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HomeMy WebLinkAbout1999-01-11 City CouncilCity of Palo Alto ’ CAtyManager sReport TO: FROM: HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT:ADMINISTRATIVE SERVICES DATE:JANUARY 11, 1999 CMR:100:99 SUBJECT:ANNUAL STATUS REPORT ON DEVELOPERS’ FEES RECOMMENDATION Staff recommends that the City Council accept the Annual Report on Developers’ Fees for the period ending June 30, 1998 (Exhibit A). BACKGROUND State law (Government Code Section 66006) requires each local agency that imposes development impact fees to prepare an annual report providing specific information about those fees. This requirement i.s part of the law commonly referred to as AB 1600. It codifies the legal requirement that fees on new development have the proper nexus _to any project o_n 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. The law was amended effective Jan~uary 1, 1997. The provisions now require that, within 180 days 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 A brief description of the type of fee in the fund. o The amount of the fee. CMR:100:99 Page 1 of 4 O The beginning and ending balance for the fiscal year. o The amount of fees collected and interest earned. An identification of each public improvement on which fees were expended and the amount of the expenditure on each improvement, including the total percentage of the cost of the public improvement that was funded with fees. O An identification of an approximate date by which the construction of a public ¯ improvement will commence, if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement. O A description of each interfund transfer or loan made from the account or fund, including the public improvement on which the loaned funds will be expended, and in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan. O The amount of any refunds made due to inability to expend fees within the required time frame. This report must also be reviewed by the City Council at a regularly scheduled public meeting not less than 15 days after’the information is made available to the public. In addition, notice of the time and place of the meeting shall be mailed at least 15 days_prior to the meeting to any interested party who files a written request with the local agency for such a mailed notice. The Home Builder’s Association, which has filed a request with the City Manager, has been sent a notice. The law also provides that, for the fifth fiscal year following the first deposit into the fundand every five years thereafter, the local agency shall make findings with respect to any portion of the fee remaining unexpended, whether committed or uncommitted. The finding must: identify the purpose to which the fee is to be put; demonstrate a nexus between the fee and the purpose for which it was originally charged; identify all sources and amounts of funding anticipated to complete financing of incomplete improvements;.and designate the approximate dates on which the funding referred to above is expected to be deposited into the fund. With last year’s report for FY 96-97, findings were presented and adopted with respect to unexpended funds in the Stanford Research Park/El Camino Fund and the San Antonio/West Bayshore Fund. No findings are required this year. CMR:100:99 Page 2 of 4 If the agency no longer needs the funds for the purposes collected, or if the agency fails to make required findings, or perform certain administrative tasks prescribed by AB 1600, the agency may be required to refund, on a prorated basis to owners of the properties upon which the fees for the improvement were imposed, the monies collected for that project and any interest earned on those funds. DISCUSSION The City of Palo Alto development fees covered by AB 1600, and documented in Exhibit A, include the following: o Stanford Research Park/El Camino Traffic Impact Fees (PAMC Ch. 16.45) O O o Fee for new nonresidential development in the Stanford Research Park/El Camino Real Service Commercial zone, to fund capacity improvements at eight intersections. San Antonio/West Bayshore Area Traffic Impact Fees ( PAMC Ch. 16.46) Fee for new nonresidential development in the San Antonio/West Bayshore Area to fund capacity improvements at four intersections. 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. _ Parking In-Lieu Fees for University Avenue Parking District (PANIC Ch. 16.57) Fee on new nonresidential development in the University Avenue Parking Assessment District in lieu of providing required parking spaces. Residential housing in-lieu fees are also paid to the City, at the developer’s election, by residential developers in fulfillment of obligations under the City’s inclusionary zoning (Below-Market Rate Housing) program. While these fees do not necessarily fit within the defmition of development fees subject to AB 1600 reporting requirements, staff has included them in this report for informational purposes. Staff examined the accounts to determine if any development fees remain unexpended five years or more after receipt and are subject to refund. Development impact fees collected on or before June 30, 1993 which remain unexpended are contained in the San Antonio/West CMR:100:99 Page 3 of 4 Bayshore Fund and in the Stanford Research Park/El Camino Fund. Last year (CMR:482:97) the City Council made the required findings with respect to the continued need for the San Antonio/West Bayshore Fund for the San Antonio On-Ramp Project and with respect to the continued need for the Stanford Research Park/El Camino Fund for the Major Intersection Improvements at Foothill Expressway and Page Mill Road, which are scheduled for completion in 2010. The Council does not need to make the findings again this year. In the case of the Housing Impact Fees from Commercial Development and the Parking In-Lieu Fees for the University Avenue Parking District, the