HomeMy WebLinkAbout15 - Development Impact FeesCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No._L5_
January 27, 2009
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Planning Department
Erin Steffen, Planning Technician
949 - 644 -3342, esteffen (a)citv.newport- beach.ca.us
Administrative Service Department
Dan Matusiewicz, Finance Officer
949 - 644 -3126, dmatusiewicz(a)-city.newl)ort- beach.ca.us
SUBJECT: Annual Status Report on Receipt and Use of Development Impact
Fees
ISSUE:
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. The City's only
reportable development impact fee is the Fair Share Fee.
RECOMMENDATION:
Staff recommends that the City Council take the following actions:
1. Receive staff report, open public hearing, and receive public comments.
2. Motion, second, and vote to receive and file the Annual Report on Development
Impact Fees for fiscal year 2007/2008.
DISCUSSION:
Backaround:
The Mitigation Fee Act (hereafter "the Act") requires each local agency that imposes
development impact fees to prepare an annual report providing specific information
about the receipt and use of such fees. The fees must be placed in a separate account
and not co- mingled 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
Development Impact Fee Annual Report
January 27, 2009
Page 2
collected. The Act also requires that the City make periodic findings in regards to
unexpended funds, whether committed or uncommitted, to determine if such fees are
refundable.
Section 66006 (b) of the Act indicate that within 180 days after the close of the fiscal
year, the City must make available to the public the following information regarding each
account:
• Brief description of the type of fee in the account
• Amount of the fee
• Beginning and ending balance of the account for the fiscal year
• Amount of the fees collected and the interest earned
• 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 fees
• Identification of an approximate date by which the construction of the public
improvement will commence if the local agency determines that sufficient funds
have been collected to complete financing on an incomplete public improvement
• Description of each interfund transfer or loan made from the account, 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 of fund will receive on the loan
• Amount of any refunds made due to inability to expend impact fees once a
determination is made that sufficient impact fees have been collected to finance
a public improvement, and the improvement remains incomplete, and the City
has not determined an approximate date by which construction will commence
Section 66001(d) also provides that, for the fifth fiscal year following the first deposit into
the account and every five years thereafter, the City shall make findings with respect to
any portion of the fee remaining unexpended, whether committed or uncommitted. The
finding must address each of the following:
• Identify the purpose to which the fee is to be put
• Demonstrate a reasonable relationship between the fee use and the purpose for
which it is charged
• All sources and amounts of funding anticipated to complete financing in
incomplete improvements
• Designate the approximate dates on which the anticipated funding is expected to
be deposited into the account
If the City has collected sufficient funds to complete financing on an incomplete
improvement and does not identify an approximate construction date within 180 days of
the determination that sufficient funds have been collected, or no longer needs the
Development Impact Fee Annual Report
January 27, 2009
Page 3
funds for the purpose collected, or fails to make the required findings prescribed by the
Act, then the monies collected for that project and any interest earned on those funds
may be required to be refunded on a prorated basis to owners of the properties upon
which the fees for the improvement were imposed. The City's only reportable
development impact fee pursuant to the Act is the Fair Share Traffic Contribution
(hereafter "Fair Share Fee ").
Fair Share Fee:
The City's Fair Share Fee was originally adopted in 1984, updated in 1994, and
adjusted periodically based upon the consumer price index. The purpose of the Fair
Share Fee is to raise revenues sufficient to enable the City to construct circulation
system improvements that increase roadway capacity within the City such that traffic
generated by development and redevelopment of land within the City will not result in
unacceptable levels of congestion of the circulation system. The Fair Share Fee 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 Fair Share Fee for the FY2007 /2008 was
$176.93 per trip.
Financial Reporting & Accounting:
The Act requires an annual review and accounting of applicable development impact
fees as well as periodic findings concerning unexpended funds.
