HomeMy WebLinkAbout2007/07/17 Item 5
CITY COUNCIL
AGENDA STATEMENT
~f:. CIIT OF
~~ CHULA VISTA
07/17/2007
Item~
ITEM TITLE:
RESOLUTION APPROVING A REFUND OF $1.8 MILLION IN
THE FORM OF TOLL CREDITS, PURSUANT TO CALIFORNIA
GOVERNMENT CODE SECTION 66001, ON A PRORATED BASIS TO THE
CURRENT RECORD OWNERS OF PROPERTY FROM WHICH THE
INTERIM SR-125 DEVELOPMENT IMPACT FEES WERE COLLECTED.
RESOLUTION APPROVING A TRANSFER OF $1.8 MILLION
FROM THE TRANSPORTATION DEVELOPMENT IMPACT FEE FUND
(TDIF) TO AN INTEREST EARNING DEPOSIT ACCOUNT TITLED -
SR125 DIF REFUNDS, AND ALLOWING FOR THE EXPENDITURE OF
THE FUNDS IN A MANNER CONSISTENT WITH THIS RESOLUTION.
SUBMITTED BY:
REVIEWED BY:
~
CITY ENGINEER :t 'f\ "" "'"
CITY MANAGER ~....., 0--
4/5THS VOTE: YES ~ NO D
BACKGROUND
California Government Code section 66001(e) provides that excess development impact fees
collected shall be refunded to the then-current record owner of the lots or units, as identified on
the last equalized assessment roll on a prorated basis with any interest accrued thereon. Fees
collected for the Interim SRI25 DIF have been allocated to projects identified for the Interim
SR125 DIP Program. City staff estimates that approximately $1.8 million in combined principal
and interest remains after accounting for all anticipated projects. California Government Code
section 66001 (e) provides that the local agency may refund the unexpended revenues by direct
payment or by any other reasonable means. Tonight, the City Council will consider refunding
the remaining development impact fees and authorizing the City Finance Department to allocate
and disburse the fees in accordance with staffs recommendation.
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 defmed under Section 15378 of the State CEQA Guidelines because it involves only
a refund of fees paid to the Interim SR -125 DIF and does not result in any changes to the
physical environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines
the activity is not subject to CEQA. Thus, no environmental review is necessary.
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07/17/2007,Item~
Page 2 of5
RECOMMENDATION
That Council approve the following:
I. Resolution approving a refund of $1.8 million in the form of toll credits, pursuant to
California Government Code section 66001, on a prorated basis to the current record
owners of property from which the Interim SR-125 Development Impact Fees were
collected.
2. Resolution approving a transfer of $1.8 million from the Transportation Development
Impact Fee Fund (TDIF) to an interest earning Deposit Account titled - SRI25 DIP
Refunds, and allowing for the expenditure of the funds in a manner consistent with this
Resolution.
BOARDS/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
Fees collected for the Interim SRI25 DIF have been allocated to projects identified for the
Interim SRI25 DIF Program. Staff has identified a remaining amount of $1.8 million of
combined principal and interest (see Attachment 1). According to California Government Code
section 6600 I (e), the excess fees collected may be refunded to the then-current record owner of
the lots or units, as identified on the last equalized assessment roll on a prorated basis with any
interest accrued thereon. Though the fees may be refunded directly, the law also permits the City
to refund the monies by any reasonable means. Staff believes that in light of costs and staff time
associated with processing individual checks for the approximately 17,620 residential property
owners, as well as the approximately 66 commercial and industrial property owners, a more
efficient manner of providing a refund to all of the record owners would be through the proposed
refund program described below.
Proposed Refund Program: A refund of excess fees may only be made to the current record
property owners of parcels that paid the original fee. Such refund must be made on a prorated
basis; thus, parcels that were charged more, based on their zoning, number of units, or size,
would receive a proportionately higher amount of a refund. As the Council has discretion in how
to refund the monies, staff is recommending a refund program that has an incidental benefit of
improving the flow of traffic within the City, a purpose for which the fees were originally
collected. In the view of staff, such a benefit would increase the value of the refund to the
Property Owner and would be consistent with other City objectives and goals without reducing
the cash value of the refund to the Property Owners.
