City Council Agenda Report
TO: Mayor Clauzel and Members of the City Council
FROM: Ken Irwin, City Manager
BY: Douglas White, Deputy City Attorney
MEETING DATE: February 27, 2024
ITEM NO: 5.1
SUBJECT: Adopt Resolution No. 2024-10 of the Patterson City Council Rescinding Resolution No. 2023-54, in Order to Cancel the Special Mail Ballot Election Scheduled for April 9, 2024, in Connection with the ZachariasBaldwin Master Plan Reorganization to the City of Patterson; and Adopt Resolution No. 2024-11 of the Patterson City Council Rescinding Resolution No. 2022-61, in Order to Withdraw the City’s Reorganization Application Submitted to Stanislaus LAFCO, in Connection with the Zacharias-Baldwin Master Plan Reorganization to the City of Patterson.
RECOMMENDATION
Motion to Adopt Resolution No. 2024-10 of the Patterson City Council Rescinding Resolution No. 2023-54, in Order to Cancel the Special Mail Ballot Election Scheduled for April 9, 2024, in Connection with the Zacharias-Baldwin Master Plan Reorganization to the City of Patterson; and Motion to Adopt Resolution No. 2024-11 of the Patterson City Council Rescinding Resolution No. 2022-61, in Order to Withdraw the City’s Reorganization Application Submitted to Stanislaus LAFCO, in Connection with the Zacharias-Baldwin Master Plan Reorganization to the City of Patterson.
BACKGROUND
In August 2022, the City Council adopted the Zacharias and Baldwin Ranch Master Plan (“Master Plan”). The Master Plan provides a comprehensive development plan for approximately 1,296 acres located north of City limits and an additional 66 acres located south of City limits. In November 2022, the City filed a proposal with the Stanislaus County Local Agency Formation Commission (“Stanislaus LAFCO”) to annex the areas outlined in the Master Plan.
On July 26, 2023, Stanislaus LAFCO approved the City’s annexation proposal, subject to certain terms and conditions. The required protest proceeding was held on September 20, 2023. The protest hearing failed to yield the necessary level of support to confirm the City’s annexation proposal. The annexation is now subject to a special election of the registered voters in the Master Plan area, which will be held by mail ballot on April 9, 2024.
The Stanislaus County Registrar of Voters (“Registrar Office”) is providing election services for the election. The Registrar Office will commence mailing election materials and ballots around March 11, 2024.
City Staff is recommending that the City Council consider rescinding prior resolutions which called for the election and authorized the filing of the annexation application to Stanislaus LAFCO. The effect of rescinding both prior resolutions would be to cancel the special election scheduled for April 9, 2024, and also to withdraw the City’s annexation application. Concerns have arisen regarding the status of the Master Plan approvals and Final Environmental Impact Report (“Final EIR”) due to existing litigation, potential financial impacts to the City, and the possibility of an unsuccessful election. In the interest of ensuring orderly development, the concerns of City Staff are described further below.
ANALYSIS
EXISTING LITIGATION. Due to existing litigation, the Master Plan approvals and the Final EIR are in jeopardy. In September 2022, two petitions for writ of mandate were filed against the City. Both petitions challenged the Final EIR’s validity and generally seek decertification of the Final EIR and invalidation of the Master Plan approvals. One of the petitions remains pending before the court. A hearing is currently scheduled for March with a decision from the court anticipated within ninety (90) days of the hearing, absent a continuance. Among other claims asserted, the pending petition challenges the water supply assumptions contained in the Final EIR. Groundwater is contemplated as the water supply for development of the Master Plan.
Depending on the outcome of the hearing, the court may order revisions and recirculation of the Final EIR. An outcome in favor of the petitioners also may impact the planned water supply for the Master Plan project. It may be advisable to suspend the annexation proceedings until final resolution of the litigation.
IVY ROSE AREA. The Zacharias area of the Master Plan is divided into five development areas.
