Title
REPORT REGARDING THE DEVELOPMENT IMPACT FEE, PARKLAND ACQUISITION AND DEVELOPMENT FEE, AND TRUNK SEWER CAPITAL RESERVE FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2016
Body
RECOMMENDED ACTION
Recommended Action
Council receive the report.
Body
SUMMARY
California Government Code Section 66000 requires local agencies assessing Development Impact Fees (DIFs) and sewer capacity charges to make available specified financial data to the public each fiscal year. This report satisfies that requirement and has been available in the City Clerk’s Office for public review since December 23, 2016. An equivalent report for the Parkland Acquisition and Development (PAD) fees is included in this report for ease of reference and convenience to the public.
Local agencies are also required to make findings every five years for any DIF funds remaining unexpended. These findings must identify the purpose of the fee and demonstrate a reasonable relationship between the fee and the purpose for which it was charged. In the 2012 report, the City identified unexpended funds that were on deposit for five or more years and elected to make the required findings. No findings are required this year.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Body
Environmental Determination
The Development Services Director has reviewed the proposed activity, filing of an annual report regarding the Development Impact Fee, Parkland Acquisition and Development Fee, and Trunk Sewer Capital Reserve for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378(b)(4) of the State CEQA Guidelines because acceptance of fiscal reports is a fiscal activity that does not involve a physical change to the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA
Guidelines the actions proposed are not subject to CEQA.
BOARD/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
The City of Chula Vista collects several types of Development Impact Fees (DIFs), Parkland Acquisition and Development fees, and Trunk Sewer Capital Reserve fees, which were assessed during the fiscal year ending June 30, 2016. The major categories of facilities financed via DIFs include transportation, traffic signals, pedestrian bridges, drainage, sewer and public facilities.
Development impact fees are updated in two manners, either via a comprehensive DIF program review or via Council-enacted automatic annual adjustment, based upon an appropriate index.
The Telegraph Canyon Drainage DIF, Salt Creek Sewer Basin DIF, and Otay Ranch Villages 1, 2, 5, & 6 Pedestrian Bridge DIF were comprehensively updated in the current fiscal year.
In October of 2015, the following automatic index-based annual adjustments went into effect:
• The Transportation Development Impact Fee (TDIF) increased from $13,035 to $13,330 per single-family dwelling unit.
• The Western Transportation Development Impact Fee (WTDIF) increased from $3,907 to $4,004 per single-family dwelling unit.
• The Bayfront Development Impact Fee (BFDIF) was increased from $9,442 to $9,678 per single-family dwelling unit.
• The Traffic Signal fee increased from $35.29 to $36.01 per average daily vehicle trip.
• The Salt Creek Sewer Basin Development Impact Fee increased from $1,330 to $1,360 per single-family dwelling unit.
• The Otay Ranch Village 11 Pedestrian Bridge DIF increased from $2,337 to $2,390 per single-family dwelling unit.
• Public Facilities Development Impact Fee (PFDIF) increased from $9,882 to $9,940 per single-family dwelling unit.
• The Parkland Acquisition and Development fee increased from $10,251 to $10,359 per single-family dwelling unit for areas west of I-805 and from $17,933 to $18,041 for areas east of I805.
• The Trunk Sewer Capital Reserve Fee increase from $3,450 to $3,528 per single-family dwelling unit.
Other fees addressed in this report remain at the same rate as the previous fiscal year.
DEVELOPMENT IMPACT FEES
Transportation Development Impact Fee (TDIF)
The TDIF fee was established on January 12, 1988 via Ordinance 2251 to finance and coordinate the construction of new transportation facilities so that new streets are built when needed to serve new development. This fee is applicable to all new development east of Interstate 805. Prior to the program, streets were built by developers in a fragmented fashion. In addition, there was a fairness issue, as some developers fronted on large streets and were required to improve those streets while other developers had only smaller local street frontage requirements. Now, all developers in the eastern portion of Chula Vista pay the same fee per equivalent dwelling unit, and either the City constructs the street or a developer does. If the developer constructs the street they receive a TDIF fee credit which can be used to pay fees at time of building permit issuance.
The TDIF is subject to an annual index-based adjustment; in October 2015 the fee increased from $13,035 to $13,330 per equivalent dwelling unit (EDU). The fees for all land use types, as well as detailed FY 2015-16 financial information are presented in Attachment 1, Schedule A.
Western Transportation Development Impact Fee (WTDIF)
The Western TDIF fee was adopted on March 18, 2008 via Ordinances 3106 through 3110 to finance and coordinate the construction of new transportation facilities in the western neighborhoods of the City, as well as to spread the costs associated with the construction of the facilities equitably among the developing properties within the benefit area.
