^ocal Capital ^CTterature Synthesis .
Improvements
and Development
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C. 20410
February, 1978
We are pleased to share with you the enclosed report on local government
uses of capital improvements to implement conmunity development strategies.
Local Capital Improvements and Development Management is a synthesis of
the literature on 1) current coordination techniques of local governments
for planning and programming their capital facilities to help carry out
development objectives, 2) the effects of public investments on central city
maintenance and suburban development patterns and 3) the legal foundations
and constraints on public use of investments to manage development. The
report is based on textbooks and manuals, community plans and capital
programs, legal literature and case law.
The research for the enclosed report was jointly funded by the HUD
Office of Policy Development and Research and the National Science Foundation,
Research Applied to the Nation's Needs Program. The research was conducted by
the American Society of Planning Officials (ASPO) with the support of several
subcontractors.
The report should be an important aid to local government planners and
public officials using 701 Comprehensive Planning and/or Community
Development Block Grant Funds to implement balanced development programs.
Communities, areawide and state agencies receiving 701 funds are required by
statute to have completed land use and housing elements with procedures
for implementation to maintain eligibility for 701 planning grant assistance.
Capital improvement programming is one of many implementation tools available
to governmental bodies to implement plans. Regional planning agencies may
also find the report of interest as they formulate regional development
strategies to preserve and strengthen existing cities and encourage rational
suburban expansion.
ASPO, under a continuing contract, is preparing a number of detailed
case studies of some of the most interesting local government efforts to
coordinate planning and investment functions. ASPO will also examine the
affects of Federal and state funding of capital facilities on local priorities
and the methods by which coiranunities may influence regional, state or federal
programming of capital facilities. A copy of the final report will be
forwarded to you upon completion.
We and NSF hope this report will be useful to you. We welcome your
consents, particularly those concerning any practical experience your
community might have had which would benefit the study.
-2-
Additional free copies of the report are available as long as the
supply lasts from the Division of Product Dissemination and Transfer,
Office of Policy Development and Research, Department of Housing and
Urban Development, Washington, D.C. 20410.
Donna E. Shalala
Assistant Secretary for
Policy Development and Community Planning and
Research Development
ROoert C. Embry, Jr.
Assistant Secretary for
LOCAL CAPITAL IMPROVEMENTS AND DEVELOPMENT MANAGEMENT
LITERATURE SYNTHESIS
Prepared by: The American Society of Planning Officials
Chicago, Illinois 60637
Under Contract Number H-2496
Office of Policy Development and Research, U.S. Department of
Housing and Urban Development; Office of Research Applied to
National Needs, National Science Foundation,
Washington, D.C.
July 1977
STUDY PARTICIPANTS
The American Society of Planning Officials is the Prime Contractor
for this study and author of this interim report. Staff involved are;
Frank S. So, Project Manager
Michael J. Meshenberg
Judith Getzels
Other participants and their staff are:
Peat, Marwick, Mitchell & Co.
Raymond T. 01sen
John DiRenzo
William Masterson
Mvinicipal Finance Officers Association
Philip Rosenberg
Gerald E. Bellows
Ross, Hardies, O'Keefe, Babcock & Parsons
Richard F. Babcock
Fred P. Bosselman
Wendy U- Larsen
Members of the Advisory Committee who have reviewed and commented on study
materials are:
James Attebery, City Engineer, Phoenix, Arizona
Michael A. Carroll, Special Assistant to U.S. Senator Richard G. Lugar;
formerly Deputy Mayor, Indianapolis, Indiana
Robert C. Einsweiler, Planning Consultant, Minneapolis, Minnesota
Leon Eplan, Commissioner of Budget and Planning, Atlanta, Georgia
Douglas Harman, City Manager, Alexandria, Virginia
David Knapp, Assistant Director of Financial Management, San Diego,
California
Morris C. Matson, Assistant City Manager/Director of Finance, Fort
Worth, Texas
David A. Pampu, Assistant Director for Planning, Denver Regional
Council of Governments, Denver, Colorado
Robert Paternoster, Director of Planning, Long Beach, California
Ved Prakash, Visiting Professor, Department of Health Administration,
University of North Carolina, Chapel Hill, North Carolina
Paul R. Woodie, Assistant to City Manager for Research and Development,
Dayton, Ohio
This research was made possible by joint funding from the Office of
Policy Development and Research of the Department of Housing "and Urban
Development (HUD) and the Research Applied to National Needs Program
of the National Science Foundation (NSF). The funding was provided
through a contract (H-2496) with HUD. The statements and findings con¬
tained herein are those of the Contractor and do not necessarily re¬
flect the views of the U.S. Government in general or HUD and NSF in
particular. Neither HUD nor NSF makes any warranty, expressed or
iit^slied, or assumes responsibility for the accuracy or completeness
of the information herein.
TABLE OF CONTENTS
Page
PREFACE . . , . . iii
INTRODUCTION iv
NOTES viii
CHAPTER I; THE ROLE OF CAPITAL FACILITIES IN IMPLEMENTING
DEVELOPMENT POLICIES 1
Introduction ..... , ....... 1
The Capital Improvements Program 2
The Use of Pviblic Facilities in Regulating
Development 18
Public Land Acquisition to Control Development 28
Public/Private Negotiations Involving Capital
Facilities ..... 30
Integrated Systems ...... 32
Svimmary 33
NOTES 34
CHAPTER II; THE EFFECTS OF CAPITAL IMPROVEMENTS ON
DEVELOPMENT 38
Introduction 38
Trunk Sewers and Wastewater Treatment Facilities ..... 39
Water Distribution Systems , ...... 41
Highways .................. 43
P\iblic Transportation Facilities . 45
Open Space 46
Other Community Facilities 47
Summary 48
NOTES 49
CHAPTER III; SUMMARY OF LEGAL ISSUES 53
Introduction ... ............. 53
The Legal Rules, Concepts, and Issues Affecting the Previa
sion of Capital Improvements ... .......... . 55
The Extent to Which a Local Government May Link Capital
Investments with Development Management Objectives ... 60
The Prospects for Capital Investment/Development
Management Policy 66
NOTES 71
Page
CHAPTER IV: ISSUES FOR FURTHER RESEARCH 81
Four Major Development Goals , 81
Seven Key Issues 83
APPENDIX A: THE CAPITAL IMPROVEMENTS PROGRAM 87
NOTES 98
APPENDIX B: BIBLIOGRAPHY . 99
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PREFACE
This report is a synthesis of the literature on how local govern¬
ments are currently planning and programming their capital facilities
to help carry out development objectives. It is based on textbooks and
manuals, commiinity plans, capital improvements programs from many local
governments, studies related to the use of p\ablic facilities for devel¬
opment management, and legal literature, including case law. Subscribers
to ASPO's Planning Advisory Service provided much of this material as
well as many comments and suggestions.
The report is descriptive and does not attempt to evaluate the
effectiveness of any particular practice nor recommend any preferred
approach. Its purpose is to share information with community management
professionals, particularly planners, and finance officers. Research
on the project is still underway and final reports based on local experi¬
ence are planned. Reader response—in the form of comments, critiques,
and sharing of local experience and material—is strongly encouraged.
Such response will help in the design of subsequent work and the prepara¬
tion of the final reports.
ASPO, as a prime contractor for this study, is responsible for
the overall preparation of the entire docvunent. Peat, Marwick, Mitchell
& Co., prepared the background paper that formed the basis for Chapter II.
Ross, Hardies, O'Keefe, Babcock and Parsons wrote the legal analysis and
interpretation appearing in revised form as Chapter III, and the Municipal
Finance Officers Association prepared Appendix A and assisted in preparing
Chapter I.
We are indebted to the members of the Advisory Committee for their
continuing advice and helpful comments on drafts of this report. A number
of other individuals have also read all or part of earlier drafts, includ¬
ing Malcolm Rivkin, Philip Herr, Kirk Wickersham, Clyde Fisher, and David
Brower. Finally, we appreciate the continuing advice and support of
James E. Hoben and Margaret Pepin-Donat of HUD and Terry Sopher of NSF.
ASPO, of course, remains fully responsible for all statements and conclu¬
sions.
iii
INTRODUCTION
Capital improvements decisions represent significant policy
choices for local government. High costs are frequently involved when
a new highway, tremsit system, water or sewer improvement, or school,
is built. Over $27.5 billion was spent by local governments for capi¬
tal outlays in 1974-75.^ These costs alone are sufficient reason to
raise the investment decisions to a high level of public policy interest.
However, other reasons may be equally importcmt. While capital improve¬
ments are built to respond to present and anticipated needs, it is wide¬
ly believed that they help effect change as well; that is, they have
secondary effects on development. Water and sewer lines, for example,
not only answer existing needs for service but may encourage further de¬
velopment. Highways not only relieve overcrowded facilities; they may
also lead to new development as well as change the character of the
neighborhoods through which they pass. A new school may not only meet
educational needs but may serve as a catalyst to reverse neighborhood
decline.
The importance of public facilities in implementing community poli¬
cies has been understood for many years. The 1928 Standard City Planning
Enabling Act called for city planning commissions to review major public
works decisions for consistency with the comprehensive plan. The prepa¬
ration and review of the capital improvements program (CIP) was intended
as a way to assure that public facilities reenforced the policies enun¬
ciated in the plan.
Now, however, a set of forces is at work that may lead to the fur¬
ther consideration of capital investments as a technique to implement
commvinity policy.
In rapidly-growing cities and counties increasing concern about the
costs of urban sprawl, may be a prime motivating force for a re-examina¬
tion of the capital investment process. Degradation of the environment,
snarled traffic, and loss of agricultural and open space to development are
problems facing these communities. Many local governments, particuleurly
at the urban fringe, are demonstrating increased willingness to control
the location, pace, and amount of development, some with the deliberate
intent to slow growth to what they consider to be a mamageable level.
Limiting growth and encouraging compact development are new goals for
many rapidly-developing communities. The recognition of the secondary
effects of capital facilities on development makes it increasingly likely
that these facilities will be planned in ways which support cuid reenforce
the traditional land use controls. At the very best, attempts are being
made to coordinate zoning and sxibdivision ordinances and capital facili¬
ties planning to avoid inconsistent development practices.
Local governments in other contexts are also motivated to reconsider
the use of capital facilities for development management. In mature com¬
munities faced with a declining tax base and a deteriorating capital
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plant, the pressure to use fiscal resources wisely is nvotivating careful
consideration of the effects of capital investirents. Cities are invest¬
ing public money in capital facilities in the hope that such facilities
will stimulate private investments or help to stablize or rehabilitate
old neighborhoods. Proposals to limit public investment in neighborhoods
that are considered economically questionable are also being seriously
considered. Limited resources are causing cities to examine their capital
investment choices with great care.
Moreover, the financial conditions of many cities has led to some
erosion of confidence in the municipal bond market. Because municipal
bonds are major sources of fxinding capital for improvements, the planning
and programming of these improvements will inevitably be affected. Al¬
though 1976 was still a bumper year, with over $33 billion in municipal
bonds coming to the market, a two-tiered market has begun to emerge with
older cities and some older states representing the lower and more dis-'
advantaged segments.
The financial community that supports public indebtedness is demand¬
ing, more evidence of fiscal solvency and effective management. A recent
report on the rating practices followed by Standard and Poor's, one of
the largest municipal bond rating companies, states;
The investment advisory organization likes to inquire about
the issuer's capital improvement program and its other long-
range plans. In fact, it likes to see these plans, ascertain
who prepares them, and study them for evidence of careful
thought or haphazardness.2
Every proposal for public investment will be examined and weighed against
competing claims. . Communities in this situation will have to leam to
articulate the principles by which they make choices.
Communities responding to the pressures either of rapid growth or
stagnation and fiscal deterioration may be the primary governments search¬
ing for new management techniques. But communities with relatively few
immediate problems are also making efforts to coordinate policy and are
undertaking capital facilities planning. Fort Worth, Texas, for example,
makes a case for closely integrating planning and capital investment de¬
cisions .
The capital improvement planning process (has changed) from
an engineering orientation to a master goal and objective
program for the city . . . (The) physical plan must give
consideration to the socioeconomic mix in the city and the
new broad range of environmental concerns as well as the
traditional needs. ... An effective Capital Improvements
Program requires a team effort with meaningful interface of
physical, social and fiscal considerations.3
Further incentives for local governments to link their capital facili¬
ties planning with overall development objectives are offered in various
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federal programs. Many federal grant programs require evidence of con¬
sistency of federally-aided projects with areawide or statewide plans
under A-95 review. Indeed consistency requirements are being specified
in regulations with increasing frequency. For example:
— The Clean Air Act and the Water Pollution Control Amendments of
1972 require communities to relate capital facility expenditures
such as sewers and highways, to the development policies identi¬
fied in these Acts.
— Section 208 Areawide Waste Treatment Management Planning guide¬
lines specifically require that water quality plans be consis¬
tent with plans for development, land use, and other policies,
and that management programs and institutions exist to carry
them out.
— Federal aid to urban transportation now encourages integration
of transportation programs into overall land use plans on a
regional and metropolitan basis.
— Instead of encouraging communities to seek categorical grants for
individual projects such as urban renewal, community facilities
or open space, the Federal Community Development Block Grant
legislation is designed to ecnourage local governments to make
public policy choices by looking at how various programs and
expenditures and investments fit together to meet community goals.
— The HUD 701 planning program supports comprehensive planning that
includes among its elements plans for "public facilities . . .
long-range physical and fiscal plans . . . [and] progrcunming of
capital improvements and other major expenditures. ..."
— The Public Works and Economic Development Act of 1976 provides
incentives for local governments to coordinate their spending for
public facilities with their development policies. The purpose
of the Act is two-fold, relating employment programs to the stim¬
ulation of the economy through building needed public facilities.
Areas demonstrating characteristics indicating "long-term eco¬
nomic deterioration" are eligible for special economic develop¬
ment grants. The requirement that designated areas must demon¬
strate planning and management capability to administer the grants
is likely to motivate close attention to coordinated policy and
facilities planning.
State legislation provides additional support for coordinating the
iit5)lementing tools at the disposal of local governments to achieve social,
environmental and fiscal objectives. The Vermont Capability and Develop¬
ment Plan, (1973) for example, protects towns attempting to control the
rate of their growth through timing the construction of public facilities
by requiring district environmental commissions to consider the impact of
development on public services. If a town has adopted a capital improve¬
ments program, the burden of proof that services are adequate falls on the
developer. The state is forbidden to act in a manner inconsistent with a
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local plcui or capital budget so long as the development does not affect
an overriding state interest.
The Florida Local Government Comprehensive Planning Act of 1975 re¬
quires preparation of comprehensive plcuis by local governments and con¬
sistency of subsequent "governmental action" with the plan after its
adoption.
Organization of the Report
This study examines the literature reporting on CD the ways that
communities attempt to link their capital improvements to their develop¬
ment objectives; (2) evidence of impacts on development by capital im¬
provements; and (3) legal questions arising in connection with community
decisions affecting capital improvements. Capital improvements may be
used by a community to accomplish several purposes, including the pro¬
vision of the infrastructure for basic public service, the reduction of
future maintenance and operating costs, the provision of amenities, and
the achievement of development objectives.^ These purposes often are
inseparable, that is, a particular project may serve one or perhaps all
four piirposes. The focus of this study is on the fourth purpose, the
use of capital improvements to achieve development objectives. The term
"development" is used broadly to include not only new growth, but also
renewal, rehabilitation, stabilization or infilling of existing built-up
areas, normally by the private sector.
The report is divided into four chapters. Chapter I summarizes the
literature on the various techniques used to link capital improvements
and development policies. While it focuses on the capital improvements
program as a widely-used and potentially significant device, it also
describes other local government practices.
Chapter II reviews reports and studies on the effects of capital
improvements on development.
Chapter III reviews the legal background for the use of local govern¬
ment's capital investment powers to shape or influence private develop¬
ment. It discusses the case law which sets limits or offers opportunities
for development management through capital improvements.
Chapter IV presents a set of issues which are left unresolved by the
literature. These issues are raised to help guide comments that readers
may wish to offer and to indicate the direction the continuing research
for this study will take.
Appendix A presents a s\mimary of the key elements of the capital
improvements programming process. Appendix B is a partially annotated
bibliography of the major works used in the preparation of this report.
NOTES
1. "Governmental Finance in 1974-75," GF75 No. 5, U.S. Department of
Commerce, Bureau of the Census, September 1976, p. 18.
2. Hugh C. Sherwood, How Corporate and Municipal Debt is Rated (New York,
John Wiley & Sons, Inc., 1976), p. 119.
3. Morris Matson, "Capital Budgeting—Fiscal, and Physical Planning,"
Governmental Finance, Vol. 5, No. 3, August 1976, pp. 43, 58.
4. Seattle Office of Policy Planning. Draft Recommendations: Summary—
1978-83 Capital Improvement Policy Plan; 1977 Community Development
Block Grant Program; 1977 Housing Assistance Plan (Seattle: 1977),
pp. 13-15.
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CHAPTER I: THE ROLE OF CAPITAL FACILITIES IN
IMPLEMENTING DEVELOPMENT POLICIES
Introduction
This chapter explores some of the ways in which communities have
tied capital facilities decisions to community development objectives.
The descriptions rely exclusively on published literature. No attempt
to evaluate the success of these efforts is made.
The Capital Improvements Program (CIP)* appears to be a logical
place to begin to look for evidence of linkage between a community's
use of public capital facilities and its development policies. Evi¬
dence of communities' intentions regarding their capital investments
is most commonly located in their published CIPs. Of the techniques
through which communities meinage their capital facilities to achieve
their development objectives, the CIP is probably the most generally
used. It originated about fifty years ago and is now prepared by many
cities and counties across the country. In addition, the literatxire
suggests that the CIP is being used in some communities as a part of
an entire system of techniques designed to link capital facilities to
development policies. Subdivision ordinances, requirements for develop¬
ment permits, and annexation agreements, for example, are being rede¬
signed and coordinated with a community's CIP. Some communities, how¬
ever, have l?een identified that control the provision of capital facili¬
ties for development objectives only through means other than the CIP.
Our discussion of the literature begins with the CIP and proceeds
through descriptions of a n\jmber of procedures other than the CIP which
are being used in commvinities to link capital facilities to community
objectives.
This chapter is organized as follows:
A. The Capital Improvements Program
Particular attention is focused on evidence of linkage between the
CIP and commvinity objectives through (1) systems for setting priorities,
and (2) forms of presentation.
Initial expressions of limitations of the CIP process are also re¬
ported in this section.
B. The Use of Public Facilities in Regulating Development
A nimiber of procedures and techniques which are based on the pre¬
sumed relationship of public capital facilities to private development
will be examined in this section, ^niese include:
*
See Appendix A.
-1-
1. Service Districts and Development
Limit Lines
2. Annexation and Intergovernmental Agreements
3. Adequate Facilities Ordinances
4. Access to Facilities
5. Municipal Service Pricing
The final two sections examine two familiar proced\ires involving
public capital investments which are believed to have power to manage
private development. These are:
C. Pioblic Land Acquisition
D. Public/Private Negotiation
The Capital Improvements Program
The linkage of capital improvements programs with existing commxinity
development (and redevelopment) policies is often difficult to determine.
The extent of detail describing the process by which programs are selected
varies with each published CIP. Many questions concerning the decision
making process remain unanswered. For example, does a planning department
examine each item in a CIP to try to determine its impact on a given
neighborhood? Or, does an explicit policy contribute to a decision to
concentrate development in a given location?
What we may observe from examining a number of CIPs is that while
some of them do indeed explicitly describe the linkage which is made
between projects and policies, many CIPs are only lists of projects auid
project costs. The ability to capture the relationship between the CIP
and community policies by investigating the CIP documents is limited.
The CIP represents the end product of a complex process of decision-making
that itself is not well-documented.
The literature search raised questions about what a CIP means to a
community. Some communities find the CIP primarily a valuable means of
improving their financial management and their scheduling. The CIP fre¬
quently presents a detailed budget for the coming year as well as a
longer-range plan for the future. The long-range CIP has the capital
projects that the government believes to be desirable, whether or not
actual funds are allocated for their realization.
Some jurisdictions have evolved their capital programming in such
fashion that their programs no longer appear to fit the traditional defi¬
nition of the CIP- The process of planning and capital budgeting in these
communities is integrated in such a manner that a separate CIP is no longer
presented. These systems may indicate new directions that the traditional
CIP process may take.
-2-
As communi'ties have yained a better understanding of the relation¬
ships between their capital facilities decisions, their development
patterns, and their costs, the potential power of the CIP to serve as
a technique to implement planning policy has become a matter of increas¬
ing interest. Evidence that decisions about capital facilities are
being more closely linked to land use and development policies is begin¬
ning to be reflected in a number of CIPs, procedures manuals, and com¬
munity studies.
Systems for setting priorities
One indicator of the way in which the CIP is coordinated with com¬
munity policy is the establishment of criteria for setting priorities.
Not all communities offer a description of their priorities. Some pro¬
vide only a broad categorization such as "urgent" or "necessary." Others,
however, have developed elaborate systems in an effort to objectively
rate projects for inclusion in the CIP. Such systems require communities
to articulate their goals and policies. This section describes some of
these priority systems.
Establishing priorities for the various projects that have been pro¬
posed is a key point in the CIP process. Priority-setting provides a
comm\inity with the opportunity to indicate its values, and to link its
policies firmly with its investment decisions. The Toledo-Lucas County
Plan Commissions, in a recent report, voiced the belief that cities require
more help in priority setting, stating that it was too often an intuitive
process, one of the "non-codified" parts of the (CIP) process involving
. . . invention and selective adaptation." The report suggests that the
process be made more explicit and insofar as possible more objective.^
Local priorities obviously will vary with the policies of the parti¬
cular community. Local priorities furthermore are often strongly affected
by federal and state policies. In some cases the local community has
little alternative but to comply. For example, achievement of water qual¬
ity objectives may require a jurisdiction to undertake a wastewater treat¬
ment program. Extensive improvement to a city incinerator may be required
under the Federal Clean Air Act; or the Federal Aviation Administration
may set a level for airport standards that the local government must ac¬
cept.
Federal or state policies play an important but less direct role in
other cases. The availability of federal or state funds or a new federal
or state project in an adjacent region may influence a community's de¬
cision to request a particular project. Categorical grant funds may be
available only for specific types of activities or block grants may offer
broad choices. The grant formula and local share requirements will in¬
fluence the decision to propose eligible projects for federal funds that
otherwise might not have been considered for inclusion in the CIP if the
city relied exclusively on its own sources of revenue. For example,
Chapter II discusses the manner in which the availability of federal
fvinds for interceptor sewers has led to building excess capacity in
some cases.
-3-
The influence of federal funding is explicitly exhibited in a num¬
ber of local priority systems. Aurora, Colorado, for exaitple, awards
points in its CIP rating system for use of outside revenue sources.
National City. California gives the second of seven priorities to "proj¬
ects that must be financed in order to meet the provisions of Federal
or State grants." The city of Memphis states:
. . . sources of funding should be considered and projects
planned so that full utilization is made of intergovern¬
mental revenues.
In his letter transmitting the 1974 Six-Year Development Program, the
mayor of Pittsburgh states:
The 1974 Program contains significant changes . . . due
largely to comments and recommendations made by our citi¬
zens and to drastically altered conditions of Federal Fund¬
ing for urban programs.
All local governments do not perceive themselves as responding
quickly and positively to the availability of state and federal monies.
Federal funding formulas may range from requiring no local share to one
which requires a considerable amount of local matching funds. A local
government's decision to use federal monies may be influenced by the
amount of local share it is required to provide.
The decision to apply for and receive federal or state funds may
be based on the local government's agreement or disagreement with the
objectives and requirements of the particular program. Federal public
housing construction programs, although a unique area for inclusion in
most CIPs, have not been universally accepted, particularly in sub¬
urban areas. The Community Development Block Grant Progreim (CDBG) ,
which "entitles" certain communities to federal funds and does not
require any local share, has been rejected by some local governments
because of certain program requirements.
Recognizing that such money will inevitably influence their pri¬
orities some communities adopt a specific policy toward outside sources
of funds. For example, the city of Baltimore states it will accept
funds from non-city sources only if the projects they support fulfill
definite city needs; the acceptance does not obligate the city to put
up more matching funds than can be afforded; and the acceptance does
not put an undue maintenance burden on the city at project completion.^
It may be argued that changes in the federal funding mechanisms
over the past several years have made federal programs more responsive
to local priorities instead of forcing local government to respond to
federal priorities. With the advent of General Revenue Sharing and
CBDG, local governments theoretically have available flexible programs
that may be adapted to a variety of local environments.
■4-
Nevertheless the vagaries of federal funding is said to preclude
some communities from considering federally funded progreuns in the CIP
beyond the first year program and capital budget.
An examination of the methods which several jurisdictions use to
set their priorities indicates the variety of forms which the process
can take. The communities described in the following section have de¬
vised schemes that indicate their intention to connect their CIP to
their overall development objectives.
Memphis. Capital facilities planning directed to the objective of
neighborhood rehabilitation plays a strong part in shaping Memphis* CIP.
The City of Memphis committed itself in late 1974 to a new policy based
on the belief that focusing limited available funds is likely to
have a greater effect than thinly dispersing resources. The fact that
federal dollars, rather than local tax revenues, are being used is as¬
sessed as significant in citizens' acceptance of this strategy. High
priority areas for investment are identified by the Policy Planning and
Analysis Bureau and are related to adopted neighborhood plans. The
Procedures Manual for Capital Improvements Budget and Program (August
1974) takes unusual care in spelling out the policies on which Memphis'
unusual priorities are based.
Priority areas planning is based on the following concepts:
(1) Geographic areas of the City experiencing preliminary
or advanced deterioration have multiple problems which tend
to be interrelated; (2) By treating problems simultaneously
or in a coordinated manner, a greater impact can be made
on an area than by treating each problem independently; (3)
Priority areas can be identified based on the current con¬
ditions and needs of these areas along with goals and ob¬
jectives of the Administration; (4) Since funds and man¬
power are limited in each program area and City division,
these limited funds should be directed to the same accepted
priority areas so that, for example, streets and drainage
are improved and housing rehabilitated as other capital
and operating projects are implemented; (5) By concentrat¬
ing improvements within designated priority areas, frag¬
mentation is reduced and impact is maximized.
Thus, stabilization of priority areas is a major goal which Memphis
specifically seeks to achieve with its CIP as one of its tools. The
concentration of services to avoid scattered development is another
major goal:
It is our goal to provide neighborhood level facilities to
unserved and underserved communities. To accomplish this,
the following concerns should be considered. Projects should
be developed so that annexed areas will receive the services
specified in the "plan of services" that were developed as
a condition to annexation. Excessive and costly urban sprawl
is discouraged. Therefore, in considering capital projects.
-5-
first priority for extending service will be assigned to
fully servicing substantially developed areas within the city.
Second priority will be assigned to capital projects that
will serve newly developed areas that are contiguous to sub¬
stantially developed portions of the City.
Memphis' CIP priorities not only are shaped by general policy con¬
siderations but policy statements are related to the plans of each
department. Justification for the priorities and procedures are spelled
out in detail in the functional areas. Policy, planning, and the CIP
appear to be closely integrated in Memphis' program.3
Nashville-Davidson. The Metropolitan Government of Nashville and
Davidson County has been concerned for several years with developing a
system of setting priorities for capital improvements. The changes
described in the last four editions of their annual capital improvement
budget and programs indicate the city's interest in improving this step
in the CIP process. Nashville-Davidson's Capital Improvements Budget
and Program 1976-77 Through 1981-82 presents within the document the
"project screening process" to which the Metropolitan Planning Commis¬
sion subjects all department capital project submittals. Each project
is judged and ranked on three levels: "geographic location," "localized
significant areas," and "individual project significance." A project's
relationship to the City's overall plan is an important factor in its
rating. Under the heading "geographic location," for example, added
weight is given to capital projects that serve to alleviate problems of
special areas based on information from the comprehensive plan, commun¬
ity development treatment areas, and other plans and studies. Even
projects scored according to their relative importance within the func¬
tional departments, reportedly take adopted plans into consideration.
A statement at the outset of the budget presentation describes the
priority-setting procedure and emphasizes its importance.4 (See Exam¬
ple 1) .
Minneapolis. The City of Minneapolis has a priority evaluation rat¬
ing system that the plcuining office believes is "invaluable in achieving
a balanced program." The Capital Long Range Improvements Committee (CLIC),
uses citizen task forces to evaluate capital improvements proposals. The
CLIC itself considers the city's financial capability and annually makes
recommendations including bond expenditure limits. Proposals are rated
on a scale of zero to 50 points on fourteen factors. (The criteria for
precise numerical rating require further investigation.) Among the com¬
munity objectives are "Economic Development," further defined as the ex¬
tent to which the proposed capital improvements "will encoxirage capital
investment, improve the City's tax base, improve job opportunities, attract
consiomers to the City, or produce public or private revenues;" and "Public
Benefit," defined as the extent to which the proposed capital improvement
"is justified in terms of ntunber of people to be benefited." The CLIC
also receives advice and recommendations on capital improvements from the
city planning commission. The planning commission prepares a checklist
that contains many policy-related items for departments to follow in medc-
ing referrals to the commission. (See Exeunple 2.)^
-6-
PROJECT SCREENING PROCESS
NASHVILLE-DAVIDSON, TENNESSEE
For preparation of the recommended 1976-82 Capital Improvements Budget and Program, the Metropolitan Planning
Commission staff established the following procedures for reviewing and screening all capital project submittals.
This process represents a revision of previous procedures and is subject to annual evaluation.
THREE LEVEL SCORING PROCEDURE
A three level scoring approach was established to permit a thorough review of the capital improvement needs of the
community, and the significance and impact each "needed" project might have upon a particular area or upon the
commxmity as a whole. The three levels of consideration are geographical location, overall community priorities,
and individual project significance.
LEVEL I: GEOGRAPHIC LOCATION
Three types of consideration are given for geographic location. Special areas are sections of Davidson
County determined to require additional governmental attention because of existing or developing con¬
ditions and problems. Based on information from the General Plan options, Community Development
"treatment areas" and other plans and studies, capital projects which serve to alleviate the problems of
these special areas are given a determined added weight in the scoring.
Projects of localized significance which do not serve one of the special areas, or are not intended to meet
the specific objectives of a special area which they do serve are scored under a second type of geographic
consideration. Using the Planning Units for Metropolitan Nashville and Davidson County, each is given a
score based upon long-range development planning policies, consensus areas of the General Plan options,
nondispersal, low income areas, and conservation.
Projects which potentially serve all or most of the community are considered under community-wide signifi-
cance. Since the geographical site is not a major criteria for the project, it is not scored separately on Level
I, but will receive the same score as assigned on Level II.
LEVEL II: FUNCTIONAL PRIORITIES
Each of the functional and subfunctional categories of Metropolitan Government service (e.g. Fire Protection,
Water Services, Parks, etc.) were ranked by Metropolitan Planning Commission staff concensus relative to
one another based upon expressed community priorities, the significance and magnitude of need, the relative
existing deficiencies, and middle-range strategies. Scores determined by this ranking apply to non-special
area projects of localized significance or projects of community-wide significance. For each identified special
area the functional or subfunctional services which relate to the identified needs and objectives of that area
are assigned a score determined by a ranking of their relative signficance within the particular area.
LEVEL III: INDIVIDUAL PROJECT SIGNIFICANCE
On this level each project is scored based upon its importance relative to all other projects within the depart¬
ment. Considerations such as adopted plans, the department's priorities, environmental issues, significant
nonlocal funding and performance measures are taken into account in determining the scores.
SCORING AND RANKING
The final project score is determined from the scores received on the three levels. For each of the three levels the
scores would range from 1 to 10, whole numbers only. The final score is determined by multiplying the scores
received on each of the three levels. The project scorer may use his or her professional judgment to vary the scores
on Levels I ^«ld II which were determined by staff consensus. All projects are then arrayed with the higher scores
indicating projects most important to overall community needs .
AUTOMATIC PRIORITY PROJECTS
Certain projects submitted may receive automatic priorities and thereby not go through the scoring process outlined
above. Those projects to which Metropolitan Government is irreversibly committed or which alleviate an existing
emergency need situation can receive an automatic Priority "lA" which gives it first consideration for funding.
Projects which require further study or which are contrary to adopted plans receive automatic Priorities "2B" and
"3", respectively. Those projects which do not address themselves to planning considerations, but by nature of
their financing or description must be included in the Capital Improvements Budget, receive a Priority "N" from
the Metropolitan Planning Commission. The Mayor changes this priority to one of the other priority designations
in his recommended Capital Bndoet, Each of the priorityand the complete evaluation procedure are outlined on
the attached flow chart.
Example 2.
SCORING RANGE
(Oo Not Exceed Maximum)
PRIORITY EVALUATION FORMULA
LINE
Where application of priority formula
does not seem to result in adequate
score for a project, the Task Force may
request CLIC to add up to 50 points.
PROJECT
0-50
GOALS AND
OBJECTIVES
Extent proposal contributes to the goals and cAjectives of
the requesting agency and/or governing authority.
1
0-50
STANDARDS AND
CRITERIA
Extent proposal conforms to criteria and standards ested>-
lished by requesting agency and/or governing authority.
2
0-50
SERVICE
LIMITS
Extent that existing (or absence of) public or private facil¬
ities limits (or denies) the provision of adequate services
in area.
3
0-50
ENVIRONMENTAL
QUALITY
Extent proposal may improve environmental quality of the City
and its neighborhoods.
4
0-50
QUALITY OF
LIFE
Extent proposal would offer opportunities for improving the
quality of life for residents in terms of personal enrich¬
ment and living conditions.
5
0-50
SPECIAL
NEED
Extent proposal meets a community obligation to serve a spec¬
ial need of a segment of the City's population, including
low/moderate income, aged, minorities, handicapped, etc.
6
0-50
HEALTH, SAFETY,
GENERAL WELFARE
Extent proposal eliminates conditions detrimental to health,
safety, and general welfare of the community.
7
0-50
SERVICE
DISTRIBUTION
Extent proposal improves the city-wide distribution of
related services.
a
0-50
ECONOMIC
DEVELOPtlENT
Extent proposal will encourage capital investment, improve
the city's tax base, improve job opportunities, attract con¬
sumers to the City, or produce public or private revenues.
9
0-50
PUBLIC
BENEFIT
Extent proposal cost is justified in terms of number of per¬
sons to be benefitted.
10
0-50
COST
EFFECTIVE
Extent proposal may be cost effective in terms of capital
and probeJsle operating costs.
11
0-50
COMMITMENT
Extent proposal is acceptable in terms of possible future
commitments to provide similar improvements in other areas
of the City.
12
o
in
COORDINATION
Extent proposal appears to be coordinated with other public
or private projects or facilities.
13
1
o
NEIGHBORHOOD
IN'/OLVEt-IENT
Extent of efforts made to inform area residents about pro¬
posal and involve them in its planning.
14
TOTAL PRIORITY POINTS:
Source: Capital Long-Range Improvements Committee, Minneapolis, Minnesota
Example 3.
Proposed for the Town of Franklin, Mass.
Tlie foilov/inc cliecLulist should help in considering the
secondary consequences of building capital facilities or niaking
ether capital outlays. All questions are structured so that "yes"
«noT/ers indicate an inoact consistent with town policy as ex-
nresssd in pjuAmrillG FOEl FRAIECLIIT, the ileoidants' Master Plan
Studies, 137<1-137C.
Hot
Yes ITo Applicable j
1. Will this project either leave unchanged
or slow the rata of population growth
in Franhlin?
2. Is the amount of growth that this pro¬
ject is designed to serve consistent
v;ith the most recent projections of the
Planning Board?
3. Will this project either leave unchanged
or increase the ratio of Jobs in Franklin
to residents of FranlLlin?
4. If the project is likely to stimulate
residential development in an area, as
opposed to townv/ide,
a. will that development be totally
in the Center or Suburban District?
b, will that development be partially
in the Center or Suburban District?
c, can the stiriulated growth in that
area be ser/iced with roads, schools,
utilitLes, etc., without further
town investments?
ilot
Yes Ho ADolicable
d. are existing development controls
adequate to relieve all other concerns
about the stimulated growth in that
area?
