This agenda item provides for consideration of a petition by the property owner, Jackling Aggregates, LLC, for voluntary annexation of a parcel totaling approximately 386.87 acres in size located at 555 Highland Ranch Parkway. Upon annexation the parcel will convert from a Washoe County zoning designation of GR (General Rural) to a City of Sparks zoning designation of A40 (Agriculture). This annexation request is coming forward for City Council consideration in conjunction with three related requests for: a development agreement pursuant to NRS 278.0201; certification of a Comprehensive Plan amendment to change the land use designation on a portion of the site from Open Space (OS), Employment Center (EC) and Commercial (C)  to Intermediate Density Residential (IDR) and Commercial (C); and, rezoning of the subject parcel from A40 (Agriculture) to SF6 (Single Family Residential – 6,000 sq. ft. lots) and C2 (General Commercial).

The subject parcel is located north of Highland Ranch Parkway just west of the intersection with Pyramid Highway. (Refer to Vicinity Map). The site is currently vacant except for a Truckee Meadows Water Authority (TMWA) water tank located along Highland Ranch Parkway. The subject property was formerly the site of an aggregate mining operation. The aggregate pit is not visible from either Highland Ranch Parkway or Pyramid Highway as it is situated in a bowl surrounded by ridges. The remaining quarry area and substantial portions of the site have been graded and are intended for development. There is a paved access road connecting Highland Ranch Parkway to the quarry site.

The applicant’s property is part of approximately 2,000 acres that were brought into the Sparks Sphere of Influence in 2002 as a Cooperative Planning Area with Washoe County. An area plan, known as the West Pyramid Plan, was prepared for this acreage and certified by the City Council in July of 2008. The land use designations for the subject property on the 2016 Sparks Comprehensive Plan Land Use Map – Open Space, Employment Center, and Commercial – are equivalent to but replaced the land uses designated for the site in the West Pyramid Plan. 

On March 13, 2017, the City Council directed staff to negotiate and prepare a development agreement pursuant to NRS 278.0201 concerning the development of the subject property. The proposed agreement is intended to address the type and intensity of development on the site, along with the entitlements necessary to develop the property. A development agreement is also proposed to address the requirements and terms for the provision of infrastructure, including the property’s possible inclusion in Impact Fee Service Area Number 1 (IFSA#1). Another purpose of the agreement is to provide for the applicant to waive, as permitted by NRS 278.0201, certain statutory timeframes for the processing of applications so that the land use requests can be considered concurrently by the Planning Commission and the City Council. Finally, for the owners and developer, the agreement is intended to provide for greater regulatory predictability for the duration of the project’s build-out.

On April 5, 2018, the Planning Commission reviewed these four requests and recommended the City Council approve the annexation petition, certify the Comprehensive Plan amendment and approve the development agreement and rezoning requests. (Please refer to the Planning Commission Report of Action.)

On May 9, 2018, the Regional Planning Commission (RPC) held a public hearing and reviewed the requested Comprehensive Plan amendment. The RPC also reviewed the project that is proposed for the site, as described in the development agreement, as a project of regional significance. The RPC determined that both the Comprehensive Plan amendment and the proposed project conform with the Truckee Meadows Regional Plan.

The request is a petition to annex 386.87 acres into the City of Sparks. As discussed in the Background section, this request is coming forward for City Council consideration in conjunction with three related requests for a development agreement, a Comprehensive Plan land use amendment, and rezoning. The purpose of bundling the Development Agreement with the annexation application, as well as the Comprehensive Plan amendment and rezoning requests, is to provide the public, third-party reviewing agencies, the Planning Commission, and City Council with an understanding of the development proposed for the subject property at the time these requests are considered. The Development Agreement is also intended to serve as the basis for satisfying the so-called concurrency requirement (Goal 3.5 and Policy 3.5.1) of the 2012 Truckee Meadows Regional Plan for infrastructure and public services that must be addressed with the land use applications. For these reasons, the Development Agreement is central to several of the Annexation Findings that follow.

Annexation Findings

Finding A1.  The request conforms to the requirements of NRS 268.

