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HomeMy WebLinkAbout2001-10-16 City CouncilCity of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL ATTN:FINANCE COMMITTEE FROM:CITY MANAGER DEPARTMENTS:ADMINISTRATIVE SERVICES/PLANNING DATE:OCTOBER 16, 2001 CMR: 381:01 SUBJECT:DEVELOPMENT IMPACT FEES FOR PARKS, COMMUNITY CENTERS AND LIBRARIES REPORT IN BRIEF Under California law (AB 1600), cities have the ability to charge new development for its relative share of the cost of public facilities and services. The City of Palo Alto already charges such "development impact fees" for housing and traffic. During discussions of the City’s financial condition as part of the Long Range Financial Plan, Council raised the idea of considering additional development impact fees as a revenue source, to provide funding for mitigating the impact of new development on City services. Staff evaluated potential impact fees for parks, community centers and libraries. In order to impose development impact fees, the City must make certain findings to establish the connection or "nexus" between the development and the public facilities or services that will be funded by the fee, and to determine the amount of the fee. A nexus study, attached to this report, provides a detailed legal framework for the imposition of impact fees, defines the City facilities addressed in the study, illustrates the calculation methodology used by staff, and specifies the maximum fee levels which the City could charge to new development. Based on the nexus study, staff has developed proposed impact fees for parks, community centers and libraries. Finance Committee direction is requested to determine any adjustments to the proposed fee levels for recommendation to the City Council and for preparation of an ordinance to establish such fees. CMR:381:01 Page 1 of l0 RECOMMENDATION Staff recommends that the Finance Committee: 1) review the attached information related to the imposition of new development impact fees for parks and community facilities; 2) determine any changes or adjustments to the proposed fee levels as shown in Table 1 on page 6 for recommendation to the City Council; and 3) direct staff to prepare an ordinance for Council adoption to establish the proposed development impact fees. BACKGROUND At a July 17, 2000 Council Study Session, Council was presented with a Long Range Financial Plan (CMR:321:00). Discussions pertaining to the financial challenges facing the City, as well as the existing Infrastructure Plan, pointed to the insufficiency of revenues required to meet the City’s long-term needs. At a September 20, 2001 Finance Committee meeting, that scenario was re-emphasized with forecasts now showing even smaller City surpluses and greater financial challenges (CMR:355:01). At the time of the July 2000 presentation of the Long Range Financial Plan, there were also discussions surrounding a new development occurring in the downtown area at the site of the former medical clinic (PAMF/SOFA develoPment), and the impacts that such a development would have on City services. Concerned about the eroding City infrastructure and the potential degradation of City services, Council raised the idea of considering new development impact fees as a revenue source. A development impact fee is a fee imposed on new development to pay for the cost of public facilities and services attributable to the development. The City of Palo Alto already has a number of development impact fees in place. These include, for example, traffic impact fees in the Stanford Research Park area and housing impact fees for multi- family residential and commercial projects. Council requested that staff assess the feasibility of new development impact fees as potential revenue sources and evaluate present levels of fees. Based upon Council’s direction, staff evaluated impact fees for parks and community facilities (including libraries and community centerg). The results of that study and staff recommendations are included in this report. Staff also evaluated the existing housing fee levels, which are covered in a companion report (CMR:383:01), and is in the process of examining existing traffic fees. Additional impact fees requiring extensive evaluation and a nexus study, such as those for transportation improvements and traffic calming measures, would be included in a subsequent study, should the City decide to further pursue impact fees. At the time of the current study, the consultant also completed a feasibility study for impact fees for a new police facility, to determine if the City should consider performing a nexus study to justify such a fee. Staff is continuing to evaluate that option, including revenue potential from such a fee. CMR:381:01 Page 2 of 10 DISCUSSION Legal Setting The ability of California cities to charge new development for its relative share of the cost of public facilities and services is regulated by the Mitigation Fee Act (Sections 66000-66008 of the Government Code), also known as AB 1600. In order to impose such fees on new development, .the legislative body must make certain findings to establish the connection or "nexus" between the development and the public facilities or services that will be funded by the fee, and also to establish the connection between the development and the amount of the fee that is being imposed on the development. The fees imposed on a development cannot be more than the cost of the relative burden on city facilities or services attributed to that development. Development fees cannot be used to cure existing deficiencies in services or facilities. In order to support the required "nexus" findings, public agencies usually prepare nexus studies that establish the connection between different types of new development and the need for expanded or new city services or facilities. To perform the study for Palo Alto, staff retained the services of DMG-MAXIMUS, an expert in the field of impact fees, ~vith extensive experience in California. The attached report, City of Palo Alto Parks and Community Facilities Impact Fee Study (Attachment 1), was prepared by DMG-MAXIMUS (DMG). It provides a detailed legal framework for the imposition of development impact fees, defines the facilities addressed in the study, illustrates the impact fee calculation methodology used by staf~ and specifies levels of fees which the City could justifiably charge to new development. This report serves as the City’s nexus study for fees for parks, community centers and libraries. Existing Palo Alto Impact Fees Development impact fees are implemented in most California communities, and fund a wide variety of projects. Among the most common are housing, transportation, and park fees. The City already has development impact fees for housing, traffic mitigation and downtown parking. The Commercial Housing-in-Lieu Fund contributes to programs that increase the City’s low income and moderate income housing stock. The housing fee ($4.21/square foot) is charged for nonresidential development. (For residential housing projects of three or more for-sale units or five or more rental units, there is a cost to developers through the Palo Alto Below Market Rate (BMR) Program. Although this is not an impact fee under AB 1600, it does constitute a cost to developers.) Traffic mitigation fees are for new nonresidential development in the Stanford Research Park (SRP)/E1 Camino Real commercial zone ($3.03/square foot) and the San Antonio/West CMR:381:01 Page 3 of t0 Bayshore areas ($1.64/square foot). In addition, there is an in-lieu parking fee in the downtown area ($32,898/parking space). Palo Alto’s existing housing fee was established in 1985 (Chapter 16.47 of the Palo Alto Municipal Code) and the traffic fee was established in 1989. Although the fees are updated annually to reflect increases in the consumer price index or Bay Area Construction Cost Index, fee levels are not sufficient to cover the burden placed on the City’s facilities by new development. Staff has completed an updated analysis of the housing fee, which is presented in CMR:383:01. An updated traffic fee study is in progress; staff expects to present the results and recommendations to Council in December 2001. New Impact Fees Following direction from Council, staff began researching potential new impact fees for Palo Alto and found that the process of developing impact fees can be lengthy. Council expressed strong interest in a citywide transportation fee. However, before a nexus study for such a fee can even be started, the City needs to update and upgrade its traffic models, a project that is currently underway. Therefore, staff chose to focus preliminary efforts on fees that could be implemented in a shorter timeframe: fees for parks, community centers and libraries. The DMG report documents the relationship between new development and the need for expanded or additional facilities. The existing and proposed new impact fees are based on maintaining the existing level of service for each service type, as new development increases the number of users. Palo Alto parks, community centers and libraries are used by residents, non-resident employees and visitors. The Department of Community Services conducted surveys in July of 2001 to estimate the level of use of these facilities by each group. Survey results are summarized in Appendix 2 of the DMG report (Attachment 1). Parks The City of Palo Alto has 165.8 acres dedicated to neighborhood and district parks. An additional 3,781 acres is dedicated to open space. Nearly all of the neighborhood and district parks are developed (163.5 acres), while less than 8% (282 acres) of open space is developed. Table 3.1 in the attached DMG report lists Palo Alto’s existing parks and shows total developed acreage for each location. Impact fees for open space are not recommended at this time. Acquisition of new open space is not anticipated in the near term, and further development of existing open space will be limited. Information on the impact of new development on open space is included in Appendix 1 of the DMG report. CMR:381:01 Page 4 of 10 The maximum costs of providing new park facilities to meet the demands of new development were calculated based on current land acquisition and development costs, employment data, projected resident population, and the relative level of park use by residents and non-resident employees. Community Centers Palo Alto’s community centers include Cubberly, Lucie Stern, Mitchell Park, the Junior Museum, and the Art Center. Impact fees for community centers were developed based on development costs, employment data, projected resident population, and the relative level of community center use by residents and non- resident employees. Libraries The City of Palo Alto currently maintains and staffs six libraries, consisting of 57,204 square feet and approximately 271,675 volumes. Impact fees for libraries were developed based on development and material costs, employment data, projected resident population, and the relative level of library use by residents and non-resident employees. Land cost was not included because new library facilities are likely to be constructed on existing library sites rather than as entirely new facilities in different locations. Fee Levels The development impact fees presented in the DMG report represent the maximum impact fee amounts justified by the analysis. Fee levels were reviewed by the interdepartmental staff Land Use Committee, which considered them in light of other potential impact fees proposed by the City. The Committee recommended fee levels for parks, community centers and libraries at 2/3 of those supported by the nexus study, rather than at the maximum levels allowed by the nexus study. Although the nexus study utilizes the most recent information in terms of land acquisition and development costs, these costs may be reduced in the current economic downturn. The following table displays the maximum fee levels for parks, community centers and libraries justified by the nexus study. Staffs recommended fee levels are also listed. To see the effect of these new fees on the total amount of impact fees that would be paid by new commercial and hotel development, the table also includes potential revised fees for housing and traffic, although the exact levels of these fees are still being determined. CMR:381:01 Page 5 of 10 Table 1 Maximum versus Recommended Impact Fee Levels Maximum Fee Level Staff Recommendation Single Family (per home) Parks $11,884 $7,960 Community Centers 2,844 1,900 Libraries 1,070 720 sub-total $15,798 $10,580 Multi-Family (per unit) Parks $7,770 $5,210 Community Centers 1,860 1,250 Libraries 699 470 sub-total $10,329 $6,930 Commercial/Industrial (per sq. ft) Parks $3.38 $2.26 Community Centers 0.19 0.13 Libraries 0.18 0.12 Housing (est.)12.00 12.00 SRP Traffic (est.)6.10 6.10 sub-total $21.85 $20.61 Hotel/Motel (per sq. ft) Parks $1.53 $1.03 Community Centers 0.09 0.06 Libraries 0.08 0.05 Housing (est.)12.00 12.00 sub-total $13.70 $13.14 Note: Residentia! developers of for-sale housing projects with three or more units or rental projects of five or more units must comply with Palo Alto’s BMR requirements. Although these are not impact fees, they do represent a cost to the developers of either dedicating BMR units or paying an in-lieu fee. Those costs are not included in this chart. A comparison of the recommended impact fees to those of other municipalities is also useful in determining where to establish Palo Alto’s fees. However, this is difficult to accomplish. Every city has its own array of types of fees, and many are applied on a "case-by-case" basis rather than as ~a set fee. Staff researched impact fees covering parks, facilities, libraries, and traffic for cities throughout California, but could find none with the exact fee categories as those proposed. Therefore, staff found communities with similar fees, and, for purposes of comparison, looked at the aggegate of fees faced by CMR:381:01 Page 6 of 10 developers, rather than comparing fees on a one-to-one basis. Table 2 summarizes this comparison. A more complete description of fees in other California cities is available in Attachment 2. Palo Alto - current San Francisco2 Gilroy3 San Jose4 Morgan Hills 1. 2. 3. 