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HomeMy WebLinkAbout1996-09-24 City CouncilCity of Palo Alto C ty Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT:ADMINISTRATIVE SERVICES AGENDA DATE: SEPTEMBER 24, 1996 CMR:380:96 SUBJECT:ANNUAL STATUS REPORT ON DEVELOPERS’ FEES AND ADOPTION OF FINDINGS REGARDING UNEXPENDED FEES REQUEST This report transmits information for fiscal year 1995-96 on the status of development impact fees imposed and collected by the City to defray the costs of public facilities related to development projects. State law (Government Code Section 66006) requires each local agency, which imposes development impact fees, to prepare an annual report providing specific information about those fees. This requirement is part of the law commonly referred to as AB 1600. Staff requests Council approval of findings in Exhibit B with respect to the continuing need for impact fees which have been unexpended for a period of five years or more since their receipt. RECOMMENDATION Staff recommends that the City Council accept the report attached as Exhibit A. In addition, staff recommends that the City Council make the findings attached to this report as Exhibit B with respect to the continued need for certain funds in the San Antonio/West Bayshore Fund, which are planned to be used for the San Antonio On-Ramp Project. POLICY IMPLICATIONS Policy implications relate to whether or not findings are adopted with respect to unexpended funds in the San Antonio/West Bayshore Fund. CMR:380:96 Page 1 of 4 EXECUTIVE SUMMARY AB 1600 (Government Code Sections 66000 et. seq.) imposes several obligations upon local agencies with respect to fees imposed on new development. This law became effective on January 1, 1989. It codifies the legal requirement that fees on new development have the proper nexus to any project on which they are imposed. In addition, AB 1600 imposed certain accounting and reporting requirements with respect to the fees collected. The fees, for accounting purposes, must be segregated from the general funds of the City and from other funds or accounts containing fees collected for other improvements. Interest on each development fee fund or account must be credited to that fund or account and used only for the purposes for which the fees were collected. Annually, after the close of the fiscal year, the agency which collected the fees must make available to the public the following information regarding each fund or account: o ¯the beginning and ending balance for the fiscal year o the amount of fees collected, interest earned, and other income in the fund o the amount of expenditure for each public facility or improvement made from the fund o the amount of any refunds made due to inability to expend fees within the required time frame This report must be presented to the legislative body. Exhibit "A", attached, fulfills this requirement. AB 1600 also provides that, five years after collecting a development fee subject to the law, a local agency shall make findings once each subsequent fiscal year with respect to any portion of the fee remaining unexpended or uncommitted. The finding .must identify the purpose to which the fee is to be put and demonstrate a nexus between the fee and the purpose for which it was originally charged. If the agency is unable to make the findings for continued need for the fee, then the uncommitted portion of the fee, and any accrued interest, must be refunded to the current owner of the development for which the fee was originally paid. The City of Palo Alto development fees covered by AB 1600, and documented in the attached Exhibit A, include the following: CMR:380:96 Page 2 of 4 o Stanford Research Park Traffic Impact Fees (PAMC Ch. 16.45) Fee for new nonresidential development in the Page Mill/El Camino Real Service Commercial zone, to fund capacity improvements at eight intersections. O San Antonio/West Bayshore Area Traffic Impact Fees ( PANIC Ch. 16.46) Fee for new nonresidential development in the San Antonio/West Bayshore Area to fund capacity improvements at fou~ intersections. O Housing Impact Fees Imposed on Commercial Developments (PAMC Ch. 16.47) Fee on large commercial and industrial development to contribute to programs that increase the City’s low income and moderate-income housing stock. o Parking In-Lieu Fees for University Avenue Parking District (PAMC Ch. 16.57). Fee on new nonresidential development in the University Avenue Parking Assessment District in lieu of providing required parking spaces. In-lieu fees are also paid to the City by residential developments in fulfillment of obligations under the City’s inclusionary zoning (Below-Market Rate Housing) program. While these fees do not necessarily fit within the definition of development fees subje(t to AB 1600 reporting requirements, staff has included them in this report for informational purposes. The five-year review period established by AB 1600 covers fees collected on or before June 30, 1991. Staff examined the accounts to determine if any