Four of the development areas are controlled by the major developers of the Master Plan. The other development area is referred to as the “Ivy Rose Area.” The Ivy Rose Area is approximately 143 acres in the eastern portion of the Master Plan adjacent to Ward Avenue and State Route 33. There are existing residences and agricultural lands in the Ivy Rose Area, many in the form of ranchettes.
City Staff has conducted outreach with landowners in the Ivy Rose Area to prepare for the annexation and establish terms and conditions for future development of the Ivy Rose Area.
Some concerns remain among Ivy Rose Area landowners regarding the consequences of annexation. City Staff is still working with the landowners to address their concerns. Prior to formal annexation, City Staff also desires to establish the obligations of the Master Plan developers for the public improvements in the Ivy Rose Area (for example, construction of roadway and utility improvements for future connection to the City water and sewer systems).
The City seeks the support and cooperation of the Ivy Rose Area landowners prior to formal annexation. Additional time would allow City Staff to continue planning for future development of the Ivy Rose Area.
Furthermore, the results of the protest hearing cause concern that the election may be unsuccessful. At the protest hearing for the annexation proposal, 19 verified protests were received of the 40 registered voters in the annexation area. If the election is unsuccessful, the City may have to wait at least one year before filing another annexation application. Avoiding an unsuccessful election has the potential to prevent further delay.
IMPACT FEE UPDATES. Another concern is that in preparation for the annexation, City Staff commenced comprehensive updates to current citywide impact fees. The planned impact fee updates include the following: Regional Transportation, City Hall, Corporation Yard, Recreational Facilities, and Park Facilities. Comprehensive updates to these impact fees have not occurred since before 2010. The City has undergone significant growth since 2010, with development advancing in the West Patterson Business Park Master Plan, the Villages of Patterson Master Plan, and the Baldwin Ranch North Master Plan. Buildout of the Master Plan would eventually add nearly 20,000 residents to the City. Updating the impact fees prior to formal annexation would ensure that growth impacts will be mitigated and levels of service will remain consistent. If the impact fee updates will not apply to new development in the Master Plan, then necessary public facility improvements would be severely underfunded. Without the impact fee updates in place prior to annexation, there is risk that the City will lose $50-$100 million in impact fee collections. Delaying the annexation would allow more time for City Staff to finalize the required nexus studies and bring them to Council for approval.
DEVELOPMENT AGREEMENT. Finally, there is not yet a Development Agreement between the City and the four major developers of the Master Plan (collectively, the “Developers”). City Staff and the Developers are currently negotiating a Development Agreement, for future consideration by the City Council. With development, financing, and infrastructure obligations still undetermined, City Staff would prefer to have a final Development Agreement in place prior to formal annexation. As previously mentioned, City Staff would also like to include in the Development Agreement certain obligations for public improvements in the Ivy Rose Area.
Delaying the election would allow more time for City Staff to continue discussions with the Developers prior to formal annexation.
The foregoing reasons raise concern that formal annexation of the Master Plan into City limits at this time would be premature. The City has an obligation to provide orderly development for current and future City residents. Delaying annexation to a future time would allow more time for resolution of outstanding issues prior to development of the Master Plan.
FISCAL IMPACT
The Master Plan is projected to add approximately 5,400 new residential units to the City, in addition to new industrial and commercial development. The impact fees planned for updates were last formulated prior to 2010 and are based on outdated nexus studies. Not having the new impact fees in place prior to development of the Master Plan has the potential to cost the City $50-$100 million in impact fee collections. If the annexation goes forward, there is risk that development of the Master Plan and related public facility improvements will be underfunded.
COUNCIL OPTIONS
1. Adopt both resolutions.
2. Deny both resolutions.
3. Postpone discussion of the resolutions to a future date, with questions or directions for City Staff to undertake further review.
4. Adopt the resolution to cancel the special election, and postpone further discussion on withdrawal of the annexation applications to a future time.
ATTACHMENTS
1. Resolution No. 2024-10
2. Resolution No. 2024-11