HomeMy WebLinkAbout2006/10/24 Item 14
COUNCIL AGENDA STATEMENT
Item:~
Meeting Date: 10/24/06
ITEM TITLE:
A. PUBLIC HEARING TO CONSIDER ADOPTION OF AN ORDINANCE
AMENDING CHAPTER 3.50 OF THE CHULA VISTA MUNICIPAL CODE
RELATING TO UPDATES IN THE PUBLIC FACILITIES
DEVELOPMENT IMPACT FEES (PFDIF) TO PAY FOR VARIOUS
PUBLIC FACILITIES WITHIN THE CITY OF CHULA VISTA.
B. ORDINANCE NO. OF THE CITY OF CHULA VISTA,
CALIFORNIA, AMENDING CHAPTER 3.50 OF THE CHULA VISTA
MUNICIPAL CODE RELATING TO DEVELOPMENT IMPACT FEES TO
PAY FOR VARIOUS PUBLIC FACILITIES WITHIN THE CITY OF
CHULA VISTA.
REVIEWED BY:
C. RESOLUTION NO. ADOPTING THE "PUBLIC FACILITIES
DEVELOPMENT IMPACT FEE, MARCH 2006 UPDATE".
Director of Budget and Analysis ~
/;(
City Manager //
(4/5ths Vote: Yes _ No--1L)
SUBMITTED BY:
In August of 1989, Council adopted an ordinance establishing a series of 'supplemental' impact
fees. After a more comprehensive review of the City's capital needs over the next year, the
Public Facilities Development Impact Fee (PFDIF) program was established in January of 1991,
via Ordinance 2432. This program enables the City to implement the intent of the Growth
Management Oversight Commission (GMOC) program, and to ensure that existing residents do
not bear the costs of new development. This program was last comprehensively updated in
November of 2002. Tonight Council will consider approval of the "Public Facilities Development
Impact Fee, March 2006 Update". The public hearing has been duly noticed.
RECOMMENDATION: That Council:
1. Conduct the Public Hearing;
2. Approve the Ordinance amending Chapter 3.50 of the Chula Vista Municipal Code (first
reading), to take effect and be in full force on the sixtieth (60th) day from and after its
second reading and adoption; and
3. Approve the Resolution adopting the report prepared by staff.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
This discussion represents a brief recap of more detailed information contained in the attached
"Public Facilities Development Impact Fee, March 2006 Update" report.
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The purpose of the Public Facilities Development Impact Fee (PFDIF) is mitigation of the
cumulative burden on public facilities placed by new development. The public facilities financed
by the PFDIF include the following eleven (11) components:
1. Civic Center Expansion
2. Police Facilities and Equipment
3. Corporation Yard Relocation
4. Libraries
5. Fire Suppression System
6. Geographic Information System (GIS)
7. Computer Systems
8. Telecommunications Systems
9. Records Management System
10. Administration
11. Major Recreation Facilities
Of the eleven (11) PFDIF components detailed above, staff recommended the closure of four
(4) support system components earlier this evening; including the Geographic Information
System (GIS), Computer Systems, Telecommunications Systems, and Records Management
System components. This report assumes the Council's approval of the recommended
closures.
On November 12, 2002, City Council approved the "Public Facilities DIF, November 2002
Amendment". This represents the last comprehensive update of the PFDIF program. In June of
2005, Council approved the application of an annual inflationary increase for the PFDIF. For
those components involving construction of facilities, the annual increase was tied to the
Construction Cost Index (CCI) published by the Engineering News Record. For the remaining
components, the annual inflationary increase was tied to the annual increase in the Consumer
Price Index (CPI) for the San Diego Metropolitan Area. The first such annual increase went into
effect in October of 2005, increasing the single family fee per dwelling unit from $5,480 to
$5,489. Staff delayed undertaking a comprehensive PFDIF program update in anticipation of
the City's General Plan Update, completed in December of 2005.
The current update does not include any new major facilities, but instead focuses on updating
the program obligation to account for increased construction and financing costs of previously
included projects. In addition, the current update includes increased densities and other land
use changes included in the General Plan Update approved by Council on December 13th,
2005. The next update will address new facility needs identified in various Master Plan updates
currently in progress as appropriate.
The fees, facility phasing schedules, and PFDIF cash reserves detailed in the "Public Facilities
Development Impact Fee, March 2006 Update" are based on a specific rate of growth which, if
different than projected, will require a reevaluation of those fees, facility phasing, and cash
reserves in future updates.
Public Facilities Development Impact Fee Increase
As described above, the City's PFDIF program has not been comprehensively updated since
November of 2002. In the ensuing period, a number of factors have led to the increased rates
included in the current update. These factors include increased costs for construction materials
and project insurance; increased financing costs; the addition of four minor projects; and a
reduction in the number of future development units (residential dwelling units and commercial/
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industrial acres) over which to spread the program's costs. New projects reflected in this update
include studies and minor capital acquisitions. The relative impact of new projects and
construction and financing cost increases is illustrated in the chart below.
2%
II Project Costs
o Financing Costs
. New Projects
The majority of the aforementioned reduction in future development units is a direct and
unavoidable result of the ongoing development within the City. For example, since the
November 2002 PFDIF Update, the City has permitted approximately 4,000 single family and
3,000 multi-family units. This factor would have had greater impact on the program's cost, had
the General Plan's increased densities and western redevelopment and infill development not
been considered in the current update. These two factors combine to result in a net loss of
approximately 1,500 future residential units, between the November 2002 report and the current
report. There is an additional impact to the commercial and industrial rates per acre resulting
from a significant reduction in the anticipated development for these two land uses, as
compared with the November 2002 Update. These changes bring the PFDIF's development
projections in line with the recently adopted General Plan Update.
The proposed fees are based upon anticipated future development within the City. The
projected development for each land use is as follows:
land Use Description Units
Single Family Dwelling Units
Multi-Family Dwelling Units
Commercial Acres
I ndustrial Acres
4,854
22,467
518.42
881.51
Using these development projections, the PFDIF fee has been calculated for each land use
category. The current and proposed fees, as well as the resultant fee increases, are detailed
below.
land Use Description Current Fee Proposed Fee Increase
Single Family Dwelling Unit $
Multi-Family Dwelling Unit $
Commercial Acre $
Industrial Acre $
5,489
5,109
21,727
4,044
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$
$
$
$
$
$
$
$
7,891
7,477
25,181
7,958
2,402
2,368
3,454
3,914
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PFDIF fees are calculated individually for each program component. The following table details
the component fee for each land use category.
Single Family Multi-Family Commercial Industrial
Component Dwelling Unit Dwelling Unit Acre Acre
Civic Center Expansion $ 2,188 $ 2,073 $ 6,981 $ 2,206
Police Facility $ 1,464 $ 1,581 $ 6,914 $ 1,491
Corporation Yard Relocation $ 393 $ 315 $ 6,684 $ 3,148
Libraries $ 1,258 $ 1,258 $ $
Fire Suppression System $ 1,106 $ 796 $ 2,923 $ 582
Geographic Information System $ - $ - $ $
Computer Systems $ $ - $ $
Telecommunications $ - $ - $ $
Records Management System $ - $ - $ - $
Recreation Facilities $ $ $ - $
Pro ram Administration $ $ $ $ 531
dlll5llili
1Ji'w'"w,d,
As illustrated in the table above, no fee has been calculated for the Geographic Information
System, Computer Systems, Telecommunications Systems, or Records Management Systems
components of the PFDIF; as the March 2006 fee calculation assumes the closure of these
support system components. Council will consider the closure of these components via
separate action this evening.
While the increase per industrial acre remains the highest percent increase, it is worth noting
that prior to the November 2002 Update, the rate per industrial acre was significantly higher.
For example, in the 1999 Update, the fee per industrial acre was set at $13,090. This rate was
then increased in the March 2002 Update to $20,860. It was only in the November 2002 Update
that the fee per industrial acre was reduced to $3,848. When considered in this light, the rate
per industrial acre currently proposed represents a decrease of 39% from the 1999 rate (a
decrease of 6.5% annually); and a reduction of more than 62% from the March 2002 rate. This
reduction was achieved by partnering with the development community to further refine the
program's cost spreading methodology and improved land use data.
