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HomeMy WebLinkAbout2010/08/17 Item 9 CITY COUNCIL AGENDA STATEMENT ;s\lft- CITY OF ~ (HUlA VISTA August 17, 2010 Item q ITEM TITLE: ORDINANCE OF THE CITY OF CHULA VISTA MODIFYING THE FEE DEFERRAL PROGRAM ASSIST ANT CITY MANAGJiIi;;JRECTOR OF DEVELOPMENT SERVICES CITY MANAGER.~ 4/5THS VOTE: YES D NO l8J SUBMITTED BY: REVIEWED BY: SUMMARY On December 16, 2008, City Council approved the creation of a payment plan program for development fees due to the current economic downtum. This deferral program was enhanced on April 21, 2009 where City Council also approved the defen'al of Park fees. The current deferral program requires applicants to enter into an agreement with the City for the deferral of fees. The Building Industry Association (BIA) has approached City staff with two specific concerns: 1. the time, and, 2. the costs associated with processing these deferral agreements, The proposed ordinance answers these two concerns by delaying the trigger for the bulk of development fees from building permit issuance to final inspection. The proposed ordinance also extends the deferral program for an additional year, to December 31, 2011, at which time fees will revert back to their traditional triggers: building permit issuance or final map approval. ENVIRONMENTAL REVIEW The Environmental Rcview 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 the proposal consists of a fiscal action that will not result in a potentially significant physical impact on the environment. Therefore, pursuant to Section 15060(c)(3) of the Slale CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDA nON Council approve the Ordinance to take effect and be in full force 30 days after the second reading and adoption. DISCUSSION Since 2008 the City has given applicants the option to defer the bulk of development fees by entering into an agreement with the City. This agreement is recorded against the property as a lien 9-1 I , 1 __~~__.~ ..~.."lI7: 8/17 /08, Item~ Page 2 of 3 and released by the City once the fees have been paid. There is a certain amount of time and cost associated with this process and the BIA has requested that deferral program be amended such that the fees are not due and payahle until each building permit's final inspection, thereby obviating the need for an agreement to defer such fees. Given that the purpose of deferring fees is to stimulate economic development within the City of Chula Vista, staff supports any' administrative change that can make the program more efficient as long as the City is protected against a possible non- payment. The proposed ordinance under consideration tonight has these protections. The Deferred Fees The fees to be deferred under this ordinance are as outlined in Table 1 below: Table 1 Fees to be collected prior to final inspection of a building permit Fee Description Authority Fee Amount" for a typical single Family detached dwelling Sewer Capacity Fee 13.14.090 Municipal Code $3,478.00 Public Facility Development 3.50 Municipal Code $8,735.00 Impact Fee (DIF) Eastern Transportation 3.54 Municipal Code $11,317.00 Development impact Fee Western Transportation 3.55 Municipal Code $3,243.00 Development impact Fee Telegraph Canyon Drainage Ordinance 2384 $216.50 Fee established Poggi Canyon Sewer Ordinance 2716 $265.00 Development Impact Fee Salt Creek Sewer Development Ordinance 2974 $1,330.00 Impact Fee Otay Ranch Village 1 and 5 Ordinance 2767 $1,114.00 Pedestrian Bridge DIP Otay Ranch Village 11 Ordinance 2898 $2,126.00 Pedestrian Bridge DIP Park Acquisition and 17.10 Mlmici pal Code $17,256.00 (East) $9,574 (West) Development Fees " It is important to note that not all projects pay all fees. For example, building permits east of 1-805 are obligated to pay the Eastem Transportation Development Impact Fee and building permits issued west of 1- 805 are obligated 'to pay the Western Transportation Development Fee. There are also specific sewer basiu fees depending on which basin the development occurs in. City Protections Against Non-Payment The major change associated with this ordinance is that an agreement will no longer be recorded against each property. This agreement has been the primary protection against nonpayment of fees as the agreement is a lien on the property through which the City could collect payment. The proposed protections contained in this ordinance are that the City will not allow occupancy or even the final building inspection until such time as the fees are paid. In addition all fees become payable when the ownership changes during construction, requiring the new builder to either pay 9-2 , ~._--.... _..",~ 8/17/08, Item ~ Page 3 of 3 the fees or to pull a new permit if a deferral is requested. Finally, if the program is not proceeding as planned, the City Manager is authorized to collect fees earlier upon the determination by the Finance Director that either the fees are necessary or there is a risk associated with collection of the fees at a later date. Date of Termination of this Ordinance The deferral program has been proposed in light of the current period of economic downturn in order to stimulate development. As such, the deferral program is temporary in nature. The applicability of this ordinance will be limited to the anticipated period of the current market slump and will expire on December 31, 20 II. 