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HomeMy WebLinkAboutStaff Report 3405 City of Palo Alto (ID # 3405) City Council Staff Report Report Type: Consent Calendar Meeting Date: 1/14/2013 City of Palo Alto Page 1 Summary Title: Annual Status Report on Developers' Fees FY 2012 Title: Review and Acceptance of Annual Status Report on Developers' Fees for Fiscal Year 2012 and Adoption of Resolution Making Findings Regarding Continuing Need for Unexpended Parkland Development Fees in the Amount of $38,729; Community Center Development Fees in the Amount of $562,329; Library Development Fees in the Amount of $213,729 From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that the City Council review and accept the Annual Report on Developers' Fees for the period ending June 30, 2012 (Attachment A). In addition, staff recommends that the City Council adopt the attached resolution (Attachment B) regarding the continuing need for unexpended funds in the Park Dedication Fund, Community Centers Development Fund and Libraries Development Fund. Background State law (Government Code Section 66006) requires each local agency that imposes development impact fees prepare an annual report providing specific information about those fees. This requirement is part of the law commonly referred to as AB 1600. It codifies the legal requirement that fees on new development must have the proper nexus to any project on which they are imposed. In addition, AB 1600 imposes 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. Government Code Section 66006 contains comprehensive annual reporting requirements for development impact fees. This statute requires that, within 180 days after the close of the City of Palo Alto Page 2 fiscal year, the agency that 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. o The beginning and ending balance for the fiscal year in the fund. o The amount of fees collected and interest earned. o 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. An early packet consisting of Attachment A only was made available to the public and included in the packet for the December 10, 2012 meeting of the City Council. City of Palo Alto Page 3 The law also provides that, for the fifth fiscal year following the first deposit into the fund and 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; and identify all sources and amounts of funding anticipated to complete financing of incomplete improvements along with the approximate dates on which the anticipated funding is expected to be deposited into the fund. If the agency no longer needs the funds for the purposes collected, or if the agency fails to make required findings, or to 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 Attachment A, include the following: o Stanford Research Park/El Camino Real traffic impact fees (PAMC Ch. 16.45): Fee for new nonresidential development in the Stanford Research Park/El Camino Real Service Commercial zone, to fund capacity improvements at eight intersections. o 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. o Housing impact fees imposed on commercial developments (PAMC Ch. 16.47): Fee on 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 non-residential development in the University Avenue Parking Assessment District in lieu of providing required parking spaces. o Parks, Community Centers, and Libraries impact fees (PAMC Ch. 16.58): Fee on new residential and non-residential development to provide community facility funds for parks, community centers and libraries. City of Palo Alto Page 4 o Residential housing in-lieu fees (PAMC Ch. 16.47): Fee on residential developments in- lieu of providing required below-market rate units to low and moderate income households. o Charleston-Arastradero Corridor pedestrian and bicyclist safety fees (PAMC Ch. 16.59): Fee on new development and re-development within the Charleston-Arastradero Corridor to provide for pedestrian and bicyclist improvements. o Parkland dedication fees (Quimby Act) (California Government Code Section 66477): Fees or parkland dedication imposed on new residential and non-residential development. o Water and sewer capacity fees (California Government Code Section 66000): Fee on developments adding load to water and sewer systems. o Citywide Transportation impact fee (PAMC Ch 16.59): Fee on development in all parts of the City to fund transportation projects and programs to reduce congestion. AB 1600 requires the City to make specified findings in the event any funds are not expended within five fiscal years of collection and every five years thereafter. While there are several funds containing collected fees that have not been expended in five years, the required statutory carryover findings have already been made for those funds and no further findings are required. There are three categories of fees that require statutory findings. (These proposed findings are contained in Attachment B.) The Parkland Dedication Fund has an