Despite fee increases approved since 2002, the PFDIF as a percent of the average single family
home sale price (in 2006) has decreased by more than 17%, from 1.43% to 1.18%. This
calculation is based upon the average sales price of single family detached homes in the City of
Chula Vista, as reported in the San Diego County Regional Multiple Listing Service (MLS).
Overall residential impact fees (including school, park, transportation, and other development
fees) as a percent of the average single family home sale price have dropped by more than 9%,
from 7.7% to 7.0% during the same period. The preceding calculations both assume the
implementation of the March 2006 Update PFDIF fee structure in the calculation of the 2006
rates. In light of these declines, it is anticipated that the proposed rates will be borne by
residential developers without significantly impacting product affordability, marketability, or
development timing.
Cost Allocation Methodoloqy
The allocation of costs in a development impact fee program must be based upon benefit
received. The six (6) project components of the PFDIF program (excluding the Program
Administration component) are principally based upon providing infrastructure necessitated by
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people-related public service to the community, e.g. fire protection, police protection, public
works services, etc. Originally, the PFDIF assigned benefit to future development on the basis
of land use types (residential, commercial, and industrial) using population generation factors.
The November 2002 Update introduced the use of Service Demand Factors in the allocation of
costs among land use types. At that time, the factors were largely based upon the FIND (Fiscal
Impact of New Development) model and TDIF (Transportation Development Impact Fee) factors
in effect at that time. .
The March 2006 report recommends updating the service demand factors using the General
Plan Fiscal Impact Model in place of the FIND model, in the calculation of both the Police
Facility and Fire Suppression component factors. The FIND model was originally developed for
the Otay Ranch annexation only, whereas the General Plan model is a citywide model. In
addition, the data used in the General Plan model is more current, making it the more
appropriate model for use in the current PFDIF update. The TDIF factors are based on Average
Daily Trips, and were updated by Council in June of 2005. These updated trip generation
factors were used in the calculation of the Corporation Yard component's service demand
factors.
Commercial & Industrial Development Service Demand Factors
The current update includes one refinement of the service demand factor methodology. This
change applies only to commercial and industrial development, and is intended to provide a
more equitable cost allocation among land uses and increase the degree of coordination and
standardization between the City's public facilities and transportation development impact fee
programs.
The City's Transportation Development Impact Fee (TDIF) program excludes 'pass-by' trips
from the calculation of commercial development fees. As the Corporation Yard component's
service demand factors are based upon the TDIF rates, this exclusion is already in use within
the PFDIF program. The proposed modification will apply this same methodology to all
applicable components.
For commercial and industrial development, "pass-by" trips are now reflected in the Police, Fire,
and Corporation Yard service demand factors. Pass-by trips are trips in which a stop at a
commercial or industrial facility is one part of a linked trip to or from home or work. An analysis
of commercial trip origins and destinations was performed as part of this update process. This
analysis found that approximately 77 percent of commercial trips are generated from within the
PFDIF boundary area and 23 percent are from outside the area. Similarly, 46 percent of trips to
industrial uses in the City were identified as originated outside the program boundary. Detailed
calculations of external trips for commercial and industrial land uses are included as
Attachments 5 and 6 of this report, respectively.
This update applies these ratios in the calculation of the service demand factors for commercial
and industrial uses. Excluding these pass-by trips from the calculation of commercial and
industrial service demand factors limits the PFDIF obligation for these two land-uses to the
mitigation of external customers and employees only. These pass-by trips are then used to re-
assign the internally generated service demand back to the residential land uses. For new
residential development in Chula Vista, all costs associated with mitigating their impact on
public services will now be assessed via the residential fee only.
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Prepavment Funds
In the March 2002 PFDIF update, developers were given the opportunity to prepay fees for two
components - the Civic Center Expansion component, and the Police Facility component. The
prepay fee was a reduced rate, calculated by excluding financing costs from the fee calculation.
This program was designed to allow developers to provide project construction funds up front,
eliminating the need to secure these funds through long-term borrowing and protecting
developers from project cost increases (other than extraordinary circumstances).
An audit of the prepayment program was completed in conjunction with the March 2006 Update.
As a result of this audit, staff is recommending that 100% of the prepayment funds received
(approximately $6.95 million) be applied to Phase III of the Civic Center Expansion, thereby
reducing the construction funds to be financed via long-term borrowing. With a reduction in
funds to be borrowed, a reduction in associated financing costs is assumed in the current PFDIF
Update. In total, the application of prepayment funds results in an estimated PFDIF financing
obligation reduction of approximately $6.25 million.
Debt Service ObliQation
Of the future program obligation of $226.3 million, approximately $132.6 million (60.2%) is
attributable to debt service payments. These payments represent the repayment of principal, as
well as finance charges incurred in the long-term borrowing of project construction funds. The
debt service obligations of the PFDIF program are detailed in the following table.
Debt Service Remaining Obligation
2000 COP A - Corporation Yard
2002 COP - Police Facilities
2003 Refunding COP - 800 MHZ
2003 Refunding COP - CAD System
2003 Refunding COP - Fiscal System
Adamo Property Acquisition
Civic Center - Phase I
Civic Center - Phase II
Civic Center - Phase 11/
$
$
$
$
$
$
$
$
$
14,243,052
46,278,533
10,225
525,507
15,404
408,286
37,920,147
24,972,462
8,229,195
The bonds for the Civic Center Phase III project have not yet been sold, and are therefore a
projection based upon the most recent bond sale completed - Phase II of the Civic Center
Complex Expansion.
The PFDIF Program is unable to sell bonds directly in order to generate project funds; therefore
the City is the final guarantor of the PFDIF's debt. Should insufficient PFDIF funds be available
to meet the debt service obligation, the City's General fund would have to fill any gap. The City
is exploring the possible creation of a 'Market Fluctuation Reserve' to set aside PFDIF funds for
unanticipated fluctuations in the housing market and anticipates including the creation of such a
reserve fund in the next update of the PFDIF program.
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Cash Flow Analvses
In conjunction with the current PFDIF Update, several cash flow analyses have been prepared.
As these models illustrate, the City has good security to cover PFDIF construction and debt
service expenditures, should a major downturn occur. In the future, close monitoring of these
models will be critical in ensuring the ongoing viability of the PFDIF program.
Attached are the following cash flow models:
. Attachment 2 - PFDIF Program Cash Flow Summary
. Attachment 3 - PFDIF Program Expenditure Detail
. Attachment 4 - PFDIF Program Cash Flow - Debt Service Obligation Minimum Building
Permit Activity
The first two attachments reflect the program as proposed in the 2006 Update. Attachment 2,
the PFDIF Program Cash Flow Summary, illustrates the overall cash flow of the PFDIF
program. As shown in the attachment, the PFDIF program will generate sufficient fee revenue
to meet all expenditure commitments, resulting in a $0 fund balance at the conclusion of the
program. Attachment 3 includes detailed expenditure data, as summarized in Attachment 2.
Attachment 4 was created to identify the minimum number of building permits that must be
issued annually in order to meet the City's existing PFDIF debt service obligation. This scenario
is discussed in greater detail below. This model reflects the same debt service expenditures
detailed in Attachment 3, the PFDIF Program Expenditure Detail.
During the last five years (FY 2002 - FY 2006) the City permitted an average of approximately
2,500 residential units annually. The future development forecasted by the Planning
Department through build out, and reflected in the current update, is as follows:
Land Use Description Units
Single Family Dwelling Units 4,854
Multi-Family Dwelling Units 22,467
Commercial Acres 518.42
I ndustrial Acres 881.51
From a cash flow perspective, permits issued rather than dwelling units constructed is the
salient statistic. It is at the time of permits issuance that impact fees are collected. As such,
these models and all related discussions refer only to permits issued.
