HomeMy WebLinkAboutOrd 2001-2841-C ORDINANCE NO. 2841-C
URGENCY ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF CHULA VISTA ESTABLISHING THE SAN MIGUEL
RANCH FISCAL DEFICIT FEE AS A BUILDING PERMIT-
BASED FEE TO PROVIDE PERMANENT FUNDING FOR THE
PREPARATION OF 15 ANNUAL FISCAL REVIEWS FOR THE
SAN MIGUEL RANCH PROJECT, AND FOR PAYMENT OF
ANY FISCAL DEFICITS IDENTIFIED BY THOSE ANNUAL
REVIEWS, AS REQUIRED BY ORDINANCE 2829 WHICH
ESTABLISHED THE SAN MIGUEL RANCH FISCAL DEFICIT
ACCOUNT
WHEREAS, the San Miguel Ranch Sectional Planning Area (SPA) Plan and Public
Facilities Financing Plan/Fiscal Impact Analysis (PFFP/FIA) were approved by the City Council
on October 19, 1999, by Resolution No. 19631; and
WHEREAS, the PFFP/FIA identified that the San Miguel Ranch Project would operate at
an annual net fiscal deficit to the City; and
WHEREAS, Condition No. 22 of Resolution No. 19631 required the project applicant to
establish a mechanism to mitigate that deficit to the City's satisfaction,prior to annexation of the
project site; and
WHEREAS, on February 29, 2000, the City Council approved a Master Tentative
Subdivision Map for the San Miguel Ranch project by Resolution No. 2000-068; and
WHEREAS, Condition No's. 95a & 95b of Resolution No. 2000-068 further specified
the Applicant's responsibility to establish an account to finance the preparation of annual fiscal
reviews and deficit analyses for the project, and to establish a permanent mechanism, prior to
approval of the first Final Map within the project, to pay the City for the ongoing preparation of
the annual reviews, and for any fiscal deficits identified by the annual reviews; and
WHEREAS, on April 3, 2000, the San Diego Local Agency Formation Commission
(LAFCO) adopted a Resolution (Ref. No. R099-42) approving San Miguel Ranch
Reorganization subject to conditions, one of which reads "Pursuant to conditions regarding a
forecasted annual fiscal deficit, contained in the SPA and Tentative Map, the property owner will
establish and fund a mitigating mechanism to the City's satisfaction"; and
WHEREAS, on December 19, 2000, in conjunction with actions on annexation of the San
Miguel Ranch project area, the City Council approved Ordinance 2829, establishing the San
Miguel Ranch Fiscal Deficit Account; and
WHEREAS, pursuant to Sections 3 and 5 of Ordinance 2829, the Applicant (NNP-
Trimark San Miguel, LLC) ("Applicant") shall, prior to approval of the first Final Map within
the project, establish and fund a permanent mechanism to satisfy the Applicant's responsibility
for funding preparation of the 15 annual reviews, and for payment of the project's fiscal deficits
identified by those reviews; and
Ordinance 2841-C
Page 2
WHEREAS, Exhibit 2, attached hereto is an excerpt from the approved San Miguel
Ranch PFFP/FIA and generally describes the forecasted annual fiscal deficit; and
WHEREAS, Exhibit 3, attached hereto identifies the proposed San Miguel Ranch Fiscal
Deficit Fee which will establish a permanent funding mechanism and ensure payment of said fee
to the City prior to issuance of building permits, to mitigate any fiscal deficits resulting from the
project; and
WHEREAS, the City Council has determined, based upon information presented to it in
conjunction with prior action on the Project's SPA, PFFP~FIA, Tentative Subdivision Map and
Annexation, that imposition of the San Miguel Ranch Fiscal Deficit Fee on all developments
within the San Miguel Ranch SPA Plan area for which building permits have not yet been issued
is necessary in order to protect the public safety and welfare, to ensure the effective
implementation of the San Miguel Ranch SPA Plan, and is reasonably related to the development
of the San Miguel Ranch Project; and
WHEREAS, the Project's PFFP/FIA indicates that the City's operating deficits result
from residential development, not commercial, so the proposed fees are proposed to be tied to
residential dwelling units, both single and multiple family; and
WHEREAS, the Environmental Review Coordinator has determined that the action is not
a project as defined by the California Environmental Quality Act (CEQA), and therefore is not
subject to environmental review. No further action is necessary; and
WHEREAS, the first reading of Ordinance 2841 by the City Council occurred on August
7, 2001, and the second reading of Ordinance 2841 by the City Council occurred on August 14,
2001; and
WHEREAS, Urgency Ordinance 2841-A was adopted on August 7, 2001, and shall be of
no further force and effect thirty (30) days after its adoption; and
WHEREAS, Urgency Ordinance 2841-B was adopted on August 28, 2001, and shall be
of no further force and effect thirty (30) days after its adoption; and
WHEREAS, said interim measures are effective for thirty (30) days and may be extended
twice for an additional thirty (30) day period upon subsequent action by the City Council; and
WHEREAS, state law requires said urgency ordinance to be adopted by a four-fifths
vote.