Exhibit A illustrates the accounting of Fair Share Fee revenues, expenditures,
transfers, and changes in the account balance for FY 2007/2008. The Fair Share Fees
are retained in a separate account in the City's "Circulation & Transportation Fund" and
are not commingled with other funding sources. A general accounting of this fund is
provided in the City's Comprehensive Annual Financial Report (CAFR) and can be
obtained at the following web address htti)://www.citv.newport-
beach.ca.us /accounting /CAFR.asp (Page 154 in the 2007/08 CAFR).
Exhibit B illustrates that the entire account balance of the Circulation & Transportation
Fund as of FY 2002/2003 (including Fair Share Fees collected in FY 2002/2003) has
been expended within five years of receipt. Therefore, Fair Share Fees are not subject
to the reporting requirements of Section 66001(d) and no findings are required as to
unexpendedfunds.
Exhibit C provides project descriptions of each public improvement for which
expenditures were referenced in Exhibit A.
Development Impact Fee Annual Report
January 27, 2009
Page 4
Environmental Review
The proposed action is not defined as a project under the California Environmental
Quality Act (CEQA) because it involves government fiscal activities which do not involve
any commitment to any specific project which may result in a potentially significant
physical impact on the environment (Section 15378 of the CEQA Guidelines).
Public Notice:
Notice of this hearing was made by posting the Council Agenda on the City's official
notice bulletin board and posting the agenda and report on the City's Website. Notice of
the time and place of the hearing, including the address where the information could be
reviewed, was also posted on the City's official notice bulletin board, and mailed to the
Building Industry Association of Southern California, Orange County Chapter per their
written request not less than 15 days prior to the hearing.
Funding Availabilit
Not applicable.
Alternatives:
City Council could direct staff to resubmit report with any changes deemed necessary.
Prepared by:
Erin Steffen VU an Matusiewicz
Planning Technician Finance Officer
Submitted by:
Sharon Wood
Assistant City Manager
Development Impact Fee Annual Report
January 27, 2009
Page 5
Attachments: Exhibit A Fair Share Fee Revenues, Expenditures & Changes in
Account Balance
Exhibit B Status of Fair Share Fees Revenues Collected
Exhibit C Description of Projects
Development Impact Fee Annual Report
January 27, 2009
Page 6
EXHIBIT A
Fair Share Fee Revenues, Expenditures & Changes in Account Balance
FY 2007/2008
Note:
(1) 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, 2008, the City received $704,578 of Fair Share Fees, and $352,289 was paid
to the CIOSA Construction capital projects fund. Through June 30, 2008, $3,545,454 of Fair
Share Fees have been paid. No additional liability has been recorded, because any future
repayment is uncertain; any amounts not contributed by February 20, 2016, will be forgiven.
Total Project
Percent
Costs
Fair Share
(Fiscal Yr Only)
Funded
Revenues:
Fair Share Fees
$ 704,578
Private Contributions
420,450
Interest Income
110,292
Total revenues
1,235,320
Expenditures:
Capital Improvement Projects
Wayfinding and Monument Signage (C2700813)
129,578
159,919
81.0%
E Coast Hwy Widening (C5100650)
1,865
1,865
100.0%
Dover Drive Sidewalk (C510854)
35,753
35,903
99.6%
Traffic Signal lnstln /Upgrd(C5200068)
47,368
47,368
100.0°/0
Transportation Model Mnt (C5200143)
2,869
2,869
100.00/0
Traffic Signal Preemption Syst (C5200408)
11,865
11,665
100.0%
Mesa Drive Widening (C5200665)
5,423
5,423
100.0%
Traffic Signal Cocrd Impv (C5200699)
5,591
5,591
100.0%
Newport Blvd Rt Turn Ln@ Hos (C5200737)
450,112
776,067
58.0%
Signal System Improvement (C5200852)
216,050
224,232
96.4%
906,273
1,270,901
71.3%
Transfers Out:
Transfers Out - To CIOSA Fund (Pledged Fair Shair Fees)
352,289
(1)
Transfers Out - To General Fund (Administrative Reimb)
80,000
Total expenditures
1,338,562
Net change in fund balance
(103,242)
Fund balance, beginning
2,253,199
Fund balance, ending
$2,149,957
Note:
(1) 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, 2008, the City received $704,578 of Fair Share Fees, and $352,289 was paid
to the CIOSA Construction capital projects fund. Through June 30, 2008, $3,545,454 of Fair
Share Fees have been paid. No additional liability has been recorded, because any future
repayment is uncertain; any amounts not contributed by February 20, 2016, will be forgiven.