In the attached cash flow analyses and the discussion below, the model is based upon four time
increments. These increments are as follows:
. Increment 1: 2006 - 2010
. Increment 2: 2011 - 2020
. Increment 3: 2021 - 2030
. Increment 4: 2031 - Build out
Debt Service Obligation Minimum Building Permit Activity Scenario
As detailed in Attachment 3, the PFDIF's total debt service is forecasted to total approximately
$23.2 million in Increment 1, $52.6 million in Increment 2, and approximately $43 million in
Increment 3. From 2031 through build out, the remaining debt service will decline to
approximately $13.8 million. In all, between 2006 and build out, the PFDIF program will expend
more than $132.6 million on debt service payments.
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The cash flow presented in Attachment 4 shows the minimum residential building permit activity
necessary to meet the PFDIF's anticipated debt service obligation, as described above. This
analysis, therefore, assumes no future staff time or other project expenditures from the program.
Project expenditures omitted from this model include future Rancho del Rey Library funding, as
well as the future EUC Library, EUC Fire Station, and two recreation facilities to be sited in Otay
Ranch Village 4. This model has also been updated to reflect all actual expenditures and
revenues realized in fiscal year 2006. In the interest' of being conservative, no future
commercial or industrial development has been assumed in this'model.
It should be noted that no annual residential development is reflected in Increment 1. This is a
result of the available cash balance of the PFDIF fund, reducing the program's need by
approximately $24.4 million in the first increment. With only $23.2 million in debt service
payments during this period, no additional fee revenue is necessary to meet the PFDIF's debt
service obligation through 2010. Non-debt service expenditures incurred through the end of
fiscal year 2006 are fully offset by actual revenues received during the same accounting period.
The minimum annual development necessary to meet the PFDIF's anticipated debt service
obligation has been calculated for both single family and multi-family residential uses. As
mentioned previously, no additional development is required in Phase I to meet the PFDIF's
debt service obligations during that phase. In Increment 2, in order to meet the debt service
obligations of the PFDIF fund, either 622 single family units, OR 656 multi-family units would
have to be permitted annually. Most likely, actual development will be some combination
thereof.
In Increments 3 and 4, the permitting of 292 - 575 residential units annually will be necessary to
meet the program's debt service obligation. It should be noted that as far back as 1986, annual
residential growth has never fallen below 800 units. During the last five years, the City has
permitted an average of 2,500 residential units. These historic trends suggest that residential
development in the City will not fall below the levels necessary to meet the PFDIF's debt service
obligation.
Developer Discussions
The City has a long history of working collaboratively with the development community to
ensure the most successful development impact fee programs possible. In order to continue
this successful partnership, the 2006 PFDIF Update process included multiple meetings with
interested parties during a five (5) month period. A representative from the Building Industry
Association (BIA), along with representatives from all major developers in the City were invited
to attend these meetings.
Meetings with the development community resulted in the identification of five (5) primary issues
of concern. These issues include the allocation of program costs between residential and
commercial I industrial land uses; the use of prepayment fees; financing costs associated with
the Rancho del Rey Library; the planned University Area of the Otay Ranch; and land use
tabulations. As described above, the issues of cost allocations between land uses and the use
of prepayment fees have been addressed in the final PFDIF report. Issues related to financing
the Rancho del Rey Library, the University Area, and land use tabulations are discussed below.
Rancho del Rey Library
Historically, the PFDIF program has not included financing costs associated with the Rancho del
Rey Library. Instead, the program assumed the construction of the facility using State Grant
funds and other cash on hand. The City was unable to secure the anticipated State Grant, and
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is now required to move forward with construction of the facility. In conjunction with the current
update, a review of the PFDIF's cash flow and development projections revealed the need to
secure project funding through long-term borrowing. As a result, anticipated financing costs
were added to the initial draft of the March 2006 PFDIF Update. During the aforementioned
meetings with the development community, a number of developers voiced concern over the
addition of these financing costs to the PFDIF program, and the subsequent impact of those
costs on the fee schedule. The Otay Ranch Company proffered their pending bonded
infrastructure CFD (Communities Facilities District) for Otay Ranch Village 2 as a potential
solution. Following analysis by City staff, it was determined that the PFDIF obligation for this
village is sufficient to meet anticipated Rancho del Rey Library facility construction costs. As a
result of the availability of this CFD's bond sale proceeds, the City may not have to seek long-
term borrowing to construct this facility. With this understanding and agreement, all financing
costs associated with this facility were removed from the final Library component fee calculation.
Should the Otay Ranch Village 2 CFD be delayed, or not be formed as planned, it may be
necessary to delay construction of the library, and I or consider long-term financing in the future.
Any decision to seek long-term borrowing in the future would be based upon PFDIF cash flow
projections and other applicable considerations.
Planned University Area of Otay Ranch
Since its inception in 1989, the PFDIF program has excluded all units within the planned
University site from the overall unit count. This exclusion is consistent throughout the City's
development impact fee programs. In the 2000 PFDIF Update, this issue was explicitly
addressed in the report's Introduction section. This section reads as follows (bold emphasis
added):
For the purposes of this report, the "Area of Benefit" is generally defined as all land to be
developed within the City of Chula Vista, as detailed in this report (ref Methodology
Section, pages 2-7). The Rancho San Miguel project area has not, as yet, annexed into
the City. However, this project has been included in the area of benefit since it has an
approved City SPA plan. Conversely, the Mid-Bayfront project is not being included at
this time since there is no approved plan detailing the project's proposed residential units
and/or industrial/commercial acres. Once a Mid-Bayfront plan is adopted, the PFDIF will
need to be amended to include this project. The planned University site in the Otay
Ranch project area is not included since the University will be responsible for
developing its own facilities.
The exclusion of these units is also addressed in both 2002 PFDIF Update reports. Each of
these reports included a discussion of the newly initiated Prepayment Program. In the
discussion of this program, the reports discuss potential future changes to planned
development. In both reports, the future inclusion of residential units from the University Site is
used as an example of a significant Equivalent Dwelling Unit ("EDU") change, which could occur
in the future. In addition, the March 2002 report Appendix included detailed acreage projections
for both commercial and industrial land uses. This projection excluded all commercial and
industrial acreage within the planned University site. The omission of these acres from the total
acreage projection directly leads to the exclusion of the acres from the fee calculation itself.
As described above, the exclusion of the University site from the program is consistent with the
City's other impact fee programs. The City's Transportation Development Impact Fee ("TDIF")
was also updated in 1999. In the staff report presented to City Council, the exclusion of the
University site from the program is directly addressed. The report reads as follows:
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The TDIF report excludes Villages 9 & 10 of/he Otay Ranch (Which have a primary land
use designation as the University site) and related roadway improvements from the Area
of Benefit. The secondary land uses (i.e., residential and commercial) are identified in
the report but not counted toward the EDUs generating fees. A final recommendation on
the TDIF for this planning area will be presented to Council upon approval of its ultimate
land use.
The report goes on to explain why the University site was excluded from the TDIF Area of
Benefit:
It is anticipated that the University, if approved, would be responsible for constructing
suitable transportation facilities. If the University is not constructed and the area
develops according to the approved alternative, future updates will incorporate said area
and related facilities into the program.
Discussions to this effect were also included in the staff reports presented to City Council for the
2002 and 2005 TDIF Updates.
As described in the above excerpt from the 1999 PFDIF report, the Mid-Bayfront project was
also excluded from the PFDIF program at that time. Now that a detailed development plan for
this project has been completed, the projected development associated with this site has been
included in the 2006 PFDIF fee calculation. The same process is anticipated for the University
site. In order to include this project in the fee program in the future, any impacts to service
delivery resulting from the development of the University site will be analyzed, taking into
account the provision of public facilities by the University itself. For instance, most University
campuses include library, recreation, and public safety services. The precise nature of the
facilities and services to be provided on-campus is not known at this time, nor has a detailed
land use plan been developed for the University site.