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 fOlmd in California Code of Regulations section I 8704.2(a)(l) is not applicable. FISCAL IMP ACT Current FY Impact Approval of this ordinance has no General Fund Impact. Staff time associated with assessing fees will be picked up on the back end of the permit rather than permit issuance. The net effect due to time value of money issues (the City receives funds later than traditional) should be off-set by the fact the fees will be priced at the time of payment, not the time ofbuildirig permit issuance. Ongoing Fiscal Impact The effect of this ordinance in the medium to long term should be negligible given that the program expires at the end of 20 II. To the extent that new development would not have occurred but for this program the effect may even be positive from a property tax perspective. Prepared by: Tom Adler. Development Services Department 9-3 ORDINANCE NO. ORDINANCE OF THE CITY OF CHULA VISTA MODIFYING THE FEE DEFERRAL PROGRAM WHEREAS, the City of Chula Vista (City) requires the payment of various types offees to help off-set the impacts of new development; and WHEREAS, Chapter 5 of the California Government Code starting with S66000 and titled the "Mitigation Fee Act" ("the Act") establishes processes and conditions for the charging and payment of impact fees for development project; and WHEREAS, S66007(a) and (b) provides that fees on residential development shall not be required to be paid prior to the date of final inspection or certificate of occupancy; however, if the local agency determines that fees or charges for public improvements or facilities that are part of a plan are needed prior to such dates, they may be required at an earlier time; and WHEREAS, the City has adopted several fees and charges for public improvements and facilities as part of a plan, including: I. Telegraph Canyon Drainage Fee, adopted on August 7, 1990, pursuant to Ordinancc No. 2384 2. Poggi Canyon Sewer Basin Development Impact Fee, adopted on December 9, 1997, pursuant to Ordinance No. 2716 3. Salt Creek Sewer Basin Development Impact Fee, adopted on August 24, 2004, pursuant to Ordinance No. 2974 4. Otay Ranch Village 1 and 5 Pedestrian Bridge Development Impact Fee, adopted on January 5, 1999, pursuant to Ordinance No. 2767 5. Pedestrian Bridge Development Impact Fee Program for Otay Ranch Village II, adopted on February 18,2003, pursuant to Ordinance No. 2898 6. "PFDIF" to pay for various public facilities, pursuant to Chapter 3.50 of the Chula Vista Municipal Code 7. Transportation Development Impact Fee for the Eastern Territories of the City (TDIF), pursuant to Chapter 3.54 of the Chula Vista Municipal Code 8. Western Transportation Development Impact Fee (WTDIF), pursuant to Chapter 3.55 of the Chula Vista Municipal Code 9. Parklands and Public Facilities Fees (Pad Fees) to pay for park related lands acquisition and the development of park facilities, pursuant to Chapter 17.10 of the Chula Vista Municipal Code 10. Sewage Capacity Charge, pursuant to Section 13.14.090 of the Chula Vista Municipal Code WHEREAS, the City requires the preceding fees to be paid prior to or upon issuance of building permits; and 9-4 Ordinance No. Page 2 WHEREAS, the City recognizes that the payment of fees represents a substantial tinancial commitment for many projects; and WHEREAS, the City recognizes that delaying certain fees may assist in the development of projects; and WHEREAS, City Council has adopted Ordinance 3120 to establish a payment plan program to help lower the financial commitment for projects within the City until December 31, 2010; and WHEREAS, City Council has adopted Ordinance 3126 to provide for the deferral of Park Acquisition and Development Fees; and WHEREAS, the building community has requested that the deferral program be modified such that the above refcrenced fees would be payable prior to final inspection of each building permit; and WHEREAS, the City agrees that, provided it determines such fees are not needed prior to or upon issuance of building permits and that deferral shall not impact related Capital Improvement Programs or the provision of facilities, during the period of economic downturn, it would be appropriate to collect fees prior to final inspection or certificate of occupancy; and WHEREAS, the City would like to adopt an ordinance with a sunset period allowing for the payment of such fees prior to final inspection or certificate of occupancy upon request of the