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HomeMy WebLinkAboutAgenda Statement 1989/01/19 Item 13 COUNCIL AGENDA STATEMENT Item -2Z" - ` Meeting Date 4/10/89- ' PTO ITEM TITLE: Ordinance aZg`/ Amending Ordinance 2251 to provide for early approval of credits against Development Impact Fees and modifying the list of D.I.F. Projects included in the Ordinance SUBMITTED BY: Director of Public Works�� REVIEWED BY: City Manager (4/5ths Vote: Yes No X ) Ordinance 2251 provides for the collection of Development Impact Fees in the eastern area of the City. It also includes a list of projects to be financed through the collected fees. It is proposed that Ordinance 2251 be amended to allow for deferral of payment or early credit. In addition, traffic signals on East "H" Street at the entrance to Southwestern College are proposed to be added to the list of Facilities in Section 3 of Ordinance 2251 . RECOMMENDATION: Place Ordinance on first reading. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: The Development Impact Fee program was created to provide funding for $71 million of major streets in the eastern portion of the City. If developers build projects included in the program, they can request and receive credits or reimbursement based on the cost of the D.I.F. street project they construct. Deferral of Payments Several developers have expressed a concern about Ordinance 2251 regarding the equity of fully funding the street project and double securing it by paying DIF fees on permits pulled before completion of the street project. Ordinance 2251 provides for the collection of Development Impact Fees at the building permit stage. Any developer may choose to build one or more transportation facilities to be financed by D.I.F. and receive credit or reimbursement for the construction cost once the facility is completed under the existing ordinance. Staff has looked at this issue and concurs that this situation is somewhat of a "double jeopardy" to the developer. Page 2, Item -e2" /7 Meeting Date 4I4Q/-89- /// 7`19 The Deferral of Payments will provide a second option for the City to allow credit or reimbursement for the construction of public facilities. In this case, the developer may be allowed to obtain building permits and apply the Development Impact Fees levied on that parcel toward the construction of the public facility. This process has been structured to answer the developer's concerns and still protect the City's interest. This method will diminish the possibility that a developer will be required to advance the money for the construction of the public facility and, in addition, pay the required Development Impact Fees. An example of this situation would be Bonita Point Plaza at the northwest corner of East "H" Street and Otay Lakes Road. They are requesting authority to build a portion of Otay Lakes Road adjacent to their parcel and receive credit against the required Development Impact Fees levied on that parcel . The estimated cost of building this portion of Otay Lakes Road is $320,000. It is proposed that the City Council adopt the following additions to Section 4 of Ordinance 2251 in order to allow for partial or full D.I.F. credits to be taken against street improvements in lieu of receiving credits or reimbursements after completion of the D.I.F. project. Also staff feels that the credit should be partial in most cases due to the preliminary cost information involved with this process. 1 . The developer shall provide a detailed cost estimate which itemizes those costs of the construction attributable to the Transportation Facility Project and excludes any work attributable to a specific subdivision project. The estimate is preliminary and subject to final determination by the Director of Public Works upon completion of the Transportation Facility Project. 2. The developer may receive immediate credit for 75 percent of the estimated cost of the construction attributable to the Transportation Facility Project. The immediate credits shall be applied to the developers obligation to pay fees for building permits issued after the establishment of the credit. The developer shall specify those building permits to which the credit is to be applied. Changes are also included that, where a developer intends to utilize the early credit provisions, the performance bond shall be in the amount of 100% of the value of the project. 3. The developer may also defer payment of Development Impact Fees then due in an amount equal to the remaining 25 percent of the estimated cost of the Transportation Facility Project, provided that liquid securities such as cash or an irrevocable letter of credit, but not bonds or set-aside letter is given to the City in the amount of the fees to be deferred. 4. After final determination of eligible expenditures has been made by the Public Works Director, final amount of Development Impact Fee credits shall be determined. The developer shall receive credit against the Page 3, Item - —Meeting Date. 1.0. 9 t//7 /y/ ) deferred fee obligation in an amount equal to the difference between the final expenditure determination and the amount of the immediate credit used. THe amount of the deferred fee obligation shall be based on the fee schedule in effect at the time of the final credit determination and shall be converted into either equivalent dwelling units or gross acre basis. The developer shall have 30 days to pay the deferred fee. If the deferred fees are not paid within that time, the City may make a demand against the liquid security. 5. The developer may waive reimbursement and use the excess as credit against future development fee obligations. Traffic Signal Addition to D.I.F. Program During the public hearing for adoption of Ordinance 2251 , it was mentioned that the traffic signal on East "H" Street at the entrance of Southwestern College should be another facility financed through the Development Impact Fees. It is now proposed that Council approve the addition of a traffic signal on East "H" Street as a facility to be financed by Development Impact Fees. This traffic signal will be constructed by Sudberry Development, Inc. as part of the reimbursement agreement. The proposed widening of Otay Lakes Road from East "H" Street to Bonita Road is four-lane major street with raised landscaped median as called for in the study for the Eastern Area Development Impact Fees for Streets by Willdan Associates & George T. Simpson. Now, it is anticipated that Otay Lakes Road will be constructed as a six lane prime arterial . The raised landscaped median will be replaced with striped median to allow future widening of the street. FISCAL IMPACT: The estimated cost to install a 16-foot raised landscaped median on Otay Lakes Road adjacent to Rancho del Rey is $450,000, whereas the estimated cost for a 16-foot striped median is $22.0,000. The addition of the traffic signal on East "H" Street at Southwestern College will add approximately $95,000 to the Development Impact Fee program. This results in a net decrease to the program of $135,000. Based on the fact that this is a $71 million program over many years, and considering that the fund will be reviewed annually to account for inflation and program changes, the impact is minimal . ZAO:nr/HX-001 WPC 4013E