On December 13'", 2005, Council approved an update of the City's General Plan. At that time,
significant uncertainty existed with regard to land use changes in the Planned University Area of
the Otay Ranch, including Villages 8, 9, and 10. As a result of this uncertainty, the approval of
these villages was deferred for a period of 120 days. This deferral was then extended for two
additional 120-day periods on April 11, 2006 and July 25, 2006. Until the Council approves a
General Plan Update for these two villages, the previous General Plan land uses remain in
effect.
Staff has targeted the end of calendar year 2006, or early 2007, for Council approval of an
updated General Plan for these villages. Following this approval, staff will begin the process of
performing a detailed analysis of the impacts of the planned University site on public services.
Upon the completion of this analysis, the City will bring forward an update to the PFDIF
program. This update will incorporate additional units and acreages as appropriate, while
reflecting the impact of the University project on the delivery of City services.
It is the position of the development community that these units should be included in the PFDIF
program in advance of the finalization of University plans. Inclusion of any projected
development from these villages would act to reduce the fee per unit throughout the program
boundary, while increasing the level of risk assumed by the General Fund, should projected
development not occur. It is staff's opinion that it is the most prudent course of action to
continue excluding these units until the General Plan Update for the Otay Ranch University Area
has been approved and an analysis of resultant public service impacts has been completed.
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Land Use Tabulations
The PFDIF fee calculation is based upon projections of residential units and commercial I
industrial acres to be developed in the City. These numbers are projections only, and are
subject to change and revision as land use plans evolve. In preparing the March 2006 PFDIF
Update, revised commercial and industrial fees per acre were calculated. When compared with
existing fees, a significant increase was apparent. This ihcrease is largely attributable to a
decrease in the number of commercial and industrial acres projected for development within the
program boundaries.
In an effort to understand this decreased development projection, prior PFDIF Update reports
were reviewed. Staff identified a significant increase in the November 2002 Update commercial
and industrial acreage development projection, as compared with the March 2002 Update.
These additional acres acted to reduce the PFDIF fees per acre for these land uses. The
November 2002 Update was the result of a successful collaborative effort between the City of
Chula Vista and the local development community. The commercial I industrial development
acreage projection applied in the November 2002 update was based upon data provided by the
San Diego Association of Governments (SANDAG). In conjunction with the current PFDIF
update, this projection was revised to reflect the City's updated General Plan land use densities.
It is the position of the development community that the change in commercial/industrial
acreage projected between the March 2002 and November 2002 updates represents an error
on the part of the City, and that the City bears responsibility for any fee revenue not collected as
a result of this error.
In contrast, it is the position of staff that regular adjustments and updates made to bring
projections inline with actual revenues, expenditures, and development are inherent to the
nature of impact fee calculations. In addition, the City may use, at its discretion, such
standardized analytical documentation available to allow the City to determine effective land use
projections, in order to calculate reasonable fee allocation figures. In this instance, the City
utilized what, at the time, was the best available information to complete the March and
November 2002 updates. Further, the development community was fully informed of the land
use tabulation that the City utilized, and did not object to utilizing this standard information. As
discussed herein, presently, staff is utilizing the recent General Plan Update for land use
tabulation purposes; as the General Plan Update is now considered the best available
information. The City has always, and will continue to, use the best information available at the
time in regards to facility costs; financing costs, and development projections.
ENVIRONMENTAL REVIEW
The Environmental Review Coordinator has reviewed the proposed activity for compliance with
the California Environmental Quality Act (CEQA) and has determined that the activity is not a
"Project" as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to
Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Although
environmental review is not necessary at this time, environmental review and a CEQA
determination may be required prior to the approval of final design plans and the awarding of
construction contracts for facilities funded through Public Facilities Development Impact Fees.
14-11
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Page 12, Item:
Meeting Date: 10/24/06
I~f
DECISION MAKER CONFLICTS:
Staff has reviewed the property holdings of the City Council and has found two (2) conflicts
exist, in that Councilmembers Jerry Rindone and Steve Castaneda have property holdings
within 500 feet of the boundaries of the property which is the subject of this action.
FISCAL IMPACT:
Facilities included in the Public Facilities Development Impact Fee (PFDIF) program total
$250.7 million, with a future program need of $226.3 million ($24.4 million in funds on hand).
Revenues resulting from this fee update will provide the funds necessary to offset the costs
associated with the construction and financing of all PFDIF projects.
Attachments:
1. Public Facilities Development Impact Fee, March 2006 Update
2. PFDIF Program Cash Flow Summary
3. PFDIF Program Expenditure Detail
4. PFDIF Program Cash Flow - Debt Service Obligation Minimum Building Permit Activity
5. Commercial Land Use External Trip Analysis
6. Industrial Land Use External Trip Analysis
14-12
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www.katzokitsu.com
Los Ange/es
323.260.4703
Fax: 323.260.4705
Tustin
714.573.0317
(.x, 714.573.9534
San Bernardino
909.890.9693
fax,909.890.9694
_Katz, Okitsu & Associates
~~ Planning and Engineering
ATTACHMENT 5
July 19,2006
A644 I
Tiffany Allen
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
SUBJECT:
SUMMARY OF CHULA VISTA COMMERCIAL PFDIF ANALYSIS
Dear Ms. Allen:
Katz, Okitsu & Associates has prepared this memorandum to assist in the update of the
Commercial service demand factor (SDF) for the City's PFDIF (Public Facilities Development
Impact Fee) program. The following analysis methodology was employed to isolate commercial
trips originating/terminating outside the City limits from commercial trips traveling within the
City limits. Commercial trips within the City limits are considered to be Chula Vista residents
whom already contribute via their residential fees. Therefore, the City has suggested that only
the "outside" commercial trips be applied to the SDF calculations for the PFDIF program.
Analysis Methodology:
I) Identify predominantly commercial traffic analysis zones (T AZs) within the City of Chula
Vista.
2) Commission SANDAG (San Diego Association of Governments) to run a combined select
zone model based on the chosen commercial-dominant zones, after removing all non-
commercial land uses from each zone.
3) Based on the model output, identify all commercial trips originating I terminating outside
the City of Chula Vista limits.
4) Calculate the average commercial trip rate per acre from the model.
S) Calculate the Commercial external SDF based on the percentage of "outside" commercial
model trips (as compared to the total number of commercial trips generated by the
model).
Katz, Okitsu & Associates worked with the City of Chula Vista Traffic Engineer to identify
commercial-dominant T AZs within the City of Chula Vista limits. Eight zones were selected
from different parts of the City as to provide a more global representation of commercial
activity. Collectively, the eight zones contain community commercial, regional commercial and
street front commercial land uses, thereby providing a variety of commercial components and
a range of trip generation rates.
SANDAG produced a combined select zone model for all eight commercial-dominant TAZs
using the City of Chula Vista's General Plan Update preferred land use alternative for Buildout
conditions (AltS8c). All non-commercial land uses were removed so that strictly commercial
trips were represented. Average daily traffic volumes from the eight zones were distributed
throughout the network. A cordon was identified on the select zone plot to represent the
14-17
T
~ Katz, Okitsu & Associates
...... Planning and Engineering ,
Ms,Allen
July 19, 2006
Page 2 of 2
A644 I
ATTACHMENT 5
City boundary. Otay Ranch - University Villages 9 and 10, located in the southeast portion of
the City of Chula Vista, are not currently included in .the City's PFDIF Program. Therefore,
these villages were placed outside of the cordon.
As previously described, trips traveling toHrom each commercial zone within the City
boundary are considered to be Chula Vista residents whom already contribute via residential
impact fees. Therefore, the total number of commercial trips originating / terminating outside
the cordon was calculated, and then divided over the total number of trips generated by the
model (approximately 172,000 daily trips) to equal the "percentage of outside trips". The
percentage of outside trips was found to be 23%.
In conclusion, the calculated external service demand for commercial development within the
City of Chula Vista's PFDIF program area is 23% of the total commercial service
demand.
