Loading...
HomeMy WebLinkAbout2004-03-01 City Council (8)©0~ TO: llA City of Palo Alto City Manager’s Report HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: SUBJECT: MARCH 1, 2004 CMR: 173:04 2957 WAVE~EY AVENUE: REQUEST BY CHUCK BRADLEY FOR A PARTIAL REFUND OF DEVELOMENT IMPACT FEES PAID IN NOVEMBER 2002 ON A SECOND RESIDENTIAL UNIT CONSTRUCTED IN CONJUCTION WITH A REPLACEMENT HOME RECOMMENDATION Staff recommends that the City Council deny the request for a partial refund. BACKGROUND On March 25, 2002, the City Council adopted development impact fees to meet some of the capital costs for parks, libraries and community centers to serve new residents. On September 17, 2002, the City Council introduced an ordinance reducing impact fees for multi-family units of 900 square feet or less, from $6,930 to $3,500. The fee reduction was effective on projects approved after November 7, 2002 (CMR 380:02). One of the projects subject to the impact fees was the replacement of a single family dwelling at 2957 Waverley of approximately 925 square feet with a new residence of approximately 2,600 square feet and a second unit of approximately 900 square feet. The larger unit was not subject to development impact fees because it replaced an existing home. The second unit was subject to the fees. The larger unit was approved on June 2002. The second unit was approved on August 26 2002. Development impact fees were paid when the building permit was issued on November 21, 2002. A synopsis of events and dates related to development impact fees and the property owner’s request for a partial refund is listed in attachment A. DISCUSSION Detailed information regarding application of the law related to the property at 2497 Waverley has been provided to Mr. Bradley by the City Attorney’s Office (attachment B). Palo Alto Municipal Code 16.58.040 states "the obligation to pay the fees established by this chapter shall accrue as of the date the first discretionary approval is given for the CMR: 173:04 Page 1 of 3 development, or if no discretionary approval is required, as of the date a complete application is submitted for a building permit." The $6,930 fee collected is consistent with the ordinance: it was the fee amount required by law on the date the project was approved. Mr. Bradley attended the July 16, 2003 public hearing when the impact fee levels were considered by the Finance Committee. Mr. Bradley also attended the September 17, 2003 City Council meeting, where he strongly recommended the City Council exempt single- family homes from the ordinance during oral communications. City Council adopted the proposed fees on September 17, 2002. Residential properties were not exempted as recommended by Mr. Bradley, nor does the ordinance permit either the increase or decreased fees to be applied retroactively. Five residential units were subject to the $6,930 development impact fee before Council adopted the $3,500 fee level for units smaller than or equal to 900 square feet, including the property at 2457 Waverley Avenue. The other properties subject to the $6,930 fee level are: 727 Addison 2nd unit 124 Emerson 2nd unit attached to garage 2051 E1 Camino Real 2 units (part of a mixed use project) None of the property owners listed above, other than Mr. Bradley, have requested a partial refund based on the lower fee authorized by City Council. POLICY IMPLICATIONS The proposed recommendation is consistent with Council policies and priorities. ATTACHMENTS A. Refund Request Synopsis B.Code Interpretation, Calculation of Community Facility Development Impact Fees - Palo Alto Municipal Code 16.58.040 C. Letter addressed to City Council from Chuck Bradley, February 20, 2004 CMR: 173:04 Page 2 of 3 PREPARED BY: HEATHER Administrator, Planning and Community Environment DEPARTMENT HEAD: ISLIE Director of Planning and Community Environment CITY MANAGER APPROVAL: Assistant City Manager cc: Chuck Bradley CMR:173:04 Page 3 of 3 Attachment A: Request for Refund Synopsis Property located at 2957 Waverley Avenue. Demolished 969 square foot home. Constructed 2,624 2-story home plus 897 square foot cottage and detached 3-car garage. Mr. Bradley’s Property Council Action January 28, 2002 March 25, 2002 April 22, 2002 ..May 20, 2002 August 26, 2002 June 20,2002 July16,2003 September 17, 2002 November21,2002 Application for Cottage Application for replacement home and garage Cottage approved (date obligation to pay the fee accrues, per the ordinance) Replacement home and garage approved $6,930 Impact fees paid on the cottage $0 paid on the replacement home. Effective date of Impact fees Impact fees adopted which apply to single-family homes and multi-family units. Finance Committee recommends reduced fee for multi-family units, including cottages. Mr. Bradley attends the Finance Committee meeting (per e-mail sent to City Attorney’s office). Council reduced impact fees