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03/08/1994, 1 - TRANSPORTATION DEVELOPMENT IMPACT FEES
I1111I^ 11111 11 vJ r MEETINe- I�I Iu Ifl Ijl°UII c� o san �a�s os�spo _ - ZZ COUNCIL AGENDA R ORT ITEM NUMBER: / FROM: William C. Statler, Director of FinanceI/� , Prepared by: Linda Asprion, Revenue 14Yanager.. SUBJECT: TRANSPORTATION DEVELOPMENT IMPACT FEES CAO RECOMMENDATION Introduce an ordinance to print establishing transportation development impact fees and adopt a resolution establishing fee amounts to be effective July 1, 1994. DISCUSSION The implementation of transportation impact fees has been under serious consideration for over three years. Following extensive analysis of this concept by the staff as well as an independent consultant specializing in these kinds of fees - and after presenting and discussing the findings of this analysis in detail with affected industry representatives - adoption of transportation impact fees was formally presented to Council in June of 1993. The Council referred this item to the Economic Strategy Task Force (ESTF) for their consideration and advice. Specifically, the ESTF was requested to consider two basic questions: should impact fees be adopted at all, and if so, at what levels? . Following review by the ESTF, consideration of these fees was scheduled for Council consideration on February 1, 1994. The Council Agenda Report providing a detailed discussion of the ESTF's recommendations, the staffs responses, and extensive documents regarding the history and basis for the fees was concurrently distributed to the Council and each member of ESTF as well as the Chamber of Commerce, Business Improvement Association, Building Industry Association of the Central Coast, SLO Property Owners Association, Builders Exchange, Manufacturing and Processing Association, Business Coalition, and Sierra Club. After the distribution of this report, the City received several requests to continue this item. Given the amount of time previously devoted to considering this important matter and the concerns surrounding its adoption, this item was continued to March 8, 1994. Notification of this extended review period and an offer to meet with interested parties was provided to all ESTF members and the organizations listed above. This notice and offer was also provided to the Environmental Quality Task Force, ECOSLO, League of Women Voters, Citizens Planning Alliance, Residents for Quality Neighborhoods, San Luis Drive Neighbors, and Foothill Neighborhood Association. Two of these organizations requested that staff meet with them to further discuss this issue: the Chamber of Commerce and the Manufacturing and Processing Association. The following two suggestions/concerns were introduced by the Chamber regarding the administration of the fees. ■ How will square footage be used in calculating the fee for service stations? ■ Can developers be allowed the option of providing a letter of credit to secure the transportation impact fee payment until occupancy rather than requiring payment of the fees at the time the building permit is issued? ����nn�►►�Illll��h � �l city of San LUIS OBISpo COUNCIL AGENDA REPORT Both of these suggestions are discussed below along with staff recommendations. Calculating Fees for Service Stations The question raised by the Chamber regarding what will be included in the square footage calculation for service stations is excellent. The previous recommendation for the transportation impact fee for service stations was based on square footage, which is consistent with other land use types. The concern is that some stations provide additional services along with selling gasoline and as such would pay more based on square footage than a service station with a small cashier booth and numerous gasoline pumps. Additionally, covered gasoline pumps count as square footage under the Building Code whereas uncovered pump areas do not. Accordingly, a large service station with numerous pumps could pay very little if the only square footage was a small cashier booth and uncovered gasoline pumps. Clearly, this is not the intent of the transportation impact fees. After reviewing the question and administration of implementing the fee based on square footage staff believes that charging transportation impact fees on a per pump basis rather than on square footage would be a better approach. Accordingly, the resolution fee schedule has been modified to reflect a per pump fee of $1,015.00 rather than a fee based on square footage. It should be noted that the per pump fee includes 1,000 square feet of structural space. Letter of Credit Option Rather than collecting full payment at building permit issuance as currently recommended, it was suggested that we implement an option for developers to provide a letter of credit securing the amount of the transportation impact fees to be held by the City until such time as the building is released for occupancy. At that time, the developer will pay the transportation impact fees or the City will collect on the letter of credit. Included in this approach is the option for multiple releases as occupancy occurs at various stages. The suggestion for the letter of credit option emanates from the concern that a developer will be required to pay the transportation impact fee from the original construction loan and will pay interest on that amount during the building process and occupancy - which can be lengthy. Staff has carefully reviewed the on-going administration involved with this option and does not recommend it. Currently, letters of credit are used for unusual circumstances such as unique performance requirements or code enforcement issues, but not for securing routine requirements or processing fees. Past staff experience with the administration of letters of credit has proven to be extremely time intensive and necessitates a more "hands on" level of involvement - both of which are costly to the City. Additionally, staff is concerned that by providing the letter of credit option for securing transportation impact fees we may be opening the door for developers to request that other basic fees be included in the amount secured by the letter of credit. 