HomeMy WebLinkAbout09/20/1994, 3 - RESTRUCTURING PARK IN-LIEU FEES I�I SII"IINI�II�III'tll�llllllll CI ,ty of San Luis OBISPO MEETING DATE:
j COUNCIL AGENDA R PORT ITEM NUMBER: -
FROM: William C. Statler, Director of Finance
Prepared by: Linda Asprion, Revenue Manage{��
SUBJECT: RESTRUCTURING PARK IN-LIEU FEES
CAO RECOMMENDATION
Adopt a resolution restructuring park in-lieu fees effective December 1, 1994.
DISCUSSION
Background
California Government Code Section 66477 authorizes cities to require dedication of land, the
payment of fees in-lieu thereof, or a combination of both for park and recreational purposes.
Accordingly, park-in-lieu fees are included in the subdivision regulations that require
subdividers to dedicate land or pay fees in-lieu of dedicating land for parks based on fair
market values. In June, 1984, Resolution 5376 was adopted setting maximum park in-lieu fee
amounts. As a practical matter, this limit has become the defacto fee schedule, which has not
been adjusted since 1984. As part of the strategic budget direction adopted by Council on
March 13, 1993, the Revenue Task Force recommended updating the park in-lieu fees from
the 1984 levels (Exhibit A).
Based upon this Council direction, an independent economic consultant, Economics Research
Associates (ERA), was requested to perform a review of current residential land values in the
City to provide the basis for amended park in-lieu fees. ERA's review included land within
the urbanized in-fill areas and in the lower density outlying areas. Based on their analysis,
values per acre range from $287,500 to $101,500 with an average value of$194,500 per acre,
which is their recommended basis for setting fees. ERA also recommends that a 20%
surcharge be added to cover infrastructure/site improvement costs such as utility connections,
streets, sidewalks, curbs and gutters, fencing, drainage, etc. that would normally be required
from a developer providing park land, per the City's ordinance. ERA's complete
recommendations are provided in Exhibit B.
What is a Park In-lieu Fee?
Under the City's municipal code, subdividers are required to dedicate 5 acres of parkland for
every 1,000 residents projected to live in their development area. Rather than dedicating land,
there are occasions when paying an in-lieu fee in an amount of comparable value is the
preferred method of meeting this parkland dedication requirement.
111M IIIVIIlq1n jj$ city of San tuts osispo
COUNCIL AGENDA REPORT
Currently the City's park in-lieu fee is based upon the size of the dwelling unit (determined
by the number of bedrooms) in "not to exceed" amounts as follows:
$667 for each studio dwelling
$880 for each one-bedroom dwelling
$1,333 for each two-bedroom dwelling
$2,000 for each three-bedroom dwelling
$2,666 for each dwelling with four or more bedrooms
Based upon ERA's research, staff is recommending a two-tiered park in-lieu fee structure based
on the 1990 census average household size for single family dwelling (2.7 persons per
household) and multi-family residential dwelling (2.14 persons per household):
$3,180 for each single family residential unit
$2,520 for each multi-family residential unit
The fee amount will remain current with annual adjustments based on changes in the consumer
price index.(CPI), with the base fee updated at least every five years.
Why Amend the Park In-lieu Fees?
Park in-lieu fees are a part of the subdivision regulations that require a subdivider to dedicate
parkland or pay fees in-lieu of dedicating land for parks: By restricting the amount of the in-
lieu fees payable, which is what Resolution 5376 does, the City is limiting the amount of
revenue available for parkland acquisition and improvements. The City's municipal code states
that:
"When the dedication of land is not required or when land dedication partially fulfills
the required contribution of the subdivider to meeting additional local park demand
resulting from the subdivision, in-lieu fees shall be paid. The amount of such in-lieu
fee shall be the fair market value of the land which otherwise would be required to be
dedicated..."
Rescinding Resolution 5376 and amending the method of calculating the park in-lieu fees
allows the City to collect the fees appropriately due from the subdivider.
How Does San Luis Obispo Compare to Other Cities?