The City’s Seven Year Annexation Program has expired. However, NRS 268.670 allows the Sparks City Council to consider annexing property without an annexation program if it is contiguous to the City limits and annexation is requested by 100 percent of the property owners. Because the subject property is contiguous to the City limits and annexation is being requested by the only property owner, the City Council may consider this request for annexation.

Finding A2. The request conforms to the findings established for annexation applications pursuant to the Sparks Municipal Code Chapter 20.05.05.

Sparks Municipal Code 20.05.05 requires annexation requests to be reviewed for the following considerations:

1. Location of the property to be considered for annexation:

The property being considered for annexation is located on the north side of Highland Ranch Parkway. It is contiguous to the City limits on two sides and is within the City’s Sphere of Influence. (Refer to Exhibit 02 – Annexation Map).

2. The logical extension of City limits:

The property is contiguous to the City limits on two sides and located within the City’s Sphere of Influence. There are existing utilities in proximity to the property.

3. The need for expansion to accommodate planned regional growth:

The subject property is within the City’s Sphere of Influence. Based on a study conducted by Truckee Meadows Regional Planning Agency, there is an existing housing shortage in the region. Development of the subject property will increase the region’s supply of single family housing.

4. The location of existing and planned water and sewer service:

Water service will be provided by the Truckee Meadows Water Authority (TMWA). Sanitary sewer will be provided by the City of Sparks. The developer will have to dedicate sufficient water rights to serve the development with the final subdivision map(s). There is an existing TMWA water tank located on the property.

Sanitary sewer service will be provided to the project via the North West Sanitary Sewer Interceptor located to the east of the project.  The developer will be responsible for construction of all new sanitary sewer lines as well as upgrades to existing sanitary sewer lines that will connect the project to the North West Interceptor. The land uses contemplated for the project were included in the City’s sanitary sewer model based on the maximum unit count: 1,800 residential units and 13.4 acres of commercial.  The results of the sanitary sewer modeling indicate that the developer will be required to construct capacity improvements to the existing sanitary sewer system located between the project and the North West Interceptor to maintain an acceptable level of service.   

5. Community goals that would be met by the proposed annexation:

As specified in the development agreement, the applicant is planning to develop the subject property with between 1,200 and 1,800 single family residences and 13.4 acres of commercial and/or multi-family uses. The single family lots will primarily be located in the interior area of the property with most of the perimeter remaining as open space. The commercial development will be along Highland Ranch Parkway.

The Comprehensive Plan goals and policies that would be met by the proposed annexation, given the proposed use of the site, are:

Policy MG7: When reviewing annexation requests, the City will consider whether the proposed annexation: a) is included in the City’s Seven Year Annexation Program; b) is needed for the City’s growth within seven years; c) represents a logical extension of the city limits; d) allows for efficient and cost-effective provision of public services and capital facilities; and e) would be fiscally positive for a period of at least 20 years. When reviewing land use entitlements (e.g. master plan amendments, zone changes, tentative maps, conditional use permits) for land annexed within the previous 10-year period, the City may require an updated fiscal analysis if the proposed development materially varies from the development contemplated in the fiscal analysis prepared for the annexation.

Items a – c are discussed above. Items d and e are addressed in paragraphs F and G below, respectively. 

Goal H2:  Promote a strong, diverse housing market that supports economic growth and vitality while ensuring environmental and fiscal sustainability.

Policy CF1:  When reviewing new development, the City will not approve an application unless the City services can be provided at acceptable service levels.

Annexation of the subject property and approval of the Comprehensive Plan land use amendment and rezoning requests would provide additional land for housing development. This property has been in the City’s Sphere of Influence since 2002 and has Comprehensive Plan land use designations of Employment Center, Open Space, and Commercial. However, because most of the property is situated in a bowl not visible from Highland Ranch Parkway or Pyramid Highway, all but approximately 13 acres are unsuitable for employment center or commercial uses. Annexation of the site for housing development can be expected to promote Sparks’s housing market, advancing Goal H2.