02 City of San LUIS OBISpo Wj;S COUNCIL AGENDA REPORT SUMMARY Staff contacted a variety of organizations offering to share information regarding the proposed transportation impact fees and to consider suggestions addressing specific concerns. Two administrative suggestions emanated from these organizations and have been reviewed by staff. Changing the basis of the transportation impact fee for service stations from square footage to a per pump charge is recommended and is reflected in the attached resolution. Allowing a developer the option of providing a letter of credit to secure the amount of the transportation impact fees and delaying the actual payment of those fees until occupancy is not recommended due to the difficulties associated with this process. ATTACHMENTS ■ Ordinance implementing transportation impact fees ■ Resolution setting the amounts of transportation impact fees DOCUMENTS PREVIOUSLY DISTRIBUTED The Council Agenda Report prepared for the February 1, 1994 meeting .provides a comprehensive discussion of the issues surrounding the adoption of transportation impact fees, including. ■ Backgroundand purpose ■ Discussion of ESTF recommendations and staff responses ■ Draft ordinance and resolution establishing transportation impact fees and setting fee amounts ■ Appendices A. Improvements and estimated costs for transportation impact fees B. Future development and weighted trip generation ■ Exhibits , 1. Council agenda report from June 1, 1993 meeting which comprehensively discusses the purpose of the fees and basis for calculating them 2. Transportation impact fee study prepared by David M. Griffith & Associates 3. Recommendations regarding transportation impact fees from the ESTF Due to the size of this report, it has not been reprinted with this agenda packet. Accordingly, Council members are requested to bring this material with them to this meeting. Additional copies are available upon request. ORDINANCE NO. (1994 SERIES) AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO ADDING CHAPTER 4.56 IMPLEMENTING TRANSPORTATION IMPACT FEES FOR ALL NEW DEVELOPMENT WITHIN THE CITY OF SAN LUIS OBISPO WHEREAS, the City Council has held a public hearing to consider proposed fees to mitigate the impacts of new development on transportation facilities in the City of San Luis Obispo; and, WHEREAS, the impact fees are to be used to implement the goals and objectives, policies,programs, and standards of the San Luis Obispo General Plan, Short Range Transit Plan, and Bikeway Element of the County Regional Transportation Plan, and are consistent therewith; and, WHEREAS, the Community Development Director has determined that this ordinance is exempt from the provisions of the California Environmental Quality Act pursuant to Article 18, Sections 15061 (a) and 15273 (a) (4) of the California Environmental Quality Act Procedures and Guidelines; and, WHEREAS, the proposed ordinance promotes the public health safety and general welfare; WHEREAS, the proposed ordinance complies with the provisions of Government Code Section 66000, et seq; NOW THEREFORE BE IT ORDAINED by the City Council of the City of San Luis Obispo as follows: SECTION 1. A new Chapter 4.56 is hereby added to read as follows: Chapter 4.56 TRANSPORTATION IMPACT FEES A. Purpose. In order to implement the goals and objectives of the General Plan, the 1991 Short Range Transit Plan, and the Bikeway Element of the 1990 San Luis Obispo County Regional Transportation Plan, and to provide adequate transportation facilities to serve new development in the City of San Luis Obispo and to mitigate the impacts of that new development, certain public facilities and improvements must be, or had to be, constructed or purchased. The City Council has determined that transportation impact fees are needed in order to finance these facilities and improvements and to pay for new development's fair share of the construction or purchase costs of these facilities and improvements. In establishing the fee described in the following sections, the City Council has found the fee to be consistent with the City's General Plan, and pursuant to Government Code Section 65913.2, has considered the effects of the fee with respect to the City's housing needs as established in the Housing Element of the said General Plan. B. Transportation Impact Fees. 1. Transportation impact fees are hereby established as a condition of any new development for which any of the following approvals or permits is required: (a) Approvals of land divisions pursuant to Title 16 of the San Luis Obispo Municipal Code,including approval of lot line adjustments,certificates of compliance,parcel maps, tract maps and condominium conversions; (b) Land use approvals pursuant to Title 17 of the San Luis Obispo Municipal Code,including rezonings or the approval of development plans,site plans, minor use permits, variances, but excepting approval of San Luis Obispo General Plan/Land Use Ordinance amendments; (c) For the issuance of any occupancy permit or final building inspection, and (d) All other approvals of real property development, which approvals are subject to the jurisdiction of the City of San Luis Obispo and which approvals are subject to the exercise of the discretion of the City Council, Planning Commission, or Community Development Director. For purposes of this chapter, new development includes any change of use or occupancy which increases the traffic service requirements of a development. 