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Home My WebLink About08/21/2007, PH 1 - MARGARITA AREA DEVELOPMENT IMPACT FEE UPDATE council M 8-21-07 j accnaa REpoRt CITY O F SAN LUIS O B 1 S P O FROM: Bill Statler, Director of Finance& Information Technologyv SUBJECT: MARGARITA AREA DEVELOPMENT IMPACT FEE UPDATE CAO RECOMMENDATION Adopt a resolution updating sub-area development impact fees for transportation improvements in the Margarita Area. DISCUSSION Overview The proposed fee update only affects new development in the Margarita Area Specific Plan (MASP). The purpose of the update is to reflect revised cost estimates for the Prado Road extension. The MASP projected this cost at $9.8 million; and interim cost of living adjustments to MASP sub-area fees have brought the underlying cost base to $10.7 million. However, based on a cost analysis prepared on behalf of property owners in the area by Tec Civil Engineering Consultants, the revised cost estimate is $18.9 million. Accordingly, the sub-area transportation fees need to be updated to reflect this higher cost. Background The Council adopted the MASP on October 12, 2004. It includes a comprehensive financing program for the infrastructure needs unique to this area. The financing plan is largely based on the use of pay-as-you-go development impact fees. These were developed in accordance with the stringent requirements of Section 66,000 of the California Government Code (commonly referred to as "AB 1600"), which sets detailed standards for the preparation of development impact fees. The Council adopted the current MASP sub-area fees for transportation improvements on January 4, 2005. These have been updated annually since then by increases in the consumer price index. In the case of the Prado Road extension, it was envisioned that this improvement would be built by new development, and as such,.the impact fees serve to determine the basis for reimbursement agreements, rather than fees to be collected. In short, we do not expect to actually collect these fees for the Prado Road extension. However, since they serve as the basis for subsequent reimbursement agreements in assessing "fair share" allocations between developments, it is important to keep them up to date.. Margarita Area Development Impact Fee Update Page 2 Updated Fees The following summarizes the current and revised improvement cost estimates that determine transportation impact fees in this area. As reflected in this chart, only the portion relating to the Prado Road extension is being revised, as this is the focus of this update. For example, while current cost estimates for the Prado Road interchange are also much higher than initially projected in the MASP, we do not recommend any changes at this time given the many uncertainties associated with this project. MASP Transportation Improvement Costs Original Current Revised Prado Road Extension 9,832,200 10,764,200 18,967,700 Prado Road Interchange 2,860,000 3,131,100 3,131,100 Prado &H_ iguera Intersection 286,300 313,400 313,400 Total $12,978,500 $14,208,700 $22,412,200 Percent Increase from Current 1 57.7% As reflected above, adjusting overall costs for the Prado Road extension portion results in an increase of 58%. This results in a recommended increase in impact fees of 58% as follows: MASP Transportation Fees Original Current Proposed Residential Per Unit Single Family Residential $4,948 $5,417 $8,545 Multi-Family Residential 3,053 3,342 5,272 .Non-Residential Per 1,600 S nare'Feef Retail 22,306 24,421 38,521 Business Park/Office/Light Manufacturing 9,31 10,248 16,165 Margarita Area Only It is important to note that the proposed fees only affect the Margarita Area: community-wide development impact fees (which new development in the Margarita Area will also be responsible for paying in addition to their area-specific fees) are not affected by the proposed area-specific fees. Effective Date AB 1600 requires 60 days between adoption of fees and their effective date. Accordingly, October 22, 2007 is the recommended effective date. Notification In accordance with AB 1600 notification requirements, we have mailed notices regarding this hearing to all of the groups and individuals on our standard fee mailing list (about 60 of them /-2 Margarita Area Development Impact Fee Update Page 3 based on their request to be included on this list), which includes all of the property owners in the Margarita area. As of the date of report preparation, we have not received any comments regarding the proposed fees. CONCURRENCES Public Works and Community Development concur with the proposed fee update. FISCAL IMPACT In accordance with City policy, adoption of the proposed fees will ensure that new development in the Margarita area will pay its fair share of the facilities needed to serve it. Accordingly, there is no adverse fiscal impact associated with adoption of these fees. ALTERNATIVES The Council could choose not to update the fees or adopt them at lower level than recommended: This will result in a shortfall in funding sources for the Prado Road extension, and as such, we do not recommend either of these options. ATTACHMENT Resolution updating transportation development impact fees in the Margarita Area. G:Margarita Area Specific Plan/August 2007/Council Agenda Report/8-21-07 RESOLUTION NO. (2007 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO UPDATING TRANSPORTATION DEVELOPMENT IMPACT FEES IN THE MARGARITA AREA WHEREAS, the Council adopted the Margarita Area Specific Plan on October 12, 2004 following extensive public hearings by the Planning Commission and Council; and WHEREAS, Chapter 9 (Public Facilities Financing) of the Margarita Area Specific Plan provides a detailed description of the transportation improvements needed to serve this area and their costs, along with the method of apportioning these costs between types of development; and WIfEREAS, the Council adopted transportation development impact fees for the Margarita Area on January 5, 2004 based on this financing program in compliance with the provisions of Section 66000 of the Government Code(AB 1600); and WHEREAS, under the fee program adopted at that time by the Council, whenever the actual or estimated costs of facilities identified in the impact fee analysis changes, the Director of Finance & Information Technology (Director) shall review the impact fees and determine whether the change affects the amount of the impact fees; and if the impact fees are significantly affected, the Director shall, within thirty(30)days, recommend to the Council a revised fee for their consideration; and WHEREAS, a revised cost estimate for the Prado Road extension has been prepared that results in an increase of 57.7% in the estimated cost of transportation improvements in the area. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo that transportation development impact fees in the Margarita Area are hereby revised as set forth in Exhibit A effective October 22,2007, and that all other provisions of Resolution No. 9643 remain in effect. Upon motion of seconded by and on the following roll call vote: AYES: NOES`. ABSENT: the foregoing resolution was adopted on August 21, 2007. Mayor David F. Romero ATTEST: Audrey Hooper, City Clerk APPROVED AS TO FORM: Jo than owell, City Attorney Resolution No. (2007 Series) Page 2 EXHIBIT A MARGARITA AREA. TRANSPORTATION DEVELOPMENT IMPACT FEES Effective October 22, 2007 Residential Per Unit Single Family Residential $8,545 Multi-Family Residential 5,272 Non-Residential Per 1,000 Square Feet Retail 38,521 Office/Business Park/Light Manufacturing 16,165 I