Contacting the twelve cities previously used for comparison purposes by the Revenue Task
Force, we found that ten of the cites have some form of park in-lieu fee policy (Palm Springs
and Santa Barbara do not have established park in-lieu fees), with the application of the fee
as diverse as the cities. Additionally, the cities within San Luis Obispo County were contacted
and all have some form of park in-lieu fee - again as diverse as the cities. Below is a list of
the fee charged by each of these cities.
3�
"����► I�N�I���II�III city Of San lues OBISPO
COUNCIL AGENDA REPORT
Park Maximum SFR Avg, MFR Avg. Last
City Standard Fee Fee Fee Revision
Visalia 7.6 Ac/1,000 $ 700/DU• $ 700' $ 700• 1993
Ventura 3.5 Ac/1,000 None - FMV of Land X# of Acres 1983
Davis 5 Ac/1,000 $150,000/Ac X #of acres 1986
Monterey 5 Ac/1,000 $650/bdrm $1,950 $1,300 1984
Napa 2.5 Ac/1,000 $90,000/Ac' $ 650• $ 4150 1993
Petaluma 2.6 Ac/1,000 $208,364/Ac• $3,985• $1,979' 1993
Santa Cruz 3 Ac/1,000 None Avg cost of 1 Ac.+$100,000 dev costs X # of acres 1991
Camarillo 5 Ac/1,000 None FMV of land X # of Acres 1984
S. J. Capistrano 5 Ac/1,000 $302,500/Ac• X # of Acres for developments over 50 units 1993
Developments of 49 units or less $4,840' $4,390'
Santa Maria 5 Ac/1,000 $1,884/DU' $1,884• $1,884' 1994
Arroyo Grande 4 Ac/1,000 $1,252/DU' $1,252' $1,252/du* 1993
Atascadero 8.25 Ac/1,000 Based on square footage $ .511/sq. R $ 1.011/sq, ft. 1991
For a 2,000 sq. ft.home $1,022 $2,022
Grover Beach 5 Ac/1,000 $2,500/DU $2,500 $2,500/DU 1991
Morro Bay 4 Ac/1,000 None - Avg assessed value of 1 Ac X # of Acres X 120% 1992
Paso Robles 5 Ac/1,000 $ 509/lot N/A N/A 1986
Pismo Beach 4 Ac/1,000 $200,000/Ac X # of Acres 1994
Current SLO fee 5 Ac/1,000 $667 - $2,666 based on $2,000 $1,334 1984
number of bedrooms
Proposed SLO fee 5 Ac/1,000 $194,500' +20% $3,180' $2,520• 1994
Ac = Acre DU = Dwelling Unit FMV = Fair Market Value • = Amount adjusted annually
SFR = Single Family Residential Unit MFR =Multiple Family Residential Unit
Based upon this comparison with sixteen other communities, twelve cities have a set fee
schedule for their park in-lieu fees and four cities do an appraisal on a case-by-case basis.
Providing a set fee schedule not only allows the developer to understand the costs of
development prior to beginning the project, but also eases administration of the fees.
The effective date to implement the proposed restructured park in-lieu fees is December 1,
1994.
3-3
m�► �IIIII�IIP �U city of San tuts OBISpo
COUNCIL AGENDA REPORT
COMMUNITY PARTICIPATION
A briefing was held on the evening of August 31, 1994 to review the proposed rate structure
and to answer any questions that they might have. Notices accompanied by ERA's analysis
were sent to the SLO County Builders Exchange, Chamber of Commerce, Property Owners
Association, Business Coalition, Builders Industry Association of the Central Coast, Residents
for Quality Neighborhoods, and Environmental Quality Task Force (Exhibit C). Only one
person attended this briefing, and at this point, the only formal response that we have received
is from the SLO County Builder's Exchange (Exhibit D), which recommends that we defer any
changes in the park in-lieu fee schedule for two years.
In staff's opinion there is little to be gained by further delay - the fees have not been updated
for over 10 years. There is certainly an inequity in continuing the existing disparity between
the value of a required parkland dedication vs. a required in-lieu fee payment. Finally, it could
be more difficult to adjust this out-of-date fee at some later time, when construction activity
is higher. At present, relatively few are expected to actually pay park-in-lieu fees, as noted
below under the fiscal impact discussion.
