AGENDA #11
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Land Use Management Ordinance Text Amendment, Modifications to Payment-in-Lieu of Recreation Area
DATE: April 10, 2006
PURPOSE
Enactment of the attached ordinance would amend the Land Use Management Ordinance to remove all references to buildings and structures from the formula for calculation of payments-in-lieu of recreation area. If enacted, payments-in-lieu of recreation area would be calculated based on only land value and not on the value of land and structures as currently determined.
BACKGROUND
On October 10, 2005, the Council amended the Land Use Management Ordinance to change the method used in calculating payments-in-lieu of recreation area required as part of major subdivision applications. The modification required a shift away from private appraisals to values assessed by Orange County and/or Durham County for property tax purposes, and a multiplier established by the Council annually as part of the budget.
On January 9, 2006, the Council established a multiplier of 1.55. The multiplier is now part of the Parks & Recreation User Fee Policy and is subject to annual review as part of the Town budget process.
On March 20, 2006, the Town Council held a Public Hearing to consider changes to the method used to calculate payments-in-lieu of recreation area. No issues were raised at the Public Hearing.
DISCUSSION
Recreation Area is the amount of land that must be set aside for the future use of the residents of subdivisions. Recreation Area is not generally improved for active recreation. The Town currently allows payments-in-lieu of providing Recreation Area.
Section 5.5.2 of the Land Use Management Ordinance sets minimum amounts of Recreation Area that must be dedicated with any major subdivision of land. Section 5.5.2 (d) (1) allows a developer to propose a full or partial payment-in-lieu of providing recreation area on the site.
Proposed Change to the Method of Calculating Payments-in-Lieu of Recreation Area: Provisions for payments-in-lieu of recreation area under the old Development Ordinance and the original version of the Land Use Management Ordinance were intended to reflect the value of the land after it is developed, including all streets, utilities and infrastructure, and ready for construction of homes. The intent of the changes that were adopted in 2005 was to provide a fairer and more consistent method of calculating payments-in-lieu then the private appraisal method that had been previously used.
However, the language in the Land Use Management Ordinance Text Amendment that was adopted in October 2005 included the following provision:
A per square foot value of the property shall be determined, as established by Orange County and/or Durham County for real estate tax purposes, including land value and the value of all existing structures and improvements. (emphasis added)
In the past, developers were not asked to include the cost of existing buildings and structures in their calculations for payments-in-lieu. For example, under the current ordinance, if a lot with an existing home is to be subdivided into a number of lots, we would have to apply the value of the house to the formula. We believe that this would increase the payment-in-lieu costs significantly beyond the levels required in the past. We believe that the addition of the language requiring the valuation of structure was an oversight.
The proposed modification would remove from the calculations for payments-in-lieu all references to buildings and structures. If enacted, payments-in-lieu would be calculated based on only land value and not on the value of land and structures as currently determined.
RECOMMENDATIONS
Parks and Recreation Commission Recommendation: On January 18, 2006, the Commission voted unanimously (10-0) to recommend enactment of the proposed change. Please refer to the attached Parks and Recreation Commission Memo.
Planning Board Recommendation: On February 7, 2006, the Planning Board voted unanimously (9-0) to recommend enactment of the proposed change. Please refer to the attached Summary of Planning Board Action.
Manager’s Recommendation: We recommend that the Council enact the attached ordinance to amend the Land Use Management Ordinance provisions regarding modification to payment-in-lieu of recreation area language.
ATTACHMENTS