The number of residential properties, east of the 1-805 Freeway, who paid the interim SR-125
DIF (collected between January 1995 and April 2004) is set forth in the table below:
Residential Units
Apartments Condominiums Duplex or Senior Single Family Total
Townhome Housing Residential Units
2,389 2,135 441 204 12,451 17,620
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07/17/2007, ItemS-
Page 30[5
An additional 66 commercial and industrial property owners paid into the interim SR-125 DIF
program as well. Councilmembers, who are also Property Owners and who may participate in
the decision making related to the adoption of this refund program, will not receive any of the
benefits described under the refund program and will not be permitted to participate in the refund
program in any manner.
The refund program shall be implemented as described below:
. SBX would create an express trust and associated documents on behalf of all of the
Property Owners.
. The trust "res" would be toll credits for the SR -125 in the amount of $1.8 million.
. The dollar amount of toll credits placed in trust for each Property Owner would vary in
amount depending on the type of property owned and the proportion that the property
contributed to the $1.8 rnillion total. The City will be responsible for advising SBX of
the eligible Property Owners and the respective refund amounts.
. SBX would notifY the Property Owners of the existence of the refund program and the
credits in trust through direct mail and notice in a local newspaper of general circulation.
. The notice would do all of the following:
o Indicate that in order to take advantage of the refund program and obtain the
credits in trust, the Property Owner must establish a South Bay Expressway
[SBX] FasTrak account for the toll road SR-125
o Explain the manner in which a [SBX] FasTrak account can be established (The
manner in which an account can be established is set forth below).
o Explain that Property Owner has up to six months to establish a [SBX] FasTrak
account and make clear that a failure to establish such account will result in a
forfeiture of the refund. The possibility of forfeiture will be made clear by using
larger font, contrasting colors, different font type, or other techniques to make the
language clear and visible on the notice.
. In order to ensure maximum participation in the refund program, an aggressive program
will be undertaken to notifY and encourage Property Owners to take advantage of the
refund program. Multiple mailings and other forms of advertising will be used to
maximize the visibility of the refund program.
. After SBX has created the trust and sent out the initial notification by direct mail and in a
local newspaper of general circulation, the City would fund the trust with the $1.8 million
of remaining Interim SR-125 DIF fees.
. A Property Owner would then be required to open the SBX FasTrak account, which
would have an associated account number.
. Once an SBX FasTrak is opened and account number is assigned, SBX will transfer the
Property Owner's credit balance to their SBX account and the Property Owner would be
able to extinguish the credit balance through use of the SR-125 toll road.
. At the completion of the six-month enrollment period, SBX would notifY the City of
forfeited funds, if any, which SBX shall use in a manner approved by the City Manager
consistent with the goal of improving traffic circulation.
The proposed Refund Program is designed to meet the requirements of California Government
Code sections 66000 et seq., by providing refunds to the current Property Owners of excess fees
paid in a reasonable manner. Through this refund method, which credits the FasTrak accounts of
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07117/2007, Item~
Page 4 of5
the Property Owners, an added benefit to the refund is created by alleviating overcongestion on
City streets and enhancing the quality oflife of the Property Owners.
FasTrak uses Radio Frequency Identification (RFID) technology to read data from a transponder
placed in a vehicle (usually mounted by velcro strips to the inside windshield) moving at full
highway speed. The RFID transponder in each vehicle is associated with a prepaid debit account.
Each time the vehicle passes underneath a toll collection site, the account is debited to pay the
toll. When a FasTrak account runs low, the toll credit balance is automatically replenished using
the credit or debit card or by cash/check replenishment, at the customer's choice. FasTrak
customers receive significant discounts over those who choose to pay cash for their trip. The
South Bay Expressway/SR-125 fee schedule is attached (Attachment 2).
