Fort Collins City Council votes in favor of 1041 regulations - Coloradoan

Fort Collins City Council votes in favor of 1041 regulations

Fort Collins City Council votes to implement 1041 regulations for water, highway projects
Sady Swanson

Fort Collins City Council is on its way to implementing regulations that will give the city more oversight of large-scale highway and water projects where local government might have limited oversight.

Council members voted 6-1 to approve the proposed "1041 regulations" during their meeting on May 2. Council member Shirley Peel voted against adopting the regulations, which must pass a vote on Tuesday, May 16, to be implemented.

Adopting these 1041 regulations gives “the city a tool in our toolbox to have a binding review of a certain set of major infrastructure projects,” Community Development and Neighborhood Services Director Paul Sizemore said during a City Council work session in February. These projects include major new water or wastewater systems and new highway or interchange projects.

Council placed a moratorium on these projects through June 30.

The Northern Integrated Supply water delivery project is an example of a project that would be impacted by 1041 rules.

The city’s stated goals for the regulations include:

- Address deficiencies with the city’s Site Plan Advisory Review (SPAR) process, which is the current tool used for such projects.
- Establish predictability for applicants.
- Establish a meaningful public process.
- Incentivize project designs that avoid impacts to critical natural habitats and cultural resources.

Water providers and leadership from surrounding communities criticized the 1041 regulations for hindering regional collaboration on current and future water projects, while representatives from environmental groups asked council to adopt the regulations and continue to look at ways to further protect the city's natural areas and resources.

"This is about empowerment of the people of Fort Collins," said Gary Wockner, representing environmental group Save the Poudre.

Peel said while she believes in protecting the city's natural areas and having local control of projects that impact the city, she voted against the regulations because "I think this has adverse effects on the Fort Collins-Loveland Water District,” which is the water provider for the majority of her district.

“This is a time when regional partners need to be working together to address water issues,” Peel said, thanking staff for their work and the public for sending in their comments. “... I think even with all this work and all this trying to get to a good place with these, they’re just another barrier to regional cooperation, which is what we need now more than ever.”

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What is the process for receiving a 1041 permit?

The new regulations only apply to projects designated by council: new major water or wastewater projects and new highway or interchange projects. These don't include stormwater or agriculture facilities.

If a project falls into one of the applicable categories, applicants will first go through a review process to determine the project's potential for causing significant adverse environmental and cultural impacts. This review will consider the magnitude of the adverse impacts, how long those things will be impacted and the likelihood of significant impacts occurring because of a project.

Staff will look at a project's impacts to city-owned areas or parks, natural habitat areas, historic and cultural resources and disproportionally impacted communities, environmental planner Kirk Longstein said during February's work session.

If staff finds that a project isn't likely to cause any significant adverse impacts, the city could issue a "finding of no significant impacts" (FONSI) and waive the full 1041 permit requirement. Those projects could still be subject to other types of permits or reviews through the city.

If there are significant adverse impacts identified, a full 1041 permit will be required. Within the following 60 days, application materials will be reviewed by staff and a neighborhood meeting will be held.

Within 90 days of a completed application being submitted, there will be a hearing on it in front of City Council. Staff will review the application to make sure it complies with city standards, with the help of a third-party contractor.

City council may approve a permit if:

- The development plan has no significant impacts.
- Proposed mitigation measures sufficiently offset the impacts.
- Council-imposed conditions demonstrate compliance with the standards.

"The initial steps in the permitting process are intended to incentivize applicants to propose a development that avoids adverse impacts before entering a full permit review," Longstein said.

Providing more details about project expectations early on in the application process gives applicants more predictability, something utility providers have said they want, Longstein said. Applicants can opt for a pre-application review of the project by council to get early feedback.

“... Staff worked hard to bring forward a proposal or recommendation that incentivizes applicants to avoid critical natural resources and cultural resources, and also to be as clear as possible as to what those critical natural resources and cultural resources are,” Longstein said in the May 2 meeting.

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Why the city implemented 1041 regulations

These regulations will replace the city’s Site Plan Advisory Review process. Currently, the types of projects that will go through the 1041 permit process are reviewed through SPAR or a natural area easement process.

Projects that qualify for a 1041 permit review that also go through natural areas will first have to go through the more rigorous 1041 permit process and then apply for a natural areas easement, Longstein said.

City staff was first asked by council to look into adding 1041 regulations into the land use code in 2021 in part to address deficiencies in the city’s SPAR process. The SPAR process allowed the "agency that’s building the project … to override any suggestions that come from the city,” Sizemore said during the work session. Implementing 1041 regulations creates a binding review process for these projects.

Council member Julie Pignataro said council’s decision to adopt 1041 regulations “wasn’t to stop a particular project, but a particular project showed a flaw in our process.”

That project is the Northern Integrated Supply Project. The city’s planning and zoning commission disapproved of the project’s plans in city limits in 2021 through the SPAR process, but SPAR decisions can be overruled by the entity proposing the project, which is what Northern Water did.

Project proponents can appeal 1041 decisions through city processes or in the courts, but they can’t overrule them. City staff said projects that went through the city’s SPAR process will still have to get a 1041 permit.

Pignataro said her priority is to protect the city’s natural areas as much as possible, but also to provide a “predictable path forward for these projects that need to happen.”

“This does not kill any kind of project. It puts parameters around a project so that it doesn’t hurt the things that make our community great,” Pignataro said.

How will 1041 regulations impact NISP, other projects?

Because the project was not approved through the city's SPAR process, NISP will need a 1041 permit for the portions of the project within city limits if the 1041 regulations are approved by council on Tuesday, Longstein said.

Here are some other upcoming projects that will have to go through the 1041 permit process, according to Longstein:

- Fort Collins-Loveland Water District: Foothills tank storage and zone 5 transmission
- Boxelder Sanitation District: Boxelder Interceptor
- Fort Collins Utilities: Two potential projects in the next 10 years
- Colorado Department of Transportation: Mulberry Street interchange

When council gave initial approval to these regulations on May 2, they also adopted a staff recommendation to not include projects that would be done in an existing right of way, like a proposed water pipeline down the middle of a street in Old Town, which narrowed down the potentially affected projects significantly, Longstein said.

Water providers and leadership from surrounding towns told council members these regulations would hinder regional collaboration on important water projects.

Brad Wind, the general manager of Northern Colorado Water Conservancy District, which is spearheading NISP, said intergovernmental agreements instead of blanket 1041 regulations would create "more fluid relationships" to meet future regional water needs.

Severance Mayor Matthew Fries said water security requires a regional approach, and 1041 regulations are not in the region's best interest.

"We support the use of intergovernmental agreements. That's a useful and productive tool to address project-specific, entity-specific and context-specific issues in preference to a one-size-fits-all regulation such as 1041," said Chris Pletcher, general manager of Fort Collins-Loveland Water District. "The use of IGAs allows the use of appropriate regulatory control where needed and not applied where not needed."