on multi-family units 900 square feet or less from $6,930 to $3,500. By law the fee applies to projects approved after September 17 2002. Mr. Bradley attend Council meeting. Recommends the City Council exempt single-family homes from the ordinance during oral communications. ATTACHMENT B Code Interpretation Office of the City Attorney City of Palo Alto No. 2003-02 DATE: TO: FROM: SUBJECT: March 5, 2003 Heather Shupe, Administrator Department of Planning and Community Environment Wynne S. Furth, Senior Assistant City Attorney Calculation of Community Facilities Deve!opment Impact Fees - Palo Alto Municipal Code ~16.58.040 Issue Presented Is the reduction of development impact fees for multi- family units of 900 square feet or less retroactive? No. Analysis In March of 2002, the City Council adopted development impact fees to meet some of the capita! costs for parks, libraries and community centers to serve new residents. On September 17, 2002, the City Council introduced an ordinance reducing the impact fees for multiple-family units, including second units, of 900 square feet or less. At the same time, it increased the fees for new homes larger than 3,000 square feet. The fee reduction was effective on November 7, 2002. One of projects subject to the impact fees was the replacement of a single family dwelling of approximately 925 square feet with a new residence of approximately 2,600 square feet and a second unit of 900 square feet or less. The larger unit, which was built first, was not subject to deve!opment impact fees because it replaced an existing home. The second unit was subject to the fees. Palo Alto Municipal Code §16.58.040(a) describes detail how impact fees are calculated and when they are due: (a) The obligation to pay the fees established by this chapter shall accrue as of the date the first discretionary approval is given for the development, or if no discretionary approva! is required, as of the date a complete application is submitted for a building permit in 030321 syn 0091212 CODE INTERPRETATION, continued Heather Shupe, Administrator Department of Planning and Community Environment March 21, 2003 SUBJECT:Calhulation of Community Facilities Development Impact Fees - Palo Alto MuniciDal Code ~16.58.040 for the development. Fees shall be due and payable as of the date a complete application is submitted for a building permit for the development. Fees shall be due and payable to the City of Palo Alto prior to issuance of a building permit for the development, and shal! be calculated at the rate of the fees in effect as of the date the obligation to pay the fees accrued. The project in question received a conditional use permit, which is a discretionary approval, on August 26, 2002. At that time, the fee for the new unit was $6,930. That is the applicable fee; it was due (and paid) on November 21, 2002, when the permit was pulled. Staff has no discretion under the ordinance to alter the fee set by the Council. Wynne S. Furth Senior Asst. City Attorney Approved: Ariel Pierre Calonne City Attorney WSF:syn cc:Steve Emslie, Director of Planning & Community Environment Lisa Grote, Chief Planning Official Amy French, Current Planning Manager 030321 syn 0091209 City Council Members City of Palo Alto 250 Hamilton Ave. Palo Alto, CA 94301 February 20, 2004 ATTACHMENT C Dear Council Members: I am hereby requesting City Council approval for a Development Impact Fee refund of $3,430. This letter explains the basis for this request and why a refund is in order. Summary The City Council did not make the DIF fee reduction retroactive knowing that some homeowners would get caught in the "fee trap." City staff led me into believing that the reduced fee of $3,500 would apply at the time the building permits were issued. ¯The $3,430 overcharge is an unfair financial burden on one homeowner to pay for community facilities that benefits the residents at large. Background In April 2002 1 applied for a Conditional Use Permit (CUP) as required to build a 900 sq.ft, cottage as a second dwelling unit on my property. This was in addition to a 2,600 sq.ft, home, and the CUP was part of the building permit process. The CLIP invoked the Development Impact Fee (DIF) of $6,930, which was in effect at the time. On September 17, 2002, the City Council reduced the DIF for Cottages from $6,930 to $3,500. (See Summary of Key Dates below.) Fee Reduction Not Made Retroactive The $6,930 fee would apply only to those who built "granny" units on lots greater than 8,000 sq.ft, and who had their Conditional Use Per~nit approved during the five-month period from April 8, 2002 (when the Council approved the $6,930 fee) to September 17, 2002 (when the Council reduced the fee to $3,500). The City does not normally make such ordinances retroactive. However, this should have been an exception to avoid the unfairness to a very small number of cottage building