CONCURRENCES
Restructuring park in-lieu fees was presented at the Parks and Recreation Commission meeting
on September 7, 1994. The Commission supports revision of the fees. Minutes from the
meeting are provided in Exhibit E.
Both the Parks & Recreation and Community Development Departments concur with the
recommendation.
FISCAL 11%]PACT
The amount of additional revenue that will be generated by eliminating the limitation on the
park in-lieu fees depends entirely on the number of residential subdivisions whose parkland
requirements will be met through fees rather than dedications. For 1994-95, $20,000 in park
in-lieu fee revenues have been projected. Assuming this level of activity, the new fees would
generate about $5,000 to $12,000 in additional annual revenues.
ALTERNATIVES
■ Retain the existing limit Given the community's need for parks and open spaces and
our current limited ability to fund them, staff does not recommend retaining a limit on
the in-lieu value of land that was set in 1984.
■ Case-by-case appraisal, Prior to 1984 when the limit was created, fair market value
was determined on a case-by-case basis using one of two methods:
Independent appraisal report paid for by the applicant
1111111111111011 city of San tins OBISPO
Emil COUNCIL AGENDA REPORT
Escrow statement showing sales price if it was recently purchased by the
applicant
Due to the burden this method places on the developer and the administrative burden
for staff, this alternative is not recommended.
ATTACHMEENT
Resolution restructuring park in-lieu fees
EXHIBITS
A. Recommended strategic budget direction from March 13, 1993 Council budget
workshop
B. Economic Research Associates recommendations regarding the City's park in-lieu fee
C. Notice to community groups
D. Letter from SLO County Builders Exchange
E. Minutes from September 7, 1994 meeting of the Parks and Recreation Commission
RESOLUTION NO. (1994 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
RESTRUCTURING PARK IN-LIEU FEES
WHEREAS, California Government Code Section 66477 authorizes the Council to enact
an ordinance requiring dedication of land, the payment of fees in-lieu thereof, or a combination
of both, as a condition of approval for a final tract or parcel map; and
WHEREAS, the city has adopted such requirements in its subdivision regulations
(Municipal Code Sections 16.40.060 through 16.40.100), which allow the Council, by
resolution, to establish criteria for determining and procedures for collecting fees; and
WHEREAS, an independent economic consulting fain has researched residential land
costs as they apply to the City's park land dedication in-lieu fee.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo that:
SECTION 1. Resolution No. 5376 (1984 Series)is hereby rescinded.
SECTION 2. Park in-lieu fees are established as follows:
a. Each potential additional single family dwelling .unit
in the C/OS and R-1 zones within the subdivided area $3,180.00
b. Each potential additional multi-family dwelling unit
in zones other than C/OS and R-1, within the subdivided area $2,520.00
SECTION 3. Park in-lieu fees shall be effective December 1, 1994 and adjusted
annually on July 1st by the change in the Consumer Price Index (CPI - U.S. City Average) by
the most recently published information available. The base rate for the fees shall be reviewed
at least every five years.
SECTION 4. Any required fee in-lieu of park land dedication shall be paid when the
final map is recorded, unless another time schedule for payments has been approved as a
condition of tentative map approval.
2 r/
On motion of ; seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was passed and adopted this __ _—_____ of _ _ _ , 1994.
Mayor, Peg Pinard
ATTEST:
biane Gladwell, City Clerk
Jor nse Ci ttomey
. 37
RECOMMENDED STRATEGIC BUDGET DIRECTION Exhibitz
FISCAL PROBLEM
Revenue/Expenditure Gap 2,800,000
Projected at basically the same as the five year forecast presented to Council on November 10, 1992
except sales tax revenues are projected to be better by$300,000 while insurance expenditures
(workers compensation/liability)are projected to be$600,000 higher.
State Takeways
Projected to be at least$500,000,based on the experience of the last two years.State cuts above 500,000
5500,000 take us into the contingency plan.
TOTAL :::.. :. :'.. .... : .. 3 300 000
Forecast assumptions continue to include reducing equipment replacement by2575 and CIPprojecu by-50%.
