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ORDINANCE NO. 3327 OF THE CITY OF CHULA VISTA UPDATING THE WESTERN TRANSPORTATION DEVELOPMENT IMPACT FEE TO MITIGATE TRANSPORTATION IMPACTS WITHIN WESTERN CHULA VISTA, AMENDING THE WESTERN TRANSPORTATION DEVELOPMENT IMPACT FEE BENEFIT AREA, ESTABLISHING THE BAYFRONT TRANSPORTATION DEVELOPMENT IMPACT FEE AND AMENDING CHAPTER 3.55 OF THE MUNICIPAL CODE (SECOND READING AND ADOPTION)
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RECOMMENDED ACTION
Recommended Action
Council adopt the ordinance.
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SUMMARY
The City's Western Transportation Development Impact Fee (WTDIF) Program was established on March 18, 2008, by Ordinances 3106 through 3110. This program is similar to the Eastern Transportation Development Impact Fee (TDIF) Program, which was established on January 12, 1988. In addition to preparing the City for future growth in the western portion of the City, these ordinances were required to be enacted by the City in order to continue to receive annual TransNet funds for local streets. Since this fee was established over five years ago, an update and revision is now due. In addition, it has been determined that the Bayfront, previously included in the WTDIF, should be removed from the WTDIF and a new DIF area covering only the Bayfront be established.
ENVIRONMENTAL REVIEW
The Development Services Director has reviewed the proposed activity for compliance with the California Environmental Quality Act and has determined that the activity is not a "Project" as defined under Section 15378 of the State CEQA guidelines because the activity consists of administrative/fiscal actions that will not result in direct or indirect physical changes to the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is required. Although environmental review is not required at this time, once the scope of potential individual projects has been fully defined, environmental review will be required for each project and the appropriate environmental determination will be made.
BOARD/COMMISSION RECOMMENDATION
Not applicable
DISCUSSION
New developments place demands on the existing transportation infrastructure, which can be mitigated by upgrading existing and/or constructing new transportation facilities. Chula Vista's original Transportation Development Impact Fee (TDIF) program, which was established on January 12, 1988, by Ordinance 2251, has functioned as a system to distribute the cost of constructing certain infrastructure facilities in an equitable manner among new development in Eastern Chula Vista. The proceeds from the fee are used to construct new transportation improvements or expand existing facilities.
The Western Transportation Development Impact Fee Program was established in 2008 in order provide a similar program to distribute the cost of infrastructure needed in order to accommodate new development in Western Chula Vista. The second reason to establish a Western TDIF was stated in the TransNet Ordinance approved by the San Diego County voters in November 2004, which states, "Any local agency that does not provide its full monetary contribution required by Section 9(A) in a given fiscal year will not be eligible to receive funding for local streets and roads
for the immediately following fiscal year."
Starting on July 1, 2008, each agency in the San Diego region was required to contribute a minimum of $2,000 in exactions (updated annually) from the private sector for each newly constructed residential housing unit to the Regional Transportation Congestion Improvement Program (RTCIP). On July 1, 2014, the amount was increased to $2,254. This ensures that future development contributes its proportionate share of funding needed to pay for the Regional Arterial System, as defined in SANDAG's Regional Transportation Plan. The RTCIP requirement does not apply to the Eastern TDIF because it was established prior to the 2004 TransNet ordinance requirement. The Western TDIF must comply with the 2004 TransNet ordinance requirements.
Basis and Methodology for the Establishment and Value of the Original WTDIF
The basis and methodology used in calculating the fee in this update is consistent with the basis and methodology used in the "Western Transportation Development Impact Fee Report" presented to City Council on March 4, 2008, and adopted on March 18, 2008, through passage of Ordinances Nos. 2008-3106 through 3110 (Attachment 1). One of the primary assumptions in the formulation of the original WTDIF is that the need for additional public facilities is generated by new development and the cost of the facilities should be paid by that new development in proportion to the traffic generated by said development. Average Daily Traffic (ADT) generation rates published by SANDAG for different land use categories were used to determine the trip generating characteristics on the transportation system.