-10-
If the project is lilceiy to slov; resi¬
dential development in an area, as op¬
posed to toY/mvicie,
a. is that area in the Rural District?
b. are one or more public service sys¬
tems in the area being used at- or
near-capacity?
If the project is lihely to stimulate
commercial or Industrial development in
an area, as opposed to tov/mvide,
a. is that area nov; zoned for ccmjaerce
or industry?
b. can the stimulated development be
adequately serviced v/ith roads, util
ities, etc., without further town
investments?
c. are essisting development controls
adequate to relieve all other con¬
cerns about the stimulated growth?
If located in a Rural District, will thi
project itself be free of characteristic
leading to an urbanized "character"?
-11-
The Metropolitan Council Five Year CIP for Sewage Facilities (Minne¬
apolis/St. Paul) considers a nimiber of planning policies as a guide to
setting its (regional) capital program priorities. Like the Minneapolis
CIP, the Metropolitan Council uses a point evaluation system. The system
balances public health and pollution considerations, consistency with the
metropolitan land use plan, and availability and adequacy of other public
services. Sewerage policies are tied into and support regional land devel
opment goals through the criteria selected for priorities. About half of
the possible points that can be assigned to a projected plan to extend
trunk lines are allocated on the basis of public service adequacy and land
use considerations. To the extent that these points influence the deci¬
sion to locate lines in a particular area, sewerage policies encourage
growth in areas designated for higher densities in the regional plan.
Thus, sewerage policies are tied into and support regional land develop¬
ment goals through the criteria selected for priorities.
Franklin, Massachusetts. In a draft report prepared for the town of
Franklin, consultants Philip B. Herr and Associates prepared a simple
checklist for the town's Capital Outlay Committee to help them examine
capital improvements decisions of one department in the context of other
department decisions and in the context of the town's growth and develop¬
ment policy. The use of such an inexpensive, easy-to-use checklist is
suggested by Herr as an initial aid to developing priorities related to
plans. (See Example 3.)^
The priority systems discussed above are all reported in the litera¬
ture. Although these systems are designed to be responsive to community
policies, how, in practice, they have affected the CIPs which they regu¬
late is not known.
Presentation; the unified plan and CIP
Several communities have altered the form in which their CIP and
their overall plan is presented to reflect the integration of the pro¬
cesses involved. In these cases, a unified document is presented as the
overall strategy or policy statement of the community. The CIP may be
merged with the comprehensive plan either to some degree, or, in one
case, completely. The document may no longer be referred to as a
Capital Improvements Program, but may have a broader title, such as
"Community Improvement Program" (Manchester, New Hampshire). This ap¬
proach replaces the conventional model in which the CIP may be presented
as little more than a list of projects and their estimated costs and fi¬
nancing mechanisms. Though a community with a cursory list of projects
may have also been guided by policy in preparing its CIP, it is difficult
for the reader to draw any conclusions to that effect from the dociament
itself.
In some CIPs, projects are developed at the lowest levels of manage¬
ment. These flow upward for review and compilation into a single docu¬
ment. In others, the projects appear to emanate from overall goals and
objectives rather than from a listing of projects. This "top down" ap¬
proach organizes activities under major service areas, then categories,
and finally programs activities within them. The presentation may revolve
-12-
around broad program areas such as environment, health and safety, com¬
munity development, culture and recreation. This method of organization
and presentation appears to point to underlying policy considerations
more directly than a straight compilation; in practice, however, both
methods of collecting projects, may have been used.
The amount of information provided in CIPs may extend well beyond
a presentation of projects and costs. Dayton, for example, identifies
one of the community's areas of concern as Community Environment and pre¬
sents under this category the city's programs in housing, economic environ¬
ment, transportation, water, conservation, and support service. Manchester,
New Hampshire presents service categories such as "leisure." In both cases,
each major component includes a goal statement and benchmarks for deter¬
mining future goals. The presentation of both docviments reflects an at¬
tempt to make the allocation of resources and the goals they serve compre¬
hensible to citizens and policy makers. The official doctiments of several
cities provide examples of such attempts to make the capital improvements
program responsive to a guiding plan.
Baltimore. The city of Baltimore's Development Program 1976-1981,
links its proposed capital projects with the city's planning policies in
13 program areas. These areas range from the traditional parks, transpor¬
tation, and solid waste disposal programs, to a "multi-service center"
program, aimed "to improve health, social and economic conditions in the
city by bringing together a community's needed services in a concerted and
coordinated fashion . . . (in) close proximity . . . within the communi¬
ties." The document is divided into two parts; the first section, "The
Comprehensive Plan" concentrates heavily on relating policies to capital
projects and provides a framework and justification for the detailed CIP
presented in the second section. The introduction to the second section
e}q>lains the CIP process itself and the city's fiscal policies, as well
as listing the items of the proposed budget.7
Pittsburgh. The city of Pittsburgh's biannual six-year development
program is conceptually similar to Baltimore's in that both cities inte¬
grate planning policy and capital programming into a single report.
Former Planning Director Robert Paternoster comments that the six-year
development program "can be described both as an action-oriented com¬
prehensive plan and as a policy-directed capital improvement program."
Pittsburgh's 1976 program for capital improvements appears to be firmly
based on the statement of its policies relating to seven community ob¬
jectives, including housing, economic development, transportation, recre¬
ation, and culture. Well over half of the document is devoted to policy-
The connection of goals and implementation is explicit. For example,
in the 1972 Program, the city set forth a policy in the areas of housing
and community development to provide strong support for existing neigh¬
borhoods and to reorient its redevelopment program away from concentrated
projects toward a more city-wide approach. The implementation of this
policy can be seen in siibsequent programs as the city doubled its invest¬
ment in public facilities in neighborhoods, and reoriented the capital
-13-
inprovements program of the Redevelopment Authority from one that em¬
phasized projects to one that emphasized programs. The new programs
being implemented by the Redevelopment Authority appear to be consistent
with the overall policy direction, and include a massive city-wide, low
interest, home improvement loan program as well as a public subsidy pro¬
gram to stimulate new sales housing construction in older neighborhoods,
"under the program, public funds are used to make up the difference be¬
tween the cost to construct the house and the market value of the house
on the site." Pittsburgh achieves these programs through a mix of city,
state, and federal (largely community development block grant) funds,
all of which are channelled through its Capital Improvement Program.8
Dayton. The City of Dayton reports that it has taken a major step
toward linking the CIP process with other plans and programs of the city.
Capital programs and service programs are both considered as line items
in the budget. Dayton's plan for 1976 is called appropriately. Program
Strategies; it represents cin innovative attempt to restructure the bud¬
geting process with limited resources.
Dayton's Program Strategies serves as a policy discussion statement
from which the annual appropriations ordinance (the traditional line item
budget) is drawn. The procedure includes the consideration of statements
of needs and objectives for the coming year from seven Neighborhood Coun¬
cils, information gathered from extensive piablic opinion surveys that
measure the perceived effectiveness of city services, and Polk Data Ser¬
vice statistics that describe in detail the changing patterns and needs
in the city on an annual basis. All this material is presented in the
Strategies document. Overall objectives are presented in four major
subject areas: security, commiinity environment, human development and
public representation. Subcategories under each of these four areas re¬
late to specific programs. The programs may include services or capital
facilities. The budget for each program is included. The budget is
clearly organized to reflect the city's policies. Dayton's program is
based on a \anified planning, programming, budgeting system (PPBS) and is
administered by the Office of Management and Budget.8
Richmond, Virginia and Montgomery County, Maryland. Although Rich¬
mond and Montgomery County Csee Example 4) present their capital in^rove-
ment programs as documents separate from their plans, the format in
which they are presented strongly emphasizes the connection between the
CIP and the plan. Both jvirisdictions present their programs in similar
form. Each individual project appears on a separate page, with data
describing the required funds, CIP history, related requirements, opera-
^^^^9 budget effect, relation to the master plan, and project justifica¬
tion. The section on justification often directly relates the capital
facility to its underlying goal . For example, the discussion of Kanawha
Square, a projected landscaped plaza in Richmond, suggests that "long-
term economic benefits" from the private sector are anticipated in the
project area that had already shown signs of "potential for high value
development" through recent new construction. The belief that a capital
facility will achieve the goal of attracting private investment is ex¬
plicit and underlies the selection of a specific location for invest¬
ment. 10
-14-
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1. Nombof
Agtncy No.
UpdotoCodo
759475
A. IDENTIf ICATION AND COOING INFORMATION
J. tw. JAW. 8. X976
DO NOT USE
J. Nmw E. BETlttrSPA WEIGH. IMPRVHT. ?ROG
4. COMHIMm DEVELOrMEMT AND HOUSItC
3. COM & ECONOMIC DKVELOPHENT
6. ^nnifiQ Ar*o BCTIlKSDA"CHEVy CHASE
Cmt Elcm«nH
Planning. Oeiign
I. ond Supcnriiion
2. lend
Sitt ImpvQvtmanH
3. and UlfitiM
4. Conitrvdian
Furntfvra
i ond EquipmenI
6. Tplpl
(•)
Totol
114
321
A35
m
11m
FY 75
(10)
Eilimata
FY 76
30
66
JL
EXPENDITURE SCHEDUIE (GOO'S)
(11)
Totol
6 Yaors
76
.251.
JuU.
(12)
Ynr I
FY 77
22
J5_
JU-
(13)
Ywr 2
FY 78
39
130
(14)
VbwS
FY 79
IS
J50_
(»)
Ymf 4
FY 80
(14)
Y«or 5
FY 81
(12)
Ytor 6
FY 82
(18)
kjrond
6 Y«m
C.
FUNDING SCHEDUIE (OOO'S)
CO BONDS
rCD. AID
54
381
46'
SO
JllL
J2_
J£SL
.65.
E. ANNUAL OPERATING BUDGET IMPACT (OOO'i)
0
Program Coklli Sloll
Ofhsr
Pocflttjf CorH: MointenoiHa
Deb) Sarrka
Totol Cottt
OHwiting PovCTiio or Cot) Soviogi
-vL-
j
F. APPROPRIATION AND EXPENDITURE DATA (00a»)
Dote Firit In Copitol Progrom
Dote First Appropriation
Initial Cost Estimate
Present Cost Estimote
Cumulotive
rL
FY
-2X.
€spenditwr«t ond Unencvnbered
AppropFiotlofl
2.43
Encumbroncoi
.-02
Soloncn
331-
Appropriotion Request, Budget Teor FY 77 [
Supplementol Appropriotion Request
Current Yeor FY 76
G. RELOCATION INFORMATION
enmitins 0 Indimduols 0 Busmessos D
D. DESCRIPTION & JUSTIFICATION
PROJECT NO. 751475 PROJECT NAME Faet- nnehrmrln Mr> 1 [tlshrsi-1i/srsr1 Tmpr-mr-Ps-rs ;
!• DESCRIPTION. This program provides funds for design and construction of comprehensive public Improvements in
the East Bchtesda Neighborhood. These Improvements vlll be aimed at strengthening the residential character of the
area while protecting the housing stock from commercial speculation. The specific public Improvements for this
area are outlined as neighborhood objectives In the recently drafted East Bethcsda Concept Flan. These Include
the Installation of curbs along neighborhood streets at specific and critical locations, during FY 76. A con^re-
5enslve pedestrian system will be established In the area during FY 77 by the construction of sidewalks at critical
locations. The expenditure schedule for FY 78 Includes an N.I.P. contribution to the upgrading of Xllbu^ Street
and the establishment of four local parks In the area. Finally, the FY 79 expenditure schedule allows for Im¬
proving the usefullness of the Lynbrook Recreation Center by constructing additional outdoor facilities for rec¬
reation and culture. Service Area; 4,000 population; approximately % square mile and bounded by Jones Bridge
load on the north, Columbia Country Club on the east. East West Highway on the south and Wisconsin Avenue on the
vest.
2. JUSTIFICATION. Plans and Studies - Staff report "Transitional Neighborhoods In Montgomery County," Housing
choices. CRP Report Towards an Architecture of the ComnLinttv. Bethesda-Chevy Chase Master Plan and the Bethcsda
Sector Plan. Specific Data; Research Indicates a declining tax base In transitional "grey areas" coinciding with
ticlghborhood deterioration and lack of adequate public Improvements. Master plans for Central Business Districts
indicate design and improvement features which can be implemented. Speculative ownership in residential dwellings
In "grey areas* is spproximatcly 30X. These areas contain substantial amounts of moderately priced housing which
Is critical to the County-wide housing supply. Cost Decrease; Current project cost reflects revised project
elements.
STATUS. Detailed design through operational. Prior to Implementation of thla project, appropriate amendments
to the Montgomery County Road Code will be necessary and such smendmenta are now under prEpsratlon by the Executive
H. MAP Mop Reference Code; DI7F
a
X
(D
•tk
\ I
I. COORDINATION INFORMATION
- Review, comncnt and Implementation of N.I.P.
recommendations by IWT.
Review and coiment on N.l.P, activities by
MNCPFC, DEP, and East Bethcsda Citiccn.-
Association.
Florida Coimnunities. In Florida new legislation has encouraged
communities to integrate their capital budget decisions closely with
their overall plans. Florida's Local Government Comprehensive Planning
Act passed by the Florida State Legislature in 1975 requires municipali¬
ties to prepare and adopt a comprehensive plan by July 1, 1979, and to
make land development regulations consistent with the plan. The Act speci¬
fies certain items that must be included in the plan. Sam Shannon, Direc¬
tor of Planning for the city of Sanibel, Florida, for example, writes in a
letter to ASPO that the city has interpreted the requirements of the law
that "the plan be economically feasible," and that "the economic assumptions
on which the plan is based . . . shall be analyzed and set out as . - .
part of the plan" as a mandate "to establish a capital improvements pro¬
gram within the Plan, and to demonstrate the funding program to imple¬
ment the items identified." The Sanibel plan, adopted in 1976, responds
with an economic base analysis and a discussion of capital improvements,
that considers the financial implications of future growth, and adopts
a policy that "to the maximum extent possible under the law," recommends
that new development should be required to pay its own way. The plan¬
ning department refers to Florida Supreme Court decisions regarding the
types of facilities and services for which new development may legally
be required to pay impact fees or taxes, and thoroughly considers and
discusses likely sources of future revenue within the text of the com¬
prehensive plan.11
San Luis Obispo, California states its capital facilities policies
within its plan. Growth management as a community goal has provided a
strong impetus for linking the CIP to the plan. The Proposed General
Plan Revision states, "the city should program and prioritize urban
service extensions and improvements consistent with land use and phased
development policies of the plan, in its recommended policies and pro¬
posals section."
The "Implementation" section of the proposed plan discussed at length
phasing future city growth and includes a Capital Improvement Program
outline that makes clear "the great influence that the provision, nature,
and location of public facilities have on the pattern of urban growth"
and emphasizes the importance of timing. Urban service limits are in¬
cluded in the plan; it is recommended that the city "shall not provide
urban services or annex territory outside of the urban reserve limit."^2
Ann Arbor. Ann Arbor, Michigan's Capital Improvement Budget and
Program for 1977-1978, though presented separately from the comprehensive
plan, relies heavily on the city's General Development Plan and Area
Development Plans.
The CIP states:
Current and long-range policy issues weigh heavily in the con¬
sideration and adoption of this year's CIB (Capital Improve¬
ment Budget)-CIP document. The question of levels of addi¬
tional growth and services to be provided are the main issues
of concern . . . budgeted and programmed projects must be evalu-
-16-
ated on the basis of key guidelines adopted in the General
Development Plan policies, which have direct bearing on the
CIB-CIP. . . .
The relevant guidelines which appear in the plan also appear in the CIP.
Of particular interest is the directive taken from the plan to:
Confine the provision of municipal services within the city
limits, or if extended imder appropriate circumstances, re¬
quire contractual agreements to at least meet city standards
of land use and environmental control.
Ann Arbor's attempt to relate its CIP and its plan may spring from an
extensive growth study which the city completed in 1972.^^
Limitations of the CIP
The previous sections have reported ways in which communities have
tpied to link the CIP with community development policy. The literature
search would not be complete, however, without noting the reservations
that have been expressed.
Although recent responses to an ASPO request for information concern¬
ing current practice reflect a high level of interest in using the CIP
as an instrument of planning, some commentators express doubts. One
group of respondents continues to hold that the primary purpose of the
CIP is to assist the technical processes of budgeting. An example of
this point of view is fovind in a letter from a Tennessee covinty com¬
mission, which states that, "the CIP process is ... a financial tool
and is not designed to carry out specific elements of a comprehensive
plan." A letter from a suburb of Chicago supports this: "The CIP has
little to do with planning; it is used exclusively as an instrument for
improved financial planning."
Another group of respondents notes that lack of jurisdictional con¬
trol prevents the CIP' from becoming a powerful plemning tool:
The major inhibiting factors are road widening, additional
schools and recreational facilities, all controlled by
other governmental bodies . . . the federal government and
state government play a major role in a good share of the
capital improvements activities that go on within the com¬
munity .
Insecurity about the fate of the CIP in the political arena is ex¬
pressed by another group of planners:
My impression of capital improvement planning progreimming
is that it is subject to two opposing forces: (1) a desire
to rationalize the preconceived priorities and (2) a desire
to respond to the opportunities and interest group desires
of the moment. Because of these forces and the political
-17-
behavior of elected and appointed officials, the CIP will
probably never become the management tool administrators
would desire. (Not for attribution.)
Mr. J.E. Attebery, City Engineer, Phoenix, Arizona, in a letter to
ASPO, December 8, 1976 appears to support the above view with the follow¬
ing statement;
One of the dominant.forces in land use development and in
capital improvement projects is the 'political process.'
If we fail to recognize that this exists, then we . . . are
not dealing in the 'real world'. . . . Obviously, councils
and supervisors that are elected from a ward or district
must be responsive to the people from that area with a
little less concern for the overall general good of the
community as a whole.
The Kansas City Department of Planning and Development exemplifies
some of the apparent aunbiguities concerning the use of the CIP to help
manage community development policy. Although the Department has used
capital improvements programming as a means of determining scheduling and
costs for a number of years, Robert Leanna, the Director of Planning and
Development, writes to ASPO that he believes that, "it is impossible to
have public schedules that have any meaning." Uncertainty as to funding
is one reason given for the difficulty. "Guidelines, funding availability,
and priorities by [state and federal] government change almost monthly."
The problem of projecting needs with any degree of accuracy for very far
into the future is another limitation. Because of these perceived diffi¬
culties, the Department takes "an approach of establishing priorities
based on needs defined by existing population and short-term growth pat¬
terns. "
Nevertheless, Leanna does believe that piablic investment might be
used to help carry out plans and does see a way in which this could be
done: "Our city is, for the first time seriously considering such issues
as pricing policies for services and decisions whether or not lines will
be extended for streets and sewers as an instrument of land development
policy." In spite of "the growing recognition that there is a definite
relationship between the settlement pattern which occurs in the commvinity
and the cost of services to that settlement" confidence in the CIP as the
way to deal with these concerns is not expressed.
The Use of Public Facilities in Regulating Development
The decision by a local government to use the CIP as a means to further
community policies stems from the belief that public capital facilities can
influence development in a desired way. Communities recognize that the
power of government to shape development involves an array of other devices
as well: zoning, for example, and other forms of regulation; fiscal incen¬
tives and disincentives; plans and negotiated agreements.
-18-
A number of communities are beginning to link these devices with
each other for the purpose of strengthening their growth management,
neighborhood preservation or CBD development programs. Such systems are
designed in an attempt to meike the community's regulations, ordinances
and fiscal policies consistent and mutually supportive. For example, in
communities attempting to follow a systematic approach, the intention of
the specific location and phasing of water and sewer lines can be sup¬
ported by a zoning ordinance that regulates density of development in the
affected area; or, a mapped urban service area can restrict a capital pro¬
gram to an area specifically designated by the overall plan.
This section describes several regulatory devices that involve public
capital facilities as part of a management system.
The growth management literature describes a number of the capital
improvements related tools and techniques used to control suburban land
development. Sometimes the capital improvements program itself is listed
as a separate growth management technique, sometimes not. In general most
of the techniques try to influence the location and timing of facilities.
Techniques that directly influence location of public facilities and
services by limiting the physical area of pviblic responsibility include:
(1) urban and/or rural districts and (2) long-term development limit lines.
Other techniques introduce timing by making development follow explicit
public facilities decisions rather than simply letting piablic facilities
be extended whenever development requires them. These include: (1) re¬
quirements for adequate public facilities to serve new development (2) con¬
trol of access to existing facilities. In addition, some familiar proce¬
dures that involve capital investments are now being explicity used as
part of development management systems. These include (1) pxjblic acquisi¬
tion of land (2) annexation and (3) municipal service pricing.
While the above techniques are not as commonly used as traditional
zoning or subdivision regulations to manage development, they are appear¬
ing increasingly in communities that are trying to control growth. One
prime concern of new-growth communities is the cost of indiscriminate ex¬
tensions of community facilities and services. Growth management techni¬
ques try to minimize the need for new facilities and maximize the use of
existing facilities. Of the 13 communities studied in Urban Growth Manage¬
ment Systems, 11 used "location and access to facilities" as a method of
controlling growth. And, of these 11, 7 had the controls linked to a
formal capital improvements programming process.14 one inference from
this report is that as these systems mature, public facilities decisions
generally, and the CIP specifically, emerge as a significant system ele¬
ment. 15
A recent survey of 105 communities that identify themselves as en¬
gaged in growth management shows the percentage that use techniques di¬
rectly involving public improvements: 64.8 per cent have requirements
for adequate off-site facilities, 59.0 per cent use the location of facili¬
ties to influence growth, 42.9 per cent use capital programming to influ¬
ence growth timing, and 55.2 per cent use the control of access to exist¬
ing facilities. Relatively fewer communities used the techniques that
-19-
adjust their corporate or service boundaries; 33.0 per cent used short-
term urban and/or rural service areas, and 28.6 per cent used long-term
development limit lines.
One interesting note in this survey was that 34 per cent of the com¬
munities indicated that they intended to use capital programming to in¬
fluence growth timing.This ranked among the few techniques that were
not in use but in which communities expressed interest.
These statistics tell very little about the actual content of the
controls. Clearly, the categories overlap and the techniques blur. The
development limit line is not much different from an urban service area
and neither of these techniques is easily distinguished from using the
location of facilities to influence growth location or capital program¬
ming to influence growth timing. Even less is known about the relation¬
ship between these techniques and the traditional CIP process. Like¬
wise, one wonders if from any random number of communities one would get
the same type of response. Is it not likely that half of the communities
would always say they influence growth patterns by their decisions about
the location and timing of public facilities?
It is reasoncible that if a community is concerned about the location
and timing of its development, then it is also concerned about the location
and timing of public facilities. But that is about as far as the litera¬
ture can go. It does not tell what factors tend to promote or inhibit the
development of a regular planning process which integrates capital facili¬
ties decisions with the desire to manage land development. A description
of some of the techniques and examples of communities using them follows.
Service districts and development limit lines
Restricting the provision of p\iblic facilities to defined urban
service districts is a management technique with a relatively long
history. The primary development objective served by this device is the
promotion of more compact growth than would occur if public services and
facilities were extended in the same pattern as development occurred.
The goal is to minimize the need for new sewer and water extensions,
police and fire protection, transportation, and Schools, when such
services and facilities are available in other locations. A service
district can either be drawn within a single municipality to make the
the area in which urban services are provided smaller than the munici¬
pality' s boundaries (e.g.. Coon Rapids, Minnesota), or it can be drawn
across government lines so as to prevent leapfrog development at the
edges of an urban center (e.g., Lexington, Kentucky; Sacramento, Cali¬
fornia; Nashville-Davidson, Tennessee; Salem, Oregon, and many others.;
These latter systems generally operate through intergovernmental agree¬
ments that establish where cind when" services will be extended.
Lexington-Fayette County, Kentucky, developed the prototype of this
system; since 1958, it has had an urban service area implemented through
its zoning ordinances. As originally designed, all residential lots of
less than 2.5 acres in size and all commercial and industrial uses were
-20-
permitted only within the urban service area. This meant that land out¬
side the urban service area would be zoned only for agricultural use and
residential use for lots of 2.5 acres or more. This distinction was
finally adopted, with the exception that the limit on residential uses
was dropped to one-acre lots.
The stated purpose of the urban service area in Lexington-Fayette
County is;
To delineate those areas which should be first developed in
order that the most efficient use could be made of the pub¬
lic tax money in providing necessary public services to
developing areas.18
The system was not designed to restrict the growth rate by curtailing the
supply of land; instead, it was simply an attempt to avoid scattered de¬
velopment. The district includes sufficient land to assure "a reasonable
margin of supply over demand and a range of choice in urban land develop¬
ment and building sites." Consequently, the urban district was designed
so that half of the land included in the service district was undeveloped.
The size of these districts seems to be decided by the logic of the
local situation. Coon Rapids, for example, simply defined its service
district as the area already covered with sewer and water and set 75 per
cent developed as the criterion for the time when the service district
would be extended.
Refinements and elaborations of the type and number of service dis¬
tricts appears to be a trend. San Jose, California, for example, divides
its urban service district into two categories; "urbanized areas," and
"urban expansion areas," which consist of vacant and agricultural land
proposed for urbanization in the future. In addition, an "urban reserve
area" outside the urban service district but within the city's defined
"sphere of influence" or urban limit line is also designated. The
Twin Cities Metropolitan Covincil uses a service district scheme in its
development framework. Proposals for five development "tiers," or plan¬
ning areas in San Diego and Baltimore County, and for four planning
zones in Oklahoma City appear to be sophisticated outgrowths of the
basic division into urbanized and nonurbanized areas based on public
service provision.
It is probably safe to say that the urban service district does not
represent a radical departure from "good practice" in any municipality.
Most communities cannot afford to extend service ad hoc and they try
(formally or informally) to make some logical extension policies. The
theoretical advantages of the urban service district appear to include
the following:
— The service district reinforces or strengthens the exten¬
sion policies by formally connecting them to land use regu-
-21-
lations. By requiring large lots or preventing subdivi¬
sion outside the defined areas, additional disincentives
for scattered growth are built in.
— The service district diminishes the chances that sewer
and water extensions and other public facilities will be
made ad hoc and piecemeal. Since the system requires
formal ordinance and mapping changes, it is more likely
that any given decision to extend urban services will
be evaluated in terms of overall policies. One could
thus argue that the service district tends toward long-
term consistency in the investment of public facilities.
— And, probably most important, the service district pro¬
vides a mechanism by which adjacent governments and
special districts can form compacts to coordinate their
procedures for investing in urban infrastructure.
The literature describing the service district often refers to the
CIP as an implementing device but does not give details. The general
impression the literature gives is that the CIP follows the decisions
cODOut the service boundaries. The CIP generally is prepared for 5 or
10 years at the most; and while a long-term ultimate limit line, or
"sphere of influence" may be defined for a commvinity it is not likely
that a CIP will be programmed for more than a given part of the area so
defined. The boundaries are decided first, then the details of when and
where the service extensions are provided within these boundaries is
decided in another process, usually the shorter-term CIP process.
Fiscal policies and the service area boundaries may be more closely
connected than it appears. In Lexington, for example, the boundaries of
the service area supposedly, in part, reflect logical units of service
extensions following drainage basins. Tabors et al., in Letnd Use and
the Pipe, believes that the control exercised by the service area is
relatively weak and that,
... by its very nature, the service area concept provides
only a very general type of land use control. . . . Obvi¬
ously, the success of such a policy depends strongly upon
the extent of land provided. If too much land is included
in the district, the policy will have no effect at all,
while if too little land is included, resulting excessive
prices within the service area could force developers into
a leapfrog pattern of acquisition, opposite to the intended
effect.20
Annexation and intergovernmental agreements
Annexation policies serve as an additional mechanism by which communi¬
ties are coordinating their capital investments and their development ob¬
jectives. Jurisdictions may attempt to tie their annexation policies to
designated service areas in an attempt to control the location and timing
-22-
of development. The rationale for this connection is clear; communities
must consider the demands that proposed new territories will place on
their urban services and other public facilities prior to accepting jviris-
diction over the annexed territory.
Intergovernmental agreements often are required both in carrying
out annexation policies and in defining urban service districts. This
is true both because the land area necessary for a rational facilities
plan often crosses jurisdictional boundaries, and because a variety of
special districts is involved. If local governments are committed to
the use of capital facilities for managing development, they must ob¬
viously retain a measure of control of these facilities. Where alterna¬
tives exist outside of the control of the muncipality (for example, in
states allowing the establishment of sanitary sewer districts by law),
facilities cannot be as important a factor in directing development.
Nevertheless, transfers of functions from one governmental unit to
another (including special districts) have become an increasingly com¬
mon practice. Of 3,319 municipalities surveyed in a recent study, fully-
a third reported they had transferred responsibility for a function to
another governmental unit during the period 1965 to 1975.21 Pviblic
works, sewage collection and treatment, solid waste collection, and water
supply and transportation represent a significant portion of the functions
transferred.
Formal agreements, contracts, or review requirements provide one way
of control. Many governments, however, have delegated functions, parti¬
cularly to special districts, with no restrictions, for what appeared to
be sound financial reasons but which now may give rise to problems.
Several jurisdictions provide us with examples of attempts of separate
government units to coordinate their capital programs, or to control de¬
velopment outside their boundaries.
Santa Rosa, California, for example, has prepared a map of the city's
ultimate boundaries, and within them, has set off areas in which xirban ex¬
pansion will be permitted during the next five years. Within this five-
year plan, a system of priorities has been set up that allows for the
orderly e3q)ansion of urban services based on, among other things, the ease
by which the areas can be served (islands and corridors surrounded by the
city have high priority), the current status of services (areas that are
now receiving city services on a de facto basis), and need (areas now ex¬
periencing health and sanitation problems). For the most part, sewer and
water services are restricted to development taking place within the five-
year urban expansion area. Although this policy has not been formally
adopted by the City Council for annexation proposals, it is respected by
the Council in issuing certificates of compliance for parcels in the
county. The policy is reinforced by higher utility charges for those out¬
side the city and by the fact that if services are provided written agree¬
ments are signed pledging cooperation in future annexation and public im¬
provement efforts.22
-23-
In 1970, the city of Salem, Oregon and Marion and Polk Counties
formally adopted a long-term urban growth boundary encompassing about
70 square miles. Urban development is to be continued within the bound¬
ary in order to provide sewer and water facilities and police and fire
protection "efficiently and economically." In addition, an urban poli¬
cies section of the agreement provides that the three governments will
include the urban boundary and the policies which it supports within
their comprehensive plans. Inside the Urban Growth Boundary within
Marion County, development can occur within areas of existing sewer and
water service. There are four such areas where service either through
special districts or through private companies, is provided and develop¬
ment is still occurring to fill in those service areas. However, no
new service areas are to be developed according to the agreement between
Salem and the County. It is likely that a rapid period of annexation of
these areas currently served by the sewer districts or companies will
take place followed by limitations on future expansion of service.
Salem's agreement with Polk County is more comprehensive. Salem
and Polk County have agreed to a joint policy that essentially states
that no development requiring sewer, drainage, or water can occur out¬
side of the incorporated areas. The land must be annexed prior to any
development permission.23
Santa Clara County, California, adopted a boundary restricting
future annexation to specific areas and defining the areas where public
capital improvements will be provided through intergovernmental agree¬
ments. As a framework for orderly development, the county planning
department prepared an urban development and open space plan for the
entire county. From the plan, the county and the municipalities worked
with the covinty's Local Agency Formation Commission (LAFCO) to set
mutually agreed-upon boundaries for future urban service districts.
LAFCO was created by state mandate primarily to pass on the incor¬
poration of new units of government and the annexation of property to
existing cities. It is controlled in each county by a board of county
and local officials. In addition to simply ruling on incorporations
and annexations, the Santa Clara County LAFCO helped to assign "spheres
of influence" to all the existing municipalities within the county,
earmarking the territory of each, so that each knows in advance which
areas of unincorporated land it might expect to annex eventually- The
boundaries essentially surround existing urban areas. A major source
of irritation among the municipalities, the struggle for tax base, was
mitigated.
The municipalities are responsible for the urban services within
their districts, and there is an active policy of annexing the unincor¬
porated areas within these spheres of influence to the municipalities.
When a developer comes to the county with a development requiring
sewers, drainage facilities, or water, the county reportedly simply does
not accept the application and insists that the developer negotiate
with the municipality which has the option to annex.
-24-
If the city refuses its option to annex, the developer, under cer¬
tain conditions may go to the county for development permission. Though
some prior conditions involving special districts may create difficul¬
ties, the intention of Santa Clara's policy is to assure that all urban
developable land is within a given urban service boundary- Though the
special districts remain they must receive approval from LAFCO to e:q>and
their boundaries. Approval is not granted unless the municipality agrees.
This program has all been accomplished by joint policy, adopted by
each unit of government, rather than by contract.24
Finally, a note should be made about one form of annexation that
is an idiosyncrasy of Illinois. In 1963, Illinois passed enabling legis¬
lation for preannexation agreements. It provides a statutory means by
which property owners and municipalities enter into binding contracts
detailing the rights and responsibilities of each of the parties. These
contracts can bind both subsequent elected bodies and subsequent land¬
owners for periods of up to 10 years. This enabling legislation has
allowed Illinois municipalities to work out detailed capital programs
for new territory at the time of annexation. These contracts generally
involved both the timing and scale of publiq investments and a schedule
of private landowners contributions to, or dedication of, public facili¬
ties. 25
Adequate facilities ordinances
In October 1970, Prince George's County, Maryland, amended its Sub¬
division Regulations to stipulate that "before preliminary approval may
be granted for any subdivision plat the Planning Board must find that
sufficient public facilities and services exist or are programmed for
the area." Among the factors considered in the ordinance are: (a) dis¬
tance of any necessary extension of sewerage and water facilities, (b)
availability of access roads adequate to serve traffic that would be
generated, and (c) availability of adequate school, fire, police, utility,
and park and recreation services. Facilities included in the adopted
County Capital Improvements Program or State Highway approved programs
for construction in the next six years are eligible.
A similar, but more specific, ordinance was recently adopted by
adjacent Montgomery County, Maryland. The public facilities required
in the ordinance include: (a) existing roads and public transportation,
(b) sewerage or water services, (c) police, fire, health clinics, schools,
and utilities, and (d) existing or proposed street access. In consider¬
ing questions of adequacy, the Planning Board is to consider, but is not
be limited to, the estimated increase in population, the present or pro¬
jected state of development, and the avoidance of excessive expenditure
of public funds. The Planning Board is empowered to reject plans for
any development where the public facilities are not availed^le or where
existing facilities would become overloaded.26
Although it is not necessary to have a capital improvements pro¬
gram in order to have an adequate facilities ordinance, communities that
-25-
have passed these requirements in their subdivision ordinances have tended
to design CIP processes that are intended to complement the land use con¬
trols. However, the literature does not detail the need experienced by
the community that led them to institute these complementary processes.
The existence of a CIP providing evidence of the community's future in¬
tentions appears to provide some legal defense of adequate facilities
ordinances. For example, the authority of the City of Livermore, Cali¬
fornia to pass an ordinance prohibiting the issuance of any residential
building permit until a certain quality of educational facilities, sew¬
age and water supply is achieved, was recently affirmed by the California
Supreme Court (See page 66). The case, however, was sent back to the
lower court for trial to determine whether the Livermore policy was re¬
lated to the welfare of the region, with guidelines that included;
. . . the court must ascertain whether the city or appropri¬
ate agencies have undertaken to construct needed improve¬
ments, and must determine when the"improvements are likely
to be completed.27
The dissenting judge more sharply attacked the ordinance on the grounds
that it "provided no timetable or dates by which the public services are
to be made adequate."28
The existence of a CIP is considered to be one of the reasons for
the court's upholding of the widely-cited development management system
of Ramapo, New York. (See page 67 ) Ramapo's program controls the
timing and location of new development by tying it to staged capital
improvements. Points are awarded for the availability of specified facil-
Tties related to an applicant's project. The capital "Tmprovements system
was established in 1968 and the point system adopted a year later. The
fact that the town was apparently making a good faith effort to supply
the improvements, as indicated in its CIP, was an important basis for up¬
holding the system.29
Access to facilities
Many communities are not only concerned about locating municipal
facilities in order to direct development, but also in controlling
access to facilities to pace or encourage the consiunption of these
types of capital investments. The logic behind restriction of access
—especially' to sewer and water—is that since these municipal invest¬
ments are believed to provide economies of scale, it pays to overbuild
for future growth. Yet, by overbuilding, it is possible to stimulate
undesirable development. Consequently, it is desirable to pace the
hook-up to these facilities to counterbalance this tendency. The City
of Salem, Oregon, and Polk and Marion Coiinties provide example of
the use of this restriction. A 1961 agreement recognized Salem as the
exclusive supplier of sewage treatment for the area. In order to gain
access to the treatment facilities, development must be located in or
annexed to the city of Salem or one of the two sewer service districts
in Marion County.
