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HomeMy WebLinkAbout2002-01-14 City CouncilTO: FROM: City of Palo Alto City Manager’s Report HONORABLE CITY COUNCIL CITY MANAGER 8 DEPARTMENT:ADMINISTRATIVE SERVICES DATE:JANUARY 14, 2002 CMR:427:01 SUBJECT:ACCEPTANCE OF ANNUAL STATUS REPORT ON DEVELOPERS’ FEES RECOMMENDATION Staff recommends that the City Council accept the Annual Report on Developers’ Fees for the period ending June 30, 2001 (Exhibit A). BACKGROUND State law (Government Code Section 66006) requires each local agency that imposes development impact fees to prepare an annual report providing specific information about those fees. This requirement is part of the law commonly referred to as AB 1600. It codifies the legal requirement that fees on new development have the proper nexus to any project on which they are imposed. In addition, AB 1600 imposes certain accounting and reporting requirements with respect to the fees collected. The fees, for accounting purposes, must be segregated from the general funds of the City and from other funds or accounts containing fees collected for other improvements. Interest on each development fee fund or account must be credited to that fund or account and used only for the purposes for which the fees were collected. The law was amended effective January 1, 1997. The provisions now require that, within 180 days after the close of the fiscal year, the agencythat collected the fees must make available to the public the following information regarding each fund or account: o o A brief description of the type of fee in the fund. The amount of the fee. o The beginning and ending balance for the fiscal year. CMR:427:01 Page 1 of 4 o The amount of fees collected and interest earned. An identification of each public improvement on which fees were expended and the amount of the expenditure on each improvement, including the total percentage of the cost of the public improvement that was funded with fees. An identification of an approximate date by which the construction of a public improvement will commence, if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement. A description of each interfund transfer or loan made from the account or fund, including the public improvement on which the loaned funds will be expended, and in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan. O The amount of any refunds made due to inability to expend fees within the required time frame. This report must also be reviewed by the City Council at a regularly scheduled public meeting not less than 15 days after the information is made available to the public. In addition, notice of the time and place of the meeting shall be mailed at least 15 days prior to the meeting to any interested party who files a written request with the local agency for such a mailed notice. The law also provides that, for the fifth fiscal year following the first deposit into the fund and every five years thereafter, the local agency shall make findings with respect to any portion of the fee remaining unexpended, whether committed or uncommitted. The finding must: identify the purpose to which the fee is to be put; demonstrate a nexus between the fee and the purpose for which it was originally charged; and identify all sources and amounts of funding anticipated to complete financing of incomplete improvements along with the approximate dates on which the anticipated funding is expected to be deposited into the fund. If the agency no longer needs the funds for the purposes collected, or if the agency fails to make required findings, or perform certain administrative tasks prescribed by AB 1600, the agency may be required to refund, on a prorated basis to owners of the properties upon which the fees for the .improvement were imposed, the monies collected for that project and any interest earned on those funds. CMR:427:01 Page 2 of 4 DISCUSSION The City of Palo Alto development fees covered by AB 1600, and documented in Exhibit A, include the following: Stanford Research Park/E1 Camino Real Traffic Impact Fees (PAMC Ch. 16.45) Fee for new nonresidential development in the Stanford Research Park/El Camino Real Service Commercial zone, to fund capacity improvements at eight intersections. o San Antonio/West Bayshore Area Traffic Impact Fees (PAMC Ch. 16.46) Fee for new nonresidential development in the San Antonio/West Bayshore area to fund capacity improvements at four intersections. Housing Impact Fees Imposed on Commercial Developments (PAMC Ch. 16.47) Fee on large commercial and industrial development to contribute to programs that increase the City’s low income and moderate-income housing stock. O Parking In-Lieu Fees for University Avenue Parking District (PAMC Ch. 16.57) Fee on new nonresidential development in the University Avenue Parking Assessment District in lieu of providing required parking spaces. Residential housing in-lieu fees are also paid to the City, at the developer’s election, by residential developers in fulfillment of obligations under the City’s inclusionary zoning (Below-Market Rate Housing) program. While these fees do not necessarily fit within the definition of development fees subject to AB 1600 reporting requirements, staff has included them in this report for informational purposes. Staff examined the accounts to determine if any development fees remain unexpended five years or more after receipt and are subject to refund. The San Antonio/West Bayshore Fund and Stanford Research Park/El Camino Real Fund contain development impact fees collected on or before June 30, 1993 that remain unexpended. In fiscal year 1997-98 (CMR:482:97) the City Council made the required findings that there was a continued need for the San Antonio/west Bayshore Fund for the San Antonio On-Ramp Project. Council also found that CMR:427:01 Page 3 of 4 there was a continued need for the Stanford Research Park/El Camino Real Fund for the major intersection improvements in the