Under the refund program, all program participants would have to open a SBX FasTrack account
and all standard terms and conditions of such accounts would apply. Typically, FasTrak requires
an individual to open an account, to make an initial deposit to prepay tolls and provide a method
for replenishing the account, once the balance is depleted. With the refund program, the Property
Owners who open a FasTrak account would not have to make a initial deposit to prepay tolls, as
the refund would act as their deposit. In addition, if a Property Owner opens an account using a
credit card or automatic bank draft as the account replenishment method, no security deposit
would be required for the FasTrak transponder. If the Property Owner uses cash or check as
their replenishment method, a $35 security deposit would be required for the FasTrak
transponder. Staff undertands that SBX has begun establishing accounts. Eligible participants
that open a FasTrak account prior to the toll credit program taking effect will have their
allocation automatically applied to their FasTrak account and they will be notified accordingly.
Potential Program Benefits
The City's traffic studies for the toll facility show that the difference in volumes between the
north end of the City and the south end of the City are projected to be approximately 40,000 trips
per day. These 40,000 trips originate or terminate within the City of Chula Vista and could use
the toll road instead of the 1-5 or I-80S freeways or the local north/south arterials. When
considering the potential effect of a Refund Program that provides toll credits for eligible
properties, it is reasonable to assume that the availability of a toll credit will encourage a greater
number of users than might otherwise be utilizing this facility.
It is anticipated that traffic volume decreases related to the opening of the SR-125 will be most
significant on the local arterial approaches from eastern Chula Vista to I-80S such as Bonita
Road, East H Street, Telegraph Canyon Road, East Orange Avenue/Olympic Parkway, and Main
Street and for local trips, streets that parallel South Bay Expressway between East H Street and
Birch Road. Motorists in central (between I-80S and SR-125) and western (west ofI-805) Chula
Vista would benefit by a corresponding reduction in traffic volumes along the I-80S corridor and
to some extent on the 1-5 corridor, especially during the peak commute times.
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07/17/2007, Item~
Page 5 of 5
Local Trip Toll Free Period
Although not directly related to Refund Program, as part of an overall traffic reduction program,
for up to three months from date of the South Bay Expressway opening or until a value of
$400,000 is reached, all local travel on South Bay Expressway from East H Street to Birch Road
would be toll-free; thereby relieving overall congestion on eastern territory roads for the benefit
of all. This program will be funded separately by SBX. To the extent that SBX incurs expenses
to market the Toll Credit Program to eligible properties (program development, advertising,
direct mail, events, etc.) those expenses would be deducted from the $400,000 local trip toll-free
program funds and the available amount/time period for the program would be adjusted
accordingly. To the extent that allocated funding for local trip toll-free travel value is achieved
prior to the end of three months, the local trip free travel program would be terminated, unless
other arrangements are agreed to between the City and SBX to continue the program.
DECISION MAKER CONFLICT
As noted above, Councilmembers, who are also Property Owners and who may participate in the
decision making related to the adoption of this refund program, will not receive any of the
benefits described under the refund program and will not be permitted to participate in the refund
program III any manner.
FISCAL IMPACT
There is no impact to the City's General Fund as a result of this action. Project funds in the
amount of $1.8 million will be appropriated from the available fund balance of the TDIF fund.
These monies are comprised of fees collected for the Interim SR-125 DIF, transferred to the
available fund balance of the TDIF in June of 2005 per Resolution 2005-156.
ATTACHMENT
I. Interim SR-125 DIF Fund Summary
2. South Bay Expressway/SR-125 Toll Fee Schedule
J :\EngineerIAGENDA ICAS2007107 -17 -07ISR 125 .AGEND AST A TEMENT. TDIFRefundv4.071707 .doc
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INTERIM SR-125 DIF FUND SUMMARY
CATEGORY
REVENUES
Fee Revenues
Estimated Interest Eamings
TOTAL REVENUES
DESCRIPTION
AMOUNT
(MILLIONS)
$ 15.5
$ 4.0
$ 19.5
EXPENDITURES
Operating Expense
Project Expense
Project Expense
Other Expenses
Forgiveness of Debt
Project Expense
TDIF Project #67
TDIF Project #68
TOTAL EXPENDITURES
Program Administration & City Staff Services
Interim SR-125 Facility Phase I
SR-125 Franchise Review
Settlement Contribution
Ramp Widening - East H Street @ N 1-805
Transportation Demand Management (TDM)
SR-125 Overpass @ Rock Mountain Road
SR-125 Overpass @ Otay Valley Road
$
$
$
$
$
$
$
$
$
(1.6)
(0.6)
(0.2)
(1.4)
(3.4)
(0.2)
(4.5)
(5.8)
(17.7)
ESTIMATED REFUND AMOUNT $ 1.8
SR125 DIF Fund Analysis - Summary (2)
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A\to..c.l'lm€Jrf- I
07/09/2007
Ati--a-w m -v--n- 2-
South Bay Expressway Toll Schedule
From Otay Mesa Road 10 SR.54 S3.50 $3.75
. SPRING VALLEY
Frum Otay Mesa Road 10 Birch Ruad. Olympic
Parkway, Otay lakes I Telegraph Canyon Road $2.50 $3.75 ..