unexpended fund balance of $38,729 that was collected in fiscal year 2007 and prior. The Community Centers Development Fund has an unexpended fund balance of $562.329 that was collected in fiscal year 2007 and prior. The Libraries Development Fund has an unexpended fund balance of $213,729 that was collected in fiscal year 2007 and prior. The San Antonio/West Bayshore Fund, Stanford Research Park/El Camino Real Fund, University Avenue In-Lieu Parking Fund, and Community Center and Library Development Funds contain development impact fees that remain unexpended. In fiscal year 2008 (CMR 107:09) the City Council made the required findings that there was a continued need for the San Antonio/West Bayshore funds for a right turn lane at the intersection of westbound Charleston at San Antonio. In fiscal year 2008, Council also found a continued need for the Stanford Research Park/El Camino Real fund for major intersection improvements at the Page Mill/Hanover City of Palo Alto Page 5 intersection and a continued need for the University Avenue In-Lieu Parking funds for the purpose of construction of public parking spaces. In the case of housing impact fees from commercial development, developers impact fees for Charleston/Arastradero pedestrian/bike safety fees, and citywide transportation impact fees, the funds on hand as of June 30, 2012 have all been received within the past four years. Therefore, no findings are required for those fees. This report does not account for fees received after June 30, 2012. Fees received as part of the large Stanford University Medical Center expansion will be reflected in next year’s report. The City received fee payments for the Stanford project in December 2012 and will be detailed in an upcoming report to the City Council related to the Stanford/City development agreement funds. Resource Impact If the Council does not make the findings contained in Attachment B, the development fees described therein might be required to be refunded. This would have a fiscal impact of $814,817. Policy Implications This report does not represent any change to existing City policies. Environmental Review Presentation of this annual report is not a project under the California Environmental Quality Act; accordingly, no environmental assessment is required. Attachments:  Attachment A: Developer Fees (XLS)  Attachment B: Resolution Adopting Findings with Respect to Unspent Impact Fees (DOCX) Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2012 Stanford Research Park/San Antonio/West FUND El Camino Fund Bayshore Fund Purpose and Authority Traffic impact fees imposed on new Traffic impact fees imposed on new for Collection nonresidential development in the nonresidential development in the Stanford Research Park/El Camino San Antonio/West Bayshore Areas Real CS zone to fund improvements to fund capacity improvements at at eight identified intersections.four identified intersections. PAMC Ch. 16.45 PAMC Ch. 16.46 Amount of the Fee $10.84 per square foot $2.23 per square foot Fund Balance July 1, 2011 $2,733,213 $779,420 Activity in 2011-12 Revenues Fees Collected 551,306 0 Interest Earnings 84,483 20,933 Unrealized Gain/Loss Investments 19,569 1,639 Transfer In from Gas Tax Fund Transfer In from CIP Fund ------------------------------------------------------------------------------------------------------------------- Total Revenues $655,358 $22,572 Expenditures Other 0 0 Charleston/Arastradero Corridor Improvements 0 0 (PL-05002) ------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 0 ------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2012 $3,388,571 $801,992 Net Funds Available $3,388,571 $801,992 Unexpended balance after five years 0 0 USE OF FEES:USE OF FEES: No expenditures have been made from this fund in Fiscal Year 2012. Fees are planned to be used for Gunn High School entrance near Foothill/Arastradero. No expenditures have been made from this fund in Fiscal Year 2012. Fees are planned to be used for specific traffic improvements in the Charleston/San Antonio Road area, but have been delayed by a related project to be constructed by the State Department of Transportation. Page 1 of 8 1/9/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2012 University Avenue Commercial Housing Parking Assessment District FUND In-Lieu Fund In-Lieu Fund Purpose and Authority Fees imposed on large commercial Fees collected from non-residential for Collection and industrial development to development within the University Ave. contribute to programs that increase Parking Assessment District in lieu of the City's low income and moderate-providing the required number of income housing stock.parking spaces. PAMC Ch.16.47 PAMC Ch 16.57 Amount of the Fee $17.97 per square foot $67,100 per space Fund Balance July 1, 2011 $2,451,820 $105,014 Activity in 2011-12 Revenues Other Revenue from Other Agencies 1,057,420 536,800 Interest Earnings 55,625 5,040 Unrealized Gain/Loss Investments (3,528)11,139 