HomeMy WebLinkAbout07/20/1993, C-6 - HOUSING AUTHORITY REQUEST FOR RELIEF FROM WATER AND SEWER HOOK UP FEES I��N�I��IIIYlllllllll�ll`II`I���U��I I Cit / MEETING GATE:
son �Uis oBispo
ITEM NUMBER:
COUNCIL AGENDA REPORT C'
FROM: Ken Hampian, Assistant City Administrative Officer pi�q�
Prepared By: Deb Hossli, Administrative Analyst
SUBJECT: Housing Authority Request for Relief From Water and Sewer Hook up Fees
CAO RECOMMENDATION: Adopt a resolution waiving water and sewer hook up fees for
the Housing Authority in the amount of $53,000.
DISCUSSION:
Background
In mid-1991, the City executed a fifty-five year lease with the Housing Authority to
construct and operate a low income housing project (for seniors and the disabled) on
city-owned property located at 1090 Orcutt Road in San Luis Obispo. As set out in the
lease, the Housing Authority agreed to construct a minimum of eighteen low income rental
units on the site. The City, in turn, agreed to provide the property for $1 per year.
Since City Council approval of the lease agreement, the Housing Authority has secured
the necessary planning approvals (there will actually be 24 units) and financing for the
project. The Housing Authority is now in the final stages of obtaining a building permit
for the project and intends to begin construction in the very near future.
Housing Authority Request
Due to several project delays beyond the control of the Housing Authority, the costs of
the low income housing project have increased by approximately $50,000 over the $1.2
million budget available. The project budget was further impacted when the Housing
Authority learned that the City's water and sewer hook up fees would total approximately
$94,000; $53,000 over what has been budgeted for the project. Because of the negative
impact these additional costs will have on the project, the Housing Authority is requesting
relief for all fees above the$41,000 budgeted (which equates to a$53,000 waiver of fees).
The Housing Authority's letter requesting the relief from the fees is attached (See
Attachment "A"). The Housing Authority is basing this request on the recent "conceptual
approval' of the draft Housing Element which proposes to exempt affordable housing
projects sponsored by organizations like the Housing Authority from payment of
development, construction and sewer and water hook up fees (See Attachment "B"). It
is important to note that the Housing Authority will also be exempted from paying building
permit fees of$12,400 based on an already adopted City Council policy (See Attachment
il�H��i►►�IIIIIgIIp ���`I City of San tins OBISPO
COUNCIL AGENDA REPORT
Recommendation
Staff has reviewed this request with the Housing Authority and concurs that the City
should waive the $53,000 in project fees. Without the fee relief, the Housing Authority will
be forced to eliminate important components of the project (e.g., elimination of one of the
elevators to serve seniors and the disabled, elimination of the community room, etc.). In
addition, based on the contents of the draft Housing Element currently under review by
the State, the City Council is clearly committed to encouraging and fostering low income
housing projects of this nature. Partial relief of.the fees, while somewhat premature (as
the policy has not been formally adopted), would be consistent with the general intent of
this policy.
CONCURRENCES:
The Housing Authority concurs with the staff recommendation.
ALTERNATIVES:
■ Do not provide any fee relief to the Housing Authority.
Given the City's current financial position, it would not be unreasonable for the City to
choose this approach. This alternative is not recommended, however, in light of the
policies in the draft Housing Element and the impacts to the project as discussed above.
■ Provide full relief of fees to the Housing Authority (for a total of $94,000).
The City could also choose to provide full fee relief to the Housing Authority. This
alternative, however, is not recommended. The Housing Authority has only requested
partial waiver of the fees relief and has acknowledged that this arrangement will still allow
them to construct a quality housing project. Given the City's current financial position and
the fact that the Housing Element has not been formally adopted, it would be
unnecessary and premature to provide full fee relief to the Housing Authority.
FISCAL IMPACT:
Approval of the staff recommendation will not result in any additional costs to the City.
It will, however, represent a loss of $53,000 in expected revenue.
ATTACHMENT:
Resolution
"A" - Letter from Housing Authority
"B" - Excerpt from Housing Element
"C" - Resolution exempting Housing Authority from development review fees
RESOLUTION NO. (1993 Series)
RESOLUTION PROVIDING WATER AND SEWER
HOOK UP FEE WAIVERS IN THE AMOUNT OF $53,000
TO THE SAN LUIS OBISPO HOUSING AUTHORITY
FOR THEIR. PROJECT LOCATED AT 1090 ORCUTT ROAD
WHEREAS, the Housing Authority (via the San Luis Obispo Non-Profit Housing
Corporation) is developing a low income housing project at 1090 Orcutt Road in the City
of San Luis Obispo for seniors and the disabled;
WHEREAS,the Housing Authority is in the final stages of securing a building permit
for the project and, as such, has been advised by the City that the water and sewer hook
up fees will total approximately $94,000;
WHEREAS, the Housing Authority has only budgeted $41,000 for these types of
fees;
WHEREAS, the Housing Authority has requested the City to waive the fees above
the $41,000 (which equates to $53,000) as the project will be significantly compromised
if the additional fees are not waived;
WHEREAS, the City's draft Housing Element (which the City Council has
conceptually approved) contains a provision to exempt certain low income housing
projects from payment of development review, construction permit, sewer and water hook
up fees;
WHEREAS, waiving the $53,000 in fees would meet with the general intent of this
policy.
