Use of Development Impact Fees for the Year Ending June 30, 2017

Article Source: City of San Bruno CA

City Council Agenda Item Staff Report

Rico E. Medina, Mayor

Laura Davis, Vice Mayor

Marty Medina, Councilmember

Irene O'Connell, Councilmember

Michael Salazar, Councilmember

DATE: January 9, 2018

TO: Honorable Mayor and Members of the City Council

FROM: Jim O'Leary, Interim Finance Director

SUBJECT: Adopt Resolution Accepting the Annual Report on Receipt and Use of Development Impact Fees for the Year Ending June 30, 2017

BACKGROUND:

The legal requirements for enacting development impact fees are set forth in Government Code §§ 66000-66025 (Mitigation Fee Act) and are commonly referred to as AB 1600 requirements. These fees are generally intended to mitigate cost impacts development projects on existing City facilities and infrastructure. AB 1600 requires that local agencies provide an accounting of impact fees imposed on development projects.

The Annual Report on Development Impact Fees, Exhibit A to the attached resolution, covers four current development charges and fees adopted by the City Council. Two of these are subject to AB 1600 requirements, Water Capacity charges and Sewer Capacity charges. Park In-Lieu fees and Below Market Rate Housing In-Lieu fees are developer fees collected by the City but are exempt from AB 1600 requirements. These fees are included in this report for informational purposes. This Annual Report reports revenues collected and project costs incurred between July 1, 2016 and June 30, 2017.

Developer fees are segregated from the General Fund and from other funds or accounts containing fees collected for other purposes in accordance with accounting standards. Interest earned on each fee is credited to the fund or account and used only for the purposes for which the fees were collected.

Amended provisions require an agency collecting the fees must make available to the public the following information regarding each fund or account (Government Code § 66006):

• Description of the type of fee in the fund.
• Amount of the fee.
• Beginning and ending balance for the fiscal year.
• Amount of fees collected and interest earned.
• Identification of each public improvement on which fees were expended and the amount of the expenditure on each improvement.
• 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.
• 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.

8. Amount of any refunds made due to inability to expend fees within the required time frame.

The Annual Report must be reviewed by the City Council at a regularly scheduled public meeting; 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. No such requests were made at the time of this report. The Annual Report attached to the City Council resolution (Exhibit A) presents the revenues, expenditures, and fund balances for the four impact fees.

DISCUSSION:

The City development impact fees covered by the AB 1600 requirements and documented in Exhibit A attached to the resolution include the following:

• The City levies Water Capacity charges on new or expanded connections to the water system. These charges are levied as a condition of development or change in use, and are designed to recover the cost of capacity in infrastructure and assets benefitting new development.
• The City levies Sewer Capacity charges on new or expanded connections to the sewer systems. These charges are levied as a condition of development or change in use, and are designed to recover the cost of capacity in infrastructure and assets benefitting new development.
• Park In-Lieu fees (Municipal Code Ch. 12.44): Fees to dedicate land for parks and recreational purpose.
• Below Market Rate Housing [BMR] In-Lieu fees (Municipal Code Ch. 12.230): Fees on all residential ownership or rental developments of 10 units or more throughout the City.

The City has fully utilized all 2012-13 through 2016-17 Water and Sewer Capacity charges and related interest earnings.

Residential developers also paid the fees listed below in fulfilling City requirements. While these fees do not fit within the definition of development impact fees subject to AB 1600 reporting requirements, staff has included them in this report for informational purposes.

A supplementary Five-Year Project Cost and Funding Summary for all impact fees is included as Attachment I to provide further information on each fee.

FISCAL IMPACT:

None, report provides information only. The Finance Department is currently conducting the study approved by City Council related to potential citywide Development Impact Fees. New development creates demand for expanded roadways, sewer lines, recreational facilities, and other public infrastructure. These fees are one­time charges to new development used to defray costs of providing these additional

facilities. The Department intends to complete the report for City Council review and approval before beginning the 2018-19 budget development process.

RECOMMENDATION:

Adopt resolution accepting the Annual Report on the Receipt and Use of Development Impact Fees for the Year Ended June 30, 2017.

ALTERNATIVES:

Annual report is for informational purposes only.

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FULL Council Agenda Packet WITH Staff Reports can be viewed and downloaded from:

https://sanbruno.ca.gov/gov/elected_officials/city_council_minutes_n_agendas.htm

This document should be available late Friday before the Tuesday Council Meeting

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Robert Riechel

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Photo Credit: San Bruno CA Patch Archives

Source Credit: San Bruno CA City Council

Web Site: https://sanbruno.ca.gov

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