From State of California 0 ------------------------------------------------------------------------------------------------------------------- Total Revenues 1,109,517 552,979 Expenditures Purchase of 801 Alma property 0 0 Consultant Fees 0 ------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 0 ------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2012 $3,561,337 $657,993 Other Commitments/Appropriations Encumbrances 0 Reserve for unrealized gain on investments (76,076)(15,561) Net Funds Available $3,485,261 $642,432 Unexpended balance after five years 0 0 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this fund in Fiscal Year 2012. No expenditure of funds have been made from this fund in Fiscal Year 2012. Page 2 of 8 1/9/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2012 Residential & Non-Residential Housing Residential & Non-Residential Housing Community Facilities Community Facilities FUND Parks Community Centers Purpose and Authority Fees imposed on new residential and Fees imposed on new residential and for Collection non-residential development approved non-residential development approved after Jan 28, 2002 for Parks. after Jan 28, 2002 for Community Centers. PAMC Ch. 16.58 PAMC Ch. 16.58 Amount of the Fee Residential: Single family $10,410/residence (or $15,545/residence larger than 3,000 sq ft); Multifamily $6,814/unit (or $3,446/unit smaller than or equal to 900 sq ft) Residential: Single family $2,699/residence (or $4,040/residence larger than 3,000 sq ft); Multifamily $1,776/unit (or $896/unit smaller than or equal to 900 sq ft) Nonresidential: Commercial/industrial $4,420 per 1,000 sq ft; Hotel/Motel $1,999 per 1,000 sq ft Nonresidential: Commercial/industrial $250 per 1,000 sq ft; Hotel/Motel $113 per 1,000 sq ft Fund Balance July 1, 2011 $2,813,254 $1,551,316 Activity in 2011-12 Revenues Fees Collected 278,221 22,430 Interest Earnings 80,845 42,020 Unrealized Gain/Loss 11,688 4,752 Transfer In from CIP Fund 0 0 ------------------------------------------------------------------------------------------------------------------- Total Revenues $370,754 $69,203 Operating Transfer to Capital Projects Fund 0 0 ------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 0 ------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2012 $3,184,008 $1,620,518 Other Commitments/AppropriationsReserve for unrealized gain on investments (119,301)(62,244)------------------------------------------------------------------------------------------------------------------- Net Funds Available $3,064,707 $1,558,274 Unexpended balance after five years 0 $562,329 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2012. No expenditure of funds have been made from this Fund in Fiscal Year 2012. Page 3 of 8 1/9/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2012 (INFORMATION ONLY) Residential & Non-Residential Housing Residential Housing Community Facilities In-Lieu Fund FUND Libraries Purpose and Authority Fees imposed on new residential and Fees collected from residential for Collection non-residential development approved developments of three or more units in after Jan 28, 2002 for Libraries. lieu of providing the required below- market rate unit(s) to low and moderate PAMC Ch. 16.58 income households. PA Comprehensive Plan and PAMC Chapter 18 Amount of the Fee Residential: Single family $942/residence (or $1,403/residence larger than 3,000 sq ft); Multifamily $563/unit (or $309/unit smaller than or equal to 900 sq ft)Varies Nonresidential: Commercial/industrial $238 per 1,000 sq ft; Hotel/Motel $100 per 1,000 sq ft Fund Balance July 1, 2011 $552,502 $7,337,176 Activity in 2011-12 Revenues Fees Collected 16,764 5,369,089 Webster Wood In-Lieu Payment 0 4,425 Palo Alto Bimmer In-Lieu Payment 0 0 Interest Earnings 15,147 97,065 Unrealized Gain/Loss Investments 1,839 47,178 Tax Credit Refund 0 ------------------------------------------------------------------------------------------------------------------- Total Revenues $33,750 $5,517,757 Expenditures Legal (718) Housing Program Expense 0 (160,000) Principal Retired (119,999) Grants (200,000) ------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 (480,718) ------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2012 $586,252 $12,374,215 Other Commitments/Appropriations (1,863)Reserve for unrealized gain on investments (22,477)(140,049) Reserve for Notes Receivable include $375,000 for 3053 Emerson, $3,804,300 for Tree House Apts, $585,126 for Oak Manor, $756,819 for Sheridan Apts. and $1,863,854 for 801 Alma.