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HomeMy WebLinkAbout2008/12/16 Item 7 CITY COUNCIL AGENDA STATEMENT :::::,~~ CITY OF - - CHULA VISTA 12/16/08, Item =+- SUBMITTED BY: ORDINANCE OF THE CITY OF CHULA VISTA ESTABLISHING THE DEVELOPMENT PROCESSING AND IMPACT FEE PAYMENTPLANPROGRAM;~~ DIRECTOR OF ENGINEERING' , . DIRECTOR OF PLANNING . UILDINctl~ DIRECTOR OF FINANCE~ ' INTERIM CITY MANAGER "'7 f 4/STHS VOTE: YES 0 NO [g] ITEM TITLE: REVIEWED BY: SUMMARY The City of Chula Vista requires the payment of various processing, development impact, capacity, and in-lieu fees to ensure new development mitigates its impact on public facilities, The payment of these fees is a substantial commitment for many projects, and spreading the payment of the fees over an extended period may assist in tbe development of projects, Members of the development community have contacted the City and requested an extended payment schedule program be considered. The proposed Ordinance represents the City's response to this request. ENVIRONMENTAL REVIEW 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 l5060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. RECOMMENDATION Council approve the Ordinance establishing a Development Processing and Impact Fee Payment Plan Program (first reading), to take effect and be in full force 30 days after the second reading and adoption. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION The City collects processing, development impact, capacity, and in-lieu fees from developers as a condition of project approval. These funds are used to offset the City's cost of providing 7-1 12/16/08, Item~ Page 2 of 3 development review services and to finance the construction of public improvements necessary to mitigate the subject project's impact on the City's public facilities. The payment of processing and development fees is a substantial commitment for most development projects. As a result of the current downturn in development and the continued tightening of the credit market, the burden created by the payment of fees at building permit issuance has increased. Local developers and the Building Industry Association (BIA) have approached the City requesting consideration of an extended payment plan program. In response to this request, staff has surveyed other California jurisdictions and found that several fee deferral programs are being offered. These programs include deferral of fees to various project milestones, including certificate of occupancy and close of escrow. In order to help stimulate economic development and to be responsive to the needs of our customers, staff recommends the creation of an extended payment plan program for certain processing and development impact fees. The Ordinance provides a framework for individual projects to enter into payment plan agreements with the City. The program is intended as a temporary response to the current housing market slump, and as such, will expire on December 30,2010. General Program guidelines included in the Ordinance are described below. DEVELOPMENT PROCESSING AND IMPACT FEE PAYMENT PLAN PROGRAM The Development Processing and Impact Fee Payment Plan program allows the extended payment of certain processing and development impact fees. Participation in the Program requires the developer enter into an agreement with the City identifying the fees to be paid, total fee amount due, and establishing a payment schedule for the fees (including initial deposit and amount due per month and/or milestone). The fees due are as determined by the fee schedule in effect at the time the agreement is executed. If the applicant fails to comply with all provisions and requirements of the Ordinance or individual payment plan agreement, the City will adjust the development processing and impact fees due to reflect the then current fee rates. The maximum payment schedule is 12 months, with an optional 12 month extension at the discretion of the City Manager or his designee. Any additional extension of the payment schedule requires Council approval. In no event will the fee payment schedule extend beyond either: 1) the City's approval and signature on the final inspection card for residential development; or 2) the issuance of the certificate of occupancy for a non-residential development. All developers with projects currently submitted to the City for review and permlttmg are eligible for the extended payment program, including residential, commercial, and industrial projects. Those developers with current outstanding debts with the City are not eligible for the program until their City accounts are brought current, to the satisfaction ofthe Finance Director. 7-2 12/16/08, Item~ Page 3 of 3 Applicants will not be required to submit an administrative fee to cover the cost of administering the payment plan agreements. In addition, no interest will be charged on the fees included in the individual payment plans. The order in which payment plan funds are applied to the various fee programs shall be at the sole discretion of the Finance Director. The payment schedule agreement required by the Program is non-transferrable and must be recorded as a lien on the subject property, with the applicant responsible for all recording costs. Upon receipt of payment in full, the City will file a release of lien. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section 18704.2(a)(1) is not applicable to this decision. FISCAL IMPACT Approval of the Ordinance creates a framework for a payment program only, and therefore has no General fund impact. For future payment plan agreements as authorized by the Ordinance, applicants will reimburse the City for all costs incurred in the preparation, execution, and recordation of the individual project agreements, resulting in no net General fund impact. Staff costs incurred in administering individual payment plan agreements will not be recovered via a stand-alone administrative fee. lt is anticipated that these costs will not exceed staff time generally spent administering fee programs. Approval of individual project payment plan agreements will result in extended payment of processing and development fees. Delayed receipt of fees will result in decreased interest earnings and may impact project constmction phasing. ATTACHMENTS None. Prepared by: lracsema Quilantan, Assistant Director of Engineering. Engineering Department M.IEngineer'IAGENDA ICAS2008',{ 2-16-08',Fee Deferral Program Staff Report Rev.doc 7-3 ORDINANCE NO. ORDINANCE OF THE CITY OF CHULA VISTA EST ABLISHING THE DEVELOPMENT AND PROCESSING IMP ACT FEE PAYMENT PLAN PROGRAM WHEREAS, the City of Chula Vista (City) requires the payment of various types of development impact fees to help address the impacts of new development; and WHEREAS, on August 7, 1990, pursuant to Ordinance No. 2384, the City Council established the Telegraph Canyon Drainage Fee; and WHEREAS, Ordinance No. 2384 requires that the Telegraph Canyon Drainage Fee be paid before the approval by the City of the development project, or if not paid at the time of approval of the final map or parcel map, the fee must be paid before the issuance of the first building permlt for the development; and WHEREAS, on December 9, 1997, pursuant to Ordinance No. 2716, the City Council establish the Poggi Canyon Sewer Basin Development Impact Fee; and WHEREAS, Ordinance No. 2716 requires that the Poggi Canyon Sewer Basin Development Impact Fee be paid in cash upon the issuance of a building permit; and WHEREAS, on January 5, 1999, pursuant to Ordinance No. 2767, the City Council established the Otay Ranch Village I and 5 Pedestrian Bridge Development Impact Fee; and WHEREAS, Ordinance No. 2767 requires that the Otay Ranch Village I and 5 Pedestrian Bridge Development Impact Fee be paid prior to the issuance of building permits for residential development projects; and WHEREAS, on February 18, 2003, pursuant to Ordinance No. 2898, the City Council established the Pedestrian Bridge Development Impact Fee Program for Otay Ranch Village II; and WHEREAS, Ordinance No. 2898 requires that the Pedestrian Bridge Development Impact Fee for Otay Ranch Village II be paid in cash upon the issuance of a residential building pel111it; and WHEREAS, Chapter 332 of the Chula Vista Municipal Code establishes the Residential Construction Tax; and WHEREAS, the Residential Construction Tax requires that the tax be paid upon the application for a building permit; and 7-4 Ordinance No. Page :2 WHEREAS, Chapter 3.50 of the Chula Vista Municipal Code establishes the Development Impact Fees to Pay for Various Public Facilities (PFDIF); and WHEREAS, the PFDIF requires that the fee be paid upon the issuance of a building pennit; and WHEREAS, Chapter 3.54 of the Chula Vista Municipal Code establishes the Transportation Development Impact Fee for the Eastern Territories of the City (TDIF) and Chapter 3.55 of the Municipal Code establishes the Western Transportation Development Impact Fee (WTDIF); and WHEREAS, both the TDIF and the WTDIF require that the fee be paid upon the issuance of a building pennit; and WHEREAS, Section 13.14.090 of the Chula Vista Municipal Code establishes the Sewage Capacity Charge; and WHEREAS, the City recognizes that the payment of fees represents a substantial financial commitment for many projects; and WHEREAS, the City recognizes that establishing a payment plan for certain fees may assist in the development of projects; and WHEREAS, this Ordinance establishes a payment plan for certain development processing and impact fees for a specified period of time. NOW THEREFORE, the City Council of the City ofChula Vista does ordain as follows: Section 1. Environmental Review 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. Section 2. Purpose The City Council of the City of Chula Vista desires to encourage the constmction of residential and nonresidential development projects within the City. The City Council finds that the early payment of certain impact fees for new development creates such a barrier to such development and desires, by the adoption of this Chapter, to ease such barrier by establishing a payment plan for certain development impact fees. 2 7-5 Ordinance No. Page 3 Section 3. Definitions "Applicant" means the owner of the real property or the developer with an approved development project who seeks a development impact fee payment plan pursuant to this Ordinance. "Approved Residential Development Project" means a market rate residential development consisting of single-family or multifamily residential units sold or rented at prevailing market rates and free of any afford ability restrictions which has received final discretionary action by the City and which is in compliance with all environmental requirements due prior to issuance of a building penllit. "Approved Development Project " means a nonresidential development which has received final discretionary action by the City and which is