4. Table 2 Total Impact Fee Comparison Single Family Multi-Family $ o.o $ o.o Commercial $ 7.24 $ 0.0 $ 0.0 $22.00 $ 28,872 $ 24,228 $17.69 $ 9,499 + tax $2,440 + tax $ 0.08 + tax $ 5,236 $ 4,179 $ 6.51 Proposed Palo Alto fees include parks, libraries community centers, housing, and SRP area traffic. San Francisco fees include parks, housing and citywide transit. Gilroy fees include Police and fire facilities, plus citywide traffic and parks. San Jose fees include Parks and Buildings, plus 1-1.54% construction tax 1% Art tax in selected areas only Morgan Hill fees include Parks, Library, Traffic, Police, Fire, and "General". RESOURCE IMPACT New development impact fees could provide badly-needed funding for capital improvements for parks, community centers and libraries in order to mitigate the impact of new development. The attached report specifies potential revenues associated with each development impact fee at the maximum level allowable under the nexus study. The study’s revenue forecasts assume that all increases in population and employment would be attributable to new development and thereby subject to the fees. Such an approach over-estimates the revenue potential of the fees. Staff has analyzed the correlation between historical increases in population and residential development, and applied that factor to a census-based forecast of population increases in Palo Alto. Those adjusted levels are reflected as a "Census-based Projection" in the table below to portray the potential revenues for staff’s proposed fee levels, based on anticipated population increases and their corresponding development. The table also shows projected revenues based on last year’s actual level of development activity under "activity-based projection". (This figure excludes the Stanford Cancer Center, which was an exceptional, one-time project.) CMR:381:01 Page 7 of I0 Table 3 Revenue Projections for Proposed Fee Levels* Potential Annual Census-based Activity-based Revenues Projection Projection Parks 601,695 281,590 Community Centers 109,620 34,343 Libraries 44,680 25,249 $ 755,995 $ 341,181 *Proposed fee levels are approximately 2/3 of the mc~vimum justified in the nexus study Administration of new impact fees has not yet been fully evaluated. This includes fee collection, fund administration, and reporting. Staff has yet to determine if these tasks can be absorbed by existing personnel. If not, additional resources may be required. POLICY IMPLICATIONS Development impact fees increase the cost of new development. Adding new fees and increasing existing fees increase developers’ costs if they elect to build in Palo Alto, which in turn may raise costs for buyers and renters of the new properties. The fee levels proposed by this report are easily justified based on the impacts that new development has on City services and facilities. Staff is recommending fees that will provide funding to offset these impacts while ensuring that developing in Palo Alto is not prohibitively expensive relative to other California communities. These fees should also be considered in conjunction with other actions impacting development costs in Palo Alto (such as impending changes to the City’s Housing Element of the Comprehensive Plan). Council could elect to exempt specific types of development from these proposed fees, but would need to articulate the rational policy basis for each exemption. Staff recommends exemptions only for public schools and public facilities for purposes of parks, community centers, and library impact fees. City facilities would be partially funded by impact fees, therefore collecting fees which will be returned to these projects creates an unnecessary administrative expense. Staff recommends an exemption for public schools due to community concern regarding escalating costs for school renovations and maintenance. It should be noted that the current housing fee exempts churches; colleges and universities; commercial recreation; hospitals and convalescent facilities; private clubs, lodges and fraternal organizations; private education facilities; and public facilities. As part of Phase II of the Housing Fee Study, staff will examine the basis for existing exemptions relative to current council priorities and policies. Staff recommends that the eventual fee structures and exemptions become uniform among impact fees to simplify administration for both the City and developers. CMR:381:01 Page 8 of 10 The nexus study prepared for the proposed fees demonstra.tes the amount of justifiable fees that could be charged to different types of development (e.g., single-family, multiple-family, commercial/industrial and hotel) based on each type’s relative usage or burden on the facilities for which the fee would be used. Staff recommends that the fees imposed be relatively consistent for all types of development; however, the City Council, for policy reasons, could elect to charge relatively less to one type of development, effectively subsidizing that development through the General Fund. An example of such a policy might be to reduce or waive impact fees as a means to encourage the construction of multiple-family housing or dedicated low-income multiple family housing. ALTERNATIVES TO STAFF RECOMMENDATION The following are possible alternatives to staff’s recommended adoption of the proposed development impact fees: 1)Decide not to implement new impact fees at this time. The expected revenues from development impact fees are only a small portion of the funds needed for the City to meet its infrastructure needs. Because Palo Alto is effectively built-out, there is not a lot of new development anticipated. Impact fees are charged only on new development. That includes new residences on vacant land (but not new construction following demolition of an existing home), and only the incremental increases in commercial development. 2) Elect to implement fees at a higher (or lower) level than those suggested in this report. The attached nexus study justifies potential impact fees at a level higher than those proposed by staff. Council could choose to set individual fee levels for parks, community centers or libraries at the legally allowed maximums or at any lower level. 3) Select types of development that would be exempt from the requirements of any new impact fees. (As noted above, each exemption must include a rational policy basis.) TIMELINE Once the Finance Committee recommends specific fee levels to staff, staff will prepare an ordinance for Council to adopt to establish the new development impact fees. The new fees can be instituted 60 days following adoption of the ordinance. Staff also intends to hold discussions with local building groups prior to the first public hearing on the fees. ENVIRONMENTAL REVIEW This report does not require California Environmental Quality Act (CEQA) review. CMR:381:01 Page 9 of I0 ATTACHMENTS Attachment 1: DMG-Maximus repot: City of Palo Facilities Impact Fee Study (September 18, 2001) Alto: Parks and Community Attachment 2: PREPARED BY: Development Impact Fees in Other California Cities Sr. Financial Analyst, Administrative Services HEATHER SHUPE Administrator, Planning and Community Environment DEPARTMENT HEAD APPROVAL: Director, A~/rninistrative Services CITY MANAGER APPROVAL: EI~IILY HARRISON Assistant City Manager CMR:381:01 Page 10 of 10 ATTACHMENT 1 City of Palo Alto, CA Parks and CommuniO/ Facilities Impact Fee Study DMG-MAXIMUS 4320 Auburn Boulevard, Suite 2000 Sacramento, CA 95841 916.485.8102 Ci(y of Pa/o Alto - Parks and Communi(y Facilities Impact Fees TABLE OF CONTENTS Table of Contents Executive Summao/ Section 1 - Introduction Legal Framework Impact Fee Calculation Methodology Facilities Addressed in This Study Section 2 - Population and Employment Population Employment Section 3 - Impact Fees for Parks Service Area and Time Frame Methodology Existing Facilities Demand Variable Level of Service Impact Fee Calculation Impact Fees per Unit of Development Projected Revenue 1-1 1-5 1-8 2-1 2-2 3-1 3-1 3-1 3-2 3-3 3-4 3-5 3-5 Section 4- Impact Fees for Communi(y Centers Service Area and Time Frame 4-1 Methodology 4-1 Existing Facilities 4-1 Demand Variable 4-1 Level of Service 4-2 Impact Fee Calculation 4-3 Impact Fees per Unit of Development 4-4 Projected Revenue 4-4 Section 5 - Impact Fees for Libraries Service Area and Time Frame Methodology Existing Facilities Demand Variable Level of Service Impact Fee Calculation Impact Fees per Unit of Development Projected Revenue 5-1 5-1 5-1 5-2 5-3 5-3 5-4 5-5 September 18, 2001 DMG-/klA~/VlUS Page i Ci{y of Pa/o Alto - Parl~s and Communi(y Facilities Impact Fees Table of Contents TABLE OF CONTENTS (Continued) Section 6- Implementation Adoption Administration Training and Public Information Recovery of Study Cost 6-1 6-1 6-6 6-7 Appendix 1 - Impact Fees for Open Space Acquisition Appendix 2 - User Surveys for Communi(y Centers, Parks and Libraries September 18, 2001 DAxlG-A4AXl/~I US Pa,~e ii Ci(y of Pa/o A/to - Parks and Community Facilities Impact Fees Executive Summary EXECUTIVE SUMMARY The City of Palo Alto has retained DMG-MAXIMUS to prepare this study to ana- lyze the impacts of development on the need for parks, community centers, and libraries, and to calculate development impact fees based on that analysis. This re- port documents the data, methodology, and results of that impact fee study. The methods used to calculate impact fees in this study are intended to satisfy all legal requirements governing such fees, including provisions of the U. S. Constitution, the California Constitution, and the California Mitigation Fee Act (Government Code Sections 66000 et seq.). ORGANIZATION OF THE REPORT Section 1 of this report provides an overvie~v of impact fees. It discusses legal re- quirements for establishing and imposing such fees as well as methods used in this study to calculate the fees. Section 2 contains information on existing and future population and employment in Palo Alto. Sections 3 through 5 analyze the impacts of development on specific types of facilities. Each of those sections addresses a particular type of facility and documents existing facilities, levels of service, facility costs, impact measurement, and fee calculations. Revenue projections are also in- cluded. Section 6 discusses procedures and legal requirements for implementing an impact fee program under California la~v. It addresses adoption, administration, and training. FACILITIES ADDRESSED IN THIS REPORT The types of public facilities covered in this report are listed below, along with the report sections in which they are addressed. Neighborhood and Community Parks Community Centers Libraries (Section 3) (Section 4) (Section 5) Impact fees for the acquisition of open space were also calculated. That analysis is presented in Appendix 1. POP g ILA TION AND EMPL 0 YMEN T DATA Population data used in this study came principally from the California Department of Finance, Demographic Research Unit. Employment data and forecasts of future September 18, 2001 DM G-MAX/M US Pase S- 1 Ci(y of Pa/o Alto - Parks and Communiw Facilities Impact Fees Executive Summary population and employment growth came from the ABAG publication Projections 2000. Additional information on population and employment was provided by the City of Palo Alto Department of Planning and Community Environment. As shown in Section 2 of this report, Palo Mto’s population grew at an average compounded rate of 0.43% per year from 55,900 in 1990 to 58,600 in 2000. The Department of Finance population estimate for January 2001 was 60,800. ABAG estimates that there were 98,450 jobs in the City itself in 2000, and forecasts em- ployment growth of only 5% over 20 years to 103,330 jobs in 2020. In all cases, service population was used to measure the impact of development on parks and recreation facilities. "Service population" is defined as a weighted com- posite population consisting of residents, employees, and visitors. Service popula- tion is counted in terms of equivalent residents. Each component of the service population is weighted to reflect its relative impact on the facilities addressed in this study. Weighting of components may vary by type of facility, because the rela- tive impact of service population components is not identical for all facilities. II~4PA CT FEE ANAL YSIS Each type of facility addressed in this report is analyzed individually. In each case, the relationship between development and the need for additional facilities was quantified in a way that allows impact fees to be calculated for various types of de- velopment. Impact fees are based here on the cost of maintaining the existing level of service for each asset type, as new development increases the number of users. "Level of service" is defined in the impact fee analysis as a ratio of existing facili- ties to service population for each type of asset. That ratio determines, for exam- ple, how much additional park acreage or library space is needed to serve each equivalent resident generated by new development. When those demand factors are applied to an estimated cost for each type of asset, the result is a cost per equivalent resident. Then, the cost per equivalent resident is multiplied by the es- timated number of equivalent residents per unit of development to arrive at the impact fee per unit of development. A unit of development, as defined in this study, is one dwelling unit for residential land use categories or 1,000 square feet of building area for most non-residential categories. Impact Fees for Parks. Section 3 of this report addresses neighborhood and district parks. Park users were surveyed by the Community Services Department to estab- lish the relative demand created by residents, employees, and visitors. (Survey re- sults are presented in Appendix 2.) That information was used to determine the appropriate weighting factor for each component of the service population. Once September 18, 2001 DIVIG-A4AXIAq US Pa~e S-2 Cigy of Pa/o Alto - Parks and Communi{y Facilities Impact Fees Executive Summao/ the number of equivalent residents in the service population was determined, the existing level of service was calculated as the ratio of existing park acreage to equivalent residents. Table S.1 summarizes the process of calculating a cost per equivalent resident for each asset type. For more detail, see Section 3. Table S. 1 Cost per Equivalent Resident - Neighborhood and District Parks Component Nbhd/District Parks Existing Existing Acres per Cost Acres Equiv. Res.Equiv. Res.per Acre 163.5 121,600 0.00134 3,400,000 Cost Per Equiv. Res. $ 4,570.71 The next step in establishing impact fees is to multiply the cost per equivalent resi- dent by the number of equivalent residents per unit of development to arrive at an impact fee per unit of development. The results of that step are summarized in Ta- ble S.4 for all types of facilities addressed in this report. Impact Fees for Community Centers. Section 4 of this report addresses community centers. Community center users were surveyed to establish the relative demand created by residents, employees, and visitors, and that information was used to de- termine the appropriate weight for each component of the service population. Once the number of equivalent residents in the service population was determined, the existing level of service was calculated as the ratio of existing community center building area (in square feet) to equivalent residents. Table S.2 summarizes the process of calculating a cost per equivalent resident for community centers. For more detail, see Section 4. Table S.2 Cost per Equivalent Resident - Community Centers Existing Existing Sq. Ft. per Cost per Cost Per Component Square Feet Equiv. Res.Equiv. Res.Sq. Ft