quadrants 1a, b, and d Vic Russell purchased Lot 4 of the Newberry Neighborhood, consisting of approximately 54.72 acres from the Baldwin-Herndon Oregon Trust in October 2005.3 In September 2006, Russell received tentative plat approval to partition Lot 4 into two parcels (MP-06-22). The partition was recorded in 2007 (Figure 2). Parcels 1 and 2 located in the NPA can eventually be further subdivided because Russell received Quadrant Plan approval for Quadrants 1a, b, and d in January 2007 (QP-06-1).4 Table 1 shows how PRCs are allocated across the three quadrants. Figure 2 – Minor Partition-06-22 3 52.44 acres are located on the west side of Highway 97; 2.28 acres located on the east side of Highway 97 is outside the NPA. 4 Quadrant Plans are required prior to initiating tentative plats in the NPA. Tentative plats must be in conformance with their respective Quadrant Plans. -4- Table 1 – Russell PRC Obligation by Quadrant Quadrant Gross Acres Calculation PRC Requirement PRC Burden D 1a 17.5 17.5 * 5.97 B 104.0 * $7,500 $780,000 1b 24.8 24.8 * 5.97 149.5 * $7,500 $1,121,250 1d 12.1 12.1 * 5.97 71.5 * $7,500 $536,250 Total 54.4 A - 325 * $7,500 C $2,437,500 A The total gross acreage for Quadrants 1a, b, and d is 54.4. B The number of PRCs required per gross acre is 5.97 (325 PRCs / 54.4 gross acres). C The total number of PRCs for Quadrants 1a, b, and d is 325. They are divided proportionally, according to the gross number of acres, among each of those three quadrants. D $7,500 equals one PRC. To lower the PRC burden, a NPA developer can work with eligible property owners and offer a lower amount as long as it leads to a nitrogen reducing on-site system. In September 2007, Russell received tentative subdivision plat approval from Deschutes County for 73 lots on 17.5 acres in Quadrant 1a (Parcel 1; TP-07-995). As summarized in Table 2, Russell’s PRC obligation per lot is $10,684.93. Table 2 – Russell PRC Lot Cost Quadrant Lots in Tentative Plat Calculation A PRC per Lot 1a 73 104 PRCs req. / 73 lots * $7,500 $10,684.93 1b N/A N/A N/A 1d N/A N/A N/A Total - - - A $7,500 equals one PRC. To lower the cost, a NPA developer can work with eligible property owners and offer a lower amount as long as it leads to a nitrogen reducing on-site system. The tentative plat remains active. Through an intergovernmental agreement, in 2011, the City of La Pine became responsible for processing time extensions for land use permits within their jurisdiction. In January 2012, Russell received an extension from the City for TP-07-07-995 to January 11, 2017. Quadrants 2a, b, and d Pahlisch Homes received Quadrant Plan approval for Neighborhood 2 of the NPA in 2004. Table 3 shows how PRCs are allocated across the three quadrants. Table 3 – Pahlisch Homes PRC Obligation by Quadrant Quadrant Gross Acres Calculation PRC Requirement PRC Burden D 2a 30.55 30.55 * 6.98 B 213 * $7,500 $1,597,500.00 2b 26.16 26.16 * 6.98 183 * $7,500 $1,372,500.00 2d 19.75 19.75 * 6.98 138 * $7,500 $1,035,000.00 Total 76.46 A - 534 * $7,500 C $4,005,000.00 A The total gross acreage for Quadrants 2a, b, and d is 76.46. B The number of PRCs required per gross acre is 6.98 (534 PRCs / 76.46 gross acres). C The total number of PRCs for Quadrants 2a, b, and d is 534. They are divided proportionally, according to the gross number of acres, among each of those three quadrants. -5- D $7,500 equals one PRC. To lower the PRC burden, a NPA developer can work with eligible property owners and offer a lower amount as long as it leads to a nitrogen reducing on-site system. Pahlisch Homes Inc. received tentative subdivision plat approval for Quadrants 2a, b, and d last November. As summarized in Table 4, Pahlisch’s PRC obligation per lot is $13,756.53. Table 4 – Pahlisch Homes PRC Average Lot Cost Quadrant Lots in Tentative Plat Calculation A PRC per Lot 2a 103 213 PRCs req. / 103 lots * $7,500 $15,509.71 2b 100 183 PRCs req. / 100 lots * $7,500 $13,725.00 2d 86 138 PRCs req. / 86 lots * $7,500 $12,034.88 Total 289 - $13,756.53 avg. / lot A $7,500 equals one PRC. To lower the cost, a NPA developer can work with eligible property owners and offer a lower amount as long as it leads to a nitrogen reducing on-site system. Neighborhoods 3 and 4 Deschutes County owns Neighborhoods 3 and 4. No Quadrants Plans have been authorized for these two neighborhoods. The total PRC burden is 3,654, which equates to $27,405,000 if a future developer decides to pay the fall back option of $7,500 per PRC.