RECOMMENDATIONS
r Implement expenditure/service cuts — reduces regular staffing by 30 positions(11%u). 2,189,800
0- Use fund balance(reserves),capital project cuts,and sale of property to partially
fund construction of the Fire Station Headquarters and Performing Arts Center in order
to reduce future debt service costs. 497,000
0- Increase revenues: 1993-94
— Increase cable franchise tax rate from 496 to 596 41,000
— Increase recrea tion fees to achieve 10%overall cost recovery 100,000
Increase transient occupancy tax rate from 996 to 1096 260,000
— Updatepub/icsafety fees from 196.7 levels 106,000
— Implement reimbursement to the General Fun dfromWater and SeWer Funds for
computer mapping(CARD)engineeringservlces 52,200
— Adopt proposed Uniform BuBding Code fees in 1994 in accordance with City pollcy 54,000
The following new revenue sources are also recommended. However,they are either restricted
in their use for specific capital purposes,cannot be implemented until late in 1994-95 at the
earliest,are contingent upon further legal developments,or require significant poilcy decisions
that in some cases(such as paramedic fees) require actions by other government agencies.
Because of this,they cannot be relied upon in balancing our budget for 1993-95. However,
they will improve our long term fiscal health,and as such,policy approval to begin the steps
necessary to implement them at the earliest possible opportunity is recommended at this time:
Allocate CDBG revenues for indirect costs,economic stability,and homeless shelter
! 1 2a=—eiffc service char es
Updateparkm—lieu eeslroml9 levels
rat retro
Establish transport.?tion andgeneral facility development impact fees
Adopt local property transfer tax
+ Begin negotiations with employee associations to identify and agree upon ways of
reducing labor costs that can reduce the impact of service/staffing cuts. unknown
TOTAIi:,
. : . . 3 00 000
CONTINGENCY PLANS
What we must do if there are further state takeawa vs or we do not achieve recommended com onenm
0- Further service/staffing cuts as presented in this report
.► Further labor cost savings
w Further revenue increases
Greater user fee cost recovery
— Assesment districts
— Expanded tax base
— Other revenue increases
ms- Further use of fund balance (reserves)
1 �- 9
ExhibiL96
Economics Research Associates
Athliated with Drivers Jonas
July 29, 1994
Mr. William Statler
Director of Finance
City of San Luis Obispo
990 Palm St.
P.O. Box 8100
San Luis Obispo, CA 93403-8100
RE: Recommendations regarding the City's park dedication in-lieu fee
DearMr. Statler:
This letter report presents our findings regarding residential land costs as they
apply to the City's park land dedication in-lieu fee.
The City's regulations regarding park land dedication and fees in lieu of dedication
are described in the City's subdivision regulations, sections 16.40.050 through 16.40.110.
With regards to this assignment, the most pertinent sections are stated as follows:
Section 16.40.050;paragraph A -
"... each new subdivision shall dedicate land equivalent to five acres for each one
thousand residents expected to reside within the subdivision, except as provided in
Sections 16.40.060, 16.40.070 and 16.40.100. "
Section 16.40.080;paragraph A -
"The amount of such in-lieu fee shall be the fair market value of the land which
otherwise would be required to be dedicated..."
Section 16.40.080:paragraph B-
"The fair market value... shall be based on the portion of the land proposed to be
subdivided which is intended for development and shall re)7ect the market value at the
time the tentative map is approved"
964 51h Avenue,Suite 214,San Diego,California 92101 -(619)544-1402 Fax:(619)544-1404 � l
Los Angeles-San Francisco-San Diego-Chicago-Boston-Washington,D.C.-London
Section 16 40.080;paragraph C-
"Fees collected in lieu of land dedication shall be used for enlarging or
improving local parks serving the area in which the subdivision is located "
While this ordinance provides the policy for in-lieu fee determination, the actual
fee currently is based on Resolution No. 5376, adopted in 1984, which establishes a set
schedule. The City is considering rescinding the limitations on fees adopted in the
resolution and adopting a new fee policy.