Equiv. Res. Community. Centers 234,525 80,402 2.92 $ 375.00 $ 1,093.84 The next step in establishing impact fees is to multiply the cost per equivalent resi- dent by the number of equivalent residents per unit of development to arrive at an impact fee per unit of development. The results of that step are summarized in Ta- ble S.4 for all types of facilities addressed in this report. Impact Fees for Libraries. Section 5 of this report addresses libraries. Library users were surveyed to establish the relative demand created by residents, employees, and visitors. As with the other types of facilities, that information was used to deter- mine the appropriate weight for each component of the service population. Once September 18, 2001 DA4G-A/IAX/A4 LIS Pa, ffe S-3 CRk" of Pa/o Alto - Parks and Communi(y Facilities Impact Fees Executive Summary the number of equivalent residents in the service population was determined, the existing level of service was calculated for both existing library building area (in square feet) and the existing library collection (in number of volumes). Table S.3 summarizes the process of calculating a cost per equivalent resident for libraries. For more detail, see Section 5. Table S.3 Cost per Equivalent Resident - Libraries Component Building Area (Square Feet) Library Materials (Volumes) Total Existing Existing Units Equiv. Res. 57,204 75,251 271,675 75,251 Units per Equiv. Res. 0.76 3.61 Cost per Unit $ 375.00 $ 35.00 Cost Per Equiv. Res. $ 285.07 $ 126.36 $ 411.42 The next step in establishing impact fees is to multiply the cost per equivalent resi- dent by the number of equivalent residents per unit of development to arrive at an impact fee per unit of development. The results of that step are summarized in Ta- ble S.4 for all types of facilities addressed in this report. SUA/IA4AR Y OF/A,IPACT FEES Table S.4 summarizes the impact fees calculated in this report. Fees shown in Ta- ble S.4 are for one unit of development, by facility type and land use category, and are rounded to the nearest dollar. Total fees for one unit of development in each land use category are shown in the right-hand column. Units of development for each development type are shown in the table. Table S.4 Impact Fees per Unit of Development - Summary Development Type Single Family Residential Multiple Family Residential 6 Commercial/Office/Industrial Hotel/Motel Dev Units I Parks z DU $11,884 DU $7,770 KSF $3,382 KSF $1,527 Centers 3 $2,844 $1,860 $190 $86 Libraries/ Mat’ls 4 $1,070 $699 $183 $82 Total Fees per Unit s $15,798 $10,329 $3,755 $1,695 DU = dwelling unit; KSF = 1,000 gross square feet of building area See Table 3.5 See Table 4.5 See Table 5.5 Sum of all impact fees per unit of development Includes single family attached development September 18, 2001 DA,IG-A4AXIA4US Page S-4 Ci(y of Pa/o Alto - Par/¢s and CommuniO, Facilities Impact Fees /I14 P L EA4 E N TA TI O N Executive Summao" Implementation of an impact fee program raises both practical and policy issues. Section 6 of this report points out many practical and procedural issues related to the implementation of the City’s impact fee program, and outlines administrative procedures mandated by the Mitigation Fee Act with respect to impact fees. Topics covered in that section include adoption and collection of fees, accountability for fee revenues, expenditure time limits, reporting and refunding requirements, up- dating of fees, and staff training. The development impact fees calculated in this report are intended to represent the maximum impact fee amount justified by this analysis. Of course, the City Council may choose to adopt lower fees. In that event, future impact fee revenue will not support the level of service used in calculating the fees, and the Council will have to make choices as to how the impact fee revenue should be spent. It is important to emphasize that the fees may be used only for the purposes outlined in this re- port. Impact fees not expended properly within a reasonable time must be re- funded in accordance with the Mitigation Fee Act. It should also be emphasized that all costs used in this report are in current dollars. To the extent that costs for land and capital improvements escalate over time, the impact fees should be adjusted to keep pace with that inflation. We recommend that the implementing ordinance or resolution contain provisions for annual ad- justments. Changes in construction cost can be based on the Engineering News Re- cord Building Cost Index. Changes in land cost would have to be based on local information. If the fees are not escalated for inflation, the City could experience a significant shortfal! in the ability of fees to pay for needed facilities over several years. RECO VERY OF STUDY COST We do not recommend adding an administrative fee to impact fees to cover the costs of administering the impact fee program. Those costs should be included in the processing fees charged to developers and builders. However, it is reasonable for the City to recover the cost of this study through the impact fee program. Once the City Council decides what impact fees to impose, it is a relatively simple matter to calculate an adjustment to cover the cost of the study. Assuming the impact fee study will be updated every five years or so, the cost of this study can be divided by the amount of revenue projected over the next five years to determine the percentage by which fees should be increased to cover the cost of the study. That percentage typically represents a very small increase in the September 18, 2001 DA4G-~/klUS Pa~e 5-5 City of Pa/o Alto - Parl¢s and Community Facilities Impact Fees Executive Summary fees. For example, if the study cost $20,000 and the City expects to collect $10 million in impact fees over the next five years, the fees calculated in this study would be have to be increased by 0.2% to recover the cost of the study over five years [20,000 / 10,000,000 = 0.002]. That increase would amount to only about $2.00 per $1,000 paid by an applicant. The necessary adjustment should be made before the fees are actually adopted by the City Council. September 18, 2001 DA/IG-/14AX/A/IUS Pase S-6 CiO" of Palo Alto - Parl~s and Community Facilities Impact Fees Introduction SECTION 1 INTRODUCTION The City of Palo Mto has retained DMG-MAXIMUS to prepare this study to analyze the impacts of development on the need for parks, community centers, and libraries, and to calculate development impact fees based on that analysis. This report documents the data, methodology, and results of the impact fee study. The methods used to calculate impact fees in this study are intended to satisfy all legal requirements governing such fees, including provisions of the U. S. Constitution, the California Constitution, and the California Mitigation Fee Act (Government Code Sections 66000 et seq.). LEGAL FRAMEkVORK U. S. Constitution. Like all land use regulations, development exactions, including impact fees, are subject to the Fifth Amendment prohibition on taking of private property for public use without just compensation. Both state and federal courts have recognized the imposition of impact fees on development as a legitimate form of land use regulation, provided the fees meet standards intended to protect against regulatory takings. To comply with the Fifth Amendment, development regulations must be shown to substantially advance a legitimate governmental interest. In the case of impact fees, that interest is in the protection of public health, safety, and welfare by ensuring that development is not detrimental to the quality of essential public services. The U. S. Supreme Court has found that a government agency imposing exactions on development must demonstrate an "essential nexus" between the exaction and the interest being protected (See Nollan v. California Coastal Commission, 1987). In a more recent case (Dolan v. City of Tigard, 1994), the Court made clear that an agency also must show that an exaction is "roughly proportional" to the burden cre- ated by development. Dolan is less significant for impact fees than for some other types of exactions (e.g. mandatory dedication of land) because’ proportionality is inherent in the proper calculation of impact fees. In addition, the Dolan decision appeared to set a higher standard of review for mandatory dedications of land than for monetary exactions. California Constitution. The California Constitution grants broad police power to local governments, including the authority to regulate land use and development. That police power is the source of authority for imposing impact fees on develop- September 18, 2001 DMG-MAXIMUS Page 1-1 Ci(y of Pa/o Alto - Parl~s and Community Facilities Impact Fees Introduction ment to pay for infrastructure and capital facilities. Some impact fees have been challenged on grounds that they are special taxes imposed without voter approval in violation of Article XIIIA. That objection would be valid only if fees exceeded the cost of providing capital facilities needed to serve new development. If that were the case, then the fees would also run afou! of the U. S. Constitution and the Mitigation Fee Act. Articles XIIIC and XIIID, added by Proposition 218 in 1996, require voter approval for some "property-related fees," but exempt "the imposi- tion of fees or charges as a condition of property development." The Mitigation Fee Act. California’s impact fee statute originated in Assembly Bill 1600 during the 1987 session of the Legislature, and took effect in January, 1989. AB 1600 added several sections to the Government Code, beginning with Section 66000. Since that time the impact fee statute has been amended from time to time, and in 1997 was officially titled the "Mitigation Fee Act." Unless otherwise noted, code sections referenced in this report are from the Government Code. The Act does not limit the types of capital improvements for which impact fees may be charged. It defines public facilities very broadly to include "public improve- ments, public services and community amenities." Although the issue is not specifi- cally addressed in the Mitigation Fee Act, other provisions of the Government Code (see Section 65913.8) prohibit the use of impact fees for maintenance or op- erating costs. Consequently, the fees calculated in this report are based on capital costs only. The Mitigation Fee Act does not use the term "mitigation fee" except in its recently added official title. Nor does it use the more common term "impact fee." The Act simply uses the word "fee," which is defined as "a monetary exaction, other than a tax or special assessment, ... that is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project .... " To avoid confusion with other types of fees, this report uses the widely-accepted term "impact fee," which should be understood to mean "fee" as defined in the Mitigation Fee Act. The Mitigation Fee Act contains requirements for establishing, increasing and im- posing impact fees. They are summarized below. It also contains provisions that govern the collection and expenditure of fees, and require annual reports and peri- odic re-evaluation of impact fee programs. Those administrative requirements are discussed in the Implementation Section of this report. Certain fees or charges re- lated to development are exempted from the requirements of the Mitigation Fee Act. Among them are fees in lieu of park land dedication as authorized by the September 18, 2001 DA4G-A4AXIA4US Pa~e /-2 City of Palo Alto - Parl¢s and Community Facilities Impact Fees Introduction Quimby Act (Section 66477), fees collected pursuant to a reimbursement agreement or developer agreement, and fees for processing development applications. Required Findings. Section 66001 requires that an agency establishing, increasing or imposing impact fees, must make findings to: 1. Identify the purpose of the fee; 2. Identify the use of the fee; and, 3. Determine that there is a reasonable relationship between: a. The use of the fee and the development type on which it is imposed; b. The need for the facility and the type of development on which the fee is imposed; and c.The amount of the fee and the facility cost attributable to the devel- opment project. (Applies only upon imposition of fees.) Each of those requirements is discussed in more detail below. Identifying the Purpose of the Fees. The broad purpose of impact fees is to protect the public health, safety and general welfare by providing for adequate public fa- cilities. The specific purpose of the fees calculated in this study is to fund the con- struction of certain capital improvements identified in this report. Those im- provements are needed to mitigate the impacts of expected development in the City, and thereby prevent deterioration in public services that would result from additional development if impact fee revenues were not available to fund the needed improvements. Findings with respect to the purpose of a fee are probably sufficient if they state the purpose as financing development-related public facilities in a broad category, such as transportation or water supply. Identifying the Use of the Fees. According to Section 66001, if a fee is used to fi- nance public facilities, those facilities must be identified. A capital improvement plan may be used for that purpose, but is not mandatory if the facilities are identi- fied in the General Plan, a Specific Plan, or in other public documents. If a capital improvement plan is used to identify the use of the fees, it must be updated annu- ally by resolution of the governing body at a noticed public hearing. Impact fees calculated in this study are based on specific capital facilities identified elsewhere in this report, which is intended to serve as the public document identifying the use of the fees. September 18, 2001 D/14G-/klAXIA4US Pase 1-3 City of Palo A/to - Parks and Community Facilities Impact Fees Introduction Reasonable Relationship Requirement. As discussed above, Section 66001 requires that, for fees subject to its provisions, a "reasonable relationship" must be demon- strated between: 1. the use of the fee and the type of development on which it is imposed; 2.the need for a public facility and the type of development on which a fee is imposed; and, 3.the amount of the fee and the facility cost attributable to the develop- ment on which the fee is imposed. These three reasonable relationship requirements as defined in the statute parallel the three elements of the "rational nexus" standard which has evolved in the courts to test the validity of development exactions under the U. S. Constitution. Those elements are, "benefit," "impact," and "proportionality," respectively. The reason- able relationship language of the statute is considered less strict than the rational nexus standard used by the courts. Of course, the higher standard controls. We will use the nexus terminology in this report for two reasons: because it is more concise and descriptive, and also