REPORT TO THE CITY COUNCIL
FROM: SCOTT L. MOZIER, P.E., Director
Public Works Department
BY: ANDREW J. BENELLI, P.E., City Engineer/Assistant Director
Public Works Department, Traffic Operations & Planning Division
SUBJECT
Title
Annual Review and Acceptance of the FY 2021 Summary of Impact Fee Waivers.
Body
RECOMMENDATIONS
Staff recommends that the City Council review and accept the FY2021 Summary of Impact Fee Waivers.
EXECUTIVE SUMMARY
The Economically Disadvantaged Neighborhoods Incentive Program requires an annual report to City Council that lists all the Development Impact fee waivers processed in the last fiscal year. The attached files provide a listing of the FY2021 fee waivers that were approved for each participating development project and include a breakdown for each impact fee program. The attached files also list the public infrastructure funds that the City has received to offset the revenue loss of waived or reduced development impact fees.
BACKGROUND
The City charges development impact fees to new development for various types of public infrastructure, consistent with Section 66000 et seq. of the California Government Code, generally known as the Mitigation Fee Act or AB1600. Fees collected by the City include Regional Street Impact Fees, New Growth Area Street Impact Fees, Traffic Signal Mitigation Impact Fees, Citywide Fire Facilities Impact Fees, Citywide Police Facilities Impact Fees, Citywide Park Facilities Impact Fees, Quimby Parkland Dedication Fees, Water Capacity Fees and Wastewater Capacity Fees.
Each development fee was established in accordance with an adopted nexus study. The law requires that impact fees bear a reasonable relationship to the impact of the proposed development. Developers can be charged no more than their “fair share” under AB1600. Therefore, any waived or reduced fees are tracked against public infrastructure funds which may help offset the lost impact fee revenue. The Council has adopted the following impact fee waiver or reduction programs:
• iDIFER - Provides fee reductions for industrial and commercial developments that provide job creation or significantly increase property tax base.
• BUILD Act - Provides fee reductions for construction of new homes that replace existing homes that are being demolished or have been destroyed by fire.
• Commercial BUILD Act - Provides fee reductions for commercial or industrial developments that replace existing buildings being demolished or have been destroyed by fire.
• Economically Disadvantaged Neighborhoods - Provides fee reductions for certain categories of projects in economically disadvantaged neighborhoods.
• Economic Expansion Act - Provides fee reductions and other incentives for projects that generate substantial taxes or provide employment.
• Businesses Impacted by High-Speed Rail Condemnation - Allows landowners to relocate without paying fees when property is condemned for High-Speed Rail.
• Ventura / Kings Canyon Corridor Job Creation Act - Provides fee reductions for new development on the Ventura / Kings Canyon Corridor.
• Infill Incentive Program for Certain Residential Infill Projects - Provides fee reductions for multi-family projects that are under five acres and surrounded by existing development.
The full listing of waivers by incentive program, entitlement number, applicant and development location/address is attached to the staff report.
The Fire Impact Fee was increased in May 2019 when the Fire Department determined that they could no longer provide adequate response times in the area west of State Route 99 due to new homes and multi-family projects being constructed. The new fees were adopted with a Health and Safety Finding. Due to that “Finding” all new projects must pay the current fee, even if the project was initially approved before the increase. The Health and Safety finding also prohibits waiving the Fire Impact Fee. However, three of the Waiver Programs have exceptions that allow the Fire Fee to be paid from other sources. The two “Build Act” waiver programs assume that the impact of the previous building on the property was mitigated, for the existing house or building that is being (or was) demolished. Residential projects pay per unit, so the size of the home or apartment does not alter the amount of the fee that is due. Commercial and industrial projects have Fire fees that are adjusted to match the size of the building. If the building is larger that the structure that was demolished, the developer is required to pay the Fire fee for the increase, but they receive credit for the Fire fee on the demolished building. The Infill Incentive Program also allows developers to avoid paying fire Impact fees. A General Fund transfer is provided to the Fire Department to backfill the waiver.
Total waivers from 2014 through today are summarized below, broken down by incentive program and by fee program:
• Commercial BUILD / Economically Disadvantaged Neighborhoods - $1,406,784.08
• iDIFER - $4,058,018.19
• Residential BUILD - $473,741.99
• Infill Incentive Program for Certain Residential Infill Projects - $254,562.55
Fees waived and the total amounts are listed below:
• Citywide Fire Facilities - $543,562.16
• Citywide Police Facilities - $1,522,575.10
• Citywide Park Facilities - $744,389.00
• Citywide Regional Streets - $913,029.52
• New Growth Area Major Streets - $910,997.96
• Traffic Signal Mitigation Impact Fee - $1,303,990.52
The grand total of fees waived from the 2014 inception to today is $5,938,544.26. Grants and other public infrastructure funds received by the City during this time period, which may help offset fee waivers, are listed below by fee program:
• Fire and Police - $0
• Parks - $10,491,902
• Regional Streets - $12,713,582
• New Growth Streets - $2,344,900
• Traffic Signals - $1,655,235
The grand total of public infrastructure funding received which may help offset fee waivers is $27,205,619.
ENVIRONMENTAL FINDINGS
The annual fee waiver summary is not a project under the California Environmental Quality Act and does not require an environmental finding.
LOCAL PREFERENCE
Local preference does not apply as this item is only for acceptance of the annual update.
FISCAL IMPACT
There is no fiscal impact of implementing the staff recommendation of receiving the report.
Attachments:
Summary of Approved Impact Fee Waivers
Summary of Public Infrastructure Funds Received