NOW, THEREFORE, the City Council of the City of Chula Vista does ordain as follows:
SECTION 1. Territory to Which Fee is Applicable
The area to which the San Miguel Ranch Fiscal Deficit Fee herein established shall be
applicable is the same as the San Miguel Ranch SPA Plan, and defined by the San Miguel Ranch
Reorganization (City Council Resolution No. 2000-482) and reflected on Exhibit 1 attached
hereto ("Affected Territory").
Ordinance 2841-C
Page 3
SECTION 2. Purpose
By Ordinance 2829, the City Council established the San Miguel Ranch Fiscal Deficit
Account. Pursuant to Sections 3 and 5 of Ordinance 2829, the purpose of this ordinance is to
establish the permanent fimding mechanism to pay the City for conducting 15 annual fiscal
reviews and analyses, and for any fiscal deficits resulting from the San Miguel Ranch project.
SECTION 3. Finding of Urgency
That the City Council of the City of Chula Vista finds that it is necessary that this
ordinance go into effect immediately to enable the collection of the San Miguel Ranch Fiscal
Deficit Fee at the time of the issuance of the building permits for each dwelling unit, so that the
San Miguel Ranch property pays its fair share of the cost of delivering City improvements and
services during the development of the project, and thereby mitigate any fiscal impact to the
City. Immediate implementation of this fee is necessary due to current and immediate threat to
public safety, which will result, should there be a shortfall in the amount of money necessary to
provide City improvements and services. The City Council finds that the prospect of a financial
shortfall and concern about increasing charges to existing City property owners constitutes a
current, immediate threat to the public health, safety and welfare justifying the immediate
imposition of this fee.
SECTION 4. Establishment of Building Permit Fee
A San Miguel Ranch Fiscal Deficit Fee ("Fee") to be expressed on a
per-residential-dwelling-unit basis, shall be paid prior to the issuance of a building permit for any
residential project with the Affected Territory.
SECTION 5. Determination of Dwelling Units
Each single family attached and detached dwelling unit shall be considered one dwelling
unit for purposes of this Fee. Each multi-family attached and detached dwelling unit shall also be
considered a dwelling unit for the purposes of this Fee. Commercial and other non-residential
uses shall not be charged this Fee.
SECTION 6. Time to Determine Amount Due; Advance Payment Prohibited
The Fee for each residential dwelling unit 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 was granted or applied for, or when the building permit plan check was conducted,
or when application was made for the building permit. The Fee shall be adjusted from time to
time as the City determines approphate.
SECTION 7. Amount of Fee
The Fee shall be calculated at the following rates:
$896.00 for each dwelling unit issued a building permit during calendar year 2001; and
Ordinance 2841-C -
Page 4
$922.00 for each dwelling unit issued a building permit during calendar year 2002; and
$950.00 for each dwelling unit issued a building permit during calendar year 2003; and
$979.00 for each dwelling unit issued a building permit during calendar year 2004; and
$1,008.00 for each dwelling unit issued a building permit during calendar year 2005.
The calculation of the initial Fee for the San Miguel Ranch Fiscal Deficit Fee is shown in
Exhibit 3.
Should issuance of building permits for residential dwelling units continue beyond
calendar year 2005, the fee shall be increased an additional 3% (percent) for each subsequent
calendar year, and the increased fee shall be applied to all residential units issued building
permits in that calendar year.
