HomeMy WebLinkAbout29 - Development Impact Fees & AgreementsSEW P0,4T CITY O F
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�9�,FOaNr City CouncH Staff Report
Agenda Item No. gg
November 26, 2013
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Finance Department
Dan Matusiewicz, Finance Director
949 -644 -3123, dmatusiewicz @newportbeachca.gov
PREPARED BY: Rukshana Virany, Accounting Manager
APPROVED:�p a
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TITLE: Annual Reporting on Development Impact Fees & Development
Agreements
ABSTRACT:
Pursuant to the Mitigation Fee Act (Government Code Section 66000, et seq.), the City
is required to report on the receipt and use of development impact fees.
Regarding Development Agreements (Government Code Section 65865(e)), the City is
required to comply with the reporting requirements in Government Code Section 66006
with respect to any fee the City receives or cost it recovers.
RECOMMENDATION:
Staff recommends that the City Council receive, review and file the Annual Reports on
Development Impact Fees (Exhibit A), and Development Agreements (Exhibit B).
FUNDING REQUIREMENTS:
There are no funding requirements related to this item.
DISCUSSION:
The Mitigation Fee Act (hereafter "the Act ") requires each agency that imposes
development impact fees to submit annual and five (5) -year reports providing specific
information about the receipt and use of such fees. Fees collected must be placed in
separate accounts and not commingled with other sources of general revenues. Interest
on each account must be credited to that account and used only for the purpose for
which the fees were collected. The Act also requires that the City make periodic findings
Annual Reporting on Development Impact Fees & Development Agreements
November 26, 2013
Page 2
in order to justify continued receipt of unexpended funds, or possibly be subject to
refunding portion of such funds.
Although the Act does not apply to Developer Agreements, the reporting requirements
on both the Development Impact Fee and Developer Agreements are the same and fall
under Government Code Section 66006.
Section 66006(b) of the Act requires that within 180 days after the close of the fiscal
year, the City must make available to the public a brief description of the fee, amount of
the fee, beginning and ending balances of the account or fund for the fiscal year, and
amount of fees collected and the interest earned. The Act also requires identification of
each public improvement on which the fees were expended and the amount of the
expenditures on each improvement, an approximate date by which the construction of
the public improvement will commence, a description of each inter -fund transfer or loan
made from the account or fund, and the amount of any refunds made due to the inability
to expend impact fees. Section 66001(d) provides that, for the fifth fiscal year following
the first deposit into the account or fund and every five (5) years thereafter, the City
shall make findings with respect to any portion of the fee remaining unexpended,
whether committed or uncommitted.
The City is in conformance with the Act, is not subject to any refunding requirements,
and the City has Fair Share Fees as the only source of reportable impact fees.
Regarding Development Agreements, the City has two sources of reportable
Development Agreements, including the Hoag Development Agreement, and the North
Newport Center Development Agreement. Finally, all funds have been expended in the
last five years and, as the result, the City has nothing to report under the five -year
reporting requirement.
Exhibits A and B provide additional narrative and all the required information related to
the annual review and accounting of applicable development impact fees and
Development Agreements, as well as periodic findings concerning unexpended funds.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find that the adoption of this resolution is not subject
to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2)
(the activity will not result in a direct or reasonably foreseeable indirect physical change
in the environment) and 15060(c)(3) (the activity is not a project as defined in Section
15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3,
because it has no potential for resulting in physical change to the environment, directly
or indirectly.
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Annual Reporting on Development Impact Fees & Development Agreements
November 26, 2013
Page 3
PUBLIC NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
The annual reports were also made available to the public and the Building Industry
Association of Southern California, Orange County Chapter, fifteen (15) days prior to
the Council Meeting.
Submitted by:
Van Matusiewicz
Finance Director
Attachments: A. Exhibit A — Development Impact Fee Report
B. Exhibit B — Development Agreements Report
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City of Newport Beach
Development Impact Fee Report
Fiscal Year 2012 -13
Background
EXHIBITA
The City's Fair Share Fee program was originally adopted in 1984, updated in 1994 and adjusted
periodically based upon the consumer price index. The purpose of the Fair Share Fee program is
to equitably distribute the cost of traffic congestion reduction improvements to the future
development that generates the need for such projects. The fair share traffic contribution is
based upon the unfunded portion of the estimated construction cost of the total circulation
system roadway improvements necessary to implement the master plan of streets and
highways (net roadway costs), and the total number of vehicle trips anticipated as a result of
trend growth.
The Mitigation Fee Act, Government Code §66000 et seq., (the "Act "), the bulk of which were
adopted as 1987's AB 1600 and are commonly referred to as "AB 1600 requirements" governs
the establishment. and administration of development impact fees paid by new development
projects for public facilities needed to serve new development. Fees must be separately
accounted for and used for the specific purpose for which the fee was imposed.
Annual Reporting
The Act requires that the City prepare an annual report detailing the status of collected
development impact fees as defined in the Act. The annual report must be made available to
the public and presented to the City Council not less than fifteen (15) days after it is made
available to the public at the next regularly scheduled City Council meeting. The meeting before
the City Council must be held within one hundred eighty (180) days of the end of the fiscal year.