in compliance with all environmental requirements due prior to issuance of a building permit. Section 4. Development Impact Fees Subject to the Payment Plan Program Notwithstanding the provisions of Chapters 3.32, 3.54 and 3.55 of the Chula Vista Municipal Code and the Ordinances listed below, the provisions of this Ordinance shall apply only to the following development impact fees: (a) the Sewer Capacity Fee codified lD Section 13.14.090 of the Chula Vista Municipal Code; (b) the Residential Construction Tax codified in Chapter 3.32 of the Chula Vista Municipal Code; (c) the Development Impact Fees to Pay for Various Public Facilities codified in Chapter 3.50 of the Chula Vista Municipal Code; (d) the Eastem Area Transportation Development Impact Fee codified in Chapter 3.54 of the Chula Vista Municipal Code; (e) the Westem Transportation Development Impact Fee codified in Chapter 3.55 of the Chula Vista Municipal Code; (I) the Telegraph Canyon Drainage Fee established on August 7, 1990 pursuant to Ordinance No. 2384; (g) the Poggi Canyon Sewer Basin Development Impact Fee established on December 9, 1997, pursuant to Ordinance No. 2716; (h) the Otay Ranch Village 1 and 5 Pedestrian Bridge Development Impact Fee established on January 5, 1999, pursuant to Ordinance No. 2767; and 3 7-6 Ordinance No. Page 4 (i) and the Pedestrian Bridge Development Impact Fee Program for Otay Ranch Village 11 established on Febmary 18,2003, pursuant to Ordinance No. 2898. Section 5. Establishment of the Development Impact Fee Payment Plan Program (a) The Development Impact Fee Payment Plan Program is established for those development impact fees listed in Section 4. (b) The Development Impact Fee Payment Plan Program shall apply only to Approved Residential Development Projects and Approved Development Projects as defined in this Ordinance. (c) An Applicant may file an application with the City to request a payment plan for any or all of those development impact fees listed in Section 4. (d) The Applicant shall deposit with the City an amount to be determined by the City Manager for an Approved Residential Development Project or an Approved Development Project at the time the building permits are issued. No building permit shall be issued for an Approved Residential Development Project or an Approved Development Project subject to this Ordinance unless the Applicant has paid this deposit. (e) The Applicant, and the owner of the property, if different, shall be required to enter into an agreement with the City, in a form approved by the City Attorney, agreeing to the payment plan. (I) The maximum period for any payment plan pursuant to this Chapter is twelve (12) months from the date of issuance of building permits. This period may be extended once for twelve (12) months at the discretion of the City Manager. Any additional extensions shall be at the discretion of the City Council. (g) All fees subject to the Development Impact Fee Payment Plan Program shall be paid in full the earlier of: (1) the City's approval and signature on the final inspection card by the Director of Planning and Building, or designee, for an Approved Residential Development Project; or (2) the issuance ofthe certificate of occupancy for an Approved Development Project; or (3) the end of the maximum period described in subsection (I) ofthis Section 5. Section 6. Agreement Shall Constitute a Lien The Applicant and the owner of the property, if different, shall execute a Development Impact Fee Payment Plan Program Agreement with the City. The Agreement shall be recorded by the City and shall constitute a lien against the property for the payment of the fees. The City Manager shall execute the Agreement on behalf of the City. Once the obligation is paid in full, the City shall record a Release of the Lien. 4 7-7 Ordinance No. Page 5 Section 7. Determination of the Amount of Development Impact Fees The amount of development impact fees owed by the Applicant shall be determined by the City pursuant to the provisions outlined in the Municipal Code or in the ordinances establishing the fees. These amounts shall be fixed as of the date of the execution of the Development Impact Fee Payment Plan Agreement by the City. The amounts of these fees shall not change as long as the Applicant is in full compliance with all provisions and requirements of this Ordinance and the Development Impact Fee Payment Plan Program Agreement. If, however, the Applicant fails to comply with all the provisions and requirements of this Ordinance or the Agreement, the City may adj ust the development impact fees to reflect the current rates for the fees. Section 8. Not Transferable The City's approval of a Development Impact Fee Payment Plan is not transferable to any other project. even if the Applicant is the same and the other project would qualify for the Development Impact Fee Payment Plan Program. Section 9. Recordation Costs The Applicant shall pay all costs of recordation of documents required pursuant to this Ordinance and the Development Impact Fee Payment Plan Program Agreement at the execution ofthe Development Impact Fee Payment Plan Program Agreement by the City. Section 10. Expiration of this Ordinance This Ordinance shall take effect thirty days after final passage and shall expIre on December 31, 20 I 0, and as of that date, is repealed. Presented by Approved as to form by ~.-!~IL ~~~ Bart C. Miesfeld C City Attorney Richard A. Hopkins Director of Engineering 5 7-8