The first step in determining the original WTDIF was to determine the future growth-related traffic impacts from development west of I-805. Various approved City documents, such as the City's General Plan, the Urban Core Specific Plan, the 1991 Mid-Bayfront Environmental Impact Report, and related traffic studies were used (collectively "City Documents"). Based on these impacts, a list of recommended road improvements from the Bayfront to I-805 was generated. These improvements would need to be constructed in order to maintain an acceptable level of service, not to remedy any deficiencies already existing, on the City's circulation system west of I-805. The improvements will serve the entire benefit area by either providing roads for residents, employees, or customers to use, or by providing new streets for existing traffic, thus freeing up capacity on existing streets that can be used by new development.
The improvement locations were subdivided into the following categories:
· Interstate 5 Improvements
· Interstate 805 Improvements
· State Route 54 Improvements
· Regional Arterial System (RAS -as defined by SANDAG) Improvements
· General Plan Impacts and Mitigation
· Bicycle and Pedestrian Facilities Improvements
· Mid-bayfront Local Coastal Program Roadways
· Bayfront Roadways
· Other Roadways (signalization projects)
The next phase in the process involved calculating an impact fee to address the traffic impacts identified in the City Documents. The original WTDIF looked at associated costs for all eligible projects in Year 2007 dollars, the number of Average Daily Trips (ADT) and the corresponding Level of Service (LOS) for each affected street segment and intersection proposed for improvement. Anticipated traffic volumes for Year 2030 were retrieved from the City Documents and their impacts on existing infrastructure were analyzed to determine the impacts attributable solely to future development. This information establishes the nexus between future development and the need for future traffic-related improvements.
The WTDIF fee is based on estimated trips for residential, commercial and industrial development. The City of Chula Vista, like other cities in San Diego County, uses the SANDAG Vehicular Traffic Generation Rates for the San Diego Region as the resource for specific land use trip generation. Trips were then converted to Equivalent Dwelling Units (EDUs) which are units of measure that standardize all land use types to the level of demand created by one single-family dwelling unit (SFDU).
In 2008, it was also estimated that the western area of the City had a total of 19,914 future EDUs. Applicable costs for all eligible projects were summed up and divided by the number of remaining EDU's on the west side of the city. The initial baseline costs per EDU were determined to be $3,148.11. To this sub-total, the WTDIF City administrative cost of 2% ($62.96/EDU) and a SANDAG administrative cost of 1% were added. The final fee was calculated at $3,243 per EDU. This fee has been collected and monitored separately for Regional facilities and local roadways. Regional arterials comprise 78.92% or $2,559 of the total fee, while 21.08% or $684 of the total fee remains for local roadways.
The initial schedule of fees for the WTDIF is presented on Table 1 (Attachment 2). Land uses that are classified as Community Purpose Facilities are exempt from payment of the WTDIF. "Community Purpose Facility" means a facility which is used for social service activities, public or private schools, day care, senior care or recreation or worship and spiritual growth.
The WTDIF program allows for the construction of eligible transportation projects by developers in lieu of paying the WTDIF at building permit issuance similar to the existing Eastern TDIF program. Any projects constructed by a developer would be audited and credits issued incrementally as the facility is constructed.
The TransNet Ordinance provides for an annual inflation adjustment to the fee on July 1 of each year beginning in 2009. The annual inflation adjustment will be 2% or based on the Caltrans Highway Construction Cost Index, whichever is higher. The program collects an additional 2% of the total improvement cost estimate for City staff administration. Originally, it was also anticipated that an additional 1% would be collected for SANDAG administrative costs, particularly for the cost of the Independent Taxpayer Oversight Committee (ITOC) annual audits.
Changes Since 2008
There have been several changes that affect the WTDIF since it was originally established in March 2008. City staff had never been invoiced for the 1% administrative fee by SANDAG. Staff was subsequently informed by SANDAG in a letter dated December 15, 2010, that this fee would not be collected. The City subsequently went to Council on October 25, 2011, and November 15, 2011, to enact Ordinance No. 3214, which deleted the 1% SANDAG fee from the WTDIF rates. City staff has also processed refunds of the 1% administration fee to all permit holders who had paid it.
