What’s Your Authority?

What’s Your Authority?

Live blogging from the May 7, 2009, worksession of the Montgomery County Planning Board on implementation of the White Flint Sector Plan.

Diane Schwartz Jones, representing the County Executive: good news is we can’t veto a Master Plan. Planning board Chairman Royce Hanson: could veto all the implementation. Lots of ways to undermine.

Hanson: other ways to finance? Jacob Sesker, planner coordinator, Vision Division: legal issues. Art. 15 of Maryland Constitution requires uniform taxes. Can’t have higher taxes on commercial or residential properties. Practical issue for an implementable Master Plan. Hanson: this would be a barrier to the simplest approach would be a special assessment district levied only on commercial property. Sesker: distinction between tax and assessment. Tax is subject to Charter Limit, passed last year, on increases in revenues generated from taxes are limited to rate of inflation. Jennifer Barrett (finance director for Exec): applies to all revenue, which competes under the cap. Sesker: other ways to raise revenue from private sector to finance the infrastructure. Development districts are excluded from the cap. Special assessment districts could be structured without running afoul of the cap. And, excise taxes on development similar to impact tax on residential development. Could use those to pay for some of the infrastructure. Could propose legislation for impact taxes, but deferred over a number of years; county has found some difficulty in structuring those. Barrett: even spread over years it’s problematic to secure that. Sesker: consultants are looking at ways to work all this together. Can use a district to prime the pump to raise some revenue right at the beginning, and then as development occurs, take those properties out of the special assessment district and put them in another development district.

Hanson: where would these districts work in White Flint? Barrett: we’ve talked about infrastructure and moving forward. Create some incentives to be in the district. Trying to get creative. Hanson: now need 80% consent of property owners, but what if legislation created a new district to implement a master plan which created a new tax rate to fund the infrastructure? Trying to avoid the “free-rider” problem, where some owners who don’t pay the tax benefit from the results. In White Flint, that’s a big problem, because everyone in the area will benefit from the improvements.

Hanson: we’re only a few weeks from getting this plan to Council and getting it done. Going back two years with discussions with Steering Committee and Advisory Committee before that, we had an understanding that we wouldn’t do a plan that couldn’t get implemented, and that we couldn’t depend on the normal process because a lot of the streets require major actions. Too big to impose on a single development, and we can’t depend on project by project creation of streets and the Pike, which is really the key to making everything work.

Sesker: we have discussed with Exec on costs. Some of the concerns are with right of way acquisition. Example: revision of Executive Blvd and proposed Main/Market Street. Cmsnr Alfandre: that road program is important enough that it could determine the rest of the project. Sesker: That ties to my decision #1: no development authority, just use existing facilities. What needs to be funded publicly and what privately? Alfandre: what’s the big bucket? And timing? Sesker: we’ll do that at the June 4 Worksession, bringing a “super Table 7” with specific projects, costs including right of way acquisition. Won’t include in the Master Plan, but will show you and give you a comfort level. Alfrandre: total cost of White Flint? Sesker: just transportation, we estimated $300 million, not including right of way. Feb. 19 memo estimated public vs private financing. Roughly 30% borne by public sector.

Sesker: implementarion authority or existing? Robinson: vote based on efficiency or pragmatism? Sesker: balancing. Hanson: surest way to get this done would be an authority but whether it would fly? Robinson: there are no prospects of doing an authority. I want to move the discussions forward through channels that have reasonable prospects of coming true. I see no prospects for that doing that with an authority. Authority would be outside the normal budget process, so would not be dependent on annual appropriations. Others are within the normal process. Presley: Exec’s objections? Jones: we can do what you want without an authority with the broad powers outlined in the draft Plan. We can enter into contracts; we do it all the time. More efficient if we do it the way we always do. Tremendous redundancy if there’s an authority. We already have a regional services center. We can create a redevelopment office as we did for Silver Spring.

Hanson: principal difference is that if we had an authority, it would be a special district with a governing board, statutorily defined powers and responsibilities, mechanism for engaging the stakeholders in the determination of how the revenue stream would be spent. Would be subject to county agencies, but it would have a certain amount of autonomy to move things along. It would work; I doubt that there’s an appetite for it in this County, and I regret that. County is behind in decentralizing government, but that’s one of the other issues besides regionalism. If I saw real enthusiasm for the use of the other tools, and a package ready to recommend, I’d be willing to give up on the implementation authority. I’m not ready to lose it. Presley: if there’s an efficiency gain in the authority, there’s a gain, but there’s also a challenge. Hanson: I think the first approach is the use of the conventional means. Robinson: I think so. Hanson: may be useful to keep authority as a fallback position if we can’t move any other way, but let’s see how we go. I wouldn’t like to throw this away prematurely. Cool it but don’t put it on ice.

Sesker: next decision is Tax Increment Financing. Possible tool, but not recommended because we planned an authority. In the absence of an authority, staff recommends TIF. Robinson: support that. Jones: could provide for that in the Plan, we would recommend other possibilities for achieving the same objective. Barrett: what is your objective? Hanson: important issue. Currently, any developer will pay impact taxes at time of permitting and those funds go to general revenue fund. Here for the system to work and for an alternative to Rockville Pike to be in place for development to occur and the Pike to be redesigned, we have to have some of that money in advance and used for that construction of infrastructure. Needs to be clearly available. Needs to be available before someone comes in to develop it because we need the right of way. So we need a mechanism beyond the traditional needs to be sure this infrastructure can be produced in time for the other things to occur. We can’t rebuild the Pike without alternatives for people to use while the Pike is being rebuilt. We need a level of public participation in this redevelopment that’s different from the ordinary development that’s occurring in other parts of the county. Barrett: describe the problems and the proposed solutions, but don’t lock us in. Lay out the problem, not the solution. Hanson: area needs to have either an assured system of funding or of raising the revenues early on. Our proposal collects revenues early so we can get started.  Authority is my first choice, the TIF is my second, and if we can’t do either, then we’re back to hoping.

Hanson: our analysis and the private community’s analysis came out at the same place: about a 10% surcharge to do what is needed. Advantage of special assessment is that it doesn’t deprive the rest of the county of the increase in revenues, only of ten percent of the property tax. A surcharge would make other parts of the county compete for that revenue.

Sesker: final decision is whether to reword the implementation issues to avoid constitutional and charter limit issues. Hanson: we’re not going to take on the Constitution and Charter in a Master Plan.

Upcoming schedule: rest of May 7: status fo fiscal analysis and implementation; design guidelines. May 21, design guidelines by district. June 4: zoning, staging and implementation again.

Barnaby Zall


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