to signify that the methods used to calculate im- pact fees in this study are intended to satisfy the more demanding constitutional standard. Individual elements of the nexus standard are discussed further in the following paragraphs. Demonstrating an Impact. All new development in a community creates additional demands on some, or all, public facilities provided by local government. If the supply of facilities is not increased to satisfy that additional demand, the quality of public services for the entire community will deteriorate. Impact fees may be used to recover the cost of development-related facilities, but only to the extent that the need for facilities is a consequence of development that is subject to the fees. The Nollan decision reinforced the principle that development exactions may be used only to mitigate conditions created by the developments upon which they are im- posed. That principle clearly applies to impact fees. In this study, the impact of development on improvement needs is analyzed in terms of quantifiable relation- ships between various types of development and the demand for specific facilities, based on applicable level-of-service standards. This report contains all information needed to demonstrate this element of the nexus. Demonstrating a Benefit. A sufficient benefit relationship requires that impact fee revenues be segregated from other funds and expended only on the facilities for which the fees were charged. Fees must be expended in a timely manner and the facilities funded by the fees must serve the development paying the fees. Nothing September 18, 2001 D/VIG-/VIAXlIMUS Pa~e 1-4 Ci(y of Palo Alto - Parl~s and Community Facilities Impact Fees Introduction in the U.S. Constitution or California law requires that facilities paid for with im- pact fee revenues be available exclusively to developments paying the fees. Procedures for earmarking and expenditure of fee revenues are mandated by the Mitigation Fees Act, as are procedures to ensure that the fees are expended expedi- tiously or refunded. All of those requirements are intended to ensure that devel- opments benefit from the impact fees they are required to pay. Thus, an adequate showing of benefit must address procedural as well as substantive issues. Demonstrating Proportionality. The requirement that exactions be proportional to the impacts of development was clearly stated by the U.S. Supreme Court in the Dolan case and is logically necessary to establish a proper nexus. Proportionality is established through the procedures used to identify development-related facility costs, and in the methods used to calculate impact fees for various types of facilities and categories of development. In this study, the demand for facilities is measured in terms of relevant and measurable attributes of development. For example, the need for police facilities is measured by the number of police calls for service gen- erated by a particular type and quantity of development. In calculating impact fees, costs for development-related facilities are allocated in proportion to the service needs created by different types and quantities of devel- opment. The following section describes methods used to allocate facility costs and calculate impact fees in ways that meet the proportionality standard. Impact Fees for Existing Facilities. It is important to note that impact fees may be used to pay for existing facilities, provided that those facilities are needed to serve additional development and have the capacity to do so, given relevant level-of- service standards. In other words, it must be possible to show that the fees meet the need and benefit elements of the nexus. IAdPA C T FEE CAL C ULA T/ON B4E THODOL OGY Any one of several legitimate methods may be used to calculate impact fees. The choice of a particular method depends primarily on the service characteristics and planning requirements for the facility type being addressed. Each method has ad- vantages and disadvantages in a particular situation, and to a limited extent they are interchangeable because essentially they are all intended to allocate costs in pro- portion to the facility needs created by development. September 18, 2001 DAdG-WIAX/A/I US PaNe 1-5 City of Pa/o Alto - Parl¢s and Communi(y Facilities Impact Fees Introduction Reduced to its simplest terms, the process of calculating impact fees involves only two steps: determining the cost of development-related capital improvements, and allocating those costs equitably to various types of development. In practice, though, the calculation of impact fees can become quite complicated because of the many variables involved in defining the relationship between development and the need for facilities. The following paragraphs discuss three methods for calculating impact fees and how those methods can be applied. Plan-based Impact Fee Calculation. The plan-based method allocates costs for a specified set of improvements to a specified set of developments. The improve- ments are identified by a facility plan and the development is identified by a land use plan. Facility costs are allocated to various categories of development in pro- portion to the amount of development and the relative intensity of demand for each category. Demand is represented by an appropriate, quantifiable indicator. For example, demand for street improvements is typically measured by the number of vehicle trips generated by development. In this method, the total cost of relevant facilities is divided by total demand to cal- culate a cost per unit of demand. Then, that cost per unit of demand is multiplied by the amount of demand per unit of development (e.g. dwelling units or square feet of building area) in each category to arrive at a cost per unit of development. This method implicitly assumes that the entire service capacity of the specified fa- cilities will be absorbed by the planned development, or that any excess capacity is unavoidably related to serving that development. For example, it may be necessary to widen a street from two lanes to four lanes to serve planned development, but that development may not use all of the added capacity. Assuming that the im- provements in question are needed only to serve the new development paying the fees, it is legitimate to recover the full cost of the improvements through impact fees. The plan-based method is often the most workable approach where actual service usage is difficult to measure (as is the case with administrative facilities), or does not directly drive the need for added facilities (as is the case with fire stations). It is also useful for facilities, such as streets, where capacity cannot always be matched closely to demand. This method is relatively inflexible in the sense that it is based on the relationship between a particular facility plan and a particular land use plan. Consequently, if the land use plan changes significantly, the fees may have to be re- calculated. Capacity-based Impact Fee Calculation. This method can be used only where the capacity of a facility or system is known, and the amount of capacity used by a par- September 18, 2001 DAdG-A4AX/A4US Page 1-6 City of Palo Alto - Parlcs and Community Facilities Impact Fees Introduction ticular type and quantity of development can be measured or estimated. This method calculates a rate, or cost per unit of capacity based on the relationship be- tween total cost and total capacity. It can be applied to any type or amount of de- velopment, provided the capacity demand created by that development can be es- timated and the facility has adequate capacity available to serve the development. Since the fee calculation does not depend on the type or quantity of development to be served, this method is flexible with respect to changing development plans. Under this method, the cost of unused capacity is not allocated to development, so unused capacity would not be covered by impact fees if it is not absorbed by devel- opment. Capacity-based fees are most commonly used for water and wastewater systems. To calculate a capacity-based impact fee rate, facility cost is divided by facility ca- pacity to arrive at a cost per unit of service. To determine the fee for a particular development project, the cost per unit of capacity is multiplied by the amount of capacity needed by that project. To produce a schedule of impact fees based on standardized units of development (e.g. dwelling units or square feet of building area), the rate is multiplied by the amount of service needed, on average, by those units of development. Standard-based Impact Fee Calculation. The standard-based method is related to the capacity-based approach in the sense that it is based on a rate, or cost per unit of service. The difference is that with this method, costs are defined from the out- set on a generic unit-cost basis and then applied to development according to a standard that sets the amount of service or capacity to be provided for each unit of development. The standard-based method is useful where facility needs are defined directly by a service standard, and where unit costs can be determined without reference to the total size or capacity of a facility or system. Parks fit that description. It is com- mon for cities or counties to establish a service standard for parks in terms of acres per thousand residents. In addition, the cost per acre for, say, neighborhood parks can usually be estimated without knowing the size of a particular park or the total acreage of parks in the system. This approach is also useful for facilities such as libraries, where it is possible to es- timate a generic cost per square foot before a building is actually designed. One advantage of the standard-based method is that a fee can be established without committing to a particular size of facility. Facility size can be adjusted based on the amount of development that actually occurs, thereby avoiding excess capacity. September 18, 2001 DMG-/~_AX/MUS Page 1-7 Ci(y of Pa/o Alto - Parks and Community Facilities Impact Fees Introduction FACILITIES ADDRESSED/N THIS STUDY Impact fees for the following types of facilities and improvements will be addressed in this report: ¯Neighborhood and District Parks ¯Community Centers ¯Libraries Impact fees for open space were also calculated. That analysis is presented in Appendix 1. September 18, 2001 D/klG-A4AX/A4US Pas-e 1-8 Ci(y of Pa/o Alto - Parlcs and Communi(y Facilities Impact Fees Population and Employment SECTION 2 POPLILA TION AND EMPLOYMENT DATA This section of the report summarizes information on population and employment data that will be used in calculating impact fees for parks, recreation facilities, and libraries. That information forms a basis for defining levels of service, analyzing facility needs, and allocating the cost of land and improvements between existing and future development, and among various types of new development. Population and employment data used in this study were obtained from the U.S. Census Bureau, the California Department of Finance Demographic Research Unit, and the Association of Bay Area Governments (ABAG). POP LILA TION Palo Alto contains virtually no undeveloped land; that fact severely constrains population growth in the City. Even so, a favorable economic climate and Palo Alto’s desirability as a place to live have resulted in slow but steady population in- creases over the last decade. The official population of Palo Alto, as deter- mined by the 2000 cen- sus was 58,600--an in- crease of 4.8% from the 1990 level of 55,900. The January, 2001 esti- mate by the California Department of Finance (DOF) Demographic Re- search Unit was 60,800. Figure 2-A Palo Alto Population (1990-2001) 72,000 60,000 48,000 36,000 24,000 12,000 0. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 YEAR The chart in Figure 2-A depicts the City’s population year-by-year from 1990 through 2001. It should be noted that the apparent dip in the 2000 population actually reflects the correction of accumulated estimating errors between the 1990 Census and the 2000 Census. Overall population growth was quite slow during that period, totaling just 4.8%, or 0.43% per year on average. In that light, it is interesting to note that the January 2001 population estimate by DOF is 60,800, a jump of almost 4% from the 2000 Census figure. September 18, 2001 DMG-A4AXIA4 US Page 2-1 CiW of Palo A/to - ParRs and CommuniO~ Facilities Impact Fees Population and Employment ABAG’s Projections 2000 forecasts that population growth in Palo Alto will show a total increase of only 6.3°/0 from 2000 to 2020--an average growth rate of about 0.30/0 per year. EMPL 0 YMENT The best available employment figures for Pa!o Alto also come from Projections 2000, which reports that there were 98,450 jobs in the City in 2000--approxi- mately 1.7 jobs per resident. ABAG’s forecasted employment growth for the City shows an increase of only 5°/o over twenty years to 103,330 jobs in 2020. SER VICE POPULATION In the impact fee analysis, "service population" is used to measure the impact of development on parks and recreation facilities in Palo Mto. "Service population" is defined as a weighted composite population consisting of residents, employees, and visitors counted as equivalent residents. Each component of the service population is weighted to reflect its relative impact on the facilities addressed in this study. Weighting of components may vary by type of facility, because the relative impact of service population components is not identical for all facilities. Inclusion of visitors in the service population means that a portion of the demand for park and recreation facilities is attributed to visitors in this study. However, no impact fee is calculated for visitors, because such fees can be imposed only on new development in Palo Alto. September 18, 2001 DM G-MAXIM US Pase 2-2 CiOz of Pa/o A/to - Par/~s and Community Facilities Impact Fees Parks SECTION 3 IMPACT FEES FOR PARKS This section of the report addresses the impact of development on the need for parks in Palo Alto. The fees calculated in this section of the report are intended to cover the cost of land acquisition and park improvements for neighborhood and district parks. Acquisition of park land as a condition of approval for residential subdivisions is governed by the Quimby Act (Government Code ~66477). However, because land for subdivisions is not available in Palo Alto, this report assumes that park impact fees charged by the City will be governed by the Mitigation Fee Act (Government Code ~66000, et seq.) SER VICE AREA AND TIME FRA/UE The study area addressed by this analysis encompasses the City of Palo Alto. Be- cause level-of-service standards are set on a citywide basis, the impact fees for park and recreation improvements will be calculated on a citywide basis and applied to new development in all parts of the City. The time flame for this study is indefinite. It is not necessary to define a specific time frame