The WTDIF is subject to an annual index-based adjustment; in October 2015 the fee increased from $3,907 to $4,004 per EDU. The fees for all land use types, as well as detailed FY 2015-16 financial information are presented in Attachment 1, Schedule B.
Bayfront Transportation Development Impact Fee (BFDIF)
The Bayfront Transportation Development Impact Fee was adopted on November 18, 2014 via Ordinance 3327 to finance and coordinate the construction of new transportation facilities in the Chula Vista Bayfront area, as well as to spread the costs associated with the construction of the facilities equitably among the developing properties within the benefit area. This fee is applicable to new development in the Chula Vista Bayfront area, generally described as properties west of Interstate 5 and between E Street and Naples Street.
The BFDIF is subject to an annual index-based adjustment; in October 2015 the fee increased from $9,442 to $9,678 per EDU. No financial activity was recorded in the current fiscal year.
Traffic Signal Fee
The Traffic Signal fee was adopted to finance and facilitate construction of traffic signal improvements required to mitigate increases in traffic volume caused by new development. This citywide fee is assessed per average daily trip generated.
The Traffic Signal fee is subject to an annual index-based adjustment; in October 2015 the fee increased from $35.29 to $36.01 per trip. Detailed FY 2015-16 financial information is presented in Attachment 1, Schedule C.
Telegraph Canyon Drainage Development Impact Fee
The Telegraph Canyon Drainage fee was adopted to finance and facilitate construction of drainage improvements serving the Telegraph Canyon Drainage Basin and has remained at $4,579 per acre since 1998.
In November of 2015, the City Council considered and approved a comprehensive update of the Telegraph Canyon Drainage DIF. The 2015 action revised the detailed capital improvement program and confirmed the existing rate of $4,579 per acre. Detailed FY 2015-16 financial information is presented in Attachment 1, Schedule D.
Telegraph Canyon Gravity Sewer Development Impact Fee
The Telegraph Canyon Gravity Sewer fee was adopted to finance and facilitate expansion of the trunk sewer serving Telegraph Canyon Sewer Basin tributary properties. The fee has remained unchanged at $216.50 per EDU since 1998. The fees for all land use types, as well as detailed FY 2015-16 financial information are presented in Attachment 1, Schedule E.
All anticipated Telegraph Canyon Gravity Sewer DIF improvements have been installed and the fund balance has been exhausted. Repeal will be considered by the City Council in fiscal year 2016-17.
Poggi Canyon Sewer Basin Development Impact Fee
The Poggi Canyon Sewer Basin fee was adopted to finance and facilitate construction of the Poggi Canyon Trunk Sewer, serving properties within the benefit area. This fee is applicable to the Poggi Canyon Basin. The fee was established at $400 per EDU in 1997.
In June 2009, the Poggi Canyon Sewer DIF was updated and the fee was reduced to $265 per EDU. The fee remains unchanged since the 2009 action. The fees for all land use types, as well as detailed FY 2015-16 financial information are presented in Attachment 1, Schedule E.
Salt Creek Sewer Basin Development Impact Fee
The Salt Creek Sewer Basin fee was adopted to finance and facilitate construction of the Salt Creek Trunk Sewer, serving properties within the benefit area. This fee is applicable to the Salt Creek Sewer Basin, a portion of the Upper Otay Lake Basin north of the Salt Creek Sewer Basin, Wolf Canyon Basin, and a portion of the Lower Otay Lake Basin east of the Salt Creek Sewer Basin.
In July 2015, the City Council considered and approved a comprehensive update of the Salt Creek Sewer Basin DIF. The 2015 action confirmed the existing rate of $1,330 per EDU and authorized annual index-based updates. The first such update was implemented in October 2015, increasing the fee from $1,330 to $1,360 per EDU. The fees for all land use types, as well as detailed FY 2015-16 financial information are presented in Attachment 1, Schedule E.
Otay Ranch Village 1, 2, 5, & 6 Pedestrian Bridge Development Impact Fee
The Otay Ranch Village 1, 2, 5, & 6 Pedestrian Bridge fee was adopted to finance and facilitate construction of pedestrian bridge facilities that will serve the subject villages. A comprehensive update of the fee program was considered and approved by the City Council in December 2015. The 2015 action reduced the fee from $1,114 to $844 per single-family dwelling unit and authorized annual index-based updates. The first such update will occur in October 2016.
