Title
Discuss the Potential Review of Policies, Capital Investments, and Regulatory Tools in Light of Recent Changes to State Law Regarding Municipal Annexations
Summary
COUNCIL GOAL: Direction for Strategic and Economic Growth
MEETING DATE: December 4, 2017
DEPARTMENT: Development Services - Planning Department
CONTACT: Jennifer Arnold, Planning Manager
Nick Ataie, PE, CIP Engineering Manager
Brian Lockley, AICP, CPM, Director of Planning
Michael Quint, Executive Director of Development Services
RECOMMENDED CITY COUNCIL ACTION:
• Discuss and provide direction to Staff.
ITEM SUMMARY:
• The City of McKinney has consistently been one of the fastest growing communities in the country and this volume of growth is expected to continue over the next several years. As a result, pressures for development on the periphery of our city limits and into our extraterritorial jurisdiction (ETJ) will become even more prevalent.
• Annexation, growth policies, capital investments, public-private partnerships, and regulatory authority are all ways in which a municipality can actively influence growth and development patterns over time. These tools provide an important mechanism for protecting a community’s long term interests and vitality.
• Given recent changes in state law regarding annexations, the use of municipal annexation (involuntary annexation) to proactively influence development patterns will not likely be a viable tool for the City of McKinney. As such, the other mechanisms available to the city (i.e. policy, investment, regulatory tools, etc.) will become even more important for protecting the community’s long term interests.
• With this in mind, Staff recommends a thorough review of existing city policies related to growth planning, capital investment planning and regulatory authority to identify any necessary changes or improvements that may better prepare the city for anticipated growth.
• Specifically, Staff recommends a review of the following:
1. Review of infrastructure related projects within the City’s Capital Improvement Program (CIP) and the prioritization of those projects (i.e. roads, water, wastewater, and drainage projects);
2. Review of the city’s subdivision ordinance, utility ordinance and Certificates of Convenience and Necessity (CCN) as they relate to the provision of water and sewer services;
3. Consider and better understand the role of innovative financing tools such as Tax Increment Reinvestment Zones (TIRZs), Public Improvement Districts (PIDs), and Municipal Utility Districts (MUDs) in growth planning; and
4. Consider the way in which the city utilizes economic development, facilities, and development agreements.
• The review of these items will take time and Staff suggests that they occur over the next nine to twelve months. However, Staff is presently seeking consensus from the Council to immediately being looking at the prioritization of infrastructure CIP projects and the review of the subdivision and utility ordinances to identify potential changes or improvements that would better protect the city’s long term interests.
• The CIP generally includes public infrastructure projects such as roads, water, wastewater, and drainage that either add new capacity to the city’s infrastructure system or reconstruct aging infrastructure throughout the city.
• Many of the projects that add new capacity also aim to reduce barriers that may help activate new development projects within the city limits. While this provides benefits to areas within the city, it can also unlock areas outside of the city limits for development.
• This activation is generally a positive thing. However, without prudent exercise of the city’s subdivision and utility authority to protect areas outside of the city limits, the activation of new developments on the fringe of the city and/or in the ETJ can have unintended consequences (i.e. substandard development quality, incompatible land uses).
BACKGROUND INFORMATION:
• The area of McKinney’s current city limits is approximately 68 square miles. However, the ultimate area of McKinney’s city limits is roughly 116 square miles. This means that just over 40 percent of McKinney’s ultimate area currently sits within the ETJ.
• While a municipality can plan for the future desired development conditions of land within its extraterritorial jurisdiction (ETJ), it cannot exercise land use control (i.e. zoning) or taxing authority over those unincorporated areas.
• As a result, new developments that occur within the ETJ can sometimes lead to undesirable long-term development patterns, inconsistent levels of public infrastructure and services, and/or uses that are not aligned with a city’s overall future land use plans.
• Generally speaking, municipal annexations have been a common way for Texas cities to incorporate land into their jurisdiction for the purpose of encouraging orderly growth patterns and protecting long term interests over time.
• While the authority to carry out municipal annexations is still granted to Texas cities under Chapter 43 of the Texas Local Government Code, recent changes in state law have modified the procedures for carrying out municipal annexations.
• Among other things, municipal annexations now generally require a successful petition and/or election process in addition to a public hearing process in order for an area to be municipally annexed. These new changes in state law became effective on December 1, 2017.