because the method used to calculate these fees does not depend on the timing of development or the total amount of development to be served. METHODOLOGY Impact fees are calculated in this section using the standard-based method discussed in Section 1. Standard-based fees are open-ended, meaning the fee calculations do not depend on assumptions about the ultimate limits of development in the City. Impact fees are calculated in current dollars and should be adjusted annually to re- flect changes in costs. EXIS TIN G FA CIL / TIES Table 3.1 on the following page lists Palo Alto’s ’ existing parks and shows the total acreage and developed acreage for each facility. This information will be used to establish the existing level of service, that is, the ratio of park acreage to equivalent residents, as explained on page 3-3. September 18, 2001 DMG-A/IAXlA/IUS Page 3-1 Ci(y of Pa/o Alto - Parks and Communi(y Facilities Impact Fees Parks Table 3.1 City of Palo Alto - Existing Parks Park Name Baylands Athletic Center Bol Park Briones Park E1 Camino Park Eleanor Pardee Park Greer Park Hoover Park Hopkins Park Mitchell Park Peers Park Ramos Park Rinconada Park Nobles Park Seale Park Terman Park Boulware Park Bowden Park Cameron Park Cogswell Plaza Downtown Park North E1 Palo Alto Park Lawn Bowling Green Lytton Plaza Mayfield Park Monroe Park Sara Wallis Park Scott Park Weisshaar Park Werry park Park Type 1 D D D D D D D D D D D D D D D N N N N N N N N N N N N N N Total Developed Acreage Acreage 8.6 8.6 13.8 13.8 3.5 3.5 11.5 11.5 9.6 9.6 22.3 20.0 4.2 4.2 12.4 12.4 22.0 22.0 4.7 4.7 3.6 3.6 20.0 20.0 4.7 4.7 3.2 3.2 7.6 7.6 1.5 1.5 1.5 1.5 1.2 1.2 0.5 0.5 2.1 2.1 0.5 0.5 1.9 1.9 0.2 0.2 1.1 1.1 0.6 0.6 0.3 0.3 0.4 0.4 1.1 1.1 1.2 1.2 165.8 163.5Total Neighborhood & District Park Acreage Source: City of Palo Mto Community Services Department 1 D = District Park; N = Neighborhood Parks DEMAND VARIABLE Palo Mto’s parks are used primarily by residents, but non-resident employees and visitors also make use of those facilities. Consequently, the demand variable used in this study is "service population," defined as a weighted combination of resi- dents, employees, and visitors. The service population is counted in terms of equivalent residents. September 18, 2001 DMG-A4AX/MUS Page 3-2 Ci(y of Pa/o Alto - Parks and Communi(y Facilities Impact Fees Parks Table 3.2 shows the estimated share of equivalent residents contributed by each component of the service population. For residents and non-resident employees, a weighting factor is used to define the ratio of actual residents/employees to equiva- lent residents. The weight assigned to non-resident employees reflects the esti- mated relative impact of that group on the use of City parks, compared with a base weight of 1.0 for residents. The weights have been adjusted so that the share of equivalent residents in the right hand column of Table 3.2 matches the results of park user surveys conducted by the Community Services Department in July 2001. (See Appendix 2 for more detail on the surveys.) No weight is assigned to visitors. The number of equivalent residents for the visitor component in Table 3.2 is set at a level consistent with the results of the park user surveys. Because visitors are not subject to an impact fee, it is not necessary to es- tablish a weighting factor for that component. Table 3.2 Service Population Weighting - Parks Population Component Residents Non-Resident Employees Visitors Totals Existing Level 1 60,800 78,760 N/A Equiv. Res. Weight 2 1.000 0.200 N/A Equivalent Residents 3 60,800 15,752 45,048 121,600 Share of Equiv. Res. 50.0o/6 13.0O/o 37.0% 100.0% Current resident population based on Department of Finance estimate for 2001. Non-resident employees = total employees from ABAG estimate less 20°/0 for residents employed in the City, as estimated in the 1995 Palo Alto Jobs-Housing Nexus Analysis by Keyser-Marston Associates. Weight required to balance shares of equivalent residents with shares of park users found in 2001 surveys conducted by the Department of Community Services. (See Appendix 2.) Equivalent residents = existing level x equivalent resident xveight, except for visitor equivalent residents which are based directly on the results of park user surveys. LEVEL OF SERVICE This study uses the existing level of service in the City as the basis for calculating impact fees for parks. The goal is to establish fees that will allow the City to main- tain the current level of service as demand increases because of new development. In this section, level of service is defined as the ratio of neighborhood and district park acreage to equivalent residents. Open space parks are addressed in Appendix 1. Table 3.3 on the next page shows the current ratio of neighborhood and district park acreage to equivalent residents. Because almost 99°/o of the City’s existing September 18, 2001 DMG-MAX/M US Page 3-3 CRy of Pa/o Alto - Parlcs and CommunRy Faci/ities /mpact Fees Parlcs park acreage is currently developed, there is no need to distinguish total park acre- age from developed acreage in this analysis. The actual figure used in subsequent calculations is developed acreage, which is a slightly smaller number than total acreage. Table 3.3 Existing Ratio of Parks to Service Population Component Neighborhood & District Parks Existing Existing Acres per Acres 1 Equiv. Res 2 Equiv. Res 3 163.5 121,600 0.00134 See Table 3.1 See Table 3.2 Acres per equivalent resident = existing acres / equivalent residents IMPACT FEE CALCULATION Impact fees for parks will be calculated using the standard-based method described in Section 1 of this report. The fee calculations will use estimated average costs for land acquisition and park improvements. A single impact fee will be calculated for both land and improvements, so the per-acre cost used in the calculations represents the combined cost of both components. Inasmuch as equivalent residents are being used to measure demand for these facilities, the fees will be calculated initially as a cost per equivalent resident using the ratio of acreage to equivalent residents from Table 3.3.Table 3.4 shows the calculation of cost per equivalent resident. Table 3.4 Cost per Equivalent Resident - Neighborhood & District Parks Acres per Equiv.TotalCost Cost per Equiv. Resident 1 per Acre 2 Resident 3 0.00134 $3,400,000 $4,570.71 See Table 3.2 Combined cost of land acquisition and park development. Estimated land cost of $3.0 million per acre provided by the Palo Alto Real Estate Division based on an appraisal of the Terman School site, April, 2000. Estimated development cost of $400,000 per acre provided by the Community Services Dept. based on costs estimated for the SOFA Neighborhood Park by Royston Hanamoto, Alley and Abey Architects, September, 2001 Cost per equiv, res. = cost per acre x acres per equiv, res. September 18, 2001 DMG-A4AXlA4US Pase 3-4 Ci(y of Pa/o Alto - Parks and Community Facilities Impact Fees Parks Because of the difficulty of acquiring desirable park sites in Palo Alto, the City may choose to expend impact fee revenue for improvements that enhance the capacity ¯ of existing parks to serve additional demand, rather than to acquire more land. IMPACT FEES PER UNIT OF DEVELOPMENT The next step is to convert the cost per equivalent resident from Table 3.4 into impact fees per unit of development by development type. To make that conversion, the cost per equivalent resident is multiplied by the average number of equivalent residents per unit of development by development type. Table 3.5 shows the resulting impact fees per unit of development for neighborhood and district parks. Table 3.5 Impact Fees per Unit of Development - Neighborhood and District Parks Development Dev Res./Empl. Type Units 1 per Unit 2 Single Family Residential DU 2.6 Multiple Family Residential 7 DU 1.7 Commercial/Office/Industrial KSF 3.7 Hotel/Motel KSF 1.7 Demand Weight 3 1.00 1.00 0.20 0.20 Equiv. Res. Per Unit 4 2.60 1.70 0.74 0.33 Cost Per Equiv. Res. s $ 4,570.71 $ 4,570.71 $ 4,570.71 $ 4,570.71 Impact Fee i per Unit 6 $ 11,884 $7,770 $ 3,382 $ 1,527 DU = d~velling unit; KSF = 1,000 gross square feet of building area Average residents per unit for residential development based on 1990 Census data. Average employees per unit for non-residential development estimated by staff based on the 1993 Jobs-Housing Nexus Study by Keyser Marston Associates, modified to reflect data in ABAG Forecast 2000, "Employment Change by Sector in Santa Clara County" See Table 3.2 Equivalent residents per unit = residents or employees per unit x demand weight. See Table 3.4. Impact fee per unit = equiv, residents per unit X cost per equiv, resident. Rounded to nearest dollar. Includes single family attached development PROJECTED REVENUE Finally, the impact fees calculated above can be applied to future development to estimate the potential revenue that could be collected by the City if those fees are implemented. Table 3.6 on the next page shows annual revenue projections in cur- rent dollars for the fees calculated in this section. Those projections are based on ABAG forecasts of population and employment. The projections assume that all increases in population and employment forecasted by ABAG will result from net new development. If that assumption is incorrect, actual revenue may be lower than projected. September 18, 2001 DMG-A/IAXlMUS Page 3-5 City of Pa/o Alto - Parlcs and Community Facilities Impact Fees Parks Table 3.6 Average Annual Revenue Potential - Park Impact Fees Growth Avg. Ann. Component Increase 1 Residents 244 Employees 296 Total Weight 2 1.00 0.20 Added Cost Per Equiv. Res.3 Equiv. Res.4 244.00 $4,570.71 59.10 $4,570.71 Annual Revenue s $1,115,253 $ 270,129 $1,385,381 Based on ABAG Forecast 2000. See Section 2 of this report. See Table 3.2 Added equivalent residents = average annual increase x demand weight. See Table 3.4 Projected average annual revenue = added equiv, residents X cost per equiv, resident Projections assume all forecasted growth in pop. & empl. results from development. The costs used in this report are in current dollars. To keep pace with changing price levels, the fees calculated above should be adjusted annually to keep pace with actual costs for land and park improvements. See the Implementation Section for more on inflation adjustments. September 18, 2001 DMG-MAX/A4 US Page 3-6 CiW of Pa/o Alto - Parlcs and CommunRy Facilities Impact Fees Community Centers SECTION 4 IMPA C T FEES FOR COMM UNITY CENTERS This section of the report addresses the impact of development on the need for community centers in Palo Alto. The fees calculated in this section of the report are intended to cover the cost of design and engineering, construction, and other necessary project costs. SER VICE AREA AND T/ME FRAME The study area addressed by this analysis encompasses the City of Palo Alto. Be- cause level-of-service standards are set on a citywide basis, the impact fees for community centers will be calculated on a citywide basis and applied to new devel- opment in all parts of the City. The time frame for this study is indefinite. It is not necessary to define a specific time frame because the method used to calculate these fees does not depend on the timing of development or the total amount of development to be served. METHODOL OGY Impact fees are calculated in this section using the standard-based method discussed in Section 1. Standard-based fees are open-ended, meaning the fee calculations do not depend on assumptions about the ultimate limits of development in the City. Impact fees are calculated in current dollars and should be adjusted annually to re- flect changes in costs. EXISTING FACILITIES Table 4.1 lists Palo Mto’s exist- ing community centers and their building areas. This information will be used to establish the ex- isting level of service, that is, the ratio of total community center building area to equivalent resi- dents. Table 4.1 Existing Community Centers Community Center Cubberly Community Center Lucie Stern Community Center Mitchell Park Community Center Junior Museum and Zoo Art Center Total Building Area (Square Feet) 182,000 7,500 9,300 5,856 29,869 234,525 Source: Palo Alto Community Services Department DEMAND VARIABLE Palo Alto’s community centers are used primarily by residents, but non-resident employees and visitors also make use of those facilities. Consequently, the demand September 18, 2001 DMG-IVIAXl/klUS pao~e zl- 1 Ci(y of Pa/o Alto - Parlcs and Community Facilities Impact Fees CommuniO~ Centers variable used in this study is "service population," defined as a weighted combina- tion of residents, employees, and visitors. The service population is counted in terms of equivalent residents. Table 4.2 shows the estimated share of equivalent residents contributed by each component of the service population. For residents and non-resident employees, a weighting factor is used to define the ratio of actual residents/employees to equiva- lent residents. The weight assigned to non-resident employees reflects the esti- mated relative impact of that group on the use of the City’s community centers, compared with a base weight of 1.0 for residents. The weights have been adjusted so that the share of equivalent residents in the right hand column of Table 4.2 matches the results of community center user surveys conducted by the Community Services Department in July 2001. (See Appendix 2 for more detail on the surveys.) No weight is assigned to visitors. The number of equivalent residents for the visitor component in Table 4.2 is set at a level consistent with the results of the user sur- veys. Because visitors are not subject to an impact fee, it is not necessary to estab- lish a weighting factor for that component. Table 4.2 Service Population Weighting - Community Centers Population Component Residents Non-Resident Employees iVisitors Totals Existing Level 1 60,800 78,760 N/A Equiv. Res. Weight ~- 1.000 0.047 N/A Equivalent Share of Residents 3 Equiv. Res. 60,800 3,702 15,900 80,402 75.6% 4.6% 19.8% 100.0% Current resident population based on Department of Finance estimate for 2001. Non-resident employees = total employees from ABAG estimate less 20°/0 for residents employed in the City, as estimated in the 1995 Palo Alto Jobs-Housing Nexus Analysis by Keyser-Marston Associates. Weight required to balance shares of equivalent residents with shares of center users found in 2001 surveys conducted by the Department of Community Services. (See Appendix 2.) Equivalent residents = existing level x equivalent resident weight, except for visitor equivalent residents which are based d!rectly on the results of park user surveys. LEVEL OF SERVICE This study uses the existing level of service in the City as the basis for calculating impact fees for community centers. The goal is to establish fees that will allow the City to maintain the current level of service as demand increases because of new development. September 18, 2001 DA/IG-AdAXlMUS Page 4-2 