Our assignment was to review current residential land values in the city in order to
provide the basis for a revised park land in-lieu fee. The land value analysis is for general
planning efforts only and is not an appraisal.
We met with you and city staff to collect the City's current park dedication and in-
lieu fee ordinance and to review where the City may require future parks. Based on this
review of future park needs, we divided the urbanized portion of the city into seven
subareas and searched for recent residential property transactions within each subarea.
We also collected and reviewed residential land transactions in the City's peripheral areas
where subdivision proposals are most likely. We collected and analyzed recent residential
land transactions in the city by subarea, reviewed each property's assessed valuation, and
estimated the 1994 land value of each transaction. We cross-referenced these parcel
transactions with the City's land use data base to determine parcel sizes so that prices
could be evaluated on a per acre basis. We reviewed assessor's parcel maps for
properties that were not listed in the data base. The results of this analysis are presented
in Table 1 for the residential property transactions in the urbanized subareas, and Table 2
for the peripheral area. The subareas are depicted generally in the attached map.
Table 1 presents single-family residential property records within each of the seven
urbanized subareas. These transactions are all single-family properties on lots ranging
from.09 to .67 acres. Most properties already had homes and improvements which had to
be subtracted from the sales price to estimate land value. The 1994 improvement values
were estimated by deflating the 1993 assessed value for improvements by 2 percent
annually to the record year date (to account for Proposition 13's automatic increase since
the record date), then increasing the adjusted record date value by the Consumer Price
Index to a 1994 value (to account for inflation), then discounting the inflation-adjusted
1994 value by 1 percent annually since the original record date (to account for physical
depreciation). The estimated 1994 improvement values were subtracted from the
estimated 1994 property sales values to estimate the resultant land values. As shown, it
was estimated that the 1994 land value for these transactions averaged approximately
$572,700 per acre. Some subareas had lower prices in the mid-$400,000 range while
other subareas, particularly Area 3, had a higher average in the mid-$700,000 range.
2 3-�a
The average land value of$572,700 is for improved lots in the city's built areas
where several park needs were identified. As stated in the City's ordinance, the park in-
lieu fee shall reflect the value of the land at the time the tentative map is approved, or the
value after subdivision entitlements are established but before site and infrastructure
improvements are developed. Therefore, improvement costs have to be subtracted from
the $572,700 figure to establish a comparable basis for land value. Assuming an average
of five units per acre under the City's R-1 zoning, the average land value observed from
recent transactions equals approximately $114,500 per unit. The approximate residual
value per unit, net of development costs, is as follows:
Improved Lot Value/Unit $1142500
Less:
Master infrastructure costs $ 16,000
Lot improvement costs $ 16,000
Fees $ 5,000
Selling costs $ 5,000
Return on investment S 15,000
Total Costs $ 57,000
Unimproved Lot Value/Unit $ 57,500
At $57,500 per lot, and five lots per acre, an acre of unimproved residential land
would equal approximately $287,500 based on recent transactions. This estimated
average value is based on residential property transactions located throughout the city,
including the urbanized areas which are already developed and highly valued. New
subdivisions of the same density in outlying areas would typically have lower values per
acre due to their distance from the town center, lower gross density, and fewer established
public amenities.
As shown in Table 2, land transactions in the lower density outlying areas generate
an average land value of$80,000 per acre. Most of these transactions include properties
that are on San Luis Obispo's periphery, outside the City's boundaries; properties that
potentially would be subdivided if annexed. The value of these parcels vary considerably
depending on the underlying residential density allowed. Table 2 organizes the land
transactions by density. It is clear that the greater the density zoned, the greater the land
value on a per acre basis. The lowest density residential land (10+ acres per unit)
generates a land value of almost $50,000 per acre, while the highest density land (1 - 2.5
acres per unit) sold for $110,000 per acre for improved estate lots. Based on our 1992
analysis of the Dalidio property, we estimate that a single-family residential subdivision of
five units per acre on land peripheral to the city would generate a value of approximately
$101,500 per unimproved acre (in 1994 dollars), after approvals but prior to the
development of any improvements.
