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HomeMy WebLinkAbout2001-01-08 City Council (3)TO: FROM: City of Palo Alto CityManager’s Report HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE:JANUARY 8, 2001 CMR:104:01 SUBJECT:ACCEPTANCE OF 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, 2000 (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 is 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 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. The law was amended effective January 1, 1997. The provisions now require that, within 180 days after the close of the 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. CMR:~Page 1 of 4 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. 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. 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. 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 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 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. CMR:435:00 Page 2 of 4 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 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 intersectionsl 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 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. 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 definition 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. The San Antonio/West Bayshore Fund and Stanford Research Park/El Camino Real Fund contain development impact fees collected on or before June 30, 1993 that remain unexpended. In fiscal year 1997-98 (CMR:482:97) the City Council made the required findings that there was a continued need for the San Antonio/West CMR:435:00 Page 3 of 4 Bayshore Fund for the San Antonio On-Ramp Project. Council also found that there was a continued need for the Stanford Research Park/El Camino Real 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, 2000 have all been received within the past four years. Therefore, no findings are required for these fees. RESOURCE IMPACT Council approved the required findings with respect to unexpended fees in 1997- 98. 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 California Environmental Quality Act; accordingly, no environmental assessment is required. ATTACHMENT Exhibit A:Annual Report on Development Fees for Period Ending June 30, 2000 PREPARED BY: Trudy Eikenberry, Senior Accountant DEPARTMENT HEAD APPROVAL: CARI~, Y~ATS// Director, Administrative Services CITY MANAGER APPROVAL: AUDREY SI Assistant to the City Manager cc: Home Builders Association CMR:435:00 Page 4 of 4 Exhibit A City of Palo Alto Annual Report on Developers’ Fees for Period Ending June 30, 2000 FUND Purpose and Aulhority for Collection Stanford Research Park/’ El Camino Fund Traffic impact fees imposed on new nonresidential development in the Stanford Research Park/El Camino Real CS zone to fund improvements at eight identified intersections. ¯ PAMC Ch. 16.45 San Antonio/West Bayshore Fund¯ Traffic impact fees imposed on new nonresidential development in the San AntonioNVest Bayshore Areas to fund capacity improvements at four identified intersections. PAMC Ch. 16.46 Amount of the Fee $2.82 per square foot $1.53 per square foot Fund Balance July 1, 1999 Activity in 1999-00 Revenues Fees Collected Interest Earnings Total Revenues Expenditures Major Intersection Improvement CIP Total Expenditures Ending Balance June 30, 2000 $991,350 360,889 37,489 398,378 (609,000) (609,000) $780,728 $408,225 20,275 20,275 $428,500 Net Funds Available $780,728 $428,500 USE OF FEES: In 1999-00 funds were used for major intersection improvements. The total project cost is $1,537,505 of which $949,000 in impact fees are budgeted to be used. This represents 61.72% of the project total cost. USE OF FEES: No expenditures have been made from this fund. 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. FUND Purpose and Authority for Collection Exhibit A City of Palo Alto Annual Report on Developers’ Fees for Period Ending June 30, 2000 Commercial Housing In-Lieu Fund Fees imposed on large commercial and industrial development to contribute to programs that increase the City’s low income and moderate- income housing stock. PAMC Ch.16.47 University Avenue Parking Assessment District In-Lieu Fund 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 Fund Balance July 1, 1999 Activity in 1999-00 Revenues Fees Collected Interest Earnings Safe of Bautista Court Total Revenues Expenditures Housing Program Expense Principal Retired Total Expenditures Repayment from Housing -.Residential Fund Ending Balance June 30, 2000 $3.87 per square foot prior to 4/30/00 $4.03 per square foot as of 4/30/00 $5,676,661 575,739 157,732. 8,372 741,843 (50,000) 0 (50,000) (lOO,OOO) $6,268,504 $30,621 perspace $273,549 432,120 26,394 458,514 $732,063 Other Commitments/Appropriations Reserve for Notes Receivable:(2,621,976) (3,011,609) Net Funds Available $634,919 $732,063 USE OF FEES: During 1999-00, $50,000 in fees were used for contract expenses with the Palo Alto Housing Corporation for administration of the Below-Market-Rate housing program. Reserve for Notes Receivable include $2,221,976 for 725-753 Alma St., $400,000 for Barker Hotel. Encumbrance reserves include $2,764 for Mid- Peninsula Housing and $3,008,845 for Palo Alto Medical Foundation housing site acquisition. USE OF FEES: A budgeted transfer in the amount of $798,000 was made in 1997-98 from this fund to the Capital Improvement Project fund, to be used for CIP 19530, Downtown Parking Structure feasibility project. This project is estimated to cost $42 million in the year 2002. Funds on hand represent 4% of the total cost. The project is. currently in the design phase, and is contingent on voter approval of an assessment district, which will provide the bulk of the project funding. FUND Purpose and Authority for Collection Exhibit A City of Palo Alto Annual Report on Developers’ Fees for Period Ending June 30, 2000 (INFORMATION ONLY) Residential Housing In-Lieu Fund Fees collected from residential developments of three or more units in lieu of providing the required below- market rate unit(s) to low and moderate income households. PA Comprehensive Plan and PAMC Chapter 18 Amount of the Fee . Varies Fund Balance July 1, 1999 $2,802,226 Activity in 1999-00 Revenues ’ Fees Collected 403,826 Webster Wood In-Lieu Payment 9,650 Sale of Property-Bautista Court 128,227 Total Revenues 541,703 Expenditures Housing Program Expense 0 Principal Retired (99,00~) Total Expenditures (99,002) Repayment to Housing - Commercial Fund 100,000 Ending Balance June 30, 2000 $3,344,927 Other Commitments/Appropriations Reserve for Notes Receivable:(2,847,485) Net Funds Available $497,442 USE OF FEES: Reserve for Notes Receivable include $375,000 for 3053 Emerson, $1,306,035 for Oak Manor, $825,000 for Sheridan Apts. and $341,450 for Palo Alto Gardens.