CiO/ of Pa/o Alto - Parks and CommuniO~ Facilities Impact Fees CommunRy Centers In this section, level of service is defined as the ratio of total community center building area to equivalent residents. Table 4.3 shows the current ratio of commu- nity center building area to equivalent residents in Palo Alto. Table 4.3 Ratio of Community Center Building Area to Service Population Existing i Existing Equiv. Component Sq. Ft. *Res ’- Community Centers 234,525 80,402 Sq. Ft. per Equiv. Res 2.92 See Table 4.1 See Table 4.2 Sq. Ft. per equiv, resident = existing sq. ft. / equivalent residents /M PA C T FEE CAL C ULA TI ON Impact fees for community centers ~vill be calculated using the standard-based method described in Section 1 of this report. The fee calculations will use esti- mated costs per square foot for building construction, including design, engineer- ing, and other project costs. (See Appendix for more detail on costs.) Land cost is not included in the fee calculations, because new community center facilities are expected to be constructed as additions to existing facilities rather than as entirely new facilities. Because equivalent residents are being used to measure demand in calculating im- pact fees for these facilities, the fees will be calculated initially as a cost per equiva- lent resident using the ratio of building area to equivalent residents from Table 4.3. Those costs will then be converted into impact fees per unit of development by land use category. Table 4.4 shows the calculation of cost per equivalent resident. Table 4.4 Cost per Equivalent Resident - Community Centers Sq. Ft. per Component Equiv. Res. Community Centers 2.92 Cost per Cost per Equiv. Sq. Ft. 2 Res. 3 $375.00 $1,093.84 See Table 4.3 Estimated cost provided by the Palo Alto Public Works Department based on Children’s Library Feasibilit3, Study, developed by Architectural Resources Group, May 2000. Cost per equiv, resident = cost per sq. ft. x sq. ft. per equiv, resident September 18, 2001 DMG-MAXIA4 US Page 4-3 City of Pa/o Alto - Parlcs and Community Facilities Impact Fees Community Centers IMPACT FEES PER UNIT OF DEVELOPMENT The next step is to convert the cost per equivalent resident from Table 4.4 into im- pact fees per unit of development by development type. To make that conversion, the cost per equivalent resident is multiplied by the average number of equivalent residents per unit of development by development type. Table 4..5 shows the re- sulting impact fees per unit of development for community centers. Table 4.5 Impact Fees per Unit of Development - Community Centers Development Dev Res./Empl. Type Units I per Unit 2 Single Family Residential DU 2.6 Multiple Family Residental 7 DU 1.7 Commercial/Office/Industrial KSF 3.7 Hotel/Motel KSF 1.7 Demand Weight 3 1.00 1.00 0.05 0.05 Equiv. Res. Per Unit 4 2.60 1.70 0.17 0.08 Cost Per Equiv. Res. s $ 1,093.84 $ 1,093.84 $ 1,093.84 $ 1,093.84 Impact Fee per Unit 6 $ 2,844 $ 1,860 $ 190 $ 86 DU = dwelling unit; KSF = 1,000 gross square feet of building area Average residents per unit for residential development based on 1990 Census data. Average employees per unit for non-residential development estimated by staff based on the 1993 Jobs-Housing Nexus Study by Keyser Marston Associates, modified to reflect data in ABAG Forecast 2000, "Employment Change by Sector in Santa Clara County" See Table 4.2 Equivalent residents per unit = residents or employees per unit xdemand weight. See Table 4.4. Impact fee per unit = equiv, residents per unit xcost per equiv, resident. Includes single family attached development PROJECTED REVENUE Finally, the impact fees calculated above can be applied to future development to estimate the potential revenue that could be collected by the City if those fees are implemented. Table 4.6 on the next page shows annual revenue projections in cur- rent dollars for the fees calculated in this section. Those projections are based on ABAG forecasts of population and employment. The projections assume that all increases in population and employment forecasted by ABAG will result from net new development. If that assumption is incorrect, actual revenue may be lower than projected. September 18, 2001 DMG-MAXIMUS Pa~e 4-4 City of Pa/o Alto - Parks and Community Facilities Impact Fees Community Centers Table 4.6 Projected Average Annual Revenue - Community Center Impact Fees Growth Component Residents Employees Total Avg. Ann. Increase 1 244 296 Demand Added Weil~ht "-Equiv. Res.3 1.00 244.00 0.05 13.89 Cost Per Equiv. Res.4 $ 1,093.84 $ 1,093.84 Annual Revenue s $ 266,898 $ 15,192 $ 282,090 Based on ABAG Forecast 2000. See Section 2 of this report. See Table 4.2 Added equivalent residents = average annual increase x demand weight. See Table 4.5 Projected average annual revenue = added equiv, residents x cost per equiv, res. Projections assume all forecasted growth in pop. & empl. result from development. The costs used in this report are in current dollars. To keep pace with changing price levels, the fees calculated above should be adjusted annually for inflation. See the Implementation Section for more on inflation adjustments. September 18, 2001 DA/IG-A4AX/A4 LIS Page 4-5 Ci(y of Pa/o A/to - Parks and CommuniO, Facilities Impact Fees Libraries SECTION 5 IMPACT FEES FOR LIBRARIES This section of the report addresses the impact of development on the need for li- braries in Palo Alto. The fees calculated in this section of the report are intended to cover the cost of design and engineering, construction, and other necessary project COSTS. SERVICE AREA AND TIME FRAME The study area addressed by this analysis encompasses the City of Palo Alto. Be- cause level-of-service standards are set on a citywide basis, the impact fees for li- braries will be calculated on a citywide basis and applied to new development in all parts of the City. The time frame for this study is indefinite. It is not necessary to define a specific time frame because the method used to calculate these fees does not depend on the timing of development or the total amount of development to be served. METHODOLOGY Table 5.1 Existing Libraries Impact fees are calculated in this section using the standard-based method discussed in Section 1. Standard-based fees are open- ended, meaning that they do not depend on assumptions about the ultimate limits of development in the City. Impact fees are calcu- lated in current dollars and should be adjusted annually to reflect changes in costs. EXISTING FACILITIES Table 5.1 lists Palo Alto’s exist- Library Branch Main Library Downtown Branch ]Children’s Library College Terrace Branch Mitchell Park Branch Terman Park Branch Total Building Area (Square Feet) 26,313 8,774 3,360 2,392 10,984 5,381 57,204 Volumes * 113,745 18,255 39,916 22,155 67,946 9,658 271,675 Source: Palo Alto Community Services Department I Number of volumes includes all catalogued items in the librar collections (books, videos, cassettes, etc.). The figures do not include non-catalogued items such as individual magazines, many paperback books, and microfilm. ing branch libraries, with the building area and the number of volumes of library materials for each branch. This information will be used to establish the existing level of service, that is, the ratios of total library building area and number of vol- umes to equivalent residents. September 18, 2001 DMG-MAX/A4US Page 5-1 Ci(y of Pa/o A/to - Parks and Community Facilities Impact Fees DEMAND VARIABLE Libraries Palo Alto’s libraries are used primarily by residents, but non-resident employees and visitors also make use of those facilities. Consequently, the demand variable used in this study is service population, defined as a weighted combination of residents, employees, and visitors. The service population is counted in terms of equivalent residents. Table 5.2 shows the estimated share of equivalent residents contributed by each component of the service population. For residents and non-resident employees, a weighting factor is used to define the ratio of actual residents/employees to equiva- lent residents. The weight assigned to non-resident employees reflects the esti- mated relative impact of that group on the use of City libraries, compared with a base weight of 1.0 for residents. The weights have been adjusted so that the share of equivalent residents in the right hand column of Table 5.2 is consistent with the results of library user surveys conducted by the library staff in May 2001. (See Ap- pendix 2 for more detail on the surveys.) No weight is assigned to visitors. The number of equivalent residents for the visitor component in Table 5.2 is set at a level consistent with the results of the library user surveys. Because visitors are not subject to an impact fee, it is not necessary to establish a weighting factor for that component. Table 5.2 Service Population Weighting - Libraries Population Component Residents Non-Resident Employees Visitors Totals Existing Level 1 60,800 78,760 N/A Equiv. Res. Weight 2 1.000 0.120 N/A Equivalent Residents 3 60,800 9,451 5,000 75,251 Share of Equiv. Res. 80.8% 12.6%o 6.6% 100.0o/8 Current resident population based on Department of Finance estimate for 2001. Non-resident employees = total employees from ABAG estimate less 20°/0 for residents employed in the City, as estimated in the 1995 Palo Alto Jobs-Housing Nexus Analysis by Keyser-Marston Associates. Weight required to balance shares of equivalent residents with shares of park users found in 2001 surveys conducted by the Department of Community Services. (See Appendix 2.) Equivalent residents = existing level x equivalent resident weight, except for visitor equivalent residents which are based directly on the results of library user surveys. September 18, 2001 DA4G-A4AXlM US Pa, Be 5-2 City of Pa/o A/to - Parlcs and CommunRy Facilities Impact Fees LEVEL OF SERVICE Libraries This study uses the existing level of service in the City as the basis for calculating impact fees for libraries. In this section, level of service is defined as the ratio of library building area and volumes of library materials to equivalent residents. The goal is to establish fees that will allow the City to maintain the current level of service as demand increases because of new development. Table 5.3 shows the cur- rent ratios of library building area and volumes to equivalent residents in Palo Alto. Table 5.3 Ratio of Library Building Area and Materials to Service Population Component Building Area (Square Feet) Library Materials (Volumes) Existing Units 1 57,204 271,675 Existing Equiv. Units per Res 2 Equiv. Res 75,251 0.76 75,251 3.61 See Table 5.1 See Table 5.2 Units per equivalent resident = existing units / equivalent residents IMPACT FEE CAL CULA TION Impact fees for libraries will be calculated using the standard-based method de- scribed in Section 1 of this report. The fee calculations will use estimated costs per square foot for building construction, including design, engineering, and other project costs. An estimated average cost per volume will be used for library mate- rials. Land cost is not included in the fee calculations, because new library facilities are expected to be constructed as additions to existing facilities or construction on existing library sites rather than as entirely new facilities in different locations. (See Appendix for more detail on costs.) Since equivalent residents are being used to measure demand in calculating impact fees for these facilities, the fees will be calculated initially as a cost per equivalent resident using the ratio of units to equivalent residents from Table 5.3. Table 5.4 on the next page shows the calculation of cost per equivalent resident. September 18, 2001 D/VIG-MAXIMUS Pas"e 5-3 CiO/ of Pa/o Alto - Parlcs and Communi(y Facilities Impact Fees Libraries Table 5.4 Cost per Equivalent Resident - Library Buildings Units per Component Equiv. Res. Building Area (Square Feet)0.76 Library Materials (Volumes)3.61 Total Cost per Unit. 2 $375.00 $35.00 Costper Equiv. Res.3 $285.07 $126.36 $411.42 See Table S.3 Estimated cost provided by the Palo Alto Public Works Department based on Children’s Library Feasibility Study, developed by Architectural Resources Group, May 2000. Cost per equiv, resident = cost per sq. ft. x sq. ft. per equiv, resident IMPACT FEES PER UNIT OF DEVELOPMENT The next step is to convert the cost per equivalent resident from Table 5.4 into im- pact fees per unit of development by development type. To make that conversion, the cost per equivalent resident is multiplied by the average number of equivalent residents per unit of development by development type. Table 5.5 shows the re- sulting impact fees per unit of development for libraries. Table 5.5 Impact Fees per Unit of Development - Libraries Development Dev Res./Empl. Type Units 1 per Unit 2 Single Family Residential DU 2.6 Multiple Family Residental 7 DU 1.7 Commercial/Office/Industrial KSF 3.7 Hotel/Motel KSF 1.7 Demand Weight 3 1.00 1.00 0.12 0.12 Equiv. Res. Per Unit 4 2.60 1.70 0.44 0.20 Cost Per Equiv. Res.s $ 411.42 $ 411.42 $ 411.42 $ 411.42 Impact Fee per Unit 6 $ 1,070 $699 $ 183 $ 82 DU = dwelling unit; KSF = 1,000 gross square feet of building area Average residents per unit for residential development based on 1990 Census data. Average employees per unit for non-residential development estimated by staff based on the 1993 Jobs-Housing Nexus Study by Keyser Marston Associates, modified to reflect data in ABAG Forecast 2000, "Employment Change by Sector in Santa Clara County" See Table 5.2 Equivalent residents per unit = residents or employees per unit × demand weight. See Table 5.4. Impact fee per unit - equiv, residents per unit × cost per equiv, resident. Rounded to nearest dollar. Includes single family attached development September 18, 2001 DMG-AdAXIMUS Page 5-4 CRy of Pa/o Alto - Parl~s and CommunRy Facilities Impact Fees PR O]ECTED REVENUE Libraries Finally, the impact fees calculated above can be applied to future development to estimate the potential revenue that could be collected by the City if those fees are implemented. Table 5.6 shows annual revenue projections in current dollars for the fees calculated in this section. Those .projections are based on ABAG forecasts of population and employment. The projections assume that all forecasted in- creases in population and employment forecasted by ABAG will result from net new development. If that assumption is incorrect, actual revenue may be lower than projected. Table 5.6 Projected Average Annual Revenue - Library Impact Fees Growth i Avg. Ann. Component Increase 1 Residents 244 Employees 296 Total Demand Added Cost Per Annual Weight 2 Equiv. Res.3 Equiv. Res.4 Revenue s 1.00 244.00 $411.42 $100,387 0.12 35.46 $411.42 $ 14,589 $114,976 Based on ABAG Forecast 2000. See Section 2 of this report See Table 5.2 Added equivalent residents = average annual increase x demand weight. See Table 5.4 Projected average annual revenue = added equiv, residents x cost per equiv, resident Projections