2. The said transportation impact fees are established in order to pay for needed facilities and improvements reasonably related to new development within the City. From time to time, the City Council shall, by resolution, set forth the specific amount of the impact fees, the specific public improvements to be financed and their estimated cost, describe the reasonable relationship between the fees and the various types of new developments, and set forth the time of payment of the fees. Said resolution shall provide for a method of adjusting the amount of the impact fees on an annual basis to account for changes in the cost of construction or other considerations affecting the reasonable relationship between the fees and the cost of facilities and improvements on which the fees are based. (a) For any development other than residential, the resolution shall provide for payment of fees at the time of building permit issuance. (b) For residential development, the resolution shall provide for the payment of fees at the time of building permit issuance, except where the provisions of Section 66007 of the California Government Code require the collection of fees to be delayed until the time of final inspection or issuance of a certificate of occupancy. 3. The City Council shall, at least once every five years, review the basis for transportation impact fees to determine whether said fee is still reasonably related to the impacts of development, and whether the facilities and improvements for which the fees are charged are still needed. C. Exemptions. The fees imposed under this ordinance shall not apply to the following: 1. Other government agencies. 2. That portion of a structure which existed before the addition of dwelling units or the enlargement of floor area in a non-residential structure. If a structure is destroyed or demolished, and replaced within two years from the date of demolition, the impact fees shall be based on the service requirements of the new development less the service requirements of the development which it replaced. D. Applicant Construction of Facilities or Improvements. If the applicant for approval of any development project is required by the City, as a condition of approval, to construct facilities whose cost has been used in the calculation of impact fees which apply to that project, the applicant shall receive a credit for that portion of the total fees otherwise payable that are attributable to those facilities. If the credit exceeds the amount of the transportation impact fee due on the development, a reimbursement agreement with the applicant shall be offered. The reimbursement amount shall not include the portion of the improvement needed to provide services or mitigate the need for the facility or the burdens created by the development. /-d E. Limited Use Of Fees. The revenues raised by payment of the transportation impact fees shall be placed in a separate account along with any interest earnings on that account, and shall be used solely to: 1. Pay for the design and construction, including construction management, of transportation improvements described in resolutions adopted pursuant to Section B, or to reimburse the City for funds advanced from other sources to pay for said design and construction. 2. Reimburse developers who have been required or permitted to install portions of said facilities or improvements pursuant to Section D, hereof. F. Fee Adjustments. 1. Each development is independent and no reductions to impact fees will be transferrable to another development nor will an excess be refunded. 2. Any person whose new development is subject to impact fees may request a refund, of up to 50% percent of the street portion of the fee paid, if the sustained average vehicle ridership (AVR) is in excess of 1.6 AVR. A sustained period is considered to be one year. The percentage of refund will be the same as the percentage in excess of the 1.6 AVR standard. 3. Any person whose new development is subject to impact fees may appeal to the City Council for a reduction or adjustment of those fees, or a waiver of those fees, based on the absence of any reasonable relationship between the impacts of that new development and either .the amount of the fees or the type of facilities or improvements funded by the fees. The appeal shall be made in writing and filed with the City Clerk, together with any required appeal fee, within ten (10) days following notification that the fee is to be imposed. The appeal shall state in detail the factual basis for the claim of waiver, reduction or adjustment. The City Council shall consider the appeal at an appeal hearing to be held within sixty (60) days after the filing of the appeal. The hearing may be continued from time to time. The decision of the City Council on the appeal shall be final. If a reduction, adjustment or waiver is granted, any change in the permitted type or intensity of land use within the approved development project shall invalidate the reduction, adjustment or waiver of the fee. G. Unexpended Transportation Impact Fee Revenues. 1- 7 1. Notwithstanding Section B3., whenever any impact fee, or portion of an impact fee, remains unexpended or uncommitted five (5) or more years after payment of the fee, the City Council shall make findings once each fiscal year with respect to the unexpended amount. The City Council shall identify the purpose for which the fee is to be used, and demonstrate a reasonable relationship between the fee and the purpose for which it was charged. The findings required by this section need be made only for monies in the possession of the City, and need not be made with respect to any letters of credit, bonds or other items given to secure payment of the fee at a future date. 2. The City shall refund to the then-current owner or owners of the new development project or projects, on a prorated basis the unexpended or uncommitted portion of the impact fees for which need cannot be demonstrated pursuant to this section. The City may refund the unexpended or uncommitted revenue by direct payment, by providing a temporary suspension of impact fees or by any other means consistent with the intent of this section. The determination of the means by which those fees are to be refunded is a legislative act. 3. If the City Council determines that the administrative costs of refunding