Transferable Development Credit & Pollution Reduction Credit Programs

1. Transferable Development Credit & Pollution Reduction Credit Programs Oregon APA Legal Issues Workshop

3. History • 1960’s and 1970’s • 125-square mile area of La Pine subdivided into over 12,000 lots in 200 subdivisions 1982 • La Pine Aquifer Study finds high nitrate levels in groundwater. 1994 • Oregon DEQ finds increasing nitrate levels outside of La Pine. 1996 • 7,000 remained undeveloped • County receives a $157,250 Regional Problem Solving Grant to identify regional problems and evaluate solutions.

4. La Pine Regional Problem-Solving Project Engaging citizens in La Pine and local, state and federal stakeholders in coordinated problem solving to find “locally appropriate solutions”

5. Regional Problem Solving Themes (1996) • Groundwater contamination & water quality threatened by septic systems • High water table • Existing subdivisions with unbuildable lots • Development impacts wildlife, especially deer migration corridor • Extreme wildfire potential • Poor quality roads • Lack of evacuation routes 42 Square Mile RPS Boundary

9. Adopted Comprehensive Plan Goals for Regional Problem Solving 1. To preserve water and air quality, reduce wildfire hazards and protect wildlife habitat. 2. To create a new neighborhood that provides services efficiently, sustains economic development and reduces adverse impacts to groundwater quality in South Deschutes County. 3. To develop an equitable, market-driven system, that reduces the potential development of existing lots in floodplains, wetlands, mule deer migration corridors and areas susceptible to groundwater pollution. 4. To ensure that domestic water derived from groundwater meets safe drinking water standards. 5. To explore innovative sewage treatment and disposal methods.

10. La Pine Regional Problem-Solving Project • $5.5M U.S. EPA grant to test innovative septic systems • Wildfire and wildlife impact mitigation programs • Creating a Transferable Development Credit Program

11. TDC Program • 544 Acres for about $500,000 • Expanded La Pine UUC Boundary • Loaned Sewer District over $1 million to serve the property • Conducted extensive public outreach to create a master plan & TDC program.

12. Neighborhood Planning Area County Purchases Federal Land and Expands La Pine Urban Unincorporated Area Boundary

13. The Plan

14. What Could It Look Like?

15. What Could It Look Like?

16. Benefits of the New Neighborhood • Eliminates need for $200 million dollar rural sewer system. • Keeps Rural areas Rural. • Purchases private property rights. • Provides opportunity for a range of housing types. • Meets Community Facility needs. • Proximity to La Pine Industrial Park. • Accommodates population growth. • Transportation: • Trip lengths shortened. • Average Daily Trips reduced along Highway 97 corridor. • Increased opportunity for walking, biking and transit.

17. TDC Program Goal • Encourage 1,650 owners of 3,600 “eligible” lots to sell their TDCs based on projected build out of New Neighborhood • AND • Require developers of the La Pine New Neighborhood to “buy” those credits

18. Neighborhood Planning Area Transferable Development Credit Program Definition: A credit given for a restrictive covenant granted to Deschutes County restricting the placement of a septic system on the subject property.

19. Transferable Development Credit • Sending Area • Lot owners can sell TDCs • 1 TDC per lot • 1.5 TDC per lot in High Priority Deer Migration Corridor Area • Record Deed Restriction • Keep or sell lot • Participation is voluntary • TDCs sold at market rate

20. TDC Eligible Properties • Legal lot or parcel in the RPS study area • Not greater than 2 acres • Has (or can get) septic approval (more than 2 feet above groundwater) • Undeveloped – no dwelling • Not developed with a sewage disposal system

21. Transferable Development Credit • Receiving Area • New Neighborhood • Developer must turn in 5.5 TDCs per net developable acre • County sells land at a discount • Participation is mandatory to develop • Developer to purchase TDC from a private landowner at market rate or County • Per lot cost determined by # of lots platted per acre

22. County Kick-Started the Program • Created a bank of TDCs to get the program started by: • Converting foreclosed properties to TDCs • Working with properties who owned multiple lots to sell TDCs • Actively marketed the program to property owners in sending area

23. Results • SENDING AREA • 43 TDCs from private property owners (35 lots) • 97 TDC from County owned lots (76 lots) • Restrictive covenants recorded on 111 lots • 3500 lbs of nitrate eliminated per year • RECEIVING AREA • 106 TDCs assigned to Quadrant 2c (Pahlisch) • 32 acres developed for residential use on La Pine Sewer

24. Transferable Development Credit Program Neighborhood Planning Area

25. TDC Amendments: 2005-2006 • Program worked with low land prices. After land prices increased, the program slowed. • National Demonstration Project to test innovative septic systems & USGS Groundwater Assessment results parallel to the rising land prices changed program focus to reducing nitrogen loading from existing septic systems • Convened 17+ member Advisory Committee • Recommended Amendments to create a Pollution Reduction Credit Program • BOCC adopts amendments in June 2006

26. Transferable Development Credit Amendments Part 1: Create a Pollution Reduction Credit • Pollution Reduction Credits created when an existing system is upgraded (owner would own a PRC to sell to developer), or • When a Neighborhood Planning Area developer pays into the Groundwater Partnership Fund $

27. Transferable Development Credit Amendments Pollution Reduction Credits $ Neighborhood Planning Area

28. Transferable Development Credit Amendments Developer Obligations Neighborhood Planning Area

29. Transferable Development Credit Amendments Part 2: Timing of Pollution Reduction Credits Pollution Reduction Credits obligations recorded on final plat approval for new subdivisions in the Neighborhood Planning Area Obligations must be met prior to issuing building permits

30. Transferable Development Credit Amendments Resolution Details • Number of pollution reduction credits apportioned across the entire Neighborhood Planning Area • Cost of the partnership fund for paying for credits instead of installing them • $7,500 per credit (about half the cost to upgrade a septic system) • Partnership fund set high to create incentive for developers to retrofit instead of paying • Cost based on data from the La Pine National Demonstration Project and currently available technologies

31. Transferable Development Program Changes: (OLD) Transferred Development: Prevents pollution from new development (NEW) Pollution Reduction: Reduces pollution from existing systems

32. Tentative Plat for Quadrants 2a, 2b & 2d (2013) • Findings and Decision issued November 1, 2013 • Developer obligated to provide 534 Pollution Reduction Credits • Proceeds will help retrofit standardized septic systems & other groundwater protection programs Neighborhood Planning Area 32

33. Conclusion • Program has evolved over time due to land prices, National Demonstration Project & USGS Assessment • City of La Pine will take over planning jurisdiction in early 2014 & maintain the program – primarily PRCs • Program may change if Goal 11 Exception for sewer is approved & installed • Should the program be changed for Neighborhoods 3 & 4? Neighborhood Planning Area 33