HomeMy WebLinkAboutR-10849 Intent to Apply Pending Capital Facilities Fee Program and Water and Wastewater Capacity and Connection Fee Program to New DevelopmentRESOLUTION NO. 10849 (2017 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, SETTING FORTH INTENT TO APPLY THE
PENDING CAPITAL FACILITIES FEE PROGRAM AND WATER AND
WASTEWATER CAPACITY AND CONNECTION FEE PROGRAM TO
NEW DEVELOPMENT
WHEREAS, in October 2012, the City Council adopted an Economic Development
Strategic Plan (EDSP). The EDSP was updated in 2015. The primary goal of the plan is to help
create head of household jobs, and the Plan recognizes how important infrastructure financing is
to accomplish this goal; and
WHEREAS, in April 2013, the City Council authorized staff to hire a consultant to
undertake an infrastructure financing analysis that would include a series of study session with the
Council, as an implementation measure of the EDSP. The purpose of these study sessions was to
provide the Council and the community with information, context and tools to support informed
decision making and direction as many as needed; and
WHEREAS, on January 21, 2014, the City Council held Study Session #1: Introduction
and Background. This session covered the current trends in municipal infrastructure financing,
gave an overview of development impacts fee and reviewed the development of the City's existing
fee programs; and
WHEREAS, on February 18, 2014, the City Council held Study Session #2: Economic
and Policy Implications of Development Impact Fees. This session highlighted the tools available
to the City and the policy implications and trade-offs associated with the various options; and
WHEREAS, on March 18, 2014, the City Council held Study Session #3: Direction for
updating the City's Development Impact Fees. This session focused on the path forward, and City
Council provided direction to staff, based on the first two sessions and accompanying documents,
to proceed with the update of the City's development impact fees, to integrate fees into and
prioritize projects in the City's Capital Improvement Program, and to explore new infrastructure
funding strategies to support the objectives of the Economic Development Strategic Plan with
particular focus on creating head of household jobs in San Luis Obispo; and
WHEREAS, on August 16, 2016, the City Council held a fourth Study Session: Public
Infrastructure Financing Framework and Draft Policies. This session provided a framework for a
comprehensive approach to funding the City's public facilities and infrastructure improvements
and recommended draft policies for City Council consideration. The Framework provides a
systematic way of considering funding and financing options so that the City is able to construct
needed public facilities and infrastructure in a manner that funds facilities and infrastructure
needed to maintain and enhance the City's quality of life for current and future residents,
employees and visitors, makes efficient use of available funding sources and financing
mechanisms, implements General Plan policy, is fair and equitable with respect to incidence of
burden (who pays), and is consistent with economic development objectives; and
Resolution No. 10849 (2017 Series) Page 2
WHEREAS, on August 16, 2016, the City Council held a public hearing and authorized
staff to issue a Request for Proposal (RFP) for the preparation of a Public/Capital Facilities Impact
Fee Program Nexus Study. The preparation of a Nexus Study was identified in the 2015-17
Financial Plan as an Objective that supports Major City Goals in Housing, Multi -Modal
Transportation, as well as supports the other important objective of Downtown. It also continues
implementation of the EDSP strategy to reduce barriers to job creation, which was part of the
Major City Goal in Economic Development in the 2011-13 Financial Plan; and
WHEREAS, on November 23, 2016, the City requested proposals for consultant services
to prepare the City's Capital Facilities Fee Program Nexus Study per Specification No. 91356. The
scope of work for the Study included a Citywide Capital Facilities Fee Program with supplemental
area -specific fees as needed and only if supported by nexus logic. The Capital Facilities Fee
Programs scope of work also included categorical subcomponents for Transportation, Parkland
and Park Improvements, General Government, and Public Safety; and
WHEREAS, on April 21, 2017, pursuant to said request Economic & Planning Systems.
Inc. submitted a proposal that was accepted by the city for said project; and
WHEREAS, on June 29, 2017, the City conducted outreach with stakeholders in the
development community at a Developer's Roundtable meeting. At this meeting the study
objectives and approach were discussed; and
WHERAS, on October 5, 2017, the City conducted outreach with stakeholders in the
community at the San Luis Chamber of Commerce, Economic Development Committee meeting,
and with stakeholders in the development community at a Developer's Roundtable meeting. At
these meetings the preliminary maximum fees calculated as part of the Capital Facilities Fee
Program Nexus Study were discussed; and
WHEREAS, on October 11, 2017, the Planning Commission held a study session to
review the preliminary results of the Capital Facilities Fee Program Nexus Study and the Water
and Wastewater Capacity and Connection Fee Program Study. During the study session the
development community expressed concern that the pending changes to the City's development
impact fee programs would create uncertainty for the development community which could result
in unanticipated impacts to the fiscal feasibility for development projects; and
WHEREAS, On October 17, the City Council held a study session to review the
preliminary results of the Capital Facilities Fee Program Nexus Study and the Water and
Wastewater Capacity and Connection Fee Program Study. During the study session, the
development community expressed concern that the pending changes to the City's development
impact fee programs would create uncertainty for the development community which could result
in unanticipated impacts to the fiscal feasibility for development projects. The City Council
provided staff with guidance regarding policy considerations and directed staff to return with more
analysis of the fee burden feasibility, impacts to affordable housing objectives, identification of
alternative infrastructure funding sources, refinement of project improvement lists,
implementation phasing and additional community outreach; and
R 10849
Resolution No. 10849 (2017 Series) Page 3
WHEREAS, with any new or proposed increase in development impact fees, agencies
typically encounter a "rush the planning counter" by developers to secure project approval or
vested rights status before the new fees take effect. To address this concern, staff recommended
the adoption of this Resolution that provides notice that it is the City's intent to adopt updated
development impact fee programs by March 2018, and that it is the expectation that all applicable
development projects that are issued building permits once those impact fees have been established
will be expected to pay those fees, since they will benefit from the improvements, facilities, and
services that will be covered by those fees. In addition, staff recommends that the following
condition of approval language be added to applicable development projects to provide additional
clarification as to which fees that development project will be subject to:
In accordance with Resolution No. 10849 (2017 Series), the Developer shall pay
any and all development impact fees, including water and wastewater capacity and
connection fees, in the amount in effect at the time of issuance of building permit.