unexpended or uncommitted impact fees pursuant to this section exceed the amount to be refunded, the City Council, after a public hearing, notice of which has been published pursuant to Section 6061 of the California Government Code and posted in three prominent places within the area of the new development project, may determine that the said fees shall be allocated for some other purpose for which impact fees are collected and which serves the new development project on which the fees were originally imposed. SECTION 2. A summary of this ordinance, together with the names of Councilmembers voting for and against, shall be published once in full, at least five (5) days prior to its final passage, in the Telegram-Tribune, a newspaper published and circulated in the City. Pursuant to Government Code 66017, the ordinance shall go into effect at the expiration of sixty (60) days after its final passage. �'D INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis Obispo at its meeting held on the day of , 1994, on motion of . and seconded by and on the following roll call vote: AYES: NOES: ABSENT: Mayor Peg Pinard ATTEST: City Clerk, Diane Gladwell APPROVED: rge en, ty otorney /� 9 RESOLUTION NO. (1994 SERIES) RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO SETTING THE AMOUNT OF TRANSPORTATION IMPACT FEES WHEREAS, the City of San Luis Obispo has prepared studies to determine the need for transportation facilities and improvements to serve new development; and, WHEREAS, a study entitled City of San Luis Obispo Transportation Impact Fee Study, dated March 15, 1993, by David M. Griffith & Associates, Ltd. (hereinafter called "Impact Fee Study"),which is incorporated herein by reference, has analyzed the relationship between future development and the cost of needed transportation facilities and improvements; and, WHEREAS, the Economic Strategy Task Force (ESTF) has reviewed the transportation impact fees to determine if the basic concept of the fees is appropriate and if so, to make recommendations regarding the implementation of the fees. WHEREAS, that study was made available for public inspection and review ten (10) days prior to a public hearing held on this matter on March 8, 1994; and public notice was provided ten (10) days prior to the public hearing; and NOW, THEREFORE, the City Council of the City of San Luis Obispo finds and resolves that: 1. Findings. A. The purpose of the transportation impact fees is to provide adequate street improvements, transit improvements, and bicycle facilities to satisfy the needs of new development and to mitigate the impacts of new development on the City's transportation facilities. B. The transportation fees collected pursuant to this resolution shall be used only to pay for street, transit, and bikeway facilities and improvements and shall not be in lieu of any other fee or tax. C. There is a reasonable relationship between the types of development on which the fees are imposed and (1) the use of the fees and (2) the need for the facilities and improvements. D. There is a reasonable relationship between the amount of the fee and the cost of the facilities and improvements attributable to the developments on which the fees are imposed. The estimated costs of facilities and improvements, including financing costs, to be paid for by transportation fees is shown in the Impact Fee Study as subsequently modified and provided in Appendices A and B attached hereto. Those costs have been allocated to new development on the basis of dwelling unit type (residential) or type of development and size of development (non-residential), which are reasonably related to traffic generation by the development project. 2. Cost Estimates. At any time that the actual or estimated costs of facilities identified in Appendix A significantly changes, the Finance Director shall review the transportation fees and determine whether the change significantly affects the amount of the fees. If the fees are significantly affected, the Finance Director shall, within thirty (30) days, recommend to the City Council a revised fee. 3. Amount of Transportation Fees. The amount of the transportation impact fees is set forth in Table 1 attached hereto. Unless otherwise acted upon by the City Council, the amount of the fees will automatically be adjusted on July 1 of each subsequent year by the percentage change in the U. S. Bureau of Labor Statistics consumer price index for all urban consumers (CPI-U), all-cities average for the prior calendar year. 4. Time of Payment. A. Transportation impact fees for any development project or portion thereof shall be payable prior to issuance of the building permit. B. For any development project or portion thereof, impact fees shall be assessed at the time of application and remain valid for as long as the application is proceeding through valid processing as per the Uniform Administrative Code. 5. Separate Accounts, The Finance Director shall deposit fees collected under this resolution in a separate transportation impact fee fund as required by Government Code Section 66006. Within sixty (60) days of the close of each fiscal year, the Finance Director shall make available to the public an accounting of the fund, and the City Council shall review that information at its next regular public meeting. 