Stanford Research Park area, which are scheduled for completion in 2010. The Council does not need to make the findings again this year. In the case of the Housing Impact Fees from Commercial Development and the Parking In-Lieu Fees for the University Avenue Parking District, the funds on hand as of June 30, 2001 have all been received within the past year. Therefore, no findings are required for these fees. RESOURCE IMPACT Council approved the required findings with respect to .unexpended fees in 1997- 98. As a result, there is no fiscal impact associated with this year’s report. POLICY IMPLICATIONS This report does not represent any change to existing City policies. ENVIRONMENTAL ASSESSMENT Presentation of this annual report is not a project under the California Environmental Quality Act; accordingly, no environmental assessment is required.. ATTACHMENT Exhibit A:Annual Report on Development Fees for Period Ending June 30, 2001 PREPARED BY: TRUDY EIKENBERRY Manager, Accounting DEPARTMENT HEAD APPROVAL: CARL Dir{:lministrative Services CITY MANAGER APPROVAL: Assistant City Manager cc: Home Builders Association CMR:427:01 Page 4 of 4 Exhibit A City of Palo Alto Annual Report on Developers’ Fees for Period Ending June 30, 2001 FUND Purpose and Authority for Collection Stanford Research Park/ El Camino Fund Traffic impact fees imposed on new nonresidential development in the Stanford Research Park/El Camino Real CS zone to fund improvements at eight identified intersections. PAMC Ch. 16.45 San AntoniofWest Bayshore Fund Traffic impact fees imposed on new nonresidential development in the Sa Antonio/West Bayshore Areas to fund capacity improvements at.four identified intersections. PAMC Ch. 16.46 Amount of the Fee $2.86 per square foot $1.55 per square foot Fund Balance July 1, 2000 Activity in 2000-0i Revenues Fees Collected Interest Earnings Unrealized Gain on Investment Total Revenues Expenditures Major Intersection Improvement CIP Total Expenditures $780,728 655,123 71,983 32,104 759,209 0 0 $1,539,937 $428,50O 11,780 26,719 12,147 50,646 0 0 $479,146Ending Balance June 30, 2001 Net Funds Available $1,539,937 $479,146 USE OF FEES: No expenditures have been made from this fund during FY 00-01. Budgeted transfers in the amount of $340,000 in FY 98-99 and $609,000 in FY 99-00 were made from this fund to be used for major ¯ intersection improvements. The total project cost is $1,624,000, of which $949,000 in impact fees are budgeted to be used. This represents 58.44% of the project total cost. USE OF FEES: No expenditures have been made from this fund. Fees are planned to be used for specific traffic improvements in the Charleston/San Antonio Road area, but have been delayed by a related project to be constructed by the State Department of Transportation. Exhibit A City of Palo Alto Annual Report on Developers’ Fees for Period Ending June 30, 2001 FUND Purpose and Authority for Collection Commercial Housing In-Lieu Fund Fees imposed on large commercial and industrial development to contribute to programs that increase the City’s low income and moderate- income housing stock. PAMC Ch.16.47 University Avenue Parking Assessment District In-Lieu Fund Fees collected from non-residential development within the University Ave Parking Assessment Distdct in lieu of providing the required number of parking spaces. PAMC Ch 16.57 Amount of the Fee 7/1/00-4/29/01 as of 4/30/01 Fund Balance July 1, 2000 Activity in 2000-01 Revenues Fees Collected Interest Earnings Unrealized Gain Investment Total Revenues Expenditures Housing Program Expense South of Forest Affordable Housing Other Transfer to Capital Improvement Project Total Expenditures $4.03 per square foot $4.21 per square foot $6,268,504 565,679 54,259 61,604 681,542 (5O,OOO) (3,379,826) (2,764) (3,432,590) $31,068 perspace $732,063 201,201 43,871 13,015 258,087 (766,295) (766,295) Ending Balance June 30, 2001 $3,517,456 $223,855 Other Commitments/Appropriations Reserve for Notes Receivable (2,621,976) Net Funds Available $895,480 $223,855 USE OF FEES: During 2000-01, $50,000 in fees were used for contract expenses with the Palo Alto Housing Corporation for administration of the Below-Market-Rate housing program. South of Forest Affordable Housing project expenditures consist of $2,904,826 for site option costs and $475,000 for site and demolition costs. Reserve for Notes Receivable include $2,221,976 for 725-753 Alma St. and $400,000 for Barker Hotel. USE OF FEES: Budgeted transfers in the amounts of $798,000 for FY1997-98 and $766,295 for FY 2000-01 were made from this fund to the Capital Improvement Project fund, to be used for CIP 19530, Downtown Parking Structure feasibility project. This project is estimated to cost $42 million. Funds on hand represent 4% of the total cost. The bulk of the project funding will come from a voter approved assessment district. The project is currently in the design phase. Exhibit A City of Palo Alto Annual Report on Developers’ Fees for Period Ending June 30, 2001 FUND Purpose and Authority for Collection (INFORMATION ONLY) Residential Housing In-Lieu Fund Fees collected from residential developments of three or more units in lieu of providing the required below- market rate unit(s) to low and moderate income households. PA Comprehensive Plan and PAMC Chapter 18 Amount of the Fee Vades Fund Balance July 1, 2000 Activity in 2000-01 Revenues Fees Collected Webster Wood In-Lieu Payment Interest Earnings Unrealized Gain Investment ¯ Total Revenues Expenditures Housing Program Expense Principal Retired Total Expenditures $3,344,927 1,310,268 8,875 112,840 33,839 1,465,822 (573,337) (101,972) (675,309) Ending Balance June 30, 2001 $4,135,440 Other Commitments/Appropriations Reserve for Notes Receivable (2,677,333) Net Funds Available $1,458,108 USE OF FEES: Reserve for Notes Receivable include $375,000 for 3051-61 Emerson, $1,204,064 for Oak Manor, $756,819 for Sheridan Apts. and $341,450 for Palo Alto Gardens.