The following is a list of development review projects that would be exempt from the resolution:
a) Development projects that are currently entitled under a vesting tract map that specified
which development impact fees would be applied to the project;
b) Ministerial development review projects that receive building permit issuance prior to
the adoption of the updated development impact fee programs; and
c) Discretionary development review projects that are currently in process and will have
building permits issued for that development prior to the establishment of the updated
development impact fee programs.
WHEREAS, the City Council finds that the condition of approval language is consistent
with the objectives, policies, and strategies specified in the Economic Development Strategic Plan
and the General Plan of the City of San Luis Obispo, as described below, and as further detailed
in the accompanying City Council staff report prepared for this action:
a) Costs of Growth — Land Use Policy 1.13.9: The city shall require the costs of public
facilities and services needed for new development to be borne by the new
development, unless the community chooses to help pay the costs for certain
development to obtain community -wide benefits. The City shall consider a range of
options for financing measures so that new development pays its fair share of costs of
new service and facilities which are required to serve the project, and which are
reasonably related to the new growth attributable to the development.
b) Economic Development Strategic Plan Policy IA: Ensure that the fair -share structure
includes appropriate percentages for each party bearing a portion of the infrastructure
costs. Utilize a consultant to lead a series of study sessions with the City Council on
the City's impact fee stricture guided by existing policies and options for the City to
consider related to how impact fees are determined, calculated, and applied.
c) Furthermore, the condition of approval language is consistent with the Land Use and
Circulation Element overall land use policies by preserving a funding source for city-
wide community benefits, including but not limited to, financial support for
transportation, parks and recreation, multi -modal infrastructure, public safety, and
water and wastewater infrastructure in the City.
Resolution No. 10849 (2017 Series)
Page 4
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Recitals. The above recitals are true and correct and are incorporated herein
by this reference.
SECTION 2. Action. Unless exempt as set forth below, all building permits for new
development within the City shall be subject to the new or increased development impact fees as
described in the Recitals above. The condition of approval language is hereby approved and shall
be added to all discretionary development review projects that are currently in process or will be
in process between the date of this resolution and the adoption of updated development impact fee
programs. Projects exempt from this requirement are as follows:
a) Development projects that are currently entitled under a vesting tract map;
b) Ministerial development review projects that receive building permit issuance prior to
the adoption of the updated development impact fee programs; and
c) Discretionary development review projects that are currently in process and will have
building permits issued for that development prior to the establishment of the updated
development impact fee programs.
SECTION 3. Upon the effective date of this Resolution, the Community Development
Director is hereby authorized and directed to apply the condition of approval language to all
applicable discretionary development review projects that are currently in process or will be in
process between now and the adoption of the updated development impact fee programs, unless
exempt from this Resolution as described above. In accordance with Government Code §
66474.2(b)(2), the City Clerk is hereby directed to publish notice of this Resolution per
Government Code section 65090(a) describing the nature of the proposed changes to. the City's
development impact fee program. The notice shall be subject to the approval of the City Attorney.
Resolution No. 10849 (2017 Series)
Page 5
SECTION 3., CEQA determination. The City Council herby finds that the modification of
rates and charges by public agencies is statutorily exempt from the California Environmental
Quality Act (CEQA) under section 15273 of the Public Resources Code because changes in fees
is not intended to fund expansion of capital projects not otherwise evaluated under CEQA.
Upon motion of Vice Mayor Rivoire, seconded by Council Member Christianson, and on the
following vote:
AYES: Council Members Christianson, Gomez and Pease,
Vice Mayor Rivoire and Mayor Harmon
NOES: None
ABSENT: None
The foregoing resolution was adopted this 21' day of November, 2017.
Harmon
ATTEST:
Carrie Gallagher
City Clerk
APPROVED AS -TO FORM:
Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my Baal aiiLl affixed the official seal of the City
of San Luis Obispo, California, this day of Df[? CJS , 2017.
Carrie Gallagher
City Clerk