assume all forecasted growth in pop. & empl. result from development. The costs used in this report are in current dollars. To keep pace with changing price levels, the fees calculated above should be adjusted annually for inflation. See the Implementation Section for more on inflation adjustments. September 18, 2001 DMG-A4AXIMUS Pase 5-5 City of Palo A/to - Parlcs and Community Facilities Impact Fees Implementation SECTION 6 IMPL EMEN TA TION This section of the report contains recommendations for adoption and administra- tion of a development impact fee program based on this study, and for the inter- pretation and application of impact fees recommended herein. Statutory require- ments for the adoption and administration of fees imposed as a condition of devel- opment approval are found in the Mitigation Fee Act (Government Code Sections 66000 et seq.). ADOPTION The form in which development impact fees are adopted, whether by ordinance or resolution, should be determined by the City Attorney. Typically, it is desirable that specific fee schedules be set by resolution to facilitate periodic adjustments. Procedures for adoption of fees subject to the Mitigation Fee Act, including notice and public hearing requirements, are specified in Government Code Section 66016. Such fees do not become effective until 60 days after final action by the Governing body. Actions establishing or increasing fees subject to the Mitigation Act require certain findings, as set forth in Government Code Section 66001 and discussed in Section 1 of this report. ADA4INIS TRA TION Several requirements of the California Mitigation Fee Act (Government Code Sec- tions 66000 et seq.) address the administration of impact fee programs, including collection and accounting procedures, refunds, updates and reporting. References to code sections in the following paragraphs pertain to the California Government Code. Application of Impact Fee Rates. In general, impact fees recommended in this re- port are calculated initially in terms of a cost per unit of service, and then con- verted into fees per unit of development. In this case, the service units are equiva- lent residents added by new development. To implement impact fees, it is neces- sary to estimate how many units of service are added by a certain development project. For the administrative convenience of the City, and to facilitate cost esti- mating by builders and developers, it is useful to convert impact fee rates into fees for common units of development-e.g., dwelling units for residential development, or building area for commercial development. All impact fee rates calculated in this study have been converted into fees per unit of development for the land use categories defined in this study. September 18, 200/DMG-/VIAX/WILIS Pa~e 6- I City of Pa/o A/to - Parks and Community Facilities Impact Fees Implementation However, we recommend that the impact fees be adopted in a manner that allows the flexibility to calculate impact fees for certain projects based on a project specific estimate of equivalent residents added by the project. That approach provides a basis for adjusting fees in cases where a development project has characteristics (e.g., population per unit or square feet per employee) that vary significantly from the norms used to characterize the development types used in this report. It should also be noted that many commercial and industrial buildings change occupants over time, and we believe that, in most cases, the City is justified in applying fees based on typical characteristics for the appropriate development category, regardless of how a new building may be used by its initial occupants. The fact that the initial user of a new building may have below average number of occupants does not en- sure that future users will have similarly low demand. An exception would be buildings designed for a very specific purpose, such as fast food restaurants. Imposition of Fees. Pursuant to the Mitigation Fee Act, when the City imposes an impact fee upon a specific development project, it must make findings to : 1.Identify the purpose of the fee; 2.Identify the use of the fee; and 3.Determine that there is a reasonable relationship between: ao bo Co The use of the fee and the development type on which it is imposed; The need for the facility and the type of development on which the fee is imposed; and The amount of the fee and the facility cost attributable to the development project. Most of those findings would normally be based on an impact fee study, and this study is intended to provide a basis for all of the required findings. According to the statute, the use of the fee (See 2., above) may be specified in a capital improve- ment plan, the General Plan, or other public document. This study is intended to serve as a public document identifying the use of the fees. In addition, Section 66006, as amended by SB 1693, provides that a local agency, at the time it imposes a fee for public improvements on a specific development project, "... shall identify the public improvement that the fee will be used to fi- nance." For each type of fee calculated in this report, the improvements to be September 18, 2001 DMG-AdAXlAxlUS Pase 6-2 City of Pa/o Alto - Parlcs and Community Facilities Impact Fees Implementation funded by the impact fees are identified. Consequently, this report provides a basis for the notification required by the statute. Collection of Fees. Section 66007, provides that a local agency shall not require payment of fees by developers of residential projects prior to the date of final in- spection, or issuance of a certificate of occupancy, whichever occurs first. How- ever, "utility service fees" (not defined) may be collected upon application for utility service. In a residential development project of more than one dwelling unit, the agency may choose to collect fees either for individual units or for phases upon fi- nal inspection, or for the entire project upon final inspection of the first dwelling unit completed. An important exception allows fees to be collected at an earlier time if they will be used to reimburse the city for expenditures previously made, or for improvements or facilities for which money has been appropriated. The agency must also have adopted a construction schedule or plan for the improvement. These restrictions do not apply to non-residential development. Notwithstanding the foregoing restrictions, many cities routinely collect impact fees for all facilities at the time building permits are issued, and builders often find it convenient to pay the fees at that time. In cases where the fees are not collected upon issuance of building permits, Section 66007 provides that the city may re- quire the property owner to execute a contract to pay the fee, and to record that contract as a lien against the property to ensure that the fees are paid. Credit for Improvements provided by Developers. If the City requires a developer, as a condition of project approval, to construct facilities or improvements for which impact fees have been, or will be, charged, the impact fee imposed on that development project, for that type of facility, should be adjusted to reflect a credit for the cost of those facilities or improvements. If the reimbursement would ex- ceed the amount of the fee to be paid by the development for that type of facility, the City may wish to negotiate a reimbursement agreement with the developer. Credit for Existing Development. If a project involves replacement, redevelopment or intensification of previously existing development, impact fees should be applied only to the portion of the project which represents an increase in demand for City facilities, as measured by the demand variable used in this studymadded equivalent residents. Since residential service demand is normally estimated on the basis of demand per dwelling unit, an addition to a single family dwelling unit typically would not be subject to an impact fee if it does not increase the number of dwelling units in the structure. If a dwelling unit is added to an existing structure, no impact fee would normally be charged for the previously existing units. A similar ap- proach can be used for other types of development. However, if it is clear that a September 1 ~, 2001 DMG-/VIAXIM US Page 6-3 CiO~ of Palo Alto - Parks and Communi~ Facilities Impact Fees Implementation project will have a disproportionate impact, compared with other projects of a similar type, the City should consider adjusting the impact fees accordingly. Earmarking of Fee Revenue. Section 66006 specifies that fees shall be deposited with other fees for the improvement in a separate capital facilities account or fund in a manner to avoid any commingling of the fees with other revenues and funds of the local agency, except for temporary investments. Fees must be expended solely for the purpose for which the fee was collected. Interest earned on the fee reve- nues must also be placed in the capital account and used for the same purpose. The language of the law is not clear as to whether depositing fees "with other fees for the improvement" refers to a specific capital improvement or a class of im- provements (e.g., street improvements). We are not aware of any city that has in- terpreted that language to mean that funds must be segregated by individual proj- ects. As a practical matter, that would make it exceedingly difficult to accumulate enough funds to construct any improvements funded by impact fees. Common practice is to maintain separate funds or accounts for impact fee revenues by facility category (i.e., streets, traffic signals, or park improvements), but not for individual projects. We recommend that approach. Reporting. As amended by SB 1693 in 1996, Section 66006 requires that once each year, within 180 days of the close of the fiscal year, the local agency must make available to the public the following information for each separate account established to receive impact fee revenues: 1.The amount of the fee; 2.The beginning and ending balance of the account or fund; 3.The amount of the fees collected and interest earned; Identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the per- centage of the cost of the public improvement that was funded with fees; o Identification of the approximate date by which the construction of a public improvement will commence, if the City determines sufficient funds have been collected to complete financing of an incomplete public improvement; A description of each inter-fund transfer or loan made from the account or fund, including interest rates, repayment dates, and a description of the im- provement on which the transfer or loan will be expended; September 18, 2001 DMG-AZlAXlMLI5 Pas-e 6-4 City of Pa/o Alto - ParRs and Community Facilities Impact Fees Implementation 7.The amount of any refunds or allocations made pursuant to Section 66001, paragraphs (e) and (f). That information must be reviewed by the City Council at its next regularly sched- uled public meeting, but not less than 15 days after the statements are made public. Findings and Refunds. Prior to the adoption of Government Code amendments contained in SB 1693, a local agency collecting impact fees was required to expend or commit the fee revenue within five years or make findings to justify a continued need for the money. Otherwise, those funds had to be refunded. SB 1693 changed that requirement in material ways. Now, Section 66001 requires that, for the fifth fiscal year following the first de- posit of any impact fee revenue into an account or fund as required by Section 660061 and every five years thereafter, the local agency shall make all of the fol- lowing findings for any fee revenue that remains unexpended, whether committed or uncommitted: 1. Identify the purpose to which the fee will be put; 2.Demonstrate the reasonable relationship between the fee and the purpose for which it is charged; 3.Identify all sources and amounts of funding anticipated to complete financ- ing of incomplete improvements for which impact fees are to be used; Designate the approximate dates on which the funding necessary to com- plete financing of those improvements will be deposited into the appropriate account or fund. Those findings are to be made in conjunction with the annual reports discussed above. If such findings are not made as required by Section 66001, the local agency must refund the moneys in the account or fund. Once the agency deter- mines that sufficient funds have been collected to complete an incomplete im- provement for which impact fee revenue is to be used, it must, within 180 days of that determination, identify an approximate date by which construction of the public improvement will be commenced. If the agency fails to comply with that requirement, it must refund impact fee revenue in the account according to proce- dures specified in the statute. Costs of Implementation. The ongoing cost of implementing the impact fee pro- gram is not included in the fees themselves. Implementation costs would include the staff time involved in applying the fees to specific projects, accounting for fee September 18, 2001 DMG-AdAXlA/I US Page 6-5 City of Palo Alto - Parl~s and Community Facilities Impact Fees Implementation revenues and expenditures, preparing required annual reports, updating the fees, and preparing forms and public information handouts. We recommend that those costs be included in user fees charged to applicants for processing development ap- plications. Annual Update of the Capital Improvement Plan. Section 66002 provides that if a local agency adopts a capital improvement plan to identify the use of impact fees, that plan must be adopted and annually updated by a resolution of the governing body at a noticed public hearing. The alternative is to identify improvements in other public documents. Since impact fee calculations in this study include costs for future facilities to be funded by impact fees, we believe it is to the City’s advan- tage to use this report as the public document in which the use of impact fees is identified. In that event, we believe the City would not be required to update its CIP annually to satisfy Section 66002. Indexing of Impact Fee Rates. The fees recommended in this report are stated in current dollars. Fees should be adjusted annually to account for construction cost escalation. The Engineering News Record Building Cost Index is recommended as the basis for indexing the cost of yet to be constructed projects. It is desirable that the ordinance or resolution establishing the fees include provisions for annual es- calation. The level of the Building Cost Index as of December 1999 was 3497.2. Updates of This Study. The impact fees contained in this report were calculated using spreadsheets designed specifically for that purpose. Those spreadsheets will be provided to the City and they can be used to update fees in the event the City’s land use plans and/or facility plans change