Development Impact Fee Annual Report
January 27, 2009
Page 7
EXHIBIT B
Status of Fair Share Fee Revenues Collected (5 Year Test)
FY 2007/2008
Fund Balance June 30, 2003
$5,064,098
(Cumulative revenues collected net of
expenditures through FY 2002/2003)
Project Expenditures & Transfers
2004
$1,462,425
2005
793,698
2006;
2,142,062
2007
1,158,396
2008
1,338,995
Total
$ 6,895,576
Conclusion: All unexpended revenues as of 2003
have been spent withi n 5 Years.
Development Impact Fee Annual Report
January 27, 2009
Page 8
EXHIBIT C
Description of Projects
FY200712008
DIRECTIONAL, WAYFINDING AND MONUMENT SIGNAGE (C2700813)
On June 12, 2007 the City Council authorized the award of the City Gateway Sign Project to Bravo Sign &
Design. The initial contract provided for the installation of eight gateway signs featuring prominent City
and district entry points. On the same night, Council approved a ninth monument sign to be located at
East Coast Highway east of Cameo Highlands Drive delineating the easterly boundary of Corona del Mar
district. On April 8, 2008 Council approved additional funds for a tenth sign at the northwest corner of
Newport Coast Drive and San Joaquin Hills Road to identify the Newport Coast Community Center. The
contract was substantially completed 7/17/08.
EAST COAST HIGHWAY WIDENING BETWEEN MORNING CANYON AND CAMEO SHORES
(C5100650)
On November 22, 2005, the City Council authorized the award of the PCH Improvements from Morning
Canyon to Cameo Shores contract to Elite Bobcat Service, Inc. The contract provided for the construction
of curb and gutter, a two foot maximum high slough wall and a sidewalk on Pacific Coast Highway in
Corona del Mar. This project has provided a safe pedestrian walkway adjacent to the highway and
facilitates the Cameo Homeowners Association's efforts to beautify the area between Hampden Road
and Pacific Coast Highway. The contract was substantially completed 3/15106. Remaining design fees
were paid in FY 2007 -08.
JAMBOREE ROAD BRIDGE WIDENING (C5100784)
This portion of the project will provide funding to obtain the right -of -way for the improvements to widen the
roadway on Jamboree Road over State Route 73. This estimated $6 million construction project is
proposed to be funded with Measure M and State dollars in subsequent fiscal years. Design and
permitting are underway. Estimated completion date is unknown and is dependent on securing funding
for the construction of this project.
DOVER DRIVE SIDEWALK (C5100854)
This project will construct a sidewalk, retaining wall, and environmental mitigations along Dover Drive
adjacent to Castaways Park. Construction is underway and is expected to be completed in early 2009.
TRAFFIC SIGNAL REPLACEMENT PROGRAM (C5200068)
This project provides for the annual replacement and maintenance of existing controllers, poles, and
related signal equipment. Construction is underway and is expected to be completed in early 2009.
TRANSPORTATION MODEL MAINTENANCE (C5200143)
This project provides for the annual updating of the transportation model required by changes in land use
and circulation within the City and surrounding portions of Orange County. Modeling is performed by a
consultant with input from Transportation and Development Services staff in cooperation with the
Planning Division.
TRAFFIC SIGNAL PREEMPTION SYSTEM (C5200408)
This project provides for the installation of traffic signal preemption (Opticom) systems for Fire
Department vehicles at various locations. This project allows for four signals to be retrofitted each year in
concert with the annual traffic signal maintenance and replacement project. Construction is underway
and is expected to be completed in early 2009.