The City Council intends to review the amount of this Fee annually or from time to time.
The City Council may, at such reviews, adjust the amount of this Fee as necessary to assure
compliance with the purposes of this Fee as set forth herein, and the San Miguel Ranch SPA Plan
and PFFP/FIA.
SECTION 8. Authority for Accounting and Expenditures _
The proceeds collected from the imposition of this Fee and any interest earned thereon shall be
deposited into the San Miguel Ranch Fiscal Deficit Account established by Ordinance 2829, and
such proceeds shall be expended only for the purposes and under the authorities set forth in that
Ordinance 2829.
SECTION 9. Revision and Refund of Fees
At such time as the City Council determines that this Fee is no longer required to be
collected for the purposes set forth herein, the Fee shall be suspended.
If the Fee is suspended as provided above, the Finance Director shall provide a report to the
City Council stmunarizing the revenues and expenditures to date resulting from the Fee. If there
are surplus funds available, the City Manager shall provide a recommendation to the City
Council on the most fair and equitable disposition of any excess Fees that may have been
collected. In the absence of an alternative determination of fairness by the City Council, a
refund, which divides the remaining unused balance by the residential units for each developer or
applicant who has paid the Fee, shall be deemed a fair method.
SECTION 10. Findings
The City Council of the City of Chula Vista does hereby find that the
establishment of the Fee is necessary to protect the public safety and welfare, to ensure the
effective implementation of the San Miguel Ranch SPA Plan, and is reasonably related to
the development of the San Miguel Ranch Project, for the following reasons:
Ordinance 2841-C
Page 5
A. The San Miguel Ranch Tentative Map Resolution, Condition of Approval//95 requires
that a Fiscal Deficit program be established to correct any annual operating deficiencies
incurred by the City as a result of the development of the San Miguel Ranch Project. This
program will finance the cost of 15 annual reviews and analyses of the fiscal impact of
the Project upon the City, and payment of any fiscal deficits identified by those annual
reviews.
B. The San Miguel Ranch PFFP/FIA produces a representation of the project's fiscal
impacts upon the City for any given year to the buildout of the project.
C. It is projected that the City's operating deficits will result from residential development,
not commercial or industrial, so the proposed fees are to be tied to residential traits, both
single family and multi-family.
D. The amount of the Fee levied by this ordinance to fund the annual fiscal deficit analyses
does not exceed the estimated cost of providing this service.
E. The collection of the Fee established by this ordinance at the time of the building permit
is necessary to ensure that funds will be available for the purposes described in the San
Miguel Ranch PFFP/FIA and in Ordinance 2829.
SECTION 11. Fee Additional to Other Fees and Charges
The Fee established by this ordinance is in addition to the requirements imposed by other
City laws, policies or regulations relating to the development of San Miguel Ranch.
SECTION 12. Time Limit for Judicial Action
Any judicial action or proceeding to attack, review, set aside, void or annul this ordinance
shall be brought within the time period as established by Government Code Section 54995 after
the effective date of this ordinance.
SECTION 13. Expiration of This Ordinance
This ordinance shall be of no further force and effect 30 days after its adoption.
SECTION 14. Effective Date
This ordinance shall become effective immediately upon four-fifths vote.
Presented by Approved as to form by
Robert A. Leiter John Kaheny
Planning and Building Director City Attorney
Ordinance 2841-C
Page 6
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 18th day of September, 2001, by the following vote:
AYES: Councilmembers: Davis, Rindone, Salas, and Horton
NAYS: Councilmembers: None
ABSENT: Councilmembers: Padilla
Shirley Hort6n, Mayor
ATTEST:
Susan Bigelow, City ClerkU
STATE OF CALiFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
I, Susan Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing
Ordinance No. 2841-C was passed as an urgency measure on the 18th day of September, 2001.
Executed this 18th day of September, 2001.