applicant and a determination by the City that such fees are not needed at an earlier time. NOW THEREFORE, the City Council of the City of Chula Vista does ordain that Ordinances 3120 and 3126 shall be repealed and replaced 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 construction of residential and nomesidential development projects within the City. The City Council finds that the early payment of certain impact fees for new development is not always essential to the orderly and efficient development and in the current economic downturn, creates a barrier to such development. The City, therefore desires, by the adoption of this Ordinance, to ease such barrier by delaying the trigger for the payment of some fees for a certain period of time, provided the City determines that such fees will have no impact on the City's improvement programs and provision of public facilities. 9-5 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 to defer a development impact fee until final inspection or certificate of occupancy. "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 affordability 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 permit. "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. Application of this Ordinance This Ordinance shall apply only to Approved Residential Development Projects and Approved Development Projects as defined in this Ordinance. Section 5. Fees Subject to the Payment Plan Program Notwithstanding the provisions of Chapters 3.54, 3.55 and 17.10 of the Chula Vista Municipal Code and the Ordinances listed below to the contrary, the provisions of this Ordinance shall apply only to the following fees: (A) the Sewer Capacity Fee codified in Section 13.14.090 of the Chula Vista Municipal Code; (B) the Development Impact Fees to Pay for Various Public Facilities codified in Chapter 3.50 of the Chula Vista Municipal Code; , (Cl the Eastern Area Transportation Development Impact Fee codificd in Chapter 3.54 of the Chula Vista Municipal Code; (D) the Western Transportation Development Impact Fee codified in Chapter 3.55 of the Chula Vista Municipal Code; (E) the Telegraph Canyon Drainage Fee established on August 7, 1990 pursuant to Ordinance No. 2384; (F) the Poggi Canyon Sewer Basin Development Impact Fee established on December 9,1997, pursuant to Ordinance No. 2716; (G) The Salt Creek Sewer Basin Development Impact Fee established on August 24, 2004 pursuant to Ordinance No.2974; (H) the Otay Ranch Village I and 5 Pedestrian Bridge Development Impact Fee established on January 5,1999, pursuant to Ordinance No. 2767; and 9-6 Ordinance No. Page 4 (I) the Pedestrian Bridge Development Impact Fee Program for Otay Ranch Village 11 established on February 18,2003, pursuant to Ordinance No. 2898. (J) the Parklands and Public Facilities fees of Title 17.10 of the Chula Vista Municipal Code Section 6. Time of Payment of Fee (A) All fees subject to this Ordinance shall be paid prior to Final Inspection or Certificate of Occupancy. (B) Nothwithstanding Section 6(A), above, the City Manager, in hislher sole discretion, may require payment of the fees at an earlier date upon the occurrence of any of the following events: 1. the change of ownership of the Approved Residential Development Project, Approved Development Project, or any portion or portions thereof. 2. upon the City's Finance Director determination that the fecs are necessary based on the adopted facilities programs in accordance with section 66007 (b) I of the Government Code. 3. upon a determination by the City' Finance Director, that there exists a risk associated with the collection of fees at a date later than permit issuance. Section 7. Amount of Fees Due and Payable (A) The amount of development impact fees due and payable by the Applicant shall be the amount of the fee at the time of payment, not the time of building permit issuance. (B) In the event that the City, for any reason, fails to collect any or all fees prior to Final Inspection or Certificate of Occupancy, such fee shall remain the obligation of the applicant, be subject to interest at the rate of 2% per annum from the date on which Final Inspection or Certificate of Occupancy was issued, and be adjusted and increased by any amount incurred by the City related to the collection of such fees. Section 8. Expiration of this Ordinance This Ordinance shall take effect thirty days after final passage and shall automatically expire on December 31, 2011, and as of that date, is deemed repealed. Notwithstanding the foregoing, any building permit issued prior to the expiration of this Ordinance shall not be required to pay fees until Final Inspection or Certificate of Occupancy, provided none of the events identified in Section 6(B) have occurred. Presented by Approved as to form by Gary Halbert, AICP, PE Assistant City Manager/Director of Development Services lid's ~l3art C. Miesfeld MDu..\J I J City/Agency Attorney \-..iilLot. 9-7