The fees for all land use types, as well as detailed FY 2015-16 financial information is presented in Attachment 1, Schedule F.
Otay Ranch Village 11 Pedestrian Bridge Development Impact Fee
The Otay Ranch Village 11 Pedestrian Bridge fee was adopted to finance and facilitate construction of four pedestrian bridges in Otay Ranch Village 11.
The Village 11 Pedestrian Bridge DIF is subject to an annual index-based adjustment; in October 2015 the fee increased from $2,337 to $2,390 per single-family dwelling unit. The fees for all land use types, as well as detailed FY 2015-16 financial information are presented in Attachment 1, Schedule F.
Eastern Urban Center (Millenia) Pedestrian Bridge Development Impact Fee
The Eastern Urban Center (Millenia) Pedestrian Bridge Development Impact Fee was adopted to finance and facilitate construction of the Eastlake Parkway Pedestrian Bridge in the Eastern Urban Center (Millenia) project area.
The EUC Pedestrian Bridge DIF was established with an initial rate of $615.13 per single-family DU via Ordinance 3273, adopted in August of 2013. The fees for all land use types, as well as detailed FY 2015-16 financial information are presented in Attachment 1, Schedule F.
Public Facilities Development Impact Fee (PFDIF)
The Public Facilities DIF was adopted to finance and facilitate construction of public facilities necessary to serve new development. The fee includes six components. All components are subject to an annual index-based adjustment; in October 2015 the combined fee increased from $9,882 to $9,940 per single-family dwelling unit. Detailed FY 2015-16 financial information is presented in Attachment 1, Schedule G. The components of the PFDIF, including current fees are as follows:
Administration ($620) - Administration of the PFDIF program, oversight of expenditures and revenues, preparation of updates, calculation of costs, etc.
Civic Center Expansion ($2,835) - Expansion of the Civic Center per the 1989 Civic Center Master Plan to provide sufficient building space and parking needed to serve new development. The Civic Center Master Plan was updated in July 2001 to include impacts of Otay Ranch development. Project phases included the remodel and expansion of City Hall, remodel of the Public Services Building and remodel of the former Police Facility, Community Development and Legislative Buildings. Includes associated capital expenses.
Police Facility ($1,725) - Improvements per the Civic Center Master Plan to provide sufficient building space and associated facilities needed to serve new development. Improvements include construction of a new policy facility, upgrading the communications center and installation of new communication consoles. Also includes the purchase and installation of a computer-aided dispatch system (CAD), Police Records Management System, Mobile Data Terminals, and police vehicles.
Corporation Yard Relocation ($465) - Relocation of the City’s Public Works Center from the Bayfront area to the more centrally located site on Maxwell Road. Also includes the purchase of new vehicles directly attributable to new development and the need to maintain an expanding infrastructure network.
Libraries ($1,627) - Improvements include construction of the South Chula Vista Library and future planned libraries and installation of an automated library system. This component is based on the facility needs identified in the Library Master Plan and is applicable to new residential development only.
Fire Suppression System ($1,433) - Projects include the relocation of Fire Stations 3 and 4, construction of a fire training tower and classroom, purchase of a brush rig, installation of a radio communications tower and construction of various fire stations in developing areas of the City. This fee currently reflects the nine- station network called for in the 1999 Fire Station Master Plan. Also includes the purchase of fire apparatus for new stations, as required to serve new development.
Major Recreation Facilities ($1,235) - Component added in November 2002 to build major recreation facilities required to serve new development such as community centers, gymnasiums, swimming pools, and senior/teen centers. This component is based on the facility needs identified in the Park & Recreation Master Plan and is applicable to new residential development only.
Although the majority of the public facility project costs are borne by new development, it is important to note that some public facility projects contain both a City and new development cost share. The City share often reflects “joint impetus” projects, which are necessitated by growth and non-growth factors and/or the City’s obligation to correct pre-existing space/equipment deficiencies. The PFDIF fees only relate to new development’s cost share for each component.
Parkland Acquisition and Development (PAD) Fees
The Parkland Acquisition and Development in-lieu fee was adopted by the City to acquire neighborhood and community parkland and to construct parks and recreational facilities. The acquisition component of the fee is set at $12,676 for areas east of I-805 and $4,994 for areas west of I-805, per single-family dwelling unit.
The development component of the fee is applicable citywide and is subject to an annual index-based adjustment; in October 2015 the development component increased from $5,257 to $5,365 per single-family dwelling unit. This action increased the combined fee from $17,933 to $18,041 and from $10,251 to $10,359; for areas east and west of I-805, respectively.
