The discussion became a bit contentious Monday evening for the El Dorado City Commission as they reviewed the city’s subdivision regulations.
The commission had asked Scott Rickard, assistant city engineer, to do a survey of other cities and what incentives they offer as far as cost improvements in new residential subdivisions.
Rickard contacted 18 communities with a similar makeup.
“By far what we found out is El Dorado definitely helps the most as far as supplementing development,” Rickard said. “We received similar results in 2011 and 2007 and maybe in 2001.”
According to the policy, El Dorado currently pays for intersections on streets, storm water system, water distribution system and any oversizing for sanitary sewer lines needed for future use in new developments.
Of the cities responding to Rickard, a few pay for intersections, none supported storm water costs, a few helped with water distribution, a few helped with 100 percent with water lines for fire protection and a few contributed in costs for what is above normal size for sanitary sewer.
“In the last 12 years, subdivision regulations, specifically improvement costs, have been discussed quite often and have gone back and forth and continually revert back to where we are today,” Rickard said. “It’s gone back and forth a few times in the last 12 years, but no developments have been subject to anything different than what currently stands today.
“We have held community forums back in 2011 discussing this with developers, builders, citizens, the Planing Commission and that is what got us back to where we are today.”
There have been few changes over the years in this version of the policy. They typically have gone with a 10-year payback, although they did allow that to go out to 20 years. They also used to do a fixed principal payment, but converted that to a flat payment so the person paying could plan for it better.
The city also has seen an increase to their costs as the cost to put in infrastructure has gone up, such as an increase in asphalt costs.
Rickard went on to review some recent developments, such as Prairie Land Phase I on the west edge of the city. This had little city-at-large cost and also saw a return on investment quickly for the city.
Phase 2 of the development had a lot of stormwater infrastructure and their bond payments were quite a bit higher, but as of 2015 the city expects the investment to be even with bond payments and continue to see that return on investment grow from there.
Looking at the Criss Additions, Rickard said after four years the waterline infrastructure had paid for itself and was producing $426,000 in property taxes.
Page 2 of 6 - “Definitely that development has paid for itself and continues to pay for itself,” he said. “We think development is a good thing. It helps the city continue to grow. We hear from a lot of employers in the area of employees who cannot find adequate housing in town and have to live in another town and commute to El Dorado. We want to do everything we can to help them find a house in El Dorado. We are struggling to get new homes built in town.”
Commissioner Bill Young said he thought a large part of that struggle was a lack of lots.
“We have some developers putting together some lots for development that can be opened up to building and I think that will help,” he said.
After hearing the review of the regulations, Commissioner David Chapin said, “I’m pretty proud of that.”
“I’m not,” responded Mayor Mike Fagg. “Why should I pay for somebody else’s stormwater?”
“Who paid for yours?” Chapin asked him.
“I don’t know,” Fagg said. “I’m telling you 18 other cities don’t do that.”
“So let’s do what they do,” Chapin countered.
Fagg said that was not the problem.
“If we put the price up higher they are not going to build new houses,” Chapin said.
“Do we just give them a house to come to town?” Fagg asked.
“We’re not giving that to them,” Chapin responded. “I’m just not sure I’ve got a better answer right now to build things.”
Fagg thought rather than spend money on existing housing, they should let the developers go out and do the development. He wanted to provide an incentive for the guy who is building a house, not the person developing the land.
“You can’t put another $500 (a month) on a house to sell a house,” Chapin argued. “I would agree if we were in the other cities. That’s why they don’t have to do it because they sell the whole addition out in five years or less.”
“Why don’t we?” Fagg asked.
“If we could, we would,” Chapin responded. “People choose to live in Andover. We can’t make them buy the house.”
“So we in El Dorado have to pay for all of this to make them want to move here?” questioned Fagg.
Page 3 of 6 - Chapin said if a person looks at the economics it really does work out.
Fagg’s concern was on one addition in the past that was not successful and the city was left with the general obligation bond. He thought they should have gotten a letter of credit from that developer.
“Out of all of those projects, we had one that failed,” Young said.
Rickard said the downfall of the one failed development was the lots were spread out over an area where they could not build.
“I think the people (commissioners) before us have tried and tried to get development in this town and this was a way they could get a house affordable to sell in our demographics,” Chapin added. “Thirty to 50 years from now as Wichita approaches and we become an Andover to, well Andover maybe, we might be able to do what you want to do.”
Fagg still was concerned under the current system if a development is not successful the city has to pay for it.
“What we should do is nothing, then we never have to worry about anything going bad,” Chapin responded.
Fagg replied he wanted to look at existing housing.
“That’s for the private sector to do,” Chapin said.