Susan Bigelow, City Clerl~/
=~ / Ord #2841-C
BONITA SUNNYSIDE
ROLLIN~,
CHULA VISTA PLANNING AND BUILDING DEPARTMENT
LOCATOR PROJECT P.O~ECT DESCm.~IO.:
APPUCANT:TRI MARK PACIFIC~gAN MIGUEL EEC San Miquel Ranch
PROJECT Unincorporated Coun~ area adjacent
ADDRESS: to the no~hedy boonda~ of Chula ~sta. ~SCa~ Impact Review Ordinance
SCA[E~~ FILE NUMBER: ......... ~ o~inance ~b~ish a F~sca~ ampact Renew ~c~
~._ :NORTH No Scale SM~01F a.~ Fund ~r cbc San Nigue] Ranch Pffannea
' EXHIBIT ~ ----
Fisc'q Analysis EXHIBIT 2
handles the maimenance ofchy parks and provided p~k maintenance costs of S8.399 per
public aark acre. CIC allocated the park cos! on a per acre (340 acres ci~x'x~ ide and 1 ~ ' -
required acres for San Miguel Ranch) and recreation costs on a per housino unit basis.
.annual park maintenance costs allocated lo San Miguel Ranch are estimated at $1 (14.568
at build-out ($8.399 * 12.45). Vista Mother Miguel does not include any park uses.
However. park costs of $8_399 X .4 acres were applied because of the chv's requiremem
for 3 acres of park per ] .000 population. Therefore. annual park maintenance engineerin~
costs for Vista Mother Miguel are $3.400. Excluding the Women's Club, which is
assumed to be self-supporting, costs for recreation services total $46 per housing unit.
Using this multiplier, results in costs of $64.600 for the San Miauel Ranch (refer to Table
A-1 §) and $2,000 for Vista Mother Mi~uel (refer m Table B~I 8). The following table
details ~e cost allocation for Parks and Recreation.
98/99 Bud.oct Cost Allocation Unit/Acre
Parks 53.127684 $8.399 per park acre
Administration Parks 374_260
Administration-Open Space 334.552 Provided bv lighting & landscape district
Maintenance 2,418.870 '
General 2,147,445
Marina Park ~71 4~ -
- - , ~3 Not applicable
Recreation $2.502.606 5;46 per housing unit
AtNetics 260.720 55 per ho~ing unit
Aquatics 516.172 Sl 0 per housing unit
Senior Citizens 288.839 $5 per housing unit
General 1_062.615 $20 per housing unit
Administration-Recreation 374.260 $7 per housing unit
Net Fiscal Impact
Utilizing the previously mentioned methodoloaies, estimated net fiscal impacts are
presented in Tables 61 and 62. ' -
As prevmusly mentioned, ali values are in 1998 dollars.
No annual adjustments to revenues or costs were utilized. The estimatfid annual flows of
costs and revenues are prima-ily related to the estimated project absorption.
Table 61 presents the results of the fiscal impact associated with the San Miguel Ranch.
Fiscal revenues range from $219,500 in the first >'ear of development (2001) to
$1.137.300 at build-out (*006) '
· - . F~scal expenditures range from $219.100 in 3,ear one to
$1,262,400 at build-out. The net fiscal impact from developing the kan Miguel Ranch
is a positive $400 in year one and becomes a neaative $125,100 at project build-out It
should be noted that during some years the net fiscal impact will be more or less due to
infrequently needed street repairs.
San Miguel Ranch _
Public Facilities Finanze Plan 4.4.14 - 18
San h~igue] Ranch consists ofa ~_'pical mixed land-use plan includina sinale familx homes.
m ulti- fa:nily homes, neighborhood sl~opping center, parks and school. ~The ~omes rayne e from
$140.000 for a multi-family unit to $400.000 for a sino_.le family home on a larae lot. Tile
median ho.using price and associaled estimated household incom~ for San Migue~Ranch are
significant]>, higher than the Overall ciD,. The San Mi_~uel Ranch is expected Io aenerate
higher than average per unit property and sales taxes. (~ther revenues are expected-to be al
or above city averages. In terms of expenditures, this project is not expected to incur any
unusual or higher than average costs for city services.