Therefore, we believe there is at least a two tiered basis for unimproved, single-
family residential land value in the city - an average of$287,500 per acre applicable to
infill subdivisions in the urban areas, and $101,500 per acre applicable to new, larger scale
subdivisions in the urban periphery. If the City chose to have a single basis for residential
land value, an average of these two amounts, or approximately $194,500 per acre would
be appropriate.
While a two tiered land basis policy would be a more accurate approximation of
land costs for park development in the different parts of the city, it would favor outlying
subdivisions relative to infill subdivisions due to the resulting lower fee for outlying
development, and would require the City to define urban and peripheral areas, which could
be difficult.
An average value approach, on the other hand, would favor infill subdivisions by
reducing their burden to below cost (requiring some other public funds or use of public
land to subsidize park costs associated with these subdivisions), and would encourage
outlying subdivisions to dedicate land since the fee would be based on a value that exceeds
their land costs. To the extent that urban land has to be acquired or improved to provide
community parks that serve all city residents, including those in peripheral subdivisions,
the average fee basis would be more appropriate for the outlying developments than
strictly a peripheral land cost basis. Finally, the average value approach would be simpler
to administer.
Therefore, we recommend that the fee be based on the average of urban and
peripheral land values, or $194,500 per acre. This recommendation is based on a nexus
rationale that the City will locate neighborhood parks in the same immediate area as the
development, but will locate community parks in the urban core to serve all residents;
thus, the fee should reflect a blend of peripheral and urban residential land costs. The
blend presented here is 50/50.. As the City updates its Parks and Recreation Element, it
will have a better idea where future parks will be located and if the ratio used to calculate
the average land cost basis should change.
The fee should be structured to differentiate between type of units (single-family
or multi-family) to account for different household sizes and their respective impacts.
Single-family units would typically be assessed a higher fee than multi-family units.
The fee should also remain current with land values either by basing the fee on a
case-by-case appraisal, or by establishing a fee and pegging it to a price index, updating
the base fee every five years.
Finally, the City has the right to add an additional charge to cover certain site
preparation costs such as street improvements, utility connections, street trees and
sidewalks, curb and gutters, fencing, drainage, and other improvements that it would
normally require a developer to provide with dedicated park land, per the City's
ordinance. Therefore, the in-lieu fee should include a factor (we suggest 20 percent) to
4 3— 2.
cover the pro-rated share of these costs that the City would have to incur if it buys and
improves park sites itself using in-lieu fees.
Based on the City's park standard and current in-lieu fee structure, we would
recommend the following park in-lieu fee:
Per single family residential unit
1990 Census average household size- 2.70 persons
Acres required per household (5 acJ1,000 pop.) - 0135 acres
Park land in-lieu fee per unit(rounded to nearest $50) -
@ $194,500 per acre- $2,650
Plus 20% for improvements - 530
Total fee per single-family residential unit - $3,180
Per multi family residential unit
1990 Census average household size - 2.14 persons
Acres required per household (5 ac./1,000 pop.) - .0107 acres
Park land in-lieu fee per unit (rounded to nearest $50) -
@ $194,500 per acre- $2,100
Plus 20% for improvements- 420
Total fee per multi-family residential unit - $21520
These fees, regardless of unit type, and are based on 1994 values for unimproved
land zoned for single-family residential use (this assumes that the City would not likely
purchase higher cost land zoned for multi-family residential, use, or land that is already
substantially improved, to meet its park needs).
5 3-13
We hope this analysis proves useful. Please call if you have any questions or if we
can serve you further.
Respectfully submitted,
William Anderson, AICP
Principal
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�►���►►► iIII►IIIIIIIIIII ��ii11°��� ► ���
city of San luis OBIS
po
990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403-8100
August 17, 1994
Dear ,
The purpose of this letter is to encourage your attendance at an upcoming briefing to discuss
two topics which we plan to present for Council consideration at their September 20, 1994
meeting:
■ Adoption of 1994 Uniform Building Code fees
■ Amendment of park in-lieu fees
This meeting is scheduled for:
Date: Wednesday, August 31, 1994
Time: 7:30 pm
Place: City Hall - Hearing Room
990 Palm Street
Attached for your review are the following materials:
■ Building fees. It is the City's policy to set building fees based on the Uniform Building
Code. The attached legislative draft of the Building and Safety fee schedule compares
current and proposed fees.