“The private sector should be doing the developing,” Fagg said.
“I don’t know what you want to do different than not promote development,” Chapin replied.
Fagg’s concern came from the fact the current plan is completely opposite of what the comprehensive plan says to do.
“If we do what you want to do now, odds are we will have less development,” Chapin said. “We struggled to get in 30 years 15 developments and some are very small, and that’s good? I would entertain anything, but to say we’re not going to do this and we’re not going to do that, I just think it’s an investment from the city to make the city grow. Sometimes you have to throw money at things to make it grow.”
“I’m concerned we don’t have the money to pay for it,” Fagg said.
Chapin agreed they needed to look at every development as it comes to them.
“We look at all of that,” Rickard said. “That’s (new development) where you get that revenue that keeps us going.”
“Under our current system, if successful, we win and the developer wins,” Fagg said. “Maybe we should go into the development business. If we take the risk, why not get the return.”
Page 4 of 6 - Young did not agree with him.
“You make it sound like the developers don’t invest any money into the development,” he said. “I like living in a country where if you invest time and money and it is successful, you win. We don’t want to punish them for doing well. You’re saying they win like it’s a bad thing.”
“I’m saying,” Fagg responded, “everyone in this community needs to look at this chart (of what other cities pay) and see what everyone is doing. If we do what we’re doing and it is not successful and they are not doing it and are successful, we need to look at why.”
“Why today is because we don’t have lots to build on,” Young said. “That’s the reason why we’ve had two building permits pulled this year. We have to find a way to incent a developer to give us some lots to build on. When Frontier or the hospital or college or anyone brings new employees to town that’s the reason they’re not moving here because those houses are not available.”
Fagg was still concerned it was not fair to the person trying to sell his or her house.
“When government gets in using taxpayer money in private industry, bad things could happen,” he said.
Chapin pointed out they are paying for an intersection anyone could use, storm water they have no control over, and sewer and water, which are recouped in payments in usage.
“You make it sound like the city as a whole doesn’t benefit from this,” Young added. “Look at Vintage Place and the money generated out there. Every citizen in El Dorado is benefitting from the tax dollars generated in those homes.”
Commissioner Nick Badwey added any economist will say the surest way to lower taxes is to increase the tax base.
“I’m just saying, out of 18 cities and we give everything and we are the lowest in housing, it says we are not doing the right thing,” Fagg responded.
“It might say something else, too,” Chapin said. “We are having a hard time figuring out how to get people to move here.”
Rickard pointed out the developer does take the risk, but it is the future homeowner who benefits from the way they assess the developments through specials.
Fagg wanted to see a compromise. To help them figure out what they need, he suggested doing a housing study such as the one the city of Hutchinson did, but Young thought Hutchinson was a different demographic.
Page 5 of 6 - Fagg encouraged the commissioners to think about what the city will look like 10 years from now and some of the current streets.
“I would rather be helping some people who already live here,” he said. “Do I want new development? Sure I do. I’m saying we don’t have to give them everything. Hopefully all I could ask for is to have a little more compromise.”
Young pointed out El Dorado has its own identity.
“If you want to get to this position where we conform to what other cities do, let’s talk about water rates and do what Andover and Wichita does,” Young said.
Rickard said when he was talking to the other cities, they also were struggling with low building permits and some liked the way El Dorado did things.
“I don’t want to be the leader in giving away stuff,” Fagg said.
“You’re contention is we’re giving everything way,” Young said. “We’ve had two building permits in 2013. The solution is not to up the price.”
“We’re not upping the price; they’re paying for the cost,” Fagg replied.
“If we’re not getting builders with the incentives we have today, the solution is not to take away the incentives,” Young said. “How is that going to attract new builders? Tell me how we attract new builders if we take away incentives? That’s a simple question.”
Fagg responded by again saying if they are going to give them everything, the city should get into the development business.
At this point, Chapin said he had reached a compromise. He suggested requiring a letter of credit from developers.
“I think it would be prudent to qualify the developer and if they don’t have the means to pledge it, then you need a letter of credit,” said Herb Llewellyn, city manager. “I think that’s easy to do.”
“That’s the best that I can do,” Chapin said. “I’m reaching out.”
Fagg still wanted to focus on existing housing.
“Tell us what you would like to do with existing housing and a plan, and if it is a good idea, I will support it, and if it is a bad idea, I will fight against it,” Chapin told Fagg.
Fagg asked if they could have the company that conducted Hutchinson’s survey come talk to them about what they do and what they charge.
Page 6 of 6 - After a bit more discussion, Fagg said, “I’m in the minority here so let’s move on.”
The commission did not make any change to the policy.
Julie Clements can be reached at email@example.com.