(7,385,099) ------------------------------------------------------------------------------------------------------------------- Net Funds Available $563,775 $4,847,205 Unexpended balance after five years $213,729 0 Page 4 of 8 1/9/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2012 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2012. Expenditures in Fiscal Year 2012 include $160,000 to Palo Alto Housing Corp for BMR fees, $119,999 for Oak Manor Apts loan forgiveness, and $200,000 to Housing Trust of SC County for affordable housing. Page 5 of 8 1/9/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2012 Parkland Dedication Charleston-Arastradero Corridor Pedestrian and Bicyclist Safety FUND Purpose and Authority Fees on parkland dedication imposed Fees collected from new development and for Collection on new residential and non-residential re-development within the Charleston- development Arastradero Corridor to provide for pedest- rian and bicyclist safety improvements. Govt Code Sec.66477 (Quimby Act) PAMC Ch. 16.60 Amount of the Fee Varies Residential: $1,091.09 per unit; Commercial: $0.32 per sq ft Fund Balance July 1, 2011 $572,689 $414,749 Activity in 2011-12 Revenues Fees Collected 172,819 338,255 Interest Earnings 17,361 16,296 Unrealized Gain/Loss Investments 9,719 4,787 ------------------------------------------------------------------------------------------------------------------- Total Revenues $199,899 $359,339 Expenditures Operating Transfer to Capital Projects Fund 0 (47,400) ------------------------------------------------------------------------------------------------------------------- Total Expenditures 0 (47,400) ------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2012 $772,588 $726,688 Other Commitments/Reappropriations Reserve for unrealized gain on investments 0 0 ------------------------------------------------------------------------------------------------------------------- Net Funds Available $772,588 $726,688 Unexpended balance after five years $38,789 0 USE OF FEES:USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2012. Budgeted transfers in the amount of $47,400 were made the the Capital Improvement Fund in Fiscal Year 2012 for the Corridor Plan (PL-05002). Page 6 of 8 1/9/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2012 Citywide Transportation FUND Purpose and Authority for Collection Transportation impact fees imposed on new development in all parts of the City to fund congestion reduction projects. PAMC Ch. 16.59 Amount of the Fee $2,987 per net new PM peak hour trip Fund Balance July 1, 2011 $237,378 Activity in 2011-12 Revenues Fees Collected 232,674 Interest Earnings 11,003 Unrealized Gain/Loss Investments 8,190 -------------------------------------------------------- Total Revenues $251,867 ExpendituresOperating Transfer to Capital Projects Fund 0 Operating Transfer to BMR Fund Principal Retired -------------------------------------------------------- Total Expenditures 0 -------------------------------------------------------- Ending Balance June 30, 2012 $489,245 Other Commitments/Reappropriations Reserve for unrealized gain on investments 0 -------------------------------------------------------- Net Funds Available $489,245 Unexpended balance after five years 0 USE OF FEES: No expenditure of funds have been made from this Fund in Fiscal Year 2012. Page 7 of 8 1/9/2013 Attachment A City of Palo Alto Annual Report on Developers' Fees for Period Ending June 30, 2012 (INFORMATION ONLY) FUND Water and Wastewater Collection Purpose and Authority Capacity fees charged to developers that for Collection are adding load to the water and sewer systems effective July 1, 2005. California Government Code Sect 66000 Amount of the Fee Water Domestic: 5/8 in., 3/4 in. $5,000, 1 in. $9,400, 1 1/2 in. $18,850, 2 in. by est. $125/FU, 3 in. by est. $125/FU , 4 in. by est. $125/FU , 6 in. by est. $125/FU Water Fire Service: 2 in. $750, 4 in. $9,000, 6 in. $22,530, 8 in. $43,080, 10in. $69,510 Sewer: 4 in. $10,500 first 50 FU, $210/FU additional, 6 in. by est. $210/FU, 8 in. by est. $210/FU FU is fixture unit Activity in 2011-12 Capacity Fees Collected Water $911,660 Wastewater Collection 404,659 Total $1,316,319 USE OF FEES: The fees are used exclusively for water and sewer system improvements Page 8 of 8 1/9/2013 Attachment B NOT YET APPROVED 1 120927 jb 0131001 Resolution No. _______ Resolution of the Council of the City of Palo Alto Making Findings Regarding Continuing Need for Unexpended Community Center Development Fees in the Amount of $562,329; Library Development Fees in the Amount of $213,729 and Park Dedication Fees in the Amount of $38,789 R E C I T A L S A. Government Code Section 66001(d) requires the City to make certain findings with respect to development fees collected which remain unexpended or uncommitted five of more fiscal years after deposit of such fees; and B. As authorized under Chapter 16.58 of the Palo Alto Municipal Code, the City has collected a development fee known as the “Community Center Impact Fee” for the purpose of funding development and improvements to community centers; and C. The sum of $562,329, representing fees collected pursuant to Chapter 16.58 since January 2002, together with accrued interest thereon, remains unexpended five or more years after deposit of the fees (“unexpended Community Center Impact development