]-he primary, factor responsible for this project's ne_oative fiscal impact is primarily due
to the relatively small city share of property tab:es under the existing annexation
agreement with the Count>'. Because the project is currently located in the County of San
Diego and proposed to be annexed into the'City of Chula Vista, the city's share of
properr2' tax is determined by the City/County Master Tax A~reement. which limits the
city's share to 8.6 percent. For properties located within th~ City of Chula Vista. the
average ci~ share of property tax is roughly 14_7 percent. If San Miauel Ranch utilized
a 14.7 percent share, the fiscal impact would be positive for all years-presented in Table
6I The last >'ear presented based on a 14.7 perc~nt share would be positive 598.200.
Table 62 presents the results of the fiscal impact associated with Vista Mother Miauel.
Fiscal revenues are $32,700 in >,ear 2002 and remain the same throughout the presented
development schedule, due to forecasted one-year absorption schedule. Fiscal
expenditures are 534,700 in 2002 and increase to 535.000 at build-out. The increase in
expenses is related to the infrequent street repair costs. The net fiscal impact from
developing Vista Mother Miguel is a negative 52,000 for all presented >,ears except the
. ~ar 2006 (52.300), which includes street maintenance costs. Similar to San Mi~_uel
Ranch. the median housing price and associated estimated household income for \~ista
Mother Miguel are significantly higher than the overall city. Vista Mother Miguel is
expected to generate higher than average per unit property and sales taxes. Other
revenues are expected to be at or above city averages. In terms of expenditures, this
project is not expected to incur any unusual or higher than average costs for city services.
This project is also proposed to be annexed into the ciw, which Iimits the city's shm:e of
prope~' :ax to 8.6 percent.
For bo~h the San Miguel Ranch project and the Vista Mother Miauel subdivision, the City
and the developer will negotiate and establish a fee program to offset the projected fiscal
defidts through a condition of approval of the SPA and/or tentative subdivision map.
· San .!yligu,el~anch .
4.4.14 - 19 ~.,~,~ ~-~_:, .....
Fiscal Analysis
Table 61
NET FISCAL IMPACT OF THE SAN MIGUEL RANCH
ON THE CITY OF CHULA ¥ISTA
Revenue Sources Re~'enues (In Thousands)
2001 2002 2003 2004 2005 2006
Secured ProperO_, Tax $60~4 $131.4 $196.5 $262.3 $314.7 $314.7
Unsecured Property Tax $0.0 $0.0 $0.0 $0.0 $3.3 $3.3
Propsrry Transfer Tax $5.5 512.0 $17.9 $24.0 $27.9 $27.9
gales & Use Tax $87.0 $188.5 $265.6 $352.9 $451.1 $451.1
Franchise Tax $4.7 $10.2 $14.4 $19.1 $30.8 $30.8
TOT Tax $0.7 $1.5 $2.1 $2.7 $4.0 $4.0
UtiliB, Tax $6.4 513.8 $19.5 $25.9 $41.7 $41.7
Business License $0.0 $0.0 $0.0 $0.0 $6.3 $6.3
Miscellaneous Revenues $54.8 5118.8 $t 67.4 $222.4 $257.6 $257.6
TOTAL tLEVENIJES $219.5 5476.1 $683.3 $909.3 $1,137.3 $1,137.3
Expenditure Sources Expenditures (In Thousands)
2001 2002 2003 2004 2005 2006
Government Admin. $39.8 594.1 $137.2 5185.0 $225.6 $229.3
Planning $3.8 $8.3 Sl 1.7 $15.6 $19.1 $19.1
Police $88.9 $192.6 $271.5 5360.7 $467.4 $467.2
Fire $36.2 S78.4 5110.5 $146.9 $180.1 $180.1
LibraD, $22.2 $48.0 S67.7 $89.9 5103.0 5103.0
Public Works $14.2 533.5 548.7 $65.7 $77.6 $94.5
Park and Recreation $13 9 $62~9 5108.0 $154.7 $]69.2 5169.2