Sincerely,
Katz, Okitsu & Associates
J. Arnold Torma, P.E.
Principal Engineer
SLM
Attachments:
Attachment A - Commercial External SDF Calculations for City's PFDIF Program
14-18
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225 1 San Diego Ave.
Suite A270
San Diego, CA
92110-2926
619.683.2933
fax; 619.683.7982
koasd@kaCIokitsu.com
www.kaCIokitsu.com
Los Angeles
323.260.4703
Fax; 323.260.4705
Tustin
714.573.0317
fax; 714.573.9534
San Bemardino
909.890.9693
fax; 909.890.9694
_ Katz, Okitsu & Associates
Planning and Engineering
ATTACHMENT 6
July 19, 2006
A644 I
Tiffany Allen
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 919 I 0
SUBJECT:
SUMMARY OF CHULA VISTA INDUSTRIAL PFDIF ANALYSIS
Dear Ms. Allen:
Katz, Okitsu & Associates has prepared this memorandum to assist in the update of the
Industrial service demand factor (SDF) for the City's PFDIF (Public Facilities Development
Impact Fee) program. The following analysis methodology was employed to isolate industrial
trips originatinglterminating outside the City limits from industrial trips traveling within the
City limits. Industrial trips within the City limits are considered to be Chula Vista residents
whom already contribute via their residential fees. Therefore, the City has suggested that only
the "outside" industrial trips be applied to the SDF calculations for the PFDIF program.
Analysis Methodology:
I) Identify predominantly industrial traffic analysis zones (T AZs) within the City of Chula
Vista.
2) Commission SANDAG (San Diego Association of Governments) to run a combined select
zone model based on the chosen industrial-dominant zones, after removing all non-
industrial land uses from each zone.
3) Based on the model output, identify all industrial trips originating I terminating outside the
City of Chula Vista limits.
4) Calculate the average industrial trip rate per acre from the model.
S) Calculate the Industrial external SDF based on the percentage of "outside" industrial
model trips (as compared to the total number of industrial trips generated by the model).
Katz, Okitsu & Associates worked with the City of Chula Vista Traffic Engineer to identify
industrial-dominant T AZs within the City of Chula Vista limits. Four zones were selected
from different parts of the City as to provide a more global representation of industrial
activity. Collectively, the four zones contain the following industrial land uses: industrial park,
light industry and heavy industry, thereby providing a variety of industrial components and a
range of trip generation rates.
SANDAG produced a combined select zone model for all four industrial-dominant T AZs using
the City of Chula Vista's General Plan Update preferred land use alternative for Buildout
conditions (AltS8c). All non-industrial land uses were removed so that strictly industrial trips
were represented. Average daily traffic volumes from the four zones were distributed
throughout the network. A cordon was identified on the select zone plot to represent the
City boundary. Otay Ranch - University Villages 9 and 10, located in the southeast portion of
14-20
T
_ Katz, Okitsu & Associates
Planning and Engineering
Ms. Allen
July 19, 2006
Page 2 of 2
A644 I
ATTACHMENT 6
the City of Chula Vista, are not currently included in the City's PFDIF Program. Therefore,
these villages were placed outside of the cordon.
As previously described, trips traveling tolfrom each industrial zone within the City boundary
are considered to be Chula Vista residents whom already contribute via residential impact
fees. Therefore, the total number of industrial trips originating I terminating outside the
cordon was calculated, and then divided over the total number of trips generated by the
model (approximately 37,000 daily trips) to equal the "percentage of outside trips". The
percentage of outside trips was found to be 46%.
In conclusion, the calculated external service demand for industrial development within the
City of Chula Vista's PFDIF program area is 46% of the total industrial service demand.
Sincerely,
Katz, Okitsu & Associates
J. Arnold Torma, P.E.
Principal Engineer
SLM
Attachments:
Attachment A -Industrial External SDF Calculations for City's PFDIF Program
14-21
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ATTACHMENT 6
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ORDINANCE NO.
AN ORDINANCE OF THE CITY OF CHULA VISTA,
CALIFORNIA, AMENDING CHAPTER 3.50 OF THE
CHULA VISTA MUNICIPAL CODE RELATING TO
DEVELOPMENT IMPACT FEES TO PAY FOR VARIOUS
PUBLIC FACILITIES WITHIN THE CITY. OF CHULA
VISTA .
WHEREAS, on January 81h, 1991, the City Council of the City of Chula Vista adopted
Ordinance No. 2432, establishing the Public Facilities Impact Fee (PFDIF or Impact
Fee); and
WHEREAS, on June 141h, 2005, the City Council of the City of Chula Vista adopted
Ordinance No. 3010, increasing the PFDIF from $5,048 to $5,480 per single family
dwelling unit; and
WHEREAS, cost estimates for the current list of needed public facilities have been
updated; and
WHEREAS, PFDIF allocation factors have been recalculated using General Plan Fiscal
Impact Model analysis; and
WHEREAS, the Impact Fee is solely based upon that portion of the project costs which
are attributable to new development; and
WHEREAS, the fee increase was developed in conjunction with developers and the
Building Industry Association (BIA); and
WHEREAS, development is considered to take place in accordance with the Phasing
Plan established by the City's Planning Department, which is subject to change
depending on actual development phasing;
WHEREAS, the City's Environmental Review Coordinator has reviewed the proposed
activity for compliance with the California Environmental Quality Act (CEQA) and has
determined that the activity is not a "Project" as defined under Section 15378 of the
State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA
Guidelines the activity is not subject to CEQA,
NOW THEREFORE BE IT ORDAINED, that the City Council of the City Of Chula Vista
does hereby adopt and amend Chapter 3.50 of the Chula Vista Municipal Code relating
to development impact fees to pay for various public facilities as follows:
SECTION 1: Findinqs
The City Council finds, after consideration of the evidence presented to it including the
"Public Facilities Development Impact Fee, March 2006 Update", that certain
amendments to Chapter 3.50 of the Chula Vista Municipal Code are necessary in order
to assure that there are sufficient funds available to finance the public facilities
necessary to serve new development within the City of Chula Vista by the development
impact fee; and
14-23
T
The City Council finds, based on the evidence presented at the public hearing, and
consistent with the City's General Plan, that the imposition of public facility impact fees
on all development within the City of Chula Vista for which building permits have not
been issued is necessary in order to protect the public health, safety and welfare by
providing for the public facilities and services to assure effective implementation of the
City's General Plan; and
The City Council finds that the amount of the amended fees levied by this ordinance
does not exceed the estimated cost of providing the public facilities.
SECTION 2: That the existing Ordinance Nos. 2432, 2320, 2554, 2810, 2855 and 2886
are hereby superseded, and Chapter 3.50 of the Chula Vista Municipal Code is
amended to read as follows:
3.50.010 General intent.
The city's general plan land use and public facilities elements require that adequate
public facilities be available to accommodate increased population created by new
development within the city of Chula Vista.
The city council has determined that new development will create adverse impacts on
the city's existing public facilities which must be mitigated by the financing and
construction of certain public facilities which are the subject of this chapter. New
development contributes to the cumulative burden on these public facilities in direct
relationship to the amount of population generated by the development or the gross
acreage of the commercial or industrial land in the development.
The city council has determined that a reasonable means of financing the public facilities
is to charge a fee on all developments in the city of Chula Vista. Imposition of the public
facilities development impact fee on all new development for which building permits have
not yet been issued is necessary in order to protect the public safety and welfare,
thereby ensuring effective implementation of the city's general plan. (Ord. 2887 S 1,
2002).
3.50.020 Definitions.
For the purposes of this chapter, the following words or phrases shall be construed as
defined in this section, unless from the context it appears that a different meaning is
intended:
A. "Building permit" means a permit required by and issued pursuant to the Uniform
Building Code, as adopted by reference by this city.
B. "Developer" means the owner or developer of a development.
C. "Development permit" means any discretionary permit, entitlement or approval for
a development project issued under any zoning or subdivision ordinance of the
city.