■ Park in-lieu fees. Our current fees are based on limits set in 1984. Based upon Council
direction, an independent economic consultant, Economics Research Associates (ERA),
has evaluated current residential land values in the City to provide the basis for updated
park in-lieu fees. A copy of ERA's report is provided for your review along with a
summary of current and proposed rates.
We encourage you and/or representatives from your organization to attend this briefing which
will include a question and answer period along with an opportunity for comments.
Additionally, we will be happy to meet further with your organization at your convenience.
If you have any questions concerning this meeting, or require additional information, please
do not hesitate to contact me at 781-7130.
Sincerely,
William C. Statler, Director of Finance
The City of San Luis Obispo is committed to including the disabled in all of its services,programs and activities. �� Q
Telecommunications Device for the Deaf(805)781-7410. 1/
Exhibit
SLO COUNTY
BUILDERSSAN WIS OBISPO OFFICE • 3563-G Sueldo• P.O. Box 1222• San Luis Obispo, CA 93406
EXCHANGE (805)543-7330. FAX (805)543-16
ATASCADERO OFFICE • 5407 EI Camino Real •Atascadem, CA 93422
(805)466-0870•FAX(805)4665029
August 29, 1994
Mr. William C. Statler
Director of Finance
City of San Luis Obispo
P.C. Bc- 8140
San Luis Obispo, CA 93403-8100
Dear Mr. Statler:
Thank you for sending us the information on the 1994 Uniform Building Code
fees and the amendment of park in-lieu fees for the City of San Luis Obispo.
After carefully analyzing these proposals, the San Luis Obispo County
Builders Exchange (SLOCBE) would respectfully request that these increases
be delayed for at least another two years, as a way of showing the city's
commitment to assisting the very weak recovery we presently are
experiencing in the construction industry here.
At this time it is ar less expensive to purchase an existing home than to
build a new one. The real estate market remains very slow. A number of
factors have contributed to this stagnation: unemployment, out-of-state
flight, rising interest rates, increased materials and labor costs.
There is little .if anything) the City of San Luis Obispo can do about
these.
In light of this situation, it would be a tremendous help to everyone if the
city would postpone any fee increases for now. We are not experiencing
rapid growth to justify hiring aaditionai staff to process permits.
Potential park land is not being gobbled up overnight. On these facts
alone it seems hard to justify increasing fees; taken with the
cumulative impact of the economic factors mentioned above, we believe
an increase in fees would be most unwise at this time.
We would be receptive to discussing alternatives that would help keep
building costs down while ensuring quality construction and compliance with
all existing government regulations. Only by working together will we reach
our mutual goals of a healthy economy and a healthful environment.
Sincerely,
Z/440 xe�
LESLIE RAMSEY
Executive Director
3-Zo
8hlob)�
PARKS & RECREATION COMMISSION
MINUTES
Wednesday, September 7, 1994
CALL TO ORDER: Meeting called to order at 7:OOpm by Chair Macedo
MEMBERS PRESENT: Chair Macedo, Joe Kourakis, Jack Davidson, Wendy Pyper,
LeeAnn Hagmaier
STAFF: Director LeSage, Kathy Koop, Carol Poll
GUESTS: Chris Pontius, Sandi Johnson
ITEM #4. REPORT ON PARK IN LIEU FEES - LINDA ASPRION
Director LeSage introduced Linda Asprion of the City's Finance Dept. to the
Commission. Director LeSage and Linda explained the Park in Lieu Fees, which have
not been changed since 1984. A Council Agenda is being presented to the City
Council on Sept. 20 to increase these Park in Lieu Fees and Finance is seeking the
Commissions approval and support for this proposal.
M/S/A Kourakis/Hagmaier. Parks & Recreation to support an increase in Park In Lieu
Fees to cover the needed costs of acquiring land or improving existing parks for
recreational purposes to directly serve the area being developed.