Development Impact Fee Annual Report
January 27, 2009
Page 9
MESA DRIVE WIDENING (C5200665)
The City worked cooperatively with the County of Orange on a project to widen Mesa Drive westerly of
Irvine Avenue, as part of the larger County project to widen Irvine Avenue between University Drive and
Bristol Street. The goal of the Mesa Drive widening project is to allow the east approach on Mesa Drive
to be re- striped to provide a dual left -turn lane for traffic turning on to southbound Irvine Avenue and the
current right -turn lane to become a through and right -turn lane. The west approach of Mesa Drive
needed to be physically widened to create an appropriate alignment with the east approach. The Irvine
Avenue widening project is underway by the County of Orange. Construction is expected to be completed
in Summer 2009.
TRAFFIC SIGNAL COORDINATION AND IMPROVEMENTS (C5200699)
The Traffic Signal Modernization Project is a multi -year project to install new and upgraded City -wide
traffic signal management systems that utilizes current and future technology improvements. Phase 1 of
the project is currently under construction and includes the installation of fiber -optic communications,
CCTV cameras, and new traffic signal controller equipment. The contractor will install communication
connections with the Central Library in advance of the installation of the new traffic signal field equipment
and the new Traffic Management Center at the future City Hall facility. Phase 1 improvements are
expected to be completed in early 2009.
NEWPORT BOULEVARD RIGHT TURN LANE @ HOSPITAL ROAD (C5200737)
On March 27, 2007, the City Council awarded the Newport Boulevard Right Turn Lane at Hospital Road,
Contract No. 3655, to Hillcrest Contracting for the total contract bid price of $788,889. This project
consisted of the removal of asphalt concrete pavement, base rock, curb, gutter, sidewalk, catch basin,
storm drain, manholes, soil, landscaping, irrigation, traffic signals, signing, and striping while protecting
existing fencing, monitoring wells, landscaping, irrigation lines, a water line, and other utilities. The
contractor excavated and graded the roadway and slope, installed the shotcrete drainage ditch, curbs,
gutters, sidewalk, catch basins, storm drains and storm drain manholes. Also included in the scope of
work was the preparation of subgrade, placement of base rock, asphalt paving, setting utility covers to
grade, installation of landscaping, irrigation, traffic signals, traffic signal loop detectors, traffic signing,
striping and markings, and other appurtenant and incidental items of work as required to complete the
project. The contract was substantially completed prior to 1/22/08.
SIGNAL SYSTEM IMPROVEMENTS - CITYWIDE (C5200852)
The Traffic Signal Modernization Project is a multi -year project to install new and upgraded City -wide
traffic signal management systems that utilizes current and future technology improvements. Phase 1 of
the project is currently under construction and includes the installation of fiber -optic communications,
CCTV cameras, and new traffic signal controller equipment. The contractor will install communication
connections with the Central Library in advance of the installation of the new traffic signal field equipment
and the new Traffic Management Center at the future City Hall facility. Phase 1 improvements are
expected to be completed in early 2009.
NOTICE OF PUBLIC HEARING
Annual Status Report on Receipt and Use of Development Impact Fees
(PA2008 -079)
NOTICE IS HERBY GIVEN that on January 27, 2009, at 7:00 p.m., a public hearing will
be conducted in the City Council Chambers (Building A) at 3300 Newport Boulevard,
Newport Beach, California. The City Council of the City of Newport Beach will consider the
following:
The Annual Status Report on Receipt and Use of Development Impact Fees, which is
required pursuant to the Mitigation Fee Act (Government Code Section 66000, et seq.).
Consideration of the report is exempt from environmental review under Section 15379 of
the California Environmental Quality Act (CEQA) because it is not defined as a project as it
involves government fiscal activities which do not involve any commitment to any specific
project which may result in a potentially significant impact on the environment.