_ WHEREAS, waiving the $53,000 in fees will serve an important municipal purpose
-in furthering the provision of low-income housing.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis
Obispo that water and sewer hook up fees for the Housing Authority's low income project
located at 1090 Orcu t Road will be waived in the amount of $53,000 and, as such, the
Housing Authority will only pay the City $41,000 for water and sewer hook up fees.
c-�3
On motion of seconded by and
on the following roll call vote:
AYES:
NOES:
-ABSENT:
the foregoing resolution was passed and adopted this day of 1993.
Mayor Peg Pinard
ATTEST:
City Clerk, Diane Gladwell
APPROVED AS TO FORM:
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aur►fo4?Y ATTACHMENT
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OF THE Cl'I'Y OF SAN LUIS OBISPO -
487 Le$Street P.O.Bog;638 SanLms'Olnspo,CA93406 Phone :(805)543 4478 Faic(805)543 4992
Executive Director-Secretary Jima 16 1993
George J. Moylan
Mr. John Dunn
Chief AriminiaFratl{7B Officer
City of San r„i s Qn spo
P.O. Box 8100
San Luis aAspo, CA 93406-8100
Dear John:
Oar ncnm- f t affiliate is about to begin constLvction of the 24 units of
senior citizen and handicapped housing to be built on the Orc utt Road-Laurel
Iane property leased from the City.
We are r"ptiati V a construction contract with J.W. Design and Ca mtructien,
Inc., who submitted the lowest of three bids received from a pre-qualified 1;sr
of five potential bidders. We are also in the last phases of securing a buildimg
permit from the City.
Develcpwat Department,, of pl" �/��{..� 'f,' ationayng.�mmk�i� Wit of }h}Etthe�pF,is�h+ and Gtion �ameyye State
Tax CreditlAMat,�,n Camittee, have all taken longer than eapected. But we are
at the end of that process and progress will soon be visible to all.
However, the variaus delays have added casts to the development. Thus the $1.2
milli en we projected for mnfatn3CtiM, will have increased by aanwd ately
$50,000 when our negotiati,oa:s are oaipleted with the general. contractor. We
originally budgeted $41,000 in local fees which doesn't come anywhere near what
today's actual costs will be.
Recent housing element discussions scussi ons both at the Planning Cammi ssi on and City
Caa,cil level as reflected in the June 1993 draft of the proposed Musing
element (Page 7, Policy 1.22.16) would emmpt the Housing Authority and any
not-for-profit entity from develcpwnt review, m struct m permit, and sewer
and water hookup fees. There is a requirement that the devlcip,nq entity
guarantee permanent aff bJ- ty for low and moderate incamp households, which
of course our naa-profit affiliate has dome.
I realize that this policy is &Myteal at this time, and while it is in the
element submitted to the State Department Of Ha]siibV and Community ty Development
it is subject to public baring review as well as final review by the Planning
Cmmission and City Council. I also realize that this development was prcposed
well before consideration of this concession.
However, I would ask you and the City Council for any consideration you might
give us an this matter. If not a complete eaoeaptien from the fees menti coed
above at least then a "hold harmless" iruN mon which .would limit our
cnsihi1ity to the initially budgeted $41,000.
Si moral yr
George� J. Moylan EGWLNOIISNG
live Direct= oEmorvasEn
lip
7M MENT "B"
MY of San lU1S OBISpO
HOUSINGR.
ELEMENT :,"'ll
June -1993
COUNCIL
- HEARING
DRAFT . � .
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INotes:
'Developer may choose to develop affordable housing in the required amounts, or to pay
an in-lieu housing fee based on the above formula.
'-Affordable Dwelling Units must meet City affordability criteria listed in Goal 1.22.
s"Building Value" shall mean the total value of all construction work for which a permit
would be issued, as determined by the Chief Building Official using the Uniform
Building Code.
1.22.12 The City will establish a housing trust fund to be used to develop affordable housing
units and acquire land for affordable housing projects. To qualify for such public
assistance, housing must include guarantees that it will remain affordable as long as
legally permissible. Affordable housing in-lieu fees will be placed in this fund.