funds on hand as of June 30, 1998 have all been received within the past three years. Therefore, no findings are required for these fees. RESOURCE IMPACT Council approved the required f’mdings with respect to unexpended fees last year. As a result, there is no fiscal impact associated with this year’s report. POLICY IMPLICATIONS This report does not represent any change to existing City policies. ENVIRONMENTAL ASSESSMENT Presentation of this annual report is not a project under the Califomia Environmental Quality Act; accordingly, no environmental assessment is required. ATTACHMENT Exhibit A Annual Report on Development Fees for Period Ending June 30, 1998 PREPARED BY: Linda Craig, Senior Accountant DEPARTMENT HEAD APPROVAL: CITY MANAGER APPROVAL: ~~~r~AAdT ’~rfi ini strative S erv~ces Assistant City Manager CC: Home Builders Association CMR:100:99 Page 4 of 4 Exhibit A City of Palo Alto Annual Report on Developers’ Fees for Period Ending June 30, 1998 FUND Stanford Research Park/ El Camino F-und San Antonio/West Bayshore Fund Purpose and Authority for Collection Traffic impact fees imposed on new nonresidential develop- ment in the Stanford Research Park/El Camino Real CS zone to fund improvements at eight identified intersections PAMC Ch. 16.45 Traffic impact fees imposed on new nonresidential develop- ment in the San AntonioNVest Bayshore Areas to fund capacity improvements at four identified intersections. PAMC Ch. 16.46 Amount of the Fee $2.79 per square foot $1.49 per square foot Fund Balance July t, 1997 Activity in 1997-98 Revenues Fees Collected Webster Wood In-Lieu Payment Interest Earnings Total Revenues Expenditures Housing Program Expense Principal Retired Downtown Parking Structure CIP Major Intersection Improvement CIP Total Expenditures Ending Balance June 30, 1998 Other Commitments/Appropriations Encumbrance - Palo Alto Housing Corp. 1998-99 Budget - Major Intersection Imp. CIP Notes Receivable 1997-98 Budget - Sheridan Apts. Net Funds Available $714,563 545,042 64,936 609,978 (150,000) (150,000) $564,563 (340,000) $224,563 $362,799 25,223 25,223 .0 $362,799 $362,799 USE OF FEES: In 1997-98 funds were used for theFoothill Expressway/Page Mill intersection improvements. The totalproject cost is $1,624,000, of which $652,000 in impact fees are budgetedto be used. This represents 40% of the project total cost. USE OF FEES: No expenditures have been made from this fund. Fees areplanned to be used for specific traffic improvements in theCharleston/San Antonio Road area, but have been delayed bya related project beingconstructed by the State Department of Transportation. lof3 FUND Commercial Housing In-Lieu Fund University Avenue Parking Assessment District In-Lieu Fund Purpose and Authority for Collection Fees imposed on large com- mercial and industrial develop- ment to contribute to programs that increase the .City’s low income and moderate-income housing stock. PAMC Ch. 16.47 Fees collected from non-residential development within the University Ave. Parking Assesment District in lieu of providing the required number of parking spaces. PAMC Ch 16.57 Amount of the Fee $3.63 per square foot $18,291 per space Fund Balance July 1, 1997 $3,789,275 $779,155 Activity. in 1997-98 Revenues Fees Collected Webster Wood In-Lieu Payment Interest Earnings 1,362,434 165,424 42,296 Total Revenues 1,527,858 42,296 Expenditures ~’ Housing Program Expense Principal Retired Downtown Parking Structure CIP Major Intersection Improvement ClP (191,250) (798,000) Total Expenditures (191,250)(798,000) Ending Balance June 30,1998 $5;125,883 $23,451 Other Commitments/Appropriations Encumbrance - Palo Alto Housing Corp. 1998-99 Budget - Major Intersection Imp. ClP Notes Receivable 1997-98 Budget - Sheridan Apts. (5O,OOO) (3,095,000) Net Funds Available $1,980,883 $23,451 USE OF FEES: During 1997-98, $35,458 in feeswere used for contract expenses with the Palo Alto HousingCorporation for administration ofthe Below-Market-Rate housing program. $51,607 was paid toCommunity Housing Inc. and $44,926 was a final payment forLytton IV Housing. Notes receivable in the amount of $59,258 were recorded as anexpense during the year.Notes Receivable include 725-753 Alma St. $2,695,000and Barker Hotel $400,000. USE OF FEES: In 1997o98, a budgeted transfer in the amount of $798,000 was madefrom this fund to the Capital Improvement Project fund, to be used for CIP 19530, DowntownParking Structure feasibility project.This project is estimated to cost$21.6 million in the year 2000. Funds on hand represent 4% of thetotal cost. The project is currently in the design phase, and is contingenton voter approval of an assessmentdistrict, which will provide the bulk of the project funding. 2of3 FUND (INFORMATION ONLY) Residential Housing In-Lieu Fund Purpose and Authority for Collection Amount of the Fee Fees colected from residential developments of three or more units in lieu of providing the re-quired below-market rate unit(s) to low and moderate income households.PA Comprehensive Plan and PAMC Chapter 18 Varies Fund Balance July 1, 1997 Activity. in 1997-98 Revenues Fees CollectedWebster Wood In-Lieu Payment Interest Earnings Total Revenues Expenditures Housing Program Expense Principal RetiredDowntown Parking Structure CIP Major Intersection Improvement CIP Total Expenditures Ending Balance June 30, 1998 Other Commitments/Appropriations Encumbrance - Palo Alto Housing Corp. 1998-99 Budget- Major Intersection Imp. ClP Notes Receivable1997-98 Budget - Sheridan Apts. Net Funds Available $2,112,586 839,004 8,475 8,321 855,800 (93,318) (93,318) $2,875,068 (1,876,156) (825,801) $173,111 USE OF FEES: During 1997-98, $825,801 wasbudgeted from this fund for theacquisition of the SheddanApartment project. Thisrepresents 33% of the City’s $2.5million loan for this project.Notes Receivable include$375,000 for 3053 Emerson and$1,501,156 for Oak Manor. 3of3