6. Effective Date. This resolution shall become effective July 1, 1994. Upon motion of , seconded by and on the following roll call vote: AYES: NOES: ABSENT: the foregoing resolution was adopted this day of , 1994. Mayor Peg Pinard ATTEST: City Clerk, Diane Gladwell APPROVED: e4 or engity Attorney �'�oz TABLE 1 TRANSPORTATION IMPACT FEES Land Use Category Impact Fee per Unit of Development Single Family Residential $ 1,180/DU Multi-Family Residential $ 1,047/DU Retail* $ 1,861/KSF* Office $ 2,367/KSF Service Commercial $ 1,284/KSF Industrial $ 684/KSF Hospital $ 2,120/KSF Motel/Hotel* $ 548/Room" Service Station (includes 1,000 square feet)** $ 1,015/Pump Other $ 110/Trip ' Fees for retail and hotel/motel are set at 50% of the adjusted study costs in recognition of the fiscal benefits these developments bring to the City. ** Square footage above this amount will be charged at the service commercial rate, excluding structures that are specifically built to cover pump areas. DU = Dwelling Unit KSF = 1,000 Square Feet /-/3 1 APPENDIX A IMPROVEMENTSAND ESTIMATED COSTS TRANSPORTATIONIMPACT FEE STUDY STREET IMPROVEMENTS PROJ IMPROVEMENT IMPROVEMENT ESTIMATED % FOR IMPACT NOJ51 LOCATION DESCRIPTION COST NEW DEV FEE SHARE II.C.2 Hwy 101/1-as Osos Widen Bridge/ $3,000,000 100.0% $3,000,000 Valley Rd Modify ramps II.8.2 Higuera St/ High St to Marsh St Widen (west side) $2,000,000 100.0% $2,000,000 II.B.7 Higuera St[ Widen $1,000,000 100.0% $1,000,000 Madonna Rd to City Limit II.D.1 Orcutt Rd/SPRR Grade separation $4,000,000 20.0% [1] $800,000 II.B.6 Prado Rd Bridge/ Widen bridge $1,000,000 100.0% $1,000,000 Hwy 101 II.A.7 South St Extend to connect $4,250,000 20.0% 12j $850,000 w[Bishop St Various locations 20 traffic signals $2,000,000 100.0% $2,000,000 Madonna Rd/ Hwy 101 Widen/101 bridge $2,300,000 30.6% [31 $703,800 Higuera St/ Madonna Rd to High St Widen $775,000 30.6% [3) $237,150 Various Congestion mgmt $2,000,000 100.0% [4) $2,000,000 projects Subtotal Street improvements $22,325,000 60.9% $13,590,950 Notes. [1) Assumes 80% funding from Public Utility Commission as railroad safety project. Project required to serve new development. [2) Assumes 80% benefit to existing development. [3) Project cost apportioned according to future development share of total traffic (See Table f—1). impact fees will be used to recoup funds advanced by the City. improvements as a condition of approval for a shopping center project. [4] The Circulation Element sets a standard of LOS 'D'for arterial streets and highways outside the downtown area, and LOS'E'for downtown streets. [5) Project numbers refer to the 5/92 Draft Circulation Element(See Appendix C). A-1 J APPENDIX A IMPROVEMENTSAND ESTIMATED COSTS TRANSPORTATIONIMPACT FEE STUDY TRANSIT IMPROVEMENTS PROJ IMPROVEMENT IMPROVEMENT ESTIMATED % FOR IMPACT NO. LOCATION DESCRIPTION COST NEW DEV FEE SHARE Mobile Fleet expansion $1,500,000 50.0% [8) $750,000 171 (5 buses) Various locations Bus Stop Amenities $175,000 30.6% $53,550 Downtown Transfer Center $2,740,000 15.3% 191 $419,220 Subtotal Transit Improvements $4,415,000 27.7% $1,222,770 Notes. M Fleet expansion based on 43.3%increase in travel demand as represented by trip generation. [8]Assumes that 50%of acquisition cost will be funded by grants. [9I Assumes that 50%of transit center cost will be funded by grants, with the balance shared by existing and future development in proportion to travel demand. BICYCLE FACILITIES PROJ IMPROVEMENT IMPROVEMENT ESTIMATED % FOR IMPACT NO.[51 LOCATION DESCRIPTION COST NEW DEV FEE SHARE I.C. SPRR Right of Way New blkeway 1101 $8,000,000 30.6% $2,448,000 I.B. Various Bikeway impNmts, $4,000,000 30.6% $1,224,000 bicycle facilities Subtotal Bicycle Facilities $12,000,000 30.6% $3,672,000 Notes: [5] Project numbers refer to the 5192 Draft Circulation Element (See Appendix C). [10] Assumes adoption of Bicycle Transportation Program 3.13 In the Draft Circulation Element as indicated in Figure 4: Transportation Capital Projects (attached). GRAND TOTAL $38,740,000 47.7% $18,485,720 A-2 C4 co — LLN O co r a9 r 0 co C14 64 69 G p p m Q -- m c H 0 8 1* 8 C^D CO O f^p .''.�. N 25 O Y r T O C7 ra N I,- a CL m oNi H r H o g 0 v LO 0 .� a Q c 5 m o LL of ai T c a r a co ca 0 o a Y r N p N r- co cc 6N4 3 V 7 LL W O r O O O co O N H co ~ CL 7 a yNy ?� cm�},, c0 m •.".. m Y O r H O 0 r 0 co r 064 O. a N O co O � m = a o E m CL N Z m = v Lon us 8 4 8 � m o 8 E N CO _ L r 7 ci C aro r co N 0 H N 0. r 1 1 C O vi N W � a7 VO CL O Z — c S c g cmq c� v co(c 0 8 0 :". a cc a E td d c mWW .� 3LL v of r 0 o cv n c cc0 oo � ©° `o c'� � a) kO � ¢ JY '_. 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'K 'K A * 3C WW r r J N X20 co U H U Fes- � 0 O m p tQi a > O w x !Z5 � Lou o LU o w 3 � 3m W W W 0] U Q W O O O O Q N .� ¢ ao- _ = Z = O Cl)Q ¢ O LULU I— a a H u- LL 1-i7f N" INGg_9 AGENDA I DAIC ITEM 0_ San Luis Obispo Chamber of Commerce 1039 Chorro Street • San Luis Obispo, California 93401-3278 (805) 781-2777 9 FAX (805) 543-1255 David E. Garth, Executive Director CPUNCIL ❑ D DIR AO FlN D March 2, 1994 ❑ 5RE CHIEF PLE=MG MV DIR ❑ POUCE CHF ❑ MGMTTEAM ❑ REC DIR Honorable Mayor and City Council Members ❑ C FILE 13UTIL DIR City of San Luis Obispo ;. ❑ PERSDIR 990 Palm Street San Luis Obispo, CA 93401 RECEIVE® RE: TRANSPORTATION DEVELOPMENT IMPACT FEES t"AR 7. 1994 Dear Mayor Pinard and City Council Members: CITY COUNCIL MN BUJ$OBISP_O,CA The San Luis Obispo Chamber of Commerce would like to thank you for rescheduling the Transportation Development Impact Fees item to March 8, 1994. This has given the Chamber's Transportation Impact Fees Task Force more time to fully evaluate the proposed fees and the related impacts on business. As you may recall, the Chamber originally opposed the fees back in May of 1993 due to negative impacts on the economy at that time, the potential disincentive for businesses to invest in our community, and because the project list upon which the fees were based was flawed. After significant review of the revised impact fee proposal, and an overall appreciation of the need to maintain a viable infrastructure for our community, the Chamber's Board of Directors accepts the reduced level of fees from 27.6 MM to 13.6 MM. While the Chamber of Commerce accepts reduced fees, it provides the following comments and recommendations regarding the implementation of the fee program: 1) The Transportation Development Impact Fees on road projects should be limited to projects included in the Circulation Element. While the Chamber conceptually supports the extension of South Street to Johnson Avenue, this project is not currently in the Draft Circulation Element. If the project is ultimately removed from the Draft Circulation Element then it should be removed from the project list for Transportation Impact Fees. ACCREDITED CKAURER OF COMMERCE C. BCA O.COvrCnCE 0. 