TOTAL EXPENDITURES $219.1 5518.0 S755.4 SI,018.4 Sl,241.7 S1.262.4
2001 2002 2003 2004 2005 2006
TOTAL REVENUES $219.5 $476.1 $683.3 $909.3 51,137.3 $1,137.3
TOTAL EXPENDITURES $219.1 5518.0 $755.4 $1.018.4 $I.24117 '$1.262.4
NET FISCAL IMPACT $0.4 (S41.9) ($72.0) ($109.1) ($104.3) ($125.1)
San Miguel Ranch
Public Facilities Finance Plan 4.4.14 - 20
Table 62
NET FISCAL IMPACT OF VISTA MOTHER MIGUEL
ON THE CITY OF CHULA VISTA
Revenue Sources Revenues (In Thousands)
2001 2002 2003 2004 2005. 2006
Secured ProperO., Tax $0.0 $9.8 59.8 $9.8 $9.8 59.8
Unsecured Propem.' Tax $0.0 S0.0 S0.0 $0.0 50.0 S0.0
Property. Transfer Tax $0.0 50.9 $0.9 $0.9 $0.9 50.9
Sales & Use Tax $0.0 512.5 $12.5 $12.5 $12.5 $12.5
Franchise Tax $0.0 50.7 $0.7 $0.7 $0.7 $0.7
TOT Tax $0.0 $0.1 $0.1 $0.1 $0.1 $0.1
Utility Tax $0.0 $0.9 S0.9 $0.9 $0.9 $0.9
Business License $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Miscellaneous Revenues $0.0 $7~9 S7.9 $7.9 $7.9 $7.9
TOTAL REVENUES $0.0 g32.7 S32.7 5;32.7 $32.7 $32.7
Expenditure Sources Expenditures (In Thousands)
2001 2002 2003 2004 2005 2006
Government Admin. 50.0 $6.3 $6.3 56.3 $6.3 $6.4
Planning $0.0 50.6 50.6 $0.6 $0.6 $0.6
Police $0.0 512.7 512.7 $12.7 5;12.7 $12.7
Fire $0.0 $5.2 55.2 $5.2 $5.2 $5.2
' Library $0.0 $3.2 53.2 $3.2 $3.2 $3.2
Public Works $0.0 $l.4 51.4 $1.4 $1.4 $I .7
Park and Recreation $0.0 55.4 S5.4 55.4 S5.4 _5.5.4
TOIAL EXPENDITURES $0.0 534.7 $34.7 S34.7 5;34.7 535.0
2001 2002 2003 2004 2005 2006
TOTAL REVENUES $0.0 532.7 $32.7 $32.7 $32.7 $o_.7~'~
TOTAL EXPENDITURES $0.0 534.7 534.7. 534.7 $34.7 535.0
NET FISCAL IM2PAC/ $0.0 (S2.0) (52.0) (S2.0) (S2.0) (52.3)
San Miguel Ranch
4.4.14 - 21 Public Facilities Finance Plan
01/04/00 T~E ]~:59 F~ 619 637 4D~'3 C I C RESEARCH
RECEIVED _
I I I I m-
CIC RESEARCH, INC.P NNING
Economic Reseamh ~ Ma~eting Reseamh ~ Environmental Reseamh . Su~ey Reseamh
Januaw 4, 2000
Mr. Ed Batchelder
City of Chula Vista
3115 FouAh Avenue, Suite R
Chula Vista CA 91910
Re: San Migue[ Ranch Fiscal Deficit Funding Alternatives
Dear Ed:
The purpose of this leber is to present potential funding alternatives for the identified San
Miguel Ranch fiscal operating deficit. The fiscal analysis presents an estimated annual net
fiscal impact over the proposed development period (2001 to 2005) and one year beyond,
to account for some public works costs, which do not occur until a~er 5 years. The fiscal
impact was slightly positive in the first year and negative in the 2~ through the 6t~ year. At
build-out, the estimated annual fiscal impact was a negative $125,000 (current 1999
dollars). At the request of the Ci~ of Chula Vista, CIC develop~ ~o funding alternatives
~or the forecasted fiscal impact deficit.
The included table presents the' net fiscal impact for the presented development period
and an additional 25 years beyond build-out. Although very unlikely, for the purpose 'of this
analysis, CIC assumed the City of Chula Vista's public costs and revenues would adjust at
the same rate over the subject period. From 2006 to 2030 the fiscal deficit is assumed to
remain at an annual $125,000 (FY 99~00 dollars). CIC presented different time periods for
which the developer could be responsible for the fiscal deficit. Aisc presented in the table
is the estimated annual number' of housing units built and sold. This absorption period was
utilized in CIC's fiscal report.
