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: April 2, 2024
ITEM NO: 8.1
SUBJECT: Adopt Resolution No. 2024-20, Approving Two Agreements Relating to the Ivy Rose Area of the Zacharias Master Plan: (1) A Water/Sewer Connection and Sound Wall Agreement with Property Owners in the Ivy Rose Area; and (2) An Agreement with Developers of the Zacharias Master Plan for the Construction of Public Improvements.
RECOMMENDATION
Motion to Adopt Resolution No. 2024-20, Approving Two Agreements Relating to the Ivy Rose Area of the Zacharias Master Plan: (1) A Water/Sewer Connection and Sound Wall Agreement with Property Owners in the Ivy Rose Area; and (2) An Agreement with Developers of the Zacharias Master Plan for the Construction of Public Improvements.
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 reorganization 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 reorganization proposal. The annexation is now subject to an election of the registered voters in the Master Plan area, which will be held by mail ballot on April 9, 2024.
The “Zacharias Area” of the Master Plan is divided into five (5) development areas. Four (4) of the development areas are controlled by the major developers of the Master Plan (collectively, the “Developers”). 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. The Ivy Rose Area contains existing residents and agricultural lands.
To advance development of the Master Plan and integrate Ivy Rose Area property owners into the City, City staff has prepared two (2) agreements: one (1) agreement between the City and property owners in the Ivy Rose Area, and one (1) agreement between the City and the Developers.
PROPERTY OWNER AGREEMENT: WATER/SEWER CONNECTION AND SOUND
WALL AGREEMENT
City staff has conducted outreach and met with property owners in the Ivy Rose Area to discuss development conditions after annexation of the Master Plan. City ordinances require that parcels located within City limits must be connected to the City water and sewer systems, at such times that there are water or sewer mains available within certain distances of the parcel.
As an effort to integrate the Ivy Rose Area into the City and facilitate development of the Master Plan, City staff has composed a form agreement for property owners in the Ivy Rose Area (“Property Owner Agreement”). The Property Owner Agreement seeks to minimize the costs of connecting to the City’s water and sewer systems while also ensuring connection to the City systems at some point in the future. The Property Owner Agreement also provides for construction of a sound wall along the border of the Ivy Rose Area.
Terms and conditions included in the Property Owner Agreement are summarized as follows:
· Requirement for System Connection. Property owners in the Ivy Rose Area would not be required to connect to the City’s water and sewer systems, until such time in the future that the property develops or is subdivided.
· Impact Fees. For existing residences, voluntary connections to the City’s water and sewer systems would not require payment of impact fees. However, connections to the water and sewer systems upon future development or subdivision of the property would require payment of impact fees.
· Costs of Water and Sewer Pipelines. The Developers will be responsible for installing the water and sewer pipelines that will serve the Ivy Rose Area, including laterals stubbed out to the property line. The property owners would be responsible for installing the service lines inside of the property line.
· Abandonment of Septic Systems. When the property connects to the City sewer system, the landowner will be required to abandon and destroy the septic systems on the property. · Sound Wall. A paseo is planned along the border between the Ivy Rose Area and the neighboring development areas, running north-south within the Master Plan. The Developers will be responsible for installing a sound wall as the adjacent project areas develop. The City has included conditions for the sound wall relating to design, maintenance, and access to the Ivy Rose Area properties. Upon future development of the Ivy Rose Area, the City may also require removal of the sound wall. · Term. The benefits contained in the Agreement will expire after thirty (30) years (e.g., waiver of impact fees, deferral of the requirement to connect to the City’s water and sewer systems). After 30 years, the property owners will be subject to all applicable City ordinances and policies.
AGREEMENT WITH DEVELOPERS: ZACHARIAS PROJECT AGREEMENT FOR
THE IVY ROSE AREA
The Property Owner Agreement is contingent on the City and the Developers agreeing to terms and conditions for construction of public improvements. The agreement with the Developers (“Developer Agreement”) provides the following terms and conditions:
· Water and Sewer Pipelines. The Developers will be responsible for installing water and sewer lines along Rose Avenue, Ivy Avenue, and Ward Avenue. The improvement obligation includes laterals stubbed out to the property lines of existing properties in the Ivy Rose Area. Installation of these water and sewer lines will occur in conjunction with development of the adjacent project areas.
· Sound Wall. The Developers have agreed to install the sound wall along the border of the Ivy Rose Area. The City has included conditions for the sound wall relating to design, acceptance by the City, and ongoing maintenance.
· Financing. The public improvements will be obligations of the Developers and included as conditions for development of the adjacent project areas. It is anticipated that an infrastructure community facilities district (“Infrastructure CFD”) will be formed to assist with the financing of the backbone infrastructure. The water lines, sewer lines, and sound wall will be eligible for financing from the Infrastructure CFD formed for the Master Plan project.
FISCAL IMPACT
Water and sewer connections involve costs for property owners, such as construction costs and impact fees. The Property Owner Agreement is an effort to integrate Ivy Rose Area property owners into the City and minimize costs of connection.
The Developers will construct the water line and sewer lines improvements up to the property lines of the Ivy Rose Area. The Developers will also construct the sound wall requested by property owners in the Ivy Rose Area. These public improvements are obligations of the Developers and will likely be financed by the Infrastructure CFD formed by the Master Plan project.
The agreements are unlikely to have a significant impact on the City’s capital facility obligations. The Developers will be responsible for constructing the public improvements for the benefit of the Ivy Rose Area. The Master Plan project areas will also be annexed into maintenance community facilities districts, which will fund the City’s ongoing maintenance obligations.
COUNCIL OPTIONS
1. Approve and authorize execution of the Property Owner Agreement and the Developer Agreement.
2. Propose specific modifications to the Property Owner Agreement or the Developer Agreement for City staff to review before bringing the agreements back to Council for approval at a future time.
3. Deny the attached resolution, in which case the City Manager would not be authorized to execute the attached agreements.
ATTACHMENTS
1. Resolution No. 2024-20
EXHIBIT A: Zacharias Project Agreement for the Ivy Rose Area (referred to herein as the “Developer Agreement”)
EXHIBIT B: Water/Sewer Connection and Sound Wall Agreement (referred to herein as the “Property Owner Agreement”)