-26-
The logic of "overbuilding" sewers is not without challenges. Two
studies, Interceptor Sewers and Urban Sprawl,30 and Land Use and the
Pipe,^^ raise questions about the practice of building excess capacity
as a rational investment strategy. The doubtful accuracy of population
projections and the disproportionate tax burden on early users are given
as reasons to examine this practice critically.
Municipal service pricing
Several recent reports suggest that "pricing policy" (i.e., how the
costs of facilities are allocated to users, developers, and the general
public) for public capital facilities, especially those serving new
development, can play a much more important role in achieving community
objectives than it currently does. Pricing policy, in allocating the
cost of services to various segments of the community—new residents,
service users, the entire community—can, it is claimed, change the
economic incentives for certain types and locations of development.
Available methods of pricing capital facilities include;
1. Incremental Budget Pricing—in which a developer is charged
only for increases in the governmental budget directly related to his
development.
2. Incremental Budget Pricing With Payback—in which the developer
is repaid for excess capacity as additional users develop within his
service area.
3. Average Incremental Pricing—in which capital costs associated
with increased service are averaged over the total expected number of
service users and the developer pays the costs associated with his de¬
velopment .
4. Average Incremental Zone Pricing—similar to item 3 above,
except that the costs of services are averaged over particular areas
of a city permitting isolation of expensive service areas.
5. General Revenue Pricing—in which the costs of service expan¬
sion are allocated across the entire community.
6. General Revenue Zone Pricing—in which the costs are allocated
to residents or property owners within zones drawn to isolate high-cost
(as well as low-cost) areas.
Each of these approaches has advantages and disadvantages, and
each system may be more appropriate for one particular capital facility
than another. Incremental budget pricing, for example, may work well
and be most fair where facilities are involved that will primarily
serve one development, such as short sewer extensions and on-site ser¬
vices; average incremental pricing may best serve to finance a large
facility such as a fire station that will serve a whole area. Zone
pricing policies are best used to discourage development in high-cost
areas.
-27-
A recent Rand Corporation study which was funded by the National
Science Foundation, tentatively concludes that a realistic cost-based
policy of charging for new public capital facilities appears to be
effective in deterring leapfrog development. The effects of pricing
alone on slowing growth or encouraging density of development, however,
appears to depend also on the presence of other variables specific to
a given area.^^
Ann Arbor, Michigan's Growth Study analyzes the pricing policies
of that community particularly with respect to water, sewers, and roads
and indicates the ways in which pricing appears to have contributed to
undesirable urban expansion. The analysis may be applied to other com¬
munities.
Donald A. Downing, in two recent monographs, supports the view that
appropriate pricing policies associated with other regulatory and in¬
vestment policies do have an effect on the decisions of land owners,
developers, and home buyers. Downing's papers include case studies of
Montgomery County, Maryland; and Knoxville, Tennessee.
Like the other techniques mentioned in this section, variable pric¬
ing of capital facilities in relation to costs has long been in use,
particularly in relation to new subdivisions, but such policies have
usually been administered in a piecemeal fashion with prices set by
various departments in accordance with no set policy. What is new in
the recent studies is their suggestion that the technique be considered
in relation to total community development or redevelopment objectives
as part of an integrated control system.
Pricing policies, according to the authors, can be used indirectly
as well as directly to achieve a sound fiscal position; pricing can be
used to encourage compact development, for example. Slow growth, resi¬
dential density, and the provision of low-cost housing are other objec¬
tives that possibly could be affected by capital facilities pricing
policy.
Public Land Acquisition to Control Development
Control of land development and redevelopment through public owner¬
ship of land is a time-honored device. There is a good deal of experi¬
ence in inner city redevelopment through federally sponsored urban re¬
newal programs and in asseinbly of land for industrial development, but
the practice has been little used in this country as a means of guiding
fringe area development.35
Piiblic land acquisition falls mainly under three headings: (1) ad¬
vanced land acquisition for public facilities; (2) land banking; and (3)
open space or greenbelt acquisition.
Advanced land acquisition is a common practice of local government.
Based on a community's comprehensive plan and knowledge of the rate and
-28-
location of anticipated development, capital funds are allocated to pur¬
chase land for streets, schools, or other public facilities.Mont¬
gomery County, Maryland, for example, has a long-standing advanced acqui¬
sition program with a $3 million revolving fund.37
Land banking refers to the acquisition by government of substantial
amounts of private land and holding it for future use. Some cities have
come into such holdings through tax foreclosures; others through an
adopted policy of acquisition to achieve various p\i>lic purposes, includ¬
ing; controlling the urban growth pattern; regulating land prices; cap¬
turing capital gains; regulating land use; ameliorating goal conflicts;
making land available for low-cost housing, recreation, and other pviblic
uses; combatting speculation; subsidizing certain activities; and earn¬
ing pviblic" revenue through sale or lease of land from the land bank.^®
On the other side, it is argued that withholding land from develop¬
ment may increase prices of private land, that administrative discretion
opens dangerous opportunities for public corruption, that initial financ¬
ing may overburden the tax base, and that administrative decisions may be
too much to contend with.39
%
With the relatively little experience to go by, these arguments re¬
main academic. There is little research to back them up.
There are several methods of acquiring land or an interest in land:
1. Purchase of easements or development rights. These involve
purchasing an interest in the land vinder which the existing owner re¬
tains title but sells some rights, such as the right to develop. Common
types of easements are sidewalk, conservation of open space, scenic,
etc. While these less than fee-simple purchases are used to keep costs
down, in practice'costs can be as high as 95 per cent of the full market
value. In Suffolk Coionty, on New York's Long Island, the county govern¬
ment is in the process of purchasing development rights to 15,000 acres
of farmland for $75 million to ensure its retention as agricultural land.^O
New York City is working on the same idea in order to preserve historic
buildings.
2. Purchase and resale. A public agency purchases land, improves
it with street, sewer and other facilities, and sells it back to private
developers with deed restrictions to assure implementation of public
policies. This is the conventional urban renewal approach; it also has
been used in a ntunber of Canadian cities such as Saskatoon, Saskachewan,
in which 80 per cent of the residential development and 95 per cent of
the industrial development has occurred on the city's 5,300 acre lamd
bank.^^ On a larger scale are proposals for public purchase of raw land
and the gradual development, over a period of years, of major develop¬
ments or new towns. The only experience of this type in this country
is with the New York State Urban Development Corporation.
3. Purchase and lease. Under this approach, the pviblic retains
ownership but leases the land to those who agree to abide by terms of
the leases.
-29-
Open space or greenbelt acquisition is a device commonly used to
provide park and recreational land. Increasingly, it also is used to
withhold land from development in strategic areas and thus help to
manage growth. London's greenbelt and that of Ottawa, Canada, are
prominent examples.42 jn this country. Boulder, Colorado, has used a
citizen-approved one cent sales tax to buy a 3,000 acre greenbelt.
Jefferson and Boulder counties are also using a surtax to purchase open
space. Other cities with greenbelt programs are Dallas, Texas, and the
counties of Marin, San Mateo, and Santa Clara, California.43
Public/Private Negotiations Involving Capital Facilities
In addition to the techniques already listed, negotiation of specif¬
ic exchanges between private sector developers and public sector invest¬
ors involves capital facilities. Often these exchanges are on a
small scale wnen municipalities are attempting to attract individual
businesses to locate in their area or to redevelop specific sites. These
negotiations may include the accumulation of land by a municipality for
private development; the provision of special facilities for treating
particular types of wastes; or transportation links as incentives for
privately sponsored cultural, business, or recreational installations.
Capital improvements may be used also by the public sector as negotiable
items in joint ventures with the private sector.
Dallas' Assistant Director for Urban Design, for example, expresses
the city's commitment to this process with his statement that:
• . . the city will work with developers to provide an
approved plan for high-risk inner-city areas and will
commit itself to such actions as making capital improve¬
ments and rerouting utilities in accordance with the
plan.44
The city recently purchased the old Union Terminal Building and its
28-acre site for such a joint venture project. With the approval of the
City Council and City Manager, the city negotiated a major downtown
renewal project on the site with a private developer as a partner. The
rehabilitation of the terminal, plus a new privately financed hotel and
a new publicly financed park are part of an extensive revitalization
effort.
The Boston Redevelopment Agency in its pioblication. Recycled Boston,
recommends a similar use of capital investments to accomplish particular
projects.45 The new curbs and new utility lines provided by the city in
conjunction with a recycled private building at One Winthrop Square is
evidence of Boston's extensive use of capital improvements pinpointed to
encourage private development of specific projects. In both Dallas and
Boston, public improvements and outright acquisition are tailored to
the needs of interested private developers. Such capital improvements
may include lighting and landscaping public areas, provision of adequate
parking, extension of transit services, and building of pedestrian ways.
-30-
These examples are on a relatively small scale and easy to compre¬
hend, but similar use of piiblic improvements on a large scale is often
the rule in redevelopment projects. The exact process by which public
funds are committed to these joint ventures, however, is not always
easy to follow. The negotiation process, the chain of decision making
involved in programming and budgeting, is not subject to textbook defini¬
tion. Although the framework supporting a specific decision may exist
in a long-range p\ablic policy statement and a specific decision may be
justified by reference to such a policy statement, such negotiation fre¬
quently falls outside the regular budgeting process. Specific opportuni¬
ties arise for the city or for the developer which cannot be predicted.
The initiative may come from either the public or the private sector and
the process is often ad hoc.
That such investment is common is known but how widespread such
investment is relative to the entire city capital budget and how the
process works itself through before a decision becomes an item in the
capital budget is, however, not documented. Generalization is difficult
because of the necessarily unsystematic nature of such negotiation.
Nevertheless, public investments as a result of private negotiation may
represent a significant piece of the city budgeting process and the de¬
sign of a realistic budgeting system must recognize the importance and
value of such negotiation. How to design a system that will provide speed
and flexibility on the one hand, and safeguard the public interest on
the other, is a matter which may never be satisfactorily resolved.
In negotiation, municipalities may use discretionary capital improve¬
ments as leverage to encourage desired high-risk development. The City
can be characterized as eager, the developer as somewhat reluctant. A
new and different situation arises as the public costs of growth become
apparent; the developer in this situation is the eager party, and the
municipality, the less willing. Though capital improvements are still
the bargaining point and negotiation still takes place, the positions are
reversed. The responsibility for capital improvements, traditionally con¬
sidered the domain of the piablic sector, is now being shifted to the pri¬
vate developer; in return for assuming the responsibility, the developer
essentially receives permission to develop. In the one case, the public
sector stimulates private growth by providing public facilities; in the
other case, the public sector controls or restricts growth by negotiating
with the private sector to provide facilities. The most celebrated and
explicit example of the outcome of the latter system is, of course, in
Ramapo where developers may speed up or gain authorization to build if
they will provide facilities, which customarily had been considered public
improvements—off-site public sewers, roads, parks and fire stations.
Though choice is provided, the terms of negotiation are quite restricted.
The concept of negotiation in this context has been developing for
at least the last decade. Pre—annexation agreements in some states, and
permissions for PUD, for example, conditional upon provision of capital
improvements, are widespread and generally accepted practices. The small
-31-
suburb of Carol Stream, Illinois, provides an example of the way in which
capital improvements are used as the fulcrum of negotiation. Carol Stream
has instituted a public "impact" committee, which negotiates with a de¬
veloper to assure the community that prior to building a PUD, the neces¬
sary capital facilities to handle new residents had been planned, and a
method of financing was agreed upon by the developer and the community.
In all cases the developer was expected to carry the brurden
of the increased capital facilities . . . Negotiations pro¬
ceeded until the developer and the various taxing bodies
were satisfied that the impact upon the community would not
be adverse. . . .
Thus, the Village of Carol Stream received money or land for parks, public
swimming pools, a new fire station and two new fire trucks, three school
sites and additional school facilities, and a new public library in grant¬
ing permission for nine developments.
Once the principle is accepted that the developer will provide or
pay for certain facilities, the negotiation process itself appears to be
reasonably limited by ordinance and open to public scrutiny. Precisely,
how the new process will affect the total city budget is not yet clear.
The Village of Carol Stream is at present attempting to assess the total
financial impact of its negotiation system on its tax structure, and is
testing the financial projections on which its "impact" statements were
based. It is to be anticipated that evaluation of these new systems for
their effect on the budgeting process will not present the kind of prob¬
lems that ad hoc joint venture projects continue to present. Whether
negotiation represents a reasonable method to save the municipality ex¬
pense or an unfair shifting of financial burden to new residents remains
a matter of controversy. Furthermore, whether shifting costs to the pri¬
vate sector becomes the primary goal of such systems to the detriment
of other community goals is another question which may be raised.
Integrated Systems
Integrated land management systems that coordinate all or some of
these devices—CIP, zoning and subdivision ordinances, service districts,
land acquisition, negotiation, and formal and informal pricing policies
are attracting the interest of a nxmiber of municipalities. Ramapo, New
York, was a forerunner, ^an Diego and Oklahoma City are considering such
comprehensive approaches to land use and development control. The Mary¬
land National Capital Park and Planning Commission and Montgomery County
are attempting to encourage the development of a new town in Germantown,
Maryland through the use of a sophisticated array of land use controls and
incentives. Elements of some of these new approaches may meet with legal
challenges. It appears, however, that planning practice is shifting to
include a wider range of processes and techniques than it once depended
upon.
-32-
Summary
The provision of public capital facilities is considered a means of
achieving development goals by a number of cities and counties. The in¬
tention to use capital facilities in this manner can be seen in the CIPs
of some communities, particularly in those vdiich spell out their capital
investment priorities systematically. In addition, the close integration
of the community's plan and its CIP may be reflected in the form in vdiich
the plan and the CIP is presented.
Communities may attempt to link public facilities with development
goals in other ways as well. Techniques include the imposition of geo¬
graphic restraints on the provision of facilities, such as development
limit lines or urban service districts. Adequate facilities ordinances
in some communities introduce the element of timing to the provision fa¬
cilities in attempts to tie permission for private development to the prior
existence of certain capital facilities. Public land acquisition is a fur¬
ther use of capital fvinds for long-term development goals. The imposition
of selective municipal service pricing as a potential means of controlling
future development has been suggested but there is little actual experi¬
ence reported.
The fact that major capital facilities are frequently not controlled
by general-purpose local governments is reflected in some communities by
formal interjurisdictional agreements on policies toward providing capital
facilities. Annexation agreements also reflect the desire to control the
provision of public facilities.
Negotiation between the public and private sector plays an important
part in facilities planning. The part each sector contributes clearly
depends upon the local market situation. Some attempts to formalize this
process have been reported.
-33-
1
2
3
4
5
6
7
8
9
10
11
12
13
14
NOTES
Eugene H. Naujock, "Capital Improveinents Programming in Toledo,"
unpioblished paper, Toledo-Lucas County Plan Commissions, September
1976.
Baltimore City Planning Commission, Department of Planning, Balti¬
more 's Development Program 1976-1981 (Baltimore: n.d.), p. 99.
City of Memphis, Procedures Manual for the City of Memphis Capital
Improvements Budget and Program, (Memphis: 1974), pp. iv, v-
Metropolitan Government of Nashville-Davidson County, Capital Budget
and Program: 1976-77 Through 1981 (Nashville, Tennessee: September
1976), pp. 11, 12.
Capital Long-Range Improvements Committee (CLIC), CLIC (Minneapolis,
Minnesota: City of Minneapolis, October 1971) .
Philip B. Herr Associates, Boston, Mass., Planning for Franklin, un-
piiblished draft, July 1976.
Baltimore City Planning Commission, op. cit.
Pittsburgh City Planning Commission, 1974 Six Year Development Pro¬
gram, and 1976 Six Year Development Program (Pittsburgh, Pennsyl¬
vania) .
Dayton Office of Management and Budget, 1776-1976 Program Strategies
(Dayton, Ohio: February 1976) .
City of Richmond, 1976-77 Capital Budget Adopted (Richmond, Virginia:
May 1976).
City of Sanibel Planning Department, Comprehensive Land Use Plan
(Sanibel, Florida: July 1976).
City of San Luis Obispo, Proposed General Plan Revision (San Luis
Obispo, California: n.d.).
City of Ann Arbor Planning Commission, 1975 Capital Improvements
Budget and Program for 1977-1981 (Ann Arbor, Michigan: February
1976) .
Michael E. Gleeson et al.. Urban Growth Management Systems: An
Evaluation of Policy-Related Research, Planning Advisory Service
Report Nos. 309/310 (Chicago: American Society of Planning Officials,
August 1975); Steve Carter, Kendall Bert, and Peter Nobert, "Local
Government Techniques for Managing Growth," Management and Control of
-34-
Growth; Issues. Techniques, Problems. Trends, ed. by Randall Scott,
David Brower, and Dallas Miner (Washington, D.C.: The Urban Land
Institute, 1975), Vol II, pp. 330-354, and Robert H. Freilich, "Devel¬
opment Timing, Moratoria, and Controlling Growth: Preliminary Report,"
Management and Control of Growth: Issues, Techniques, Problems, Trends,
Vol. II, pp. 361-396.
15. Gleeson, ibid, p. 8-9.
16. David R. Godschalk, David Brower, Larry McBennett, and Barbara Vestal
in Constitutional Issues of Growth Management (Chicago: The ASPO Press,
1977).
17. Ibid., p. 371.
18. For a description of Lexington's urban/rural service areas see Gleeson,
op. cit.
19. Lexington-Fayette City-County Planning Commission, Planning Services
Division, A Review of the "Urban Service Area" Concept. (Lexington
Kentucky: August 1964).
20. Richard D. Tabors, Michael H. Shapiro, and Peter P. Rogers, Land Use
and The Pipe; Planning for Sewerage (Lexington, Massachusetts: Lex¬
ington Books, 1976), p. 121.
21. Joseph F. Zimmerman, "State-Local Relations: The State Mandate Irri¬
tant," paper presented at the Citizen Input Into Funding County Govern¬
ment Conference*of the Human Services Planning 'Council of Schenectady
County, Incorporated, Schenectady, New York, October 12, 1976.
22. Letter to ASPO from Bruce Anderson, Director, Comprehensive Planning,
Santa Rosa, California.
23. W.J. Kvarsten, "Urban Service Boundaries," Public Management, May 1974.
24. Kvarsten, op. cit., and D. Alesch, Local Governments' Ability to Manage
Growth in a Metropolitan Context (Santa Monica, California: Rand Cor¬
poration, August 1974).
25. Kay Aevermann, Pre-Annexation Agreements in Illinois, unpublished manu¬
script.
26. Descriptions of these two communities can be found in both Gleeson, et.
al., op. cit., and in the article by Steve Canter, Kendall Bert, and
Peter Nobert, op. cit.
27. Potomac Institute, Inc., Metropolitan Housing Program, Memorandum 77-1,
January 19, 1977, p. 5.
-35-
28. Ibid., p. 7.
29. Golden v. Planning Board of Town of Ramapoy 39 N.y.2d 298 (1972).
30. Clark Binkley et. al.. Interceptor Sewers and Urban Sprawl (Lexington,
Massachusetts: Lexington Books, 1975).
31. Tabors, op. cit.
32. David de Ferranti, Lawrence Dougharty, and Benjamin Zychner, Municipal
Service Pricing, Rand Series Report Nos. R-1878/1 NSF through 4 NSF
(Santa Monica, California: Rand Corporation, November 1975).
33. City of Ann Arbor Planning Department, The Ann Arbor Growth Study (Ann
Arbor, Michigan: October 1972).
34. Donald A. Downing, Pricing and Investment Policy as a Growth Policy Tool:
Application to Sewer Extensions in Montgomery County, Maryland (Silver
Spring, Maryland: The Maryland-National Capital Park and Planning Com¬
mission, 1974); The Role of Water and Sewer Extension Financing in Guid¬
ing Urban Residential Growth, Report No. 19 (Knoxville, Tennessee:
Water Resources Research Center, University of Tennessee, June 1972).
35. John W. Reps, "The Future of American Planning: Requiem or Renascence?"
Planning 1967 (Chicago: American Society of Planning Officials, 1967),
p. 49.
36. U.S. Department of Housing and Urban Development, Advance Land Acquisi¬
tion by Local Governments (Washington, D.C.: U.S. Government Printing
Office, 1968).
37. Michael E. Gleeson et. al., op. cit., p. 35.
38. Steve Carter, Kendall Bert, and Peter Nobert, Local Government Techni¬
ques for Managing Growth, Management Information Service Report, Vol. 6,
No. 5 (Washington, D.C.: International City Management Association, May
1974), p. 14; and, generally, Harvey L. Flechner, Land Banking in the
Control of Urban Development (New York: Praeger Publishers, 1974).
39. Carter, ibid., pp. 14-15.
40. "Two Steps Ahead in Saving Farmland," Planning, October 1976, p. 8.
41. Kermit C. Parsons and Harriet L. Budke, Canadian Land Banks, Planning
Advisory Service Report No. 284 (Chicago: American Society of Planning
Officials, October 1972), p. 10.
42. Kermit Parsons, et. al.. Public Land Acquisition for New Communities
and the Control of Urban Growth: Alternative Strategies (Ithaca, N.Y.:
Center for Urban Development Research, Cornell University, March 1973).
-36-
43. carter, op. cit., p. 15.
44. Weiming Lu, "Public Commitment and Private Investment in Preservation,"
Economic Benefits of Preserving Old Buildings (Washington, D.C.: The
Preservation Press, 1976), p. 41.
45. Boston Redevelopment Authority, Recyled Boston (Boston: February 1976).
46. John R. Adamson, "How One Community Provides New Facilities for New
Residents," Illinois Municipal Review, June 1976, p. 5.
-37-
CHAPTER II: THE EFFECTS OF CAPITAL IMPROVEMENTS ON DEVELOPMENT
Introduction
Water is a controlling factor over any community's long-range
health and growth. . . .1
The construction of highways, mass transit lines, sewers, and
other infrastructure can have a powerful effect on local land
use. 2
[There are] several significant growth and development problems
in [Massachusetts], including the inefficient use of land re¬
sources, the deterioration of older centers, the inequitable
distribution of costs and opportunities to Massachusetts' com¬
munities and residents, and inadequate levels of economic activ¬
ity and residential investment. An analysis of certain key
state investment programs indicates that public sector programs
have played a much more than passive role in the evolution of
these problems. Public programs have often facilitated and in
many situations, in their collective and cumulative effect, have
been the primary factor in the evolution of these problems.3
The Capital Improvements Program is the single most effective
technique of implementing the Boulder Valley Comprehensive Plan.
Through the provision of major public facilities (water and
sewer mains, streets, parks, fire stations, etc.) The City can
influence and, in many cases, direct the pattern of urbaniza¬
tion . 4
The public development of transportation systems and the provi¬
sion of sewage and water utilities have been key factors in
detemining the extent and types of private building in all
communities.^
These statements all reflect the assumption that certain public capi¬
tal improvements, especially transportation facilities and sewers, have a
significant influence on the nature and timing of development. As indi¬
cated in the preceding chapter, public investment decisions are often
based explicitly on the assumed effects of capital improvements. Empiri¬
cal tests of these assumptions are, however, few and far between. The
difficulty of constructing elegant tests of these assumptions in a real
world mitigates against the existence of precise proof. The factors that
enter into a decision by a real estate investor or developer to buy land,
build on it, or invest in existing buildings are not separable. The major
factors are probably identifiable, but whether a single one is the deter¬
minant or causative factor is what is problematic. The availability and
price of land, the existence of zoning and other land use controls, market
-38-
demand, and the physical and social characteristics of the area, as well
as the availability and types of public improvements, all contribute to
decisions of private sector developers.
Nevertheless, common sense, experience, and informed observation
continue to lead researchers to attempt to find definitive proof of what
is generally believed to be the case: that capital improvements do in¬
deed influence private decisions to invest in communities. The precision
and conclusiveness of empirical studies vary. This chapter reports on
the available literature which attempts to provide this evidence, and
summarizes studies which explore the relationship between individual capi¬
tal projects or packages of projects and the timing, location, level, and
type of development. The literature covered is limited largely to case
studies in which projects were built and results were analyzed. The
validity of the individual reports is not judged.
The literature suggests that development is most closely correlated
with linear facilities—utilities (interceptor sewers and related treat¬
ment plants and wastewater distribution systems) and transportation (high¬
ways and major transit facilities). These are generally considered the
"critical" facilities without which development is unlikely to occur and,
conversely, which can be used to influence the nature, timing, and location
of development. This conclusion may result from the fact that major em¬
pirical studies have tended to focus on linear facilities. The empirical
literature on other capital facilities is relatively inconclusive.
This section summarizes the impact of the following improvements:
— trunk sewers and wastewater treatment facilities
— water distribution systems
— highways
— public transportation facilities
— open space
— other community facilities
Trunk Sewers and Wastewater Treatment Facilities
Studies of the impact of sewerage facilities in the following loca¬
tions were reviewed: Lake Tahoe Basin of California and Nevada;^ Phila¬
delphia and York County, Pennsylvania.^ In addition, three related
studies were reviewed, two funded by the Environmental Protection Agency^
and one by the Council on Environmental Quality.
-39-
. The provision of sewer service appears to be an important factor
influencing the location, timing, and level of development in
local jurisdictions according to both empirical and qualitative
studies.
While there is not agreement on the magnitude of the
impact of sewerage investments on future land use
patterns, few would argue that there is no effect.
The significant questions at the moment are how poli¬
cies utilizing control of expansion of sewerage sys¬
tems may be used for positive control in land use
planning, and which, of the several available methods
of control and/or direction of investment, will be
the most effective in given circumstances and will
withstand possible legal challenges.11
• The impact of wastewater management systems on land use patterns is
related to many factors including the amount of available vacant
sewered land, the amount and price of vacant land served by system
improvements, the demands for residential and non-residential de¬
velopment, and the existence of allowable alternatives such as
septic systems.
• Empirical and qualitative studies suggest that the capacity and
physical layout of the interceptor sewer system within communities
can influence the location, magnitude, and timing of development.
For example, long interceptor sewers traversing undeveloped land
may stimulate low density residential development. This suggests
the need to separate "attributes" of the system from the system
itself, in order to more carefully understand likely effects. In
other words, the existence of the sewer may have an effect on
growth, but its location, capacity, construction phasing, connec¬
tions, and cost of connection may be the significant factors deter¬
mining its effect on development. Insofar as these factors can be
manipulated by government—and many legal and institutional issues
exist—government may be able to more closely manage growth.
• Excess wastewater management system capacity based on over-design
and speculative population projections may act as a growth stimu¬
lant.
• Sewers can effect development by increasing the amount of avail¬
able developable land. The CEQ study notes "Sewers typically have
their greatest impact on the construction of single-family homes;
and these are most likely to be built where there are large tracts
of undeveloped land."13 ^^^d the EPA study. Interceptor Sewers and
Urban Sprawl goes on:
-40-
Though sewer design is not the causal factor in the
creation of low-density suburban housing patterns,
interceptors can influence residential land use
either by supporting development that sprawls over a
large service area, or by making the pattern of hous¬
ing more difficult.
• The availcibility of sewers may affect land value sometimes signi¬
ficantly. The Philadelphia study reported, for example, that the
average price of land with access to sewers was over four times
the price of land without access in the study area. At the same
time, the study noted the difficulty of isolating the effect of
sewers on property values because of the interrelationship of
factors influencing such values. "The existence of sewers, alone,
cannot overcome other forces limiting development in particular
subareas."15
• Finally, several studies indicate that federal financing of sewer
programs may contribute to low-density development.
Interceptor Sewers concluded that both the techniques
used by local project sponsors to finance the local share
of project costs and the funding policies of regional
EPA offices appear to encourage the construction of in¬
terceptor systems that stimulate the rapid low-density
housing construction characteristic of suburban communi¬
ties . 1®
The York County study similarly concluded that federal and
state subsidies tended to encourage the_construction of
interceptors through undeveloped land.
The studies concluded that greater reliance on local fund¬
ing would be likely to lead to fewer systems built with
excess capacity. "There would be a great incentive to
consolidate future development within the existing communi¬
ty or in directly adjoining areas, increasing the overall
density of land use.''^^
Water Distribution Systems
The literature review did not uncover specific impact studies that
dealt exclusively with the effects of water distribution system invest¬
ments on development. Several reports presented qualitative assessments
of the influence of water services on development. These reports are dis¬
cussed below.
The impact of water investments on development is clearly more signi¬
ficant in those areas of the country that have inadequate water supplies.
The geographic context in which impact studies were performed cannot be
overlooked. Certain sections of the West, Southwest, and Southeast por¬
tions of the nation must rely on the transmission of potable water from
-41-
considerable distances. In these cases "development even at low densities
I1I8
has tended to be related to the availability of a water supply system.
Elsewhere in the country, water supplies are generally adequate to serve
existing and near-term demand and access to water is more readily avail¬
able and less of a constraint on development.
Engineering characteristics of water distribution lessen its impact
on the location of development. Sewer systems are located in watersheds
and follow natural draining patterns to the extent possible through gravity
flow. Crossing watersheds require the installation of expensive pumping
or lift stations. Unlike sewers, water is transported under pressure and
the geographic coverage of water distribution systems is not constrained
by natural drainage areas. In this regard, it has been observed that:
Sewer engineering is more restrictive (than water), being tied
to drainage topography . . . Sewer requirements will always
remain more closely tied to topography and will be a compact¬
ing influence to urban sprawl.
This view is supported by a study by the San Diego County Comprehen¬
sive Planning Organization which states:
Since the hydraulics of a water system are not dependent on
gravity flow, the areas occupied by these various retail
(water) distributors have no geographically fixed boundary.
Because of this, areas requiring new water service have
found it relatively easy to annex to a nearby distributor.20
A qualitative case study of sewer and water delivery systems in Knox-
ville, Tennessee, found that the absence of consistent sewer and water ex¬
tension policies resulted in urban sprawl.
The extension policies of all water and sewer institutions,
which are based solely on meeting service needs (and fire
protection in the case of the Knoxville Utilities Board),
confirm this claim (i.e., the area's growth has not been
consciously directed by placement of water and sewer sys¬
tems) - Willingness on the part of the institutions to
construct main and interceptors wherever and whenever a re¬
quest is made . . . not only hinders efforts to guide urban
growth but, in fact, fosters urban sprawl.
A recent New York Times article examined the influence of water dis¬
tribution system expansion on the development patterns in rural areas.22
The article notes that loans and grants from the Farmers Home Administra¬
tion have funded numerous water system improvements in rural areas. In
one area. Grand Forks, North Dakota, the availability of a reliable water
supply is claimed to have encouraged the conversion of land from agricul¬
tural to residential use. According to the article, residential develop¬
ment has occurred in five-acre zoned locations far removed from fire,
police, school, or commercial services. However, the new water supply
system also is claimed to have helped stimulate farming in the Grand Forks
area.
-42-
Outside those areas with limited water supplies, access to water is
generally available and less of a constraint on development than sewers.
There appears to be some interest in limiting access to water as a growth-
management tactic, perhaps by water-supply moratoria,23 there is
little evidence of action in this direction. However, in areas where
there is a real or potential water shortage, extensions to water distri¬
bution systems might be successfully used to influence future development
if the ptiblic can control the system.
Highways
Highways are cited as playing "a major role in shaping American
cities."24 ^ good deal of postwar suburbanization is attributed to in¬
creased use of automobiles and improved highway access. Freeways are
cited for causing the decline of city neighborhoods, both by creating
barriers within neighborhoods and by making it easier for people to shop
or work downtown and return to their suburban homes. Access points fre¬
quently are sites of intense development and beltways ringing many
large cities often have led to major new development—residential and
business—nearby, sometimes at the expense of existing cities.
Over the years there have been innumerable studies of the land use,
economic, environmental and social effects of highways on both developed
and undeveloped areas. Many valuable studies were done in the late 1950s
and early 1960s. More recently, primarily to fulfill environmental impact
statement requirements of the National Environmental Policy Act, there has
been a growing number of increasingly sophisticated studies. But rela¬
tively few of these have been rigorous case studies. Almost all of these
focus on freeways and expressways while few have investigated the influ¬
ence of arterial and local street construction or upgrading. The find¬
ings of these case studies include:
• New freeways and beltways frequently are cited as having been the
predominant factor causing new development to occur in particu¬
lar locations. Studies do not necessarily indicate that develop¬
ment is "generated" by major new highways, i.e., that they create
growth that would not otherwise have occurred. But they strongly
indicate that growth tends to concentrate where transportation ac¬
cess has been improved by new highways.25
• Freeway improvements may particularly influence the timing and
magnitude of development within growing metropolitan areas with
large amounts of low-cost undeveloped land. These findings are
confirmed in comparative studies of metropolitan areas with and
without beltways26 and additional studies of Route 128 around
Boston27-28 Raleigh, North Carolina,29 and Rhode Island,20 and
studies of transportation and wastewater investments in Washing¬
ton, D.C., Boston, Denver, and Minneapolis-St. Paul.^^
• While construction of radial highways and beltways may not have
"caused" the population loss, flight of the middle class, and
industrial locations from central cities, they are major contri-
-43-
butors to these forces. The Route 128 study concluded, for
example, that most "new" industry in the suburbs had relocated
from the central city^^ as did a study of the Chicago area.33
A St. Louis study34 reported that radial highway improvements
appear to have allowed private firms to expand or locate be¬
yond the former fringe area and that the beltway promoted the
formation of a concentrated ring of development around the
city's central core.
' The Raleigh, and St. Louis studies noted above and a similar
study done in Northern Virginia suggested that apartment, of¬
fice and commercial development in suburban locations tended
to concentrate in the vicinity of beltways.35
• Areas in the vicinity of highway interchanges are "prime" impact
areas which historically have attracted commercial, office, in¬
dustrial, and high-density residential development in urban areas.
A comprehensive Federal Highway Administration Study36 found
strong development pressures near interchanges; but development
is likely to vary by type of interchange design and by types of
intersecting highways. Particular findings were:
— that residential land uses tended to predominate near inter¬
changes of interstate highways and local roads;
— that highway related land uses such as motels, service stations
and restaurants, concentrated at interchanges of Interstate
and U.S. numbered highways;
— that large concentrations of industrial land uses were located
at interchanges of two interstate highways; and
— that higher-density land uses (e.g., apartments, industrial
parks) tended to concentrate at beltways interchanges in major
population centers.
• Highways are reported as often having significant in\pacts on land
values, but in highly variable ways:37
— adjacent residential properties tend to decrease in value be¬
cause of real or perceived negative environmental impacts such
as noise and exhaust fiimes;
— properties served -by highway improvements but not immediately
adjacent, tend to increase in value because of the improved
access;
— properties adjacent to interchanges tend to increase in value
for highway-oriented commercial uses such as service stations,
restaurants, and hotels and motels.
• Finally, while there has been considerable analysis of the impacts
of major highways, little information is available about the effects
-44-
of arterial or other relatively minor highway improvements on
development patterns or activity. While changes in street
patterns and upgrading and widening of roadways may be asso¬
ciated with neighborhood or inner-city commercial revitaliza-
tion programs, there is little evidence that such improvements
were key factors contributing to the overall effort. Indeed
the shifting of street patterns has as often been blamed for
deterioration of neighborhoods.
Public Transportation Facilities
Public transportation and highways appear to affect urban activities
for the same general reason—improved accessibility—but public transpor¬
tation, more limited in its range, appears to produce more limited effects.
Available literature on the impacts of public transportation concentrates
primarily on those metropolitan areas that have recently built or are
building rail rapid transit systems.
The areas for which data are available include Toronto, Phildelphia
(i.e., the Lindenwold Line), San Francisco, Chicago, and Cleveland.
