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REPORT REGARDING THE DEVELOPMENT IMPACT FEE, PARKLAND ACQUISITION AND DEVELOPMENT FEE, AND TRUNK SEWER CAPITAL RESERVE FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2014
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RECOMMENDED ACTION
Recommended Action
Council receive the report.
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SUMMARY
State 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. These reports satisfy that requirement and have been available in the City Clerk's Office for public review since December 1, 2014. 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
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, 2014. 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. On July 1, 2013, the Western Transportation Development Impact Fee (WTDIF) increased from $3,476 to $3,546 per equivalent dwelling unit. In October of 2013, the following automatic index-based annual adjustments went into effect:
· The Transportation Development Impact Fee (TDIF) increased from $12,480 to $12,494 per equivalent dwelling unit.
· The Public Facilities Development Impact Fee (PFDIF) increased from $9,510 to $9,654 per single-family dwelling unit.
· The Traffic Signal fee increased from $33.45 to $34.27 per average daily vehicle trip.
· The Otay Ranch Village 11 Pedestrian Bridge DIF increased from $2,241 to $2,243 per single-family dwelling unit.
· The Parkland Acquisition and Development fee increased from $9,978 to $10,100 per single-family dwelling unit for areas west of I-805 and from $17,660 to $17,782 for areas east of I-805.
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 adopted 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 program was last comprehensively updated in 2005, increasing the fee per EDU to $10,050. This fee is subject to an annual index based adjustment; in October 2013 the fee increased from $12,480 to $12,494 per equivalent dwelling unit (EDU). The fees for all land use types, as well as detailed FY 2013-14 financial information are presented in Attachment 1, Schedule A.
On November 18, 2014 the City Council approved a comprehensive update of the TDIF program increasing the fee from $12,494 to $13,035 per EDU. The November 2014 action will be reflected in next year's annual report.
Western Transportation Development Impact Fee (WTDIF)
The Western TDIF fee was adopted on March 18, 2008 via Ordinances 3106 to 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. This fee is applicable to all development west of Interstate 805. This fee is subject to an annual index-based adjustment on July 1 of each year; in July 2013 the fee increased from $3,476 to $3,546 per EDU. The fees for all land use types, as well as detailed FY 2013-14 financial information are presented in Attachment 1, Schedule B.
On November 18, 2014, the City Council approved a comprehensive update of the WTDIF program increasing the fee from $3,546 to $3,907 per EDU and establishing a new Bayfront Development Impact Fee (BFDIF) with an initial rate of $9,442 per EDU. This action will be reflected in next year's annual report.
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. As funds are accumulated they are expended on traffic signal projects. This citywide fee is assessed per average daily trip generated. This fee is subject to an annual index based adjustment; in October 2013 the fee increased from $32.45 to $34.27 per trip. Detailed FY 2013-14 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. Detailed FY 2013-14 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 2013-14 financial information are presented in Attachment 1, Schedule E.
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 2013-14 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 August 2004, the Salt Creek Sewer Basin DIF was updated, increasing from $284 to $1,330 per EDU, via Ordinance 2974-A. The fee remains unchanged since the 2004 action. The fees for all land use types, as well as detailed FY 2013-14 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. The fee program was last modified in February 2007, when it was amended to include Otay Ranch Village 2. This action amended both the program's area of benefit and facility list. Construction costs were revised and a new fee of $1,114 per EDU was established and remains unchanged. Detailed FY 2013-14 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. This fee is subject to an annual index based adjustment; in October 2013 the fee increased from $2,241 to $2,243 per single-family dwelling unit. The fees for all land use types, as well as detailed FY 2013-14 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 2013 the combined fee increased from $9,510 to $9,654 per single family dwelling unit. Detailed FY 2013-14 financial information is presented in Attachment 1, Schedule G. The components of the PFDIF, including current fees are as follows:
Administration ($601) - Administration of the PFDIF program, oversight of expenditures and revenues, preparation of updates, calculation of costs, etc.
Civic Center Expansion ($2,756) - 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 ($1,671) - 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 ($450) - 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 ($1,582) - 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. This fee is applicable to new residential development only.
Fire Suppression System ($1,393) - 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 ($1,201) - 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. This fee 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 2013 the development component increased from $4,984 to $5,106 per single family dwelling unit. This action increased the combined fee from $17,660 to $17,782 and from $9,978 to $10,100; for areas east and west of I-805, respectively. This fee is applicable to new residential development only. The fees for all residential land use types, as well as detailed FY 2013-14 financial information are presented in Attachment 2.
On January 28, 2014 the City Council adopted Ordinance 2014-3303 eliminating the PAD fee obligation for hotel and motel development. The ordinance went into effect on March 13, 2014.
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 updated in 2005, increasing the fee per EDU to $3,478. The fee remains unchanged since the 2009 action. Detailed FY 2013-14 financial information is presented in Attachment 3.
On July 8, 2014, the City Council approved an action decreasing the Trunk Sewer Capacity fee from $3,478 to $3,450. This action will be reflected in next year's annual report.
FY 2013-14 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, 2013.
· Fees received during the fiscal year ended June 30, 2014.
· Other miscellaneous revenues received during the fiscal year ended June 30, 2014.
· Interest earned from investing the cash balances available in each fund during the fiscal year ended June 30, 2014.
· Expenditures from each of the funds during the fiscal year ended June 30, 2014.
· A description of each capital project with expenditures funded entirely or in part by DIF/PAD/Trunk Sewer funds in FY 2013-14 and the percentage of the project funded by this fee through FY 2013-14. More detailed information on all projects is available in the annual Capital Improvement Program (CIP) Budget.
· Information on any loans from DIF/PAD/Trunk Sewer Capital Reserve funds during FY 2013-14.
· Ending balances as of June 30, 2014 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.
The ending balances as of June 30, 2014 are in the process of being audited as part of the audit of citywide financial statements, and are therefore subject to adjustment.
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 Building Industry Association of San Diego, the Eastlake Development Company, the McMillin Companies, the Otay Ranch Company, the Otay Land Company, Trimark Pacific Homes and Brookfield 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 18702.4(a). Consequently, this item does not present a conflict 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: FY2013-14 Financial Information for all DIFs, including the Public Facilities DIF
2. FY2013-14 Financial Information for PAD Fees
3. FY2013-14 Financial Information for Trunk Sewer Capital Reserve Fees
Staff Contact: Tiffany Allen