applicants who would be subject to the higher fee during the short five-month period. The City did this fully aware that anyone who had their Conditional Use Permit approved during the five-months would get caught in the "fee trap" and not benefit by the reduction. City Staff Was Misleading and Negligent The City Council reduced the DW fee to $3,500 just three weeks after my Conditional Use Permit was approved on August 26, 2002. The City requires .that all related building fees are due and payable at the time the building permits are issued. My permits were obtained on December 10th, 2002 after the fee reduction. The reason I was led to believe that the $3,500 fee was in effect when the building permits were issued are based on the following: ¯A single-page handout by the Planning Dept. titled: "Development Impact Fee - Rate Changes" that I obtained in April 2002 states: "Full payment is due with building permit." "Fees shall be due and payable as of the date a complete application is submitted for a building permit." City Development hnpact Fee Ordinance No. 4742, Chapter 16.58, Se:.tion 16.58.040, Timing of Payment. "... The City is required to charge you the fee in effect at the time that you wish to pull a building permit, and no permit can be issued until the fee is paid in full..." Excerpt from an e-mail I received from Wynne Furth on October 10, 2002. "... The new fees established are: Define a smaller multi-family unit, as one of 900 square feet or less and such dwellings are subject to a fee level of $3,500 rather than $6,930. If you have been charges fees that do not match these you should bring it to the attention of the development center staff ..." Excerpt from an e-mail I received from Carl Yeats on December 4, 2002. By the above sources it seemed clear that the $3,500 DIF fee would be in effect when my building permits were issued. I did not learn until the following year that the fee in effect was when the Conditional Use Permit was approved, NOT when the building permits are issued as follows: As Steve Emslie explained in an e-mail dated March 25, 2003: "The reason for this stems essentially from the provision in the ordinance that establishes the obligation to pay the fee in place at the time the first discretionary approval is given. In the case of your project, this was the conditional use permit for the secondary unit which was ganted on August 26, 2002." This was very deceptive and misleading! The City staff neglected to inform me in a timely manner exactly which DIF fee was in effect during my permit process. If the City staff had properly explained this I would have requested a delay in the CUP approval by three weeks to avoid paying the higher fee. Excessive Financial Burden for One Homeowner The Development hnpact Fee revenues are used exclusively for the financial support of local parks, community centers and libraries. The $6,930 DW is a disproportionately higher tax amount to pay for community facilities compared to what other homeowners pay when building a new home in Palo Alto. The $3,430 difference is also a disproportionate higher tax amount than what other cottage building homeowners paid after the City Council approved the fee reduction. It is grossly unfair to place such a heavy financial burden on one homeowner to pay for community facilities that benefits the residents at large. I’m requesting that the City Council correct the inequity of the Development bnpact Fee reduction by approving the $3,430 refund. I’m asking only to be treated the same as any others seeking CUP approval after September 17, 2002. A copy of the full text of the quoted e-mails will be forwarded on request. Please let me know of any questions. Sincerely, Chuck Bradley 2957 Waverley Street Palo Alto, CA 94306-2441 Summary of Key Dates April 8, 2002 - City Council passed Development bnpact Fee Ordinance No. 4742, Chapter 16.58, that raised the cottage DW fee to $6,930. April 22, 2002 - I applied for a Conditional Use Permit as required to build a 900 sq.ft. cottage as a second dwelling unit on my property in addition to a 2,600 sq.ft, home. August 26, 2002 - My Conditional Use Permit was approved by the City Planning Department. September 17, 2002 - The Council reduced the cottage DIF from $6,930 to $3,500. November 21, 2002 - Not being properly informed of the reduction, I paid the $6,930 fee. December 4, 2002 - I was informed of the fee reduction in an e-mail from Carl Yeats, Director of Palo Alto Administrative Services after I paid the higher fee. December 10, 2002 - I paid for and obtained my Building Permits. March 25, 2003 - I made a request for the refund to the city staff beginning in December 2002. But it wasn’t until this date in an e-mail from, Steve Emslie, Director of Planning, that I learned that the fee in effect was when the CUP was approved (August 2002), not when the building permits were granted.