The table presents two funding alternatives for 5 different time periods. Although the
identk~ed fiscal deficit could continue indefinitely, it is very difficult to fbrecast future
revenues and expenditures. The presented time periods range from a six year (consistent
with the fiscal analysis) period to a 30-year period. The two funding alternatives include a
one-time payment and a per-housing unit fee. The per-unit fee is to be paid at the same
.~me as the building permit, based on the presented building schedule. Both
methodologies utilize a discounted cash flow analysis (Net Present Value) of the annual
deficit_ In both alternatives a net present value was calculated tr[ilizing a 3 IJercent
01,'04/00 T1-E 14:00 F:,'( 6]~_9 037 4040 C [ C RESE~RC]I ~
Mr. Batcheider
ooo ! I I I
Page 2
discount rate, which assumes that the difference between inflation and interest rates is
3%~ per year_
The one-time payment-funding alternative ranges from $397,000 (assumes the developer
is responsible for a 6-year pedod) to $2,170,000 (assumes the developer is responsible
for a 30-year period). These one-time payments represent the net present values (NPV) of
the presented cash flows utilizing the 3% discount rate. The per-unit fee is based on the
above net present values divided by the number of units proposed and increased three
percent each year to adjust for inflation_ This fee ranges from a Iow of $293 (2001 dollars
for a 6-year period) to a high of $1,805 (2005 dollars for a 30-year period) per housing
unit, based on the presented absorption schedule.
Based on discussions with City of Chula Vista's department heads, a period to include 10
years beyond the build out represents an equitable time period for which the developer
should be responsible for the fiscal deficit. This represents a 15-year period from 2001 to
2015. Utilizing the two presented funding alternatives results in a one time fee of $1.2
million or a per- building permit fee, which ranges from $896 in 2001 to $1,008 by 2005.
Sin ce rely,
Mark Crooks
Senior Market Analyst
MCC:df
Tile 3% discount rate was calculated using a 3% inflation rate and a 6% return on funds.
~36~ ~cke~ St~t ~ San D/ego, California 7eleph~e (6~9) 637-40D0 =Fax: (6f~7)
01/04/00 Tt'E ~4:00 FLN 619 637 4040 C I C RESE&RCH EXHIBIT 3
Proposed San Miguel Development
Potential Funding Alternatives for Fiscal Operating Deficit
Alternative Alternative Per Building Permit Fee
One-time 2001 2002 2003 2004 2005
Time Period Paym, ent (2001 (2002 (2003 (2004 (2005
~or Estimat__es (FY99/O0 dollars) dollars) dollars) dollars) dollars) dollars)
6 Year
2001 to 2006 $396,623 $293 $302 $311 $320
10 Year $330
:2001 to 2010 $785,905
15 Yea-~- $581 $59[3 $616 $635 $654
:2001 to 20!5 $1,212,042
! 25 Year $896 $922 $950 $979 $1,0~08
2001 to 2025 $1,836,993 $1,357 I $1,398 $1,440 $1,483 $1,528
30 Year I
2001 to 2039 ! $2,170,239 $1,604 $],652' $1,701 $1,75~2 $1,805
1) Assumes 3% inflation and 6% interest (net discount rate of 3%)
_2) Assumes the City of Chula Vista's public costs and revenues
djust at the same rate over the subject period
3) The one-time payment fee is in FY 99/00 dollars, the per building permit 'fee is presented in
2001 to 2005 dollars.
Net Fiscal
(000s) ~3uiid-Out
Number (FY99/00 Schedule
of Years Year dollars) %,1_[, 11L~)
I ] I 2001 $0.4 I 300
i 21 2002 ($41.9)1 350
L 3 I 2003 ($72.0) 266
I 41 2004 ($109.1)i 301
I 5 t 2OO5 ($104 3)! 177
L. 6 2006 ($125.1)1 o
~ 71 2007 ($125.1)
_.. 8 2008 ($125.1)
9 2009 ($125.1)
10 2010 ($125.1)
11 2011 ($125,1)
_ 12 2012 ($125.1)
_ 13 2013 ($125.1)
14 2014 ($125.1)
-~ ($125.1) _per year
Source: CIC Research. Inc. December 1999 £.~ ~%