As part of the development agreement, the applicant is petitioning to be included in IFSA#1. If the subject property is eventually included in IFSA#1, development of the site will contribute to the construction of a fire station to serve the area and storm drain, sewer, and parks improvements. In addition, Section 3.2 of the development agreement requires the developer to increase the capacity of Highland Ranch Parkway between the Pyramid Highway and the entrance to the subject property, and to construct improvements to the intersection of those two roadways. The Planning Commission concluded that, provided the development agreement is approved, the requested annexation complies with Policy CF1.

6. The efficient and cost-effective provision of service areas and capital facilities:

This item is discussed in the preceding paragraph. The subject property would be served by sanitary sewer facilities that need to be extended from the east side of Pyramid Highway. Capacity would need to be added to these facilities. Development of this project will need to be timed to assure the sanitary sewer capacity improvements are in place. Fire response would currently be from Fire Station Number 4 or through the automatic aid agreement with Truckee Meadows Fire District.

7. Fiscal analysis regarding the proposed annexation:

The Fiscal Impact Analysis (FIA) was updated June 13, 2018 to reflect changes to the development agreement to require that the street providing primary access within the subject property be a four-lane, median-divided roadway, rather than two lanes. This change would increase the City’s estimated road maintenance costs.

The updated FIA estimates this annexation and single-family development of 1,223 single family units and 13 acres of commercial uses will generate $47.28 million in revenue to the General Fund and $33.13 million in General Fund expenditures, resulting in an anticipated cumulative positive impact of $14.14 million over the 20-year analysis period.

The FIA estimates 20-year revenues of $3.34 million to the Road Fund and $16.1 million in expenditures.  This estimate results in an anticipated deficit of $12.76 million over 20 years due to the disconnect between limited sources of revenue available for the Road Fund and the high costs of street maintenance and repair. This is not a unique situation for new development within the city of Sparks, but the existing Road Fund revenue structure is insufficient to meet the street maintenance costs associated with all new and existing streets.

Combining the net positive General Fund amount of $14.14 million and the net negative Road Fund amount of $12.76 million produces a projected positive fiscal impact of approximately $1.38 million over the 20-year analysis period.  The FIA states that increasing the number of residential units with no significant additional streets requiring City maintenance would increase this projected surplus. Staff concurs with this premise. (Refer to Fiscal Impact Analysis)

8. Whether Washoe County has adopted a Community Management Plan for the proposed annexation area:

Washoe County does not have an adopted Community Management Plan that covers the area proposed for annexation. The City has not received any comments from Washoe County.

1. Whether the annexation creates any islands:

The annexation will not create an island because the property is contiguous to the City’s current corporate boundary on the eastern and (a portion of the) southern property lines.

10. Any other factors concerning the proposed annexation deemed appropriate for consideration by the City Council:

Before any tentative maps can be reviewed by the City, the applicant must prepare and submit a slope analysis per SMC 20.04.011 governing Slopes, Hilltops and Ridges, delineating the developable portion of the property.

Finding A3. The property requested to be annexed conforms to the Comprehensive Plan as it is within the City’s Sphere of Influence and Seven Year Annexation Program.

The City of Sparks initially exerted planning jurisdiction by including this area in its Sphere of Influence in 2002. The City’s Annexation Program expired in 2015. However, NRS 268.670 allows the Sparks City Council to consider annexing property without an annexation program if it is contiguous to the City limits and annexation is requested by 100 percent of the property owners. Both requirements are satisfied in this case.

Finding A4. Public notice was given and a public hearing held per the requirements of the Sparks Municipal Code.

Public notice was given per the requirements of the Sparks Municipal Code and Nevada Revised Statutes. The Planning Commission and City Council meetings function as the public hearings for this item. The proposed annexation was noticed, at a minimum, to all owners of property within 750 feet of the subject properties. Letters were mailed to 50 property owners. The public notice was published in the Reno Gazette Journal on March 22, 2018. 

1. The City Council can adopt Bill 2739 to annex the property at 555 Highland Ranch Parkway.
2. The City Council could remand the annexation request back to Planning Commission with direction.
3. The City Council could deny the annexation petition.

I move, based on Findings A1 through A4 as set forth in the staff report, to adopt Bill 2739 to annex into the city of Sparks real property approximately 386.87 acres in size located at 555 Highland Ranch Parkway, Washoe County, Nevada.