The studies cited below are generally more up-to-date and in selected
cases more rigorous in their efforts to determine the relationship between
transit investments and land use changes than many of the studies refer¬
enced for highways. Since the BART system (Bay Area Rapid Transit) in San
Francisco has just been completed, the land use impacts related to the sys¬
tem are only partially apparent. However, several studies have identified
initial land use impacts which appear to be related to the system, espe¬
cially for the areas around selected stations.
38 39
The analyses done for Toronto, Philadelphia, and San Fran-
cisco'^O all indicate that rapid transit improvements may lead
to a concentration of development around stations provided that
overall growth pressures exist and especially when encouraged
by governmental incentives such as density bonuses, revised zon¬
ing, and additional public investments. In each case, it was
difficult to isolate the role of the transit system. There is
some evidence in Toronto,for example, that zoning incentives
were more significant in encouraging the high density develop¬
ment near the rapid transit system than the transit system it¬
self.
• Transit stations constructed in highly developed locations such
as CBDs and major non-CBD commercial areas tend to attract high-
density office and residential development.'^2
• Evidence for Chicago,Cleveland,44 and Camden45 suggest that
rapid transit improvements alone will not of themselves stimulate
the redevelopment and revitalization of declining neighborhoods.
-45-
• The Toronto experience suggests that constructing transit lines in
developed areas rather than in undeveloped, low density, s\jburban
locations may provide greater development densities within metro¬
politan areas.
• The physical characteristics of the transit system and the phy¬
sical and socioeconomic characteristics of the areas in the
vicinity of system transit stations appear to be important fact¬
ors influencing development patterns. Rapid transit improvements
located in the medians of freeways or along existing railroad
rights-of-way appear less likely to promote land use changes than
transit lines operating in new rights-of-way.^^
Open Space
Few empirical case studies of the impact of open space were discovered
in the literature. The majority of reports reviewed for this project pre¬
sent policy and planning guidelines or forecasts of probable effects,
rather than actual impact assessments of open space on land use develop¬
ment. While those studies do not fall strictly within the guidelines for
this search, the paucity of studies of the actual impacts of public open
space dictated their inclusion.
The Bay Area Simulation study developed a model to assess the economic
impacts of a regional open space plan in the San Francisco area. The model
forecasted regional growth patterns (based on employment, housing, and land
use) under two scenarios; growth within the context of a regional open
space program and growth without such a program over the period 1960-1990.
Based on this simulation, it was projected that a regional open space pro¬
gram would have a significant impact on land use patterns reducing by 20
per cent the amount of land urbanized without an open space program. The
resulting compaction of development would yield significant savings on the
costs of utility extensions, governmental services, and transportation.48
In a cost-benefit study of potential development of the Palo Alto
foothills in California, it was found that the necessary level of govern¬
ment investment would exceed the revenues to be returned by residential
land use. The study concluded that from a municipal fiscal point of view,
the most economic alternative was to leave the majority of the foothills
as open space.49
50
A Boulder, Colorado, case reports that local governments can
restrict development in selected locations through the acquisition of
open space.
Information could not be found which suggests that open space invest¬
ments attract certain types of development, particularly residential de¬
velopment. Intuitively, it seems reasonable that such amenities would
influence residential development patterns.
-46-
other Community Facilities
The final category of capital improvements is the set of municipal
facilities which are non-linear. The list of facilities is extensive
and includes, for example;
schools
courthouse and government offices
libraries
police and fire stations
recreation centers
hospitals and other health centers
pedestrian malls
street lighting
Although the design, construction, and operation of such facilities
are common to most general-purpose local governments, there is little
solid evidence in the literature empirically describing their influence
on community development patterns. It is particularly difficult to
isolate the interrelationships between these community facilities and
development patterns. The issue of whether such facilities precede and
may help induce development or reinvestment or support development is
particularly difficult to determine. In many large scale projects, in
both cities and developing areas, private and piablic investment occurs
more or less concurrently. Questions of "impact" here seldom are raised,
except intuitively. And, here, as with other capital improvements, the
nature and quality of the activity taking place within the facility, e.g.,
education, justice, public safety and protection, health services—may be
of far greater significance than the facility itself in terms of its
effects.
Finally, the limited literature available in this area tends to be
more prospective than retrospective and is therefore of limited value.
There are many proposals for development, redevelopment, or stabiliza¬
tion of cities or parts of cities, but these offer little or no empiri¬
cal data. The voluminous community facilities planning literature also
failed to yield much evidence of actual impacts.
Thus, the results of the literature review are quite inconclusive.
It is obvious that maintenance of a community's quality of life, and
perhaps its survival is dependent to some degree on pviblic facilities
and services such as schools, police and fire protection, health care,
the courts, and so forth. Local government recognizes its responsibili¬
ties, often its legal mandate, to provide such facilities commensurate
with its ability to pay for them. Community facilities are frequently
justified on the basis of "need." Need, of course, is a qualitative
determination based on an array of factors. Among these factors may be
intuitive or conscious efforts to "cause" certain things to happen, in¬
cluding the attracting of people or development activity to particular
parts of a community (or to discourage it elsewhere).
-47-
But except for some reports indicating the importance of schools in
residential location (or relocation) decisions,51 the literature offers
no help to planners or decision makers.
Summary
Attempts to provide evidence that investment or lack of investment
in public improvements can cause private investment or disinvestment and
hence community growth or decline are focused particularly in the litera¬
ture discussing sewers and highways, though the precise nature of such
change is still being researched. But the factors that determine whether
a community will grow or stabilize or decline depend upon complex economic,
social, and environmental conditions. Isolating one factor as the deter¬
minant, or even as a key determinant, may be impossible with available
analytical tools, and may be unnecessary.
As indicated in Chapter I of this report, government may exercise
leverage over private development decisions through a broad ramge of
techniques—from advice and negotiation on one extreme to pviblic purchase
on the other, with the many regulatory, investment, taxation, and other
tools between. The literature quite emphatically and repeatedly points
out that while one or the other level might be more critical at a parti¬
cular time or in a particular place the impact of a particular public
action, including capital investments cannot be separated from the com¬
plex of decisions that leads to community growth or change, the search
for "cause" notwithstanding.
-48-
NOTES
1. Joseph H. Karanz, Manager and Chief Engineer, Waukesha, Wisconsin,
Water Utility, American City, June 1974, p. 57.
2. Council on Environmental Quality, The Growth of Infrastructure
Investments, prepared by Urban Systems Research and Engineering, Inc.,
(Washington, D.C.: U.S. Government Printing Office, May 1976, p. 8.)
3. Massachusetts Office of State Planning, Towards a Growth Policy for
Massachusetts, A Preliminary Draft (Boston: October 1975, p. 61).
4- Boulder, Colorado, Planning Board, "Memorandum on 1977-1982 Capital
Improvements Program," June 26, 1976, p. 1.
5. Robert E. Coughlin, "Programming Public Facilities to Shape Community
Growth," Yearbook of Agriculture, 1963 (Washington, D.C.: U.S. Depart¬
ment of Agriculture, 1963), p. 460.
6. James E. Pepper and Robert E. Jorgensen, Influences of Wastewater
Management on Land Use: Tahoe Basin 1950-1972, prepared for Office
of Research and Development, U.S. Environmental Protection Agency,
October 1974.
7. Grace Milgram, The City Expands, Philadelphia: Institute for Environ¬
mental Studies, University of Pennsylvania, prepared for the U.S.
Department of Housing and Urban Development, March 1967.
8. C.Y. Li, "Sewerage Plan Involves Open Space Preservation," Civil
Engineering, January 1973.
9. S.E. Bascom, et. al.. Review and Bibliography of Secondary Impacts of
Major Investments: Highways, Mass Transit, Interceptor Sewers (Wash¬
ington, D.C.: Council on Environmental Quality, June 1974), and S.E.
Bascom, et al.. Secondary Impacts of Transportation and Wastewater In¬
vestments: Research Results, prepared for the Council on Environmental
Quality, U.S. Department of Housing and Urban Development, and U.S.
Environmental Protection Agency (Washington, D.C.: Office of Research
and Development, U.S. Environmental Protection Agency, July 1975) .
10. Brinkley, Clark, et. al.. Interceptor Sewers and Urban Sprawl (Lexing¬
ton, Mass.: Lexington Books, D.C. Heath and Co., 1975); and Urban
Systems Research and Engineering, Inc., Interceptor Sewers and Subur¬
ban Sprawl; The Impact of Construction on Residential Land Use (Vol.
1, Analysis; Vol. 2, Case Studies) (Washington, D.C.: Council on
Environmental Quality, September 1974).
11. Richard D. Tabors, et. al.. Land Use and the Pipe: Planning for Sew-
age (Lexington, Mass.: Lexington Books, D.C. Heath and Co., 1976),
p7~109.
12. See, e.g.. Tabors, ibid.
-49-
13. Urban Systems Research and Engineering, Inc., The Growth Shapers: The
Land Use Impacts of Infrastructure Investments (Washington, D.C,: U.S.
Council on Environmental Quality, May 1976), p. 53.
14. Urban Systems Research and Engineering, op. cit., p. 3.
15. Milgram, op. cit., p. 61.
16. Op. cit., p. 3.
17. Brinkley, op. cit., p. 97.
18. William I. Goodman and Louis B. Wetmore, "Growth Patterns and National
Programs for Urban Development," in Urban Expansion— Problems and Needs,
papers presented at Administration Spring Conference, Housing and Home
Finance Agency, April 1963, p. 50.
19. Inter-County Regional Planning Commission, Metro Growth Plan, Master
Plan Report No. 16 (Denver: The Commission, 1961), p. 52 as quoted in
Kenneth B. Kenney, Public Policy Alternatives Affecting Water and Sewer
Service in Urban Growth Areas, Masters Thesis, Department of City and
Regional Planning, University of North Carolina, Chapel Hill, 1964, p. 82.
20. San Diego County Comprehensive Planning Organization, Water Distribution
and Sanitary Sewerage Systems: Background and Policy Study, prepared for
the U.S. Department of Housing and Urban Development, Feburary 1972, p. 9.
21. Gary G. Hayes, Institutional Alternatives for Providing Programmed Water
and Sewer Services in Urban Growth Areas: A Case Study of Knoxville -
Knoxville County, Tennessee, Report No. 18, (Knoxville: Water Resources
Retsearch Center, University of Tennessee, June 1972), p. 168.
22. New York Times, "Rural Water Lines a Mixed Blessing," November 18, 1975.
23. "Water-supply Moratoriums—Are They Next?" "Editorial," The American City,
June 1974, p. 11.
24. The Growth Shapers, op. cit., p. 28.
25. Julia A. Connally, "The Socio-Economic Impact of the Capital Beltway on
Northern Virginia," Bureau of Population and Economic Research, University
of Virginia, CharlottesviO^le, Virginia, 1968> cited in U.S. Department of
Transportation, Federal Highway Administration, Social and Economic Effects
of Highways (Washington, D.C., 1976 ), p. 78; and, Russell H. " Thompson and
W.G. Adkins, "Some Economic Effects of the Suburban Portion of North Central
Expressway, Dallas, Texas," Bulletin No. 15, Texas Transportation Institute,
Texas A&M University, 1961.
26. Connally, ibid.
27. Massachusetts Institute of Technology, Economic Impact Study of Massachu¬
setts Route 128, December 31, 1958, cited in U.S. Department of Commerce,
Bureau of Public Roads, Highways and Economic and Social Changes (Wash¬
ington, D.C., 1964), p.~5r: ~
-50-
28. Don Levitan, "Massachusetts Route 128: A Nonemulative Enigma," Trans¬
portation Research Board 583, Transportation Research Board, Washington,
D.C., 1976.
29. Snehamay Khasnabis and Williard F. Babcock, "Impacts of a Beltway on a
Medium-Sized Urban Area in North Carolina: A Case Study," Transportation
Research Board 583, Transportation Research Board, Washington, D.C., 1976.
30. University of Rhode Island, "The Interstate Highway System and Urban
Structure—A Force for Change in Rhode Island," 1975, cited in U.S.
Department of Transportation, Federal Highway Administration, Social
and Economic Effects of Highways, Washington, D.C., 1976, p. 151.
31. Bascom, op. cit.
32. Massachusetts Institute of Technology, op. cit.
33. G.W. Bleile and L. Moses, "Transportation and the Spatial Distribution
of Economic Activity," Highway Research Board Bulletin, No. 311, pp. 27-30,
1962.
34. Peter deLeon and John Enns, The Impact of Highways Upon Metropolitan Dis¬
persion: St. Louis (Santa, Monica, Calif.: Rand Corporation, Sept. 19/3.)
35. Connally, op. cit.
35. U.S. Department of Transportation, op. cit.
37. Martin M. Stein, "Highway Interchange Area Development - Some Recent
Findings," Public Roads - A Journal of Highway Research, December 1969,
Vol. 35, No. 11.
38. D.F. Crowle, Land Use Change Transportation Implications, Part I:
Population Change 1961-1971, Metropolitan Toronto Transportation
Plan Review, October 1972; Martin C. Libicki, Land Use Impacts of
Major Transit Improvements, Office of Transportation Planning
Analysis, U.S. Department of Transportation, March 1975; E. Falter-
meyer, "Toronto, The New Great City," Fortune, September 1974, pp.
126-138.
39. D.E. Boyce, et al. Impact of Rapid Transit on Suburban Residential
Property Values and Land Development - Analysis of the Philadelphia-
Lindenwold High-Speed Line, prepared for U.S. Department of Trans¬
portation, November 1972; Colin A. Gannon, et al. The Impact of Rail
Rapid Transit Systems on Commercial Office Development, The Case of
Philadelphia-Lindenwold Speedline, prepared for U.S. Department of
Transportation, June 1972.
40. Terrell W. Hill, "The Impact of Transit, The Central Business District:
Transportation: The Lifeline of an Urban Society," Fourth Interna¬
tional Conference on Urban Transportation, 1969; Douglas B. Lee and
Deborah F. Wieck, Market Street Study, Institute of Urban and Regional
Development, University of California, Berkeley, California, 1973; and
-51-
Douglas B. Lee, "Impacts of BART on Prices of Single-Family Residences
and Commercial Property," 1973, cited in DeLeuw, Gather & Company,
Transit System Impacts on Urban Land Use, prepared for Regional Trans¬
portation District, Denver, Colorado, February 28, 1975.
41. Peat, Marwick and Partners, An Investigation of Methodology for Assess¬
ing Impact of Accessibility Changes on Land Use, prepared for Ministry
of Transportation and Communications, July 1974, p. 3.
42. National League of Cities, et al. Transit Station Joint Development,
prepared for U.S. Department of Transportation, June 1973, p. IV-21.
43. Libicki, op. cit.
44. Ibid.
45. Boyce, op. cit.
46. Peat, Marwick, and Co., op. cit.
47. Libicki, op. cit.
48. Richard J. Recht and Robert J. Harman, Open Space and the Urban Growth
Process; An Economic Evaluation Using a Growth Allocation Model, Re¬
search Report 31 (Berkeley: The Center for Real Estate and UrbcUi Eco¬
nomics, Institute of Urban and Regional Development, University of
California, 1969).
49. Livingston and Blayney, Open Space vs. Development: Foothills
Environmental Design Study, Final Report to the City of Palo Alto,
Palo Alto, California, 1971.
50. M.E. Gleeson, et. al.. Urban Growth Management Systems (Chicago:
American Society of Planning Officials, 1976).
51. Urban Land Institute, Community Builders Handbook (Washington, D.C.,
1968), p. 62; Raymond J. Burby and Shirley F. Weiss, New Communities
USA (Lexington, Mass.: Lexington Books, D.C. Heath and Co., 1976),
pp. 120-121; R.L. Andrews, The Evironmental Impacts of School Closures,
August 23, 1974; and F. Aleshire, paper presented at ICMA Conference,
Seattle, September 1975, p. 4.
-52-
CHAPTER III: SUMMARY OF LEGAL ISSUES
Introduction
This chapter explores some of the legal considerations related to the
use of capital improvements to help manage development. While the chapter
addresses the fundamental legal questions regarding government's authority
to provide capital improvements, it focuses on a particularly troublesome
issue: can a government that provides pxiblic utilities, water and sewer¬
age for example—refuse, delay, plan, or program such facilities for other
than "utility-related" reasons such as a desire to manage development; and,
can it pursue policies that allocate the costs of facilities to different
users. These have emerged as potentially serious issues as communities
have begun to consider, and in some cases to adopt capital improvement
policies that tried to shape the timing, location, and nature of growth,
contrary to the conventional mode of providing service when and where
needed.
The exploration of these issues in this chapter is in three parts.
It is organized around the way governments would be likely to approach the
issues and the ways they are defined in the law.
The first section "The Legal Rules, Concepts, and Issues Relevant to
the Provision of Capital Improvements" discusses basic legal doctrine rel¬
ative to government's authority to provide capital improvements. In par¬
ticular, it discusses the doctrine that comes from private utility law but
which appears pertinent in situations where government provides public
utilities. The law as it applies to private utility companies (regulated
by the state, of course) is relatively clear. What is less clear is the
degree to which this law applies to municipally-owned utilities. The
authors of this report support the view of most authorities that basic
utility law is equally applicable to both privately and municipally owned
utilities. There is, however, some opinion to the contrary with which the
authors do not agree.1
The second section, "The Extent to Which Local Government May Link
Capital Investments with Development Management Objectives," discusses a
substantially smaller body of law that deals with local government's recent
efforts to coordinate, link or shape development through utility extension
or pricing policies. Here the law is somewhat uncertain and inconsistent;
as a result of the uncertain applicability of the limited body of law to
other situations, the third section, "The Prospects for Capital Invest¬
ment/Development Management Policy," attempts to interpret and offer some
reasoned prognostication about the likely direction of the law in the
general area of the use of capital improvements to manage development.
Thus, this chapter differs from the other chapters of this report in that
some interpretation is given in addition to the description. The authors
believe this interpretation is essential because: (a) the issues are
relatively new and unfamiliar to an audience of pviblic officials, planners
-53-
and budget officers; (b) the amount of interest in using public capital
investment powers to manage growth is keen and thus landerstanding is es¬
sential; and, (c) early reviews of descriptive background studies indi¬
cated that it was necessary to address the question "what are the implica¬
tions of this analysis?"
Because this chapter presents legal material to the non-lawyer, sev¬
eral points should be noted to help in its reading:
1. The legal issues addressed in this chapter are on the cutting
edge of planning law; the issues are new and there are very few
cases applying directly and precisely to them. It is not possible
to arrive at conclusive generalizations, but only to identify
various interpretations and possible future directions of the law.
2. When federal law is clearly established by the United States
Supreme Court, that law applies to all states. In the opinion
of the authors, it is unlikely that the Supreme Court will in¬
volve itself in these matters. Thus, the holdings in state
courts will be most relevant.
3. An opinion of a state court, of course, applies only to that
state. Lawyers and courts often look to other states to examine
policy, philosophy, or doctrine, particularly when the local law
is silent on a point.
4. In addition, when the law offers no clear direction it is accepted
legal practice to seek analogies in closely-related areas. Since
the law is largely silent on government's use of public utilities
for development management, the lawyers may look at utility law to
determine what principles might apply. The authors of this report
believe there is evidence that the courts may consider this body
of law for precedent.
5. One question that may occasionally occur to the reader is how
widespread or prevalent is a particular legal doctrine or deci¬
sion. In order to gain any understanding of this it is manda¬
tory that the citations be consulted. A rough guide is as fol¬
lows: when a treatise is cited the opinion is widely held; when
several state decisions are cited the concept is moderately ac¬
cepted; and, when a single case is cited it is likely that the
concept is not widespread and may even be relatively recent.
6. Finally, this report is not a legal brief; it is a piece of legal
research. In a brief, a particular point of view is advocated.
The author of the brief has an interest to defend, a particular
point of view to argue, and has his mind made up about the issues
at stake. This report, on the other hand, tries to state the law
as objectively as possible. In interpreting the law the authors
try to remain objective without deciding whether local governments
should or should not adopt particular practices, nor do they urge
the courts to rule in particular ways.
-54-
The Legal Rules, Concepts, and Issues Affecting the Provision of
Capital improvements
It is well established law that local governments may construct, main¬
tain and operate capital facilities for public purposes. It is also generally
well established that within the bounds of constitutional, statutory and char¬
ter restrictions, local governments may decide without judicial interference
the type of capital improvement, its location, and its financing.2 This sec¬
tion discusses the factors that may limit the exercise of this discretion.
To what extent may different levels of service be provided to
different customers?
While it is fundamental in utility law that "reasonably adequate service"
and charges for services must be provided fairly and without "undue discrimina¬
tion, "3 it is obvious that local governments cannot provide capital facilities
without engaging in some form of discrimination. The process of site selection
alone involves a preference of one area over another. Some forms of discrimin¬
ation have been considered pemissible if founded on "reasonable classifications.
For example, a very common type of utility classification is between business
and residential customers. There has been considerable debate, however, con¬
cerning appropriate bases for differentiating between classifications. In
general, classifications have been considered reasonable if each classifica¬
tion is based on substantially similar circumstances and conditions^ and the
municipality is not intentionally discriminating on the basis of race,5
religion, or wealth^ in their formulation.
To what extent may different costs be imposed on different
groups for the same services?
The coordination of capital investments with growth management policies
may result in the imposition of costs on some groups to discourage develop¬
ment or the lowering of costs on others to encourage development. Consti¬
tutional prohibitions against the use of public funds or credit for private
purposes had traditionally prevented local governments from using revenues
to induce the development of industry within a municipality-7 More recent
decisions, however, allow the use of municipal funds, taxing power or muni¬
cipal credit to attract industry in a variety of waysS or benefit specific
groups such as through urban renewal projects.9
It is also a general rule, however, that while a utility must charge
the same rate for the same service, it "may, without being guilty of unlaw¬
ful discrimination, classify its customers on any reasonable basis and design
separate rates for each class.As in classification for the provision of
service, classifications for ratemaking purposes may be based on substantial
variation in service or conditions.H Determinations of whether different
classifications are appropriate are made on a case-by-case basis in light of
the specific facts but some classifications have been traditionally accepted.
For example, a number of states allow municipally owned utilities to impose
higher rates on non-residents. On the other hand, it is a hotly debated item
whether social policy considerations (e.g. should the elderly be permitted to
pay lower rates?) should be allowed to enter the ratemaking process at all.12
-55-
To the extent utility rates may be structured to attract industry, to
benefit the poor or large users, or to impose higher costs on non-residents,
it is possible that principles of utility law would permit the use of rate
structures for development management purposes. If so, a community could
continue providing lower rates for developments that further specific develop¬
ment management polices. Once such classifications were formulated, they
would have to be utilized in a non-discriminatory fashion. Certainly private
utilities do establish rates to reflect management policies. But the phasing
of utility extensions in the geographic sense of that term has not been a
traditional factor in the rate design process. Some re-orientation would be
required.
To what extent must potential customers be provided with service?
Linking capital investments to growth management policies may result in
decisions to refuse service to new developments. This section only discusses
this problem in terms of utility law. Later in this chapter those few specific
situations where the question has been raised in the context of municipal
growth management cases will be considered.
In general, a utility must provide service without discrimination to all
customers within its "service area." The service area of a private utility
is established (a) by regulatory commissions, through the grant of certifi¬
cates of public convenience and necessity which entitle the utility to operate
in a certain area; (b) by franchise granted by municipalities; (c) through
contracts with individual customers; and (d) by the utility's holding itself
out as providing service.13 The service area of a municipally owned utility
is usually defined by municipal boundaries, and a municipally owned utility
may not be required to provide service beyond its boundaries.14 However, if
a municipality has extended service beyond its boundaries on more than a
limited basis,13 it may be required to provide all reasonable requests for
service and may not discriminate against new development.1^ A municipally
owned utility, however, may refuse to provide new service on "reasonable"
grounds. 17 In general, a utilitsy must "anticipate the natural growth" of
its service area and take all "reasonable measures" to meet the reasonable
demands of a growing community.1®
There are two major factors which the courts and regulatory commissions
have developed to define the standard of reasonableness which governs the
obligation of utilities to extend services to new areas.1^ These factors
are, in the opinion .of the authors, likely to be applicable to municipally
owned utilities which have provided service beyond their boundaries "as a
public utility."
First, while the potential profitability of an extension is not necessar¬
ily determinative, courts will consider cost-revenue arguments in balance with
the demand for service and the availability of alternative services.20
Second, in some instances inadequate facilities or shortages of supply
have been allowed to excuse the provision of new service. A lawsuit pending
in the Texas courts is attempting to halt new sewer connections in Houston
until completion of a new sewage treatment plant.21 Similar litigation has
been successful in New York and Florida.22 in Smoke Rise, Inc. v. Washing¬
ton Suburban Sanitary Commission,23 a federal court approved a state imposed
-56-
moratorium on new service as a valid exercise of the police power to remedy
a sewage crisis in Prince George's County and Montgomery County, Maryland.
The Maryland Department of Health and Mental Hygiene also ordered the Wash¬
ington Suburban Sanitary Commission, which is empowered to construct and
maintain a sanitary sewer system within the affected counties, to develop
interim and long-range plans to improve treatment capacity- The court found
that the Commission, in conjunction with state and local officials, was ac¬
tively pursuing implementation of these plans. The court considered the
purpose and duration of the sewer hook-up moratorium as reasonable in light
of the complexity of the issues and difficult jurisdictional disputes.24
In California a water district is authorized by statute to impose a
moratorium on new water extensions when there is a water shortage.25 a
California court recently upheld a moratorium where a district perceived a
threatened water shortage.26
In Fairfax County, Virginia, however, sewer moratoria imposed because of
a shortage of treatment facilities have been invalidated. The Virginia courts
have either found that there was actually no shortage of treatment facili-
ties27 or that the County should provide them.28
Shortages of supply, however, may not be used indefinitely as an excuse
not to provide service. A New York court, for example, ordered a village to
pay a developer damages and to issue a permit to connect to the municipal
sewage system.29 Nine years had elapsed in this case since the court had
ordered the village to modify its sewage system. The court noted, in addi¬
tion, that there were indefinite future plans to meet minimum state stan¬
dards. 30
Finally, shortage of supply may not be used to justify a racially dis¬
criminatory extension policy. The city of Delray Beach, Florida, was con¬
fronted with an application for new water and sewer service from a proposed
development for minority farmworkers within its service area, as determined
by the County, but outside its corporate limits.31 The court ignored the
city's argument that it could not provide service due to inadequate facili¬
ties, reaffirming the principle established in part by Kennedy Park Homes
Ass'n. V. Lackawanna,32 that "inadequate facilities" may not be used to
camouflage racially discriminatory motives.
To what extent may new customers be charged for the installation of
new facilities?
There are a number of techniques utilized by municipalities to finance
the provision of new facilities required by new residents. These methods
impose the cost of new facilities directly or indirectly upon the new resi¬
dents. All of these methods involve somewhat different legal issues, but
connection and impact fees have in common some utility issues and the basic
problem in municipal law of distinguishing between a fee and a tax. Fees,
in general, are imposed for regulatory purposes pursuant to the police power.
Funds generated from fees must be earmarked for use for the specific regula¬
tory purpose for which they are imposed. If a fee is greater than the cost
of administering the regulation, it must be considered a tax and invalidated
if the coiranunity has been given no specific authorization for that type of
tax. A tax is imposed for revenue purposes and usually must be specifically
authorized.23
-57-
Connection Fees. The vast majority of jurisdictions have the authority
to impose a fee for connecting to a water or sewer system, usually as a regu¬
latory measure. As in utility ratemaking, the standards for formulating a
charge for new services is reasonableness. The amount charged "may not be
greater than a sum reasonably necessary to cover the costs of issuance, in¬
spection and enforcement.The actual cost of providing the service is the
most prevalent standard for determining reasonableness.It is generally
considered reasonable to impose conditions and charges if a new customer is
in an unusual or difficult location.But charges must be imposed in an
equitable fashion.
Impact Fees and Taxes. A number of communities have begun to use
"impact" fees or taxes as a way of recouping the expenses imposed upon a
municipality because of new capital facilities required by new develop¬
ments.^® Impact fees or taxes are also known as "bedroom taxes," "new
construction taxes" or "business license taxes." All varieties attempt
to exact an amount of money greater than the actual cost of providing
services to new residents. The increasing use of these fees and taxes
reflects the difficulty of providing immediate services for new growth
areas when property taxes are not collected immediately because of time
lags in placing property on tax rolls and actual receipt of the revenue.
There are a number of cases where attempts to impose some fom of
impact fee have been invalidated. Both Michigan and New Jersey courts
have overturned building permit fees imposed by municipalities where the
fee was greater than the actual cost of issuing and administering the
permits.39 in both cases the fees were viewed as an impermissible attempt
to raise revenue through the use of regulatory powers. Still other cases
have invalidated impact fees on the grounds that the funds generated were
inadequately earmarked'^® for the use of facilities within the new develop¬
ment.
There is increasing authority, however, for impact fees and taxes.
The city of Dunedin, Florida, imposed building permit fees which were set
high enough to meet the future capital requirements of the city's sewer
and water system as well as to defray operating expenses. A developer
challenged the fees, alleging that since the monies were earmarked for
capital improvements to the water and sewer systems, the fees amounted to
unauthorized taxation.The court stated that a legitimate purpose for
setting rates and charges is raising capital for future outlay but invali¬
dated the ordinance because of the failure to restrict the use of the funds
to the specific development. The analysis of the Florida court went very
far to allow the city to pass on the cost of the new development. It did
not eliminate, however, the prohibition against using the funds for the
benefit of the entire community.
However, sewer and water connection fees designed to offset costs of
an entire system have been upheld in Utah and Colorado.^2 interest¬
ing to note that in the Utah case the fee was attached on the ground that
a single class—i.e. new residents—would have to pay the tax; yet the court
upheld the fee.
The most successful attempts to impose impact fees have been in Cali¬
fornia. The city of Newark imposed a license tax on new construction to
-58-
be paid prior to the issuance of a building permit, based on the number of
rooms to be constructed. The revenue received from this tax was to be de¬
posited in a "capital outlay fund." The Home Builders Association attacked
the charge arguing that building permit taxes should be limited to the costs of
examination and that the tax violated equal protection by imposing a greater
burden on residential construction than on commercial and industrial struc¬
tures. The California Supreme Court approved the tax , holding that it was
specifically authorized by statute and did not seek to regulate building
permits but to raise revenue."phe most significant aspect of this case
is that revenues generated by the tax may be used for any municipal purpose.
Numerous other cities in California have followed Newark and enacted impact
tax ordinances to acquire parks and construct schools and recreational facili¬
ties,^^ and the taxes may be used to benefit the entire community.
Even if an impact fee is actually authorized, it may not be imposed on
a discriminatory basis. A fee was invalidated in New Jersey because it
imposed a higher fee on houses which were part of a development than on
individually constructed homes.New Jersey has approved, however, a fee
structure which differentiates between industries and residences.The city
of Dunedin's building permit fee discussed above was attacked in part on the
grounds that it discriminated against new residents. The court held that
there was no improper discrimination since it was uniformly assessed against
all new residents.
Subdivision Exactions. Developers are often required to construct
facilities such as sewers and water lines, to dedicate land in new sub¬
divisions or to provide cash-in-lieu of such dedications.^® While all
exactions are subject to the general police power limitation that the
cost of providing facilities must be reasonably related to benefits to
public health, safety and welfare, courts usually approve of required
dedications of on-site .facilities when they specifically benefit a parti¬
cular development.'^® Off-site facility dedication requirements are fre¬
quently invalidated due to a lack of specific benefit to the subdivision^O
or because state subdivision enabling legislation does not explicitly per¬
mit such exactions.
In California land exactions from developers need not be based solely on
the needs of a proposed development. In Associated Home Builders of Greater
East Bay, Inc. v. City of Walnut Creek,the constitutionality of the Cali¬
fornia dedication statute was challenged. The court held that it is legiti¬
mate to consider present and future needs of present and future subdivisions.
Further, the court specifically noted that the statutory requirement that
contributions be used only for the purpose of providing park or recreational
facilities to serve the subdivision does not mean that a particular contri¬
bution may only be used by the subdivision's residents. Rather, it means
that the fvmds from fees may not be diverted from park and recreational facili¬
ties available for use by those residents. A contribution need not be used
exclusively for the residents of the subdivision but may benefit the entire
community.53 There is a limitation on the ability of a local government, how¬
ever, to require dedications which benefit areas other than a proposed devel¬
opment. If the governmental unit requires the dedication of oversized sewers,
the developer may be reimbursed for the extra cost, which can then be charged
to other persons who benefit from the oversized facility.54
-59-
The zoning ordinance of the town of Ramapo, New York provides a different
method for imposing the cost of new capital facilities on new developments.
In order to obtain the necessary number of "development points" for the
issuance of a building permit, a developer may provide capital facilities
which are required by the proposed new area.55 if capital facilities are not
scheduled to be provided to the new area for some time, the developer may be
more motivated to provide them himself.56
Annexation Agreements. In some states a municipality may utilize annexa¬
tion agreements to require a new area or new development to provide their
capital facilities prior to annexation.57 Illinois is the only state in
which there is specific statutory authorization for this technique.• Illinois
agreements may provide for capital facilities to be furnished by a developer
or on a cost-sharing basis with the mvinicipality. 58
In some states courts have upheld annexation agreements without speci¬
fic statutory procedures that formalize the process. In both Colorado and
Maryland courts have enforced annexation agreements against the developers
without specific enabling legislation.^^ In California a recent appellate
court found that because a city has the authority to enter into contracts
to carry out its necessary functions, it has the authority to contract in
connection with its annexation and sewage functions.50 in the case before
the court the developer was seeking to enforce an agreement in which a city
had promised sewer service in return for specified fees and dedications.
After the agreement was executed the San Francisco Bay Area Regional Water
Quality Control Board had imposed a sewer moratorium on new connections in
the city. The court ordered the city to upgrade its sewer system so that
it could provide service to the development and awarded damages to the
developer. Further, the court noted that as long as the agreements are
"just, reasonable, fair and equitable," they are binding on future city
council members.
The Extent to Which a Local Government May Link Capital Investments with
Development Management Objectives
While there are a number of methods which can be utilized to coordinate
capital investments and the management of growth, legal issues will arise
most frequently in situations where decisions must be made on the extension
of public services or the grant of rezoning requests for new private devel¬
opment. This section will describe those methods in terms of the legal
issues that are raised.
May growth management policy provide the basis for extension or
refusal of public services?
Consistency Requirements. The Standard City Planning Enabling Act,
the model drafted in 1928 by the Department of Commerce, required that com¬
prehensive plans include recommendations for the development of capital
facilities, streets and open spaces;61 the plan is advisory in nature but
proposals for the construction of public facilities were to be referred to
the planning commission for review. Many states also have comprehensive
plan provisions which require consideration of capital facility development
and mandatory referral provisions. Most also provide that a vote of the
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governing body may overrule a planning commission's disapproval,62 some
states requiring a two-thirds vote.63 Mandatory referral provisions merely
allow but do not require coordination of a capital facilities plan with
development objectives embodied in a comprehensive plan.
Other jurisdictions have enacted "consistency provisions" which to
varying degrees require that zoning and land use controls be consistent
with comprehensive plans.64 To the extent that municipalities are required
to follow their own zoning ordinance the construction of capital facilities
must be consistent with the comprehensive plans in these jurisdictions.
One example is the Florida Local Government Comprehensive Planning
Act of 1975, which requires that counties, municipalities and special
districts adopt comprehensive plans.65 Mandatory and optional elements are
outlined in the Act to be included in the plans. After a plan is adopted,
the Act provides that no private and public development shall be permitted
except in conformity with the plan.®6 Land development regulations, includ¬
ing zoning, subdivision controls, and other measures which control land
development, must also be consistent with this comprehensive plan. Munici¬
palities and other governmental units must provide capital facilities in a
manner that is consistent with the comprehensive plan.67
If a proposed development applies for service, utility law principles
may mandate extensions. But, if this situation arises in a jurisdiction
that requires that public and private development occur consistent with a
comprehensive plan, and a proposed development is inconsistent with the plan,
a refusal of service may be necessary. The City of Boulder argued in Robiu-
son V. Boulder^^ that utility service would not be provided the proposed
development because growth in the area was inconsistent with their compre¬
hensive plan. The court stated that it need not address the problem of
whether the comprehensive plan "relieves the City of Boulder of its duty
to the public in its proprietary role as a p\ablic utility." The court
observed in this connection that the County Commissioners, not the City of
Boulder, had jurisdiction over the decisions concerning conformity of the
development with the comprehensive plan, a fact which may sharply distin¬
guish Robinson from cases where both land use and utility are within the
jurisdiction of a simple agency. This case, therefore, leaves unanswered
the problem presented when a single governmental unit both considers a pro¬
posed development as it relates to a comprehensive plan and provides the
utility services that will be needed by that development if it is approved.