The WTDIF fee has been increased every year on July 1. Ordinances 2008-3106 through 2008-3110 provided that the fee be adjusted by either the Caltrans Highway Construction Cost Index or 2%, whichever is higher. During Fiscal Year 2011-12, the Caltrans Index increased by 9.38%. The SANDAG Ordinance allows flexibility in choosing a comparable index, and SANDAG staff felt that a 2% increase, which reflected the Engineering News Record (ENR) 20-City Index of 1.93%, more accurately reflected the actual change in regional construction costs.
Subsequently, Council adopted Ordinance No. 2012-3246 on December 11, 2012 (Attachment 3). The new ordinance allows the City to use the Caltrans Highway Construction Cost Index, the ENR 20-City Index (Los Angeles) or an index of at least 2 %. Annual adjustment of the fee shall be automatic in accordance with action taken by the SANDAG Board of Directors. The WTDIF may also be reviewed and amended by City Council as necessary.
The most recent increase on July 1, 2013, increased the WTDIF fee to $3,546 per EDU. The entire schedule of fees is shown on Attachment 4. The minimum portion of this that must be allocated to the Regional Arterial System (RAS) is $2,208 per EDU. Although the fee was not increased in July 2014, the required RAS allocation was increased to $2,254 on July 1, 2014.
Since the establishment of the WTDIF, two documents relating to the construction of bicycle and pedestrian facilities were completed and approved by Council. This includes the City's first Pedestrian Master Plan, which was approved by Council on June 22, 2010. The revised Bikeway Master Plan was approved by Council on February 1, 2011. The priority projects identified in these two reports were reviewed to identify those projects that were within the area covered by the original Western TDIF and located on Regional Arterials. Four new or amended projects were added from these documents.
Establishing a Bayfront Transportation Development Impact Fee (BFDIF)
Since the establishment of the WTDIF, all properties to the west of the I-805 freeway have been included in the program. With the exception of the Bayfront area's new master plan, most of the development in western Chula Vista is infill development. Since most of the infrastructure has already been constructed, those WTDIF facilities unrelated to the Bayfront consist of expanding existing infrastructure and adding new and modified traffic signals.
The Bayfront facilities are significantly different, because they will serve new large developments on predominantly vacant land. The infrastructure includes completely new streets and new traffic signals. Due to the large amount of new infrastructure needed on the Bayfront, it could be perceived as disproportionate for the developers in the largely developed area between the I-5 and the I-805 to be required to pay for the entire infrastructure needed in the Bayfront area.
In light of this and with the agreement of the Bayfront developers, it was determined that a separate DIF should be established for the Bayfront area. To establish a Bayfront DIF (BFDIF) requires the existing WTIDF area be divided into two separate areas, as shown on the attached map (Attachment 5). The BFDIF area roughly includes the area west of I-5 between E Street and Naples Street.
A Nexus Study has been prepared for the establishment of the BFDIF (Attachment 6). This study considers the new development being proposed for the Bayfront area (a total of 7,248 new Equivalent Dwelling Units (EDUs). This number of EDUs excludes public facilities as they are not charged development impact fees. The Chula Vista Bayfront Master Plan Final Environmental Impact Report (CVBMP EIR), dated April 2010, presents a detailed traffic analysis of the impacts to be generated by the new development. This analysis determined that certain transportation-related facilities are required solely because of the impacts from Bayfront development (Bayfront Roadways). Other facilities, such as those identified along the I-5 freeway, the Bayshore Bikeway, and Regional Arterial System Projects are required due to impacts from both the area of the original WTDIF east of the I-5 and the Bayfront (Shared Facilities). These costs of these Shared Facilities are required to be divided between the two areas based on the relative impacts from those areas.
The final spreadsheet in the BFDIF Nexus Study is attached to the Agenda Statement (Attachment 7). It includes project costs from the original WTDIF (Original Project Costs), those costs escalated to July 2014 dollars, and the portion of those costs that are attributable to Bayfront impacts. In addition to the projects identified in the original WTDIF, the CVBMP EIR identified need for additional projects that would be required to fully mitigate the impacts from development within the Bayfront. Some of these additional projects are regional projects, while others are local. The total cost of improvements attributable to Bayfront (i.e. Bayfront share of Original Project Costs and costs of the additional projects) is $68,438,679.98. The rate per EDU is $9,442.