significantly. The fees should be re- viewed and updated about every five years, unless significant changes in land use or facility plans make it necessary to update the fees more often. TRAINING AND PUBLIC INFORA/IA TION Administering an impact fee program effectively requires considerable preparation and training. It is important that those responsible for applying and collecting the fees, and for explaining them to the public, understand both the details of the fee program and its supporting rationale. Before fees are imposed, a staff training workshop is highly desirable if more than a handful of employees will be involved in collecting or accounting for fees. It is also useful to pay close attention to handouts which provide information to the public regarding impact fees. Impact fees should be clearly distinguished from user fees, such as application and plan review fees, and the purpose and use of particular impact fees should be made clear. September 18, 2001 DMG-MAX/IVlUS Page 6-6 CiOx of Pa/o Alto - Parlcs and Community Facilities Impact Fees Implementation Finally, anyone who is responsible for accounting, capital budgeting, or project management for projects involving impact fees must be fully aware of the restric- tions placed on the expenditure of impact fee revenues. The fees recommended in this report are tied to specific improvements and cost estimates. Fees must be ex- pended accordingly and the City must be able to show that funds have been prop- erly expended. RECOVERY OF STUDY COST We do not recommend adding an administrative fee to impact fees to cover the costs of administering the impact fee program. Those costs should be included in the processing fees charged to developers and builders. However, it is reasonable for the City to recover the cost of this study through the impact fee program. Once the City Council decides what impact fees to impose, it is a relatively simple matter to calculate an adjustment to cover the cost of the study. Assuming the impact fee study will be updated every five years or so, the cost of this study can be divided by the amount of revenue projected over the next five years to determine the percentage by which fees should be increased to cover the cost of the study. That percentage typically represents a very small increase in the fees. For example, if the study cost $20,000 and the City expects to collect $10 million in impact fees over the next five years, the fees calculated in this study ,vould be have to be increased by 0.2% to recover the cost of the study over five years [20,000 / 10,000,000 = 0.002]. That increase would amount to only about $2.00 per $1000 paid by an applicant. The necessary adjustment should be made before the fees are actually adopted by the City Council. September 18, 2001 D/klG-/MAXI/klUS Page 6- 7 Appendix 1 Impact Fee~ for Open 5pace Acquisition City of Palo A/to - Parl~s and Community Facilities Impact Fees Appendix APPENDIX 1 IMPACT FEES FOR OPEN SPACE A CQ LI/S/ T/ON This section of the report addresses the impact of development on the need for open space in Palo Alto. The fees calculated in this section of the report are in- tended to cover the cost of land acquisition and certain improvements for open space parks in Palo Alto. Acquisition of land for neighborhood and community parks as a condition of ap- proval for residential subdivisions is governed by the Quimby Act (Government Code ~66477). However, the Quimby Act does not apply to other types of park land. In addition land for subdivisions is not available in Palo Alto. Hence, this report assumes that any open space impact fees charged by the City would be gov- erned by the Mitigation Fee Act (Government Code ~66000, et seq.) SER VICE AREA AND TIME FRAME The study area addressed by this analysis encompasses the City of Palo Alto. Be- cause level-of-service standards are set on a citywide basis, the impact fees for open space will be calculated on a citywide basis and applied to new development in all parts of the City. The time flame for this study is indefinite. It is not necessary to define a specific time frame because the method used to calculate these fees does not depend on the timing of development or the total amount of development to be served. METHODOL OGY Impact fees are calculated in this section using the standard-based method discussed in Section 1. Standard-based fees are open-ended, meaning that they do not de- pend on assumptions about the ultimate limits of development in the City. Impact fees are calculated in current dollars and should be adjusted annually to reflect changes in costs. EXISTING FA CIL I TIES Table 1 on the following page lists Palo Alto’s existing open space parks and shows the total acreage and developed acreage for each. This information will be used to establish the existing level of service, that is, the ratio of total open space acreage and developed acreage to population. September 18, 2001 DIklG-/VIAXIIkl US PaNe A I- 1 CRy of Pa/o Alto - Parks and CommunRy Facilities Impact Fees Appendix / Table 1 City of Palo Alto - Existing Open Space Parks Open Space Park Name Baylands Preserve/Byxbee Park ~ Arastradero Preserve Esther Clark Park Foothills Park Total Open Space Park Acreage Park Type 0 0 0 0 Total Acreage 1,760.0 609.0 22.0 1,400.0 3,791.0 Developed Acreage 170.0 12.0 0.0 100.0 282.0 Excludes the Municipal Golf Course (164 Acres) DEMAND VARIABLE Palo Alto’s open space parks are used by both residents and visitors, but for pur- poses of this .analysis they will be treated as an amenity that primarily benefits resi- dents of Palo Alto by enhancing the physical environment of the community. Con- sequently, the demand variable used in this study is resident population. LEVEL OF SERVICE This study uses the existing level of service in the City as the basis for calculating impact fees for open space parks. The goal is to establish fees that will allow the City to maintain the current level of service as demand increases because of new development. Table 2 shows the current ratio of acres to population for open space park land and developed open space acreage. Table 2 Existing Ratio of Open Space Acreage to Population Component Total Open Space Land Developed Open Space Existing Existing Acres 1 Population 2 3,791.0 60,800 282.0 60,800 Acres per Capita 0.0624 0.0046 See Table 1 January 2001 Estimate by the California Department of Finance September 18, 2001 DMG-MAXIM US Page A 1-2 Ci(y of Pa/o Alto - Parlcs and CommuniO, Facilities Impact Fees Appendix IMPACT FEE CALCULATION Impact fees for open space will be calculated using the standard-based method described in Section 1 of this report. The fee calculations will use estimated average costs for land acquisition and park improvements. Because population is being used to measure demand in calculating impact fees for these facilities, the fees are calculated initially as a cost per capita. That calculation is shown in Table 3. Table 3 Cost per Capita - Open Space Acres per . Capita 1 0.0624 0.0046 Total TotalCost Cost per per Acre 2 Capita 3 $150,000 $9,352.80 $100,000 $463.82 $9,816.61 See Table 2 Estimated land cost provided by the Palo Alto Real Estate Division. Estimated development cost provided by the Community Services Department. Cost per capita = acres per capita x cost per acre IMPACT FEES PER UNIT OF DEVELOPMENT The next step is to convertthe cost per equivalent resident from Table 3 into im- pact fees per unit of development by development type. To make that conversion, the cost per capita is multiplied by the average number of residents per dwelling unit for each type of residential development. Table 4 on the next page shows the resulting impact fees per unit of development for open space. Note that because resident population is used as the demand variable in this analysis, the resulting fees apply only to residential development. September 18, 2001 DMG-MAXlA4US Page A 1-3 Ci(y of Palo A/to - Parks and Communi(y Facilities Impact Fees Appendix Table 4 Impact Fees per Unit of Development - Open Space Development Dev Population Type Units a per Unit 2 Single Family Residential DU 2.6 Multiple Family Residential DU 1.7 Cost Per Capita 3 $9,816.61 $9,816.61 Impact Fee per Unit 4 $ 25,523 $ 16,688 DU = dwelling unit Average population per unit based on 1990 Census data. See Table 3 Impact fee per unit = population per unit x cost per capita PROJECTED REVENUE Finally, the impact fees calculated above can be applied to future development to estimate the potential revenue that could be collected by the City if those fees are implemented. Table 5 shows annual revenue projections in current dollars for the fees calculated in this section. Those projections are based on ABAG forecasts of population growth. The projections assume that all forecasted increases in popula- tion and employment result from net new development. If that assumption is incor- rect, actual revenue may be lower than projected. Table 5 Average Annual Revenue Potential - Open Impact Fees Growth Component Population Avg. Annual Cost Per Increase 1 Equiv. Res.2 244 $9,352.80 Annual Revenue $ 2,282,082 Based on ABAG Forecast 2000. See Table 4 Projected average annual revenue = added population X cost per capita. The costs used in this report are in current dollars. To keep pace with changing price levels, the fees calculated above should be adjusted annually for inflation. See the Implementation Section for more on inflation adjustments. September 18, 2001 DMG-IVIAXlA4 US Pa~ffe A I-4 Appendix 2 Ll~er 5urvey~ for Communi(y Center~, Parl~, and Librarie~ Ci(y of Palo Alto - Parl~s and Communi{y Facilities Impact Fees Appendix 2 APPENDIX 2 USER SURVEYS FOR COMMUNITY CENTERS, PARKS, AND LIBRARIES In this impact fee analysis, "service population" is used to measure the impact of de- velopment on community centers, parks and libraries in Palo Alto. This service population is defined as a weighted composite consisting of residents, employees, and visitors. In order to weight each component of the population to reflect its relative impact on the specific facilities, the City needed to determine who the users are of City facilities. Staff from the Department of Community Services surveyed the users of Palo Alto’s community centers, parks and libraries. The surveys were conducted between May and July of 2001 . Questions were asked to identify if the users lived and/or worked in Palo Alto. The resulting tallies demonstrated what percentage of users are residents, employees or visitors. These figures were then used in the study to determine the relative impacts that new residents or employees might have on each type of facility and calculate a corresponding impact fee. The survey results are summarized below. Park Survey Results - Summary Residence/Employment Summary of in Palo Alto Weekdays Saturdays All Responses Live and work in Palo Alto 40 18.3%16 16.7°/0 56 17.8% Live not work in Palo Alto 71 32.6%30 31.3°/o 101 32.2°/o Work not live in Palo Alto 33 15.1°/o 8 8.3°/o 41 13.1°/o Neither work nor live in P.A.74 33.9°/o 42 43.8°/o 116 36.9% Totals 218 100.0O/o 96 100.0%314 100.0% Note: Survey by Community Services Department staff, July 2001. Community Center Survey Results - Summary Residence/Employment Stern Mitchell Park Summary of in Palo Mto Center Center M1 Responses Live and work in Palo Mto 31 31.3°/o 4 12.5°/0 35 26.7°/o Live not work in Palo Mto 46 46.5%18 56.3°/0 64 48.9°/o Work not live in Palo Mto 5 5.1°/o 1 3.1%6 4.6°/o Neither work nor live in P.A.17 17.2%9 28.1°/0 26 19.8°/o Totals 99 100.0°/o 32 100.0%131 100.0% Note: Survey by Community Services Department staff, July 2001. September 18, 2001 D/14G-A4AX//1/I US Pa~ge A2-1 City of Palo Alto - Parlcs and Communi(y Facilities Impact Fees Appendix 2 Library Survey Results - Summary ResidencedEmployment Down-College Chil-Mitchell in Palo Alto town Terrace Main dren’s Terman Park Totals % Live in Palo Alto 106 74 560 327 11 470 1,548 80.8% Don’t Live in Palo Alto 33 47 185 43 1 58 367 19.2°/o Subtotal 139 121 745 370 12 528 1,915 100.0°/o Work in Palo Alto 71 48 313 163 5 173 773 38.2°/o Don’t work in Palo Alto 61 87 553 197 7 344 1,249 61.8°/o Subtotal 132 135 866 360 12 517 2,022 100.0°/o Note: Survey by Library staff in May 2001. September 18, 2001 DMG-A/IAXlA4 US Page A2-2 ATTACHMENT 2 Development Impact Fees in Other California Cities Single Multi City Family Family Comm’l Other Notes San Francisco Downtown Parks 2.00 Downtown Transit 5.00 Housing 14.00 Childcare 1.00 total 22.00 effective 1/2002 or provide on-site Parks 9,096 6,497 Traffic 5,695 4,617 12.73 Police 2,988 4,558 4.28 Fire 303 432 0.27 Public Facilities 1,394 1,394 0.42 Storm 1,329 1,172 Sewer-Residential 5,747 4,105 - Water-Residential 2,320 1,453 total 28,872 24,228 17.69 Additional fees: Street Trees 2.56 256.00 2.56 Storm-comm’l 1,563 Sewer-comm’l 1,845 Water-comm’t 3,526 San Jose Parks 9,400 2,350 Art Building/Structures 99 90 Construction Tax Traffic 0.08 total 9,499 2,440 0.08 effective 1/2002 per front foot per acre per 100 gallons per day per 1,000 gallons per day 1%redevelopment areas only selected areas only 1.0 -1.54%per construction value, selected areas only 362 per peak-hour tfip, N. SJ only Morgan Hill Parks 2,187 1,851 General 250 212 0.07 Library 190 160 Traffic 1,870 1,309 5.98 Police 106 169 0.19 Fire 633 478 0.27 total 5,236 4,179 6.51 Com m ’l traffic 2.81-5. 9 8/sq. ft Notes:Commercial fees are charged on a per square foot basis, unless otherwise noted. San Francisco and Gilroy information per the planning division of each city. All other information per "2001 Kosmont Cost of Doing Business Survey" page 1 of 2 Development Impact Fees in Other California Cities Single Multi City Family Family Comm’l Other Notes Burlinqame Parks - Bay Front Commercial Recreation Campbell Parks Foster City Parks Traffic Milpitas Parks Mountain View Parks Construction Tax Northern California 1.50 $0.86-$4.74 $8,279 / acre Warehouse-Restaurant 10,990 10,990 Multi-Family $5,635-10, 990/un# de~rm~ed on a case-by-case bas~ 70.00 per annual or $15 per trip 172,000 per acre - residential determined on a case-by-case basis 0.33% construction value San Mateo Parks Transportation Santa Clara Parks Traffic determined on a case-by-case basis 2,241 1,664 3.22 15 !5 -1.00 0.08-0.40 Industrial/Manufacturing $1.35 + $5 per additional bedroom Warehouse-Hotel-Industrial Sunnyvale Parks Housing Construction Tax determined on a case-by-case basis 7.19 per acre, over 35% FAR. Under Review 5.14% construction value Burbank Community Facilities Traffic Art 1,752 Southern California 1,297 0.75-1.52 2.31-4.22 1% parks, libraries, police, fire Industrial-Retail-Office construction value Claremont Parks Fire Traffic 4,400 4,400 0.20 0.20 0.20 298 92-210 0.67-1.14 Industrial-Retail-Office Lancaster Parks Fire Traffic Signalization Long Beach Parks Transportation- Downtown 600-1,000 1,195 456 2,680 193 1,063 0.41-1.12 456 O.06 2,070 3.00-4.50 per bedroom per 1,000 s.f.; $643 > lOOK s.f + $10.90 perADTE selected areas only page 2 of 2