The report must include the type of fee, beginning and ending balances, the amount of fees
collected and interest earned, expenditures by type, a description of interfund transfers or
loans, and the amount of any refunds made.
Excluded from this report are types of developer fees that are not subject to the reporting
requirements of the Act. For example, fees collected pursuant to the City's zoning powers,
rather than pursuant to the Act, are in -lieu housing fees, public art -in -lieu fees and park -in -lieu
fees.
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EXHIBITA
Annual Report
To comply with Government Code §66006, the following information regarding AB 1600 fees is
presented:
1) A brief description of the type of fee in the account or fund:
Fair Share Fees - These fees provide funding to accommodate traffic generated
by future development within the City and are separately accounted for in the
Circulation & Transportation Fund.
2) The amount of the Fair Share Fee:
Fair Share rate is $192.87 per trip for FY 2012 -13.
3) The Beginning & Ending balance of the account or fund:
See attached Financial Report.
4) The amount of fees collected and interest earned:
See attached Financial Report.
5) An identification of each public improvement on which fees were expended and the
amount of the expenditures on each improvement, including the total percentage of the
cost of the public improvement that was funded with the fees:
See attached Financial Report.
6) An identification of an approximate date by which the construction of the public
improvements will commence if the City determines that sufficient funds have been
collected to complete financing on an incomplete public improvement, as identified in
the City's master plans, and the public improvement remains incomplete:
FY 12 -13 public improvement projects are complete and new projects planned
for FY 13 -14.
7) A description of each interfund transfer or loan made from the account or fund,
including the public improvement on which the transferred or loaned fees 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:
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EXHIBIT A
The City entered into a Circulation Improvement and Open Space Agreement
( CIOSA) with a developer whereby the City received a loan of $14,395,572 to be
used only for certain transportation and circulation improvements. The City
agreed to match the contribution (without interest) by pledging 50% of future
Fair Share fees (developer impact fees) which are recorded in the Circulation
and Transportation special revenue fund. During the year ended June 30, 2013,
the City received $358,101 of Fair Share Fees, and $179,051 was paid to the
CIOSA Construction capital projects fund. Through June 30, 2013, $4,780,065 of
fair share fees have been paid. No additional liability has been recorded
because any future repayment is uncertain; any amount not contributed by
February 20, 2016 will be forgiven.
The City transferred $80,000 to the General Fund in administrative
reimbursement for time spent by staff on public improvement projects.
8) The amount of refunds made pursuant to subdivision (f) of Section 66001 any allocation
pursuant to subdivision (f) of Section 66001.
No refunds were made during the fiscal year.
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EXHIBIT A
Fair Share Revenues, Expenditures & Changes in Fund Balance
FY 2012 -2013
Fair Share Fees
Total Revenues
penditures:
Capital Improvement Projects
Traffic Signal Replacement Program (C3001007)
Traffic Signal Modernization Phase 5 (C3002009)
Total Project
Costs
(FY Only)
$ 358,101
358,101
Fair Share
228,570
799,255
28.6%
15,425
15,425
100.0%
243,995
814,680
29.9%
ansfers Out:
Transfer Out- CIOSA Fund (Pledged Fair Share Fees) 179,051
Transfer Out- General Fund (Administrative Reimbursement) 80,000
Total Expenditures 503,046
Net Change in fund balance (144,945)
Balance, beginning (377,915)
Balance, ending $ (522,860)
Description of Projects
Traffic Signal Replacement Program (C3001007)
The City Council awarded FY 2011 -12 Traffic Signal Rehabilitation contract to PTM Engineering
Services, Inc., on April 10, 2012. As part of the ongoing effort to maintain signal reliability and
reduce traffic signal outages, the project replaced aging traffic signal equipment and wiring at
the intersections of Jamboree Road /Eastbluff Drive and Ford Road, Superior Avenue /Placentia
Avenue, and Coast Highway /Jamboree Road. The project was substantially completed on
January 22, 2013. The next phase of project, FY 12 -13 Traffic Signal Rehabilitation contract was
awarded by City Council to KDC, Inc., dba Dynalectric on November 12, 2012. Work on this
contract included replacement of essential traffic signal equipment and infrastructure to ensure
reliability of the traffic signals at the Coast Highway /Marguerite Avenue and Superior
Avenue /Ticonderoga Street- Nice Lane intersections. The contract was substantially completed
on June 25, 2013.
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Traffic Signal Modernization Phase 5 (C3002009)
This project is a multi -year, multi - phased program to update the City's traffic signal system.
Phase 5 includes hardware and fiber optic cable upgrades to a total of 11 existing intersections
in and around Newport Center. Installation of 3 new CCTV cameras will provide views of all
major entry points to Fashion Island. The work also includes the installation of a new signal at
Anacapa Drive and Newport Center Drive and left turn signal phasing and lane modifications at
San Miguel Road and Newport Center Drive. The construction contract was awarded by the City
Council to Select Electric on June 14, 2011 and completed on June 12, 2012. The remaining
expenditures in FY 2012 -13 were for additional project support.