Annexation. The act of annexation can influence both capital invest¬
ment and growth policy. It is an act by a municipality which may trigger
obligations that would otherwise not be required. While there is apparently
no reported case where a miinicipality has refused to annex an area because
it is considered inconsistent with articulated growth management policies,
accepted principles of annexation law would appear to permit such a practice.
Annexation is a legislative function of a local government, and the decision
to annex or not to annex an area is subject to only limited judicial review.
The wisdom, expediency and motives of a refusal to annex are not reviewable
vinless fraud, malice, or a gross abuse of discretion is alleged.Barring
-61-
such allegations, the sole question is whether a city has complied with
statutory procedures.^1
A municipality does have a tool to implement its growth policies if
it may refuse annexation and condition the provision of public services
upon annexation and conformity with growth management objectives
Colorado has a statutory provision which authorizes the conditioning of
the supply of municipal services upon the execution of a contemporaneous
agreement to apply for annexation.It is difficult to determine, however,
how such a policy which requires annexation prior to receipt of services
could be considered "utility-related," the sole legitimate grounds stated
by the Colorado Supreme Court in Robinson v. Boulder for refusing to extend
services.
In California, annexation may not proceed without the approval of the
county's Local Agency Formation Commission (LAFCO)While a commission
may not impose any conditions upon annexation which would directly regulate
land use or subdivision requirements, standards for the evaluation of pro¬
posals may be developed which may include land use elements. Some factors
which may be considered in the review of annexation proposals are popula¬
tion density, land use patterns, the likelihood of significant growth, and
the adequacy of existing services.
LAFCO may also develop "spheres of influence" which define the optimal
boundaries for each city. A number of other jurisdictions have granted
municipalities the authority to enter into agreements with other municipali¬
ties not to annex certain areas for a period of time.^^ These agreements
and the designation of spheres of influence allow more effective planning
for the provision of capital facilities prior to annexation.
Extension of Utility Facilities. Only two court cases have directly
addressed the issue of whether a local government may refuse to provide
utility facilities if development of an area is deemed inconsistent with
its stated growth management policies.
In 1965 the City of Boulder adopted a policy statement, entitled "The
Service Area Concept—A Program for Boulder's Planned Development" which
stated the city's intention to use its water and sewer services to provide
for the "orderly development of the fringe area and to provide an equitable
and sound financial structure for the city's utility system." This policy
established the city's service area, which included property outside munici¬
pal boundaries and outlined detailed terms and conditions for the provision
of water and sewer services in that area. The plaintiffs in Robinson v.
Boulder78 were located within the city's service area but outside the city
borders and were refused water and sewer service. The city's primary argu¬
ment was that the proposed development violated the Interim Growth Policy
as the subject property was not scheduled for development until 1990.
Both the trial court and the Supreme Court found that the city has
held itself out as the sole provider of water and sewer services in the
defined service area and the city had adequate capacity to service the
plaintiffs. Except for a section of a sewer trunk that the developer had
-62-
agreed to build, water and sewer facilities were in place and available for
use. The court ordered the city to extend water and sewer service and held
that a refusal to extend water and sewer service must be based on "utility-
related reasons" and may not be based on growth management objectives.
The holding in Robinson v. Boulder is consistent with the position
taken by the Virginia courts. A lower court in Langley Development Corp.
V. Board of Supervisors of Fairfax County79 declared that a sewer morator¬
ium and allocation policy adopted for the purpose of preventing growth was
an invalid exercise of the police power.
In Swanson v. Marin Municipal Water District^*^ the California appellate
court approved a water moratorium but noted:
... we are not unmindful of the somewhat dire circumstances
which flow from our decision in this matter. Politically, the
power to 'cut off one's water' by the simple expedient of im¬
posing a moratorium such as the one here involved is a potent
weapon in effecting a no-growth policy within a community.
Since the District has neither the power nor the authority to
initiate or implement such a policy, the imposition of any
restriction on the use of its water supply for that purpose
would be invalid.®^
In Smoke Rise, Inc. v. Washington Suburban Sanitary Commission the plaintiffs
had alleged that the sewer moratorium was being used to implement a tacit no-
growth policy. The court noted that while local governments may not refuse
to face the future,
it is well established that development demand may properly be
impeded where growth restrictions are imposed pursuant to well-
reasoned, comprehensive plans for the improvement of the physi¬
cal infrastructure of the region.
May the zoning power be used to defer development until adequate
public facilities are provided?
Ramapo. The New York Court of Appeals upheld the zoning ordinance of
the Town of Ramapo, New York,®^ and that municipality has become the symbol
for growth management through development timing. This ordinance, paired
with the town's master plan, a six-year capital budget, and twelve-year capita]
program, was designed to manage the town's growth through timing and sequential
controls. The zoning ordinance designated residential development as a separ¬
ate use classification that requires obtaining a special permit prior to the
issuance of a building permit or subdivision plat approval. Permits may be
issued only if the proposed development earns fifteen development points,
based on the proximity of the development to municipal improvements. Permits
may also be tied to the scheduled completion date of the capital improvements
or the developer may provide his own improvements to earn the necessary devel¬
opment points.
-63-
A majority of the New York Court of Appeals rejected the contentions
that the ordinance was an unathorized exercise of the town's zoning power
and denied due process, equal protection of the laws and the right to travel.
The court found the constitutionally required rational basis for the town's
phased growth program in the fact that "existing physical and financial
resources of the community are inadequate to furnish the essential services
and facilities which a substantial increase in population requires." The
court found, in addition, that the power granted in the New York zoning
enabling act allows the town to "restrict and regulate" and by way of
implication direct the growth of population for the purposes indicated in
the act. The ordinance attempts to assure that development occurs only
where adequate public facilities exist, a goal encompassed by a stated pur¬
pose of the act to "facilitate the adequate provision of transportation,
water, sewerage, schools, parks and other public requirements." (in the
opinion of the authors, the Ramapo opinion should be relied upon with caution
because of recent developments. Justice Brietel, who wrote the dissenting
opinion in that case, is now Chief Justice, two new justices have joined the
court, and the opinion of the New York Court of Appeals in a subsequent 1975
case, Berenson v. Town of New Castle,suggests that the court may now svib-
ject municipal land use policies to a more rigorous "regional intact" test
than was the case in Ramapo.)
California. In 1974 a constitutional challenge was brought against
the Petaluma, California growth management system—a series of interrelated
tools and ordinances. The primary elements of the system included: (1) a
limitation of the issuance of annual residential permits to 500 units or 6
per cent of existing housing; (2) a Residential Development Control System
with a point system for awarding building permits based in part on the
availability and adequacy of pijblic facilities; (3) an urban extension line
to delineate the outer limits for the city's expansion; and (4) a limited
water contract with Sonoma County Water Agency to supply sufficient water
to the city under the reduced growth plan.85
The United States District Court, holding for the plaintiffs on con¬
stitutional grounds, foiand in addition, that the city could have met the
demand for public facilities at the 1970-1971 growth rate; that facilities
were either in place, under construction or capable of being augmented to
meet increased demand; and that the city controls its own water service and
has a surplus of water funds. The court held that the city may not purposefully
limit the availability of a particular commodity and then justify a popula¬
tion limitation based on that inadequacy.®^
As has been well reported, the court of appeals reversed the district
court and upheld the Petaluma Plan. The court held that the concept of
public welfare is sufficiently broad to include the city's interest in pre¬
serving its small town characteristics and avoiding uncontrolled or rapid
growth. The Plan does not arbitrarily or unreasonedjly burden interstate
commerce or exclude any particular income class or racial group. The ques¬
tion of adequate facilities was addressed by this court only in passing. In
a footnote, the court noted that while the city had tried to show that the
Plan was implemented to prevent overtaxing water and sewage facilities, it
was "unnecessary to consider that issue.Presumably, the court was say¬
ing that its approval of the city's growth management system rendered moot
-64-
any consideration of utility issues. At least so far as the federal courts
are concerned, California cities apparently may refuse to provide utilities
and then deny a permit on the basis of inadequate facilities.^®
On the other hand, more recently the California Supreme Court in Asso¬
ciated Home Builders of the Greater Eastbay, Inc. v. City of Livermore,"^ a
bench regarded in the past as sympathetic with m\inicipal control over growth,
was confronted with a city ordinance that prohibited the issuance of any new
residential permits iintil identified educational, sewage and water supply
problems were solved. One of the plaintiff's arguments against the ordinance
was that it is an unconstitutional infringement upon a migrant's right to
travel. The coturt, however, stated that the proper constitutional test is
whether the ordinance "reasonably relates to the welfare of those whom it
significantly affects" and that the welfare of a region must be considered
if an ordinance may "strongly influence the supply and distribution of hous¬
ing for an entire metropolitan region." The court outlined three steps to
be followed to determine the regional impact of an ordinance: (1) forecast
the probable effect and duration of the restriction; (2) identify the com¬
peting interests; and (3) determine whether" the ordinance, in light of its
probable impact, represents a reasonable accommodation of those interests.
The court remanded the case to the trial court to make this determination.
It is interesting in connection with this report that the California
Supreme Court noted in particular the lack of evidence to show the extent
existing services fall short of the desired standards and the extent of
existing planned construction of needed improvements. It would appear,
therefore, that a CIP may become increasingly important in growth management
efforts in California.
Maryland. The Maryland courts have upheld the use of zoning and provi¬
sion of capital facilities as a growth management tool. In Norbeck Village
Joint Venture v. Montgomery County Council®® the court of appeals upheld a
plcui designed to stage development by comprehensively re-zoning almost
50 square miles and controlling sewer access to avoid excessive costs of
public services. This technique is in prevalent use in Montgomery and
Prince George's Counties and it receives consistent judicial support.91
Virginia. Variations on development timing schemes have not received
as favorable a judicial treatment in other jurisdictions.92 The Virginia
Supreme Court has severely restricted the possible use of the zoning power
for growth management purposes. In both Board of Supervisors v. Allman®®
and Board of Supervisors v. Williams94 the court declared denials of rezon-
ing as discriminatory, unreasonable, arbitrary, and capricious. In Allman
the court concluded that the Board of Supervisors had denied the plaintiffs
application for rezoning "primarily because of its timing, rather than
because of its impact on public facilities." The evidence in this case showed
that the board approved re-zoning requests in areas around already developed
projects and denied requests beyond the periphery of these projects in the
same area and serviced by the same facilities. The board argued in both cases
that the denials were based on inadequate public facilities but the court con¬
cluded that necessary public facilities were either available or would become
available by the time development occurred. Noting the "ever existing problem
-65-
of finance," the court observed in Allman that many public facilities usually
are constructed after, not before, the demand for services and actual devel¬
opment .
The Prospects for Capital Investment/Development Management Policy
Perspective
Since this review of the law offers no precise direction for those
considering the ways that capital investments can be used to manage devel¬
opment, this final section offers some interpretation and prediction of
the likely direction of the law. This prognosis is based primarily on the
authors' view that basic utility law has been and remains the foundation
for the legal doctrine in this area.
The context of prognosis
The use of capital improvements to deliberately influence growth is an
area of law where the relevant decisions can be counted on the fingers of
one hand. With such a meager record, it would be foolhardy to pretend
certainty on the course of the future. Many lawyers agree there is a high
probability that the United States Supreme Court will remain aloof from
what it views as peculiarly local issues. This means that a multitude of
varying opinions by state supreme courts will make the crystal ball even
more clouded. To the paucity of case law and these jurisprudential variables,
there must be added the current ambiguous legal obligations of a municipality
in its land use policies to the region of which it is a part, a consideration
that may directly affect the validity of the use of capital investment poli¬
cies to manage growth. No one yet knows how that issue will come out. The
New York Court of Appeals in Ramapo^^ sanctioned a growth management plan
tied to a CIP and rejected the argiiment that the scheme would make a shambles
of regional planning.
Of course, these problems cannot be solved by Ramapo or any single
municipality but depend upon the accommodation of widely disparate
interests for their ultimate resolution. To that end, state-wide
or regional control of planning would insure that interests broader
than that of the municipality underlie various land use policies.
Nevertheless, that should not be the only interest in which growth
devices such as these, aimed at population assimilation, not exclu¬
sion, will be sustained; especially where, as here, we would have
no alternative but to strike the provision down in the wistful hope
that the efforts of the State Office of Planning Coordination and
the American Law Institute will soon bear fruit. (Emphasis added.)
Less than four years later in Berenson v. Town of New Castle,the same
court said that regional needs must be considered in any municipal land use
planning policy and gave the underscored portion of the cibove excerpt from
the Ramapo opinion a different twist:
Whether New Castle should be permitted to exclude high density
residential development depends on the facts and circumstances
present in the town and the community at large. Until the day
comes when regional, rather than local, governmental units can
make such determinations, the courts must assess the reasonable¬
ness of what the locality has done. (Emphasis added.)
-66-
Nor should too much be read into the decision of the Colorado Supreme
97
Court in Robinson v. Boulder. The city was venturing to set policy outside
its boundaries in an area where final decisions over land use policy were
made by the county.
However indistinct the legal road signs may be, however o£>scure the
trail between the interests of each municipality and of the region, it can
be expected that the use of capital iit5)rovements to direct municipal growth
will proliferate in those areas where pressures are most apparent. Certainly
those in command of policy have rejected and will continue to dispute Edward
Banfield's baleful prediction that "owing to the nature of man and society
(and more particularly, American culture and institutions) we cannot 'solve'
our serious problems by rational management. Indeed, by trying we are almost
certain to make matters worse.
It is worth noting in the context of this discussion of the legal issues
in development management policy that observations similar to those of
Professor Banfield have been made by some economists concerning the effective¬
ness of p\iblic regulation of privately owned utilities.Such criticism of
managed policy, whether in urban affairs or public utility law, have not
stayed efforts to bring some rationality to public control in each field, and
although there are differing circumstances between the two fields of law, the
evolution of utility law may provide some insights to the predictable devel¬
opment of the law in growth management by municipalities over the next decade.
The public regulation of utilities evolved out of concepts that were
gradually shaped over centuries in the common law and remain at the basis of
Anglo-American law today: notions of the need for fairness where a near
monopoly over service or goods was perceived to be affected with a public
interest, considerations of social or political expediency which led to some
forms of allowable discrimination, and a concern that the purveyors of such
goods and services had to receive a reasonable return in order to attract
and hold the capital necessary for them to serve the public. The compara¬
tively simple populist slogans of the late nineteenth century focused on the
evils of monopoly power; today, the issues of utility regulation are far more
complex—questions, for example, of controlling the end use of cheap, clean
natural gas and the appropriateness of government allocation of energy supplies
between regions. Yet in spite of these changes, the simple rules mentioned
above remain the touchstone of policy in the waning years of the twentieth
century. And there is no reason why they will not be employed in evaluating
the capital investment/growth management policies of local governments.
Of course, the analogy between the growth of utility law and the use of
capital investment policies by municipalities to manage growth is rough but
there are similarities, and when breaking ground in a new field the law has
not hesitated to seize upon precedents wherever it could find them.-100
Fairness
The near monopoly enjoyed by a private utility has its counterpart in
the control of a municipality over the provision of capital improvements.
The adjective "near" should be underscored in both instances. Not all regu¬
lated utilities are free from competition, particularly in the energy field,
and municipalities which control the extension of sewer lines, may find that
capital investments by other public agencies (such as state highway depart-
-67-
merits) or alternative non-public solutions such as private wells, septic
systems, schools, or energy sources may undermine the municipal growth
management plan. But if control over capital investment in varying de¬
grees does rest with the municipality, then we may expect that, as with
private utilities, the courts, if not the state legislatures, will insist
that such control be exercised with some approximation of fairness to the
consumer, whether that person be a landowner or a seeker after shelter.
The most difficult question will be: to what class is the duty of
fairness owed; only to those within the boundaries of the community or to
others, whether they be other communities or persons who desire to enter
the community? As noted earlier, in December, 1976, the Supreme Court of
California remanded a case to the trial court to determine the regional
impact of a municipality's growth management plan.^^l We should not expect
to see the courts compelling municipalities to annex against their will but
we may expect increased judicial surveillance of the regional impact of
capital investments used to influence growth within its boundaries, and we
should anticipate a more searching inquiry by the courts on both the motives
behind and the feasibility of asserted municipal capital programs. (It
should not be forgotten that the Ramapo decision was on a motion for sixnmary
judgment. That is, there was no significant inquiry by the court into the
quality of the capital program nor of the probability of its implementation.)
Rough notions of fairness will affect not only the external in^jacts of
growth management policy. Equitable considerations will also direct judicial
scrutiny to the intramural consequences. If a municipality asserts that it
is necessary to este±)lish an urban service area or in some fashion to slow
down growth on the periphery in order to finance public improvements in the
core and to stimulate development in the by-passed areas, it is predictable
that the courts will be asked to determine whether or not the community has,
indeed, made such reinvestments in the inner neighborhoods (or whether in
light of its fiscal condition, it can) and whether private development in the
scattered central vacant areas is feasible.
Professor Robert Freilich has declared the necessary correlation between
the outlying areas and the inner city areas ("Tiers"):
The functional relationship between the identified Tiers and their
respective roles and coordination within the overall growth manage¬
ment strategy is critical to supporting the legal validity of the
entire system.102
The authors believe that the ancient concept of fairness that fash¬
ioned utility law will emerge in procedural as well as sxibstantive rules
in municipal growth management law. Just as utilities are subject to regu¬
lation, for example, over their billing and credit practices, so the pro¬
cess by which communities implement their policies will be subject to
greater scrutiny. There already are some signs that old notions of legis¬
lative immunity from judicial oversight of process are breaking down,103
and any development management system which exacerbates the growing prob¬
lem of delay in the development permission process will be examined with
greater care,104 the more severe the nature of local policy becomes.
-68-
"Undue" discrimination
Fairness, as was suggested, has not been the only benchmark in the
growth of utility law. Political and social exigencies have helped to
fashion the rules, and often have acted as a counterweight to the conse¬
quences were "fairness" carried to its logical conclusion. These pragmatic
influences have been most noticeable where discrimination in various forms
is permissible if not mandated in utility law. The rubric is that the
discrimination cannot be "undue." The homeowner may get a break over the
store owner in the rate structure; in an energy crisis on-line customers
will be protected from would-be customers by the establishment, under the
aegis of the regulatory agency, of a service connection policy. So it
would be surprising if every assertion that a capital investment/growth
management policy resulted in discrimination were recognized. It may be
expected that there will be classes of landowners and of potential residents
who will be penalized by such a policy but who will not be entitled to re¬
lief. The growing acceptance by the courts in many states of mandatory
dedications or of payments in lieu as a condition of development permission
does result in the home buyer in that subdivision paying, in effect, two
taxes, the one he shares with all residents of the municipality, and the
one passed on by the developer who paid money or dedicated land for schools
or parks. That appears in many states to be permissible discrimination.
There will be, in short, a balancing, and if this imprecise prospect troubles
those who search for exactness, it may not be much consolation to be reminded
of Justice Holmes' aphorism that the life of the law has not been logic; it
has been experience.
Rate of return
Finally, it has been basic to utility law that the offeror of regulated
goods or services is entitled to a reasonable return in order to insure a
flow of capital to maintain adequate services. Although most municipal
services are not regarded as profit-making enterprises (water and electric
services, where municipally owned, are possible exceptions), nevertheless
cost/revenue considerations are necessary and appropriate in municipal
decision-making. Bankruptcy is not exclusively a matter for the private
market. So we may expect that more and more municipalities will seek to
justify their use of capital investment policy to direct and control growth
on the basis that the costs of uncontrolled growth will exceed the tax
revenues derived therefrom just as a utility may resist as unprofitable a
demand that it enlarge its territory. The impact of growth upon schools and
other services will continue to be a colorable argument as long as the cost
of those services is borne by the local government. To the extent, however,
that state or federal agencies assume a greater share of those costs, the
fiscal consequences of growth will take on a less persuasive role in growth
management.
Concluding observations
If we can find some guideposts in utility law to the future course of
a growth policy, many of which should be encouraging to its advocates, there
-69-
is one feature of the utility business that may chill the enthusiasm for the
use of a capital improvement program to manage municipal growth. That is
the potential role of the state as referee or arbitrator between the offeror
of the services and the consumer. The holder of the private utility franchise
cannot do as it pleases; it must obtain permission in a supposedly neutral
forum. Someone may argue that because a city may control or limit a franchise
of a private utility, it may also control its own investment policy. The
authors disagree. In the former case, the municipality is in the role of a
neutral fomm between the entrepreneur and the public. In the latter instance
it is the municipality which is the advocate.
So the spread of the practice of using capital investment policies at
the municipal level may generate a demand for a state agency to review such
policies just as one hundred years ago this country witnessed a call for
public regulation of those enterprises "affected with a public interest."
If managed growth in one municipality should result in leap-frog development
in other areas, a greater burden may be placed upon state controlled trans¬
portation policies. If competition among municipalities for the "best" growth
results in fiscal disparities conong municipalities, increased financial de¬
mands may be made upon the state to rectify inequalities. If local growth
management policy conflicts with or is perceived to abort state environmental
policies, the state may be compelled, as it has in a few jurisdictions, to
preempt municipal policies. If growth management policy "takes" from some on
the edge of town but fails to make up for this by reinvestment in the inner
neighborhoods, a cry for a political solution will be heard from a bizarre
alliance of property owners on the periphery and the poor in the decaying areas.
So it may be that the tide of capital improvement programming to deliber¬
ately influence growth will carry with it an outcome that most municipal
decision-makers would dislike: the state as referee between municipality and
landowner and, indeed, among communities. Just this has occurred before in
this country and there is no reason why it may not happen again.
-70-
NOTES
1. See generally, Charles Haar and Daniel Fessler, "An Efficient Alternative:
The Common Law Duty of Equal and Adequate Services." Most authorities
consider that basic utility law is equally applicable to privately and
municipally owned utilities. Robinson v. Boulder, , Colo. ^547 P.2d
228 (1976); Dale v. City of Morgantown, 270 N.C. 567, 567, 155 S.E.2d
136 (1967); Reid Development Corporation v. Parsippany Troy Hills Town¬
ship, 10 N.J. 299, 89 A.2d 667 (1952); Wickenberg v. Sabin, 68 Ariz. 75,
200 P.2d 342 (1948); McQuillin, 12 Municipal Corporations, (hereinafter
"McQuillin") §35.35. But see Reid Development Corporation v. Parsippany
Troy Hills T^ownship, 31 N.J. Super. 459, 107 Ad 20 (app. div. 1954) .
There is some opinion to the contrary. See Comment, "Control of the Tim¬
ing and Location of Government Utility Extensions," 26 Stan. L. Rev. 945,
953-958 (1974).
2. McQuillin, §37.25. A municipality generally may not be compelled to
provide a capital improvement. McQuillin, §37.27; Travini v. Maricopa
County, 9 Ariz. App. 228, 450 P.2d 1021, 1022 (1969); but see State ex
rel. Golembeske v. White, 362 A.2d 1354 (Conn. 1976).
3. See generally. Priest, 1 Principles of Public Utility Regulation 227-326
(1969); Note, The Duty of the Public Utility to Render Adequate Service:
Its Scope and Enforcement, 62 Colum. L. Rev. 312 (1962); McQuillin,
§35.25; Nichols, Public Utility Service and Discriminaton (1928); Lake,
Discrimination by Railroads and Other Public Utilities (1974).
4. See 73 C.J.S. Public Utilities §7; Nichols, Public Utility Service and
Discrimination 1022 (1928); Priest, 1 Public Utilities §270 et seq.
(1932); 64 Am. Jur! 2d Public Utilities §38; Lakewood Tp. v. Lakewood
Water Co., 29 N.J. Super. 422, 102 A.2d 671 (1954); Dickinson v. Maine
Pub. Service Co., 65 PUR 3d 366 (1966).
5. Compare Washington v. Davis, 44 L.W. 4789 (June 7, 1976) and Milliken v.
Bradley, 418 U.S. 717 (1974) with Greene v. City of Memphis, 535 F.2d
976 (6th Cir. 1973) and Hawkins v. Town of Shaw, 437 F.2d 1286 (5th Cir.
1971). See generally, Fessler & Haar, Beyond the Wrong Side of the
Tracks: Municipal Services in the Interstices of Procedure, 6 Harv. Civ.
Rights - Civ. Lib. L. Rev. 441, 461-463 (1971); Merget & Wolff, "The Law
and Municipal Services: Implementing Equity," Pviblic Management, Vol. 58
No. 8,2 (August, 1976). See also Goldstein v. City of Chicago, 504 F.2d
989 (7th Cir. 1974) (Legitimate to allocate service on basis of type of
dwelling unit); Dandridge v. Williams, 397 U.S. 471 (1970) (court may not
"second guess" local government's decision to allocate limited financial
resources).
6. Compare Serrano v. Priest, 5 Cal. 3d 584, 96 Cal. Rptr. 601, 487 P.2d
124 (1971); and Robinson v. Cahill, 63 N.J. 196, 306 A.2d 65 (1973);
with San Antonio Independent School District v. Rodriguez, 441 U.S.
(1973); see also. Steel Hill Development, Inc. v. The Town of Sanborton,
-71-
392 F. Supp. 1134 (D. N.H. 1974); Ybarra v. City of Tovm of Los Altos
Hills, 503 F.2d 250 (9th Cir. 1974); Coleman v. General Motors Corp.,
386 F. Supp. 87 (N.D. Ga. 1974); Cilliczka v. Johnson, 363 F. Supp.
453 (E.D. Mich. 1973).
7. 56 Am Jur. 2d Municipal Corporations §589; Anno., 112 ALR 571.
8. McQuillin, §44.40, 39.26; 64 Am. Jur. 2d Public Securities and Obliga¬
tions §110; People ex rel. City of Salem v. McMackin, 53 111. 2d 347,
291 N.E. 2d 807 (1972); City of Gaylord v. Bechett, 378 Mich. 273, 144
N.W.2d 460 (1966); City of Fernandine v. State, 197 So. 454 (Fla. 1940).
9. Herman v. Parker, 348 U.S. 26, 99 L Ed 27, 75 S. Ct. 98 (1954); Gage v.
City Wilmington, 293 A.2d 555 (Del. 1972); Webster Realty Co. v. Fort
Dodge, Iowa, 174 N.W. 2d 413 (1970); McQuillin, §§24.44, 24.563; Anno. 44
ALR 2d 1414, 1420; 40 Am. Jur.^2d, Housing Laws and Urban Redevelopment
§§1-3.
10. 73 C.J.S. Pviblic Utilities §27; 64 Am. Jur. 2d P\iblic Utilities §110;
Priest, 1 Public Utility Regulation; Cal. Public Utility Code §453(a)
and (b) (1968); Colo. Rev. Stat. Ann. §40-3-106(1) (1973); Md. Ann.
Code, Art. 78 §26(a)(l)-3 (1975 Replacement Vol.); Va. Code Ann. §56-234
(1976 Supp.); Wickenburg v. Sabin, 68 Ariz. 75, 200 P.2d 342 (1948);
F. S R. Lazarus and Co. v. Ohio Public Utilities Commission, 162 Ohio St.
223, 122 N.E.2d 783 (1954).
11. Glenwild Estates v. Borough of Butler, Doc. No. 638-558, 7/29/64 (N.J.)
(PUR Digest Vol. A. 1963-67 Supp.); Sayles v. Bennett Avenue Development
Corp., 258 Iowa 628, 138 N.W.2d 895 (1965).
12. Re; Illinois Bell Tel. Co., 13 PUR 4th 482, 491 (1976); similarly,
Oregon Public Utility Commissioner's Order No. 75-758; Re: Rate Con¬
cessions to Poor Persons and Senior Citizens, 14 PUR 4th 87 (1976);
similarly, Rhode Island Consimters' Council v. Archie Smith, 111 R.I. 271,
302 A.2d 757 (1973); New Jersey Bell Telephone Co. received approval on
November 3, 1976 from the State Board of Public Utility Commissioners to
initiate small "lifeline" rates to permit low usage residential customers
such as senior citizens and the poor to receive lower basic residential
rates. New York Times, November 4, 1976. See also, Michigan Bell Tel.
Co., 94 PUR 3d 321, 346 (1972); Re: New England Tel. & Teleg. Co.,
94 PUR 3d 476 (1972); S.B. 2502 & H.R. 11449, 94th Cong., 2d Sess. (1976);
New York Times, November 4, 1976; New York Times 55, October 27, 1976;
Newsweek 69, November 8, 1976.
13. Priest, 1 Public Utility Regulation 233 (1969).
14. McQuillin 12 Municipal Corporations §§35.34 c, 35.35 c; Delmarva Enter¬
prises, Inc. V. Mayor and Council of Dover, 282 A.2d 601 (Del. Sup. 1971);
Mayor and Council of Rockville v. Goldberg, 264 A.2d 113 (Md. 1970); Mayor
and City Covincil of Cumberland v. Powles, 225 Md. 580, 258 A 2d 510 (1969);
^72^
city of Colorado Springs v. Kitty Hawk Development Co., 154 Colo. 535,
392 P.2d 467 (1964); City of Milwaukee v. Public Service Coimnission,
268 Wise. 116, 66 N.W.2d 716 (1954); 48 ALR 2d 1230; Sengstock, Extra¬
territorial Powers in the Metropolitan Area 22 (Legislative Research
Center University of Mich., Law School, 1962).
15. See Robinson v. Boulder, Colo. 547 P.2d at 230 distinguish¬
ing City of Englewood v. Denver, 123 Colo. 290, 229 P.2d 667 (1951);
Mayor and Council of Rockville v. Goldberg, 257 Md. 563; 264 A.2d 113
(1970); Mongiello v. Borough of Highstown, 17 N.J. 611, 112 A.2d 241 (1955).
16. Robinson v. Boulder, Colo. , 547 P.2d 228 (1976); Delmarva
Enterprises, Inc. v. Mayor and Council of City of Dover, 282 A.2d 601
(Del. Sup. 1971), aff'd, 301 A.2d 277 (1973); Borough of Phenixville
V. Penn. Public Utility Commission, 3 Pa. Cmwth. 56, 280 A.2d 471
(1971); Poison V. Public Service Commission, 237 So.2d 585 (Fla. App.
1970); Mayor and City Council of Cumberland v. Powles, 235 Md. 574, 258
A.2d 410 (1969); City of Roanoke v. Fisher, 193 Va. 651, 70 S.E.2d
274 (1952).
17- Crownhill Homes, Inc. v. City of San Antonio, 433 S.W.2d 448 (Tex. Civ.
App. 1968); Mayor and Co\incil of Rockville v. Goldberg, 257 Md. 563,
264, A.2d 113 (1970).
18. See Lukrawka v. Spring Valley Water Co., 169 Cal. 318, 146 P. 640 (1915).
19. See Thomas, "Public Utilities: Extension of Service," 16 Rutgers L.
Rev. 318 (1962); Ramsey, "Control of the Timing and Location of Govern¬
ment Utility Extensions," 26 Stan. L. Rev. 945 (1974); Statutes often
require that extensions be provided in the interest of ptiblic convenience
and necessity whenever required by a Public Utility Commission. See, e.g.,
Cal. Public Utility Code §762 (1968); Colo. Ann. Stat. §40-4-102 (1973);
Md. Ann. Code, Art. 43 §387c (1973); Va. Ann. Code §56-263 (1974 Replace¬
ment Vol.).
20. City of Crossett v. Arkansas Louisiana Gas Co., 99 PUR 3d 394 (1973);
Delmarva Enterprises, Inc. v. Mayor S Council of Dover, Del. Super.,
282 A.2d 601, aff'd., 301 A.2d 277 (1973); Haines et al. v. City of
New York, 51 A. 2d 247, 380 N.Y.S.2d 1004 (1976); Ridley Township v. Penn.
Pub. Util. Com., 172 Pa. Super. 472, 478, 94 A.2d 168, 171 (1953)
("a public utility cannot collect the cream of its territory and reject
the skimmed milk"); see also. Re: Moiontain States Tel. S Teleg. Co.,
96 PUR 3d 321 (1972); Valnel Corp. v. Silverton Water Co., 47 PUR 3d 409
(N.J. 1963); Board of Fire Commissioners v. Elizabethtown Water Co.,
27 N.J. 192, 142 A.2d 85 (1958); Reid Development Corp. v. Parsippany Troy
Hills Township, 31 N.J. Super. 439, 197 A.2d 20 (1954); see generally,
Thomas, "Public Utilities: Extension of Service," 26 Rutgers Law Rev.
318 (1962).
-73^
21. Land Use Planning Reports 5, September 6, 1976, Vol. 4, No. 36; See
Rivkin, Sewer Moratoria as a Growth Control Technique, II Management
and Control of Growth 473 (ULI 1975); White, "Water as a Tool in Land
Use Control, Legal Considerations: An Exploratory Essay," 20 Rocky
Mt. Mineral Law Institute 671 (1975); Note, "The First for Population
Control: Water Hook-up Moratoriiim and the Duty to Augment Supply,"
27 Hastings Law J. 753 (1976).
22. City of N. Miami Beach v. Metropol. Dade Cty., 317 So.2d 110 (Fla.
App. 1975); Kennilworth Management Co. v. Ithaca, 63 Misc. 2d 617',
313 NYS 2d 35 (1970); Belle Harbor Realty Corp. v. Kerr, 35 NYS 2d 507,
364 NYS 2d 160 (1974); but see. Poison v. Pub. Serv. Com., 155 Mont.
464, 473, P.2d 508 (1970).
23. 400 F. Supp. 1369 (D. Md. 1975).
24. But see. Art Builders, Inc. v. Harford County, Maryland, Circuit Court
of Harford County, 22371/28/126 (July, 1976), where the court ordered
hook-ups and awarded damages to the developer where there were existing
ptiblic works agreements prior to the issuance of the moratori\am.
25. Cal. Water Code §350 (1971).
26. Swanson v. Marin Municipal Water District, 56 Cal. App. 3d 512, 128
Cal. Rptr. 485 (1976); see also. Re: Utility Status of Certain Water
Supply Assos., 91 PUR 3d 126 (1971); Stead and Anderson, "The California
Water Plan," 11 Cry California No. 3 (1976).
27. See, Land Use, 9 Univ. of Rich. L.R. 513, 613 (1975); Camelot Builders
Inc. V. Board of Supervisors of Fairfax County, Virginia (Chancery No.
38968, 1973); Chantilly Development Corp. v. Board of Supervisors of
Fairfax County (Chancery No. 43235, 1975).
28. J. Hazel, "Land Use Through Litigation," Urban Land (1976); Edsall
Investments, Inc. v. Board of Supervisors of Fairfax County, Virginia
(Chancery No. 38978, 1974); Gulf Reston, Inc. v. Board of Supervisors
of Fairfax County, Virginia (Chancery No. 38421, 1974). See J. Hazel,
et al., "Provision of Municipal Services: The Fairfax Experience,"
ALI-ABA Course on Land Planning and Regulation of Development (1976);
see also. Pond, Public Utilities §289 (1932).
29. Charles v. Diamond, 447'A.D. 2d 426, 366 NYS 2d 921 (1975).
30. The natural gas shortage has resulted in numerous allocation problems.
The Illinois Commerce Commission has allowed Peoples Gas Light & Coke Co.
to file revised tariffs creating a "Controlled Attachment Plan," which
recognizes existing commitments where applicant is "irreversibly com¬
mitted to use gas." ICC Docket No. -55809, Order Dated 12/16/70. (Simi¬
larly, See ICC Order No. R017637 (1970) regarding Illinois Power Company's
-74-
imposition of priorities on the connection of new gas loads.) and Re:
Columbia Gas of New York/ 91 PUR 3d 89 (1971); Re: Consolidated Edison
Co. of New York, 89 PUR 3d 517 (1971) ; Re: El Paso Natural Gas Co.,
494 F.2d 925 (DCCA 1974). Difficult experiences with allocation have
also been reported in Maryland. See Linowes, "A Legal Challenge in
Federal Court to a Federal-State-Local Sewer Moratorium Policy," BNA-
HDR Seminar Energy and Environmental Controls—Impact on Land Develop¬
ment." Interviews with Mr. Joseph Blocher and Mr. Gerald Korpeck in
Silver Spring, Maryland on September 22, 1976.