Dr East H Slrool
Any local trip botwoon Birch Road and BONITA
75C $2.50 San Miguel Rancl1 Road
East H Stroet
From Birch Road. Olympic Parkway, olay lakes I East H Street
Telegraph Canyon Rnad Of Easl H Street $2.00 $2.50
to SR-54 Olay Lakes/Telegraph Cyn.
from San Miguel Ranch Road 10 SR.54 $1.50 $2.00 Olympic Parkway
CHULA VISTA
Birch Read
Origin I Destination
from SR.54 to San Miguel Ranch Road
I From S8.54 to East H Slreet otay lakes I
I[ Tolegraph Canyon Road, Olympic Parkway Dr
Birch Road
FasTrak Cash
$1.50
$2.DD
A
Olay Mesa Road
r-
I Any local trip botwoon East H Strool and 75C $2.50
I Birch Road
I From East H Stroet Oley lakes I Telegraph $Z.5D $3.75
! Canyon Road, Olympic Parkway or Birch Road
lID olay Mosa Road
,
I Frum S8-54 10 Otay Mesa Road $3.50 $3.75
otay Mesa Border Crossing
.
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MEXICO I
I
I
,
$Z.Oo
,
$,," I
UNITEO STATES
OTAY MESA
~
South Bav expressway
Pd !iH i ) !:.ick d:I~;_"'ii
5-7
RESOLUTION NO. 2007-
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING A REFUND OF $1.8
MILLION IN THE FORM OF TOLL CREDITS,
PURSUANT TO CALIFORNIA GOVERNMENT CODE
SECTION 66001, ON A PRORATED BASIS TO THE
CURRENT RECORD OWNERS OF PROPERTY FROM
WHICH THE INTERIM SR-125 DEVELOPMENT
IMPACT FESS WERE COLLECTED
WHEREAS, the Interim SR-125 Development Impact Fee [SR-125 DIF] was
established by Ordinance No. 2579 in January 1994 to ensure that sufficient funds would
be available to construct a north-south transportation corridor should the SR-125 freeway
not be constructed in time to serve impending development; and
WHEREAS, in May 2005, the City Council adopted Ordinance No. 3029
amending the Transportation Development Impact Fee [TDIF] Program, and Resolution
No. 2005-156 transferring the fund balance of the SR-125 DIF fund to the TDIF fund;
and
WHEREAS, fees collected for the Interim SR125 DIF have been allocated to
projects identified for the Interim SR125 DIF Program and staff estimates that
approximately $1.8 million in combined principal and interest remains after accounting
for all anticipated projects; and
WHEREAS, California Government Code section 6600l(e) provides that excess
development impact fees collected shall be refunded to the then-current record owner of
the lots or units, as identified on the last equalized assessment roll on a prorated basis
with any interest accrued thereon and that the local agency may refund the unexpended
revenues by direct payment or by any other reasonable means; and
WHEREAS, if the City, consistent with California Government Code section
66001 (e), provides the refund of the excess $1.8 million to the eligible property owners in
the form of toll credits for the SR-125 toll road, the City will be able to obtain a volume
discount of up to $400,000 from SBX in additional toll credits for the 3 month period
following the opening of the SR-125, which should encourage the use of the toll road.
Additionally, by refunding the excess DIF contribution in this manner, the City will
promote its transportation management goals by relieving congestion on surface streets;
and
WHEREAS, 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 because it involves only a refund of fees paid to the Interim SR-125
5-8
Resolution No. 2007-
Page 2
DIF and does not result in any changes to the physical environment and therefore,
pursuant to Section 15060 (c)(3) of the State CEQA Guidelines the activity is not subject
to CEQA.