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City of Newport Beach
Development Agreements Report
Fiscal Year 2012 -13
Background
EXHIBIT B
A Development Agreement ( "DA ") is a contract between a local jurisdiction and a person who
has ownership or control of property within the jurisdiction. The purpose of the agreement is to
specify the standards and conditions that will govern development of the property. The
development agreement provides assurance to the developer that he /she may proceed to
develop the project subject to the rules and regulations in effect at the time of approval - the
development will not be subject to subsequent changes in regulations.
DA should also benefit the local jurisdiction. The city or county may include conditions
(mitigation measures) that must be met to assure that a project at a specific location does not
have unacceptable impacts on neighboring properties or community infrastructure. The
agreement may clarify how the project will be phased, the required timing of public
improvements, the developer's. contribution toward funding system -wide community
improvements, and other conditions. The agreement can also facilitate enforcement of
requirements, since it is a contract that details the obligations of the developer and local
jurisdiction.
Annual Reporting
For DAs entered into or after January 1, 2004, Government Code §65865 (e) requires that the
City shall comply with the reporting requirements pursuant to Government Code §66000, with
respect to any fee the City receives or cost it recovers. Government Code §66006 requires the
City to submit annual and five (5) year notices detailing the status of collected public benefit
fees, and be placed on the agenda for review at a public meeting not less than 15 days after the
report is made available to the public. The meeting before the City Council must be held within
one hundred eighty (180) days of the end of the fiscal year. The report must include the
beginning and ending balances, the amount of fees collected and interest earned, expenditures
by type, a description of interfund transfers or loans, and the amount of any refunds made.
Excluded from this report are types of developer fees that are not subject to the reporting
requirements under Government Code §65865(e). For example, these include fees collected
pursuant to the City's zoning powers, such as in -lieu housing fees, public art -in -lieu fees and
park -in -lieu fees.
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EXHIBIT B
Annual Report
To comply with Government Code §66006, the following information regarding DAs Fee is
presented:
1) A brief description of the type of public benefit fee in the account or fund:
North Newport Center Development Agreement — On December 18, 2007, the City Council
adopted Ordinance No. 2007 -21 approving Development Agreement ( "DA ") No. DA2007 -002
between the City and The Irvine Company. The DA granted The Irvine Company entitlement and
transfer rights within the North Newport Center Planned Community ( "NNCPC "). On August 24,
2012, the City Council adopted Ordinance No. 2012 -20, amending the DA to vest the revised
development intensities and allocations within the NNCPC and to establish public benefits for
the City. The DA specifies the term, permitted uses, density and intensity of development,
circulation improvements, public benefits and dedication of street right -of -way and open space.
Public benefit fees were required to be paid by The Irvine Company as part of the DA approval,
and are accounted for in the Facilities Financing Replacement Fund.
2) The amount of the DA fees:
$31,500 per residential unit for 430 units at the issuance of the first building
permit. Total of $13, 545,000 received in July 2011.
3) The Beginning & Ending balance of individual DAs:
See attached Financial Report.
4) The amount of DA fees collected and interest earned:
See attached Financial Report.
5) An identification of each public improvement on which fees were expended and the
amount of the expenditures on each improvement, including the total percentage of the
cost of the public improvement that was funded with the fees:
There were no FY 2012 -13 expenditures.
6) An identification of an approximate date by which the construction of the public
improvements will commence if the City determines that sufficient funds have been
collected to complete financing on an incomplete public improvement, as identified in
the City's master plans, and the public improvement remains incomplete:
All Development Agreement funds have been expended and construction is
expected to be completed in FY 2013 -14.
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7) A description of each interfund transfer or loan made from the account or fund,
including the public improvement on which the transferred or loaned fees 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:
Transferred $2,257,028 to Civic Center Park fund for construction costs as
allowed per Section 4.2 of the Zoning Implementation & Public Benefit
Agreement dated January 18, 2008, which states the following:
The City shall use the Public Benefit Fee for any of the following expenses: the
design, engineering, and construction of a new City Hall anywhere within the City
of Newport Beach, the costs to acquire the Option Site if City exercises the
option under the Option Agreement, City's pro rata share of the costs to design
and construct the Parking Structure if City builds a City Hall on the Option Site,
and any other municipal purpose as determined by the City.
8) The amount of refunds made pursuant to subdivision (f) of Government Code §66001
any allocation pursuant to subdivision (f) of Government Code §66001.
No refunds were made during the fiscal year.
North Newport Center Development Agreement
FY 2012 -13
Beginning Balance $ 2,253,466
Revenues:
Developer Fees -
Interest Income 3,562
Total Revenues 3,562
Expenditures:
Other Financing Sources:
Transfer Out 2,257
Total Other Financing Sources 2,257
Net Change in Fund Balance (2,253,466)
Ending Balance
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