D. "Development project" or "development" means any activity described as the
following:
1. Any new residential dwelling unit developed on vacant land;
2. Any new commercial/office or industrial development constructed on
vacant land;
3. Any expansions to established developments or new developments on
nonvacant land in those land use categories listed in subsections (D)(1)
14-24
T
and (2) of this section, if the result is a net increase in dwelling units. The
fee shall be based solely on this net dwelling unit increase;
4. Any new or expanding special land use project;
5. Any special purpose project developed on vacant land or nonvacant land,
or expanded within a pre-existing site, if the result is a net increase in
dwelling units. The fee shall be based solely on this net dwelling unit
increase; .
6. Any other development project not listed above but described in Section
65927 and 65928 of the State Government Code.
E. "Community purpose facility" means a facility which serves one of the following
purposes:
1. Social service activities, including such services as Boy Scouts and Girl
Scouts, Boys and Girls Club, Alcoholics Anonymous and services for the
homeless;
2. Public schools;
3. Private schools;
4. Day care;
5. Senior care and recreation;
6. Worship, spiritual growth and development.
F. "Special land use" means any nonresidential, non-commercial/office or
nonindustrial development project (e.g., Olympic Training Center, hospitals,
utilities), or non-special purpose project.
G. "Special purpose project" means any for-profit community purpose facility (e.g.,
day care).
H. "Engineer report" refers to the April 20, 1993, "development impact fees for public
facilities" report.
I. "Extraordinary project cost increases" means increases resulting from costs that
could not have been reasonably foreseen at the time a project budget was
established.
J. "Extraordinary dwelling unit change" means an increase or decrease in the
number of remaining planned residential dwelling units or commercial/industrial
acres for which building permits have not yet been pulled, which changes the
existing total by more than 2,000 dwelling units or 200 commerciallindustrial
acres. (Ord. 2887 S 1, 2002).
3.50.030 Public facilities to be financed by the fee.
A. The public facilities ("facilities"), which are the subject matter of the fee, include
buildings, equipment and related one-time start-up costs or portions thereof, as
detailed in subsection (C) of this section and in the engineer report on file in the
office of the city clerk.
B. The city council may modify or amend this list of facilities by written resolution in
order to maintain compliance with the city's general plan or the capital
improvement program.
C. The facilities are as follows:
1. Civic Center expansion;
2. Police department facilities and equipment;
3. Corporation yard relocation/expansion;
4. Library system expansion;
5. Fire suppression system expansion;
6.~ Geographic information system expansion;
7.~ Computer system expansion;
14-25
T
8.~ Te/ecommunication system expansion;
9.~ Records management system expansion;
10. Major recreation facilities (community centers, gymnasiums,
swimming pools). (Ord. 2887 S 1, 2002).
"Facilitv oroiects are como/ete. No future oroiects will be added.
3.50.040 Territory to which fee applicable.
The area of the city of Chula Vista to which the fee herein established shall be applicable
shall be the territorial limits of the city of Chula Vista ("territory"), as they may from time
to time be amended. (Ord. 2887 S 1, 2002).
3.50.050 Establishment of fee.
A development impact fee ("fee") is hereby established to pay for the facilities within the
territory. The fee shall be paid upon the issuance of building permits for each
development project within the city of Chula Vista, except that, at the discretion of the
city manager, a developer may prepay all or part of civic center expansion fees that
would be applicable to the developer's future development projects. Prepayment would
occur at the then current rate; however, the developer has sole responsibility for paying
subsequent fee increases resulting from (1) extraordinary project cost increases, or (2)
normal annual adjustments in the Consumer Price Index (CPI) or Building Construction
Index (BCI), or (3) extraordinary dwelling unit changes. (Ord. 2887 S 1, 2002).
3.50.060 Determination of fees by land use category.
For purposes of this fee, single-family dwelling units shall include single-family detached
homes and detached condominiums; multifamily dwelling units shall include attached
condominiums, townhouses, duplexes, triplexes, and apartments. Commercial/office and
industrial development projects shall be charged on a per acre basis. Development
impact fees for single-family, multifamily, commercial and industrial land uses shall be
based on the demand for service generated by that land use, for each public facility set
forth in CVMC 3.50.030:
Service Demand Generated by Land Use
Public Facility Single-
Family Multifamily Commercial Industrial
Dwelling Dwelling Unit Acre Acre
Unit
Police department .~150 .~747 .~075 .~028
facilities and equipment
Corporation yard .~125 .~65 .~228 .~182
relocation/expansion
Library system
expansion (residential .~178 .4+5822 .000 .000
only)
Fire suppression system .~212 .J7G707 .~060 .GW020
expansion -
Major recreation facilities .~.178 .4+5.822 .000 .000
(residential only)
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General Government
Civic Center expansion .:>&7169 .400742 .~058 .Gd4031
Geogruphic information ~ 4G8 ~ 0004
system expaAsion
Computer eyetem ~ 4G8 ~ 0004
expansion
Telecommunication ~ 4G8 ~ 0004
system eXl3aneion
Recorde management ~ 4G8 ~ 0004
eyetem expansion I
Administration .:>&7169 .400742 .~058 .Gd4031
The rate for each special land use development project, as defined in CVMC 3.50.020,
shall be equivalent to the commercial/office rate per gross acre of land. The Olympic
Training Center shall be equivalent to the industrial rate per gross acre of land. The rate
for each special purpose project, as defined in CVMC 3.50.020, shall be equivalent to
one-half the commercial/office rate per gross acre of land. The charges shall be those
outlined in CVMC 3.50.090(C). The fee multiplied by the total number of dwelling units or
acres within a given development project represents a developer's fair share ("fair
share") for that development project. (Ord. 2887 ~ 1, 2002).
3.50.070 Time to detenmine amount due.
The fee for each development shall be calculated at the time of building permit issuance
and shall be the amount as indicated at that time, and not when the tentative map or
final map were granted or applied for, or when the building permit plan check was
conducted, or when application was made for the building permit, except that a
developer of a development project providing low- and/or moderate-income housing in
accordance with Section III, Objective 1 of the 1991 housing element of the general plan
may request authorization to prepay or defer the fee for up to 500 equivalent dwelling
units (EDUs) and said request may be approved at the sole discretion of the city
manager. In order to facilitate those low- and/or moderate-income projects which are
planned for construction through March 24, 2005, the fee for said projects shall be the
fee existing as of March 25, 2002. (Ord. 2887 ~ 1, 2002).
3.50.080 Purpose and use of fee.
The fee collected shall be used by the city for the following purposes, in such order and
at such time as determined by the city council:
A. To pay for such of the facilities that the city council determines should be
constructed, installed or purchased at that time, or to reimburse the city for
facilities funded by the city from other sources.
B. To reimburse developers who have been required or permitted by CVMC
3.50.140(A) to construct, install or purchase approved facilities listed in CVMC
3.50.030(C), in such amounts as the council deems appropriate.
C. To repay any and all persons who have, pursuant to prior fee Ordinance Nos.
2320 or 2432, or pursuant to this chapter, advanced or otherwise loaned funds
for the construction of a facility identified herein.
D. To repay the city for administration costs associated with administration of the
fee. (Ord. 2887 ~ 1, 2002).
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3.50.090 Amount of fee.
A. The fee shall be the amounts set forth in subsections (8) and (C) of this section.
The fee shall be adjusted, starting on October 1, 2005, and on each October 1st
thereafter, based on the following two indexes:
For the Civic Center expansion, libraries, fire suppression and major recreation
facilities: the Engineering News Record, Building' Construction Cost Index for the
Los Angeles Area. '
For the police, corporation yard, geographic information systems, computer
systems, telecommunications systems, records management and administration
components: The U.S. Department of Labor, Bureau of Labor Statistics (San
Diego Metropolitan Statistical Area).
Adjustments of the fee based upon annual changes to these two indexes shall be
automatic and shall not require further action by the city council. The PFDIF may
also be reviewed and amended by the city council as necessary based on
changes in the type, size, location or cost of the facilities to be financed by the
fee; changes in land use designation in the city's general plan; and upon other
sound engineering, financing and planning information. Adjustments to the fee
resulting from these discretionary reviews may be made by resolution amending
this section.