31. United Farmworkers of Florida Housing Project, Inc. v. City of Delray
Beach, 493 F.2d 799 (5th Cir. 1974).
32. 436 F.2d 108 (2nd Cir. 1970). "Act of God" or strikes will also excuse
the provision of services for a time if the utility makes a reasonable
effort to restore service. Florida Power Corp. v. Tallahassee, 18 So.2d
671 (1944); Kuhlman Plastics Co. v. Kansas City Power S Light Co., 400
S.W.2d 409 (Mo. 1966).
33. 71 Am. Jur. 2d, State and Local Taxation §§1-8, 15-18; 70 Am. Jur.
2d, Special or Local Assessments §§1-8; McQuillin, Municipal Corporations
§38.01 et seq.
34. Rocky Hill Convalescent Hospital, Inc. v. Metropolitan District, 160
Conn. 446, 280 A.2d 344 (1971); Strahan v. City of Aurora, 35 Ohio
Misc. 37, 311 N.E.2d 876 (1974).
35. Torsoe Bros. Construction Corp. v. Bd. of Trustees of the Village of
Monroe, 375 NYS 2d 612 (1975).
36. Pond, Public Utilities §275; See also Treadway v. Arkansas Louisiana
Gas Co., 196 Ark. 874, 120 S.W. 387 (1938); Turn City Pipe Line Co. v.
Harding Glass Co., 283 U.S. 353, 75 L Ed. 1112, 51 S. Ct. 476 (1931).
Re: Marlton Sewerage Corporation, 60 PUR 3d 223 (N.J. 1956), Re: Valley
Utility Co. 73 PUR 3d 41 (Ohio 1968).
37. Rutan Estates, Inc. v. Belleville, 56 N.J. Super. 330, 152 A.2d 853
(1959) .
38. Hagman, "Windfalls for Wipeouts" ch. 16 Impact Taxes. Boyd, "Pro-statewide
Impact Fees," Janis, "Con-statewide Impact Fees," State Government, Winter
(1975)-
39. Merrilli v. City of St. Clair Shores, 355 Mich. 575, 96 N.W.2d 144
(1959); Daniels v. Borough of Point Pleasant, 23 N.J. 357.; 29 A.2d 265
(1957).
40. City of Dunedin v. Contractors and Builders Ass'n. of Pinellas County,
329 So.2d 314 (Fla. 1976). But see, Broward County v. Janis Development
Corp., 311 So.2d 371 (Fla. App. 1975).
-75-
41. City of Dunedin, id.
42. Western Heights Land Corp. v. City of Fort Collins, 146 Colo. 464, 362
P. 2d 155 (1970); Home Builders Ass'n of Greater Salt Lake v. Provo City,
28 Utah 2d 402, 503 P. 2d 45 (1972); but see, Weber Basin Home Builders
Ass'n. V. Roy City, 26 Utah 2d 215, 487 P. 2d 866 (1971).
43. Assoc. H.B. of Greater East Bay, Inc. v. City of Newark, 18 Cal. App.
3d 107, 95 Cal. Rptr. 658 (1971); see also. City of Mesa v. Home Builders
Ass'n. of Central Arizona, Inc., Ill Ariz. 29, 523 P. 2d 57 (1974).
44. Hagman, Windfalls for Wipeouts.
45. S.S. SO Corp. V. Bernards Tovmship Sewage Authority, 62 N.J. 369, 301
A.2d 18 (1970).
46. Airwick Industries v. Carlstadt Sewage Authority, 57 N.J. 107, 270 A.2d
18 (1970).
47. City of Dunedin, at 320. But see. Beauty Built Construction Co. v. City
of Warren, 375 Mich. 229, 134 N.W.2d 214 (1965); Metro Homes v. City
of Warren, 173 N.W.2d 230 (Mich. App. 1970); Strahan v. City of Aurora,
35 Ohio Misc. 37, 311 N.E. 2d 876 (Ohio Com PI. 1974).
48. See e.g., Va. Code Ann. §§15.1-465, 15.1-466 (1976 Supp.) 1973-74 Op.
Va. Atty. Gen. 342; 10 Univ. Richmond L. Rev. 440, 444 (1976); Cal
Gov't. Code §66477 (1976 Supp.).
49. Anno., 43 ALR 3d 847 (1972).
50. Frank Anguini, Inc. v. City of Cranston, 264 A.2d 910 (R.I. 1970);
McKain v. Toledo City Plan Commission, 270 N.E.2d 370 (Ohio App. 1971);
Compare Board of Education v. Siirety Developers, Inc., 63 111. 2d 193,
347 N.E.2d 149 (1975), with Krugoff v. City of Naperville, 111. App.
3d (1976) .
51. See Development Corp. v. City of Maitland, 267 So.2d 860 (Fla. App.
1972); but see Jenad, Inc. v. Village of Scarsdale, 18 N.Y.2d 78, 271,
N.Y.S.2d 955 (1966).
52. 4 Cal. 3d 633, 94 Cal. Rptr. 630, 484 P,2d 606 (1971).
53. Another California court recently used the same reasoning to approve an
exaction upon conversion of a building into a condominium. Norsco
Enterprises v. City of Fremont, 54 Cal.3rd 488, 126 Cal. Rptr. 659,
54. Cal. Bus. & Profess. Code §11543 (1976); see also Lefcoe at 1089-99.
But see. Board of Supervisors of James City County v. Rowe, 216 Va.
128, 216 S.E.2d 199 (1975).
-76-
55. Golden v. Planning Bd. of the Town of Ramapo, 30 NY 2d 359, 285 N.E.2d
291, 334 NYS 2d 138 (1972).
56. A developer in Montgomery County, Maryland is providing his ovm sewage
treatment plant in order to obtain subdivision approval. The new area
was not scheduled for increased sewage treatment facilities for some
time. Interview with Mr. Gerald Korpeck, attorney in Silver Spring,
Maryland, September 22, 1976.
57- See, Frank Schnidman, "Annexation Agreements," Urban Land 7 (June, 1976).
58. 111. Rev. Stat. ch. 24 §11-15-.1-1 et. seq.; 111. Meegan v. Tinley Park,
52 111.2d.354; 288 N.E.2d 423 (1972).
59. City of Colorado Springs v. Kitty Hawk Development Co., 392 P.2d 467
(1964); Mayor and Council of Rockville v. Brookeville Turnpike Construc¬
tion Co., Inc., 228 A.2d 263 (1967).
60. Morrison Homes Corp. v. City of Pleasanton, 130 Cal. Rptr. 196 (May,
197&) .
61. D. Mandelker, "The Role of the Local Comprehensive Plan in Land Use
Litigation," 74 Mich. L.R. 899 (1976).
62. See e.g., Colo. Rev. Stat. Ann. §31-23-109 (1973); Md. Ann. Code, Art.
663 §3.08 (1970 Repl. Vol.); Montgomery County Code, Art. 85 §67 (1972)
also provides for mandatory referrals of capital projects to Montgomery
County Planning Board.
63. Va. Code Ann. §15.1-456 (1975 Supp.).
«
64. Ca'l. Gov't Code §65300; 65860(a) (1976); Ky. Rev. Stat. Ann. §100.201
(1971); Neb. Rev. Stat. §23-114.03 (1974).
65. Fla. Stat. Ann. §§163.3161-3211 (1975 Supp.).
66. Fla. Stat. Ann. §163.3194(1)(1975 Supp.).
67. Mandelker, "The Role of the Local Comprehensive Plan in Land Use Litiga¬
tion," 74 Mich. L.R. 899, 962 (1976).
68. Colo. , 547 P.2d 230 (1976).
69. Antieau, Municipal Corporation Law §1A.01.
70. McQuillin, 2 Municipal Corporations §7.40.
71. People ex rel. Citizens v. Village of Bloomingdale, 37 111. App. 3d 583;
346 N.E.2d 5 (1976) (action challenging advisability and wisdom of annexa¬
tion) .
-77-
72. An Illinois court has stated that a city's argument that it had an
absolute right to accept or refuse annexation was a "well taken
position." New-Mark Builders Inc. v. City of Aurora, 90 111. App. 2d
98, 233 N.E.2d 44 (1968); see also, City of Colorado Springs v. Kitty
Hawk Development Co., 154 Colo. 535, 392 P.2d 467, 472 (1964)(municipal¬
ity under no legal obligation to annex contiguous territory); see also
Colo. Rev. Stat. §31-8-112 (1973).
73. Telephone conversation with Kirk Wickersham, former City Attorney for
the City of Boulder on October 14, 1976. Colo. Rev. Stat. §31-8-12
(1973). See Adams v. Colorado Springs, 178 Colo. 241, 496 P.2d 1005,
1007 (1972); Aurora v. Andrew Land Co., 176 Colo. 246, 490 P.2d 67
(1971); United Farmworkers of Florida Housing Project, Inc. v. City of
Delray Beach, 493 F.2d 799 (5th Cir. 1974). The Oregon Court of Appeals
recently upheld a water and sewer contract a condition of which was
annexation within 60 days after substantial completion of the indus¬
trial plant (Bell v. City of Corvalis, 551 P.2d 125 (Ore. App. 1976).
74. Colo. , 547 P.2d 228 (1976).
75. Cal. Gov't. Code §35002 (1968); see Note, 23 Hastings L.J. 913 (1972).
76. See e.g., Iowa Code §368.4 (1975); Illinois Rev. Stat., Ch. 24 §11-12-9
(1975); but see. City of Safety Harbor v. City of Clearwater, 330 So.
2d 840 (Fla. App. 1976).
77. Iowa prohibits annexation unless a municipality is able to provide sub¬
stantial municipal services to the new area. Iowa Code §368.17(4) (1975).
78. Colo. , 547 P.2d 230 (1976).
79. Chancery No. 46273, Fairfax County, Virginia, 1976.
80. 56 Cal. App.3d 512, 812 Cal. Rptr. 458 (1976).
81. Id at 460. See also, Niklaus, "New Mexico" Growing Pains," American Way,
October, 1976.
82. 400 F. Supp. 1369, 1384 (D.C. Md. 1975). A pending case involving the
refusal to extend water service in the Circuit Court for Montgomery
County, Md. raises the issue of discrimination based in part on utility
law. De Franceaux Realty Group, Inc. v. Montgomery County & Washington
Suburban Sanitary District, Law no. 44200.
83. Golden v. Planning Bd. of Town of Ramapo, N.Y.2d 359, 285 N.E.2d 291,
334 NYS 2d 138 (1972). The City of San Diego, California has proposed
a Growth Management Progrcim which keys development to adequate public
facilities (R.H. Freilich, 1976). See generally, Clark and Grable,
"Growth Control in California: Prospect for Local Government Imple¬
mentation of Timing & Sequential Control of Residential Development,"
5 Pac. L.J. 570 (1974). Similarly, see Baltimore County. 4 Land Use
Planning Reports 7 (1976).
-78-
84. 38 N.Y.2d 102, 378 N.Y.S.2d 686, 341 N.E.2d 236 (1975).
85. Construction Industry Assoc. of Sonoma County v. Petaliima, 522, F.2d
897 (9th Cir. 1975).
86. 375 F. Supp. 574 (C.D.C. 1974).
87. 522 F.2d at 902.
88. See also. Builders Assoc. of Santa-Clara-Santa Cruz Counties v.
Superior Ct. of Santa Clara County, 118 Cal. Rptr. 158, 528 P.2d 582
(1974) (approving zoning ordinance prohibiting rezoning for resi¬
dential development for overcrowded school districts for two years).
89. S.F. 23222 (Supreme Court Cal. December 17, 1976).
90. 254 Md. 59, 254 A.2d 700 (1969).
91. See e.g.. County Council for Montgomery County v. District Land Corp.,
274 Md. 691, 337 A.2d 712 (1975). But see, Maryland-National Capital
Park and Planning Commission v. Ronseberg, 269 Md. 520, 307 A.2d 704
(1973) (inadequate school facilities insufficient grounds for rejec¬
tion of proposed svibdivision) . In 1973, Montgomery County adopted an
adequate facilities ordinance. Montgomery County, Maryland Code §50-24
(1975 Supp.). See generally, Brower et al.. Urban Growth Management
Through Development Timing (1976). In 1976, the Governor of Maryland
approved a resolution establishing an Adequate Public Facilities
Commission. Maryland and House Resolution No. 73 (May, 1976). There
are many critics and proponents of this approach. Interviews with
Randall Scott, formerly general counsel for Maryland National Capital
Park and Planning Commission, September, 24, 1976; Richard Tustian,
Director of Planning for Maryland National Capital Park and Planning
Commission. September 22, 1976.
92. Christine Building Co. v. City of Troy, 367 Mich. 508, 116 N.W.
816 (1962); Bishe v. City of Troy , 381 Mich. 611,166 N.W.
(1969) .
93. 215 Va. 434, 211 S.E.2d 48 (1975).
94. 216 Va. 49, 216 S.E.2d 33 (1975).
95. 30 N.Y.2d 359, 285 N.E.2d 191, 344 N.Y.S.2d 138 (1972).
96. 38 N.Y.2d 102, 378 N.Y.S.2d 686, 341 N.E.2d 236 (1975).
97. Colo. , 547 P.2d 228 (1976).
98. Banfield, The Unheavenly City Revisited, ix (1974) .
99. George J. Stigler and Claire Friedland, Journal of Law and Economics 1
(1962).
-79-
100. Javins v. First Nat'l. Realty Co]^p., 428 F.2d 1071 (DCCA 1970) (apply¬
ing principles of contract law to a property law problem to find an
implied warranty of habitability); MacPherson v. Buick Motor Co., 217
N.Y. 382, 111 N.E. 1050 (1916).
101. Associated Home Builders of Greater Eastbay, Inc. v. City of Livermore,
S.F. 23222, (Supreme Court Gal. December 17, 1976).
102. A Growth Management Program for San Diego, 6-3 (July, 1976) .
103. Snyder v. City of Lakewood, 542 P.2d 371 (Colo., 1975); Fasano v. Board
of County Commissioners of Washington County, 264 Or. 574, 507 P.2d
23 (1973); Fleming v. City of Tacoma, 81 Wash.2d 292, 502 P.2d 327
(1972).
104. Bosselman, Feurer and Siemon, The Permit Explosion (ULI 1976) .
-80-
CHAPTER IV: ISSUES FOR FURTHER RESEARCH
Many local governments have recognized the need to coordinate capital
facilities decisions with larger community goals and objectives. Despite
the lack of guaranteed secondary effects, communities have made assump¬
tions about effects and have developed mechanisms to make their facili¬
ties serve their development goals. Published reports, articles, and
studies indicate that some communities have begun experimenting with more
sophisticated or innovative systems. The shortcomings of this litera¬
ture are evident. CIPs, manuals, plans, and ordinances published locally
were never intended for the education of the planning profession; their
purpose is limited, their readership local. Published articles, too,
describe local experience; they often provide greater detail about the
local planning process but do not for the most part generalize. What is
missing from much of the literature describing the attempts to link capi¬
tal facilities planning to development goals are descriptions of adminis¬
trative structures and processes in sufficient detail to serve as a guide
to other communities. For descriptions of the ways things work in a par¬
ticular area we must approach the participants directly.
Nevertheless, existing published material does allow some generali¬
zations to be made about major issues to help define the areas for fur¬
ther investigation.
Four Major Development Goals
One can conveniently generalize about the development issues by
classifying them under the development goals that capital facilities
are intended to support. Four major goals are identified: (1) limit¬
ing growth; (2) avoiding scattered development; (3) stimulating private
investment; (4) rehabilitating or stabilizing neighborhoods. These
four goals are not novel, nor are they necessarily exclusive. For
example, a suburban county may hope concurrently to limit new devel¬
opment on the suburban fringe and to direct investment to the core
city by the judicial restriction or provision of public facilities.
The pursuit of these four goals appears to raise particular questions,
which while never answered completely, appear to be at least addressed
in the planning programs of some communities.
The limiting of growth
Of the four goals, the limiting of growth is the most recent and is
the goal most likely to be subject to controversy and legal challenge.
In brief, most systems that are seeking to limit growth through the
meinipulation of capital facilities have these characteristics: permis¬
sion for new development is dependent on the existence of certain public
facilities, or on the promise that such public facilities will be built
by the public sector according to a given schedule. The schedule is
often spelled out in the community's capital improvements program. The
community may in addition permit development to occur sooner than pro-
-81-
grammed if the developer himself assumes the costs of providing the re¬
quired facilities. Most such plans are limited to residential develop¬
ment only. Legal questions appear to arise if a community attempts to
limit development through capital facilities-related ordinances without
providing a plan of its own for future facilities. In conjunction with
restriction of development related to provision of capital facilities,
some communities attempt to set a numerical quota for future development,
and some provide development incentives for low-income housing or hous¬
ing with other characteristics desired by the community.
Here the critical questions appear to hinge on the community's
power to withhold public facilities to prevent or forestall new devel¬
opment. Residential development cannot occur without access to trans¬
portation, water, and sewage disposal. Insofar as government controls
these facilities, it can totally control development. But seldom does
a particular jurisdiction have total authority; special districts or
adjacent governmental units may provide some of the facilities; devel¬
opers may be allowed to supply their own facilities; the community may
be legally bound to supply facilities, especially when it has an exclu¬
sive franchise; or alternative facilities in the private sector may be
available, such as septic tanks or private roads.
The encouragement of compact growth
Avoiding scattered or leapfrog development, a goal which has fiscal
as well as environmental and esthetic motives, is not new. Planning/
management systems with this goal have many of the same characteristics
as growth-control systems without necessarily having the conscious and
deliberate intent to put a ceiling on development. Capital facilities
are used to achieve this goal by limiting their provision to locations
contiguous to areas already being serviced.
Here, there are difficult issues concerning the criteria for set¬
ting the boundaries for service areas and the ways in which communities
deal with applications for development beyond the service area.
Jurisdictional questions in "compact growth" communities are similar
to those in growth-control communities: the key facilities are not al¬
ways in control of a single government.
The encouragment and stimulation of development
This goal is time-honored in vigorously expanding communities , in
stable communities , and in declining communities as well. The public
sector provides capital facilities (as well as other incentives) in these
cases to attract private development in general, or a private business or
industry in particular, in the hope that eventual benefits will accrue to
the community at large.
Issues that arise in these situations include the difficulty of
holding the private investor involved in a negotiation process publicly
-82-
accountable, and the amount of discretionary power the chief executive
can have to negotiate in a process which is supposed ultimately to de¬
pend on an accepted plan. Furthermore, costs and benefits are difficult
for the community to know; for example, are the public expenses involved
in providing a special access road to a new factory balanced by the in¬
creased taxes and employment which the factory brings to the community,
or will there be secondary expenses?
The use of capital facilities to stabilize or rehabilitate tar¬
geted neighborhoods
This goal, although not uncommon in the past, appears to be more
prevalent today than it was in the 50's and 60's when large scale clear¬
ance and renewal projects were a more popular approach to handling typi¬
cal big city problems. Less money for large-scale projects, as well as
disillusionment with the effectiveness of such programs contribute to
the change in approach. The public sector at all levels appears to be
more committed to preservation of existing neighborhoods.
Targeting of capital funds for specific neighborhoods can take an
extreme form when the selection of one neighborhood means that another
neighborhood will have to do without. Communities are trying to deal
more openly with questions of what constitutes a salvageable neighbor¬
hood and what does not and are attempting to use more objective stan¬
dards than formerly. These issues demand considerably more investiga¬
tion.
Seven Key Issues
What the literature tells us about the mechanisms chosen to pursue
these goals is, as-we have indicated, tantalizing but neither detailed
enough on the one hand, nor general enough, on the other. It is not
difficult to understand the problems that motivated communities to design
new ways of dealing with their capital investments; the problems are
common to many communities. It is far more difficult to understand how
local administrative structures were altered to deal with these problems.
Can we assume from examining a unified plan and CIP, for example, that
the unified form of the plan means that the operations of planning, bud¬
geting, and programming have become equally unified? How have the plan¬
ners (who are accused of being financially naive and unrealistic), and
the budget officers (who are considered too narrowly concerned with pres¬
ent cost-accounting) been brought together to develop a new program? The
specifics remain to be discovered.
The problems accompanying the use of capital facilities as a means
of achieving development goals vary in emphasis depending upon the parti¬
cular goal pursued. Nevertheless several major questions are raised from
the analysis of the literature that apply to all systems and goals. These
questions will be directly investigated as the study proceeds.
What is the perceived role of politics in making public capital
investment decisions?
Time after time the literature characterizes project selection, pri¬
ority-setting, and other steps taken in making capital investment
-83-
decisions as orderly and based on articulated development objectives. How
the objectives were reached, and what occurred within the political system,
is not described. When local governments report the ways that their systems
link development objectives with capital investments, are they "telling it
like it is" or are they "telling it the way it ought to be?" Clearly, we
must investigate the processes as reported by those involved from all per¬
spectives, including the political.
What is the effect of the programs and policies of other levels of
government on local options in developing programs?
Local priorities are often determined on the basis of available fed¬
eral and state money; uncertainty over federal funds may limit effective
development programming; local governments may be subjected to conflicting
or rapidly changing state and federal requirements; CDBG may skew local
capital expenditures. Special districts may also have their own develop¬
ment programs.
Conflicts between local and regional, federal and state projects
and policies appear to weaken management systems at all levels. For
example, federal policy to concentrate on building new sewer systems
rather than upgrade or expand existing systems may promote suburban
development at the expense of the central cities, regardless of local
or regional policies. Federal sewer policy is said to be as important
a determinant of development today as federal highway policy was in the
sixties. A state highway project might be questionable from a city per¬
spective for making it easy for workers to commute and thus accelerate
the city's declining populations. At a regional level, a single juris¬
diction within a region may cause a problem when it makes a unilateral
decision to limit its growth and thereby displaces development to neigh¬
boring communities, compounding the sprawl it wished to control.
It appears from the initial research of this study that before work¬
able management systems involving capital facilities can be developed,
the consequences of the policy of one level of government for the pro¬
grams and policies of others will need to be made clear. While it is
obvious that different levels of government have their own policies and
action agendas, conflicts may in some cases be unintentional, and may be
avoidable once the injjlications of policies are clarified.
How do local jurisdictions perceive the legal implications of link¬
ing capital investments with development objectives?
While this interim report indicates the few cases that appear to
offer a basis for defining the limits of the law in this area, the degree
to which communities themselves feel constrained by the law, and whether
efforts are being made to change the law where it appears to be constrain¬
ing is not known. Does, for example, knowledge of "favorable" decisions
encourage experimentation with new programs, or do communities hesitate
to try a new program for fear of legal challenge?
-84-
How do local jurisdictions cope with dispersed control of facil-
ities?
The ability of local government to manage development when it does
not have direct control over some of the key development-influencing
capital investments, emerges as a key issue. Some general-purposes
local governments have entered into agreements with special districts
and neighboring governments to coordinate the provision of services and
facilities. Others have worked out informal approaches. In yet other
governments failure to coordinate investments remains a critical issue .
Councils of government and other regional agencies have, in some in¬
stances, tried to serve a regional coordinating function with varying
degrees of success. Actual or proposed solutions to interjurisdictional
problems merit investigation.
What is the effect of the tightening fiscal base on public capital
investment decisions?
While the lack of funds clearly restrains local options, it may
force inventive approaches to decisions about where to spend—or not to
spend—the little available money, and for improving management. The
literature does not address this directly.
How do capital investment decisions and other land use control
techniques reinforce one another?
How do adequate facilities ordinances, urban limit lines, the CIP,
and zoning controls work with each other within a total development
management system? Potential loopholes in a system may diminish its
effectiveness; for example, questions can be raised about the thwarting
of development policy which might occur when developers build their own
iitprovements. Since these systems are relatively new there is little
experience to report in the literature.
How are standards of adequacy and levels of service determined?
Communities that tie development permissiorf to the availability of
adequate facilities need to define levels of adequacy and may need to
provide justification for them. Levels of service must be agreed upon.
Similarly, mature cities concerned about maintaining the existing infra¬
structure need to establish standards of adequacy as a basis for deter¬
mining the location and nature of additional investments. Studies jus¬
tifying standards may provide legal support if challenges are made on
the basis of discriminatory or inequitable treatment. Some communities
wrestling with these difficult problems have begun working on the devel¬
opment of supportable standards.
These key questions have emerged both directly from the study of
the literature and from the many comments provided by our Advisory Com¬
mittee, consultants to the project, and by local government officials
across the country who have provided material for this project. It is
-85-
anticipated that direct contact with local government officials in the
next phase of this study will begin to provide us with exair^jles of the
ways that some jurisdictions respond. Readers of this report are en¬
couraged to add their comments and to supply additional information.
-86-
APPENDIX A; THE CAPITAL IMPROVEMENTS PROGRAM
This Appendix is an overview of the capital improvements program and
the process by which it is prepared and adopted by local government. The
sources of this material are manuals and studies (see Appendix B) and a
review of many individual CIPs. It is intended to supply basic defini¬
tions and descriptive information to those unfamiliar with this litera¬
ture.
1. What is a Capital Improvements Program?
The National Council on Governmental Accounting has defined the
capital improvements program as follows:
A plan for capital expenditures to be incurred each year over
a fixed period of years to meet capital needs arising from the
long-term work program or otherwise. It sets forth each proj¬
ect or other contemplated expenditure in which the local govern¬
ment is to have a part and specifies the full resources esti¬
mated to be available to finance the projected expenditures.1
Capital improvements programs vary from the simple to the extremely
complex, depending on the size of the governmental unit and the sophis¬
tication of the participants. The time period covered by the CIP may
range from one year to 20 years; the majority cover six years. In many
cases, the first year of the CIP is called the capital budget. A capital
budget can generally be thought of as the link between the longer term
capital improvements program and the current annual budget and appropri¬
ation process used by most governmental units. Most governmental units
update the CIP annually.
The functions of the CIP are generally:
• Linking a local government's master plan and fiscal plan to physi¬
cal development;
• Estimating capital requirements;
• Scheduling all capital projects over a fixed period with appro¬
priate planning and implementation;
• Budgeting priority projects and developing a project revenue
policy for proposed improvements;
• Coordinating the activities of various departments in meeting
project schedules;
-87-
• Monitoring and evaluating the progress of capital projects; and,
• Informing the public of projected capital improvements.2
2. What is a Capital Improvement Project?
The definitions of a "capital improvement project" vary between
different sized governmental units and different levels of local govern¬
ment. A capital improvement project is most broadly defined as any
major project requiring the expenditure of public funds (over and above
operating expenditure of public funds) for the purchase, construction or
replacement of the physical assets of the community.3 in most cases this
includes land necessary for a project. Generally, a capital improvement
project has a "useful life" of over one year and has a significant value
which may be defined from $5,000 upward, depending on the size of the
governmental unit. Projects may range from the costly airports, highways,
and sewers and treatment plants, to hospitals, fire and police stations,
parks, tennis coiirts, and street lights.
3. What is the Extent of Capital Improvements Programming by Local
Covernmen t s ?
There are no recent statistics on how many local governments do
capital improvements programming. The summary results of an MFOA survey
undertaken in 1966 are shown in Table 1.^ A total of 245 out of 482 juris¬
dictions surveyed reported the use of capital budgeting techniques. Of
this total, 193 governments (79 per cent) reported the use of a capital
improvements programming procedure. (This includes a small portion of
Canadian jurisdictions).
CIPS are often prepared by general purpose units of government (co\in-
ties, cities, towns, etc.). In some cases, the governmental unit is a
combined city-county such as the City and County of Honolulu or Indiana¬
polis-Marion Coiinty. Special districts may also undertake capital improve¬
ments programming. In a few instances, regional councils are preparing
CIPs, largely as compilations of local programs, in order to help reduce
conflict and overlap among jurisdictions. Some are being prepared on an
experimental basis.
A number of cities and counties include as appendices to their own
CIP documents the CIPs of coterminous special districts such as schools
or park districts.
4. What Does the Capital Improvements Program Document Look Like?
A review of published CIPs indicates considerable variation in foinnat.
In some localities, the document may be little more than a list of proj¬
ects and their estimated cost. Sources of funding may or may not be in¬
cluded.
-88-
Table 1.
CAPITAL BUDGETING PRACTICES IN THE UNITED STATES AND CANADA
According to Number of Governmental Units Reporting
5
Cities
11 Cities
l6 Citiep
'S Cities
69 Zities
17 Cities
19 Cities
21 Cities
153 Cities
19
21
2*»5 Unite
Over
300,000-
250,000 -
100,000 -
50,000 -
25,000 -
10,000 -
Under
22
School
Special
1.000,000
1.000.000
500,000'
250.000
100,000
50.000
25.000
10.000
Totals
Counties
Districts
Districts
Totals
Report! "t: Governmental Units
Continental United States
5
11
13
22
u
16
21
163
22
19
21
225
Conmonwealth of Puerto Rico
—
—
1
1
—
—
1
Canada
—
—
5
2
5
6
3
—
19
—
—
~
19
Orderly Procedure £stablisbed
Tea
5
11
15
20
5^
11
11
15
1^^2
18
13
20
193
No
—
—
1
5
15
6
8
6
^*1
k
6
1
52
Method of fstablishaent
State or Provincial Law
1.
2
1
1
2
6
k
1
5
16
Charter
3
If
3
, 1
7
—
1
1
21
3
1
25
Ordixiance
1
2
1
1
5
3
1
3
15
15
Resolution
—
2
1
2
4
2
—
2
12
3
2
3
25
£xec. or Admin* Order
1
2
6
1^
29
3
6
7
68
2
6
5
81
Coabinatioa of above
—
—
3
2
6
2
1
1
15
1
2
2
20
Official Resoonsible for Initiation
Chief Admin. Officer
1
3
1
8
37
10
12
13
85
1
11
11
108
Planning Director
2
1
6
7
9
—
1
—
26
1
2
29
Budget Officer
1
1
1
1
1
1
—
1
7
8
1
1
17
Biblic Works Director
or City &igineer
—
1
—
—
2
1
2
—
6
.
r,
Finance Director
1
1
2
k
7
—
1
1
17
17
Other Official or Body
—
2
1
1
3
—
—
5
10
1
5
U
18
Combination of Above
—
2
5
3
8
3
P
1
?if
6
1
5
y
Denartoental Priority Lists Requested
1 year
—
—
2
3
19
6
8
7
5
5
6
61
2 years
—
—
--
—
—
—
1
2
3
1
6
3 years
—
—
1
1
U
2
—
1
9
—
1
10
^ years
1
—
—
—
1
—
—
2
__
2
5 years
1
2
• k
7
17
3
if
1
39
5
1
5
50
6 years
3
9
7
12
2^
5
7
71
5
a
6
90
10 years
—
—
1
1
1
—
—
—
3
2
5
Combination of above
—
—
1
1
3
2
—
2
9
1
2
~
12
Standard Forms Show:
ft'oject Costs
5
5
12
13
25
1
5
5
69
6
3
(»
82
Ht^e It Operation Costs
5
5
10
11
19
1
3
58
6
3
3
70
Inventory of Unfinanced Pro.lects
Inventory Compiled
5
9
13
lU
55
5
7
5
93
12
9
13
127
Arranged by yearly priorities
5
8
1?
16
39
11
9
9
109
13
6
15
l"*?
Table 1 (continued)
CAPITAL BUDGETING PRACTICES IN THE UNITED STATES AND CANADA
According to N\amber of Governmental Units Reporting
5 Cities
11 Cities
if Cities
25 Cities
69 Cities
17 Cities
19 Cities
21 Cities
123 Cities
19
21
2V5 Units
Over
500,000 -
250,000 -
100,000 -
50,000 -
25.COO -
10,OX -
Under
22
School
Special
1.000.000
1,000.000
500.000 .
250.000
100.'XX)
50.000
25.000
10,000
Totals
Counties
Districts
Districts
Totals
CacltaX Ifflprovem«nt Proicram
Recoonended by CAO
2
6
15
20
11
11
12V
11
12
13
160
Assisted by Citizens' Com.
3
6
7
9
17
3
5
2
52
V
5
1
62
Assisted by Adnin. Com.
1
6
6
15
30
9
10
12
89
9
15
10
123
Tentative Capital Imp. Program
Recoimended by CAO
1
3
1
3
19
6
8
7
V8
5
5
6
6V
Final Priority Determined by
Legialative Body
I
5
11
uo
10
12
If*
97
11
11
6
■125
City Planning Comnissioo
—
U
1
6
9
1
2
1
2k
2
—
1
27
Public Works Priority Con.
1
2
—
—
3
1
—
7
—
—
—
7
Board of Estimate
—
1
I
..
2
--
—
—
2
Citizen's Committee
—
1
1
—
—
—
1
Other Body
—
1
2
1
2
6
1
1
6
IV
Ccaibination
1
—
1
—
—
1
1
—
V
—
—
—
k
First fear Included in
15V
Annual Budaet
k
8
10
9
^3
12
12
lU
112
15
13
iV
Annual Capital Imp. Proaram
Recommended by Above Body
1
3
2
5
13
3
2
3
32
2
k
2
vo
Incorporated in Annual Budget
2
5
1
7
16
2
6
3
VO
2
5
3
50
Appropriations based on
1V8
ftraiect Amounts
5
5
8
16
kl
11
11
17
liv
12
12
10
Other Authorization Rea'd
llV
before start
3
k
7
10
35
7
9
11
86
6
9
13
Who Grants such Authorizations
Legislative Body
1
5
6
12
32
9
Itf
9
88
V
9
12
113
Chief Admin. Officer
1
5
2
1
2
11
1
1
2
15
Other Officer or Body
3
1
2
1
2
1
—
—
10
—
V
2
16
Combination
—
2
—
1
3
—
1
—
7
1
1
—
9
Unencumbered Pro.iect f\inds
Reappropriated Next Year
k
6
9
13
^5
11
15
17
120
13
159
Project status reviewed:
After proposed budget
submitted
3
U
6
5
20
6
<
o
59
6
6
k
75
Prior to submission of
27
proposed budget
1
k
h
11
22
5
7
6o
7
ft
12
Reappropriations included
7^
ll6
in proposed budget
1
2
5
12
30
10
10
8
10
13
15
At the other extreme, the document is presented as the overall strat¬
egy or policy statement of the unit and may be merged with the comprehen¬
sive plan as, for example, in Baltimore. The amount of information pro¬
vided in such a CIP document may extend well beyond a presentation of
projects, costs, and even the project's relationship to the comprehensive
plan. CIP documents may include a description of the process of project
selection; the role of each actor in the process; a detailed financial
plan; and an analysis of alternative methods of financing capital improve¬
ments with their respective advantages and disadvantages. Futhermore,
the overall picture of the city's financial "health" may be presented.
5. The Coordinating Function
The coordinating role of capital programming is usually assumed by
one of four potential agencies: (1) the Planning Commission and/or Plan¬
ning Department; (2) a central management type of agency such as an Office
of Management and Budget; (3) the Finance Department; or (4) the CIP Co-
ordinating Committee, which may be made up of department heads and direc¬
tors of planning, budget, or finance. In some localities, the central
management agency may report directly to the chief executive; in others
it may serve as the planning staff to the CIP Coordinating Committee.
6. The Process of Preparing the CIP
In general, forms are distributed from a central point, capital pro¬
posals are made by department heads, returned for review by some kind of
review committee which may include people from "a number of government
functions and positions, compiled into a tentative program, presented to
the commvinity for review, reviewed by the Chief Executive, and forwarded
finally to the legislative body for approval and adoption. The process
normally is amplified, regularized, and set in a formal framework by regu¬
lations, a calendar, standard forms, and sometimes a manual.
7. Review
In some cases both the planning and finance review may be performed
by the central agency itself; in other cases the review may be delegated
to the appropriate agency.
Depending on who is in charge, and whether the CIP is viewed as a
planning, finance, or management document, the review may emphasize
certain factors over others.
a. The Financial Review
The finance officer, may view the CIP primarily as a municipal fi¬
nancial management tool.