development fees collected on or before that date remain unexpended or uncommitted. (Staff has included notes receivable and projects currently budgeted in the category "committed.") The only development impact fees collected on or before June 30, 1991 which remain unexpended are contained in the San Antonio/West Bayshore Fund. Staff is recommending that the City Council make the findings contained in Exhibit B with respect to the continued need for these funds for the San Antonio On-Ramp Project. CMR:380:96 Page 3 of 4 FISCAL IMPACT There are no fiscal impacts from the presentation of this report. If the Council does not make the fmdings contained in Exhibit B, the development fees described therein will be required to be refunded. This would have a fiscal impact of $286,016. ENVIRONMENTAL ASSESSMENT Presentation of this annual report is not a project under the Califomia Environmental Quality Act; accordingly, no environmental assessment is required. ATTACHMENTS Exhibit A Annual Report on Development Fees for Period Ending June 30, 1996 Exhibit B Findings With Respect to Unspent Impact Fees in San Antonio/West Bayshore Traffic Fund PREPARED BY: Linda Craig, Senior Financial Analyst DEPARTMENT HEAD APPROVAL :~ Emi~Ha~r~son Deputy City Manager, CITY MANAGER APPROVAL: CC: n/a ~inistrative~ices /Junfi’’Fleming/" ~ Manager CMR:380:96 Page 4 of 4 O(DO0 E EXHIBIT "B" FINDINGS WITH RESPECT TO UNSPENT IMPACT FEES IN SAN ANTONIO/WEST BAYSHORE TRAFFIC FUND WHEREAS, Government Code section 66001(d), effective January 1, 1989, requires the City to make certain findings once each fiscal year .with respect to development fees collected after that date which remain unexpended or uncommitted five or more years after deposit of such fees; and WHEREAS, the City has collected development fees as authorized under Chapter 16.46 of the Palo Alto Municipal Code for the purpose of funding transportation capacity improvements at certain designated intersections, and has segregated those fees in a separate fund; and WHEREAS, the sum of $286,004, representing fees collected pursuant to Chapter 16.46 since January 1, 1989, together with accrued interest thereon, remains unexpended five or more years after deposit of the fees ("the San Antonio fees"); and WHEREAS, the City Council desires to make the findings required by law with respect to such fees; NOW, THEREFORE, THE CITY COUNCIL does find as follows: 1. The San Antonio fees were collected pursuant to Chapter 16.46 of the Palo Alto Municipal Code, to be used solely for the purpose of funding trb.nsportation capacity improvements at designated intersections which are adversely impacted from new non-residential development in the San Antonio/West Bayshore Area ("Area"). 2. The need for the improvements for which the San Antonio fees were collected was identified in an Environmental Impact Report ("EIR") certified by the City Council on January 13, 1986. 3. Chapter 16.46 identifies the specific improvements to be constructed with the fees collected thereunder, which include a right-turn lane on westbound Charleston at San Antonio, a signalized intersection at the site of the Ford Aerospace driveway, and interconnections of traffic signals in the Area, or alternative improvements in the Area as determined by the Chief Transportation Official, subject to the approval of the City Council. 4. The State Department of Transportation (Caltrans) has plans for a new on-ramp and ramp metering improvements at the San Antonio Road junction with Highway 101. This project has been planned for over ten years, but has not yet been constructed because the State is currently engaging in further review and study of the project. 5. The San Antonio/West Bayshore improvements described in Chapter 16.46 are to be constructed together with or after the Caltrans on-ramp improvements, because of the need to coordinate construction projects and assess the impacts of the new on-ramp prior to commencement of the City improvements. Accordingly, the City has been unable to undertake the improvements as of this time, and the San Antonio fees remain unspent. 6. A reasonable relationship exists between the San Antonio fees and the purpose for which they were collected, in that the fees were imposed upon new non-residential developments in the Area. Those projects, according to the EIR, cumulatively generate traffic which adversely impact the intersections designated in the EIR. 7. The San Antonio fees will be used solely for purpose of constructing the traffic improvements identified in Chapter 16.46, as required under the Code. 8. The San Antonio fees continue to be required in order to fund the improvements specified in Chapter 16.46, in that the improvements have not yet been constructed for the reasons described above, and the cost of the necessary improvements is to be spread proportionately among the new non-residential users which contribute the traffic generating the need for the improvements. 9.Based on the foregoing, a continuing need for the San Antonio fees has been demonstrated.