The Commission directed Director LeSage to present to Council at the Sept. 20th
meeting their concerns: 1) fees be structured so they are more equitable; 2) fees be
applied immediately after collection; 3) fees not become a burden on homeowners.
3-zl
MEETIG AGENDA
#� )ATE ITEM #
SL® COUNTY
BUILDERSSAN WIS OBISPO OFFICE • 3563-G Sueldo• P.O. Box 1222• San Luis Obispo. CA 93406
EXCHANGE (805)543-7330• FAX(8M)543.7016
ATASCADERO OFFICE •5407 EI Camino Real •Atascadem, CA 93422
(805)466.0870• FAX(805)466-5029
September 20, 1994
Cpt1NCIL DIR
Honorable Peg Pinard FlN DI
Mayor, City of San Luis Obispo ❑ CHIEF
Honorable Penny Rappa NEY &0rPW DIR
Honorable Allen Settle CLERKADRIG ❑ POLICE CHF
Honorable David Romero ❑ MGMT TEAM O REC DIR
Honorable Bill Roalman ❑ c aF ❑ UTIL DIR
City Hall ❑ PERS DIR
990 Palm Street _
San Luis Obispo, CA 93401
Dear Mayor Pinard and Council Members: .
On behalf of the San Luis Obispo County Builders Exchange I wish to reiterate our
'opposition to any increase in park in-lieu fees and Uniform Building Code fees at this
time.
Based upon the Revenue Task Force comparison of sixteen other cities with San Luis
Obispo, twelve cities have a set fee schedule and four cities do an appraisal on a case-by-
case basis. Of the twelve cities that have a set fee schedule, only three (Petaluma, San
Juan Capistrano, and Grover Beach) are higher than San Luis Obispo for the average
Single Family Residence fee. For the Multiple Family Residence fee, only five cities are
higher than San Luis Obispo's current fee (Petaluma, San Juan Capistrano Grover Beach,
Atascadero and Santa Maria). Their fees were set between 1991 and 1994; the San Luis
Obispo fees were set in 1984. Thus a case can be made that the San Luis Obispo fees
have been as high or higher than three out of four comparable cities' fees for the past ten
years. Just because they haven't been raised for a decade doesn't mean they are "behind"
in some way. Quite the opposite is true.
Furthermore, as stated in my original letter of August 29, 1994 (see attached), there is no
great land rush here. Park land is not being gobbled up by subdivisions, nor are more
staff required to process permits, because of the current slowdown. Although the
Community Development Department staff and the Parks and Recreation Commission
(according to the minutes of their September 7, 1994 meeting) would have you believe that
fees must be raised "to cover the needed costs of acquiring land or improving existing
parks for recreational purposes to directly serve the area being developed," according to
the Council agenda report no massive developments are occurring, and only $5,000 -
$12,000 additional revenues would be collected if the higher fees were to be enacted.
-1- RECEIVED
SEP 2 01999
Cm COUNCIL
SAN LUIS OBISPO, CA
Raising the fees is not the answer. Until we see a major increase in construction activity,
under the existing schedule or under the new schedule, there will not be adequate monies
collected to do any substantial improvements or acquisitions. The existing fee schedule is
adequate, especially when compared with other cities; what is inadequate is the amount of
construction going on to cause the generation of this revenue. Increasing fees at
this time will only demonstrate this administration's insensitivity to our sluggish economy
and disregard for the concerns of those very persons whose industry generates these fees.
In an effort to balance the 1993-1995 Financial Plan an increase in Uniform Building Code
fees was built into the 1994-1995 revenue projections by the City Council. This planned
increase is now being cited to justify increasing these fees. The staff person who decided
in an election year to raise fees rather than reduce expenses was evidently more interested
in retaining his own job than in helping you retain yours. Here again, we believe the
current fees are more than adequate to generate the necessary revenues if there is a
reasonable level of construction activity.
We respectfully request that these increases be delayed for at least another two years as a
way of showing this administration's commitment to assisting the very weak recovery we
are presently experiencing in the local construction industry. Only by working together
can we reach our mutual goals of a healthy economy and a healthful environment.
Sincerely,
X.1.C!
Leslie Ramsey
Executive Director
Attachment
LR1mb
-2-