1.1E ONIIED S1A1E3 2) Regarding the Project List, there appears to be an inconsistency in the logic. For example, the cost for widening Higuera (from High Street to Marsh Street) is listed as 100%new development responsibility,while the cost of widening of Higuera (from Madonna to High) is listed at 30% new development responsibility. The reverse seems to be more appropriate since there is a long recognized community need to expand Higuera from High to Marsh. 3) Regarding the Project List, the Chamber believes that the Orcutt Road/SPRR project should be limited to a 20% cap for new development cost regardless of funding from the Public Utilities Commission. 4) In respect to Land Use Categories, as listed on Table 1 of 1-13 in the recent Staff Report, the categories themselves need to be more clearly defined to clarify exactly what use would fall under any given category. 5) Any remodel or rebuild should not be subject to Transportation Development Impact Fees if the project's "use designation" does not change. 6) Transportation Development Impact Fees for gas stations should be blended in with other commercial businesses to avoid driving gas stations out of business with inordinately high fees. Gas stations, in the Chamber's opinion, do not "generate" trips, and thus should not pay higher fees than other commercial operations. The fees, if too high,could discourage the development of alternative fuel facilities such as compressed natural gas. 7) The Chamber of Commerce recommends that fees be collected at occupancy as opposed to staffs recommendation to collects fees at the time the building permit is issued. The City should accept letters of credit or set aside letters as an assurance of payment of the Transportation Development Impact Fees. Since financing costs for major projects are substantial, set aside letters would serve as a viable mechanism to ensure payment of the impact fees. 8) Commercial businesses operating in large amounts of commercial space,yet with few employees, and thus few trips generated, should have an avenue to appeal the fee assessment since square footage alone does always equate to transportation impacts. 9) The Chamber supports the inclusion of the Multi-Modal Transfer Center in the Transportation Impact Fees Program. While this is a regional project, some of the City's portion of its funding should come from Transportation Development Impact Fees. 10) The City should consider alternative funding mechanisms to Transportation Impact Fees such as assessment districts. The Chamber requests a joint study session with Council, staff, and experts within the business community to further explore other financing mechanisms for needed infrastructure.. The Chamber of Commerce has identified these key concerns for a fair and equitable Transportation Development Impact Fee program. It is with these recommendations that the Chamber of Commerce supports the adjusted Transportation Development Impact Fees. Sincerely, Wanda Strassburg,President San Luis Obispo Chamber of Commerce William A. Thoma,Vice President Legislative Division San Luis Obispo Chamber of Commerce UAIt A3=7.1 I W ff® �i►I IIIIIIIIII II��������� plllllllll cityO sAn luiS oBispo 9gRaft 6J;ekV#dM &U Box 8100 • San Luis ObispoCtA 100 N DR ❑ F CHIEF "IR a 8 1994 EY PLV DIRMarch 4, 1994 R►a ❑ POLICE CHFCITY CLERK J�M ❑ REC DIRLE ❑ U71L DIRTO: City Council . ❑ PERS DIR _ FROM: Kurt Kup hairman - Environmental Quality Task Force SUBJECT: Transport tion Impact Fees At its meeting of March 3, 1994, the Environmental Quality Task Force (EQTF) supported the following statement concerning proposed transportation impact fees. Please contact me or Carla Sanders if you have questions. Recommendations of the Environmental Quality Task Force (EQTF) Regarding a Transportation Impact Fee (TIF) 1. The EQTF supports adopted City policy that new development should pay its fair share of the costs of constructing the community facilities that are necessary to serve it. Therefore, the EQTF strongly supports the adoption of a TIF program. 2. The residents of San Luis Obispo should not be expected to live with lower levels of service as a result of new development. The TIF should be used to ensure that service levels on roads and at intersections are, at a minimum, maintained at current levels, by funding alternatives to the private automobile as a means of meeting the city's future transportation needs. 3. The list of projects to be funded by the fee should be expanded to include alternative types of transportation that address regional transportation impacts of local growth, such as light rail and both commuter and local busses. 4. The EQTF strongly supports policy 7.1 (page 19) of the draft Circulation Element. Strict adherence to the priority order of policy 7.1 will protect established neighborhoods and the environment. 5. All new development that will impact the city's transportation system should pay the costs of mitigating that impact through the TIF program. Retail and hotel or motel developments should not pay a reduced fee, as suggested in the staff report, simply because these uses "improve the transient occupancy tax and sales tax." These uses OThe City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities. �� Telecommunications Device for the Deaf (805) 781-7410. will be among the largest generators of traffic and should pay for the facilities needed to accommodate that additional traffic. 