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A financial plan may be included in the CIP document. This plan
spells out the policies for financing the CIP- It may explain why a
special district has or has not been included, or why one method of
financing has been favored over another.*
Many governmental units have developed an awareness of the in^jact
that operating and maintenance costs associated with capital improve¬
ment projects can have on future operating budgets. For example, a
labor intensive project such as a fire station could require annual op¬
erating costs in excess of the one-time capital cost required to con¬
struct the facility. The cost of amortizing street improvements lies
largely in the cost of debt service; the cost of amortizing a library,
hospital, or recreation center carries with it major increases in cost
for operation and maintenance.
Many CIP procedures require estimates of future operating and main¬
tenance costs to be provided along with the capital cost of the project.
The finance literature as well as CIP documents and instruction
manuals describe typical methods of finance.
(1) Current Revenue (Pay-As-You-Go)
Pay-as-you-go is the financing of improvements from current
revenues such as general taxation, fees, service charges, special
funds, or special assessments.
t2) Reserve Funds
In reserve fvind financing, funds are accumulated in advance for
capital construction or purchase. The accvimulation may result from
surplus or "earmarked" operational revenues, funds in depreciation
reserves, or the sale of capital assets.
(3) General Obligation Bonds
Some projects may be financed by general obligation bonds.
Through this method, the taxing power of the jurisdiction is pledged
to pay interest upon, and retire the debt. General obligation bonds
can be sold to finance permanent types of improvements such as schools,
municipal buildings, parks, and recreation facilities. Voter approval
may be required.
(4) Revenue Bonds
Revenue bonds frequently are sold for projects, such as water
and sewer systems, that produce revenues. Such bonds usually are
not included in state imposed debt limits, as are general obligation
bonds, because they are not backed by the full faith and credit of
the local jurisdiction, but are financed in the long run through
service charges or fees. The interest rates are almost always higher
than are general obligation bonds' interest rates, and voter approval
is seldom required.
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(5) Lease-Purchase
Local governments using the lease-purchase method prepare speci¬
fications for a needed p\jblic works project that is constructed by a
private company or authority. The facility is then leased by the
municipality. At the end of the lease period, the title to the fa¬
cility can be conveyed to the municipality without any future pay¬
ments. The rental over the years will have paid the total original
cost plus interest. This method has been used successfully in park¬
land purchases.
(6) Authorities arid Special Districts
Special authorities or districts may be created, usually to
provide a single service such as schools, water, sewage treatment,
toll roads, or parks. Sometimes they are formed to avoid restric¬
tive local government debt limits and as a way to finance facilities
serving more than one jurisdiction. They may be financed through
revenue bonds retired by user charges although some have the power
to tax to raise funds.
(7) Special Assessments
Piiblic works that benefit particular properties may be financed
more equitably by special assessment, i.e., paid by those who direct¬
ly benefit. Local improvements often financed by this method include
street paving, sanitary sewer, and water mains.
t8) State and Federal Grants
State and federal grant-in-aid programs are available to finance
a number of programs. These may include streets, water and sewer
facilities, airports, parks and playgrounds, etc. The cost of fund¬
ing these facilities may be borne completely by grant funds or a
local share may be required. Federal General Revenue Sharing and
Community Development Block Grants have given local governments more
choice in how to spend their grant money. Much of this money has
been used to finance capital improvements.
(9) Tax Increment Financing
Tax increment financing may be used to provide front-end funds
in an area where large-scale redevelopment is feasible. A district
around the proposed development is designated with a tax base equi¬
valent to the values of all the property within the area. The tax
revenues paid to taxing units are computed on the initially estab¬
lished tax base during the redevelopment period, which is usually
the expected life of the project. The area is then redeveloped
using funds provided by the sale of tax increment bonds. These
bonds are sold by the municipality or specially created taxing dis¬
trict for acquisition, relocation, demolition, administration, and
site improvements. Because of the higher value of the newly devel-
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oped property in the district, more tax revenue is collected and the
tax "increment" above the initially established level goes into a
fund to retire the bonds. After the development is completed and
bonds are retired, the tax revenues from the enhanced tax base are
distributed normally-
b. Planning Review
As discussed at length in Chapter I, the CIP process may be part of
an ongoing planning process employed by the local government. The role
of the planner in the process may either be that of initiator of projects,
reviewer or overseer of the entire process. Moak and Hillhouse, authors
of a standard text in municipal finance, view the planning role as more
dominant than the role of the finance office.
If the finance staff and the planners both report to the
same chief administrator or executive, the weight of the
reasoning is in favor of placing responsibility for inte¬
gration and for preparation of the document upon the plan¬
ners. The finance staff would have primary responsibility
for the finance side of the program and the planners, re¬
sponsibility for the physical (or capital improvement)
side.^
8. Approval and Adoption of the Program
The review and adoption of the CIP by policy makers, first the chief
executive and then the city council, complete the CIP process.
a. Role of the Chief Executive
The chief executive (mayor, city manager, or county manager) usually
assumes the major administrative responsibility for the formulation of
the capital improvements policy and may recommend projects to be included
in the program.
The degree to which the chief executive participants in programming
depends to a great extent upon local government structure and the assign¬
ment of powers by statute, charter, and ordinance. Thus, the role of the
chief executive will vary substantially among council-manager, commission,
weak mayor-council, and strong mayor-council forms of city government.
Beyond formal authority the chief executive may also set the tone
for the CIP process by the importance he places on it and by setting out
the policies by which CIP projects should be formulated. During the pre¬
paration, he may provide review and input and act as the link between the
council and the program administrators. At the completion stage, he may
send the document to the city council for review and approval.
Michael J. White and Scott R. Douglass, in a study of CIP processes,
found that the chief executive's participation varied from relatively full
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control to a substantial degree of disengagement from substantive issues.6
In one community, the chief executive worked through an informal structure
composed of himself and two trusted officials rather than the formal CIP
committee. In this case the chief executive was the "central decision
maker."
Alternatively, the chief executive may be the central decision maker
or an "influencer." A chief executive may seek to affect outcomes only
on major program issues. The chief executive's position on issues and
programs may be well-known to planners and budget officers if he has
been in office for a long period. Department heads may anticipate the
chief executive's goals and respond accordingly.
The final role is that of "process monitor." The chief executive
sits on no review committee and is formally involved only toward the
very end of the process. The executive's concerns are with matters of
coverage and coordination and the character of the review.
b. Role of the Governing Body
The community's governing body usually has the official role of adopt¬
ing, modifying, or rejecting the program or individual projects. In the
exercise of these official fiinctions, legislators necessarily recognize
the political nature of the document and the interest of their constitu¬
ents. In addition to their votes and participation in legislative hear¬
ings, individual representatives may also become directly involved in the
preparation of the program as members of the planning commission or a
special capital improvements committee.7
In some jurisdictions, adoption of the multi-year CIP also includes
adoption of the first year's program as the annual capital budget.
Moak and Hillhouse suggest that:
Councilmen may see in these processes an instrument for estab¬
lishing a fairly even level of capital outlays from year to
year in order to achieve ... a more stcible property tax
rate.^
Philadelphia. The CIP document for Philadelphia offers and example
of the role a City Council may play.
City Council conducts its own hearings with each of the depart¬
ments, followed by public hearings. After these deliberations.
Council can delete projects from the Program. It cannot make
other changes until it requests and receives the comments of
the City Planning Commission; these comments, however, are not
binding upon the Council. Council adopts the final Capital
Program and the Capital Budget.^
Dayton. The Dayton city commission provides overall policy guidance
to the capital investment process by establishing program strategy issues.
-95-
The city manager and his staff review and respond and provide status re¬
ports to the commission to ensure that the city is properly interpreting
the program strategy issues and the proper criteria are applied in making
recommendations. Department heads are provided with the program strategy
issues in order to guide their formulation of the programs. The process
concludes with the commission approving a program document. After adop¬
tion, the city commission establishes program strategy issues for the
next year.10
Forth Worth. Morris C. Matson, Assistant City Manager for Finance,
describes the role of the council in Fort Worth as follows:
The printed draft is . . . distributed to City Council mem¬
bers for review and study and a work session is scheduled
for the staff and Council to discuss the proposed CIP and
to determine the course of action to be taken in distribut¬
ing it to the public. Based on this work session, the City
Council sets a schedule of public meetings and hearings
with the Sector Planning Councils to discuss the proposed
CIP.
The public meetings . . . are explanatory and informative
in nature with a request for feedback and proposals for
changes where appropriate.
A summary report is prepared describing the input of the
citizens and this report is provided to the Council mem¬
bers for use in their deliberations over the final CIP-
Once a decision has been made by the Council as to the
projects to be included, a decision is made cdx>ut a
future bond election. The council must authorize the
bond sale.11
c. Role of Policy Makers and Politics
Moak and Hillhouse recognize that the CIP process is, in part, a
political process. They state:
Pressures from various segments of the public can serve to
enlighten elected officials as to what is wanted. The Chief
Executive and the Council have political leadership respon¬
sibilities. Their expertise lies in assessing the politi¬
cally feasible, in adjudicating among competing pressures,
and in gaining consent.12
Cogger and Krumholz, describing the CIP process in Cleveland, try to
catch the flavor of the "politics" of CIP. They state:
Cleveland's City Covincil is composed of thirty-three coun¬
cil persons elected by ward for two-year terms. Since
certain capital improvements have a high degree of public
-96-
visibility, council persons have a considerable stake in
the allocation of the City's capital resources. They are
willing to trade votes on a wide range of issues for the
construction of a recreation center or fire station, the
rehabilitation of a playground or health center, the pav¬
ing of several streets, or the provision of sewer improve¬
ments in their wards.
It is likely, too, that legislative representatives are equally inter¬
ested in seeking to block undesirable projects such as a highway which
may bisect their districts.
While the literature occasionally makes reference to the politi¬
cal aspects of the CIP process, it does not adequately describe the
nature of political involvement nor its effect on development policies.
d. Citizen Participation
The role and influence of citizen participation of the CIP decision
making process is as varied as the process itself. It may range from no
involvement, to what is described by Montgomery County, Maryland, as
"citizen participation every-step-of-the-way." There are many possible
points of involvement. In the project formulation state, citizens' con¬
tributions to sector plans, as is the case in Fort Worth and Montgomery
County, may influence department requests. Citizen surveys may have in¬
fluence in shaping city council policy, as is the case in Dayton. Citi¬
zens may be required to review the CIP as part of a larger review func¬
tion. Citizen participation is mandated for such programs as the Commun¬
ity Development Block Grant program. At the approval stage, the city
covmcil may hold public hearings. The method of financing, particularly
in the case of general obligation bonds, may require voter approval.
It would be difficult to report any general findings relative to the
direct influence of citizens on the CIP. However, many local governments
are placing citizen participation in a formalized setting which permits
the citizen to be an initiator, reviewer, advisor, or approval authority.
Clearly, the end of the formulation process for many capital improvements
is the financing stage. Voters have the final word when they accept or
reject various bond referendvims offered to them for passage.
-97-
NOTES
1. National Council on Governmental Accovmting, Governmental Accounting,
Auditing, and Financial Reporting (Chicago: "Municipal Finance
Officers Association, 1968), p. 155.
2. City of San Bernadino, CIP Manual of Instruction, (San Bernadino:
1974), p. 1.
3. Denver Regional Covincil Governments, Capital Improvements Programming
for Local Governments (Denver: 1975), p. 1.
4. George A. Terhune, Capital Budgeting Practices in the United States
and Canada (Chicago, Municipal Finance Officers Association, 1966),
pp. 11, 12.
5. Lennox L. Moak and Albert M. Hillhouse, Concepts and Practices in
Local Government Finance (Chicago: Municipal Finance Officers Asso¬
ciation, 1975), p. 110.
6. Michael J. White and Scott R. Douglass, "An Interpretation of Capital
Programming as a Political Process in No-Growth Municipalities,"
(American Political Science Association Conf., 1975), pp. 6-7.
7. In jurisdictions with a commission forum of government, individvial
commissioners may participate through the departments they super¬
vise.
8. Moak and Hillhouse, op. cit., p. 101.
9. Philadelphia City Planning Commission, Capital Program 1976-1981,
(Philadelphia: 1976), p. 7.
10. Dayton Office of Management and Budget, 1776-1976 Program Strategies
(Dayton, Ohio: February, 1976).
11. Morris C. Matson, "Capital Budgeting—Fiscal and Physical Planning,"
Government Finance, 3 (1976), p. 45.
12. Moak and Hillhouse, op. cit., p. 101.
13. Janice Cogger and Norman Krumholz, "The Capital Improvements Program¬
ming Process in Cleveland: Myth and Reality," (Chicago: American
Society of Planning Officials Conf., 1975), p. 4.
-98-
APPENDIX B: BIBLIOGRAPHY
1) CIP: Manuals and Backgrovind Articles
Most of this literature is concerned with the technical details of the subject.
Ihis includes descriptions on how to construct a capital budget, the various
justifications for capital improvement planning, and things to do once the
budget is adopted.
Alexander, James, Jr. "Capital Programming—Who Needs It?" New Jersey
Municipalities, Vol. 51, No. 8 (November 1974);
A basic reference spelling out the responsibility of the planning
commission in New Jersey to review all capital projects and to be the
"keeper of the master plan." Speaks to necessity of intergovernmental
coordination.
In reference to master plan it states that the plan also indicates
areas where development should be encouraged and perhaps more important¬
ly, areas of the community where growth and development should be dis¬
couraged. Does not clearly tie master plan to CIP.
Atkins, Richard A. "Capital Prograunming and Capital Budgeting—General Con¬
siderations and Procedures." Presented at the Conference of the Niagara
County Industrial Development and Planning Commission, April 1965.
Blair, Lachlan F. "Programming Community Development." Principles and Practice
of Urban Planning. Edited by William F. Goodman and Eric C. Freund.
Washington, D.C.: International City Management Association, 1968, pp.
379-400.
Descriptions of programming techniques, a presentation of an overall
range of implementation measures for influencing the pattern, timing, and
character of physical development. Coordination scheduling, and financing
of capital improvements is discussed along with zoning, land subdivision,
and urban renewal as significant versions for planning implementation.
Burr, Eugene E. Preparation of a Capital Improvement Program. MTAS Technical
Report. Knoxville, Tennessee; Municipal Technical Advisory Service,
Institute for Public Service, University of Tennessee and Tennessee
Municipal League, November 1975.
Perspectives in planning for capital improvements such as those of
department heads, overview officials like mayor/manager, finance officers,
and planning director.
Coughlin, Robert E. "The Capital Programming Problems." Journal of the
American Institute of Planners, Vol. 26, No. 1 (February 1960): 39-48.
An analytical framework is set forth for formulating a capital
program, given a comprehensive plan. A set of consistent decisions at
different levels of project generality and for different time periods
leads to the determination of the program in detail.
-99-
Coughlin, Robert E., and Pitts, Charles A. "The Capital Programming Process."
Journal of the American Institute of Planners, Vol. 26, No. 3 (August
1960): 236-241.
The Pittsburgh charter made possible an unusally strong role for
capital programming. This is a study of the emergence of the programming
process as a result of complex reactions to that charter and to each
other by the departments, the administration, the planning commission,
the city council, and citizen groups.
Denver Regional Council of Governments. Capital Improvements Programming for
Local Governments. Denver, Colorado: 1975.
A "how-to-do-it" guide on CIP. Includes sample forms, methods of
financial analysis, and a list of basic definitions.
Evans, Richard D. Guidelines for Municipal Capital Programming. Boston:
Commonwealth of Massachusetts Department of Community Affairs, 1975.
130 pp.
A manual for selecting, scheduling, and financing projects, it ex¬
plains the importance of capital improvements programming for state
munipalities.
Fajardo, Richard P. Capital Budget Guidelines and Procedures. Oxnard, Cali¬
fornia: City of Oxnard, 1976.
A guide to developing a capital budget and a capital improvements
progrcim. A detailed presentation is offered for integrating Community
Development Block Grant funds into the overall CIP process. A detailed
methodology for financial projections is also presented.
City of Gary. Introduction to Long Range Capital Improvement Programming and
Budgeting. Gary, Indiana: n.d.
Provides a detailed analysis of various options available to local
governments for financing capital improvements. Explains the relative
merits and problems of each option.
Georgia Municipal Association, Committee on Financial Administration, and Georgia
Municipal Clerks.and Financial Officers Association. Capital Budgeting,
A Workshop for Georgia Municipalities. Atlanta, Georgia: Georgia
Municipal Association, 1966.
A very simple workbook on capital budgeting prepared by finance
officials.
Indianapolis-Marion County Department of Metropolitan Development. Capital
Programming. Indianapolis, Indiana: 1976.
An in-depth analysis of the existing CIP process in Indianapolis-
Marion County with recommendations for procedural changes. Which
would provide a central role for the CIP in setting local government
direction.
-100-
Indianapolis-Marion County Department of Metropolitan Development. Divi¬
sion of Planning and Zoning. A Procedures Manual for the Preparation and
Review of the Capital Improvements Budget and Program for Indianapolis
and Marion County, Indiana 1975-1976. Indianapolis; April, 1974. 16
pp.
A procedures manual to aid departments and agencies in the prepara¬
tion of the forms on which capital improvements information is to be
s\ibmitted.
League of California Cities. Guidelines for Capital Improvement Budgeting in
California Cities. Sacramento, California: December 1966.
League of Kansas Municipalities. A Guide for Capital Improvements Programming
and Budgeting in Kansas Cities. Topeka, Kansas: August 1976.
A very basic review of the CIP process. Speaks to comprehensive
plans, operating costs, and intergovernmental coordination. Has a
specific section on financing projects which lists sources of funds in
Kansas. Ties the CIP process into the annual capital budget.
Levitan, Donald. "Capital Improvements Program," Massachusetts Selectman, vol.
32, no. 2 (April 1973): 19-22.
Lower Pioneer Valley Regional Planning Commission. Implementation of a Regional
Capital Improvement Program. West Springfield, Massachusetts: 1973.
McClain, J.M. Capital Budgeting in Selected States. Ph.D. dissertation. Bureau
of Business Research. College of Commerce. University of Kentucky, 1963.
A dissertation that covers state practice in California, Maryland,
Minnesota, and Wisconsin.
City of Memphis. Procedures Manual for the City of Memphis Capital Improvement
Budget and Program. Memphis, Tennessee: September 1975. 26 pp.
A detailed guide to undertaking CIP in the city, including the
overall city strategies and policies that department heads should con¬
sider in initiating CIP projects. Concentrates on revitalization of
deteriorated city areas.
Mercer, J.L. Programming and Controlling Capital Improvements. Management
Information Service, Vol. 4, No. LS-2. Washington, D.C.: International
City Management Association, February 1972. 35 pp.
Minnesota State Planning Agency. Office of Local and Urban Affairs. Capital
Improvement Programs: A Guide for Minnesota Communities. St. Paul,
Minnesota: 1974. 20 pp.
Reasons for capital improvements programming are given along with
guidelines for priority systems and CIP preparation. Sample capital im¬
provements forms accompany the text.
Moak, Lennox L., and Killian,. Kathryn W. A Manual of Suggested Practice for the
Preparation and Adoption of Capital Programs and Capital Budgets by Local
Governments. Chicago: Municipal Finance Officers Association of the
United States and Canada, 1964. 52 pp.
An outline of the essential steps involved in capital progreimming
-101-
and capital budgeting, this manual results from the survey of 17 cities
and consists of practices in effect in early 1963. There is a discus¬
sion of "Comprehensive Physical Development Plans" and "Long-term Fiscal
Policy." An early and basic text.
City of San Bernardino. CIP Manual of Instruction. San Bernardino, California:
1974.
A basic instruction manual for the preparation of OIPs.
Scattergood, Roger. "Capital Improvements Programming: A Useful Tool for
Public Financing." Pennsylvanian, the Magazine of Local Governments,
Vol. 10, No. 5 (May 1971): 20-22.
A basic review of the process in Pennsylvania; states that among the
CIP's purposes is to "carry out the community's comprehensive development
plan or community renewal plan if any." Mentions that Pennsylvania
school districts are required to adopt long range development plans.
Operating costs are identified as a factor to be included.
So, Frank S. Capital Improvement Programs, Planning Advisory Service Report
No. 151. Chicago: American Society of Planning Officials, October
1961.
This was the first attempt at an instructional approach for local
planners.
South Central Alabama Development Commission. A Guide for Developing a Capital
Budget. Montgomery, Alabama: June 1975.
A HUD-sponsored manual for smaller cities stating the advantages of
a capital budget and the basic steps in preparing a CIP and capital
budget. Pretty much a how-to-do-it book.
City of Tucson Department of Planning. Capital Improvement Review System.
Tucson: October 1975. 109 pp.
Excellent rundown of issues involved in the CIP process.
U.S. Department of Housing and Urban Development. Urban Management Assistance
Administration. Office of Metropolitan Development. Capital Improvements
Programming in Local Government. Washington, D.C.: Government Printing
Office, October 1969.
An attempt to familiarize local residents and government officials
with CIP and to describe procedures that may be followed in preparation,
adoption, and use of CIP. Considers 6 year program the most suitable
for a CIP and discusses the need for it to be a comprehensive
plan. Land acquisition and consturction of all neighboring and overlapping
jurisdictions should be included or at least considered.
City of Winston-Salem. Instruction Manual for Use in Preparation of CIP.
Winston-Salem, North Carolina: 1976.
A short, simple instruction guide to department heads on how to
complete CIP project request forms.
-102-
2) Local Capital Improvements Programs and Capital Budgets
Selected examples from municipalities that integrate their CiPs and budgets
with the planning process.
City of Albuquerque. 1975 Capital Improvements Program. Albuquerque, New
Mexico: July 1975.
Municipality of Anchorage. Preliminary CIP 1977-1982. Anchorage, Alaska.
City of Ann Arbor Planning Commission. 1976 Capital Improvements Budget and
Program for 1977-1981. Ann Arbor, Michigan: February 1976. 79 pp.
Contains a section on the relationship between the capital improve¬
ments program and the general development plan, a focus of rational
policy decisions determining physical public improvements, and a dis¬
cussion of mandatory referral.
Baltimore City Planning Commission. Department of Planning. Baltimore's
development Program 1976-1981. Baltimore: n.d. 252 pp.
Exceptional presentation relating plan to CIP.
City of Brookline. CIP FY 1977-1982. Brookline, Massachusetts: February
1976.
Dayton Office of Management and Budget. 1776-1976 Program Strategies. Dayton,
Ohio: February 1976. 181 pp.
Presents city programs in four major subject areas: security,
community environment, human development, and public representation.
Unique presentation of descriptive data for current conditions, followed
by city's goals, and projected programs including budget in 18 subcategories.
Both capital facilities and service programs are covered in the document.
An integrated program which serves as a "policy discussion" statement
from which the budget is drawn. Unusual presentation containing results
of extensive public surveys and Polk data on current conditions relating
to a variety of individual programs. Capital facilities are closely
coordinated with other programs.
District of Columbia. 1977-1982 Capital Improvements Program. Washington,
D.C. : January 1976.
City and County of Honolulu. Capital Improvements Program Fiscal Years 1976
to 1981. Honolulu, Hawaii: July 1976.
Indianapolis-Marion County, Department of Metropolitan Development 1977 Capital
Expenditure Budget and Program. Indianapolis, Indiana: June 1976.
City of Kansas City. Capital Budget for the Fiscal Year May 1, 1976-April 30,
1977-City of Kansas City, Missouri. Kansas City, Missouri: March 1976.
City of Lakewood. Office of Budget and Research. Capital Improvements: 1976-
1980. Lakewood, Colorado: 1976.
-103-
i;rograin Performance Budget, 1976; Municipal Services Evaluation
and Objectives. Lakewood, Colorado: December 1975.
1976 was the first year Lakewood used a consolidated program, per¬
formance, and line item budget, incorporating both the annual operating
and capital improvements budgets prepared by the City Administrator's
Office of Budget and Research.
City of Milwaukee. The Capital Improvements Program 1976-1981. Milwaukee,
Wisconsin: February 1976.
Montgomery County Government. Adopted Capital Improvements Program, Montgomery
County Government Fiscal Years 1977-1982. Rockville, Maryland: 1976.
2 vol.
Extremely detailed project-by-project presentation. Description
and justification in terms of community needs, source of project, or
expected impact is included for almost every project.
City of Orlando. CIP 1975-1980. Orlando, Florida: June 1975.
Philadelphia City Planning Commission and School District of Philadelphia: 1976-
1981 Capital Program. Philadelphia, Pennsylvania: June 1975. 338 pp.
Good presentation of neighborhood plans and facilities. Extensive
section on development of CIP.
City of Phoenix. Capital Improvement Program 1973-78. Phoenix, Arizona:
December 1972.
The Phoenix Growth Committee (with 125 voluntary members) and the
Citizen's Bond Advisory Committee, play important roles in the CIP process.
Growth Committee reviews city's use of bonds to ensure that the Capital
Programs and necessary revisions are in keeping with intent of Growth
Committee.
Pittsburgh City Planning Commission. 1974 Six Year Development Program.
Pittsburgh, Pennsylvania: 1974.
A combined plan/CIP in a single document. An innovative approach.
. 1976 Six Year Development Program. Pittsburgh, Pennsylvania: 1974.
City of Portland. CIP 1976 City of Portland, Maine. Portland, Maine: March 1976.
City of Richmond. 1976-77 Capital Budget Adopted. Richmond, Virginia: May 1976.
The CIP is free of plan implementation rhetoric. Like Montgomery
County's, each project is presented on a separate page with a map, descrip¬
tion, and "justification."
City of Rochester. City of Rochester CIP 1976/77-1981/82. Rochester, New
York: 1976.
City of Rock Island. Six Year CIP 1973-1978. Rock Island, Illinois: March
1973.
City of Rockville. City of Rockville, Maryland CIP 1977-1982. Rockville,
Maryland: April 1976.
-104-
city of St. Petersburg. 1972-78 Six Year Program Plan. St. Petersburg, Florida:
July 1973.
Each item considered is directed towards a goal. Specifically
stated goals are included for transportation, environment, recreation,
culture, safety, and citizen participation.
City of Salinas. CIP 1976-1981. Salinas, California: March 1976.
City of Sanibel Planning Department. Comprehensive Land Use Plan. Sanibel, Florida:
July 1976.
An integrated plan and CIP with a strong financial statement.
City of San Luis Obispo. Proposed General Plan Revision. San Luis Obispo,
California: n.d.
An integrated presentation of the plan and the CIP; includes an
urban service limit.
City of Sarasota. Capital Improvements Programs and Budget: Fiscal Year
October 1, 1976 Through September 30, 1977: An Identification and Pro¬
gramming of Those Capital Improvements Considered Necessary Over a Six
Year Period Together With a Capital Budget for the Initial Year of Such
Program. Sarasota, Florida: 1976.
City of Springfield. 1976-1982 CIP. Springfield, Missouri: March 1976.
City of Stockton. CIP-Revised April 9, 1976: 1976-1981 City of Stockton.
Stockton, California: April 1976.
City of Thomasville. Capital Improvement Budget, Thomasville, North Carolina.
Thomasville, North Carolina: May 1972.
-105-
3) Studies of Specific Communities
Analyses of the effect of various communities' approaches to controlling develop¬
ment by use of capital improvements.
City of Ann Arbor Planning Department. The Ann Arbor Growth Study. Ann Arbor,
Michigan: February 1973.
Concentrates on an economic analysis of public facilities, housing,
and schools in Ann Arbor. It clearly sets out the implications of
pricing systems for growth patterns. This study contains empirical
information that is applicable to other communities and appears to be
of particular value to any community considering financial devices as" a
means for growth control. The section on "Growth and Pricing of Public
Facilities" is particularly relevant.
City of Aurora. Capital Improvement Priority System. Aurora, Colorado.-,
n.d. (Mimeographe d)
Presents a system of rating CIP within eleven categories ranging
from legal aspects to availability of intergovernmental funds.
Black, Thomas. "Germantown, Maryland: A New Approach to Community Development."
Urban Land, Vol. 35, No. 8 (September 1976): 13-21.
A study of the planned new community developed by a combination of
public and private initiatives.
Brown, W.H., Jr., and Gilbert, C.E. Planning Municipal Investment: A Case Study
of Philadelphia. Philadelphia: University of Pennsylvania Press, 1961.
293 pp.
A study of capital programming in Philadelphia in an attempt to
discover and describe how a city makes its investment decisions.
Boulder Area Growth Study Commission. Exploring Options for the Future: A
Study of Growth in Boulder County. Boulder, Colorado: November 1973.
10 vols.
Thorough study of the area, extensive interviews, and models of
four alternate policies. Volume X - Summary, includes 16 recommendations
to state, county, and local levels. Major policy recommendation is to
design planning ordinances "integrating growth policy, development
timing strategy, non-commitment of buffer zone areas, subsidy of low-
income housing, and annexation policies."
Cogger, Janice, and Krumholz, Norman. "The Capital Improvements Progreimming
Process in Cleveland: Myth and Reality." Paper presented at the 1975
Annual Conference of the American Society of Planning Officials, Van¬
couver, B.C., April 12-17, 1975. 10 pp.
The authors describe how the planning department can have a far
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greater intact upon the allocation of the City's capital resources by
involving itself in the process by which investment decisions are actually
made, rather than by involving itself in the preparation of a CIP that
consistently exceeds even the wildest estimates of the City's financing
capabilities.
Dawson, Grace. No Little Plans; Fairfax County's PLUS Program for Managing
Growth, Land Use Working Paper No. 5028-1. Washington, D.C.: The Urban
Institute, April 1976. 216 pp.
A lengthy case study of the 18-month process of preparing the new
Planning and Land Use System program. Attempts to identify those aspects
of program that worked or didn't work, and to explain why.
Dayton Department of Housing and Neighborhood Affairs. 1977 Community Develop¬
ment Block Grant Task Force: Recommendations to the City Manager. Dayton,
Ohio: October 1976.
Describes the criteria that Dayton uses to assign priorities to
neighborhoods for specific programs. "Stable," "strategic," and "transi¬
tional" neighborhoods are mapped and defined. Dayton's intention to con¬
centrate resources in strategic areas is discussed.
Dickason, Forest. "Orange County Study." APWA Reporter, Vol. 41, No. 6 (June
1974): 22-23.
Fundamental growth policies and development strategies based on the
assumption that population in the county can and should be influenced by
local public policy.
Emanuel, Manuel S. "Ramapo's Managed Growth Program: After Five Years Experience."
Management and Control of Growth: Issues, Techniques, Problems, Trends,
Vol. 3. Edited by Randall W. Scott. Washington, D.C.: Urban Land
Institute, 1975.
Faltermayer, Edmund. "Toronto, The New Great City." Fortune, Vol. 90, No. 3
(September 1974): 126-138.
Describes the chracter and level of development which has occurred
in the Toronto metropolitan area over the past 15 to 20 years. Factors
contributing to the location, timing, and level of development are also
described including the Toronto subway .System.
Fort Worth City Planning Department. Policy Decisions in Forth Worth, 1976-78
Capital Iirprovement Program. Fort Worth, Texas: n.d. 24 pp.
Describes and evaluates an attempt at involving citizens in the
piP process.
Freilich, Robert H. A Four-Tiered Growth Management Program for San Diego.
San Diego, California: City of San Diego, 1975.
A study for the City Council of San Diego which recommends formu¬
lating CIP around four distinct growth management areas and tiers.
Tier I would consist of the downtown area and surrounding mixed-use
areas; Tier II, of the older, existing developed areas of the City;
Tier III of the areas, of active development; and Tier IV of the rural
agricultural areas beyond.
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Gilmore, John S., and Duff, Mary K. Boomtown Growth Management; A Case Study
of Rock Springs—Green Rivers, Wyoming. Boulder, Colorado: Westview
Press, 1975.
Suggests the importance of formally enlisting the private sector
in financing anticipated capital facilities in rapidly developing
communities.
Gladstone Associates. Analysis of the Economic Base and Growth Potentials,
1976-1990. Gillette, Wyoming: Department of Planning and Development,
Gillette and Campbell County, June 1976. 95 pp.
A study of fundamental economic changes in the future of the region
so that effective policies amd strategies can be formed by knowing the
scale and character of growth likely to occur.
. Strategies for Balanced Growth and Development, 1976-1990.
Gillette, Wyoming: The Department of Planning and Development, Gillette
and Campbell County, June 1976. 25 pp.
A presentation of considerations and strategies for addressing the
beginning of a sustained period of population and employment growth in
the area studied. Considered are strategies for a diversified economic
base; fiscal pressures; and housing market dynamics, which are the three
areas in which the city and county can have a substantial role in mini¬
mizing negative effects of rapid growth.
Gruen Gruen and Associates, Inc. The Impacts of Growth: An Analytical Framework
and Fiscal Example. Berkeley, California: The California Better Housing
Foundation, Inc., 1972. 194 pp.
A construction of a framework for making effective decisions regard¬
ing development. The study uses this framework to consider the impact of
alternative residential growth policies for two surbiirban California
communities.
City of Halifax Planning Department. Lcind Developnient Distribution Strategy.
Halifax, Canada: July 1976. 46 pp.
As part of a future land development distribution strategy for the
city, this report recommends a phasing program which specifies "priority"
areas where future residential development can best be accommodated, and
"control" areas where development should be restricted. This document is
in support of Halifax's intention to "tie the CIP directly to the
planning process through an explicit policy framework directed at
land use management." An analysis of a number of 1991 growth options
in terms of their impacts on the city's municipal services and facili¬
ties is given.
Haverford Township Department of Community Development. The Fiscal Impact of
New Development. Havertown, Pennsylvania: April 1976. 53 pp.
An examination of the fiscal impact of various types of land
development on the budgets of the township and its school district.
Methodologies are given which permit the estimation of public costs
and revenues associated with both residential eind non-residential
development.
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Huntington Beach Planning Department. Growth Policy Study. Huntington Beach,
California: October 1973. 258 pp.
Essentially a study of past, present, cind projected growth in the
Huntington Beach area and offering alternate growth policies.
Manatee County Planning Department. OPUG (Optimum Population and Urban Growth):
A Growth Policy for Manatee County, Florida. Brandenton, Florida:
May 1973. 45 pp.
Directed to citizens. A good rationale for the delineation of four
levels of service areas in one county.
Matson, Morris C. "Capital Budgeting—Fiscal and Physical Planning." Govern¬
ment Finance, Vol. 5, No. 3 (August 1976): 42.
This article presents an overview of the CIP process in Fort Worth,
Texas. The writer sees the change in approach of undertaking CIP to a
interdepartmental teeim approach with emphasis on citizen participation
as a tool to effective capital improvments programs.
Matthias, John Otto. The Germantown Master Plan: An Innovative Form of New
Community. Submitted for presentation, 57th Annual Conference, American
Institute of Planners. Silver Spring, Maryland: Montgomery County
Planning Department of the Maryland-National Capital Park and Planning
Commission, 1976. 24 pp.
Reports on a current attempt by the Montgomery County Planning
Department to stimulate the growth of a new town through a combination
of public and private investment. Uses the total array of planning
tools including the provision of staged capital" facilities integrated
with a master plan* for the area.
Metropolitan Washington Council of Governments. Capital Improvements in the
Washington Metropolitan Area, 1968-1973. Washington, D.C.: 1968.
Lists of all CIPs planned by 25 local governments, special districts,
state and federal agencies.
As a result of survey to get information, Washington COG established
EDP system which gives ability to analyze lists, updates projects changes
made, and provides basis for developing consistent programming processes
throughout entire area. 8 major functions: education, environment
health, general government, health, open space and recreation, public
safety, transportation, welfare and other physical developments. Six
jurisdictions follow similar procedures in CIP.
McKean, Eugene C., and Taylor, Harold C. Paying for Public Facilities in
Kalamazoo County. Kalamazoo, Michigan: The W.E. Upjohn Institute
for Employment Research, October 1968. 40 pp.
Focusing on the long-term need for public facilities in Kalamazoo
County and on alternative patterns of constructing and financing these
needed public facilities, the study covers basic concerns such as the
construction schedule to be followed in providing public facilities,
the financing pattern to be utilized in paying for them, and the rate
of growth in governmental revenues from existing revenues sources that
may be expected within a specified period.
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Oblinger-Smith Corporation. Strategy for Land Planning and Implementation
1976-1990. Gillette, Wyoming: Department of Planning and Develop¬
ment. Gillette and Campbell County, August 1976. 65 pp.