B. The fee shall have portions which are, according to the engineer report, allocated
to a specific facility ("fee components"), which correspond to the costs of the
various facilities, plus the administration cost for the fee", which is a percentage
of the fee GGmponents' GGsl.
C. The fee shall be the following, depending on the land use:
Land Use Fee
Residential - Single-family $M007,891/DU
dwellings
Residential - Multifamily dwellings ~7.477/DU
Commercial/Office $21,7Q725,181/acr
e
Industrial $4,-G4G7,958/acre
Special land use $25,18121,707/acr
e
Olympic Training Center $7,958/4;MQ/acre
Public purpose Exempt
Nonprofit community purpose Exempt
facility
Special purpose project $10,!lsd12,590/acr
e
(Ord. 3010 S 1, 2005; Ord. 2887 S 1, 2002).
3.50.100 Development projects exempt from the fee.
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A. Development projects by public agencies shall be exempt from the provisions of
the fee if those projects are designed to provide the public service for which the
agency is charged ("public purpose").
B. Community purpose facilities which are not operated for profit ("nonprofit
community purpose facilities") are also exempt inasmuch as these institutions
provide benefit to the community as a whole, including all land use categories
which are the subject matter of the fee. The city council hereby determines that it
is appropriate to spread any impact such nonprofit community purpose facilities
might have to the other land use categories subject to the fee. In the event that a
court determines that the exemption herein extended to community purpose
facilities shall for any reason be invalid, the city council hereby allocates the
nonprofit community purpose facilities' fair share to the city of Chula Vista and
not to any of the land use categories which are the subject matter of the
development impact land use categories.
C. Development projects which are additions or expansions to existing dwelling
units or businesses, except special land use projects, shall be exempt if the
addition or expansion does not result in a net increase in dwelling units or
commercial/industrial acreage. (Ord. 2887 ~ 1, 2002).
3.50.110 Authority for accounting and expenditures.
A. Fees Collected Before the Effective Date of the Ordinance Codified in This
Chapter.
1. All fees which have accrued shall remain in separate accounts
("accounts") corresponding to the facilities listed in CVMC 3.50.030, as
established by the director of finance, and shall only be expended for the
purposes associated with each facility account.
2. The director of finance is authorized to maintain accounts for the various
facilities identified in this chapter and to periodically make expenditures
from the accounts for the purposes set forth herein.
B. Funds Collected On or After the Effective Date of the Ordinance Codified in This
Chapter.
1. The fees collected shall be deposited into a public facility financing fund
("public facilities development impact fee fund," or alternatively herein
"fund"), which is hereby created and shall be expended only for the
purposes set forth in this chapter.
2. The director of finance is authorized to establish a single fund for the
various facilities identified in this chapter and to periodically rnake
expenditures from the fund for the purposes set forth herein. (Ord. 2887
~ 1, 2002).
3.50.120 Findings.
The city council finds that collection of the fee established by this chapter at the time of
the building permit issuance is necessary to provide funds for the facilities and to ensure
certainty in the capital facilities budgeting for growth impacted public facilities. (Ord.
2887 ~ 1, 2002).
3.50.130 Fee additional to other fees and charges.
This fee is in addition to the requirements imposed by other city laws, policies or
regulations relating to the construction or the financing of the construction of public
improvements within subdivisions or developments. (Ord. 2887 ~ 1, 2002).
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3.50.135 Mandatory oversizing of facility - Duty to tender reimbursement offer.
Whenever a developer of a development project is required as a condition of approval of
a development permit to cause a facility or a portion of a facility to be built to
accommodate the demands created by the development project, the city may require the
developer to install, purchase or construct the facility according to design specifications
approved by the city, that being with such supplemental size or capacity required by the
city ("oversized capacity requirement"). If such an oversized capacity requirement is
imposed, the city shall offer to reimburse the developer from the fund either in cash or
over time, with interest at the fair market value of money, as fees are collected, at the
option of the city, for costs incurred by the developer for the design and construction of
the facility, not to exceed the estimated cost of that particular facility as included in the
calculation and updating of the fee. The city may update the fee calculation as the city
deems appropriate prior to making such offer. This duty to offer reimbursement shall be
independent of the developer's obligation to pay the fee. (Ord. 2887 ~ 1, 2002).
3.50.140 Developer construction of facilities.
A. Whenever a developer of a development project would be required by application
of city law or policy as a condition of approval of a development permit to
construct or finance a facility, or if a developer proposes to design and construct
a portion of a facility in conjunction with the prosecution of a development project
within the territory, and follows the procedure for doing same hereinbelow set
forth, the city council shall, in the following applicable circumstances, tender only
the credit or reimbursement hereinbelow identified for that circumstance:
1. If the cost of the facility, incurred by the developer and acceptable to the
city, is less than or equal to that portion of the developer's fair share
related to the fee component for that facility, the city may only give a
credit ("developer credit") against that portion of the developer's fair share
related to the fee component for that facility ("fair share of the fee
component"); or
2. If the cost of the facility, incurred by the developer and acceptable to the
city, is greater than that portion of the developer's fair share related to the
fee component for that facility, but less than or equal to the developer's
total fair share, the city may give a credit, which credit shall first be
applied against that portion of the fair share related to the fee component
for that facility, and the excess costs for the facility shall then be applied
as credits against such other fee components of the developer's total fair
share as the city manager, in his sole and unfettered discretion, shall
determine; or
3. If the cost of the facility, incurred by the developer and acceptable to the
city, is greater than the developer's total fair share, the city may give a
credit against the developer's total fair share as the city manager, in his
sole and unfettered discretion, shall determine; and/or the city may tender
to the developer a reimbursement agreement to reimburse said developer
only from the fund as moneys are available, over time, with interest at the
fair market value of money, at the option of the city.
B. Unless otherwise stated herein, all developer credits shall be calculated on a
dollar basis and converted into dwelling units at the time building permits are
pulled, based on the then-current fee. (Ord. 2887 ~ 1, 2002).
3.50.150 Procedure for issuance of credits or tender of reimbursement offer.
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The city's extension of credits or tender of a reimbursement offer to a developer
pursuant to CVMC 3.50.140 shall be conditioned on the developer complying with the
terms and conditions of this section:
A. Written authorization shall be requested by the developer from the city and
issued by the city council by written resolution before developer may incur any
costs eligible for reimbursement relating to the facility.
B. The request for authorization shall contain the information listed in this section
and such other information as may from time to time be requested by the city.
C. If the council grants authorization, it shall be by written agreement with the
developer, and on the following conditions among such other conditions as the
council may from time to time impose:
1. Developer shall prepare all plans and specifications and submit same for
approval by the city;
2. Developer shall secure and dedicate any right-of-way required for the
facilities;
3. Developer shall secure all required permits and environmental clearances
necessary for construction of the facilities;
4. Developer shall provide performance bonds in a form and amount and
with a surety satisfactory to the city (where the developer intends to utilize
provisions for immediate credit, the perfonmance bond shall be for 100
percent of the value of the project);
5. Developer shall pay all city fees and costs;
6. The city shall be held harmless and indemnified, and upon tender by the
city, defended by the developer for any of the costs and liabilities
associated with the construction of the facilities;
7. The city will not be responsible for any of the costs of constructing the
facilities. The developer shall advance all necessary funds to construct
the facilities;
8. The developer shall secure at least three qualified bids for work to be
done. The construction contract shall be granted to the lowest qualified
bidder. If qualified, the developer may agree to perform the work at a
price equal to or less than the low bid. Any claims for additional payment
for extra work or charges during construction shall be justified and shall
be documented to the satisfaction of the director of public works;
9. The developer shall provide a detailed cost estimate which itemizes those
costs of the construction attributable to the facilities and exclude 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 facilities;
10. The city may grant partial credit for costs incurred by the developer on the
facility upon determination of satisfactory incremental completion of the
facility, as approved and certified by the director of public works, in an
amount not to exceed 75 percent of the cost of the construction
completed to the time the partial credit is granted, thereby retaining 25
percent of such credits until issuance by the city of a notice of completion;
11. When all work has been completed to the satisfaction of the city, the
developer shall submit verification of payments made for the construction
of the facility to the city. The director of public works shall make the final
determination on expenditures which are eligible for credit or
reimbursement. (Ord. 2887 S 1, 2002).