6. The EQTF is not opposed to the consideration of fee reductions for developments that have an effective Transportation Demand Management (TDM) Plan,which sets specific performance standards and requires compliance with those standards within a set period of time. Effective monitoring to ensure compliance would be a requirement of any TDM Plan. The fee reductions would not include any portion of the fee paid for transit or bicycle facilities. _�.._—% . r' ,- _—�= . _ �;,-•, `- =- :•AEET-M1G - ` GEW1�A L CDD DIR DATE -9 ITEM # O FIN DIR ❑ FIRE CHIEF Y ❑ PUJ DIR IG ❑ POUCE C M ❑ REC DIR ' evelo pers Iose bid -E 0 UTIt.DiR ❑ PERS DIF; n new Paso fees f ® $5,000-per-house Moresco suggested reducing thes - developers' costs in other ways so:• fee IS too much they could afford to pay the new fee,1 , This could be done, he said, by; they le�/ COrltenU making changes in the city's building. standards and rules. Developer Charles French of San- R . By Phil Dirkx Luis Obispo gave examples of the: RECEIVEDD Telegram-Tribune changed standards the developers: would like to see. They include-' MAR 8 1994 PASO. ROBLES — Several real narrower streets, with less room for:1 estate developers pleaded Tuesday. on-street parking,narrower sidewalks!; CITY COUNCIL night with the. City Council, saying and fewer sewer manholes. MN LMS OBISP%CA the.j couldn't afford to pay same It would also help, he said, if they; proposed new development fees. didn't have to pay the fees until' The council went ahead. and ap- people were ready to move into the; proved $5,000 per house in new fees, houses, instead of when they get the'' but agreed to phase them in over a building permits. That would. save lour-year period them interest on the fee money. City officials say the new fees are I necessary to help pay for new public The developers wanted the city to-,. works and equipment to serve'the delay imposing any new fees until:, residents who will five in the houses new,easier standards and policies are., the developers build. approved to offset the cost of the fees. The needed items, the official say, But City Councilman Walt Mackfi ' include such things as twomore lanes said, "I can't buy that." City officials, for the Niblick Road bridge, public and the developers have been dis safety buildings and equipment,a new cussing the fees for about a year, he. City Hall and the library. . said, and-the developers should have: The present city fees for an average brought up the proposed policy) new house built in most parts of the changes earlier. city total about $8,300,..:said City City Councilman Steve Martin manager Richard Ramirez. That-in- seemed skeptical of some of the. eludes the$2,189 bridge fee to pay for developers'statements. the existing Niblick Road bridge.. "If we backed off all our fees, you But several developers said.Tues- still couldn't sell the houses,"he said ' day night that real estate market conditions are bad.at this time. The "I suggest we do some .horse:• market is so bad, they Said,that they trading, Martin said He proposed-: can barely sell their. houses for reducing the fees to$5,000 p&house:: enough money to cover their costs. from the original proposal of$5,050.. There is no money to pay the new He also proposed imposing the new-: fees,said Dennis Moresco of San Luis fees at the rate of$1,500 per year.Andy Obispo,president of the Central Coast he proposed letting the developers:. BuNLke ider,Industry v sore of the Mea- pay the new fees at time they get city-; doMike Farms tract said his houses approval to occupy the houses rather: are selling now for t,said $60,000 isho less than when they get building permits. .;: The City Coucnil voted unanimous--: than he could get for them two or ly to approve Martin's suggestion three years ago. DECEIVED LAR 8 1994 MEETING AGENDA I 08 March 1994 clnr couNcll DATE L 9 STEM # SAN LUIS OBISPO,.CA Honorable Mayor & Council Members Er::1 CDD DIR City of San Luis Obispo O' �IN D:R P.O. Box 8100 C ❑ FIRE CHIEF p D�W DGi San Luis Obispo, CA 93403 e ❑ POLICE CHF O REC DIR RE: Item No. 1 - Transportation Development Impact Fees 10UTILDIR _ PERS DIR Dear Mayor Pinard & Council Members, The need to maintain and enhance the city's transportation infrastructure is a vital component of a functional community. Although, the San Luis Obispo Business Coalition (SLOBC) supports the overall concept of Transportation Impact Fees to maintain our current and. future transportation needs, we have serious reservations regarding certain of staff's specific recommendations for fee implementation. Foremost is our concern that the funding of infrastructure in this community should be a part of a greater economic vision. Fees for transportation infrastructure should not be a "stand alone" issue, as they are currently being presented. In light of the fact that many of the Economic Stabilization Task Force's (ESTF) recommendations are only now being implemented, it would only seem fitting that the transportation impact fees be more closely aligned with the ESTF implementation program. Specifically, the SLOBC has concerns with the following aspects of staff's recommendations. • Timing of the implementation of the fees...New fees will do little to encourage existing business expansion or entice new desirable businesses to locate to our area. Since impact fee receipts depend on certain levels of development, and because construction is highly sensitive to economic cycles, the current economic conditions make these impact fees rather uncertain. • Project list...Several of the projects on the current list have questionable net value to the community as a whole. Some of these projects should be funded through "user fees" rather than through fees that will be collected based upon the impact of a specific development. A disproportionate amount of total fees to be collected are designated to be spent on projects that will only benefit a small percentage of the community. • Fee due date...Flexibility should be incorporated into the fee's payment schedule/financing mechanism. For example, payment could be made to coincide with the time of occupancy. Or, better yet, a payment schedule could be developed to allow payment over a longer specified period of time. 08 March 1994 Transportation Development Impact Fees Page 2 of 2 • Accountability for initiation of specific projects...Delays in impact fee- . financed construction can violate the financing principles upon which impact fees are