TITLE: CONCERNING URBAN GROWTH MANAGEMENT BY LOCAL GOVERNMENTAL UNITS, AND MAKING AN APPROPRIATION THEREFOR.

Fiscal Impact Summary	FY 1999/2000	FY 2000/2001
State Revenues Cash Fund	$782,300	$773,400
State Expenditures General Fund - Transfer Cash Fund	$782,300 782,300	$773,400 773,400
FTE Position Change	0.0 FTE	0.0 FTE
Other State Impact: None.
Effective Date: Upon signature of the Governor.
Appropriation Summary for FY 1999-2000: Department of Local Affairs - $782,300 and 0.0 FTE - General Fund transfer to Cash Fund
Local Government Impact: Requires certain local governments to develop and administer an urban growth boundary program. Provides financial grants to local governments.

This bill specifies the state goals for urban growth; allows any governmental unit to adopt an urban growth boundary; and requires certain counties, certain municipalities, and each metropolitan planning organization to adopt an urban growth boundary within a certain time frame. The bill requires the urban growth boundary to conform to any existing comprehensive plan. The urban growth boundary of any metropolitan planning organization is to be a composite of the urban growth boundaries of the municipalities and counties that are members of the organization.

The bill specifies certain conditions for each governmental unit to consider when adopting an urban growth boundary, and requires the governmental unit to coordinate the designation of the boundary with all adjacent municipalities and counties. The bill provides a manner for disputes to be resolved. If mediation does not resolve a dispute, the bill requires the affected parties to establish an interjurisdictional arbitration committee from a list of arbitrators to be supplied by the Department of Local Affairs. The bill prescribes the committee's duties, and requires the expenses of the committee to be paid by the affected parties.

The bill requires each governmental unit to annually review its urban service area and to make adjustments to meet market needs consistent with economic growth. Each metropolitan planning organization is required to adjust its urban growth boundary accordingly. The bill also requires each governmental unit to review its adopted urban growth boundary at least once every five years. Affected counties and municipalities are to consult each other during the review process, and to revise their respective urban growth boundaries to accommodate projected urban growth.

The bill requires state agencies to expand, provide, or fund urban services within adopted urban growth boundaries unless statutorily exempted. The bill requires metropolitan planning organizations and local districts, except school districts and regional transportation districts, to expand, provide, or fund urban services within adopted urban growth boundaries.

The bill requires the Department of Local Affairs to establish a technical and financial assistance program for governmental units required to comply. The department is also required to provide mediation services when requested, at the cost of the parties to the dispute. The bill requires the department to develop and administer a grant program to provide financial assistance. The bill allows the department to adopt rules requiring governmental units to provide matching funds.

The bill creates the Urban Growth Fund to consist of moneys provided by the General Assembly or made otherwise available. All investment earnings and repayments of financial assistance are to be retained in the fund and are not to revert to the General Fund. The bill makes an unspecified appropriation to the Department of Local Affairs for FY 1999-2000.

This bill requires the Department of Local Affairs to perform certain on-going administrative tasks, and to develop and administer a technical and financial assistance program. Table 1 provides a summary of the department's expenditures for FY 1999-2000 and FY 2000-01, based upon the following assumptions:

• that approximately 28 local governments will apply for grants during each of three successive years;

• that costs for dispute resolution will be reimbursed by the parties to the dispute; and

• that grants will not be awarded to cover the costs of recurring administration.

The Department of Local Affairs estimates that 27 counties and 58 municipalities, a total of 83 local governments, will be required to comply with the provisions of this bill. A recent poll of some county administrators indicates that some counties may not be required to incur additional expenses to comply to the provisions of this bill, while others may incur significant costs.

The cost of establishing an urban growth boundary and related agreements will depend upon the scope of work, nature of urban services, inter-jurisdictional relationships, and the number of areas to be established. The cost to develop each urban growth boundary agreement is estimated to range from $15,000 to $50,000. The cost to develop an urban service area within the urban growth area is estimated to range from $15,000 to $50,000. Additionally, local governments will incur additional recurring costs to administer the program.

The bill requires the Department of Local Affairs to establish a grant program to assist local governments with the costs of adopting and implementing urban growth boundaries throughout the state. This fiscal note assumes the amount of the state grants will not be sufficient to cover the entirety of the local government's development costs, and will cover no portion of the local government's on-going administrative costs.

This fiscal note would imply the Department of Local Affairs would require a General Fund transfer of $782,300 to the Urban Growth Fund. Of this amount, the Department of Local Affairs would require a cash fund spending authority of $783,200. Of this amount, the Department of Law would require a cash fund exempt spending authority of $1,000.

Table 1 - Department of Local Affairs Urban Growth Fund Expenditures
	FY 1999-2000	FY 2000/2001
Contracted Personal Services	$65,900	$65,900
Operating Expenses	3,500	3,500
Legal Expenses	1,000	0
Dispute Resolution	4,000	4,000
Non-recurring Expenses	7,900	0
Grants - 28 @ $25,000	700,000	700,000
Total Expenses	$782,300	$773,400