NOW, THEREFORE, the City Council of the City of Chula Vista hereby
approves a refund of $1.8 million in the form of toll credits for the State Route-125 Toll
Road on a prorated basis to the current record owners of property from which the Interim
SR-125 Development Impact Fees were.
Scott Tulloch
City Engineer
Presented by
H:\ENGINEER\RESOS\ResoslOO7\01-17-07\STM365 SRI25 Toll Credit Refunds Reso,doc
5-9
RESOLUTION NO. 2007-
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING A TRANSFER OF
$1.8 MILLION FROM THE TRANSPORTATION
DEVELOPMENT IMPACT FEE (TDIF) FUND TO AN
INTEREST EARNING DEPOSIT ACCOUNT TITLED -
SRI25 DIF REFUNDS, AND ALLOWING FOR THE
EXPENDITURE OF THE FUNDS IN A MANNER
CONSISTENT WITH THIS RESOLUTION
WHEREAS, the Interim SR-125 Development Impact Fee [SR-125 DIF] was
established by Ordinance No. 2579 in January 1994 to ensure that sufficient funds would
be available to construct a north-south transportation corridor should the SR-125 freeway
not be constructed in time to serve impending development; and
WHEREAS, in May 2005, the City Council adopted Ordinance No. 3029
amending the Transportation Development Impact Fee [TDIF] Program, and Resolution
No. 2005-156 transferring the fund balance of the SR-125 DIF fund to the TDIF fund;
and
WHEREAS, fees collected for the Interim SR125 DIF have been allocated to
projects identified for the Interim SR125 DIF Program and staff estimates that
approximately $1. 8 million in combined principal and interest remains after accounting
for all anticipated projects; and
WHEREAS, California Government Code section 6600l(e) provides that excess
development impact fees collected shall be refunded to the then-current record owner of
the lots or units, as identified on the last equalized assessment roll on a prorated basis
with any interest accrued thereon and that the local agency may refund the unexpended
revenues by direct payment or by any other reasonable means; and
WHEREAS, staff believes that in light of costs and staff time associated with
processing individual checks for the approximately 17,620 residential and 66 commercial
and industrial property owners, a more efficient manner of providing a refund to all of the
record owners would be in the form oftoll credits; and
WHEREAS, if the City, consistent with California Government Code section
6600l(e), provides the refund of the excess $1.8 million to the eligible property owners in
the form of toll credits for the SR-125 toll road, the City will be able to obtain a volume
discount of up to $400,000 from SBX in additional toll credits for the 3 month period
following the opening of the SR-125, which should encourage the use of the toll road.
Additionally, by refunding the excess DIF contribution in this manner, the City will be
able to promote its transportation management goals by relieving congestion on surface
streets; and
5-10
Resolution No. 2007-
Page 2
WHEREAS, the City Council has considered the method of refunding the excess
development impact fees collected and determined that it is a reasonable method of
refunding the fees pursuant to California Government Code section 66001(e) and
authorizes the City Finance Department to allocate and disburse the fees in accordance
with staffs recommendation, which requires SBX to create an Express. Trust and
associated documents on behalf of all of the affected Property Owners, requires SBX to
notify said Property Owners of the existence of the refund program, after which time the
City will fund the trust with the $1.8 million to be credited to the balances of the Property
Owner's accounts; and
WHEREAS, 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 because it involves only a refund of fees paid to the Interim SR-125
DIF and does not result in any changes to the physical environment and therefore,
pursuant to Section 15060 (c )(3) of the State CEQA Guidelines the activity is not subject
to CEQA.
NOW, THEREFORE, the City Council of the City of Chula Vista hereby
approves a transfer of $1.8 million from the Transportation Development Impact Fee to
an interest earning Deposit Account titled - SRI25 DIF Refunds, and allows for the
expenditure of funds in a manner consistent with this resolution.
Presented by
Scott Tulloch
City Engineer
H:\ENGINEER\RESOS\Resos2007\07-17-07\STM365 TDIF fund transfer 10 SRl2S TD(F Refunds Reso_doc
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