Copies of the Development Impact Fee Report are available for public review and
inspection at the Planning Department, City of Newport Beach, 3300 Newport Boulevard,
Newport Beach, California and on the Planning Department's website at
www.city.newport-beach.ca.us/PLN/Planning.htmi.
All interested parties may appear and present testimony in regard to this review. If you
challenge this review in court, you may be limited to raising only those issues you or
someone else raised at the public hearing (described in this notice) or in written
correspondence delivered to the City, at, or prior to, the public hearing. The agenda and
staff report may be reviewed at the City Clerk's Office, City of Newport Beach,
3300 Newport Boulevard, Newport Beach, California, 92663 or at the City of Newport
Beach website at www.citv.newport- beach.ca.us on the Wednesday prior to the hearing.
For more information, call (949) 644 -3200.
OOZ X-
Leilani I. Brown, MMd
City Clerk
Authorized to Publish Advertisements of all kinds including public notices by
Decree of the Superior Court of Orange County, California. Number A -6214,
September 29, 1961, and A -24831 June 1], 1963. RECEIVED
PROOF OF PUBLICATION X-9 JAN 23 AM 4, 15
STATE OF CALIFORNIA)
) ss.
COUNTY OF ORANGE )
I am a Citizen of the United States and a
resident of the County aforesaid; I am
over the age of eighteen years, and not a
party to or interested in the below entitled
matter. I am a principal clerk of the
NEWPORT BEACH - COSTA MESA
DAILY PILOT, a newspaper of general
circulation, printed and published in the
City of Costa Mesa, County of Orange,
State of California, and that attached
Notice is a true and complete copy as
was printed and published on the
following dates:
January 17, 2009
I declare, under penalty of perjury, that
the foregoing is true and correct.
Executed on January 20, 2009 at
Costa Mesa, California.
Signatur
Obi IGll OF
7Y CLERK
"P"17 BE0
NOTICE Of PUBLIC
HEARING
An fol SJ I o Repel
on Reteipf wd the
of Dewkp od bWd
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TAP00"191
NOTICE IS HEREBY GIV-
EN that on January 27,
2009, at 7:00 p.m., a
public bearing will be
conducted in the City
Council Chambers
(Building A) at 3300
Newport Boulevard,
Newport Beach, Cali-
fornia. The City Council
of the City of Newport
Beach will consider the
following:
The Annual Status Re-
port on Receipt and
Use of Development
Impact Fees. which is
required pursuant to
the Mitigation Fee Act
(Government Code
Section 66000, at
seq.).
Consideration of the
report is exempt from
environmental review
under Section 15379 of
the'Califismia Environ-
mental Quality Act
(CEQA) because R is
not defined as a
project as it involves
government fiscal ac
tivities which do not
involve any commit-
ment to any specific
project which may re-
sult in a potentially
significant impact on
the environment.
Copies of the Develop-
ment Impact Fee Re-
port are available for
public review and in-
spection at the Plan-
ning Department, City
of Newport Beach,
33DO Newport Boule-
vard, Newport Beach,
California and on the
Planning Department's
website at vrww.city.
•ewport- beach.ca.
es /PLN /Planning.
bfml.
All interested parties
may appear and pres-
ent testimony in regard
to this review. If you
challenge this review in
court, you may be
r�t
limited to raising only
those issues you or
someone else raised at
the public hearing (de-
scribed in this notice)
or in written corre
spondence delivered to
the City. at, or prior
to, the public hearing.
The agenda and staff
report may be re-
viewed at the City
Clerk's Office, City of
Newport Beach.
3300 Newport Boule-
vard, Newport Beach,
California, 92663 or at
the City of Newport
Beach website at www.
city. new port - beach. ca.
us on the Wednesday
prior to the hearing.
For more information,
call (949) 644.3200.
Lellani L Brown. MMC
City Clerk
Published Newport
Beach/Costa Mesa Dai-
ly Pilot January 17,
2009 Sa720