This work attempts to focus on the potential of capital improve¬
ments programming in guiding and shaping the tempo, location, and
character of urban development, but not its amount.
OKC Plan Team. Preliminary Conclusions Task 4.4. Oklahoma City: The Steering
Committee for the Oklahoma City Comprehensive Plan for Growth Management
and Community Development, February 1976. 30 pp.
An interim report of an eimbitious 18 month comprehensive planning/growth
management process which attempts to integrate the full range of planning
tools; policies and plans; budgeting and construction of community
facilities; zoning; subdivision; and other regulatory controls in a new
plan for Oklahoma City, an area which covers both undeveloped suburban
land and deteriorating core city areas. The discussion of the policy
choices available to guide city growth and resource allocation is particularly
interesting, as is the attempt to link appropriate programs to a variety
of neighborhood types.
Pikielek, Frederick. Boston's 1975-85 Public Facilities Program and Its Role
in Achieving Goals for the People of the City and Their Neighborhoods.
Boston: Boston Redevelopment Authority, June 1974. 45 pp.
Boston's Public Facilities Program plays an unusual role which is some¬
where between that of a comprehensive plan and a traditional CIP- It is
explicitly policy oriented; revitalizing and upgrading of selected neighbor¬
hoods and support of private sector investment are its major goals.
Rivkin, Malcolm D. Some Insights Into the Practice of Government Development:
Lessons from Experience. Washington, D.C.: Transportation Research
Board, September 1976. 29 pp.
One of the first studies of actual project experience of joint
development on a comparative basis in order to identify common factors
in successful undertakings.
City of St. Paul. St. Paul Population Change: Challenge and Opportunity. A
Report of the Migration Committee. St. Paul, Minnesota: 1975.
St. Paul Office of City Planning, Development Programming. Goals and Policies
for Capital Resource Allocation. St. Paul, Minnesota: July 1976.
A report limited to explanation of the linkage between policy and
capital resource allocation.
City of Tucson Department of Planning. Report on the 1976-77 Five Year Capital
Improvement Program. Tucson: March 1976. 26 pp.
A critical view of a CIP in terms of each project's compatibility
with overall goals.
Westchester County Planning Board. Westchester County Comprehensive Development
Policies: Assumptions, Goals, and Urban Form. White Plains, New York:
1974. 82 pp.
A guide to promoting a better understanding of the relationship of
countywide development goals to both local planning programs euid regional
plcinning objectives.
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white, Michael J., and Douglas, Scott R. "An Interpretation of Capital Pro¬
gramming as a Political Process in No-Growth Municipalities." Paper
presented at the 1975 Annual Meeting of the American Political Science
Association, San Francisco, Calif., September 1-5, 1975.
An analysis of a study of four New York communities and their method
of CIP decision-making. Concludes that the process is in contrast to
"text book" approaches, and is heavily influenced by political decisions.
Woodie, Paul R. "From PPBS to Program Strategies." Governmental Finance ,
Vol. 5, No. 3 (August 1976): 50-57.
A study of Dayton, Ohio's budget revealing the usefulness and cost/
effectiveness of services and program outputs by using a method they call
"program strategies."
Zucker, Paul C. Capital Improvements Program. Memorandum from the Tucson,
Arizona, Planning Director to the Deputy City Manager. Tucson, Arizona:
City of Tucson Department of Planning. September 20, 1976.
A policy paper stating the method by which each city department is
to set priorities and how each project fits into the CIP process.
-Ill-
4) Financing of Capital Facilities
This section cites documents on budgeting and local government financial issues.
American Institute of Planners. Report of the Planning Policy Committee in
Financing The Plan. Washington, D.C.: February 1963.
American Pioblic Works Association, American Society of Civil Engineers, and
Water Pollution Control Federation Joint Committee. Financing and Charges
for Wastewater Systems. Chicago: The Joint Committee, 1973. 69 pp.
This report is primarily intended to cover the financing and estab¬
lishment of charges for separate sanitary sewer systems.
Aronson, J. Richard, and Schwartz, Eli. Capital Budget Finance. Management
Information Service, Vol. 2, No. S2. Washington, D.C.: International
City Management Association, February 1971.
Recommends that format of CIP table should include complete list of
major capital improvements; establishment of total cost of each improvement;
outside sources of financing; scheduling of construction starts; and
annual expenditures. Master table represents final integration and
consolidation of all the major analyses: 6 year forecasts of operating
revenues expenditures, annual service charge on existing debt, and
annual amount of recurring capital expenditures; the net cash flow (if
any) that remains is amount available.
Council of State Governments. Capital Budgeting and Methods of Borrowing.
Lexington, Kentucky: 1969.
A survey of state methods to finance CIPs. Some of the findings
are: 1) States place greater reliance on use of capital budgeting to
finance capital projects than on operating budgets, 2) items least often
financed through regular operating budget are land purchase for buildings
(6 states) and initial equipment for new building (8 states), and 3) no
sharp line differentiating between financing items in capital budget
with current revenues or from bonds.
Kent, Calvin A. ; Oppedahl, Richard ; and Stevens, Lynn. Municipal Franchising and
Regulation; An Evaluation of Policy Related Research. Vermillion, South
Dakota: School of Business. University of South Dakota, September 1974.
A survey of literature in the field and a selected, annotated biblio¬
graphy of those materials that were found to be acceptable research.
Moak, Lennox L., and Hillhouse, Albert M. Concepts and Practices in Local Govern¬
ment Finance. Chicago: • Municipal Finance Officers Association of the
United States and Canada, 1975. 454 pp.
A general treatise on local government finance with special emphasis
upon the administrative aspects of each area covered.
National Council on Governmental Accounting. Governmental Accounting, Auditing
and Financial Reporting. Chicago: Municipal Finance Officers Association
of the United States and Canada, 1968.
The basic "bible" of accounting for state and local government.
Provides an extensive glossary of financial terms which have gained wide
acceptance•
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Prakash, Ved and Waszlenko, Michael J. Investment Analysis and Financial Plan¬
ning ^ Account No. UNI-07291-041-8-75 and UNI-07291-041-9-75. New York:
The United Nations (mimeographed), n.d. 69 pp.
This report develops a framework for investment planning in which
physical, economic, programmatic, and financial aspects are viewed as
integral elements of the planning process for urban and regional develop¬
ment. The main emphasis is on housing and urban infrastructure (facili¬
ties and services) which are typically planne^d, built,., and financed by
the public sector.
Steiss, A.W. Local Government Finance—Capital Facilities Planning and Debt
Administration. Lexington, Massachusetts; Lexington Books, 1975.
Textbook on CIP which concludes: 1) There is a need for more
systematic planning and budgeting of public facilities and responsibility
for establishing public policy rests with elected representatives'
systematic and comprehensive appraisal of goals and objectives.
Strategic plan should explore alternatives to guide growth and development
toward desirable goals and objectives. 2) Policy statements must be
capable of being translated into levels of service. (3) Standards of
service must have degree of built in flexibility. 4) Government must
have long term plans for operating budget as well as for capital budget.
Terhune, George A. Capital Budgeting Practices in the United States and Canada.
Chicago: Municipal Finance Officers Association of the United States
and Canada, 1975.
Provides the results of a survey of various local governments that
undertake capital budgeting and programming.
Sherwood, Hugh C. How Corporate and Municipal Debt is Related: An Inside Look
at Standard S Poor's Rating System. New York: John Wiley & Sons, 1976.
This book is an in-depth report on how Standard & Poor's, one of the
three rating organizations, rates municipal bonds, and various corporate
debt instruments. Included among the factors considered is evidence of
sound management of its capital commitments as presented in a CIP.
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5) Policy; Background Studies
General background infomration on growth management techniques and issues.
Burby, Raymond J., and Weiss, Shirley F. New Communities USA. Lexington,
Massachusetts: Lexington Books, 1976.
This report documents a comprehensive study of new community
development in the United States. The study includes a survey of
residents' teasons for choosing to live in new communities.
Hysom, John L., Jr. "Land Use Controls: Who Watches the Watchers?" Urban
Land, Vol. 33, No. 3 (March 1974) ; 3-9.
Discusses why land use control has become a major concern of
aroused citizens and government officials throughout the nation,
focusing the spotlight on the once private deliberations of a chosen
few.
Levin, Robert A. Growth Control: Some Suggestions for Urban Decisionmakers.
Rand Report No. R-1419-NSF. Santa Monica, California: Rand Corpora¬
tion, June 1974. 27 pp.
Parsons, Kermit c., and Budke,Harriet L. Canadian Land Banks, Planning Advisory
Service Report No. 284. Chicago: American Society of Planning Officials,
October 1972. 16 pp.
A study of the use of large-scale municipal land ownership as a
major improvement in systems exercising direct control over the location,
scale, price, and detailed design of urban development.
Real Estate Research Corporation. The Costs of Sprawl: Case Studies and Further
Research. NTIS PB. 257738. Washington: Office of Policy Development and
Research. U.S. Department of Housing and Urban Development. October 1975.
The purpose of this study was to expand and supplement various analy¬
ses of a prior study of the environmental and economic effects of alterna¬
tive development patterns. The investigation of a limited number of case
study suburbs, representing a variety of growth and development modes,
resulted in new insights into the relationship between community planning
and delivery of public service.
Scott, Randall W., ed. Management and Control of Growth: Issues, Techniques,
Problems, Trends. Washington, D.C.: Urban Land Institute, 1975. 3 vols.
Van Wormer, Bernard T. "Roles of the Planners and Public Works Officials."
APWA Reporter, vol. 41, no. 6 (June 1974) : 22 pp.
A short, general article about how both the planner and the public
works official can control growth and reduce the error of locating and
sizing services for the area.
^114-
6) Effect of Improvements on Development
Studies of the role that public capital facilities play in land use development.
Aleseure, F. "School Districts and Cities . . . Getting It Together." Paper
presented at the International City Management Association Conference.
Seattle, Washington, September 1975.
Andrews, R.L. et al. The Environmental Impacts of School Closures. Seattle,
Washington: Bureau of School Service and Research. University of
Washington, August 1974.
This paper analyzes the influences of school closures on adjacent
development. Communities from all regions of the nation were included
in the study. In selected communities, school closings accelerated the
decline of adjacent neighborhoods.
Bleile, G.W., and Moses, L. "Treuisportation and the Spatial Distribution of
Economic Activity." Highway Research Board Bulletin No. 311 (1962):
'27-30.
An examination of the overall pattern of locational change of manu¬
facturing firms in the Chicago metropolitan area. Industrial relocation,
expansion, and new location in this area from 1950-1960 are treated in
terms of distance from the central business district (inner city, city
fringe, and suburban areas). Forces affecting relocation decisions of
firms are discussed and hypotheses of locational change are tested.
Asker, Joe. "If Transit Comes, Can a Real Estate Developer be Far Behind?"
Railway Age, November 8, 1971: 32.
Barton-Aschman Associates. Highway and Land-Use Relationships in Interchange
Areas. Springfield, Illinois: Illinois Division of Highways, January
1968.
This study developed guidelines to assist the Illinois Division of
Highways in planning for and integrating future land use developments in
the design of interchanges on the state's highway system. The types of
development most likely to be attracted to highway interchange areas are
identified.
Bascom, S.E. et al. Secondary Impacts of Transportation and Wastewater Invest¬
ments: Research Results, prepared for the Council on Environmental Qual¬
ity, U.S. Department of Housing and Urban Development, and U.S. Environ¬
mental Protection Agency (Washington, D.C.: Office of Research and De¬
velopment, U.S. Environmental Protection Agency, July 1975).
This study is based on a literature review and statistical analysis
of transportation and wastewater investments in the metropolitan areas
of Washington, D.C., Boston, Denver, and Minneapolis-St. Paul. The
study finds that public infrastructure investment can have a significant
impact on the timing, location, and magnitude of development. This is
particularly true of single-family construction in the urban fringe.
Today sewer investments appear to have greater influence than highways
because of stricter water pollution control laws and the fact that most
areas are served by highways, thus mitigating the impact of new construction.
Benke, William. All About Land Investment. New York: McGraw-Hill, 1976.
-115-
Binkley, Clark et al. Intercepter Sewers and Urban Sprawl. Lexington,
Massachusetts: Lexington Books, 1975. 118 pp.
The purpose of this study was to analyze the relationship between
urban growth and the federal sewer grant program (under the 1972 Amendments
to the Federal Water Pollution Control Act). The study found that the
design of interceptor sewers had a significant impact on stimulating
growth. The presence of sewer tends to induce growth where growth would
not normally occur without sewers. Factors contributing to this process
include sewer design life, excess capacity, and financing techniques.
Boston Redevelopment Authority. Government Center. Boston: February 1970.
This report analyzes changes in property values and assessed values
associated with the construction of the Government Center in the City of
Boston. The Center, which covers a 60-acre tract, includes both public
and private development, the total cost of which is estimated to range
between $200 million and $300 million. The Government Center project is
considered to have improved the quality of the adjacent neighborhood and
to have provided a high status office location in Boston.
Boyce, D.E. et al. Impact of Rapid Transit on Suburban Residential Property
Values and Land Development—Analysis of the Philadelphia—Lindenwold
High-Speed Line. Washington, D.C.: U.S. Department of Transportation.
U.S. Government Printing Office, November 1972.
This report documents a comprehensive study of the impacts of the
Lindenwold Line, which runs from downtown Philadelphia to Lindenwold,
New Jersey, on suburban residential development and property values.
Statistical procedures were employed to analyze the influence of the
Line and other factors on suburban development. Case studies on land
development policies of municipalities in the vicinity of stations on
the outer portion of the Line are presented as is an analysis of the
impacts of increased development on pi:iblic finances.
Chapin, F. Stuart, Jr. "Taking Stock of Techniques for Shaping Urban Growth,"
Journal of the American Institute of Planners, 1973.
Connally, Julia A. The Socio-Economic Impact of the Capital Beltway on Northern
Virginia. Charlottesville, Virginia: Bureau of Population and Economic
Research. University of Virginia, 1968.
This study evaluates the land use and related socioeconomic impacts
of the Washington, D.C., Capital Beltway (1-495) in northern Virginia.
The report identifies the nature, magnitude, and reasons for land use
changes in areas of northern Virginia traversed by the beltway.
Coughlin, Robert E. "Programming Public Facilities to Shape Community Growth."
A Place to Live: The Yearbook of Agriculture 1963. U.S. Department of
Agriculture. Washington, D.C.: Government Printing Office, 1963, p.
460-468.
-116-
Crowle, D.F. Land Use Change Transportation Implications> Part I; Population
Change 1961-1971. Toronto, Canada: Metropolitan Toronto Transportation
Plan Review, October 1972.
de Ferranti, David. Municipal Service Planning: Impact on the Spatial Location
of Residential Development. Rand Report No. R-1878/4-NSF. Santa Monica,
California: Rand Corporation, November 1975. ICQ pp.
de Leon, Peter, and Enns, John. The Impact of Highways Upon Metropolitan Disper¬
sion: St. Louis. Santa Monica, California: Rand Corporation, September
1973.
A statistical analysis of the effects of new radial freeways cind
beltways on the location of population and employment in the St. Louis
metropolitan area. Radial freeways appeared to have promoted the dispersions
of development from older parts of the region to the urban fringe while
beltways tended to concentrate suburban development in the vicinity of
the facility.
DeLeuw, Cather and Company. Transit System Impact on Urban Land Use. Denver,
Colorado: Regional Transportation District, February 1975.
This report includes an extensive annotated bibliography on the
impacts of rapid transit improvements on land use patterns. Transit
system characteristics and other factors likely to influence development
patterns are summarized.
Denne, Robert C. "The Determinants of Value: An Annotated Bibliography." Assessors
Journal, Vol. 11, No. 3 (September 1976): 153-195.
Dougharty, Laurence. Municipal Service Pricing: Impact on Fiscal Positions.
Rand Report No. R-1878/2-NSF. Santa Monica, California: Rand Corpora¬
tion, November 1975. 138 pp.
An examination of the impact of alternative pricing policies for muni¬
cipal service on the fiscal position of the city. Focus is primarily on
the pricing of services to new residential development. The impact of pricing
on municipal services is measured by two indices of fiscal position: 1) the
distribution of cost between old and new residents, and 2) the efficiency of
each policy in the resource allocation process.
et al. Municipal Service Pricing: Impact on Urban Development and
Finance Summary and Overview. Rand Report No. R-1878/1-NSF. Santa Monica,
California: Rand Corporation, November 1975. 29 pp.
This report summarizes research estimating the effect of muicipal service
pricing on local objectives. Attention was focused on the pricing of
capital facilities (e.g., interceptor sewers) to serve new residential de¬
velopment.
Downing, Donald A. Pricing and Investment Policy as a Growth Policy Tool:
Application to Sewer Extensions in Montgomery County, Maryland. Silver
Spring, Maryland: The Maryland-National Capital Park and Planning Com¬
mission. 1974. 15 pp.
Five pricing and investment policies which may be applied to sewer
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extensions are described and compared with the existing policies of the
region. The discussion emphasizes what changes should be made in policy
so that it may become a tool for implementing growth policy.
. The Role of Water and Sewer Extension Financing in Guiding
Urban Residential Growth. Report No. 19. Knoxville, Tennessee: Water
Resources Research Center. University of Tennessee, June 1972. 185 pp.
The basic objective of this thesis was to identify ways in which
water and sewer financing arrangements may be adjusted to complement a
policy of urban growth guidance.
^orestell, William L. "Should Water Utilities Control Growth?" The American
City, Vol. 89, No. 6 (June 1974): 57-58.
A discussion of the utilities position in the growth-no-growth con¬
troversy .
Foster, William S. "Water-Supply Moratoritims—Are They Next?" The American City,
Vol. 89, No. 6 (June 1974): 11.
Gannon, Colin A. et al. The Impact of Rail Rapid Transit Systems on Commercial
Office Development, The Case of the Philadelphia-Lindenwold Speedline.
Washington, D.C.: U.S. Department of Transportation, June 1972.
This project studied the impact of the Lindenwold Line on commercial
office development in the transit service area. Suburban office development
was stimulated by the construction of the Line according to the report.
However, the report notes that many other variables influenced such
development.
Gleeson, Michael E. et al. Urban Growth Management Systems: An Evaluation of
Policy Related Research. Planning Advisory Service Report No. 309, 310.
Chicago: American Society of Planning Officials, 1976. 141 pp.
The objective of this report is to describe and compare growth
management systems used by 13 local governments. The report describes
and assesses the applicability of the growth management techniques used
by the 13 communities. Procedures followed in administering the growth
management systems are summarized as are legal considerations related to
managing growth.
Goodman, William I., and Wetmore, Louis B. "Growth Patterns and National
Programs for Urban Development." Paper presented at the Administration
Spring Conference of the Housing and Home Finance Agency, Washington,
D.C., April 1963.
Hayes, Gary G. Institutional Alternatives for Providing Programmed Water and
Sewer Services in Urban Growth Areas: A Case Study of Knoxville-Knox
County, Tennessee. Report No. 18. Knoxville, Tennessee: Water Resources
Research Center. University of Tennessee, June 1972. 219 pp.
A study of the strategic role which the City-County planning commission
must play in the utilization of water and sewer systems to guide the
urban growth of the area and in the development process in general.
-118-
Highway Research Board. Impact of the Bay Area Rapid Transit System on the
San Francisco Metropolitan Region. Special Report 111. Washington,
D.C.: February 1970. 55 pp.
Hill, Terrell W. "The Impact of Transit, The Central Business District:
Transportation, the Life Line of an Urban Society." Paper presented
at the Fourth International Conference on Urban Transportation, 1969.
Hirst, Joanna, and Hirst, Thomson. "Capital Facilities Planning as a Growth
Control Tool and a Case Study of Metropolitan Washington, D.C." Manage¬
ment and Control of Growth: Issues, Techniques, Problems, Trends. Vol.
2. Edited by Randall W. Scott. Washington, D.C.: Urban Land Institute,
1975.
Inter-County Regional Planning Commission. Metro Growth Plan. Master Plan
Report No. 16. Denver, Colorado: 1961.
International City Management Association. "Local Government Techniques for
Managing Growth," Management Information Service Report, Vol. 6, No. 5
<May 1974). 21 pp.
The report discusses a wide range of land use control as a means of
managing growth. Techniques discussed include development moratoria,
zoning controls, urban service boundaries, public acquisition of land,
and population limits.
Jones and Stokes Associates. Land Use, Open Space and the Government Process:
The San Francisco Bay Area Experience. Edited by E.E. Smith and D.S.
Riggs. New York: Praeger Publishers, 1974.
This study advocates the preservation of open space in the San
Francisco Bay area through both private and governmental techniques. It
presents a variety of socioeconomic and environmental reasons for preserva¬
tion of open space and analyzes the current policies and conditions that
threaten it. The analysis includes brief qualitative references to the
role of open space in controlling the pattern of urban development.
Kenney, Kenneth B. Piiblic Policy Alternatives Affecting Water and Sewer Ser¬
vice in Urban Growth Areas. Chapel Hill, North Carolina: Published
M.A. thesis submitted to the Department of City and Regional Planning.
University of North Carolina, 1964. 191 pp.
This master's thesis examines the impact of federal and state policies
on sewer and water investments. Case studies of several metropolitan
areas using water and sewer extension as growth guidance tools are
included. The analysis is focused primarily on the policy aspects of
sewer and water extensions rather than on an examination of the actual
impacts of such policies.
Khasnabis, Snehamay, and Babcock, Williard F. Impacts of a Beltway on a Medi\im-
Sized Urban Area in North Carolina: A Case Study. Transportation
Research Board 583. Washington, D.C.: Transportation Research Board,
1976.
The land use impacts of the northern section of the beltway in the
Raleigh, North Carolina, metropolitan area are identified over the
period 1960 through 1972. Substantial residential, commercial, and
office development were attracted to locations served by the beltway.
Multiple regression procedures were employed to identify the relation¬
ships between highway improvements and land use changes.
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Kinnard, William N. Industrial Real Estate. Washington, D.C.; Society of
Industrial Realtors, 1967.
Lee, Douglas B. et al. If Transit Comes, Can a Real Estate Developer be Far
Behind? BART Impact Studies, Final Report Series. BART 2, Part 3, Vol.
6. Berkeley, California: Institute of Urban and Regional Development.
University of California, June 1973.
, and Wieck, Deborah F. Market Street Study. Berkeley, California:
Institute of Urban and Regional Development. University of California,
1973.
Levitan, Don. Massachusetts Route 128: A Nonemulative Enigma. Transportation
Research Board 583. Washington, D.C.: Transportation Research Board,
1976.
This paper is a historical study of the interrelationships between
the construction of Route 128, a circumferential highway around Boston,
and the increase in development along this highway corridor. The study
concluded that many factors such as the lack of undeveloped land in the
City of Boston, the completion of many segments of the region's highway
system, private industrial development, and railroad access to the
corridor were the primary factors influencing growth in the Route 128
corridor.
Li, C.Y. "Sewerage Plan Involves Open Space Preservation." Civil Engineering,
Vol. 43, No. 1 (January 1973): 85-86.
This article discusses the policy basis for the Comprehensive
Sewerage Plan for York County. Pennsylvania. The location of sewer
interceptors is viewed as a tool to promote compact urban development
centers and preserve open space. The plan recommends that interceptors
not be located in those areas designated as open space. In addition,
the use of force mains (which cannot easily be tapped into) between
service areas is recommended as a means of controlling development.
Libicki, Martin C. Land Use Impacts of Major Transit Improvements. Washington,
D.C.: Office of Transportation Planning Analysis. U.S. Department of
Transportation. U.S. Government Printing Office, March 1975.
This report analyzes and summarizes the impacts of rapid rail
transit systems on development in major North American metropolitan
areas based on published materials. The study identifies the factors,
such as the character of existing development, the design of the transit
system, and the role of government policies, which appeared to influence
land use changes related to rapid transit systems. The report contains
an extensive bibliography.
Livingston and Blayney. Open Space vs. Development: Foothills Environmental
Design Study. Palo Alto, California: n.p., 1971.
McMahan, John. Property Management: Effective Decision Making in Uncertain
Times. New York: McGraw-Hill, 1976.
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Maryland-National Capital Park and Planning Commission. Prince George's County
Planning Board. Proposed Staging Policy for Prince George's County,
Maryland. Riverdale, Maryland: Maryland-National Capital Park and
Planning Commission, May 1973. 68 pp.
A staging policy is proposed to coordinate private development with
public investment and to guide development of the county in a proper
sequential manner, so as to create a beneficial balance between residen¬
tial and employment opportunities.
Massachusetts Institute of Technology. Economic Impact Study of Massachusetts
Route IS8. Cambridge, Massachusetts: December 1958.
This report presents the economic and land use impacts of Route 128
around the City of Boston. Extensive industrial, research, and develop¬
ment activities were attracted to locations adjacent to Route 128.
Route 128 is frequently cited as a highway having major impacts on
regional development.
Massachusetts Office of State Planning. Towards a Growth Policy for Massachusetts
(Preliminary Draft). Boston: Commonwealth of Massachusetts, October
1975.
Describes the problems facing the state as a result of its past
growth patterns; proposes a series of developmental objectives and a set
of comprehensive growth policies; delineates the state's role in influ¬
encing the character of growth; and, finally, recommends a series of
changes in state programs or proposes steps that the state and take to
develop and further a comprehensive plan of action for sound growth and
development. The report is particularly instructive in pointing out the
negative effects of well-intentioned programs—school building assistance
planning and construction for sewage treatment," highway improvements,
etc. Recommendations included in Section V can be useful to many locations
and levels of government.
Maziotti, Donald F. Capital Improvements—Programming as a Land Use Control
in Oregon. Portland, Oregon: Portland Bureau of Planning, n.d.
A county and city survey in Oregon determining the extent to which
capital budgeting is used as a financial and budgeting tool and as a
technique for controlling land use development, plus an examination of
statutory law in the State of Oregon on the subject of capital budgeting.
Metropolitan Dade County Planning Department. Comprehensive Development
Master Plan for Metropolitan Dade County, Florida. Miami, Florida:
March 1975. 236 pp.
Comprehensive plan clearly analyzes the effects of public facilities
on the area. CIP is in progress at the time of ptiblication.
Milgram, Grace. The City Expands. Washington, D.C.: Department of Housing
and Urban Development. U.S. Government Printing Office, March 1967.
This case study of a section of Philadelphia sought to identify
those factors contributing to the rise in land values of vacant land
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over an 18-year period. Among the factors identified as important in
influencing the price of land were proximity to transportation facili¬
ties, access to public sewerage, and zoning.
National League of Cities et al. Transit Station Joint Development. Washington,
D.C.: U.S. Department of Transportation. U.S. Government Printing
Office, June 1973.
This study evaluates the use of joint development techniques as a
means of promoting desired development in the vicinity of transit sta¬
tions. The report contrasts planned and unplanned development which has
or is expected to occur in the vicinity of six transit stations. Guide¬
lines for and the potential benefits of joint development techniques are
presented.
New Jersey Department of Community Affairs. Secondary Impact of Regional
Sewerage Systems. Trenton, New Jersey: 1975.
An investigation of the nature and extent of secondary impacts
emanating from the construction of regional sewer systems.
New York Times. "Rural Water Lines a Mixed Blessing." November 18, 1975.
This article describes the land use impacts related to the expan¬
sion of a rural water distribution system in Grand Forks Covinty, North
Dakota. Little empirical data are presented to indicate the magnitude
of the land use changes noted in the article. The role of federal loans
and grants in expanding the system also is discussed.
North Carolina State University- A Study of Development Characteristics Along
Urban-Controlled Freeways in North Carolina and Their Relationship With
the Freeway. Raleigh, North Carolina: 1974.
This project examined the influence of freeways in the State of
North Carolina on development in urban areas over a 10-year period.
Freeways were found to influence urban development patterns but the
nature and magnitude of the impacts varied according to the size of
urban area. Guidelines are presented in this study to promote orderly
land development near interchanges.
Parsons, Kermit C. et al. Public Land Acquisition for New Communities and
the Control of Urban Growth: Alternative Strategies. Ithaca, New York:
Center for Urban Development Research. Cornell University, March 1973.
223 pp.
Peat, Marwick, Mitchell & Co. An Investigation of Methodology for Assessing
Impact of Accessibility Changes on Land Use. Toronto, Canada: Ontario
Ministry of Transportation and Communications, July 1974.
A statistical analysis of the influence of major transit and high¬
way system improvements on residential and nonresidential development in
the Toronto metropolitan area is presented in this report. The study
concluded that there appeared to be an identifieible relationship between
transportation improvements and land use changes. A comprehensive time
series data base was compiled and analyzed in this project which has
been used to develop a methodology for forecasting land use changes
related to transportation system improvements.
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Rosslyn/Crystal City Impact Analysis. Arlington, Virginia:
Arlington County, May 1974.
This study identified land use, socioeconomic, and employment
changes in the Rosslyn and Crystal City areas of Arlington County,
Virginia, over the period 1960 through 1974. Capital improvements
supporting the observed increase in development are identified. Changes
in County operating costs and revenues over the 14-year period were also
estimated in this study.
Pepper, James E., and Jorgensen, Robert E. Influences of Wastewater Management
on Land Use: Tahoe Basin 1950-1972. Washington, D.C.: Office
of Research and Development. U.S. Environmental Protection Agency.
U.S. Government Printing Office, October 1974.
This is a case study using statistical analysis techniques to
determine the relationship between wastewater infrastructure investment
and land use patterns. Increases in land use densities were found to
follow the expansion of treatment facilities. It was also found that
s\ibdivision approval rates increased in anticipation of the provision or
expansion of wastewater treatment facilities.
Recht, J. Richard and Barman, Robert J. Open Space and the Urban Growth Process:
An Economic Evaluation Using a Growth Allocation Model. Research Report
31. Berkeley, California: The Center for Real Estate and Urban Economics.
Institute of Urban and Regional Development. University of California,
1969.
A computer simulation model was developed to determine the impact
of a regional open space plan in the San Francisco Bay area on employment,
housing, and Icind use patterns. Based on the projection of the model,
it was found that a regional open space plan would result in significant
savings in utility and transportation costs due to a compaction in urban
development.
University of Rhode Island. The Interstate Highway System and Urban Structure—
A Force for Change in Rhode Island. Kingston, Rhode Island: 1976.
This study analyzes the land use impacts of Rhode Island related to
the construction of the interstate highway system. Based on comparisons
of "before" and "after" data, the authors found that the principal
effect of such highways was the restructuring of industrial development
patterns.
Rivkin, Malcolm D. "Growth Control via Sewer Moratoria." Urban Land, Vol.
33, No. 3 (March 1974): 10-15.
Discussion of the technique of using sewer moratoria by local,
state, and federal governments to restrain new development.
San Diego County Comprehensive Planning Organization. Water Distribution and
Sanitary Sewage Systems: Background and Policy Study. Washington,
D.C.: U.S. Department of Housing and Urban Development. U.S. Government
Printing Office, February 1972.
This study provides the support and basis for the selection of
sewer and water policies in San Diego County. It describes the institu-
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tional and environmental factors that influence the provision of water
and sewerage facilities. In addition, the study describes the land use
impacts that are related to the provision of water and sewerage facili¬
ties.
Stein, Martin M. "Highway Interchange Area Development—Some Recent Findings."
Public Roads—A Journal of Highway Research, Vol. 35, No. 11 (December
1969): 241-250.
This report analyzed the amount and type of development which had
occurred in interchange areas of freeways and expressways of 16 states.
The analysis concluded that development near interchanges is likely to
vary by type of interchange design and by the character (e.g., local,
interstate) of the highways intersecting at the interchange.
Syracuse-Onandaga County Planning Agency. Syracuse Metropolitan Area Comprehen¬
sive Plan: Conformance of Public Utility Services. Syracuse, New York;
June 1975. 82 pp.
Discusses the effect of "network facilities" (sewer and water
lines) on development. Recommends "if a consolidated sanitary district
is found . . . efficient, the boundaries should conform to the cordon
line [service districts set by the plan]." The "cordon line strongly
corresponds to existing sanitary districts."
1990 Developed Plan discussed in this report has as one of its
primary concepts, "development location to take advantage of already
existing and definitely programmed public facilities and services."
CIP is considered a necessary support to the plan.
Tabors, Richard D.; Shapiro, Michael H.; and Rogers, Peter P. Land Use and the
Pipe: Planning for Sewerage. Lexington, Massachusetts: Lexington
Books, 1976. 182 pp.
Attempting to bridge the gap between the literature on engineering
and planning, this book is concerned with giving a general overview of
the impact on a community rather than specifically looking at the rela¬
tionship between capital improvement decisions and land use development
management decisions. It indicates that sewer systems have a considerble
influence on development, though they often are planned separately from
overall community plans.
Thompson, Russell H., and Adkins, W.G. Some Economic Effects of the Suburban
Portion of North Central Expressway, Dallas, Texas. Bulletin No. 15.
College Station, Texas: Texas Transportation Institute. Texas A & M
University, 1961.
This report is a "before/after" study of the land use impacts of
the Dallas North Central Expressway which connects downtown Dallas with
suburban Richardson, Texas. The study identified changes in population
growth, residential building permits, property tax valuation, and indus¬
trial development in Richardson and four control towns. Significant
land use changes occurred in Richardson relative to development in four
control jurisdictions.
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U.S. Department of Transportation. Federal Highway Administration. Social and
Economic Effects of Highways. Washington, D.C.: U.S. Government
Printing Office, 1976.
This report summarizes and organizes a wide selection of literature
dealing with the social, economic, and land use impacts of highway
improvements. Abstracts of recently completed research studies funded
by the Federal Highway Administration are included in the report.
Although some of the studies cited in the report are dated, the report
is a useful summary of research studies on highway related land use
impacts.
Urban Systems Research and Engineering, Inc. The Growth Shapers: The Land
Use Impacts of Infrastructure Investments. Washington, D.C.: U.S. Council
on Environmental Quality, May 1976.
This largely qualitative analysis looks at the land use impacts of
highways, mass transit, sewers, and other capital investments. The
study indicates that capital investments influence the location, amount,
density, and timing of land use development. It raises questions and
issues for consideration by local governments in developing capital
improvement programs.
. Interceptor Sewers and Suburban Sprawl: The Impact of Construction
Grants on Residential Land Use: Final Report. 2 vols. Washington,
D.C.: U.S. Council on Environmental Quality, September 1974.
A study of the relationships between interceptor sewer construction
financed by the Environmental Protection Agency and residential development
patterns in rapidly growing communities. The primary purpose of the study
was to describe and analyze residential land use impacts of the EPA-sponsored
interceptor projects, focusing attention on the extent to which the project
design, review, and approval process included a consideration of those land
use implications.
Virginia Beach Office of City Manager. A Proposal for Managing Growth, Part
Two; A Plan for Planning. Virginia Beach: Virginia Beach Office of
City Manager, March 1974. 76 pp.
A good rationale for use of capital facilities to control growth.
Describes four techniques in use across the country and makes local
recommendations based on them.
Westchester County Department of Planning. Intermunicipal Aspects of Providing
Public Utilities. White Plains, New York: Westchester County Department
of Planning, December 1974. 34 pp.
Provides a concrete example of the legal and fiscal problems arising
from the overuse of special districts to administer public facilities.
Walden Research Division of Abcor. Growth Effects of Major Land Use Projects:
Volume III—Summary. Cambridge, Massachusetts: Office of Air and Waste
Management. Environmental Protection Agency, September 1976.
This final volume documents the development of the predictive equa¬
tions of the land use model and the development of the traffic model of
the previous volumes and serves as a guideline document for the applica¬
tion of the models developed to task of predicting land use and emissions
associated with major land use projects.
-125-
Wichern, Philip H. Boundary Change by Adminstrative Conmission—The Minnesota
Experience■ Saint Cloud Study Area Report: Governmental Activities,
Community Development, and Public Finances, Part 3, Sec. 2. Minneapolis,
Minnesota: Municipal Reference Bureau. General Extension Division.
University of Minnesota, 1968.
Zycher, Benjamin et al. Municipal Service Pricing: Impact on the Growth of
Residential Development. Rand Report No. R-1878/3-NSF. Santa Monica,
California: Rand Corporation, November 1975. 43 pp.
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*U.S. QOVERNHENT FKIimNG OFFICE i 1978 0-733-842/476
December 1977
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