1.22.13 The City will periodically review its building and planning regulations to see if there
are changes that could assist the production of affordable housing while not
conflicting with other General Plan policies. Such periodic review will aim to
remove regulations that are no longer needed.
1.22.14 The City will adopt procedures to speed the processing of applications and
construction permits for affordable housing projects that do not involve significant
planning issues or entitlements such as rezoning. City staff and commissions should
be directed to give such projects priority in allocating work assignments, scheduling,
conferences and hearings, and in preparing and issuing reports.
1.22.15 The City will review its building and planning regulations to find ways to allow
construction by owner-builders of personalized, unconventional housing types that
reduce cost and/or energy and materials consumption, provided that residential
quality and safety can be maintained.
1.22.16 /The City will amend its regulations to exempt certain affordable housing projects
from payment of development review, construction permit, sewer and water hookup
fees. Affordable housing units which are to be administered through the City's
Housing Authority, not-for-profit housing organizations, the County of San Luis
Obispo or other government agencies, and which guarantee permanent affordability
for low-and moderate income households, should be eligible to seek exemption from
such fees.
1.22.17 The City will revise its condominium conversion regulations to discourage or prevent
the conversion of affordable rental units to condominiums unless permanent
affordability guarantees are incorporated into the conversion, such as deed
restrictions.
7
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RESOLUTION NO. (195- ,,cries)
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF S, LUIS OBISPO
ADOPTING DEVELOPMENT REVIEW FEES FOR PLANNING,
BUILDING & SAFETY, AND ENGINEERING SERVICES
WHEREAS, the City of San Luis Obispo's Municipal Code authorizes the
establishment of various fees for delivery of municipal services; and
WHEREAS, the cost of providing planning, building & safety, and engineering
services have been comprehensively reviewed by Vertex Cost Systems in 1988; and
WHEREAS, the proposed fees for development review services are consistent with
the User Fee Cost Recovery Policy adopted by the City Council in the 1991-93 Financial
Plan; and
%VHEREAS, the Director of Community Development has determined that the
adoption of the proposed development review fees is exempt from the provisions of the
California Environmental Quality Act (CEQA) under Section 15273 of the State CEQA
Guidelines as the purpose of these charges is to meet operating expenses; and
WHEREAS, the City Council held a noticed public hearing concerning these fee
adjustments on September 17, 1991.
NOW, THEREFORE, BE IT RESOLVED, that:
SECTION 1. The City Council of the City of San Luis Obispo hereby establisht-
development review fee schedules for Planning,Building& Safety, and Engineering services,
as provided in Exhibits A, B, and C attached hereto to be effective November 16, 1991.
SECTION 2. Any project owned or actively managed by the San Luis Obispo
Housing Authority shall be exempt from all development review fees.
SECTION 3. Consistent with current cost recovery policies, all development review
fees shall be reviewed and updated-on an ongoing basis. Accordingly, any flat fees in
Exhibits A, B, and C should be adjusted annually on November 1st of each year by changes
in the Consumer Price Index [all Urban Consumers (CPI-U) for the Los Angeles - Long
Beach - Anaheim area] for the most recent period that this information is available prior
to November 1st; and a comprehensive analysis of development review fees similar to that
prepared by Vertex Cost Systems in 1988 should be made at least every five years.
SECTION 4. To ensure cost recovery for services not specifically referenced in
Exhibits A, B, and C for supplemental or additional services as may be required, charges
Attachment 'T'
shall be based on actual labor, material, equipment, and indirect costs. In determining¢
labor costs, hourly billing rates shall be established by the Director of Finance which
appropriately reflect salary, benefit, and overhead costs. In determining equipment usage
costs, the equipment rental schedule developed by the California Department of
Transportation (CALTRANS) or similar authoritative source-for equipment costs shall be
used. For services provided by the City through private contract not specifically referenced
in this document, the contract price plus 10'7'o for City contract administration shall be used
in establishing the service charge.
SECTION 5. If any charge set forth in this resolution or the application thereof to
I
any person or circumstance is held to be invalid, such invalidity shall not affect any other
charge or application thereof, and to this end the charges established in this Resolution are
declared to be severable.
SECTION 6, Refunds of any portion of fees for withdrawn or partially complete
projects shall be determined by the Director of Community Development, Building fd
City Engineer, or Director of Public Works 'based on code requirements and Official,
appraisal of the cost of staff work performed. / their
SECTION 7. Effective November 16, 1991, Resolutions No:5009 (1983 Series), No,
5908 (1986 Series), No. 5953 (1986 Series), and No. 6486 (1988 Series) are hereby rescinded
along with all other fee schedules in conflict herewith.
Upon motion of
seconded by and on the
following roll call vote:
AYES:
FOES:
ABSENT:
the foregoing resolution was adopted this da of
y , 1991.
ATTEST: Mayor Ron Dunin
Pam Voges, City Clerk
X I