fees”); and D. As authorized under Chapter 16.58 of the Palo Alto Municipal Code, the City has collected a development fee known as the “Library Impact Fee” for the purpose of funding development and improvements to libraries; and E. The sum of $213,729, representing fees collected pursuant to Chapter 16.58 since January 2002, together with accrued interest thereon, remains unexpended five or more years after deposit of the fees (“the unexpended Library development fees”); F. As authorized under Chapter 16.58 of the Palo Alto Municipal Code, the City has collected a development fee known as the “Park Dedication Fee” for the purpose of funding acquisition of land and improvements for neighborhood and district parks; and G. The sum of $38,789, representing fees collected pursuant to Chapter 16.58 since January 2007, together with accrued interest thereon, remains unexpended five or more years after deposit of the fees (“the unexpended Park Dedication fees”). The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council makes the following findings: NOT YET APPROVED 2 121113 jb 0131001 Community Center Fees 1. The Community Center fees were collected pursuant to Chapter 16.58 of the Palo Alto Municipal Code, to be used for the purpose of funding construction of community centers. 2. The unexpended Community Center fees in the amount of $562,329 are intended to be used to fund the joint Mitchell Park Library and Community Center, and renovation of the Palo Alto Art Center but have not been expended to date for the following reasons:  An expenditure plan for the Mitchell Park Center is still being finalized and is expected to include gifts from non-profit library and recreation organizations with established alliances with the City of Palo Alto.  Expenditures include acquisition of building furnishings and amenities. The transfer of funds is being timed to align with completion and opening of full operation of the Mitchell Park Center and is expected to be made by FY 2015. 3. The need for the improvements for which the Community Center fees were collected was identified in an Environmental Impact Report (“EIR”) certified by the City Council on January 13, 1986. 4. The Community Center fees continue to be required in order to fund the improvements specified in Chapter 16.58 and in this resolution. 5. Based on the foregoing, a continuing need for the Community Center fees has been demonstrated. Library Fees 6. The Library fees were collected pursuant to Chapter 16.58 of the Palo Alto Municipal Code, to be used solely for the purpose of funding the development of libraries. 7. The City plans to spend the unexpended Library fees in the amount of $213,729 on the development of two Measure N building projects; the new facility at the Mitchell Park Library and Community Center and the renovation of the Main Library. This development may include the expansion of print and electronic materials. The funding plan is still being finalized but is expected to include gifts from non-profit library organizations and possibly community development fees. The transfer of funds is being timed to align with the Measure N construction schedules and is expected to be made by FY 2015. 8. The need for the improvements for which the Library fees were collected was identified in an Environmental Impact Report (“EIR”) certified by the City Council on January 13, 1986. NOT YET APPROVED 3 121113 jb 0131001 9. The Library fees continue to be required in order to fund the improvements specified in Chapter 16.58 and in this resolution. 10. Based on the foregoing, a continuing need for the Library fees has been demonstrated. Park Dedication Fees 11. The Park Dedication fees were collected pursuant to Chapter 16.58 of the Palo Alto Municipal Code to be used for the purpose of acquiring land to build a recreation park in underserved communities. 12. The unexpended balance of $38,789 in Parkland Dedication fees has not been used for the following reasons:  Although the City has identified potential properties for building a park, none have been placed on the market.  The City desires to acquire land in underserved communities, but has not been able to identify large enough plots to build a useable recreation park.  At $1M+ per acre, $38K is insufficient to purchase any useable land for a park. 13. The fees continue to be required in order to fund the improvements specified in Chapter 16.58 and in this resolution. 14. Based on the foregoing, a continuing need for the Park Dedication fees has been demonstrated. // // // // // // // // // NOT YET APPROVED 4 121113 jb 0131001 SECTION 2. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: ______________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: ______________________________ City Manager ________________________________ ______________________________ Senior Asst. City Attorney Director of Administrative Services ______________________________ Director of Planning and Community Environment