The PAD fee is applicable to new residential development only; the fee requirement for hotel and motel developments was eliminated via Ordinance 2014-3303 in fiscal year 2013-14. The fees for all residential land use types, as well as detailed FY 2015-16 financial information are presented in Attachment 2.
Trunk Sewer Capital Reserve Fees
The Trunk Sewer Capital Reserve fee was established in 1985 via Ordinance 2107 to finance all or a portion of the cost to enlarge sewer facilities to enhance efficiency of utilization and/or adequacy of sewer capacity.
The fee program was last comprehensively updated in 2014, decreasing the fee per EDU from $3,478 to $3,450. The 2014 action also authorized annual index-based updates. The first such update was implemented in October 2015, increasing the fee from $3,450 to $3,528 per EDU. Detailed FY 2015-16 financial information is presented in Attachment 3.
Interfund Loans
On February 17, 2015, the City Council approved an Interfund Loan Policy, along with a series of resolutions affirming and consolidating various interfund loans between DIF, PAD, and Trunk Sewer Capital Reserve Funds. Pursuant to the Policy, all interfund loans will accrue interest charges equal to the City’s actual pooled cash investment return. As a result of this change, the interest charges to date for all existing interfund loans were recalculated. The total amount due reported in the attached schedules may, therefore, vary significantly from the amounts presented in prior reports. In addition, interest rates will no longer be reported for interfund loans in this report, as the applicable rate will vary based upon the City’s actual investment returns.
FY 2015-16 Financial Information
Attachment 1, Schedules A through F, reports the required financial information for all DIFs except the Public Facilities DIF. Attachment 1, Schedule G reports the required financial information for the Public Facilities DIF and its components. Attachment 2 reports the required financial information for the Parkland Acquisition and Development fees. Attachment 3 reports the required information for the Trunk Sewer Capital Reserve fees. The schedules contain the following items:
• Beginning balance as of July 1, 2015.
• Fees received during the fiscal year ended June 30, 2016.
• Other miscellaneous revenues received during the fiscal year ended June 30, 2016.
• Interest earned from investing the cash balances available in each fund or from interfund loans during the fiscal year ended June 30, 2016.
• Expenditures from each of the funds during the fiscal year ended June 30, 2016.
• A description of each capital and non-capital project with expenditures funded entirely or in part by DIF/PAD/Trunk Sewer funds in FY 2015-16 and the percentage of the project funded by this fee through FY 2015-16. More detailed information on capital projects is available in the annual Capital Improvement Program (CIP) Budget.
• Outstanding balances of interfund loans made from DIF/PAD/Trunk Sewer Capital Reserve funds, as of the end of FY 2015-16.
• Ending balances as of June 30, 2016 for each fund.
• The amount, description, and purpose of each fee.
• Identification of an approximate date by which the construction of public improvements will commence.
Findings Required for Funds in Possession Over 5 Years
Government code Section 66001(d) requires the local agency to make findings with respect to any portion of development impact fees remaining unexpended for the fifth year following the first deposit into the account or fund, and every five years thereafter. The City reviewed all funds and made the required findings as appropriate in 2012. The DIF funds will next be reviewed, and additional findings made if appropriate, in 2017.
Copies of this report were sent to the San Diego Building Industry Association, Baldwin & Sons, Brookfield Homes, CalAtlantic Homes, HomeFed Corporation, JPB Development, the McMillin Companies, Meridian Development, Pacifica Companies, Shea Homes, Sudberry Properties, and Trimark Pacific Homes.
DECISION-MAKER CONFLICT
Staff has determined that the action contemplated by this item is ministerial, secretarial, manual, or clerical in nature and, as such, does not require the City Council members to make or participate in making a governmental decision, pursuant to California Code of Regulations Title 2, section 18704(d)(1). Consequently, this item does not present a conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. Accepting the report supports the Operational Excellence goal by ensuring the City’s development impact fee programs continue to comply with relevant California Government Code reporting requirements.
CURRENT YEAR FISCAL IMPACT
This is an informational report and there is no fiscal impact associated with accepting or rejecting the report.
ONGOING FISCAL IMPACT
This is an informational report and there is no fiscal impact associated with accepting or rejecting the report.
ATTACHMENTS
1. Schedules A through G: FY 2015-16 Financial Information for all DIFs, including the Public Facilities DIF
2. FY 2015-16 Financial Information for PAD Fees
3. FY 2015-16 Financial Information for Trunk Sewer Capital Reserve Fees
Staff Contact: Tiffany Allen, Development Services Department