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3.50.155 Developer transfer of credits.
A developer who, in accordance with the provisions of CVMC 3.50.140 and 3.50.150,
receives credits against future payments of the fee for one or more fee components may
transfer those credits as provided herein to another developer.
A. The developer shall provide the city with written notice of such transfer within 30
days. The notice shall provide the following information:
1. The name of the developer to whom the credits were transferred;
2. The dollar value of the transferred credits; ,
3. The fee component(s) against which the credits will be applied; and
4. The projected rate, by fiscal year, that the credits will be applied, until said
credits have been fully redeemed.
B. Credits received by a developer of a low- and/or moderate-income project in
accordance with CVMC 3.50.070 can only be transferred to another low- and/or
moderate-income development project. (Ord. 2887 S 1, 2002).
3.50.160 Procedure for fee modification or reduction.
Any developer who, because of the nature or type of uses proposed for a development
project, contends that application of this fee is unconstitutional or unrelated to mitigation
of the burdens of the development may apply to the city council for a modification or
reduction of the fee. The application shall be made in writing and filed with the city clerk
not later than 10 days after notice of the public hearing on the development permit
application for the project is given, or if no development permit is required, at the time of
the filing of the building permit application. The application shall state in detail the factual
basis for the claim of modification or reduction. The city council shall make reasonable
efforts to consider the application within 60 days after its filing. The decision of the city
council shall be final. If a reduction or modification is granted, any change in use within
the project shall subject the developer to payment of the fee. The procedure provided by
this section is additional to any other procedure authorized by law for protection or
challenging this fee. (Ord. 2887 S 1, 2002).
3.50.170 Fund loans.
A. Loans by the City. The city may loan funds to the fund to pay for facilities should
the fund have insufficient funds to cover the cost of said facility. Said loans, if
granted, shall be approved upon the adoption of the annual city budget and shall
carry interest rates as set by the city council for each fiscal year. A schedule for
repayment of said loans shall be established at the time they are made and
approved by the council, with a maximum term not to exceed the life of the fund.
B. Developer Loans. A developer may loan funds to the city as outlined in CVMC
3.50.140 and 3.50.150. The city may repay said developer loans with interest,
under the terms listed in subsection (A) of this section. (Ord. 2887 S 1, 2002).
3.50.180 Effective date.
This chapter shall become effective sixtv (60) days followino its second readino and
adoption January 1 g, 200:3 (Ord. 2887 S 1, 2002).
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SECTION 3:
This chapter shall become effective sixty (60) days following its second reading and
adoption.
Presented by
Approved as to form by
Edward Van Eenoo
Director of Budget and Analysis
14-33
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ADOPTING THE "PUBLIC FACILITIES
DEVELOPMENT IMPACT FEE, MARCH 2006 UPDATE".
WHEREAS, on January 8th, 1991, the City Council of the City of Chula Vista adopted
Ordinance No. 2432, establishing the Public Facilities Im'pact Fee (PFDIF); and
,
WHEREAS, the purpose of the PFDIF is mitigation of the cumulative burden on public
facilities placed by new development; and
WHEREAS, staff has prepared a comprehensive update of the PFDIF program,
including a public facility expenditure plan for 2006 - 2030, development projections,
and impact fee calculations; and
WHEREAS, development is considered to take place in accordance with the Phasing
Plan established by the City's Planning Department which is subject to change
depending on actual development phasing; and
WHEREAS, the 2006 - 2030 expenditure plans for public facilities are detailed in each
PFDIF component in the "Public Facilities Development Impact Fee, March 2006
Update" and summarized in the Cash Flow Analysis; and
WHEREAS, the 2006 - 2030 expenditure plan serves the purpose of identifying the
planned use of all Public Facilities DIF funds; and
WHEREAS, the "Public Facilities Development Impact Fee, March 2006 Update" was
developed in conjunction with developers and the Building Industry Association (BIA);
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista
does hereby adopt the "Public Facilities Development Impact Fee, March 2006 Update".
Presented by
Approved as to form by
Edward Van Eenoo
Director of Budget & Analysis
14-34
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9201 Spectrum Center Blvd., Suite 110
San Diego, CA 92123-1407
'Recud.. IO/2J.:!Ol..# 5:3Qp",
!+etv\ 14
P 858.450.1221
F 858.552.1445
October 24, 2006
www.blasandiego.org
PRESIDENT
Horace Hogan II
Brehm Communities
Mayor Stephen Padilla and
Members of the City Council
City ofChula Vista
276 Fourth Avenue
Chula Vista, CA 91910
VICE PRESIDENT
Scott Brusseau
Newport National Corp.
TREASURER / SECRETARY
Paul Barnes
Shea Homes
Re: Public Facilities Development Impact Fee Update
Agenda Item #14
Dear Mayor Padilla,
IMMEDIATE PAST PRESIDENT
The Building Industry Association of San Diego County ("BIA")
SRcoh' sanddsA'rom. H f C I'f renresents 1450 member companies including de,velopers, builders, and
Ie man merrcan ames 0 a I arnl~
associates comprising a work force of 165,000. We have reviewed the city
of Chula Vista's proposed Public Facilities Development Impact Fee
("PF-DIF".)
CHIEF EXECUTIVE OffiCER
Paul A. Tryon
California Building
Industry Association
I would like to thank your staff for diligently working with the BIA and its
members to address a number of concerns we raised early in this review
and update, their diligence in working on these issues has essentially
narrowed our concerns to two specific areas.
AFfiLIATES
National Association
of Home Builders
The Staff Report ("SR") accurately reflects concerns raised by the BIA
regarding two specific issues 1) the Planned University Area of Otay
Ranch ("University") (SR at page 9) and 2) Land Use Tabulations (SR at
page 11.) In both instances we believe that staffs proposal for the PF-DIF
either shifts responsibility for un-accounted for development or
impermissibly shifts the City existing responsibility to future
development.
National Association
of Industrial and
Office Properties
In the case of the University site the staff has not satisfied our concerns
that responsibility for the anticipated impacts created by the University
will be solely bourn by the University. There is no guarantee, for
example, that fire and police service will be provided on site by any
proposed academic use. At a minimum Chula Vista needs to account
for that eventuality by explicitly analyzing the impact of the proposed
university use on all facilities with in the PF-DIF.
In addressing our concerns regarding the land use tabulation error made in
the November 2002 PF-DIF update, the staff report minimizes the
significance of this miscalculation by lumping it in with the adjustments
generally acknowledged as necessary when "bringing projections in line
BUILDING INDUSTRY ASSOCIATION OF SAN DIEGO COUNTY
actual revenues, expenditures and development." The sort error addressed here is not
merely the result of minor adjusts related to markets, and materials, but a significant
miscalculation that is now in the arena of existing development. Once a fee has been paid
for a particular unit the City takes on that unit as a part of its existing responsibility. It is
not appropriate to now ask for current development to pay for what is essentially an
existing deficiency. The city of Chula Vista has, in the past, been one of the few cities I
have worked with that has been willing to acknowledge and correct its past errors in the
calculation of their PF-DIF. I urge the City Council to continue this admirable stance
by directing staff to return with a fee corrected to acknowledge this accounting
error as one that should be assumed by the city of Chula Vista as an obligation of
existing development.
I again want to thank the Finance Department staff for working with us on these and
other issues. I appreciate their professionalism and dedication. I am particularly pleased
with the vastly improved reporting format designed for this particular addition of the PF-
DIF.
Thank you for considering my request in this matter.
Sincerely,
r
Jerry Livingston
Staff Counsel