Updating Western Transportation Development Impact Fee
The calculation of the updated Western TDIF began with the list of projects included in the initial 2008 report. The Mid-Bayfront category was eliminated, as it will now be included in the BFDIF. Some projects included in the 2008 report have been eliminated, because they have been completed or other funding sources have been identified.
A new evaluation was done on the number of EDUs to be developed in the Western area. The number of EDUs identified in the 2008 report was 19,914. From this number, those EDUs attributed to the Bayfront were deducted. In addition, it was determined by City staff that the development in the WTDIF area would not reach the original estimate of 12,666 EDUs, but instead would be 10,365 (a reduction of 2,301 EDUs). The decrease in the number of EDUs is attributed to the use of a more realistic growth potential in the Western area.
A Nexus Study was prepared to amend and update the WTDIF (Attachment 8). The final spreadsheet in the Nexus Study is also attached (Attachment 9). It includes the original project costs, costs escalated to July 2014, the WTDIF share (i.e. deducting the BFDIF share), and existing and projected traffic conditions. Additionally, specific references to traffic impacts discussed in the Urban Core Specific Plan (UCSP) or traffic monitoring that was perfomed as directed by the City's Growth Management Oversight Committee (GMOC) are provided. The total cost of improvements attributable to growth in the WTDIF area is $40,597,039.50. The fund balance in this account is $96,406.01. Therefore, the total amount which will need to be financed by future fees is $40,500,633.49. This cost includes both local and the WTDIF share of regional projects.
The total proposed rate is $3,907 per EDU. This also includes the 2 percent administrative fee, which is applied to hard costs only. If compared to the WTDIF amount of $3,617 which would have been otherwise effective on July 1, 2014, this is a total increase of $290, or approximately 8.0 percent. Since this rate did not take effect on July 1, 2014, the current rate is $3,546 per EDU.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found no property holdings within 500 feet of the boundaries of the properties which are the subjects of this action. Staff is not independently aware, and has not been informed by any Councilmember, 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. The Western transportation Development Impact Fee supports the Strong and Secure Neighborhood strategy. The western TDIF finances the construction and upgrading of public infrastructure, which is a key City function in providing a safe and efficient roadway system for residents, businesses and visitors.
CURRENT YEAR FISCAL IMPACT
There is no direct impact on the General Fund from approving the proposed resolution and ordinance. All staff costs associated with preparation of this action are borne by the administrative components of the BFDIF and WTDIF programs.
Western Transportation Development Impact Fee (WTDIF)
Adoption of the proposed ordinance increases the WTDIF from $3,546 to $3,907 per EDU. This is an increase of approximately 10.2 percent (or $361). This rate increase will generate additional revenue for the WTDIF fund of $361 per EDU. Actual fiscal impact to the WTDIF fund will vary based on the number of building permits issued within the WTDIF program boundaries.
Bayfront Transportation Development Impact Fee (BFDIF)
Adoption of the proposed ordinance establishes the new BFDIF fee program, at a rate of $9,442 per EDU. Actual fiscal impact to the BFDIF fund will vary based on the number of building permits issued within the BFDIF program boundaries.
ONGOING FISCAL IMPACT
The proposed WTDIF fee increase and the new BFDIF fee provide funding to construct the new and expanded transportation facilities needed in order to accommodate new development in western Chula Vista.
After subtracting out the current fund balance of $96,406.01, the future WTDIF program cost of $40,500,633.49, when spread over the remaining 10,365 EDUs generates the proposed WTDIF rate of $3,907. The future BFDIF program cost of $68,438,679.98, when spread over the remaining 7,248 EDUs, generates the proposed BFDIF rate of $9,442.
The facilities constructed under this fee program will result in routine maintenance.
Attachments:
1. Ordinance 2008-3106
2. 2008 WTDIF Schedule of Fees
3. Ordinance 2012-3246
4. 2013 WTDIF Schedule of Fees
5. WTDIF/BFDIF Map
6. BFDIF 2014 Nexus Study
7. BFDIF Cost Calculations
8. WTDIF Nexus Study
9. WTDIF Cost Calculations
Staff Contact: Elizabeth Chopp