based, thereby depriving fee payers of potential benefits. What assurance do we have that the City will act in a timely manner once fees are collected? In closing, the effects of impact fees on communities imposing them is perhaps the least well-understood aspect of fee debates. To reiterate, the SLOBC supports the continued efforts toward addressing current and future transportation needs. But, we question not only the urgency of this ordinance, but certain aspects as proposed by staff and outlined above. Adoption of this ordinance will be counter productive to formulating a comprehensive economic program. We encourage you to set this issue aside until you mandate a clear, concise and pro-active economic program. Res ly, S ISP SINESS COALITION Tom Wo ai rson Build;ng I stry A soc tin Chamber of Commerce �//'2'�) q�-% Dennis resco Charlie Fruit Business Improvement Assn. SLO Pr ty Owners Association c Cleeves C.M. Florence Manufacturers & Distributors Assn. Association of Realtors Maggie Cox Jo rib SAN LUIS OBISF. ASSN. OF MANUFACTURERS & �jtSTRIBUTORS 992 Monterey Street, Suite B San Luis Obispo,CA 93401 (805)545-8887 MEETING AGENDA DATE "J"V ITEM # March 1, 1994 COUNCIL ftf CDD DIR JaeCLERKIORIG 9��AO WIN DIR ACAO 13 FIRE CHIEF B'ATTORNEY ePW DIR ❑ POLICE CHFHonorable Mayor& Council MembMGMTTEAM ❑ REC DIR C READ FILE ❑ UTIL DIR City of San Luis Obispo �. iL6 ❑ PERS DIR PO Box 8100 San Luis Obispo, CA 93403-8100 RECEIVED RE: Item No. 1, Transportation Development Impact Fees [IAR 8 1994 Dear Mayor Pinard& Council Members: SAN clrr COUNCIL LUIS OBISPO,CA As you know,the San Luis Obispo Association of Manufacturers & Distributors (SLO- AMD) is keenly interested in the proposed Transportation Impact Fees which have been under review for some time. Our members have devoted a considerable amount of time to reviewing the proposed fees and the effects their adoption could have on business in the industrial sector. Our association members recognize the necessity of a sound infrastructure for both efficient business operation as well protection of the quality of life we all enjoy. We agree that it is reasonable for business to share in these costs, but we also believe it is imperative that the required infrastructure be similarly reasonable. To that end, we support the reduction in number of projects proposed for funding through transportation impact fees. We concur with both the ESTF and the staff report that the projects be reduced from $27.6 million to $13.6 million, although we take exception to the bike lane/railroad right of way acquisition costs. While this project is laudable, we feel it benefits a small percentage of the population at an unreasonable cost to the general community. The project uses transportation impact fee funds inefficiently and is a notion we cannot support at the funding level currently proposed. The fee itself in the industrial sector($684 per thousand square feet of new space) appears generally reasonable. However, the ordinance needs to allow better flexibility for individual business operations in the industrial sector. For instance, one of our businesses may occupy a large amount of space but operate with few employees. Since the fee formula is based on numbers of trips generated to the business,the formula may not be equitable for all industrial operations. We request that businesses be allowed to appeal their fees and have them reduced when appropriate. We further believe that industrial operations with a transportation management plan in place should be eligible for fee reductions. 3/1/94 k SLO re: Transportation Impact Fees page 2 We request that fee payment be required in phases rather than at the issuance of building permit. Fees should be eligible for an escrow account in order to offset some of the costs with interest to the business. Lastly, we want to offer a thought to you. While retail and hotel/motels receive fee relief for the tax revenue they bring to the City,businesses like ours in the manufacturing and distributing sector continue to be overlooked for the contributions we make to the community. Please keep in mind that our businesses pay millions of dollars in property tax, some of which finds its way to the General Fund. We support dozens of human service organization, we offer innovative employee benefits and we generate most of our sales outside SLO County. We are key to the fabric of this community and would like our contributions acknowledged both fiscally and philosophically. We appreciate the opportunity to be included in this discussion and we thank you and the members of the ESTF, as well as City staff, for the work done on the Transportation Impact Fee issue. Best regards, Maggie Cox SLO-AMD Director MEETING AGENDA �1I I�j ATE - - ITEM #= RQn Residents for Quality Neighborhoods P.O. Box 12604. San Luis Obispo, CA 93406 19'COUNCIL CDD DIR '(CAO Y(FIN DIR March 6, 1994 VACAO ❑ FIRE CHIEF VATTORNEY ❑ PW DIR VrXERK10RIG ❑ POLICE CHF Honorable Mayor & Council Members ❑ MGMTTEAM ❑ REC DIR City of San Luis Obispo ❑ READ FILE ❑ UTILDIR P.O. Box 8100 q�F/L.�_ ❑ PERS DIR San Luis Obispo, CA 93403-8100 Dear Mayor Pinard and Council Members, The Residents for Quality Neighborhoods wish to thank the Mayor and members of the city council for requesting our input on proposed the Transportation Development Impact Fees. Our primary concerns are in the proposal to lower levels of service to city residents, which is proposed here and in the draft Circulation Element. Our concerns: ( 1) Do the costs generated by new development go away by lowering levels of service to residents? Or are they merely shifted to residents? (2) Doesn't lowering levels of service to residents only postpone consideration of the real solutions to the problems of increased traffic in the city? (See page 19 of the Circulation Element. ) (3) Should good planning for new development in our city be premised on lowering the current levels of service to our residents? Sincerely, Raymond E. Co-chair Residents for Quality Neighborhoods