Sprawl less harmful than Oklahoma City leaders thought

Journal Record, The (Oklahoma City), Apr 18, 2007 by Brian Brus

A new fiscal impact analysis has found that Oklahoma City benefits from encouraging revitalization of its urban core against concerns of city sprawl, although the difference is less than city officials said they expected.

The study by the TischlerBise economic planning consulting firm also found that the city's income structure cannot continue to provide services to residents at their current level "without finding new revenue sources or raising existing rates."

"When you don't have specific numbers available, you make assumptions that are broad and big. Then you find out that the issues are smaller, but more intricate," said Mayor Mick Cornett after staff presentations to City Council members and other city leaders Tuesday at a special council meeting. "But am I swayed after looking at this that sprawl isn't such a big deal? No; it's still a big deal, but I think it's a little more complicated than we thought before."

The TischlerBise analysis was based on assumptions that the current level of spending and services provided, as represented by the fiscal year 2006 budget, will continue at that level. Oklahoma City Planning Director John Dugan stressed that the study focused only on projected development and infrastructure needs of the next decade based on that snapshot in time and could not address service deficiencies that were not obvious in the budget then.

Population projections show the 539,300 estimated city residents in 2005 will grow to about 610,100 by 2015, resulting in a similar growth pattern in housing units and jobs. That growth will drive additional retail development on which the vast majority of the city's funding is based. Researchers tackled two scenarios for comparison: The first assumed land use policies and development trends would continue unchanged, allowing more urban sprawl, while the second was modified by potential public policy decisions that would shift some of that development closer to the city's core.

Without additional funding, Oklahoma City government will face a cumulative net deficit of about $54.5 million over 10 years under existing policies, or a cumulative net deficit of $24.6 million if policies are shifted to focus on keeping people closer to the center. The difference between the two scenarios, about $3 million annually, was less than City Council members and city staff expected, many said.

But it's still not enough reason to loosen the reins on urban sprawl, Cornett said, noting one complication outside the range of the study is how population density affects the school districts that rely extensively on ad valorem taxes.

"You have to consider how the impact on schools impacts on our government. If you don't think there's a connection, all you have to do is look at MAPS for Kids," he said of the voter-approved temporary sales tax for the redevelopment of the Oklahoma City Public Schools District. "That's $500 million of our sales tax capacity being spent on schools, largely because the inner city school system suffered when people moved out of the district to what they thought were better schools.

"And that's what I mean by the question being more layered and complicated. I don't know exactly where we're headed, but these are numbers that council members have wanted for decades; they wanted some basis to make decisions on sprawl."

Officials said the cost of allowing city development to sprawl into empty expanses at city limits isn't keyed so much to providing new emergency services as it was to transportation costs. High- density apartment complexes have overwhelmed city streets with traffic in many areas.

Regardless of policy decisions, Oklahoma City will face funding problems because it is constrained to sales tax revenues, the research firm concluded. To that end, "One revenue source that TischlerBise recommends that the city consider is impact fees," the study said.

Impact fees are intended to spread the cost of the city's infrastructure to new development itself - building permits, for example. Common impact fees utilized by other cities include roads and transportation, parks and trails, and water and wastewater systems.

City officials said they plan to review possible fee structures and gather public input.

Council members also discussed another general obligation bond issue, which voters have authorized repeatedly over the years to support basic services. The 1989 bond authorization was worth $153.7 million; the 1995 authorization raised $220.7 million; and the 2000 authorization was worth $340.4 million.

In order to support $736 million in projects such as citywide road resurfacing and widening, traffic signal upgrades, parks development, libraries, and police and fire department improvements, city officials will likely ask voters to approve a seven-year debt plan or nine-year plan. In either case, the city's bond debt will be paid down over time by residents' ad valorem taxes, as it currently is.

A typical $150,000 home with a net assessed value of $16,500 is currently charged with a $248 annual property tax at the 16-mill level. If that level is increased to 18 - as would be the case under a seven-year bond plan - the same property tax would be $279 per year, or a difference of less than $3 per month.